Case4:04-cv-04875-SBA Document17 Filed05/16/05 Page1 of 12
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`IN THE UNITED STATES DISTRICT COURT
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`FOR THE NORTHERN DISTRICT OF CALIFORNIA
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`IO GROUP, INC.,
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`Plaintiff,
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`BIC PRODUCTIONS, et al.,
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`Defendants.
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`No. C 04-4875 SBA
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`ORDER
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`[Docket No. 8]
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`This matter comes before the Court on Plaintiff Io Group, Inc.'s application for default judgment
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`against Defendant BIC Productions ("Defendant BIC") [Docket No. 8]. Having fully considered Plaintiff’s
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`application, the allegations contained in the complaint, the declarations and exhibits filed in support of
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`Plaintiff’s application, the factors enunciated in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986), and for
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`good cause appearing, the Court hereby GRANTS Plaintiff's application as set forth in this Order.
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`BACKGROUND
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`Plaintiff Io Group, Inc. ("Plaintiff") is a California corporation doing business as "Titan Media," with its
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`principal place of business located at 121 Capp Street, Suite 200, San Francisco, California 94110. Compl.¶
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`2. Plaintiff produces and distributes adult entertainment products, including Internet website content,
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`photographs, videos, and DVDs. Id. ¶ 10.
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`Defendant BIC Productions ("Defendant BIC" or "BIC") is a California entity that produces and
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`distributes gay adult movies and runs and operates a website located at www.bicprod.com. Id. ¶ 4.
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`Defendant Patrick Lawlor ("Defendant Lawlor") is an individual who resides in Pennsylvania. He
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`appears as a model/actor in adult films produced by BIC. Id. ¶ 3. He also owns and operates a website
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`located at www.glovdcopsf.com. Id.
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`Plaintiff alleges that Defendant BIC and Defendant Lawlor illegally copied, distributed and publicly
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`displayed fifty-seven (57) images that belong to Plaintiff and for which Plaintiff holds valid Certificates of
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`Copyright Registration. Id. ¶¶ 23, 29. Specifically, Plaintiff alleges that forty-nine (49) acts of infringement
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`occurred from the base domain www.bicprod.com, which is registered to Defendant BIC, and eight (8) acts
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`of infringement occurred from the base domain www.glovdcop.sf.com, which is registered to Defendant
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`Lawlor. Id. ¶ 24-25. Twenty-six of the infringed photographs contained Plaintiff's conspicuously displayed
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`copyright mark. Id. ¶ 26.
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`On November 6, 2002, Plaintiff sent to Defendant BIC a take-down notice and a letter demanding that
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`BIC, and each and every person or company affiliated with BIC, cease and desist illegally copying, publishing
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`and publicly displaying Plaintiff's works. Declaration of Gill Sperlein ("Sperlein Decl.") ¶ 8; Exs. A, B. The
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`November 6, 2002 letter explained that Plaintiff believed that BIC had used at least forty-nine (49) of Plaintiff's
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`copyrighted images and that BIC's acts of infringement were willful. Id. at Ex. B. Plaintiff warned BIC that
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`it could be liable for up to $150,000 per infringed work. Id. ¶ 8. Through counsel, Plaintiff attempted to reach
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`a compromise and avoid litigation. Id. at Ex. B. BIC removed Plaintiff's images from the website but was
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`unwilling to compensate Plaintiff for use of the images. Id. ¶ 8.
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`Plaintiff filed a Complaint against BIC and Lawlor on November 16, 2004. On November 17, 2004,
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`Plaintiff served on BIC a copy of the summons and complaint along with a request that it waive service of
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`process, two copies of a completed waiver for its execution and a self-addressed, stamped envelope. Sperlein
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`Decl. ¶ 11. BIC did not execute or return the waiver. Id. ¶ 12. Subsequently, Plaintiff engaged a process
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`server who served Defendant BIC by substitute service, proof of which Plaintiff filed with this Court. Id. ¶ 13.
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`A response became due on February 4, 2005. On February 9, 2005, Plaintiff delivered to Defendant BIC by
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`United States mail and by e-mail a letter reminding BIC that a response was past due. Id. ¶ 14. Defendant
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`BIC failed to serve an answer or other response to the Complaint. Id. ¶ 15. Upon Plaintiff's request, the Clerk
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`entered default on February 14, 2005. Id. ¶ 16.
