Case 2:16-cv-01462-DRH-ARL Document 26 Filed 02/24/17 Page 1 of 12 PageID #: 188
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`MEMORANDUM & ORDER
`16-CV-1462 (DRH)(ARL)
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`------------------------------------------------------X
`GREAT MINDS,
`
`Plaintiff,
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`-against-
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`FEDEX OFFICE AND PRINT SERVICES,
`INC.
`
`Defendant.
`------------------------------------------------------X
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`APPEARANCES:
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`Law Office of Rhett O. Millsaps II
`Attorneys for Plaintiff
`745 Fifth Avenue, Suite 500
`New York, New York 10151
`By:
`Rhett O. Millsaps II, Esq.
`
`Baker & McKenzie LLP
`Attorneys for Defendant
`2300 Trammell Crow Center
`2001 Ross Avenue
`Dallas, Texas 75201
`By: Mark D. Taylor, Esq.
`Nicholas O. Kennedy, Esq.
`
`HURLEY, Senior District Judge:
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`Plaintiff Great Minds (“plaintiff” or “GM”) commenced this action against defendant
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`FedEx Office and Print Services, Inc. (“defendant” or “FedEx”) alleging violations of the
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`Copyright Act of 1976, as amended, 17 U.S.C. §§ 101 et seq. Presently before the Court is
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`defendant’s motion to dismiss the complaint and for an award of attorney’s fees. For the reasons
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`set forth below, the motion to dismiss is granted and the motion for attorney’s fees is denied.
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`

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`Case 2:16-cv-01462-DRH-ARL Document 26 Filed 02/24/17 Page 2 of 12 PageID #: 189
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`BACKGROUND
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`The following allegations are taken from the complaint (“Compl.”) and documents
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`attached thereto.
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`Plaintiff is a non-profit organization that produces various educational materials used by
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`school districts across the county. Included in those materials is a comprehensive mathematics
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`curriculum, Eureka Math, for grades PreK-12 (“Material” or “Licensed Material”) for which GM
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`owns the federal copyright. Plaintiff publishes and sells printed book versions of the Material and
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`has entered into royalty bearing licenses with third parties for commercial reproduction of the
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`Material. Compl. ¶¶ 8-11, 15.
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`Plaintiff also makes the Material available under a “Creative Commons Attribution - Non
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`Commercial - Share Alike 4.0 International Public License (the “License”).” Compl. ¶ 12 & Ex.
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`B. As such, GM is the licensor. GM’s “public licensing of its Eureka Math curriculum under this
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`Creative Commons license advances [its] mission and benefits the public by allowing teachers,
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`students, and school districts to freely share, reproduce, and use the Materials for their non-
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`commercial, educational benefit.” Compl. ¶ 12.
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`The License describes the licensed rights in relevant part as follows: “Licensor hereby
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`grants You a worldwide, royalty-free, non-sublicensable, non-exclusive, irrevocable license to
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`exercise the Licensed Rights in the Licensed Material to reproduce and Share the Licensed
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`Material, in whole or in part, for NonCommercial purposes only.” Compl. Ex. B, ¶ 2(a)(1)(A).
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`“You” is defined as “the individual or entity exercising the Licensed Rights.” Compl. Ex. B ¶
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`1(n). The License further provides that as Licensor, plaintiff “waives any right to collect royalties
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`from You for the exercise of the Licensed Rights, whether directly or through a collecting society
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`Page 2 of 12
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`under any voluntary or waivable statutory or compulsory licensing scheme. In all other cases the
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`Licensor expressly reserves any right to collect such royalties, including when the Licensed
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`Material is used other than for NonCommercial purposes.” Id. at ¶ 2(b)(3). The License defines
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`NonCommercial as “not primarily intended for or directed towards commercial advantage or
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`monetary compensation. For purposes of this Public License, the exchange of Licensed Materials
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`for other material subject to Copyright or Similar Rights by digital file-sharing or similar means
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`is NonCommercial provided there is no payment of monetary compensation in connection with
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`the exchange.” Id. ¶ 1(k). “You” is defined as “the individual or entity exercising the Licensed
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`Rights under this Public License.” Id. ¶ 1(l). The License requires that a licensee who shares the
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`Material must, inter alia, “indicate the Licensed Material is licensed under this Public License,
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`and include the text of, or the URI or hyperlink to, this Public License.” Id. ¶ 3(a)(1)(C). With
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`respect to “Downstream recipients,” the License provides that “[e]very recipient of the Licensed
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`Material automatically receives an offer from the Licensor to exercise the Licensed Rights under
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`the terms and conditions of this Public License” and “[y]ou may not offer or impose any
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`additional or different terms or conditions on, or apply any Effective Technological measures to,
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`the Licensed Material if doing so restricts exercise of the Licensed Rights by any recipient of the
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`Licensed Material.” Id. at ¶ 3(a)(5)(A) & (C).
