UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

Jennifer Dickert, d/b/a Altered Context

v. Civil No. 14-cv-316-JL Opinion No.

North Coast Family Health, Inc., et al.

MEMORANDUM ORDER

This case involves the pleading requirements in an action

for copyright infringement brought against a naturopathic healing

clinic by a former employee. Plaintiff Jennifer Dickert sued

North Coast Family Health, Inc. and its president, Dr. Leon M.

Hecht, III, (collectively “North Coast”) alleging that North

Coast continued to use copyrighted materials belonging to Dickert

on North Coast’s website, Facebook page, and other marketing

materials after Dickert revoked permission to do so. This court

has subject-matter jurisdiction under

(federal

question) and 1338(a) (copyrights).

The defendants move to dismiss Dickert’s complaint for

failure to state a claim, see Fed. R. Civ. P. 12(b)(6), and lack

of subject-matter jurisdiction, see Fed. R. Civ. P. 12(b)(1).

After holding oral argument, the court grants the motion in part

and denies it in part. As explained fully infra, Dickert’s

complaint makes out a claim that she may be able to recover her actual damages for defendants’ alleged infringement of her

copyright in North Coast’s website.

I. Applicable Legal Standard

To survive a motion to dismiss for failure to state a claim

under Rule 12(b)(6), the plaintiff must allege facts in his or

her complaint sufficient to “state a claim to relief that is

plausible on its face.” Ashcroft v. Iqbal,

(2009) (quoting Bell Atl. Corp. v. Twombly,

(2007)). “A claim has facial plausibility when the plaintiff

pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the

misconduct alleged.”

. “Plausibility does not demand

a showing that a claim is likely to succeed,” but does require “a

showing of more than a sheer possibility of success.” Butler v.

Balolia,

(1st Cir. 2013) (quotation marks

omitted). The defendant bears the burden of demonstrating that

the complaint fails to state a claim for which relief can be

granted. See, e.g., Doe v. Friendfinder Network, Inc.,

(D.N.H. 2008) (Laplante, J.).

The court accepts the well-pleaded facts of the complaint as

true and draws all reasonable inferences in the plaintiff’s

favor, S.E.C. v. Tambone,

(1st Cir. 2010) (en

banc), but disregards “statements in the complaint that merely

2 offer legal conclusions couched as fact or threadbare recitals of

the elements of a cause of action,” Ocasio–Hernandez v.

Fortuno–Benet,

(1st Cir. 2011) (quotation marks,

bracketing, and ellipse omitted). In doing so, the court takes

account of facts set forth in, or incorporated into, the

complaint. Absent certain narrow exceptions, such as for

documents of undisputed authenticity, documents central to the

plaintiff’s claim, and documents sufficiently referenced in the

complaint, “consideration of documents not attached to the

complaint, or not expressly incorporated therein, is forbidden,

unless the proceeding is properly converted into one for summary

judgment under Rule 56,” which is not the case here. Watterson

v. Page,

(1st Cir. 1993).

Similarly, when considering a motion to dismiss for lack of

subject-matter jurisdiction under Rule 12(b)(1), the court

“accept[s] as true all material allegations of the complaint, and

construe[s] the complaint in favor of the complaining party.”

Peterson v. United States,

(D.N.H. 2011)

(quoting Warth v. Seldin,

(1975)). The burden,

however, “lies with the plaintiff, as the party invoking the

court's jurisdiction, to establish that it extends to his

claims.”

(citing Kokkonen v. Guardian Life Ins. Co. of Am.,

(1994)).

3 II. Background

The relevant facts, drawn from the complaint1 and construed

in the light most favorable to Dickert, are as follows. Dickert

worked at North Coast until sometime in late 2011 or early 2012

as a dietician and administrative employee. While thus employed,

Dickert also designed and maintained a website, Facebook page,

and other promotional materials for the practice--materials in

which she alleges that she retains the copyright. She understood

that she performed that work as an independent contractor, and

that she would receive a percentage of defendants’ revenues in

consideration for licensing the defendants to use that material.

