Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 1 of 30 Page ID #:2552
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`UNITED STATES DISTRICT COURT
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`CENTRAL DISTRICT OF CALIFORNIA
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`CASE NO. CV 15-01869 MMM (MRWx)
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`FINDINGS OF FACT AND
`CONCLUSIONS OF LAW SUPPORTING
`ENTRY OF PRELIMINARY
`INJUNCTION
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`CHINA CENTRAL TELEVISION, a China
`company; CHINA INTERNATIONAL
`COMMUNICATIONS CO., LTD., a China
`company; TVB HOLDINGS (USA), INC., a
`California corporation; and DISH NETWORK
`L.L.C., a Colorado corporation,
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`vs.
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`CREATE NEW TECHNOLOGY (HK)
`LIMITED, a Hong Kong company; HUA YANG
`INTERNATIONAL TECHNOLOGY LIMITED,
`a Hong Kong company; SHENZHEN
`GREATVISION NETWORK TECHNOLOGY
`CO. LTD., a China company; CLUB TVPAD,
`INC., a California corporation; BENNETT
`WONG, an individual, ASHA MEDIA GROUP
`INC. d/b/a TVPAD.COM, a Florida corporation;
`AMIT BHALLA, an individual; NEWTVPAD
`LTD. COMPANY d/b/a NEWTVPAD.COM
`a/k/a TVPAD USA, a Texas corporation;
`LIANGZHONG ZHOU, an individual;
`HONGHUI CHEN d/b/a E-DIGITAL, an
`individual; JOHN DOE 1 d/b/a BETV; JOHN
`DOE 2 d/b/a YUE HAI; JOHN DOE 3 d/b/a 516;
`JOHN DOE 4 d/b/a HITV; JOHN DOE 5 d/b/a
`GANG YUE; JOHN DOE 6 d/b/a SPORT
`ONLINE; JOHN DOE 7 d/b/a GANG TAI WU
`XIA; and JOHN DOES 8-10,
`Defendants.
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`Plaintiffs,
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 2 of 30 Page ID #:2553
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`On March 13, 2015, plaintiffs China Central Television (“CCTV”), China International
`Communications Co., Ltd. (“CICC”), TVB Holdings (USA), Inc. (“TVB USA”), and DISH
`Network L.L.C. (“DISH”) (collectively, “plaintiffs”) filed this copyright infringement action
`against Create New Technology HK Limited (“CNT”), Hua Yang International Technology
`Limited (“Hua Yang”), Shenzhen GreatVision Network Technology Co., Ltd. (“GreatVision”),
`Club TVpad, Inc. (“Club TVpad”), Bennett Wong, Asha Media Group (“AMG”), Amit Bhalla,
`newTVpad Ltd. Company (“newTVpad”), Liangzhong Zhou, Honghui Chen, and various
`fictitious defendants.1 Three days later, plaintiffs filed a motion for preliminary injunction
`against CNT, Club TVpad, and AMG (collectively, “defendants”).2 None of these defendants
`has opposed the motion.3
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`I. FINDINGS OF FACT
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`The Parties
`A.
`1.
`CCTV and Television Broadcasts Limited (“TVB”) are television broadcasters in
`mainland China and Hong Kong, respectively. Through affiliates, CCTV and TVB license
`
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`1 Complaint, Docket No. 1 (Mar. 13, 2015).
`2 Notice of Motion and Motion for Preliminary Injunction (“Motion”), Docket No. 23
`(Mar. 16, 2015).
`3 CNT was served with the summons and complaint on March 18, 2015. AMG was
`served on March 19, and Club TVpad was served on March 20. (See Proof of Service on
`Create New Technology, Docket No. 38 (March 24, 2015); Proof of Service on Asha Media
`Group, Docket No. 42 (Mar. 27, 2015); Proof of Service on Club TVpad, Docket No. 44 (Mar.
