FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`GREAT MINDS, a non-profit
`organization,
`Plaintiff-Appellant,
`
`v.
`
`No. 18-55331
`
`D.C. No.
`2:17-cv-07435-JFW-E
`
`OFFICE DEPOT, INC., a
`Delaware corporation,
`Defendant-Appellee.
`
`OPINION
`
`Appeal from the United States District Court
`for the Central District of California
`John F. Walter, District Judge, Presiding
`
`Argued and Submitted November 8, 2019
`Pasadena, California
`
`Filed December 27, 2019
`
`Before: Jerome Farris and M. Margaret McKeown, Circuit
`Judges, and Virginia M. Kendall,* District Judge.
`
`Opinion by Judge Farris
`
`* The Honorable Virginia M. Kendall, United States District Judge for
`the Northern District of Illinois, sitting by designation.
`
`

`

`2
`
`GREAT MINDS V. OFFICE DEPOT
`
`SUMMARY**
`
`Copyright
`
`The panel affirmed the district court’s dismissal for
`failure to state a claim of a copyright infringement brought
`by Great Minds, publisher of math curriculum Eureka Math.
`
`The panel held that defendant Office Depot, Inc., did not
`become a licensee of a Creative Commons license, and
`become bound by its terms, or otherwise infringe Great
`Minds’ copyright by making copies of Eureka Math materials
`for a profit on behalf of school and school district licensees.
`There was no dispute that the school and school districts
`licensees’ copying of Great Minds’ material was permitted
`under the license. There also was no dispute that, if Office
`Depot were itself a licensee, commercial copying of Great
`Minds’ material would fall outside the scope of the license
`and infringe Great Minds’ copyright. The panel held that,
`under California law, the school and school district licensees’
`exercise of their rights under the license through the services
`provided by Office Depot did not result in Office Depot
`becoming a licensee. The panel further held that the district
`court did not abuse its discretion in denying leave to amend
`the complaint.
`
`** This summary constitutes no part of the opinion of the court. It has
`been prepared by court staff for the convenience of the reader.
`
`

`

`GREAT MINDS V. OFFICE DEPOT
`
`3
`
`COUNSEL
`
`Christopher J. Sprigman (argued), Simpson Thatcher &
`Bartlett LLP, New York, New York; Jeffrey E. Ostrow,
`Simpson Thatcher & Bartlett LLP, Palo Alto, California;
`Rhett O. Millsaps, II, Law Office of Rhett O. Millsaps II,
`New York, New York; for Plaintiff-Appellant.
`
`Jennifer A. Golinveaux (argued), Winston & Strawn LLP,
`San Francisco, California; Diana Hughes Leiden, Winston &
`Strawn LLP, Los Angeles, California; for Defendant-
`Appellee.
`
`Andrew M. Gass (argued) and Elizabeth H. Yandell, Latham
`& Watkins LLP, San Francisco, California; Diane M. Peters,
`Creative Commons Corp., Mountain View, California; for
`Amicus Curiae Creative Commons Corporation.
`
`OPINION
`
`FARRIS, Circuit Judge:
`
`Plaintiff-Appellant Great Minds, publisher of math
`curriculum Eureka Math, appeals from the January 18, 2018
`dismissal under Fed. R. Civ. P. 12(b)(6) of its copyright
`infringement claim against Office Depot, Inc. in the United
`States District Court for the Central District of California
`(Walter, J.). We AFFIRM. Office Depot did not itself
`become a licensee of the “Creative Commons Attribution-
`NonCommercial-ShareAlike 4.0
`International Public
`License” (and become bound by its terms) or otherwise
`infringe Great Minds’ copyright by making copies of Eureka
`
`

