Comeback Media, Inc. v. Particle Media, Inc., et al.

Opinion

1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 COMEBACK MEDIA, INC., Case No. 25-cv-03298-CRB

9 Plaintiff,

ORDER GRANTING IN PART AND 10 v. DENYING IN PART PARTICLE MEDIA, INC.’S MOTION TO 11 PARTICLE MEDIA, INC., et al., DISMISS 12 Defendants.

13 Plaintiff Comeback Media, Inc. (“Comeback”), sued Defendants Particle Media, 14 Inc. (“NewsBreak”), Digital Next, Inc. (“Total Impulse”), and an individual defendant for 15 claims stemming from the alleged infringement of Comeback’s copyrights and trademark.1 16 TAC (dkt. 34) ¶ 3. Comeback alleges Total Impulse and the individual defendant copied 17 and published Comeback’s news articles on NewsBreak. Id. ¶¶ 3, 22–23. NewsBreak 18 previously moved to dismiss Comeback’s claims and the Court granted the motion in part 19 and denied it in part. Order (dkt. 33) at 1. Now, Comeback has filed a third amended 20 complaint against Defendants, amending its claims for copyright infringement and 21 trademark infringement. TAC. NewsBreak again moves to dismiss all claims against it. 22 Mot. (dkt. 38). The Court GRANTS the motion in part and DENIES in part.2 23 I. BACKGROUND 24 The Court has previously chronicled the factual allegations and now discusses only 25 the new additions in the operative complaint. In this iteration, Comeback adds a direct 26

