Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_11-cv-05385/USCOURTS-cand-3_11-cv-05385-6/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

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MINDEN PICTURES, INC.,

Plaintiff,

 v.

PEARSON EDUCATION, INC., et al.,

Defendants. /

No. C 11-05385 WHA

ORDER GRANTING IN PART

AND DENYING IN PART

MOTION FOR LEAVE TO FILE

THIRD AMENDED COMPLAINT

AND VACATING HEARING

INTRODUCTION

In this copyright action involving stock photos used in educational textbooks, plaintiff

seeks leave to file a third amended complaint. For the reasons explained below, plaintiff’s

motion is GRANTED IN PART AND DENIED IN PART. 

STATEMENT

The background of plaintiff’s efforts to plead its case is discussed at length in a prior

order (Dkt. No. 39). Plaintiff now seeks leave to amend its complaint for the third time. The

proposed amendments primarily pertain to plaintiff’s wish to add a claim for contributory

copyright infringement by defendant resulting from defendant’s transmission and distribution of

infringing works to third parties. 

Plaintiff also moves to add allegations concerning ancillary and custom publications, and

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 to remove the “John Doe Printer” defendants. This aspect of the motion is unopposed by

defendant. 

ANALYSIS

Under Rule 15, leave to amend should be given when justice so requires. The underlying

purpose of Rule 15 is to facilitate decisions on the merits, rather than on the pleadings or

technicalities. United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981). In the absence of an

apparent reason, such as undue delay, bad faith, undue prejudice, or futility of amendment, leave

should be “freely given.” Foman v. Davis, 371 U.S. 178, 182 (1962). In assessing these factors,

all inferences should be made in favor of granting the motion. Griggs v. Pace Am. Group, Inc.,

170 F.3d 877, 880 (9th Cir. 1999). 

Nevertheless, “when a district court has already granted a plaintiff leave to amend, its

discretion in deciding subsequent motions to amend is ‘particularly broad.’” Chodos v. West

Publ’g Co., 292 F.3d 992, 1003 (9th Cir. 2002). A court does not abuse its discretion in denying

a motion to amend a complaint when the movant presents no new facts but only new theories,

and provides no satisfactory explanation for his failure to develop his contentions originally. 

Vincent v. Trend Western Tech. Corp., 828 F.2d 563, 570–71 (9th Cir. 1987). 

Rule 16(b) requires that the time to amend the pleadings be limited by a scheduling order. 

A party seeking to amend after the date set in a scheduling order must first show “good cause.” 

FRCP 16(b)(4). 

1. SUBJECT-MATTER JURISDICTION.

As a threshold matter, defendant contends that the Court lacks subject-matter jurisdiction

over plaintiff’s proposed claims for contributory infringement based on the actions of third

parties outside the United States. This order disagrees. 

It is a well-established principle that, as a general rule, the Copyright Act has no

extraterritorial effect. L.A. News Serv. v. Reuters Television Int’l, Ltd., 149 F.3d 987, 990 (9th

Cir. 1998). There is an exception known as the predicate act doctrine whereby a plaintiff can

collect damages for foreign copyright violations that are directly linked to the domestic

copyright violation. Id. at 991–992. Defendant contends this exception is inapplicable because

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the predicate act doctrine “applies to damages arising from infringement within the United

States; it does not permit a plaintiff to assert claims for contributory infringement arising from

direct infringement that occurs outside the United States” (Opp. 11 (emphasis in original)). 

There is a split in authority as to whether the extraterritoriality question is jurisdictional

in nature, or should instead be analyzed in terms of whether the extraterritorial acts state a claim

for infringement. Litecubes, LLC v. Northern Light Prods., Inc., 523 F.3d 1353, 1367–68 (Fed.

Cir. 2008). Assuming, arguendo, that it is jurisdictional, this order finds that subject-matter

jurisdiction exists. 

Defendant misreads the holding of the controlling precedent in this circuit, L.A. News

Services v. Reuters Television International, Ltd. Although the holding in that decision did not

specifically refer to “contributory infringement,” our court of appeals was squarely faced with a

contributory infringement claim involving foreign infringements and predicate domestic

infringement. In that context, our court of appeals held that the plaintiff was “entitled to recover

damages flowing from exploitation abroad of the domestic acts of infringement committed by

defendants.” 149 F.3d at 992. 

The present action is analogous. Here, plaintiff’s proposed third amended complaint

alleges that “[u]pon information and belief, Pearson’s unauthorized reproduction and distribution

to the Third Parties took place in the United States” (Dkt. No. 49-1 ¶ 31). Thus, plaintiff alleges

a domestic predicate act of infringement. The third-party extraterritorial acts flow from this

infringement because plaintiff alleges that the foreign third parties then published local reprints

of the domestically-infringing works (id. ¶ 32). 

