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IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF DELAWARE
REDBOX AUTOMATED RETAIL, LLC,Plaintiff,vs.UNIVERSAL STUDIOS HOMEENTERTAINMENT, LLC, UNIVERSALCITY STUDIOS, LLLP, UNIVERSALCITY STUDIOS PRODUCTIONS, LLLP,and FOCUS FEATURES, LLC,Defendants.
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Civil Action No. 08-766 (RBK)JURY TRIAL DEMANDED
REDACTEDPUBLIC VERSION
DEFENDANTS’ OPENING BRIEF IN SUPPORT OF THEIRMOTION TO DISMISS COMPLAINT PURSUANT TO RULE 12(B)(6)
OF COUNSEL:Paul H. Zoubek (PA Bar I.D. No. 36716)R. Monica Hennessy(PA Bar I.D. No. 77928)
M
ONTGOMERY
,
M
C
C
RACKEN
,W
ALKER
&
R
HOADS
,
LLP
Liberty View457 Haddonfield Road, Suite 600Cherry Hill, NJ 08002(856) 488-7700R. Montgomery Donaldson (DE Bar ID 4367)
rdonaldson@mmwr.com
Lisa Zwally Brown (DE Bar ID 4328)
lzbrown@mmwr.com
M
ONTGOMERY
,
M
C
C
RACKEN
,W
ALKER
&
R
HOADS
,
LLP
1105 N. Market St, Suite 1500Wilmington, DE 19801(302) 504-7800
Counsel for Defendants Universal Studios Home Entertainment, LLC, Universal CityStudios, LLLP, Universal City StudiosProductions, LLLP, and Focus Features, LLC
Glenn D. Pomerantz (State Bar No. 112503)David C. Dinielli (State Bar No. 177904)
M
UNGER
,
T
OLLES
&
O
LSON
LLP
355 South Grand AvenueThirty-Fifth FloorLos Angeles, CA 90071-1560(213) 683-9100Dated: December 5, 2008
Case 1:08-cv-00766-RBK Document 15-2 Filed 12/05/2008 Page 1 of 33
TABLE OF CONTENTS
Page
-i-I. INTRODUCTION.............................................................................................................1II. BACKGROUND...............................................................................................................3A. THE COMPLAINT...............................................................................................3B. UNIVERSAL’S CONTRACTS WITH ITS DISTRIBUTORS............................4III. ARGUMENT.....................................................................................................................6A. LEGAL STANDARD............................................................................................6B. PLAINTIFF’S COPYRIGHT MISUSE CLAIM (COUNT I) FAILS AS AMATTER OF LAW AND MUST BE DISMISSED.............................................71. Copyright Misuse Is An Equitable Defense, Not A Cause of Action........72. Even If Copyright Misuse Were A Cause Of Action, Redbox HasNot Alleged Any Misuse, As A Matter Of Law......................................10C. THE ANTITRUST CLAIMS MUST BE DISMISSED......................................111. The Rule-Of-Reason Claim Should Be Dismissed (Count III)..............12a. Anticompetitive Effects...............................................................13(i) No Allegations Of Reduced Output Or IncreasedPrice.................................................................................13(ii) No Sufficient Allegations Of Market Power...................15b. Product Market.............................................................................172. The “Quick Look” Claim (Count II) Must Be Dismissed BecauseThat Doctrine Has No Application Here, And Necessarily FailsBecause The Rule Of Reason Claim Fails...............................................19D. THE INTERFERENCE CLAIM (COUNT IV) MUST BE DISMISSED..........201. An Interference Claim Cannot Be Founded On A Defendant’sExercise Of A Legal Right.......................................................................212. Because Universal Has The Legal Right To Tell Its DistributorsHow To Distribute Its Products, It Cannot Be Liable For“Interference” For Doing So....................................................................223. Universal’s Legal Right Is Set Forth In Its Written Contracts;There Are No Issues Of Fact To Preclude Dismissal..............................23IV. CONCLUSION................................................................................................................27
Case 1:08-cv-00766-RBK Document 15-2 Filed 12/05/2008 Page 2 of 33
TABLE OF AUTHORITIES
Page(s)
-ii-
F
EDERAL
C
ASES
A & M Records, Inc. v. Napster, Inc.
,239 F.3d 1004 (9th Cir. 2001).................................................................................................10
Alcatel USA, Inc. v. DGI Techs., Inc.
,166 F.3d 772 (5th Cir. 1999)...................................................................................................10
Altera Corp. v. Clear Logic, Inc.
,424 F.3d 1079 (9th Cir. 2005)...............................................................................................8, 9
American Franklin Life Ins., Co. v. Galati
,776 F. Supp. 1054 (E.D. Pa. 1991)..........................................................................................26
Angelico v. Lehigh Valley Hosp., Inc.
,
184 F.3d 268 (3d Cir. 1999).....................................................................................................13
Arista Records, Inc. v. Flea World, Inc.
,356 F. Supp. 2d 411 (D.N.J. 2005)..........................................................................................10
Barkan v. Dunkin Donuts, Inc.
,520 F. Supp. 2d 333 (D.R.I. 2007)...........................................................................................26
Bell Atlantic Corp. v. Twombly
,127 S. Ct. 1955 (2007).....................................................................................................6, 7, 26
Bilbrey v. Brown
,
738 F.2d 1462 (9th Cir. 1984)...................................................................................................9
Bobbs-Merrill Co. v. Straus
,210 U.S. 339 (1908).................................................................................................................11
Brown Shoe Co. v. United States
,370 U.S. 294 (1962).............................................................................................................2, 17
Brunson Commc’ns, Inc. v. Arbitron, Inc.
,239 F. Supp. 2d 550 (E.D. Pa. 2002).............................................................................1, 12, 13
Cal. State Council of Associated Gen. Contractors of Cal., Inc. v. Carpenters
,459 U.S. 519 (1983).............................................................................................................6, 14
California Dental Ass’n v. FTC
,526 U.S. 756 (1999).................................................................................................................20
Car Carriers, Inc. v. Ford Motor Co.
,745 F.2d 1101 (7th Cir. 1984)...................................................................................................7
CCPI Inc. v. American Premier, Inc.
,967 F. Supp. 813 (D. Del. 1997)................................................................................................7
Commonwealth of Pennsylvania v. PepsiCo, Inc.
,836 F.2d 173 (3d Cir. 1988).................................................................................................7, 13
Continental T.V., Inc. v. GTE Sylvania, Inc.
,
433 U.S. 36 (1977)...............................................................................................................2, 14
Case 1:08-cv-00766-RBK Document 15-2 Filed 12/05/2008 Page 3 of 33
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