NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

_______________ No. 23

- 2382

___________ DAWN CUTILLO; INFINITY HEALTH LLC, Appellants

v. DAVID CUTILLO; INFINITY HEALTH ADVISORS LLC
IHA DISTRIBUTION, LLC (Intervenor in District Court)

_______________ On Appeal from the United States District Court For the Eastern District of Pennsylvania (D.C. No. 5

- 21

- cv - 02787) District Judge: Honorable John M. Gallagher

_______________ Submitted Und er Third Circuit L.A.R. 34.1(a) June 27, 2024 Before: JORDAN, SMITH, Circuit Judges and BUMB, * Chief District Judge. (Filed : July 1 , 2024 )

* Honorable Renée Marie Bumb, Chief District Judge of the United States District Court for the District of New Jersey, sitting by designation.2 _______________ OPINION ∗ ∗

_______________ JORDAN, Circuit Judge

. Dawn and David Cutillo are siblings and former business partners

. Dawn’s
company , Infinity Health LLC (“Infinity Health”) , entered into a licensing agreement with Infinity Health Advisors LLC (“IHA ” ), of which David owns eighty percent

. 1 The license relat es to the franchising of a natural hormone therapy program that Dawn developed. Dawn now challenge s the District Court’s dismissal of her copyright claim against IHA and the Court’s holding that the parties had entered into an exclusive license agreement. 2 Because he r arguments lack merit, we will affirm.
I. B ACKGROUND Beginning in 2009, Dawn developed “natural hormone balancing methodologies [,] ” which she copyrighted in a book called “The Hormone Shift” and in corresponding instructional materials ( together, the “Works”). (J.A

. at 56.) She formed Infinity Health to commercialize the “Becoming Balanced” or “BeBalanced” hormone

∗ ∗ This disposition is not an opinion of the full court and, pursuant to I.O.P. 5.7, does not constitute binding precedent.

1 Intending no undue familiarity, we use the parties’ first names for ease in distinguishing them.

2 Unle ss otherwise specified, we refer to both Dawn and Infinity Health as “Dawn” and in the singular , for ease for reference when referring to the claims in this suit.3 therapy program (the “System”) that she created , and she granted to Infinity Health an “oral, implied license” to the Works

. ( Opening Br. at 2; J.A. at 24 , 33

. ) Around 2014, Dawn and David formed IHA to pursue franchising

. 3 Dawn, through Infinity Health, licensed the copyrights in and to the Works to IHA, which license was memorialized in the operative “Exclusive Master Distributor and License Agreement” ( the “License Agreement”)

. ( J.A. at 24, 34

- 35

. ) Section 1(c) of the License Agreement states that IHA has “ the perpetual, exclusive, royalty

- free right to use the Sy stem in order to continue managing and operating a franchise system ... in the manner determined by Franchisor [ i.e., IHA 4 ] and subject to the terms and conditions set forth [] in this Agreement.” 5 (J.A. at 25.) The License Agreement also contemplates that IHA “ may require Owner [i.e., Infinity Health 6 ] to provide consultation services with regard to refining and developing all aspects of the [p]roducts, [s]ervices, and System.” (J.A. at 26.) The License

3 Dawn owns fifteen percent of the membership units in IHA, I nfinity H ea lth owns five perce nt, and David owns the remaining eighty percent.

4 Under the License Agreement, IHA is the “ Franchisor .” ( J.A. at 24. )

5 The “ License Agreement makes no references to

... the Works [.]” ( Opening Br. at 10.) It only refers to the “System.” The Second Amended Complaint, however, explains that “[the] Exclusive Master Distributor and License Agreement

... reflect [s] [Infinity Health]’ s sublicense to IHA to make use of the Works and other assoc iated intellectual property [.]” (J.A. at 34

- 35.) Therefore, Dawn allege s that the System encompasses the copyrighted Works at issue.

6 Infinity Health is designated in the License Agreement as the “ Owner. ” ( J.A. at 24. )4 A greement’s termination pro vision in Section 9(a) grants Infinity Health the right to “terminate the license described in Section 1(c) ... in the event that [IHA] fails to properly support the BeBalanced franchise system by requiring its franchisees to administer the System and utiliz e the [p] roducts and [s] ervices according to the reasonable specifications established by Owner .” (J.A. at 28.) Following the License Agreement ’s execution , Dawn “bec [ a ] me aware” that IHA “ha[d] been creating, copying, distributing and displaying unaut horized derivative versions of the Works.” (J.A. at 35.) Dawn objected via email to those changes, but IHA paid her no heed , she says, and prevented her from having access to the materials created

