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Court Refuses to Dismiss Action Involving an Infringing Video Posted in Canada, But Stored on YouTube's Servers in California

Wednesday, August 31, 2011

Laura McQuade | Bloomberg Law Shropshire v. Canning, No. 10-CV-01941, 2011 BL 215882 (N.D. Cal. Aug. 22, 2011) In a copyright infringement action involving the posting of an allegedly infringing video on YouTube, the U.S. District Court for the Northern District of California mostly denied defendant's motion to dismiss. The court found that plaintiff, the singer and co-owner of the song, "Grandma Got Run Over By a Reindeer," alleged an act of infringement that was "not wholly extraterritorial," in that the video featuring his song was posted by a YouTube user in Canada, but stored on servers in California. Shropshire at 8. In so holding, the court decided to follow the Federal Circuit's reasoning in Litecubes, LLC v. Northern Light Products, Inc., 523 F.3d 1353 (Fed. Cir. 2008), by treating the issue of extraterritoriality as an element of a copyright infringement claim rather than as a matter of subject matter jurisdiction. The court dismissed plaintiff's claim of misrepresentation under the Digital Millennium Copyright Act ("DMCA"), but only as to certain of Shropshire's allegations.

Shropshire Alleges Infringement of "Grandma Got Run Over By a Reindeer"

Plaintiff Elmo Shropshire, who recorded the song "Grandma Got Run Over By A Reindeer" (the "Grandma Song"), co-owns the copyright to the song along with defendant Patricia Trigg, d/b/a Kris Publishing. According to Shropshire, defendant Aubrey Canning, Jr. posted a video on YouTube that displayed a series of Christmas-themed images and featured "The Irish Rovers," a Canadian musical group, singing the Grandma Song. Shropshire's office manager, Pam Wendell, informed Canning that the video infringed Shropshire's copyright and asked him to remove the video. In response, Canning indicated that he would license the song. Canning neither licensed the song, nor removed the video. Wendell contacted Canning twice more, but Canning did not remove the video and did not seek to license the Grandma Song. Instead, Canning responded that Wendell should contact YouTube to get the video removed because he would not remove it. Wendell subsequently sent a notice to YouTube, pursuant to Section 512(c) of the Copyright Act, seeking removal of the video. YouTube initially removed the video, but then reinstated the video after receiving Canning's counter-notice, which argued that "no part of [his] Grandma video is a copy of any original work made by [the Plaintiff]" and that he had a "good faith belief the material was removed due to a mistake or misidentification of the material to be removed or disabled." Shropshire at 3. Despite receiving additional notices from Shropshire, YouTube refused to remove the video, and so Shropshire filed suit asserting claims for copyright infringement and misrepresentation under the DMCA.

Extraterritoriality Is an Element of the Claim, Not an Issue of Subject Matter Jurisdiction

Canning argued that his allegedly infringing act of posting the video took place in Canada, and, therefore, was not subject to the U.S. Copyright Act because it was a wholly extraterritorial infringement. At the outset, the court acknowledged the lack of clarity as to whether the issue of extraterritoriality should be treated as an issue of subject matter jurisdiction, or simply as an element of a copyright infringement claim. The U.S. Supreme Court, in Arbaugh v. Y & H Corp., 546 U.S. 500 (2006), held that where Congress has not specifically provided otherwise, courts should treat statutory limitations as elements of a claim, not jurisdictional in nature. The Ninth Circuit, however, has not yet interpreted how Arbaugh applies in the context of the Copyright Act. Ultimately, the court decided that the Federal Circuit's decision in Litecubes, LLC v. Northern Light Products, Inc., 523 F.3d 1353 (Fed. Cir. 2008) was "well-reasoned and persuasive." Shropshire at 6. According to the Litecubes decision, "[t]here is no indication that Congress intended the extraterritorial limitations on the scope of the Copyright Act to limit the subject matter jurisdiction of the federal courts." Id. at 1368. The court concluded that under Arbaugh, the issue of extraterritoriality should be treated as an element of a copyright infringement action instead of an issue of subject matter jurisdiction.

Plaintiff Alleged an Infringement That Was Not Wholly Extraterritorial

The court acknowledged that the allegedly infringing act here began in Canada where Canning created the video. According to the court, had defendant stopped at simply making the allegedly infringing video in Canada, "there is no doubt that the strict presumption against extraterritoriality would apply and Plaintiff would not have a claim." Shropshire at 8. Canning, however, subsequently uploaded the allegedly infringing video onto YouTube's servers in California, resulting in the potential for the video to be viewed by thousands of YouTube users in the United States. The court cited a similar case, Los Angeles News Service v. Conus Communications Co. Ltd., 969 F. Supp. 579 (C.D. Cal. 1997), where a Canadian broadcaster's allegedly infringing programming, which was intended for Canadian citizens, but incidentally picked up by 8,000 U.S. homes, was found to be within the purview of the U.S. Copyright Act. As in Conus, it was irrelevant that Canning claimed not to know that the servers were in California, or that he intended only to upload his video to YouTube in Canada because intent is not an element of copyright infringement. The court thus denied Canning's motion to dismiss Shropshire's copyright infringement claim, finding that Shropshire had not alleged an act that was wholly extraterritorial, and, therefore, the U.S. Copyright Act applied.

Shropshire's Misrepresentation Claim Under the DMCA Dismissed As to Certain Allegations

Under Section 512(f) of the DMCA, a person who makes a misrepresentation in a DMCA counter-notice may be liable for any damages caused to the copyright owner. Shropshire alleged that the following statements by Canning constituted such a misrepresentation: (1) "I have a good faith belief the material was removed due to a mistake or misidentification of the material to be removed or disabled;" and (2) "No sound was copied, no visuals were copied and no part of my Grandma video is a copy of any original work made by Elmo. My video's audio as performed by the Canadian Irish Rovers under Section 107 of the Copyright Act of 1976 of the United States allows for 'fair use'." Shropshire at 11. Shropshire claimed that Canning's first statement constituted a misrepresentation because Canning was in communication with Wendell before he issued his counter-notice, and, therefore, he knew that YouTube had not removed his video as a result of a "mistake or misidentification." Indeed, Shropshire pointed out that Canning even told Wendell to contact YouTube about removing the video, suggesting that he had acknowledged Shropshire's rights to the song. The court found that Shropshire had sufficiently alleged a claim of misrepresentation as to this first statement in Canning's counter-notice. As to Canning's second statement, however, the court found Canning's statements were not actionable because the statement was factually accurate: "the Grandma song video does not contain a copy of 'any original work made by Elmo.' The fact that Plaintiff is a co-owner of the musical composition to the Grandma song does not morph Defendant's statement into a misrepresentation." Id. at 13. The court thus dismissed Shropshire's misrepresentation claim to the extent it applied to this second statement by Canning.
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