Case5:11-cv-01049-LHK Document21 Filed12/21/11 Page1 of 16
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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` Defendants.
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`Plaintiffs DFSB Kollective Co., Ltd. (“DFSB”), Jungle Entertainment, Woolim
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`Entertainment, Afternoon Music Entertainment, Inc., Boohwal Entertainment, and Loverock
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`Company (collectively “Plaintiffs”), move for default judgment against Defendant Kenny Tran
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`d/b/a ihoneyjoo.com and ihoneydew.com (“Defendant” or “Tran”). For the reasons set forth
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`below, the Court GRANTS Plaintiffs’ motion for default judgment, permanent injunction, statutory
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`damages, and post-judgment interest.
`I.
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`Background
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`All Plaintiffs in this action are Korean corporations with their principal places of business
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`in Seoul, Korea. See Complaint (“Compl.”) ¶¶ 7-12. Plaintiffs Jungle Entertainment, Woolim
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`Entertainment, Afternoon Music Entertainment, Inc., Boohwal Entertainment, and Loverock
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`Case No.: 11-CV-01049-LHK
`ORDER GRANTING DEFAULT JUDGMENT
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`Case No.: 11-CV-01049-LHK
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`ORDER GRANTING MOTION FOR
`DEFAULT JUDGMENT
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`DFSB KOLLECTIVE CO., LTD., JUNGLE
`ENTERTAINMENT, WOOLIM
`ENTERTAINMENT, AFTERNOON MUSIC
`ENTERTAINMENT, INC., BOOHWAL
`ENTERTAINMENT, and LOVEROCK
`COMPANY,
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` Plaintiffs,
`v.
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`KENNY TRAN, an individual, and D/B/A
`IHONEYJOO.COM and IHONEYDEW.COM,
`and Does 1 through 10, inclusive,
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`For the Northern District of California
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`United States District Court
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`Case5:11-cv-01049-LHK Document21 Filed12/21/11 Page2 of 16
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`Company own Korean pop music recordings and are copyright claimants to those musical
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`recordings and associated artwork. Compl. ¶¶ 8-12. These Plaintiffs have delegated to DFSB
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`primary responsibility for enforcing their copyrights online. Compl. ¶¶ 8-12.
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`Defendant Kenny Tran, a resident of Australia, operates several different websites,
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`including ihoneyjoo.com and ihoneydew.com (the “websites”). Compl. ¶ 17. Additionally, Tran,
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`operating under several different aliases, is a member of the online social networking sites
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`Facebook and Twitter; the online video community YouTube; and various web lockers or online
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`storage sites, including Mediafire.com. Compl. ¶ 17. Defendant uses the services of Twitter,
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`Facebook, and YouTube to advertise and direct people to his websites. Compl. ¶ 19.
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`Defendant uses his websites to disseminate to internet users content, in the form of both
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`music and accompanying artwork, that has been unlawfully copied. Compl. ¶ 19. To listen to or
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`download an infringing copy of a work, the user clicks on a link next to an image of the
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`copyrighted album cover. Compl. ¶ 22. The user is then directed to a third-party website where
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`the user may download the album that was uploaded onto the third-party website by Plaintiff.
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`Compl. ¶ 23. Users are able to download unauthorized copies of the DFSB Plaintiffs’ copyrighted
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`material without Plaintiffs’ permission. Compl. ¶ 23.
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`Defendant’s websites and accounts on third party websites (including Twitter, Facebook,
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`and YouTube) provide instructions or assistance to users encountering problems downloading the
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`Korean music, and allow users to make requests for additional music. B. Cho Decl. ¶ 5.
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`Defendant’s websites also contain advertisements, from which Defendant is able to derive revenue.
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`Compl. ¶ 22. Defendant also uses PayPal to solicit donations from users.
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`Plaintiffs have identified, and attached to their complaint as Exhibit A, a list of 129
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`copyrighted works owned by the Plaintiffs and allegedly pirated by the Defendant in the method
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`identified above. See Compl. Ex. A, ¶ 13, 21. In 2009 and 2010, DFSB, through its representative,
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`investigated Tran’s allegedly infringing online activities. J Cho. Decl. ¶ 3; B. Cho Decl. ¶ 6. After
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`identifying the Plaintiffs’ copyrighted materials on websites operated by Defendant, “[n]umerous
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`notices were sent to Defendant through his third-party service providers regarding his copyright
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`infringement,” requesting that the infringing content be removed. B. Cho Decl. ¶ 6, Ex. B, E.
