Allegedly Wrong VeRO Notice of Claimed Infringement Not Actionable–Dudnikov v. MGA Entertainment

By Eric Goldman

Dudnikov v. MGA Entertainment, 2005 WL 3693829 (D. Colo. Aug. 17, 2005) [see the earlier Magistrate report]

This one just showed up on my radar screen–not sure why it took so long to appear on Westlaw. However, this is an interesting case because it adds to the sparse 17 USC 512(f) caselaw. It’s also the first case I know of that addresses the legal consequences of eBay’s VeRO program.

Plaintiffs sell various items on eBay, including fleece hats with a “Bratz applique affixed to it.” Defendant owns the IP rights in the Bratz brand and believes that the auctioning of the hats infringes their IP rights. [I don’t know the Bratz brand and I’m not sure what it means to affix an applique, but the plaintiffs believe they are protected by the First Sale doctrine–which, depending on where the applique comes from, may be a legitimate argument].

Therefore, defendant submitted a notice of claimed infringement under eBay’s VeRO program to shut down the plaintiffs’ auctions. The plaintiffs then initiated a pro se action raising, among other things, that the defendant committed perjury and violated 17 USC 512(f).

The perjury claim goes nowhere; usually there is no civil recourse for perjury. However, the 512(f) claim has some potential bite. The law applies if someone “knowingly materially misrepresents under [17 USC 512] that material or activity is infringing.” The court treat a VeRO notice of claimed infringement as a 512(c)(3) takedown notice which is thus subject to 512(f).

However, the 2004 Ninth Circuit Rossi case raised the bar on 512(f) claims, effectively defeating 512(f) claims if the copyright owner subjectively believed that infringement was taking place. Here, the defendant submitted a declaration that it had the requisite subjective belief. The plaintiffs didn’t appear to introduce any contrary evidence, so plaintiffs lose.

Based on the facts/procedural posture, I think the court got it right. But this case might further remind us that perhaps the deterrents for submitting unsupported 512(c)(3) notices are too low.