Viral DRM LLC v. Henniker

Background

Viral DRM alleged that Seven West copied and downloaded weather-event videos from YouTube, edited them, removed Viral DRM’s copyright-management information, and uploaded versions of the videos to promote Seven West’s YouTube channel. Viral DRM asserted claims for copyright infringement under 17 U.S.C. § 501 and for violations of the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 1202(a) and (b).

Viral DRM described itself as an exclusive authorized agent of the works and alleged that written agreements with the content creators gave it the exclusive right to pursue infringement matters. Seven West moved to dismiss for lack of standing. The court explained that challenges to Article III standing generally proceed under Rule 12(b)(1), while challenges to statutory standing under the Copyright Act proceed under Rule 12(b)(6). The court considered an exemplar agreement because Viral DRM’s complaint referred to written agreements and relied on them.

The opinion also notes that Viral DRM had voluntarily dismissed Kate Hennikier from the lawsuit without prejudice.

Copyright Act Claim

The Copyright Act permits the legal or beneficial owner of an exclusive copyright right to sue for infringement of that right. The court concluded that Viral DRM had not plausibly alleged that it was the legal owner or exclusive licensee of such a right.

The agreement preserved ownership of the works for the content creators and allowed them to license the works to third parties. Although the agreement gave Viral DRM “exclusive agency rights” to manage and administer the content—including registering copyrights, investigating infringement, negotiating settlements, and bringing claims on the creators’ behalf—the court held that these rights did not correspond to the exclusive rights protected by Section 106 of the Copyright Act. Viral DRM’s nonexclusive license to display, store, transmit, or distribute the works also did not give it standing to sue.

The court did not consider declarations from content creators submitted with Viral DRM’s opposition because the complaint did not reference them and they contradicted the agreement’s language. The motion to dismiss the copyright-infringement claim was GRANTED for lack of standing.

Digital Millennium Copyright Act Claims

The court rejected Seven West’s argument that only a copyright owner or holder may sue under the DMCA provisions at issue. It found persuasive decisions holding that any person injured by the alleged violation may bring an action under 17 U.S.C. § 1203(a).

The court held that Viral DRM plausibly alleged injury because it had authority to manage and enforce the creators’ copyrights and to control the use of copyright-management information protecting those rights. Viral DRM alleged that the videos contained watermarks and other information identifying the works as belonging to Viral DRM and its affiliate, and that Seven West removed or replaced that information to facilitate infringement. These allegations were sufficient to support both statutory standing and Article III standing for the DMCA claims.

The motion to dismiss the DMCA claims was DENIED.

Disposition

Seven West’s motion to dismiss was GRANTED in part and DENIED in part. The court granted dismissal of the Copyright Act claim and denied dismissal of the DMCA claims. Viral DRM was given leave to amend the copyright claim, and the amended complaint was due within 20 days of the order. The opinion does not state that the copyright claim was dismissed with or without prejudice; it states that Viral DRM was given leave to amend.