Opinion
1:21-cv-03255 (LGS) (SDA)
11-02-2021
Peter Lievano, Plaintiff, v. CoinTelegraph Media USA Inc., Defendant.
TO THE HONORABLE LORNA G. SCHOFIELD, UNITED STATES DISTRICT JUDGE:
REPORT AND RECOMMENDATION
STEWART D. AARON, United States Magistrate Judge.
Plaintiff Peter Lievano (“Plaintiff” or “Lievano”) filed this action under the Copyright Act, 17 U.S.C. § 101, et seq., and the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 1201, et seq., after Defendant CoinTelegraph Media USA Inc. (“Defendant” or “CT Media”) displayed one of Plaintiff's copyrighted photographs on its website without authorization. (See Compl., ECF No. 1, ¶¶ 16-20.) On September 23, 2021, District Judge Lorna G. Schofield issued a default judgment against Defendant and referred the action to me to conduct an inquest into damages. (See Default J., ECF No. 28; Order of Ref., ECF No. 27.)
For the reasons set forth below, I respectfully recommend that Plaintiff be awarded $2,000.00 in actual damages under the Copyright Act; $5,000.00 in statutory damages under the DMCA; $5,097.00 in attorneys' fees; and $477.50 in costs.
The relevant facts are derived from the proposed findings of fact submitted on behalf of Plaintiff. (See Pl.'s Proposed Findings of Fact and Conclusions of Law (“Pl.'s Proposed Findings”), ECF No. 30, at 2-5.)
Lievano is an architectural photographer. (Compl. ¶ 3.) CT Media is a news and investment company covering blockchain technology, crypto assets and emerging fintech trends. (Id. ¶ 5.) At all relevant times, CT Media owned and operated the website located at the URL: https://cointelegraph.com/ (the “Website”). (Id.)
In 2009, Lievano created the photograph entitled “Panorámica De Bogotá hacia el norte 180° // Postproducción // Bogotá” (the “Work”). (Compl. ¶ 12.) He registered the Work with the Register of Copyrights on October 25, 2019 and was assigned registration number VA 2-180-538. (Id. ¶ 13 & Ex. 1.) At all relevant times Lievano was the owner of the Work. (Id. ¶ 15.)
On a date after the Work was created, CT Media copied the Work without Lievano's permission and used the Work on the Website. (Compl. ¶¶ 17, 19 & Ex. 2.) On or about February 12, 2020, Lievano discovered CT Media's unauthorized use of the Work on the Website. (Id. ¶ 18.) CT Media never has been licensed or received permission to use the Work. (See id. ¶¶ 16, 18-19, 27.) After copying the Work, CT Media superimposed a “Brickcoin” logo over the image and added false copyright management information (“CMI”) along the right edge of the Work consisting of a stack of coins with a lightning bolt and the words “COINTELEGRAPH.” (Id. ¶ 21 & Ex. 2.)
Lievano notified CT Media of its infringement on May 26, 2020 and June 22, 2020. (Compl. ¶ 29 & Ex. 3.) CT Media failed to respond to these notices. (Lievano Decl., ECF No. 30-1, ¶ 17.)
DISCUSSION
I. Legal Standards
A. Default Generally
Following a default, the Court must accept all the well-pleaded factual allegations in the Complaint as true, except those relating to damages. See Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009). If the well-pleaded allegations establish the defaulting party's liability, the only remaining issue is whether plaintiff has provided adequate support for its requested relief. See Gucci Am., Inc. v. Tyrrell-Miller, 678 F.Supp.2d 117, 119 (S.D.N.Y. 2008) (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)).
B. Copyright Act
To establish a violation of the Copyright Act, a plaintiff must demonstrate his ownership of a valid copyright and defendant's infringement, that is, copying of original elements of the copyrighted work. See Arista Records LLC v. Doe 3, 604 F.3d 110, 117 (2d Cir. 2010). Under the Copyright Act, “an infringer of copyright is liable for either” actual damages and profits or statutory damages. 17 U.S.C. §§ 504(a)(1)-(2). The first category consists of “the actual damages suffered . . . as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.” 17 U.S.C. § 504(b). “In establishing the infringer's profits, the copyright owner is required to present proof only of the infringer's gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.” Id.
The second category, statutory damages, exists in two forms. In its general form, a plaintiff may recover “with respect to any one work . . . a sum of not less than $750 or more than $30,000 as the court considers just.” 17 U.S.C. § 504(c)(1). In its second form, if “infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000.” 17 U.S.C. § 504(c)(2).
The Copyright Act states that the Court “in its discretion may allow the recovery of full costs, ” which includes reasonable attorneys' fees. 17 U.S.C. § 505.
