IN THE UNITED STATES DISTRICT COURT
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`FOR THE DISTRICT OF NEW MEXICO
`___________________________
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`BLAINE HARRINGTON, III,
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`Plaintiff and Counter-Defendant,
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`vs.
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` No. 1:22-cv-00063-KWR-JHR
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`360 ABQ, LLC d/b/a 360 VENTURES
`REAL ESTATE,
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`Defendant and Counterclaimant,
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`MEMORANDUM OPINION AND ORDER
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`THIS MATTER comes before the Court upon the Mr. Harrington’s Motion to Dismiss
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`Counterclaims and Strike Defendant’s Second Affirmative Defense (Doc. 7). Having reviewed
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`the parties’ pleadings and the relevant law, the Court finds that Mr. Harrington’s motion is NOT
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`WELL-TAKEN and, therefore, is DENIED.
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`BACKGROUND
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` This is a copyright infringement action. Mr. Harrington is a photographer, while 360
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`ABQ, LLC is a real estate brokerage firm which displayed one of Mr. Harrington’s photographs
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`of the Albuquerque skyline without Mr. Harrington’s permission. Mr. Harrington alleges that 360
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`ABQ violated his copyright. 360 ABQ filed counterclaims, asserting that Mr. Harrington misused
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`the copyright system to “extort” money from it through allegedly abusive demands and litigation
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`tactics.
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`Mr. Harrington asserts that he created a photograph of the skyline of downtown
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`Albuquerque and obtained a copyright for that photograph. Doc. 1 at ¶¶ 9, 10. He alleges he is
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`the owner of the work. Id. He asserts that 360 ABQ published the copyrighted work on its
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`Facebook business website as part of the marketing of its real estate business. 360 ABQ is not
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`licensed to use the photograph.
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`Mr. Harrington alleged one count of copyright infringement by reproducing, distributing,
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`and publicly displaying the photograph for commercial purposes. Doc. 1 at ¶ 25
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`360 ABQ filed an answer and counterclaim. Doc. 5. 360 ABQ alleges that in 2015 it
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`placed on its Facebook page Mr. Harrington’s Albuquerque skyline photo. It says its employees
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`found the image through a web search and it did not identify a photographer or copyright owner.
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`Therefore, it alleges it believed it could lawfully display the photograph on its website. 360 ABQ
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`alleges that Mr. Harrington retained a lawyer who sent it a letter asserting that Mr. Harrington
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`owned the copyright in that photograph. The letter demanded that 360 ABQ pay $30,000 in 14
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`days or he would seek $150,000 in damages in an infringement suit.
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`It alleges that Mr. Harrington is a “copyright troll.” It asserts that Mr. Harrington allows
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`his photographs to be available on public websites without providing copyright notice and
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`threatens to sue people who, without notice of the copyright, download and use his images. It
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`alleges that Mr. Harrington demands “extortionate” settlements in amounts beyond “market
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`value.” Doc. 5 at 5. 360 ABQ alleges that if a person declines to pay him, Mr. Harrington files
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`suit for copyright infringement. It alleges that Mr. Harrington has threatened hundreds of persons
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`with copyright infringement lawsuits and they have generally paid far beyond “fair value.” 360
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`ABQ alleges that Mr. Harrington has filed at least seventy-five suits. Doc. 5 at 5.
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`360 ABQ alleges it was the target of a broader scheme by Mr. Harrington. It describes the
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`scheme as follows:
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`• Mr. Harrington has allowed for years his photographs to be available on websites without
`a copyright or ownership notice;
`• Mr. Harrington intends for his photographs to be available on certain websites without
`copyright notice to induce innocent users to download and use his photographs;
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`• Mr. Harrington hires a service to track those who download and use his photographs;
`• He directs his lawyers to threaten or pursue a claim for copyright infringement against
`those who use his photographs unless they pay an “extortionate” amount to compensate
`Mr. Harrington for the alleged infringement; and
`• Mr. Harrington acted knowingly and willfully to implement this scheme to misuse
`copyright law and extort money from targets of his scheme.
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`360 ABQ asserts copyright misuse as an affirmative defense, and asserted the following
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`counterclaims:
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`• Count 1: Declaratory Judgment for Copyright Misuse;
`• Count 2: New Mexico Unfair Practices act, NMSA 1978 § 57-12-1; and
`• Count 3: Prima Facie Tort.
