Attorney Steve®  Copyright Infringement DMCA updates!  512(f) claims

CASE ON POINT:  Digital Marketing Advisors v. McCandless Group, LLC et al, 2-21-cv-06888

Defendant argued Plaintiff did not meet the pleadings requirements for a 17 USC 512(f) claim

As Defendants further showed, Plaintiff's conclusory complaint necessarily fails the Ninth Circuit's “high bar” for pleading sufficient “facts” required to support the “subjective” bad faith element of statutory liability under the DMCA. (Def. Br. at 7-8, citing Ouellette v. Viacom Int'l, Inc., 2012 WL 1435703, at *1-3 (D. Mont. Apr. 25, 2012) (holding that “§ 512(f) requires [plaintiff] to allege facts, at the pleading stage, that demonstrate that [defendant] acted without a good-faith belief”), aff'd, 671 F. App'x 972 (9th Cir. 2016), citing Rossi v. Motion Picture Assn. of Am., Inc., 391 F.3d 1000, 1004-05 (9th Cir. 2004).) As the Ouellette court further underscored, the “strict requirements” set by the Ninth Circuit for its “high bar” of the “subjective” bad faith pleading under the DMCA is crucial because “[w]ithout the subjective standard, copyright owners such as [defendant] could face limitless lawsuits just by policing its copyrighted material on the internet.” 2012 WL 1435703, at *3. Indeed, the Ninth Circuit's refusal to impose liability for “unknowing mistake[s] …, even if [defendant] acted unreasonably,” Rossi, 391 F.3d at 1005, further underscores the importance of meeting the “strict requirements” of the “high bar” for the “subjective” bad faith pleading under the statute.

In response, Plaintiff ignores all of these authorities, as well as the authorities showing that Plaintiff must also carry the burden of heightened particularity of pleading under Rule 9(b), since it accused Defendants of “fraudulent” conduct. (Def. Br. at 8, citing SAC at ¶ 10; see also Def. Br. at 5 (collecting authorities).) Instead, Plaintiff relies on ENTTech Media Grp. LLC v. Okularity, Inc., 2021 WL 916307 (C.D. Cal. Mar. 10, 2021), for the proposition that Plaintiff's allegation that Defendants failed to “consider[] … fair use prior to sending a takedown notification” is, in itself, sufficient to meet the “strict requirements” of the “high bar” for the “subjective” bad faith pleading under the statute. (Opp'n at 7-8.) But the ENTTech plaintiff had more than that. The ENTTech plaintiff alleged that defendant failed to consider fair use because it “automatically generates [and submits] DMCA notices,” 2021 WL 916307, at *4.3 Plaintiff here has pleaded no similar basis for the allegation that Defendants had failed to consider fair use before they issued their notices—in fact, other than its unsupported conclusory allegations that Defendants did so, Plaintiff offers no facts to support its conclusions, let alone “sufficient” facts required to satisfy the “strict requirements” of the “high bar” for the “subjective” bad faith pleading under the statute.

In other words, Plaintiff's pleading invites this Court to adopt the res ipsa loquitur approach to incorrect takedown notices under the statute—meaning, if one was issued, then the issuer must have failed to consider fair use. But since the Ninth Circuit refused to impose liability for even “unreasonabl[e]” mistakes, Rossi, 391 F.3d at 1005, Plaintiff's approach must be rejected. This is especially so considering that Plaintiff failed to plead.

While the ENTTech court also observed that “no authority holds that claims under § 512(f) must be pleaded with particularity,” id. at *6, the Ouelette decision (relying on the Ninth Circuit's opinion in Rossi) suggests otherwise—if not under Rule 9(b), then (at the very least) requiring any such pleading to provide “sufficient” facts to satisfy the “strict requirements” of the “high bar” for the “subjective” bad faith pleading under the statute. Moreover, the ENTTech court also observed that plaintiff's claim there “d[id] not turn upon allegations of fraud,” id. at *6 n.44, while Plaintiff's claim here appears to do so (see SAC at ¶ 10).

any knowing conduct on Defendants' behalf—in fact, nowhere does Plaintiff even plead that Defendants knew that Plaintiff owned the copyright, which further dooms its claim. (Def. Br. at 7-8, citing MP3Tunes, LLC v. EMI Grp., PLC, 2008 WL 11508670, at *8 (S.D. Cal. Apr. 18, 2008) (holding that “the Amended Complaint does not plausibly allege knowing and material misrepresentations by Defendant … [because it ] did not allege facts which identify how or why Defendants knew or should have known” the purported falsity of its notice), and Ouellette, 2012 WL 1435703, at *1-3 (concluding that the DMCA claim was properly dismissed because plaintiff failed to “allege sufficient facts that [defendant] knew” that its takedown notices were improper and thus “fail[ed] to plead factual allegations that meet the subjective standard…. Thus, [plaintiff] has failed to plead a prima facie case of misrepresentation under 17 U.S.C. § 512(f)

Moreover, as Defendants further showed (see Def. Br. at 8), Plaintiff's allegations necessarily incorporate by reference the actual content of the takedown notices at issue. Accordingly, this Court may properly consider the actual takedown notice, the entire content of which was that the picture at issue was “[a] photograph I took.” (McCandless Decl., Ex. 1 (January notice); see also McCandless Decl. at ¶ 6 (no record of any August 2021 notices).) Since there are no facts anywhere in the complaint that could possibly demonstrate that Defendants actually knew they did not take the picture at issue, this is an additional ground counseling in favor of dismissing this claim.

