Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 1 of 40
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF NEW YORK
`
`
`GRANITE MUSIC CORPORATION,
`COOLWELL MUSIC,
`TROUP LONDON MUSIC, and
`UNIVERSAL-POLYGRAM INTERNATIONAL
` PUBLISHING, INC.,
`
`Plaintiffs.
`
`v.
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`CENTER STREET SMOKE HOUSE, INC.,
`CREGG S. PAUL, and
`SCOTT R. PAUL,
`
`Defendants.
`
`
` REPORT
`and
` RECOMMENDATION
`
`09-CV-00872A(F)
`
`APPEARANCES:
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`HANCOCK ESTABROOK, LLP
`Attorneys for Plaintiffs
`MICHAEL J. SCIOTTI, and
`ROBERT C. WHITAKER, JR., of Counsel
`1500 AXA Tower 1
`100 Madison Street
`Syracuse, New York 13202
`
`DAMON MOREY LLP
`Attorneys for Plaintiffs
`MICHAEL LAWRENCE AMODEO, of Counsel
`200 Delaware Avenue
`Suite 1200
`Buffalo, New York 14202
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`THE OKAY LAW FIRM
`Attorneys for Defendants
`MEHMET K. OKAY, of Counsel
`P.O. Box 622
`Batavia, New York 14020
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`JURISDICTION
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`This case was referred to the undersigned by Honorable Richard J. Arcara on
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`December 9, 2009, for pretrial matters including report and recommendation on
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 2 of 40
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`dispositive motions. The matter is presently before the court on Plaintiff’s motion filed
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`November 15, 2010, seeking a default judgment (Doc. No. 34).
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`BACKGROUND
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`Plaintiffs Granite Music Corporation (“Granite Music”), Coolwell Music (“Coolwell
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`Music”), Troup London Music (“Troup London Music”), and Universal-Polygram
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`International Publishing, Inc. (“Universal-Polygram”) (together, “Plaintiffs”), commenced
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`this copyright infringement action on October 9, 2009, alleging that on May 17-18, 2008,
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`Defendants Center Street Smoke House, Inc. (“the Smokehouse”), Cregg S. Paul
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`(“Cregg Paul”), and Scott R. Paul (“Scott Paul”) (together, “Defendants”), presented
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`three public performances of musical compositions for which the copyrights are owned
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`by Plaintiffs, in violation of the Copyright Act, 17 U.S.C. § 501 et seq. (“the Act”).
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`Plaintiffs seek to recover statutory damages, available under § 504 of the Act, for each
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`of three alleged copyright infringements, and costs, including attorney damages. On
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`December 7, 2009, Defendants filed an answer (Doc. No. 12), generally denying the
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`salient allegations of the Complaint and asserting 12 Affirmative Defenses including,
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`inter alia, Plaintiffs suffered no damages as a result of Defendants’ alleged copyright
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`infringement activity (Second Affirmative Defense), Defendants’ actions were
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`commercially reasonable and lawful (Third Affirmative Defense), Plaintiffs’ asserted
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`copyrights and their respective registrations are invalid (Eighth and Ninth Affirmative
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`Defenses), payment (Eleventh Affirmative Defense), and failure to join necessary party
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`(Twelfth Affirmative Defense).
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`The parties to this action engaged in four mediation sessions pursuant to this
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 3 of 40
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`District’s Alternative Dispute Resolution plan, as a result of which Defendants agreed to
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`withdraw their Answer and admit liability. On June 23, 2010, the parties filed the fully
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`executed Stipulation to Withdraw Defendants’ Answer with Prejudice and Admit Liability
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`(Doc. No. 30) (“Stipulation”), in which Defendants state Defendants “hereby admit
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`liability as to all allegations contained in the Complaint . . . .” Stipulation at 1. The
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`parties further stipulated that Plaintiff would seek a default judgment against
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`Defendants requesting statutory damages, attorneys’ fees and costs, and a permanent
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`injunction against Defendants. Id. at 2. On July 6, 2010, Plaintiffs filed a Request for
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`Entry of Default (Doc. No. 31), which was granted on July 23, 2010 when the Entry of
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`Default against Defendants was filed by the Clerk of the Court (Doc. No. 32).
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`On November 15, 2010, Plaintiffs filed the instant motion (Doc. No. 34)
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`(“Plaintiffs’ motion”), seeking entry of a default judgment against Defendants. Plaintiffs’
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`motion is supported by the attached Affidavit of Michael J. Sciotti, Esq. (Doc. No. 34-1)
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`(“Sciotti Affidavit”), with attached exhibit A (“Sciotti Affidavit Exh. A”), a Memorandum of
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`Law in Support of Plaintiffs’ Motion for a Default Judgment (Doc. No. 34-2) (“Plaintiffs’
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`Memorandum”), with attached exhibits 1 through 8 (“Plaintiffs’ Exh(s). __”), and the
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`Declaration of Douglas Jones in Support of Plaintiffs’ Motion for Default Judgment (Doc.
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`No. 34-3) (“Jones Declaration”), with attached exhibits A though D (“Jones Declaration
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`Exh(s). __”). In opposition to Plaintiffs’ motion, Defendants filed the Answering
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`Affirmation of Mehmet K. Okay, Esq. (Doc. No. 38) (“Okay Affirmation”), on January 10,
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`2011, and the Affidavit of Cregg S. Paul (Doc. No. 39) (“Cregg Paul Affidavit”), on
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`January 16, 2011.
