Equine Legal Solutions, PC v. DigitalOcean, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

EQUINE LEGAL SOLUTIONS, PC, Case No.: 3:22-cv-01850-AN

Plaintiff,

v.

OPINION AND ORDER

FIRELINE FARMS, INC.,

Defendant.

Plaintiff Equine Legal Solutions, PC ("ELS") brings this action against defendant Fireline

Farms, Inc., alleging a copyright infringement claim under the Copyright Act, 17 U.S.C. § 101 et seq. On

June 13, 2024, defendant filed a motion for summary judgment. On August 16, 2024, plaintiff filed a

motion for summary judgment. The Court heard oral argument from the parties on January 22, 2025. For

the reasons stated below, defendant's motion is DENIED, and plaintiff's motion is GRANTED.

LEGAL STANDARD

Summary judgment is appropriate when there is no genuine issue as to any material fact

and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). When deciding a

motion for summary judgment, the court construes the evidence in the light most favorable to the non-

moving party. See Barlow v. Ground, 943 F.2d 1132, 1135 (9th Cir. 1991). When "parties file cross-

motions for summary judgment, the court must consider each party's evidence, regardless under which

motion the evidence is offered." Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir. 2011).

However, "the mere existence of some alleged factual dispute between the parties will not defeat an

otherwise properly supported motion for summary judgment; the requirement is that there be no genuine

issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphases omitted).

The substantive law determines which facts are material. Id. at 248. "Only disputes over facts that might

affect the outcome of the suit under the governing law will properly preclude the entry of summary

judgment." Id. A dispute about a material fact is genuine "if the evidence is such that a reasonable jury

could return a verdict for the nonmoving party." Id.

The moving party has the initial burden of informing the court of the basis for its motion

and identifying the portions of the pleadings and the record that it believes demonstrate the absence of an

issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the non-moving

party bears the burden of proof at trial, the moving party need not produce evidence negating or disproving

every essential element of the non-moving party's case. Id. at 325. Instead, the moving party need only

prove that there is an absence of evidence to support the non-moving party's case. Id.; In re Oracle Corp.

Secs. Litig., 627 F.3d 376, 387 (9th Cir. 2010). If the moving party sustains its burden, the non-moving

party must then show that there is a genuine issue of material fact that must be resolved at trial. Celotex,

477 U.S. at 324.

BACKGROUND

Plaintiff is an Oregon corporation that provides equine-related legal services. Compl., ECF

[1], ¶ 4. Defendant is a Florida corporation that operates a horse ranch in Southwest Ranches, Florida. Def.

Answer, ECF [34], ¶ 5; Def. Mot. for Summ. J. ("Def. Mot."), ECF [73], at 2.

Plaintiff is the registered owner of two copyrights: TX0007188695, for the work titled

"Youth Visitor Release and Instructions," and TX0008398596, for the work titled "Equine Boarding Forms

Package." Decl. Rachel E. Kosmal McCart Supp. Pl. Mot. for Summ. J. ("McCart Decl."), ECF [86], ¶¶ 5-

6 & Exs. 1-2. On October 31, 2016, defendant purchased the "Equine Boarding Forms Package" available

on plaintiff's website, a bundle that included two forms: the Boarding Stable Visitor Hold Harmless and

Indemnification Agreement – Adult ("Adult Release") and Boarding Stable Visitor Hold Harmless and

Indemnification Agreement – Youth ("Youth Release") (collectively, the "Forms"). Id. ¶¶ 7, 9-12 & Ex. 3;

Decl. Robert Parker Supp. Def. Mot. ("Parker Decl."), ECF [74], ¶ 5 & Ex. 3. The Forms included standard

legal language, prepared specifically for the horse rental context, and fillable blanks for defendant's

customers to complete. See Parker Decl. Ex. 3; McCart Decl. ¶ 14 & Exs. 4-5. Defendant purchased the

Forms for $149.99,1 and plaintiff delivered the Forms to defendant via email for download. See McCart

Decl. ¶ 7 & Ex. 3; Parker Decl. Ex. 3.

Plaintiff requires its customers to enter into a license agreement ("License Agreement")

before they can access the legal forms that they have purchased. McCart Decl. ¶¶ 18-19. Before defendant

downloaded the Forms, it digitally accepted the terms of the License Agreement by clicking on the box

titled "I Agree." See id. ¶ 19; McCart Decl. Ex. 6. The License Agreement provides that any customer that

does not agree to the terms of the License Agreement should not click on the box titled "I Agree." See

McCart Decl. Ex. 6. Section 2.2 of the License Agreement, titled "Use Limitation," provides in full:

"All documents and materials on the ELS Website, including any documents, emails and

other materials you may access or receive in connection with this agreement (collectively,

'ELS Materials'), are strictly for your personal use or use in your horse-related business.