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`LEGAL STANDARD
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`The decision of whether to grant or deny a request for default judgment lies within the sound
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`discretion of the district court. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (affirming denial
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`of motion for default judgment and sua sponte dismissal of plaintiff’s claims). In exercising its discretion,
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`the district court is guided by consideration of the following factors:
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`(1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive
`claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the
`action; (5) the possibility of a dispute concerning material facts; (6) whether the
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`default was due to excusable neglect; and (7) the strong policy underlying the Federal
`Rules of Civil Procedure favoring decisions on the merits.
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`Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986) (affirming denial of motion for default judgment
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`where district court had serious reservations concerning the substantive merit of the claims, a large amount
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`of damages were at issue, and there was a factual dispute with regard to the matters alleged in the
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`pleadings).
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`A.
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`The Eitel Factors
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`ANALYSIS
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`1.
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`Substantive Merits and Sufficiency of the Complaint
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`The first two Eitel factors are (1) the merits of plaintiff's substantive claim, and (2) the sufficiency of
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`the complaint. Eitel, 782 F.2d at 1471-72. These two factors require that a plaintiff "state a claim on which
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`the [plaintiff] may recover." Kloepping v. Fireman's Fund, 1996 U.S. Dist. LEXIS 1786, 1996 WL 75314,
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`at *2 (N.D. Cal. 1996). Since default has been entered against Defendant BIC, the factual allegations of the
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`Complaint, with the exception of the allegations regarding damages, will be taken as true. Geddes v. United
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`Financial Group, 559 F.2d 557, 560 (9th Cir. 1977).
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`a.
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`Copyright Infringement
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`Plaintiff alleged claims for copyright infringement, contributory copyright infringement and vicarious
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`copyright infringement.
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`The Copyright Act, 17 U.S.C. § 106, protects the owner of a copyright by granting him or her
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`exclusive rights to "reproduce, distribute, and publicly display copies of the work." Mattel Inc. v. Walking
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`Mt. Prods., 353 F.3d 792, 799 (9th Cir. 2003) (citation omitted). "A prima facie case of copyright
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`infringement by reproduction is established by showing ownership by the plaintiff and copying by the
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`defendant." Id.
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`The Complaint alleges that Plaintiff holds properly registered copyright certificates for the forty-nine
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`(49) photographs that it claims BIC reproduced. Compl. ¶¶ 24, 29. The Complaint further alleges that BIC
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`infringed these works by reproducing, distributing, and publicly displaying the works on the www.bicprod.com
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`website without the proper approval or authorization of Plaintiff. Id. ¶ 34. Accordingly, Plaintiff has stated a
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`claim for copyright infringement. Plaintiff has also stated claims for contributory and vicarious copyright
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`infringement.1 Compl. ¶¶ 42-45, 47-50.
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`b.
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`Right to Publicity
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`The Complaint also alleges a claim for misappropriation of the right to publicity under both common
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`law and California Civil Code § 3344.
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`Under California law, an individual's right to publicity is invaded if another appropriates for his
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`advantage the individual's name, image, identity or likeness. Fleet v. CBS, Inc., 50 Cal. App. 4th 1911, 1918
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`(1996). "This is an actionable tort under both common law and Civil Code section 3344." Id.
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`"A common law cause of action for appropriation of name or likeness may be pleaded by alleging (1)
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`the defendant's use of the plaintiff's identity; (2) the appropriation of plaintiff's name or likeness to defendant's
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`advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury." Id. (citations omitted).
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`"In addition, to plead the statutory remedy provided in Civil Code section 3344, there must also be an
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`allegation of a knowing use of the plaintiff's name, photograph or likeness for purposes of advertising or
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`solicitation or purchases." Id. "Furthermore . . . [a] 'direct' connection must be alleged between the use and
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`the commercial purpose." Id.
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`The Complaint claims that Plaintiff's copyrighted works embody images of actors all of whom executed
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`written agreements with Plaintiff through which Plaintiff became the exclusive proprietor of the actors' rights of
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`publicity in the performances embodied in Plaintiff's creative works. Id. ¶ 51; see KNB Enterprises v.
