denying motion to dismiss and finding that a listing of unauthorized copies of sound recordings available through an online file-sharing system was sufficient evidence to plead a violation of the copyright owner's exclusive right of distributionSummary of this case from UMG Recordings, Inc. v. Grande Commc'ns Networks, LLC
CIVIL ACTION NO. W-06-CA-051.
July 17, 2006
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Tyler Payne's Motion to Dismiss Plaintiff's Complaint. Having considered the Motion, Plaintiffs' Response, Defendant's Reply, the pleadings, and applicable legal authority, the Court finds that the Motion does not have merit and should be denied.
Warner Bros. Records Inc., Sony BMG Music Entertainment, Priority Records LLC, UMG Recordings, Inc., and BMG Music (collectively "Plaintiffs") filed suit against Defendant Tyler Payne on February 17, 2006, alleging copyright infringement. Specifically, Plaintiffs allege that Defendant violated their 17 U.S.C. § 106 exclusive rights of reproduction and distribution, using Kazaa, an online file-sharing program. Specifically, the causes of action state:
13. Plaintiffs are informed and believe that defendant, without the permission or consent of Plaintiffs, has used, and continues to use, an online media distribution system to download the Copyrighted Recordings, to distribute the Copyrighted Recordings to the public, and/or to make the Copyrighted Recordings available for distribution to others. In doing so, Defendant has violated Plaintiffs' exclusive rights of reproduction and distribution. Defendant's actions constitute infringement of Plaintiffs' copyrights and exclusive rights under copyright.
. . .
15. Plaintiffs are informed and believe that the foregoing acts of infringement have been willful and intentional, in disregard of and with indifference to the rights of Plaintiffs.Plaintiffs' Original Complaint, ¶¶ 13, 15. In Exhibit A, Plaintiffs set out 11 "Copyrighted Recordings" to which they allegedly hold registered copyrights. In Exhibit B, Plaintiffs include several computer-screen printouts, allegedly showing music files stored on Defendant's computer and listed on the Internet file-sharing system. Plaintiffs allege they also hold registered copyrights to "certain of the sound recordings listed on Exhibit B." Id. ¶ 11. Defendant moves to dismiss the action for failure to state a claim on the grounds that (1) Plaintiffs did not plead copyright infringement with the requisite particularity and (2) merely making music files available online using a file-sharing program does not constitute copyright infringement.
II. STANDARD OF REVIEW
A motion to dismiss under Rule 12(b)(6) "is viewed with disfavor and is rarely granted." Kaiser Aluminum Chemical Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982) (quoting 5 Wright and Miller, Federal Practice and Procedure, § 1357 at 598 (1969)). It is well settled that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the Plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Boudeloche v. Grow Chemical Coatings Corp., 728 F.2d 759, 762 (5th Cir. 1984); Kaiser, 677 F.2d at 1050. When considering such a motion, the complaint must be liberally construed in the plaintiff's favor, and all facts well pleaded in the complaint should be accepted at true. Campbell v. Wells Fargo Bank, N.A., 781 F.2d 440, 442 (5th Cir. 1986). Therefore, "the question on a motion to dismiss under Rule 12(b)(6) is whether in the light most favorable to the plaintiff, and with every doubt resolved in the pleader's [favor], the complaint states any legally cognizable claim for relief." 5 Wright and Miller, Federal Practice and Procedure, § 1357 at 640 (3d ed. 2004).
A. Sufficiency of the Complaint
Defendant alleges that Plaintiffs have failed to state a claim for copyright infringement because they have failed to allege specific acts of infringement and have failed to adequately plead specific works and ownership. Motion to Dismiss at 4-6. Plaintiffs counter that they have adequately pled a copyright infringement claim, asserting that it is unnecessary to allege specific acts of infringement in a case such as this one, and that they have sufficiently alleged ownership in at least the eleven sound recordings in Exhibit A. Plaintiffs' Response at 4.
A complaint need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a); Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002). The purpose of this rule is to "give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Id. (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Under this notice pleading standard, even conclusory allegations are not automatically fatal. GE Capital Corp. v. Posey, 415 F.3d 391, 396-97 (5th Cir. 2005). In a copyright infringement suit, the plaintiff must allege (1) ownership of a valid copyright and (2) a violation of one or more of the owner's exclusive rights in 17 U.S.C. § 106. See Feist Pub., Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991) (citation omitted).
The Court finds that Plaintiffs have satisfied the requirements of Rule 8. First, Plaintiffs sufficiently allege ownership and registration of the eleven songs in Exhibit A. Second, Plaintiffs allege the reproduction and distribution of their copyrighted works. Notably, Exhibit B contains alleged screen shots of Payne's Kazaa share folder, which contains filenames similar to the song titles listed in Exhibit A. Finally, Plaintiffs need not allege specific acts of infringement, because they have alleged continuous and ongoing acts of infringement. See Franklin Elec. Publishers v. Unisonic Prods. Corp., 763 F. Supp. 1, 4 (S.D.N.Y. 1991). Therefore, Plaintiffs' Complaint clearly gives Defendant fair notice of the copyright infringement claims and the grounds on which they rest.
