Case 1:19-cv-02431-PKC-SDA Document 385 Filed 04/29/24 Page 1 of 8
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` 19-cv-2431 (PKC) (SDA)
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` OPINION AND ORDER
` ON FEES AND COSTS
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`ELOHIM EPF USA, INC.,
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`-against-
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`Plaintiff,
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`162 D & Y CORP. d/b/a Flower Karaoke, DONG
`HYUN HA, MANHATTAN ZILLER ZILLER,
`INC. d/b/a K2 Karaoke, Y & P BAYSIDE CORP.
`d/b/a Happy Karaoke, PHIL SOOK CHO, SING
`SING BELL, INC. d/b/a Christmas Karaoke, JIN
`E. AN, MUSIC BOX KTV, INC. d/b/a Music
`Box K-TV, ANTHONY KIM, M & S MUSIC
`STUDIO, INC. d/b/a Gagopa Karaoke, HYE
`KYUNG HAN, SS NOBLESS HOUSE, INC.
`d/b/a Noblesse House, YINHUA HUANG,
`PLACE OF HAPPY & LUCKY INC. d/b/a The
`King Karaoke, GUNHA SONG, NORAE
`HAHNUN JIB CORP. d/b/a Open Karaoke,
`BIZMAX NY, INC. d/b/a WOW Karaoke, LI
`BEOM KIM, HARMONY KARAOKE KTV,
`INC. d/b/a Harmony Karaoke, JOSEPH N.
`ZOINO, SWEETIE & VIP, INC. d/b/a I Luv
`Luxury Room, YS2 ENTERPRISES, INC. d/b/a
`CEO Business Club, HYUAN HAK YI, EUNSIK
`SUN, GS GLOBAL CORP d/b/a Red, DAVID
`RHEE, SOMETHING 1, INC. d/b/a Something,
`SUNNY TAE KIM, SAGWA NAMOO, INC.
`d/b/a Sagwa Namoo, KYUNG SOON NAM,
`TOMATO 162, INC. d/b/a Tomato Karaoke
`Room, SUNG LAW KIM, OPEN KARAOKE
`CORP. d/b/a Open Karaoke, KU HO YOU,
`DONG HUN KIM, BASE KARAOKE, INC.
`d/b/a Base Karaoke, NEW MANHATTAN
`ZILLER ZILLER, INC. d/b/a Base Karaoke,
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`Defendants.
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`Case 1:19-cv-02431-PKC-SDA Document 385 Filed 04/29/24 Page 2 of 8
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`CASTEL, U.S.D.J.,
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`Plaintiff Elohim EPF USA, Inc. (“Elohim”) moves for attorneys’ fees and costs
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`pursuant to 17 U.S.C. § 505. (ECF 378.) Following a bench trial, the Court found that the
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`defendant Korean karaoke establishments located in Manhattan and Queens infringed Elohim’s
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`performance and display rights in seven disputed songs, and awarded statutory damages against
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`these establishments and their owners in the amount of $3,500 per infringed work. See Elohim
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`EPF USA, Inc. v. 162 D & Y Corp., 2023 WL 8720149 (S.D.N.Y. Dec. 18, 2023). Familiarity
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`with this case is assumed.
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`Weighing the relevant factors for a fee-shifting application under section 505, the
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`Court concludes that defendants’ legal arguments were not objectively unreasonable and that an
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`award of fees and costs in this case would not advance the goals of the Copyright Act. See
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`Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 197 (2016); Fogerty v. Fantasy, Inc., 510 U.S.
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`517 (1994). Elohim’s motion for fees and expenses will be denied.
