Case 1:07-cv-02565-RPM-MEH Document 20 Filed 05/06/08 USDC Colorado Page 1 of 7
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
`
`Civil Action No. 07-cv-02565-RPM-MEH
`
`SONY BMG MUSIC ENTERTAINMENT, a Delaware general partnership,
`ATLANTIC RECORDING CORPORATION, a Delaware corporation,
`UMG RECORDINGS, INC., a Delaware corporation, and
`BMG MUSIC, a New York general partnership,
`
`Plaintiffs,
`
`v.
`
`STEVEN LINDSAY,
`
`Defendant.
`
`RECOMMENDATION ON MOTION FOR DEFAULT JUDGMENT
`
`Before the Court is Plaintiffs’ Application for Entry of Default Judgment by the Court
`
`[Docket #15]. Plaintiff brings one claims for copyright infringement. Plaintiff alleges that
`
`Defendant unlawfully distributed Plaintiffs’ copyrighted material over the Internet via a “peer-to-
`
`peer” (“P2P”) file copying network. Plaintiff requests statutory damages, attorney’s fees and costs,
`
`and an injunction.
`
`Pursuant to 28 U.S.C. § 636(b)(1)(B) and the Order of Reference filed by the District Court,
`
`the Motion has been referred to this Court to issue proposed findings of fact and a recommendation
`
`for disposition of the Motion. Dock. #16. The Court held an evidentiary hearing on the Motion on
`
`May 5, 2008. The Court recommends that, for the reasons stated herein, the Motion be granted.
`
`I.
`
`Findings of Fact
`
`Plaintiffs allege that third-party investigator Elizabeth Hardwick identified an individual
`
`using LimeWire on the P2P network Gnutella at IP address 71.219.187.1. This individual had 235
`
`audio files in his “shared” folder available for other members of the P2P network to download over
`
`

`
`Case 1:07-cv-02565-RPM-MEH Document 20 Filed 05/06/08 USDC Colorado Page 2 of 7
`
`the Internet. On June 13, 2007, Ms. Hardwick downloaded ten songs from this individual, for which
`
`Plaintiffs own the exclusive copyright. Ms. Hardwick was able to download an entire copy of each
`
`of the ten songs. In her Affidavit, she states that she could have downloaded more of the 235 audio
`
`files had she chosen to do so. Hearing, Plaintiff’s Exh. 5; Dock. #19-6. The ten songs downloaded
`
`are listed in Exhibit A to the Complaint. Plaintiffs then subpoenaed the IP records from Qwest
`
`through an Ex Parte Application for Leave to Take Expedited Discovery in Civil Action No. 07-cv-
`
`01352-RPM and determined that the IP address listed above was assigned to the internet account
`
`of Defendant Steven Lindsay at the time of the infringement. Plaintiffs further allege that they have
`
`placed proper notices of their copyrights under 17 U.S.C. § 401 on the respective album covers of
`
`these ten songs.
`
`During the evidentiary hearing, Plaintiffs submitted sworn affidavits establishing their
`
`exclusive copyright for these ten songs, as well as copies of the certificates of registration for these
`
`copyrights. All of the copyrights were registered prior to June 13, 2007. Plaintiffs seek statutory
`
`damages, costs, and an injunction.
`
`II.
`
`Recommended Conclusions of Law
`
`Defendant was personally served with the Complaint in this case on March 12, 2007. Dock.
`
`#11. After Defendant failed to file an answer, Plaintiffs moved for Entry of Default by the Clerk
`
`of the Court, which was entered on April 18, 2008. Dock. #13. By failing to answer the Complaint,
`
`Defendant has relieved the Plaintiffs of the burden of proving its factual allegations. See Olcott v.
`
`Delaware Flood Co., 327 F.3d 1115, 1125 (10th Cir. 2003) (“defendant, by his default, admits the
`
`plaintiff’s well-pleaded allegations of fact”). Consideration of default judgment on Plaintiffs’ claim
`
`is now appropriate.
`
`2
`
`

`
`Case 1:07-cv-02565-RPM-MEH Document 20 Filed 05/06/08 USDC Colorado Page 3 of 7
`
`A.
`
`Copyright Infringement
`
`Plaintiffs’ Complaint alleges a violation of the copyright laws, 17 U.S.C. § 101 et seq. To
`
`prevail on a claim for direct infringement of a copyright, Plaintiff must show (1) ownership of the
`
`infringed material and (2) that Defendant infringed at least one of the exclusive rights granted to
`
`copyright holders under 17 U.S.C. § 106. See 17 U.S.C. § 501. These rights include the exclusive
`
`rights to do or authorize the following:
`
`(1) to reproduce the copyrighted work in copies or phonorecords;
`(2) to prepare derivative works based upon the copyrighted work;
`(3) to distribute copies or phonorecords of the copyrighted work to the public by sale
`or other transfer of ownership, or by rental, lease, or lending;
`(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes,
`and motion pictures and other audiovisual works, to perform the copyrighted work
`publicly;
`(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes,
`and pictorial, graphic, or sculptural works, including the individual images of a
`motion picture or other audiovisual work, to display the copyrighted work publicly;
`and
`(6) in the case of sound recordings, to perform the copyrighted work publicly by
`means of a digital audio transmission.
`
`17 U.S.C. § 106. Here, Plaintiffs have alleged, through well-pleaded facts, that they own the
`
`copyright in the ten works attached to the Complaint and that these copyrights are registered with
`
`the United States Copyright Office. Plaintiffs have also alleged that Defendant allowed other
`
`members of the P2P network to access these songs and download copies of the songs without the
`
`consent of the Plaintiffs. Accordingly, Plaintiff has stated a claim for copyright infringement of
`
`Plaintiffs’ rights to reproduce and to distribute these works.
`
`B.
`
`Damages
`
`An infringer is liable for either (1) the owner’s actual damages and the infringer’s profits or
`
`(2) statutory damages. 17 U.S.C. § 504(a). In the present case, Plaintiffs seek statutory damages,
`
`as set forth in 17 U.S.C. § 504(c)(1):
`
`3
`
`

