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State Street Global Advisors Trust Co. v. Visbal

United States District Court, S.D. New York

January 3, 2020

STATE STREET GLOBAL ADVISORS TRUST COMPANY, Plaintiff,
v.
KRISTIN VISBAL, Defendant.

          MEMORANDUM ORDER AND OPINION

          GREGORY H. WOODS UNITED STATES DISTRICT JUDGE.

         Fearless Girl-a bronze statue that became a viral sensation after it was placed at Bowling Green in New York City-stands at the center of the dispute in this case. In 2017, State Street Global Advisors (“SSGA”) commissioned sculptor Kristen Visbal to create an original statue for International Women's Day. After it was unveiled, that statue became known as “Fearless Girl” and received wide media attention. SSGA and Visbal then executed a set of contracts that governed the use of the Fearless Girl copyright and trademark. When SSGA learned that Visbal sought to sell replicas of the statue to buyers in Australia and Germany in ways that allegedly violated the terms of these contracts, SSGA commenced this litigation. Visbal has subsequently counterclaimed against SSGA, alleging a breach of those same contracts.

         There are two motions pending before the Court. First, SSGA moves to amend its complaint. Dkt No. 82. Because SSGA's direct copyright infringement and trademark infringement claims are not futile and would not unduly prejudice Visbal, SSGA's motion to amend is GRANTED as to these claims. However, Plaintiff's claims for secondary copyright liability are extraterritorial as alleged. Consequently, Plaintiff's motion to amend is futile as to these claims and Plaintiff's motion to amend is DENIED in part. Second, SSGA moves to dismiss a subset of Visbal's counterclaims and to strike a subset of Visbal's affirmative defenses. Dkt No. 120. Because Visbal has not adequately alleged the elements of tortious interference with contract, fraud in the inducement, copyright infringement, or contributory copyright infringement, SSGA's partial motion to dismiss and partial motion to strike is GRANTED.

         I. PLAINTIFF'S MOTION TO AMEND

         A. BACKGROUND

         1. Facts[1]

         The proposed Second Amended Complaint (“SAC”) alleges that “SSGA conceived and launched its Fearless Girl campaign”-“a global campaign through which SSGA initiates corporate change to support gender diversity and woman leadership on corporate boards”-to “demand[] support of corporate gender diversity.” SAC, Dkt No. 83-4, ¶¶ 5, 7. Plaintiff “unveiled Fearless Girl” on March 8, 2017 to promote a fund it manages that is “designed to measure the performance of U.S. large, successful companies that are ‘gender diverse[.]'” Id. ¶¶ 2, 25-26. Fearless Girl was installed at Bowling Green in New York City and was originally slated to stand for one month. Id. ¶ 27. However, given the statue's popularity, it remained at Bowling Green until December 10, 2018 when it was moved to a new location outside the New York Stock Exchange (“NYSE”). Id.

         “SSGA owns U.S. Trademark Registration No. 5, 728, 466 (the ‘466 Registration') for FEARLESS GIRL in connection with ‘promoting public interest in and awareness of gender and diversity issues, and issues pertaining to the governance of corporations and other institutions' . . . and ‘funds investment; financial management services; financial investment advisory services; financial administration of donor-advised funds for charitable purposes; accepting and administering monetary charitable contributions; and financial information' . . . [i]n addition to its common law rights in the FEARLESS GIRL mark[.]” Id. ¶ 34 (brackets omitted). “SSGA also owns pending U.S. Trademark Application Serial No. 87/570, 401 (the ‘401 Application') for FEARLESS GIRL in connection with ‘providing recognition and incentives by the way of awards to demonstrate excellence in the field of gender and diversity issues[.]'” Id. ¶ 35 (brackets omitted). Defendant has also “obtained a copyright registration for the three-dimensional Fearless Girl sculpture from the U.S. Copyright Office, Registration No. VAu001281157, effective March 16, 2017.” Id. ¶ 41.