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`Sometime around October 2015 GM discovered that “at least one FedEx store in
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`Michigan had reproduced the Material for profit - a commercial use - without authorization.” In
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`response to GM’s demand that FedEx enter into a royalty-bearing license or cease reproduction
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`of the Materials, FedEx asserted that “its duplication of the Materials for its own profit was
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`lawful because FedEx was assisting school districts in their noncommercial use of the Materials”
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`Page 3 of 12
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`and refused to comply with GM’s demand. Compl. ¶¶ 16-18.
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`In February 2016, GM “discovered that at least one FedEx store in or around Suffolk
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`County, New York also had reproduced the materials for profit without authorization or license
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`. . . .” Compl. ¶ 19. In response to GM’s renewed demand to cease commercial reproduction of
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`the Materials or to enter into a license, FedEx again declined because “in FedEx’s view, FedEx
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`is merely acting as agent for school districts in assisting them with their lawful activities under
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`the License.” Id. ¶¶ 20, 21.
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`This action asserting a claim for copyright infringement followed.
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`A.
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` Standard of Review - Motion to Dismiss
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`DISCUSSION
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`In deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court
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`should “draw all reasonable inferences in Plaintiff[‘s] favor, assume all well-pleaded factual
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`allegations to be true, and determine whether they plausibly give rise to an entitlement to relief.”
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`Faber v. Metro. Life Ins. Co., 648 F.3d 98, 104 (2d Cir. 2011) (internal quotation marks omitted).
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`The plausibility standard is guided by two principles. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
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`(citing Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)); accord Harris v. Mills, 572 F.3d 66,
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`71–72 (2d Cir. 2009).
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`First, the principle that a court must accept all allegations as true is inapplicable to legal
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`conclusions. Thus, “threadbare recitals of the elements of a cause of action supported by mere
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`conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. Although “legal conclusions can
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`provide the framework of a complaint, they must be supported by factual allegations.” Id. at 679.
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`A plaintiff must provide facts sufficient to allow each named defendant to have a fair
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`Page 4 of 12
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`understanding of what the plaintiff is complaining about and to know whether there is a legal
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`basis for recovery. See Twombly, 550 U.S. at 555.
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`Second, only complaints that state a “plausible claim for relief” can survive a motion to
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`dismiss. Iqbal, 556 U.S. at 679. “A claim has facial plausibility when the plaintiff pleads factual
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`content that allows the court to draw the reasonable inference that the defendant is liable for the
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`misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,’ but asks
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`for more than a sheer possibility that defendant acted unlawfully. Where a complaint pleads facts
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`that are ‘merely consistent with’ a defendant's liability, it ‘stops short of the line’ between
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`possibility and plausibility of 'entitlement to relief.' ” Id. at 678 (quoting Twombly, 550 U.S. at
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`556-57) (internal citations omitted); see In re Elevator Antitrust Litig., 502 F.3d 47, 50 (2d Cir.
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`2007). Determining whether a complaint plausibly states a claim for relief is “a context specific
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`task that requires the reviewing court to draw on its judicial experience and common sense.”
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`Iqbal, 556 U.S. at 679; accord Harris, 572 F.3d at 72.
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`B.
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`Copyright Infringement
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`To state a claim for copyright infringement, a plaintiff must allege “(1) ownership of a
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`valid copyright and (2) copying of constituent elements of the work that are original.” Feist
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`Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). A claim for copyright
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`infringement will fail if the challenged use of the copyrighted work is authorized by a license.
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`See Graham v. James, 144 F.3d 229, 236 (2d Cir. 1998). The existence of a license to engage in
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`the challenged copying is an affirmative defense and the party claiming the benefit of the license
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`has the burden of proving its existence. Tasini v. New York Times Co., Inc., 206 F.3d 161, 170-
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`71 (2d Cir. 2000). This is because “[a] copyright owner who grants a nonexclusive license to use
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`Page 5 of 12
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`Case 2:16-cv-01462-DRH-ARL Document 26 Filed 02/24/17 Page 6 of 12 PageID #: 193
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`his copyrighted material waives his right to sue for copyright infringement.” Graham, 144 F.3d at
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`236.