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`Case No.: 11-CV-01049-LHK
`ORDER GRANTING DEFAULT JUDGMENT
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`For the Northern District of California
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`United States District Court
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`Case5:11-cv-01049-LHK Document21 Filed12/21/11 Page3 of 16
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`DFSB declares that Defendant avoids these notices by “simply open[ing] new accounts or
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`shift[ing] his current accounts to new hosts.” B. Cho Decl. ¶ 6; J Cho. Decl. ¶ 3. In addition,
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`Plaintiffs have declared that they believe that Tran is “one of the biggest illegal uploaders (and free
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`download link providers) of Korean music in the world.” B. Cho Decl. ¶ 8. Indeed,
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`iHoneyJoo.com generated more online traffic than the top 3 legitimate Korean music portal sites
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`combined. B. Cho Decl. ¶ 8.
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`Plaintiffs filed their complaint on March 7, 2011. ECF No. 1. On June 28, 2011, Plaintiffs
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`filed a proof of service showing that the summons and complaint had been personally served on
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`Defendant in New South Wales, Australia. On July 21, 2011, Plaintiffs filed a request for the
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`Clerk’s office to enter default. The Clerk filed a notice of entry of default on July 27, 2011. On
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`September 12, 2011, Plaintiffs filed a motion for default judgment. Defendant has not filed an
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`opposition to the motion for default judgment, nor has Defendant filed an answer, a Rule 12
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`motion, or otherwise made an appearance in this case.
`II.
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`Analysis
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`Under Federal Rule of Civil Procedure 55(b)(2), a party may apply to the court for entry of
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`judgment by default. “The district court’s decision whether to enter a default judgment is a
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`discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). When a court is
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`considering whether to enter a default judgment, it has “an affirmative duty to look into its
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`jurisdiction over both the subject matter and the parties.” In re Tuli, 172 F.3d 707, 712 (9th Cir.
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`1999). First the Court determines whether it has personal jurisdiction over Defendant, and whether
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`process was properly served on Defendant. Then the Court analyzes whether to grant a default
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`judgment against Defendant.
`A. Personal Jurisdiction
`“Personal jurisdiction over an out-of-state defendant is appropriate if the relevant state’s
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`long arm-statute permits the assertion of jurisdiction without violating federal due process.”
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`Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800-01 (9th Cir. 2004). Because
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`California’s long arm statute is co-extensive with federal due process requirements, the
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`jurisdictional analyses under California law and federal due process are the same. Id. at 801; Cal.
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`Case No.: 11-CV-01049-LHK
`ORDER GRANTING DEFAULT JUDGMENT
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`For the Northern District of California
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`United States District Court
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`Case5:11-cv-01049-LHK Document21 Filed12/21/11 Page4 of 16
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`Code Civ. Proc. § 410.10. The Due Process Clause requires that nonresident defendants have
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`certain “minimum contacts” with the forum state, “such that the maintenance of the suit does not
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`offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326
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`U.S. 310, 316 (1945) (internal citations and quotation marks omitted).
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`The Ninth Circuit employs a three-part test to determine whether a party has sufficient
`minimum contacts to be susceptible to specific1 personal jurisdiction:
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`(1) The non-resident defendant must purposefully direct his activities or consummate some
`transaction with the forum or resident thereof; or perform some act by which he
`purposefully avails himself of the privilege of conducting activities in the forum, thereby
`invoking the benefits and protections of its laws;
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`(2) the claim must be one which arises out of or relates to the defendant’s forum-related
`activities; and
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`(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it
`must be reasonable.
