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ITN Flix, LLC v. Univision Television Group, Inc.

United States District Court, D. Utah, Central Division

May 5, 2017

ITN FLIX, LLC, a Utah limited liability company, Plaintiff,
v.
UNIVISION TELEVISION GROUP, INC., a Delaware corporation; UNIVISION HOLDINGS, INC., a New York corporation; UNIVISION SALT LAKE CITY, LLC; UNIVISION COMMUNICATIONS, INC., a Delaware corporation; and EL REY NETWORK, LLC, Defendants.

          Dustin B. Pead Magistrate Judge

          MEMORANDUM DECISION AND ORDER DENYING MOTION TO DISMISS PLAINTIFF'S SECOND AMENDED COMPLAINT

          David Nuffer United States District Judge

         This memorandum decision and order addresses whether a copyright infringement claim should be dismissed against media broadcasters who broadcasted a motion picture over their networks. The allegations show that the broadcasters did not create the allegedly infringing work which was broadcasted and did not broadcast the copyrighted work. The copyright infringement claim need not be dismissed. Broadcasters who distribute an infringing work may be held liable for infringing the distribution right of the copyrighted work even if they did not participate in the creation of the infringing work.

         Defendants Univision Television Group, Inc.; Univision Salt Lake City, LLC; Univision Communications, Inc.; and El Rey Network, LLC (collectively “Broadcaster Defendants”) move to dismiss the Second Amended Complaint[1] under Rule 12(b)(6) (“Motion”).[2] Plaintiff ITN Flix, LLC (“ITN”) opposes the Motion (“Opposition”).[3] The Broadcaster Defendants filed a reply in support of the Motion (“Reply”).[4] For the reasons below, the Motion is DENIED.

         BACKGROUND

         In October 2015, ITN and Mr. Gil Medina filed a complaint for copyright infringement against Univision Holdings, Inc.; Univision Salt Lake City, LLC; Univision Communications, Inc.; and El Rey Network, LLC (“Original Defendants” which are comprised of all the Broadcaster Defendants[5] except Univision Television Group, Inc.).[6]

         Four months later, in February 2016, ITN and Mr. Medina filed an amended complaint under Rule 15(a) which also asserted a single cause of action against the Original Defendants for copyright infringement.[7] The amended complaint alleged, among other things, that ITN held a valid copyright to a motion picture originally titled Jack's Law, later titled Vengeance. The amended complaint alleged that Mr. Robert Rodriguez, the founder and chairman of Defendant El Rey Network, obtained access to Vengeance in 2005, and that he later made a film entitled Machete that infringed ITN's copyright for Vengeance. But the amended complaint alleged only three similarities between Vengeance and Machete, and failed to allege sufficient facts establishing that the Original Defendants infringed ITN's copyright.[8]

         The order dismissing the first amended complaint held that the copyright infringement claim could not stand because there were insufficient allegations of access and insufficient allegations of similarity between Vengeance and Machete.[9] But the order also explained that “there is a significant question whether Rodriguez's alleged access in 2005 provides an adequate link . . . to El Rey Network or any of the other Broadcasters” for purposes of copyright infringement.[10]

         The order further explained that the amended complaint alleged that Vengeance was re-shot and re-edited after it was provided to Mr. Rodriguez in 2005. Thus, third party access could not be inferred because Vengeance evolved into a non-identical work from the version provided to Rodriguez.[11] There was no allegation in the first amended complaint that the copy of Vengeance provided to Mr. Rodriguez in 2005 was the same as the final version.

         The first amended complaint was dismissed and leave was granted to file a second amended complaint by November 21, 2016.[12]

         On November 8, 2016, ITN filed the Second Amended Complaint currently under review. The Second Amended Complaint removes Gil Medina as a plaintiff; adds Univision Television Group, Inc. as a defendant; and, like the original complaint and the first amended complaint, asserts a single cause of action for copyright infringement.[13]

         The Second Amended Complaint adds significant allegations that make it meaningfully different from the amended complaint that was dismissed. Among other things, the Second Amended Complaint includes over fifty alleged similarities between Vengeance-the copyrighted work-and Machete-the allegedly infringing work.[14] The Second Amended Complaint also alleges that:

• “Rodriguez acknowledged . . . that he copied and used material from Vengeance and offered to pay . . . for his use of Vengeance[15] and
• even though “minor edits” were made to Vengeance when it was re-shot and re-edited, “the material given to Rodriguez was identical to the finalized Vengeance in all material aspects.”[16]

         The Broadcaster Defendants move to dismiss the Second Amended Complaint, arguing that the Second Amended Complaint “fails to rectify the pleading deficiencies addressed in the Court's November 2, 2016 Order . . . .”[17] The Broadcaster Defendants are incorrect.