`

`GREAT MINDS V. OFFICE DEPOT
`
`ath materials for a profit on behalf of school and school
`district licensees.
`
`4 M
`
`BACKGROUND
`
`is an education-based non-profit
`Great Minds
`organization. It created and copyrighted a math curriculum
`called “Eureka Math” for grades PreK-12, which it publishes
`and sells commercially in print form nationwide. It also
`releases digital files of Eureka Math online for free download
`to any member of the public under a limited public copyright
`license template produced by Creative Commons.1 Under the
`License, “[e]very recipient of [Eureka Math] automatically
`receives an offer from [Great Minds] to exercise the Licensed
`Rights.” License § 2(a)(5)(A).
`
`The License grants “the individual or entity exercising
`the Licensed Rights” a “worldwide, royalty-free, non-
`sublicensable, non-exclusive, irrevocable license to . . .
`reproduce and Share [Eureka Math], in whole or in part, for
`NonCommercial purposes only . . . .” License §§ 1(n),
`2(a)(1). The License defines “Share” to mean, in pertinent
`part, “to provide material to the public by any means or
`process that requires permission under the Licensed Rights,
`such as reproduction, public display, public performance,
`distribution, dissemination, communication, or importation,
`. . .” License § 1(l). “NonCommercial” means, in pertinent
`
`1 Creative Commons is a non-profit organization that offers free
`copyright license templates to be used to share and protect creative and
`academic works. See What We Do, CREATIVE COMMONS, (Nov. 17, 2019,
`3:23 PM), https://creativecommons.org/about/. The License at issue
`here is available online at https://creativecommons.org/licenses/by-nc-
`sa/4.0/legalcode.
`
`

`

`GREAT MINDS V. OFFICE DEPOT
`
`5
`
`part, “not primarily intended for or directed towards
`commercial advantage or monetary compensation.” License
`§ 1(k).
`
`But § 2(b)(3) of the License reserves Great Minds’ right
`to collect royalties for commercial uses of Eureka Math:
`
`To the extent possible, the Licensor waives
`any right to collect royalties from [the
`licensee]
`for
`the exercise of
`[these
`NonCommercial] Licensed Rights, whether
`directly or through a collecting society under
`any voluntary or waivable statutory or
`compulsory licensing scheme. In all other
`cases the Licensor expressly reserves any
`right to collect such royalties, including when
`[Eureka Math]
`is used other
`than for
`NonCommercial purposes.
`
`If any individual or entity exercising the licensed rights
`“fail[s] to comply with [the License], [their] rights under [the
`License] terminate automatically.” License § 6(a). Great
`Minds claims that this applies equally to every individual or
`entity that possesses Eureka Math materials, including all
`“downstream recipients.”
`
`Office Depot provides copy services on request and
`behalf of public schools and school districts. It charges a fee
`for those services, and at times it makes copies of Eureka
`Math materials for the schools’ use. It does not sell those
`copies to the public in Office Depot stores. Great Minds
`claims, and Office Depot does not dispute, that Office Depot
`employs field representatives to advertise its copying services
`to schools and school districts that use Eureka Math. In 2015,
`
`

`

`GREAT MINDS V. OFFICE DEPOT
`
`hen Great Minds discovered that Office Depot was
`reproducing Eureka Math on behalf of the schools, the parties
`entered into a separate licensing agreement, whereby Great
`Minds permitted Office Depot to make the copies in
`exchange for royalty payments. After the Eastern District of
`New York ruling in Great Minds v. FedEx Office and Print
`Servs., Inc., No. 16-CV-1462 (DRH)(ARL), 2017 WL
`744574, at *4 (E.D.N.Y. Feb. 24, 2017), aff’d, 886 F.3d 91
`(2d Cir. 2018), which held that the License could not “be read
`to preclude a licensee from hiring someone to make copies of
`[Eureka Math] so the licensee can use them for a
`‘noncommercial’ purpose,” Office Depot terminated the
`royalty agreement.2
`
`6 w
`
`As a result, on October 11, 2017, Great Minds filed suit
`against Office Depot in district court, alleging claims of
`copyright infringement, 17 U.S.C. §§ 101 et seq., and breach
`of contract. Great Minds does not dispute that the school
`districts’ own use and distribution of Eureka Math materials
`is “NonCommercial” and permitted by the License. Rather,
`it alleges that Office Depot was “deliberately and willfully
`infringing [Great Minds’ copyrights] by actively soliciting
`customers for commercial reproduction of Eureka Math,” and
`“by reproducing and distributing Eureka Math for profit
`without Great Minds’ authorization.” Great Minds asserts that
`the “NonCommercial” restriction in the License requires
`commercial print shops like Office Depot to “negotiate a
`
`2 The FedEx decision resulted from a separate suit, with virtually
`identical facts, filed by Great Minds against a different copy services
`company. See FedEx, 2017 WL 744574, at *1–2. In March 2018, the
`Second Circuit affirmed the E.D.N.Y. dismissal on agency principles.
`Great Minds v. FedEx Office and Print Servs., Inc., 886 F.3d 91, 95–96
`(2d Cir. 2018).
`
`

