Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-03883/USCOURTS-cand-3_14-cv-03883-10/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:501 Copyright Infringement

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MEDIA.NET ADVERTISING FZ-LLC,

Plaintiff,

v.

NETSEER, INC.,

Defendant.

Case No. 14-cv-03883-EMC 

ORDER GRANTING IN PART AND 

DENYING IN PART DEFENDANT’S 

MOTION TO DISMISS; AND DENYING 

DEFENDANT’S MOTION TO STRIKE

Docket No. 84

Previously, the Court denied Defendant‟s motion for summary judgment but granted its 

motion to dismiss. Docket No. 69. With respect to the motion to dismiss, the Court gave Plaintiff 

leave to amend its claims for copyright infringement and unfair competition (California Business 

& Professions Code § 17200). Id. Plaintiff subsequently filed a second amended complaint 

(“SAC”) in which it repled the copyright infringement and § 17200 claims. Docket No. 76. 

Defendant has now moved to dismiss those claims. In the alternative, Defendant has moved to 

strike portions of the SAC. Id. Having considered the parties‟ briefs, as well as the oral argument 

of counsel, the Court hereby GRANTS in part and DENIES in part Defendant‟s motion to 

dismiss. The Court further DENIES Defendant‟s motion to strike.

I. FACTUAL & PROCEDURAL BACKGROUND

Plaintiff is a provider of online contextual-advertising services and offers its customers a 

website-based advertisement creation platform (the “Platform”), which allows its users to create 

custom advertisements. SAC 76 ¶¶ 1, 21, 24. Website publishers using the Platform can place a 

Media.net ad unit on their websites so that when a website visitor clicks on the ad unit, the visitor 

is taken to a “search results page” which displays relevant advertisements. Id. ¶ 26. Plaintiff 

published the original version of its search results page (“Original Media.net Results Page”) in 

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February 2014. Id. ¶ 29.

Defendant is a competing contextual-advertising provider. SAC ¶¶ 39-40. Defendant also 

provides advertising units that its customers can place on their websites. Id. ¶ 40. As with

Plaintiff‟s Platform, when a user clicks on Defendant‟s advertising unit, the user is directed to a 

search results page that offers relevant advertisements. Id. ¶ 41. Plaintiff alleges Defendant 

directly copied a substantial portion of Plaintiff‟s hypertext markup language (“HTML”) code and 

used it to create Defendant‟s own search results page which is substantially similar to Plaintiff‟s. 

Id. ¶¶ 43-47. 

As indicated above, previously, Defendant challenged Plaintiff‟s first amended complaint 

(“FAC”) in a motion to dismiss. The Court granted the motion in part but gave Plaintiff leave to 

amend its copyright infringement claims and its § 17200 claim. Docket No. 69. With respect to 

the copyright claims, the Court concluded that “portions of Plaintiff‟s HTML code” were 

copyrightable, specifically, the portions that contained “classes” and “comments.” Id. at 14:11-27. 

However, the Court found that the copyright claims, as alleged, were not adequately pled because, 

inter alia, Plaintiff failed to “identify each portion of the HTML code Defendant allegedly 

infringed.” Id. at 18:16-18. As for the § 17200 claim, the Court held that, as alleged, it was 

deficient because it was preempted by the Copyright Act. Id. at 27:12-14. The Court gave 

Plaintiff leave to amend the copyright infringement and § 17200 claims to cure the above 

deficiencies. Id. at 29:3-8.

Plaintiff thereafter filed its SAC. With respect to the copyright claims, the SAC is largely 

the same as the FAC. For example, like the FAC, the SAC contains the same table of “several 

examples of NetSeer‟s infringement.” SAC ¶ 48. The only new substantive allegation in the SAC 

is the statement that Defendant “viewed and copied all or substantial portions of the Media.net 

result page source code.” Id. ¶ 60. As for the § 17200 claim, Plaintiff has revised its allegations, 

now focusing on Defendant‟s alleged “misrepresentation and omissions of material fact” to 

Plaintiff‟s existing and potential clients that amounted to “unfair or fraudulent business acts.” Id.

¶¶ 104, 107.