With this understanding, Dickert gave defendants permission to

use this material while she was employed by, and thus receiving

payments from, the defendants.2

1 Defendants ask the court to draw certain inferences based on a letter from Dickert to North Coast attached as an exhibit to defendants’ motion to dismiss (document no. 8), on the grounds that plaintiff does not dispute the authenticity of that document. See Watterson,

. But to do so would have the practical effect of turning defendants’ motion to dismiss into a motion for summary judgment on one of its affirmative defenses, which the court declines to do at this stage in the litigation. 2 At oral argument, Dickert explained that she expected to receive a percentage of North Coast’s profits if the website brought additional clients into the office and thus increased those profits. See Complaint (document no. 1) at ¶ 4. She confirmed that she did not receive any payment from North Coast for her work in connection with the website separate from her normal wages.

4 After Dickert parted ways with North Coast, she expected

North Coast to continue compensating her for the right to use the

website and promotional materials. When it became clear that

North Coast would not pay her for the right to continue to use

these materials, Dickert withdrew her permission. Defendants

then continued to use and make copies of Dickert’s material on

their website, Facebook page, and promotional materials without

Dickert’s consent.

In September 2012, Dickert issued a takedown notice under

Section 512(c)(3) of the Digital Millennium Copyright Act of 1998

(DMCA)3 to One World Hosting, the internet service provider that

hosts North Coast’s website. North Coast responded with a

statement from Dr. Hecht, explaining that the work Dickert

performed on the website and any other promotional materials she

created for North Coast were done within the scope of her

3 A “takedown notice” is notification from a copyright holder to a service provider--such as, in this case, a website hosting company--informing the service provider that content posted by a user allegedly infringes the holder’s copyright, and requesting that it be removed from the service provider’s system. Under the DMCA, a service provider who, “upon notification of claimed infringement . . . responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity” may not be held liable “for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider . . . .”

(c)(1)(C).

5 employment at North Coast, and thus constituted a work for hire4

for which Dickert was fully compensated through her wages.

On January 14, 2013, Dickert registered North Coast’s

website with the Copyright Office. Dickert subsequently filed

the present suit against North Coast and Dr. Hecht, seeking

statutory and actual damages for defendants’ alleged acts of

copyright infringement, as well as temporary and permanent

injunctive relief against future infringement.

III. Analysis

North Coast argues that Dickert has not stated a claim upon

which relief can be granted as to the materials other than the

website (the “non-website works”) because she failed to register

them with the Copyright Office, and that she has not stated a

claim upon which relief can be granted as to North Coast’s

website because she has not pled facts sufficient to establish

4 “Under the Copyright Act, a work comes within the work for hire doctrine if it consists of either (i) a work prepared by an employee within the scope of her employment, or (ii) one prepared by an independent contractor on special order or commission.” Warren Freedenfeld Associates, Inc. v. McTigue,

(1st Cir. 2008) (citing

). In such a case, “the employer or other person for whom the work was prepared is considered the author for purposes of [the Copyright Act], and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.”

.

6 that she may be entitled to relief. The court agrees with

defendants’ first point, but disagrees with the second.

A. Copyright Registration

Except under limited circumstances not applicable here, “no

civil action for infringement of the copyright in any United

States work shall be instituted until preregistration or

registration of the copyright claim has been made in accordance

with” the Copyright Act.

(a). Because Dickert

registered only the website with the Copyright Office, defendants

argue, only the website satisfies the requirement of § 411(a),

and Dickert’s claim that defendants infringed her copyright in

the non-website works should therefore be dismissed.

Defendants rely on Torres-Negron v. J&N Records, LLC, in

which the Court of Appeals for the First Circuit held that valid

registration of a copyrighted work was a jurisdictional

prerequisite to an infringement suit.

