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Digitalb, SH.A. v. Setplex, LLC

United States District Court, S.D. New York

January 11, 2018

DIGITALB, SH.A, Plaintiff,
v.
SETPLEX, LLC, et al., Defendants.

          OPINION & ORDER

          WILLIAM H. PAULEY III, DISTRICT JUDGE

         DigitAlb, Sh.a (“DigitAlb”) brings this action alleging copyright infringement, trademark dilution, communications piracy, and breach of contract against Setplex LLC (d/b/a NimiTV and d/b/a TVAlb), LBD Group, LLC, Lionel Dreshaj, and Benjamin Dreshaj (together, “Setplex”). Setplex moves to dismiss the claims for direct and contributory copyright infringement in the United States as well as the trademark dilution claim under Rule 12(b)(6). It also seeks to dismiss the claim for copyright infringement in various European countries for forum non conveniens under Rule 12(b)(3), and alternatively asks this Court to decline to exercise supplemental jurisdiction over that claim. For the reasons that follow, Setplex's motion is granted in part and denied in part.

         BACKGROUND

         The allegations in the First Amended Complaint (“Compl.”) are presumed true for the purposes of this motion. This action arises from the piracy of Albanian-language television programming. DigitAlb is an Albanian corporation engaged in the distribution of Internet Protocol Television (“IPTV”) programming from certain Albanian-language television channels. (Compl. ¶¶ 6, 14-15; Compl., Ex. A.) IPTV involves the delivery of streaming content and programming by “sending coded digital transmissions over the Internet, ” which are then translated by standard television receivers or other devices provided by the distributor to the subscriber. (See Compl. ¶¶ 6, 12.) DigitAlb distributed and published this programming pursuant to licenses from the Albanian and Kosovan originators of the programming who granted it exclusive distribution rights in the United States, the European Union, the United Kingdom, and other independent European countries. (Compl. ¶¶ 6, 13-15.) In addition, DigitAlb licensed other parties to distribute and publish this programming. (Compl. ¶¶ 6, 13.)

         The gravamen of the Complaint is that Setplex-a U.S.-based distributor of Albanian-language content and programming-infringed DigitAlb's exclusive distribution rights by pirating, retransmitting, and publishing the licensed programming to its own customers in the United States and in Europe without DigitAlb's authorization. (Compl. ¶¶ 1, 7, 16-17.) Although the Complaint largely glosses over the method through which Setplex purportedly distributed this programming, this Court gathers that, at minimum, Setplex delivered the programming to its subscribers through its website or by providing its subscribers with devices or equipment to receive and display the programming. (Compl. ¶¶ 26, 34, 39.) Following a pre-motion conference identifying certain pleading deficiencies in DigitAlb's U.S. copyright claims, DigitAlb amended its complaint to add “[e]xamples of the individual daily programs published on each channel and to which Plaintiff holds exclusive rights.” (Compl. ¶ 14; see Compl., Ex. A.) Four claims are the subject of this motion: (1) Count I, for direct copyright infringement in the United States; (2) Count II, for contributory copyright infringement in the United States; (3) Count IV, for copyright infringement in the United Kingdom, the European Union, and other European countries; and (4) Count VI, for false designation of origin and trademark dilution.

         LEGAL STANDARD

         The legal standards governing a motion to dismiss for failure to state a claim are well-established. On a Rule 12(b)(6) motion, the factual allegations in a complaint are accepted as true and all reasonable inferences are drawn in the plaintiff's favor. Gonzalez v. Hasty, 802 F.3d 212, 219 (2d Cir. 2015). To survive a motion to dismiss, the complaint “must contain sufficient factual matter” to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 663, 678 (2009) (citation omitted). In other words, the “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 500 U.S. 544, 555 (2007). While a complaint “does not need detailed factual allegations” to survive a motion to dismiss, Bell Atl. Corp., 500 U.S. at 555, a pleading that merely recites conclusory allegations or a “formulaic recitation of the elements of a cause of action” fails to state a claim, Iqbal, 556 U.S. at 678 (citation omitted).