`27, 2015).) Plaintiffs served a copy of their motion for preliminary injunction on CNT, Club
`TVpad, and AMG on March 18, 2015. (See Proof of Service Re: Motion for Preliminary
`Injunction, Docket No. 33 (Mar. 18, 2015).) CNT has not appeared and has had its default
`entered. (See Minutes (In Chambers) Order Granting Plaintiffs’ Requests for Entry of the
`Default, Docket No. 87 (May 28, 2015); Default by Clerk Entered As To Hua Yang and Create
`New Technology, Docket No. 88 (May 28, 2015).) AMG and Club TVpad have each answered
`the complaint. (See Answer to Complaint by Asha Media Group, Docket No. 58 (Apr. 23,
`2015); Answer to Complaint by Club TVpad, Inc., Docket No. 72 (May 11, 2015).)
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 3 of 30 Page ID #:2554
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`copyrighted television programming for retransmission in the U.S. via authorized satellite,
`cable, and other television service providers (“Authorized U.S. Providers”).4
`2.
`CICC is a CCTV affiliate that licenses Authorized U.S. Providers to broadcast
`CCTV’s “Great Wall” package of channels to paying U.S. subscribers. Although CICC
`licenses certain satellite and cable retransmission rights, CCTV retains and owns the exclusive
`right to transmit CCTV programming in the United States over the internet.5
`3.
`TVB USA is a wholly owned indirect subsidiary of TVB and distributes and
`licenses TVB programming in the United States. TVB owns and maintains the exclusive right
`to transmit TVB programming in the United States via Internet Protocol Television (“IPTV”)
`and Over-the-Top (“OTT”) in video-on-demand format.6
`4.
`“IPTV” is the electronic delivery of video programming via internet protocol
`over a service provider’s infrastructure – such as AT&T’s “U-verse.” “OTT” is the delivery of
`video programming using an internet connection that is not owned, managed, or operated by
`the party delivering the programming – i.e., Netflix.7
`5.
`DISH is a television service provider that delivers television services to
`subscribers through satellite and internet platforms. DISH is a licensee of both CCTV and
`TVB; pursuant to the licensing agreements, DISH owns the exclusive right to transmit certain
`CCTV and TVB programming in the United States via satellite, and certain TVB programming
`via OTT, except in video-on-demand format.8
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`4 Compendium of Evidence In Support of Motion for Preliminary Injunction – Volume I
`(“Comp. Vol. I”), Docket No. 23-1 (Mar. 16, 2015), Declaration of Samuel P. Tsang (“Tsang
`Decl.”), ¶¶ 3-4, 11; Comp. Vol. I, Declaration of Chunguang Lu (“Lu Decl.”), ¶¶ 3-5, 9.
`5 Lu Decl., ¶¶ 5, 10-11.
`6 Tsang Decl., ¶¶ 3-4, 9, 11.
`7 Id., ¶ 9.
`8 Comp. Vol. I, Declaration of Christopher Kuelling (“Kuelling Decl.”), ¶¶ 5-6, 9; Lu
`Decl., ¶¶ 12-13; Tsang Decl., ¶ 12.
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 4 of 30 Page ID #:2555
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`6.
`CNT is a Hong Kong company that manufactures the “TVpad” device – a set-top
`box that delivers streaming television programming from Asia to customers in the United States
`over the internet without requiring customers to pay subscription fees to an authorized
`provider.9
`7.
`CNT offers TVpads for sale to consumers throughout the United States –
`including within the Central District – through its website, www.itvpad.com, and through U.S.
`distributors. CNT’s latest model of the TVpad, the TVpad4, is sold at retail for $299.00.10
`8.
`Club TVpad is a California corporation based in Hayward, California. Club
`TVpad operates an interactive website on which it offers TVpads for sale to California
`consumers. Corporate records identify Wong as Club TVpad’s officer and agent for service of
`process.11
`9.
`AMG is a California corporation that operates an interactive website on which it
`offers TVpads for sale to California consumers. Corporate records identify Amit Bhalla as
`president of AMG.12
`B.