You may not modify (except to fill in blanks as indicated), take language from, retype or

otherwise create derivative works from any ELS Materials. For your own personal use and

in the ordinary course of your horse-related business, you may copy, email and otherwise

distribute the ELS Materials. However, you may not post any ELS Materials to the

Internet, including on your own website, and you may not sell any ELS Materials. You

may not distribute any ELS Materials, by email or otherwise, unless the distribution is in

connection with your personal use of the ELS Materials or the use of ELS Materials in the

ordinary course of your horse-related business."

Id.

In 2021, defendant began working with a web developer to create a business website. Def.

Mot. 2-3; see Decl. Kaihly Gonzalez Supp. Def. Mot. ("Gonzalez Decl."), ECF [75], Ex. 1. As part of the

process, defendant provided the web developer with its business documents, including the Forms. Def.

Mot. 3; see Gonzalez Decl. Exs. 1-2. Defendant alleges that the web developer saved the documents in a

temporary online library, which was not linked to any website but was accessible through a Google search.

Def. Mot. 3. The parties dispute whether that website was ever published online, but it is undisputed that

the Forms were accessible at URLs connected to defendant's website. See id. at 3-4 (citation omitted);

Gonzalez Decl. Exs. 1-2; Pl. Resp. Opp'n to Def. Mot. ("Pl. Resp."), ECF [85], at 12-13; McCart Decl. ¶¶

1 The McCart Declaration supporting plaintiff's response shows an order of "Item #33 Equine Boarding Agreement

Package" for $149.99. ECF [80], at Ex. 2. Defendant asserts that they purchased the Forms for $49.99, Def. Mot. 3,

and the McCart Declaration supporting plaintiff's motion shows an order of "Item #11 Equine Facility Use Agreement"

for $49.99, ECF [86], at Ex. 3. Regardless, it is undisputed that defendant purchased the Forms from plaintiff.

28-30.

From time to time, plaintiff conducts internet searches to identify documents that it believes

infringe on its legal forms. McCart Decl. ¶ 22; Def. Mot. 4 (citing Compl. ¶ 10). To do so, plaintiff searches

for specific horse-related language that is unique to its forms—primarily phrases that describe horse-related

risks and behaviors. McCart Decl. ¶ 24; Def. Mot. 4 (citing Compl. ¶ 10). On or about November 17,

2021, plaintiff conducted an internet search for the specific horse-related language and discovered the

Forms that were accessible at two URLs on defendant's website. McCart Decl. ¶ 28; Def. Mot. 4 (citing

Parker Decl. Ex. 4).

Plaintiff sent takedown notices compliant with the Digital Millennium Copyright Act

("DMCA") via email to defendant on November 17, 2021, and to defendant's internet service provider

("ISP") on November 29, 2021. See McCart Decl. Exs. 7, 9; Parker Decl. Ex. 4. Both notices included the

URLs at which the Forms were located. See McCart Decl. Exs. 7, 9; Parker Decl. Ex. 4. Plaintiff sent

additional DMCA compliant takedown notices to defendant on December 8, 2021. McCart Decl. ¶ 33 &

Ex. 8. On December 23, 2021, defendant's president called plaintiff's office to ask how defendant could

still use the Forms that it purchased from plaintiff. Decl. Donna Edwards Supp. Pl. Resp., ECF [79], Ex.

1. That same day, plaintiff's employee emailed defendant stating: "Our license agreement does not allow

you to post our forms on a website. . . . While you can't post them on your website, you can email them to

prospective clients." Id. Ex. 2. On December 29, 2021, plaintiff visited the URLs where the Forms were

located, and the Forms were no longer accessible at those URLs. McCart Decl. ¶ 37.

On January 5, 2022, plaintiff conducted another search for the specific horse-related

language and discovered that the Forms were again accessible at the URLs where they had previously been

posted. Id. ¶¶ 38-40. That day, plaintiff sent an email to defendant's ISP notifying it that defendant had

reposted the Forms and asking for the ISP's assistance in removing them. Id. Ex. 12. On January 5, 10, 13,

and 18, 2022, plaintiff sent follow-up emails to the ISP. Id. ¶¶ 41, 43, 45, 47. Plaintiff did not receive a

response. Id. ¶¶ 42, 44, 46. Plaintiff believes that by January 25, 2022, the ISP had disabled defendant's

website. Id. ¶ 48.

On March 4, 2022, plaintiff conducted another search for the specific horse-related

language and discovered that the Adult Release form was again posted on defendant's website, this time at

a different URL. Id. ¶ 49. That day, plaintiff sent another DMCA compliant takedown notice via email to

defendant and its new ISP. Id. ¶¶ 52-53 & Exs. 16-17; see Parker Decl. Ex. 5. On or around March 11,

2022, plaintiff determined that the Adult Release form had been removed from defendant's website. McCart

Decl. ¶ 54. Defendant received a confirmation from the new ISP that the Adult Release form had been

taken down. Def. Mot. 4; see Gonzalez Decl. Ex. 4.