1032153, at *1 n.2 (N.D. Cal. Mar. 3, 2020) (considering the actual content of the pleaded URLs on a motion to dismiss as incorporated by reference); see also Love v. Pacifica Napa Winery LLC, 2021 WL 5848078, at *2 (N.D. Cal. Dec. 9, 2021) (same); Evans v. McCoyHarris, 2019 WL 4284504, at *4 n.3 (C.D. Cal. May 9, 2019) (same). Accordingly, because the alleged take-down had nothing to do with Defendants' alleged take-down notices, the claim cannot proceed. See Amaretto Ranch Breedables, LLC v. Ozimals, Inc., 790 F. Supp. 2d 1024, 1029 (N.D. Cal. 2011) (“A fair reading of the statute, the legislative history, and similar statutory language indicates that a § 512(f) plaintiff's damages must be proximately caused by the misrepresentation to the service provider and the service provider's reliance on the misrepresentation.”) (original italics). Moreover, Plaintiff fails to allege any supporting facts under the first prong of the claim either, let alone those satisfying the Ninth Circuit's “high bar” for pleading sufficient “facts” supporting the required “subjective” bad faith in issuing the notice under the statute. Ouellette v. Viacom Int'l, Inc., 2012 WL 1435703, at *1-3 (D. Mont. Apr. 25, 2012) (holding that “§ 512(f) requires [plaintiff] to allege facts, at the pleading stage, that demonstrate that [defendant] acted without a good-faith belief” and also observing that “[w]ithout the subjective standard, copyright owners such as [defendant] could face limitless lawsuits just by policing its copyrighted material on the internet”), aff'd, 671 F. App'x 972 (9th Cir. 2016), citing Rossi v. Motion Picture Assn. of Am., Inc., 391 F.3d 1000, 1004-05 (9th Cir. 2004). Indeed, “[a] copyright owner cannot be liable simply because an unknowing mistake is made, even if the copyright owner acted unreasonably in making the mistakes. Rather, there must be a demonstration of some actual knowledge of misrepresentation on the part of the copyright owner.” Id. at 1005. Plaintiff pleads no facts even suggesting such “subjective” bad faith here. All Plaintiff says is that it is supposedly the rightful copyright owner of the pictures at issue and that Defendants thus “could not have formed a good faith basis” to issue the notice. (SAC at ¶¶ 8, 12 & 18.) Plaintiff never pleads that Defendants actually knew of its ownership. As such, the claim fails. See MP3Tunes, 2008 WL 11508670, at *8 (holding that “the Amended Complaint does not plausibly allege knowing and material misrepresentations by Defendant … [because it ] did not allege facts which identify how or why Defendants knew or should have known” the purported falsity of its notice), citing Twombly, 550 U.S. at 555 (motion to dismiss should be granted if the allegations of the complaint do not raise the right to relief above the speculative level); accord Ouellette, 2012 WL 1435703, at *1-3 (concluding that the DMCA claim was properly dismissed because plaintiff failed to “allege sufficient facts that [defendant] knew” that its takedown notices were improper and thus “fail[ed] to plead factual allegations that meet the subjective standard…. Thus, [plaintiff] has failed to plead a prima facie case of misrepresentation under 17 U.S.C. § 512(f)….”). This is especially so given that Plaintiff claims the notices at issue here were “fraudulent” (SAC at ¶ 10), thus triggering the heightened pleading requirement under Rule 9(b)—which Plaintiff necessarily fails because the complaint pleads insufficient facts even under Rule 8's simple notice requirement, let alone the heightened pleading requirements of Rule 9(b). See, e.g., Lisner v. Sparc Grp. LLC, 2021 WL 6284158, at *3 (C.D. Cal. Dec. 29, 2021) (Birotte Jr., J.) (“Claims sounding in fraud … are subject to the heightened pleading requirements of Rule 9(b).”). In fact, Plaintiff never actually pleads the content of the offending statement. Since it is incorporated by reference, the Court may consider it. (See McCandless Decl., Ex. 1 (January notice); see also McCandless Decl. at ¶ 6 (no record of any August 2021 notices).) The actual statement reads that the offending content posted on Reddit includes “[a] photograph I took.” (McCandless Decl., Ex. 1 (January notice).) This was the entire extent of the assertion at issue, and there are no facts anywhere in the complaint that could possibly demonstrate that Defendants actually knew they did not take the picture at issue. Finally, Plaintiff's allegations of “willful blindness” (SAC at ¶ 23) fare no better. “To demonstrate willful blindness a plaintiff must establish two factors: ‘(1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.” Lenz v. Universal 

