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Live Face on Web, LLC v. Howard Stern Productions

March 17, 2009


The opinion of the court was delivered by: McLaughlin, J.


Live Face on Web, LLC ("LFOW") alleges that the defendants have infringed its copyright in a proprietary software that allows a company to display a "live" salesperson or spokesperson superimposed on the company's website. According to LFOW, Cameo HD, with the knowledge, assistance, and consent of the individual defendants, Robert P. Perna, Frederick A. Horowitz, Douglas Drossman, and Brian Sheil (collectively, "the Cameo defendants"), misappropriated LFOW's software and offered it to Howard Stern Productions, Inc. ("HSP") for use on HSP's website. HSP then displayed on its website video presentations of Howard Stern Show cast members, which were allegedly powered by LFOW's proprietary software, without purchasing or licensing the software from LFOW.

In addition to bringing various claims against the Cameo defendants, LFOW has sued HSP for contributory copyright infringement (Count II), vicarious copyright infringement (Count IV), unjust enrichment (Count IX), and civil conspiracy (Count XI).*fn1 HSP has moved to dismiss these claims. The Court will grant HSP's motion with respect to LFOW's claims of contributory copyright infringement, unjust enrichment, and civil conspiracy, but will deny the motion with respect to LFOW vicarious copyright infringement claim.

I. Facts*fn2

In October 2007, LFOW registered the copyright for software that allows companies to display a "walking" and "talking" personal host who introduces a website to an online visitor. This spokesperson can be configured to explain a company's products or services and to direct a visitor's attention to a particular product or aspect of the website. The software is powered by a video streaming software that LFOW licenses to businesses and individuals throughout the United States. According to the complaint, LFOW did not authorize the defendants to use the software. Compl. ¶¶ 24, 27, 29, 59, 114.

HSP is a business entity owned by Howard Stern. HSP develops and produces entertainment content distributed to paying customers through a Sirius Satellite Radio show ("the Howard Stern Show"), as well as "on-demand" television programming available to cable and satellite television subscribers ("Howard TV") and an interactive website ("the Howard Stern website"). According to LFOW, all of these media mutually reinforce one another: the website promotes the Howard Stern Show and Howard TV; Howard Stern Show events are frequently uploaded to the Howard Stern website; subscribers to the Howard Stern Show are invited to the website, and in turn, subscribers to the website receive free access to the Sirius online media player, Howard Stern video clips, and additional features. Id. ¶¶ 31-33.

At some point, HSP began displaying video presentations of Howard Stern Show cast members on the Howard Stern website. These presentations were configured to appear within seconds after a visitor came upon the website, and were designed to draw and prolong the visitor's attention to the website and to other Howard Stern media promoted on the website. According to the complaint, the presentations increased the amount of time users would spend on the website when they visited.*fn3 The presentations also enhanced visitors' online experience and reinforced and advanced the brand and image of the Howard Stern Show and HSP's products and services.*fn4 LFOW also alleges that HSP derives substantial advertising revenue tied directly to the volume of traffic it attracts to the website. Id. ¶¶ 34-36, 45, 89.

According to LFOW, the spokesperson video presentations on the Howard Stern website were the product of a collaborative effort between HSP and the Cameo defendants. Specifically, Cameo HD, with the knowledge, assistance, and consent of the individual defendants, offered technology to HSP which had been knowingly misappropriated from LFOW.*fn5 The complaint further alleges that HSP and the Cameo defendants jointly arranged to and did record video footage of Howard Stern Show personalities, digitized the footage, and caused the files to be uploaded to the Howard Stern website. HSP also, through its duly authorized agents, embedded a hyperlink on the Howard Stern website allowing the presentations to be displayed each time the website was visited by a user. As a result, every time a user visited the site, the website automatically executed or allowed an unauthorized copy of the software to be distributed or copied onto each visitor's personal computer. According to LFOW, HSP had control over the technology allowing the presentations to be so displayed and copied. Id. ¶¶ 35, 41, 47-49.

Upon discovering the presentations on the Howard Stern website, LFOW sent a cease and desist letter to HSP and Sirius, demanding that HSP immediately and permanently cease and desist from all copying, use, and distribution of the LFOW software and/or all variations thereof. LFOW later learned that, in response to the letter, HSP disabled the hyperlink allowing users to access the presentations on the website. Compl. ¶¶ 52-53.

II. Analysis

LFOW has brought claims against HSP under both federal copyright law and Pennsylvania common law. It alleges that HSP is liable as a contributory and vicarious copyright infringer for the Cameo defendants' unlawful misappropriation of the LFOW software. It further alleges that HSP has been unjustly enriched by the unauthorized use of its software, and that HSP is liable for engaging in a civil conspiracy with the other defendants. HSP argues that the copyright claims should be dismissed for failure to state a claim, and that the state law claims should be dismissed as preempted by the Copyright Act. The Court will first discuss LFOW's copyright claims, and will then turn to LFOW's state law claims.

A. Copyright Claims

Courts recognize two types of secondary or indirect liability for copyright infringement: contributory infringement and vicarious infringement. See Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930 (2005). LFOW has brought claims for secondary liability against HSP under both doctrines.

1. Contributory Infringement

To state a claim of contributory copyright infringement, a plaintiff must allege: (1) direct copyright infringement by a third party; (2) knowledge of the third-party infringement; and (3) a material contribution to the infringement. Columbia Pictures Indus., Inc. v. Redd Horne, Inc., 749 F.2d 154, 160 (3d Cir. 1984). Here, HSP disputes only the second element of LFOW's claim. It asserts that LFOW's complaint is "manifestly devoid of a single fact" to suggest that HSP knew or should have known of the Cameo defendants' direct infringement, and that ...

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