Viral DRM LLC v. Francisco Morante Fuentes
- Jacquelyn Corley
- 3:23-cv-05045
- U.S. District Court · Northern District of California
- 7
In Viral DRM v. Francisco Morante Fuentes, Judge Corley denied default judgment and dismissed the copyright case because Viral DRM did not show standing.
Viral DRM LLC’s copyright infringement and related claims against Francisco Morante Fuentes were dismissed for lack of standing, and its motion for default judgment and request for leave to amend were denied.
What happened
Viral DRM LLC sued Francisco Morante Fuentes, alleging that he copied its copyrighted videos and re-uploaded them to a YouTube channel. After Fuentes did not respond, the Clerk entered default, and Viral DRM asked the court for a default judgment.
The court denied default judgment and dismissed the action for lack of standing. It concluded that Viral DRM’s agreements with the copyright holders gave it enforcement and distribution responsibilities but did not give it an exclusive right needed to sue for copyright infringement. The court also found that the record did not clearly establish who owned or licensed the works involved in Viral DRM’s other claims.
Judge Jacquelyn Scott Corley also denied Viral DRM leave to amend, explaining that the company had already amended its complaint and had received several opportunities to clarify its claims and supporting evidence.
The detailed version
- Viral DRM LLC v. Francisco Morante Fuentes · No. 3:23-cv-05045
- Jacquelyn Corley
- Mar. 14, 2025
Background
Viral DRM LLC brought copyright infringement and related claims against Francisco Morante Fuentes. It alleged that Fuentes downloaded and copied Viral DRM’s copyrighted materials from YouTube and re-uploaded infringing versions to his YouTube channel, Fulltops. Fuentes did not respond to the amended complaint. The Clerk entered default, after which Viral DRM moved for default judgment.
At the hearing on that motion, the court questioned whether Viral DRM had standing—the legal ability to bring the claims. The court directed Viral DRM to provide its licensing agreement with the copyright holders and later ordered it to explain why it had standing. Viral DRM submitted responses and agreements, but the court found that the submissions did not establish standing.
Copyright-infringement claim
Under Section 501(b) of the Copyright Act, the legal or beneficial owner of an exclusive copyright right may sue for infringement of that right. The court explained that an assignment or exclusive license can transfer a copyright interest sufficient to support standing, while a nonexclusive license cannot.
The copyright-registration certificates attached to the amended complaint identified John Michael Sibley and Michael Brandon Clement as the registered owners of the works at issue, rather than Viral DRM. The agreements Viral DRM submitted granted it exclusive agency rights to manage and administer content, search for infringements, register copyrights, authorize attorneys to negotiate settlements, issue takedown notices, and display, store, transmit, and distribute works as needed to fulfill the agreement. The copyright holders retained ownership rights.
The court held that these agreements did not give Viral DRM the exclusive right to authorize third parties to reproduce, distribute, and display the copyrighted videos. Rights to enforce a copyright are not the same as ownership of an exclusive right under Section 106. Applying Ninth Circuit precedent, the court concluded that Viral DRM lacked standing to bring the copyright-infringement claim.
Digital Millennium Copyright Act claims
Viral DRM also alleged that Fuentes violated Section 512(f) of the Digital Millennium Copyright Act by submitting false counternotices in response to Viral DRM’s takedown notices. Section 512(f) allows a copyright owner or authorized licensee to seek damages for material misrepresentations made to an online service provider.
The court found that the record did not establish who owned or was authorized to license the works involved. Viral DRM had not submitted licensing agreements for several videographers identified in its materials. The takedown notices also identified copyright owners and rights managers in ways that did not clearly match the people and entities identified elsewhere in the record. The court further found that the amended complaint, agreements, declarations, and response to the order to show cause did not specifically connect particular works to particular videographers or clarify the relationships among Viral DRM, Live Storms Media, News Media Network, and the videographers.
Because the record did not show who the copyright owners or authorized licensees were, the court concluded that Viral DRM had not demonstrated standing under Section 512(f).
Digital Millennium Copyright Act watermark claims
Viral DRM alleged claims under Sections 1201 and 1202 concerning the removal or alteration of copyright-management-information watermarks identifying the works as property of Live Storms Media. The court found that Viral DRM had not demonstrated standing for these claims because the record did not clearly establish Live Storms Media’s relationship with Viral DRM, the videographers, or the works at issue.
Disposition
The court denied Viral DRM’s motion for default judgment and dismissed the action for failure to demonstrate standing. The court also denied leave to amend. It noted that Viral DRM had previously been allowed to amend and had received several opportunities to clarify its claims and evidence, but its successive filings continued to create uncertainty. The order disposed of Docket Nos. 64 and 74.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.