Hartmann v. Popcornflix.com LLC

Background

Ralf Hartmann sued Popcornflix.com LLC and Chicken Soup For the Soul Entertainment, Inc., alleging direct copyright infringement, contributory infringement, vicarious infringement, and infringement under foreign copyright laws. He alleged that Popcornflix distributed four films—Commander Hamilton, After the Rain, Austin Powers: International Man of Mystery, and The Last Tattoo—to subscribers without a license. The opinion states that Popcornflix is a wholly owned subsidiary of Chicken Soup and that the service operates in the United States and more than 60 other countries.

For purposes of the dismissal motion, the court treated the well-pleaded factual allegations in Hartmann’s amended complaint as true, but did not make findings about whether those allegations were actually true.

Direct Copyright Infringement

To plead direct copyright infringement, Hartmann had to plausibly allege which works were covered, that he owned the copyrights, that the copyrights were registered as required by law, and what acts of infringement occurred.

The court found that Hartmann plausibly alleged ownership of all four films. At this stage, he did not have to plead a complete chain of every transfer of ownership. The court also found that Hartmann plausibly alleged registration of After the Rain because the amended complaint provided the correct registration number.

The court found, however, that Hartmann did not plausibly allege registration of Commander Hamilton, Austin Powers, or The Last Tattoo. The numbers he provided for Commander Hamilton and Austin Powers concerned recorded copyright-related contracts rather than registrations of the underlying films. The number for The Last Tattoo concerned a textual work, identified as a script, rather than the motion picture. The court therefore dismissed without prejudice the direct-infringement claims involving those three films. The direct-infringement claim involving After the Rain survived the motion.

Contributory Infringement

Contributory infringement is secondary liability based on knowingly inducing, causing, or materially contributing to another person’s direct infringement. Hartmann alleged that Popcornflix had digital-rights-management software that could have helped it identify infringement and that Popcornflix’s former owner had been involved in related contract litigation.

The court found these allegations insufficient. An allegation that software existed, without facts showing that Popcornflix investigated or had reason to investigate the alleged infringement, did not plausibly show the required knowledge. The former owner’s litigation also did not adequately show that Popcornflix knew it was contributing to infringement, particularly because neither defendant was a party to that litigation. The court dismissed the contributory-infringement claims.

Vicarious Infringement

Vicarious infringement can impose liability when a defendant has the right and ability to supervise infringement and has a direct financial interest in exploiting copyrighted material. Hartmann argued that Chicken Soup was liable because it purchased Popcornflix and operated it as a wholly owned subsidiary.

The court held that the parent-subsidiary relationship alone did not plausibly show that Chicken Soup had the required right and ability to supervise Popcornflix. It dismissed the vicarious-infringement claim.

Foreign Copyright Claims

Hartmann alleged that the defendants infringed copyright laws in numerous foreign countries by distributing the films outside the United States. The court found that the amended complaint did not identify which countries’ laws were allegedly violated, specify the relevant foreign laws, or provide the factual basis for those claims. It dismissed the foreign-copyright claims.

Leave to Amend and Disposition

The court granted Hartmann leave to replead the dismissed claims. Any amended pleading had to be filed within 21 days of the Opinion and Order.

Judge Vernon S. Broderick denied defendants’ motion to dismiss as to the direct-copyright-infringement claim involving After the Rain. He granted the motion as to the direct-copyright-infringement claims involving Commander Hamilton, Austin Powers, and The Last Tattoo, and as to the contributory-infringement, vicarious-infringement, and foreign-copyright-infringement claims. The Clerk of Court was directed to close all pending motions.