512(f) Once Again Ensnared in an Employment Ownership Dispute–Shande v. Zoox

August 16, 2023 · by · in Copyright

DMCA Section 512(c), the notice-and-takedown provision, codifies a simple paradigm. Copyright owners are in the best position to spot and redress infringement, so they should identify alleged infringement to services and seek intervention when they see infringements. This paradigm, however, breaks down when copyright ownership is contested. In that circumstance, the takedown notice becomes a proxy battle for a larger and likely fact-dependent war over ownership, which the service in the middle isn’t in a good position to resolve.

Today’s post is about another copyright ownership dispute that spilled over into 512(f), the civil cause of action for abusive takedown notices. The litigants are an employer and former employee. The employee created works while employed, but allegedly independently, and posted the works online. The employer sent takedown notices to the hosting service for those works, claiming the works were prepared within the scope of employment and thus works-for-hire. The hosting service honored the takedown notice. Now the employee is suing over the employer’s allegedly wrongful assertion of ownership. This includes a 512(f) claim.

Unsurprisingly, 512(f) does not help the employee. The court accepts that the employer believed the works were created within the scope of employment, so the associated takedown notice wasn’t sent in bad faith. The 512(f) claim fails. So does the rest of the employee’s lawsuit.

One could argue that Section 512 worked as it should in this case. By design, it seeks to push questions over ownership to court, rather than have the intermediary service try to resolve those questions. Shande will get his day in court. But even if he prevails in the ownership dispute, 512(f) won’t help compensate him for his troubles.

Case Citation: Shande v. Zoox, Inc., 2023 WL 5211628 (N.D. Cal. Aug. 14, 2023)

MAY 2024 UPDATE: Shande successfully amended the complaint so that the 512(f) claim survived the motion to dismiss. Some of the allegations that worked:

  •  Shande claims “Zoox knew that Epic would more readily take down the Content in response to a simple allegation of copying, as opposed to a convoluted work-made-for-hire argument. . . .”
  • According to Shande, “a Zoox Director and Technical Program Manager told the company’s Associate General Counsel for IP and Technology that the Content was ‘different from what [Shande] was doing at Zoox’ and had been created using ‘old school videogame techniques.’” In addition, the company’s co-founder and Chief Technology Officer allegedly “told Shande that ‘it’s not like you broke some federal law,’ while intimating that the company’s real concern was that a competitor might utilize the Content to create a demonstration video which would facilitate its ability to obtain venture funding.”

However, Zoox anti-SLAPPed Shande’s claims for interference with contractual relations, interference with prospective economic advantage, and violation of California’s UCL, because “Numerous cases hold that sending a DMCA takedown notice is an activity protected by § 425.16” (Cites to Moonbug and Beyond Blonde) and 512(f) preempts state law claims (plus the C&D was covered by the litigation privilege). Due to the mandatory fee-shift from the anti-SLAPP motion, Shande still runs a high probability of owing Zoox more than he will receive in 512(f) damages. This case looks like an excellent candidate for a no-money settlement.

Shande v. Zoox, Inc., No. 5:22-cv-05821-BLF (N.D. Cal. May 21, 2024).

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BONUS: More 512(f) quick links from this year:

* Cinq Music Group, LLC v. Create Music Group, Inc., 2023 WL 4157446 (C.D. Cal. Jan. 31, 2023). “Courts in the Ninth Circuit have regularly held that the DMCA preempts state law claims arising out of submission of takedown notices.” 512(f) once again wipes out state law claims, even if 512(f) doesn’t apply.

* Powerwand Inc. v. Hefai Neniang Trading Co., 2023 WL 4201748 (W.D. Wash. June 27, 2023). A plaintiff wins 512(f) case on a default judgment.

* Moonbug Entertainment Ltd v. Babybus Network Technology Co., No. 21-cv-06536-EMC (N.D. Cal. July 27, 2023). Jury answered yes to the question: “In the March 20, 2023 Counternotification regarding the Yes Yes Playground video on Super JoJo’s Portuguese language channel, did Babybus knowingly and materially misrepresent that material was removed or disabled from YouTube by mistake or misidentification?” The jury awarded Moonbug $10k for its 512(f) win. A rare 512(f) jury victory.