         MOTION TO DISMISS STANDARD

         Dismissal under Rule 12(b)(6) is appropriate when the complaint, standing alone, is legally insufficient to state a claim for which relief may be granted.[18] When considering a motion to dismiss for failure to state a claim, the thrust of all well-pleaded facts is presumed, but conclusory allegations need not be considered.[19] A court is not bound to accept the complaint's legal conclusions and opinions, whether or not they are couched as facts.[20] “A 12(b)(6) motion should not be granted unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”[21]

         FACTUAL ALLEGATIONS[22]

         The Second Amended Complaint makes the following factual allegations:

In or about 2004, Mr. Gil Medina met actor Danny Trejo.[23] Mr. Trejo had never been cast as a lead actor in a scripted feature film or film franchise.[24] In 2005, Mr. Medina approached Mr. Trejo about serving as “the lead actor and anchor of a vigilante action feature film franchise centered on his distinctive look, style, inherent and authentic toughness, charisma, and other special traits.”[25] ITN, an independent production company of which Mr. Medina is a principal and managing member, would provide creative talent, financing, entertainment business acumen, and other resources.[26] Mr. Trejo agreed to participate.[27]

         Vengeance

         “By the fall of 2005, [ITN] and Trejo had produced a rough cut of a vigilante action feature film with Trejo in the starring role. The film had the working title Jack's Law, later changed to Vengeance . . . .”[28] “On or about November 4, 2005, ” ITN and Mr. Trejo delivered “a copy of the script and a DVD of . . . Vengeance to Rodriguez.” Mr. Rodriguez is the founder and chairman of Defendant El Rey Network.[29]

         “Although minor edits were later made to the script and rough-cut DVD given to Rodriguez, the material given to Rodriguez was identical to the finalized Vengeance in all material aspects, including the same plot, characters, pace, mood, dialogue, setting, and sequence of events.”[30] ITN suggested that Mr. Rodriguez or his companies put their name on the project to improve the reputation of the movie, and suggested that Mr. Rodriguez collaborate with ITN to build a vigilante action feature film franchise centered on Mr. Trejo.[31] Mr. Rodriguez examined the script and the DVD, but declined ITN's offers.[32]

         A theater-ready version of Vengeance was completed in early 2006.[33] ITN registered the film “with the applicable copyright offices, ” first as Jack's Law in 2005 and then as Vengeance in 2010, receiving registration numbers 3 Pau 3-559-647 and Pau 3-527-726.[34]

         Machete

         In or about 2007, Mr. Rodriguez directed and produced a trailer of a film called Machete, a vigilante action hero movie featuring Mr. Trejo as the lead actor.[35] In 2009, Mr. Rodriguez, Mr. Trejo, and others commenced filming Machete.[36] Mr. Rodriguez “subsequently provided Machete to the Broadcaster Defendants for distribution and public display.”[37]

         Machete was released in theaters in 2010, earning approximately $26 million in the United States and $19 million internationally. Machete also made approximately $22 million in “home market earnings.”[38] The Broadcaster Defendants “actively promoted, displayed, broadcasted, and distributed Machete to the public” and “showed Machete publicly on their respective networks, all to the detriment of [ITN], thereby infringing on [ITN]'s copyrights.”[39]

         In 2011, Mr. Trejo “confronted Rodriguez about Rodriguez's copying of Vengeance in making Machete. Rodriguez acknowledged to Trejo and Medina that he copied and used material from Vengeance and offered to pay Medina for his use of Vengeance. However, Rodriguez later refused to pay.”[40]

         Alleged Similarities Between Vengeance and Machete

         The back of Machete's DVD case describes the plot of Machete. It states:

Set up, double-crossed and left for dead, Machete (Trejo) is an ass-kicking ex-Federale who lays waste to anything that gets in his path. As he takes on hitmen, vigilantes and a ruthless drug cartel, bullets fly, blades clash and the body count rises. Any way you slice it, vengeance has a new name - Machete.[41]

         Both films involve Mr. Trejo acting as an ex-law-enforcement officer whose wife and daughter are murdered.[42] He is left for dead but survives and ultimately obtains revenge on the men who killed his family and injured him.[43] While seeking revenge, the Mr. Trejo's character defends vulnerable people who are threatened by villains.[44]

         “Each movie contains a scene, similar in the time-stop and sequence of events of the movies, where the protagonist [Mr. Trejo's character] is sitting alone, reminiscing of his murdered family, having flashbacks of his family's murder, and vowing revenge.”[45] Each of “these scenes express the same moods of loss, darkness, pain, depression and revenge.”[46]