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`The Copyright Act gives a district court discretion to award costs and reasonable
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`attorneys’ fees to the prevailing party. 17 U.S.C. § 505. Section 505 does not provide for
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`attorneys’ fees “as a matter of course.” Fogerty, 510 U.S. at 533. Courts may look to “several
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`nonexclusive factors” on the application, including “frivolousness, motivation, objective
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`unreasonableness (both in the factual and in the legal components of the case) and the need in
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`particular circumstances to advance considerations of compensation and deterrence.” Id. at 535
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`n. 19 (quotation marks omitted). Courts should place “substantial weight on objective
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`reasonableness . . . .” Kirtsaeng, 579 U.S. at 207. “Courts every day see reasonable defenses
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`that ultimately fail (just as they see reasonable claims that come to nothing); in this context, as in
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`Case 1:19-cv-02431-PKC-SDA Document 385 Filed 04/29/24 Page 3 of 8
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`any other, they are capable of distinguishing between those defenses (or claims) and the
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`objectively unreasonable variety.” Id. at 208.
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`“[O]bjective reasonableness can be only an important factor in assessing fee
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`applications – not the controlling one.” Id. “[I]n any given case a court may award fees even
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`though the losing party offered reasonable arguments (or, conversely, deny fees even though the
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`losing party made unreasonable ones). For example, a court may order fee-shifting because of a
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`party’s litigation misconduct, whatever the reasonableness of his claims or defenses. Or a court
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`may do so to deter repeated instances of copyright infringement or overaggressive assertions of
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`copyright claims, again even if the losing position was reasonable in a particular case.” Id. at
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`208-09 (internal citation omitted). A successful section 505 application advances the Copyright
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`Act’s goals of encouraging and rewarding authors’ creations while enabling others to build on
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`that work. Id. at 204.
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`Elohim is the United States subpublisher of Korean-language musical
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`compositions. It filed the Complaint in this action on March 19, 2019, and the case was assigned
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`to then-District Judge Nathan. (ECF 1.) Elohim originally asserted that 35 named defendants
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`and 20 Doe defendants infringed its copyrights on 25 musical compositions. Many defendants
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`answered and appeared, though some did not, and default judgment was entered against them.
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`(See ECF 157, 376.) Elohim filed a First Amended Complaint on January 20, 2020 and a
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`Second Amended Complaint on October 30, 2020. (ECF 71, 140.)
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`Both sides moved for summary judgment after the close of discovery. Judge
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`Nathan referred the motion to Magistrate Judge Aaron to hear and report. (ECF 201.)
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`Magistrate Judge Aaron recommended the denial of Elohim’s motion, explaining that it
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`ultimately was a jury issue as to whether “public performances” under the Copyright Act took
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`Case 1:19-cv-02431-PKC-SDA Document 385 Filed 04/29/24 Page 4 of 8
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`place in the defendant establishments. Elohim EPF USA, Inc. v. 162 D & Y Corp., 2022 WL
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`2531345, at *3-4 (S.D.N.Y. Mar. 12, 2022). Defendants urged that judgment should be granted
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`in their favor because no reasonable jury could find that Elohim held valid copyrights in all 25 of
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`the disputed compositions. Id. at *4. In response, Elohim agreed that it did “not have complete
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`chain of title” for nine compositions, and voluntarily withdrew its claims as to those works. Id.
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`As to the remaining compositions, Magistrate Judge Aaron concluded that defendants’
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`contentions about KOMCA records, Korean translation issues and copyright certificates raised
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`issues of fact as to ownership. Id. at *4-8. This case was subsequently reassigned to the
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`Undersigned, and the Court adopted the Report and Recommendation. See 2022 WL 2072565
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`(S.D.N.Y. June 9, 2022).
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`On July 13, 2023, the day before trial commenced, Elohim withdrew its claim of
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`infringement as to nine more compositions. (ECF 347.) It explained that it had been unable to
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`corroborate its rights in those nine compositions and wanted “to streamline the trial.” (Id. at 2-
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`3.) Thus, from the initial 25 compositions alleged to be infringed, Elohim proceeded to trial on
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`seven. Elohim’s claims against three defendants were dismissed in their entirety because those
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`defendants were not alleged to have infringed any of the remaining seven works. (ECF 354.)
