Broadcast Music, Inc. et al v. McCarty's Finish Line et al
Filing
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MEMORANDUM (Order to follow as separate docket entry) re: 10 MOTION for Default Judgment as to Defendants. Signed by Honorable Matthew W. Brann on 8/31/2017. (jn)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
BROADCAST MUSIC, INC;
LESS THAN ZERO MUSIC;
SOUTHFIELD ROAD MUSIC; FAKE
AND JADED MUSIC; EMBASSY
MUSIC CORPORATION; E.O. SMITH
MUSIC; TENTATIVE MUSIC, INC;
SONY/ATV SONGS LLC; HOUSE OF
GAGA PUBLISHING LLC; and
REDONE PRODUCTION LLC
d/b/a SONGS OF REDONE,
Plaintiffs,
v.
MCCARTY’S FINISH LINE, INC.
d/b/a TAYLOR’S BAR & GRILL; and
KEITH T. HYNDMAN, individually,
Defendants.
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No. 4:16-CV-02233
(Judge Brann)
MEMORANDUM OPINION
AUGUST 31, 2017
Plaintiffs – Broadcast Music, Inc., Less Than Zero Music, Southfield Road
Music, Fake and Jaded Music, Embassy Music Corporation, E.O. Smith Music,
Tentative Music, Inc., Sony/ATV Songs LLC, House of Gaga Publishing LLC, and
RedOne Production LLC d/b/a Songs of RedOne – filed a Motion for Default
Judgment against Defendants McCarty’s Finish Line, Inc. d/b/a Taylor’s Bar &
Grill and Keith T. Hyndman. For the reasons that follow, the motion is granted.
I.
BACKGROUND 1
McCarty’s Finish Line, Inc., (“McCarty’s”) operates Taylor’s Bar & Grill
(“Taylor’s”) in Unityville, PA. 2 Mr. Hyndman is the president of McCarty’s and
the operator and manager of Taylor’s. Broadcast Music, Inc. (“BMI”) holds the
right to license the public performance of over ten million copyrighted musical
compositions (“BMI Catalog”), including the compositions which are the subject
of this lawsuit. 3 The other plaintiffs own the copyrights to the specific musical
compositions which are the subject of this lawsuit.4
A.
Initial Contact Between BMI and Mr. Hyndman
In 2010, BMI began contacting Mr. Hyndman and Taylor’s about the need,
under United States copyright laws, to purchase a license for any compositions
from the BMI Catalog that were publicly performed at Taylor’s. 5 On June 3, 2010,
BMI sent a letter to Mr. Hyndman and Taylor’s that explained BMI’s purpose and
functions, indicated how a license could be obtained through BMI’s website, and
1
The facts for this section were drawn from plaintiffs’ motion for default judgment and
attached exhibits, ECF No. 10; the testimony and exhibits introduced at the hearing on this
motion; and plaintiffs’ complaint and attached exhibits, ECF No. 1. See Broadcast Music,
Inc. v. Spring Mount Area Bavarian Resort, Ltd., 555 F.Supp.2d 537, 541 (E.D. Pa. 2008)
(when considering a motion for default judgment a court assumes the truth of all factual
allegations made in a complaint).
2
ECF No. 1 ¶ 14.
3
Id. ¶ 3.
4
Id. ¶ 4.
5
Hearing Ex. P-2.
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provided contact information for further questions. 6 Over the next several weeks,
BMI placed ten phone calls to Taylor’s, leaving several voicemails and messages
with employees. 7
On July 19, 2010, Mr. Hyndman called BMI. 8 On this call, Mr. Hyndman
stated that, although Taylor’s hosted live music events, an attorney had told him
that these performances were “okay” because the music was “changed,” and “not
the original.”9 The BMI representative nevertheless explained Mr. Hyndman’s
responsibilities regarding BMI Catalog compositions, and Mr. Hyndman asked to
receive more information about the proffered license in order to review it with his
attorney. 10 The next day, July 20, 2010, BMI sent a proposed license to Mr.
Hyndman. 11
B.