`Uncontested Facts Regarding Defendants’ Infringement
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`1.
`CNT and the TVpad Infringing Apps
`10.
`Before a TVpad user can access television programming, he or she must
`download applications from the “TVpad Store” – the store is a primary feature of every TVpad
`device. Thus, before TVpad users in the United States can access unauthorized CCTV and
`TVB programming, they must download free apps from the TVpad Store for their devices.13
`
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`9 Comp. Vol. I, Declaration of Christopher Weil (“Weil Decl.”), ¶¶ 9, 16.
`10 Id., ¶¶ 10-13, 64-71; see also id., Exh. 4.
`11 Comp. Vol. I, Declaration of Shuk Kuen “Lily” Lau (“Lau Decl.”), ¶¶ 4-5, 9. See also
`id., Exhs. 57-78, 62.
`12 Id., ¶¶ 21-24. See also id., Exh. 74.
`13 Weil Decl., ¶ 26; Comp. Vol. I, Declaration of Nicholas Braak (“Braak Decl.”), ¶¶ 8,
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`14-16.
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 5 of 30 Page ID #:2556
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`11.
`Plaintiffs’ investigators have identified 15 TVpad apps available in the TVpad
`Store that permit TVpad users in the United States to access unauthorized CCTV and TVB
`programming (“Infringing TVpad Apps”). The Infringing TVpad Apps are identified in the
`chart attached hereto as Exhibit A. These Infringing TVpad Apps provide CCTV and TVB
`programming in four modes: “live” streaming, “time-shifted” streaming, and two forms of
`video-on-demand streaming.14
`12.
`In late 2014, plaintiffs’ investigator observed and recorded 30 CCTV television
`episodes and 23 TVB television episodes streamed through Infringing TVpad Apps on the
`TVpad device. A TVB USA executive observed and recorded portions of an additional 406
`TVB episodes streamed through Infringing TVpad Apps in video-on-demand mode. Each
`episode recorded by plaintiffs’ investigator and the TVB USA executive (“Registered
`Programs”) are registered with the United States Copyright Office. Plaintiffs have not granted
`anyone a license to stream the Registered Programs over the internet into the United States
`through the Infringing TVpad Apps.15
`13.
`Before accessing the TVpad Store, users must accept CNT’s mandatory terms of
`service. These terms state, inter alia, that CNT reserves the right to “filter, modify, refuse or
`delete any or all software applications in the TVpad Store,” and to “suspend, remove, or disable
`access to any Products, content, or other materials accessible through the TVpad Store.”16
`14.
`CNT solicits new applications for the TVpad Store, announces the release of new
`applications, and sells different “editions” of its TVpad4 device with unique application
`collections. CNT has stated that it “has strictly controlled and managed the way to upload apps
`on TVpad Store[.]”17
`
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`14 Braak Decl., ¶¶ 16-17, 52; Tsang Decl., ¶ 22.
`15 Braak Decl., ¶¶ 74-76; Tsang Decl., ¶¶ 23, 25-27; id., Exh. 92; Lu Decl., ¶¶ 23-25; id.,
`Exh. 94; Kuelling Decl., ¶ 14.
`16 Braak Decl., ¶¶ 29-30; id., Exh. 47 at ¶¶ 3.8 and 3.10.
`17 Weil Decl., ¶¶ 18, 25, 36; id., Exhs. 7, 9-12, 18; Comp. Vol. I, Declaration of George
`P. Wukoson (“Wukoson Decl.”), ¶ 2; id., Exh. 104 at 4.
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 6 of 30 Page ID #:2557
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`15.