. As a result of th ose and other disputes , Dawn and Infinity Health sued David, IHA, and intervenor IHA Distribution, LLC , alleging eleven claims

. The d efendants filed

a partial motion to dismiss, which the Court granted in part and denied in part. As

r elevant here, t he Court held that IHA’s “exc lusive license to ‘the Works’ and related materials [wa]s a viable defense against [ the ] claim of copyright infringement and the claim must be dismissed.” (J.A. at 59.) Dawn filed a motion for partial reconsideration of the Court’s dismissal of Count
O ne, and that motion was summarily denied. The Court then granted summary judgment in part to the defendants and, declining to exercise supplemental jurisdiction, dismissed the remaining state law claims and counterclaims without prejudice

. T his timely appeal followed. Before us, Dawn challenge s only the District Court’s dismissal of Count One of the Second Amended Complaint for Copyright Infringement under 17 U.S.C. § 101 et
seq.5 II. D ISCUSSION 7 Dawn argue s that the Dist rict Court erred in hold ing that the License Agreement

was an ex cl usive copyright agreement and that , in any event , IHA exceeded the scope of the license by violating Section 9(a) of the agreement.

“ To establish a claim of copyright infringement, a plain tiff must show: ( 1) ownership of a valid copyright; and (2) unauthorized copying of original elements of the plaintiff ’ s work.” Tanksley v. Daniels , 902 F.3d 165, 172

- 73 (3d Cir. 2018) (internal quotation marks omitted)

. Granting a license to use the copyright materials defeats a claim for copyright infringement , so long as the license e operates within the scope of the license

. See Sony Corp. v. Universal City Studios, Inc. , 464 U.S. 417, 433 (1984) (“[A] nyone who is authorized by the copyright owner to use the copyrighted work in a way specified in the statute

... is not an infringer of the copyright with respect to such

use. ”) ; cf. MacLean Assocs., Inc. v. Wm. M. Mercer

- Meidinger

- Hansen, Inc. , 952 F.2d 769, 779 (3d Cir. 1991) (holding that “ the licenso r can still bring suit for copyright infringement if the licensee ’ s use goes beyond the scope of the nonexclusive license ”). The crux of Dawn’s copyright claim is that IHA and David exceeded the scope of the license: “ [D]efendants have engaged in the unauthorized creation[,] ... copying,

7 The District Court had jurisdiction under 2 8 U.S.C. § 13 31. We have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review over the district court’s grant of a motion to dismiss , Delaware Nation v. Pennsylvania , 446 F.3d 410, 415 (3d Cir. 2006) , accepting all well

- pled allegations in the complaint as true and drawing all reasonable inferences in favor of the non

- moving party. In re Rockefeller Ctr. Props. , Inc. Sec. Litig. , 311 F.3d 198, 215 (3d Cir. 2002).6 distribution and display of [] derivative versions of the Works[.]” (J.A. at 46.) But t he License Agreement does not forbid IHA from creating, copying, distributing , or displaying derivative variations of the Works

. I t contains no limits at all. It grant s to IHA “ the perpetual, exclusive, royalty

- free right to use the System

... in the manner determined by [it] and subject to the terms and conditions set forth ” in th e License Agreement. (J.A. at 25

. ) Th ere are no terms and conditions limiting that use. The only “ term or conditio n” that Dawn attempts to point to in the License Agreement is the termination provision in Section 9(a), which provides th at termination of the license may occur “ in the event that [IHA] fails to properly support the BeBalanced franchise system by requiring its franchisees to administer the System and utilize the Products and Services according to the reasonable specifications established by [Infinity Health].” (J.A. at 28.) She does not, however, make a n y allegation that IHA has failed to “properly support the ... franchise system [

. ] ” (J.A. at 28.) Further, t he License Agreement itself contemplates that IHA would “refin[e] and develop[] all aspects of the ... System.” (J.A. at 26 ; see also J.A. at 25 (granting IHA the “right to use the System ... in the manner determined by [ IHA .]” (emphasis added)) .) Sh e has thus fail ed to state a clai m , and, a ccordingly, t he District Court did not err in dismissing Count One of the
S econd A mended C omplaint

. 8

8 As “ we may affirm on any ground supported by the record, ” Laurel Gardens, LLC v. Mckenna , 948 F.3d 105, 116 (3d Cir. 2020) , we need not decide whether the License Agreement was an exclusive license.7 III. C ONCLUSION For the foregoing reasons, we will affirm the District Court’s judgment

.