Kinsey et al v. Jambow, Ltd. et al
Filing
22
MEMORANDUM Opinion and Order Signed by the Honorable Amy J. St. Eve on 12/4/2014:Mailed notice(kef, )
14-2236.141
December 4, 2014
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
DONALD EDWARD KINSEY and
RALPH EDWARD KINSEY,
)
)
)
Plaintiffs,
)
)
v.
)
)
JAMBOW, LTD. and CAYMAN MUSIC, LTD., )
)
Defendants.
)
No. 14 CV 2236
MEMORANDUM OPINION AND ORDER
On October 27, 2014, the court entered default against the
defendants,
Jambow,
(“Cayman”),
on
the
Ltd.
(“Jambow”)
plaintiffs’
and
complaint
copyright in three musical compositions.
Cayman
for
Music,
Ltd.
infringement
of
Plaintiffs’ request for
entry of default judgment is now before the court.
Pursuant to Federal Rule of Civil Procedure 55, the court may
enter a judgment by default when the non-moving party has “failed
to plead or otherwise defend” itself.
The decision to grant or
deny default judgment lies within the district court’s discretion
and is reviewed only for an abuse of discretion.
Domanus v.
Lewicki, 742 F.3d 290, 301 (7th Cir. 2014) (citing Dundee Cement
Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1322
(7th Cir. 1983)).
“A default judgment establishes, as a matter of
law, that defendants are liable to plaintiff on each cause of
action alleged in the complaint.”
892 (7th Cir. 2012).
Wehrs v. Wells, 688 F.3d 886,
“Upon default, the well-pled allegations of
the complaint relating to liability are taken as true, but those
relating to the amount of damages suffered ordinarily are not.
Thus, damages must be proved unless they are liquidated or capable
of calculation.”
Id. (citations, internal quotation marks, and
brackets omitted).
I.
Liability
Among the exclusive rights set forth in the Copyright Act are
the rights to reproduce and distribute copies of the copyrighted
work.
382
HyperQuest, Inc. v. N’Site Solutions, Inc., 632 F.3d 377,
(7th
Cir.
2011)
(citing
17
U.S.C.
§
106).
Copyright
infringement occurs when anyone violates the exclusive rights of a
copyright
owner.
17
U.S.C.
§
501(a).
To
prove
copyright
infringement, a plaintiff must show (1) ownership of a valid
copyright; and (2) copying of constituent elements of the work that
are original.
Janky v. Lake County Convention & Visitors Bureau,
576 F.3d 356, 361 (7th Cir. 2009).
The complaint sets out the following facts, which the court
deems admitted due to the defendants’ default.
Plaintiffs, Donald
Edward Kinsey and Ralph Edward Kinsey, are Chicago-area musicians
and songwriters. They are the sole owners of registered copyrights
in three musical compositions: “Reggae the Night Away,” “Live Love
Rejoice,” and “Where You Gonna Run” (the “Kinsey Works” or the
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“Works”).1
Plaintiffs allege that the defendants have wrongfully
purported to license to third parties “Reggae the Night Away” and
“Live Love Rejoice” through Jambow and its website, www.jambow.com,
and wrongfully purported to license to third parties “Where You
Gonna Run” through a non-party entity called PeerMusic on its
website, AllMusic.
allege
that
Cayman
(Compl. ¶¶ 17, 19-20.)
falsely
represented
to
Plaintiffs further
performance-rights
organizations that it owns the Kinsey Works and that the defendants
falsely informed PeerMusic that they own the copyrights to the
Kinsey Works.
(Compl. ¶¶ 16, 19.)
Plaintiffs allege that the
defendants have violated their exclusive rights in the Kinsey Works
by wrongfully reproducing and distributing the Works. Accordingly,
the allegations of the complaint, taken as true, establish that the
defendants
have
infringed
the
three
copyrights
owned
by
the
plaintiffs.
II.
Requested Relief
A.