         In 2017, Plaintiff and Defendant entered into three contracts: a Master Agreement, Dkt No. 16-2, at 2-12, a Copyright License Agreement, Dkt No. 16-2, at 16-19, and a Trademark License Agreement, Dkt No. 16-2, at 23-30 (collectively, the “Agreements”), “concerning the promotion and use of Fearless Girl.” SAC ¶¶ 22, 36.[2] According to the SAC, “under the Agreements, SSGA owns exclusive rights to use the Fearless Girl artwork in connection with financial services and with gender diversity issues in corporate governance.” Id. ¶ 37. Defendant “cannot sell, license, or distribute copies of the Fearless Girl artwork (i) for any commercial and/or corporate purpose with very limited exceptions, (ii) to any third party to use in connection with gender diversity issues in corporate governance or in the financial services sector, or (iii) to any political party, politician, activist, or activist group with very limited exceptions.” Id. (citing Agreements at 16 (Copyright License Agreement § 1); id. at 5 (Master Agreement § 7(c))).

         a. The Australian and German Sales

         The SAC alleges that Defendant sold a Fearless Girl replica to three Australian firms (the “Australian Sale”). Plaintiff alleges that it learned from “news sources” that Fearless Girl was “being brought to Melbourne[, Australia] by lawyers Maurice Blackburn and industry super funds HESTA and Cbus, as a symbol of the fight for gender equality.” Id. ¶ 48 (quotation omitted). The SAC alleges that “Maurice Blackburn is a large Australian law firm whose specialties include personal injury, class actions, superannuation, insurance, and financial services.” Id. ¶ 49. HESTA is the “Health Employees Superannuation Trust Australia, which is a super fund managed by H.E.S.T. Australia Limited.” Id. ¶ 50 (quotation omitted). Cbus is the “Construction and Building Unions Superannuation, and is one of Australia's largest super funds.” Id. ¶ 51. “These Australian firms promoted Fearless Girl in corporate press releases that” allegedly “suggested that it was SSGA's statue that was arriving in Australia, rather than” a replica. Id. ¶ 52. The SAC alleges that “Maurice Blackburn's Instagram account, which depicts the company's trademarks, slogans, and branding, boasted a photograph of the unauthorized Fearless Girl replica and made prominent use of SSGA's FEARLESS GIRL trademark alongside its own[.]” Id. ¶ 53. Plaintiff alleges that “[u]pon information and belief, Visbal, or an individual acting on Visbal's behalf, took the photograph of the Fearless Girl replica” that was displayed on Maurice Blackburn's Instagram Account “while [the replica] was in the U.S. and supplied it to Maurice Blackburn prior to sending the replica from the U.S. to Australia.” Id. ¶ 54.

         Plaintiff alleges that “[a]fter SSGA filed this lawsuit, Visbal participated in a promotional event hosted by Maurice Blackburn, HESTA, and Cbus at Federation Square in Melbourne, Australia, to unveil the unauthorized Fearless Girl replica she sold and shipped from the U.S.” Id. ¶ 60. This replica allegedly “d[id] not give attribution to SSGA, as required under Section 1(d) of the Master Agreement.” Id. ¶ 61. The SAC alleges that “Visbal delivered two speeches as part of the unveiling event” during which she “commended and promoted Maurice Blackburn, Cbus and HESTA and spoke about gender diversity issues in corporate governance and in the financial services sector[.]” Id. ¶ 63. Plaintiff further alleges that “[a]fter Visbal's and the Australian firms' unveiling ceremony, the Australian firms continued to publicize the unauthorized replica in connection with gender equality in the workplace and alongside prominent displays of their corporate branding[.]” Id. ¶ 64.

         The SAC also alleges that Defendant sold, or planned to sell, a replica to “an unknown German buyer or buyers [(the ‘German Sale'] . . . and that there would be an event to unveil the replica in Germany, likely at or around the same time as the event in Australia.” Id. ¶ 73. However, no unveiling has occurred in Germany. See Section I.B, infra (describing the preliminary injunction entered by the Court to block both the sale to the undisclosed German buyer to the extent that it had not already been completed and the public unveiling in Germany).