`Plaintiffs’ investigator performed forensic analysis of the TVpad device and
`determined that Infringing TVpad Apps in “live” mode stream CCTV and TVB programming
`through a peer-to-peer network, in which each TVpad user streams video content to large
`numbers of other users worldwide. Stated differently, each TVpad user not only receives live
`CCTV and TVB broadcasts, but also simultaneously retransmits those broadcasts to other
`TVpad users throughout the United States and around the world. CNT is aware of the peer-to-
`peer streaming feature of the TVpad and has publicly praised the feature.18
`16. According to plaintiffs’ investigator, peer-to-peer streaming can only function if
`an individual initially captures CCTV and TVB broadcast signals in Asia. After the signal is
`captured, the individual converts the signal into digital data and then streams the data to TVpad
`users through the peer-to-peer network.19
`17.
`Plaintiffs’ investigator has also determined that Infringing TVpad Apps in
`“video-on-demand” mode stream CCTV and TVB programs to TVpad users directly from
`servers in the United States, including servers in Los Angeles.20
`18. Data packets received from these servers indicate that recorded video files reside
`on the servers. Thus, individuals or entities that pirate CCTV and TVB programs from Asia
`make copies of the programs and stream those copies from servers located in the United
`States.21
`19.
`Forensic analysis has demonstrated that Infringing TVpad Apps in time-shift
`mode stream CCTV and TVB programming both through the peer-to-peer network and directly
`from servers in China.22
`
`
`18 Braak Decl., ¶¶ 10(a), 53-56; id, Exh. 45; Weil Decl., ¶ 19; id., Exh. 9 at 1.
`19 Braak Decl., ¶¶ 17, 56. Plaintiffs refer to individuals responsible for capturing
`broadcast signals and converting them into data streamed through peer-to-peer networks as
`“App Infringers.”
`20 Id., ¶¶ 10(b), (d), 60-62; id., Exh. 45
`21 Id., ¶ 62; id., Exh. 45.
`22 Braak Decl., ¶¶ 10(c), 63.
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 7 of 30 Page ID #:2558
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`20.
`CNT promotes its television service, the Infringing TVpad Apps, and the
`availability of CCTV and TVB programming on the TVpad devices. In some cases, it has
`falsely represented that the content it delivers has been authorized by CCTV and TVB. CNT
`solicits new distributors by stating that it provides “[e]xclusive & authorized live content from
`mainland China/HK/Taiwan”; this statements is displayed next CCTV and TVB logos. CNT
`has also advertised on its website that the TVpad delivers “massive content from China,
`Taiwan, and HK.”23
`21.
`CNT places banner advertisements for Infringing TVpad Apps that stream CCTV
`and TVB programs on the user interface of the TVpad device. It also utilizes categories such as
`“Live TV,” “VOD,” and “TV Dramas” in the TVpad Store to make it easy for users to locate
`and download Infringing TVpad Apps.24
`22.
`CNT’s blog actively promotes Infringing TVpad Apps. For example, on January
`8, 2014, CNT stated that the Gang Yue Wang Luo Dian Shi app provides live channels in high
`definition, and noted that it is “definitely the favorite of those who love to watch TVB.” CNT’s
`blog post included a screenshot of a TVB program.25
`23.
`CNT’s Facebook page regularly promotes the availability of CCTV and TVB
`television programs through the Infringing TVpad Apps. One post by the TVpad administrator
`on CNT’s Facebook page encourages users to watch a CCTV documentary and places the CNT
`logo directly next to programming information for CCTV channels.26
`24.
`CNT’s Facebook page includes a promotional video that features icons of
`Infringing TVpad Apps and a CCTV broadcast.27
`
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`23 Weil Decl., ¶¶ 28-50; id., Exhs. 8, 13-29, 33.
`24 Braak Decl., ¶¶ 31-36, 38-41, 46-50; id., Exhs. 46, 48.
`25 Weil Decl., ¶ 36; id., Exh. 18.
`26 Id., ¶¶ 39-42; id., Exh. 20 at 3-6; id., Exh. 21.
`27 Id., ¶¶ 42, 50; id., Exh. 21; id., Exh. 29 at 1-53, 61-71.
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 8 of 30 Page ID #:2559
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`25.