27 1 Pursuant to Civil Local Rule 7-1(b), the Court finds this matter suitable for resolution without 1 copyright infringement claim against NewsBreak. TAC ¶¶ 5, 167–74. Comeback also 2 clarifies that it alleges direct trademark infringement against NewsBreak. TAC ¶¶ 5, 179. 3 No other significant differences exist between the previous complaint and the instant one. 4 After Comeback amended its complaint, the parties stipulated to strike Comeback’s 5 state law claims for unfair competition and misappropriation. Stipulation (dkt. 37); Order 6 Striking Claims (dkt. 39). NewsBreak now moves to dismiss all remaining claims against 7 it: contributory copyright infringement, vicarious copyright infringement, direct copyright 8 infringement, and trademark infringement. Mot. 9 II. LEGAL STANDARD 10 Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a 11 complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12 12(b)(6) motion to dismiss, a plaintiff must allege “enough facts to state a claim to relief 13 that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A 14 claim is facially plausible when the plaintiff pleads facts that “allow the court to draw the 15 reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. 16 Iqbal, 556 U.S. 662, 678 (2009) (internal citation omitted). A court must construe the 17 alleged facts in the light most favorable to the plaintiff. See Retail Prop. Tr. v. United 18 Bhd. of Carpenters & Joiners of Am., 768 F.3d 938, 945 (9th Cir. 2014) (holding that the 19 court must “draw all reasonable inferences in favor of the nonmoving party” for a Rule 20 12(b)(6) motion). Courts, however, are not “required to accept as true allegations that are 21 merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” Khoja v. 22 Orexigen Therapeutics, Inc., 899 F.3d 988, 1008 (9th Cir. 2018). Courts may dismiss a 23 complaint with prejudice if “it is clear that the complaint could not be saved by 24 amendment.” Lund v. Cowan, 5 F.4th 964, 973 (9th Cir. 2021) (quoting Kendall v. Visa 25 U.S.A., Inc., 518 F.3d 1042, 1051 (9th Cir. 2008)). 26 III. DISCUSSION 27 NewsBreak argues that all claims against it should be dismissed because Comeback 1 rejects NewsBreak’s attempt to challenge Comeback’s vicarious copyright infringement 2 claim. Second, the Court dismisses Comeback’s new direct infringement claim due to a 3 lack of supporting factual allegations. And third, the Court dismisses Comeback’s 4 contributory copyright infringement and trademark infringement claims since the amended 5 complaint fails to remedy the Court’s identified deficiencies. 6 A. Vicarious Copyright Infringement 7 NewsBreak renews its argument that Comeback fails to state the elements of a 8 vicarious copyright infringement claim. And again, the Court disagrees. 9 Just as the Court had found in the last go-round, Comeback sufficiently alleges 10 NewsBreak’s right and ability to supervise infringing conduct by alleging that NewsBreak 11 suspended Total Impulse’s account due to misconduct. TAC ¶ 29; see Order at 7. 12 Additionally, Comeback sufficiently alleges NewsBreak’s direct financial interest in Total 13 Impulse’s infringing activity. Comeback alleges that NewsBreak would get traffic and 14 advertising revenue from articles published on its platform. TAC ¶¶ 2, 4, 18, 24. And 15 Comeback alleges that Total Impulse’s infringement led to a significant decrease in 16 revenue and traffic to Next Impulse’s articles. TAC ¶¶ 20–22. 17 Moreover, Comeback does not allege “access to infringing material in general,” as 18 NewsBreak argues. Mot. at 9 (emphasis added) (quoting Perfect 10 v. Giganews, 847 F.3d 19 657, 673 (9th Cir. 2017)). The complaint is specific to Total Impulse’s infringement on 20 NewsBreak. See TAC ¶¶ 20–22. Drawing “all reasonable inferences in favor of the 21 nonmoving party,” the Court finds that Comeback’s allegations raise the plausible 22 inference that NewsBreak derived a direct financial benefit from Total Impulse’s 23 infringement. Retail Prop. Tr., 768 F.3d at 945. 24 NewsBreak also argues that Comeback must be held to a heightened standard it 25 fashions from dicta in Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., where the 26 Supreme Court noted that a defendant must have “declin[ed] to exercise a right to stop or 27 limit” the infringing activity. 545 U.S. 913, 930 (2005) (emphasis added); Mot. at 8. 1 account, meaning it did not decline to exercise its right to control the activity. Mot. at 8. 2 But the Ninth Circuit has characterized this language as dictum. Perfect 10, Inc. v. Visa 3 Int’l Serv. Ass’n, 494 F.3d 788, 802 (9th Cir. 2007). And NewsBreak cites no cases that 4 have applied this purported standard—likely because it is not actually a legal standard. 5 The Ninth Circuit’s test for vicarious liability, reiterated more recently in Giganews, is 6 controlling. 847 F.3d at 673. Consequently, the Court denies NewsBreak’s motion to 7 dismiss Comeback’s vicarious copyright infringement claim. 8 B. Direct Copyright Infringement 9 NewsBreak argues that Comeback fails to state the elements of its new direct 10 copyright infringement claim. The Court agrees. 