         b. Defendant's Website

         Plaintiff alleges that Defendant has created a website “to sell smaller-size statuette replicas to prospective buyers[.]” Id. ¶ 80. The SAC alleges that Defendant “has used and is using an automated sales form and/or web-based sales system on her website to accept orders for a Fearless Girl statuette from any buyer who completes the sales form, provides a valid address, and pays the purchase price.” Id. (emphasis omitted). This website allegedly “includes no safeguard to reasonably ensure that replicas of Fearless Girl do not end up in the wrong hands and are not used for a purpose prohibited by the parties' Agreements.” Id. (emphasis omitted). The SAC alleges that, via her website, “Visbal sold a statuette to an employee of the financial institution Edward Jones who, upon information and belief, was acting on behalf of Edward Jones for use at a corporate-sponsored event[.]” Id. ¶ 87. Thus, Plaintiff alleges that Defendant “displayed two-dimensional images of the Fearless Girl artwork on social media” and “displayed a three-dimensional statuette of the Fearless Girl artwork at a conference all in connection with gender diversity issues in corporate governance and in the financial services sector.” Id. ¶ 90.[3]

         The SAC also alleges that “Section 11(e) of the Master Agreement prohibits Visbal from registering a domain name that incorporates the FEARLESS GIRL mark, with the sole exception being that Visbal may create a website for direct sales of Fearless Girl replicas using the domain ‘fearlessgirlsculpture.com' and may use the domain ‘fearlessgirl.us' to redirect to the ‘fearlessgirlsculpture.com' website.” Id. ¶ 94 (emphasis omitted). According to the SAC, “Visbal is using ‘fearlessgirl.us' beyond this narrow exception by using ‘fearlessgirl.us' as her primary website to sell Fearless Girl statuettes rather than as a redirect page, and by using ‘fearlessgirlsculpture.com' to redirect to her website at www.fearlessgirl.us.” Id. ¶ 95.

         Plaintiff alleges that Defendant is “using the ‘fearlessgirl.us' domain-which contains SSGA's entire FEARLESS GIRL mark-in connection with educational services, and the promotion of public interest in gender and diversity issues in corporate governance, including in the financial services sector[.]” Id. ¶ 96. “For example, Visbal's webpage at https://www.fearlessgirl.us/the-facts/ cites to the same or similar gender diversity studies that are discussed by SSGA in promotional material for its Fearless Girl campaign, e.g., at https://www.ssga.com/about-us/reinventing-shareholder-activism-stewardship.html.” Id. Hence, the SAC alleges that “Visbal is not using the FEARLESS GIRL name solely to refer to SSGA's statue, but is instead using FEARLESS GIRL to promote and advertise herself and her replica sales, and to advertise and reinforce the connection between Fearless Girl and financial services and gender diversity issues in corporate governance[.]” Id. (emphasis omitted).[4]

         2. Procedural History

         On February 14, 2019, Plaintiff filed a complaint in New York Supreme Court. See Notice of Removal, Dkt No. 1, at 1. On February 24, 2019, Plaintiff filed an amended complaint alleging breach of contract and violation of the parties' Agreements. See Id. at 1, 21-26. On February 25, 2019, Defendant removed the case from New York state court to federal court. Id. at 1.

         Shortly thereafter, Plaintiff applied for the entry of a temporary restraining order to enjoin Defendant from completing the German Sale or, if a Fearless Girl replica had already been sent to Germany, “order[ing Defendant] to obtain and retain possession and ‘actual instructive' control over such German replica” so that it was not unveiled. Transcript of Proceedings Held on February 25, 2019 (“February 25 Hearing Transcript”), Dkt No. 29, at 51; see also Order of March 5, 2019, Dkt No. 25, at 1. Plaintiff also requested that the Court “enjoin defendant from promoting her unauthorized (a) Australian replica and (b) German replica, because such replica is being used to promote one or more third parties and/or was given to a corporate entity or a financial institution in breach of a master agreement; (4) order defendant to place the required attribution statement to SSGA on the replica in (a) Australia and (b) Germany; and (5) enjoin defendant from using an automated sales form to sell replicas, including, but not limited to, enjoining use of the automated sales form located at the www.fearlessgirl.us website.” February 25 Hearing Transcript at 52.

