MINDEN PICTURES INC v. REHABMART LLC

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF GEORGIA ATHENS DIVISION MINDEN PICTURES, INC, Plaintiff, CIVIL ACTION NO. v. 3:24-cv-00013-TES REHABMART LLC, Defendant.

ORDER DENYING MOTION TO DISMISS

Before the Court is a Motion to Dismiss [Doc. 8] filed by Defendant RehabMart LLC (“RehabMart”). Plaintiff Minden Pictures, Inc. (“Minden”) filed this lawsuit alleging that RehabMart directly infringed its copyrighted work. [Doc. 1]. Because Minden pled sufficient facts to move forward with its claims, the Court DENIES RehabMart’s Motion to Dismiss. [Doc. 8]. BACKGROUND1 Minden is a “provider of rights-managed wildlife and nature stock photos and featured stories.” [Doc. 1, ¶ 2]. Defendant RehabMart is a company that provides “rehabilitation products, medical supplies, and healthcare technologies,” and its principal place of business is in Watkinsville, Georgia. [Id. at ¶¶ 3, 9].

1 When ruling on a Rule 12(b)(6) motion, district courts must accept the facts set forth in the complaint as true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 572 (2007). Thus, at this juncture, the Court relies on Minden’s version of the facts unless otherwise noted. In 2004, Charles “Flip” Nicklin created a photograph of what appears to be a plant in water (the “Photograph”), and on December 23, 2008, Nicklin registered the

Photograph with the Register of Copyrights. [Id. at ¶¶ 10–11]; see [Doc. 1-1]. Nicklin entered into a contract with Minden in 2010, whereby he granted Minden co-ownership of the Photograph. [Doc. 1, ¶ 12]; see [Doc. 1-2].

Minden never gave RehabMart permission or authority to use the Photograph, yet on May 11, 2021, Minden discovered that RehabMart had copied the Photograph and was using it on its website for advertising purposes. [Doc. 1, ¶¶ 16–22]; see [Doc. 1-

3]. Minden notified RehabMart twice—in December 2021 and in February 2022—that its use of the Photograph infringed Minden’s copyright. [Doc. 1, ¶ 23]. However, the parties were unable to resolve this matter, so on February 14, 2024, Minden filed this lawsuit alleging copyright infringement and seeking damages as well as injunctive

relief. See [id.]. DISCUSSION RehabMart timely filed this Motion seeking dismissal of Minden’s action under

Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. See [Doc. 8]. Before reaching the merits of this Motion, the Court first set out the law that will guide its analysis. A. Legal Standard

When ruling on a 12(b)(6) motion, district courts must accept the facts set forth in the complaint as true. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 572 (2007). A complaint survives a motion to dismiss only if it alleges sufficient factual matter (accepted as true)

that states a claim for relief that is plausible on its face. McCullough v. Finley, 907 F.3d 1324, 1333 (11th Cir. 2018) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009)). In fact, a well-pled complaint “may proceed even if it strikes a savvy judge that actual proof of

those facts is improbable, and that a recovery is very remote and unlikely.” Twombly, 550 U.S. at 556 (citations omitted). Although Federal Rule of Civil Procedure 8 does not require detailed factual

allegations, it does require “more than . . . unadorned, the-defendant-unlawfully- harmed-me accusation[s].” McCullough, 907 F.3d at 1333 (citation omitted) (alteration in original). To decide whether a complaint survives a motion to dismiss, district courts are instructed to use a two-step framework. Id. The first step is to identify the

allegations that are “no more than mere conclusions.” Id. (quoting Iqbal, 556 U.S. at 679). “Conclusory allegations are not entitled to the assumption of truth.” Id. (citation omitted). After disregarding the conclusory allegations, the second step is to “assume

any remaining factual allegations are true and determine whether those factual allegations ‘plausibly give rise to an entitlement to relief.’” Id. (quoting Iqbal, 556 U.S. at 679). Furthermore, a complaint attacked by a 12(b)(6) motion is subject to dismissal

when it fails to “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555. “A plaintiff must plead more than labels and conclusions or a formulaic recitation of the elements of a cause of action.”