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`Mr. Harrington now moves to dismiss the counterclaims and strike the affirmative defense.
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`LEGAL STANDARD
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`Rule 12(b)(6) permits the Court to dismiss a counterclaim for “failure to state a claim upon
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`which relief can be granted.” Fed. R. Civ. P. 12(b)(6). To survive a motion to dismiss, a
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`counterclaim must have sufficient factual matter that if true, states a claim to relief that is plausible
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`on its face. Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009) (“Iqbal”). As such, a counterclaimant’s
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`“[f]actual allegations must be enough to raise a right to relief above the speculative level.” Bell
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`Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (“Twombly”). All well-pleaded factual allegations
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`are “viewed in the light most favorable to the nonmoving party.” Brokers’ Choice of Am., Inc. v.
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`NBC Universal, Inc., 757 F.3d 1125, 1136 (10th Cir. 2014). In ruling on a motion to dismiss, “a
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`court should disregard all conclusory statements of law and consider whether the remaining
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`specific factual allegations, if assumed to be true, plausibly suggest the defendant is liable.” Kan.
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`Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011). Mere “labels and
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`conclusions” or “formulaic recitation[s] of the elements of a cause of action” will not suffice.
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`Twombly, 550 U.S. at 555.
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`Mr. Harrington also seeks to strike the copyright misuse affirmative defense. Federal Rule
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`of Civil Procedure 12(f) permits the court to “strike from a pleading an insufficient defense.” Fed.
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`R. Civ. P. 12(f). However, motions to strike affirmative defenses are generally disfavored. See
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`Friends of Santa Fe County v. LAC Minerals, Inc., 892 F.Supp. 1333, 1343 (D.N.M.1995)
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`(citations omitted). To strike a defense, its legal insufficiency must be “clearly apparent.” Id.
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`(same). A court “must be convinced that there are no questions of fact, that any questions of law
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`are clear and not in dispute, and that under no set of circumstances could the defenses succeed.”
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`Id. (same). In deciding a motion to strike, the court bears in mind the purpose of pleading an
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`affirmative defense: to provide the plaintiff with fair notice. Falley v. Friends Univ., 787 F.Supp.2d
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`1255, 1257 (D.Kan.2011). The decision to strike an affirmative defense rests within the sound
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`discretion of the district court. Hayne v. Green Ford Sales, Inc., 263 F.R.D. 647, 650
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`(D.Kan.2009). Rule 12(f) is intended to minimize delay, prejudice and confusion by narrowing the
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`issues for discovery and trial. Hayne, 263 F.R.D. at 648–49. “[S]triking an affirmative defense is
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`considered a drastic remedy, and the court should only utilize the legal tool where the challenged
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`allegations cannot succeed under any circumstances.” Falley v. Friends Univ., 787 F. Supp. 2d
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`1255, 1259 (D. Kan. 2011) (internal citations and quotation marks omitted).
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`DISCUSSION
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`Court declines to dismiss or strike copyright misuse equitable defense.
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`I.
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`360 ABQ asserted copyright misuse as both a counterclaim and an affirmative defense.
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`Amaretto Ranch Breedables, LLC v. Ozimals, Inc., 790 F. Supp. 2d 1024, 1033 (N.D. Cal. 2011)
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`(“There is no consensus on whether copyright misuse can be brought as an independent claim (as
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`opposed to as an affirmative defense) and district courts come down on both sides of the issue.”).
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`Mr. Harrington moves to dismiss the counterclaim or strike the affirmative defense. The Court
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`finds that 360 ABQ’s well-pled allegations state a plausible claim or affirmative defense for
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`copyright misuse.
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`“Copyright misuse is an equitable defense to copyright infringement which precludes the
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`copyright holder's enforcement of its copyright during the misuse period.” Vernor v. Autodesk,
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`Inc., 621 F.3d 1102, 1115 (9th Cir. 2010). “The copyright misuse doctrine is an equitable defense
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`to a copyright infringement action that forbids the use of a copyright to secure an exclusive right
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`or limited monopoly not granted by the copyright office and is contrary to public policy to grant.”
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`Malibu Media, LLC v. Miller, No. 13-CV-02691-WYD-MEH, 2014 WL 2619558, at *4 (D. Colo.