         The Court denied Plaintiff's motion. Id. at 56. The Court's ruling was based in part on factual proffers by defense counsel during the February 25 hearing. Id. at 52. Defense counsel proffered that “there is no imminent sale of the Fearless Girl statue to any buyer or buyers in Germany” because “that sale was consummated, according to counsel, a year ago or so, and there is no imminent announcement or unveiling of that sculpture.” Id. Defense counsel also proffered that Defendant “will, in connection with her conversation or speech regarding the Australian sculpture, not be promoting the corporate entity, or financial institution, or the law firm which worked together, apparently, to fund its acquisition.” Id. In addition, defense counsel proffered that “the sales terms that have been presented in connection with” the automated sales form “adequately address[ed] the concerns” raised by Plaintiff. Id. at 54. Based on those proffers, the Court concluded that Plaintiff had not established that it would suffer irreparable harm in the absence of a temporary restraining order with respect to the German or Australian sales or the automated sales form on Defendant's website. Id. at 56-57.[5]

         On February 27, 2019, Plaintiff submitted a letter “inform[ing] the Court that Defendant had made numerous statements in speeches at the Fearless Girl unveiling ceremony in Australia that contradicted her counsel's representations and, further, that undermined the Court's basis for concluding that Plaintiff had not made a sufficient showing of irreparable harm in its previous application for a temporary restraining order.” Order of March 7, 2019 (the “Preliminary Injunction”), Dkt No. 27, at 1; see also Plaintiff's February 27, 2019 Letter, Dkt No. 7; Transcript of Proceedings Held on March 5, 2019, Dkt No. 39. Therefore, the Court entered a preliminary injunction enjoining Defendant from completing the sale of a Fearless Girl replica to “her undisclosed buyer or buyers in Germany, to the extent that such delivery, sale, or transfer has not already taken place; . . . from promoting a German replica; and . . . from using an automated sales form to sell replicas[.]” Preliminary Injunction at 3.

         On April 22, 2019, Defendant filed a letter requesting that the Court vacate the preliminary injunction. Dkt No. 54. The Court concluded that its language enjoining Defendant from using an automated sales form had been overbroad and issued an order amending and restating its Preliminary Injunction. Order of May 23, 2019 (the “Amended Preliminary Injunction”), Dkt No. 79. The restated preliminary injunction enjoined Defendant “from making automated sales of replicas.” Id. at 3.

         Plaintiff now seeks leave to file a second amended complaint to add claims for copyright infringement, trademark infringement, unfair competition, and false designation of origin. See SAC ¶¶ 161-69 (direct copyright infringement); id. ¶¶ 170-78 (inducement of copyright infringement); id. ¶¶ 179-87 (contributory copyright infringement); id. ¶¶ 188-96 (vicarious copyright infringement); id. ¶¶ 197-203 (trademark infringement); id. ¶¶ 204-07 (unfair competition and false designation of origin). On May 24, 2019, Plaintiff filed a motion for leave to file a second amended complaint and an accompanying memorandum law. See Motion for Leave to File Second Amended Complaint, Dkt No. 82; Memorandum of Law in Support of Motion for Leave to File Second Amended Complaint (“Mem.”), Dkt No. 83. Defendant subsequently filed an opposition to Plaintiff's motion, Memorandum of Law in Opposition to Motion for Leave to File Second Amended Complaint (“Opp.”), Dkt No. 92, and Plaintiff filed a reply, Reply Memorandum of Law in Support of Motion for Leave to File Second Amended Complaint (“Rep.”), Dkt No. 93.

         B. LEGAL STANDARD

         Pursuant to Rule 15 of the Federal Rules of Civil Procedure, a party may amend a pleading once as a matter of right within 21 days of serving it or, “if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever is earlier.” Fed.R.Civ.P. 15(a)(1). After that point, “a party may amend its pleading only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). However, “[t]he court should freely give leave when justice so requires.” Id. “Reasons for a proper denial of leave to amend include undue delay, bad faith, futility of amendment, and perhaps most important, the resulting prejudice to the opposing party.” AEP Energy Servs. Gas Holding Co. v. Bank of Am., N.A., 626 F.3d 699, 725 (2d Cir. 2010) (citation omitted); see also Id. (“The rule in this Circuit has been to allow a party to amend its pleadings in the absence of a showing by the nonmovant of prejudice or bad faith.”). “Mere delay . . . absent a showing of bad faith or undue prejudice does not provide a basis for a district court to deny the right to amend.” Pasternack v. Shrader, 863 F.3d 162, 174 (2d Cir. 2017) (quotation omitted).

