Luvdarts, LLC v. AT & T Mobility, LLC

710 F.3d 1068, 41 Media L. Rep. (BNA) 1633
CourtCourt of Appeals for the Ninth Circuit
DecidedMarch 25, 2013
DocketNo. 11-55497
StatusPublished
Cited by35 cases

This text of 710 F.3d 1068 (Luvdarts, LLC v. AT & T Mobility, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Luvdarts, LLC v. AT & T Mobility, LLC, 710 F.3d 1068, 41 Media L. Rep. (BNA) 1633 (9th Cir. 2013).

Opinion

OPINION

O’SCANNLAIN, Circuit Judge:

We must decide whether the owners of mobile multimedia messaging networks can be held hable for copyright infringement that allegedly occurs on their networks.

I

Plaintiffs Luvdarts LLC and Davis-Reuss, Inc. (“Luvdarts”) are California corporations that produce, publish, distribute and sell mobile multimedia content. AT & T Mobility, LLC and the other co-defendants are mobile wireless carriers (“Carriers”) who own Multimedia Messaging Service networks (“MMS networks”). Mobile phones use MMS networks to send and receive messages that include multimedia content.

Luvdarts alleges that it is in the business of selling commercial multimedia-messaging content designed to be transmitted over the MMS networks to and from mobile devices. According to its complaint, Luvdarts creates “greeting card style messages” as well as “MMS advertising campaigns, MMS news, MMS coupons, [and] MMS games.” Most of Luvdarts’s business involves selling these “greeting cards” to users who can then forward them to friends.

Attached to the content Luvdarts sells is a notice that it may be shared only once. But there is no technical impediment to a recipient forwarding a purchased message [1071]*1071to as many people as he wishes. According to Luvdarts, users are ignoring the notice and are re-sharing the content without permission or compensation- — thereby infringing Luvdarts’s copyrights. Luv-darts alleges that after it discovered the infringements, it contacted the Carriers and demanded that they provide “accountability” for the infringing content. The Carriers took no meaningful action in response to these demands.

Luvdarts sued the Carriers for copyright infringement. The First Amended Complaint alleges that the Carriers vicariously infringed, that they induced infringement, and that they violated California’s unfair competition laws. The Carriers filed a motion to dismiss the complaint for failure to state a claim on which relief can be granted. Fed.R.Civ.P. 12(b)(6). Luvdarts waived the state law claim, and the district court granted the motion as to the remaining infringement claims, dismissing the case with prejudice.

II

Luvdarts’s principal argument is that the Carriers are liable for the infringement committed by third parties over their networks under either vicarious or contributory copyright liability. As the Supreme Court has observed, the Copyright Act does not explicitly render a third person liable for another person’s infringement. Sony Corp. of Am. v. Universal City Studios, 464 U.S. 417, 434, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984). The doctrines pressed here “emerged from common law principles and are well established in the law.” Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005). Vicarious infringement occurs when one profits from direct infringement while declining to exercise a right to stop or limit it, and contributory infringement liability requires “inducing or encouraging” direct infringement. Id. The district court concluded that given Luvdarts’s allegations, liability against the Carriers cannot lie under either theory.

A

Luvdarts first contends that the Carriers are vicariously liable for infringement committed on their networks. Vicarious copyright liability is an “outgrowth” of respondeat superior. A & M Records, Inc. v. Napster Inc., 239 F.3d 1004, 1022 (9th Cir.2001). Vicarious liability attaches if the Carriers had both the (1) “right and ability to supervise the infringing activity” and (2) “a direct financial interest” in the activity. Id. (internal quotation marks omitted). In this case, Luvdarts concedes that the Carriers presently have no way of supervising the use of their networks for copyright infringement. Instead, Luvdarts’s complaint alleges only that the Carriers could “establish! ] ... a system” that would give them the right and ability to supervise the infringing activity. Luvdarts argues that this allegation is sufficient to survive a motion to dismiss.

Luvdarts fails to cite any authority to support this proposition, which runs contrary to our precedent. In Napster, this court held that “right and ability to supervise” should be evaluated in the context of a system’s “current architecture.” Napster Inc., 239 F.3d at 1024. Moreover, as we noted in Perfect 10, Inc. v. Amazon.com, Inc., resting vicarious liability on the Carriers’ failure to change their behavior would tend to blur the distinction between contributory liability and vicarious liability. 508 F.3d 1146, 1175 (9th Cir.2007) (“[I]n general, contributory liability is based on the defendant’s failure to stop its own actions which facilitate third-party infringement, while vicarious liability is based on the defendant’s failure to cause a third party to stop its directly infringing activities.”). For example, un[1072]*1072der contributory liability the Carriers’ failure to implement a digital rights management system may be used as circumstantial evidence of “the object of promoting” infringement. See Grokster, 545 U.S. at 936-37, 125 S.Ct. 2764. But under vicarious liability, it cannot substitute for an allegation of a capacity to supervise. Luvdarts’s failure to allege that the Carriers have at least something like a capacity to supervise is fatal to a claim of vicarious liability.

Even if the doctrine of vicarious liability imposed some affirmative duty to acquire supervisory capacity, Luvdarts has failed to allege facts that plausibly show that the Carriers could implement an effective system. Luvdarts’s complaint states only that the Carriers should “establish[ ] a me-tadata system of digital rights management.” Nowhere does Luvdarts explain what that system is, how it would function, or how much implementing such a system would cost. As a result, Luvdarts has not given us any facts that tend to make plausible the assertion that the Carriers could implement a system in the first place, much less that the Carriers could plausibly implement a system at a low-enough cost to justify imposition of vicarious liability.

Because Luvdarts has failed to allege adequately that the Carriers had the necessary right and ability to supervise the infringing conduct, the district court properly determined that they cannot prevail on their claim of vicarious copyright infringement.1

B

Luvdarts’s second contention is that the Carriers are contributorily liable for the infringement committed on their networks. Liability for contributory copyright infringement attaches if the Carriers (1) knew of the direct infringement; and (2) they either induced, caused, or materially contributed to the infringing conduct. See Napster, 239 F.3d at 1019.

To establish liability, the first prong requires more than a generalized knowledge by the Carriers of the possibility of infringement.

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Bluebook (online)
710 F.3d 1068, 41 Media L. Rep. (BNA) 1633, Counsel Stack Legal Research, https://law.counselstack.com/opinion/luvdarts-llc-v-at-t-mobility-llc-ca9-2013.