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II. DISCUSSION

A. Motion to Dismiss

1. Legal Standard

Defendant first moves to dismiss the newly pled copyright infringement and § 17200 

claims pursuant to Federal Rule of Civil Procedure 12(b)(6). Under that rule, a party may seek 

dismissal based on failure to state a claim. A Rule 12(b)(6) motion tests the sufficiency of a 

complaint, asking whether a plaintiff has alleged “enough facts to state a claim to relief that is 

plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial 

plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable 

inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 

678 (2009) (citing Twombly, 550 U.S. at 556). Although a complaint need not contain “detailed 

factual allegations,” a complaint that contains merely “a formulaic recitation of the elements of a 

cause of action will not do.” Twombly, 550 U.S. at 555. Rather, “„[f]actual allegations must be 

enough to raise a right to relief above the speculative level.‟” Williams v. Gerber Prod. Co., 552 

F.3d 934, 938 (9th Cir. 2008) (quoting Twombly, 550 U.S. at 555). “A claim has facial 

plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable 

inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678; see also 

Twombly, 550 U.S. at 556. “The plausibility standard is not akin to a „probability requirement,‟ 

but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

In ruling on a Rule 12(b)(6) motion, courts “accept factual allegations in the complaint as 

true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. 

St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Courts may dismiss a claim 

“only if it appears beyond doubt that the plaintiff could prove no set of facts in support of his 

claim which would entitle him to relief.” Cook v. Brewer, 637 F.3d 1002, 1004 (9th Cir. 2011) 

(internal quotation marks omitted). 

2. Copyright Infringement Claims

As noted above, when the Court granted Defendant‟s motion to dismiss the copyright 

claims as pled in the FAC, it gave Plaintiff leave to amend. The Court specifically instructed 

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Plaintiff that, to cure the deficiency in the FAC, it had “to identify each portion of the HTML code 

Defendant allegedly infringed and to allege facts regarding Defendant‟s access to Plaintiff‟s 

HTML code.” Docket No. 69, 18:16-18. 

In spite of this specific directive, Plaintiff has done little to add to its FAC. For example, 

in its SAC, Plaintiff did not add to the table from the FAC to include all examples of copied 

portions of the HTML code. Compare FAC ¶ 47 with SAC ¶ 48. Indeed, Plaintiff added no new 

examples. The only new substantive allegation in the SAC is the statement that Defendant 

“copied all or substantial portions of the HTML code.” See, e.g., id. at ¶ 60. The allegation that 

Defendant copied “substantial portions” of the HTML code does not contain the specificity 

ordered by the Court. The new allegation is not enough to comply with the Court‟s directive, 

especially in light of the Court‟s holding that the only portions of the HTML code that are 

copyrightable are “classes” and “comments.”1 See Docket No. 69, 14:11-27. 

Accordingly, the Court grants in part Defendant‟s motion to dismiss the copyright 

infringement claims. The copyright infringement claims may proceed but only based on the 

specific copying identified in ¶ 48 of the SAC. 

3. Section 17200 Claim

Previously, the Court dismissed the § 17200 claim because, as pled, it was preempted by 

the Copyright Act. The Court, however, gave Plaintiff leave to amend “to the extent [Plaintiff] 

can allege such a claim independent of a copyright violation.” Docket No. 69, 29:7-8. In its SAC, 

Plaintiff now claims Defendant violated § 17200 via conduct beyond the infringement, namely, by 

failing to disclose to Microsoft and other of Plaintiff‟s clients that Defendant never developed its 

own optimized search results page and instead stole Plaintiff‟s code. See SAC ¶¶ 101-104. 

Plaintiff asserts that, by so conducting itself, Defendant engaged in a fraudulent and unfair 

 

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The Court reaffirms its earlier ruling that the only parts of the HTML code that are copyrightable 

are the “classes” and “comments.” To the extent Plaintiff asserts that the entirety of the HTML 

code is copyrightable, that argument is without basis. Plaintiff has taken quotes from the Court‟s 

prior order out of context. Even a modestly close read of the order plainly shows the Court is 

speaking only about class names, one of two portions of the HTML code found copyrightable, and 

not the entire code. Docket No. 69, 15:25-26 (“Because class names, a form of creative 

expression, are found in both HTML as well as in the CSS, copyright protection obtains in the 

entirety of the HTML code, even though it incorporates CSS.”). 

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business practice. Id. ¶ 107. 

As before, Defendant argues that the § 17200 is still preempted. The Court agrees. 

“Copyright preemption is both explicit and broad: 17 U.S.C. § 301(a) prohibits state-law 

protection for any right equivalent to those in the Copyright Act.”2 G.S. Rasmussen & Assoc., Inc. 

v. Kalitta Flying Serv., Inc., 958 F.2d 896, 904 (9th Cir. 1992). Only “[i]f a state law claim 

includes an „extra element‟ that makes the right asserted qualitatively different from those 

protected under the Copyright Act” is the state law claim “not preempted by the Copyright Act.” 