C. DMCA
Section 1202(a) of the DMCA prohibits the addition of copyright information that falsely represents the ownership of the copyright: “No person shall knowingly . . . provide copyright information that is false.” 17 U.S.C. § 1202(a). Under the DMCA, “[a]t any time before final judgment is entered, a complaining party may elect to recover an award of statutory damages for each violation of section 1202 in the sum of not less than $2,500 or more than $25,000.” 17 U.S.C. § 1203(c)(3)(B). Because the Copyright Act and the DMCA protect against different injuries, a court may appropriately award damages under both statutes, so long as it “properly distinguishes among these injuries when it sets the amount of the award under each statute, ” avoiding duplication. Reilly v. Commerce, No. 15-CV-05118 (PAE) (BCM), 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) (courts strive to “avoid[ ] duplicating compensation for similar conduct” under the Copyright Act and the DMCA), aff'd, 970 F.3d 167 (2d Cir. 2020). In awarding statutory damages under the DMCA, courts “consider [several] factors . . ., namely, the difficulty of proving actual damages, the circumstances of the violation, whether [d]efendants violated the DMCA intentionally or innocently, and deterrence.” Agence France Presse v. Morel, No. 10-CV-02730 (AJN), 2014 WL 3963124, at *10 (S.D.N.Y. Aug. 13, 2014).
The DMCA states that the Court “in its discretion may award reasonable attorney's fees to the prevailing party, ” see 17 U.S.C. § 1203(b)(5), and “in its discretion may allow the recovery of costs by or against any party.” Id. § 1203(b)(4).
II. Application
A. Copyright Infringement Damages
Plaintiff has established that he is the owner of the registered copyright in the Work at issue and Defendant's infringement of such copyright. Plaintiff does not elect to recover statutory damages for Defendant's copyright infringement. (See Pl.'s Proposed Findings at 10.) Rather, Plaintiff seeks to recover “$10,000 (or in the alternative, no less than $2,000.00) for actual damages.” (See id.)
Plaintiff has submitted proof of his actual damages. That is, he has submitted a sworn Declaration and a chart which shows that the middle range of his comparable single-use website licensing fee for the Work and related Bogotá panoramic photographs is roughly $2,000.00. (See Lievano Decl. ¶ 18 & Ex. 3.) The Court finds that $2,000.00 (which is the alternative amount that Plaintiff seeks) reflects Plaintiff's actual damages and recommends that $2,000.00 be awarded for Defendant's copyright infringement.
Plaintiff had sought the sum of $10,000.00 in actual damages as a first alternative based upon application of a 5X multiplier to his $2,000.00 licensing fee. (See Pl.'s Proposed Findings at 8.) However, the copyright law “has no provision for ‘multipliers' in the calculation of actual damages.” Stehrenberger v. R.J. Reynolds Tobacco Holdings, Inc., 335 F.Supp.2d 466, 468 (S.D.N.Y. 2004). In the Third Circuit case upon which Plaintiff relies for his higher actual damages amount, Leonard v. Stemtech Int'l Inc., 834 F.3d 376, 393 (3d Cir. 2016) (see Pl.'s Proposed Findings at 8), a multiplier was applied to a licensing fee to calculate fair market value, based upon expert testimony submitted to the jury at trial. Here, even if the Court were to follow Leonard, no expert testimony has been submitted and the Court finds an inadequate evidentiary basis for a multiplier to be applied.
B. DMCA Statutory Damages
Plaintiff has established a violation of the DMCA. Plaintiff seeks the maximum $25,000.00 in statutory damages for Defendant's violation of the DMCA. (See Pl.'s Proposed Findings at 9.) The Court finds that Plaintiff has not provided sufficient justification for the $25,000.00 award he seeks.
Plaintiff provides no proof regarding any actual damages by reason of the DMCA violation, as distinguished from Defendant's copyright infringement. In these circumstances, it could be appropriate to award only the statutory minimum of $2,500.00. See Miller v. Netventure24 LLC, No. 19-CV-07172 (LGS) (BCM), 2021 WL 3934262, at *8 (S.D.N.Y. Aug. 6, 2021) (awarding statutory minimum damages where little or no evidence that DMCA violation increased actual injury to plaintiff), report and recommendation adopted, 2021 WL 3931928 (S.D.N.Y. Sept. 2, 2021). However, after consideration of the relevant factors, including Defendant's willfulness in placing its own name in the CMI for the Work, the Court, in its discretion, finds that statutory damages in the amount of $5,000.00 are appropriate. See Myeress v. Elite Travel Grp. USA, No. 18-CV-00340 (AJN), 2018 WL 5961424, at *4 (S.D.N.Y. Nov. 14, 2018) (awarding $5,000.00 in statutory damages for DMCA violation). The Court concludes that a $5,000.00 award for the DMCA violation, when combined with the $2,000.00 award on the Copyright Act violation (and the attorneys' fees addressed below), will provide adequate deterrence.