`CNT also actively collaborates with purported third-party App Infringers to
`develop and improve infringing content by providing customer support and technical assistance
`to help TVpad users access and share infringing streams of CCTV and TVB programming, and
`by conveying messages between TVpad users and App Infringers. For example, a CNT blog
`post instructs users how to install the infringing BETV app from the TVpad Store, providing
`step-by-step screenshots.28
`26. Administrators on CNT’s Facebook page instruct users how to download and use
`Infringing TVpad Apps to access CCTV and TVB programming. On June 12, 2014, in
`response to the question – “Anyone knows which app or channel on tvpad is showing the
`World Cup???” – a CNT administrator advised the user to try BETV and Sport Online, two
`Infringing TVpad Apps that stream CCTV channels.29
`27. When a user asked on CNT’s Facebook page, “[w]hich tvpad is can see [sic] tvb
`day and night and 12 hour back and tvb drama,” an administrator wrote “Could download three
`party applications from TVpad store for this case[.]”30
`28. Administrators provide similar assistance to help TVpad users locate CCTV and
`TVB programming on CNT’s official fan forum at tvpadfans.com.31
`29. Administrators on CNT’s Facebook page and fan forum also provide technical
`assistance and updates to customers regarding server problems impacting their ability to stream
`infringing television content.32
`30. As recently as January 9, 2015, CNT responded to user complaints about
`problems downloading the new Gang Yue Wang Luo Dian Shi app – an Infringing TVpad App,
`
`
`28 Id., ¶¶ 37, 54-56; id., Exhs. 19, 30-32
`29 Id., ¶¶ 43-45; id., Exhs. 22-24.
`30 Id., ¶ 45; id., Exh. 24.
`31 Id., ¶ 50; id., Exh. 29 at 81-87.
`32 Id., ¶¶ 37, 39; id., Exhs. 34, 36; Braak Decl., ¶ 59; id., Exh. 51.
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 9 of 30 Page ID #:2560
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`They apologized for any inconvenience, and asked customers to send a private message to CNT
`so that CNT and the “app provider” could address the problem.33
`31.
`CNT’s statements demonstrate that it collaborates with third party app
`developers to develop and improve infringing content. By way of example, on August 18,
`2013, CNT published a post on its Facebook page soliciting suggestions as to how it could
`help CNT “better serve [its] overseas customers and allow overseas TVpad users to enjoy better
`Chinese TV services.” In response, one user suggested adding a TVB football channel; the
`administrator said he would “communicate with third-party application developers” regarding
`the suggestion.34
`32.
`In response to another user’s suggestion that CNT “improve all streaming sound
`bit rates and enable stereo,” the administrator reported that “the application providers are
`working on this issue.”35
`33.
`In addition to responding to user suggestions and questions, CNT also
`communicates information regarding the Infringing TVpad Apps to users. In October 2013, for
`example, a CNT administrator posted a notification on CNT’s official Facebook page advising
`TVpad users that maintenance required on the infringing 516 app might cause service
`disruptions.36
`34. Despite its internet-based streaming business model, CNT has not (a) posted a
`policy instructing users how to report infringing activity, (b) appointed an agent to receive
`notifications of claimed infringement under the Digital Millennium Copyright Act, 17 U.S.C. §
`512 (c)(2), or (c) adopted any notice-and-takedown procedures in the TVpad Store.37
`
`
`33 Weil Decl., ¶ 60; id., Exh. 37.
`34 Id.
`35 Id., ¶¶ 54-55; id., Exhs. 30-31.
`36 Id., ¶ 56; id., Exh. 32.
`37 Braak Decl., ¶ 51.
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 10 of 30 Page ID #:2561
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`35.
`CNT employs a business model that requires TVpad users to pay an up-front,
`one-time fee for unlimited access to unauthorized, infringing programming. Consumers who
`wish to access the content must pay regular subscription fees to receive programming from an
`Authorized U.S. Provider.38
`2.
`Club TVpad
`36.
`Club TVpad operates an interactive website on which it sells TVpads. On its
`website and Facebook page, Club TVpad also markets the Infringing TVpad Apps, the
`infringing capabilities of the TVpad, and the availability of CCTV and TVB programming.39
`37.