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`June 12, 2014), citing Home Design Servs., Inc. v. B & B Custom Homes, LLC, No. 06–cv–00249–
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`WYD–GJR, 2008 WL 2302662, at *2 (D.Colo. May 30, 2008) (citing 185 ALR Fed 123 and
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`Alcatel USA, Inc. v. DGI Techs., Inc., 166 F.3d 772, 792 (5th Cir.1999)); see also Altera Corp. v.
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`Clear Logic, Inc., 424 F.3d 1079, 1090 (9th Cir.2005). 360 ABQ must prove that Mr. Harrington
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`“illegally extended [his] monopoly beyond the scope of the copyright or violated the public
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`policies underlying the copyright laws.” Malibu Media, LLC v. Miller, No. 13-CV-02691-WYD-
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`MEH, 2014 WL 2619558, at *4 (D. Colo. June 12, 2014) (quoting In re Indep. Serv. Orgs. Antitrust
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`Litig., 85 F.Supp.2d 1130, 1175 (D.Kan.2000)).
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`360 ABQ asserts that Mr. Harrington is a “copyright troll” who misused the copyright
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`system through allegedly abusive tactics. An individual may be a copyright trolls when he employ
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`“abusive litigation tactics to extract settlements.” Malibu Media, LLC v. Ramsey, No. 1:14-cv-718,
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`2015 U.S. Dist. LEXIS 151273, at *9 (S.D. Ohio May 26, 2015).
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`“Standing alone, initiating multiple copyright infringement actions and attempting to
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`negotiate settlements does not indicate copyright misuse or copyright trolling.” Freeplay Music,
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`LLC v. Dave Arbogast Buick-GMC, Inc., No. 3:17-CV-42, 2019 WL 4647305, at *14 (S.D. Ohio
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`Sept. 24, 2019), Energy Intelligence Grp., Inc. v. CHS McPherson Refinery, Inc., 300 F. Supp. 3d
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`1356, 1374 (D. Kan. 2018); Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 454 F. Supp.
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`2d 966, 998 (C.D. Cal. 2006) (“A plaintiff's “enforcement of its copyrights does not constitute
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`copyright misuse.”).
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`In one of the many Malibu Media cases, the district court noted that, “[i]t is certainly true
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`that [the plaintiff] has filed a very large number of infringement suits in this district and in others.
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`But that is what the holders of intellectual property rights do when they are faced with mass
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`infringement.” Malibu Media, LLC v. Doe, No. 13 C 3648, 2014 U.S. Dist. LEXIS 77929, 2014
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`WL 2581168, at *6 (N.D. III. June 9, 2014). “Although a large number of actions for infringement
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`may be relevant to determination of a plaintiff's status as a copyright troll, volume alone is not
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`dispositive.” Freeplay Music, LLC v. Dave Arbogast Buick-GMC, Inc., No. 3:17-CV-42, 2019
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`WL 4647305, at *14 (S.D. Ohio Sept. 24, 2019).
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`Here, 360 ABQ alleges more than the mere fact that Mr. Harrington files or threatens to
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`file cases to enforce his copyrights. It also alleges that Mr. Harrington intentionally allows his
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`images to be posted online without copyright notice and uses a service to track who uses or
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`downloads the image so that he can sue or “extort” money from these “unwitting” users. In
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`addition, it alleges that Mr. Harrington uses abusive litigation tactics and threats, including
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`demanding settlements well in excess of the damages. Home Design Servs., Inc. v. B & B Custom
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`Homes, LLC, No. CIVA 06CV00249 WYDGJ, 2008 WL 2302662, at *4 (D. Colo. May 30, 2008)
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`(“Damages are awarded to compensate the copyright owner for losses from the infringement, and
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`profits are awarded to prevent the infringer from unfairly benefitting from a wrongful act.”). In
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`other words, 360 ABQ alleges that Mr. Harrington is not using the copyright and legal system for
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`an authorized purpose, 17 U.S.C. § 106, but as a method to derive income from infringement
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`demands or suits. These allegations, taken as true, state a plausible claim that Mr. Harrington has
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`a wrongful motive and misused the copyright or legal system. See, e.g., Oppenheimer v. ACL
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`LLC, 504 F. Supp. 3d 503, 511–12 (W.D.N.C. 2020) (finding plausible claim of copyright misuse
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`where “a reasonable jury could find Plaintiff is using copyrights to derive an income from
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`infringement suits”); Malibu Media, LLC v. Miller, No. 13-CV-02691-WYD-MEH, 2014 WL
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`2619558, at *5 (D. Colo. June 12, 2014); Malibu Media, LLC v. Cuddy, No. 13-CV-02385-WYD-
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`MEH, 2015 WL 1280783, at *9 (D. Colo. Mar. 18, 2015).
