Motion Medical Technologies, LLC v. Thermotek, Inc.

ThermoTek, Inc. convinced a jury that Mike Wilford and his companies engaged in unfair competition and fraud in violation of Texas law. The district court, however, granted judgment as a matter of law to the defendants, concluding that federal law preempted the unfair competition claim and that ThermoTek failed to prove its damages for fraud. We affirm.

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SAS Institute, Inc. v. World Programming Ltd.

SAS Institute (SAS) and World Programming Limited (WPL) are competitors in the market for statistical analysis software. SAS alleges that WPL breached a license agreement for SAS software and violated copyrights on that software. We agree with the district court that the contractual terms at issue are unambiguous and that SAS has shown that WPL violated those terms. We thus affirm the district court’s judgment finding WPL liable for breach of the license agreement. With respect to the district court’s ruling on the copyright claim, we vacate that portion of the district court’s judgment and remand with instructions to dismiss it as moot.

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DRK Photo v. McGraw-Hill Global Education Holdings, LLC

The panel affirmed the district court’s summary judgment in favor of the defendants in a copyright infringement action brought by a stock photography agency.

The panel held that the plaintiff, a nonexclusive licensing agent for the photographs at issue, failed to demonstrate any adequate ownership interest in the copyrights to confer standing. Distinguishing Minden Pictures, Inc. v. John Wiley & Sons, Inc., 795 F.3d 997 (9th Cir. 2015), the panel held that the plaintiff lacked standing as a legal owner because its representation agreements with the photographers did not grant the plaintiff an exclusive license to authorize use of the photographs. The panel held that under Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881 (9th Cir. 2005) (en banc), the plaintiff’s assignment agreements with the photographers did not confer standing because they merely transferred the right to sue on accrued claims. The panel held that the plaintiff also lacked standing as a beneficial owner of the copyrights.

The panel affirmed the district court’s denial of the plaintiff’s motion to modify the scheduling order for leave to amend its complaint to join three photographers as plaintiffs.

Concurring, Judge Berzon wrote that Silvers, holding that the transfer of the right to sue to a nonowner or nonexclusive licensee of a copyright right can never confer standing to sue for a copyright violation, controlled but was wrongly decided.

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Mavrix Photographs, LLC v. LiveJournal, Inc.

The panel filed an amended opinion (1) reversing the district court’s holding, on summary judgment, that the defendant was protected by the safe harbor of the Digital Millennium Copyright Act from liability for posting the plaintiff’s photographs online and (2) vacating a discovery order.

In its amended opinion, the panel held that the safe harbor set forth in 17 U.S.C. § 512(c) would apply if the photographs were stored at the direction of users. The defendant, a social media platform, posted the photographs after a team of volunteer moderators, led by an employee of the defendant, reviewed and approved them. The panel held that whether the photographs were stored at the direction of users depended on whether the acts of the moderators could be attributed to the defendant. Disagreeing with the district court, the panel held that the common law of agency applied to the defendant’s safe harbor defense. Because there were genuine factual disputes regarding whether the moderators were the defendant’s agents, the panel reversed the district court’s summary judgment and remanded the case for trial.

The panel also discussed the remaining elements of the safe harbor affirmative defense. If an internet service provider shows that the infringing material was posted “at the direction of the user,” it must then also show that (1) it lacked actual or red flag knowledge of the infringing material; and (2) it did not financially benefit from infringements that it had the right and ability to control. The panel held that to fully assess actual knowledge, the fact finder must consider not only whether the copyright holder has given notice of the infringement, but also the service provider’s subjective knowledge of the infringing nature of the posts. The panel held that to determine whether the defendant had red flag knowledge, the fact finder would need to assess whether it would be objectively obvious to a reasonable person that material bearing a generic watermark or a watermark referring to the plaintiff’s website was infringing. When assessing the service provider’s right and ability to control the infringements, the fact finder should consider the service provider’s procedures that existed at the time of the infringements and whether the service provider had “something more” than the ability to remove or block access to posted materials.

Finally, the panel vacated the district court’s order denying discovery of the moderators’ identities. It remanded the case for further proceedings.

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Disney Enterprises, Inc. v. VidAngel, Inc.

The panel affirmed the district court’s preliminary injunction against the defendant in an action under the Copyright Act and the Digital Millennium Copyright Act.

Defendant VidAngel, Inc., operated an online streaming service that removed objectionable content from movies and television shows. VidAngel purchased physical discs containing copyrighted movies and television shows, decrypted the discs to “rip” a digital copy to a computer, and then streamed to its customers a filtered version of the work.

The panel held that the district court did not abuse its discretion in concluding that VidAngel’s copying infringed the plaintiffs’ exclusive reproduction right. Because VidAngel did not filter authorized copies of movies, it was unlikely to succeed on the merits of its defense that the Family Movie Act of 2005 exempted it from liability for copyright infringement. VidAngel also was unlikely to succeed on its fair use defense.

The panel held that the district court also did not abuse its discretion in concluding that the plaintiffs were likely to succeed on their DCMA claim.

The panel held that the anticircumvention provision of the DMCA, 17 U.S.C. § 1201(a), covered the plaintiffs’ technological protection measures, which controlled both access to and use of the copyrighted works.

The panel affirmed the district court’s findings regarding the likelihood of irreparable harm, the balancing of the equities, and the public interest.