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`Matthews, 78 Cal. App. 4th 362, 368 (2000) (where models assigned right to publicity to owner of
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`copyrighted photo, copyright owner could bring claim under section 3344 for unauthorized use of the model's
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`human likeness). The Complaint further alleges that BIC displayed photographs of the actors for commercial
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`gain without Plaintiff's consent. Id. ¶ 55. As a direct and proximate result of BIC's conduct, Plaintiff claims
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`that it was damaged. Id. ¶ 56. The Complaint further claims that BIC acted in conscious disregard of Plaintiff's
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`1 Contributory infringement requires that the secondary infringer "know, or have reason to know" of
`direct infringement. Adobe Sys. v. Canus Prods., 173 F. Supp. 2d 1044, 1048 (C.D. Cal. 2001). Vicarious
`liability exists when (1) a defendant has the right and ability to supervise the infringing conduct and (2) the
`defendant has an obvious and direct financial interest in the infringement. Id. The allegations of the Complaint
`satisfy all of these requirements.
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`rights. Id. ¶ 57. Thus, Plaintiff has stated a claim for both common law and statutory misappropriation of the
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`right to publicity.
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`Accordingly, the Court finds that the first two Eitel factors are satisfied.
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`2.
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`Amount at Stake
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`Under the third Eitel factor, the Court must consider the amount of money at stake in relation to the
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`seriousness of Defendant BIC's conduct. Here, Plaintiff is seeking $367,500 in statutory damages in relation
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`to its copyright claim and $54,000 in statutory damages in relation to its statutory misappropriation of the right
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`to publicity claim. Given that Defendant BIC never appeared in this action, and discovery was never taken,
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`it is unknown how this amount correlates with BIC's ill-gotten gains. Plaintiff, however, has submitted evidence
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`sufficient to show that it sells its images at the prevailing rate of $2,500 per image. Webb Decl. ¶ 8; Compl.
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`¶ 13.2 Plaintiff also states that it uses these images to drive subscriptions to its own website and thus illegal
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`distribution of these images decreases the overall value of its site. Webb Decl. ¶ 5. The illegal distribution of
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`Plaintiff's works also decreases the uniqueness of the works and damages Plaintiff's goodwill, thereby increasing
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`the amount of Plaintiff's loss. In light of the circumstances, this Court finds that Plaintiff's request of $2,500 per
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`image is reasonable.
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`Further, the amount of damages requested by Plaintiff are within the range that is specifically authorized
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`by statute. See 17 U.S.C. § 504 (providing that court may award statutory damages in the amount of $750.00
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`to $30,000.00 per work, increased to $150,000 in cases of willful infringement); Cal. Civ. Code § 3344(a)
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`(providing that court may award statutory damages in the amount $750 per photograph). Given this, the Court
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`finds that the third Eitel factor has been met.
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`3.
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`Possibility of Prejudice
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`The fourth Eitel factor considers whether Plaintiff will suffer prejudice if default judgment is not entered.
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`Potential prejudice to Plaintiff favors granting a default judgment. Considering BIC's refusal to cooperate with
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`this case, if this Court were to deny Plaintiff's motion for default judgment, Plaintiff would likely be without other
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`recourse for recovery. Thus, the fourth Eitel factor is satisfied.
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`2 When $2,500 per image is multiplied by 49 images, the result $122,500. When this amount is trebled,
`it results in Plaintiff's requested damages of $367,500.
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`4.
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`Possibility of Dispute
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`The fifth Eitel factor considers the possibility of dispute as to any material facts in the case. Upon entry
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`of default, all well-pleaded facts in the Complaint are taken as true. Accordingly, no genuine dispute of material
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`facts would preclude granting Plaintiffs' motion.
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`5.
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`Possibility of Excusable Neglect
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`The sixth Eitel factor considers the possibility that the default resulted from excusable neglect. Plaintiff
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`sent BIC a cease-and-desist notice and letter on November 6, 2002 regarding the conduct alleged in the instant
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`action. Sperlein Decl. ¶ 8. BIC was also properly served with the summons and Complaint on January 15,
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`2005. Id. ¶ 13. Further, on February 9, 2005, Plaintiff delivered to BIC a letter and e-mail reminding BIC
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`that its response to the Complaint was past due. Id. Finally, BIC was served with the instant application.
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`Neither Plaintiff nor the Court has received any response from BIC. Thus, considering the numerous
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`opportunities for BIC to participate in this action, and its failure to do so, the possibility of excusable neglect
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`in this action is remote.