McCullough, 907 F.3d at 1333 (internal quotations omitted); see also Twombly, 550 U.S. at 555. “To be sure, a plaintiff may use legal conclusions to structure his complaint, but legal conclusions ‘must be supported by factual allegations.’” McCullough, 907 F.3d at

1333 (quoting Iqbal, 556 U.S. at 679). While courts, in ruling on a motion to dismiss, must take all of the factual allegations in the complaint as true; they are not bound to accept a legal conclusion couched as a factual allegation. Iqbal, 556 U.S. at 678. Courts must

“identify conclusory allegations and then discard them—not ‘on the ground that they are unrealistic or nonsensical’ but because their conclusory nature ‘disentitles them to the presumption of truth.’” McCullough, 907 F.3d at 1333 (quoting Iqbal, 556 U.S. at 681). The issue to be decided when considering a motion to dismiss is not whether the

claimant will ultimately prevail, but “whether the claimant is entitled to offer evidence to support the claims.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by Davis v. Scheuer, 468 U.S. 183 (1984). The factual allegations in a complaint

“must be enough to raise a right to relief above the speculative level” and cannot “merely create[] a suspicion of a legally cognizable right of action.” Twombly, 550 U.S. at 545, 555. Finally, complaints that tender “‘naked assertion[s]’ devoid of ‘further factual enhancement’” will not survive against a motion to dismiss. Iqbal, 556 U.S. at 678

(quoting Twombly, 550 U.S. at 557) (alteration in original). Stated differently, the complaint must allege enough facts “to raise a reasonable expectation that discovery will reveal evidence” supporting a claim. Twombly, 550 U.S. at 556. With the foregoing

standard in mind, and taking the facts asserted in Minden’s Complaint as true, the Court rules on RehabMart’s Motion to Dismiss. B. RehabMart’s Motion to Dismiss

RehabMart moves to dismiss on the grounds that that the allegations in paragraphs 25–31 of Minden’s Complaint do not plausibly state a claim of copyright infringement. See [Doc. 8-1]; [Doc. 1, ¶¶ 25–31]; Fed. R. Civ. P. 12(b)(6). Now is as good

a time as any for the Court to flag an error that plagues RehabMart’s entire Motion. Without any explanation, RehabMart limited its analysis to only paragraphs 25–31 of the Complaint. See [Doc. 8-1, pp. 4–6]. Unsurprisingly, paragraph 25 is not the first paragraph of the Complaint, nor is it even the first paragraph of Count I. See [Doc. 1, ¶

24]. As one would expect, Minden began its Complaint at paragraph 1. See [id. at ¶ 1]. Moreover, Count I—the only cause of action in the Complaint—begins with paragraph 24, which “incorporates the allegations of paragraphs 1 through 23 of [the] Complaint

as if fully set forth” in Count I. [Id. at ¶ 24]; see [Doc. 8-1, p. 5]. All that to say, the Court sees no reason why RehabMart would only consider paragraphs 25–31, yet it did. See [Doc. 8-1, pp. 4–6]. Whether this unduly restricted analysis was careless, somehow strategic, or caused by a misunderstanding of pleading standards, the result is the

same—RehabMart’s Motion completely ignores the bulk of Minden’s Complaint. [Id.]. Having said that, the Court moves on to Iqbal’s two-step framework as articulated in McCullough. 907 F.3d at 1333 (quoting 556 U.S. at 679). Under that framework, the Court

must first identify and disregard any conclusory allegations in the Complaint, and then the Court must “determine whether [the remaining] factual allegations ‘plausibly’” state a claim of copyright infringement. Id.

In its Motion, RehabMart points out that Minden’s allegations in paragraphs 27– 31 of the Complaint “are nothing more than conclusions lacking any factual support” and “amount to ‘nothing more than a “formulaic recitation of the elements”’ of a

copyright infringement claim.” [Doc. 8-1, pp. 4, 5]; see [Doc. 1, ¶¶ 27–31]. Minden agrees that those paragraphs are “naked legal conclusions,” so the Court discards those allegations and moves on to the second step of its analysis. [Doc. 9, p. 1 (alteration in original)]; see [Doc. 1, ¶¶ 27–31]; McCullough, 907 F.3d at 1333 (quoting Iqbal, 556 U.S. at

681). Step two requires the Court to roll up its sleeves, dig in a bit deeper, and decide whether the remaining, non-conclusory allegations in the Complaint (not just the

remaining paragraphs in Count I) plausibly state a claim of copyright infringement. McCullough, 907 F.3d at 1333 (quoting Iqbal, 556 U.S. at 679). First, the Court explains what it takes to state such a claim, and then the Court must decide whether Minden’s Complaint meets the mark.