`For example, in November 2012, Club TVpad posted the following on its
`Facebook page: “Are you a Direct TV subscriber? Then you might be aware that they are
`removing TVB from their line up at the end of the month. . . . This is the best time to get a
`TVpad to replace Direct TV.”40
`38.
`Club TVpad also operates an online forum through which it regularly promotes
`Infringing TVpad Apps; it also assists customers who wish to download Infringing TVpad
`Apps and access unauthorized CCTV and TVB content and programming.41
`39. On October 26, 2014, plaintiffs’ investigator contacted Club TVpad and spoke
`with Bennett Wong about purchasing a TVpad device. Wong told the investigator that TVB’s
`TVBS and Jade channels were available through the TVpad device and that the one-time
`purchase price of the TVpad was the only cost to access television programming.42
`
`
`38 Weil Decl., ¶¶ 4, 28, 35, 38, 62; id., Exhs. 6, 13, 17, 38; Lau Decl., ¶¶ 26, 30, 34; id.,
`Exh. 80; Tsang Decl., ¶ 14; Lu Decl., ¶ 15; Kuelling Decl., ¶¶ 7-8, 11.
`39 Lau Decl., ¶¶ 10-11; id., Exhs. 63-67.
`40 Id., ¶ 10(d); id., Exh. 66.
`41 Id., ¶¶ 12-15; id., Exhs. 68-71.
`42 Id., ¶ 17.
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 11 of 30 Page ID #:2562
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`40.
`Plaintiffs’ investigator purchased a TVpad device from Club TVpad’s website.
`After receiving the TVpad device, the investigator determined that Club TVpad had pre-
`installed several Infringing TVpad Apps that stream CCTV and TVB programming.43
`3.
`AMG
`41. AMG, like Club TVpad, operates an interactive website that offers TVpads for
`sale to consumers in California. Promotional blog posts on the website advertise the
`availability of free CCTV and TVB programming through the Infringing TVpad Apps. For
`example, a December 2014 blog post promoting the new TVpad4 model stated: “Not wanting
`to pay for streaming television? TVpad4 still streams live news, sports, and television
`programming from stations like SoLive, CCTV, and many, many more.”44
`42.
`Similarly, a June 2014 blog post stated: “There are over 100 different Asian
`channels and apps to choose from, but lovers of television shows will certainly want to install
`the HITV app [an Infringing TVpad App that streams TVB programs]. Viewers can watch
`hundreds of live shows from Hong Kong, including all of their favorite dramas.”45
`43. On May 30, 2014, plaintiffs’ investigator called AMG and spoke to an individual
`identifying himself as Amit. Amit confirmed that CCTV channels were available on the TVpad
`device. In response to a question about CCTV channels, AMG sent the investigator a
`spreadsheet listing CCTV and TVB channels and the Infringing TVpad Apps that could access
`those channels.46
`44.
`Plaintiffs’ investigator purchased two TVpad devices from AMG’s website.
`Both devices came with USB flash drives that contained several Infringing TVpad Apps.47
`
`
`43 Id., ¶ 18; Braak Decl., ¶¶ 65-67.
`44 Lau Decl., ¶ 28; id., Exhs. 82-87.
`45 Id., ¶ 28(d); id., Exh. 86.
`46 Id., ¶¶ 30, 32; id., Exh. 89.
`47 Id., ¶¶ 31, 35; Braak Decl., ¶¶ 68-73.
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 12 of 30 Page ID #:2563
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`45.