Further Communications Between BMI and Mr. Hyndman
Mr. Hyndman did not purchase the proposed license. Over the next several
years, BMI continued its attempts to contact Mr. Hyndman via mail and telephone,
with mixed success. 12
6
Hearing Ex. P-3.
7
Hearing Ex. P-2.
8
Id.
9
Id.
10
Id.
11
Hearing Exs. P-2 and P-3.
12
Id.
-3-
Between August 2010 and September 2016, BMI sent 31 more letters to Mr.
Hyndman at Taylor’s. 13 Many of these letters explained BMI’s organizational
purpose and functions, the general operation of United States copyright laws, the
potential repercussions for violations of those laws, and the methods by which Mr.
Hyndman and Taylor’s could purchase a license in order to conform to those
laws.14 Five of them were titled “Cease & Desist Notice” and asked Taylor’s to
“immediately cease all use of BMI-licensed music.” 15 Although most letters were
sent via First Class USPS mail, several were sent via FedEx – of which three were
“refused by recipient.” 16
During that same time period, BMI placed 43 more calls to Taylor’s. 17 On
20 of those calls, a BMI representative spoke with a Taylor’s employee and was
often able to simply leave a message.18 A few times, however, the employee
indicated Taylor’s refusal to purchase a BMI license or was otherwise
uncooperative.19 On December 19, 2011, for example, a BMI representative spoke
to a woman – identified as Taylor’s general manager and Mr. Hyndman’s
13
Id.
14
Hearing Ex. P-3.
15
Id. The “Cease & Desist” letters were sent on January 23, 2012; February 1, 2012; August 3,
2015; March 30, 2016; April 13, 2016.
16
Hearing Exs. P-2 and P-3. Two of the refused letters were sent on April 13, 2016; the other
was sent on October 3, 2016.
17
Hearing Ex. P-2.
18
Id.
19
Id.
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girlfriend – who told the representative that she had spoken to an attorney, that the
attorney indicated no license was necessary, and that, therefore, Taylor’s would not
be purchasing one. 20 On January 19, 2012, an employee demanded proof that
Taylor’s was playing music from the BMI catalog and requested a list of local
establishments with a BMI license. 21 On April 14, 2016, an employee asked BMI
to “cease and desist” calling Taylor’s. 22 And on May 13, 2016, an employee used
“profane language” with the BMI representative and stated that BMI could bring a
lawsuit if it so chose.23
On several of the calls, a BMI representative spoke with Mr. Hyndman
himself, who continued to refuse to purchase a BMI license and to be
uncooperative.24 On December 29, 2011, for example, Mr. Hyndman indicated
that he would not purchase a BMI license, that he planned to “go to the district
attorney” over the matter, and that it was BMI’s responsibility to prove that
Taylor’s was playing music from the BMI Catalog.25 On January 19, 2012, Mr.
Hyndman said that he would “take his chances in court because [one] cannot get
20
Id.
21
Id.
22
Id.
23
Id.
24
Id.
25
Id.
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blood from a stone.”26 On March 12, 2015, Mr. Hyndman refused to discuss the
matter and hung up on the BMI representative.27 On April 9, 2015, Mr. Hyndman
again refused to discuss the matter with the BMI representative.28
On May 21, 2015, in response to a “long and ranting” voicemail left by Mr.
Hyndman, a BMI representative again called Mr. Hyndman, who – again in a
“long and ranting” manner – indicated that he “look[ed] forward to seeing [BMI]
in court.”29
C.
September 10, 2016 Visit to Taylor’s Bar & Grill
On the evening of September 10, 2016, BMI agent Sarah Fama visited
Taylor’s, making an audio recording and written report of her visit.30 Her written
report indicated that a group named “The Running Joke” performed at Taylor’s
that evening, and identified three compositions played by the band that came from
the BMI Catalog. 31 The audio recording was later analyzed by another BMI agent,
who confirmed the performance of the three compositions identified by Ms. Fama
and identified two additional BMI Catalog compositions. 32
26
Id.
27
Id.
28
Id.
29
Id.
30
ECF No. 10, Ex. A.