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Jordan-Benel v. Universal City Studios, Inc.

The panel affirmed the district court’s order denying defendants’ anti-SLAPP motion to strike a state law claim for breach of implied-in-fact contract in a copyright case.

The plaintiff alleged that the defendants infringed his copyright in a screenplay and used his screenplay idea to create films without providing him compensation as a writer. The panel held that the breach of contract claim did not arise from an act in furtherance of the right of free speech because the claim was based on defendants’ failure to pay for the use of plaintiff’s idea, not the creation, production, distribution, or content of the films. Accordingly, the district court did not err in denying defendants’ motion to strike the state law claim under California’s anti-SLAPP statute.

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Design Basics, LLC v. Lexington Homes, Inc.

This copyright suit shows the difficulty in finding protected creative expression in a crowded field, in this case, architectural design of single‐family homes. The case also shows the challenge in administering intellectual property law to discourage so‐called intellectual property “trolls” while protecting genuine creativity.

Plaintiffs Design Basics, LLC; Prime Designs, Inc.; and Plan Pro, Inc. (collectively, “Design Basics”) and their affili‐ ates claim rights to some 2700 home designs. They sued defendants Lexington Homes, Inc. and related parties (collectively, “Lexington”) for copyright infringement, contending that Lexington built homes that infringed four of Design Basics’ designs.

The district court granted summary judgment to Lexington, finding no evidence that Lexington ever had access to De‐ sign Basics’ home plans. Without access, the court reasoned, there could be no copying and no copyright infringement. We affirm. We agree with the district court that Design Basics has no evidence of access. We also conclude that no reasonable jury could find that Lexington’s accused plans bear substantial similarities to any original material in Design Basics’ plans.  

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Fourth Estate Public Benefit v. Wall-Street com, LLC

“Registration” of a copyright is a precondition to filing suit for copyright infringement. 17 U.S.C. § 411(a). This appeal requires us to decide an issue that has divided the circuits: whether registration occurs when an owner files an application to register the copyright or when the Register of Copyrights registers the copyright. Compare Cosmetic Ideas, Inc. v. IAC/Interactivecorp, 606 F.3d 612, 619 (9th Cir. 2010) (concluding that registration occurs when the owner files an application), with La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195, 1197 (10th Cir. 2005) (concluding that registration occurs when the Register approves an application), abrogated in part by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 157 (2010). Fourth Estate Public Benefit Corporation filed a suit for infringement against Wall-Street.com and Jerrold Burden. The complaint alleged that Fourth Estate had filed an application to register its allegedly infringed copyrights, but that the Copyright Office had not registered its claims. The district court dismissed the action because Fourth Estate failed to plead compliance with the registration requirement, 17 U.S.C. § 411(a). Because registration occurs when the Register of Copyrights “register[s] the claim,” id. § 410(a), we affirm.

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SoundExchange, Inc. v. Muzak LLC

This case pits SoundExchange, a nonprofit entity, charged with the responsibility of collecting royalties for performing artists and copyright owners of music, against Muzak, a company that supplies digital music channels to satellite television networks who, in turn, sell to subscribers. SoundExchange sued Muzak under the Copyright Act in district court, claiming that Muzak underpaid royalties owed. The district court dismissed SoundExchange’s complaint. (From the point of view of classic administrative law, the Register of Copyrights, to which we normally are obliged to defer, plays a rather unusual role.) Although the case is close – the controlling statute is dreadfully ambiguous – we conclude that SoundExchange has the better position, and therefore reverse the district court.

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Mavrix Photographs, LLC v. LiveJournal, Inc.

Digital Millennium Copyright Act

The panel (1) reversed the district court’s holding, on summary judgment, that the defendant was protected by the safe harbor of the Digital Millennium Copyright Act from liability for posting the plaintiff’s photographs online and (2) vacated a discovery order.

The panel held that the safe harbor set forth in 17 U.S.C. § 512(c) would apply if the photographs were posted at the direction of users. The defendant, a social media platform, posted the photographs after a team of volunteer moderators, led by an employee of the defendant, reviewed and approved them. The panel held that whether the photographs were posted at the direction of users depended on whether the acts of the moderators could be attributed to the defendant. Disagreeing with the district court, the panel held that the common law of agency applied to the defendant’s safe harbor defense. Because there were genuine factual disputes regarding whether the moderators were the defendant’s agents, the panel reversed the district court’s summary judgment and remanded the case for trial. The panel also discussed the remaining elements of the safe harbor affirmative defense. If an internet service provider shows that the infringing material was posted “at the direction of the user,” it must then also show that (1) it lacked actual or red flag knowledge of the infringing material; and (2) it did not financially benefit from infringements that it had the right and ability to control. The panel held that to fully assess actual knowledge, the fact finder must consider not only whether the copyright holder has given notice of the infringement, but also the service provider’s subjective knowledge of the infringing nature of the posts. The panel held that to determine whether the defendant had red flag knowledge, the fact finder would need to assess whether it would be objectively obvious to a reasonable person that material bearing a generic watermark or a watermark referring to the plaintiff’s website was infringing. When assessing the service provider’s right and ability to control the infringements, the fact finder should consider the service provider’s procedures that existed at the time of the infringements and whether the service provider had “something more” than the ability to remove or block access to posted materials.

Finally, the panel vacated the district court’s order denying discovery of the moderators’ identities.

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