DynaStudy, Inc. v. Hous. Indep. Sch. Dist.
DynaStudy, Inc. v. Hous. Indep. Sch. Dist.
Opinion of the Court
Pending is Defendant Houston Independent School District's Renewed Motion to Dismiss Pursuant to Rule 12(b)(6) and Motion to Strike Pursuant to Rule 12(f) (Document No. 28).
I. Background
Plaintiff DynaStudy, Inc. ("Plaintiff") is a Texas-based educational publishing company that produces student study aids for a variety of subjects and grade levels based on Texas's state standards.
Plaintiff alleges that Defendant Houston Independent School District ("Defendant"), one of its customers, "has participated in an ongoing pattern and practice of infringing [these] intellectual property rights, ... despite the fact that [Plaintiff] has repeatedly placed Defendant on notice of such ongoing and repeated infringement."
*771• Teacher Dennis Huffman at Lanier Middle School "posted a nearly identical copy of [Plaintiff's] Grade 8 Science for STAAR guide online for anyone to download," and when Plaintiff contacted Defendant, Defendant represented that Huffman had received the copyrighted material "from someone by email."8
• Teacher Nicole Diluglio at the High School for the Performing and Visual Arts "posted the DynaNotes Biology EOC online for anyone to download."9 The High School for the Performing and Visual Arts had never purchased any copy of the EOC and had no right of access to it, and upon inquiry Defendant represented that Diluglio received the copyrighted material "from a colleague."10
• Teacher Thomas Dohoney at Westside High School "plagiarized a significant portion of DynaStudy's Physics EOC and Chemistry EOC student course notes and then posted these unauthorized derivative works online at Defendant's website for anyone to download," after removing Plaintiff's copyright notices.11 Plaintiff's website was included at the bottom of each page that Dohoney distributed.12
• Teacher Marla Maharaj at DeBakey High School "posted a full version of DynaStudy's Biology EOC student course notes online at Defendant's website."13
• Teacher Amanda Schultz-Weaver at Reagan High School "posted a copy of DynaStudy's Biology EOC student course notes online," from which copy Plaintiff's copyrights and trademarks had been removed.14 Numerous other school districts and organizations infringed on Plaintiff's copyright by posting and reposting this document.15 The document appears to have been created by teacher Michael Partridge at Reagan High School, which never purchased Plaintiff's Biology EOC Student Course.16
• When Plaintiff's sales representative met with administrator Jacqueline Thompson at Yates High School to showcase Plaintiff's course notes, Thompson asked her to leave some examples for teachers to review, assuring her that the materials would not be copied.17 When the representative returned to collect the notes, they had tape over the language at the bottom stating, "COPYING THIS MATERIAL IS STRICTLY PROHIBITED," and Thompson did not deny that the works had been copied, although she professed to not know who had copied them.18
Plaintiff alleges that despite knowing of Plaintiff's intellectual property rights in its works and receiving repeated notices of ongoing infringement from 2012 to 2016, "Defendant's teachers and administrators *772continued to unlawfully distribute [Plaintiff's] materials amongst themselves" and to make unauthorized paper copies, and "Defendant has failed to take adequate steps to halt all infringement of [Plaintiff's] intellectual property rights."
In this suit Plaintiff seeks injunctive relief and damages for Defendant's violation of its intellectual property rights.
Defendant moves to dismiss Counts 2-5 for failure to state a claim, to dismiss as time-barred the allegations related to Huffman, to dismiss with prejudice the claims alleged in Plaintiff's original Complaint but not realleged in its First Amended Complaint, and to strike certain allegations as immaterial, impertinent, and unduly prejudicial to Defendant.
II. Motion to Strike
Not as a separate focused motion, but rather as an add-on to several of its Rule 12(b)(6) arguments, Defendant moves under Rule 12(f) to strike Plaintiff's allegations in paragraphs 1, 25-27, 40-45, and the figures on pages 12-15 of Plaintiff's First Amended Complaint.
After carefully reading Plaintiff's above-referenced allegations, it is evident that Defendant's conclusory arguments that they should be stricken as "immaterial, impertinent and unduly prejudicial" are wholly without merit under the standard of Rule 12(f). The allegations have at least some "possible relation to the controversy," Augustus,
III. Motion to Dismiss
A. Legal Standard
Rule 12(b)(6) provides for dismissal of an action for "failure to state a claim upon which relief can be granted." FED. R. CIV. P. 12(b)(6). When a district court reviews the sufficiency of a complaint before it receives any evidence either by affidavit or admission, its task is inevitably a limited one. See Scheuer v. Rhodes,
In considering a motion to dismiss under Rule 12(b)(6), the district court must construe the allegations in the complaint favorably to the pleader and must accept as true all well-pleaded facts in the complaint. See Lowrey v. Tex. A&M Univ. Sys.,
B. Discussion
1. Plaintiff's Prior Claims
Defendant first seeks dismissal with prejudice of several claims alleged in Plaintiff's original Complaint, but which Plaintiff dropped from its First Amended Complaint.
