United States District Court, N.D. California
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION TO DISMISS; AND DENYING
DEFENDANT’S MOTION TO STRIKE DOCKET NO. 84
M. CHEN United States District Judge.
the Court denied Defendant's motion for summary judgment
but granted its motion to dismiss. Docket No. 69. With
respect to the motion to dismiss, the Court gave Plaintiff
leave to amend its claims for copyright infringement and
unfair competition (California Business & Professions
Code § 17200). Id. Plaintiff subsequently filed
a second amended complaint (“SAC”) in which it
repled the copyright infringement and § 17200 claims.
Docket No. 76. Defendant has now moved to dismiss those
claims. In the alternative, Defendant has moved to strike
portions of the SAC. Id. Having considered the
parties' briefs, as well as the oral argument of counsel,
the Court hereby GRANTS in part and DENIES in part
Defendant's motion to dismiss. The Court further DENIES
Defendant's motion to strike.
FACTUAL & PROCEDURAL BACKGROUND
is a provider of online contextual-advertising services and
offers its customers a website-based advertisement creation
platform (the “Platform”), which allows its users
to create custom advertisements. SAC 76 ¶¶ 1, 21,
24. Website publishers using the Platform can place a
Media.net ad unit on their websites so that when a website
visitor clicks on the ad unit, the visitor is taken to a
“search results page” which displays relevant
advertisements. Id. ¶ 26. Plaintiff published
the original version of its search results page
(“Original Media.net Results Page”) in February
2014. Id. ¶ 29.
is a competing contextual-advertising provider. SAC
¶¶ 39-40. Defendant also provides advertising units
that its customers can place on their websites. Id.
¶ 40. As with Plaintiff's Platform, when a user
clicks on Defendant's advertising unit, the user is
directed to a search results page that offers relevant
advertisements. Id. ¶ 41. Plaintiff alleges
Defendant directly copied a substantial portion of
Plaintiff's hypertext markup language
(“HTML”) code and used it to create
Defendant's own search results page which is
substantially similar to Plaintiff's. Id.
indicated above, previously, Defendant challenged
Plaintiff's first amended complaint (“FAC”)
in a motion to dismiss. The Court granted the motion in part
but gave Plaintiff leave to amend its copyright infringement
claims and its § 17200 claim. Docket No. 69. With
respect to the copyright claims, the Court concluded that
“portions of Plaintiff's HTML code” were
copyrightable, specifically, the portions that contained
“classes” and “comments.”
Id. at 14:11-27. However, the Court found that the
copyright claims, as alleged, were not adequately pled
because, inter alia, Plaintiff failed to
“identify each portion of the HTML code Defendant
allegedly infringed.” Id. at 18:16-18. As for
the § 17200 claim, the Court held that, as alleged, it
was deficient because it was preempted by the Copyright Act.
Id. at 27:12-14. The Court gave Plaintiff leave to
amend the copyright infringement and § 17200 claims to
cure the above deficiencies. Id. at 29:3-8.
thereafter filed its SAC. With respect to the copyright
claims, the SAC is largely the same as the FAC. For example,
like the FAC, the SAC contains the same table of
“several examples of NetSeer's infringement.”
SAC ¶ 48. The only new substantive allegation in the SAC
is the statement that Defendant “viewed and copied all
or substantial portions of the Media.net result page source
code.” Id. ¶ 60. As for the § 17200
claim, Plaintiff has revised its allegations, now focusing on
Defendant's alleged “misrepresentation and
omissions of material fact” to Plaintiff's existing
and potential clients that amounted to “unfair or
fraudulent business acts.” Id. ¶¶
Motion to Dismiss
first moves to dismiss the newly pled copyright infringement
and § 17200 claims pursuant to Federal Rule of Civil
Procedure 12(b)(6). Under that rule, a party may seek
dismissal based on failure to state a claim. A Rule 12(b)(6)
motion tests the sufficiency of a complaint, asking whether a
plaintiff has alleged “enough facts to state a claim to
relief that is plausible on its face.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citing Twombly, 550 U.S. at 556). Although a
complaint need not contain “detailed factual
allegations, ” a complaint that contains merely
“a formulaic recitation of the elements of a cause of
action will not do.” Twombly, 550 U.S. at 555.
Rather, “'[f]actual allegations must be enough to
raise a right to relief above the speculative
level.'” Williams v. Gerber Prod. Co., 552
F.3d 934, 938 (9th Cir. 2008) (quoting Twombly, 550
U.S. at 555). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S.
at 678; see also Twombly, 550 U.S. at 556.
“The plausibility standard is not akin to a
'probability requirement, ' but it asks for more than
a sheer possibility that a defendant has acted
ruling on a Rule 12(b)(6) motion, courts “accept
factual allegations in the complaint as true and construe the
pleadings in the light most favorable to the nonmoving
party.” Manzarek v. St. Paul Fire & Marine Ins.
Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Courts may
dismiss a claim “only if it appears beyond doubt that
the plaintiff could prove no set of facts in support of his
claim which would entitle him to relief.” Cook v.
Brewer, 637 F.3d 1002, 1004 (9th Cir. 2011) (internal
quotation marks omitted).
Copyright Infringement Claims
noted above, when the Court granted Defendant's motion to
dismiss the copyright claims as pled in the FAC, it gave
Plaintiff leave to amend. The Court specifically instructed
Plaintiff that, to cure the deficiency in the FAC, it had
“to identify each portion of the HTML code Defendant
allegedly infringed and to allege facts ...