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FurnitureDealer.Net, Inc. v. Amazon.Com, Inc.

United States District Court, D. Minnesota

August 8, 2019

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

          MICHAEL M. LAFEBER AND O. JOSEPH BALTHAZOR, BRIGGS & MORGAN, PA, FOR PLAINTIFF.

          DANIEL M. CISLO, CISLO & THOMAS, LLP, AND ROBERT J. GILBERTSON, GREENE ESPEL PLLP, FOR COA, INC.

          MEMORANDUM OPINION AND ORDER

          JOHN R. TUNHEIM CHIEF JUDGE

         This case arises out of Defendant COA, Inc.'s (“Coaster”) and Defendant Amazon.com's (“Amazon”) alleged copying of text created by Plaintiff FurnitureDealer.net (“FDN”). In 2010, FDN and Coaster entered into an Agreement in which FDN agreed to create and license to Coaster a website to market Coaster's furniture products. Copyrighted content from that site allegedly appeared on Amazon URLs in 2016. FDN brought this action against Coaster and Amazon in 2018, alleging copyright infringement and breach of contract. In March 2019, Coaster brought eight counterclaims against FDN.

         Before the Court now is FDN's Motion for Partial Dismissal of Coaster's Answer, Affirmative Defenses, and Counterclaims. FDN moves to dismiss the following counterclaims: (III) Tortious Interference with Existing Business Relationships; (IV) Tortious Interference with Prospective Economic Advantage; (V) False and/or Misleading Representation of Fact - Lanham Act; (VI) Unfair and/or Deceptive Trade Practices - Minnesota Uniform Deceptive Trade Practices Act (“MUDTPA”); (VII) Unfair Business Practices - California Business & Professions Code (“CBPC”); and (VIII) Contractual and/or Equitable Indemnification.

         Because they are preempted by the Copyright Act, the Court will dismiss Counts III, IV, VI, and VII with prejudice. Because Coaster's Lanham Act claim is foreclosed under Dastar v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003), the Court will dismiss Count V with prejudice. Because FDN is not required to indemnify Coaster for any damages or fees Coaster may be required to pay as a result of this action, the Court will dismiss Count VIII with prejudice.

         BACKGROUND

         I. Coaster and FDN's Agreement and Website

         FDN is a Minnesota corporation that specializes in the creation, production, and management of marketing solutions for home furniture companies. (1st Am. Compl. (“FAC”) ¶¶ 1, 8, May 14, 2018, Docket No. 6.) As part of its marketing services, FDN creates and manages websites for furniture retailers. (Id. ¶ 8.) FDN also creates original content for use on those websites, including written descriptions of the products sold on the sites. (Id.) FDN keeps its original content in a content library (the “Content Library”). (Id.) The Content Library is stored in an automatic database that was copyrighted in September 2015. (Id. ¶ 8-9 & Ex. A at 2, May 14, 2018, Docket No. 6-1.)

         Coaster is a California furniture company and a longtime customer of FDN. (FAC ¶¶ 3, 10.) In February 2010, Coaster and FDN executed an agreement (the “Agreement”) establishing that FDN would create and maintain a customized website (the “Website”) for Coaster. (Id. ¶ 11; Decl. of Larry Furiani ¶ 3, Ex. 1 (“Agreement”) at 2, July 6, 2018, Docket No. 40.) The Agreement established that the Website would be owned by FDN and licensed to Coaster. (Agreement ¶¶ 1, 9.) The Agreement also established that FDN would “retain[] all right, title and interest in and to all software . . . [and] content . . . used by [FDN] to provide or resulting from the provision by [FDN] of its services, ” and that Coaster would “acquire[] no rights with respect thereto except for the right to use and administer its Site.” (Agreement ¶ 11.)

         Pursuant to the Agreement, FDN created text to describe the products in Coaster's catalog and placed that text on the Website. (See FAC ¶¶ 10-12; Agreement ¶ 2.) FDN added the descriptive text and other content used on the Website to its Content Library. (FAC ¶ 11.)

