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| Response To E!'s Motion To Dismiss |
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IN THE UNITED STATES DISTRICT COURT Civil Action No. 03-D-2334 (PAC)
KAREN DUDNIKOV and Pro Se Plaintiffs, v.
E! ENTERTAINMENT TELEVISION, INC., Defendant PLAINTIFF'S RESPONSE TO DEFENDANT'S MOTION TO DISMISS |
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Come now plaintiffs Karen Dudnikov, and Michael Meadors, pro se, and respectfully
submit their response to defendant's Motion To Dismiss ("Motion"):
I. INTRODUCTION 1. Defendant E! Entertainment Television ("E!") makes countless allegations of "reserved rights" and regularly alludes to "licenses" in the Motion. What E! expressly failed to do was to state any statue to support the claim of "reserved rights" and E! failed to present any evidence that a licensing agreement was offered or entered into at any time by E! or any of the recipients of the screening DVD. II. RESPONSE TO STATEMENT OF UNDISPUTED FACTS 2. Paragraph 4 falsely attempts to claim the DVD was distributed solely for purposes "as specified on the cover of the DVD" (see Def Exhibit A pg 1 and pg 2). Plaintiffs' auction was for an unopened DVD. The outside of the DVD contained no such statement. The "prohibition" on the DVD itself is not legally binding. III. ARGUMENTS A. First Sale Doctrine 3. E! cites Too, Inc. v Kohl's Department Stores, Inc., claiming plaintiffs have the burden of proof "of tracing the chain of title". This is wrong for two reasons. First, as the moving party, E! has the burden to prove the plaintiffs unlawfully acquired the DVD. Second, in Too, Inc, the proof was being required because the alleged infringer had obtained the product from a licensed manufacturer without permission from the copyright holder. 4. What E! fails to state to the court is that E! mails the DVDs and videos, unsolicited, to voting members of the Academy of Television Arts and Sciences ("ATAS") and the National Academy of Television Arts and Sciences ("NATAS"). To accomplish this, E! pays ATAS and NATAS for the right to use their mailing list. E! then delivers the screening DVDs and videos to a third party, Third Printing, in Burbank, CA, who then mails the screeners to the appropriate parties. At no time does E! know who is receiving the DVD or video. This is comparable to handing out free samples of a product on the street corner. While E! knows it is members of the ATAS and NATAS receiving the DVDs and videos, E! has no idea what their names or addresses are. 5. Title 39, United States Code, Section 3009, the Postal Reorganization Act of 1970, specifically states that unsolicited merchandise received in the mail may be kept without restriction by the recipient. As far as the federal government is concerned, it is a "gift". Ownership of the item passes from the sender to the recipient. 6. The act of unsolicited mailing of the DVDs (and videos) transfers title to the DVD unconditionally to the recipient who is free to sell or otherwise dispose of the DVD. This transfer of ownership triggers the first sale doctrine. The restriction printed on the DVD simply reflects the desires of the original owner (E!) and are not a legal obligation upon the recipient. B. Licenses 7. Numerous times E! alludes to "licenses" and "licensing" yet offers no proof that any sort of licensing agreement exists or existed. E! would have the court believe the statement by E! prohibiting subsequent sale constitutes a license. 8. A license is an contract agreement between two parties concerning the use of a product. This agreement must be stated and accepted by both parties and there must be something of value given, generally money. Nowhere on the DVD, or the DVD package, is there any hint of, or statement about, it being a licensed product. (see Defendant's Exhibit A) 9. Box top licenses, or shrink wrap licenses, create an agreement between the buyer and the seller at the time of purchase. The terms generally state that by opening the package and using the program, the buyer agrees to abide by the agreement. These licenses must be plainly stated and give the potential user the opportunity to read it before purchasing. The DVD distributed by E! contained no such wording, outside or inside. 10. Even if the DVD had contained licensing information on the outside, the fact the DVD was mailed, unsolicited, to unknown persons, they constitute gifts and any restrictions on subsequent resale are unenforceable and invalid. C. Motion Pictures 11. E! cites U.S. v. Wise in an attempt to link the distribution of the DVDs to the commercial distribution of motion pictures by studios. In U.S. v. Wise, signed licensing agreements existed between the parties. Motion picture studios have signed license agreements with distributors, movie houses, and broadcast companies. These licenses expressly state the restrictions and are agreed to by both parties. There is no license agreement covering the DVDs. 12. There are legal differences between licenses and sales contracts that affect the parties' rights under the copyright doctrine of first sale. Licenses are treated as general contracts. See Emerging Law of the Internet, at 1247. Third-party users, whether authorized or unauthorized, are not parties to the licensing agreement and generally cannot be bound by