Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 1 of 12 Page ID #:1920

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 16-5051-GW(AFMx)

Title

ALS Scan, Inc. v. Cloudflare, Inc., et al.

Present: The Honorable

Date

February 16, 2017

GEORGE H. WU, UNITED STATES DISTRICT JUDGE

Javier Gonzalez

Katie Thibodeaux

Deputy Clerk

Court Reporter / Recorder

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Jay M. Spillane

Colin T.J. O’Brien
John L. Ambrogi

PROCEEDINGS:

DEFENDANT STEADFAST NETWORKS LLC’S MOTION TO
DISMISS PLAINTIFF’S SECOND AMENDED COMPLAINT FOR
FAILURE TO STATE A CLAIM [89]

The Court’s Tentative Ruling is circulated and attached hereto. Court hears oral argument. Based on the
Tentative, and for reasons stated on the record, Defendant Steadfast’s motion is GRANTED WITH
LEAVE TO AMEND.
A Scheduling Conference is set for February 27, 2017 at 8:30 a.m.

:
Initials of Preparer
CV-90 (06/04)

CIVIL MINUTES - GENERAL

08

JG
Page 1 of 1

 Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 2 of 12 Page ID #:1921

ALS Scan, Inc. v. CloudFlare, Inc., et al., Case No. CV-16-5051-GW-AFM
Tentative Ruling on Steadfast Networks LLC’s Motion to Dismiss
I. Background
ALS Scan, Inc. (“Plaintiff”) sues CloudFlare, Inc. (“CloudFlare”); OVH SAS;
Hebergement OVH Inc.; Dolphin Media Ltd. (“Dolphin”); Hivelocity Ventures Corporation;
Steadfast Networks, LLC (“Steadfast”); and Does 1-10 (collectively, “Defendants”) for various
claims related to Defendants’ alleged infringement of Plaintiff’s copyrighted and trademarked
works. See generally Second Am. Compl. (“SAC”), Docket No. 64. The SAC asserts six causes
of action: (1) direct copyright infringement, against Dolphin and Does 1-5; (2) contributory
copyright infringement, against all Defendants except Dolphin; (3) vicarious copyright
infringement, against all Defendants except Dolphin; (4) direct trademark infringement, against
Dolphin and Does 1-5; (5) direct trademark counterfeiting, against Dolphin and Does 1-5; and
(6) contributory trademark infringement, against all Defendants except Dolphin. Id.
Plaintiff owns a library of copyrighted and trademarked works of adult entertainment. Id.
¶ 3. Plaintiff alleges that its works are repeatedly infringed by pirate Internet sites, which display
Plaintiff’s works without Plaintiff’s permission. Id. ¶ 4. These sites are allegedly supported by
third-party service providers that continue doing business with the sites even after receiving
actual notice of infringement from Plaintiff. Id. ¶ 6.
The SAC alleges that Steadfast “hosts” pirate sites, including imagebam.com
(“Imagebam”). Id. ¶ 15. Plaintiff has allegedly sent numerous notifications to Steadfast alerting
it of infringing content on Imagebam, but Steadfast has failed to implement or enforce a repeat
infringer policy by removing Imagebam from its servers. Id. ¶ 49.
Plaintiff seeks actual damages; statutory damages; disgorgement of profits; attorneys’
fees and costs; injunctive relief; and such other relief as the Court deems appropriate. See SAC
at 18:21-19:5.
On October 3, 2016, the Court granted Defendant Tiger Media, Inc.’s (“Tiger”) Motion
to Dismiss the First Amended Complaint (“FAC”) on the grounds that Plaintiff had failed to
allege secondary liability for copyright or trademark infringement against Tiger. See Tiger MTD
Ruling, Docket No. 53. The FAC had alleged that Tiger, an online advertising brokerage
business that sells advertising space on pirate websites, was liable for infringing material posted
on those pirate websites. Id. at pages 1-2. The Court dismissed the contributory copyright claim
1 
 

 Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 3 of 12 Page ID #:1922

against Tiger, explaining that a third party can only be liable for contributing to copyright
infringement where its participation in the infringing conduct of the primary infringer is
substantial (pursuant to a “material contribution” theory) or where it intentionally encourages the
infringing activity (pursuant to an “inducement” theory). Id. at page 4. However, Plaintiff had
failed to allege any link between Tiger’s advertising brokerage services and the infringing
conduct of the pirate websites, and therefore had failed to state a claim for contributory copyright
infringement. Id. at page 6. Similarly, the Court dismissed the claims for vicarious copyright
infringement and contributory trademark infringement, reasoning that the FAC failed to allege
that Tiger had the right and ability to supervise and control the infringing conduct of the pirate
websites. Id. at pages 9-10.
On October 24, 2016, the Court granted-in-part and dismissed-in-part Defendant
CloudFlare’s Motion to Dismiss. See CloudFlare MTD Ruling, Docket No. 60. With respect to
contributory copyright liability, the Court held that the FAC adequately pleaded a claim under a
material contribution theory because it alleged that CloudFlare’s content delivery network
(“CDN”) services made it faster and easier for consumers to access infringing websites and load
infringing images from any location. Id. at pages 8-9. However, the Court held that Plaintiff had
failed to allege a claim under an inducement theory because there were no allegations that
CloudFlare directly encouraged the pirate websites to display infringing content. Id. at pages 910.

In addition, the Court dismissed the vicarious copyright and contributory trademark

infringement claims because CloudFlare did not have the legal right to stop the infringing
websites or remove the infringing content from the pirate websites. Id. at pages 11-15.
Now pending before the Court is Steadfast’s Motion to Dismiss. See Mot. to Dismiss
(“MTD”), Docket No. 90.
II. Legal Standard
Under Rule 12(b)(6), a defendant may move to dismiss for failure to state a claim upon
which relief can be granted. Fed. R. Civ. P. 12(b)(6). A complaint may be dismissed for failure
to state a claim for one of two reasons: (1) lack of a cognizable legal theory; or (2) insufficient
facts under a cognizable legal theory. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see
also Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008) (“Dismissal
under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or
sufficient facts to support a cognizable legal theory.”).
2 
 

 Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 4 of 12 Page ID #:1923

In deciding a 12(b)(6) motion, a court “may generally consider only allegations contained
in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial
notice.” Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). The court must construe the
complaint in the light most favorable to the plaintiff, accept all allegations of material fact as
true, and draw all reasonable inferences from well-pleaded factual allegations. Gompper v.
VISX, Inc., 298 F.3d 893, 896 (9th Cir. 2002); Sprewell v. Golden State Warriors, 266 F.3d 979,
988 (9th Cir. 2001), amended on denial of reh’g, 275 F.3d 1187 (9th Cir. 2001); Cahill v. Liberty
Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). The court is not required to accept as true
legal conclusions couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Where a plaintiff facing a 12(b)(6) motion has pled “factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged,” the motion
should be denied. Id.; Sylvia Landfield Trust v. City of Los Angeles, 729 F.3d 1189, 1191 (9th
Cir. 2013). But if “the well-pleaded facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged – but it has not show[n] . . . the pleader is
entitled to relief.” Iqbal, 556 U.S. at 679 (citations omitted).
III. Analysis
The SAC asserts three causes of action against Steadfast, including contributory
copyright infringement, vicarious copyright infringement, and contributory trademark infringement. See generally SAC.
Steadfast asserts that Plaintiff has failed to adequately plead each cause of action. In
addition, Steadfast asserts that it is entitled to protection under the safe harbor provisions of the
Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 512, which provide protections to
internet service providers under certain conditions. See generally MTD.
A. The SAC Fails to State a Claim for Contributory Copyright Infringement
Contributory copyright infringement “may be imposed for intentionally encouraging
infringement through specific acts.” Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1170
(9th Cir. 2007) (“Amazon.com”) (citing Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,
545 U.S. 913, 930 (2005) (“Grokster”)). Thus, “one who, with knowledge of the infringing
activity, induces, causes or materially contributes to the infringing conduct of another, may be
held liable as a ‘contributory’ infringer.” Id. (quoting Gershwin Publ’g Corp. v. Columbia
Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971)); see also Perfect 10, Inc. v. Visa Intern.
3 
 

 Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 5 of 12 Page ID #:1924

Serv. Ass’n, 494 F.3d 788, 795 (9th Cir. 2007) (“Visa”) (explaining that contributory
infringement can be established through either material contribution or inducement).
1. Material Contribution
A third party can only be liable for materially contributing to infringement where its
participation in the infringing conduct of the primary infringer is “substantial.” See Religious
Tech. Ctr. v. Netcom On-Line Commc’n Servs., Inc., 907 F.Supp. 1361, 1375 (9th Cir. 1995)
(“Netcom”) (citing Gershwin Publ’g, 443 F.3d at 1162; Apple Computer, Inc. v. Microsoft Corp.,
821 F.Supp. 616, 625 (N.D. Cal. 1993); Demetriades v. Kaufmann, 690 F.Supp. 289, 294
(S.D.N.Y. 1988)).
In Amazon.com, the Ninth Circuit analyzed the material contribution prong in the context
of an Internet search engine operator (Google) and held that:
a computer system operator can be held contributorily liable if it
“has actual knowledge that specific infringing material is available
using its system,” and can “take simple measures to prevent further
damage” to copyrighted works, yet continues to provide access to
infringing works.
508 F.3d at 1172 (quoting A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1022 (9th Cir.
2001); Netcom, 907 F.Supp. at 1375 (emphasis in original). Although an “actor’s contribution to
infringement must be material to warrant the imposition of contributory liability,” the Ninth
Circuit emphasized that “services or products that facilitate access to [infringing] websites
throughout the world can significantly magnify the effects of otherwise immaterial infringing
activities.” Id. (internal quotations and citations omitted).
In Amazon.com, the district court had dismissed a contributory copyright infringement
claim against Google, holding that even assuming Google had knowledge that links to websites
displaying infringing material were made available using its search engine, because Google did
not undertake promotional or advertising efforts to encourage visits to the infringing websites, it
could not be liable for contributory infringement. Id. The Ninth Circuit reversed, reasoning that:
[t]here is no dispute that Google substantially assists websites to
distribute their infringing copies to a worldwide market and assists
a worldwide audience of users to access infringing materials. We
cannot discount the effect of such a service on copyright owners,
even though Google’s assistance is available to all websites, not
just infringing ones. Applying our test, Google could be held
contributorily liable if it had knowledge that infringing [copies of
plaintiff’s] images were available using its search engine, could
4 
 

 Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 6 of 12 Page ID #:1925

take simple measures to prevent further damage to [plaintiff’s]
copyrighted works, and failed to take such steps.
Id. The Ninth Circuit thereafter remanded the case to the district court to resolve factual disputes
over the adequacy of the plaintiff’s notices to Google of the infringement and Google’s
responses to the notices, as well as factual disputes over whether there was a reasonable and
feasible means for Google to refrain from providing access to the infringing websites. Id. at
1172-73.
Shortly after Amazon.com, the Ninth Circuit issued its decision in Perfect 10, Inc. v. Visa
Intern. Serv. Ass’n (“Visa”), 494 F.3d 788 (9th Cir. 2007). In that case, the plaintiff sued various
credit card companies for contributory copyright infringement, alleging that the credit card
companies had contracted with issuing banks to issue branded credit cards to consumers, and the
issuing banks then contracted with merchant banks to settle transactions using those cards,
including transactions for payments to Internet websites that infringed the plaintiff’s copyrights.
See Visa, 494 F.3d at 792. The plaintiff claimed that the credit card companies had materially
contributed to the websites’ infringement because they were aware of the infringement, yet
continued to process credit card payments for the infringing websites. Id. at 795.
The Ninth Circuit held that the plaintiff had failed to allege facts sufficient to establish
material contribution, because the credit card companies:
cannot be said to materially contribute to the infringement because
they have no direct connection to that infringement. Here, the
infringement rests on the reproduction, alteration, display and
distribution of [plaintiff’s] images over the Internet. [Plaintiff] has
not alleged that any infringing material passes over [d]efendants’
payment networks or through their payment processing systems, or
that [d]efendants’ systems are used to alter or display the
infringing images . . . . Here, [] the services provided by the credit
card companies do not help locate and are not used to distribute the
infringing images. While [plaintiff] has alleged that [d]efendants
make it easier for websites to profit from this infringing activity,
the issue here is reproduction, alteration, display and distribution,
which can occur without payment. Even if infringing images were
not paid for, there would still be infringement.
Id. at 796.

