Opinion
21-CV-2007 (JGK) (RWL)
02-08-2023
BUSINESS CASUAL HOLDINGS, LLC, a Delaware limited liability company, Plaintiff, v. TV-NOVOSTI, a Russian autonomous non-profit organization, Defendant.
REPORT AND RECOMMENDATION TO HON. JOHN G. KOELTL: DAMAGES INQUEST
ROBERT W. LEHRBURGER, UNITED STATES MAGISTRATE JUDGE.
This is a copyright case in which Plaintiff Business Casual Holdings, LLC (“Plaintiff” or “Business Casual”) seeks damages and other relief against Defendant TV-Novosti (“Defendant” or “TV-Novosti”) for copying Business Casual's documentary video content, incorporating it into TV-Novosti's own documentary video content, replacing Business Casual's copyright management information with that of TV-Novosti, and submitting false notices to YouTube to obtain reinstatement of its infringing videos. Business Casual alleges that TV-Novosti has willfully violated the United States Copyright Act, 17 U.S.C. § 501 (the “Copyright Act”) and the Digital Millennium Copyright Act, 17 U.S.C. § 1202 (the “DMCA”). The Court previously entered a default against TV-Novosti, and the matter is now before me for an inquest on damages and other relief. Business Casual seeks (1) $75,000 in statutory damages pursuant to the DMCA; (2) attorney's fees in the amount of $137,215.64; (3) pre-judgment and post-judgment interest; and (4) the opportunity to take third-party damages discovery, along with leave to amend the judgment based on competent proof of actual damages for copyright infringement. For the reasons set forth below, I recommend that the Court award most of the relief requested.
The facts are drawn from the Third Amended Complaint (“TAC”); the Affirmation In Support Of Default Judgment of Ronald D. Coleman, filed June 16, 2022 (Dkt. 63) (“Coleman Aff.”); the Affirmation In Support Of Award Of Attorneys' Fees of Ronald D. Coleman, filed November 15, 2022 (Dkt. 78-1) (“Coleman Fees Aff.”); and Plaintiff's Proposed Findings Of Fact And Conclusions Of Law, filed November 15, 2022 (Dkt. 78) (“FFCL”).
A. Business Casual And Its Original Video Documentaries
Business Casual, a Delaware limited liability company, creates original documentary content that it posts to its YouTube channel. (Dkt. 52, “TAC” ¶¶ 18-19.) Two of its documentary videos are the subject of this lawsuit: “How Rockefeller Built His Trillion Dollar Oil Empire” (the “Rockefeller Video”) and “J.P. Morgan Documentary: How One Man Financed America” (the “J.P. Morgan Video”) (together, the “Documentary Videos”). Business Casual first published the Rockefeller Video on YouTube on June 8, 2018, and the J.P. Morgan Video on June 25, 2020. (TAC ¶¶ 36-37.) Business Casual obtained federal copyright registrations for both Documentary Videos on March 8, 2021. (TAC ¶¶ 51-52 and Exs. F, G.)
Business Casual's Documentary Videos employ a number of processes to create original work. Although Business Casual often starts with public domain images, it transforms them by making a variety of modifications, such as restoring them using “digital paintbrushes.” (TAC ¶ 41.) In another process, known as “parallax,” Business Casual turns two-dimensional photographs into animated three-dimensional models. (TAC ¶ 38.) Business Casual often combines several different public domain images, from different eras, to create entirely new and original works. (TAC ¶ 42.) Both Documentary Videos contained a watermark identifying Business Casual as the author of the work. (See TAC ¶¶ 3, 58, 68, 70.)
B. TV-Novosti And Its Infringing Videos
TV-Novosti is a Russian autonomous non-profit organization. (TAC ¶ 20.) It operates Russia Today TV as well as the YouTube channel RT Arabic along with 38 associated YouTube channels. (TAC ¶ 21; see ¶¶ 2 (referring to Russia Today's rampant copying of Business Casual's YouTube videos), 62 (email response to Business Casual from a copyright producer at Russia Today TV).) TV-Novosti's Editor-in-Chief has referred to its media outlets as “an information weapon” to be used against the United States. (TAC ¶ 113.)
During January, February, and March 2021, Business Casual became aware of three videos appearing on TV-Novosti's RT Arabic YouTube channel that copied portions of the Documentary Videos (the “Infringing Videos”). (TAC ¶¶ 57, 67, 69.) The first and third Infringing Video copied the exact same segments of Business Casual's J.P. Morgan Video. (TAC ¶¶ 57, 69, 176.) The second Infringing Video copied portions of Business Casual's Rockefeller Video. (TAC ¶ 67.)
In each of the Infringing Videos, TV-Novosti removed Business Casual's watermark from the copied portions and replaced it with TV-Novosti's own “RT” watermark. (TAC ¶¶ 58, 68, 70.) TV-Novosti also made other modifications to avoid detection of its copying. For example, before uploading its first and third Infringing Video to YouTube, TV-Novosti deliberately removed color saturation to circumvent YouTube's Content ID and Copyright Match tools. (TAC ¶¶ 59, 71.) Additionally, TV-Novosti deliberately slowed down segments of the J.P. Morgan Video. (TAC ¶ 60.)
C. Takedown Notices, Counter-Notifications, And TV-Novosti's Admissions
On January 2, 2021, Business Casual submitted a DMCA takedown notice requesting that YouTube remove TV-Novosti's first Infringing Video. (TAC ¶ 57.) On January 11, 2021, YouTube removed the first Infringing Video and applied what is known as a “copyright strike” against TV-Novosti's YouTube Channel. (TAC ¶ 61.) Under its policy, YouTube will shut down a channel that receives three copyright strikes. (TAC ¶ 86.)
On January 18, 2021, Business Casual received an email from Russia Today TV asking why “We got a strike on our RT Arabic [YouTube] account.” (TAC ¶ 62.) That same day, Business Casual responded with an email stating, “The [copyright] strike placed on RT is, indeed, legitimate. Your video was a blatant rip-off of my company's video.” (TAC ¶ 63.) The next day, January 19, 2021, a representative of Russia Today TV responded “Yes, you are right. I am terribly sorry about the use of your material in our project. Due to an oversight and misunderstanding here, my colleagues used this fragment without your permission.” (TAC ¶ 64.) Defendant then withdrew a DMCA counter-notification it had sent to YouTube, purportedly by “mistake,” and by which it had sought reinstatement of the first Infringing Video. (TAC ¶¶ 65-66.)
That did not end TV-Novosti's infringing activity, however. On February 9, 2021, Business Casual submitted a DMCA takedown notice to YouTube requesting removal of the second Infringing Video. (TAC ¶ 67.) And, on February 15, 2021, Business Casual submitted a DMCA takedown notice requesting removal of the third Infringing Video. (TAC ¶ 69.) Acting first with respect to the third Infringing Video, on February 18, 2021, YouTube removed TV-Novosti's third Infringing Video and applied a second copyright strike to TV-Novosti's YouTube channel. (TAC ¶ 73.)
On February 20, 2021, Business Casual sent a letter to Defendant concerning the repeated infringements and proposing a settlement. (TAC ¶ 74.) Defendant, however, never responded to the overture. (TAC ¶ 75.)
Apparently not having heard from YouTube with respect to its takedown notice concerning the second Infringing Video, Business Casual re-submitted it on February 25, 2021. (TAC ¶ 76.)
On February 28, 2021, TV-Novosti filed a DMCA counter-notification with respect to the third Infringing Video - notwithstanding TV-Novosti's purported earlier “mistake” in submitting its counter-notification regarding the first Infringing Video. (See TAC ¶ 77.) In notifying Business Casual of TV-Novosti's counter-notification, YouTube indicated that it would reinstate the third Infringing Video if Business Casual did not seek a court order to restrain TV-Novosti's infringing activity within ten business days, the period prescribed by the “safe harbor” provision of the DMCA. (TAC ¶ 77.)
On March 2, 2021, Business Counsel made additional efforts to resolve the dispute, but TV-Novosti once again ignored them. (TAC ¶¶ 78-79.)
On March 4, 2021, YouTube removed the second Infringing Video and applied a third copyright strike against TV-Novosti's YouTube channel. (TAC ¶ 82.)
Given Defendant's apparent refusal to engage in settlement discussions, and Business Casual's desire to prevent reinstatement of the third Infringing Video, Business Casual filed the instant action on March 9, 2021. (Dkt. 2.)
