BUMB, District Judge:
The largest printers and distributors of sheet-music in Europe, Music Sales Limited and Farber Music Limited, (collectively, the "Plaintiffs") brought this suit pursuant to the Copyright Act, 17 U.S.C. § 501 et seq., to enforce their exclusive licenses to print and distribute sheet-music in Europe. New Jersey-based sheet-music distributor Charles Dumont & Son, Inc. (the "Defendant") has, according to the Complaint, unlawfully exported from the United States to Europe sheet-music covered by Plaintiffs' exclusive distribution licenses.
Plaintiffs originally sought to enforce their European distribution licenses in the courts of the United Kingdom, and, on October 18, 2002, Plaintiffs and Defendant agreed to the entry of a Consent Order in a British court, pursuant to which Defendant agreed to cease its allegedly infringing activities in the United Kingdom. (Pl.s' Br. 12.) However, since the Consent Order was entered, according to Plaintiffs, Defendant has been "distribut[ing] infringing sheet music from the United States into Europe with impunity." (Pl.s' Br. at 2.)
Plaintiffs now seek to enforce their European licenses in a United States court. On March 29, 2009, Plaintiffs filed the present Complaint for copyright infringement. Plaintiffs allege that Defendant has been shipping sheet-music from the United States into Europe since at least 2006. They seek damages and injunctive relief because, they allege, Defendant's distribution of sheet-music in Europe infringes upon Plaintiffs' exclusive distribution rights.
Importantly, the Complaint alleges only that the unauthorized distribution of sheet-music in Europe constitutes copyright infringement. Defendant has proffered, and the Court has no reason to doubt, that Defendant has been granted exclusive licenses to distribute in the United States the sheet-music at issue in this action. Accordingly, the Complaint contains no allegation that Defendant has copied the sheet-music unlawfully, nor that its distribution of the sheet-music within the United States is unlawful.
The Court now considers Defendant's motion to dismiss the complaint for lack of subject-matter jurisdiction and for failure to state a claim upon which relief may be granted, pursuant to Federal Rules of Civil Procedure 12(b)(1) and (6).
Defendant brings this motion to dismiss pursuant to both Rules 12(b)(6), for failure to state an actionable claim, and 12(b)(1), for lack of subject-matter jurisdiction. In deciding a Rule 12(b)(6) motion, courts must view all allegations in the complaint in the light most favorable to the plaintiff, Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir.1994), and accept any and all reasonable inferences derived from the facts alleged, Unger v. Nat'l Residents Matching Program, 928 F.2d 1392 (3d Cir.1991). Based upon the face of the complaint, courts must decide if "enough facts to state a claim for relief that is plausible on its face" have been alleged. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Courts must review the complaint to determine: (1) if it alleges genuine facts, rather than mere legal conclusions; (2) if the facts alleged (assumed to be true), as well as the reasonable inferences drawn therefrom, establish a claim; and (3) if relief based upon the facts alleged is plausible. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949-50, 173 L.Ed.2d 868 (2009).
Rule 12(b)(1) motions may challenge subject-matter jurisdiction based upon the complaint's face or its underlying facts. Pittman v. Metuchen Police Dept., No. 08-2373, 2009 WL 3207854, *1 (D.N.J. Sept. 29, 2009) (citing James Wm. Moore, 2 Moore's Federal Practice § 12.30[4] (3d ed. 2007)). "A facial attack questions the sufficiency of the pleading, and in reviewing a facial attack, a trial court accepts the allegations in the complaint as true." Id. A factual attack, by contrast, calls upon the court to engage in a weighing of the evidence. Id. Here, the Court will presume the truth of Plaintiffs' allegations, since the motion challenges only the sufficiency of the Complaint.
For a federal court to have subject-matter jurisdiction over an action, the plaintiff must have standing to bring the action in the first instance. As a general matter, "the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues." Warth v. Seldin, 422 U.S. 490,
The United States Constitution grants to Congress the power "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors ... the exclusive Right to their ... Writings...." U.S. Const., art. 1, § 8. Pursuant to this power, Congress enacted the Copyright Act of 1976, which guarantees to authors a medley (or "bundle") of rights in their work, including the rights of reproduction, adaptation, performance, display, and, of importance here, distribution. See 17 U.S.C. § 106. Section 501 of the Copyright Act grants to authors or their successors-in-interest the right to bring an enforcement action; specifically, it provides that "[t]he legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of § 411, to institute an action for any infringement of that particular right committed while he or she is the owner of it." 17 U.S.C. § 501.
Unauthorized distribution of a work protected by the Copyright Act may constitute copyright infringement and may give rise to a cause of action in federal court. See 17 U.S.C. § 106(3) ("[T]he owner of copyright ... has the exclusive rights ... to distribute copies ... of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending ...."). The right of distribution may be assigned to another party. See 17 U.S.C. § 101 (providing for the "transfer of copyright ownership" by way of "exclusive license"). Furthermore, the right is divisible such that a party may be assigned the exclusive right to distribute a work in a particular geographic region. See id. (permitting the licensure of "any of the exclusive rights comprised in a copyright" (emphasis added)).
The Copyright Act does not have extraterritorial effect, however. See Robert Stigwood Group Ltd. v. O'Reilly, 530 F.2d 1096, 1101 (2d Cir.1976) ("Copyright laws do not have extraterritorial operation. The [unauthorized] Canadian performances, while they may have been torts in Canada, were not torts here." (citations omitted)). In other words, the distribution right created by § 106(3) refers only to distribution within the United States; the Copyright Act takes no position on the lawfulness of unauthorized distribution abroad.
