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Phe, Inc. v. Does 1-122

United States District Court, N.D. Illinois, Eastern Division

May 7, 2014

PHE, INC., Plaintiff,
v.
DOES 1-122, Defendants.

MEMORANDUM OPINION AND ORDER

JOHN W. DARRAH, District Judge.

Plaintiff PHE, Inc. ("PHE") has moved for default judgment against Doe Defendants 38, 50, 66, and 117. For the following reasons, the Motion [99] is granted. The Clerk of Court will be directed to enter judgment against Doe Defendants 38, 50, 66, and 117 as follows: (1) PHE is awarded statutory damages under 17 U.S.C. § 504(c)(1) in the amount of $1, 500 per Defendant, for a total award of $6, 000; (2) PHE is awarded $2, 573.32 in costs and attorney's fees under 17 U.S.C. § 505; and (3) PHE is awarded permanent injunctive relief under 17 U.S.C. §§ 502(a) and 503(b).

BACKGROUND

PHE filed this action against Defendants on January 31, 2013, seeking damages and injunctive relief for willful copyright infringement and contributory copyright infringement under the United States Copyright Act of 1976, 17 U.S.C. §§ 101 et seq. On November 1, 2013, PHE filed its First Amended Complaint. PHE alleges that it holds the copyright to the motion picture "Buffy the Vampire Slayer XXX: A Parody" (the "Motion Picture"). PHE alleges that each Defendant, without PHE's permission or consent, used BitTorrent software to download and/or distribute PHE's copyrighted Motion Picture. (First Am. Compl. ¶¶ 4, 83, 90.) PHE alleges that each Defendant participated in a "swarm, " in which they engaged in mass copyright infringement by illegally uploading and sharing the Motion Picture within a file shared among all members of the swarm. ( Id. ¶ 5.)

PHE issued third-party subpoenas to the Internet Service Providers ("ISPs") to identify each of the Defendants. On December 6-8, 2013, Doe Defendants 38, 50, 66 and 117 were all served with a Summons and First Amended Complaint, but none appeared, answered, or otherwise responded to the First Amended Complaint. ( See Decl. of Sarah S. Burns, Dkt. No. 100, ¶¶ 4-18.) On January 21, 2014, PHE filed a motion for entry of default, pursuant to Federal Rule of Civil Procedure 55(a). On January 28, 2014, after a hearing, this Court entered default against Doe Defendants 38, 50, 66 and 117. PHE has now moved for a default judgment pursuant to Rule 55(b)(2), requesting statutory damages under the Copyright Act, costs and attorney's fees, and injunctive relief against those Doe Defendants.

DISCUSSION

Procedure for Obtaining Default Judgment

Under Federal Rule of Civil Procedure 55, a plaintiff seeking a default judgment must satisfy two steps. Fed.R.Civ.P. 55; see also UMG Recordings, Inc. v. Stewart, 461 F.Supp.2d 837, 840 (S.D. Ill. 2006). First, the plaintiff must obtain an entry of default, pursuant to Rule 55(a), by demonstrating that the defendant has failed to answer or otherwise respond to the complaint within twenty-one days of being served, as required by Federal Rule of Civil Procedure 8. Id. Second, once default has been entered, the plaintiff may then seek a default judgment against the defendant, pursuant to Rule 55(b). It is in the district court's discretion whether to enter default judgment. O'Brien v. R.J. O'Brien & Assocs., Inc., 998 F.2d 1394, 1398 (7th Cir. 1993).

In this case, the Court finds that the Rule 55(b)(2)'s procedural requirements for a judgment of default have been met. See Fed.R.Civ.P. 55(b)(2). Next, liability and damages must be determined.

Liability for Infringement

As a general rule, default judgment establishes that a defendant is liable, as a matter of law, for the causes of action alleged in the complaint by the plaintiff. United States v. Di Mucci, 879 F.2d 1488, 1497 (7th Cir. 1989). The well-pleaded factual allegations of the complaint are deemed admitted, except as to the allegations on damages. Black v. Lane, 22 F.3d 1395, 1399 (7th Cir. 1994); Fed.R.Civ.P. 8(b)(6). To establish a claim for copyright infringement, a plaintiff must show: "(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original." JCW Invs., Inc. v. Novelty, Inc., 482 F.3d 910, 914 (7th Cir. 2007) (internal citations omitted). To establish a claim for contributory copyright infringement, a plaintiff must show: "(1) direct infringement by a primary infringer, (2) the defendant's knowledge of the infringement, and (3) the defendant's material contribution to the infringement." Monotype Imaging, Inc. v. Bitstream, Inc., 376 F.Supp.2d 877, 883 (N.D. Ill. 2005) (internal citations omitted). Sharing, or "swapping, " copyrighted works online can infringe copyrights and violate the copyright holders' reproduction and distribution rights. See, e.g., In re Aimster Copyright Litig., 334 F.3d 643, 645 (7th Cir. 2003) ("If the music is copyrighted, [online] swapping, which involves making and transmitting a digital copy of the music, infringes copyright. The swappers... are the direct infringers."); Capital Records, Inc. v. Mattingley, 461 F.Supp.2d 846, 850 (S.D. Ill. 2006).

Here, PHE has alleged that it is the owner of the copyrighted Motion Picture and has provided the certificate of registration. PHE has also alleged that Defendants, without PHE's permission, used BitTorrent to illegally download, reproduce, and distribute the Motion Picture. (First Am. Compl. ¶¶ 60-62, 69-79.) PHE has also alleged that each Defendant contributed to the infringing conduct of other BitTorrent users. ( Id. ¶¶ 83, 90.) Consequently, PHE has established Doe Defendants 38, 50, 66, and 117 are liable for copyright infringement and contributory copyright infringement.

Damages

Under Section 504 of the Copyright Act, a plaintiff may elect, at any time before final judgment is rendered, to recover statutory damages instead of actual damages. 17 U.S.C. § 504(a)-(c). The Copyright Act provides that statutory damages may be awarded "in a sum of not less than $750 or more than $30, 000 as the court considers just." 17 U.S.C. § 504(c). Where the plaintiff carries his burden of proving that the 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." Id. A district court has "wide discretion" and is "not ...


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