255 F. Supp. 3d 812
N.D. Ill.2017Background
- GC2 creates artwork/videos for slot and wagering games and licensed IGT NV to use that artwork on IGT physical gaming platforms under a multi-amendment agreement (2003–2007) that reserved ownership of independently developed IP to its creator and granted IGT certain software and patent ownership rights and a per-unit royalty to GC2.
- After the relationship ended, IGT and its subsidiary DoubleDown distributed IGT games (including titles containing GC2 artwork) online via DoubleDown Casino and through third-party publishers Masque and WD Encore without licenses from GC2.
- Masque and WD Encore sell downloadable and physical copies of IGT games to end users under end-user license agreements (EULAs) that license (not sell) the software and permit licensors to terminate and pursue users for breaches.
- GC2 sued IGT, Masque, WD Encore, and end-user John Does alleging direct, contributory, and vicarious copyright infringement; a DMCA false copyright management information (CMI) claim; and an Illinois consumer fraud claim. Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6).
- Central disputes: (1) whether GC2 owns the copyrights to the disputed artwork given the agreement; (2) whether DoubleDown’s website and omission of GC2 trademarks state a DMCA CMI claim; (3) whether Masque and WD Encore can be vicariously liable for end-user infringement given control and financial benefit; (4) whether GC2 pleaded a viable consumer-fraud claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Copyright ownership of artwork | GC2: agreement leaves ownership of independently developed IP (including copyrights) with GC2 | IGT: agreement’s §4.2 gives IGT ownership of copyrights in GC2 projects incorporated into IGT platform | Court: §4.1 and other terms unambiguously preserve GC2 ownership of its artwork; §4.2 applies to software, not artwork — GC2’s standing survives dismissal |
| DMCA CMI — website terms of use asserting ownership | GC2: DoubleDown’s terms claim ownership/licensure of site content and are false as to GC2 works | IGT: Terms are boilerplate not “conveyed in connection with” works; omission of trademark is not CMI removal | Court: Terms-of-use claim dismissed for lack of “conveyed in connection with” the works; claim based on omission/alteration of GC2 trademark survives at this stage (intent argument forfeited) |
| DMCA CMI — omission/alteration of trademark on displayed works | GC2: omission or replacement of GC2 trademark on displayed artwork alters/removes CMI and is actionable | IGT: DMCA does not cover trademark omission or require adding authorship; no intent to alter CMI by IGT | Court: Trademark used to signal authorship can be CMI; omission can state a DMCA claim; plausibly pleaded intent not resolved on motion to dismiss |
| Illinois Consumer Fraud Act (ICFA) claim | GC2: DoubleDown’s misrepresentation that it owns content exposed consumers to liability; consumers relied on terms of use; relief protects consumers | IGT: No deceptive act, no intent, no proximate consumer harm | Court: ICFA claim adequately pleaded — GC2 shows nexus to consumers and consumer-protection interest |
| Vicarious copyright liability of Masque and WD Encore | GC2: EULAs reserve licensors’ ownership and give right to terminate/enforce; defendants profit by selling games containing GC2 artwork | Masque/WD Encore: No ongoing control over users; no direct financial benefit tied to infringement | Court: Allegations suffice — defendants allegedly had right/ability to supervise (EULA termination/enforcement) and a direct financial benefit (sales and use of artwork as consumer draw); vicarious claims survive dismissal |
| Rule 8(a) sufficiency | GC2: complaint factual and organized; length due to multiple defendants/products | IGT: complaint unduly long, repetitive, contains conclusions | Court: Complaint meets Rule 8(a); not dismissed for length or repetition |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for complaints)
- Camasta v. Jos. A Bank Clothiers, Inc., 761 F.3d 732 (7th Cir. 2014) (12(b)(6) dismissal standard)
- Pers. Keepsakes, Inc. v. Personalizationmall.com, Inc., 975 F. Supp. 2d 920 (N.D. Ill. 2013) (DMCA CMI “conveyed in connection with” analysis)
- Stevens v. CoreLogic, Inc., 194 F. Supp. 3d 1046 (S.D. Cal. 2016) (failure to state false CMI where defendant’s copyright notice appeared on same webpage)
- Ward v. Nat’l Geographic Soc., 208 F. Supp. 2d 429 (S.D.N.Y. 2002) (false CMI dismissal where copyright notice was on printed pages)
- Agence France Presse v. Morel, 769 F. Supp. 2d 295 (S.D.N.Y. 2011) (displaying images without author attribution can support DMCA claim)
- Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657 (9th Cir. 2017) (elements of vicarious copyright liability)
- Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996) (right to terminate vendors supports vicarious liability)
- A&M Records, Inc. v. Napster, 239 F.3d 1004 (9th Cir. 2001) (service provider vicarious liability where control and financial benefit exist)
- Ellison v. Robertson, 357 F.3d 1072 (9th Cir. 2004) (direct financial benefit inquiry for vicarious liability)
- Narducci v. Moore, 572 F.3d 313 (7th Cir. 2009) (arguments raised first in reply may be forfeited)
- Bausch v. Stryker Corp., 630 F.3d 546 (7th Cir. 2010) (permissible to hypothesize facts consistent with complaint in response to motion to dismiss)