`
`Case 1:07-cv-02565-RPM-MEH Document 20 Filed 05/06/08 USDC Colorado Page 4 of 7
`
`(1) Except as provided by clause (2) of this subsection, the copyright owner may
`elect, at any time before final judgment is rendered, to recover, instead of actual
`damages and profits, an award of statutory damages for all infringements involved
`in the action, with respect to any one work, for which any one infringer is liable
`individually, or for which any two or more infringers are liable jointly and severally,
`in a sum of not less than $ 750 or more than $ 30,000 as the court considers just. For
`the purposes of this subsection, all the parts of a compilation or derivative work
`constitute one work.
`
`(2) In a case where the copyright owner sustains the burden of proving, and the court
`finds, that infringement was committed willfully, the court in its discretion may
`increase the award of statutory damages to a sum of not more than $ 150,000. In a
`case where the infringer sustains the burden of proving, and the court finds, that such
`infringer was not aware and had no reason to believe that his or her acts constituted
`an infringement of copyright, the court in its discretion may reduce the award of
`statutory damages to a sum of not less than $ 200. The court shall remit statutory
`damages in any case where an infringer believed and had reasonable grounds for
`believing that his or her use of the copyrighted work was a fair use under section
`107, if the infringer was: (i) an employee or agent of a nonprofit educational
`institution, library, or archives acting within the scope of his or her employment who,
`or such institution, library, or archives itself, which infringed by reproducing the
`work in copies or phonorecords; or (ii) a public broadcasting entity which or a person
`who, as a regular part of the nonprofit activities of a public broadcasting entity (as
`defined in subsection (g) of section 118) infringed by performing a published
`nondramatic literary work or by reproducing a transmission program embodying a
`performance of such a work.
`
`Although Plaintiffs have alleged that Defendant’s infringement is willful, they have not sought an
`
`enhancement of damages under subsection (c)(2), requesting instead only the minimum amount of
`
`$750 for each of the ten copyright violations. The Court believes that this amount is reasonable for
`
`the conduct alleged and recommends a total statutory damages award in the amount of $7,500.00
`
`As the prevailing party under 17 U.S.C. § 505, the Court may award Plaintiffs their
`
`attorney’s fees and costs. Such an award is discretionary and is to be based on the Court’s
`
`consideration of factors such as “frivolousness, motivation, objective unreasonableness (both in the
`
`factual and in the legal components of the case) and the need in particular circumstances to advance
`
`considerations of compensation and deterrence.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 535 n.19
`
`(1994) (quotations and citations omitted). A detailed discussion of these factors is unwarranted in
`
`4
`
`

`
`Case 1:07-cv-02565-RPM-MEH Document 20 Filed 05/06/08 USDC Colorado Page 5 of 7
`
`this case, because Plaintiffs seek only costs of $420.00 for the filing of the Complaint and service
`
`of process. Considerations of compensation and deterrence alone support an award of these costs.
`
`N.A.S. Import, Corp. v. Chenson Enterprises, Inc., 968 F.2d 250, 254 (2d Cir. 1992) (“Because the
`
`Copyright Act intended to encourage suits to redress infringement, ‘fees are generally awarded to
`
`a prevailing plaintiff.’”) (citation omitted). The Court , therefore, recommends an award of costs
`
`in the amount of $420.00.
`
`C.
`
` Injunction
`
`Plaintiffs also seek an injunction under 17 U.S.C. § 502(a), which allows the Court to grant
`
`an injunction to “prevent or restrain infringement of a copyright.” A permanent injunction is
`
`appropriate if liability is established and Defendant poses a continuing threat to violate the
`
`copyright. National Football League v. McBee & Bruno’s, Inc., 792 F.2d 726, 732 (8th Cir. 1986)
`
`(citing cases). In their Complaint, Plaintiffs request the following injunction:
`
`Defendant shall be and hereby is enjoined from directly or indirectly infringing
`Plaintiffs’ rights under federal or state law in the Copyrighted Recordings and any
`sound recording, whether now in existence or later created, that is owned or
`controlled by Plaintiffs (or any parent, subsidiary, or affiliate record label of
`Plaintiffs) (“Plaintiffs’ Recordings”), including without limitation by using the
`Internet or any online media distribution system to reproduce (i.e., download) any
`of Plaintiffs’ Recordings, to distribute (i.e., upload) any of Plaintiffs’ Recordings, or
`to make any of Plaintiffs’ Recordings available for distribution to the public, except
`pursuant to a lawful license or with the express authority of Plaintiffs. Defendant also
`shall destroy all copies of Plaintiffs’ Recordings that Defendant has downloaded onto
`any computer hard drive or server without Plaintiffs’ authorization and shall destroy
`all copies of those downloaded recordings transferred onto any physical medium or
`device in Defendant’s possession, custody, or control.
`
`Complaint at 5–6. Plaintiffs, through well-pleaded factual allegations, have alleged that Defendant
`
`violated their copyrights, and Defendant has failed to respond to these allegations. Defendant is a
`
`member of a P2P network that allows files to be quickly and easily shared with others; these files
`
`include copyrighted works owned by Plaintiffs. From the facts before the Court, it appears that
`
`5
`
`