11 To state a claim for direct copyright infringement, a plaintiff must allege: 12 (1) ownership of the allegedly infringed material; (2) violation of an exclusive right of 13 copyright holders; and (3) causation (or volitional conduct) by the defendant. Giganews, 14 847 F.3d at 666. For causation, a plaintiff must allege “copying by the defendant.” Id. 15 (emphasis in original) (quoting Fox Broad. Co., Inc. v. Dish Network L.L.C., 747 F.3d 16 1060, 1067 (9th Cir. 2014)). The participation in the infringement must be active, rather 17 than passive. See id. at 667–68, 670 (“[A]utomatic copying, storage, and transmission of 18 copyrighted materials, when instigated by others, does not” result in liability. (quoting 19 CoStar Grp., Inc. v. LoopNet, Inc., 373 F.3d 544, 555 (4th Cir. 2004))). Courts find 20 volitional conduct where a defendant exercised control over the infringement, selected 21 material for upload, or instigated copying. VHT, Inc. v. Zillow Grp., Inc., 918 F.3d 723, 22 732 (9th Cir. 2019). 23 Here, Comeback fails to allege any active or volitional copying by NewsBreak. It 24 merely alleges that NewsBreak hosted, reproduced, displayed, and distributed the 25 infringing articles on its website and app. TAC ¶ 170. Comeback does not include any 26 allegations that even suggest that NewsBreak’s actions were active, rather than passive or 27 automatic. See Giganews, 847 F.3d at 668–69 (affirming the dismissal of a direct 1 display infringing images). 2 Comeback argues that NewsBreak’s grant of “Verified Publisher” status to Total 3 Impulse is sufficient to show causation. Opp’n (dkt. 40) at 7. But granting status is not the 4 same as copying. Moreover, NewsBreak granted “Verified Publisher” status before Total 5 Impulse had published any articles on the platform—before any copying had even 6 occurred. TAC ¶ 23. Accordingly, the direct copyright infringement claim is dismissed. 7 C. Contributory Copyright Infringement 8 NewsBreak argues that Comeback fails to adequately plead contributory copyright 9 infringement. The Court agrees because Comeback again fails to allege either element of 10 the claim. 11 1. Knowledge 12 Comeback failed to remedy the deficiencies the Court identified as to knowledge. 13 Comeback again does not allege that NewsBreak had reason to know of Total Impulse’s 14 infringement. Knowledge of infringement by other bad actors is inadequate as it only 15 alerts NewsBreak to the mere “possibility of infringement” on its platform. See Order at 5; 16 Luvdarts, LLC v. AT & T Mobility, 710 F.3d 1068, 1072 (9th Cir. 2013) (“[C]ontributory 17 liability [does] not automatically follow where ‘the system allows for the exchange of 18 copyrighted material.’” (citation omitted)). To salvage its claim, Comeback now argues 19 that NewsBreak was willfully blind to the infringement. Opp’n at 4–5. 20 Demonstrating willful blindness requires allegations that defendants 21 “(1) subjectively believed that infringement was likely occurring . . . and that they (2) took 22 deliberate actions to avoid learning about the infringement.” Luvdarts, 710 F.3d at 1073. 23 Defendants have no duty to stop infringement until they have “specific knowledge” of 24 infringement, and even then, that “duty only covers specific instances of infringement the 25 defendant knows or has reason to know about.” Cf. Y.Y.G.M. SA v. Redbubble, 75 F.4th 26 995, 1002–03 (9th Cir. 2023). 27 Comeback fails to meet this standard. Nowhere does Comeback allege that 1 deliberate actions to avoid learning about the infringement. Comeback merely alleges that 2 NewsBreak made Total Impulse a Verified Publisher when Total Impulse had no writers or 3 content. TAC ¶ 23. But Comeback does not explain how NewsBreak’s action ties to 4 either element of the willful blindness standard. NewsBreak had no obligation to look out 5 for infringement by Total Impulse based on knowledge of infringement by other bad 6 actors. See Redbubble, 75 F.4th at 1002–03. Comeback’s failure to satisfy this element is 7 enough to warrant dismissal. 8 2. Material Contribution or Inducement 9 Similarly, Comeback again fails to establish material contribution or inducement. 10 Instead, Comeback alleges that NewsBreak suspended Total Impulse’s account upon 11 learning of the infringement. Order at 5; TAC ¶ 29. Comeback has not alleged that 12 NewsBreak “continue[d] to provide access to infringing works,” or that NewsBreak had an 13 “objective to infringe copyrights.” Giganews, 847 F.3d at 671–72. 14 Because Comeback fails to adequately plead both elements of contributory 15 copyright infringement, the Court dismisses this claim. 16 D. Trademark Infringement 17 NewsBreak argues that Comeback again fails to state a claim for direct trademark 18 infringement against it. The Court agrees. 19 In its prior order, the Court explicitly stated that Comeback could not show direct 20 use by NewsBreak by alleging that NewsBreak hosted and displayed the infringing mark 21 on its servers and website since the “‘use’ in question is being carried out by” Total 22 Impulse. Order at 8 (quoting Rigsby v. GoDaddy, Inc., 59 F.4th 998, 1004 (9th Cir. 23 2023)). Comeback does not cure this deficiency in its amended complaint. TAC ¶ 179. 24 Comeback’s allegation that NewsBreak “reproduc[ed]” the mark shows that NewsBreak 25 “merely facilitate[d]” Total Impulse’s use of the mark since the alleged reproduction only 26 occurred because of Total Impulse’s infringement. TAC ¶ 179; Atari Interactive, Inc. v. 27 Redbubble, Inc., 515 F. Supp. 3d 1089, 1101 (N.D. Cal. 2021). The Court dismisses this IV. CONCLUSION For the foregoing reasons, the Court DENIES NewsBreak’s motion as to 2 Comeback’s vicarious liability clam and GRANTS NewsBreak’s motion as to the rest of 3 Comeback’s claims. Because Comeback has had four opportunities to adequately plead 4 these claims and any further amendment would be futile, the Court dismisses these claims 5 with prejudice. 6 IT IS SO ORDERED. Dated: February 26, 2026 8 CHARLES R. BREYER 9 United States District Judge 10 11 12 13 1

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