The Court further distinguished Amazon.com, emphasizing that “Google may

materially contribute to infringement by making it fast and easy for third parties to locate and
distribute infringing material, whereas [d]efendants make it easier for infringement to be
profitable,” which the Court emphasized could not be the basis of contributory copyright
5 
 

 Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 7 of 12 Page ID #:1926

liability. Id. at 797 (emphasis in original).
Here, the only allegations specific to Steadfast that are raised in the SAC are that
Steadfast “hosts” pirate sites, including Imagebam, and that Plaintiff has sent numerous
notifications to Steadfast of infringing content on Imagebam, but Steadfast has failed to
implement or enforce a repeat infringer policy by removing Imagebam from its servers.1 Id.
¶¶ 15, 49.
Steadfast asserts that it cannot be liable for contributory copyright infringement because
the SAC fails to allege that Steadfast had knowledge of the infringing activity on the Imagebam
website. See MTD at 13:19-20:4. Steadfast does not contend that it did not receive notices of
the infringing content, but instead relies on the DCMA safe harbor provisions, which, as
discussed infra, the Court would not resolve at this juncture. In any event, because the SAC fails
to allege material contribution or inducement, the Court need not reach the issue of whether
Steadfast had knowledge of the infringement. See Visa, 494 F.3d at 795 (“Because we find that
[plaintiff] has not pled facts sufficient to establish that [d]efendants induce or materially
contribute to the infringing activity, [plaintiff’s] contributory infringement claim fails and we
need not address the [d]efendants’ knowledge of the infringing activity.”).
Steadfast also contends that the SAC fails to allege material contribution or inducement.
See MTD at 13:17-16:19. The Court would agree. The SAC alleges only that Steadfast “hosts”
pirate sites that feature infringing content. It is entirely unclear what services Steadfast provides
to Imagebam; what type of infringing activity Imagebam conducts (or even what Imagebam is);
or how Steadfast contributes to or facilitates that infringing activity.2 As such, the Court would
find that the SAC fails to plead material contribution. See UMG Recordings, Inc. v. Shelter
                                                            
1

In its Motion, Steadfast asserts that it is a data center service company that provides cloud-based storage solutions
to businesses, including Imagebam. See MTD at 1:2-5. In turn, “Imagebam provides hosting to individually
registered users in order to upload images.” Id. at 1:5-6.
A major problem with portions of Steadfast’s Motion to Dismiss is its proffering of factual assertions
which are not contained in the pleadings in this lawsuit, nor has it requested and established a basis for this Court to
take judicial notice of those facts.
2

The Court readily admits that it does not know (and Plaintiff has clearly not alleged) if the word “host” is a “term
or art” and/or has an established definition in the industry such that when the word is used it means to provide
mechanisms (such as server space and bandwidth) and/or operations which directly allow customers to continue to
conduct businesses which engage in copyright infringement. See generally Louis Vuitton Malletier, S.A. v. Akanoc
Solutions, Inc., 658 F.3d 936, 940-41 (9th Cir. 2011). As to co-defendant Cloudflare, Plaintiff did provide several
paragraphs delineating the nature of that company’s operations, see SAC at ¶¶ 27-41 (and, subsequently, this Court
found that Plaintiff had adequately plead a claim for contributory copyright liability); whereas, for Steadfast,
Plaintiff simply relies on one word in one paragraph (Id. at ¶ 49).

6 
 

 Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 8 of 12 Page ID #:1927

Capital Partners LLC, 718 F.3d 1006, 1032 (9th Cir. 2013) (affirming dismissal of complaint for
failing to allege material contribution where complaint did not allege facts indicating that
defendants gave material assistance in helping infringing website or its users accomplish
infringement).
Plaintiff asserts that “[i]t is beyond dispute that continuing to provide server space to –
‘hosting’ – direct infringers with actual or constructive knowledge of infringement materially
contributes to direct infringement.” See Opp’n at 5:22-6:6. However, the cases Plaintiff cites in
support involved far more substantial factual assertions which established that the services
provided by the defendant actually contributed to infringement. For example, Plaintiff cites to
Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., 658 F.3d 936 (9th Cir. 2011); however,
in that case, the losing defendants hosted entire websites on its servers, routed internet traffic to
and from those websites, and had direct control over the services and servers provided to the
websites, thereby rendering the defendant’s “an essential step in the infringement process.” See
658 F.3d at 943-944.3 In addition, Plaintiff cites to Viacom Int’l, Inc. v. YouTube, Inc., 676 F.3d
19 (2d Cir. 2012), however, that case did not even address contributory copyright infringement,
but rather only addressed whether a district court had properly granted summary judgment based
on the DCMA safe harbor provisions. Plaintiff also cites to Capitol Records, Inc. v. MP3tunes,
LLC, 48 F.Supp.3d 703, 713 (S.D.N.Y. 2014), but in that case, the defendant was found to have
contributed to infringement by funding the site and facilities for the infringing activity, directing
the primary infringer’s development and setting policies for it, and creating, developing, and
marking programs for the primary infringer. Here, the sparse allegations in the SAC do not
indicate what services Steadfast provides to Imagebam or clarify Steadfast’s role in the
infringement process.
In short, the Court is unaware of any authority holding that merely alleging that a
defendant provides some form of “hosting” service to an infringing website is sufficient to
establish contributory copyright infringement. The Court would therefore find that the SAC fails
to allege facts establishing that Steadfast materially contributed to the infringement.
b. Inducement
Steadfast also argues that the SAC fails to state a claim for inducement liability. See
                                                            