Under the Copyright Act of 1976, “[a]nyone who violates any of the exclusive rights of [a] copyright owner . . . is an infringer of the copyright.” 17 U.S.C. § 105. “Subject to [certain exceptions], the owner of copyright . . . has the exclusive rights” to

reproduce the copyrighted work, prepare derivative works based upon the copyrighted work, distribute copies of the copyrighted work to the public, perform the copyrighted work publicly, display the copyrighted work publicly, and perform the copyrighted

work publicly by means of a digital audio transmission. 17 U.S.C. § 106. For a copyright infringement claim to survive a motion to dismiss, a plaintiff must allege two elements: “(1) ownership of a valid copyright, and (2) copying of constituent elements of the work

that are original.” Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). With that in mind, the Court must now identify Minden’s non-conclusory allegations in its Complaint. See [Doc. 1]. According to RehabMart, “[a]fter disregarding the bare legal conclusions

contained in paragraphs 27–31, only the allegations contained in paragraphs 25–26 remain.” [Doc. 8-1, p. 5]. If that were the case, the Court would’ve easily granted this Motion. However, having already explained why the Court must consider every

paragraph of Minden’s Complaint, and having already discarded paragraphs 27–31 for the purposes of this analysis, the Court finds no other conclusory allegations in the Complaint. See [Doc. 1]. Thus, the Court must determine whether the remaining allegations in paragraphs 1–26, assumed to be true, satisfy both Feist prongs. See

McCullough, 907 F.3d at 1333 (quoting Iqbal, 556 U.S. at 679); 499 U.S. at 361. 1. Minden Satisfies the First Feist Prong RehabMart does not challenge Minden on the first Feist prong. See [Doc. 8]; 499

U.S. at 361. “To ‘satisfy Feist’s first prong, a plaintiff must prove that the work . . . is original and that the plaintiff complied with applicable statutory formalities.’” Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1541 (11th Cir. 1996) (quoting Lotus Dev. Corp. v. Borland Int’l, Inc., 49 F.3d 807, 813 (1st Cir. 1995), aff’d, 516 U.S. 233 (1996)). “In judicial

proceedings, a ‘certificate of registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate.’” Id. (quoting 17 U.S.C. § 410(c)).

When a plaintiff produces a certificate of registration, “the burden shifts to the defendant to demonstrate why the claim of copyright is invalid.” Id. (citing Bibbero Sys., Inc. v. Colwell Sys., Inc., 893 F.2d 1104, 1106 (9th Cir. 1990)). RehabMart concedes that

paragraphs 25–26 of Minden’s Complaint alone satisfy the first Feist prong, but the Court has a few notes before moving on. [Doc. 8-1, p. 6]; see 499 U.S. at 361. The Court agrees with RehabMart’s conclusion that Minden’s Complaint satisfies the first Feist first prong but disagrees with its reasoning. See [Doc. 8-1, Section II.d.]; 499

U.S. at 361. RehabMart concedes that paragraphs 25–26 of the Complaint are enough to plausibly allege that Minden owns a valid copyright, but paragraphs 10–14 put more meat on the bones. [Doc. 8-1, p. 6]; see [Doc. 1, ¶¶ 10–14, 25–26]. In those five

paragraphs, Minden alleges that the Photograph is an original work, alleges that it owns a valid copyright, and substantiates its claim by referencing attached copies of a certificate of registration and a contract granting co-ownership of the Photograph to

