Yu v. ByteDance Inc.

Background

Yintao Yu alleged that ByteDance engaged in two schemes while he was head of engineering for ByteDance’s U.S. offices. First, he alleged that ByteDance used software to scrape videos and other content from competitor websites, including Instagram and Snapchat, and reposted the content on its own services without permission. Second, he alleged that ByteDance created fabricated users that generated fake likes and follows, inflated engagement metrics, and helped attract users, investors, and lenders.

Yu also alleged that he raised concerns about these practices and other workplace conduct, took medical leave, and was later terminated. His first amended complaint asserted nine causes of action under California law, including unfair-business-practices claims, retaliation, employment-related claims, contract claims, wrongful termination, and a claim for unpaid wages.

Defendants removed the case from California state court. They argued that the first cause of action, which sought a public injunction under California’s Unfair Competition Law, was completely preempted by the federal Copyright Act and therefore supported federal-question jurisdiction. Yu moved to return the case to state court.

Copyright Preemption

The court applied the Ninth Circuit’s two-part test for copyright preemption. It considered whether the material involved fell within the subject matter of copyright and whether the state-law claim sought to protect rights equivalent to the exclusive rights provided by copyright law. A state-law claim can avoid preemption if it contains an additional element that changes the nature of the claim.

The court concluded that online videos fell within the subject matter of copyright. It further concluded that the portion of Yu’s first cause of action alleging that ByteDance copied Yu’s Instagram videos and reposted them without permission sought to protect rights equivalent to copyright owners’ rights to reproduce and distribute their works. That portion of the claim was therefore preempted.

The court reached a different conclusion about the remaining theories. Allegations concerning fabricated users and inflated engagement metrics involved fraud or misrepresentation, which is an additional element not required for a copyright claim. The allegations that ByteDance scraped content in violation of competitors’ terms of use also did not depend on deciding who owned the content or whether copyright infringement occurred. Those portions of the first cause of action were not preempted.

Disposition

The court DISMISSED the first cause of action to the extent it alleged that ByteDance scraped and reproduced Yu’s online videos without permission. Yu’s counsel stated that Yu would not amend the complaint to assert a federal copyright claim based on those allegations.

Because the complaint then contained only state-law causes of action, the court declined to exercise supplemental jurisdiction—the federal court’s authority to hear related state-law claims—over the remaining claims. The court GRANTED Yu’s motion to remand and REMANDED the amended complaint, with the preempted allegations dismissed, to the Superior Court for the County of San Francisco. All other pending motions were DENIED AS MOOT. The court also declined to award Yu attorney fees and costs, finding that defendants had an objectively reasonable basis for removing the case.

The court expressly made no finding about whether Yu had standing to pursue the remaining unfair-business-practices claim or whether those allegations stated a claim.