Justia Civil Procedure Opinion Summaries

Articles Posted in Copyright
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In a case before the United States Court of Appeals for the Sixth Circuit, Premier Dealer Services, a developer and administrator of automobile dealers’ aftermarket products, sued Allegiance Administrators for infringing its copyright. The issue stemmed from Premier's creation of a Lifetime Powertrain Loyalty Program, which included a loyalty certificate that set out the program's terms and conditions. Premier had registered this certificate for copyright protection. When Allegiance started working with a former Premier client, it used Premier’s Lifetime Powertrain Loyalty Program certificates in its own plan, with minor modifications in the contact information.In the lawsuit, the district court ruled that Allegiance had infringed Premier’s copyright, ordered Allegiance to give up any profits from using the certificates, and awarded Premier attorney’s fees. On appeal, the Sixth Circuit affirmed the decision of the lower court.The appellate court held that Premier's certificate was "original" and thus protected by copyright. The court clarified that originality in copyright law has a low threshold, requiring only that the author independently created a work with some minimal degree of creativity. The court rejected Allegiance's argument that the certificates were scenes a faire—stock or standard phrases that necessarily follow from a common theme or setting, which are not protectable by copyright. The court found that Allegiance had not provided sufficient evidence that industry standards or other external constraints dictated the content of the certificates.Regarding the disgorgement of profits, the court agreed with the lower court's calculations. It noted that Premier had successfully shown a reasonable relationship between Allegiance’s infringement and its gross revenues. The burden then shifted to Allegiance to demonstrate which part of its gross revenues did not result from the infringement, but Allegiance failed to fulfill this burden.Finally, the court upheld the award of attorney’s fees to Premier, finding that the lower court did not abuse its discretion in characterizing Allegiance's arguments as unreasonable and contrary to settled law. View "Premier Dealer Services, Inc. v. Allegiance Administrators, LLC" on Justia Law

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In this case, Sony Music Entertainment and numerous other record companies and music publishers sued Cox Communications, alleging that Cox's customers used its internet service to infringe their copyrights. The plaintiffs argued that Cox should be held accountable for its customers' copyright infringement. A jury found Cox liable for both willful contributory and vicarious infringement of over 10,000 copyrighted works owned by the plaintiffs and awarded $1 billion in statutory damages.The United States Court of Appeals for the Fourth Circuit held that Cox was not vicariously liable for its customers' copyright infringement because Cox did not profit from its subscribers’ acts of infringement, a legal prerequisite for vicarious liability. However, the court affirmed the jury’s finding of willful contributory infringement because Cox knew of the infringing activity and materially contributed to it.The court vacated the $1 billion damages award and remanded the case for a new trial on damages, holding that the jury’s finding of vicarious liability could have influenced its assessment of statutory damages. The court did not vacate the contributory infringement verdict. View "Sony Music Entertainment v. Cox Communications, Incorporated" on Justia Law

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In this case, professional concert photographer Larry Philpot brought a copyright-infringement claim against news website Independent Journal Review (IJR) after IJR used his photograph of musician Ted Nugent in an online article. IJR sought summary judgment, arguing that its use of the photo constituted fair use under the Copyright Act and alternatively arguing that Philpot's copyright registration was invalid. Philpot also sought summary judgment, contending that his registration was valid and that IJR's use was not fair use. The district court granted summary judgment to IJR on fair use grounds and denied Philpot's motion.On appeal, the United States Court of Appeals for the Fourth Circuit reversed and remanded the decision. The court held that IJR's use of the photograph did not constitute fair use because it was non-transformative and commercial, and it adversely affected the potential market for the photograph. It also found that Philpot's copyright registration was valid because the photograph was not published before Philpot registered it as an unpublished work. The court concluded that IJR was not entitled to summary judgment on its fair use defense and that Philpot was entitled to summary judgment on the validity of the copyright registration. View "Philpot v. Independent Journal Review" on Justia Law