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`Schwarzenegger, 374 F.3d at 802. The first factor is satisfied by either purposeful availment or
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`purposeful direction. Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128 (9th
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`Cir. 2010). Purposeful availment typically consists of action taking place in the forum that invokes
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`the benefits and protections of the laws of the forum, such as executing or performing a contract
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`within the forum. Schwarzenegger, 374 F.3d at 802. To establish purposeful availment, a plaintiff
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`must show that the defendant “engage[d] in some form of affirmative conduct allowing or
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`promoting the transaction of business within the forum state.” Gray & Co. v. Firstenberg Mach.
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`Co., 913 F.2d 758, 760 (9th Cir. 1990). Purposeful direction, by contrast, usually consists of
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`evidence of the defendant’s actions outside the forum state that are directed at the forum, such as
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`the distribution in the forum state of goods originating elsewhere. Schwarzenegger, 374 F.3d at
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`803. “A purposeful availment analysis is most often used in suits sounding in contract. A
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`purposeful direction analysis, on the other hand, is most often used in suits sounding in tort.”
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`Schwarzenegger, 374 F.3d at 802. Where, as here, the underlying action is copyright infringement,
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`purposeful direction is the proper analytical framework. Brayton Purcell LLP, 606 F.3d at 1128.
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`1 Plaintiffs do not argue, and therefore this Court does not address, whether general subject matter
`jurisdiction applies.
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`Case No.: 11-CV-01049-LHK
`ORDER GRANTING DEFAULT JUDGMENT
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`1. Purposeful Availment
`This court evaluates purposeful direction using the three-part “Calder-effects” test. See
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`Schwarzenegger, 374 F.3d at 803; see also Calder v. Jones, 465 U.S. 783 (1984). Under this test,
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`“the defendant allegedly must have (1) committed an intentional act, (2) expressly aimed at the
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`forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.”
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`Yahoo! Inc. v. La Ligue Contre Le Racisme Et L’Antisemitisme, 433 F.3d 1199, 1206 (9th Cir.
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`2006) (en banc) (internal quotation marks omitted).
`a. Intentional Act
`The Ninth Circuit has construed intent as referring to “an intent to perform an actual,
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`physical act in the real world, rather than an intent to accomplish a result or consequence of that
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`act.” Brayton Purcell LLP, 606 F.3d at 1128. Based on the Ninth Circuit’s construction of
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`“intentional act,” Tran’s uploading of copyrighted material on both his own websites, and onto
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`YouTube, Facebook, and Twitter; his indexing and inducing users to download copied material
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`from his website; and his advertising activities on his own websites are sufficient to establish
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`intentional acts.
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`b. Expressly Aimed at Forum State
`“Whether activities undertaken through internet websites are aimed expressly at a forum
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`state is assessed under the Cybersell framework.” Adobe Systems Inc. v Childers, No. 10-CV-
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`03571-JF, 2011 WL 566812, at *4 (N.D. Cal. Feb. 14, 2011). Under Cybersell, mere operation of
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`a passive website is insufficient to establish personal jurisdiction over a defendant, while operation
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`of an interactive, commercial website often is sufficient. Cybersell, Inc. v. Cybersell, Inc., 130
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`F.3d 414, 418 (9th Cir.1997). “[T]he likelihood that personal jurisdiction can be constitutionally
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`exercised is directly proportionate to the nature and quality of the commercial activity that an entity
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`conducts over the Internet.” Cybersell, Inc., 130 F.3d at 419 (quoting Zippo Mfg. Co. v. Zippo Dot
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`Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997)). “The fact that an essentially passive Internet
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`advertisement may be accessible in the plaintiff’s home state without ‘something more’ is not
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`enough to support personal jurisdiction.” Facebook, Inc. v. Teachbook.com, LLC, No. CV 10-
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`03654 RMW, 2011 WL 1672464 (N.D. Cal. May 3, 2011) (citing Cybersell, Inc., 130 F.3d at 414).
