Shropshire v. Canning

In copyright infringement and DMCA misrepresentation action involving the creation of a video in Canada which was then uploaded to You Tube’s servers in California, the court denied defendant’s motion to dismiss the infringement claim on extraterritoriality grounds, holding that extraterritoriality (whether or not the claim arises in the U.S.) is an element of a claim and not an issue of subject matter jurisdiction and further held that the doctrine of extraterritoriality does not apply if at least some part of the infringement occurs in the U.S.; court also denies in part defendant’s motion to dismiss DMCA misrepresentation claim.

Plaintiff, Elmo Shropshire, is a co-owner of the copyright in the musical composition “Grandma Got Run Over By a Reindeer” (“Grandma”). Defendant allegedly created a video using Christmas-themed still images and an audio recording of “Grandma” performed by a Canadian musical group. Defendant, who was located in Canada, posted the video on YouTube and a copy of the video resided on YouTube’s California servers.

Plaintiff’s office manager contacted defendant and asked him to remove the video, which he refused to do. Plaintiff then filed a DMCA takedown notice and YouTube removed the video. Defendant subsequently filed a DMCA counter-notice and YouTube restored the video.

Plaintiff filed suit for copyright infringement, misrepresentation under Section 512(f) of the DMCA, and declaratory judgment. Defendant moved to dismiss all claims.

The court first addressed the issue of extraterritoriality, because defendant argued that his act of creating the video in Canada took place outside the U.S. and thus falls outside the reach of the U.S. Copyright Act. The court noted that courts are divided on whether extraterritoriality is an issue of subject matter jurisdiction or an element of an infringement claim. Relying on Litecubes, LLC v. Northern Light Products, Inc., 523 F.3d 1353 (Fed. Cir. 2008), the court held that extraterritoriality is an element of a copyright claim and proceeded to analyze defendant’s motion to dismiss under Rule 12(b)(6).

Next, the court discussed whether all parts of the infringing act must take place in the U.S. for the U.S. Copyright Act to apply, or if it is sufficient that only some part of the infringing act take place in the U.S. The court held that uploading a video from Canada to YouTube’s servers located in California for display within the U.S. is not “wholly extraterritorial” to the U.S. Accordingly, the court held that the plaintiff sufficiently alleged an act of direct copyright infringement and denied defendant’s motion to dismiss that claim.

Plaintiff also claimed that defendant filed a false counter-notice with YouTube. Section 512(f)of the DMCA provides that “any person who knowingly materially misrepresents . . . that material or activity was removed or disabled by mistake or misidentification shall be liable for any damages” to an injured copyright owner.

Defendant’s counter-notice stated (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’.”

Regarding the first statement in the counter-notice, the court relied on emails between plaintiff’s office manager and defendant about removing the video in which the office manager explained why defendant’s video was infringing plaintiff’s copyright and which ended with defendant telling plaintiff to file a takedown notice with YouTube. The court concluded that the plaintiff made specific and plausible allegations that defendant did not have a good faith belief that defendant’s video was removed due to mistake or misrepresentation. The court denied defendant’s motion to dismiss the DMCA claim on this issue.

However, the court granted the defendant’s motion to dismiss the DMCA claim as it related to the second statement. The court held that plaintiff failed to establish that defendant’s statement “no part of [the] Grandma song video is a copy of any original work made by Elmo” is a misrepresentation.

The court also denied defendant’s motion to dismiss the claim for declaratory relief.