On November 18, 2022, plaintiff conducted another search for the specific horse-related

language and discovered that the Youth Release form was again posted on defendant's website, this time at

a different URL. McCart Decl. ¶¶ 55-56. That day, plaintiff sent another DMCA compliant takedown

notice via email to defendant and its new ISP. Id. ¶¶ 57-58 & Exs. 18-19; Parker Decl. Ex. 6. Defendant

asked the web developer why defendant was still receiving these takedown notices, and the web developer

provided defendant with his conversations with the new ISP trying to figure out why the Forms were still

appearing online. Def. Mot. 4; see Gonzalez Decl. Exs. 1-2. The new ISP could not explain why the Forms

were still visible but noted that it was promptly taking down the documents once they were noticed by

plaintiff. Def. Mot. 4-5; see Gonzalez Decl. Ex. 2.

Aside from the Forms at issue in this case, defendant also purchased at least two of

plaintiff's other products: a "Partial Equine Lease Agreement" on January 13, 2019, and an "Equine Facility

Use Agreement" on December 29, 2019. Parker Decl. Ex. 3; McCart Decl. Ex. 3.

DISCUSSION

Defendant moves for summary judgment on the grounds that "[p]laintiff has sold a purely

utilitarian product" and "has no right under copyright law to restrict the use of these documents by claiming

a limitation on online distribution[.]" Def. Mot. 5. Plaintiff moves for summary judgment on the grounds

that it owns valid copyrights in the Forms, it had the exclusive right to distribute and display the Forms,

and defendant distributed and displayed the Forms in violation of the License Agreement. Plaintiff also

argues that defendant's infringement was willful and that plaintiff is entitled to statutory damages.

To prevail on a claim of direct copyright infringement, plaintiff must establish

(1) "ownership of the allegedly infringed material" and (2) that defendant "violate[d] at least one exclusive

right granted to" plaintiff under 17 U.S.C. § 106. A&M Recs., Inc. v. Napster, Inc., 239 F.3d 1004, 1013

(9th Cir. 2001) (citations omitted).

A. Copyright Infringement

1. Ownership of Copyrights

A plaintiff is "required to show registration as an element of an infringement claim."

Unicolors, Inc. v. Urb. Outfitters, Inc., 853 F.3d 980, 988 (9th Cir. 2017) (citation omitted). "A certificate

of registration from the U.S. Copyright Office raises the presumption of copyright validity and ownership."

Id. (citation omitted).

The record shows that plaintiff owns the copyrights TX0007188695, for the work titled

"Youth Visitor Release and Instructions," and TX0008398596, for the work titled "Equine Boarding Forms

Package." See McCart Decl. Exs. 1-2. The record also shows that plaintiff's copyrights are valid and that

the Forms contain the copyrighted works. Despite defendant's numerous arguments regarding the utilitarian

functions of legal forms, the minimal originality contained in plaintiff's copyrighted works, and the blank

forms doctrine, defendant ultimately concedes that plaintiff "has a valid copyright[] and a valid business in

selling its copyrighted works." Questioning the copyrightability of plaintiff's works and discussing the

applicability of the blank forms doctrine is only relevant if defendant is contesting the validity of plaintiff's

copyrights, which it apparently is not.2 Because it is undisputed that plaintiff owns copyrights of works

that are contained within the Forms, plaintiff has satisfied the first prong of its copyright infringement claim.

2. Violation of Exclusive Right

2 As an example, defendant emphasizes the "thinness" of plaintiff's copyrights and the fact that copyright law does not

protect purely utilitarian functions or purely legal verbiage. See Def. Reply Supp. Def. Mot. ("Def. Reply"), ECF

[81], at 4-7. But the "thinness" of a valid copyright is relevant where a party wishes to use the facts or information

contained within a copyrighted work in preparing another work, which would not infringe on a copyright "so long as

the competing work does not feature the same selection and arrangement." Feist Publ'ns, Inc. v. Rural Tel. Serv. Co.,

Inc., 499 U.S. 340, 349 (1991). That is not the case here, as it is undisputed that the entire contents of the Forms were

accessible from defendant's website.

Defendant argues that plaintiff cannot claim exclusive rights in its legal forms. Defendant

also argues that if a customer already has legal rights to do something with their purchase, such as distribute

the Forms online, the customer does not require a license in order to exercise that legal right. In its response

and its own motion, plaintiff argues that defendant violated its exclusive distribution rights. On reply,

plaintiff also argues for the first time that defendant violated its exclusive display rights.

As an initial matter, defendant's argument that plaintiff cannot claim exclusive rights in the

Forms is meritless because defendant concedes that plaintiff's copyrights are valid. Thus, to establish a

claim for copyright infringement, plaintiff need only prove a violation of one of its exclusive rights. See

17 U.S.C. § 501(a); Atl. Recording Corp. v. Howell, 554 F. Supp. 2d 976, 980-81 (D. Ariz. 2008).

a. Distribution Right

Section 106(3) of the Copyright Act grants to a copyright owner the exclusive right "to

distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of

ownership, or by rental, lease, or lending[.]" 17 U.S.C. § 106(3). Because the statute does not define the

term "distribute," courts have interpreted the term in light of the statute's plain meaning and legislative

history. Atl. Recording Corp., 554 F. Supp. 2d at 981. "The general rule, supported by the great weight of

authority, is that 'infringement [of the distribution right] requires an actual dissemination of either copies

or phonorecords.'" Id. at 981 (alteration in original) (citations omitted) (quoting Nat'l Car Rental Sys. v.