Statutory Damages
The Copyright Act provides that an aggrieved copyright owner
may recover statutory damages, instead of actual damages, of “a sum
of not less than $750 or more than $30,000 as the court considers
just” for each work infringed.
17 U.S.C. § 504(c)(1).
The statute
also provides that where the plaintiff proves that the defendant
1/
Certificates of copyright registration for the Works are attached to
the complaint as Exhibits A, B, and C.
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committed willful infringement, the court may increase the award of
statutory damages to a sum of not more than $150,000, and if the
court finds that the infringer was not aware and had no reason to
believe that his acts constituted copyright infringement, it may
reduce the award of statutory damages to a sum of not less than
$200.
17 U.S.C. § 504(c)(2).
The court is not required to follow any rigid formula when
awarding statutory damages.
It may consider various factors such
as the difficulty or impossibility of proving actual damages, the
circumstances of the infringement, and the efficacy of the damages
as a deterrent to future copyright infringement.
See Chi-Boy
Music v. Charlie Club, Inc., 930 F.2d 1224, 1229-30 (7th Cir.
1991); F.E.L. Publ’ns, Ltd. v. Catholic Bishop of Chicago, 754 F.2d
216, 219 (7th Cir. 1985). “[W]hen the infringement is willful, the
statutory damages award may be designed to penalize the infringer
and to deter future violations.”
Chi-Boy Music, 930 F.2d at
1229-30. “[A] finding of willfulness is justified if the infringer
knows that its conduct is an infringement or if the infringer has
acted in reckless disregard of the copyright owner’s right.”
Wildlife Express Corp. v. Carol Wright Sales, Inc., 18 F.3d 502,
511
(7th
Cir.
1994)
(internal
quotation
marks
omitted).
“[E]vidence that notice had been accorded to the alleged infringer
before the specific acts found to have constituted infringement
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occurred is perhaps the most persuasive evidence of willfulness .
. . .”
Chi-Boy Music, 930 F.2d at 1227.
Plaintiffs allege that the defendants received notice on
several occasions before March 7, 2013 of plaintiffs’ copyrights in
the Kinsey Works.
(Compl. ¶¶ 31, 42, 54.)
Plaintiffs also allege
that they contacted Cayman before March 7, 2013 to assert their
rights in the Kinsey Works and to contest Cayman’s claims of
ownership
and
that
Cayman’s
representative,
Ben
Scholfield,
responded via letter in an effort to resolve the dispute.
¶ 21.)
(Compl.
Plaintiffs replied to Cayman in January 2014, prior to
filing this lawsuit, asserting that the defendants are improperly
offering
to
license
the
Kinsey
Works
to
third
parties
and
improperly claiming royalties for licensing the Works through
performance-rights organizations.
also asked
the
activities
in
defendants
the
Kinsey
to
In that letter, the plaintiffs
cease
Works,
and
for
desist
all
information
licensing
about
all
performance-rights organizations through which the defendants have
claimed ownership rights in the Works and all licenses granted in
the
Works,
and
for
an
accounting
of
defendants have received for the Works.
all
revenues
(Id. ¶ 22.)
that
the
Defendants
failed to respond prior to the complaint’s filing on March 28,
2014, and they continue to offer licenses in the Kinsey Works.
(Id. ¶¶ 23, 24, 31, 42, 54.)
business
of
licensing
Moreover, the defendants “are in the
copyrighted
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works,
including
those
copyrighted in the United States,” so they have “institutional
knowledge about copyrights and actual knowledge of Plaintiffs’
rights to the Kinsey Works.”
(Id. ¶ 31, 42, 54.)
As a result of the default judgment, the court takes the
plaintiffs’ allegations as true.
Because the plaintiffs allege
that they notified the defendants about plaintiffs’ copyrights in
the Kinsey Works and requested that the defendants cease their
activities
and
also
that
the
defendants
responded
but
have
continued to infringe plaintiff’s copyrights, the court concludes
that the defendants have acted willfully.