31
Id.
32
Id. A total of five BMI Catalog compositions were identified: (1) “Inside Out,” whose
copyright is owned by plaintiffs Less Than Zero Music, Southfield Road Music, and Fake
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Following this visit, BMI sent three additional letters to Mr. Hyndman at
Taylor’s. 33 In an October 3, 2016 letter, BMI informed Mr. Hyndman about Ms.
Fama’s visit to Taylor’s and indicated that it “remain[ed] ready to furnish
[Taylor’s] with the necessary license at this time.” 34 The letter requested license
fees dating back to March 2015 as well as the cost of Ms. Fama’s services;
otherwise, it indicated that there was “no alternative other than to refer this matter
to [BMI] attorneys for whatever action they deem necessary.” 35 In an October 4,
2016 letter – the final one sent to Mr. Hyndman – BMI stated that, “[s]ince you
have not responded to our attempts to resolve the outstanding license for Taylor’s
Bar & Grill, this matter has been forwarded to BMI’s legal Department for further
action.”36
D.
Procedural History
On November 4, 2016, the plaintiffs initiated the instant action. In their
complaint, they laid out the facts discussed supra and alleged five claims of willful
and Jaded Music; (2) “Tainted Love,” whose copyright is owned by plaintiff Embassy Music
Corporation, (3) “Say It Ain’t So,” whose copyright is owned by plaintiff E.O. Smith Music;
(4) “Good,” whose copyright is owned by plaintiff Tentative Music, Inc., and (5) “Bad
Romance,” whose copyright is owned by plaintiffs Sony/ATV Songs LLC, House of Gaga
Publishing LLC, and RedOne Production LLC d/b/a Songs of RedOne.
33
Hearing Exs. P-2 and P-3.
34
Hearing Ex. P-3.
35
Id.
36
Id.
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copyright infringement under the Copyright Act of 1976,37 with each of the five
identified compositions forming the basis for each one of the claims. 38 They
sought injunctive relief, statutory damages, and costs (including attorneys’ fees).
Although the defendants were served with a summons on November 15,
2016, they failed to plead or otherwise defend. 39 Therefore, on December 27,
2016, the plaintiffs filed a Request for Entry of Default pursuant to Federal Rule of
Civil Procedure 55(a). 40 That same day, the Clerk of Court granted the plaintiffs’
request and entered a default against the defendants. 41
On April 5, 2017, the plaintiffs filed the instant Motion for Default
Judgment pursuant to Rule 55(b).42 The attached declaration of Hope M. Lloyd, an
Assistant Vice President of BMI, indicates that BMI had the right to publicly
perform the five BMI Catalog compositions performed at Taylor’s as well as the
right to license the public performance of those compositions.43 The attached
declaration of Brian Mullaney, a Vice President of BMI, verifies the letters sent
and calls made to Mr. Hyndman and Taylor’s, and confirms Ms. Fama’s
37
17 U.S.C. § 101 et seq.
38
ECF No. 1.
39
ECF Nos. 5, 6.
40
ECF No. 8.
41
ECF No. 9.
42
ECF No. 10.
43
Id. Ex. 1.
-8-
investigation and findings. 44
This declaration also reveals that, had Taylor’s
purchased a license from BMI for its use of BMI Catalog compositions, its
licensing fees would have been $3,128.30 for the period from March 2015 through
February 2016 and $3,200.05 for the period from March 2016 through February
2017, for a total of $6,328.35.45
Additionally, the motion indicates that the plaintiffs are seeking $25,313.40
in statutory damages, or $5,062.68 per claim of infringement.46 This figure was
apparently calculated by totaling the estimated amount of unpaid license fees due
from March 2015 through February 2017 ($6,328.35) and multiplying that figure
by four ($6,328.35 x 4 = $25,313.40). 47
A hearing on damages was held on August 24, 2017. Neither the defendants
nor anyone representing the defendants was in attendance at that hearing. 48 The
plaintiffs’ first witness was John Coletta, a Vice President of BMI; he described
BMI’s functions and purpose, the method by which BMI calculates its licensing
fees,49 and general procedures for investigating and dealing with infringements of
44
Id. Ex. 2.
