By Cheryl Beise, J.D.
An individual who co-produced and hosted a television program called "The Weekend in Vegas," along with his attorney, could be liable for damages suffered by the program’s creator for sending a false notice of infringement that prompted Amazon Video to remove the program from its platform, the federal district court in Los Angeles has decided. The court held that neither proof of copyright ownership nor registration are prerequisites to bringing a claim under Section 512(f) of the Digital Millennium Copyright Act. The court, however, dismissed without prejudice the plaintiff’s other claims— fraud for lack of standing, breach of contract as preempted by the Copyright Act, and declaration of copyright ownership as duplicative of the substantive rights at issue in the DMCA claim (ISE Entertainment Corp. v. Longarzo, February 2, 2018, Fitzgerald, M.).
ISE Entertainment Corporation claimed to be the creator, owner, and holder of copyrights in the television series, "The Weekend in Vegas," (the "Program"), which airs on the ABC Affiliate station in Las Vegas, Nevada. Jeff Civillico is the co-producer and host of the Program. On August 18, 2017, Amazon Video Direct ("Amazon Video") suspended distribution of the Program pursuant to the Digital Millennium Copyright Act (DMCA) after receiving a notice of infringement from Jeff Civillico’s attorney, Gerald A. Longarzo, Jr.
ISE filed suit against Civillico and Longarzo, seeking a declaration of the rights and duties regarding ownership of the copyright of the Program, and asserting claims for fraud, breach of contract (against Civillico only) and damages under Section 512(f) of the DMCA for sending a false notice of infringement. ISE attached to its complaint a one-page "Deal Memo," dated February 2, 2017, regarding the production of the Program, stating that "Co-Producer [Civillico] agrees that any work created during the course of business with Company [ISE] is the original work and property of Company. Co-Producer further agrees that all rights, including copyrights, performance rights and publicity rights, belong to Company. The defendants moved to dismiss the complaint.
DMCA notification regime. Section 512(c) of the DMCA creates a safe harbor for online service providers, such Amazon Video, to avoid copyright infringement liability for hosting infringing content posted to their platforms by third-parties if—among other requirements—the service provider "expeditiously" removes or disables access to the content after receiving a notice of infringement, or "takedown notice," from a copyright holder that the content is infringing. The person accused of posting the infringing material may then send a counter-notification explaining why the material is not infringing. Upon receipt of a valid counter-notification, the service provider must inform the copyright holder of the counter-notification and restore the content, unless an infringement lawsuit had been filed within 14 days. Section 512(f) provides that any person who knowingly makes a material misrepresentation of infringement is liable for damages, costs, and attorney fees incurred by the "alleged infringer" as a result of the service provider relying on the false takedown notice in removing or disabling access to the material.
DMCA standing—copyright ownership. The defendants first argued that ISE lacked standing to bring a Section 512(f) claim because ISE never registered a copyright covering the Program and was therefore not a "copyright owner." The defendants cited Section 411(a) of the Copyright Act, which states, in part, that "no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title." The court, however, found that Section 411 was not relevant because the defendants were not suing for infringement, but for filing a false takedown notice. Two cases cited by the defendants did not stand for the proposition that copyright registration was a prerequisite to filing a DMCA notice.
Concluding that "neither copyright ownership nor registration are prerequisites to bringing a section 512(f) action," the court found that ISE, as the alleged infringer, had standing to bring its DMCA claim.
DMCA claim. The defendants also challenged the sufficiency of ISE’s DMCA claim. The defendants argued that that ISE’s Section 512(f) claim failed because ISE did not attach Longarzo’s takedown notice or specifically plead that Longarzo’s communication with Amazon Video complied with each required statutory element. The defendants cited no authority to support such a stringent pleading requirement. In the court’s view, it was enough that ISE pleaded that it had received notification from Amazon Video that it removed the Program from its website in accordance with the defendant’s notice.
The defendants also contended that Amazon Video’s notification to ISE did not specifically cite copyright infringement as the basis for removal of the Program. Instead, the notice stated that Amazon removed the Program at Longarzo’s request because distribution of the Program "through Amazon may not be properly authorized by the appropriate rights holder" and provided the "contact information of the third party [Longarzo] who claims you infringed its rights." If the defendants sought to remove the Program for some reason unrelated to copyright or the DMCA, they could make their arguments at the summary judgment phase, the court noted.
Lastly, the defendants asserted that ISE failed to allege that they acted with the requisite mens rea, i.e., that they knowingly made material misrepresentations in their takedown notice. "While ISE may struggle to produce evidence of subjective bad faith as the case progresses, the Complaint contains sufficient allegations of Defendants’ actual knowledge of misrepresentation to survive the present Motion," the court said. The defendants’ motion to dismiss ISE’s DMCA claim was accordingly denied.
Declaration of copyright ownership. The defendants moved to dismiss ISE’s state law claim seeking "a judicial declaration of the rights and duties of the parties hereto with regard to who is the rightful owner of the copyright" on the ground that the Declaratory Judgment Act does not create an independent cause of action and because the claim was duplicative of ISE’s other claims. The court agreed that resolution of ISE’s DMCA—the only remaining substantive claim—would require the jury to decide the parties’ respective rights in the Program. The court dismissed the declaratory judgment claim.
Breach of contract. ISE alleged that Civillico breached the Deal Memo by using clips from the Program on his website without authorization, violating the memo’s confidentiality clause, filing the DMCA Notice, claiming ownership of the Program’s copyrights, and interfering with the Program’s distribution rights.
The court dismissed ISE’s breach of contract claim, finding that it was preempted by the Copyright Act. State law claims are preempted by the Copyright Act if (2) the subject matter of the claim falls within the subject matter of copyright and (2) the rights asserted are equivalent to the rights protected by the Copyright Act. The parties did not dispute that the "subject matter" of ISE’s breach of contract claim—the Program—fell within the subject matter of the Copyright Act. The court also determined that ISE had not asserted any "rights that are qualitatively different from the rights protected by copyright." As currently pleaded, ISE’s breach claim was based entirely on allegations that the defendants made unauthorized use of Program clips, filed a false DMCA Notice, and interfered with ISE’s distribution rights.
Fraud. The court also granted the defendants motion to ISE’s fraud claim. A claim for fraud under California law must contain the following elements: (a) misrepresentation; (b) knowledge of falsity; (c) intent to defraud or induce reliance; (d) justifiable reliance; and (e) resulting damage. ISE argued that it had standing to sue for "fraudulent representations made in the DMCA notice to Amazon.com, which result in injury to [ISE]." The court disagreed, finding that ISE’s fraud claim was nonviable because it was entirely premised upon allegedly false statements Longarzo made not to ISE, but to Amazon Video and relied upon by Amazon Video.
The case is No. 2:17-cv-09132-MWF-JC.
Attorneys: Kenneth G. Eade (Law Office of Kenneth G. Eade) for ISE Entertainment Corp. Sean Michael Hardy (Freedman and Taitelman LLP) for Gerald A. Longarzo, Jr.
Companies: ISE Entertainment Corp.
MainStory: TopStory Copyright TechnologyInternet CaliforniaNews
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