         An amendment to a pleading is futile if the proposed claim could not withstand a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Lucente v. Int'l Bus. Machines Corp., 310 F.3d 243, 258 (2d Cir. 2002). Rule 12(b)(6) permits a litigant to file a motion to dismiss for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). In deciding a motion to dismiss under Rule 12(b)(6), the Court must “accept[] all factual allegations [in the complaint] as true and draw[] all reasonable inferences in the plaintiff's favor.” DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 110-11 (2d Cir. 2010) (quoting Shomo v. City of New York, 579 F.3d 176, 183 (2d Cir. 2009)). To avoid dismissal, a complaint must allege “sufficient facts, taken as true, to state a plausible claim for relief.” Johnson v. Priceline.com, Inc., 711 F.3d 271, 275 (2d Cir. 2013) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)).

         Courts follow a “two-pronged approach” in determining plausibility. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). “First, although ‘a court must accept as true all of the allegations contained in a complaint,' that ‘tenet' ‘is inapplicable to legal conclusions' and ‘threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.'” Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009) (quoting Iqbal, 556 U.S. at 678) (alterations omitted). Second, a court determines “whether the ‘well-pleaded factual allegations,' assumed to be true, ‘plausibly give rise to an entitlement to relief.'” Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010) (quoting Iqbal, 556 U.S. at 679). Deciding whether a complaint states a plausible claim is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. To satisfy the “plausibility” requirement, the plaintiff must plead facts that permit the court “to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678 (citing Twombly, 550 U.S. at 556). While the court must accept material allegations in a complaint as true, the court need not accept conclusory allegations. See Hirsch v. Arthur Anderson & Co., 72 F.3d 1085, 1092 (2d Cir. 1995).

         Although a court is normally limited to the contents of the complaint in considering a motion to dismiss pursuant to Rule 12(b)(6), a court may permissibly consider documents other than the complaint in certain circumstances, such as when they are either attached to the complaint or incorporated into it by reference and integral to its allegations. See Cortec Industries, Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991); see also Ackerman v. Local Union 363, Int'l Bhd. of Elec. Workers, 423 F.Supp.2d 125, 127 (S.D.N.Y. 2006) (“The classic examples of documents that may be considered on a motion to dismiss even though the plaintiff does not physically attach them to the complaint are the contracts that underlie the claims in suit[.]”). A district court may also “rely on matters of public record in deciding a motion to dismiss under Rule 12(b)(6), including case law and statutes.” Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 75 (2d Cir. 1998).

         C. DISCUSSION

         1. Futility

         a. Copyright Infringement

         Plaintiff's proposed direct copyright infringement claim is not futile. However, because it is extraterritorial, Plaintiff's claims for secondary copyright liability-as alleged-could not withstand a motion to dismiss. Defendant argues that Plaintiff's direct copyright infringement claim “misstates the scope of the license” granted to it in the Copyright License Agreement. Opp. at 11. Thus, Defendant argues that Plaintiff has not sufficiently alleged a “claim for copyright infringement” because Plaintiff's claim is premised on its allegedly erroneous construction of the Copyright License Agreement. Id. at 10. Defendant also argues that Plaintiff's copyright infringement claims are not “properly before this Court” because “the Copyright Act is not extraterritorial” and Plaintiff's claims are premised on acts that occurred outside of the United States. Id. at 12.

         i. Scope of the Copyright License Agreement

         Plaintiff has adequately alleged a copyright infringement claim.[6] “To state a claim for copyright infringement, a plaintiff must allege both (1) ownership of a valid copyright and (2) infringement of the copyright by the defendant.” Spinelli v. NFL, 903 F.3d 185, 197 (2d Cir. 2018) (quotation omitted). “A valid license to use the copyrighted work immunizes the licensee from a charge of copyright infringement, provided that the licensee uses the copyright as agreed with the licensor.” Id. (quotation omitted). “[W]here only the scope of the license is at issue, it is the copyright owner's burden to show that the defendant's use of a work was unauthorized.” Id. (quotation omitted).