45
Id.
46
ECF No. 10.
47
Id.
48
A court security office ascertained that no one on behalf of the defendants was present on the
fourth floor, where there courtroom is located, or in the lobby of the building. Hearing Tr.
49
Mr. Coletta introduced a document titled “Music Policy/Fee Calculation,” which indicated
how BMI calculated Taylor’s estimated licensing fee of $3,200.05. Hearing Ex. P-4.
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works in its catalog. Mr. Coletta also indicated that Taylor’s continues to host live
music. The plaintiffs’ next witness was Brian Mullaney, also a Vice President of
BMI. Mr. Mullaney described the licensing process generally and the general
methods by which BMI communicated and attempted to communicate with Mr.
Hyndman and Taylor’s.
Mr. Mullaney also discussed some of the specific
interactions with those defendants, including of the telephone calls with Mr.
Hyndman discussed supra.
During the course of this litigation, the plaintiffs submitted several affidavits
– attached to their Motion for Default Judgment,50 at the hearing, 51 and into the
record after trial 52 – showing costs and fees expended in this matter in an amount
of $14,059.00. This figure included a $400.00 filing fee, a $382.00 process server
fee, $608.00 in investigator costs, and $12,669.00 in attorneys’ fees.53
According to this document, BMI first considered whether Taylor’s features recorded music
or live music (and, if live, how many times a week), whether it charges a cover charge, and
whether dancing occurs there. After using this information to calculate a “Total Rate Per
Year Per Occupant” (which in this case was $11.15), BMI then multiplied that amount by
Taylor’s occupancy (287 persons) to come to its figure of $3,200.05. (The 287 occupancy
figure was apparently obtained from Mr. Hyndman himself over the phone. Hearing Ex. P2.)
50
ECF No. 10, Ex. 3.
51
Hearing Ex. P-9.
52
ECF No. 15.
53
ECF No. 15.
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II.
DISCUSSION
A.
Copyright Infringement
To establish a claim of copyright infringement, a plaintiff must prove “(1)
ownership of a valid copyright; and (2) unauthorized copying of original elements
of the plaintiff’s work.” 54 “Copying,” in turn, is “the act of infringing any of the
exclusive rights that accrue to the owner of a valid copyright,”55 which include, for
a musical composition, the right “to perform the [composition] publicly.” 56
The uncontested evidence shows that five BMI Catalog compositions were
publicly performed at Taylor’s, that the plaintiffs own the valid copyrights to those
compositions, and that the performances were an unauthorized copying of those
compositions.
Therefore, the plaintiffs have demonstrated five instances of
copyright infringement by the defendants.
B.
Decision to Enter Default Judgment
The decision whether to enter a default judgment under Rule 55(b) is within
the court’s discretion. 57 When deciding whether to enter such a judgment, a court
should consider “(1) prejudice to the plaintiff if default is denied, (2) whether the
54
Dun & Bradstreet Software Servs. Inc. v. Grace Consulting, Inc., 307 F.3d 197, 206 (3rd Cir.
2002).
55
Kay Berry, Inc. v. Taylor Gifts, Inc., 421 F.3d 199, 207 (3rd Cir. 2005).
56
17 U.S.C. § 106.
57
Chamberlain v. Giampapa, 210 F.3d 154, 164 (3rd Cir. 2000).
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defendant appears to have a litigable defense,” and (3) whether defendant’s delay
is due to culpable conduct.”58
Here, all three factors weigh in favor of entering a default judgment against
the defendants. First, the plaintiffs will be prejudiced if default is denied, as they
will not receive revenue for BMI Catalog music that has been played at Taylor’s
and – since evidence at the hearing indicated that Taylor’s continues to host live
music – the plaintiffs will continue to suffer infringement of their copyrights.
