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FurnitureDealer.net, Inc. v. Amazon.com, Inc.

United States District Court, D. Minnesota

March 14, 2019

FURNITUREDEALER.NET, INC. Plaintiff,
v.
AMAZON.COM, INC., and COA, INC. d/b/a COASTER COMPANY OF AMERICA Defendants.

          Michael Lefeber, BRIGGS & MORGAN, PA, for plaintiff.

          Daniel M. Cislo, CISLO & THOMAS, LLP, and Robert J. Gilbertson, GREENE ESPEL, PLLP, for defendant COA, Inc.

          MEMORANDUM OPINION & ORDER

          JOHN R. TUNHEIM CHIEF JUDGE

         This case arises out of a contract between Plaintiff FurnitureDealer.Net (“FDN”) and Defendant Coaster Company of America (“Coaster”) in which FDN agreed to create a website to market Coaster's products. FDN, a furniture marketing company, noticed that copyrighted material it created for Coaster began appearing on Defendant Amazon.com's (“Amazon”) URLs. FDN brought this action against Coaster after learning that it provided the allegedly infringed material to Amazon. Against Coaster, FDN alleges direct copyright infringement, contributory infringement, vicarious infringement, unjust enrichment, breach of contract, breach of the covenant of good faith and fair dealing, and violations of the Digital Millennium Copyright Act (“DMCA”).

         Coaster now moves to dismiss FDN's claims under Fed.R.Civ.P. 12(b)(6) and, in the alternative, requests a more definite statement under Rule 12(e). Because FDN has alleged facts sufficient to support its claims, the Court will deny Coaster's motion to dismiss as to every claim save FDN's unjust enrichment claim. The Court will grant Coaster's motion to dismiss the unjust enrichment claim because that claim is preempted by the Copyright Act. Finally, because it is possible for Coaster to reply to FDN's allegations, the Court will deny Coaster's motion for a more definite statement.

         BACKGROUND

         I. FurnitureDealer.Net's Copyright

         FDN is a Minnesota corporation specializing in the creation, production, and management of marketing solutions for home furniture companies. (Am. Compl. ¶¶ 1, 8, May 14, 2018, Docket No. 6.) As part of its services, FDN creates and manages websites for furniture retailers. (Id. ¶ 8.) In creating websites, FDN also creates content that appears on the sites, including written descriptions of its clients' products. (Id.) These descriptions include search-engine-optimized (“SEO”) text. (Id.) SEO text is, in essence, text that is tailored to maximize its prominence on the internet, particularly in response to online searches. (Id. ¶ 36.) As the effectiveness of SEO text increases, so do the rankings of the websites associated with the text. (Id.) Likewise, when SEO text is compromised, website rankings and traffic decrease. (Id.) For that reason, FDN tightly controls and regulates the use and distribution of the furniture descriptions it writes to service its clients' websites. (Id.)

         One tool FDN employs to protect and track its assets is a library of original product content (the “Content Library”), which includes content created for all clients FDN serves. (Id. ¶ 8.) The Content Library is stored in a database (the “Automated Database”), which was copyrighted in September 2015. (Id. ¶¶ 8-9 & Ex. A, Docket No. 6-1.) The Certificate of Registration from the U.S. Copyright Office identifies the title of the work as “Automated database of furniture catalogs and collections (photographs and text).” (Id. ¶ 9, Ex. A.) The “new material” listed on the certificate includes “Compilation, arrangement, original text, original photographs and revisions to certain prior photographs.”[1] (Id.)

         II. Alleged Infringement by Coaster and Amazon

          Coaster is a California furniture company and a long-time customer of FDN. (Id. ¶¶ 3, 10.) In February 2010, Coaster and FDN entered into an agreement (the “Agreement”) establishing that FDN would create and maintain a customized website for Coaster at www.coasterfurniture.com (the “Website”). (Id. ¶¶ 11-12, 31.)

         In relevant part, the Agreement contains the following terms:[2] (1) FDN owns the Website but licensed it to Coaster;[3] (2) FDN owns all rights, title and interest to all original content created by FDN for the Website; (id. ¶ 11; Decl. of Larry Furiani ¶ 3, July 6, 2018, Docket No. 39, Ex. 1 (“Agreement”) at 3, Docket No. 40); (3) use of FDN's original content is limited to the Website and websites of Coaster-authorized dealers who enter into separate licensing agreements with FDN; (Am. Compl. ¶ 12; Agreement at 6, 10); (4) Coaster retains all rights and title to domain names and design elements that it provides for the Website; (Agreement at 3); and (5) in exchange for creating and maintaining the Website, Coaster would provide FDN with referrals of authorized dealers with whom FDN could share its original content; (id. at 2).

         Pursuant to the Agreement, FDN created the Website and wrote SEO text (the “Descriptive Text”) to market Coaster's products, using Coaster's catalog as a starting point. (Am. Compl. ¶¶ 10-11.) With other content used on the Website, FDN added the Descriptive Text to its Content Library. (Id.) FDN alleges that the Descriptive Text is therefore protected not only by the Agreement, but also by the copyright of FDN's Automated Database. (Id. ¶ 11.) To alert third parties against using copyrighted material, FDN placed a graphic on each page of the Website. (Id. ¶ 34.) The graphic includes FDN's logo and states, “All rights reserved. Nothing on this page may be copied or reproduced without explicit permission.” (Id.)