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`“Dismissal of a claim for copyright infringement is proper where a contract underlying
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`the suit clearly and unambiguously demonstrates the existence of defendant’s license to exploit
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`the plaintiff’s copyrights and where plaintiff has not shown any limitation on that license.” Ariel
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`(UK) Limited v. Reuters Group PLC, 2006 WL 3161467, at *5 (S.D.N.Y. Oct. 31, 2006).
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`“Principles of contract law are generally applicable in the construction of copyright . . .
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`licenses and other transfers of rights.” Leutwyler v. Royal Hashemite Ct. of Jordan, 184 F.
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`Supp.2d 303, 306 (S.D.N.Y. 2001) (citing 3 Nimmer on Copyrights § 10.08); accord Bartsch v.
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`Metro-Goldwyn-Mayer, Inc., 391 F.2d 150, 153 (2d Cir. 1968).1 “The threshold question in a
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`dispute over the meaning of a contract is whether the contract terms are ambiguous.” Revson v.
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`Cinque & Cinque, P.C., 221 F.3d 59, 66 (2d Cir. 2000) (applying New York law). A contract is
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`ambiguous if it is “capable of more that one meaning when viewed objectively by a reasonably
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`intelligent person who has examined the context of the entire integrated agreement.” Selden
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`Assocs. v. ANC Holdings, 959 F.2d 425, 428 (2d Cir. 1992) (quotation marks omitted); see also
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`Broder v. Cablevision Sys. Corp., 418 F.3d 187, 197 (2d Cir. 2005) (“[A]mbiguity exists where a
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`contract term could suggest more than one meaning when viewed objectively by a reasonably
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`intelligent person who has examined the context of the entire integrated agreement and . . . is
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`1 The License does not specify what law governs and neither party has briefed the issue.
`However, plaintiff has cited New York contract construction principles (see DE 24 at p.2)
`without objection by defendant, and therefore “[u]nder the principle that implied consent to use a
`forum’s law is sufficient to establish choice of law,” Tehran-Berkeley Civil and Environ.
`Engineers v. Tippetts-Abbett-McCarthy-Stratton, 888 F.2d 239, 242 (2d Cir. 1989), the Court
`will apply New York law.
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`Page 6 of 12
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`cognizant of the customs, practices, usages, and terminology as generally understood in the
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`particular trade or business.” (internal citation and quotation marks omitted)). It is unambiguous
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`when it has “a definite and precise meaning, unattended by danger of misconception in the
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`purport of the [contract] itself, and concerning which there is no reasonable basis for a difference
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`of opinion.” Hunt Ltd. v. Lifschultz Fast Freight, 889 F.2d 1274, 1277 (2d Cir. 1989) (internal
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`quotation marks omitted). “Ambiguity is determined by looking within the four corners of the
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`document, not to outside sources.” Powlus v. Chesley Direct LLC, 2011 WL 135822 (S.D.N.Y.
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`Jan. 10, 2011) (internal quotation marks omitted). The determination of whether a contract is in
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`fact ambiguous is a question of law for the Court. Eternity Global Master Fund Ltd. v. Morgan
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`Guar. Trust Co. of N.Y., 375 F.3d 168, 178 (2d Cir. 2004).
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`C.
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`Summary of Arguments
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`Defendants asserts that “[t]he Complaint rests upon the mistaken premise that the school
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`district that Great Minds explicitly licenses to reproduce its materials for educational use may not
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`enlist FedEx [] to make those reproductions on their behalf. . . . The law is clear that a licensee
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`may enlist others to help it perform licensed activities. FedEx [] is doing just that. There is
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`therefore no infringement . . . .” Def.’s Mem. at 1 (emphasis in original). Plaintiff’s responds that
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`FedEx’s argument “overlook[s] that the License specifically limits it grant of rights to
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`NonCommercial purposes only and specifically reserves any right to collect royalties when the
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`Licensed Materials is used for other than NonCommercial purposes.” Pl.’s Opp. Mem. at 7
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`(internal quotation marks omitted). According to plaintiff, “FedEx’s delegation argument would
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`be persuasive if it were reproducing the Materials at cost (i.e. without making a profit) as a pro
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`bono service for the schools, and thus making a strictly noncommercial use of the Material - a
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`Page 7 of 12
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`right that the school themselves are granted . . . .” FedEx exceeds the scope of the license when it
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`“reproduces the Material for its own profit . . . since the schools themselves do not have the right
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`under the License to make such a commercial use of the Material . . . .” Id. at 7-8.