Altera Corp., 424 F.3d at 1089 (emphasis added). 

The Court concludes that Plaintiff‟s § 17200 claim is not qualitatively different from a 

copyright infringement claim. The § 17200 claim is comparable to a reverse passing-off claim. 

Reverse passing off occurs when one party obtains a second party‟s goods, removes the second 

party‟s name, and then markets the products under its own name. In other words, a reverse 

passing-off claim is, in essence, a misrepresentation claim which is, in effect, what Plaintiff is also 

alleging in the instant case – i.e., that Defendant failed to disclose to potential customers that it 

had used Plaintiff‟s code in its own product, marketing the product as its own. A number of courts 

have held that a reverse passing-off claim is not qualitatively different from a copyright claim and 

 

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Section 301(a), titled “Preemption with respect to other laws,” provides that 

all legal or equitable rights that are equivalent to any of the 

exclusive rights within the general scope of copyright as specified 

by section 106 in works of authorship that are fixed in a tangible 

medium of expression and come within the subject matter of 

copyright as specified by sections 102 and 103... are governed 

exclusively by this title. Thereafter, no person is entitled to any 

such right or equivalent right in any such work under the common 

law or statutes of any State.

17 U.S.C. § 301(a); see also Ryan v. Editions Ltd. W., Inc., 786 F.3d 754, 760 (9th Cir.), cert. 

denied, 136 S. Ct. 267 (2015) (“The Copyright Act expressly preempts all state law claims 

where...the state law grants „legal or equitable rights that are equivalent to any of the exclusive 

rights within the general scope of copyright.‟ 17 U.S.C. § 301(a)...„The [exclusive] rights 

protected under the Copyright Act include the rights of reproduction, preparation of derivative 

works, distribution, and display.‟”) (quoting Altera Corp. v. Clear Logic, Inc., 424 F.3d 1079, 

1089 (9th Cir. 2005)). An example of a nonequivalent right that is not preempted in state law 

claims is the enforcement of contractual rights, Altera Corp., 424 F.3d at 1089; in contrast, “[i]t is 

well settled that a [state law] claim...predicated on the theory that defendant‟s product replicates 

plaintiff‟s expressions contain no extra element and is therefore preempted.” Silverstein v. 

Penguin Putnam, Inc., 522 F. Supp. 2d 579, 608 (S.D.N.Y. 2007).

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is preempted because “[c]laims alleging misrepresentations of the ownership or origin of an idea 

do not differ from the „inherent misrepresentations that accompany unauthorized copying and 

reproduction of another's copyrighted work.‟” Gary Friedriche Enters., LLC v. Marvel Enters., 

Inc., 713 F. Supp. 2d 215, 232 (S.D.N.Y. 2009) (emphasis added). See also LaCour v. Time 

Warner, Inc., No. 99 C 7105, 2000 WL 688946, at *7 (N.D. Ill. May 24, 2000) (“Consumer 

confusion and deception, which [plaintiff] alleges here, have been held to be inherently present in 

any copyright action and are therefore not considered extra elements that qualitatively alter the 

nature of a claim where they are asserted.”) (emphasis added); Silverstein, 522 F. Supp. 2d at 609

(“The allegation that [defendant] also [affirmatively] misrepresented [plaintiff‟s work] as its own 

does not transform the claim into one qualitatively different from a copyright claim.”).

At the hearing, Plaintiff sought to escape the preemptive reach of § 301 by arguing that its 

§ 17200 claim goes beyond a reverse passing-off claim because it has alleged more than just a 

failure on the part of Defendant to disclose that it used Plaintiff‟s code. Plaintiff points in 

particular to ¶ 101 of the SAC which states as follows: “[Defendant] misrepresented to Microsoft 

– and other [of Plaintiff‟s] clients – that [Defendant] could perform services competitive with, if 

not better than, [Plaintiff‟s] offerings, and at a lower cost.” SAC ¶ 101. But ¶ 101 cannot be read 

in isolation. Paragraph 102 of the SAC gives the context for ¶ 101: “But [Defendant] failed to 

disclose and omitted that it never developed its own optimized search results pages or that it 

lacked technological capabilities to develop such optimized search results pages.” SAC ¶ 102. 

