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Muench Photography, Inc. v. John Wiley & Sons, Inc.

United States District Court, Second Circuit

August 6, 2013

MUENCH PHOTOGRAPHY, INC., Plaintiff,
v.
JOHN WILEY & SONS, INC. Defendant.

Memorandum & Order

LORETTA A. PRESKA, Chief District Judge.

Plaintiff Muench Photography, Inc. ("Plaintiff" or "Muench") filed this action for alleged claims for copyright infringement, contributory copyright infringement, vicarious copyright infringement, and breach of contract by Defendant John Wiley & Sons, Inc. ("Defendant" or "Wiley"). Before the Court is Defendant's Partial Motion to Dismiss the First Amended Complaint [dkt. no. 11]. For the reasons that follow, Defendant's motion is GRANTED.

I. BACKGROUND

Plaintiff filed the instant action on or about October 5, 2012. (See Complaint [dkt. no. 1].) Plaintiff filed the First Amended Complaint [dkt. no. 10] (the "FAC") on or about November 5, 2012. In considering this partial motion to dismiss the FAC, the Court takes the factual allegations in the complaint as true and draws all reasonable inferences in favor of the plaintiff. See Goldstein v. Pataki , 516 F.3d 50, 56 (2d Cir. 2008).

Plaintiff Muench is a California corporation principally placed in Goleta, California. (FAC ¶ 1.) It is the owner of the photographs created by David Muench and Marc Muench at issue in this suit (the "Photographs") and of the copyrights of said Photographs, as applicable. (Id. at ¶ 1, 6-7; Ex. 1.) Defendant Wiley is a New York corporation with a principal place of business located in Hoboken, New Jersey, that, among other things, publishes and sells educational textbooks. (Id. ¶ 2.) Defendant sells and distributes publications containing the Photographs throughout the United States, including in the Southern District of New York, and overseas. (Id.) Defendant's use of the Photographs stems from an agreement between Defendant and Corbis Corporation ("Corbis"), a stock photography agency acting on behalf of Plaintiff. (Id. ¶ 8, 24.)

Between 2003 and 2009, in response to permission requests from Defendant, Corbis sold Defendant limited licenses to use copies of the Photographs in numerous publications. (Id. ¶ 9.) These licenses contained express limitations on Defendant's use of the Photographs, including the number of copies, distribution area, image size, language, duration and/or media (print or electronic). (FAC ¶ 9; Ex. 1.) Additionally, an End User License Agreement (the "EULA") was contained within the licensing agreements requiring Wiley to pay ten times the license fee for any unauthorized use of the Photographs, in addition to any other fees, damages, and penalties available to Plaintiff. Specifically, the EULA states:

[The End User does] not acquire, and shall not claim, any rights rights (trademark, copyright or otherwise) in the Content itself apart from the End Use. Unauthorized use of Content constitutes infringement of copyright and other applicable rights and shall entitle Corbis to exercise all rights and remedies under applicable copyright and other laws, including monetary damages against all users and beneficiaries of the use of such Content. Corbis in its sole discretion reserves the right to bill [the End User] (and [the End User] hereby agree[s] to pay) ten (10) times the license fee for any unauthorized use, in addition to any other fees, damages and penalties Corbis may be entitled to under this Agreement and applicable law. The foregoing is not a limiting statement of Corbis'[s] or its Content sources' rights or remedies in connection with any unauthorized use of the Content or breach of the Agreement.

(See FAC ¶ 27.)

According to the FAC, Defendant knew when making its requests for licenses to Corbis that Defendant's actual uses under the licenses would exceed the usage rights it was requesting and for which it was paying. (FAC ¶ 10.) In other words, Defendant intended to parlay its misrepresentations into obtaining the Photographs at a lower cost than it would have paid had it been upfront about the scope of its intended uses and to conceal any copyright infringements that occurred as a result. (Id. ¶ 11.) Defendant exceeded the permitted uses under the terms of the licenses in publications identified in the FAC and used the Photographs in publications yet to be identified without any license or permission. (Id. ¶¶ 12-13.) Such unauthorized uses have helped Defendant generate billions of dollars in revenue through its publications and have deprived Plaintiff of compensation. (Id. ¶ 16.)

Additionally, the FAC sets forth that Defendant-as the only party in a position to know-had an equitable duty to disclose any unauthorized copying or distribution of the Photographs. (Id. ¶ 14.) On or about July 27, 2010, Corbis assigned to Plaintiff all claims and causes of action for the unauthorized use of the Photographs related to reproduction and distribution limits. (Id. ¶ 26 & Ex. 3.) Upon inquiry by Plaintiff on August 18, 2012, Defendant refused to disclose its uses of the Photographs. (Id. ¶ 15 & Ex. 5.)

During the relevant period, the FAC alleges that Defendant also provided the Photographs to other entities-subsidiary companies, divisions, affiliates, or third parties, including John Wiley & Sons Canada Ltd. And John Wiley & Sons Australia Ltd. (collectively, the "Third Parties")-who reprinted or distributed the Photographs in publications without Plaintiff's permission. (Id. ¶ 19.) Moreover, Defendant, who had the right and ability to supervise the Third Parties' use of the Photographs, knew when it provided the Photographs to the Third Parties that the Third Parties would use the Photographs without Plaintiff's authorization. (Id. ¶¶ 21-22.) As a result, Wiley profited from providing the Photographs to the Third Parties. (Id. ¶ 23.)

Plaintiff now alleges that Defendant committed copyright infringement, contributory copyright infringement, vicarious copyright infringement, and breach of contract and demands damages. (See id. ¶¶ 30-42.) Defendant requests that this Court dismiss some of those claims made by Plaintiff in the FAC.

II. ANALYSIS

A. Motion to Dismiss ...


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