Comput. Assocs. Int'l, Inc., 991 F.2d 426, 434 (8th Cir. 1993)); see also Perfect 10, Inc. v. Amazon.com,

Inc., 508 F.3d 1146, 1162 (9th Cir. 2007) ("[T]he district court's conclusion [that distribution requires an

'actual dissemination'] is consistent with the language of the Copyright Act."); In re Napster, Inc. Copyright

Litig., 377 F. Supp. 2d 796, 805 (N.D. Cal. 2005) ("[A] copyright owner seeking to establish that his or her

copyrighted work was distributed in violation of section 106(3) must prove that the accused infringer either

(1) actually disseminated one or more copies of the work to members of the public or (2) offered to

distribute copies of that work for purposes of further distribution, public performance, or public display.").

"In the internet context, an actual dissemination means the transfer of a file from one computer to another."

Perfect 10 v. Google, Inc., 416 F. Supp. 2d 828, 844 (C.D. Cal. 2006), aff'd in relevant part sub nom. Perfect

10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007); see SA Music, LLC v. Amazon.com, Inc., Nos.

2:20-cv-00105-BAT et al., 2020 WL 3128534, at *7 (W.D. Wash. June 12, 2020).

Here, it is undisputed that defendant caused the Forms to be uploaded such that the Forms

were accessible at the URLs that plaintiff located. As such, defendant made the Forms available. However,

"[m]erely making an unauthorized copy of a copyrighted work available to the public does not violate a

copyright holder's exclusive right of distribution." Atl. Recording Corp., 554 F. Supp. 2d at 983; see Perfect

10, Inc., 508 F.3d at 1162 (citations omitted) (rejecting contention that "merely making images 'available'

violates the copyright owner's distribution right"). There is no evidence in the record suggesting that there

was any actual dissemination or transfer of plaintiff's copyrighted work through defendant's posting of the

Forms on the internet. Plaintiff concedes that "[j]ust how many times third parties accessed and downloaded

[p]laintiff's copyrighted work during the six occasions it was available on [d]efendant's website is

unknown." Pl. Reply Supp. Mot. for Summ. J. ("Pl. Reply"), ECF [93], at 3. Plaintiff asserts that this

information should have been in defendant's control and produced in discovery and speculates that

"numerous third parties likely accessed and downloaded [p]laintiff's copyrighted work from [d]efendant's

website." Id. However, plaintiff ignores the fact that to prevail on a copyright infringement claim, it has

the burden to prove that there was actual dissemination; plaintiff cannot merely speculate that an absence

of evidence means that there could have been actual dissemination. Moreover, there is no evidence that

defendant intended to sell, lease, or otherwise transfer ownership of the Forms by causing the Forms to be

posted online. Accordingly, plaintiff has not established that defendant violated plaintiff's exclusive

distribution rights.

b. Display Right

Although plaintiff argues that defendant violated its exclusive display rights for the first

time on reply, the Court exercises its discretion to consider the merits of this argument.3 See Flathead-

3 Although defendant never moved for leave to file a surreply, one week before oral argument, the Court ordered the

parties to be prepared to discuss the scope of the exclusive display right. See Order of January 15, 2025, ECF [98].

During oral argument, defendant had the opportunity to and did respond to plaintiff's display rights argument.

Lolo-Bitterroot Citizen Task Force v. Montana, 98 F.4th 1180, 1188-89 (9th Cir. 2024). Section 106(5) of

the Copyright Act grants to a copyright owner of a literary work the exclusive right "to display the

copyrighted work publicly[.]" 17 U.S.C. § 106(5). A literary work is a work "expressed in words . . .

regardless of the nature of the material objects[.]" 17 U.S.C. § 101.

Plaintiff asserts that its copyrighted works are literary works. During oral argument,

defendant disputed this characterization, asserting that plaintiff's copyrighted works have only a utilitarian

function and minimal originality. However, a literary work requires only minimal originality. See 1

Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 2.04[A] (internal quotation marks omitted)

("The use of the term 'literary' in this context does not connote any criterion of literary merit or qualitative

value."); cf. Feist Publ'ns, Inc., 499 U.S. at 345 ("Originality does not signify novelty; a work may be

original even though it closely resembles other works so long as the similarity is fortuitous, not the result

of copying."). Moreover, because defendant concedes the validity of plaintiff's copyrights, defendant

necessarily concedes the originality of the underlying works. See Feist Publ'ns, Inc., 499 U.S. at 346

(explaining that "[o]riginality is a constitutional requirement" for a work to be copyrightable). Accordingly,

plaintiff's copyrighted works are "literary works" to which the exclusive display right applies.

