United States District Court, S.D. New York
MEMORANDUM OPINION & ORDER
M. WOOD, District Judge.
Windstream Services, LLC ("Windstream"), an
internet service provider ("ISP"), brings this
action against Defendants BMG Rights Management (US) LLC
("BMG"), a copyright holder, and Rightscorp Inc.
("Rightscorp"), BMG's copyright enforcement
agent, seeking declaratory judgment regarding copyright
noninfringement and damages for intentional interference with
contractual relations. Defendants move to dismiss for lack of
subject-matter jurisdiction and for failure to state a claim.
For the reasons set forth below, the motion to dismiss is
provides internet access services to over one million
subscribers nationwide. Am. Compl. ¶¶ 12-14, ECF
No. 38. Windstream's subscribers pay a monthly
subscription fee to receive unlimited internet access.
Id. ¶ 16. Windstream provides a
"pipeline" to the internet to its subscribers and
does not monitor or control the actions taken by its
subscribers or the content transmitted over its network.
Id. ¶ 26. Instead, Windstream merely transmits
and routes the internet content requested by its subscribers.
Id. ¶¶ 27-29.
of their subscriptions, Windstream's subscribers must
agree to Windstream's Acceptable Use Policy
("AUP") and Terms and Conditions
("T&Cs") before using Windstream's internet
services. Id. ¶ 17. As part of the AUP,
Windstream's subscribers acknowledge that it is a
violation of the AUP to use Windstream's internet
services in any way that "infringes intellectual
property." Id. ¶ 20. The AUP also provides
copyright owners with instructions for filing a copyright
infringement notice with Windstream and instructions for
submitting counter-notifications in response to a wrongfully
filed copyright infringement notice. Id. ¶ 23.
Windstream reserves the right to terminate service "that
it determines is excessive or unreasonable, "
id. ¶ 21, and may suspend or terminate accounts
that violate the T&Cs, id. ¶ 22. The
T&Cs state Windstream's ability to enforce copyright
infringement policies and state that Windstream may limit,
interrupt, suspend, terminate, or refuse internet services if
a subscriber is using Windstream's services for unlawful
activity. Id. ¶ 24.
owns, administers, and licenses copyrights in musical
compositions. Id. ¶ 33. BMG hired Rightscorp to
detect and document potential infringement of BMG's
coprights. Id. ¶¶ 34-36. In particular,
Rightscorp has technology to monitor peer-to-peer filesharing
systems such as BitTorrent. Id. ¶ 36.
BitTorrent is a filesharing system that allows a user to
"join a 'swarm' of hosts to upload or download
content from one another simultaneously." Id.
¶ 37. When a user requests a file, the BitTorrent
software "identifies multiple host computers with the
identical file, simultaneously downloads small pieces of the
requested file from each of these computers, and then
reassembles the pieces into one file on the requesting
computer." Id. Rightcorp's monitoring
system "searches BitTorrent systems and extracts
information attempting to identify alleged infringers of
BMG's copyrights." Id. ¶ 38. Using
this information, Rightscorp, at BMG's direction,
automatically generates copyright infringement notification
letters that describe the potential infringement activity.
Id. ¶ 39.
at least 2011, BMG, through Rightscorp, has sent and
continues to send Windstream copyright notices describing
instances of alleged infringement by Windstream's
subscribers. Id. ¶ 41. The parties provided the
Court with one representative notice. Allan Decl. Ex. 1
("Sample Notice"), ECF No. 43-1; see also
Miller Decl. Ex. A, ECF No. 51-1. The Sample Notice is an
email that begins "Note to ISP: Please forward the
entire notice." Sample Notice at 1. The Sample Notice
is, from then on, addressed to the accused infringer, and
Your ISP has forwarded you this notice. Your ISP account has
been used to download, upload or offer for upload copyright
content in a manner that infringes on the rights of the
copyright owner. Your ISP service could be suspended if this
matter is not resolved. You could be liable for up to $ 150,
000 per infringement in civil penalties.
Id. The Sample Notice describes the filename of the
song that is allegedly covered by BMG's copyright, notes
the time and date of the alleged infringement, states that
BMG is the exclusive owners of copyrights for that musical
artist, and identifies the computer of the accused infringer
by its internet protocol ("LP.") address.
