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Learn more about what you receive with purchase of this case. LLC v. Ugly Pools Arizona Inc.

United States District Court, D. Arizona

September 24, 2018 LLC, Plaintiff,
Ugly Pools Arizona, Inc., et al., Defendants.


          Bridget S. Bade United States Magistrate Judge

         Defendants Ugly Pools Arizona, Inc., and Brian Morris (“Defendants”) have filed a third motion for summary judgment. (Doc. 86.) The motion seeks summary judgment on Plaintiff's claim for false copyright marking under 17 U.S.C. § 1202(a), asserted in Count Three of the First Amended Complaint (“FAC”). The motion is fully briefed. (Docs. 86, 87, 92, 93, 94.) For the reasons below the Court grants the motion.

         I. Background

         A. Procedural Background

         In Count Three of the FAC, Plaintiff (“Plaintiff” or “SPSO”) alleged that Defendants violated the Digital Millennium Copyright Act, 17 U.S.C. § 1202 (“DMCA”). (Doc. 39 at ¶¶ 20, 48-50.) Plaintiff alleged falsification and removal claims under §§ 1202(a) and (b). The parties previously filed cross-motions for summary judgment on all of Plaintiff's claims in the FAC, including its claims under the DMCA. (Docs. 43, 45.) On June 9, 2017, the Court denied both motions for summary judgment on Plaintiff's falsification claim under 17 U.S.C. § 1202(a), and granted Defendants' motion for summary judgment on Plaintiff's removal claim under § 1202(b).[1] (Doc. 64 at 35-41.) The Court denied the parties' cross-motions for summary judgment on Plaintiff's § 1202(a) falsification claim because it found that there were disputed issues of fact on an element of that claim, specifically Defendants' intent in placing their copyright notice on their website. (Id. at 38-41.)

         As set forth below in Section I.B, and in the Court's June 2017 Order, Plaintiff has asserted various descriptions of its copyrighted material over the course of the litigation. (Id. at 11-12.) In its June 2017 Order, the Court concluded that for purposes of Plaintiff's infringement claim, Plaintiff's claims related to copyrighted material referred to copyrighted photographs on its website (Doc. 64 at 12.) Based on this limited description of Plaintiff's claimed copyrighted material, Defendants requested leave to file a third motion for summary judgment directed at Plaintiff's § 1202(a) falsification claim. (Doc. 75.) Defendants argued that the limitation on Plaintiff's claim of copyrighted material from Plaintiff's “website as a whole” to “photographs” on Plaintiff's website was significant. Defendants argued that they “did not change Plaintiff's copyright notice on any of its photos” and, therefore, could not be liable under § 1202(a). (Id. at 2-3.) The Court granted Defendants' motion for leave to file a third summary judgment motion on Plaintiff's § 1202(a) falsification claim. (Doc. 83.) This order addresses only that claim.

         B. Factual Background

         In the FAC and other filings in this matter, Plaintiff described its business as licensing pre-made websites that it refers to as “the Platform.” (Doc. 78-1 ¶ 1.)[2]However, Plaintiff has admitted that “much of the website code” is licensed from BigCommerce, a non-party entity that provides “backend electronic storefront” services. (Doc. 53, Ex. Q.) After Plaintiff commenced this matter, it sought to register a copyright in various aspects of the Platform. (See Doc. 64 at 5-7 (discussing the copyright registration process).) Plaintiff initially claimed a copyright in portions of computer code, code to provide for the 360-degree rotation of images, all images containing the letters CVP in the image, product descriptions, and the arrangement of text and images. (Docs. 87 at 1 ¶ 1; Doc. 96 ¶ 1.) Plaintiff later limited its copyright claim. (Doc. 87 ¶ 2; Doc. 93 ¶ 2.) On November 29, 2016, the copyright office issued Plaintiff a certificate of registration. (Doc. 50, Ex. 1; Doc. 80 ¶ 44.) The certificate of registration was for “text, photographs.” (Doc. 87 at ¶ 4; Doc. 93 at ¶ 4.) After the copyright office issued the certificate of registration, Plaintiff's filings before this Court referred to Plaintiff's copyrighted material as “the collection of photos at issue in this case.” (Doc. 87 at ¶ 5; Doc. 93 at ¶ 5.)

