Malibu Media, LLC v. Doe, 3:16-cv-00786

Background

Malibu Media (X-Art.com) sued Kevin Peterson for direct copyright infringement, alleging he used BitTorrent to download and distribute dozens of its works; Malibu pled 115 alleged infringements within the three‑year limitations period.
Peterson answered, asserted eight affirmative defenses, and filed a declaratory‑judgment counterclaim seeking a declaration of non‑infringement.
Malibu moved to dismiss the counterclaim as redundant and to strike multiple affirmative defenses under Fed. R. Civ. P. 12(b)(6) and 12(f).
Peterson opposed, arguing the counterclaim protects against Malibu voluntarily dismissing claims to avoid fee exposure and that several defenses (implied license, mitigation, waiver, estoppel) are plausibly pleaded.
The district court declined to dismiss the counterclaim (exercising discretion to allow it to remain) and resolved each affirmative defense under the plausibility standard (Twombly/Iqbal).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether to dismiss Peterson’s declaratory‑judgment counterclaim as redundant	Counterclaim merely restates issues the court will decide on Malibu’s infringement claim; should be dismissed	Counterclaim protects defendant from Malibu voluntarily dismissing meritsless claims to avoid fee exposure; dismissal would prejudice defendant	Denied — court exercised discretion to keep counterclaim alive to preserve potential fee remedies
Unclean hands defense	Defense is vague and alleges only general unlawful conduct unrelated to the copyrights at issue	Alleges illegality in creation of works and in monitoring/collection of IP data	Struck — unclean hands requires misconduct directly related to the subject of the infringement action
Implied license defense	Fails to plead the Ninth Circuit three‑part test (Asset Mktg./Effects) for an implied license	Other courts have allowed similar implied‑license theories; Asset Marketing not necessarily exclusive test	Not struck — pleaded plausibly enough to survive strike motion
Laches defense	Laches is not available to bar claims within the statutory limitations period (and copyright has a 3‑year look‑back)	Plaintiff’s prior knowledge and delay warrant laches to bar older claims	Struck — Petrella and Ninth Circuit law preclude laches as a bar to timely statutory claims
Excessive damages (constitutional challenge)	The possibility of large statutory damages does not constitute an affirmative defense; constitutional excessiveness is a damages issue, not a pleading defense	High statutory damages (potentially millions) render the claim constitutionally excessive	Struck — premature as an affirmative defense; constitutional challenges relate to eventual damages calculation
Failure to mitigate damages	Plaintiff allegedly seeded works and failed to stop ongoing sharing, so mitigation defense is plausible	Plaintiff says mitigation not available where plaintiff elects statutory damages; lacks support	Not struck — courts divided; pleaded facts permit the defense to proceed
Waiver (by seeding works)	Seeding inconsistent with Malibu’s asserted protective enforcement posture; Malibu’s prior lawsuits don’t foreclose waiver defense	Malibu argues its enforcement history shows intent to protect rights, not relinquish them	Not struck — seeding can plausibly show intent to relinquish distribution limits
Estoppel (based on seeding/entrapment)	Alleged seeding and inducement to rely plausibly satisfy estoppel elements	Plaintiff says conclusory and inconsistent with other allegations	Not struck — allegations sufficiently plausible to survive motion
Statute of limitations affirmative defense	Plaintiff alleges all infringements within 3 years, so SOL defense fails	Defendant asserts prior discovery of some infringements outside 3 years	Struck — separate‑accrual rule means claims within 3 years survive; SOL defense insufficient

Key Cases Cited

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim, not mere conclusions)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for federal pleadings)
Dream Games of Ariz., Inc. v. PC Onsite, 561 F.3d 983 (9th Cir. 2009) (unclean hands/illegality defense recognized only when misconduct directly relates to infringement)
Petrella v. Metro‑Goldwyn‑Mayer, Inc., 134 S. Ct. 1962 (2014) (copyright laches principles; separate‑accrual rule and limits on laches as a bar to timely claims)
Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522 (9th Cir. 2008) (district courts may dismiss redundant counterclaims)
Cadkin v. Loose, 569 F.3d 1142 (9th Cir. 2009) (discussing prevailing‑party and fee implications in voluntary dismissals)
Whittlestone, Inc. v. Handi‑Craft Co., 618 F.3d 970 (9th Cir. 2010) (purpose and limits of Rule 12(f) motions)