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Source: http://blog.ericgoldman.org/archives/2005/09/city_of_heroes.htm May 5, 2008 - Links have been removed.

Technology & Marketing Law Blog September 16, 2005 City of Heroes Lawsuit--New Ruling on False DMCA Takedown Notices By Eric Goldman Marvel Enterprises v. NCSoft Corp. CV 04-9253-RGK (C.D. Cal. Aug. 23, 2005). Given the interest in this case, I'm surprised that this ruling appears to have been overlooked (I found it through BNA http://pubs.bna.com/ip/BNA/ptc.nsf/is/a0b1j8w0e7 [subscription required]). In late August, there was an interesting new ruling in the City of Heroes lawsuit, with another good win for NCSoft. NCSoft, the game operator, sued Marvel under 17 USC 512(f) for sending bogus takedown notices. The takedown notices specified 2 character names, but did not specify what servers those characters resided in. Accordingly, NCSoft removed those characters across all of its servers, leading to some very bummed users whose characters were killed off. In response, NCSoft alleged the following facts: Marvel sent takedown notices on characters that Marvel itself created or that had already been removed Marvel knowingly sent notices to have NCSoft remove identically-named characters across multiple servers, even though some of those characters were legitimate the consequences were material because NCSoft added terms to its block list and deleted innocent players' characters these caused damages of lost goodwill, lost subscriptions and investigation expenses. These facts were enough to survive a motion to dismiss. We'll see if the plaintiff can prove the requisite facts, but this ruling is a pretty significant development. Many of us have hoped for stronger consequences to inhibit copyright owners from sending poorly-conceived takedown notices, and this ruling gives extra teeth to the 512(f) cause of action. One other odd argument re. 512(f)--Marvel claimed that to qualify as a 512 service provider (for purposes of bringing a 512(f) claim), the service provider must be "passive" and "innocent." This is just a specious argument, as the text of 512(k)(1) is entirely clear on this point (it defines a service provider as "a provider of online services"). Fortunately, the court emphatically rejected this arugment. NCSoft has also gone on the offensive by claiming that Marvel infringed its trademark in "City of Heroes" based on Marvel's use of the term "City of Heroes" in some promotional copy on some comic books. The trademark claims survived a motion to dismiss. I'm a little worried about how far NCSoft is trying to stretch its trademark against a slogan use by Marvel, but I support the aggressive response by NCSoft generally. Marvel is quickly learning that there are potential unexpected costs of enforcing its IP rights, and those include counterclaims. Finally, in an ironic twist, Marvel sought protection under California's anti-SLAPP laws. For reasons too complicated to explain here (as all anti-SLAPP rulings tend to be), the court rejected this effort.