A major victory today for Github and Microsoft. Judge Tigar granted the defendants’ motion to dismiss in part, including the DMCA claims for removal of copyright management information (CMI) brought under 1202(b)(1) and (b)(3).
This is a huge win for Microsoft and Github.
Out of 8 claims brought by Doe 1 against the defendants, the only claims remaining are:
1. Defendants do not move to dismiss Plaintiffs’ claims for breach of contract for open-source license violations or breach of contract for selling licensed materials. See supra at 2.
2. Plaintiffs’ unfair competition claim is dismissed only to the extent that it is predicated on their state law claims for intentional and negligent interference with prospective economic relations, unjust enrichment, and negligence.
The court allowed the plaintiffs leave to amend to allege facts for a proper DMCA CMI claims, but Judge Tigar is skeptical they can be cured: “Although the Court finds it unlikely that this deficiency could be cured by the allegation of additional facts, it grants leave to amend out of abundance of caution.”
The Court explained:
DMCA Section 1202(b)(1) and 1202(b)(3)
In its prior order, the Court denied Defendants’ motions to dismiss Plaintiffs’ claims under
Sections 1202(b)(1) and 1202(b)(3) of the DMCA, reasoning that Plaintiffs pleaded “sufficient
facts to support a reasonable inference that Defendants intentionally designed the programs to
remove CMI from any licensed code they reproduce as output.” ECF No. 95 at 19. Further, it
found that Plaintiffs’ allegations plausibly suggested that “Defendants knew or had reasonable
grounds to know that removal of CMI carried a substantial risk of inducing infringement.” Id. at
20.
Defendants now ask the Court to address an unresolved argument from the prior briefing—
namely, that “[Section] 1202(b) claims lie only when CMI is removed or altered from an identical copy of a copyrighted work.” ECF No. 107-3 at 20 (emphasis added); see ECF No. 109-3 at 23 Defendants argue that because Plaintiffs’ new allegations state that output from Copilot is often a modification of their licensed works, as opposed to an “identical copy,” they have
effectively pleaded themselves out of their Section 1202(b)(1) and 1202(b)(3) claims. ECF No.
109-3 at 23.
Agreeing with Defendants on both fronts, the Court finds that it is not precluded
from analyzing this claim anew and that Section 1202(b) claims require that copies be “identical.”8 CMI includes “information such as the title, the author, the copyright owner, the terms and conditions for use of the work, and other identifying information set forth in a copyright notice or conveyed in connection with the work.” Stevens v. Corelogic, Inc., 899 F.3d 666, 671 (9th Cir. 2018).
To state a claim under Section 1202(b)(1), Plaintiffs must plausibly allege that Defendants (1) “intentionally remov[ed] or alter[ed]” CMI while “knowing, or . . . having reasonable grounds
to know, that it will induce, enable, facilitate, or conceal an infringement of any right under this
title.” 17 U.S.C. § 1202(b)(1). Similarly, a violation of Section 1202(b)(3) requires that Plaintiffs
plausibly allege that Defendants “distribute” or “import for distribution” copies of works
“knowing that [CMI] has been removed or altered without authority of the copyright
owner[.]” 17 U.S.C. § 1202(b)(3); see also Stevens, 899 F.3d at 674 (requiring plaintiff to
demonstrate “pattern of conduct or modus operandi” to establish the requisite mental state);
Falkner v. Gen. Motors LLC, 393 F. Supp. 3d 927, 938 (C.D. Cal. 2018).
“Courts have held that no DMCA violation exists where the works are not identical.”
Advanta-STAR Auto. Rsch. Corp. of Am. v. Search Optics, LLC, No. 22-CV-1186 TWR (BLM),
2023 WL 3366534, at *12 (S.D. Cal. May 9, 2023) (internal quotations and citations omitted).
“[E]ven where the underlying works are similar, courts have found that no DMCA violation
exists” unless the works are identical. Kirk Kara Corp. v. W. Stone & Metal Corp., No. CV 20-
1931-DMG, 2020 WL 5991503, at *6 (C.D. Cal. Aug. 14, 2020); see also Frost-Tsuji Architects v.
Highway Inn, Inc., No. CIV. 13-00496 SOM, 2015 WL 263556, at *3 (D. Haw. Jan. 21, 2015),
aff’d, 700 F. App’x 674 (9th Cir. 2017) (finding no Section 1202(b) violation where the allegedly
infringing drawing was “not identical.”). Plaintiffs’ amended complaint alleges that “[t]hough
Output from Copilot is often a verbatim copy, even more often it is a modification: for instance, a
near-identical copy that contains only semantically insignificant variations of the original Licensed
Materials, or a modified copy that recreates the same algorithm.” ECF No. 97-3 ¶ 96. Indeed, the
examples Plaintiffs provide with respect to Does 1, 2, and 5 state that the Copilot output is a
“modified format,” “variation[],” or the “functional[] equivalent” of the licensed code. Id. ¶¶ 103,
110, 120. This, however, is not sufficient for a Section 1202(b) claim. Accordingly, the Court
agrees with Defendants that this is a “fundamental defect” “endemic to Plaintiffs’ theory of
[Section] 1202(b) liability.” ECF No. 107-3 at 21.
Plaintiffs’ arguments in response are unavailing. First, they cite to ICONICS, Inc. v.
Massaro, 192 F. Supp. 3d 254, 272 (D. Mass. 2016) for the proposition that “Section 1202(b) has
no requirement that the copy from which CMI is removed be identical.” ECF No. 142 at 21. But ICONICS concerned whether various “copyright headers” were CMI within the meaning of
Section 1202(c) because “the [plaintiff’s] copyright at issue cover[ed] the full versions of
programs, not individual files.” ICONICS, Inc., 192 F. Supp. 3d at 272. Notably, the parties did
not dispute that the defendants reproduced an identical copy of the plaintiff’s file. Id. Similarly,
Plaintiffs’ attempt to liken this case to Bounce Exchange, Inc. v. Zeus Enterprises Ltd., No.
15CV3268, 2015 WL 8579023 (S.D.N.Y. Dec. 9, 2015) is unpersuasive. The question in Bounce
was whether two terms that appeared in the plaintiff’s source code were CMI. Id. at *3. In
concluding that the terms were CMI, the Bounce court reasoned that the terms were “a shorthand
form of the official name of the author of the work, and they are inserted into the code itself[,]”
thereby satisfying the requirements of Section 1202(c). Id. In short, neither case cited by
Plaintiffs concerns Section 1202(b)’s identicality requirement.
Although the Court finds it unlikely that this deficiency could be cured by the allegation of
additional facts, it grants leave to amend out of abundance of caution. See Rivas v. Kijakazi, No.
C 23-03324 WHA, 2023 WL 8006846, at *2 (N.D. Cal. Nov. 17, 2023) (granting leave to amend
where “defects [in complaint] could theoretically be cured”).