In copyright dispute involving two films starring Danny Trejo as characters seeking vengeance for family’s murder, district court denied media broadcasters’ motion to dismiss production company’s claims, holding that broadcasters that distribute infringing work may be held liable for infringing distribution right of copyrighted work, even if they did not participate in creation of infringing work.

Plaintiffs ITN Flix, LLC, and Gil Medina filed a complaint for copyright infringement against Univision Holdings, Inc.; Univision Salt Lake City, LLC; Univision Communications, Inc.; and El Rey Network, LLC, alleging that by broadcasting the 2010 film “Machete” and its sequel, defendants infringed on plaintiffs’ copyrights in the 2006 film “Vengeance,” also starring Trejo. In their first amended complaint, plaintiffs alleged that Robert Rodriguez, the founder and chairman of defendant El Rey Network, obtained access to “Vengeance” in 2005, and that he later made “Machete,” which infringed ITN’s copyright for “Vengeance.” The district court dismissed the first amended complaint on the grounds that it contained insufficient allegations of access and insufficient allegations of similarity between the two films, but granted plaintiffs leave to amend.

ITN subsequently filed a second amended complaint, which added another Univision entity as a defendant and, according to the court, added significant allegations that made it “meaningfully different” from the complaint that the court had previously dismissed. Among other things, the second amended complaint included over 50 alleged similarities between the two films. The second amended complaint also added allegations that Rodriguez acknowledged he copied and used material from “Vengeance” and offered to pay for the use, and that even though “minor edits” were made to “Vengeance” when it was reshot and reedited, “the material given to Rodriguez was identical to the finalized Vengeance in all material aspects.”

After finding that ITN Flix adequately alleged ownership of a valid copyright in “Vengeance,” the district court turned to the second element of a copyright infringement claim: whether ITN Flix adequately alleged “copying of constituent elements of the work that are original.” “Copying” may be established either through presentation of direct evidence of copying, or through indirect evidence that shows (i) defendant had access to the copyrighted work, and (ii) probative similarities between the copyrighted material and the allegedly infringing work. In its prior order, the court had dismissed the first amended complaint because it did not contain sufficient allegations of access. In connection with the pending motion to dismiss, however, ITN argued that it did not need to provide evidence that the broadcaster defendants had access to “Vengeance”; rather, it needed only to show that Rodriguez had access to and impermissibly copied “Vengeance” by making “Machete,” and that the broadcaster defendants then distributed “Machete” to the public.

The district court agreed, holding that the second amended complaint sufficiently alleged a copyright infringement claim based on a “chain of distribution” theory. According to the court, a distributor, publisher or broadcaster may be liable for copyright infringement if it disseminates a work that has copied protected elements of plaintiff’s copyright, even if the distributor, publisher or broadcaster did not know that the work it was disseminating was infringing. In so ruling, the district court relied, in part, on the Tenth Circuit’s decision in Jacobson v. Deseret Book Co., which, according to the district court, “explained that the test for whether the author and the author’s publisher could be held liable for copying the copyrighted work was whether the allegedly infringing author copies the copyrighted work.”

The district court also held that ITN Flix had adequately alleged that “Machete” copied protected elements of “Vengeance,” because the second amended complaint identified dozens of similarities with regard to costumes, scenery, theme, mood, pace, sequence, specific lines of script and characters that went beyond general plot similarities.

Accordingly, the district court held that the “chain of distribution” concept was triggered as to the broadcaster defendants, recognizing that although such an approach “may seem unfair to ‘innocent resellers,’” the Copyright Act “prioritizes recovery … to protect against insolvent or unavailable reproducers over fairness to downstream distributors.” The district court also noted that a distributor may protect itself “by diligent inquiry to avoid infringement, an indemnity agreement, or insurance.”

Summary prepared by Jonathan Neil Strauss and Sasha Segall