Second, the defendants do not appear to have a litigable defense. The record
indicates the public performance of five BMI Catalog compositions at Taylor’s,
and the defendants have produced no evidence disputing that fact or showing that
the performances were authorized – indeed, the defendants, by their default, have
produced no evidence at all. Third, the defendants’ delay is due to their own
failure to participate in these proceedings. 59 Therefore, entry of default judgment
against the defendants is appropriate and is ordered.
C.
Relief
When considering a claim of copyright infringement, a court may, inter alia,
enter injunctive relief;60 may “allow the recovery of full costs,” including “a
58
Id.
59
See also Broadcast Music, Inc. v. George Moore Enterprises, Inc., 184 F.Supp.3d 166, 170
(W.D. Pa. 2016) (finding the three default judgment factors met in a similar case).
60
17 U.S.C. § 502.
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reasonable attorney’s fee”; 61 and may award damages. 62 For the reasons that
follow, all three forms of relief are appropriate in the instant case.
1.
Injunctive Relief
When deciding whether to grant a permanent injunction, a court must
consider “whether (1) the moving party has shown actual success on the merits; (2)
the moving party will be irreparably injured by the denial of injunctive relief; (3)
the granting of the permanent injunction will result in even greater harm to the
defendant; and (4) the injunction would be in the public interest.” 63
Here, a permanent injunction is warranted.
First, as discussed supra,
plaintiffs have shown success on the merits of their copyright infringements
claims. Second, it is established that a plaintiff who establishes a prima facie case
of copyright infringement – as plaintiffs have done here – is entitled to a
presumption of irreparable harm. 64 Third, granting the injunction will not result in
any greater harm to the defendants, as they are still capable of entering into a
license agreement with plaintiffs in order to perform BMI Catalog compositions
lawfully.
Finally, an injunction enforcing copyright laws and protecting
61
17 U.S.C. § 505.
62
17 U.S.C. § 504.
63
Shields v. Zuccarini, 254 F.3d 476, 482 (3rd Cir. 2001).
64
Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1254 (3rd Cir. 1983).
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copyrighted works is “by definition in the public interest.” 65 Therefore, defendants
are permanently enjoined from infringing any of plaintiffs’ copyrighted works in
any manner.
2.
Costs and Attorneys’ Fees
When considering whether to award costs and attorneys’ fees under 17
U.S.C. § 505, a court should consider, inter alia, “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.” 66 A finding of bad faith, however, is not required
for such an award.67
Here, an award of costs and attorneys’ fees is warranted. Over the course of
several years, defendants repeatedly refused to cooperate with BMI to bring their
establishment into compliance with copyright laws.
BMI gave defendants
numerous opportunities to avoid legal action, sending more than 30 letters and
making more than 40 phone calls that explained defendants’ legal duties and
offered a relatively uncomplicated method by which to comply with those duties.
The record reveals BMI’s patience and its desire to use the legal process only as a
65
Broadcast Music, Inc. v. Spring Mount Area Bavarian Resort, Ltd., 555 F.Supp.2d 537, 544
(E.D. Pa. 2008).
66
Lieb v. Topstone Industries, Inc., 788 F.2d 151, 155-57 (3rd Cir. 1986).
67
Id.
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last resort. Defendants’ conduct was objectively unreasonable, and an award of
costs and attorneys’ fees will (at least partially) compensate plaintiffs for their
efforts vis-à-vis Taylor’s and serve to deter future violations of copyright laws by
defendants and others. Therefore, the defendants are ordered to pay the plaintiffs
$14,059.00 for costs and attorneys’ fees accrued in prosecuting this matter.
3.
Statutory Damages
In a copyright infringement case, a court may award either actual or
statutory damages. 68 For each proven claim of copyright infringement, a court
may award statutory damages “in a sum of not less than $750 or more than
$30,000[,] as the court considers just”; for each proven claim of “willful[]”
copyright infringement, a court may award statutory damages of up to $150,000.69
Statutory damages are meant to compensate plaintiffs, but are also designed to
deter and discourage future wrongful conduct.70 The trend in similar cases in the
Third Circuit – indeed, in the Middle District of Pennsylvania – has been to award