         “In each movie, the main villain inflicts severe injuries on the protagonist and believes the protagonist to be dead only later to discover the protagonist is alive and seeking revenge.”[47]

         “In each movie, the protagonist is offered a large sum of money by a villain but the protagonist refuses to personally keep the money.”[48] This expresses the idea that the protagonist is motivated by a sense of justice and revenge and is unconcerned with monetary rewards.[49]

         “In each movie, the protagonist has an opportunity to engage in sexual conduct with a vulnerable female but he refuses to do so.”[50] This expresses the idea that the protagonist is motivated by a sense of justice and revenge and will not take advantage of the weak or vulnerable.[51]

         Each movie portrays the protagonist struggling between what is legal and what is moral or just from the protagonist's perspective. The result is that the protagonist breaks the law to bring justice.[52]

         Both films involve a well-developed law enforcement character who investigates the protagonist, and then ultimately joins forces with the protagonist in violently opposing the villains.[53] In Vengeance, the character is named Ron Banks played by Robert Burke. In Machete, the character is Sartana Rivera played by Jessica Alba.[54]

         Both films portray the protagonist as religious. Both films show the protagonist visiting a priest in a church to talk about his situation and to seek help. Both films show the protagonist wearing a crucifix.[55]

         Both films portray the protagonist as generous. In Vengeance, the protagonist pays a lady for a car and gives her more money than she is asking in an effort to assist her. In Machete, the protagonist gives a large amount of cash to a character to assist poor immigrants.[56]

         Both films have a similar pace and sequence of events.[57] Several other similarities are alleged, including, among other things, that the subtitles in both films are yellow and in thick font; the story line in both films is communicated vocally by a character; a villain appears on scene wearing a cowboy hat and leather jacket; a Caucasian villain speaks to Hispanic characters in heavily accented Spanish; villains drive a Mercedes S550; and the protagonist's costuming is a black leather jacket, a black t-shirt, hair down.[58] There are many other alleged similarities.[59]

         DISCUSSION

         The foundational test for copyright infringement is whether the plaintiff can establish (1) ownership of a valid copyright and (2) copying of constituent elements of the work that are original.[60] To withstand a motion to dismiss, the complaint, viewed in the light most favorable to ITN, must contain adequate factual allegations supporting each of these elements.[61]

         ITN Adequately Alleges Ownership

         Ownership of a valid copyright is not challenged and has been adequately alleged. ITN alleges that it owns a valid copyright on its film Vengeance, having registered it “with the applicable copyright offices” in 2005 and 2010 and receiving registration numbers 3 Pau 3-559-647 and Pau 3-527-726.[62] “A Certificate of Registration, if timely obtained, constitutes prima facie evidence of the validity of the copyright.”[63] Thus, the first element is adequately alleged.

         ITN Adequately Alleges Copying

         “Copying is . . . a shorthand reference to any infringement of the copyright holder's exclusive rights that are set forth at 17 U.S.C. § 106.”[64] Those exclusive rights are:

(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and
(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.[65]

         “Copying” may be established “either through the presentation of direct evidence, or through indirect evidence that shows (1) that the defendant had access to the copyrighted [work], and (2) that there are probative similarities between the copyrighted material and the allegedly copied material.”[66] “Direct proof of copying is rare, and plaintiffs will typically rely on the indirect method of proof.”[67]

         The prior order dismissing the first amended complaint noted that the first amended complaint had not alleged “direct copying” and that to establish the element of copying, the first amended complaint would have to contain sufficient allegations” of “indirect copying.” The elements required to establish “indirect copying” are “[a] that the defendant had access to the copyrighted [work], and [b] that there are probative similarities between the copyrighted material and the allegedly copied material.”[68] The order went on to conclude that access had not been adequately alleged, and there were not sufficient allegations of “striking similarity” to infer access.[69]

         ITN now argues that it “does not need to provide evidence that Defendants had access to Vengeance.”[70] “Rather, ” ITN argues, it simply needs to show “that Rodriguez had access and impermissibly copied Vengeance by making Machete, and that Defendants then distributed and displayed Machete to the public in direct violation of [ITN]'s copyrights.”[71] ITN argues that “[c]lear statute and precedent dictate that any member in the chain of distribution is strictly liable for copyright infringement based on one party's access and copying of protected material.”[72]

         The Broadcaster Defendants argue that there are no grounds to hold them liable for copyright infringement because they did not have access to Vengeance and ...


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