"A copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes." FED. R. CIV. P. 10(c).
Plaintiffs allege that "Defendant . . . has used, and continues to use, an online media distribution system to download the Copyrighted Recordings . . ." Plaintiffs' Complaint ¶ 13.
B. Applicability of Section 106(3) to Peer-to-Peer File-Sharing Systems
Defendant asserts that a copyright owner's exclusive distribution right is not violated when a sound recording is merely listed in the directory of an online file-sharing program and thereby made available to the public. Motion to Dismiss at 8. First, Plaintiffs have alleged that Defendant, in addition to merely making the works available to the public, has reproduced the works without authorization, and has/is using Kazaa to download and distribute copyrighted works to the public. In any event, the Court finds this is sufficient to avoid dismissal. Second, the Court finds that listing copyrighted works and offering them to the public using an online file-sharing program may constitute copyright infringement.
"Distribute" is not defined in the Copyright Act, but the Supreme Court has equated the term with "publication," which is defined under the Act. See Harper Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 552 (1985); Ford Motor Co. v. Summit Motor Prods., Inc., 930 F.2d 277, 299 (3d Cir. 1991). "Publication" includes "[t]he offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display." 17 U.S.C. § 101. Listing unauthorized copies of sound recordings using an online file-sharing system constitutes an offer to distribute those works, thereby violating a copyright owner's exclusive right of distribution. See A M Records, Inv. v. Napster, Inc., 239 F.3d 1004, 1014 (9th Cir. 2001) (holding that Napster users violated exclusive distribution right by uploading file names to the search index); Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199, 203 (4th Cir. 1997) ("When a public library adds a work to its collection, lists the work in its index or card catalog system, and makes the work available to the borrowing or browsing public, it has completed all the steps necessary for distribution to the public.").
See also Interscope Records v. Duty, No. 05-CV-3744-PHX-FJM, 2006 U.S. Dist. LEXIS 20214, at *4 (D. Ariz. Apr. 14, 2006) ("[T]he mere presence of copyrighted sound recordings in Duty's share file may constitute copyright infringement.").
Defendant relies upon In re Napster, Inc. Copyright Litigation, 377 F. Supp. 2d 796 (N.D. Cal. 2005), for the proposition that "actual dissemination" of copies to the public is necessary to violate the distribution right of 17 U.S.C. § 106(3). In Napster, the court held that a demonstration of actual downloading and uploading of files was necessary to impose contributory or vicarious liability for copyright infringement. In re Napster, 377 F. Supp. 2d at 805. Defendant invites the Court to follow this logic and hold that merely "making available" copies of a work cannot constitute copyright infringement. The Court declines this invitation.
First, the instant action is distinguishable from Napster. There, the plaintiffs sought to hold Napster liable for vicarious or contributory infringement. Id. The court reasoned that merely listing the items was not conclusive proof that the songs were actually uploaded onto the Napster network and made available to the public, distinguishing Napster from the library in Hotaling, which had physical possession of unauthorized copies in its collection. Id. at 803. However, in this case Plaintiffs allege that Defendant held unauthorized copies on his computer and offered them for free to the public by listing them on Kazaa. Hotaling similarly addresses allegations of direct infringement — not vicarious or contributory infringement. See Resnick v. Copyright Clearance Ctr., 422 F. Supp. 2d 252, 258-59 (D. Mass. 2006). Additionally, the same evidentiary concerns that were present in Hotaling are also present in a case involving peer-to-peer file sharing programs. Hotaling, 118 F.3d at 203 ("Were this not to be considered distribution[,] . . . a copyright holder would be prejudiced by a library that does not keep records of public use, and the library would unjustly profit by its own omission."). As Plaintiffs note, "[p]iracy typically takes place behind closed doors and beyond the watchful eyes of a copyright holder." Plaintiffs' Response at 4.
Second, listing copyrighted works on an online file-sharing system contemplates "further distribution," and thus, could constitute a violation of the copyright owner's exclusive distribution right under § 106(3). The Napster court reasoned that the definition of "publication" precluded a mere file listing, without more, from constituting a § 106(3) distribution, by limiting the term to circumstances "in which `further distribution, public performance, or public display' is contemplated." Id. at 804 (quoting 17 U.S.C. § 101). However, the Court finds that offering to distribute a music file by listing it on an online file-sharing system contemplates "further distribution." Making an unauthorized copy of a sound recording available to countless users of a peer-to-peer system for free certainly contemplates and encourages further distribution, both on the Internet and elsewhere. Therefore, the Court is not prepared at this stage of the proceedings to rule out the Plaintiffs' "making available" theory as a possible ground for imposing liability. A more detailed understanding of the Kazaa technology is necessary and Plaintiffs may yet bring forth evidence of actual uploading and downloading of files, rendering use of the "making available" theory unnecessary.
For these reasons, the Court finds that Defendant Tyler Payne's Motion to Dismiss is without merit and should be denied. Accordingly, IT IS ORDERED that Defendant's Motion to Dismiss Plaintiffs' Complaint is DENIED.