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`D.
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`The Motion to Dismiss is Granted.
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`At issue on this motion to dismiss is whether the allegations that FedEx has copied the
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`Materials at the behest of one or more school districts and charged the school districts for that
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`copying at a rate more than FedEx’s cost states a claim for violation of GM’s copyright. There is
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`no claim that the undisclosed school districts are using the Materials for other than a “non-
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`Commercial purpose” or that FedEx has copied the Materials for any other entities or for its own
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`purposes. As so framed, FedEx’s copying of the Materials is permitted by unambiguous terms of
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`the License and the motion to dismiss is granted.
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`“A licensee to make and use is not (in the absence of specific language in his license)
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`limited to making with his own hands, in his own shop, or by his own employes[2]. He may
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`employ, procure, or contract with as many persons as he chooses to supply him with that which
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`he may lawfully use, provided such conduct does not change his relation to the licensor.”
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`Marconi Wireless Telegraph Co. of Am. v. Simon, 227 F. 906, 910 (S.D.N.Y. 1915),3 aff’d, 231
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`F. 1021 (2d Cir. 1916) (“The decree of the District Court is affirmed, on the opinion of Judge
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`Hough. 27 Fed. 906."), rev’d on other grounds, 246 U.S. 46 (1918). Accord Estate of Hevia v.
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`2 For clarity, the Court notes that “employes” is an alternative spelling of employees.
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`3 Citing Foster Hose Supporter Co. v. Taylor Co., 191 Fed. 1003, 1004 (2d Cir.1913)
`(upholding dismissal of patent infringement claim as the defendant corporation was employed by
`licensee to manufacture and sell the patented items as its agent and “the license did not prevent[]
`[the licensee] from having this done for him by other persons.”)
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`Page 8 of 12
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`Portico Corp., 602 F.3d 34, 44-45 (1st Cir. 2010) (“When there is no indication that a license-
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`granting copyright owner has restricted the license’s ability to use third parties in implementing
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`the license, the license is generally construed to allow such delegation.”); Automation by Design,
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`Inc. v. Raybestos Prods. Co., 463 F.3d 749, 757 (7th Cir. 2006) (once licensee “secures the rights
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`to duplicate the [copyrighted] designs . . . it could hire another party . . . if [the Licensee] lacked
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`the tools or skills to do so itself”); Raymond T. Nimmer and Jeff C. Dodd, Modern Licensing
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`Law § 6.21 (Dec. 2016 Update); cf. Womack+Hampton Architects, LLC v. Metric Holdings Ltd.
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`P’ship, 102 Fed. App’x 374, 382-83 (5th Cit. 2004) (licensee’s hiring of others not a transfer of
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`the rights contained in the copyright license as the use at issue was consistent with the license
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`and not an impermissible transfer).
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`Here, the License does not limit a licensee’s ability to use third parties in exercising the
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`rights granted by the License. GM concedes as much when it conceded that it would be
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`permissible for Fed Ex to copy the materials if it did so at cost. Further, the License defines
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`“Share” as “to provide material to the public by any means or process . . . such as reproduction . .
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`. .” Compl. Ex. B ¶ 1(1). As defendant points out, the language “ ‘any means or process’
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`indicates an intent to allow licensees broad latitude in exercising their licensed right to reproduce
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`the [M]aterials for non-commercial use.” Def.’s Mem. at 7.
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`GM’s reliance on the language of the License which grants the right to reproduce and
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`share the Material “for NonCommercial Purposes” does not save its case. As noted earlier, the
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`License states that “You,” defined as “the individual or entity exercising the Licensed Rights”
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`under the License may “reproduce and Share the Licensed Material, in whole or in part, for
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`NonCommercial purposes only.” Compl. Ex. B ¶¶ 1(n), 2(a)(1)(A). Under the present scenario,
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`Page 9 of 12
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`the entities exercising the “Licensed Rights” are the school districts, not FedEx, as there is no
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`claim that the school districts are reproducing or sharing the materials for other than a
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`“nonCommercial Purpose.” As the school districts are the entities exercising the rights granted
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`by the License, it is irrelevant that FedEx may have benefitted by having been hired by them to
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`act, viz. make copies, in their stead. See Raybestos, 463 F.3d at 757.4
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`Nor can the reservation of rights contained in the License be read to preclude a licensee
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`from hiring someone to make copies of the Materials so the licensee can use them for a
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`“nonCommerical” purpose. The applicable provision states in relevant part: “To the extent
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`possible, Licensor waives any right to collect royalties from You for the exercise of the Licensed
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`Rights . . . . In all other cases the Licensor expressly reserves any right to collect such royalties,
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`including when the Licensed Material is used other than for NonCommerical Purposes.” Rather,
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`the unambiguous import of this provision is to reserve GM’s right to collect royalties from a
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`licensee if the licensee exceeds the scope of the license by, for example, selling copies of the
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`Materials.
