29 - Motion to Dismiss | Lawsuit | Complaint

Case: 1:12-cv-07869 Document #: 29 Filed: 03/28/13 Page 1 of 10 PageID #:401

J. Curtis Edmondson, CSB# 236105 Venture Commerce Center 3699 NW John Olsen Place Hillsboro, OR 97124 Phone: 503-336-3749 Fax: 503-482-7418 Email: jcedmondson @edmolaw.com Attorney for Defendant(s) DOE IP address 173.17.92.42

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FLAVA WORKS, INC., Plaintiff, vs. JOHN DOES 1 to 293 Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No.: 1:12-CV-07869 NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT FOR COPYRIGHT INFRINGEMENT AND CONSPIRACY (CONTESTED MOTION and ORAL ARGUMENT REQUESTED) DOE IP address 173.17.92.42 MOTION TO DISMISS FRCP §12(b)(2)(3) and (7) Hon. JOAN H. LEFKOW Hearing Date: May 16, 2013 Hearing Time: 8:30 am

TO ALL COUNSEL AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE: Pursuant to the Federal Rules of Civil Procedure and the inherent power of this Court, the Defendant DOE IP address 173.17.92.42 hereby moves that this Court dismiss the complaint under Fed Rules Civ Proc 12(b)(2)(3)(6) and (7). This motion will be heard on Thursday, May

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16th, at 8:30am in Courtroom 1925, Telephone Number: (312) 435-5832, United States Courthouse, 219 South Dearborn Street Chicago, IL, 60604. The basis for this motion is that DOE IP address 173.17.92.42, who is a resident of Northern California, hereby moves that this Court to dismiss this complaint and to issue a protective order so that defendants can use “DOE 173.17.92.42” to avoid the potential damage of his/her name associated with the pornography industry. Further, this Court should dismiss the entire complaint with prejudice since the means of obtaining the IP addresses exceeded the terms of the license agreement between Vuze and Flava Works, Inc. Defendant further seeks a protective order to protect his/her identity through these proceedings. This motion will be based on this notice, the relevant statutes, and the argument presented herein. I. SUMMARY DOE IP address 173.17.92.42 respectfully requests that this Court dismiss Plaintiff’s complaint as: 1) Flava Works, Inc. lacks personal jurisdiction over the Defendant, 2) FlavaWorks Inc. has impermissibly joined this Defendant with 292 other Defendants in this single action; and 3) Flava Works, Inc. has committed copyright misuse by exceeding the scope of their license agreement with VUZE by improperly using the VUZE software to: “…collect, or attempt to collect, personal information about Users or third parties without their consent, or use the content on the Vuze Platform for any commercial use, it being understood that the content available on the Vuze Platform is for personal, non-commercial use only…” Vuze Terms of Service, section 8.

In short, Flava Works, Inc. has breached the terms of the Vuze license agreement by collecting personal information from Bittorrent Swarms and using this information in a business
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commercial use. Given Flava’s breach of their Vuze license agreement, it would be inequitable for this court to enforce an action for infringement when the party alleging the infringement itself exceeds the scope of its copyright license used to monitor the Bittorrent swarms.

II.

FACTUAL BACKGROUND This case is about the intersection of internet copyright infringement, pornography, and

an economic business model that is a cyber version of a shakedown racket. See United States v. Nardello, 393 U.S. 286 (1969). Certain pornography companies, this Plaintiff included, sue hundreds of alleged defendants with the goal that a percentage of the defendants will “settle out” for only “a thousand”. The case is then dismissed under FRCP Rule 41 before answers are filed. See Malibu Media, LLC v. John Does 1- 10 (CD CAL 2:12-cv-3623) attached as Exhibit A. Hon. Otis Wright has commented on this peculiar litigation model by stating: “These lawsuits run a common theme: plaintiff owns a copyright to a pornographic movie; plaintiff sues numerous John Does in a single action for using BitTorrent to pirate the movie; plaintiff subpoenas the ISPs to obtain the identities of these Does; if successful, plaintiff will sent out demand letters to the Does; because of embarrassment, many Does will send back a nuisance-value check to the plaintiff. The cost to the plaintiff: a single filing fee, a bit of discovery, and stamps. The rewards: potentially hundreds of thousands of dollars. Rarely do these cases reach the merits. The federal courts are not cogs in a plaintiff’s copyright-enforcement business model. The Court will not idly watch what is essentially an extortion scheme, for a case that plaintiff has no intention of bringing to trial. [. . .] If [plaintiff] desires to vindicate its copyright rights, it must do it the old fashioned way and earn it.” Malibu Media, LLC. v. John Does 1 through 10, No. 2:12-cv-3623 (CD Cal. 2012), attached as Exhibit A.