3

One of the defendants in the Louis Vuitton Malletier case (i.e. Managed Solutions Group, Inc.) obtained a
judgment as a matter of law even though it “leased servers, bandwidth, and some IP addresses to [the infringing codefendants who], in turn, operated the servers and otherwise ran the business.” 658 F.3d at 940, 942.

7 
 

 Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 9 of 12 Page ID #:1928

MTD at 16:21-17:13. In Visa, the Ninth Circuit explained that inducement liability can be
established where one “‘distributes a device with the object of promoting its use to infringe
copyright, as shown by clear expression or other affirmative steps taken to foster infringement.’”
See Visa, 494 F.3d at 800 (quoting Grokster, 545 U.S. at 936-37).

“[T]he standard for

inducement liability is providing a service ‘with the object of promoting its use to infringe
copyright’. . . . inducement ‘premises liability on purposeful, culpable expression and conduct,
and thus does nothing to compromise legitimate commerce or discourage innovation having a
lawful promise.’” Id. (quoting Grokster, 545 U.S. at 937); see also Columbia Pictures Indus.,
Inc. v. Fung, 710 F.3d 1020, 1033 (9th Cir. 2013) (explaining that “the inducement copyright
doctrine . . . applies to services available on the Internet as well as to devices or products”).
Here, the SAC does not allege that Steadfast provides its services for the purpose of
promoting copyright infringement, or that it has directly encouraged Imagebam to display
infringing content on its website. Cf. Grokster, 545 U.S. at 923-24 (finding file-sharing service
liable for infringement where the record was “replete with evidence that from the moment
[plaintiffs] began to distribute their free software, each one clearly voiced the objective that
recipients use it to download copyrighted works, and each took active steps to encourage
infringement”). As such, the Court would find that Plaintiff has failed to plead contributory
liability by inducement.
Because Plaintiff has failed to allege contributory copyright infringement, the Court
would DISMISS the second cause of action as to Steadfast.
B. The SAC Fails to State a Claim for Vicarious Copyright Infringement
“To state a claim for vicarious copyright infringement, a plaintiff must allege that the
defendant (1) has the right and ability to supervise the infringing conduct and (2) a direct
financial interest in the infringing activity.” See Visa, 494 F.3d at 802 (citations omitted).
Steadfast argues that the SAC fails to adequately state a claim for vicarious liability because
Steadfast does not have the requisite right and ability to supervise and control the infringing
conduct. See MTD at 17:25-18:19.
The Court would agree. In Visa, the Ninth Circuit held that the defendants could not be
held vicariously liable for infringement by independent websites because they did not have the
ability to “take away the software the offending websites use to copy, alter, and distribute the
infringing images, cannot remove those websites from the Internet, and cannot themselves block
8 
 

 Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 10 of 12 Page ID #:1929

the distribution of those images over the Internet.” See Visa, 494 F.3d at 805. Similarly, in
Amazon.com, the Ninth Circuit found that there was no vicarious liability because Google did not
have the legal right to stop or limit the direct infringement of third-party websites.

See

Amazon.com, 508 F.3d at 1173. Here, the SAC contains no allegations that Steadfast has a direct
financial interest in the infringing activity or has the right and ability to stop the infringing
conduct.4
For the foregoing reasons, the Court would DISMISS the third cause of action for
vicarious copyright infringement against Steadfast.
C. The SAC Fails to State a Claim for Contributory Trademark Infringement
“To be liable for contributory trademark infringement, a defendant must have (1)
‘intentionally induced’ the primary infringer to infringe, or (2) continued to supply an infringing
product to an infringer with knowledge that the infringer is mislabeling the particular product
supplied.” See Visa, 494 F.3d at 807 (citing Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844,
855 (1982)). “The tests for secondary trademark infringement are even more difficult to satisfy
than those required to find secondary copyright infringement.”