68
17 U.S.C. § 504(a)-(b). A court may not award both actual and statutory damages. Id.
69
17 U.S.C. § 504(c)(1).
70
See, e.g., F.W. Woolworth Co. v. Contemporary Arts, 344 U.S. 228, 233 (1952) (upholding
award of maximum statutory damages and noting that “[t]he statutory rule, formulated after
long experience, not merely compels restitution of profit and reparation for injury, but also is
designed to discourage wrongful conduct”); Rodgers v. Eighty Four Lumber Co., 623
F.Supp. 889, 892 (W.D. Pa. 1985) (noting that “statutory damages should exceed the unpaid
license fees so that defendant will be put on notice that it costs less to obey the copyright
laws than to violate them” (internal quotation marks and citation omitted)).
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statutory damages in an amount equal to approximately three times the defendant’s
unpaid licensing fees.71
Here, plaintiffs seek statutory damages in an amount equal to four times the
amount of defendants’ estimated unpaid licensing fees – i.e., $25,313.40, or four
times the estimated unpaid licensing fees from March 2015 through February
2017. 72 While this is higher than other recent, similar cases, it is justified. As
discussed above, BMI, on dozens of occasions over the course of several years,
contacted the defendants in order to explain the defendants’ responsibilities under
the copyright laws and to offer a relatively uncomplicated procedure to comply
with those responsibilities – i.e., by purchasing a license.
The defendants,
however, repeatedly and consistently refused to cooperate. They outright refused
to purchase the proffered licenses, and ignored scores of messages, voicemails, and
letters. Their employees – perhaps on instruction – participated in the refusal to
purchase the proffered licenses and in obstructing BMI’s efforts to communicate
71
See, e.g., Broadcast Music, Inc. v. George Moore Enterprises, Inc., 184 Fed.Supp.3d 166,
172 (W.D. Pa. 2016) (noting, while awarding approximately three times the unpaid licensing
fees, that it was “follow[ing] well-settled law within the Third Circuit”); Broadcast Music,
Inc. v. Kujo Long LLC, 2014 WL 4059711 (M.D. Pa. 2014) (awarding slightly less than three
times the unpaid licensing fees); Broadcast Music, Inc. v. Shane’s Flight Deck, Ltd., 2010
WL 4916208 (M.D. Pa. 2010) (awarding approximately three times the unpaid licensing
fees); Broadcast Music, Inc. v. It’s Amore Corp., 2009 WL 1886038 (M.D. Pa. 2009)
(awarding approximately 3.5 times the unpaid licensing fees). But see Broadcast Music, Inc.
v. Station House Irish Pub & Steakhouse, Ltd., 2014 WL 3943846 (M.D. Pa. 2014)
(awarding approximately 1.35 times the unpaid licensing fees).
72
It is unclear why the plaintiffs calculated the unpaid fees beginning in March 2015 and not
some earlier date – e.g., sometime in 2010, when they first reached out to Mr. Hyndman and
Taylor’s.
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and work with the defendants, sometimes doing so in “profane language.” Mr.
Hyndman himself threatened to “go to the district attorney” over the matter,
refused to speak with BMI representative on some occasions, spoke in a “long and
ranting” manner on other occasions, and seemingly dared BMI to bring the instant
action. This egregious behavior justifies an award slightly higher than those in
recent copyright infringement cases in this Circuit; therefore, the requested award
of $25,313.40 is granted.73
III.
CONCLUSION
For the reasons discussed supra, the defendants are permanently enjoined
from infringing any of the plaintiffs’ copyright works in any manner. Also for the
reasons discussed supra, the plaintiffs are awarded $25,313.40 in statutory
damages and $14,059.00 in costs and attorneys’ fees.
An appropriate Order follows.
BY THE COURT:
s/ Matthew W. Brann
Matthew W. Brann
United States District Judge
73
Because this award represents a statutory damages award of $5,062.68 for each proven claim
of infringement – well below the statutory cap of $30,000 for non-“willful[]” violations – it is
unnecessary for this Court to determine if defendants’ copyright infringements were
“willful[]” under 17 U.S.C. §504(c)(1).
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