Id. The Sample Notice states that the "notice
is an offer of settlement" and provides an internet link
to Rightscorp's "automated settlement system, "
where the accused infringer can pay $30 per infringement to
receive a legal release from BMG. Id. The Sample
Notice describes that unauthorized copying or distribution
constitutes copyright infringement and states that Rightscorp
has a good-faith belief that the use complained of is not
authorized by the copyright owner. Id. at 1-2. The
Sample Notice is signed by Rightscorp's CEO. Id.
April 1, 2016, counsel for BMG sent a letter to
Windstream's general counsel regarding copyright
infringement of BMG's copyrights on Windstream's
network. Am. Compl. ¶ 51; see also Miller Decl.
Ex. B ("April 1 Letter"), ECF No. 51-2. According
to the April 1 Letter, Windstream had contacted Rightscorp in
December "to discuss a solution to the ongoing
infringement, " and BMG responded to try to reach such a
resolution. April 1 Letter at 1. The letter describes the
notifications BMG and Rightscorp have provided to Windstream,
including: the emailed notices; a dashboard that Rightscorp
provided to Windstream "to view both historic and real
time infringement of BMG's copyrighted works on its
network"; and "summary letters, detailing the
infringement of its copyrights on Windstream's network
and requesting Windstream to take appropriate action."
Id. Based on these mechanisms, BMG states that
Windstream has knowledge of the infringement on its network,
which includes millions of instances of infringement of
thousands of copyrighted works. Id. The letter
suggests that Windstream is allowing repeat infringers to use
its network to continue to infringe BMG's copyrights even
after Windstream was notified of specific instances of
infringement and suggests that Windstream may be liable for
actual or statutory damages. Id. at 2. The letter
concludes by suggesting that "the parties begin an open
dialogue to discuss an amicable resolution to this
ongoing" infringement. Id.
27, 2016, Windstream filed the instant lawsuit. Compl., ECF
No. 1. In the amended complaint, Windstream brings suit on
three counts: (1) declaratory judgment for noninfringement of
copyrights; (2) declaratory judgment for statute of
limitations; and (3) intentional inference with contractual
relations under California law. Am. Compl. ¶¶
59-79. As to the first count, Windstream seeks thirteen
declarations from the Court:
(a) Windstream, as a mere conduit for the transmission of
Internet services, is not directly liable under the Copyright
Act for any alleged infringement of BMG's copyrights;
(b) Windstream, as a mere conduit for the transmission of
Internet services, is not liable for contributory
infringement of any of BMG's copyrights;
(c) Windstream, as a mere conduit for the transmission of
Internet services, is not liable for vicarious infringement
of any of BMG's copyrights;
(d) Windstream, as a mere conduit for the transmission of
Internet services, is not liable for inducing infringement of
any of BMG's copyrights;
(e) Windstream, as a mere conduit for the transmission of
Internet services, is the type of ISP contemplated by 17
U.S.C. § 512(a) and is, therefore, not subject to the
§ 512(c) take-down notice provisions of the DMCA,
including any Notices issued by Defendants;
(f) Windstream has not been and is not required to comply
with or otherwise respond to Defendants' Notices;
(g) Even if Windstream were subject to the DMCA's
take-down notice provisions, Defendants' Notices fail to
comply with the DMCA's express statutory requirements for
take-down notices as set forth in 17 U.S.C. § 512(c)(3)
and are therefore insufficient to impose any legal duty on
(h) Defendants' Notices do not provide Windstream with
actual knowledge of any copyright infringement of BMG's
copyrights by Windstream's subscribers;
(i) Defendants' Notices constitute misrepresentation of
copyright infringement under 17 U.S.C. § 512(f);
(j) Defendants' Notices constitute intentional
interference with contractual relations under California law;
(k) Windstream has never had actual knowledge of any
copyright infringement of BMG's copyrights by
(l) Windstream has not acted willfully in violation of any
provision of the Copyright Act or other laws; and
(m)BMG is not entitled to any compensation or damages from
Windstream for any alleged infringement of ...