Id. (citing Sony Corp. v.

Universal City Studios, 464 U.S. 417, 439 n.19 (1984)). “For liability to attach, there must be
‘direct control and monitoring of the instrumentality used by a third party to infringe the
plaintiff’s mark.’” Id. (citing Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980,
984 (9th Cir. 1999)).
Steadfast asserts that the SAC fails to allege any facts that would support a claim that
Steadfast induced Imagebam to infringe Plaintiff’s trademarks, or even any facts establishing
what the purported trademark infringement entailed. See MTD at 19:9-18. Nor does the SAC
allege that Steadfast controls or monitors any instrumentality used by Imagebam to engage in
trademark infringement. Id. The Court would agree.
In sum, the Court would DISMISS the sixth cause of action for contributory trademark
infringement against Steadfast.
D. DCMA Defense
Steadfast alternatively argues that it is immune from liability under the DMCA’s Section
512(c) safe harbor. See MTD at 9:10-13:15. To qualify for protection under any safe harbor of
                                                            
4

The SAC conclusorily alleges that Defendants have “the right and ability to control or supervise the direct
infringement” and “have directly benefited financially from such infringing activity,” see SAC ¶ 69, but fails to
allege any facts substantiating that assertion.

9 
 

 Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 11 of 12 Page ID #:1930

the DMCA, a defendant must establish certain threshold requirements, including that the
defendant is a “service provider” as defined by the DMCA; the defendant adopted and
reasonably implemented a “repeat infringer” policy that “provides for the termination in
appropriate circumstances of subscribers and account holders of the service providers’ system or
network”; and the defendant accommodates “standard technical measures” that identify or
protect copyrighted works. See Viacom Int’l, Inc. v. YouTube, Inc., 676 F.3d 19, 27-28 (2d Cir.
2012). In addition, under Section 512(c), a defendant must establish:
(A) (i) does not have actual knowledge that the material or an activity using the
material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or
circumstances from which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove,
or disable access to, the material;
(B) does not receive a financial benefit directly attributable to the infringing
activity, in a case in which the service provider has the right and ability to control
such activity; and
(C) upon notification of claimed infringement as described in paragraph (3),
responds expeditiously to remove, or disable access to, the material that is
claimed to be infringing or to be the subject of infringing activity.
See 17 U.S.C. § 512(c)(1)(A)-(C).
Most courts have refused to determine on a motion to dismiss whether a party is entitled
to protection under the DMCA, noting that “it is difficult to conclude as a matter of law [that a
defendant] ha[s] ‘reasonably implemented’ a policy against repeat infringers.” See Ellison v.
Robertson, 357 F.3d 1072, 1080 (9th Cir. 2004); see also BWP Media USA Inc. v. Hollywood
Fan Sites, LLC, 69 F.Supp.3d 342, 358-59 (S.D.N.Y. 2014) (“At the complaint stage, there are
insufficient facts to demonstrate that the Defendants named in this action satisfy even the
threshold requirements [of the DMCA].

Defendants bring no credible argument that the

complaint, and attachments themselves, establish, for instance, that they have ‘reasonably
implemented’ a repeat infringer policy.”); Viacom Int’l, 676 F.3d at 41 (vacating district court’s
grant of summary judgment on DMCA defense, explaining that “further fact-finding is required
to determine whether [defendant] is ultimately entitled to safe harbor protection in this case”).
Here, because the Court would grant Steadfast’s Motion to Dismiss based on the
insufficient allegations in the SAC, the Court need not address Steadfast’s alternative basis for
dismissal under the DMCA. In any event, given the sparse factual allegations in the SAC
regarding Steadfast’s role in the infringement, it is highly unlikely that the Court has enough
10 
 

 Case 2:16-cv-05051-GW-AFM Document 111 Filed 02/16/17 Page 12 of 12 Page ID #:1931

information to determine whether Steadfast is entitled to protection at this stage in the
proceedings.
IV. Conclusion
Because Plaintiff has failed to allege secondary liability against Steadfast, the Court
would GRANT Steadfast’s Motion and DISMISS the SAC as to Steadfast. Because Plaintiff
may be able to cure the deficiencies in its allegations, the Court would dismiss the SAC without
prejudice.
 

11