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When he discovered his copyrighted book and song online, Plaintiff Russell Greer sent a “takedown notice” to Defendants Joshua Moon and his website Kiwi Farms, requesting the material be removed from the Kiwi Farms site. When Moon refused, Greer sued Defendants for copyright infringement. The district court granted Defendants’ motion to dismiss, concluding Greer failed to state a claim. On appeal, Greer argued his pro se complaint, construed liberally, adequately “alleged facts demonstrating [Moon and Kiwi Farms] had knowingly induced, encouraged, and materially contributed to direct infringements,” and so “stated a claim for contributory copyright infringement” sufficient to survive a motion to dismiss. The Tenth Circuit agreed, reversed the district court and remanded the case for further proceedings. View "Greer v. Moon, et al." on Justia Law

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Impossible X, now a Texas LLC, is a one-person company run by Joel Runyon, a self-described “digital nomad” who for two years operated his business from San Diego. Impossible X sells apparel, nutritional supplements, diet guides, and a consulting service through its website and various social media channels. Impossible Foods sued Impossible X in federal court in California, seeking a declaration that Impossible Foods’ use of the IMPOSSIBLE mark did not infringe on Impossible X’s trademark rights. The district court dismissed the case for lack of personal jurisdiction.   The Ninth Circuit reversed the district court’s dismissal. The panel held that Impossible X was subject to specific personal jurisdiction in California because it previously operated out of California and built its brand and trademarks there, and its activities in California were sufficiently affiliated with the underlying trademark dispute to satisfy the requirements of due process. First, Impossible X purposefully directed its activities toward California and availed itself of the privileges of conducting activities there by building its brand and working to establish trademark rights there. Second, Impossible Foods’ declaratory judgment action arose out of or related to Impossible X’s conduct in California. The panel did not confine its analysis to Impossible X’s trademark enforcement activities, but rather concluded that, to the extent the Federal Circuit follows such an approach for patent declaratory judgments, that approach is not justified in the trademark context. Third, the panel concluded that there was nothing unreasonable about requiring Impossible X to defend a lawsuit based on its trademark building activities in the state that was its headquarters and Runyon’s home base. View "IMPOSSIBLE FOODS INC. V. IMPOSSIBLE X LLC" on Justia Law

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Counsel filed a class action lawsuit on behalf of copyright holders of musical compositions and recovered a little over $50,000 for the class members from Defendant Rhapsody International, Inc. (now rebranded as Napster), a music streaming service. The class members obtained no meaningful injunctive or nonmonetary relief in the settlement of their action. The district court nonetheless authorized $1.7 in attorneys’ fees under the “lodestar” method.   The Ninth Circuit reversed the district court’s award of attorneys’ fees to Plaintiffs’ counsel and remanded. The panel held that the touchstone for determining the reasonableness of attorneys’ fees in a class action under Federal Rule of Civil Procedure 23 is the benefit to the class. Here, the benefit was minimal. The panel held that the district court erred in failing to calculate the settlement’s actual benefit to the class members who submitted settlement claims, as opposed to a hypothetical $20 million cap agreed on by the parties. The panel held that district courts awarding attorneys’ fees in class actions under the Copyright Act must still generally consider the proportion between the award and the benefit to the class to ensure that the award is reasonable. The panel recognized that a fee award may exceed the monetary benefit provided to the class in certain copyright cases, such as when a copyright infringement litigation leads to substantial nonmonetary relief or provides a meaningful benefit to society, but this was not such a case. The panel instructed that, on remand, the district court should rigorously evaluate the actual benefit provided to the class and award reasonable attorneys’ fees considering that benefit. View "DAVID LOWERY, ET AL V. RHAPSODY INTERNATIONAL, INC." on Justia Law

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The First Circuit vacated the judgment dismissing on claim preclusion grounds Plaintiff's claims against Eastern States Exposition alleging violations of federal copyright infringement law and the U.S. Visual Artists Rights Act, holding that the district court erred.On appeal, Plaintiff argued that the claim preclusive order gave claim preclusive effect to the dismissal in a prior action that she brought even where the dismissal rested on several grounds, not all of which would on their own render the dismissal claim preclusive. In support of her claim, Plaintiff argued that federal res judicata law recognizes the "alternative-determinations" doctrine. The First Circuit vacated the judgment dismissing the claims at issue, holding (1) the assertedly preclusive dismissal rested on one ground that, on its own, would not allow the dismissal to be claim preclusive, even though the dismissal also rested on two counts that could have; and (2) federal res judiata law recognizes the alternative-determinations doctrine, which strips a dismissal of claim preclusive effect if the dismissal rests on multiple grounds, not all of which would on their own render the dismissal claim preclusive, and the doctrine applied in this case. View "Foss v. Eastern States Exposition" on Justia Law