Minden. [Doc. 1, ¶¶ 10–14]; see [Doc. 1-1]; [Doc. 1-2]. Because RehabMart does not dispute the validity of the Photograph’s certificate of registration, which “constitute[s] prima facie evidence of the validity of the copyright,” Minden’s Complaint satisfies the

first Feist prong. See Bateman, 79 F.3d at 1541. 2. Minden Satisfies the Second Feist Prong RehabMart argues that paragraphs 25–26 of the Complaint “fail to support the second [Feist] prong.” [Doc. 8-1, p. 6]. As explained above, the Court must not restrict its

analysis to those two paragraphs. To satisfy the second Fiest prong, “a plaintiff must establish, as a factual matter, that the alleged infringer actually copied plaintiff’s copyrighted material.” Latimer v. Roaring Toyz, Inc., 601 F.3d 1224, 1233 (11th Cir. 2010);

see also Bateman, 79 F.3d at 1541. A plaintiff may prove copying by direct evidence, which is rare, or indirect evidence. Baby Buddies, Inc. v. Toys R Us, Inc., 611 F.3d 1308, 1315 (11th Cir. 2010). Minden alleges in its Complaint that RehabMart “actually copied” the Photograph.

See [Doc. 1, ¶¶ 15–23]. Specifically, Minden alleges that “after the [Photograph] was created, but prior to the filing of this action, . . . RehabMart copied [the Photograph] “without permission or authority.” [Id. at ¶ 16, 18]. Minden goes on to explain that

“Rehab[M[art has never been licensed to use the [Photograph] for any purpose,” yet “[o]n or about May 11, 2021, Minden[] discovered” that RehabMart was using the photograph on its website. [Id. at ¶¶ 15, 17]. RehabMart does not dispute that it owns

the website where Minden says it found the Photograph. See [Doc. 8]. Minden contends that “[a]fter RehabMart copied the [Photograph], it made further copies and distributed the [Photograph] on the internet to promote the sale of goods and services as part of its

business;” and that RehabMart “copied and distributed Minden’s [Photograph] in connection with [RehabMart]’s business for purposes of advertising and promoting [RehabMart]’s business, and in the course and scope of advertising and selling products

and services.” [Id. at ¶¶ 19–20]. To support its allegations, Minden refers to a document attached to the Complaint that appears to be a printout of RehabMart’s website. See [id. at ¶ 17]; [Doc. 1-3]. RehabMart’s incredulity about Minden’s “mystery document” does nothing to negate these allegations in Minden’s Complaint. See [Doc. 10, p. 4].

The allegations above, assumed to be true, are more than enough to support Minden’s claim that RehabMart actually copied the Photograph. Latimer, 601 F.3d at 1233. There is no doubt that they are far “more than . . . unadorned, the-defendant-

unlawfully-harmed-me accusation[s],” and they “give [RehabMart] fair notice of what [Minden’s] . . . claim is and the grounds upon which it rests.” McCullough, 907 F.3d at 1333 (citation omitted) (alteration in original); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, Minden’s Complaint satisfies the second Feist prong. Id.; see 499 U.S. at

361. To summarize, the Court decided this matter by applying the two-step approach articulated in McCullough. 907 F.3d at 1333 (quoting 556 U.S. at 681). At the first step, the

Court found that Minden’s allegations at paragraphs 27–31 of the Complaint are “naked legal conclusions” that are “not entitled to the assumption of truth,” and then the Court found that the remaining allegations in the Complaint are not conclusory and thus

assumed them to be true for this analysis. Id.; [Doc. 1, ¶¶ 27–31]; [Doc. 9, p. 1]. At the second step, the Court applied the Feist two-prong approach and found that remaining allegations in the Complaint, assumed to be true, plausibly state a claim of copyright

infringement. See McCullough, 907 F.3d at 1333 (quoting Iqbal, 556 U.S. at 681); Feist, 499 U.S. at 361. CONCLUSION Accordingly, because the allegations in Minden’s Complaint [Doc. 1] “plausibly

give rise to an entitlement to relief,” the Court DENIES Defendant’s Motion to Dismiss [Doc. 8], and Minden’s claims will proceed to discovery. McCullough, 907 F.3d at 1333 (quoting Iqbal, 556 U.S. at 679).

SO ORDERED, this 3rd day of June, 2024. S/ Tilman E. Self, III TILMAN E. SELF, III, JUDGE UNITED STATES DISTRICT COURT