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`6.
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`Policy for Deciding on the Merits
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`"Cases should be decided upon their merits whenever reasonably possible." Eitel, 728 F.2d at 1472.
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`However, "this preference, standing alone, is not dispositive." Kloepping, 1996 U.S. Dist. LEXIS 1786, 1996
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`WL 75314, at *3. Here, Defendant BIC's failure to answer the Complaint makes a decision on the merits
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`impractical, if not impossible. Under Federal Rule Civil Procedure 55(a), termination of a case before hearing
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`the merits is allowed whenever a defendant fails to defend an action. Thus, "the preference to decide cases on
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`the merits does not preclude a court from granting default judgment." Kloepping, 1996 U.S. Dist. LEXIS
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`1786, 1996 WL 75314, at *3.
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`In light of the foregoing analysis, the Court concludes that it may properly enter default judgment against
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`Defendant BIC.
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`B.
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`Damages
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`Since default judgment is proper, the Court must next assess Plaintiff's requested award of damages.
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`Here, Plaintiff seeks monetary damages for two claims: (1) copyright infringement; and (2) statutory
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`misappropriation of the right to publicity under California Civil Code § 3344. Plaintiff seeks statutory damages
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`in the amount of $367,500 for defendants' willful infringement of plaintiff's copyrighted works and statutory
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`damages in the amount of $54,000 for statutory misappropriation of the right to publicity.
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`1.
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`Copyright Claim
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`In an action for copyright infringement, the copyright owner is entitled to recover the actual damages
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`suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the
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`infringement. Alternatively, at the election of the plaintiff, the Court may award statutory damages in the
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`amount of $750 to $30,000 per work as it considers just, increased to $150,000 in cases of willful
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`infringement. 17 U.S.C. § 504.
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`In this case, Plaintiff argues that it should be awarded statutory damages in the amount of $2,500 per
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`work because it is too difficult to determine the amount or extent of BIC's illicit profits or the actual amount of
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`Plaintiff's loss. Specifically, Plaintiff contends that it cannot determine the amount of BIC's profits because BIC
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`failed to respond to this action. Plaintiff also alleges that its actual losses cannot be readily determined given
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`that the value of Plaintiff's works lies in their uniqueness and given that BIC's actions have resulted in harm to
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`Plaintiff's reputation. Plaintiff further notes that BIC apparently took no precautions to prevent further
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`distribution of Plaintiff's works, and thus BIC may have allowed Plaintiff's images to be further distributed to
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`an unknown number of other persons. Webb Decl. ¶¶ 6- 9. Plaintiff has submitted evidence showing that it
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`charges a licensing fee of $2,500 per image. Webb Decl. ¶ 8. Plaintiff therefore asserts that $2,500 should
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`constitute the minimum amount of statutory damages awarded per work.
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`Plaintiff further asserts that because of the willfulness of BIC's infringing acts, the statutory damages
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`should be trebled to $7,500 per work, for a total of $367,500. "Willful" infringement means "with knowledge
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`that the defendant's conduct constitutes copyright infringement." Peer Int'l Corp. v. Pausa Records, Inc., 909
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`F.2d 1332, 1335 & 1335 n.3 (9th Cir. 1990). This includes constructive knowledge. See Spectravest, Inc.
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`v. Fleet Street, Ltd., 1989 U.S. Dist. LEXIS 16594, at *12 (N. D. Cal. 1989) ("To find [an infringer's]
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`actions willful, we need only determine whether she should have known that her actions would constitute
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`infringement.").
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`In Perfect 10, Inc. v. Talisman Communs., Inc., 2000 U.S. Dist. LEXIS 4564 (C.D. Cal. 2000),
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`the plaintiff, a magazine publisher, sued a website for publishing its adult photographs on the Internet. The court
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`found that the infringement was willful because: (1) the magazine from which the photographs were taken
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`displayed a clear copyright notice; and (2) the photographs themselves displayed the names of the models and
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`other information. Id. at *10-11. The court then ordered an award of statutory damages in the amount
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`$100,000 per infringing photograph. Id. at *11.