         In this case, Defendant has copyrighted the Artwork. See Agreements at 16 (Copyright License Agreement § 1(a)). However, the Copyright License Agreement grants Plaintiff the “exclusive right” to use the Artwork “in connection with (A) gender diversity issues in corporate governance and in the financial services sector, and (B) SSGA and the products and services SSGA offers and/or will offer at any time[.]” Id.[7] The scope of Plaintiff's license is the primary dispute between the parties with respect to whether Plaintiff's copyright claims are futile. The factual predicate for Plaintiff's direct copyright infringement claim is that Defendant “distributed a copy of the Fearless Girl artwork in the form of a statuette to an employee of the financial institution Edward Jones who, upon information and belief, was acting on behalf of Edward Jones to be used in connection with gender diversity issues in corporate governance and in the financial services sector.” SAC ¶ 165-66. Plaintiff argues that this distribution violated its exclusive right outlined in subsection A of section 1(a) of the Copyright License Agreement.

         Defendant argues that Plaintiff “misstates the scope of the license in its proposed Second Amended Complaint by omitting” subsection B of section 1(a) of the Copyright License Agreement. Opp. at 11 (citing SAC ¶ 162). Defendant argues that section 1(a) of the Copyright License Agreement does not grant Plaintiff a license for uses that are either “in connection with (A) gender diversity issues in corporate governance and in the financial services sector” or in connection with “(B) SSGA and the products and services SSGA offers[.]” Rather, on Defendant's view, the license extends only to uses that both relate to gender diversity issues in corporate governance and in the financial services sector and SSGA and the products and services SSGA offers. Therefore, Defendant argues that Plaintiff has not adequately alleged a copyright infringement claim because it has not alleged that Defendant's use was related to Plaintiff and the products and services it offers.

         Defendant argues that this interpretation is supported by section 1(a)'s use of the word “and, ” rather than “or, ” between subsections (A) and (B) because this word choice implies that the license covers only uses that relate to both subsections. See Opp. at 11 (citing 1A Norman Singer & Shambie Singer, Sutherland Statutory Construction § 21:14 (7th ed. Nov. 2018 rev.)). Defendant also argues that its construction is supported by section 7(c)(ii) of the Master Agreement, which allows Defendant to “sell, license, or distribute copies of the Artwork in any medium or size to any third party to use in connection with gender diversity issues in corporate governance or in the financial services sector” if Defendant and Plaintiff consent to such use. Agreements at 6 (Master Agreement § 7(c)(ii)).

         Defendant's proposed interpretation of the Copyright License Agreement is not persuasive. Section 1(a) of the Copyright License Agreement granted Plaintiff a license in the circumstances described in each of subsections (A) and (B) individually; it does not require that both conditions must be satisfied for a use to be covered by the license. The most natural reading of section 1(a) in context is that subsections (A) and (B) are parts of a list of circumstances in which Plaintiff has granted Defendant a license to use the Artwork. Although the contract might have used “or” in this context, this does not mean that the Copyright License Agreement's use of “and” implies that both subsections must be satisfied. See Kenneth A. Adams & Alan S. Kaye, Revisiting the Ambiguity of “And” and “Or” in Legal Drafting, 80 St. John's L. Rev. 1167, 1195 (2007) (“Although and expresses conjunction and or expresses disjunction, they can serve to convey the same meaning[.]”) (footnote omitted).

         Section 7(c)(ii) of the Master Agreement confirms this reading. Defendant argues that “[i]t defies common sense to give SSGA an exclusive right to distribute and display [the Artwork] ‘in connection with (A) gender diversity issues in corporate governance and in the financial services sector'” in section 1(a) of the Copyright License Agreement while also allowing Defendant “to exercise this right in certain circumstances” under section 7(c)(ii) of the Master Agreement because Plaintiff's right would “not then be exclusive.” Opp. at 6 (quoting Copyright License Agreement § 1(a); other citations omitted). However, Defendant's argument overlooks the fact that section 7(c)(ii) requires the consent of both parties for Defendant to use the Artwork “in connection with gender diversity issues in corporate governance or in the financial services sector.” Therefore, the most persuasive construction of section 1(a) and section 7(c)(ii) is that Plaintiff has an exclusive license under section 1(a), which it can choose to waive under section 7(c)(ii). The fact that Plaintiff may choose to allow Defendant to use the Artwork in otherwise prohibited circumstances does not establish that Plaintiff's right is not exclusive.

