FurnitureDealer.net, Inc. v. Amazon.com, Inc.

Background

FurnitureDealer.net, Inc. (FDN), a Minnesota corporation that creates marketing solutions for furniture companies, entered into an agreement with COA, Inc., doing business as Coaster Company of America (Coaster). Under the agreement, FDN created and maintained a website for Coaster and wrote search-engine-optimized product descriptions. The agreement stated that FDN owned the original content it created and limited use of that content to the website and certain authorized dealers’ websites.

FDN alleged that the product descriptions later appeared on Amazon URLs used to promote and sell Coaster furniture. FDN identified at least 394 URLs containing identical or nearly identical text and sent Amazon a Digital Millennium Copyright Act (DMCA) takedown request. According to the allegations, an Amazon employee said Amazon had received the descriptions from Coaster. FDN then added Coaster to its lawsuit against Amazon.

FDN asserted claims against Coaster for direct, contributory, and vicarious copyright infringement; a DMCA violation; unjust enrichment; breach of contract; and breach of the implied covenant of good faith and fair dealing. Coaster moved to dismiss under Rule 12(b)(6), which tests whether a complaint adequately states a legal claim, and alternatively sought a more definite statement under Rule 12(e).

Copyright Claims

The court denied dismissal of FDN’s three copyright-infringement claims. It held that FDN had adequately identified the allegedly infringed material as the product descriptions, even though the complaint did not include examples of every instance. The court also found that the descriptions, which contained unique phrasing intended to make products attractive to online buyers, had enough originality to be potentially copyrightable.

The court rejected Coaster’s argument that the copyright merger doctrine applied. That doctrine can deny protection when an idea can be expressed in only a very limited number of ways. The court concluded that the furniture descriptions could be expressed in various ways and that the writers, rather than an algorithm, determined how the marketing ideas were expressed.

The court also treated FDN’s registered automated database as a collective work—a work containing separate contributions assembled into a whole—and held that the registration could cover the component descriptions because FDN alleged that it retained exclusive rights to them. The court rejected Coaster’s joint-authorship argument, finding that the allegations suggested FDN and Coaster intended FDN to provide a content-creation service, not to become joint authors. The court further found that the alleged near-identity between the Amazon text and FDN’s descriptions, along with Coaster’s relationship with FDN and access to the website, sufficiently supported an allegation that Coaster had access to the copyrighted material.

DMCA Claim

The court denied dismissal of FDN’s DMCA claim. FDN alleged that Coaster shared the descriptions with Amazon while knowing that the copyright notice appearing on FDN’s website would not appear with the material on Amazon’s pages. The court found that questions about whether the notice was valid and whether Coaster owned copyright in the website required factual development and could not be resolved on the pleadings. It also concluded that FDN could plausibly claim that copyright-management information was improperly omitted when copies of the descriptions were distributed.

State-Law Claims

The court granted dismissal of FDN’s unjust-enrichment claim. It held that the claim was preempted by the Copyright Act because it was based on Coaster’s alleged benefit from wrongful use of FDN’s copyrighted material and did not add a qualitatively different right.

The court denied dismissal of the breach-of-contract claim. Although some alleged restrictions on copying could overlap with copyright rights, the agreement also required Coaster to refer authorized dealers to FDN. The court found that FDN’s allegations could fairly be read to claim that Coaster breached that referral provision by failing to refer Amazon to FDN.

The court also denied dismissal of the claim for breach of the implied covenant of good faith and fair dealing. Because the court allowed the underlying contract claim to proceed, it allowed this related claim to proceed as well.

More Definite Statement and Order

The court denied Coaster’s Rule 12(e) request. It found that the complaint described the allegedly infringed material and referred to a spreadsheet containing examples, making it possible for Coaster to respond.

The order stated that Coaster’s motion to dismiss or for a more definite statement was granted in part and denied in part. Specifically, dismissal of the copyright-infringement claims, the DMCA claim, the breach-of-contract claim, and the breach-of-implied-covenant claim was denied; dismissal of the unjust-enrichment claim was granted; and the motion for a more definite statement was denied. The court’s classification here is procedural because the order ruled on a Rule 12 motion testing the sufficiency of the pleadings rather than finally deciding liability on the underlying claims.