Because plaintiff has exclusive rights to display its literary works, the Court must next

examine whether posting the Forms on the internet in a manner such that only plaintiff could locate them

violates plaintiff's display rights. In Perfect 10, Inc., the Ninth Circuit reviewed the plain language of

section 106(5) and held that "a computer owner that stores an image as electronic information and serves

that electronic information directly to the user ('i.e., physically sending ones and zeroes over the [I]nternet

to the user's browser') is displaying the electronic information in violation of a copyright holder's exclusive

display right." 508 F.3d at 1159-60 (alteration in original) (citation omitted). However, the court also held

that "the owner of a computer that does not store and serve the electronic information to a user is not

displaying that information, even if such owner in-line links to or frames the electronic information." Id.

(emphasis added) (citation omitted). Similarly, in VHT, Inc. v. Zillow Group, Inc., the Ninth Circuit rejected

a plaintiff's contention that the defendant violated the Copyright Act by making images "available for public

display," reasoning that "[t]his theory presumes that the Copyright Act's display right encompasses an

exclusive right to 'make available for display,' a position neither supported by the statute nor embraced by

this court." 918 F.3d 723, 736 (9th Cir. 2019) (citing Perfect 10, Inc., 508 F.3d at 1160 (9th Cir. 2007); 17

U.S.C. § 101).

However, in Bell v. Wilmott Storage Services, the Ninth Circuit held that even though a

member of the public could not access a photo by simply visiting the defendant's website, the defendant

still publicly displayed the photo. 12 F.4th 1065, 1073 (9th Cir. 2021). The plaintiff in Bell frequently

used reverse image searches to monitor infringing uses of the photo at issue and found the photo on a server

database associated with the defendant's website through one of those searches. Id. at 1069-70. The average

internet user would not have been able to access the photograph on the defendant's website; rather, the

image was only accessible to those who conducted a reverse image search or knew the precise address of

the image database archiving the photograph. Id. at 1070. Despite the facts that the photo was only

accessible to members of the public if an individual knew how to access it and that Google never indexed

the photo, the court found that "[b]y displaying the [] photo on a server that was publicly accessible to

anyone with an Internet connection, . . . [the defendant] publicly displayed the photo, regardless of whether

or not any particular person actually found and viewed it." Id. at 1073 (citation omitted). The court further

found that "[the plaintiff did] not need to prove that there was some minimum number of users who in fact

accessed the [] photo to make out a prima facie case of infringement." Id. at 1074 (citing Perfect 10, Inc.,

508 F.3d at 1159).

The facts of this case are analogous to those in Bell. Like the plaintiff in Bell, plaintiff

frequently conduct searches of the unique language it uses in the Forms to identify potential infringing uses.

Plaintiff found the Forms on defendant's website through these searches. It is undisputed that the Forms

were accessible on defendant's website, even if only temporarily. Even though it is likely that no other user

would be able to find the Forms, by displaying the Forms on a webpage that was publicly accessible to

anyone with an internet connection, defendant "publicly displayed" the Forms. See id. at 1073. This is true

even though there is no evidence that any member of the public found or viewed the Forms, as plaintiff

need not show any "minimum number of users who in fact accessed the [Forms through the website] to

establish a prima facie case of infringement." Id. at 1074. Accordingly, plaintiff has established that

defendant violated plaintiff's exclusive display rights.

Because plaintiff has shown that defendant violated one of plaintiff's exclusive rights,

plaintiff has established the second prong of its copyright infringement claim.

3. Defenses

Defendant raises a number of defenses to argue that it is not subject to liability for copyright

infringement. The Court addresses each argument in turn.

a. License Agreement

Defendant argues that its use of the Forms was within the permitted uses under the terms

of the License Agreement. Plaintiff argues that the License Agreement explicitly prohibits posting the

Forms on the internet.

The existence of a license authorizing the use of copyrighted material is an affirmative

defense to an allegation of infringement. Worldwide Church of God v. Phila. Church of God, Inc., 227

F.3d 1110, 1114 (9th Cir. 2000) (citations omitted). "Nevertheless, when the contested issue is the scope

of a license, rather than the existence of one, the copyright owner bears the burden of proving that the

defendant's copying was unauthorized under the license and the license need not be pleaded as an

affirmative defense." Straughter v. Concord Music, No. ED CV 19-1360-JFW(SHKx), 2021 WL 160709,

at *7 (C.D. Cal. Jan. 8, 2021) (internal quotation marks omitted) (quoting Sohm v. Scholastic Inc., 959 F.3d

39, 48 (2d Cir. 2020)); see LGS Architects, Inc. v. Concordia Homes of Nev., 434 F.3d 1150, 1156 (9th Cir.

2006), overruled on other grounds by Perfect 10, Inc. v. Google, Inc., 653 F.3d 976 (9th Cir. 2011). Here,

the parties agree the License Agreement exists but dispute its scope.