(1st

Cir. 2007). Attempting to refute this argument, plaintiff takes

a swing at distinguishing Torres-Negron on the facts, but misses

the ball. It is true that the Supreme Court has cast doubt on

this holding, explaining that registration with the Copyright

Office is not a jurisdictional condition, in the sense that

failure to register material does not strip this court of

subject-matter jurisdiction. Reed Elsevier, Inc. v. Muchnik, 130

, 1247-48 (2010). Rather, the Court explained, it is

a nonjurisdictional claim-processing rule. Id.; see also id. at

1243-44 (delineating “jurisdictional conditions” and “claim-

processing rules”). But that is exactly how the defendants

employ it here. While the underlying facts of Torres-Negron may

--as plaintiff explains--differ in some respects from the case at

hand, the ultimate effect is the same: because Dickert has not

registered the non-website works with the Copyright Office,

Dickert has failed to state a claim upon which this court can

grant relief as to defendants’ alleged infringement of those

materials.

To the extent the non-website works contain pictures,

language, or other such elements that were also part of the

website, those elements may be works that were registered with

the Copyright Office under

(a). See U.S.

Copyright Office, Circular 66: “Copyright Registration for

Online Works,” May 2009 (the registration of a website extends

“to the copyrightable content of the work as received in the

Copyright Office and identified as the subject of the claim.”

(emphasis in original)). Thus, insofar as Dickert can prove that

elements included in the non-website works were also included in

her registration of the website with the Copyright Office,

8 Dickert may be able to obtain relief for the reasons discussed

below.

B. The Website

Defendants argue that Dickert has failed to state a claim

upon which relief can be granted with respect to defendants’

alleged infringement of the website because none of the remedies

that Dickert requests are available to her. The court disagrees.

1. Damages

A copyright owner whose copyright has been infringed may

recover “the actual damages suffered by him or her as a result of

the infringement, and any profits of the infringer that are

attributable to the infringement and are not taken into account

in computing the actual damages.”

(b). Or, a

prevailing plaintiff may elect to recover statutory damages “in

the sum of not less than $750 or more than $30,000 as the court

considers just.”

§ 504(c). However, a plaintiff may not

recover statutory damages if the alleged infringement commenced

after the work’s publication but before its registration, unless

it is registered within three months of its initial publication.

Id. § 412(2).

In her complaint, Dickert requests either her actual damages

and defendants’ profits or, in the alternative, statutory

damages. Defendants argue that Dickert has not pled facts

9 sufficient to state a claim that she is entitled to any damages.

The court agrees with defendants as to Dickert’s claim for

statutory damages, but disagrees as to her claim for actual

damages.

a. Actual Damages

Though Dickert’s complaint is thin, the court finds that she

has pled facts sufficient to support a claim for actual damages--

if just barely. Plaintiff alleges (i) that she owns the

copyright in the material on the North Coast website and that she

granted North Coast permission to use the website during her

employment at North Coast; (ii) that defendants agreed to

remunerate her at least in the form of “a percentage of revenues

of Defendants” as consideration for use of her copyrighted

materials; and (iii) that North Coast failed to pay her for the

right to use the website after her employment ended, but

continued to use it without her consent. Dickert then requested

that the court award her “all of her direct and consequential

damages arising from Defendants’ infringement of her copyright.”

Complaint (document no. 1) at ¶ D. It is not unreasonable to

infer that some of North Coast’s revenues may arise through its

website and that, per the parties’ alleged agreement, Dickert may

be entitled to some of those revenues. Thus, Dickert has--if

only just--alleged that she was damaged by defendants’ unlicensed

10 use of the website to the extent that she reasonably expected

defendants to pay her for the right to use the website after she

left their employ, and thus has made out a claim for actual

damages. See

(b).

At oral argument, defendants contended that § 504(b) treats

actual damages and the infringer’s profits as “discrete

elements,” and that a plaintiff must plead facts connecting

defendant's profits to the infringement to circumvent a 12(b)(6)

motion. Defendants offered two cases in support of this

argument. Neither is apposite here. Polar Bear Prods. v. Timex

Corp. implicates the proof of a connection between an infringer’s

profits and its infringement required at trial to establish a

right to those profits, not the standard for a sufficient

pleading.

, 715 (9th Cir. 2004). And In re AMR

Corp. stands only for the general proposition that a plaintiff’s

damages allegations must satisfy the Iqbal and Twombly standard.