`Prior to filing suit, DISH sent cease-and-desist letters to CNT, Club TVpad, and
`AMG, demanding that each stop infringing and/or inducing infringement of plaintiffs’
`copyrights. The letters identified the Infringing TVpad Apps on the TVpad3 and listed specific
`CCTV and TVB channels and programs streamed without authorization on the Infringing
`TVpad Apps.48
`46. Despite notice, CNT, Club TVpad, and AMG have continued to market,
`advertise, and promote the Infringing TVpad Apps and the availability of unauthorized CCTV
`and TVB television programming via the TVpad device.49
`47. Defendants’ conduct has materially reduced the number of individuals who
`subscribe to authorized platforms for CCTV and TVB programming in the United States. It has
`also reduced the number of individuals willing to pay for access to such programming. This
`has led to reductions in plaintiffs’ revenues that are difficult to quantify.50
`48. Defendants’ ongoing infringement impairs the ability of CCTV, CICC and TVB
`(USA) to negotiate favorable license agreements with Authorized U.S. Providers and others.51
`49. Defendants’ ongoing infringement has also damaged plaintiffs’ goodwill.
`Plaintiffs’ investigators have observed numerous problems with the TVpad viewing experience,
`e.g., video failing to stream or terminating prematurely, low video quality, pixilation, and sound
`issues.52
`50. Defendants’ infringing conduct adversely affects plaintiffs’ strategic choices
`about where, when, and how to distribute their programs, harming their goodwill with U.S.
`
`
`48 Kuelling Decl., ¶¶ 15-25; id., Exhs. 95-103.
`49 Id., ¶¶ 22, 25; Declaration of Carla A. McCauley in Support of Plaintiffs’ Motion for
`Preliminary Injunction (“McCauley Decl.”), Docket No. 85 (May 22, 2015), ¶¶ 4-7; id., Exhs.
`B-E.
`
`50 Tsang Decl., ¶¶ 29-32; Lu Decl., ¶¶ 27-28; Kuelling Decl., ¶¶ 26-32.
`51 Tsang Decl., ¶ 39; Lu Decl., ¶ 29.
`52 Tsang Decl., ¶ 40; Lu Decl., ¶ 30; Kuelling Decl., ¶ 33; Braak Decl., ¶ 59; id., Exh.
`51; Weil Decl., ¶¶ 57-60; id., Exhs. 33-37.
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 13 of 30 Page ID #:2564
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`audiences and Authorized U.S. Providers. Defendants’ retransmission service not only streams
`CCTV and TVB programming in the United States without a license, but does so several hours
`before the programming is available through authorized channels.53
`51. Defendants’ unlawful activities deprive plaintiffs of their right not to disseminate
`many of their programs in the United States.54
`52. Defendants’ unlawful activities also pose a risk of confusion – defendants’
`unauthorized streaming of plaintiffs’ programming has confused consumers about video on
`demand products and created an mistaken perception about what constitutes lawful video on
`demand programming.55
`
`
`II. CONCLUSIONS OF LAW
`1.
`The court has authority to “grant temporary and final injunctions on such terms
`as it may deem reasonable to prevent or restrain infringement of a copyright.” 17 U.S.C. §
`502(a).
`2.
`To determine whether to issue a preliminary injunction, the court must balance
`four factors: (1) whether plaintiff is likely to succeed on the merits; (2) whether plaintiff will
`suffer irreparable harm in the absence of preliminary relief; (3) whether the equities favor
`plaintiff; and (4) whether issuance of a preliminary injunction is in the public interest. Sierra
`Forest Legacy v. Rey, 577 F.3d 1015, 1021 (9th Cir. 2009); see also Winter v. Natural Defense
`Counsel, Inc., 555 U.S. 7, 20 (2008); Fox Television Stations, Inc. v. BarryDriller Content Sys.,
`PLC, 915 F.Supp.2d 1138, 1141 (C.D. Cal. 2012) ( stating that to “obtain preliminary
`injunctive relief, a plaintiff must establish: “(1) that it is likely to succeed on the merits, (2) that
`it is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of
`equities tips in its favor, and (4) that an injunction is in the public interest” (citation omitted)).
`
`
`53 Tsang Decl., ¶¶ 33-35, 37; Lu Decl., ¶¶ 31-33.
`54 Tsang Decl., ¶ 36; Lu Decl., ¶ 34.