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`Therefore, the Court declines to dismiss the copyright misuse counterclaim or strike the
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`affirmative defense.
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`II.
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`360 ABQ’s state law counterclaims are not preempted.
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`360 ABQ also asserted a New Mexico Unfair Practices Act claim (Count II) and a prima
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`facie tort claim (Count III). Mr. Harrington asserts that these counterclaims are preempted by the
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`federal Copyright Act. The Court declines to dismiss these claims on the basis of preemption.
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` The Copyright Act describes the extent to which state common law and statutory causes
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`of action are preempted. It provides, in relevant part:
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`(a) [A]ll legal or equitable rights that are equivalent to any of the exclusive rights
`within the general scope of copyright as specified by section 106 in works of
`authorship that fixed in a tangible medium of expression and come within the
`subject matter of copyright as specified by sections 102 and 103, whether created
`before or after that date and whether published or unpublished, are governed
`exclusively by this title. Thereafter, no person is entitled to any such right or
`equivalent right in any such work under the common law or statutes of any State.
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`(b) Nothing in this title annuls or limits any rights or remedies under the common
`law or statutes of any State with respect to
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`. . .
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`(3) activities violating legal or equitable rights that are not equivalent to any
`of the exclusive rights within the general scope of copyright as specified by
`section 106.
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`17 U.S.C. § 301. "[A] state-law claim is preempted if (1) the work is within the scope of the subject
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`matter of copyright as specified in 17 U.S.C. §§ 102 and 103; and (2) the rights granted under state
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`law are equivalent to any exclusive rights within the scope of federal copyright as set out in 17
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`U.S.C. § 106." R.W. Beck, Inc. v. E3 Consulting, LLC, 577 F.3d 1133, 1146 (10th Cir. 2009)
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`(internal quotation and citation omitted).
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`The Tenth Circuit has explained that although the Copyright Act preempts state copyright
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`law,
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`it does not eliminate all state law actions. For example, conduct that may give rise
`to a federal suit for copyright infringement may also give rise to a state law claim
`in tort for unfair competition, tortious interference, or breach of contract. However,
`17 U.S.C. § 301(a) preempts such claims if “1) the work is within the scope of the
`‘subject matter of copyright’ as specified in 17 U.S.C. [§§ ] 102 and 103; and 2)
`the rights granted under state law are equivalent to any exclusive rights within the
`scope of federal copyright as set out in 17 U.S.C. [§ ] 106.” Gates Rubber Co. v.
`Bando Chem. Indus., 9 F.3d 823, 847 (10th Cir.1993). On the other hand, if “a state
`cause of action requires an extra element, beyond mere copying, preparation of
`derivative works, performance, distribution or display, then the state cause of
`action is qualitatively different from, and not subsumed within, a copyright
`infringement claim.” Id.
`La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195, 1199 n. 2 (10th Cir.2005)
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`(emphasis added). “[T]o correctly analyze [a] copyright preemption argument using the ‘extra
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`element’ test,” this Court must “compare[s] the elements of a claim for copyright infringement to
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`the elements” of the claim for which preemption is argued. Harolds Stores, Inc. v. Dillard Dep't
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`Stores, Inc., 82 F.3d 1533, 1543 (10th Cir.1996)
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`Here, the New Mexico Unfair Practices Act and prima facie tort claims clearly have “extra
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`elements” beyond a copyright infringement claim. To state copyright infringement under the
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`Copyright Act, Mr. Harrington must show “(1) ownership of a valid copyright, and (2) copying of
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`constituent elements of the work that are original.” Feist Publications, Inc. v. Rural Tel. Serv., Co.,
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`499 U.S. 340, 361, 111 S.Ct. 1282, 1296, 113 L.Ed.2d 358 (1991), cited in Harolds Stores, Inc. v.
