ivi, Inc. v. Fisher Communications, Inc.

Court grants defendant television broadcasters’ and content owners’ motion to dismiss plaintiff’s declaratory judgment action, holding that plaintiff’s first-filed action was improperly anticipatory.

Plaintiff ivi, Inc. is a Seattle-based company that obtains over-the-air broadcasts of television content that originates with broadcast providers in Seattle and New York City. ivi then distributes those broadcasts over the Internet to customers who download the ivi TV player.

Defendants are television networks, stations, and others who own broadcast television stations serving the New York City and Seattle markets, or who own copyrighted programming exhibited on one or more of the stations serving New York and Seattle.

ivi began operations on September 13, 2010. One day later, defendants Fisher Communications, Inc. and NBC Universal sent cease and desist letters to ivi. On Friday, September 17, ivi sent substantially similar letters to both Fisher and NBC, inviting both companies to discuss an amicable resolution and to negotiate an agreement to resolve the dispute. On the following Monday, September 20, 2010, ivi filed this declaratory judgment action in the W.D. of Washington, seeking a declaration of non-infringement.

One week later, the defendants filed a copyright infringement action in the S.D. of New York. The defendants in the Washington action moved to dismiss, on the grounds that the first-to-file rule should not be followed because ivi’s suit was “improperly anticipatory.” The court agreed with defendants and granted their motion to dismiss.

According to the court, an action is anticipatory when the plaintiff files it after receiving specific, concrete indications that a suit by the defendant is imminent. The court held that case law in the Ninth Circuit instructs “that when, as here, a declaratory judgment action has been triggered by a cease and desist letter, equity militates in favor of allowing the second-filed action brought by the true plaintiff in the dispute to proceed to judgment rather than the first.”

The court noted that ivi received not one, but three, cease and desist letters in short succession, two of which set specific deadlines for compliance on September 21, 2010, and September 22, 2010. ivi responded to two of these cease and desist letters on Friday, September 17, 2010, stating in writing its willingness to negotiate and arrive at an amicable arrangement short of litigation. “The record demonstrates, however, the disingenuity of ivi’s settlement posture, because on the following Monday, September 20, 2010, ivi filed suit in the Western District of Washington. . . . If there was any question left regarding the anticipatory nature of ivi’s suit, that question was resolved by ivi’s own press release which acknowledged that its lawsuit was ‘a preemptive move’ against ‘big media.’”

The totality of the circumstances led the court to conclude that ivi filed the action in the W.D. of Washington “because of imminent threat of suit by the defendants, and to secure its own forum. While the court notes the importance of generally adhering to the first-to-file rule, in this case, it properly exercises its discretion to recognize an exception and to decline to hear ivi’s case.”