On March 12, 2021, YouTube notified Business Casual that Defendant had filed a DMCA counter-notification with respect to the second Infringing Video and would reinstate that video if Business Casual did not seek a court order to restrain the infringing activity within ten business days. (TAC ¶ 83.) Accordingly, Business Casual amended its Complaint to prevent reinstatement of the second Infringing Video. (TAC ¶ 83.)
D. Russian Intervention And Defendant's Video Purge
On March 31, 2021, YouTube terminated Defendant's YouTube Channel “because we received multiple third-party claims of copyright infringement regarding material the user posted.” (TAC ¶ 86.) Just a few hours later, however, YouTube reinstated Defendant's YouTube channel “following public outcry from the Kremlin - including, but not limited to, public backlash from Maria Zakharova, Spokeswoman of the Ministry of Foreign Affairs, who accused Business Casual of being an ‘internal American terrorist.'” (TAC ¶ 87.) That same day, a representative of Defendant “thank[ed] our partners at YouTube Russia” for helping to restore the RT Arabic YouTube channel. (TAC ¶ 88.)
Over the course of the period from March 6, 2021, two days after Defendant's YouTube channel received its third copyright strike, to April 1, 2021, the day after the channel was reinstated, Defendant deleted thousands of videos from the channel with a collective count of billions of views. (TAC ¶¶ 90-101.) Before Business Casual's DMCA takedown notices, Defendant had never before engaged in such wholesale video purging activity. (TAC ¶ 102.)
On April 19, 2021, counsel for Defendant emailed Business Casual's counsel concerning a potential “pre-litigation resolution” but stated that TV-Novosti would not withdraw the second or third counter-notifications because it was TV-Novosti's “understanding that withdrawing the counter-notifications will result in YouTube terminating RT's channel.” (TAC ¶ 85.)
Procedural Background
Plaintiff commenced this action on March 9, 2021, and filed its First Amended Complaint on March 24, 2021. (Dkts. 2, 7.) Counsel for Defendant filed notices of appearance on June 7, 2021. (Dkts. 13-14.) On July 30, 2021, Plaintiff filed a Second Amended Complaint (“SAC”). (Dkt. 27.) On August 20, 2021, Defendant moved to dismiss the SAC. (Dkt. 29.) By Memorandum and Order dated March 14, 2022, the Court denied the motion to dismiss the copyright infringement claims and granted the motion to dismiss the DMCA claims but without prejudice to amend. (Dkt. 44.) See Business Casual Holdings, LLC v. TV-Novosti, No. 21-CV-2007, 2022 WL 784049 (S.D.N.Y. March 14, 2022).
The following day, March 15, 2022, the Court granted pending motions by defense counsel to withdraw and stayed the case until May 16, 2022 to allow time for Defendant to retain new counsel. (Dkt. 46.) No new counsel appeared by May 16, 2022 or any time thereafter. On May 20, 2022, Plaintiff filed the Third Amended Complaint. (Dkt. 52.)
As a corporate entity cannot litigate pro se, the Court ordered that if Defendant did not appear by new counsel and respond to the TAC by June 6, 2022, then Plaintiff may seek a certificate of default and move by order to show cause for default judgment. (Dkt. 54.) Plaintiff served the order to show cause on prior defense counsel and the Defendant in compliance with the Court's order. (Dkt. 55.)
Despite the order to show cause, Defendant did not respond to the TAC or appear in the action through counsel. Accordingly, on application by Plaintiff, the Clerk of Court issued a Certificate of Default on June 9, 2022. (Dkt. 58.) Plaintiff then moved for entry of default judgment, and on June 21, 2022, the Court issued an order to show cause why default judgment should not be entered against Defendant. (Dkt. 64.) Plaintiff filed proof of service of the order to show cause on July 19, 2022. (Dkt. 66.) On July 21, 2022, the Court issued an order extending Defendant's time to respond to the order to show cause to August 8, 2022. (Dkt. 67.) Plaintiff duly filed proof of service of that order the same day it issued. (Dkt. 68.) As before, Defendant neither appeared nor responded to the order to show cause.
On October 7, 2022, the Court granted Plaintiff's motion for default judgment and referred the matter to me for an inquest to determine damages and “any other provisions of an appropriate judgment.” (Dkt. 69.) On October 11, 2022, I issued a scheduling order for filing of inquest briefing, which provided Defendant with an opportunity to respond after Plaintiff filed its papers. (Dkt. 71.) Following multiple extensions, on November 15, 2022, Plaintiff filed its Proposed Findings of Fact and Conclusions of Law, along with materials in support of its application for attorney's fees. (Dkt. 78.) That same day, Plaintiff filed proof of service of its papers on Defendant. (Dkt. 79.) Defendant did not file any response. Accordingly, the matter is ripe for resolution.
Legal Standards On Inquest
At an inquest on damages following a default judgment, all well-pled factual allegations of the complaint, except those relating to damages, are accepted as true and all reasonable inferences are drawn in favor of the plaintiff. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (“It is an ‘ancient common law axiom' that a defendant who defaults thereby admits all ‘well-pleaded' factual allegations contained in the complaint.”) (quoting Vermont Teddy Bear Co., Inc. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004)). “A factual allegation will be deemed not well-pled only in very narrow, exceptional circumstances.” Ideavillage Products Corp. v. Bling Boutique Store, No. 16-CV-9039, 2018 WL 3559085, at *2 (S.D.N.Y. July 24, 2018) (internal quotation marks omitted). That said, a court “must still satisfy itself that the plaintiff has established a sound legal basis upon which liability may be imposed.” Jemine v. Dennis, 901 F.Supp.2d 365, 373 (E.D.N.Y. 2012) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)); accord Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (“[A district court] is also required to determine whether [plaintiff's] allegations establish [defendant's] liability as a matter of law”).
The plaintiff also bears the burden of establishing an amount of damages with reasonable certainty. RGI Brands LLC v. Cognac Brisset-Aurige, S.A.R.L., No. 12-CV-1369, 2013 WL 1668206, at *6 (S.D.N.Y. April 18, 2013) (collecting cases), R. & R. adopted, 2013 WL 4505255 (S.D.N.Y. Aug. 23, 2013); see also Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp. Division of Ace Young Inc., 109 F.3d 105, 111 (2d Cir. 1997). In conducting the inquest, the court is charged with “‘determining the proper rule for calculating damages on such a claim, and assessing plaintiff's evidence supporting the damages to be determined under this rule.'” Tiffany (NJ) Inc. v. Luban, 282 F.Supp.2d 123, 124 (S.D.N.Y. 2003) (quoting Credit Lyonnais Securities (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)). Further, the damages award on a default judgment “must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c).
The Court has determined that no hearing is necessary to determine damages (no party has requested one), and that determination of damages can be resolved on the submissions and prior proceedings. See Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 5354 (2d Cir. 1993); Fustok v. ContiCommodity Services, Inc., 873 F.2d 38, 40 (2d Cir. 1989).
Jurisdiction
The Court has both subject matter jurisdiction over this case and personal jurisdiction over the Defendant. Federal subject matter jurisdiction exists over Plaintiff's copyright infringement and DMCA claims pursuant to 28 U.S.C. § 1331 (federal question jurisdiction) and § 1338 (jurisdiction over trademark, copyright, and patent claims).
The Court has personal jurisdiction over Defendant; Defendant did not assert lack of personal jurisdiction as a basis for dismissal, and instead actually appeared and litigated this case through denial of its motion to dismiss on the merits. See Mickalis Pawn Shop, LLC, 645 F.3d at 134 (“It is well established that a party forfeits its defense of lack of personal jurisdiction by failing timely to raise the defense in its initial responsive pleading”; additionally, the court will “obtain ... personal jurisdiction over a defendant if the actions of the defendant during the litigation amount to a legal submission to the jurisdiction of the court, whether voluntary or not.”) (cleaned up). The Court also has personal jurisdiction over Defendant pursuant to NY CPLR §§ 302(a)(1), (3). Among other relevant facts, Defendant purposefully directed the Infringing Videos to United States viewers; Defendant has at least one New-York-based correspondent as well as a New York-based production studio and camera crew; Defendant regularly publishes videos intended to and that do have an effect on persons within this District; Defendant distributes its programming through a number of United States-based companies to persons throughout New York and this District; the Infringing Videos at issue were hosted on YouTube's California-based servers; Defendant's Infringing Videos featured advertisements targeting persons in the United States; and Defendants maintains an office in Washington, D.C., conducts business in the United States, and employs several persons in the United States. (See TAC ¶¶ 27-28, 103-19.) Accordingly, Plaintiff has established personal jurisdiction over the Defendant.
