369 F. Supp. 3d 932
N.D. Cal.2019Background
- Plaintiff Michel Keck, an Indiana artist, alleges Chinese merchants sold unauthorized reproductions of her artwork on Alibaba-operated marketplaces (Alibaba.com, AliExpress, Taobao, Tmall, 1688).
- Keck submitted multiple takedown notices and then sued Alibaba.com Hong Kong Ltd., Taobao China Holding Ltd., and Zhejiang Taobao Network Co., Ltd. (collectively "Alibaba Defendants") and numerous merchant stores for copyright and trademark claims, including vicarious copyright infringement.
- Keck's First Amended Complaint asserts direct, contributory, and vicarious copyright infringement and contributory trademark claims; the vicarious copyright claim is the subject of the Motion.
- Alibaba moved for partial judgment on the pleadings under Rule 12(c), arguing Keck failed to plead the two elements of vicarious copyright infringement: (1) requisite control over direct infringers and (2) a direct financial benefit from the infringing activity.
- Keck alleges Alibaba exercises high levels of control over its marketplaces (day-to-day operations, merchant onboarding, store layout, marketing), can suspend/terminate merchants and remove listings, has proactive detection technology, received repeated notices of infringement, allowed repeat infringers to continue, and monetizes marketplace traffic (including from knock-offs).
- The court considered whether, under Iqbal/Twombly pleading standards, Keck sufficiently alleged both control and direct financial benefit and denied the Alibaba Defendants’ Rule 12(c) motion, finding the FAC adequate to state a plausible vicarious infringement claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Keck alleged the requisite control to impose vicarious liability | Keck alleges Alibaba has legal right and practical ability to stop infringement (terminate/suspend merchants, remove/modify listings, design/operate marketplaces, provide merchant guidance and marketing) and failed to police fully | Alibaba says merchants are independent; mere capacity to remove listings is insufficient (relying on Google/AdSense analogy); no contractual control over third-party listings | Court: Allegations suffice — Alibaba more akin to swap-meet operator/Napster than Google; pleaded legal right and practical ability to police and alleged failures to do so |
| Whether Keck alleged a direct financial benefit from infringement | Keck alleges Alibaba receives commissions on sales, traffic is drawn by infringing/knock-off goods, and Alibaba monetizes increased traffic; causal link between infringing listings and financial benefit | Alibaba contends Keck failed to plead causal relationship and direct financial benefit as required | Court: Allegations plausibly show a causal link and direct financial benefit at pleading stage; size of benefit immaterial |
| Whether Amazon.com (Perfect 10) precedent bars vicarious liability here | Keck distinguishes Amazon because infringement occurred on Alibaba-controlled marketplaces, not third-party sites detached from platform control | Alibaba relies on Amazon to argue limited ability to stop third-party infringement similar to Google | Court: Distinguished Amazon — direct infringement occurs on defendants’ platforms and pleaded control supports vicarious claim |
| Appropriateness of Rule 12(c) dismissal vs. later resolution | Keck: Pleading-stage suffices; factual disputes better for summary judgment/trial | Alibaba: several factual deficiencies justify dismissal now | Court: Denied 12(c); some defenses are more appropriate for summary judgment or trial on developed record |
Key Cases Cited
- A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) (vicarious liability where service had ability to terminate users and control system access)
- Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996) (swap-meet operator liability where broad contract rights enabled control over vendor activity)
- Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007) (distinguishing platforms that cannot control third-party sites from those that can; limitation on vicarious liability where infringement occurs on independent websites)
- Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) (discussing vicarious and contributory copyright liability principles)
- Williams v. Gaye, 895 F.3d 1106 (9th Cir. 2018) (defining control element: legal right and practical ability to stop or limit infringing conduct)
- Ellison v. Robertson, 357 F.3d 1072 (9th Cir. 2004) (direct financial benefit requires causal relationship between infringing activity and defendant's financial gain)
- Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657 (9th Cir. 2017) (size of benefit immaterial; focus on causal relationship between infringement and benefit)