United States District Court, N.D. California
ORDER ON PLAINTIFF'S LETTER REGARDING DISCOVERY
PERIOD FOR COPYRIGHT CLAIMS Re: Dkt. No. 45
PHYLLIS J. HAMILTON UNITED STATES DISTRICT JUDGE
The
court is in receipt of a June 16 letter from pro se plaintiff
Dongxiao Yue regarding the discovery period for his copyright
claims. Dkt. 45. In an order dated June 15, 2016, the court
denied Yue’s motion for leave to amend his complaint
and to lift the restriction on the discovery period. In
relevant part, the court held that Yue’s LLC Netbula,
and not Yue personally, had standing to being claims alleging
fraud concerning a 2005 license between Netbula and defendant
MSC Software Corporation. Dkt. 44 at 6. Because Yue's
request to lift the restriction on the discovery period
appeared to be based on the addition of the new fraud claims,
that request was denied as well. Id.
Yue’s
letter to the court indicates that he now intends to join
Netbula LLC as a co-plaintiff, which will be represented by
counsel. Yue’s letter renews his request to extend the
discovery period beyond the five-year limit established by
the court in an earlier order. Dkt. 30. Yue now asserts that
his previous request to extend the discovery period was
“based on the copyright claims only.” Dkt. 45.
Yue’s
letter raises the issue of the damages available for
copyright claims in light of the Supreme Court’s
decision in Petrella v. Metro-Goldwyn-Mayer, Inc.,
134 S.Ct. 1962 (2014). Copyright claims have a three-year
statute of limitations. 17 U.S.C. § 507(b). Prior to
Petrella, there was a split in authority as to
whether damages were available only within three years from
when the suit was filed (the “injury rule”), or
whether a copyright claim does not accrue until the copyright
owner learns of the infringement, permitting damages for a
longer period so long as suit is brought within three years
of the infringement’s discovery (the “discovery
rule”). See generally Melville B. Nimmer &
David Nimmer, Nimmer on Copyright, § 12.05[B][2]. In the
Ninth Circuit, the discovery rule prevails. See Polar
Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 706 (9th
Cir. 2004).
Some
language in Petrella does appear to embrace an
injury-rule analysis. See Petrella, 134 S.Ct. at
1969 (“Under the [Copyright] Act's three-year
provision, an infringement is actionable within three years,
and only three years, of its occurrence.”) The Supreme
Court, however, did not directly “pass on” the
issue of whether the discovery rule was available to a
plaintiff who was not aware of an earlier infringement.
Id. at 1969 n.4. Under these circumstances, the
Ninth Circuit’s decision in Polar Bear
Products remains binding precedent in this circuit.
See Oracle USA, Inc. v. Rimini St., Inc., No.
2:10-CV-00106-LRH, 2015 WL 5089779, at *6 (D. Nev. Aug. 27,
2015) (“[T]he Supreme Court in Petrella
expressly declined to reject the discovery rule. As such, the
discovery rule is still controlling precedent in this action
and the court shall deny defendants’ motion as to this
issue.”) (citation omitted); Wolf v. Travolta,
No. CV 14-00938-CAS-PJW, 2016 WL 911469, at *13 (C.D. Cal.
Mar. 4, 2016) (applying Polar Bear Products);
accord Panoramic Stock Images, Ltd v. McGraw-Hill Glob.
Educ. Holdings, LLC, No. 12 C 9881, 2014 WL 6685454, at
*3 (N.D. Ill. Nov. 25, 2014) (“Until the Seventh
Circuit holds otherwise, this court concludes that the
discovery rule is still the law of this circuit.”);
Lefkowitz v. McGraw-Hill Glob. Educ. Holdings, LLC,
23 F.Supp.3d 344, 357 (S.D.N.Y. 2014) (“Defendants
direct the Court to the Supreme Court's recent decision
in Petrella . . . reading that case to hold that the
injury rule, not the discovery rule, applies to federal
copyright infringement claims. Petrella does not
hold as such.”).
The
court’s June 15 order denied Yue’s request to
extend the discovery period because it was presented as based
on Yue’s fraud claims, which Yue lacks standing to
assert. See Mot. at 6 (seeking discovery into
“the circumstances under which MSC made the
misrepresentations”); Reply at 8 (“Limiting
Discovery May Result in MSC’s Perpetuating its
Fraud”). If Yue wishes to show that the discovery
period should be extended based on his copyright claims, he
will have a chance to do so. However, under Polar Bear
Products, Yue will need to make a showing as to why
he/Netbula only began to suspect infringement in 2014, and
could not have, with reasonable diligence, discovered it
earlier. See 384 F.3d 700 at 706 (9th Cir. 2004)
(discovery rule requires that plaintiff was “unaware of
the infringement” and “reasonably could not have
discovered” the infringement earlier).
If
Netbula is to be joined as a party, Yue will need to secure
counsel to represent Netbula, and to obtain either a
stipulation from MSC or leave of the court to file an amended
complaint. See Federal Rule of Civil Procedure
15(a)(2). After an amended complaint is filed, the parties
shall meet and confer regarding the scope of the discovery
period in light of the addition of Netbula and any other
amendments to the complaint. If the parties still cannot
agree on the appropriate temporal scope of discovery,
plaintiff may file a motion seeking appropriate relief from
the court.
CONCLUSION
Yue may
file a discovery motion supported by an appropriate
declaration on the issue of whether discovery period should
be extended on the copyright claims. Until such motion is
filed and granted, or a joint stipulation regarding the
discovery period is approved by the court, the discovery
limit of five years remains.
Yue may
file a motion to amend his complaint to add Netbula as a
party if a stipulation cannot be obtained from the defendant.
And, of course, Netbula’s counsel must immediately
enter an appearance on the docket.
Lastly,
Yue is advised that the court will not respond to
“letters” filed on the docket in future. If
plaintiff would like the court to take some action, he must
make his request in ...