`
`Case 1:07-cv-02565-RPM-MEH Document 20 Filed 05/06/08 USDC Colorado Page 6 of 7
`
`Defendant could still be distributing Plaintiffs’ copyrighted works without authorization. In this
`
`case, “[f]ailure to grant the injunction would result in Plaintiffs’ continued exposure to harm with
`
`no method of recourse.” Elektra Entertainment Group, Inc. v. Crawford, 226 F.R.D. 388, 394 (C.D.
`
`Cal. 2005) (adopting an identical injunction); see also Jackson v. Sturkie, 255 F. Supp. 2d 1096,
`
`1103 (N.D. Cal. 2003) (granting a permanent injunction as part of default judgment because the
`
`defendant’s on-going ability to infringe the plaintiff’s copyright constituted a continued threat of
`
`future infringing activity and the defendant’s lack of participation in the litigation gave the court no
`
`assurance that the infringing activity would cease).
`
`III.
`
`Conclusion
`
`Accordingly, and based on the foregoing, it is hereby RECOMMENDED that the Plaintiffs’
`
`Application for Entry of Default Judgment by the Court [filed April 22, 2008; docket #15] be
`
`granted as follows:
`
`(1)
`
`(2)
`
`that the District Court grant the Motion as to Plaintiffs’ claim of copyright infringement;
`
`that the District Court award statutory damages pursuant to 17 U.S.C. § 504 in the amount
`of $7,500.00; and costs in the amount of $420.00; and
`
`(3)
`
`that the District Court enjoin Defendant as follows:
`
`Defendant shall be and hereby is enjoined from directly or indirectly infringing
`Plaintiffs’ rights under federal or state law in the Copyrighted Recordings and any
`sound recording, whether now in existence or later created, that is owned or
`controlled by Plaintiffs (or any parent, subsidiary, or affiliate record label of
`Plaintiffs) (“Plaintiffs’ Recordings”), including without limitation by using the
`Internet or any online media distribution system to reproduce (i.e., download) any
`of Plaintiffs’ Recordings, to distribute (i.e., upload) any of Plaintiffs’ Recordings, or
`to make any of Plaintiffs’ Recordings available for distribution to the public, except
`pursuant to a lawful license or with the express authority of Plaintiffs. Defendant also
`shall destroy all copies of Plaintiffs’ Recordings that Defendant has downloaded onto
`any computer hard drive or server without Plaintiffs’ authorization and shall destroy
`all copies of those downloaded recordings transferred onto any physical medium or
`device in Defendant’s possession, custody, or control.
`
`Under Fed. R. Civ. P 72, the parties shall have ten (10) days after service of this
`
`6
`
`

`
`Case 1:07-cv-02565-RPM-MEH Document 20 Filed 05/06/08 USDC Colorado Page 7 of 7
`
`Recommendation to serve and file any written objections in order to obtain reconsideration by the
`
`District Judge to whom this case is assigned.1
`
`Dated at Denver, Colorado this 6th day of May, 2008.
`
`BY THE COURT:
`
`s/ Michael E. Hegarty
`Michael E. Hegarty
`United States Magistrate Judge
`
`1 The party filing objections must specifically identify those findings or recommendations
`to which the objections are being made. The District Court need not consider frivolous, conclusive,
`or general objections. A party’s failure to file such written objections to proposed findings and
`recommendations contained in this report may bar the party from a de novo determination by the
`District Judge of the proposed findings and recommendations. United States v. Raddatz, 447 U.S.
`667, 676-83 (1980); 28 U.S.C. § 636(b)(1). Additionally, the failure to file written objections to the
`proposed findings and recommendations within ten (10) days after being served with a copy of this
`Recommendation may bar the aggrieved party from appealing the factual findings of the Magistrate
`Judge that are accepted or adopted by the District Court. Thomas v. Arn, 474 U.S. 140, 155 (1985);
`Moore v. United States, 950 F.2d 656, 659 (10th Cir. 1991); Niehaus v. Kansas Bar Ass’n, 793 F.2d
`1159, 1164 (10th Cir. 1986).
`
`7