Charming Beats LLC v. Hypebeast, Inc.

Background

Charming Beats alleged that Hypebeast, Inc. and 101 Media unlawfully used one of its copyrighted songs in a video. Its amended complaint asserted two types of copyright claims: direct infringement based on posting the video to Hypebeast’s Daily Motion webpage, and contributory infringement based on allegedly distributing the video to third parties.

The complaint also referred to an earlier lawsuit involving the same song and video. The parties agreed that the earlier lawsuit was filed in June 2020 and voluntarily dismissed with prejudice. Charming Beats acknowledged that it was the successor in interest to Yesh Music, the plaintiff in that earlier action.

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that claim preclusion, also called res judicata, barred the current claims. Claim preclusion can prevent a later lawsuit when an earlier action was decided on the merits, involved the same parties or legally connected parties, and involved claims that were or could have been brought earlier.

Court’s Analysis

The court accepted that the earlier voluntary dismissal with prejudice counted as a decision on the merits for claim-preclusion purposes. It also accepted that Charming Beats was the successor to the plaintiff in the earlier action. The court therefore focused on whether the current claims were claims that were or could have been raised in the earlier action.

The court concluded that this question was not clear from the pleadings. First, although the amended complaint did not provide dates for the alleged infringement, it could be read to allege conduct continuing through the time of the 2020 complaint. Second, the direct-infringement claim in the current case concerned a Daily Motion webpage, while the earlier complaint concerned posting the video to YouTube. The court stated that the Daily Motion posting represented a different reproduction and performance and therefore a potentially separate copyright violation and transaction.

Third, the contributory-infringement claim relied on alleged active distribution of the video to third parties. The earlier complaint mentioned downstream uploaders only in describing the video as widely viewed, not in alleging the same distributions. Charming Beats also represented that the current complaint excluded conduct occurring before the earlier dismissal.

The court recognized that both lawsuits shared the basic premise that the video copied Charming Beats’ song. But it concluded that overlap in the parties, the general course of conduct, and the legal issues did not resolve whether the claims arose from the same transaction. Because the court was not dismissing the case on claim-preclusion grounds at this stage, it did not decide whether the current defendants were the same as, or legally connected to, the defendants in the earlier action. It noted unresolved issues concerning service on 101 Media and whether the Hypebeast entity in the current case was the same entity sued earlier or could rely on a legal relationship with 101 Media.

Disposition

The court held that the record available on the motion to dismiss was insufficient to decide whether the current claims were barred by claim preclusion. It specifically did not determine whether the defense might be viable at trial on a fuller record.

Judge Arun Subramanian denied the defendants’ motion to dismiss and directed the Clerk of Court to close the docket entry for that motion. The opinion did not decide the ultimate merits of Charming Beats’ copyright claims.