McGucken v. Displate Corporation, 1:19-cv-00042

Plaintiff Elliott McGuckin is a registered copyright holder of three nature photographs and alleges Displate sold metal posters (“displates”) and used online ads reproducing his photos without permission.
Plaintiff filed suit for copyright infringement under 17 U.S.C. against Displate Corporation and unnamed Does, seeking damages, fees, and an injunction.
Displate moved to dismiss under Rule 12(b)(6), arguing it does not own or operate the website selling the allegedly infringing displates and that its Polish parent, GWD/GWP, operates the site.
Displate asserted it is only a wholly owned subsidiary and thus not responsible for the website’s alleged infringement.
The magistrate judge evaluated whether the complaint plausibly alleged Displate’s liability and whether dismissal for naming the “wrong” corporate defendant was appropriate at the motion-to-dismiss stage.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether complaint plausibly alleges Displate participated in infringement	McGuckin alleges Displate manufactured, sold, and used his works in ads, giving a plausible claim	Displate says it does not own/operate the website or ads and thus cannot be liable	Court: Allegations sufficient at Rule 12(b)(6); plausible claim survives
Whether suit should be dismissed for naming the wrong corporate defendant	Plaintiff may sue one tortfeasor among joint tortfeasors; both entities could be liable	Displate contends only parent company operates site so Displate is not liable	Court: Premature to resolve at dismissal stage; dismissal denied
Whether plaintiff must prove control/alter-ego at pleading stage	McGuckin need not prove control or alter ego at pleading stage; facts pleaded may support joint liability	Displate urges requirement to show control/alter ego now	Court: Such factual defenses are premature on Rule 12(b)(6)
Whether plaintiff may amend to add parent company	Plaintiff seeks leave to add GWD/GWP as defendant	—	Court: Grants leave to amend under Rule 15(a)(2) to add parent company

Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (copyright infringement requires ownership and copying)
Ashcroft v. Iqbal, 556 U.S. 662 (pleading must state a plausible claim)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleadings)
Playboy Enters., Inc. v. Webbworld, Inc., 991 F. Supp. 543 (participants who control or benefit from infringement can be liable)
Sygma Photo News, Inc. v. High Soc. Magazine, Inc., 778 F.2d 89 (all who participate in or benefit from infringement may be jointly liable)
Katrina Canal Breaches Litig., 495 F.3d 191 (accept factual allegations as true on Rule 12(b)(6) review)
Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383 (limits on materials considered on motion to dismiss)
Battle v. United States Parole Comm’n, 834 F.2d 419 (standards for objections to magistrate judge reports)
Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415 (consequences of failing to timely object to report and recommendation)