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

Background

FurnitureDealer.net created and managed a website for COA, Inc., doing business as Coaster Company of America, under a 2010 agreement. FurnitureDealer.net created product-description text for the website and alleged that the text was protected by the agreement and by its copyright. FurnitureDealer.net later saw similar text on Amazon.com URLs and sent Amazon multiple requests to remove the material under the Digital Millennium Copyright Act.

FurnitureDealer.net sued Coaster and Amazon in 2018, alleging copyright infringement and breach of contract. In March 2019, Coaster asserted eight counterclaims against FurnitureDealer.net. FurnitureDealer.net moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether pleaded facts state a legally sufficient claim, to dismiss counterclaims III through VIII.

Tortious-Interference Claims

Coaster alleged that FurnitureDealer.net interfered with Coaster’s relationship and prospective business with Amazon by making allegedly unsupported copyright-infringement claims. Coaster also alleged that FurnitureDealer.net committed fraud involving the Copyright Office. The court concluded that these claims were based on conduct involving material within the subject matter of copyright and that Coaster had a possible claim under 17 U.S.C. § 512(f), which addresses knowing material misrepresentations that copyrighted material is infringing when a service provider relies on them.

The court determined that Amazon qualified as a “service provider” under that provision because Amazon provided online services and operated facilities through which Coaster’s products were sold. It therefore held that the Copyright Act preempted Coaster’s tortious-interference counterclaims and dismissed Counts III and IV with prejudice.

State Statutory Claims

Coaster’s Minnesota Uniform Deceptive Trade Practices Act claim alleged that FurnitureDealer.net’s copyright notice falsely suggested that FurnitureDealer.net owned content that Coaster claimed to own. Coaster’s California unfair-business-practices claim relied on similar allegations, although the court found those allegations vague and understood them in context as challenging the copyright notice.

The court treated the notice as copyright-management information because it conveyed information about copyright ownership in connection with copyrighted material. It concluded that Coaster’s allegations placed the challenged conduct within 17 U.S.C. § 1202(a), which prohibits knowingly providing false copyright-management information with specified intent related to infringement. The court therefore held that the claims were governed by copyright law rather than state statutory law and dismissed Counts VI and VII with prejudice.

Lanham Act Claim

Coaster alleged that the copyright notice misrepresented ownership of creative content on the website. The court held that this theory was barred by Dastar v. Twentieth Century Fox Film Corp. Under Dastar, a Lanham Act claim must concern a misrepresentation about the producer or origin of tangible goods offered for sale, not the author or ownership of an underlying creative work.

The court concluded that the relevant goods were Coaster’s furniture and that Coaster did not allege that the notice confused consumers about who produced that furniture. Instead, the claim concerned ownership of creative content. The court dismissed Count V with prejudice.

Indemnification

Coaster sought contractual or equitable indemnification from FurnitureDealer.net for Amazon’s demand that Coaster provide indemnification and for unspecified claims by non-parties. The agreement required FurnitureDealer.net to indemnify Coaster against claims alleging that software licensed to Coaster infringed a patent, trademark, or copyright.

The court found that Coaster had not adequately alleged claims by non-parties and that the agreement did not cover the claims in this case. The case involved allegations that Coaster and Amazon infringed FurnitureDealer.net’s copyright in descriptive text, not allegations that software licensed to Coaster infringed someone else’s intellectual-property rights. The court dismissed Count VIII with prejudice.

Disposition

The court granted FurnitureDealer.net’s partial motion to dismiss and ordered Counts III, IV, V, VI, VII, and VIII of Coaster’s answer, affirmative defenses, and counterclaims dismissed with prejudice. The opinion did not rule on Coaster’s Counts I and II.