IP Law Daily, COPYRIGHT—C.D. Cal.: BMG salvages its copyright infringement case against Likee, (Feb 14, 2024)

By Matthew Hersh, J.D.

A contributory infringement claim against the TikTok clone will move forward.

A major record label and music publisher successfully amended its complaint to assert a contributory infringement claim against a social media company that operates in the manner of TikTok, the federal court for Los Angeles has held. The court’s order, in rejecting the social media company’s motion to dismiss, comes a little over a year after the same court ordered the music company to put its lawsuit on hold while it served DMCA takedown requests on the alleged infringer (BMG Rights Management (US), LLC v. JOYY Inc., February 12, 2024, Scarsi, M.).

The lawsuit was brought by BMG Rights Management, a Germany-based music publisher and record company that owns the copyrights to over three million musical compositions and hundreds of thousands of sound recordings. The lawsuit targets the owners of Likee, a Chinese-run social media app that BMG describes as “a rip-off version” of the ubiquitous TikTok. The complaint asserts that the social media app commits widespread copyright infringement by encouraging its users to post unlicensed music.

The lawsuit has gone through several rounds before the courts. In December 2022, the district court dismissed the complaint for failure to assert a claim. (IP Law Daily covered the ruling here.) Notably, although the court granted leave for BMG to amend its complaint, the court refused to allow BMG to move forward on the action until BMG served takedown notices on Likee under the Digital Millennium Copyright Act for videos it claimed to be infringing. The basis for this order, the court explained, was that it was inappropriate for BMG to take advantage of the discovery procedures available in federal court—especially in a court with a busy docket—before exhausting remedies available under the process set forth in the DMCA. “It appears that [BMG] seeks to leverage discovery procedures,” the court noted, “and effectively spread the substantial investigative costs to [Likee] through this litigation.” That was neither efficient nor economical, the court reasoned.

BMG followed the court’s leading by serving DMCA notices on Likee. It then amended its complaint and reasserted its copyright infringement claims. Likee moved again to dismiss the claim, leading to this ruling.

Direct infringement. The court stood by its dismissal of the direct infringement claim. In order to state a claim for direct copyright infringement, the court noted, a plaintiff must demonstrate volition conduct that proximately causes the infringement. Under circuit precedent, the court added, volitional conduct is generally present where the defendant “exercised control; selected any material for upload, download, transmission, or storage; or instigated any copying, storage, or distribution” of copyrighted materials.” Where, as here, the action is against a website owner, the court explained, “the distinction between active and passive participation in the alleged infringement is central to the legal analysis.” Did BMG make out a case of volitional conduct in this case? The court said no in 2022. It stood by its ruling here.

The problem with BMG’s complaint, the court reasoned, is that it “failed to establish the necessary causal nexus between [Likee’s] conduct and its users’ illegal copying of [BMG’s] copyrighted works.” On this point, the court found, there was no meaningful difference between the complaint that was operative in December 2022 and the now-amended complaint before the court in this case. Most importantly, the court noted, BMG did not allege that Likee specifically selected any particular content music for upload or sharing. To be sure, the court noted, BMG alleged that Likee advised its users that they should upload “better music” in the hopes that their posts would go viral. “But the term ‘better music’ on its own is at best nebulous,” the court noted. “[BMG] does not make any connection between ‘better music’ and copyrighted music, let alone [BMG’s] copyrighted works.” And while BMG alleged that Likee had a practice of picking out particular videos and promoting them, the court observed, BMG was “unable to identify a single promoted video” that infringed on its copyrighted works. The direct infringement claim would therefore fail again.

Contributory infringement. But while the direct infringement claim again failed, the contributory infringement claim would now move forward on the basis of the amended complaint. Here the DMCA takedown notices made a difference. In the complaint at issue in 2022, BMG could only make generalized claims that Likee contributed its users’ infringement with “actual knowledge” of the individual works—a core requirement of a contributory infringement claim. But thanks to the takedown notices, the court noted, BMG was now able to make its contention more specific. Indeed, in addition to identifying a handful of specific examples of infringement of which it was aware, the court noted, BMG alleged that it had made 1,516 individual takedown requests, and Likee had responded to only 56 percent of the requests. “These allegations support a reasonable inference of [Likee’s] specific knowledge of the infringement,” the court reasoned.

DMCA safe harbor. The court also found that it was too early to consider Likee’s invocation of the DMCA safe harbor provision. An affirmative defense like that of the safe harbor, the court noted, “can serve as the basis for dismissing a complaint at the pleadings stage under Rule 12(b)(6) only when the elements of the defense appear on the face of the complaint.” That was not the case here. In order to show that it met the statutory requirements for the defense, the court noted, Likee would have to establish a wide range of facts relating to its takedown policy, its policy of terminating the accounts of repeat infringers, and the like. “Whether [Likee] meets these elements is an intensely factual question,” the court noted, “the answer to which is not obvious from the pleadings.” Likee would be free to take up the matter at the summary judgment stage.

The Case is No. 2:22-cv-01578-MCS-RAO.

Attorneys: Gerard P. Fox (Gerard Fox Law PC) for BMG Rights Management [US], LLC. David Spencer Bloch (Greenberg Traurig, P.A) for JOYY Inc.

Companies: BMG Rights Management [US], LLC; JOYY Inc.

Cases: Copyright TechnologyInternet CaliforniaNews GCNNews