Plaintiff's Declaration makes the assertion that, as a result of CT Medial “plac[ing its] own CMI on the [W]ork[, ] . . . the Works were disseminated throughout the internet without any way to track them back to [him], potentially leading to more infringement in the future and destroying the commercial value of the Works for [his] business.” (Lievano Decl. ¶ 20.) However, Plaintiff has submitted no proof of actual damages having been suffered from Defendant's DMCA violation.
Thus, I recommend that Plaintiff be awarded statutory damages in the amount of $5,000.00 for the DMCA violation.
C. Attorneys' Fees And Costs
Plaintiff also seeks attorneys' fees and costs under the Copyright Act and the DMCA, both of which permit such awards. 17 U.S.C. §§ 504, 1203(b)(4)-(5). An award of fees “lies within the sole and rather broad discretion of the Court.” Baker v. Urban Outfitters, Inc., 431 F.Supp.2d 351, 357 (S.D.N.Y. 2006) (Copyright Act). In exercising that discretion, courts should consider “frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” Zalewski v. Cicero Builder Dev., Inc., 754 F.3d 95, 108 (2d Cir. 2014) (citation omitted). Given Defendant's willful misconduct, together with its failure to offer any defense to Plaintiff's claims, attorneys' fees should be awarded in this case.
Plaintiff requests fees in the amount of $5,097.00, plus $477.50 in costs (see Pl.'s Proposed Findings at 10), and has submitted the Declaration of Joseph A. Dunne (Dunne Decl., ECF No. 30-5) to substantiate those figures.
“The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cty. of Albany, 522 F.3d 182, 186 (2d Cir. 2008) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)). The burden is on the fee applicant to provide evidence that “the requested hourly rates are the prevailing market rates.” Farbotko v. Clinton, 433 F.3d 204, 209 (2d Cir. 2005). “A reasonable rate is generally the ‘prevailing market rate[ ] for counsel of similar experience and skill to the fee applicant's counsel.'” Williams v. Epic Sec. Corp., 368 F.Supp.3d 651, 656 (S.D.N.Y. 2019) (citing Farbotko v. Clinton County, 433 F.3d 204, 209 (2d Cir. 2005)). “In deciding what constitutes a reasonable rate, a court may consider ‘rates awarded in prior cases and the court's own familiarity with the rates prevailing in the district.'” Id.
Attorney Dunne, who has practiced law for about 10 years, seeks an hourly rate of $450.00 for himself, and seeks an hourly rate of $200.00 for a summer associate and two paralegals. (See Dunne Decl. ¶¶ 2-6.) The contemporaneous time records submitted reflect a total of 13.1 hours collectively billed by all the timekeepers. (See Invoice, ECF No. 30-6.)
Both the rates charged hours and hours expended appear reasonable. See Sid Avery & Assocs., Inc. v. Parallel Bar Inc., No. 19-CV-07112 (VSB) (KNF), 2021 WL 3063852, at *4 (S.D.N.Y. Feb. 2, 2021), report and recommendation adopted, 2021 WL 3056173 (S.D.N.Y. July 17, 2021) (awarding $450 per hour to Dunne and $200 per hour to summer associate and paralegals); see also Broadcast Music, Inc. v. Prana Hosp., Inc., 158 F.Supp.3d 184, 199-203 (S.D.N.Y. 2016) (finding hourly rates of $400 and $600 reasonable for two attorneys litigating a copyright case with non-legal staff assistance). Plaintiff's requested costs, consisting of the filing fee and service expenses, are similarly unobjectionable. I therefore recommend that Plaintiff be awarded $5,097.00 in attorneys' fees and $477.50 in costs.
CONCLUSION
For the foregoing reasons, I respectfully recommend that a judgment be entered awarding Plaintiff: (1) actual damages under the Copyright Act in the amount of $2,000.00; (2) statutory damages under the DMCA in the amount of $5,000.00; (3) attorneys' fees in the amount of $5,097.00; and (4) $477.50 in costs.
Plaintiff is directed to promptly serve a copy of this Report and Recommendation on Defendant and to file proof of such service.
* * *
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed. R. Civ. P. 6(a), (d) (adding three additional days when service is made under Fed.R.Civ.P. 5(b)(2)(C), (D) or (F)). A party may respond to another party's objections within fourteen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Any requests for an extension of time for filing objections must be addressed to Judge Schofield.
FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).