Principles of contract law apply to the construction of copyright licenses and other transfers

of rights. Allegro Corp. v. Only New Age Music, Inc., No. 01-790-HU, 2002 WL 32806161, at *5 (D. Or.

Oct. 4, 2002) (citation omitted), report and recommendation adopted, 2003 WL 23571745 (D. Or. Jan. 23,

2003). "Interpretation of a contract is a matter of law[.]" United States v. King Features Ent., Inc., 843

F.2d 394, 398 (9th Cir. 1988). The License Agreement provides that it "is governed by the laws of the State

of Oregon." McCart Decl. Ex. 6.

Under Oregon law, to interpret a contractual provision, the court first "examines the text

of the disputed provision[] in the context of the contract as a whole." Yogman v. Parrott, 325 Or. 358, 361,

937 P.2d 1019 (1997) (en banc). If the provision is unambiguous, the analysis ends, and the court construes

the term as a matter of law. Id.; Williams v. RJ Reynolds Tobacco Co., 351 Or. 368, 379-80, 271 P.3d 103

(2011) (citation omitted).

In addition, the construction of a copyright license must be consistent with federal

copyright law and policy. MDY Indus., LLC v. Blizzard Ent., Inc., 629 F.3d 928, 939 (9th Cir. 2010)

(citation omitted); S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1088 (9th Cir. 1989) (citing Cohen v.

Paramount Pictures Corp., 845 F.2d 851, 854 (9th Cir. 1988); Harris v. Emus Recs. Corp., 734 F.2d 1329,

1334 (9th Cir. 1984)). "Chief among these purposes is the protection of the author's rights." S.O.S., Inc.,

886 F.2d at 1088 (citing Cohen, 845 F.2d at 854). Copyright licenses are therefore "assumed to prohibit

any use not authorized." Id. (citations omitted).

Section 2.2 of the License Agreement is titled "Use Limitation" and describes how

defendant may and may not use plaintiff's legal forms, such as the Forms. The provision allows some types

of distribution, such as by email, but explicitly states that customers "may not post [the Forms] to the

internet, including on [the customer's] own website." McCart Decl. Ex. 6. Defendant's argument that the

terms of the License Agreement allowed particular kinds of distribution is unavailing because the provision

unambiguously prohibits defendant's exact conduct here—posting the Forms online. Additionally, the

Court's construction is consistent with the purposes of copyright law. A breach of this provision clearly

encroaches on plaintiff's exclusive rights to reproduce, distribute, and display its works, which are conferred

upon plaintiff by the Copyright Act. In the absence of the License Agreement, which by its nature allows

defendant to use the Forms in certain ways, any method of distribution, including posting the Forms on the

internet, would infringe on plaintiff's exclusive rights. Because the License Agreement unambiguously

prohibits posting of the Forms on the internet, plaintiff has established that defendant's conduct was not

authorized by the terms of the License Agreement.

b. Implied License

Defendant next argues that its acts were permitted by an implied license. An implied

license exists when (1) the licensee requests the creation of a work; (2) the licensor creates the work and

delivers it to the licensee who asked for it; and (3) the licensor intends that the licensee copy and distribute

the work. Asset Mktg. Sys., Inc. v. Gagnon, 542 F.3d 748, 754-55 (9th Cir. 2008) (citation and footnote

omitted). However, none of these conditions are met here. Defendant never requested the creation of the

Forms; plaintiff created the Forms on its own initiative and sold them to defendant as part of its business.

Accordingly, there is no implied license.

c. First Sale Rule

Although defendant never explicitly argues the first sale rule as a defense, defendant raises

the first sale rule at various points in its briefing. The first sale rule, set forth in section 109, provides that

a copyright owner's exclusive right of public distribution under section 106(3) may terminate with respect

to a particular copy of a work that has been lawfully made and sold. 17 U.S.C. § 109(a). "[O]nce the

copyright owner places a copyrighted item in the stream of commerce . . . , he has exhausted his exclusive

statutory right to control its distribution." Quality King Distribs., Inc. v. L'Anza Rsch. Int'l, Inc., 523 U.S.

135, 152 (1998). However, "[t]he first sale doctrine does not apply to a person who possesses a copy of the

copyrighted work without owning it, such as a licensee." Vernor v. Autodesk, Inc., 621 F.3d 1102, 1107

(9th Cir. 2010) (citations omitted). Accordingly, the parties spill much ink disputing whether plaintiff sells

its legal forms or merely "licenses to access and use" its legal forms. Compl. ¶ 1; see Def. Mot. 8-10; Pl.

Mot. 3-5.

Because plaintiff does not show that defendant violated its exclusive distribution right, the

first sale rule does not apply. See Vernor v. Autodesk, Inc., 555 F. Supp. 2d 1164, 1170 n.4 (W.D. Wash.

2008) (emphasis in original) (citing Hampton v. Paramount Pictures Corp., 279 F.2d 100, 103 (9th Cir.