         Moreover, as Plaintiff correctly notes, Defendant's interpretation would render section 7(c)(ii) of the Master Agreement unnecessary. If it were true that Defendant could use the Artwork “in connection with (A) gender diversity issues in corporate governance and in the financial services sector” so long as it did not also relate to “(B) SSGA and the products and services SSGA offers” under section 1(a), then it would be unnecessary for Defendant to obtain Plaintiff's permission for a use that related only to gender diversity issues. That is because “there would be no need for Visbal to obtain SSGA's prior written approval for a use in connection with only gender diversity issues in corporate governance or in the financial services sector, because such a use would not overlap with SSGA's exclusive license[.]” Rep. at 4. Yet section 7(c)(ii) provides for a process by which Defendant can obtain permission for just such a use. Under New York law, contracts are construed to “give[] a reasonable and effective meaning to all terms” and not to leave “a part unreasonable or of no effect.” Encyclopedia Brown Prods. v. Home Box Office, Inc., No. 91 CIV. 4092 (PKL), 1998 WL 734355, at *9 (S.D.N.Y. Oct. 15, 1998) (quotation omitted). As Defendant's interpretation does not give effect to section 7(c)(ii) of the Master Agreement, the Court concludes that her proposed construction of the Agreements is unpersuasive.

         Accordingly, Plaintiff has adequately alleged that it has an exclusive license with respect to uses of the Artwork in connection with gender diversity issues in corporate governance and in the financial services sector, and that Defendant violated that license by distributing a statute to an Edward Jones employee.

         ii. Extraterritoriality

         Plaintiff's proposed indirect copyright claims, as alleged, are impermissibly extraterritorial. Plaintiff seeks leave to amend to bring three claims for “secondary copyright infringement”- namely, inducement of copyright infringement, contributory copyright infringement, and vicarious copyright infringement. Arista Records LLC v. USENET.com, 633 F.Supp.2d 124, 149 (S.D.N.Y. 2009); see SAC ¶¶ 170-178 (inducement of copyright infringement); ¶¶ 179-187 (contributory copyright infringement); ¶¶ 188-196 (vicarious copyright infringement). “For all three theories of secondary copyright infringement, there must be the direct infringement of a third party.” Arista Records LLC, 633 F.Supp.2d at 179 (citing Matthew Bender & Co. v. West Publ'g Co., 158 F.3d 693, 706 (2d Cir. 1998)).

         Here, Plaintiff alleges that the direct infringers were three Australian firms: Maurice Blackburn, HESTA, and Cbus (the “Australian firms”). The SAC alleges that the Australian firms “display[ed] two-dimensional copies of the Fearless Girl replica purchased from Visbal on their social media accounts and on websites on the Internet that are accessible, viewable, and downloadable by users located in the United States[.]” SAC ¶ 172. According to the SAC, Maurice Blackburn “is a large Australian law firm.” Id. ¶ 49. HESTA is an Australian “superannuation fund”-that is, a pension fund; Cbus is also an Australian superannuation fund. Id. ¶¶ 50-51. The complaint does not allege that any of the Australian firms do business in the United States or that they have any other connection to, or interest in, the United States.

         The three Australian firms bought a sculpture of Fearless Girl from Visbal in a sale that Plaintiff alleges to have been prohibited by the Master Agreement. As pertinent to the proposed secondary copyright infringement claims, the SAC alleges that Maurice Blackburn posted a photograph of Fearless Girl on the company's Instagram account, id. ¶ 53, that the Australian Firm's social media accounts contained photographs of Fearless Girl, id., and that the promotional materials curated by the Australian Firms for the unveiling of their version of Fearless Girl contained images of the sculpture, id. ¶ 62. The SAC alleges no connection between the Australian Firms' use of the Fearless Girl image and the United States other than the fact that the images posted to their social media pages are accessible from the United States. See Id. ¶ 172 (“The Australian firms' display of these two-dimensional copies of the Fearless Girl replica purchased from Visbal on their social media accounts and on websites on the Internet that are accessible, viewable, and downloadable by users located in the United States constitute a violation of U.S. copyright law.”) The SAC does not allege that the images posted by the Australian firms used servers located in the United States-and in 2020, when large internet service companies locate servers across the globe, such an inference by the Court is not reasonable. Thus, the proposed amendment raises a clear question-does United States copyright law apply whenever a foreign person posts a copyrighted image to the internet abroad, even if there is no connection to the United States other than the fact that the image is accessible here? The Court believes that the answer to this question should be no.