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`Case No.: 11-CV-01049-LHK
`ORDER GRANTING DEFAULT JUDGMENT
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`For the Northern District of California
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`United States District Court
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`Here, the allegations and evidence presented by Plaintiffs in support of the motion for
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`default judgment are sufficient to show that Tran expressly aimed his conduct at California. As
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`explained above, Defendant operates several highly interactive websites that allow him to infringe
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`on DFSB Works. See J. Cho Decl. ¶¶ 2-3, Ex. A. The copies of web pages provided to the Court
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`establish that the websites are, in fact, interactive. See J. Cho Decl. Ex. A. In contrast to the
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`website in Cybersell, the websites at issue here are more than merely a passive conduit for
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`information to internet users. Instead, the websites run by Tran allow users to request music, and
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`personally download the information. Moreover, it appears as though Defendant has specifically
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`used several California companies to further his scheme of perpetrating illegal downloads. Tran
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`uses California companies Facebook, Twitter, and YouTube to promote the websites he operates,
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`and to allow users access to the pirated copies of the copyrighted music and artwork. Additionally,
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`it appears as though Defendant uses a privacy service located in California to shield his identity.
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`Drey Decl. ¶ 2. In light of the nature of the websites run by Defendant, it appears that Defendant’s
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`activities are expressly aimed at California.
`c. Causing Harm Likely to be Suffered in the Forum State
`This subfactor is often met in intellectual property cases by a plaintiff bringing suit in its
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`home forum against an out-of-state defendant alleging that the defendant engaged in infringing
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`activities knowing that plaintiff was located in the forum. Amini Innovation Corp. v. JS Imports
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`Inc., 497 F. Supp. 2d 1093, 1106 (C.D. Cal. 2007). DFSB and the other plaintiffs, however, are not
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`residents of California. Nonetheless, Defendant likely knew that his activities would cause harm in
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`California. Tran relied on several California companies to further his scheme of providing
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`copyrighted music to a world-wide audience of users. Additionally, given the evidence provided
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`by Plaintiffs of the reach of Defendant’s activities, Tran likely knew that harm – in the form of
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`distribution and download of copyright protected material – would be suffered in the forum state.
`2. Claims Arise out of Forum Related Activities
`The second prong of the test for specific jurisdiction requires that the claim be one that
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`arises out of or relates to the defendant's activities in the forum. Panavision v. Toeppen, 141 F.3d
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`1316, 1320 (9th Cir. 1998). This requires a showing of “but for” causation. Id. at 1322 (“We must
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`Case No.: 11-CV-01049-LHK
`ORDER GRANTING DEFAULT JUDGMENT
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`For the Northern District of California
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`United States District Court
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`Case5:11-cv-01049-LHK Document21 Filed12/21/11 Page7 of 16
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`determine if the plaintiff Panavision would not have been injured ‘but for’ the defendant Toeppen's
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`conduct directed toward Panavision in California.”). Here, Defendant’s contacts with the forum
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`are the use of California companies to allow third party users to download the copyright infringing
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`works. The Court finds that “but for” Defendant’s infringing activity in California, Plaintiffs
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`would not have been injured. Accordingly, the second requirement for specific jurisdiction is
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`satisfied.
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`3. Reasonableness of Exercise of Jurisdiction
`The third prong of the test for specific jurisdiction provides that the exercise of jurisdiction
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`must comport with fair play and substantial justice. Id. at 1320. The Ninth Circuit employs a
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`seven factor test to determine whether exercise of jurisdiction is reasonable. These factors are: (1)
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`the extent of the defendant’s purposeful interjection into the forum state’s affairs; (2) the burden on
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`the defendant of defending in the forum (3) the extent of conflict with the sovereignty of the
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`defendant’s state; (4) the forum state’s interest in adjudicating the dispute; (5) the most efficient
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`judicial resolution of the controversy; (6) the importance of the forum to the plaintiff’s interest in
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`convenient and effective relief; and (7) the existence of an alternative forum. Core-Vent Corp. v.
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`Nobel Indus., 11 F.3d 1482, 1487-88 (9th Cir. 1993). Once the first two prongs of the specific
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`jurisdiction test have been met, the burden shifts to the defendant to establish unreasonableness.
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`See Schwarzenegger, 374, F.3d at 802 (stating that after the plaintiff meets his burden to satisfy the
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`first two prongs, the burden then shifts to the defendant to present a “compelling case” that
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`jurisdiction is unreasonable). Defendant has not responded to the Plaintiffs’ motion for default
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`judgment, and so has not met his burden of establishing unreasonableness.