Plaintiff, Flava Works, Inc., is like all other BitTorrent pornographic companies except that Flava has disclosed that they use monitoring software (VUZE). But a closer inspection shows that Flava is using VUZE outside the scope of the permitted license. In short, Flava Works “captures” alleged infringers by itself committing the tort of copyright infringement. As
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Defendant will show, the use of VUZE software in an infringing matter should bar them from pressing their own claims of infringement.

III. ARGUMENT 1. The Court should dismiss Plaintiff’s Complaint for lack of personal jurisdiction over DOE IP address 173.17.92.42

The issue of personal jurisdiction and the internet is not a new one for this District. For Plaintiff to meet the standard of joining in a BitTorrent defendant there must be specific allegations of the intentional tortious conduct directed towards this forum. Labtest Int'l Inc. v. Ctr. Testing Int'l Corp., 766 F.Supp.2d 854, 862 (N.D. Ill., 2011). It is undisputed that DOE IP address 173.17.92.42 is located in Northern California. The Complaint does not allege how DOE IP address 173.17.92.42 intentionally directed the activities at the forum state, it rather simply alleges that a computer located at IP address 173.17.92.42 infringed its work. Plaintiff cannot ask that this Court constitutionally exercise personal

jurisdiction over DOE IP address 173.17.92.42 absent any other facts. Defendant DOE IP address 173.17.92.42 therefore respectfully requests that this Court dismiss this complaint for lack of personal jurisdiction. 2. The Court should dismiss DOE IP address 173.17.92.42 for improper joinder. Joinder fails to promote trial convenience and expedition of the ultimate determination of the substantive issues in this case. See Pac. Century Int’l, 2011 U.S. Dist. LEXIS 124518, 2011 WL 5117424, at *3 (describing the “logistical nightmare” of joining 101 Doe defendants in such an action). Though the 293 Doe defendants may have engaged in similar behavior, they are

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likely to present different defenses. See BMG Music v. Does 1-203, No. Civ. A. 04-650, 2004 U.S. Dist. LEXIS 8457, 2004 WL 953888, at *1 (E.D. Pa. Apr. 2, 2004). As one court noted, “Comcast subscriber John Doe 1 could be an innocent parent whose internet access was abused by her minor child, while Jon Doe 2 might share a computer with a roommate who infringed Plaintiffs’ works. John Does 3 through 203 could be thieves, just as Plaintiffs believe.” Id. Other courts have found misjoinder in similar copyright infringement cases. See, e.g., Pac. Century Int’l, Ltd. v. Does 1-101, No C 11-02533 DMR, 2011 U.S. Dist. LEXIS 124518, 2011 WL 5117424, at *3 (N.D. Cal. Oct. 27, 2011). These courts have found allegations that BitTorrent users downloaded the same copyrighted files were insufficient to support mass joinder.

3. The Court should dismiss the Complaint with Prejudice as Flava Works, Inc. is using VUZE Bittorrent software outside the permitted scope of the license agreement The Seventh Circuit supports broad equitable powers under the Copyright Act when such acts are against public policy. Leo Feist v. Young, 138 F.2d 972, 976 (7th Cir., 1943). In Leo Feist, the Court stated: In reaching our conclusion [regarding copyright infringement] we have not overlooked the fact that the Supreme Court has recently stated that courts of equity may appropriately withhold their aid where the plaintiff is using the right asserted contrary to the public interest, Morton Salt Co. v. Suppiger, 314 U.S. 488, 492, 62 S.Ct. 402, 86 L.Ed. 363…

This doctrine is a precursor to the now accepted doctrine of Copyright Misuse. qad. inc. v. ALN Associates, Inc., 974 F.2d 834 (7th Cir 1992). In qad, the 7th Circuit upheld the District Court’s decision to dismiss Plaintiff’s copyright infringement count when the Plaintiff made intentional misrepresentations to the Court in a motion for a preliminary injunction. Id. at 836.
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Both cases stand for the broad proposition that a copyright plaintiff must walk into court with “clean hands” before pressing their claim. Flava Works, Inc. uses the VUZE software for harvesting BitTorrent IP Addresses. VUZE has the following licensing language that prohibits certain uses of the software: “8. Prohibited Conduct. BY USING THE VUZE PLATFORM YOU AGREE NOT TO: …collect, or attempt to collect, personal information about Users or third parties without their consent, or use the content on the Vuze Platform for any commercial use, it being understood that the content available on the Vuze Platform is for personal, non-commercial use only…” The licensing terms of the Vuze software are located on the internet at http://www.vuze.com/corp/terms.php. See Exhibit B. The Vuze license is publically available and therefore may be judicially noticeable and incorporated by reference into Plaintiff’s complaint. Flava Works, Inc. CEO, Phillip Bleicher claims in his declaration, “I used Vuze software to connect to a BitTorrent Tracker” and “the data collected by Vuze”. Bleicher Declaration, Dckt. 7-1. Bleicher does not make a declaration that he has been granted a license different from the standard license provided by Vuze or if Vuze has waived these conditions. The use of a software product beyond the terms of the license agreement is an infringing act. See Mdy Indus. Llc v. Blizzard Entm't. Inc., 629 F.3d 928, 938 (9th Cir., 2011). The Vuze license has made BitTorrent users 3rd party beneficiaries by expressly stating that these parties’ identities will not be revealed when software is used. See Cargill, Inc. v. Souza 201 Cal.App.4th 962, 966 (2011) stating “A party not named in a contract may also qualify as a third party beneficiary where the agreement reflects the intent of the contracting parties to benefit the