In the default judgment context, a court has discretion to consider sua sponte whether it has personal jurisdiction over a defaulting party. See Mickalis Pawn Shop, 645 F.3d at 133 (“Before a court grants a motion for default judgment, it may first assure itself that it has personal jurisdiction over the defendant”) (cleaned up). Given that Defendant actually participated for a time in the litigation and thereby waived any defense based on personal jurisdiction, there is no need for any further analysis. Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading Corp., 619 F.3d 207, 213 (2d Cir.2010) (“a district court should not raise personal jurisdiction sua sponte when a defendant has appeared and consented, voluntarily or not, to the jurisdiction of the court”) (original emphasis omitted). For context, however, the Court summarizes above some of the facts that provide additional grounds for exercising personal jurisdiction over Defendant.
II. Defendant's Liability
By virtue of Defendant's default, Plaintiff has established Defendant's liability for willful copyright infringement and for willfully violating the DMCA.
A. Liability For Copyright Infringement And DMCA Violations
1. Copyright Infringement
To prevail on a claim of copyright infringement, a plaintiff must establish (1) ownership of a valid copyright and (2) infringement of that copyright by the defendant. See Feist Publications, Inc. v. Rural Telephone Services Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 1296(1991); Arista Records, LLC v. Doe 3, 604 F.3d 110, 117 (2d Cir. 2010). Registered copyrights are presumed valid. Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 109 (2d Cir. 2001). Demonstrating infringement requires the copyright owner to show (1) that the defendant has actually copied the owner's work and (2) that the copying is illegal because a substantial similarity exists between the defendant's work and the protectable elements of the owner's work. Id. at 110. Actual copying may be shown by direct evidence or indirect evidence; “[i]f the two works are so strikingly similar as to preclude the possibility of independent creation, copying may be proved without a showing of access.” Lipton v. Nature Co., 71 F.3d 464, 471 (2d Cir. 1995) (internal quotation marks and citation omitted). Substantial similarity, in turn, hinges on “whether an average lay observer would recognize the alleged copy as having been appropriated from the copyrighted work.” Hamil America, Inc. v. GFI, 193 F.3d 92, 100 (2d Cir. 1999).
Here, Plaintiff owns copyright registrations in both the Rockefeller Documentary and the J.P. Morgan Documentary. (TAC ¶¶ 51-52.) Those registrations are presumed valid. Yurman Design, 262 F.3d at 109. Accordingly, the first requirement is met. The facts as set forth in the TAC also establish Defendant's infringement of those copyrights. Defendant both had access to Plaintiff's Documentary Videos as they were posted on YouTube, and admitted that it actually copied portions of the videos. (TAC ¶ 64.) Although Defendant's Infringing Videos removed saturation from portions of Plaintiff's Documentary Videos and slowed down segments of them, there is substantial similarity between portions of each of Defendant's Infringing Videos and either one of Plaintiff's two Documentary Videos. (See TAC ¶¶ 57, 59-60, 67-71, 127-30, 137-38, 146-47.) Defendant's liability for copyright infringement has been established, and Plaintiff is entitled to damages as discussed further below.
2. DMCA Violations
The TAC sets forth two ways in which Defendant violated the DMCA. First, Plaintiff asserts that each of the three Infringing Videos removed and replaced copyright management information from Plaintiff's two Documentary Videos in violation of 17 U.S.C. § 1202. Second, Plaintiff asserts that Defendant submitted false counter-notices to obtain reinstatement of the Infringing Videos on YouTube in violation of 17 U.S.C. § 512(f). The well-pled allegations of the TAC establish Defendant's liability for at least violating § 1202.
a. Defendant's Violation of 17 U.S.C. § 1202
The DMCA prohibits both the removal or alteration of copyright management information (“CMI”), as well as the distribution of false CMI. CMI includes the name of, and other identifying information about, the author or copyright owner of a work, “the information set forth on a notice of copyright,” the “[t]erms and conditions for use of the work,” and “links to such information.” 17 U.S.C. §§ 1202(c)(1), (2), (3), (6), (7).
Under § 1202(a) of the DMCA, no person may provide or distribute false CMI, knowingly and with intent to induce, enable facilitate, or conceal copyright infringement. 17 U.S.C. § 1202(a). To establish a violation of this statute, a plaintiff must prove that the defendant: (1) provided or distributed CMI; (2) knew that the CMI was false; and (3) acted with the intent to cause or conceal copyright infringement. See Krechmer v. Tantaros, 747 Fed.Appx. 6, 9 (2d Cir. 2018) (“In order to plead a violation of § 1202(a), plaintiff thus must plausibly allege that defendant knowingly provided false copyright information and that the defendant did so with the intent to induce, enable, facilitate, or conceal an infringement”) (original emphasis omitted); Aaberg v. Francesca's Collections, Inc., No. 17-CV-115, 2018 WL 1583037, at *6 (S.D.N.Y. March 27, 2018) (“[T]o state a claim under ...§ 1202(a), [the plaintiff] must allege that the defendant both knew that the CMI was false, and provided or distributed the false CMI with the intent to induce, enable, facilitate, or conceal infringement”).
Additionally, pursuant to § 1202(b), absent the authority of the copyright owner, a defendant may not (1) intentionally remove or alter any CMI, (2) distribute CMI knowing that the CMI has been removed or altered, or (3) distribute copies of works knowing that CMI has been removed or altered, and knowing, or, having reasonable grounds to know, that it will induce, enable, facilitate, or conceal copyright infringement. 17 U.S.C. 1202(b). Thus, to establish a violation under § 1202(b)(1), a plaintiff must show “(1) the existence of CMI on the [infringed work]; (2) removal and/or alteration of that information; and (3) that the removal and/or alteration was done intentionally.” BanxCorp v. Costco Wholesale Corp., 723 F.Supp.2d 596, 609 (S.D.N.Y. 2010) (collecting cases). To establish a violation of § 1202(b)(3), “a plaintiff must prove: (1) the existence of CMI in connection with a copyrighted work; and (2) that a defendant distributed ... works or copies of works; (3) while knowing that CMI has been removed or altered without authority of the copyright owner or the law; and (4) while knowing or ... having reasonable grounds to know that such distribution will induce, enable, facilitate, or conceal an infringement.” Zuma Press, Inc. v. Getty Images (US), Inc., 845 Fed.Appx. 54, 57-58 (2d Cir. 2021) (cleaned up) (citing Mango v. BuzzFeed, Inc., 970 F.3d 167, 171 (2d Cir. 2020).
The well-pled allegations of the TAC establish Defendant's violation of § § 1202(a), 1202(b)(1), and 1202(b)(3). Both of Plaintiff's Documentary Videos included CMI in the form of Plaintiff's watermark identifier; which Defendant intentionally removed from Plaintiff's copyrighted material and replaced with its own, and then incorporated that material into each of Defendant's three Infringing Videos. (TAC ¶¶ 58, 68, 70, 155, 161, 167.) Defendant knowingly distributed its Infringing Videos with Plaintiff's watermark removed, without Plaintiff's permission, and with Defendant's watermark substituted in its place, and did so knowing or having reason to know that distribution of Defendant's videos replacing Plaintiff's watermark with Defendant's watermark would conceal Defendant's infringement. Indeed, Defendant took additional deliberate steps to avoid detection of infringement by removing the saturation from Plaintiff's original video content and slowing down segments in at least two of the Infringing Videos. (TAC ¶¶ 59, 71.)
b. Defendant's Violation of 17 U.S.C. § 512(f)
“The DMCA governs the means by which copyright holders can notify online service providers that their sites are hosting or providing access to allegedly infringing material.” National Academy of Television Arts and Sciences, Inc. v. Multimedia System Design, Inc., 551 F.Supp.3d 408, 432 (S.D.N.Y. 2021). That process begins when the copyright holder sends a good faith “takedown” notice to the internet provider. See 17 U.S.C. § 512(c)(3)(A). “The DMCA further provides a mechanism, commonly referred to as a ‘counter notification,' through which creators of allegedly infringing work can effectively appeal a service provider's decision to remove or otherwise disable access to their work.” Hosseinzadeh v. Klein, 276 F.Supp.3d 34, 43(S.D.N.Y. Aug. 23, 2017). Similar to a takedown notice, a counter-notification must include, inter alia, “[a] statement under penalty of perjury that the subscriber has a good faith belief that the material was removed or disabled as a result of mistake or misidentification of the material to be removed or disabled.” 17 U.S.C. § 512(g)(3)(C).