Defendants Motion to Dismiss

B. The Single Remaining DMCA Claim Fails. “Congress enacted the DMCA in 1998 to comply with international copyright treaties and to update domestic copyright law for the online world.” Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004). “Title II of the DMCA [also referred to as the Online Copyright Infringement Liability Act] contains a number of measures designed to enlist the cooperation of Internet and other online service providers to combat ongoing copyright infringement.” Rossi v. Motion Picture Ass'n of Am., Inc., 391 F.3d 1000, 1003 (9th Cir. 2004). Thus, “when a copyright owner suspects his copyright is being infringed, he must follow the notice and takedown provisions set forth in § 512(c)(3) of the DMCA.” Id. Plaintiff here attempts to state a claim under Section 512(f) of the DMCA, alleging that Defendants issues a wrongful takedown notice. To state a claim under § 512(f), a plaintiff must allege facts to show that: (1) the defendant knowingly and materially misrepresented that copyright infringement occurred; (2) a service provider relied on that misrepresentation; and (3) the plaintiff was injured as a result. Id.; see also MP3Tunes, LLC v. EMI Grp., PLC, 2008 WL 11508670, at *8 (S.D. Cal. Apr. 18, 2008). As an initial matter, Plaintiff's claim fails on its face under the aforementioned second and third prongs because the complaint on its face disclaims the required reliance by the service provider and Plaintiff's resulting damages. This is because Plaintiff actually pleads that its Reddit account was not closed because of Defendants' notices—rather, once Plaintiff's alleged takedown links are followed, the reason for the closure is displayed as “banned due to a violation of Reddit's rules against sexual or suggestive content involving minors or someone who appears to be a minor.” https://www.reddit.com/r/ShoreThang/comments/lxdkty/ellie_the_empress/ (as cited in SAC at ¶ 17 (the first link for the alleged August notices) and accessed on Jan. 24, 2022; the same message appears when opening the URL link for the alleged January notice (see SAC at ¶ 11)). The actual reasons displayed once Plaintiff's pleaded links are opened have been thus expressly incorporated by reference into Plaintiff's complaint and require for its DMCA claim to be dismissed outright. See, e.g., Rogers v. Postmates Inc., 2020 WL Music Corp., 815 F.3d 1145, 1155 (9th Cir. 2016). “Under this formulation, a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts.” Id. To meet this standard, Plaintiff must demonstrate that “before sending the takedown notification—[defendant] (1) subjectively believed there was a high probability that the [picture] constituted [proper] use, and (2) took deliberate actions to avoid learning of this [proper] use.” Id. Plaintiff here cites no facts supporting either factor, and its claim thus fails under this standard as well.

Court Awards Attorney Fees - to Copyright Defendant (amending complaint with no grounds/merits)

Next, the second, third, and fourth factors—(2) frivolousness, (3) motivation, (4) objective reasonableness of the losing party's legal and factual arguments—support a fee award. At a minimum, Plaintiff's DMCA claim was objectively unreasonable. “[A] claim is objectively unreasonable where the party advancing it ‘should have known from the outset that its chances of success . . . were slim to none.'” See Perfect 10, Inc., 2015 WL 1746484, at *11, quoting SOFA Entmt., Inc. v. Dodger Prods., Inc., 709 F.3d 1273, 1280 (9th Cir. 2013). Plaintiff voluntarily dismissed its four state law claims, seemingly because those same claims were already adjudicated in state court so Plaintiff was precluded from pursuing them again. As for the DMCA claim, Plaintiff asserted it without apparently having any evidence to support the “knowingly” component of the first element, which, as the Court noted in its Order dismissing the SAC, “[t]he Ninth Circuit has interpreted . . . . as setting a high bar for plaintiffs.” Ouellette v. Viacom Intern., Inc., CV 10-133-M-DWM-JCL, 2012 WL 1435703, at *3 (D. Mont. Apr. 25, 2012), aff'd, 671 Fed. Appx. 972 (9th Cir. 2016) (unpublished). Because Plaintiff failed to take the demanding “knowingly” element into account, his DMCA claim was factually and legally frivolous. Also importantly, Plaintiff's opposition to the current Motion demonstrates the unreasonableness of this suit. The pivotal allegation in the SAC was that Defendants' fraudulent take-down notices caused Reddit to “permanently ban[] Plaintiff's user account from the Reddit service on or about August 15, 2021.” SAC ¶ 20. However, Plaintiff's founder Zachary Urbina testified in his declaration opposing this fee motion that the account was reactivated a few days later on August 18, 2021, then banned again on August 20, and then reactivated again on September 15, 2021. See Urbina Decl. (Dkt No, 54-1 ¶ 4). Urbina also stated that the account was again banned on November 10, 2021, and that “[t]his ban . . . did not appear to be related to the

“[t]he Ninth Circuit has interpreted . . . . as setting a high bar for plaintiffs.” Ouellette v. Viacom Intern., Inc., CV 10-133-M-DWM-JCL, 2012 WL 1435703, at *3 (D. Mont. Apr. 25, 2012), aff'd, 671 Fed. Appx. 972 (9th Cir. 2016) (unpublished). Because Plaintiff failed to take the demanding “knowingly” element into account, his DMCA claim was factually and legally frivolous.

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