1960)) (noting that in Hampton, "there was no first sale issue, but rather a dispute about whether the

defendant could display the movie"). Accordingly, the Court does not reach the question of whether

defendant owns a copy of the Forms or merely a license to use the Forms.

d. DMCA Safe Harbor

Finally, defendant argues that it complied with the DMCA and is entitled to safe harbor.

The DCMA provides that a "service provider" is not liable for copyright infringement if, in relevant part,

the material was made available online by a person other than the service provider and is only intermediately

or temporarily stored on the service provider's system, see 17 U.S.C. § 512(b)(1), or the service provider

does not have knowledge of the infringing material and "acts expeditiously to remove, or disable access to,

the material[,]" id. § 512(c)(1). A service provider is either "an entity offering the transmission, routing, or

providing of connections for digital online communications, between or among points specified by a user,

of material of the user's choosing, without modification to the content of the material as sent or received[,]"

or "a provider of online services or network access, or the operator of facilities therefor[.]" 17 U.S.C.

§ 512(k)(1)(A)-(B). However, defendant is not a service provider. Moreover, defendant caused the Forms

to be made available online; it was not merely an entity that facilitated transmission of the Forms.

Accordingly, the DCMA safe harbor defenses do not apply to defendant.

B. Statutory Damages

Because plaintiff has established a claim of copyright infringement and none of defendant's

purported defenses apply, the Court turns to the question of damages. Plaintiff has elected to recover

statutory damages, which it is entitled to regardless of whether "there is adequate evidence of the actual

damages suffered[.]" L.A. News Serv. v. Reuters TV Int'l, Ltd., 149 F.3d 987, 996 (9th Cir. 1998) (internal

quotation marks omitted) (quoting Harris, 734 F.2d at 1335); see 17 U.S.C. § 504(c)(1).

"When a plaintiff demands more than the minimum amount of statutory damages in a

copyright infringement action and a party demands a jury trial, the Seventh Amendment entitles that party

to have a jury decide the amount of statutory damages." Reed v. Ezelle Inv. Props. Inc., 353 F. Supp. 3d

1025, 1037 (D. Or. 2018) (footnote omitted). Here, the parties confirmed during oral argument that they

both waived their right to a jury trial. Accordingly, this Court may award statutory damages on summary

judgment. See Fed. R. Civ. P. 38(d).

Under section 504, a court may award statutory damages of "not less than $750 or more

than $30,000 as the court considers just." 17 U.S.C. § 504(c)(1). If the infringement was "innocent," a

court may reduce the award of statutory damages to as low as $200. Id. § 504(c)(2); see Reed, 353 F. Supp.

3d at 1036. To prove innocent infringement, the defendant must show that it "was not aware and had no

reason to believe that [its] acts constituted an infringement of copyright[.]" 17 U.S.C. § 504(c)(2). If the

infringement was "willful," a court may increase the award to $150,000. Id. To prove willful infringement,

the plaintiff must show that (1) the defendant was actually aware of the infringing activity, or (2) the

defendant's actions were the result of "reckless disregard" for, or "willful blindness" to, the copyright

holder's rights. Louis Vuitton Malletier, S.A. v. Akanoc Sols., Inc., 658 F.3d 936, 944 (9th Cir. 2011).

"The court has wide discretion in determining the amount of statutory damages to be

awarded, constrained only by the specified maxima and minima." Harris, 734 F.2d at 1335 (footnote

omitted) (citing L.A. Westermann Co. v. Dispatch Printing Co., 249 U.S. 100 (1919)). "Within these

limitations the court's discretion and sense of justice are controlling[.]" Peer Int'l Corp. v. Pausa Recs.,

Inc., 909 F.2d 1332, 1336 (9th Cir. 1990) (internal quotation marks omitted) (quoting F.W. Woolworth Co.

v. Contemp. Arts, 344 U.S. 228, 232 (1952)). To determine the amount of statutory damages, courts

consider factors such as:

"(1) the expenses saved and the profits reaped; (2) the revenues lost by the plaintiff; (3) the

value of the copyright; (4) the deterrent effect on others besides the defendant; (5) whether

the defendant's conduct was innocent or willful; (6) whether a defendant has cooperated in

providing particular records from which to assess the value of the infringing material

produced; and (7) the potential for discouraging the defendant."

Apple Inc. v. Psystar Corp., 673 F. Supp. 2d 926, 928 (N.D. Cal. 2009) (internal quotation marks omitted)

(quoting Microsoft Corp. v. Nop, 549 F. Supp. 2d 1233, 1237 (E.D. Cal. 2008)).

Plaintiff argues that it is entitled to an award of $75,000 because defendant willfully

infringed plaintiff's copyrights, or in the alternative, $30,000 if the Court does not find that defendant's

infringement was willful. Defendant argues that plaintiff is entitled to only $400, equal to two innocent

infringements, or in the alternative, $1,900, equal to two minor infringements and four innocent

infringements.

The Court addresses the factors in turn. First, regarding expenses saved and profits reaped,

plaintiff concedes that "[it] has no reason to believe [d]efendant profited by posting the [Forms] on its

website." Pl. Mot. 11. Plaintiff offers no evidence of expenses saved or profits reaped by defendant.