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`First, the forum state has an interest in adjudicating the dispute. Although none of the
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`parties is a California citizen, Plaintiffs allege that Defendant (1) uses California companies to
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`perpetuate his copyright infringement, and (2) based on the reach of his websites encourages
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`California residents to download pirated music. This factor thus favors a finding that the exercise
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`of jurisdiction is reasonable.
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`Case No.: 11-CV-01049-LHK
`ORDER GRANTING DEFAULT JUDGMENT
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`Second, the extent of Defendant’s purposeful interjection into the forum state’s affairs is
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`unknown as Plaintiffs have not alleged or presented evidence regarding the number of downloads
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`conducted by California residents. Therefore, this factor is neutral.
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`Third, the burden on the Defendant, as a resident of Australia, to litigate in California is
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`significant. Nonetheless, the inconvenience is not so great as to deprive him of due process,
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`particularly given Tran’s purposeful availment of the benefits of conducting business within
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`California. See Panavision, 141 F.3d at 1323 (“A defendant’s burden in litigating in the forum is a
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`factor in the assessment of reasonableness, but unless the inconvenience is so great as to constitute
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`a deprivation of due process, it will not overcome clear justifications for the exercise of
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`jurisdiction.”).
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`Fourth, consideration of the most efficient judicial resolution is “no longer weighed heavily
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`given the modern advances in communication and transportation,” therefore, this factor is also
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`neutral because there may be witnesses and evidence located in California, Korea, and Australia.
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`Id.
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`Fifth, with respect to the existence of an alternative forum, Defendant has not come forward
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`to request an alternative forum. Nor is it clear whether Plaintiffs would be able to bring their
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`claims for infringement of United States copyrights in a Korean or Australian forum, or in the
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`forum of another U.S. state. This factor is neutral.
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`Sixth, with respect to the importance of the forum to the Plaintiffs’ interest in convenient
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`and effective relief, courts generally give little weight to a plaintiff’s inconvenience of litigating in
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`another forum. See id. at 1324. Given that Plaintiffs are non-residents, Plaintiffs’ inconvenience in
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`litigating in another forum is a neutral factor. Finally, regarding the extent to which the exercise of
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`jurisdiction would conflict with the sovereignty of Defendant’s state, “[l]itigation against an alien
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`defendant creates a higher jurisdictional barrier than litigation against a citizen from a sister state
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`because important sovereignty concerns exist.” Harris Rutsky & Co. Ins. Servs., Inc. v. Bell &
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`Clements Ltd., 328 F.3d 1122, 1133 (9th Cir. 2003) (quoting Sinatra v. Nat’l Enquirer, 854 F.2d
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`1191, 1199 (9th Cir. 1988)). While this factor weighs in favor of the Defendant, it is not sufficient
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`to defeat the Court’s otherwise proper exercise of personal jurisdiction.
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`Case No.: 11-CV-01049-LHK
`ORDER GRANTING DEFAULT JUDGMENT
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`For the Northern District of California
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`United States District Court
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`Balancing these seven factors, the Court concludes that the exercise of jurisdiction over the
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`Defendant is not unreasonable. Accordingly, the Court finds that it has personal jurisdiction over
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`the Defendant.
`B. Service of Process
`In addition to assessing whether jurisdiction is proper, a court must also determine whether
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`the service of process on the party against whom default judgment is requested is adequate.
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`Bricklayers and Allied Craftworkers Local Union No. 3 v. Palomino, 2010 WL 2219595 at * 2
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`(N.D. Cal. June 2, 2010) (citations omitted). Defendant Tran is an individual resident of New
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`South Wales, Australia. Compl. ¶ 17. Pursuant to the Federal Rules of Civil Procedure, an
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`individual may be served by an internationally agreed upon means of service that is reasonably
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`calculated to give notice, “such as those authorized by the Hague Convention on the Service
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`Abroad of Judicial and Extrajudicial Documents,” (“Hague Convention”). Fed. R. Civ. P. 4(f)(1).
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`Australia is a party to the Hague Convention. See Drey Decl. ¶ 3; Hadjdjelloul v. Global
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`Machinery Co., No. 10-4782 (DSD/SER), 2011 WL 4860025, at *3 n.6 (D. Minn. Oct. 7, 2011).