That process is what unfolded here. Plaintiff provided written notice to YouTube that each of Defendant's three videos infringed Plaintiff's copyrights and should be taken down. And Defendant responded to Plaintiff's takedown notices with counter-notifications representing that Defendant's videos did not infringe Plaintiff's copyrights.
To protect against take-down notices and counter-notices filed in bad faith, § 512(f) penalizes any person who knowingly misrepresents under § 512 that a material or activity is infringing and should be taken down or not-infringing and should be reinstated. 17 U.S.C. § 512(f). Specifically, the statute provides that:
Any person who knowingly materially misrepresents under this section
(1) that material or activity is infringing, or
(2) that material or activity was removed or disabled by mistake or misidentification,
shall be liable for any damages, including costs and attorneys' fees, incurred by the alleged infringer, by any copyright owner or copyright owner's authorized licensee, or by a service provider, who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing, or in replacing the removed material or ceasing to disable access to it.Id. To establish a claim under this statute must, Plaintiff must prove (1) that Defendant knowingly misrepresented to YouTube that the videos identified in Plaintiff's takedown notices were removed or disabled by mistake or because of misidentification of the material; (2) that, relying on Defendant's willful misrepresentation, YouTube replaced or ceased disabling the infringing material; and (3) that, as a result of the aforementioned series of events, Plaintiff incurred damages. See White v. UMG Recordings, Inc., 20-CV-9971, 2021 WL 6052106, at *2 (S.D.N.Y. Dec. 21, 2021) (stating necessary elements to survive motion to dismiss claim for violation of § 512(f)(2)).
The facts asserted in the TAC easily satisfy the first element in that Defendant knowingly misrepresented the veracity of the representations made by Plaintiff in its takedown notices. Whether the TAC satisfies the second element - that YouTube replaced the Infringing Videos in reliance on the counter-notices - is not as clear. That is because the TAC does not allege that YouTube ever reinstated any of the Infringing Videos. Indeed, Defendant withdrew its counter-notification with respect to the first Infringing Video the day after filing it. (TAC ¶¶ 65-66.) Plaintiff thus has not established Defendant's liability under § 512(f) for the counter-notification submitted for the first Infringing Video.
With respect to the second and third Infringing Videos, the TAC asserts that, based on Defendant's counter-notices, YouTube threatened to reinstate the Infringing Videos unless Plaintiff sought relief in court within ten days. (TAC ¶¶ 77, 83.) To avoid reinstatement, Plaintiff did just that, filing the complaint in the instant action and then amending it to include both the second and third infringements and counter-notifications. (TAC ¶¶ 79, 83.) There thus are no allegations that YouTube ever actually reinstated any of the Infringing Videos.
Due to precisely that omission in the Second Amended Complaint, Defendant moved to dismiss the § 512(f) claim as a matter of law. (Dkt. 30 at 21-22.) And it was because of that omission that the Court dismissed the claim. Business Casual Holdings 2022 WL 784049 at *5. As the Court explained:
In this case, the plaintiff does not allege that the allegedly infringing videos were ever restored to YouTube, and neither party cites any authority for the proposition of whether the filing of a bad-faith counter notification that does not trigger a service provider to “ceas[e] to disable access to” allegedly infringing material is sufficient to trigger liability under § 512(f)(2). By its terms, § 512(f) (2) only applies when there has been a misrepresentation in the counter notification and the service provider relies on that misrepresentation and ceases to disable access to the allegedly infringing material.Id.
At the same time, the Court seemed to suggest that a claim might be viable where, as here, a plaintiff alleged that the service provider threatened to reinstate the infringing material and likely would have done so but for the plaintiff's filing legal action within ten days: “read in the context of the section as a whole, it is clear that this phrase [“cease to disable access”] does not limit § 512(f) claims only to cases where the service provider actually ceases to disable access to the allegedly infringing material, but also applies where the service provider only threatens to do so.” Id. The Court nevertheless proceeded to dismiss the claim without prejudice to further amendment. Id.
In the wake of that decision, Plaintiff filed the TAC, by which time Defendant's counsel had withdrawn. As discussed above, however, the TAC still did not make any allegations that YouTube ever reinstated any of the Infringing Videos. Moreover, Plaintiff has not submitted any additional briefing or factual material to provide support for finding DMCA liability where a defendant submits a bad faith counter-notification, and the service provider acts on it but does not follow through with reinstating the infringing material. Holding a defendant liable in that scenario would seem to further the goal of the DMCA and would prevent what happened here: forcing a plaintiff to file legal action in response to defendant's filing of a bad faith counter-notification merely because the defendant wishes to avoid the consequences of the provider's “three-strike” policy.
The Court, however, need not resolve the issue. Plaintiff already has established Defendant's violation of the DMCA by removing Plaintiff's CMI and replacing it with Defendant's own CMI in each of the Infringing Videos. As discussed below, that is enough to establish a basis for statutory damages.
B. Willful Misconduct
Defendant is deemed to have acted willfully, merely by virtue of its default, and consequent failure to controvert the evidence of willful misconduct alleged in the TAC. North Face Apparel Corp. v. Moler, No. 12-CV-6688, 2015 WL 4385626, at *6 (S.D.N.Y. July 16, 2015) (citing Lane Crawford LLC v. Kelex Trading (CA) Inc., No. 12-CV-9190, 2013 WL 6481354, at *3 (S.D.N.Y. Dec. 3, 2013) (collecting cases), R. & R. adopted, 2014 WL 1338065 (S.D.N.Y. April 3, 2014)), R. & R. adopted, 2015 WL 5472939 (S.D.N.Y. Sept. 16, 2015).
Even putting the fact of default aside, the conduct set forth in the well-pled allegations of the TAC demonstrates that Defendant engaged in willful infringement and violation of the DMCA. Among other indicia, Defendant intentionally removed Plaintiff's watermark from the copied videos and replaced it with Defendant's own watermark, intentionally removed saturation, and took other measures to avoid detection of copyright infringement. And, Defendant submitted and then refused to withdraw its counternotification to YouTube with respect to the third Infringing Video, even though the first and third Infringing Videos included the exact same infringing content copied from Plaintiff's J.P. Morgan Video, and Defendant acknowledged - in writing - that (1) the J.P. Morgan Video is Plaintiff's “copyrighted material”; (2) the first Infringing Video copied from Plaintiff's J.P. Morgan Video; (3) the copyright strike against that Infringing Video was “indeed legitimate”; (4) the Infringing Video was a “blatant rip-off” of Plaintiff's J.P. Morgan Video; (5) Defendant copied Plaintiff's J.P. Morgan Video “without permission”; and (6) Defendant submitted a counter-notification to reinstate that video “by mistake” and subsequently withdrew it less than 24 hours later. (TAC ¶¶ 63-66.)
In sum, Plaintiff has established the Defendant's legal liability for willful copyright infringement and willful violation of the DMCA by removing Plaintiff's CMI and replacing it with Defendant's CMI.
III. Damages
As noted previously, Plaintiff seeks statutory damages in connection with Defendant's DMCA violations. Plaintiff also requests the opportunity for leave to amend the judgment for a later award of actual damages for Defendant's copyright infringement after Plaintiff has had the opportunity for some damages-related discovery. Both forms of relief are warranted. The Copyright Act and the DMCA protect against different injuries; accordingly, a court may award damages under both statutes, so long as it avoids duplication and “properly distinguishes among these injuries when it sets the amount of the award under each statute.” Reilly v. Commerce, No. 15-CV-5118, 2016 WL 6837895, at *8 (S.D.N.Y. Oct. 31, 2016); see also Mango v. BuzzFeed, Inc., 356 F.Supp.3d 368, 378 (S.D.N.Y. 2019), aff'd, 970 F.3d 167 (2d Cir. 2020) (awarding separate statutory damages awards for copyright infringement and for DMCA violations).