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`Here, the photographs at issue were displayed on a website maintained by Plaintiff. Plaintiff allows
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`individuals who pay a subscription fee to download these photographs to their home computers. The website
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`contains a "Legal Statement of Intellectual Property Rights." Webb Decl., Ex. B. The statement provides in
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`relevant part:
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`[a]ll web pages text and accompanying code is intellectual property and is
`copyrighted, having a retail value of $6000.00 US and is only available when
`ordered directly from the author. Each individual photograph or image contained on
`our web pages or portion thereof contained in this site has a retail value of $2,500
`U.S. and is only available when ordered from the author. No portion of this site may
`be used or redistributed for commercial or personal purposes.
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`Id. The statement further provides that "[u]sers may not circumnavigate any technological means we have
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`deployed to effectively control access on our site to protect our materials . . . and [doing so] is considered theft.
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`Theft of any of the above materials will result in swift and severe legal action being taken . . . [including a civil
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`suit for] copyright infringement." Id. In several places, the statement indicates that the website is protected by
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`federal copyright laws. Id. Additionally, twenty-six of the infringed photographs contained Plaintiff's
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`conspicuously displayed copyright mark. Compl. at ¶ 26. Given this, any visitor to Plaintiff's site would or
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`should have known that the material contained in the site was protected by copyright.
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`Further, Plaintiff wrote BIC a cease-and-desist letter before the filing of the instant Complaint,
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`specifically informing BIC that it was violating Plaintiff's copyrights and listing each such alleged act of
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`infringement. Sperlein Decl. Exs. A, B. The letter also sought compensation for the acts of infringement and
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`further stated that if BIC failed to satisfy its financial obligation, Plaintiff would file a complaint in federal court
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`seeking damages. Id. While BIC removed the offending images, BIC nevertheless failed to respond to
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`Plaintiff. Id. ¶ 9.
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`In light of the foregoing, the Court finds that BIC's infringement was willful. Since the Court is
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`authorized to award up to $150,000 per copyright, the Court finds that Plaintiff's request for $7,500 in
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`damages per image is reasonable. Therefore, Plaintiff's request for a total of $367,500 in statutory damages
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`for willful copyright infringement is GRANTED.
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`2.
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`Misappropriation Claim
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` California Civil Code § 3344 provides that, "[a]ny person who knowingly uses another's . . .
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`photograph . . . in any manner, on or in products, merchandise, or goods or for purposes of advertising or
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`selling, or soliciting purchases of products, merchandise, goods or services, without such person's prior consent
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`. . . shall be liable for any damages . . . equal to the greater of seven hundred fifty dollars ($750) or the actual
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`damages." Cal Civ. Code § 3344(a).3 The remedies provided for by § 3344 are cumulative and shall be in
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`addition to any others provided for by law. Cal. Civ. Code § 3344(g).
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`Here, under California Civil Code § 3344, Plaintiff is entitled to statutory damages of $750 for each
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`unauthorized use of Plaintiff's photographs. Cal. Civ. § 3344(a); see Perfect 10, 2000 U.S. Dist. LEXIS
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`4564, at *11-12 (awarding statutory damages of $750 for each model's rights violated). Plaintiff argues that
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`it should therefore be awarded damages in the amount of $54,000 because seventy-two (72) unique images
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`of recognizable models appeared on BIC's website. In support of this, Plaintiff has provided the Court with
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`forty-eight (48) photographs that BIC published on its website. Declaration of Gill Sperlein I.S.O.
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`Supplemental Memorandum ("Supp. Sperlein Decl.") at ¶¶ 5-8, Exs. A and B. Plaintiff contends that thirty of
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`the photographs contain one identifiable model each; nine of them contain two readily identifiable models; and
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`eight photographs contain three readily identifiable models. Id. at ¶ 6. Plaintiff admits that a person is not
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`"readily identifiable" if his face is obscured and there are no other unique characteristics, such as a tattoo. Id.
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`¶ 7. Upon reviewing Plaintiff's evidence, the Court finds that Plaintiff's evidence is sufficient to show that sixty-
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`seven (67) readily identifiable images are present in the photographs. With respect to six of the photographs,
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`however, the Court disagrees with Plaintiff and finds that the model's face or body is not readily identifiable.
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`Accordingly, Plaintiff has proven that it is entitled to damages amounting to $50,250.4
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`3 It is well established that the Copyright Act does not preempt this section of the California Code.
`See Downing v. Abercrombie & Fitch, 265 F.3d 994, 1004-05 (9th Cir. 2001) (California Civil Code §
`3344 not preempted by Copyright Act).
