False CMI isn't plausibly related to consumers' decisions to buy/watch TV show

Livn Worldwide Ltd. v. Vubiquity Inc., 2022 WL 18278580, No. 21-cv-09589-AB-KS (C.D. Cal. Jul. 22, 2022)

Interesting Dastar case thrown up by Westlaw. LW alleged that it was the exclusive licensee allowed to distribute and sell a 60-episode series, Martial Universe, in the US. As part of preliminary discussions with Vubiquity about a distribution agreement for iTunes, LW provided master copies of all 60 episodes, but no agreement was ever reached. Nonetheless, Vubiquity allegedly uploaded the series to iTunes for sale and download. This allegedly involved false copyright and release date information, as well as “drastically low bargain-rate prices” and failure to distinguish between HD and SD versions.  

LW sued for copyright infringement, violations of both sections of Lanham Act §43(a), §1202 CMI violations, fraud, and state-law statutory unfair competition.

Both §43(a)(1)(A) and (B) claims failed. §43(a)(1)(A):

[U]nder Dastar’s interpretation of “origin of goods,” the origin of the Martial Universe episodes on the iTunes platform is not determined by who originated or created the ideas behind the Series (Plaintiff). Instead, the origin of the episodes, as it relates to the Lanham Act, is the producer of the Series on iTunes for sale, which is Defendant because Defendant made the content available for sale on the platform. But neither of Plaintiff’s Lanham Act claims rely on allegations that Defendant caused confusion about who placed the Series on iTunes. Instead, Plaintiff’s Lanham Act claims assert that Defendant incorrectly identified the copyright owner of the Series, which is not within the scope of the Lanham Act.

False advertising: Sybersound Recs., Inc. v. UAV Corp., 517 F.3d 1137 (9th Cir. 2008), held that misrepresentations about copyright licensing status did not relate to the “nature, characteristics, and quality” of a good under §43(a)(1)(B), unlike “the visual and audio quality of the good.” So too with the allegedly inaccurate release date information.

The fraud claim was preempted by §301 of the Copyright Act. The allegations that defendant (1) generated images from the series to sell it on iTunes; (2) knowingly provided false CMI to induce the public to buy it; and (3) priced the content badly, in ways that didn’t signal its value, did not provide qualitatively distinct extra elements. The fraud claim was, at its core, about “unauthorized use, reproduction and distribution of the Series.” As to pricing, LW didn’t identify what was concealed or misrepresented. Claims under California Business & Professions Code § 17200, which prohibits “unfair competition,” were preempted for the same reason.

CMI: § 1202(a) requires that the plaintiff “plausibly allege that the defendant knowingly provided false copyright information and that the defendant did so with the intent to induce, enable, facilitate, or conceal an infringement.” It’s not enough to allege that a defendant provided false information about the copyright owner without the resulting inducement etc.

First, a release date is not CMI.

Copyright ownership information is CMI. But LW didn’t allege facts sufficient to plausibly establish that Defendant knowingly distributed that false CMI with the intent to induce infringement:

Plaintiff argues that by distributing false copyright ownership information, Defendant had to have done so with the intent to induce and enable iTunes subscribers to purchase and download the content, thereby satisfying the intent requirement of section 1202(a). However, “formulaic recitation of the elements of a cause of action, including allegations regarding a defendant’s state of mind, are not sufficient to satisfy Rule 8.” … [F]alsely identifying a copyright owner does not seem to further, or have any correlation with, iTunes subscribers buying the series, or with any sort of infringement in this case. In other words, regardless of who Defendant said the copyright owner of the Series was, it is not plausible that the number of purchasers and downloaders of the content would change.

[This seems absolutely correct as to purchasers/downloaders. But surely the copyright ownership claims affected Apple’s behavior. But then again, does Apple look at CMI on/associated with works, or is there a separate form, and would that separate form constitute CMI?]

Likewise, LW failed to allege facts showing injury based on the use of its name as opposed to its licensor’s name or nothing at all.

Because distribution rights weren’t violated merely by “making available” the work, or allowing subscribers to download or stream copies, the copyright claims were dismissed in part, but obviously the core copyright claim remains.