2. DMCA § 1202(b)
Section 1202(b) of the DMCA prohibits the unauthorized removal of information identifying a work's copyright owner or *774unauthorized distribution of works while knowing that such information has been removed.
Defendant argues that Plaintiff's claim must be dismissed because (1) Defendant had no control over or responsibility for Schultz-Weaver's posting of Plaintiff's materials on her private website because she was no longer employed by Defendant at the time of the posting and (2) Partidge's alleged conduct was outside the statute of limitations.
Defendant's first argument fails because Plaintiff alleges that "Ms. Amanda Schultz-Weaver, while employed as a biology teacher at Defendant's Reagan High School , posted a copy of DynaStudy's Biology EOC student course notes online."
Defendant next argues that the Plaintiff's claim as it relates to Partridge is time-barred because, looking to allegations included in Plaintiff's original Complaint but not in its First Amended Complaint, Partridge removed the copyright material from Plaintiff's student notes more than three years before Plaintiff filed suit.
"A statute of limitations may support dismissal under Rule 12(b)(6) where it is evident from the plaintiff's pleadings that the action is barred and the pleadings fail to raise some basis for tolling or the like." Jones v. Alcoa, Inc.,
Defendant argues that the Court should consider Plaintiff's superseded allegations that Partridge removed Plaintiff's copyright and trademark information and created the document at issue "at least as early as May 5, 2013," and possibly as early as May 3, 2012.
3. Allegations Regarding Dennis Huffman
Defendant argues that Plaintiff's allegations relating to Dennis Huffman are barred by the statute of limitations.
4. Contributory Copyright Infringement
"One infringes contributorily by intentionally inducing or encouraging direct infringement." Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,
*776In Count Two, Plaintiff alleges contributory copyright infringement as follows:
Numerous individuals and entities have and are directly infringing DynaStudy's Copyrighted Works, including Defendant, its schools, teachers and administrators, and countless other educational institutions.
Defendant induced, caused, and materially contributed to the infringing acts of others by encouraging, inducing, allowing, and/or assisting others (both within the district and within countless other school districts and educational institutions) to unlawfully reproduce and/or distribute DynaStudy's Copyrighted Works.
Defendant had knowledge of the infringing acts relating to DynaStudy's Copyrighted Works.38
Plaintiff's broad allegations do not specify the acts on which the claim is based. Plaintiff argues in response to Defendant's motion to dismiss that its contributory copyright infringement claim is based on allegations that "(1) HISD's agents and employees knowingly placed DynaStudy's protected materials on the Internet," leading to direct infringement by nineteen other educational institutions, and "(2) HISD administrators allowed teachers overnight access to protected DynaStudy materials when they knew that the teachers and administrators were likely to copy those materials (and ultimately distribute them)."
Plaintiff's claim, if based on allegations that some of Defendant's employees induced or assisted others of Defendant's employees in copying Plaintiff's materials, fails to state a claim for contributory copyright infringement against Defendant. Plaintiff seeks to hold Defendant liable for the direct infringement of all of its employees, and cites no authority for the proposition that it may also recover under a theory of contributory liability based on the collaboration between or among Defendant's employees in that direct infringement. In establishing the theory of contributory copyright infringement liability, the Supreme Court explained that "[t]he Copyright Act does not expressly render anyone liable for infringement committed by another" but that "[t]he absence of such express language in the copyright statute does not preclude the imposition of liability for copyright infringements on certain parties who have not themselves engaged in the infringing activity " because "the concept of contributory infringement is merely a species of the broader problem of identifying the circumstances in which it is just to hold one individual accountable for the actions of another. " Sony Corp. of Am. v. Universal City Studios, Inc.,
But if Plaintiff's claim is based on direct infringement by third parties, its conclusory allegations that "Defendant induced, caused, and materially contributed to the infringing acts of others by encouraging, inducing, allowing, and/or assisting others ... to unlawfully reproduce and/or distribute DynaStudy's Copyrighted Works" and that "Defendant had knowledge of the infringing acts" are insufficient *777to state a claim.
Moreover, as Defendant correctly argues, Plaintiff "has not set forth any plausible facts that HISD knew about the alleged infringement of any third party prior to the filing of this lawsuit" so as to state a claim for contributory infringement.
5. Vicarious Copyright Infringement
Vicarious copyright infringement occurs when a defendant "profit[s] from direct infringement while declining to exercise a right to stop or limit it." Grokster,
Plaintiff alleges in Count Three that "Defendant had the right and ability to control the infringing acts of its teachers and administrators who directly infringed DynaStudy's Copyrighted Works" and that Defendant obtained a direct financial benefit from the infringement.