Plaintiffs contend that they are entitled to the maximum
statutory damages for willful infringement--$150,000--for each of
the three works infringed, for a total amount of $450,000 in
statutory damages.
(Pls.’ Mem. at 8-12.)
Their calculation is as
follows: “Assuming 10-20 licenses per song--a conservative estimate
in view of Defendants’ pervasive reproduction/distribution of the
Kinsey
Works--and
a
$5,000
fee
per
license,
Defendants
have
received licensing profits of at least $50,000 to $100,000 for each
of the Kinsey Works. . . . in addition to whatever profits they
have obtained from . . . direct sales . . . .”
Plaintiffs assert
that courts have awarded as statutory damages three to six times
the estimated actual damages so as to deter willful infringement,
so an award of $150,000 per work would be “on the low end of that
calculation.”
(Pls.’ Mem. at 11.)
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Plaintiffs
argue
that
the
defendants
“likely
received
significant profits from their copyright infringement” and point to
evidence that several albums and a DVD contain sound recordings
based on the Kinsey Works.
(Id. at 10, Exs. D-H.)
They also
submit evidence that several sound recordings based upon the Kinsey
Works are available for sale online on iTunes.
B.)
(Id. at 9, Exs. A,
According to the plaintiffs, they did not authorize these
sales, and the defendants “may have received licensing fees” in
relation to these recordings.
(Id. at 9-10.)
Plaintiffs contend that the defendants have failed to provide
any information about how many licenses they have issued for the
Kinsey Works, but based upon the available sound recordings, “it is
reasonable to assume” that the defendants “have licensed each of
the Kinsey Works on at least 10-20 occasions over the life of” the
Works. (Id. at 10.)
Plaintiffs suggest that “typical fees for the
licensing of individual songs range from $4,000-$7,000 for use in
corporate videos without public distribution, $4,000-$12,000 for
use in documentaries, and $10,000-$40,000 for use in independent
movies.”
(Id.)
In support of this proposition, the plaintiffs
submit a copy of the “Frequently Asked Questions” section of the
website for License Music Now, which is evidently a music-licensing
business.
The website printout refers to the above-listed amounts
as “a few examples of recent license fees.”
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(Id., Ex. C.)
Plaintiffs fail to authenticate the evidence they submit,
including the License Music Now printout.
Moreover, the court
cannot rely on the figures listed therein because there is no
indication of how the information was gathered or prepared.
There
is also no evidence regarding the purposes for which the defendants
issued any licenses to the Kinsey Works.
Thus, the court rejects
the plaintiffs’ contention that “[e]ven if the Kinsey Works command
fees on the lower end of the range, each license would be worth
about $5,000.”
(Pls.’ Mem. at
10.)
Furthermore, the plaintiffs
fail to submit any evidence that connects the existence and sales
of
the
derivative
sound
recordings
to
any
conduct
by
the
defendants. There is no evidence that the defendants’ reproduction
and distribution of the Kinsey Works was “pervasive,” as the
plaintiffs contend.
The court is mindful, however, that the defendants’ own
conduct makes it difficult to measure the plaintiffs’ losses;
indeed, this difficulty is why statutory damages exist. See, e.g.,
Chi-Boy Music, 930 F.2d at 1230; Lorillard Tobacco Co. v. Montrose
Wholesale Candies & Sundries, Inc., Nos. 03 C 5311 & 03 C 4844,
2007 WL 2580491, at *3 (N.D. Ill. Sept. 10, 2007).
considers
that
infringement.
the
defendants
did
not
engage
The court also
in
a
one-time
They continuously offered to license the Kinsey
Works to third parties and were still doing so at the time of the
complaint.
In the court’s view, a $7,500 award of statutory
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damages for each work infringed is well within the statutory range
and should be sufficient to deter future violations, but is not
unduly large.
Accordingly, the court declines to award the full
amount that the plaintiffs request, but will award $7,500 in
statutory damages for each infringement, for a total of $22,500 in
statutory damages.
B.
