October 30, 2020

Court Sides With Nintendo Over RomUniverse In Atttempt To Dismiss The Former’s Lawsuit

As most of you will know, a year or so ago saw Nintendo suddenly flip a litigious switch and begin going after all the ROM sites that had existed for a decade or more. The timing suggests that the company may have made this move out of a misguided attempt to support its release of several retro consoles that contained many of the games that the public could also simply get for free on these ROM sites. I say misguided because it’s not as though Nintendo’s aggression suddenly made free online ROMs unavailable. They are all still very much there through various means, but Nintendo’s retro consoles sold like gangbusters anyway, because half the appeal in the product is the ease of use and the other half is in having the cool looking retro console next to the television.

Most sites simply folded up and caved. RomUniverse, run by Matthew Storman, was one of the few that attempted to fight back. Despite the site making not just Nintendo Roms available, but also all kinds of other copyrighted media, Storman tried to crowdfund his legal defense before pivoting to representing himself in court. We’re still in the early stages of the litigation. Storman sought a dismissal of the case by arguing that First Sale doctrine meant Nintendo had no claim to the Roms being offered on his site coupled with claiming to be a neutral service provider protected by DMCA safe harbors. We said at the time that the move was unlikely to work.

And we were right. The court has now ruled for Nintendo against the motion to dismiss, stating that at best the claims that Storman makes are not properly made at this stage of the litigation, along with some comments that the claims probably aren’t going to get Storman where he wants to go anyway.

After considering the arguments from both sides, US District Court Judge Consuelo B. Marshall has sided with Nintendo. In a ruling released yesterday, she denies the various arguments presented by Storman. RomUniverse’s operator wanted the case dismissed based on failure to state a claim, lack of jurisdiction, improper venue, insufficient service of process, and failure to join a party. None of these arguments convinced the court.

Storman, for example, argued that Nintendo is not the owner of previously purchased games because consumers have the right to sell, destroy, or give them away. The Judge didn’t address this in detail but concluded that Nintendo’s copyright registrations are sufficient at this stage.

On the DMCA safe harbor claims specifically, the court acknowledges that it cannot determine whether RomUniverse meets the criteria for those provisions at this stage of the trial, at which no evidence has been presented. Nintendo’s entire case here is that Storman’s site doesn’t act as a third party service provider. Asking the court to find otherwise when Nintendo hasn’t been allowed to present evidence yet would make no sense. And, as the court goes on to note, Nintendo sued for trademark infringement and unfair competition claims as well, and DMCA safe harbors don’t protect from those claims.

Therefore, the Court would be required to look beyond the pleadings to determine whether Defendant is a service provider who satisfies the statutory requirements for protection pursuant to the DMCA’s safe harbors, which is improper on a Rule 12(b)(6) motion to dismiss.

As to Storman’s claim that First Sale doctrine means that Nintendo failed to join the actual owners of the games that are the basis of the ROMs on his site, the court points out that’s not how any of this works at this stage. Nintendo has alleged that Storman’s site is liable and arguing that Nintendo also has to sue everyone else isn’t very convincing.

Defendant argues Plaintiff has “failed to join the true and essential owners of copies known only to Plaintiff, or unknown.” As discussed supra, Plaintiff sufficiently alleges ownership and “the owner of copyright …has the exclusive rights to …reproduce the copyrighted work in copies [and] to prepare derivative works based upon the copyrighted work.” 17 U.S.C. § 106(1)-(2). Therefore, Defendant fails to demonstrate there are persons subject to service of process which, in their absence, would prevent the Court from providing complete relief among the existing parties or persons claiming an interest in the subject of this action. See Fed. R. Civ. Proc. 19. Accordingly, the Court denies Defendant’s motion to dismiss based on failure to join an indispensable party pursuant to Rule ~12)~b)~~)•

And so the motion to dismiss is denied. We’ve made the point several times now that Nintendo has better ways to deal with ROM sites than this sort of litigation. That is still true. But none of that changes the fact that Storman and RomUniverse have a mountain to climb if it wants to successfully defend itself from this lawsuit.
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