A. Statutory Damages For Defendant's Violation Of The DMCA
A person who violates the DMCA is liable for either actual damages, along with any additional profits of the violator, or statutory damages. 17 U.S.C. § 1203(c)(1). With respect to someone who alters or removes copyright management information, statutory damages may be “not less than $2,500 or more than $25,000” per violation. 17 U.S.C. § 1203(c)(3)(B). In determining statutory damages, courts “consider [several] factors, ... namely, the difficulty of proving actual damages, the circumstances of the violation, whether Defendants violated the DMCA intentionally or innocently, and deterrence.” Agence France v. Morel, No. 10-CV-2730, 2014 WL 3963124, at *10 (S.D.N.Y. Aug. 13, 2014); accord Farrington v. Sell It Social, LLC, No. 18-CV-11696, 2020 WL 7629453, at *3 (S.D.N.Y. Dec. 21, 2020). Statutory damages are “especially fitting in the default judgment context where Plaintiffs are without the benefit of any disclosure by the infringer, leaving damages uncertain.” Tu v. TAD System Technology, Inc., No. 08-CV-3822, 2009 WL 2905780, at *2 (E.D.N.Y. Sept. 10, 2009).
There is a separate question of whether statutory damages may be awarded under the DMCA when the copyright owner registers its copyright only after the offending conduct begins. That issue is addressed directly below in the context of determining whether to award attorney's fees. As discussed there, while relative timing of publication, registration, and violation is relevant to whether statutory damages and attorney's fees may be awarded for copyright infringement under 17 U.S.C. §§ 504 and 505, it is not relevant in the context of DMCA violations under 17 U.S.C. §§ 1202 and 1203.
The Court finds that the maximum statutory damages of $25,000 for each Infringing Video, yielding a total of $75,000, is warranted. Determining the actual damages to Plaintiff caused by Defendant's removal of CMI from the Infringing Videos is more than “difficult”; Plaintiff has not presented any suggested means of doing so, and the Court is not presently aware of any. One could imagine a scenario where Defendant copied and distributed the Infringing Videos with the same copied material but with Plaintiff's watermark left in place. In that scenario, even though Defendant would still be committing infringement by copying without permission, a viewer would at least potentially recognize Plaintiff's watermark unto itself or as not belonging to Defendant. But how would one affix a monetary value to that? Even if Plaintiff were able to obtain discovery from third parties, as it seeks to do with respect to Defendant's acts of infringement, determining the monetary damage caused by the incremental harm of Defendant's removal of Plaintiff's watermark and replacement with Defendant's watermark would seem virtually impossible.
Defendant's willfulness, and the goal of deterring such conduct, further supports a significant statutory damages award against Defendant. As explained above, Defendant's conduct was willful and even duplicitous. Nor was it an isolated act -Defendant published three Infringing Videos, and, according to the TAC, is a rampant infringer. (TAC ¶¶ 2, 91.) And even though Defendant acknowledged that it had blatantly copied Plaintiff's copyrighted material in the first Infringing Video, Defendant republished the same copied content in the third Infringing Video, again replacing Plaintiff's CMI with that of Defendant. Defendant then perpetuated the infringement by refusing to retract its second and third DMCA counter-notifications, not because it genuinely believed the material was non-infringing, but instead because it did not want to be subject to the consequences of having violated YouTube's three-strike policy.
Statutory damages thus should be substantial enough to deter both the Defendant and others who may be inclined to engage in similar conduct. See Pires v. UOB Holdings (USA) Inc., No. 20-CV-01612, 2022 WL 902464, at *5 (S.D.N.Y. March 28, 2022) (purpose of statutory damages includes both compensation and deterrence); Kennedy Stock, LLC v. NLS New York Inc., No. 18-CV-4991, 2019 WL 13096650, at *7 (S.D.N.Y. Nov. 18, 2019) (same), R&R adopted, 2021 WL 5013737 (S.D.N.Y. Oct. 27, 2021); Farrington v. Fingerlakes1.com, Inc., No. 19-CV-6802, 2020 WL 7350336, at *6 (W.D.N.Y. Dec. 15, 2020) (“the Court does not doubt that an award of statutory damages could deter future infringements by the Defendant and third parties”). The maximum amount - $25,000 - per Infringing Video most likely is not much of a meaningful disincentive to an entity like Defendant that is backed by a foreign government, but it at least may be viewed as a substantial deterrent to other would-be violators of the DMCA.
Awarding $25,000 statutory damages for each Infringing Video is relatively conservative in the circumstances of this case. That is because removal of CMI in violation of 17 U.S.C. § 1202(b) and replacing it with false CMI in violation of 17 U.S.C. § 1202(a) are distinctly separate violations, each of which may merit statutory damages. See Sheldon v. Plot Commerce, No. 15-CV-5885, 2016 WL 5107072, at *15 (E.D.N.Y. Aug. 26, 2016) (awarding statutory damages separately both for removing CMI and replacing with false CMI because, based on the plain language of the statute, “it is reasonable to conclude that Congress intended these two subsections to be construed as prohibiting different conduct”), R&R adopted, 2016 WL 5107058 (E.D.N.Y. Sept. 19, 2016). Applying that rubric here would mean that Defendant committed six distinct DMCA violations related to CMI and that, if $25,000 were awarded per violation, Plaintiff would be awarded $150,000. Plaintiff, however, requests only half that.
Moreover, this case is distinct from cases in which courts have awarded lower amounts of statutory damages for less egregious conduct. See, e.g., Southall v. ASG Partners LLC, No. 20-CV-9103, 2021 WL 1199472, at *2 (S.D.N.Y. March 30, 2021) (awarding $5,000 in statutory damages for a single violation of DMCA); Myeress v. Elite Travel Group USA, No. 18-CV-340, 2018 WL 5961424, at *4 (S.D.N.Y. Nov. 14, 2018) (awarding $5000 in statutory damages for a single violation of DMCA where plaintiff provided no pre-suit notice to defendant); Dermansky v. Telegraph Media, LLC, No. 19-CV-1149, 2020 WL 1233943, at *6 (E.D.N.Y. March 13, 2020) (awarding $5,000 in DMCA statutory damages when there was only one act of infringement, no evidence of harm, and plaintiff took no action to cure the violation); cf. See Sheldon, 2016 WL 5107072 at *17 (awarding $25,000 for each of 20 DMCA violations, totaling $500,000 and distinguishing lower awards for similar reasons).
Accordingly, the Court recommends awarding Plaintiff $75,000 in statutory damages against the Defendant for its illegal removal and replacement of Plaintiff's CMI with Defendant's CMI.
B. Damages For Defendant's Copyright Infringement
Similar to damages recoverable under the DMCA, a copyright owner establishing infringement is entitled to recover either (1) actual damages and any profits of the infringer, or (2) statutory damages. 17 U.SC. § 504(a). Plaintiff seeks to recover actual damages and is entitled to do so.
Plaintiff does not have the option of a statutory damages award for copyright infringement. That is because statutory damages are available only when, unlike here, the infringed work has been timely registered. See 17 U.S.C. § 412 (attorney's fees and statutory damages are prohibited in copyright infringement actions where: (1) the work was unpublished and unregistered when the claimed infringement began; or (2) the work was published when the claimed infringement began but not registered by the threemonth mark thereafter); Feliciano v. Food Trucks In The Valley LLC, No. 20-CV-1759, 2021 WL 4150800, at *5 n.5 (E.D.N.Y. 2021) (“A plaintiff may only recover statutory damages and attorney's fees for copyright infringement if the copyright was registered prior to the infringement” or within three months after infringement). As noted above, Plaintiff registered both Documentary Videos on March 8, 2021, well after first publication in June 2018 and June 2020. (TAC ¶¶ 36-37, 51-52.)
The TAC seeks disgorgement from Defendant of $14 million in estimated unlawful profit, at least due to Defendant's fraudulent DMCA counter-notifications. Plaintiff has not offered any insight into how it arrived at that number. Given that YouTube ultimately took down and apparently did not reinstate the Infringing Videos, Plaintiff may want to reconsider its damages estimates for copyright infringement.
But because Plaintiff has not obtained discovery from Defendant due to its default, Plaintiff is not in a position currently to establish its actual damages, if any. In such a situation, the Court may grant leave to conduct third-party discovery to be concluded after a reasonable date. See Sky Vapors, LLC v. Blazynski, No. 14-CV-1078, 2018 WL 6696995, at *2 (W.D.N.Y. Dec. 20, 2018) (referring to court's previous grant of default judgment and authorization for plaintiff to seek post-default discovery to determine amount of damages); Holness v. National Mobile Television, Inc., No. 09-CV-2601, 2011 WL 1059115, at *4 (E.D.N.Y. Jan. 6, 2011), R&R adopted as modified, 2011 WL 1085167 (E.D.N.Y. March 21, 2011) (“Because plaintiff does not have all the information necessary to establish his economic damages at this time, I hereby grant him leave to conduct third-party discovery, to be concluded by March 31, 2011”).
