LIVE FACE ON WEB, LLC v. HIPPOCRATIC SOLUTIONS, LLC et al, No. 1:2015cv06874 - Document 25 (D.N.J. 2017)
Court Description: OPINION FILED. Signed by Judge Joseph H. Rodriguez on 3/21/17. (js)
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LIVE FACE ON WEB, LLC v. HIPPOCRATIC SOLUTIONS, LLC et al Doc. 25 UNITED STATES DISTRICT COURT DISTRICT OF NEW J ERSEY LIVE FACE ON WEB, LLC, HONORABLE J OSEPH H. RODRIGUEZ Plaintiff, Civil No. 15-6874 (J HR/ AMD) v. OPIN ION HIPPOCRATIC SOLUTIONS, LLC, and PETER KOUKOUNAS, Defendants. This m atter is before the Court on Defendants’ m otion to dism iss the Am ended Complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim . The Court has reviewed the subm issions and decides the m atter based on the briefs pursuant to Fed. R. Civ. P. 78(b). For the reasons stated here, Defendants’ m otion will be denied. Background The Court previously set forth the general background of this copyright infringement suit brought by Plaintiff Live Face on Web, LLC (“LFOW”) against Defendants Hippocratic Solutions, LLC, and Peter Koukounas. The Am ended Com plaint alleges facts consistent with those in the Court’s prior Opinion, but with further detail. LFOW develops com puter software. (Am . Com pl. ¶ 9.) The copyrighted software at issue allows a website to display a video spokesperson who walks and talks on the com puter screen, directing a website visitor’s 1 Dockets.Justia.com attention to certain aspects of the website. (Id. ¶ 9.) The website for Defendant Hippocratic Solutions allegedly has this video spokesperson functionality. (Id. ¶ 19.) “[I]n order to display the web spokesperson video on [its] website,” Hippocratic Solutions allegedly “used, copied, and distributed” LFOW’s software without perm ission. (Id. ¶ 20 ) The Am ended Complaint alleges that each tim e a person visits Hippocratic Solutions’ website and views the video spokesperson, a separate violation of LFOW’s copyright occurs. (Id. ¶ 25.) LFOW explains, “[w]hen a web browser is directed to a website linked to the LFOW Software, the embedded HTML script tag is read by the web browser and causes the autom atic distribution of a copy of the LFOW Software. The LFOW Software is autom atically saved by the web browser into cache, and/ or a hard drive(s), and loaded into com puter mem ory and/ or RAM (random access mem ory). As a result of the distribution of the LFOW Software, the specific web spokesperson video is autom atically launched and displayed . . . on the . . . website.” (Id. ¶ 13.) That is, in order for the video spokesperson to appear on Hippocratic Solutions’ website, the website causes a copy of LFOW’s copyrighted software code to be distributed to each website visitor. (Id. ¶¶ 27-28.) According to LFOW, this “volitional distribution of the infringing version of the LFOW Software by Defendants to their website visitors is seam less and transparent for the website visitors, who are able to view the 2 video spokesperson . . . by virtue of receiving the copy of the infringing version of the LFOW Software.” (Id. ¶ 28.) The Am ended Com plaint asserts only one claim : “direct, indirect and/ or vicarious” copyright infringement. (Id. ¶ 40 .) Motion to Dism iss Standard Federal Rule of Civil Procedure 12(b)(6) provides that a court m ay dism iss a com plaint “for failure to state a claim upon which relief can be granted.” In order to survive a m otion to dism iss, a com plaint m ust allege facts that raise a right to relief above the speculative level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (20 0 7); see also Fed.R.Civ.P. 8(a)(2). While a court m ust accept as true all allegations in the plaintiff's com plaint, and view them in the light m ost favorable to the plaintiff, Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 20 0 8), a court is not required to accept sweeping legal conclusions cast in the form of factual allegations, unwarranted inferences, or unsupported conclusions. Morse v. Lower Merion Sch. Dist., 132 F.3d 90 2, 90 6 (3d Cir. 1997). The com plaint m ust state sufficient facts to show that the legal allegations are not sim ply possible, but plausible. Phillips, 515 F.3d at 234. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9) (citing Twombly, 550 U.S. at 556). 