         Plaintiff alleges that in July 2014, SPSO employed Mark Kesler as a salesperson to sell licenses to use the Platform. (Doc. 78-1 ¶¶ 5, 6.) During 2014, Kesler introduced Defendant Brian Morris, owner of Defendant Ugly Pools Arizona, Inc., to Plaintiff as a potential licensee. (Id. at ¶ 13.) Defendants represented themselves to Plaintiff as prospective customers who were considering purchasing a license of SPSO's Platform to create a website for their business. (Id. at ¶ 15.) Plaintiff provided Defendants access to Kesler's copy of the Platform to assist them in making a purchasing decision. (Id. at ¶ 16.) Plaintiff alleges that “Defendants were aware that they would have to purchase a license to be authorized to have further access to the Platform-that is, to use it commercially-and that the SPSO license governed the nature of their use of the Platform.” (Id.)

         Unbeknownst to Plaintiff, Defendants and Kesler were working together and had formed a partnership for Morris to manage and redesign Kesler's site. (Id. at ¶ 18, Ex. 2 at 37.) Plaintiff alleges that Defendants downloaded “a complete copy of SPSO's Platform.” (Doc. 78-1 ¶ 20.) Plaintiff alleges that nearly a year later, Defendants published a website located at (“APS”), which was nearly identical to the Platform. (Doc. 78-1 ¶ 22.) Plaintiff asserts that Defendants admitted to copying the Platform and creating APS. (Id.) Plaintiff alleges that Defendants' site “wholly incorporated the original photos which are registered with the U.S. Copyright Office under Registration Number TX 8-268-803 (‘Registered Photos') and other content from the Platform into APS.” (Id. at ¶¶ 28-29). Plaintiff alleges that Defendants provided false copyright management information on the website with the intent to induce, enable, facilitate, or conceal infringement. (Doc. 39 at ¶ 20.)

         In its statement of facts in opposition to Defendants' third motion for summary judgment, Plaintiff does not dispute that Defendants' copyright notice is located only at the bottom of Defendants' website and is not placed next to any of Plaintiff's photographs.[3] (Doc. 87 at ¶ 7 (citing Doc. 39-6 at 7 (Ex. F to the FAC)); Doc. 93 at ¶ 7.) Plaintiff agrees that Defendants did not add their copyright notice to Plaintiff's photographs. (Doc. 87 at ¶ 7; Doc. 93 at ¶ 7.) Plaintiff has admitted that Defendants did not remove or change Plaintiff's copyright marking from any of Plaintiff's photographs. (Doc. 87 at ¶ 9 (citing Doc. 87, Ex. 1 at 54 line 5 to p. 55 line 8); Doc. 93 at ¶ 9.)

         Defendants assert that their contributions to the APS website include (1) Defendants' brand design logo on the top of the webpage, and (2) Defendants' blog entries on the bottom of the webpage. (Doc. 87 at ¶ 10 (citing Doc. 39-6 at 7, Ex. F to the FAC).) Plaintiff disputes this assertion because Exhibit F to the FAC does not depict blog entries. (Doc. 93 at ¶ 10.) Although Exhibit F does not include specific blog entries, it depicts a navigational link to a blog. (Doc. 39-6 at 2, 7.) Defendants' copyright notice appears in a shaded block at the bottom of the webpage that includes a link to the blog. (Id. at 7.) Additionally, Plaintiff has provided evidence of a blog entry. (Doc. 93-1 at 3-4.)

         II. Summary Judgment Standard

         A party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, shows “that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Only disputes over facts that might affect the outcome of the suit will preclude the entry of summary judgment, and the disputed evidence must be “such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         The nonmoving party may not rely on the mere allegations in the pleadings, but must set forth by affidavit, or other appropriate evidence, specific facts showing there is a genuine issue for trial. Id. at 249. The nonmoving party must produce at least some “significant probative evidence tending to support” its position. Smolen v. Deloitte, Haskins, & Sells, 921 F.2d 959, 963 (9th Cir. 1990). The issue is not whether the “‘evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the [nonmoving party] on the evidence presented.'” United States ex rel. Anderson v. N. Telecom, Inc., 52 F.3d 810, 815 (9th Cir. 1995) (quoting Liberty Lobby, 477 U.S. at 252). “If a moving party fails to carry its initial burden of production, the nonmoving party has no obligation to produce anything, even if the nonmoving party would have the ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102-03 (9th Cir. 2000). The Court considers the motion for summary judgment under this standard.

         III. Plaintiff's ...

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