Beijing Meishe Network Tech. Co. v. Tiktok Inc.

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BEIJING MEISHE NETWORK TECHNOLOGY CO., LTD., Plaintiff, v. TIKTOK INC., et al., Defendants.

No. 23-cv-06012-SI

United States District Court, N.D. California

July 23, 2024

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S FOURTH AMENDED COMPLAINT RE: DKT. NO. 436

SUSAN ILLSTON UNITED STATES DISTRICT JUDGE

Before the Court is defendants' motion to dismiss plaintiff's fourth amended complaint. Dkt. No. 436. Plaintiff opposes. Dkt. No. 443. The Court heard oral argument on this motion on July 12, 2024. For the reasons set forth below, the Court GRANTS defendants' motion as to the Lanham Act claim without leave to amend and DENIES defendants' motion as to the copyright infringement and trade dress misappropriation claims.

BACKGROUND^[1]

On April 23, 2024, this Court granted defendants' motion to dismiss plaintiff's third amended complaint (“TAC”) with leave to amend. Dkt. No. 429. Plaintiff Beijing Meishe Network Technology Co., Ltd. (“Meishe”) filed its fourth amended complaint on May 14, 2024. Dkt. No. 433 (“FOAC”). This complaint alleges four causes of action against defendants TikTok Inc., TikTok Pte. Ltd., ByteDance Ltd., and ByteDance Inc. (collectively, “defendants”): copyright infringement, violation of 17 U.S.C. § 1202 (the Digital Millenium Copyright Act) misappropriation of trade secrets, and Lanham Act false advertising. Id. ¶ 1. The FOAC includes many new allegations.

Meishe is a private company established in 2014 under the laws of the People's Republic of China with a principal place of business in Beijing. Id. ¶ 19. It is a “smart video and audio total solution service provider whose research and development team has been focusing on the development of the video and audio field for more than twenty years.” Id. ¶ 14. It is the owner of the “Meishe app, a computer program that enables users to complete professional-level video and audio editing processing on the mobile side through simple operations making high quality video and audio clips.” Id. ¶ 73. Meishe “developed the Meishe app and further developed the Meishe SDK [software development kit] and other software that provide users with video and audio editing functions.” Id. ¶ 74.

TikTok Inc. is a California corporation with a “regular and established place of business in Austin, Texas.” Id. ¶ 20. TikTok Pte. Ltd. is a Singapore corporation with its principal place of business in Singapore. Id. ¶ 21. ByteDance Ltd. is a Cayman Islands corporation with offices in the United States. Id. ¶ 22. ByteDance Inc. is a Delaware corporation. Id. ¶ 23. ByteDance Ltd. is the parent and owner of TikTok Inc., TikTok Pte. Ltd., and ByteDance Inc. Id. ¶ 24. ByteDance Ltd. developed the TikTok app around May 2017 and operates and controls the app in the United States and elsewhere outside of China through its subsidiaries and affiliates, including the other defendants in this case. Id. ¶¶ 27, 76.^[2] The TikTok app “allows users to create short videos, which often feature music in the background and can be sped up, slowed down, or edited with a filter.” Id. ¶ 76. On information and belief, defendants operate ByteDance Ltd.'s TikTok business in the United States as a joint enterprise. Id. ¶ 32.

Meishe brings this action related to its “asserted highly confidential, independently developed registered and unregistered source code, all of which is subject to copyright protection (hereinafter ‘Copyrighted Works').” Id. ¶ 1. Meishe registered portions of its software with the Copyright Protection Centre of China (“CPCC”) with registration numbers: 2015SR227927 (transfer of 2014SR205312), 2018SR037751, 2018SR037747, 2018SR038324 2018SR218096, 2018SR218287, 2019SR0899912, and 2020SR0291426. Id. ¶¶ 1, 74. Meishe lists completion dates for the CPCC-registered copyrights. See id. ¶ 104. Meishe is the “owner of copyrights in its highly confidential, independently-developed source code and derived object code, which have been fixed in tangible mediums before the filing date of this lawsuit regardless of registration status.” Id. ¶ 74. Meishe's “asserted Copyrighted Works include specifically identified source code modules within the following Meishe software: Meishe's App v1.0, App v1.3 revision 2631, App v1.5, App v2.5.4, NvStreamingSDK v1.0.1, NvStreamingSDK v1.1.1, NvStreamingSDK v1.3.1, NvStreamingSDK 1.13.1, NvStreamingSDK v1.15.1, NvStreamingSDK v1.16.1 commit 4f049e2100cf419d0f3602c7f13f647edf79cac7, NvStreamingSDK 2.12.1, NvStreamingSDK2.13.1, NvStreamingSDK 2.14.1 commit 0f6e86a4fac61ff96c9465093ac45b1350726831, and NvBSEdit revision 63.” Id. ¶¶ 4, 74. Meishe alleges that all its asserted source code has been provided to defendants on computers and it has further identified each asserted source code module in interrogatory responses. See id. ¶ 75, Dkt. No. 433, Ex. O.

