UMG Recordings, Inc. v. Internet Archive

Background

UMG Recordings, Inc., Capitol Records, LLC, Concord Bicycle Assets, LLC, CMGI Recorded Music Assets, LLC, Sony Music Entertainment, and Arista Music sued Internet Archive, Brewster Kahle, George Blood, George Blood L.P. (GBLP), and the Kahle/Austin Foundation. The plaintiffs alleged that they own or control copyrights in 4,142 sound recordings.

According to the amended complaint, Internet Archive operates the Great 78 Project, hired Blood and GBLP to convert 78 rpm records into digital files, and posted the files online for free streaming and downloading. The plaintiffs alleged that the recordings had been downloaded or streamed millions of times. They also alleged that Kahle founded and leads Internet Archive, serves as president and principal funder of the Foundation, and uses the Foundation to fund Internet Archive’s activities.

The amended complaint asserted ten copyright-related causes of action, including direct reproduction, distribution, and public-performance claims; contributory-infringement claims; inducement and vicarious-infringement claims; and a vicarious-liability claim against Blood.

Legal standard

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint lacks a legally recognized claim or does not allege enough facts to make the claim plausible. At this stage, the court accepts material factual allegations as true and views them favorably to the party bringing the claim, but it does not accept unsupported legal conclusions as facts.

Internet Archive defendants’ motion

The Internet Archive defendants argued that any copyright claims based on conduct occurring outside the three-year limitations period should be dismissed. Copyright claims generally must be filed within three years after they accrue. The defendants relied on a July 22, 2020 cease-and-desist letter from the Recording Industry Association of America, which alleged infringement of its members’ sound recordings.

The court noted that neither the original complaint nor the amended complaint identified when the alleged infringements occurred, including when recordings were posted or when users streamed or downloaded them. The court distinguished cases involving notices that identified specific copyrighted works. The letter relied on by the defendants did not identify any specific recording, including any of the recordings listed in the amended complaint. The court therefore held that untimeliness was not established from the face of the complaint, although the defendants might be able to use the letter at a later stage to show that particular acts occurred outside the limitations period.

The court denied the Internet Archive defendants’ motion to dismiss.

Foundation’s motion

The Foundation separately argued that the Eighth Cause of Action, a contributory-infringement claim, lacked sufficient allegations concerning the Foundation’s knowledge and contribution.

Knowledge

The court explained that contributory infringement requires allegations that a defendant, while knowing about infringing activity, induced, caused, or materially contributed to another party’s infringement. Applying Washington agency law, the court considered whether knowledge possessed by Kahle could be attributed to the Foundation. The plaintiffs alleged that Kahle was the Foundation’s president and principal funder, that most of the Foundation’s funds came directly or indirectly from him, and that he directed the Foundation to use contributed funds to support Internet Archive.

The court found no allegations establishing an exception that would prevent Kahle’s knowledge from being attributed to the Foundation. It also rejected the argument that the complaint had to allege Kahle learned about Internet Archive’s activities specifically through his role as a Foundation board member. The court held that the amended complaint sufficiently alleged the Foundation’s knowledge.

Material contribution

The Foundation argued that its alleged donations to Internet Archive, without more, could not support contributory-infringement liability. The court agreed that financial support alone would be insufficient. But it found that the complaint alleged more than donations: it alleged that Kahle was both the Foundation’s president and Internet Archive’s chief executive and that he had close involvement in and oversight of Internet Archive’s operations. The complaint also alleged that Kahle helped set Internet Archive’s goals, publicized its activities, and asked the public to donate records for digitization and posting online.

The court therefore held that the amended complaint sufficiently alleged the Foundation’s material contribution to the alleged direct infringement.

Disposition

The court denied the Internet Archive defendants’ motion to dismiss and denied the Foundation’s motion to dismiss. The defendants’ motions to dismiss were denied. The order resolved the pleading motions and did not determine whether the defendants were ultimately liable for copyright infringement.