Defendant also argues that Plaintiff's vicarious infringement claim fails because the attachments to Plaintiff's complaint show that Defendant promptly removed materials from its website when Plaintiff notified Defendant of infringing materials, such that it did not "declin[e] to exercise a right to stop or limit" its employees' infringement.
6. Trademark Infringement
Plaintiff alleges in Count Five that Defendant violated the Lanham Act,
Defendant's sole argument for dismissal is that the mere reference to Plaintiff's mark in its domain name is not trademark infringement because Plaintiff's domain name is not a registered trademark.
Plaintiff has plausibly alleged that Defendant's use of Plaintiff's trademark contained in Plaintiff's domain name is "likely to lead the public to conclude, incorrectly, that the infringing derivative works that Defendant is reproducing and/or distributing originate with, or are authorized by DynaStudy."
IV. Order
Based on the foregoing, it is
ORDERED that Defendant Houston Independent School District's Renewed Motion to Dismiss Pursuant to Rule 12(b)(6) and Motion to Strike Pursuant to Rule 12(f) (Document No. 28) is GRANTED IN PART as follows: Plaintiff's Count Two for contributory copyright infringement and Plaintiff's claims for damages based on the actions of Defendant's employee Dennis Huffman are DISMISSED with prejudice; and Defendant's motion is otherwise in all things DENIED.
The Clerk will enter this Order, providing a correct copy to all counsel of record.
Defendant's previous Motion to Dismiss Pursuant to Rules 12(b)(1) and (6) (Document No. 12) is DENIED as moot. Defendant's Opposed Motion for Leave to File a Reply to Its Pending Motion to Dismiss and Strike the First Amended Complaint (Document No. 30) is GRANTED and the reply at Document No. 30-1 is deemed filed.
Document No. 16 ¶¶ 7-8 (1st Am. Compl.).
Id. ¶ 10.
Id. ¶¶ 1, 12.
Id. ¶ 15.
Id. ¶ 1.
Id. ¶ 24.
Id. ¶¶ 25-27.
Id. ¶ 28.
Id. ¶¶ 29-30.
Id. ¶ 31.
Id. ¶ 55.
Id. ¶ 34.
Id. ¶¶ 40-41.
Id. ¶¶ 42, 45.
Id. ¶ 43.
Id. ¶¶ 47-48.
Id. ¶¶ 49-50.
Id. ¶¶ 51-53, 57.
Document No. 4 (Compl.).
Document No. 16 ¶¶ 71-128.
Document No. 28.
Id. at 4, 6-7, 11-12.
Document No. 28 at 4-5.
Document Nos. 12, 16.
Defendant does cite Etablissements Neyrpic v. Elmer C. Gardner, Inc., in which the trial court allowed plaintiffs to amend their complaint 21 months after its original filing, on condition that the two claims being dropped be dismissed with prejudice because of the "considerable prejudice to defendants" that might otherwise result.
Document No. 16 ¶¶ 111-112.
Document No. 28 at 5-11.
Document No. 16 ¶ 40 (emphasis added).
Document No. 28 at 6; Document No, 28-1
Document No. 29 at 3.
Document No. 28 at 7-9.
Document No. 16 ¶¶ 42-44.
Document No. 4 ¶ 38.
Document No. 28 at 11-12.
Document No. 16 ¶¶ 25-27.
Document No. 16-4 at 3 of 5.
Document No. 16 ¶¶ 87-89.
Document No. 29 at 10.
Document No. 16 ¶¶ 88-89.
Document No. 28 at 12.
Document No. 16 ¶¶ 43-46.
Id. ¶ 46.
The "substantially certain" standard, which the Fifth Circuit has not adopted, has not been uniformly followed even in the Ninth Circuit. See Luvdarts, LLC v. AT & T Mobility, LLC,
"Vicarious copyright liability is an 'outgrowth' of respondeat superior " which extends liability "beyond an employer/employee relationship." Napster,
Document No. 16 ¶¶ 99-100.
Id. ¶ 54 ("As Defendant's teachers and administrators began to unlawfully reproduce and distribute DynaStudy's materials with their colleagues and students and with the public, in general, through online postings, Defendant restricted its legal purchase of these materials, resulting in significant lost sales to DynaStudy and a direct financial interest to Defendant. For a number of years now, Defendant and its teachers and administrators have enjoyed the widespread use (and misuse) of DynaStudy's materials without having paid for that use.").
Document No. 28 at 14.
Document No. 16, exs. D, E.
Document No. 16 ¶ 59.
Id. ¶¶ 47-49.
Document No. 16 ¶ 55.
Document No. 28 at 15-16.
Document No. 16 ¶ 123.
Reference
- Full Case Name
- DYNASTUDY, INC. v. HOUSTON INDEPENDENT SCHOOL DISTRICT
- Cited By
- 6 cases
- Status
- Published