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`Trial commenced on July 14, 2023. The Court’s 51-page Opinion and Order,
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`Findings of Fact and Conclusions of Law reviewed the evidence of infringement of Elohim’s
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`display and performance rights in the seven songs at each of the 12 defendant establishments.
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`(ECF 369; see also 2023 WL 8720149.) Much of the evidence and the Court’s analysis related
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`to KOMCA records on the assignment of rights over the compositions, the performance and
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`display of the compositions at defendants’ establishments, and whether the defendant
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`establishments hosted “public performances.” See id. The Court concluded that defendants
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`Case 1:19-cv-02431-PKC-SDA Document 385 Filed 04/29/24 Page 5 of 8
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`were liable for direct infringement but that Elohim did not prove contributory infringement or
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`inducement of infringement. See id. The Court awarded statutory damages in the amount of
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`$3,500 for each work infringed, and concluded that under the Copyright Act, the songs “Ni Kka
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`Jit Ge,” “Ga Sik Geol,” “So Cool” and “Push Push” were registered as a “single work” in the
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`form of an album, meaning that they were “one work” for the purpose of awarding statutory
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`damages. Id. at 23-24.
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`The Court concludes that defendants’ legal and factual positions were not
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`objectively unreasonable. Defendants’ challenges to Elohim’s assignment of rights after the
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`close of discovery resulted in Elohim withdrawing its claims as to 18 of the 25 compositions.
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`Elohim acknowledged that “[t]his is the first time anyone has challenged Elohim’s rights to these
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`songs . . . .” (ECF 347 at 3.) The Court found that Elohim threatened litigation against karaoke
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`establishments without identifying the infringed works and apparently without first investigating
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`whether infringing activities actually occurred.1 Elohim also successfully urged that four of the
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`compositions constituted a “single work” for the purpose of awarding statutory damages under
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`the Copyright Act. 2023 WL 8720149, at *23. The Court also rejected defendants’ argument
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`that the KOMCA records defeated the assignment of Brave Brother copyrights to Elohim. See
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`id. at *5-7. But this required a fact-intensive and detailed analysis of the KOMCA records and
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`KOMCA’s role in international copyright management. See id. The purposes of the Copyright
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`Act are advanced when a party raises a serious, if ultimately unsuccessful, challenge to a
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`plaintiff’s assignment because it ensures that the copyright is being protected by its lawful
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`1 See 2023 WL 8720149, at *12 (“A recipient of these letters would not know which songs Elohim claimed to own
`or what songs were claimed to be unlawfully performed and displayed at the recipient’s establishment. The 2017
`letters appear to predate any of Elohim’s visits to defendants’ establishments for the purpose of determining whether
`defendants had infringed Elohim’s performance rights. The letters did not give their recipients intelligent notice of
`any purportedly infringing conduct or any reason to believe that Elohim had a meritorious claim for copyright
`infringement. The admonition in the letter of April 16, 2018 that the recipient should ‘not listen’ to attorney advice
`or rely on licenses from ASCAP or BMI gives the communication the quality of a shakedown.”).
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`Case 1:19-cv-02431-PKC-SDA Document 385 Filed 04/29/24 Page 6 of 8
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`owner. See Fogerty, 510 U.S. at 527 (“defendants who seek to advance a variety of meritorious
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`copyright defenses should be encouraged to litigate them to the same extent that plaintiffs are
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`encouraged to litigate meritorious claims of infringement.”).
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`Elohim also asserts that defendants’ arguments about the “public performance” of
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`karaoke were “frivolous” and objectively unreasonable. (Pl. Mem. 14-16.) The Court disagrees.
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`As noted, Elohim was denied summary judgment on this issue, and the Court analyzed in detail
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`the public nature of the defendant karaoke establishments. It is true that several non-binding
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`authorities have concluded as a matter of law that similar Korean karaoke businesses hosted
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`public performances. Defendants’ contrary position was not objectively unreasonable, however,
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`and the purposes of the Copyright Act were advanced by litigating this contested issue on a full
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`record in a trial on the merits.
