Gaffney v. Authentic Brands Group LLC

Background

Michael Gaffney sued Muhammad Ali Enterprises LLC, Authentic Brands Group LLC, Roots Of, Inc., doing business as Roots of Fight, and Does 1-10 for allegedly infringing his copyrights in three photographs of Muhammad Ali. Gaffney alleged that the defendants continued displaying the photographs on social-media pages after a licensing agreement expired. Muhammad Ali Enterprises LLC and Authentic Brands Group LLC moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim.

Gaffney had included claims concerning these three photographs in an earlier related proceeding. He later removed those claims through amended complaints, with the defendants’ consent, and filed this action after registering the photographs. The Copyright Office registration had an effective date of April 9, 2020, and the registration was obtained on April 30, 2020.

Claim preclusion

The defendants argued that claim preclusion—a rule generally preventing a party from bringing again claims resolved in an earlier case—barred Gaffney’s claims. They argued that removing the claims through an amendment operated as a decision on the merits under Federal Rule of Civil Procedure 41(b).

The court rejected that argument. It held that Gaffney eliminated the claims by amending his complaint under Rule 15(a), not through a Rule 41(b) dismissal. Because the claims were removed before the defendants filed a responsive pleading and with their consent, the court treated the amendment as equivalent to a voluntary dismissal under Rule 41(a), which did not preclude the claims in this action.

Statute of limitations

The defendants also argued that the Copyright Act’s three-year limitations period barred the claims. The court applied the discovery rule, under which a copyright claim generally accrues when the copyright owner discovers, or reasonably should have discovered, the alleged infringement. The court found that the prior licensing agreement and a 2015 cease-and-desist letter did not establish that Gaffney knew, or should have known, about infringement of these specific photographs before March 2018. The letter did not identify any of the photographs or any specific infringing conduct.

The court also rejected the argument that Gaffney had a duty to monitor the defendants’ public social-media activity after the licensing agreement ended. It applied the separate-accrual rule, under which successive acts of infringement can create separate claims accruing when each act occurs. The complaint alleged that Gaffney learned of the infringement in or around March 2018 and identified separate allegedly infringing posts within the limitations period. The court therefore denied dismissal on statute-of-limitations grounds. It also declined to consider a declaration submitted by an Authentic employee because the declaration was not properly before the court on a Rule 12(b)(6) motion.

Statutory damages and attorneys’ fees

The court granted the defendants’ request to strike Gaffney’s demands for statutory damages and attorneys’ fees. Under 17 U.S.C. § 412, those remedies generally are unavailable for infringement that began before the effective date of copyright registration, including later acts that are part of an ongoing series of infringement. The court found that Gaffney’s complaint alleged only pre-registration infringement and did not allege post-registration infringement. As a result, the court held that he could not seek statutory damages or attorneys’ fees.

Disposition

The court denied the defendants’ motion to dismiss. It granted the defendants’ request to strike Gaffney’s demands for statutory damages and attorneys’ fees, and directed the Clerk of Court to close the motion.