`

`GREAT MINDS V. OFFICE DEPOT
`
`7
`
`license and pay a royalty to Great Minds if they wish to use
`or reproduce Eureka Math for commercial purposes—i.e., for
`their own profit.”
`
`On December 6, 2017, Office Depot filed a motion to
`dismiss the copyright infringement claim, which the district
`court granted without leave to amend. Great Minds v. Office
`Depot, Inc., No. CV 17-7435-JFW (EX), 2018 WL 4945643,
`at *4–5 (C.D. Cal. Jan. 18, 2018). The court found that the
`License did not prohibit the school districts from employing
`third parties like Office Depot to make copies of the Eureka
`Math curriculum on their behalf. Id. This appeal followed.
`
`DISCUSSION
`
`I. MOTION TO DISMISS
`
`We review the district court’s Rule 12(b)(6) dismissal de
`novo. UMG Recordings, Inc. v. Shelter Capital Partners LLC,
`718 F.3d 1006, 1014 (9th Cir. 2013). To survive a motion to
`dismiss, “a complaint must contain sufficient factual matter,
`accepted as true, to ‘state a claim to relief that is plausible on
`its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
`(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
`(2007)). If the Court finds that the plaintiff did not allege
`sufficient facts “to raise a right to relief above the speculative
`level” and support a cognizable legal theory, it may dismiss
`the complaint as a matter of law. Twombly, 550 U.S. at 555.
`At this stage, the Court must take all well-pleaded allegations
`of material fact as true and construe them in the light most
`favorable to the non-moving party. Malibu Textiles, Inc. v.
`Label Lane Int’l, Inc., 922 F.3d 946, 951 (9th Cir. 2019).
`
`

`

`8
`
`GREAT MINDS V. OFFICE DEPOT
`
`A valid claim for copyright infringement requires
`“(1) ownership of a valid copyright, and (2) copying of
`constituent elements of the work that are original.” Feist
`Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361
`(1991) (citing Harper & Row Publishers, Inc. v. Nation
`Enters., 471 U.S. 539, 548 (1985)). The claim fails if the
`challenged use of the work falls within the scope of a valid
`license. See S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081,
`1087–88 (9th Cir. 1989). A copyright license “must be
`construed in accordance with the purposes underlying federal
`copyright law.” Id. at 1088 (citing Cohen v. Paramount
`Pictures Corp., 845 F.2d 851, 854 (9th Cir. 1988)). Federal
`courts “rely on state law to provide the canons of contractual
`construction, but only to the extent such rules do not interfere
`with federal copyright law or policy.” Id. (citing Fantastic
`Fakes, Inc. v. Pickwick Int’l, Inc., 661 F.2d 479, 482–83 (5th
`Cir. 1981)).
`
`Here, the parties agree that California law applies to the
`construction of the License. Great Minds, 2018 WL 4945643,
`at *4 n.7. “Under California law, the interpretation of contract
`language is a question of law.” Atel Fin. Corp. v. Quaker
`Coal Co., 321 F.3d 924, 925–26 (9th Cir. 2003). “[T]he terms
`of a contract must be construed in a manner that takes into
`account the context of the language and is consistent with the
`contract as a whole.” Actuate Corp. v. Int’l Bus. Machs.
`Corp., No. C-09-05892 JCS, 2010 WL 1340519, at *5 (N.D.
`Cal. Apr. 5, 2010) (citations omitted); Cal. Civ. Code § 1641.
`
`There is no dispute that the school and school district
`licensees’ copying of Great Minds’ material is permitted
`under the License. There also seems to be no dispute that if
`Office Depot were itself a licensee, commercial copying of
`Great Minds’ material would fall outside the scope of the
`
`