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`Dillard Dep't Stores, Inc., 82 F.3d 1533, 1543 (10th Cir. 1996). These are not the elements of a
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`New Mexico UPA claim or prima facie tort claim. Mr. Harrington admits that the elements of
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`claim under New Mexico’s Unfair Practices Act under are different:
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`To state a claim under the Unfair Practices Act, a claimant must show that: “(1) defendant
`made an oral or written statement that was either false or misleading; (2) the false or
`misleading representation was knowingly made in connection with the sale of goods or
`services; (3) the conduct complained of occurred in the regular course of defendant’s
`business; and (4) the representation may, tends to, or does deceive or misleading any
`person.”
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`Doc. 7 at 12 (emphasis omitted), quoting Mulford v. Altria Grp., Inc., 242 F.R. D. 615, 62021
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`(D.N.M. 2007). A misleading statement can include an omission. Skenandore v. FIP, LLC, No.
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`1:18-CV-00388-MV-LF, 2019 WL 1041338, at *8 (D.N.M. Mar. 5, 2019), report and
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`recommendation adopted, No. 1:18-CV-00388-MV-LF, 2019 WL 1318339 (D.N.M. Mar. 22,
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`2019).
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`The elements of a prima facie tort include “(1) an intentional and lawful act; (2) an intent
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`to injure the plaintiff; (3) injury to the plaintiff as a result of the intentional act; and (4) and the
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`absence of sufficient justification for the injurious act.” Beaudry v. Farmers Insurance Exchange,
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`412 P.3d 1100, 1104 (N.M. 2018).
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`Clearly, the New Mexico UPA and prima facie claims have “extra elements” beyond a
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`mere copyright infringement claim. Moreover, 360 ABQ’s state law claims are not equivalent to
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`any exclusive rights within the scope of federal copyright as set forth in 17 U.S.C. § 106. 360
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`ABQ does not dispute that Mr. Harrington generally has the right to reproduce his work, distribute
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`copies, and display his work publicly. Rather, it asserts that he committed certain tortious acts.
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`The Court concludes that these claims are not preempted.
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`III. Court declines to dismiss 360 ABQ’s counterclaims for failure to state a claim.
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`Mr. Harrington also moves to dismiss the Unfair Practices Act (Count II) and Prima Facie
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`Tort (Count III) claims for failure to state a claim.
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`Mr. Harrington argues that 360 ABQ fails to state a claim under the UPA because it failed
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`to allege a false or misleading statement. Based on this limited objection, the Court declines to
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`dismiss the UPA claim. Mr. Harrington appears to argue that a lack of copyright notice is not a
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`misleading statement. However, a misleading statement can include an omission. Skenandore v.
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`FIP, LLC, No. 1:18-CV-00388-MV-LF, 2019 WL 1041338, at *8 (D.N.M. Mar. 5, 2019), report
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`and recommendation adopted, No. 1:18-CV-00388-MV-LF, 2019 WL 1318339 (D.N.M. Mar. 22,
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`2019). Moreover, 360 ABQ alleges that Mr. Harrington made misleading statements in his
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`demand letter.
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`Mr. Harrington also argues that 360 ABQ failed to plausibly allege each element of a prima
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`facie tort. “The theory underlying prima facie tort is that a party that intends to cause injury to
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`another should be liable for that injury, if the conduct is generally culpable and not justifiable
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`under the circumstances.” Schmitz v. Smentowski, 785 P.2d 726, 734 (N.M. 1990). The elements
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`of a prima facie tort include “(1) an intentional and lawful act; (2) an intent to injure the plaintiff;
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`(3) injury to the plaintiff as a result of the intentional act; and (4) and the absence of sufficient
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`justification for the injurious act.” Beaudry v. Farmers Insurance Exchange, 412 P.3d 1100, 1104
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`(N.M. 2018). “The activity complained of must be balanced against its justification had the
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`severity of the injury, weighing: (1) the injury; (2) the culpable character of the conduct; and (3)
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`whether the conduct is unjustifiable under the circumstances.” Hagebak v. Stone, 61 P.3d 201,
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`208-09 (N.M. Ct. App. 2002). The Court finds that 360 ABQ has stated a plausible prima facie
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`tort claim.
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`IT IS THEREFORE ORDERED that the Mr. Harrington’s Motion to Dismiss
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`Counterclaims and Strike Defendant’s Second Affirmative Defense (Doc. 7) is hereby DENIED
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`for the reasons described in this Memorandum Opinion and Order.
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`IT IS SO ORDERED.
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`_________________________________
`KEA W. RIGGS
`UNITED STATES DISTRICT JUDGE
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`11
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