         United States copyright laws do not apply extraterritorially. “[I]t is a long-standing principle of American law that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” EEOC v. Arabian American Oil Co. (Aramco), 499 U.S. 244, 248 (1991) (quotation omitted). “Because courts must ‘assume that Congress legislates against the backdrop of the presumption against extraterritoriality,' unless ‘there is “the affirmative intention of the Congress clearly expressed” congressional enactments must be presumed to be “primarily concerned with domestic conditions.'” Subafilms, Ltd. v. Mgm-Pathe Communs. Co., 24 F.3d 1088, 1095 (9th Cir. 1994) (en banc) (first quoting Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285 (1949) and then quoting Benz v. Compania Naviera Hidalgo, S.A., 353 U.S. 138, 147 (1957)). Accordingly, “[i]t is well established that copyright laws generally do not have extraterritorial application.” Craig v. UMG Recordings, Inc., 380 F.Supp.3d 324, 331 (S.D.N.Y. 2019) (quoting Update Art, Inc. v. Modiin Publ'g, Ltd., 843 F.2d 67, 73 (2d Cir. 1988)); see also SubaFilms, 24 F.3d at 1095-96 (“The ‘undisputed axiom' that the United States' copyright laws have no application to extraterritorial infringement predates the 1909 [Copyright] Act and, as discussed above, the principle of territoriality consistently has been reaffirmed.”) (quoting 3 David Nimmer & Melville B. Nimmer, Nimmer on Copyright § 12.04[A][2][b], at 12-81 (1993) and citing United Dictionary Co. v. G. & C. Merriam Co., 208 U.S. 260, 264-66 (1908) (Holmes, J.); Capitol Records, Inc. v. Mercury Records Corp., 221 F.2d 657, 662 (2d Cir. 1955)).

         The adoption of a rule that would give rise to a copyright claim against a foreign actor solely on the basis of the fact that a U.S. copyrighted image was posted on the internet-and was therefore “accessible” within the United States would undermine the extraterritorial limitations on U.S. copyright law. See 7 Patry on Copyright § 25:86.20. The Court is aware of only one case which appears to have found that U.S. copyright laws apply to images posted abroad solely because they were accessible on the internet-United Feature Syndicate, Inc. v. Miller Features Syndicate, Inc., 216 F.Supp.2d 198, 225 (S.D.N.Y. 2002) (Lynch, J.) (holding that a claim was not impermissibly extraterritorial where a plaintiff “likely . . . discovered infringing material on the Miller Features web site” and “counsel for United Media now explicitly represents that the allegedly infringing material was accessible from computers within the United States and that it is prepared to prove that the defendants' alleged copyright infringement had an effect within the United States”). That decision, however, cites no case law or other precedent in support of its broad conclusion, and does not, even glancingly, consider its sweeping extraterritorial application of the United States copyright law. As a result, United Feature has limited persuasive authority.

         Decisions by other courts considering the publication of images copyrighted in the United States on the internet abroad have required some additional link between the foreign publication on the internet and the United States-some “plus” factor beyond the mere accessibility of the copyrighted property on the internet. Those “plus” factors have included (1) the direction of copyrighted material into the United States, Spanski Enters. v. Telewizja Polska, S.A., 883 F.3d 904, 916 (D.C. Cir. 2018) (holding that “a foreign broadcaster that . . . directs infringing performances into the United States from abroad commits a domestic violation of the Copyright Act”), (2) when foreign “acts are intended to, and do, have an effect within the United States, ” GB Marketing USAInc. v. Gerolsteiner Brunnen GmbH & Co., 782 F.Supp. 763, 773 (W.D.N.Y. 1991), and (3) the uploading of copyrighted materials to servers located in the United States, Shropshire v. Canning, 809 F.Supp.2d 1139, 1146 (N.D. Cal. 2011) (“[A]ccording to the allegations in the SAC, Defendant's direct action led to the ...


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