         FDN alleges that, because the descriptive text it created for the Website is part of its Content Library, the text is protected by both the Agreement and FDN's 2015 copyright. (FAC ¶ 11.) To alert Website users that the Website's content is copyrighted, FDN placed a graphic and copyright notice (the “Notice”) on each page of the Website. (Id. ¶ 34.) The Notice states: “© 2006-2016 FurnitureDealer.net, Inc., All rights reserved. Nothing on this page may be copied or reproduced without explicit permission.” (Id.) Coaster disputes that the text is covered by FDN's copyright. Coaster also alleges that much of the content on the Website originated with Coaster's own catalog and that Coaster owns several copyrights to its catalog content. (Answer ¶ 146, Mar. 28, 2019, Docket No. 92.)

         II. FDN Discovers Its Text on Amazon.com

         FDN noticed that the descriptive text it created for Coaster appeared on Amazon.com URLs. (FAC ¶¶ 14, 19.) On February 25, 2016, FDN submitted a takedown request to Amazon via email pursuant to the Digital Millennium Copyright Act (“DMCA”) and in accordance with Amazon's policies. (Id. ¶¶ 17-18.) To help Amazon identify the allegedly infringing material, FDN attached a spreadsheet to its email identifying 394 examples of URLs with infringing content. (Id. ¶ 19.) For each instance of alleged infringement, FDN included the text as written on the relevant Amazon URL and compared it to the text as it appeared on the Website. (Id.) FDN also included links to the Amazon URLs and the Website. (Id.)

         On February 26, Amazon informed FDN via email that it was unable to identify the relevant items and directed FDN to paste a link to each item directly into an email. (Id. ¶ 21.) FDN complied with that request. (Id. ¶ 24.) Amazon then requested that FDN identify the exact text it believed was protected, despite FDN having already included the text in the spreadsheet attached to its original email. (Id. ¶¶ 25-26.) On February 29, FDN complied with that request. (Id. ¶ 27.) Amazon responded to say it had received the information, but did not follow up with a substantive response. (Id. ¶ 28.)

         On April 1, 2016, FDN send a second take down request to Amazon via FedEx. (Id. ¶ 29.) On April 5, Amazon emailed FDN and stated that it had received the allegedly infringing material from Coaster. (Id. ¶ 30.) Coaster denied sharing the text with Amazon, but Amazon insisted that Coaster had provided it and repeatedly suggested that FDN work with Coaster to resolve the issue. (Id. ¶¶ 32, 37, 44.) Seeking to avoid further confusion, on April 12, FDN requested a telephone conference with Amazon. (Id. ¶ 42.) Amazon did not respond, prompting FDN to send another FedEx to Amazon reiterating its claims on April 22. (Id. ¶ 43.) Amazon responded via email on April 26, this time stating that the alleged infringement was not governed by the DMCA. (Id. ¶ 44.)

         FDN then sought and received written acknowledgment from Coaster that FDN was the owner of the content at issue and that Coaster had not authorized Amazon to use that content. (Id. ¶¶ 45, 47.) FDN sent these confirmations to Amazon's legal department via FedEx on May 19 and June 16, 2016. (Id.) Amazon sent an automated response to FDN but did not provide a substantive response. (Id. ¶ 48.)

         FDN alleges that Amazon never removed the allegedly infringing content from its URLs. (Id.) In contrast, Coaster alleges that, in response to what it labels FDN's “harassment” of Amazon, Amazon “may have removed product information about numerous Coaster products from the product detail pages . . . and caused Coaster's furniture items to appear lower in search results.” (Answer ¶ 135.) Coaster further alleges that its relationship with Amazon has been damaged as a result of FDN's actions. (Id. ¶ 136.)

         Only after FDN brought this lawsuit against Amazon did it allegedly learn that Coaster was responsible for uploading some or all of the text in issue onto Amazon's systems. (FAC ¶ 49.)

         III. Indemnification

         In addition to the terms discussed above, the Agreement between Coaster and FDN contains an indemnification clause. (Agreement ...


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