In aid of determining damages, Plaintiff specifically seeks to serve discovery demands on third-parties YouTube, LLC and its parent, Google, LLC, to obtain financial data that may help establish the amount of profits realized by Defendant from its infringement. (See FFCL at p. 32.) The Court agrees that such discovery is appropriate as long as it is narrowly tailored to the three Infringing Videos. Accordingly, I recommend granting Plaintiff leave to take such post-judgment discovery and to seek leave to amend the judgment if it pursues and obtains the damages discovery it seeks within a reasonable time, but in no event longer than six months from the entry of judgment.
IV. Pre-Judgment Interest
“The Copyright Act neither allows nor prohibits an award of pre-judgment interest.” Capitol Records, Inc. v. MP3tunes, LLC, No. 07-CV-9931, 2015 WL 13684546, at *4 (S.D.N.Y. April 3, 2015). “The DMCA is similarly silent.” Miller v. Netventure24 LLC, No. 19-CV-7172, 2021 WL 3934262, at *8 (S.D.N.Y. Aug. 6, 2021), R&R adopted, 2012 WL 3931928 (S.D.N.Y. Sept. 2, 2021). District courts consistently find, however, that they have the discretion to award or not award pre-judgment interest when awarding damages in copyright and cases where other federal law is similarly neutral. E.g., Capitol Records, 2015 WL 13684546 at *4 (declining to award pre-judgment interest in light of sizeable award “far exceed[ing] actual damages” and because plaintiff prolonged the case); Broadcast Music, Inc. v. R Bar of Manhattan, Inc., 919 F.Supp. 656, 661 (S.D.N.Y. 1996) (“Although an award of prejudgment interest in cases under the Copyright Act is discretionary with the court, ... this is a case where it would be appropriate to further the goals of the Act.”). As the Capitol Records court explained, “[s]ome courts have declined to award pre-judgment interest for willful copyright infringement, finding that pre-judgment interest should be reserved for ‘exceptional' circumstances, and concluding that damages for willfulness have already been factored into an award of maximum statutory damages. Other courts have determined that pre-judgment interest is appropriate to help deter willful copyright infringement.” 2015 WL 13684546 at *4 (citations omitted).
The court also has discretion as to the rate of interest to be applied. Broadcast Music, Inc. v. Northern Lights, Inc., 555 F.Supp.2d 328, 334 (N.D.N.Y. 2008); see also Bumble and Bumble, LLC v. Pro's Choice Beauty Care, Inc., No. 14-CV-6911, 2016 WL 658310, at *11 (S.D.N.Y. Feb. 17, 2016) (assessing pre-judgment interest under federal trademark law) (citing GTFM, Inc. v. Solid Clothing, No. 01-CV-2629, 2002 WL 31886349, at *4 (S.D.N.Y. Dec. 26, 2002)), R&R adopted, 2016 WL 1717215 (S.D.N.Y. April 17, 2016). While not uniformly so, many courts assessing pre-judgment interest in copyright and other intellectual property cases under federal law have applied the federal postjudgment interest rate set forth in 28 U.S.C. § 1961(a). See, e.g., Cengage Learning, Inc. v. Shi, No. 13-CV-7772, 2017 WL 1063463, at *5 (S.D.N.Y. March 21, 2017) (awarding prejudgment interest in a copyright and trademark case “in accordance with the rate set forth in 28 U.S.C. § 1961”); but see, e.g., Bumble and Bumble, 2016 WL 658310, at *12 (recommending application of 9% rate in trademark case).
Here, the Court recommends, in its discretion, awarding pre-judgment interest at the same rate as the federal rate for post-judgment interest. This case involves knowing, purposeful, and willful copyright infringement and violation of the DMCA. Although willfulness already has been considered with respect to the award of statutory damages, the Court finds the case exceptional given the Defendant's actions and because the statutory damages awarded for Defendant's DMCA violations is likely an insufficient deterrent to Defendant's future misconduct.
As for the date when pre-judgment interest should start to run, it is important to consider copyright infringement and DMCA violations separately. With respect to copyright infringement, pre-judgment interest ordinarily would begin from the date of infringement. Neither the TAC nor anything else submitted by Plaintiff, however, indicates the date of first infringement for any of the three Infringing Videos. Moreover, Plaintiff has not yet established any amount of actual damages on which pre-judgment interest would be imposed. With respect to Defendant's DMCA violations, Plaintiff's claims accrued at the time Defendant posted the Infringing Videos with Plaintiff's CMI replaced with Defendant's CMI. Again, nothing before the Court indicates when the Infringing Videos were first posted. Rather, the earliest relevant dates set forth in the TAC are those when Plaintiff first submitted takedown notices to YouTube on January 2, 2021, February 9, 2021, and February 15, 2021. (TAC ¶¶ 57, 67, 69.) Pre-judgment interest thus should be awarded on $25,000 starting from January 2, 2021; $25,000 starting from February 9, 2021; and $25,000 starting from February 15, 2021.
V. Post-Judgment Interest
Federal law permits a plaintiff to receive post-judgment interest “on any money judgment in a civil case recovered in a district court ... [to] be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment.” 28 U.S.C. § 1961(a). Accordingly, Plaintiff should be awarded post-judgment interest on the damages awarded in this action. See, e.g., Capitol Records, 2015 WL 13684546 at *5 (awarding postjudgment interest in copyright case); Tetra Images, LLC v. Grahall Partners, LLC, No. 19-CV-5250, 2021 WL 2809566, at *7 (S.D.N.Y. July 6, 2021) (denying pre-judgment interest on statutory damages for copyright infringement but awarding post-judgment interest).
VI. Attorney's Fees
Plaintiff seeks an award of attorney's fees of $137,215.64. The Court agrees that a fee award is warranted although not for precisely that amount.
A. Whether Fees Should Be Awarded
The Copyright Act permits the court, in its discretion, to award to the prevailing party recovery of full costs by or against any party as well as reasonable attorney's fees. 17 U.S.C. § 505. Attorney's fees are not available, however, when the infringing conduct began before the copyright owner registered the works with the U.S. Copyright Office, and registration occurred more than three months after first publication of the work. As the Copyright Act provides, a plaintiff is not entitled to recover attorney's fees (or statutory damages) for “any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work.” 17 U.S.C. § 412(2). “The law is clear that statutory damages and attorney's fees are precluded when the infringement begins prior to the work's copyright registration.” Grecco v. Associated Press, No. 16-CV-6240, 2017 WL 2913501, at *4 (S.D.N.Y. July 7, 2017) (collecting cases); accord Troll Co. v. Uneeda Doll Co., 483 F.3d 150, 158 (2d Cir. 2007) (“Under 17 U.S.C. § 412, a plaintiff may not recover statutory damages or attorney's fees for any infringement ‘commenced' before the effective date of a copyright's registration”).
That is precisely the situation here. Plaintiff first published the Rockefeller Video on June 8, 2018, and the J.P. Morgan Video on June 25, 2020. (TAC ¶¶ 36-37; FFCL ¶¶ 41-42.) Plaintiff did not register the Documentary Videos until March 8, 2021, well more than three months after the date of first publication of either video. (TAC ¶¶ 51-52; FFCL ¶¶ 50-51.) The infringing conduct, however, first began prior to the registration of both videos. Plaintiff first issued a takedown notice in regard to Defendant's first Infringing Video on January 2, 2021, Defendant's second Infringing Video on February 9, 2021, and Defendant's third Infringing Video on February 15, 2021. (TAC ¶¶ 57, 67, 69; FFCL ¶¶ 54, 58, 60.) Defendant's infringing conduct necessarily began on or before each of those respective dates - prior to March 8, 2021, when Plaintiff obtained its copyright registrations. Accordingly, Plaintiff may not recover its attorney's fees based on Defendant's copyright infringement.