2. UNDUE DELAY AND PREJUDICE.

The parties exchanged initial disclosures on February 9, 2012 (Dkt. No. 41) and full

discovery began by at least May 4 (due to an order stating that discovery should begin upon

resolution of defendant’s motion to dismiss). Plaintiff filed the instant motion to amend more

than six months later, on the last day permitted for pleading amendments in the case

management scheduling order. Defendant complains that this constitutes undue delay, and that it

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would be prejudiced by the amendment both because of the additional discovery burdens, and

because adding the new claim would delay resolution of the existing claims. 

Plaintiff’s arguments against prejudice are unpersuasive. The contributory infringement

claim, as pled in the proposed amendments, does not pertain to a single, or even a handful of

third parties. The proposed amendment asserts that defendant facilitates international

distribution through its own international rights management group. This group “arranges for

approximately 4,000 third-party licenses annually, which includes translations in approximately

50 languages read around the world” (Dkt. No. 49-1 ¶ 30). There is no indication that the “third

parties” implicated in the amendments will be limited to any reasonable number of entities. This

creates the potential for a massive expansion of the scope of discovery — with international

implications — and an onerous resulting burden on defendant. 

Plaintiff asserts that this discovery would not result in additional delay given that the

non-expert discovery cutoff is April 30. This date is less than four months from the date of the

present order. Given that the parties have not yet completed what plaintiff terms the “opening

round” of discovery after seven months, plaintiff’s optimism is unwarranted. Defendant, for its

part, faces a choice between heavy discovery burdens within a narrow window or additional

delay to complete discovery. Prejudice to the defendant seems very likely. Against this

backdrop, plaintiff’s timing of the proposed amendments can only be seen as a dilatory tactic. 

Plaintiff fails to provide an explanation for why it didn’t plead contributory infringement

in prior versions of its complaint. Instead, plaintiff’s justification for the amendments is

contemporaneous. Plaintiff asserts that defendant has refused to provide discovery related to

contributory infringement because it was not pled in the complaint. Plaintiff seeks to amend in

order to make this discovery relevant and proceed with its document requests. Put differently,

plaintiff seeks to amend its complaint so that it can conduct a discovery fishing expedition. The

clear objective of the amendments would be to shore up the amended allegations, which were

earlier thinly pled “on information and belief.” 

There is no apparent reason why plaintiff did not plead contributory infringement in the

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prior versions of its complaint. Given the likely prejudice to defendant, plaintiff will not be

permitted an additional chance to amend at this late stage. This is not a situation where

documents produced during discovery made a party aware of potential claims. Plaintiff was

clearly aware of this potential claim for contributory infringement at the time it propounded its

unanswered discovery requests. The appropriate time to have pled it was at the outset of the

action — or at least at the time plaintiff filed its second amended complaint. 

Plaintiff points out that the filing of its motion for leave to amend fell within the window

specified in the case management scheduling order. Given that plaintiff filed its motion after the

courthouse closed on the last possible day, plaintiff’s position is not compelling. Nor can

plaintiff shift the blame to defendant because of settlement overtures sent via email. The case

management scheduling order specifically states that the parties should “not ask for any

extensions on the ground of settlement discussions or on the ground that the parties experienced

delays in scheduling settlement conferences” (Dkt. No. 44 at ¶ 13). By at least mid-May, it was

plaintiff’s responsibility to plow ahead with discovery. Plaintiff chose not to do so. 

Plaintiff’s reliance on the pending action Carr Clifton v. Pearson Education, Inc., No.

11-3640 (N.D. Cal.) (Judge Davila), is likewise misplaced. In that action, the plaintiff was

permitted to file a first amended complaint where the stipulated amendments were limited to the

issue of ancillary and custom editions (see No. 11-3640, Dkt. Nos. 63, 65). The issue of

international contributory infringement was not present. 

3. ANCILLARY AND CUSTOM PUBLICATIONS, AND JOHN DOE PRINTER

DEFENDANTS.

Defendant does not oppose plaintiff’s motion insofar as it seeks to add allegations

concerning ancillary and custom publications, and to remove John Doe Printer defendants. 

Accordingly, plaintiff’s motion to amend regarding these issues (deletion of ¶¶ 4, 36–38, and

modification of ¶¶ 24, 27) is GRANTED. 

CONCLUSION

Plaintiff’s motion for leave file a third amended complaint is GRANTED IN PART AND

DENIED IN PART. Plaintiff shall file its third amended complaint containing only the

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 amendments permitted by subsection three of this order by JANUARY 9 AT NOON, and the

answer thereto is due by JANUARY 23 AT NOON. The January 10 hearing is VACATED. 

IT IS SO ORDERED.

Dated: January 7, 2013. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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