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`The fair use cases relied upon by GM, Princeton Univ. Press v. Mich. Document Serv., 99
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`F.3d 1381 (6th Cir. 1996,) and Basic Books v. Kinko’s Graphics Corp., 758 F. Supp. 1522
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`(S.D.N.Y. 1991), are distinguishable in that the customers “requesting” the copying did not have
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`a license to make the reproduction and because FedEx does not rely upon the fair use doctrine.
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`4 The Court notes parenthetically that prohibiting a school district from using a
`commercial copy service to duplicate the materials would be antithetical to GM’s avowed
`purpose in subjecting the Materials to the License, to wit, to “benefit[] the public by allowing
`teachers, students, and school districts to freely share, reproduce, and use the Materials for their
`non-commercial, educational benefit.” Compl. ¶ 12.
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`Cohen v. United States, 98 Fed. Cl. 156, 165 (Fed. Cl. 2011), also relied on by Plaintiff, is
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`similarly not relevant. In construing a license that granted “the exclusive right to publish and
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`market [the copyrighted material] in paper, diskette, and CD-ROM,” the Court found that the
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`copyright holder retained the rights to reproduce, display and distribute the material on the
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`Internet relying on the proposition that “[i]n construing the terms of a license [a] court must give
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`precedence to narrow, specific language over broad, general language.” Id. Here, the
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`unambiguous terms of the License grant the licensee, i.e., the person exercising the rights
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`provided under the License, the right “to reproduce and Share the Licensed Material, in whole or
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`in part, for NonCommercial purposes only” but does not in any manner limit the means by which
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`a licensee may reproduce the materials.
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`In sum, the unambiguous terms of License permit FedEx to copy the Materials on behalf
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`of a school district exercising rights under the License and charge that district for that copying at
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`a rate more than FedEx’s cost, in the absence of any claim that the school district is using the
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`Materials for other than a “non-Commercial purpose.” The motion to dismiss is granted.
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`E.
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`The Motion for Attorney’s Fees is Denied.
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`A “court in its discretion may . . . allow the recovery of full cost [and] also award a
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`reasonable attorney’s fee to the prevailing party” in a civil action for copyright infringement.” 17
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`U.S.C. 505. “When determining whether to award attorneys fees, district courts may consider
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`such factors as (1) the frivolousness of the non-prevailing party's claims or defenses; (2) the
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`party's motivation; (3) whether the claims or defenses were objectively unreasonable; and (4)
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`compensation and deterrence.” Bryant v. Media Right Productions, Inc., 603 F.3d 135, 144 (2d
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`Cir. 2010). “The third factor—objective unreasonableness—should be given substantial weight.”
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`Id.
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`Consideration of these factors warrant denial of FedEx’s request for attorney’s fees.
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`First, plaintiff’s claim was not frivolous and there is no claim that GM was motivated by bad
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`faith. Moreover, GM’s claim, while unsuccessful, was not objectively unreasonable.
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`Furthermore, it would appear that no court has addressed whether commercial copy services may
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`reproduce materials for a licensee under the Creative Commons License. See Pl.’s Mem. at 17.
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` The motion for costs and attorney’s fees is denied.
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`CONCLUSION
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`Defendant’s motion to dismiss is granted and its request for costs and attorney’s fees is
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`denied.5
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`Dated: Central Islip, New York
`February 24, 2017
`
` /s/ Denis R. Hurley
`Denis R. Hurley
`United States District Judge
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`5 In its opposition papers, GM requests that in the event the motion to dismiss is granted it
`be granted leave to amend. It does not, however, specify how it would amend that complaint. To
`the extent that GM believes it can amend the Complaint to state a cause of action, it may move to
`file an amended complaint within twenty (20) days of the date of this Order.
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`Page 12 of 12
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