Meishe “has the exclusive rights to reproduce, display, and distribute the Copyrighted Works,” including the registered copyrights listed above, “as well as its copyrighted source code regardless of registration.” Id. ¶ 105. Prior to filing the FOAC, Meishe provided defendants' counsel and experts a copy of the China copyright registrations and associated material and “all asserted Copyrighted Works including copyrighted registered and unregistered source code files, and Defendants experts have spent several days reviewing that code.” Id. ¶¶ 4-6, 95.

Meishe alleges that defendants “infringe upon Meishe's Copyrighted Works, including its source code and software derived from being compiled from its source code, including but not limited to the TikTok software application and website (hereinafter, ‘TikTok app'), the Faceu software application, the CapCut software application, the Lemon8 software application, the SM software application, and the BytePlus Video Editor SDK (collectively, ‘Accused Software'). Id. ¶ 15.

In March 2021, Meishe discovered that a “series of apps belonging to ByteDance, Ltd. had infringed Meishe's Copyrighted Works since at least 2018.” Id. ¶ 79. These apps include, but were not limited to, TikTok, Douyin, Jianying, and CapCut. Id. “Meishe personnel conducted an analysis between code of Meishe app and that of TikTok app [that] shows that the code used to implement video and audio editing functions in the two apps is strikingly similar, proving that Defendants copied Meishe's copyrighted work.” Id.; see also ¶ 115.^[3] “Meishe's analysis showed that numerous source code methods contained identical names to Meishe's copyrighted source code, including typographical errors.” Id. ¶ 80.

Defendants allegedly had access to Meishe's source code “at least through Meishe's former employee, Mr. Jing Xie, who is currently working for defendants.” Id. ¶ 81. Mr. Xie began his employment with a Meishe affiliate in 2007 and began his employment with Meishe in March 2015. Id. ¶¶ 85, 160, 199. As a C++ R&D engineer, Mr. Xie “directly participated in the development of Meishe's software and the subsequent upgrades of various versions until his resignation on or around June 8, 2015.” Id. ¶ 85. Mr. Xie also “had access to and control over Meishe's trade secrets, proprietary software code, and/or other confidential information” during his employment with Meishe and its affiliate. Id. ¶ 84. When Mr. Xie resigned on June 8, 2015, he “subsequently knowingly and illegally took Meishe's trade secrets, copyrighted computer code, and other confidential information” and “subsequently provided it to one or more later employers who incorporated that code into other software including but not limited to TikTok and the Accused Software.” Id. ¶¶ 88, 165, 204. According to Mr. Xie's LinkedIn and Maimai^[4] pages, he began his employment at ByteDance as “multimedia audio and video director” around October 2017. Id. ¶ 90. Mr. Xie “was in charge of ByteDance software development groups responsible for audio/video creation and editing source code.” Id. ¶¶ 91, 167, 206. At certain times, he “was also in charge of the group of U.S. engineers responsible for integrating source code into the TikTok app.” Id. “Defendants were aware of [his] prior employment with Meishe, and his work with Meishe's source code.” Id. ¶¶ 92, 113, 172, 210.

In or around March 2021, Meishe audited Mr. Xie's activities and “discovered that on or around June 3, 2015, he downloaded Meishe's Asserted Trade Secrets source code.” Id. ¶¶ 170, 208. During his employment with Meishe and its affiliate, each time Mr. Xie modified Meishe software in the “SVN system,” he first had to “check out the corresponding subtree of the repository to get a so-called ‘working copy.'” Id. ¶ 86. The “SVN system recorded all the relevant operations in its logs,” and “[t]hese logs prove that Mr. Jing Xie accessed Meishe's source code and downloaded the source code.” Id. On or around May 14, 2021, Meishe “notarized the SVN log and checked the committed log of Jing Xie on SVN.” Id. ¶¶ 170, 208.

Defendants' “source code contains identical, verbatim portions of Meishe's asserted copyrighted independently-developed source code.” Id. ¶¶ 107, 157, 196. Certain “copied portions also include typographical errors and source code comments created by Meishe's source code authors.” Id. Meishe provides two side-by-side comparison examples of its code and defendants' code in the FOAC. See id. ¶¶ 107-108. Meishe has specifically identified defendants' “source code modules that contain identical portions of Meishe's source code, including copied typographical errors and code comments” in its interrogatory responses. Id. ¶¶ 109, 159 197; see Dkt. No. 433, Ex. P. “Meishe has identified at least 115 of its source code modules associated with at least 134 ByteDance/TikTok source code modules . . . that contain directly copied code.” Id. ¶ 109. ...