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`4 $50,250 is equal to sixty-seven (67) photographs at $750 each.
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`Case4:04-cv-04875-SBA Document17 Filed05/16/05 Page11 of 12
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`C.
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`Injunctive Relief.
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`Plaintiff has also requested that the Court enter a permanent injunction against Defendant BIC.
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`Specifically, Plaintiff requests that the Court enjoin Defendant BIC from: (1) reproducing Plaintiff's copyrighted
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`works; (2) preparing derivative works based upon Plaintiff's copyrighted works; (3) distributing copies or
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`phonorecords of Plaintiff's copyrighted works to the public by sale or other transfer of ownership, or by rental,
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`lease, or lending; (4) performing any of Plaintiff's literary, musical, dramatic, or choreographic copyrighted
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`works publicly; (5) displaying any of Plaintiff's literary, musical, dramatic, or choreographic copyrighted works
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`publicly; and (6) performing any of Plaintiff's copyrighted sound recordings publicly. See Supp. Memo. at
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`3:19-4:5.
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`Section 502 of the Copyright Act provides in pertinent part: "[a]ny court having jurisdiction of a civil
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`action arising under this title may, subject to the provisions of § 1948 of title 28, grant temporary and final
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`injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright." 17
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`U.S.C. § 502. A court may issue an injunction as part of a default judgment. See Sony Music Entertainment
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`Inc. v. Elias, 2004 WL 141959 * 4 (C.D. Cal. 2004).
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`To establish that it is entitled to a permanent injunction, Plaintiff must show that Defendant BIC's
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`conduct is causing irreparable injury that cannot fully be compensated or measured in money, and that Plaintiff
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`will continue to suffer such injury unless the Court enjoins BIC's continuing infringement of Plaintiff's copyrights.
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`Id. In copyright claims, irreparable harm is presumed upon a showing of reasonable likelihood of success on
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`the merits. Id. Since the default against Defendant BIC satisfies the element of success on the merits, Plaintiff
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`need not show irreparable harm. Id.
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`Plaintiff must also show that it continues to suffer irreparable harm. Although it is significant that
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`Plaintiff's supporting evidence establishes that three years have lapsed since Defendant BIC engaged in any
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`infringing activities, BIC's failure to respond to this lawsuit suggests that Defendant does not take seriously the
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`illegality of the infringing activity and therefore may continue to infringe. Thus, Plaintiff has demonstrated that
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`an injunction is warranted.
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`However, despite this Court's explicit instructions, Plaintiff still has not clearly articulated a cognizable
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`request for injunctive relief. In fact, the request for injunctive relief that is set forth in Plaintiff's Supplemental
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`Case4:04-cv-04875-SBA Document17 Filed05/16/05 Page12 of 12
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`Memorandum greatly exceeds the scope of Plaintiff's Complaint. Specifically, although Plaintiff's Complaint
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`concerns photographs or moving images, Plaintiff is requesting that the Court enjoin Defendant BIC from
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`displaying or performing any and all copyrighted "literary, musical, dramatic, and choreographic works." See
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`Supp. Memo. at 3:26-4:5. However, Plaintiff has not demonstrated that it even owns any copyrighted "literary,
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`musical, dramatic, or choreographic works." Accordingly, the Court hereby GRANTS Plaintiff's request for
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`injunctive relief as follows: Defendant BIC is permanently enjoined from: (1) reproducing Plaintiff's copyrighted
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`works; (2) preparing derivative works based upon Plaintiff's copyrighted works; and (3) distributing copies of
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`Plaintiff's copyrighted works to the public by sale, transfer of ownership, rental, lease, or loan.
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`CONCLUSION
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`Plaintiff's Application for Default Judgment is GRANTED as follows:
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`(1) Plaintiff is awarded damages in the amount of $417,750; and
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`(2) Defendant BIC is permanently enjoined from (a) reproducing Plaintiff's copyrighted works; (b)
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`preparing derivative works based upon Plaintiff's copyrighted works; and (c) distributing copies of Plaintiff's
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`copyrighted works to the public by sale, transfer of ownership, rental, lease, or loan.
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`IT IS SO ORDERED.
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`Dated: 5-16-05
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` /s/ Saundra Brown Armstrong
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`SAUNDRA BROWN ARMSTRONG
`United States District Judge
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