`

`GREAT MINDS V. OFFICE DEPOT
`
`9
`
`License and infringe Great Minds’ copyright. The issue we
`consider then is whether the school and school district
`licensees’ exercise of their rights under the License through
`the services provided by Office Depot results in Office Depot
`becoming a licensee. We hold that it does not. A licensee’s
`hiring of a third-party copy service to reproduce licensed
`material strictly for the licensee’s own permitted use does not
`turn that third party into a licensee that is bound to the
`License terms. See Great Minds v. FedEx Office and Print
`Servs., Inc., 886 F.3d 91, 96 (2d Cir. 2018) (“Great Minds’
`licensees may rely on non-employee agents in carrying out
`permitted uses without converting
`those agents
`into
`independent licensees.”); Automation by Design, Inc. v.
`Raybestos Prods. Co., 463 F.3d 749, 761 (7th Cir. 2006)
`(affirming summary judgment for both licensee and third
`party); Storage Tech. Corp. v. Custom Hardware Eng’g &
`Consulting, Inc., 421 F.3d 1307, 1315 (Fed. Cir. 2005)
`(independent repair company that copied protected work on
`behalf of its customers-licensees was not liable for copyright
`infringement); Hogan Sys., Inc. v. Cybersource Int’l, Inc.,
`158 F.3d 319, 324 (5th Cir. 1998) (third-party contractor was
`“sheltered under” the licensee’s rights); Marconi Wireless
`Tel. Co. of Am. v. Simon, 227 F. 906, 910 (S.D.N.Y. 1915),
`aff’d, 231 F. 1021 (2d Cir. 1916), reversed on other grounds,
`246 U.S. 46 (1918) (third-party contractor was “not an
`infringer because he [was] supplying lawful goods to a lawful
`licensee”). See also Raymond T. Nimmer & Jeff C. Todd,
`1 Modern Licensing Law § 6:28 (2018) (similarly describing
`the consensus in courts).3
`
`3 Even though Great Minds did not bring a suit against the licensees,
`we also note that decisions that have addressed whether the licensee
`violates the terms of the license by hiring third parties to exercise the
`licensed rights are instructive. Those cases held, and we agree, that hiring
`
`

`

`10
`
`GREAT MINDS V. OFFICE DEPOT
`
`Under Great Minds’ reading of the License, third party
`contractors like Office Depot are “downstream recipients” of
`Eureka Math as contemplated in § 2(a)(5)(A) of the License,
`meaning they “automatically receive[] an offer from [Great
`Minds] to exercise the Licensed Rights,” they accept that
`offer the moment the copy store employee presses “copy” on
`a machine, and they become bound to the terms of the
`License. Office Depot is not a downstream recipient. That
`Office Depot employed field representatives to advertise the
`availability of copying services for schools and school
`districts that use Eureka Math does not confer a licensee
`status on Office Depot. Its activities remain within the ambit
`of the schools and school districts’ license.
`
`Great Minds also contends that the “volitional” element,
`i.e., which entity’s employee does
`the copying,
`is
`determinative in this case.4 But that argument produces the
`
`a third party to exercise the licensee’s rights does not convert that third
`party into an independent licensee. See, e.g., Estate of Hevia v. Portrio
`Corp., 602 F.3d 34, 44–45 (1st Cir. 2010) (“When . . . there is no
`indication that a license-granting copyright owner has restricted the
`licensee’s ability to use third parties in implementing the license, the
`license is generally construed to allow such delegation.”); Automation by
`Design, 463 F.3d at 757–58 (licensee’s decision to hire a third party “to
`manufacture parts for it” did not violate the license); Intel Corp. v.
`Advanced Micro Devices, Inc., No. C-90-20237-WAI, 1994 WL 594041,
`at *2–3 (N.D. Cal. Oct. 20, 1994).
`
`4 The Second Circuit effectively dismissed this “volition” argument
`on appeal in FedEx as irrelevant. See 886 F.3d at 97 (“The relevant
`question here, . . . is not whether [the third party] engaged in volitional
`conduct when it photocopied the Materials at the school districts’ request,
`but whether the License permits school districts to request those copies at
`all. We conclude that it does, . . .”). We agree. Great Minds’ citation of
`volition cases is not instructive. Those cases held that a party may be
`liable for copyright infringement only if the infringing activity was
`
`

