Moonbug Entertainment Limited v. Babybus Network Technology Co., Ltd

Background

Moonbug Entertainment Limited and Treasure Studio, Inc., collectively called Moonbug, moved for leave to file a supplemental complaint against BabyBus Co., Ltd. and BabyBus (Fujian) Network Technology Co., Ltd., collectively called BabyBus. The proposed complaint concerned events that occurred after the earlier pleading. In a summary-judgment order, the court had found six infringing videos, including BabyBus’s “Yes Yes Playground” video. Moonbug later discovered that BabyBus was still displaying and performing that video on its Portuguese-language YouTube channel and sent YouTube a takedown notice. BabyBus submitted counter-notifications disputing infringement for hundreds of videos, including a counter-notification stating that the Portuguese “Yes Yes Playground” video was an original creation that did not infringe third-party copyrights.

Motion to File a Supplemental Complaint

Moonbug sought to add allegations that BabyBus continued uploading infringing videos and submitted false counter-notifications to YouTube. The proposed complaint also added a copyright misrepresentation claim. BabyBus opposed the motion, arguing that there was insufficient time to reopen discovery before the scheduled trial.

Under Federal Rule of Civil Procedure 15(d), a court may allow a party to add allegations about events occurring after the pleading being supplemented. The court considered the factors identified in Foman v. Davis: bad faith, undue delay, prejudice, futility, and prior amendments.

The court found no indication of bad faith or undue delay, and BabyBus did not contest those factors. On prejudice, the court concluded that the proposed claim involved a narrow issue sharing facts, witnesses, copyrights, and infringing works with the existing claims. Although additional questions about BabyBus’s state of mind might be needed, the court found that those facts should be obtainable from existing witnesses and would not confuse the jury. The court also noted that BabyBus did not identify particular documents it needed but lacked.

On futility, the court determined that the allegations, taken as true, could plausibly show that BabyBus knowingly and in bad faith misrepresented that the material was removed or disabled by mistake or misidentification. The court did not find it clear from the briefing that BabyBus’s counter-notification was plainly inadvertent. Although Moonbug had amended its complaint once before, the court found that the newer facts could not have been included in that earlier amendment.

The court held that the factors favored the presumption of allowing supplementation and granted Moonbug’s motion to supplement the complaint.

Administrative Motion Concerning the Video List

Moonbug also moved to supplement the summary-judgment order with a list of willfully infringing videos. The parties had submitted a list, with foreign-language videos identified in Exhibit 1. BabyBus did not oppose supplementation of most of the list but disputed the accuracy of 22 videos.

The court ordered the parties to meet and confer about whether more specific or accurate URLs existed for those 22 videos. The parties were ordered to report back by May 12, 2023. The order stated that it disposed of Docket Nos. 271 and 280.