         After the Website was up and running and before February 2016, FDN noticed that the Descriptive Text it created for Coaster began appearing on Amazon URLs used to promote and sell Coaster furniture. (Id. ¶ 14.) By February 2016, FDN had identified and collected at least 394 Amazon URLs where its Descriptive Text appeared. (Id. ¶ 19.) Because the text appearing on the Amazon URLs was identical or nearly identical to the Descriptive Text in its Content Library, FDN believed it was copied directly from the Content Library. (Id. ¶ 14.)

         On February 25, 2016, FDN submitted a takedown request to Amazon via email pursuant to the Digital Millennium Copyright Act (“DMCA”). (Id. ¶ 17.) In the email, FDN explained in detail its concerns about copyright infringement. (Id. ¶ 19.) It also attached a spreadsheet containing a comparison of the text on Coaster's and Amazon's websites for each instance of alleged infringement along with the corresponding URLs. (Id.) Amazon repeatedly asserted that it could not identify the alleged infringements and requested more detail from FDN. (Id. ¶¶ 20-29.) Although FDN complied with Amazon's requests, Amazon did not take any steps to remove the identified material in response to this exchange. (Id. ¶ 29.)

         In one email dated April 6, 2016, an Amazon employee explained to FDN that Amazon had received the item descriptions from the product manufacturer (i.e., Coaster). (Id. ¶ 30.) Although Coaster's Vice President repeatedly denied granting Amazon permission to use the Descriptive Text, Amazon insisted that FDN work with Coaster to resolve the issue. (Id. ¶¶ 32, 35, 37, 44.)

         Still believing Amazon had acted independently, FDN brought suit against Amazon on January 26, 2018. (Compl., Jan. 26, 2018, Docket No. 1.) However, after learning that Coaster had (1) allegedly uploaded the Descriptive Text onto the Amazon URLs in question; and (2) failed to ask Amazon to remove the text from its URLs, FDN added Coaster as a defendant. (Am. Compl., ¶¶ 49, 50.)

         As of this date, the Descriptive Text in issue remains on various Amazon URLs. (Id. ¶¶ 48, 52.) FDN alleges that it has suffered and continues to suffer losses because of Amazon and Coaster's infringement. (Id. ¶¶ 51, 53.)

         DISCUSSION

         I. Coaster's Motion to Dismiss for Failure to State a Claim

         A. Standard of Review

          In reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court considers all facts alleged in the complaint as true to determine if the complaint states a “‘claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To survive a motion to dismiss, a complaint must provide more than “‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action.'” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Although the Court accepts the complaint's factual allegations as true, it is “not bound to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555 (internal quotation marks omitted). “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.” Iqbal, 556 U.S. at 678. “Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility, ” and therefore must be dismissed. Id. The Court construes the complaint in the light most favorable to the plaintiff, drawing all inferences in their favor. Ashley Cty., Ark. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009).

         While the Court is normally limited to the pleadings when considering a 12(b)(6) motion, it may properly consider materials that are necessarily embraced by the pleadings. Enervations, Inc. v. Minn. Mining & Mfg. Co., 380 F.3d 1066, 1069 (8th Cir. 2004). Such materials include “documents whose contents are alleged in a complaint and whose authenticity no party questions.” Kushner v. Beverly Enters., Inc., 317 F.3d 820, 831 (8thCir. 2003) (quoting In re Syntex Corp. Sec. Litig., 95 F.3d 922, 926 (9th Cir. 1996)).

         B. FDN's Copyright Claims

         Coaster argues that FDN's copyright infringement claims (Counts I-III) should be dismissed for four reasons: (1) FDN has not adequately identified the material it alleges was infringed upon; (2) the Descriptive Text is not copyrightable subject matter; (3) Coaster had a right to the text as a joint author; and (4) FDN has not adequately alleged that Coaster had access to FDN's copyrighted work, which is a necessary element of a copyright claim.

         i. The Identified Material

         Coaster repeatedly asserts that it is uncertain what material FDN alleges was copyrighted and subsequently infringed upon. The Court is unpersuaded. While the function and contents of the Automated Database and Content Library are somewhat obscure at this stage in the proceedings, the Court has no difficulty identifying the material in issue as the Descriptive Text that FDN produced for Coaster and placed on the Website. Coaster points to the lack of examples of infringed material in the Amended Complaint. But this is no matter; FDN has described the Descriptive Text and the alleged infringement in detail. Moreover, FDN alleges that it specifically identified hundreds of instances of infringement, placed them into a spreadsheet, and confirmed with Coaster's Vice President that FDN owned the material in question. (See Am. Compl. ¶¶ 19, 32-33.) Thus, the Court finds that FDN has alleged facts sufficient to identify the Descriptive Text as the subject of this dispute.

         ii. Copyrightable Subject Matter

          Coaster argues that FDN's copyright claims should be dismissed because the Descriptive Text is not copyrightable subject matter. First, Coaster asserts that, as SEO text, the Descriptive Text should be denied copyright protection under the merger doctrine. Second, Coaster argues that the text lacks the creativity required of copyrighted material.

         The Court first notes that the certificate of copyright registration attached to the pleadings creates a rebuttable presumption of a valid copyright in the Automated Database (“the Copyright”). See Thimbleberries, Inc. v. C & F Enterprises., Inc.,142 F.Supp.2d 1132, 1137 (D. Minn. 2001); 17 U.S.C. § 410(c) (“the certificate of registration . . . shall constitute prima facie evidence of the validity of the copyright . . ..”) However, because “copyright protection may extend only to those components of a work that are original to the author, ” FDN must show ...


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