The SAC contains no other specific factual allegation suggesting the misrepresentation alleged in 

¶ 101 goes beyond Plaintiff‟s assertion that Defendant stole its code in developing its product. 

Taken together, the gist of Plaintiff‟s complaint is a reverse passing-off claim. 

Furthermore, even if some inference could be made that there was a misrepresentation not

based on reverse passing-off, Plaintiff has failed to include sufficiently specific allegations to 

make it plausible that Defendant made any such broader misrepresentation. For example, Plaintiff 

has not alleged what, if any, specific misrepresentations Defendant made about its technological 

capability other than concealing its theft of Plaintiff‟s code. There is no allegation about 

Defendant‟s misrepresentation, for instance, about the superior size and quality of its engineering 

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staff. This is a problem of pleading not only under Federal Rule of Civil Procedure 9(b), but also 

under Iqbal and Twombly under Rule 8.

Accordingly, the Court concludes that the § 17200 claim is not qualitatively different from 

the copyright infringement claims and therefore dismisses the claim, as preempted. Because the 

Court previously gave Plaintiff an opportunity to amend but it did not cure the deficiency when 

given the opportunity, the dismissal is with prejudice.

B. Motion to Strike

1. Legal Standard

Pursuant to Federal Rule of Civil Procedure 12(f), a court may strike from a pleading “an 

insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed .R.

Civ. P. 12(f). “The function of a 12(f) motion to strike is to avoid the expenditure of time and 

money that must arise from litigating spurious issues by dispensing with those issues prior to 

trial.” Whittlestone, Inc. v. Handi–Craft Co., 618 F.3d 970, 973 (9th Cir. 2010). Motions to strike

are generally disfavored. See Barnes v. AT & T Pension Ben. Plan–Nonbargained Program, 718 

F. Supp. 2d 1167, 1170 (N.D. Cal. 2010); see also Platte Anchor Bolt, Inc. v. IHI, Inc., 352 F.

Supp. 2d 1048, 1057 (N.D. Cal. 2004) (stating that, “[i]f there is any doubt whether the portion to 

be stricken might bear on an issue in the litigation, the court should deny the motion”); McRee v. 

Goldman, No. 11–CV–00991–LHK, 2012 WL 929825, at *5 (N.D. Cal. Mar. 19, 2012) 

(explaining that motions to strike are disfavored because the motions may be used as delaying 

tactics and because there is a strong policy favoring resolution on the merits).

2. “Look and Feel” Allegations

Because the Court is not granting Defendant‟s motion to dismiss in its entirety, it must 

address Defendant‟s alternative motion to strike. Defendant asserts that the Court should strike all 

allegations in the SAC referring to the “look and feel,” appearance, or design of Plaintiff‟s search 

results page. Docket No. 84, 6:12-13. According to Defendant, such allegations are irrelevant 

because – as Plaintiff has conceded – the look and feel of a website is not copyrightable. See, e.g., 

U.S. Copyright Office, Compendium of Copyright Practices (3d ed. 2014) § 1007 (noting that 

“[e]xamples of uncopyrightable material include . . .[t]he layout, format, or „look and feel‟ of a 

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website”). 

Although Plaintiff has conceded that “look and feel” is not copyrightable, that does not 

mean that allegations regarding such are thereby lacking in any relevance. As Plaintiff contends, 

they have at least some relevance as background information; more important, the allegations are 

also relevant to Defendant‟s motive for or intent in copying, which is at issue because Plaintiffs 

have included a claim for willful infringement by Defendant. The Court agrees. See Knitwaves, 

Inc. v. Lollytogs Ltd., 71 F.3d 996, 1010-11 (2d Cir. 1995) (where the defendant admitted it 

intended to copy the look and feel of only the unprotected elements of the plaintiff‟s sweaters, 

finding that this admission established at least reckless disregard of plaintiff‟s copyrights to 

support a finding of willful infringement). Further, the Court notes that the jury in this case will 

not be given a copy of the SAC (or any operative pleading) and thus any allegations about “look 

and feel” will not cause Defendant any prejudice. 

III. CONCLUSION

For the foregoing reasons, the Court grants in part and denies in part Defendant‟s motion 

to dismiss and denies the motion to strike. The § 17200 claim is dismissed with prejudice. The 

copyright claims are limited to those examples identified by Plaintiff in ¶ 48 of its SAC.

This order disposes of Docket No. 84.

IT IS SO ORDERED.

Dated: July 28, 2016

______________________________________

EDWARD M. CHEN

United States District Judge

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