`55 Tsang Decl., ¶ 38; Lu Decl., ¶ 35; Kuelling Decl., ¶ 28.
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 14 of 30 Page ID #:2565
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`3.
`The Ninth Circuit employs a “sliding scale” under which “the elements of the
`preliminary injunction test are balanced, so that a stronger showing of one element may offset a
`weaker showing of another. For example, a stronger showing of irreparable harm to plaintiff
`might offset a lesser showing of likelihood of success on the merits.” Alliance for the Wild
`Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011) (holding that the sliding scale
`approach survives Winter so long as there is a showing of likely irreparable harm).
`A.
`Likelihood of Success on the Merits
`1.
`Secondary Liability for Copyright Infringement
`
`
`
`a.
`Direct Liability
`4.
`For all theories of secondary liability, a plaintiff “must establish that there has
`been a direct infringement by third parties.” Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d
`1146, 1169 (9th Cir. 2007). This requires a showing of: “(1) ownership of the infringed
`material, and (2) violation of at least one exclusive right granted to copyright holders under 17
`U.S.C. § 106 by the infringer.” A&M Records, Inc. v. Napster, 239 F.3d 1004, 1013 (9th Cir.
`2001) (citing 17 U.S.C. § 501(a); Baxter v. MCA, Inc., 812 F.2d 421, 423 (9th Cir. 1987);
`S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1085 n. 3 (9th Cir. 1989)).
`5.
`Plaintiffs are likely to succeed in showing its “ownership of the infringed
`material,” A&M Records, Inc., 239 F.3d at 1013, because it holds copyright registrations for the
`Registered Programs; this gives rise to a presumption of ownership and validity. 17 U.S.C. §
`410(c) (noting that a certificate of registration is “prima facie evidence of the validity of the
`copyright and the facts stated in the certificate”). Defendants, who did not oppose the motion,
`have made no attempt to rebut the presumption that flows from a valid copyright registration.
`Plaintiffs are also likely to succeed in showing that they own the exclusive rights to transmit the
`Registered Programs and other CCTV and TVB programming in the U.S. over the internet in
`various formats, and therefore have standing to sue for infringement of those rights. 17 U.S.C.
`§ 501(b).
`6.
`Next, plaintiffs are likely to succeed in showing that the unauthorized streaming
`of their programs over the internet, as evidenced by the observations and recordings of
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`Case 2:15-cv-01869-MMM-AJW Document 97 Filed 06/11/15 Page 15 of 30 Page ID #:2566
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`plaintiffs’ investigator and a TVB USA executive, infringes an “exclusive right granted to
`copyright holders under 17 U.S.C. § 106.” A&M Records, Inc., 239 F.3d at 1013.
`7.
`The Copyright Act grants plaintiffs the exclusive right to “perform the
`copyrighted work publicly.” 17 U.S.C. § 106(4). A party publicly performs a copyrighted
`work when it “transmit[s] or otherwise communicate[s] a performance or display of the work . .
`. to the public, by means of any device or process, whether the members of the public capable
`of receiving the performance or display receive it in the same place or in separate places and at
`the same time or at different times.” 17 U.S.C. § 101.
`8.
`In ABC, Inc. v. Aereo, Inc., 134 S. Ct. 2498 (2014), the Supreme Court held that
`Aereo publicly performed plaintiffs’ television programs by streaming those programs over the
`internet to “large numbers of paying subscribers who lack[ed] any prior relationship to the
`works.” Id. at 2510. The Court reasoned that Aereo performed the works “publicly” because it
`streamed programs to “a large number of people who [were] unrelated and unknown to each
`other,” and who did not “receive [the] performances in their capacities as owners or possessors
`of the underlying works.” Id. at 2509-10; see also Warner Bros. Entertainment v. WTV
`Systems, Inc., 824 F.Supp.2d 1003, 1009-11 (C.D. Cal. 2011) (entering a preliminary injunction
`against a service that streamed motion pictures without authorization over the