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`Separately, a court may properly consider “litigation misconduct” on a section
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`505 fee-shifting motion. Kirtsaeng, 579 U.S. at 209. It is true that discovery was protracted and
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`defendants failed to meet Court-ordered deadlines early in the case. On February 11, 2020,
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`Magistrate Judge Aaron granted a motion to compel filed by Elohim, ordered defendants to
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`respond to Elohim’s discovery requests and sanctioned defense counsel $750 to compensate
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`Elohim’s counsel for its work on the motion to compel.2 (ECF 84.) Elohim filed a motion to
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`strike the Answer of 19 defendants for failure to comply with discovery orders, though it later
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`withdrew that motion. (ECF 102, 135.) Six defendants initially defaulted and the Clerk of Court
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`issued Certificates of Default against them; Elohim did not move for the entry of default
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`judgment, and after the defaulting defendants appeared, Judge Nathan granted those defendants’
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`motion to the vacate the Certificates of Default, over Elohim’s opposition. (ECF 51, 53-56, 58,
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`2 The sanctioned attorney was a partner at Kim & Cha, LLP. (ECF 84.) Younghoon Ji of Ahne & Ji was later
`substituted as defense counsel (ECF 153, 284) and was defendants’ trial counsel in this case.
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`Case 1:19-cv-02431-PKC-SDA Document 385 Filed 04/29/24 Page 7 of 8
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`157.) After the close of discovery, defendants successfully moved to reopen discovery for a 60-
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`day period. (ECF 156, 162.) The limited discovery was contentious, and included the denial of
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`a motion to compel filed by defendants. (ECF 185.)
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`Elohim also points to defendants’ reluctance to consent to trying the claims to the
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`Court instead of a jury. All three iterations of Elohim’s complaint included a jury demand, as
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`did defendants’ answers. (ECF 1, 71, 140, 12, 132, 141, 142.) After the Final Pretrial
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`Conference, defendants agreed to try Elohim’s claims to the Court, and the parties filed a
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`stipulation to withdraw their respective jury demands. (ECF 308.) Elohim urges that because
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`defendants “insist[ed]” on a jury trial, counsel expended “hundreds of hours” preparing verdict
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`forms, a draft jury charge and other trial documents. (Pl. Mem. at 7.) Elohim also notes that
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`defendants refused to engage in settlement discussions or mediation. (Pl. Mem. at 8.)
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`Elohim’s frustrations do not merit an award of fees under section 505.
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`Defendants’ failure to meet discovery deadlines early in the case led to a successful motion to
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`compel and a sanction against defense counsel. The matter was ably handled by Magistrate
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`Judge Aaron and does not warrant further relief. The remaining points identified by Elohim do
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`not fall under the label of “litigation misconduct.” The vacatur of certain certificates of default
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`and the extension of discovery were the products of judicial rulings adverse to Elohim.
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`Defendants ought not be subject to section 505 fee-shifting because they were hesitant about
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`consenting to a bench trial after Elohim itself previously demanded a jury, or because they chose
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`to litigate the case through trial instead of agreeing to settle.
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`Other relevant factors on a section 505 motion include the parties’ motivations,
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`deterrence and compensation. See Fogerty, 510 U.S. at 534 n.19. Defendants vigorously
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`opposed plaintiffs’ claims and there is no basis to conclude that they acted with an improper
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`motive. The Court weighed the goals of deterrence and compensation in its determination of
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`statutory damages. 2023 WL 8720149, at *22. These factors do not support Elohim’s motion.
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`CONCLUSION.
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`Plaintiff’s motion for fees and costs is DENIED. The Clerk is respectfully
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`directed to terminate the motion. (ECF 378.)
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`SO ORDERED.
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`Dated: New York, New York
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`April 29, 2024
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