         In deciding a Rule 12(b)(6) motion, a court may consider only the facts stated on the face of the complaint, the documents attached to the complaint by reference, and matters of which judicial notice may be taken. Leonard F. v. Isr. Disc. Bank of N.Y., 199 F.3d 99, 107 (2d Cir. 1999). Although Setplex includes several documentary exhibits in support of its motion to dismiss, those exhibits are not necessary to resolution of this motion.

         DISCUSSION

         I. U.S. Copyright Infringement Claims

         A. Direct Copyright Infringement

         Count I alleges that Setplex violated DigitAlb's exclusive distribution rights by distributing its licensed programming in the United States without authorization. (Compl. ¶¶ 19-21.) To state a claim for copyright infringement, a plaintiff must allege that it owns a valid copyright and that the defendant violated one of the exclusive rights the plaintiff holds in the work, which includes distribution rights. Capitol Records, LLC v. ReDigi Inc., 934 F.Supp.2d 640, 648 (S.D.N.Y. 2013) (citing Twin Peaks Prods., Inc. v. Publ'ns Int'l, Ltd., 996 F.2d 1366, 1372 (2d Cir. 1993)). In other words, a plaintiff must generally plead (1) the specific original works are the subject of the copyright claim; (2) that plaintiff owns the copyrights in those works; (3) that the copyrights were registered in accordance with 17 U.S.C. § 411; and (4) the acts by which and the time period during which the defendant infringed the copyright. Kelly v. L.L. Cool J., 145 F.R.D. 32, 36 (S.D.N.Y. 1992).

         Setplex tethers its arguments for dismissal to DigitAlb's failure to allege that the at-issue copyrights are registered in accordance with the Copyright Act. Specifically, it contends that DigitAlb acknowledges that the copyrights are not registered pursuant to 17 U.S.C. § 411, and that DigitAlb has not alleged that the copyrights are exempt from registration as non-United States works. DigitAlb does not dispute that the at-issue copyrights are not registered, but instead retorts-without citing any legal authority-that it is not required to explicitly plead that the works are exempt from registration.

         Pursuant to the Copyright Act, holders of copyrights in “United States works” may not institute a copyright infringement suit “until preregistration or registration has been made.” 17 U.S.C. § 411(a). A work is a “United States work” only if, in the case of a published work, it is first published (1) in the United States; (2) simultaneously in the United States and another treaty party whose law grants copyright protection for at least the term provided in the United States; (3) simultaneously in the United States and a foreign nation that is not a treaty party; or (4) in a foreign nation that is not a treaty party, and all the authors of the work are headquartered in the United States. 17 U.S.C. § 101. On the other hand, non-United States works-generally, works first published outside the United States in a foreign country that is a signatory to the Berne Convention-are exempt from registration. See 5 Patry on Copyright § 17:77 (2017); accord Jose Armando Bermudez & Co. v. Bermudez Int'l, 2000 WL 1225792, at *10 (S.D.N.Y. Aug. 29, 2000).

         As a threshold matter, this Court rejects DigitAlb's assertion that it is not required to allege exemption from § 411's registration precondition. Although DigitAlb appears to concede that works first published abroad and in the United States simultaneously would be subject to registration, its argument implicitly suggests that because the Complaint does not allege simultaneous publication, those works must be exempt. (See Memorandum of Law Opposing the Motion of Defendants to Dismiss Counts I, II, IV, and VI of the First Amended Complaint, ECF No. 51 (“Pl.'s Opp.”) at 4.) But this cannot be the rule. If a court were to woodenly accept that a work is exempt from registration based on the omission of allegations indicating that the work is a United States work, any party seeking to surmount the registration requirement could simply omit any allegation of first publication in the United States or first publication simultaneously within and outside the United States. Thus, should DigitAlb seek to rely on the § 411 registration exemption, it must allege that the works are not United States works within the meaning of § 101. See Joint Stock Co. Channel One Russia Worldwide v. Infomir LLC, 2017 WL 696126, at *13 (S.D.N.Y. Feb. 15, 2017); accord Kernel Records Oy v. Mosley, 694 F.3d 1294, 1304-05 (11th Cir. 2012) (summary judgment context).