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unnamed party."1 Further, the Vuze license is limited to non-commercial use—a condition that has been breached. Here, Flava has used the Vuze software in a manner outside the scope of the license. In short, Flava has infringed the Vuze software to locate infringers. As this Court sits in equity, it should, given the unusual facts, do as was done in qad and dismiss this complaint with prejudice.

4. Defendant further requests a protective order to prevent the release of users’ information until final judgment is entered. “[U]nder Rule 26(c), the Court may sua sponte grant a protective order for good cause shown.” McCoy v. Southwest Airlines Co., Inc., 211 F.R.D. 381, 385 (C.D. Cal. 2002). The Court issues the limited protective order described below because the ISP subscribers may be innocent third parties, the subject matter of the suit deals with sensitive and personal matters, and the jurisdictional and procedural complications might otherwise dissuade innocent third parties from contesting the allegations. Here, as has been previously discussed by other courts in this district, the ISP subscribers may not be the individuals who infringed Flava‘s copyright. See, e.g., Pac. Century Int’l, 2011 U.S. Dist. LEXIS 124518, 2011 WL 5117424, at *2; see also IO Group, Inc. v. Does 1-19, No. C 10-03851 SI, 2011 WL 772909, at *1 (N.D. Cal. Mar. 1, 2011) (granting the plaintiff additional time to identify and serve the true defendant where a subscriber asserted that he did not infringe plaintiff’s work, suggesting that someone else used his IP address to infringe the plaintiff’s work,

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The VUZE license has a California choice of law provision. See VUZE license, section 19.3. VUZE further has a dispute resolution clause that may require this matter be transferred to Santa Clara County, California.
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and the plaintiff claimed that it needed to take third-party discovery from the subscriber to try to identify who actually used the subscriber’s IP address to allegedly infringe the plaintiff’s work). Clearly, the privacy interests of innocent third parties weighs heavily against the public’s interest in access to court documents. See Gardner v. Newsday, Inc., 895 F.2d 74, 79-80 (2d Cir. 1990). The protective order is an equitable and fair way to allow Flava to litigate their rights and for potentially innocent third parties to not have their names sullied.

III.

Conclusion Given the nature and type of these cases, the Court should be extra diligent in protecting

the identities of the defendants. Therefore DOE respectfully requests that this Court quash the subpoena for all members who live outside this judicial district and issue a protective order so that their true identities are not produced until a final judgment is entered against them. Respectfully submitted,

Dated: March 28, 2013

/s/ J. Curtis Edmondson J. Curtis Edmondson (CASB #236105) LAW OFFICES OF J. CURTIS EDMONDSON 3699 NW John Olsen Place Hillsboro, OR 97124 Phone: 503-336-3749 Fax: 503-482-7418 Email: jcedmondson @edmolaw.com

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Declaration of J. Curtis Edmondson in the Motion to Quash I. J. Curtis Edmondson, declare this to be true under penalty of perjury, pursuant to 28 U.S.C. 1746 on the date set forth at my signature below: 1. I am an attorney licensed to practice in the State of California and have been admitted to the bar of the Eastern, Northern, Southern, and Central District of California. I am counsel of record in this matter admitted pro hac vice. I am licensed in ND, WA and DC. 2. I represent a defendant who resides outside this judicial district. This defendant is identified by his or her IP address to prevent his or her name from being associated with pornography. 3. The VUZE license agreement is available on the Internet; a copy of the license agreement is attached as an exhibit. 4. My background is in electrical engineering and I am a member of the patent bar. I believe I am competent to testify about computer technologies in general.

I declare under penalty of perjury under the laws of the United States. Executed this 28 day of March, 2013, at Hillsboro, Oregon. /s/ J. Curtis Edmondson Declarant

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PROOF OF SERVICE I hereby certify that on March 28, 2013, a copy of the foregoing was filed by CM/ECF with the Civil Clerk at the Northern District of Illinois. The following will receive a copy of the foregoing Doe IP Address 173.17.92.42 MOTION TO DISMISS by electronic copy:

Meanith Huon Huon Law Firm P.O. Box 441 Chicago, IL 60690 (312) 405-2789 huon.meanith @gmail.com

Dated: 3/28/2013

Respectfully Submitted,

William Petillo, Paralegal Law Offices of J. Curtis Edmondson 3699 NW John Olsen Place Hillsboro, OR 97124 T: (503) 336-3749 F: (503) 482-7418 E: wpetillo @edmolaw.com

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