(Bankr. S.D.N.Y. 2014). The court is therefore

not persuaded that the plaintiff must set forth her damages

arguments with the particularity defendants request at this stage

in the proceeding.

b. Statutory Damages

While actual damages may be available to Dickert, she has

not pled facts sufficient to state a claim for statutory damages.

11 The parties agree that Dickert did not register the website with

the Copyright Office until January 14, 2013. But Dickert alleges

that she revoked permission for North Coast to use the website

after the close of “the relationship in which Plaintiff was an

independent contractor as well as an employee of Defendants,”

which relationship concluded in “late 2011 or early 2012.”

Complaint (Document no. 1) at ¶¶ 5, 10. Thus, Dickert failed to

register the website until well after the alleged infringement

began, and cannot recover statutory damages. See

(1).

Attempting to save this claim, Dickert backpedals and argues

that “[i]t is not known at this time precisely when the

infringement commenced” and that “[i]t is plausible . . . that

infringement commenced after the January 14, 2013 registration of

the work.” Objection to Defendant’s Motion to Dismiss (Document

no. 9) at ¶¶ 12, 14. But Dickert cannot consistently allege that

the infringement commenced after January 14, 2013, because

Dickert also alleged that she issued a takedown notice under the

DMCA--which necessarily requires the plaintiff to claim that

defendants’ use of the website infringed her copyright therein--

in September 2012.5 See Complaint (document no. 1) at ¶ 4. Even

5 At oral argument, counsel for plaintiff raised the possibility that Dickert granted North Coast a limited license to use the website for some indeterminate period after Dickert

12 taking the facts in Dickert’s complaint as true and resolving all

inferences in her favor, the court finds that Dickert cannot save

her complaint by arguing that the alleged infringement may have

begun after the website’s registration with the Copyright Office.

2. Injunctive Relief

In addition to her claim for actual damages, Dickert has

also stated a claim for injunctive relief. Defendants argue

that, because they have stopped using the website that Dickert

designed, her request for injunctive relief is moot and this

court therefore lacks subject-matter jurisdiction over the

dispute. But that is not the law. While defendants are correct

that a case is moot when there is no longer a live controversy,

“[i]t is well settled that a defendant's voluntary cessation of a

challenged practice does not deprive a federal court of its power

to determine the legality of the practice.” City of Mesquite v.

Aladdin's Castle, Inc.,

(1982). Abandonment of

the practice may be “an important factor bearing on the question

whether a court should exercise its power to enjoin the defendant

from renewing the practice, but it is a matter relating to the

requested payment. But the complaint contains no such allegation. And it is clear from the DMCA takedown notice issued by Dickert--which is sufficiently referenced in the complaint for the court to consider it in connection with this motion, see Watterson,

-4--that she had revoked her permission at least as of the date of that notice.

13 exercise rather than the existence of judicial power.”

This

is so because a defendant who has voluntarily ceased an

infringing activity may yet resume that activity.

at 289

n.10. Therefore, the parties asserting mootness--in this case,

defendants--bear “the formidable burden of showing that it is

absolutely clear the allegedly wrongful behavior could not

reasonably be expected to recur.” Friends of the Earth, Inc. v.

Laidlaw Envtl. Servs. (TOC), Inc.,

(2000).

Defendants have not met that burden.

Defendants argue, in a single paragraph, that Dickert’s

request for injunctive relief is moot because defendants claim

that they have replaced the website to which Dickert contributed

with a new website. Yet defendants have not shown that they

cannot, nor have they even alleged that they will not, reemploy

the allegedly infringing website, nor any material from the

allegedly infringing website. To the contrary, Dickert alleges

that defendants’ proposed new website contains--and thus

defendants may continue to infringe--at least some portions of

her copyrighted material. Thus, Dickert carries her burden and

has made out a claim for injunctive relief.

14 IV. Conclusion

For the reasons set forth above, defendants’ motion to

dismiss6 is GRANTED as to plaintiff’s request for statutory

damages, and otherwise DENIED.

SO ORDERED.

____________________________ Joseph N. Laplante United States District Judge

Dated: June 10, 2015

cc: David J. Greene, Esq. Lawrence M. Edelman, Esq.

6 Document no. 8.

15