`

`GREAT MINDS V. OFFICE DEPOT
`
`11
`
`following absurd results: (1) a teacher may copy Eureka Math
`on an Office Depot-owned copy machine for a fee in-store,
`but cannot hand the materials to an Office Depot employee to
`be copied; (2) a school may pay a copy machine provider a
`monthly fee to keep a machine on site to copy Eureka Math,
`but cannot pay Office Depot employees to make the same
`copies; and (3) a school may permit teachers to copy Eureka
`Math on school-owned or leased machines, but cannot pay a
`high school student to make the same copies.
`
`Great Minds’ interpretation cannot be correct. The
`License itself provides no basis to distinguish between
`permitted copies of Eureka Math made by a licensee’s own
`employees (e.g., school teachers or staff) versus those made
`by a third-party contractor (e.g., Office Depot employees).
`We decline to read such a distinction into the License.
`
`Under the License, a non-commercial licensee may hire
`a third-party contractor, including those working for
`commercial gain, to help implement the License at the
`direction of the licensee and in furtherance of the licensee’s
`own licensed rights. The License extends to all employees of
`the schools and school districts and shelters Office Depot’s
`commercial copying of Eureka Math on their behalf. Holding
`differently would prevent proper non-commercial licensees
`from using relatively common means of reproduction to
`share, engage with, and exercise their rights to the licensed
`
`volitional conduct. They do not say the converse—as Great Minds
`suggests—that with volition, a defendant is liable for copyright
`infringement. See, e.g., Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657,
`666 (9th Cir. 2017); Cartoon Network LP, LLLP v. CSC Holdings, Inc.,
`536 F.3d 121, 131 (2d Cir. 2008); Religious Tech. Center v. Netcom On-
`Line Commc’n Serv., Inc., 907 F. Supp. 1361, 1370 (N.D. Cal. 1995).
`
`

`

`12
`
`GREAT MINDS V. OFFICE DEPOT
`
`work in a way that would contravene the intent of the License
`and undermine its utility. We conclude that the licensees’
`contract with Office Depot to exercise the licensees’ rights
`under the License does not impose an independent liability on
`Office Depot. As a result, Great Minds has failed to state a
`plausible claim to relief on its copyright infringement claim.
`
`II. LEAVE TO AMEND
`
`We review a district court’s denial of leave to amend for
`abuse of discretion. Design Data Corp. v. Unigate Enters.,
`Inc., 847 F.3d 1169, 1172 (9th Cir. 2017). Dismissal without
`leave to amend is proper if it is clear that “allegation of other
`facts consistent with the challenged pleading could not
`possibly cure the deficiency.” Montz v. Pilgrim Films &
`Television, Inc., 649 F.3d 975, 984 n.3 (9th Cir. 2011)
`(internal quotations omitted). The district court denied leave
`to amend because its interpretation of the License was a
`question of law and “permitting Great Minds to amend would
`be an exercise in futility.” Great Minds, 2018 WL 4945643,
`at *5 n.8 (citing Rutman Wine Co. v. E. & J. Gallo Winery,
`829 F.2d 729, 738 (9th Cir. 1987)). We agree.
`
`Great Minds argues that the district court failed to
`consider relevant extrinsic evidence showing that the License
`is reasonably susceptible to Great Minds’ own interpretation.
`See United States v. King Features Entm’t, Inc., 843 F.2d
`394, 398 (9th Cir. 1988) (citing Brobeck, Phleger & Harrison
`v. Telex Corp., 602 F.2d 866, 871 (9th Cir. 1979), cert.
`denied, 444 U.S. 981 (1979)). But Great Minds alleged no
`such extrinsic evidence in its complaint. On appeal, it now
`offers three new pieces of evidence: a survey published by
`Creative Commons and two third-party websites. None of
`that evidence is relevant to the ultimate issue on appeal:
`
`

`

`GREAT MINDS V. OFFICE DEPOT
`
`13
`
`whether Office Depot’s commercial reproduction of Eureka
`Math on behalf and at the direction of proper non-commercial
`licensees converted Office Depot into a licensee. The district
`court did not abuse its discretion in denying leave to amend.
`
`AFFIRMED.
`
`