Plaintiff may, however, still recover attorney's fees with respect to Defendant's DMCA violations. Shihab v. Complex Media, Inc., No. 21-CV-6425, 2022 WL 3544149, at *7-8 (S.D.N.Y. Aug. 17, 2022). Similar to the language used in § 505, the DMCA allows a court “in its discretion” to award reasonable attorney's fees and costs to a prevailing party. 17 U.S.C § 1203. In Shihab, the Court addressed the issue of whether the bar on statutory damages and the recovery of attorney's fees pursuant to 17 U.S.C. § 412 applies to DMCA violations no less than it does to copyright infringement. Apparently addressing an issue of first impression, the Court determined, as a matter of statutory interpretation, that § 412, which expressly refers only to fees awardable under §§ 504 and 505 for infringement, does not preclude awarding attorney's fees to a party who prevails on a DMCA claim. Shihab, 2022 WL 3544149 at *7-8 (“based on the ordinary meaning of section 412, and the structure of sections 412, 504, 505, 1202 and 1203 of Title 17 of the United States Code, the Court concludes that section 412 does not preclude Shihab's claim for an award of statutory damages, attorney's fees and costs under section 1203 for his DMCA violation claim”). Accordingly, the relative timing of publication, registration and infringement does not come into play in determining whether an award of attorney's fees should be made for Defendant's DMCA violations. The Court thus may award attorney's fees in this case.
In exercising its discretion whether to award fees under the DMCA, the same considerations apply as when considering whether to award attorney's fees for copyright infringement, including the non-prevailing party's “frivolousness, motivation, objective unreasonableness” (both in the factual and legal components of the case), together with the need in particular circumstances to advance considerations of compensation and deterrence.” Zuma Press, 845 Fed.Appx. at 59 (reciting factors in context of both copyright infringement and DMCA violations, and quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19, 114 S.Ct. 1023, 1033 n.19 (1994)); see also Sheldon, 2016 WL 5107072, at *18 (E.D.N.Y. Aug. 26, 2016) (reciting factors in context of both copyright infringement and DMCA violations). Courts must weigh the factors in a way that is “faithful to the purposes of the Copyright Act and are applied to prevailing plaintiffs and defendants in an evenhanded manner.” Fogerty, 510 U.S. at 534, n.19, 114 S.Ct. at 1033, n.19. Although not controlling, the objective unreasonableness of the infringer's position “carries significant weight.” Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 197, 209, 136 S.Ct. 1979, 1989 (2016).
Considering all the circumstances - Defendant's willful misconduct; its deliberate deception by not only removing Plaintiff's CMI but also replacing it with Defendant's own CMI; its multifaceted attempts to avoid detection of infringement; its repeated violations, even after acknowledging it had blatantly infringed Plaintiff's copyrighted material; and the limited deterrent value of the limited statutory damages awarded - an award of attorney's fees and costs is appropriate here and furthers the goals of the Copyright Act. See Kirtsaeng, 579 U.S. at 204, 136 S.Ct. at 1986.
B. Calculation Of A Reasonable Fee Award
The traditional approach to determining a fee award is the “lodestar” calculation, which is the number of hours expended multiplied by a reasonable hourly rate. See Healey v. Leavitt, 485 F.3d 63, 71 (2d Cir. 2007); Tackie v. Keff Enterprises LLC, No. 14-CV-2074, 2014 WL 4626229, at *6 (S.D.N.Y. Sept. 16, 2014). The Second Circuit has held that “the lodestar ... creates a ‘presumptively reasonable fee.'” Millea v. Metro-North Railroad Co., 658 F.3d 154, 166 (2d Cir. 2011) (quoting Arbor Hill Concerned Citizens Neighborhood Association v. County of Albany, 522 F.3d 182, 183 (2d Cir. 2008); and then citing Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 552, 130 S.Ct. 1662, 1673 (2010)); see also Stanczyk v. City Of New York, 752 F.3d 273, 284-85 (2d Cir. 2014) (reaffirming Millea). To arrive at a lodestar calculation, “[t]he party seeking an award of [attorney's] fees should submit evidence supporting the hours worked and rates claimed.” Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939 (1983).
Plaintiff has submitted such evidence here, including a declaration from counsel and copies of contemporaneous records of time expended by specific attorneys. (Coleman Fees Aff., Ex. A.) The following table sets forth the attorneys for whom Plaintiff seeks to recover attorney's fees, their hourly rates, the time they spent on the case, and the total amounts billed (Coleman Fees Aff. ¶ 14):
Attorney Name
Hourly Rate
Hours Billed
Total Billed
Anderson Duff
$350
103.40
$39,190.00
Antigone Peyton
$385
121.45
$46,758.25
Douglas Behm
$500
3.70
$ 1,850.00
Jeremy Hill
$400
32.96
$ 13,184.00
Ronald Coleman
$865
42.40
$ 36,233.39
303.91
$137,215.64
1. Hourly Rates
Courts assess the reasonableness of a proposed hourly rate by considering the prevailing market rate for lawyers in the district in which the ruling court sits. Polk v. New York State Department of Correctional Services, 722 F.2d 23, 25 (2d Cir. 1983). “The rates used by the court should be current rather than historic hourly rates.” Reiter v. Metropolitan Transportation Authority New York City Transit Authority, 457 F.3d 224, 232 (2d Cir. 2006) (internal quotation marks omitted). “[C]ourts may conduct an empirical inquiry based on the parties' evidence or may rely on the court's own familiarity with the rates if no such evidence is submitted.” Wong v. Hunda Glass Corp., No. 09-CV-4402, 2010 WL 3452417, at *2 (S.D.N.Y. Sept. 1, 2010) (internal quotation marks omitted). Additionally, “the range of rates that plaintiff's counsel actually charges their clients ... is obviously strong evidence of what the market will bear.” Rozell v. Ross-Holst, 576 F.Supp.2d 527, 544 (S.D.N.Y. 2008); see also Lilly v. County of Orange, 910 F.Supp. 945, 949 (S.D.N.Y. 1996) (“The actual rate that counsel can command in the market place is evidence of the prevailing market rate”).
Plaintiff initially was represented by two lawyers, Anderson J. Duff of Duff Law PLLC, and Antigone Peyton of Cloudigy Law PLLC. In April 2022, those attorneys withdrew, and on May 16, 2022, the firm of Dhillon Law Group Inc., appeared as new counsel for Plaintiff. (Dkt. 48-49.)
Anderson Duff charged an hourly rate of $350. Duff has been admitted to the bar for 12 years, focusing on trademark and copyright matters. Prior to co-founding Duff Law, he worked at two prominent intellectual property firms in New York and Boston, as well as the Media Law Group at NBCUniversal. Duff graduated number one in the Intellectual Property and Information Technology LL.M. program at Fordham University School of Law. (Coleman Fees Aff. ¶¶ 3-4.) Antigone Peyton charged an hourly rate of $385. She is a registered patent attorney with over 20 years of legal experience, focusing on copyright, trademark, privacy, cybersecurity, information governance, tech law, policy, and regulation. She currently is the Director of Legal and Policy at a technology integration company and also has an independent practice. Peyton previously managed the Intellectual Property and Technology Group at a large firm, and later, the e-Discovery group, at an international intellectual property firm. (Coleman Fees Aff. ¶¶ 5-6.)
Three attorneys from Dhillon Law performed work on this case. Jeremy Hill charged a rate of $400 per hour. He has 21 years of experience as a lawyer, although his practice focuses principally on financial matters. (Coleman Fees Aff. ¶ 8.) Douglas Behm has over 40 years of experience as an attorney. He is a former New York City assistant district attorney and federal prosecutor for the United States Department of Justice in the Eastern District of New York. He has been a partner in a variety of large firms as well as a solo practitioner and has received several top attorney ratings. Behm's hourly rate is $500. (Coleman Fees Aff. ¶ 7.) Finally, lead attorney Ronald Coleman has been admitted to the bar for over 30 years. He has spent much of his career focusing on intellectual property, First Amendment, and commercial litigation. He has tried copyright infringement cases to jury verdicts and has been lead counsel for numerous matters at both the trial and appellate level. He has spoken on intellectual property matters to an array of legal organizations and published numerous related articles. Coleman charged an hourly fee of $865. (Coleman Fees Aff. ¶¶ 9-12.)