Injunctive Relief
Plaintiffs request permanent injunctive relief pursuant to 17
U.S.C. § 502(a), which provides that the court may grant a final
injunction on such terms as it deems reasonable “to prevent or
restrain
infringement
of
a
copyright.”
Plaintiffs
seek
an
injunction prohibiting the defendants from infringing the Kinsey
Works.
A plaintiff seeking an injunction in a copyright case must
show that (1) he has suffered an irreparable injury; (2) remedies
available at law, such as monetary damages, are inadequate to
compensate
for
that
injury;
(3)
considering
the
balance
of
hardships between the plaintiff and defendant, a remedy in equity
is warranted; and (4) the public interest would not be disserved by
a permanent injunction.
See Flava Works, Inc. v. Gunter, 689 F.3d
754, 755 (7th Cir. 2012) (citing eBay Inc. v. Mercexchange, L.L.C.,
547 U.S. 388, 391 (2006), and holding that eBay’s four-factor test
for permanent injunctive relief governs requests for relief in
copyright cases).
Plaintiffs maintain that they have suffered
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irreparable
harm
because
the
defendants
have
“usurped”
“creative control” of the Works by licensing them.
their
They also
maintain that monetary damages are inadequate to compensate for
this injury.
factors,
the
(Pls.’ Mem. at 12.)
plaintiffs
As for the third and fourth eBay
contend
that
the
only
hardship
the
defendants would suffer as a result of a permanent injunction is
that they would be prohibited from licensing copyrighted works that
they have no right to license in the first place and that the
protection of copyright serves the public interest.
The court agrees with the plaintiffs that the eBay factors
weigh
in
favor
of
a
permanent
injunction.
Defendants
have
continued to offer to license the Kinsey Works despite having
received notice that they were infringing.
Without a permanent
injunction, the defendants will likely continue their infringing
conduct. Accordingly, the court grants the plaintiffs’ request for
entry of a permanent injunction.
C.
Attorneys’ Fees and Costs
Plaintiffs request an award of attorneys’ fees and costs
pursuant to the Copyright Act, which provides that a court may
award reasonable attorneys’ fees and costs to the prevailing party.
See 17 U.S.C. § 505.
“The two most important considerations in
determining whether to award attorneys’ fees in a copyright case
are the strength of the prevailing party’s case and the amount of
damages or other relief the party obtained.”
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Assessment Techs. of
WI, LLC v. Wiredata, Inc., 361 F.3d 434, 436 (7th Cir. 2004).
“[T]he
smaller
the
damages,
provided
there
is
a
real,
and
especially a willful, infringement, the stronger the case for an
award of attorneys’ fees.”
Id. at 437.
“Attorney’s fees may be
awarded for reasons other than simply making the plaintiff whole,
such as encouraging the assertion of colorable copyright claims and
deterring infringement.”
Chi-Boy Music, 930 F.2d at 1230.
A
finding of willful infringement supports an award of attorneys’
fees.
Id.
Defendants willfully infringed the plaintiffs’ copyrights, and
they failed to defend themselves in this case.
The damages are
small, so an award of attorneys’ fees and costs is appropriate in
order to adequately deter the defendants’ future infringement.
Therefore, the court grants the plaintiffs’ request for an award of
reasonable attorneys’ fees and costs.
CONCLUSION
Plaintiffs’ request for entry of default judgment is granted
in part and denied in part.
The court will enter judgment in favor
of the plaintiffs and against the defendants in an amount of
$22,500.00 in statutory damages and will award the plaintiffs their
reasonable attorneys’ fees and costs incurred in this action.
The
court will also enter a permanent injunction prohibiting the
defendants from infringing the Kinsey Works.
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Plaintiffs shall file by December 11, 2014 an affidavit in
support of their request for attorneys’ fees and costs. Plaintiffs
shall submit to the court’s proposed-order box by December 11, 2014
a proposed final judgment order that conforms with this opinion.
DATE:
December 4, 2014
ENTER:
____________________________________________
Amy J. St. Eve, United States District Judge
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