3 Analysis Defendants argue that the Am ended Com plaint fails to state a claim for copyright infringem ent. They argue that there are no allegations of unlawful copying and any alleged copying occurred outside the statute of lim itations. Defendant Koukounas also asserts that the Am ended Com plaint’s allegations fail to support any individual liability on his part. “To establish infringement, two elem ents m ust be proven: (1) ownership of a valid copyright, and (2) copying of constituent elem ents of the work that are original.” Feist Publications, Inc. v. Rural Telephone Service Co., Inc., 499 U.S. 340 , 361 (1991). Only the second elem ent is at issue in this m otion. “Copying is a shorthand reference to the act of infringing any of the copyright owner’s . . . exclusive rights set forth at 17 U.S.C. § 10 6.” Dun & Bradstreet Software Servs., Inc. v. Grace Consulting, Inc., 30 7 F.3d 197, 20 6 (3d Cir. 20 0 2) (internal citation and quotation om itted). “The exclusive rights im plicated in this suit are the first three enum erated by § 10 6: the right ‘(1) to reproduce the copyrighted work in copies . . .; (2) to prepare derivative works based upon the copyrighted work; [and] (3) to distribute copies . . . of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.’” Live Face on Web, LLC v. Em erson Cleaners, Inc., 66 F. Supp. 3d 551, 554 (D.N.J . 20 14). 4 The Court finds that LFOW has sufficiently pled a claim for direct copyright infringement 1 by alleging that Hippocratic Solutions’ website causes a copy of the LFOW Software to be autom atically downloaded to the website visitor’s com puter in cache, mem ory and/ or hard drive. (Am . Com pl. ¶ 25.) See Emerson Cleaners, 66 F. Supp. 3d at 555. “The specific technological m echanism by which this is accom plished m ay be explored during discovery.” Id. Besides sufficiently alleging that Hippocratic Solutions reproduced the com puter code, the Am ended Com plaint also alleges that Hippocratic Solutions’ website distributed copies of the code to each of the website’s visitors. (Am. Com pl. ¶¶ 20 , 25, 31.) Whether Hippocratic Solutions’ actions were unauthorized or unlawful is not an appropriate issue at this stage of the litigation. As to the argument that the allegations of the Am ended Com plaint are tim ebarred, the Am ended Com plaint alleges that each tim e a person visits Hippocratic Solutions’ website and views the video spokesperson, a separate violation of LFOW’s copyright occurs. Without discovery, the parties cannot know when the last alleged violation occurred. LFOW contends that it Accordingly, the Court need not address whether the Am ended Com plaint pleads “access to” the infringed upon work to support an inference of copying. While the instant motion discusses direct and indirect infringement, it does not argue separately against vicarious liability. 1 5 discovered 2 the infringement in 20 14 and filed suit on J une 19, 20 15, which is within the applicable three-year statute of lim itations set forth in 17 U.S.C. § 50 7(b). Again, at the m otion to dism iss stage, the Court cannot foreclose this argument in favor of the defense. Finally, Defendant Koukounas argues that the Am ended Com plaint lacks facts to sustain its claim of individual liability. Of course, individuals m ay be liable for copyright infringement. Colum bia Pictures Indus. v. Redd Horne, Inc., 749 F.2d 154, 160 (3d Cir. 1984) (“An officer or director of a corporation who knowingly participates in the infringement can be held personally liable, jointly and severally, with the corporate defendant.”). The Am ended Com plaint alleges: Upon inform ation and belief, Defendant Peter Koukounas (“Koukounas”) is a resident of New J ersey and the owner and/ or m anaging m em ber of Hippocratic Solutions and the subject website(s) at issue here. Koukounas is the owner and/ or chief executive officer of Hippocratic Solutions, and was responsible for registering the subject website(s) at issue in this action and controlling the content of, m odification to, and distribution of infringing source code from the subject website(s) at issue in this 2 The Third Circuit has adopted the discovery rule, a general inquiry notice rule that a claim accrues when the plaintiff discovers or should have discovered with “due diligence” that his rights had been violated with regard to copyright infringement actions. See Brownstein v. Lindsay, 742 F.3d 55, 69-70 (3d Cir. 20 14). The Supreme Court noted, without passing on the question, that “nine Courts of Appeals have adopted, as an alternative to the incident of injury rule, a ‘discovery rule,’ which starts the lim itations period when the plaintiff discovers, or woth due diligence should have discovered, the injury that form s the basis for the claim .” Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962, 1969 n.4 (20 14). 6 action. Additionally, Koukounas was the adm inistrative contact for the subject website(s) at issue in this action. (Am . Com pl. ¶ 3; accord Am . Com pl. ¶¶ 17-27, 44-48.) The Court finds this sufficient to withstand the instant m otion. Conclusion For these reasons, Defendants’ m otion to dism iss the Amended Com plaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim will be denied. An appropriate Order will be entered. Date: March 21, 20 17 / s/ J oseph H. Rodriguez J OSEPH H. RODRIGUEZ UNITED STATES DISTRICT J UDGE 7
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