The rates charged by attorneys Duff, Peyton, Hill, and Behm are unquestionably reasonable for attorneys of their experience working on intellectual property litigation such as this one in the Southern District of New York. See, e.g., Aquavit Pharmaceuticals, Inc. v. U-Bio Med, Inc., No. 19-CV-3351, 2021 WL 4312579, at *28 (S.D.N.Y. July 16, 2021) (finding hourly rates of $575 and $600 “reasonable in this District for work on complex intellectual properties”), R. & R. adopted as modified, 2021 WL 3862054 (S.D.N.Y. Aug. 30, 2021); Latin American Music Co., Inc. v. Spanish Broadcasting System, Inc., 13-CV-1526, 2020 WL 2848232, at *6 (S.D.N.Y. June 1, 2020) (observing that courts in copyright cases consider reasonable rates of $400 to $750 an hour for partners); Pyatt v. Raymond, 10-CV-8764, 2012 WL 1668248, at *6 (S.D.N.Y. May 10, 2012) (collecting cases approving rates ranging from $400 to $650 for partners in copyright and trademark cases over a decade ago).
Attorney Coleman's hourly rate is a closer call. His $875 hourly rate exceeds the range of rates typically awarded as suggested by the cases above. That said, rates of that magnitude and higher have been approved in complex commercial litigation. Tiffany & Co. v. Costco Wholesale Corp., No. 13-CV-1041, 2019 WL 120765, at *10 (S.D.N.Y. Jan. 7, 2019) (hourly rates of $315-$585 for associates and $625-$845 per hour for partners “are reasonable considering the prevailing rates for firms engaging in complex litigation in this district”); APEX Employee Wellness Services, Inc. v. APS Healthcare Bethesda, Inc., No. 11-CV-9718, 2018 WL 5784544, at *5 (S.D.N.Y. Nov. 5, 2018) (approving hourly rates of up to $1,058.25 in breach of contract action); MSC Mediterranean Shipping Co. Holding S.A. v. Forsyth Kownacki LLC, No. 16-CV-8103, 2017 WL 1194372, at *3 (S.D.N.Y. March 30, 2017) (awarding associate rates of $569.02 to $753.42 and partner rates between and $874.60 to $1,048.47 “given the experience and work performed by the particular individuals” in a breach of contract case that was “relatively straightforward” but also involved foreign law and work done on an urgent basis); United States Bank National Association v. Dexia Real Estate Capital Markets, 12-CV-9412, 2016 WL 6996176, at *8 (S.D.N.Y. Nov. 30, 2016) (finding billing rates ranging from $250 per hour to $1,055 per hour were reasonable as “partner billing rates in excess of $1,000 an hour are by now not uncommon in the context of complex commercial litigation”) (internal quotation marks and citation omitted). In the context of this particular case - involving a foreign autonomous organization, a defendant that initially appeared and moved to dismiss but later abandoned the litigation, and the comparatively modest number of hours performed at Coleman's rate in relation to the entire case (approximately 14 percent) - the Court deems his $865 hourly rate to be reasonable.
2. Hours Worked
To determine the compensable hours, “the court must examine the hours expended by counsel and the value of the work product of the particular expenditures to the client's case.” Tlacoapa v. Carregal, 386 F.Supp.2d 362, 371 (S.D.N.Y. 2005) (citing Gierlinger v. Gleason, 160 F.3d 858, 876 (2d Cir. 1998)). “In making this examination, the district court does not play the role of an uninformed arbiter but may look to its own familiarity with the case and its experience generally as well as to the evidentiary submissions and arguments of the parties.” Gierlinger, 160 F.3d at 876 (internal quotation marks omitted). “The relevant issue ... is not whether hindsight vindicates an attorney's time expenditures, but whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures.” Grant v. Martinez, 973 F.2d 96, 99 (2d Cir. 1992); see also Mugavero v. Arms Acres, Inc., No. 03-CV-5724, 2010 WL 451045, at *6 (S.D.N.Y. Feb. 9, 2010) (same). A court thus should exclude from the lodestar calculation “excessive, redundant or otherwise unnecessary hours.” Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999); see also Luciano v. Olsten Corp., 109 F.3d 111, 116 (2d Cir. 1997) (“If the district court concludes that any expenditure of time was unreasonable, it should exclude these hours from the lodestar calculation”).
A prevailing party can recover fees for several categories of work, including failed efforts otherwise reasonably pursued. See, e.g., Gortat v. Capala Brothers, Inc., 621 Fed.Appx. 19, 23 (2d Cir. 2015) (“there is no rule that [p]laintiffs need achieve total victory on every motion in pursuit of a successful claim in order to be compensated for the full number of hours spent litigating that claim”); Ni v. Bat-Yam Food Services Inc., No. 13-CV-07274, 2016 WL 369681, at *8 (S.D.N.Y. Jan. 27, 2016) (awarding attorneys' fees for hours spent on discovery, discovery-related motions, failed settlement negotiations, and summary judgment motions); Easterly v. Tri-Star Transportation Corp., No. 11-CV-6365, 2015 WL 337565, at *10 (S.D.N.Y. Jan. 23, 2015) (approving fees for time spent, inter alia, preparing pleadings prior to the commencement of the action, discovery, discovery disputes, summary judgment motions, and a damages inquest).
The Court has reviewed the records and finds virtually all of the time spent to be reasonable. The work performed generally is of the nature and type that would be expected for a case such as this one. The principal work performed included client consultations and briefings; investigation; research; drafting multiple complaints as the facts continued to develop; preparing and dealing with DMCA takedown notices and counter-notices; opposing Defendant's motion to dismiss; preparing the motion for default judgment; preparing inquest materials; and strategizing with respect to all the foregoing. The Court has not detected anything in the records suggesting any significant duplication of effort or inefficiency. For the most part, work appears to have been performed by persons whose rates and experience were appropriate to the task. Except as noted below, the hours spent, broken down by each individual and supported by contemporaneous documentation, were all reasonably necessary for the litigation of Plaintiff's claims.
Had the case continued much further, and attorney Coleman continued to incur the highest number of hours among the attorneys working on the matter, the Court may well have come to a different conclusion, at least with respect to the number of hours performed at Coleman's rate in relation to the other attorneys with lower rates.
There are a handful of billing entries that do not warrant recovery of fees. These include communications with third parties about litigation funding (Duff, 2.0 hours, 8/2/2021, $700); meeting with and calls about the FBI (Duff, 1.8 hours, 8/23-24/2021, $630; and Behm, 1.2 hours, 4/15/2021 and 5/24-26/2021, $600); and communicating with client about hiring litigation attorney (Behm, 1 hour, 3/5/2021, $500). “Litigation funding” presumably concerns potential financing of the lawsuit, which is a business matter even if it is sought to fund Plaintiff's prosecution of the case. The entries concerning meeting with the FBI and hiring a litigation attorney do not provide sufficient information to tie those events to compensable legal work related to the case. The total amount that should be deducted from compensable fees is $2,430. Applying that deduction, the Court finds that Plaintiff should be awarded fees of $134,785.64.
These figures are found in the Coleman Fees Aff., Exs. A, E.
VI. Costs
A prevailing party is entitled to recover costs. See Fed.R.Civ.P. 54(d)(1) (“Unless a federal statute, these rules, or a court order provides otherwise, costs - other than attorney's fees - should be allowed to the prevailing party”). Plaintiff has not requested determination of costs on this inquest. Following entry of judgment, however, Plaintiff may submit an appropriate bill of costs to the Clerk of Court. See S.D.N.Y. Local Rule 54.1 (party may file notice of taxation of costs within 30 days of entry of final judgment).
Conclusion
For the foregoing reasons, I recommend that the Court enter judgment in favor of Plaintiff against Defendant awarding Plaintiff: (1) $75,000 in statutory damages pursuant to the DMCA; (2) attorney's fees in the amount of $134,785.64; (3) pre-judgment and post-judgment interest at the federal rate for post-judgment interest; and (4) the opportunity to take third-party damages discovery and to seek leave to amend the judgment based on competent proof of actual damages for copyright infringement within six months of entry of judgment.
Service
Plaintiff shall effect service of this Report and Recommendation on the Defaulting Defendants through the same means of service previously approved by the Court.
Procedure For Filing Objections
Pursuant to 28 U.S.C. § 636(b)(1) and Rules 72, 6(a), and 6(d) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days to file written objections to this Report and Recommendation. Such objections shall be filed with the Clerk of Court, with extra copies delivered to the Chambers of the Honorable John G. Koeltl, United States Courthouse, 500 Pearl Street, New York, New York 10007, and to the Chambers of the undersigned, United States Courthouse, 500 Pearl Street, New York, New York 10007. FAILURE TO FILE TIMELY OBJECTIONS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW.