Neu Productions Inc. v. Outside Interactive, Inc.

Background

Neu Productions Inc., John Robert Roderick, and Patrick Parnell sued Outside Interactive, Inc. The case concerns ownership, infringement, and licensing of copyrights. Roderick asserted a claim seeking a declaration that he owned the copyrights and a claim for copyright infringement. Parnell asserted claims based on alleged misappropriation of his publicity rights under California law. Neu Productions asserted a breach-of-contract claim, and all three plaintiffs asserted unjust-enrichment claims. The defendant moved to dismiss the First Amended Complaint for failure to state a claim.

A magistrate judge recommended dismissing Claims III, IV, and V, denying dismissal of Claim I, allowing eight copyright-infringement claims involving copyrights registered before May 18, 2023 to proceed, and allowing the defendant to renew dismissal of infringement claims involving copyrights not registered before that date after the plaintiffs filed a second amended complaint with the appropriate registration certificates. The recommendation also called for dismissal of the request for costs under 28 U.S.C. § 1927, while allowing the requests for statutory damages and attorneys’ fees under the Copyright Act to proceed. The parties did not object to the recommended dismissal of Claims III, IV, and V or to the opportunity to file a second amended complaint for subsequently registered copyrights.

Copyright-Infringement Claims

The parties agreed that licenses existed for publication of the relevant episodes. Their dispute concerned the scope of those licenses—specifically, whether they permitted Outside Interactive to distribute the programs on its streaming services and third-party platforms in addition to television.

At the pleading stage, Roderick needed to plausibly allege that Outside Interactive exceeded particular license terms. The court held that he met that requirement by alleging that the programs were to be used only on Outside Television and for a limited time. The First Amended Complaint also referred to production-contract language stating that no other use of the project was anticipated and that compensation had been agreed upon only for the specified use. Because licenses can be created orally or through the parties’ conduct, the court found that the production contracts did not necessarily establish the full scope of the licenses. The motion to dismiss Claim II was therefore denied as to the adequately pleaded infringement claims.

Declaratory-Judgment Claim

Roderick sought a declaration that he owned the copyrights, that they were not works made for hire owned by Outside Interactive, and that Outside Interactive therefore had no right to expand their distribution. The court held that this claim did not seek a remedy expressly provided by the Copyright Act and did not require interpretation of that Act. The court concluded that a dispute over who owns a copyright is a contract or ownership dispute rather than a claim arising under the Copyright Act. The motion to dismiss Claim I was granted.

Statutory Damages, Attorneys’ Fees, and Costs

The defendant argued that the plaintiffs could not obtain statutory damages or attorneys’ fees because the alleged infringement began before the relevant copyrights were registered. The court explained that deciding this issue would require information about when each work was first published, when each copyright was registered, and when infringement of each copyright began.

The First Amended Complaint did not provide that information for all of the copyrights at issue. Because the timing was uncertain and the plaintiffs were entitled to discovery on those questions, the court denied the motion to dismiss the requests for statutory damages and attorneys’ fees. The court granted the motion as to the plaintiffs’ request for costs under 28 U.S.C. § 1927.

Disposition

The court adopted the magistrate judge’s recommendations concerning Claims II, III, IV, and V. It granted the motion to dismiss with respect to Claims I, III, IV, and V; granted it with respect to the plaintiffs’ claims for costs under 28 U.S.C. § 1927; and granted it with respect to Claim II for copyrights not registered before May 18, 2023, without prejudice to renewal after filing a second amended complaint. It denied the motion in all other respects, including as to the copyright-infringement claims for the eight copyrights registered before May 18, 2023 and the requests for statutory damages and attorneys’ fees. Judge Lewis A. Kaplan signed the order.