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Defendant Citizens Equity First Credit Union (CEFCU) petitioned the Trademark Trial and Appeal Board (TTAB) to cancel a trademark registration belonging to Plaintiff San Diego County Credit Union (SDCCU). SDCCU procured a stay to the TTAB proceedings by filing an action seeking declaratory relief to establish that it was not infringing either of CEFCU’s registered and common-law marks and to establish that those marks were invalid. The district court granted SDCCU’s motion for summary judgment on noninfringement. After a bench trial, the district court also held that CEFCU’s common-law mark was invalid and awarded SDCCU attorneys’ fees.   The Ninth Circuit filed (1) an order amending its opinion, denying a petition for panel rehearing, and denying on behalf of the court a petition for rehearing en banc; and (2) an amended opinion affirming in part and vacating in part the district court’s judgment and award of attorneys’ fees. The panel held that SDCCU had no personal stake in seeking to invalidate CEFCU’s common-law mark because the district court had already granted summary judgment in favor of SDCCU, which established that SDCCU was not infringing that mark. The panel held that the district court correctly exercised personal jurisdiction over CEFCU regarding SDCCU’s noninfringement claims, which sought declaratory relief that SDCCU was not infringing CEFCU’s registered mark or common-law mark. View "SAN DIEGO COUNTY CREDIT UNION V. CEFCU" on Justia Law

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Will Co. Ltd., a Japanese adult entertainment producer, brought a copyright infringement action against the owners and operators of ThisAV.com, a video-hosting site based in Hong Kong, alleging that the site was displaying without authorization several of its copyrighted works. The district court found that it lacked specific personal jurisdiction over ThisAV.com’s owners and operators because Will Co. could not establish that they “expressly aimed” ThisAV.com’s content at the United States market, or that it was foreseeable that operating the site would cause jurisdictionally significant harm in the United States. Defendants were Youhaha Marketing and Promotion Limited (“YMP”) and Ka Yeung Lee.The Ninth Circuit reversed the district court’s dismissal of a copyright suit for lack of specific personal jurisdiction and remanded for further proceedings. The panel concluded that both YMP and Lee committed at least one intentional act by operating ThisAV.com and purchasing its domain name and domain privacy services. As to the second element, both Defendants did “something more” than mere passive operation of the website. As to the third element, Defendants’ conduct caused harm in the United States because there were almost 1.3 million visits to their website in the United States during the relevant period, and that harm was foreseeable. View "WILL CO., LTD. V. KA LEE" on Justia Law

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In a prior appeal, the Ninth Circuit vacated a prior dismissal for lack of personal jurisdiction and remanded with instructions that Plaintiff be permitted to undertake jurisdictional discovery. On remand, the district court granted defendant VNG Corporation’s renewed motion to dismiss, finding that there was no specific personal jurisdiction in California over VNG, a Vietnamese corporation that released the Zing MP3 mobile music application in the Apple App Store and the Google Play store.   The Ninth Circuit reversed the district court’s dismissal, for lack of personal jurisdiction, of a copyright infringement suit and remanded for further proceedings. In assessing whether Plaintiff established a prima facie case of jurisdiction, the court analyzed jurisdiction under Federal Rule of Civil Procedure 4(k)(2), which provides for jurisdiction over foreign defendants that have ample contact with the United States as a whole, but whose contacts are so scattered among states that none of them would have jurisdiction. Under Rule 4(k)(2), the plaintiff must prove: (1) the claim at issue arises from federal law; (2) the defendant is not subject to any state’s courts of general jurisdiction; and (3) invoking jurisdiction upholds due process. The plaintiff has the burden to show the first two prongs, and the burden then shifts to the defendant to show that the application of jurisdiction would be unreasonable. The court concluded that VNG purposefully targeted American companies and their intellectual property. Rejecting VNG’s argument regarding forum non conveniens, the court concluded that venue, in this case, was not proper in Vietnam. View "LANG VAN, INC. V. VNG CORPORATION" on Justia Law