         While DigitAlb proclaims that it “is certain from the allegations in the First Amended Complaint” that it did not publish the at-issue programming simultaneously in the United States, a careful examination of the relevant allegations reveals DigitAlb's conclusion to be far from certain. (See Pl.'s Opp. at 5.) Here, the only allegations pertaining to publication of the programming are that DigitAlb “published those works outside of the United States” and that it “licens[ed] other distributors within and without the United States, not including the defendants, to publish them.” (Compl. ¶ 13.) But these allegations do not identify where or when the programming was first published.[1]

         Two additional points warrant brief discussion. First, DigitAlb avers that the programming was “created, developed, and produced . . . outside of the United States, i.e. in the Republic of Albania or the Republic of Kosovo.” (Compl. ¶ 13.) Indeed, courts in this Circuit sometimes frame the registration requirement in terms of the work's “country of origin.” E.g., Sadhu Singh Hamdad Trust v. Ajit Newspaper Advert., Mktg. & Commc'ns, Inc., 503 F.Supp.2d 577, 584 (E.D.N.Y. 2007) (citing Jose Armando Bermudez & Co., 2000 WL 1225792, at *10). Of course, this phrasing makes sense in light of § 411(a)'s historical exemption from registration of “copyright[s] in Berne Convention works whose country of origin is not the United States.” 17 U.S.C. § 411(a) (1997) (emphasis added). But like § 101's current definition of “United States work, ” the preceding version of § 101 defined the “country of origin” as the United States for § 411 purposes based on where the work was “first published.” See 17 U.S.C. § 101 (1997); accord 5 Patry on Copyright § 17:77 (couching the “country of origin of the work” in terms of where that work was first published). Therefore, while the amended complaint suggests that the works may have “originated” in Albania or Kosovo from a layman's perspective, it says nothing about where the works were first published.

         Second, DigitAlb alleges that the programming on at least some of the at-issue channels-Top Channel, Top News, Musical, and Top Channel HD-was “first aired . . . either (1) outside of the United States or (2) simultaneously outside the United States and within the United States.” (Compl. ¶ 50.) This too is insufficient to allege where the works were first published because the mere public performance or display of a work does not constitute publication. 17 U.S.C. § 101; accord 1 Nimmer on Copyright § 4.11 (explaining that broadcast of audiovisual works does not constitute publication). Accordingly, DigitAlb's direct copyright infringement claim is dismissed.

         B. Contributory Copyright Infringement

         Count II alleges contributory infringement by LBD Group and the Dreshaj Defendants on the basis that they facilitated, managed, or directed Setplex's unauthorized distribution of the programming by entering into contracts with consumer subscribers for the programming and causing the delivery of the programming to the subscribers. (Compl. ¶¶ 26-29.) To state a claim for contributory copyright infringement, a plaintiff must allege that someone “with knowledge of the infringing activity[] induce[d], cause[d], or materially contribute[d] to the infringing conduct of another.” Blank Prods., Inc. v. Warner/Chappell Music, Inc., 2013 WL 32806, at *3 (S.D.N.Y. Jan. 3, 2013) (quoting Arista Records, LLC v. Doe 3, 604 F.3d 110, 117-18 (2d Cir. 2010)). Setplex's only argument for dismissal of this claim is that DigitAlb's failure to sufficiently plead the registration element is fatal to its contributory copyright infringement claim. It does not otherwise challenge the sufficiency of the allegations related to contributory infringement. This Court's analysis of the direct copyright infringement claim compels the same result as to the contributory infringement claim because § 411 is a precondition to suit, not to bringing direct infringement claims only. Accordingly, Count II is also dismissed.

         C. Le ...


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