The general rule that foreign conduct does not give rise to a cause of action under the Copyright Act has one "established exception": A person who commits infringing acts within the United States may be held liable for causing, by their infringing acts, the unauthorized use of the material abroad. See John Gladstone Mills III, et al., 2 Pat. L. Fundamentals § 6:139 (2d ed. WL 2009) ("An established exception provides that extraterritorial acts are subject to the U.S. copyright law when there is infringement within the United States that permits further reproduction abroad."). In the leading case Peter Starr Production Co. v. Twin Continental Films, Inc., 783 F.2d 1440 (9th Cir.1986), the defendant executed a contract in the United States that authorized a third party to exhibit a film abroad without the consent of the film's copyright owner. Because the court found the defendant's authorization of the exhibition to be an infringing act in itself, it held that defendant's act fell within the scope of United States copyright laws. Id. at 1443.
Based upon the foregoing, "in order for the [C]ourt to exercise subject matter jurisdiction over [P]laintiff[s'] claims, [P]laintiff[s] bear[] the burden of alleging and proving that [D]efendant is liable ... for an act of infringement committed in the United States." ITSI T.V. Productions, Inc. v. California Authority of Racing Fairs, 785 F.Supp. 854, 863-64 (E.D.Cal. 1992) (emphasis added), aff'd in part, rev'd in part on other grounds, 3 F.3d 1289 (9th Cir.1993).
Here, Plaintiffs' entire argument can be reduced to the simple proposition that the distribution of sheet-music from the United States into Europe is not "extraterritorial".
To be clear, the unauthorized distribution of a work in the United Kingdom, by mailing the work from the United States to the United Kingdom, does not constitute infringement under the Copyright Act. Section 106(3) creates a right of distribution in the United States only; any right of distribution that exists in the United Kingdom is a manifestation of British law. Plaintiffs treat the copyright laws of disparate nations as if they comprise a seamless ensemble, with infringement of any one's law enforceable wherever the act was committed. Of course, this Court's subject-matter jurisdiction is limited to cases arising under the Copyright Act; it has no power to vindicate violations of British law. See L.J. Kutten, 3 Computer Software Protection § 13:33 (WL 2009) ("It is basic law that one cannot sue in a foreign country alleging violation of U.S. law. Similarly one could not sue for violation of a foreign copyright law in a U.S. district court."). By way of illustration, the Court offers the following analogy. American libel laws are more permissive than corollary British laws, which adhere to a strict liability regime even for faultlessly inaccurate statements about public figures. See Sarah Staveley-O'Carroll, Libel Tourism Laws: Spoiling the Holiday and Saving the First Amendment?, 4 N.Y.U. J.L. & Lib. 252 (2009). Accordingly, a publication mailed from New York to London might
Finally, the Court requested that the parties prepare supplemental briefing to address whether a recent amendment to the Copyright Act, 17 U.S.C. 602(a)(2) as amended by the Prioritizing Resources and Organization for Intellectual Property Act of 2008 ("PRO-IP Act") Pub.L. No. 110-403, 122 Stat. 4256 (2008), affects the disposition of the pending motion. All parties agreed that it does not. (Pl.s' 1st Supp. Br. 1; Def.'s 1st Supp. Br. 1.)
The PRO-IP Act added an exportation right to the Copyright Act. Defendant's supplemental brief argues that the new exportation right, by its terms, applies only to "exportation of infringing items ... from the United States ... of copies ... the making of which ... constituted an infringement of copyright." 17 U.S.C. § 602 (emphasis added). Here, there is no allegation that the infringing copies were made in violation of copyright; Plaintiffs allege only that the distribution of the (otherwise lawful) copies infringes upon their license. This position is certainly consistent with a plain reading of the statute, and since Plaintiffs agree that the exportation right does not apply here,
Although the exportation right does not apply here, the discussion of the new right in the leading copyright treatise raises an acute concern that is relevant to the motion now before this Court. Addressing the case of "an infringer who exports a [licensed product abroad] without any color of authority ...," Nimmer on Copyright explains:
Melville B. Nimmer & David Nimmer, 2 Nimmer on Copyright § 8.11[B][2] (Rev. Ed. 2009). The Court agrees that enabling those in Plaintiffs' position to bring suit in United States courts would open the floodgates to an unmanageable number of new actions.
Plaintiffs complain that the Court's decision today will leave them without any remedy, since British courts have no means to enforce an injunction against an American company. If indeed Plaintiffs had no viable remedy, this would certainly
Because Plaintiffs lack statutory standing to bring this lawsuit, the Court must grant Defendant's motion to dismiss for lack of subject-matter jurisdiction and for failure to state an actionable claim. An accompanying order will issue this date.
Singing a somewhat different tune in the later case Subafilms, Ltd. v. MGM-Pathe Communications Co., the Ninth Circuit reversed itself and, abrogating Peter Starr, held that the domestic authorization of the misuse of copyrighted materials abroad does not constitute infringement. 24 F.3d 1088, 1090 (9th Cir. 1994). Some courts, including one in this District, have nonetheless continued to follow the Peter Starr rule. See, e.g., Expediters Int'l of Washington, Inc. v. Direct Line Cargo Management, 995 F.Supp. 468, 477 (D.N.J.1998) ("[A]uthorization of infringing acts abroad constitutes direct infringement and is actionable under United States Copyright Law."). Even were the Peter Starr rule controlling, Plaintiffs would not prevail here, as no predicate act of infringement occurred within the United States in this case.