Second, regarding revenues lost, plaintiff states that "it is impossible to calculate how many

sales [p]laintiff lost as a result of the [Forms'] presence on [d]efendant's website." Id. Plaintiff also offers

no evidence of its revenues lost.

Third, regarding the value of plaintiff's copyrights, plaintiff argues that "the Boarding

Forms Package, of which the [Forms] are an integral part, is a cornerstone of [p]laintiff's business" because

it is plaintiff's best-selling and most expensive product, currently priced at $199.99. Id. at 12; see McCart

Decl. ¶¶ 74-75. Plaintiff also argues that the horse industry is "far from a niche business – there are 6.65

million horses in the United States that add $177 billion to the United States economy." Id. (citation

omitted). While these statements indicate that plaintiff's two copyrights have value, nothing in the record

helps the Court determine what that value is.

Fourth, regarding the deterrent effect to others, plaintiff asserts that "[c]opyright

infringement has become an increasing problem for [p]laintiff, and infringers and website hosts alike are

increasingly unresponsive to DMCA notices." Id.; see McCart Decl. ¶ 26. While that may be plaintiff's

experience as a general matter, nothing in the record supports this assertion.

Fifth, regarding whether defendant's conduct was willful or innocent, plaintiff identifies

six instances in which the Forms were accessible on defendant's website, and defendant does not dispute

that these instances occurred. It is also undisputed that defendant received five DMCA notices relating to

the Forms. However, no evidence in the record shows that defendant was aware that the Forms were

publicly accessible on its website before it received the DMCA notices. In fact, the evidence shows only

that after defendant received each of the DMCA notices, either directly from plaintiff or through its ISP,

defendant worked to have the Forms removed from the website and cease the infringing conduct. Plaintiff

appears to argue that the fact that defendant's president called plaintiff's office to ask how defendant could

still use the Forms is evidence of defendant's actual knowledge, but that only indicates that defendant was

asking how it could use the Forms that it had already purchased from plaintiff. Nothing in the record

supports a finding of willful infringement. On the contrary, the evidence shows that defendant "was not

aware and had no reason to believe that [its] acts constituted an infringement of copyright[.]" 17 U.S.C.

§ 504(c)(2). Accordingly, the Court finds that defendant's infringement was innocent.

Sixth, regarding defendant's cooperation, plaintiff argues that "[d]efendant did not produce

a single record that would allow [p]laintiff to glean any insight into the breadth of [d]efendant's internet

distribution of [p]laintiff's copyrighted works. Moreover, [d]efendant was uncooperative in general with

the discovery process." Pl. Mot. 13 (citing McCart Decl. Exs. 33, 40). The only evidence plaintiff cites to

is defendant's second supplemental response to plaintiff's first request for production, in which defendant's

counsel responded that defendant did not have custody or control of the documents that plaintiff requested.

See id. This is not evidence of non-cooperation, and plaintiff presents no other evidence to support its

assertion.

Seventh, regarding the deterrent effect to defendant, plaintiff argues that "[t]he probability

of [d]efendant infringing [p]laintiff's copyrights again in the future seems high" and that "[c]learly, it will

take more than [d]efendant has spent in legal fees on this case to deter [d]efendant from further

infringement." Pl Mot. 13-14. Plaintiff appears to believe that just because defendant did not comport with

plaintiff's approach to litigating this case—e.g., by litigating to the summary judgment phase and retracting

a settlement offer—defendant must have acted in bad faith and should be deterred. This is not evidence of

a need to deter defendant. Evidence in the record shows that defendant purchased at least two other forms

of plaintiff's. Parker Decl. Ex. 3; McCart Decl. Ex. 3. However, nothing in the record suggests, nor does

plaintiff allege, that defendant has used either of these products in a manner that infringes on plaintiff's

copyrights. Accordingly, the need to deter defendant appears to be minimal.

Taking the above factors into consideration, the Court concludes that because defendant's

infringement was innocent, there is no evidence of profits reaped or revenues lost, and the need for

deterrence is minimal, a statutory award of $200 for each work infringed is just in this case. During oral

argument, plaintiff represented that the Forms represented two works, which defendant did not dispute.

Accordingly, a total statutory award of $400 is appropriate.

C. Attorney's Fees and Costs

The court may award full costs and "a reasonable attorney's fee to the prevailing party as

part of the costs." 17 U.S.C. § 505. As the prevailing party, plaintiff is entitled to recover costs and

reasonable attorney's fees.

CONCLUSION

For the foregoing reasons, defendant's Motion for Summary Judgment, ECF [73], is

DENIED, and plaintiffs Motion for Summary Judgment, ECF [85], is GRANTED. Defendant shall pay

plaintiff $400 in statutory damages for infringing the copyrighted works in the Forms. Judgment shall be

entered on behalf of plaintiff.

IT IS SO ORDERED.

DATED this 12th day of February, 2025. .

Adrienne Nelson

United States District Judge

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