its terms. Copyrights are rights "against the world," but a licensing agreement affects only its parties and, as such, any licensing agreement involving the DVD would be between the copyright owner and the purchaser, if the DVD had been sold. Therefore, any licensing terms that did exist would not apply to plaintiffs as a third party. D. Right of Distribution 13. The right of distribution under 17 U.S.C. §106 refers strictly to the first distribution of the product. Giving the DVD away to unknown persons satisfies that first distribution since ownership was transferred. There are no rights of re-distribution as claimed by E!. 14. Justice Stevens, delivering an opinion for a unanimous Supreme Court in the case Quality King Distributors, Inc. v. L'Anza Research Int'l, Inc (96-1470), 98 F.3d 1109, reversed, stated: "The whole point of the first sale doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution." 15. In Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984), the Supreme Court stated that copyright protection "subsists . . . in original works of authorship fixed in any tangible medium of expression." 17 U. S. C. § 102(a) (1982 ed.). This protection has never accorded the copyright owner complete control over all possible uses of his work. (White- Smith Music Publishing Co. v. Apollo Co., 209 U.S., at 19). E. Fair Use Doctrine 16. Plaintiffs argued fair use in anticipation of E! claiming trademark infringement. Plaintiffs have conceded fair use is generally a trademark issue. E!'s attempt to link fair use under copyright law is misplaced as fair use under copyright law involves the copying of a product and there is no copying alleged here by E! F. Tortious Interference 17. A valid contract existed as the attempted sale of the DVD was legal because the plaintiffs had ownership of the DVD. E! has not established the illegality of the ownership. Plaintiffs have established ownership is legal and unrestricted. 18. Damage to the plaintiffs exists in the form of a lost sale, lost potential future sales, and defamatory emails sent to the bidders by eBay when the auction was terminated. 19. The auction had several bids. A contract to purchase was in effect according to the rules of eBay. All eBay users, and VeRO Members, agree to abide by the eBay User Agreement. Paragraph 4 of the Agreement states:
"4. Bidding and Buying. By bidding on an item you agree to be bound by the conditions of sale included in the item's description so long as those conditions of sale are not in violation of this Agreement or unlawful. Bids are not retractable except in exceptional circumstances, such as: when the seller materially changes the item's description after you bid; a clear typographical error is made; you cannot authenticate the seller's identity; or when the seller does not confirm your purchase in the Half.com area of our services. If you choose to bid on mature audience items or items that are restricted to adult use, you are certifying that you have the legal right to purchase such items. " Paragraph 5 of the eBay User Agreement states: "5.2 Binding Bids. Except for items listed in a category under the Non-binding Bid Policy, if you receive at least one bid at or above your stated minimum price (or in the case of reserve auctions, at or above the reserve price), you are obligated as the seller to complete the transaction with the highest bidder upon the auction's completion, unless there is an exceptional circumstance, such as: (a) the buyer fails to meet the terms of your listing (such as payment method), or (b) you cannot authenticate the buyer's identity. " When a person submits a bid for an item on auction, just below the box for the bid is the following warning from eBay: "Your bid is a contract - Place a bid only if you're serious about buying the item. If you are the winning bidder, you will enter into a legally binding contract to purchase the item from the seller. " 20. Plaintiffs rely upon repeat business. Forty-five percent of plaintiffs' eBay transactions are repeat customers. Future sales were jeopardized. 21. Ebay sends termination emails to all bidders informing them that the auction was ended because the listing violated the trademark and/or copyrights of another party. This creates a negative impression to potential bidders. G. Negligent Or Fraudulent Misrepresentation 22. E! knows, and their counsel knows, or reasonably should know as a matter of the business in which they are engaged, that the unsolicited mailings of the DVDs and videos remove subsequent control from E! and that restrictions printed on the DVDs and videos are not valid and unenforceable. Therefore their actions to terminate the auction were calculated and an intentional communication of false information. H. Outrageous Conduct 23. As stated in paragraph 22, the actions by E! were calculated and deliberate and without regard to the rights of others or the law. IV. CONCLUSION Based upon the foregoing, plaintiffs respectfully request this court to deny the Motion To Dismiss. Respectfully submitted this 16th day of April, 2004.
Karen Dudnikov Certificate of Service I HEREBY CERTIFY that on this 16th day of April, 2004, a true and correct copy of the Plaintiffs response was mailed, with all attachments, postage prepaid, First Class Mail to:
Michael G. Martin
E! Entertainment Television |