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U2 Home Entertainment, Inc. v. Kylin TV

July 10, 2007

U2 HOME ENTERTAINMENT, INC., PLAINTIFF,
v.
KYLIN TV, INC., NEULION, INC., FALCONSTAR, INC. AND TRANSVIDEO INTERNATIONAL, LTD., DEFENDANTS.



The opinion of the court was delivered by: Dora L. Irizarry, U.S. District Judge

OPINION AND ORDER

On June 2, 2006, plaintiff U2 Home Entertainment, Inc. ("U2") brought suit against defendants Kylin TV, Inc. ("Kylin"), Neulion, Inc. ("Neulion"), Falconstar, Inc. ("Falconstar"), and Transvideo International, Ltd. ("Transvideo") (collectively, "defendants"), claiming that they had infringed on plaintiff's alleged exclusive right to publicly perform the twenty-five Asian language films listed in the complaint. In lieu of an answer, defendants jointly filed a motion to dismiss the complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) on July 31, 2006. On November 28, 2006, plaintiff filed a letter motion seeking a premotion conference on its proposed motion for a preliminary injunction. The court granted plaintiff's request, and a pre-motion conference was held on January 11, 2007. However, by letter dated February 22, 2007, plaintiff withdrew its motion for a preliminary injunction. For the reasons set forth below, defendants' motion to dismiss is denied.

Background

Plaintiff is a California corporation doing business as Century Home Entertainment, New Image Audio & Video and Tai Seng Video Marketing. (Compl. ¶ 2.) U2 claims to have the exclusive authority to publicly perform in the United States certain Chinese language (Cantonese and Mandarin), as well as other Asian language, motion pictures and television programs originally produced in Asia via television, cable television, satellite television and the Internet. (Id. at ¶¶ 2, 10.) As an exhibit to the complaint, plaintiff attached a list of the twenty-five motion pictures at issue herein, along with their registration numbers, if available. (Id. at Ex. A.)*fn1

Defendant Kylin is a Delaware corporation with its principal place of business in Plainview, New York, and defendants Neulion and Falconstar are New York corporations with their principal places of business in Plainview, New York and Melville, New York, respectively. (Id. at ¶¶ 4-6.) Defendant Transvideo is an "unknown entity that is an affiliate of Kylin TV, Inc." (Id. at ¶ 7.) U2 alleges that all defendants "participate[d] in," "authorize[d]," "contribute[d] to," and are "vicariously liable for" the "unauthorized public performance of plaintiff's motion pictures." (Id. at ¶¶ 8, 13.)

Throughout the complaint, plaintiff refers to all above-named defendants collectively as "Kylin TV." (Id. at ¶ 8.) In relevant part, plaintiff describes defendants' allegedly infringing activities as follows: "a member of the public can become a monthly subscriber by registering with Kylin TV on the internet website . . . [and] pay[ing] a monthly subscription fee beginning at fifteen dollars. . . [which provides the subscriber with a] set top box . . . [which may then be connected] to a television and to a cable or DSL broadband connection . . . . The subscriber is [then] able to view feature length motion pictures and television programs. Kylin TV duplicates, distributes and uploads these motion pictures onto a computer network accessible to members of the public." (Id. at ¶¶ 13-16.) In so doing, plaintiff claims that the Kylin TV website provides subscribers with the option to view certain of plaintiff's motion pictures including, but not limited to, the titles attached to the complaint as Exhibit A, even though plaintiff has never authorized defendants to "duplicate, distribute or perform publicly any of plaintiff's motion pictures." (Id. at ¶¶ 17-19.)

Plaintiff's counsel first notified Kylin of its claims of infringement by forwarding a copy of a draft complaint to Kylin's offices on April 24, 2006. (Kohlberger Decl. Ex. 1.) In the draft complaint, plaintiff identifies the defendants as "John Does I Through X, doing business as 'Kylin TV, Inc.'" (Id.) On April 26, 2006, Kylin's counsel sent a letter to plaintiff's counsel, which stated that it was investigating plaintiff's claims. (Kohlberger Decl. Ex. 2.) On May 8, 2006, Kylin's counsel sent a letter to plaintiff's counsel asking it to provide documentary evidence demonstrating that U2 is the owner or exclusive licensee of each of the works listed in Exhibit A of the draft complaint. (Kohlberger Decl. Ex. 3.) On May 9, 2006, plaintiff's counsel responded by stating:

[Plaintiff's] rights have been repeatedly sustained by federal courts, most recently in the reported decisions of U2 Home Entertainment, Inc. v. Lai Ying Music & Video Trading, Inc. and Wei Ping Yuan, 2005 WL 1231645 (S.D.N.Y. May 25, 2005) and U2 Home Entertainment v. Rolling Rock Music Corp. et al., 2004 WL 2609416 (S.D.N.Y. Nov. 17, 2004). Although we have not compared the lists of works in these actions with those set forth in Exhibit A, the claims of title will surely be similar if not identical. (Kohlberger Decl. Ex. 4.) On May 17, 2006, Kylin's counsel again requested that plaintiff provide evidence that it is the exclusive licensee of the works listed in plaintiff's draft complaint.

(Kohlberger Decl. Ex. 5.) The May 17 letter also stated that "Kylin TV was granted a sublicense to the relevant works by its affiliate, TransVideo International Ltd." (Id.)

On June 2, 2006, U2 commenced the instant action for copyright infringement. In addition to seeking the maximum statutory damages, attorneys fees and costs, plaintiff seeks to have defendants enjoined preliminarily during the pendency of this action and permanently from: (1) duplicating, distributing or uploading onto a computer network accessible by the public any of plaintiff's motion pictures; (2) transmitting, broadcasting or otherwise publicly performing any of plaintiff's motion pictures; and (3) infringing or contributing to or participating in the infringement by others of any of the copyrights in plaintiff's motion pictures, and from acting in concert with, aiding or abetting others to infringe any of said copyrights in any way.

The time to answer was extended to July 31, 2006, on which date defendants moved to dismiss the complaint pursuant to Rule 12(b)(6).In support of their motion to dismiss, defendants' counsel submitted as exhibits the online records of the United States Copyright Office, as well as copies of the results of a search conducted by Thomson of the assignment files of the United States Copyright Office for the twenty-five motion pictures at issue herein. (See Kohlberger Decl. Exs. 6-9.) Plaintiff filed its opposition brief on August 14, 2006, along with an affirmation by plaintiff's counsel, which allegedly includes documents relating to defendants Neulion, Falconstar and Transvideo, and an affidavit from U2's General Counsel, Alan T. Huie, Esq., which allegedly includes copies of copyright registrations or pending registrations, as well the corresponding "chain of title" documents. (Shapiro Affirm. Exs. A-F; Huie Aff. Exs. 1-25.) Defendants filed their reply on August 21, 2006.

Discussion

I. Documents That May Be Considered on a Motion to Dismiss

As a threshold matter, both parties to the instant action have submitted a number of exhibits with their briefs. When material outside the complaint is presented to, and not excluded by the court, "the motion shall be treated as one for summary judgment and disposed of as provided in [Federal Rule of Civil Procedure] 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion . . . ." Fed. R. Civ. P. 12(b). However, for purposes of this rule, the complaint is deemed to include documents attached to the complaint, documents referenced in the complaint, and documents integral to the complaint. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002); Fed. R. Civ. P. 10(c). A document is "integral" to the complaint where "the complaint relies heavily upon its terms and effects." Chambers, 282 F.3d at 153. "A plaintiff's reliance ...


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