Prior Posts on Section 512(f)

* Surprise! Another 512(f) Claim Fails–Bored Ape Yacht Club v. Ripps
* You’re a Fool if You Think You Can Win a 512(f) Case–Security Police and Fire Professionals v. Maritas
* 512(f) Plaintiff Must Pay $91k to the Defense–Digital Marketing v. McCandless
* Anti-Circumvention Takedowns Aren’t Covered by 512(f)–Yout v. RIAA
* 11th Circuit UPHOLDS a 512(f) Plaintiff Win on Appeal–Alper Automotive v. Day to Day Imports
* Court Mistakenly Thinks Copyright Owners Have a Duty to Police Infringement–Sunny Factory v. Chen
* Another 512(f) Claim Fails–Moonbug v. Babybus
* A 512(f) Plaintiff Wins at Trial! 👀–Alper Automotive v. Day to Day Imports
* Satirical Depiction in YouTube Video Gets Rough Treatment in Court
* 512(f) Preempts Tortious Interference Claim–Copy Me That v. This Old Gal
* 512(f) Claim Against Robo-Notice Sender Can Proceed–Enttech v. Okularity
* Copyright Plaintiffs Can’t Figure Out What Copyrights They Own, Court Says ¯\_(ツ)_/¯
* A 512(f) Case Leads to a Rare Damages Award (on a Default Judgment)–California Beach v. Du
* 512(f) Claim Survives Motion to Dismiss–Brandyn Love v. Nuclear Blast America
* 512(f) Claim Fails in the 11th Circuit–Johnson v. New Destiny Christian Center
* Court Orders Rightsowner to Withdraw DMCA Takedown Notices Sent to Amazon–Beyond Blond v. Heldman
* Another 512(f) Claim Fails–Ningbo Mizhihe v Doe
* Video Excerpts Qualify as Fair Use (and Another 512(f) Claim Fails)–Hughes v. Benjamin
* How Have Section 512(f) Cases Fared Since 2017? (Spoiler: Not Well)
* Another Section 512(f) Case Fails–ISE v. Longarzo
* Another 512(f) Case Fails–Handshoe v. Perret
* A DMCA Section 512(f) Case Survives Dismissal–ISE v. Longarzo
* DMCA’s Unhelpful 512(f) Preempts Helpful State Law Claims–Stevens v. Vodka and Milk
* Section 512(f) Complaint Survives Motion to Dismiss–Johnson v. New Destiny Church
* ‘Reaction’ Video Protected By Fair Use–Hosseinzadeh v. Klein
* 9th Circuit Sides With Fair Use in Dancing Baby Takedown Case–Lenz v. Universal
* Two 512(f) Rulings Where The Litigants Dispute Copyright Ownership
* It Takes a Default Judgment to Win a 17 USC 512(f) Case–Automattic v. Steiner
* Vague Takedown Notice Targeting Facebook Page Results in Possible Liability–CrossFit v. Alvies
* Another 512(f) Claim Fails–Tuteur v. Crosley-Corcoran
* 17 USC 512(f) Is Dead–Lenz v. Universal Music
* 512(f) Plaintiff Can’t Get Discovery to Back Up His Allegations of Bogus Takedowns–Ouellette v. Viacom
* Updates on Transborder Copyright Enforcement Over “Grandma Got Run Over by a Reindeer”–Shropshire v. Canning
* 17 USC 512(f) Preempts State Law Claims Over Bogus Copyright Takedown Notices–Amaretto v. Ozimals
* 17 USC 512(f) Claim Against “Twilight” Studio Survives Motion to Dismiss–Smith v. Summit Entertainment
* Cease & Desist Letter to iTunes Isn’t Covered by 17 USC 512(f)–Red Rock v. UMG
* Copyright Takedown Notice Isn’t Actionable Unless There’s an Actual Takedown–Amaretto v. Ozimals
* Second Life Ordered to Stop Honoring a Copyright Owner’s Takedown Notices–Amaretto Ranch Breedables v. Ozimals
* Another Copyright Owner Sent a Defective Takedown Notice and Faced 512(f) Liability–Rosen v. HSI
* Furniture Retailer Enjoined from Sending eBay VeRO Notices–Design Furnishings v. Zen Path
* Disclosure of the Substance of Privileged Communications via Email, Blog, and Chat Results in Waiver — Lenz v. Universal
* YouTube Uploader Can’t Sue Sender of Mistaken Takedown Notice–Cabell v. Zimmerman
* Rare Ruling on Damages for Sending Bogus Copyright Takedown Notice–Lenz v. Universal
* 512(f) Claim Dismissed on Jurisdictional Grounds–Project DoD v. Federici
* Biosafe-One v. Hawks Dismissed
* Michael Savage Takedown Letter Might Violate 512(f)–Brave New Media v. Weiner
* Fair Use – It’s the Law (for what it’s worth)–Lenz v. Universal
* Copyright Owner Enjoined from Sending DMCA Takedown Notices–Biosafe-One v. Hawks
* New(ish) Report on 512 Takedown Notices
* Can 512(f) Support an Injunction? Novotny v. Chapman
* Allegedly Wrong VeRO Notice of Claimed Infringement Not Actionable–Dudnikov v. MGA Entertainment