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`Both the Hague Convention, and the rules of civil procedure in New South Wales allow personal
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`service of process on an individual by private-process server. See id. (noting that service of
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`process in Australia “must comply with the Hague Service Convention, be performed through
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`diplomatic channel or be carried out by private-process server”); Drey Decl. Exs. K, L. Tran was
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`personally served by a licensed Australian process server on June 21, 2011. See ECF No. 10.
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`Accordingly, service of process was proper.
`C. Default Judgment Factors
`In determining whether default judgment is appropriate, courts typically consider the
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`following factors: (1) the possibility of prejudice to plaintiff, (2) the merits of plaintiff’s
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`substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action,
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`(5) the possibility of a dispute concerning the material facts, (6) whether the default was due to
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`excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure
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`favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).
`9
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`Case No.: 11-CV-01049-LHK
`ORDER GRANTING DEFAULT JUDGMENT
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`For the Northern District of California
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`United States District Court
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`

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`Case5:11-cv-01049-LHK Document21 Filed12/21/11 Page10 of 16
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`1. Merits of Plaintiff’s Claims and Sufficiency of the Complaint
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`After entry of default, “well-pled allegations in the complaint regarding liability are deemed
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`true.” Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). The Court will
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`therefore consider the merits of Plaintiffs’ claims, the sufficiency of its pleadings, and the
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`possibility of a dispute concerning the material facts, together. In addition to the allegations in
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`their Complaint, Plaintiffs also submitted documentation of Defendant’s websites and accounts,
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`take down notices sent to service providers, as well as detailed declarations documenting DFSB’s
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`investigation of Defendant’s activities. The Court will also consider these submissions in
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`evaluating the merits of Plaintiffs’ substantive claims.
`a. Copyright Infringement
`Plaintiffs’ first cause of action asserts copyright infringement in violation of 17 U.S.C.
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`§ 501. The Copyright Act grants the copyright owner the exclusive right to reproduce a
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`copyrighted work, to distribute copies of the work, and to authorize reproduction or distribution.
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`See 17 U.S.C. § 106(1)-(3). To establish copyright infringement, a plaintiff must prove: (1)
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`ownership of a valid copyright, and (2) that the defendant violated at least one exclusive right
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`granted to plaintiff under 17 U.S.C. § 106. A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004,
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`1013 (9th Cir. 2001). Plaintiffs have met this standard. As to the first element, the Complaint
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`alleges that Plaintiffs own copyrights in at least 129 different song titles on 11 different albums.
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`See Compl. & Ex. A. These copyrights are registered with the Copyright Office, and Plaintiffs
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`have provided the registration certificates for all 11 albums (which contain all 129 songs). See B.
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`Cho Decl. Ex. C. As to the second element of infringement, Plaintiffs allege that Defendant made
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`unauthorized copies of the musical recordings of the DFSB Plaintiffs’ works and uploaded them
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`for distribution and that the uploaded songs are identical to Plaintiffs’ copyrighted works. Compl.
`¶¶ 17, 23. Plaintiffs have also provided a declaration, with supporting exhibits2 stating that
`Plaintiffs’ investigation identified the copyrighted titles available online. B. Cho Decl. ¶ 7 & Exs.
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`2 It is difficult to identify, based on the exhibits, precisely which songs are available where.
`However, the Court finds that the declarations sufficiently establish that the copyrighted works
`were copied and uploaded.
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`Case No.: 11-CV-01049-LHK
`ORDER GRANTING DEFAULT JUDGMENT
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`A, B, D, E. These allegations, taken as true, are sufficient to establish a claim for copyright
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`infringement pursuant to 17 U.S.C. § 501.
`b. Contributory Copyright Infringment
`Plaintiffs’ second claim is for contributory copyright infringement. A defendant is
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`contributorily liable for copyright infringement if the defendant knowingly induces, causes, or
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`materially contributes to the infringing conduct of another. Ellison v. Robertson, 357 F.3d 1072,
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`1076 (9th Cir. 2004) (internal citation omitted). Plaintiffs sufficiently allege a claim for
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`contributory copyright infringement. First, Plaintiffs allege that the third party websites through
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`which Defendant has an account, host and distribute the infringing content described above, in
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`violation of 17 U.S.C. § 501. Compl. ¶ 36; B. Cho. Decl. Ex. D. Plaintiffs further allege that
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`Defendant contributes to this infringing conduct by uploading the content onto these third party
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`websites, and by indexing the works and providing access to the third-party websites from his own
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`websites. Compl. ¶ 35.
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`Finally, Plaintiffs allege that Defendants know that the files hosted on third-party websites
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`are infringing because he has received notices from the Plaintiffs and the third party hosts alerting
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`him to the unauthorized and infringing conduct. Compl. ¶ 36. Thus, Plaintiffs have established that
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`Defendant knew or had reason to know of the infringing activity to which he was contributing on
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`the third party websites. Based on Plaintiffs’ allegations, the Court finds that Plaintiffs have
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`adequately pled a claim for contributory copyright infringement. Further, taking these allegations
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`as true, Plaintiff has demonstrated it is likely to succeed on this claim.
`c. Inducement of Copyright Infringement
`Plaintiffs’ final claim is for inducement of copyright infringement. See Compl. ¶¶ 42-48.
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`However, there is some doubt as to whether this is a separate cause of action or more properly
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`considered a species of contributory infringement. The Supreme Court explained that “[o]ne
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`infringes contributorily by intentionally inducing or encouraging direct infringement.” Metro-
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`Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930 (2005). In Grokster, the Court
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`discussed an “inducement rule,” finding that “one who distributes a device with the object of
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`promoting its use to infringe copyright, as shown by clear expression or other affirmative steps
`11
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`Case No.: 11-CV-01049-LHK
`ORDER GRANTING DEFAULT JUDGMENT
`
`For the Northern District of California
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`United States District Court
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`taken to foster infringement, is liable for the resulting acts of infringement by third parties.” Id. at
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`936-37. In light of the Supreme Court’s discussion, several courts have expressed doubt that
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`inducement of infringement states a separate claim for relief. See, e.g., IO Group, Inc. v. Jordan,
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`708 F. Supp. 2d 989, 999 (N.D. Cal. 2010); Capitol Records, Inc. v. MP3tunes, LLC, 2009 WL
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`3364036, at *4 (S.D.N.Y. 2009); Arista Records LLC v. Usenet.com, 2009 WL 1873589, at *18 n.
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`17 (S.D.N.Y. 2009). This Court acknowledges that inducement of copyright infringement may not,
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`in fact, be a valid cause of action. In light of the fact that it does not appear that Plaintiffs seek
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`additional damages or relief under this cause of action, however, the Court need not rule on this
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`issue.
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`2. Remaining Eitel Factors
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`Based on the above analysis, the Court concludes that Plaintiffs’ well-pleaded complaint
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`and the merits of its substantive claims favor entry of default judgment. The Court also finds that
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`weighing the remaining Eitel factors together support Plaintiffs’ motion. First, Plaintiffs will be
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`prejudiced if default judgment is not entered. Because Defendant has refused to respond to the
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`Complaint or otherwise take part in the litigation, Plaintiffs will be denied the right to adjudicate
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`their claims and obtain relief if default judgment is not granted. Second, as to the sum of money at
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`stake, Plaintiffs seek $645,000.00 in statutory damages. Although entry of default judgment may
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`not be appropriate where a large sum of money is at stake, see Eitel v. McCool, 782 F.2d at 1472,
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`here the damages sought are statutory, and the amount is left to the Court’s discretion. Third, given
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`the supporting documentation submitted by Plaintiffs, and the relatively straightforward nature of
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`Plaintiffs’ claims, it appears unlikely that a dispute of material fact would arise in this case.
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`Fourth, it does not appear that Defendants’ default was due to excusable neglect. Defendant was
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`personally served with the Summons and Complaint on June 21, 2011. Moreover, Defendant was
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`also served with the Request for Entry of Default. Drey Decl. at ¶ 6. Defendants thus had notice
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`and opportunity to appear in this litigation before Plaintiffs moved for default judgment. Finally,
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`although federal policy favors decisions on the merit