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`On January 21, 2011, Plaintiffs filed the Affidavit of Michael J. Sciotti, Esq. (Doc.
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 4 of 40
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`No. 40) (“Sciotti Reply Affidavit”), and Plaintiffs’ Reply Memorandum in Support of Their
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`Motion for a Default Judgment (Doc. No. 41) (“Plaintiffs’ Reply”). Oral argument was
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`deemed unnecessary.
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`Based on the following, Plaintiffs’ motion for entry of a default judgment should
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`be GRANTED.
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`FACTS1
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`Granite Music, Coolwell Music, Troup London Music, and Universal-Polygram,
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`Plaintiffs to this action, are songwriters or music publishers, as well as members of
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`American Society of Composers, Authors and Publishers (“ASCAP”), a performing
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`rights licensing organization to which Plaintiff have granted a nonexclusive right to
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`license non-dramatic public performances of the musical compositions to which
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`Plaintiffs own the copyrights. ASCAP offers to providers of entertainment, including
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`radio and television stations, restaurants, and nightclubs, licenses permitting
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`copyrighted musical compositions within ASCAP’s repertoire to be lawfully performed in
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`such establishments. ASCAP routinely contacts owners and operators of entertainment
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`establishments where ASCAP’s members’ copyrighted music is performed to advise the
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`owners and operators of the obligation imposed under federal copyright law to obtain
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`the proper license prior to performing such music. Because Plaintiff’s licensing rights to
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`the musical compositions within their repertoire is non-exclusive, users of such musical
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`compositions who do not obtain a license from ASCAP can still lawfully perform such
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`1
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` Taken from the pleadings and motion papers filed in this action.
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 5 of 40
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`musical compositions by separately negotiating with each copyright owner for
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`permission to perform such works.
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`Defendant Smokehouse is a business establishment that provides public
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`entertainment, accommodation, amusement and refreshments. The Smokehouse is
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`owned and operated by Defendants Cregg Paul and Scott Paul who are financially
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`benefitted by the entertainment provided at the Smokehouse.
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`ASCAP maintains business records for each establishment ASCAP has
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`contacted to license or attempted to license, including Defendants. In March 2002,
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`ASCAP made its first of 57 contacts with Defendants to offer Defendants an ASCAP
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`licensing agreement. In subsequent contacts in person, by letters, and telephone
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`conversations, ASCAP representatives repeatedly advised Defendants of Defendants’
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`obligations and liability under the Copyright law, and Defendants occasionally tendered
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`various payments to ASCAP, but continued to refuse to sign the requisite ASCAP
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`licensing agreement. In particular, Defendants tendered to ASCAP three checks over a
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`five-year period, including $ 674.50 in 2002, $ 2,504.14 in 2004, and $ 4,067.37 in
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`2007, for a total of $ 7,246. Upon receipt of each check, ASCAP contacted Defendants
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`and advised that ASCAP could not cash the checks without an ASCAP licensing
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`agreement signed by Defendants. ASCAP further advised that without an ASCAP
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`licensing agreement, Defendants were not authorized to perform any of the copyrighted
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`musical compositions within ASCAP’s repertoire, and any such performance would
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`constituted copyright infringement. Plaintiffs maintain that the signed licensing
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`agreements are required because without such agreements, ASCAP would be unable
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`to keep track of its licensees and the terms of license issued to each. Given
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 6 of 40
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`Defendants’ continued refusal to enter into an ASCAP licensing agreement, Plaintiff’s
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`returned each of the three checks to Defendants, accompanied by letters explaining
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`that unless Defendants executed an ASCAP licensing agreement, Plaintiffs could not
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`cash the checks. Accordingly, ASCAP has never received any payment for a licensing
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`agreement from the $ 7,246 in checks Defendants tendered to ASCAP. The fees on
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`the licensing agreement ASCAP repeatedly offered Defendants between March 2002
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`through 2010 total $ 10,877.40.
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`ASCAP arranged for independent investigator Lawrence DeMarco (“DeMarco”),
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`to attend a public musical performance given by “Billy Parker and The Silvers” (“the
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`band”) at the Smokehouse. The band was not employed by Defendants, but was an
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`independent contractor. The musical performance, which commenced in the evening of
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`May 17, 2008 and continued into the early morning of May 18, 2008, included three
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`compositions within ASCAP’s repertoire, “Stars on the Water,” “Route 66" (a/k/a “Get
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`Your Kicks on Route 66"), and “Tulsa Time.” The copyrights for these three
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`compositions are respectively owned by Plaintiffs Granite Music, Troup London Music,
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`and Universal-Polygram. Specifically, in addition to other musical compositions not at
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`issue in the instant case, the band performed “Route 66" on May 17, 2008 at 9:31 P.M.,
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`Tulsa Time on May 17, 2008 at 10:50 P.M., and Stars on the Water on May 18, 2008 at
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`12:18 A.M. (“the copyright infringements”). When Plaintiffs informed Defendants of these
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`specific incidents of copyright infringement, Defendants continued to refuse to execute
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`an ASCAP licensing agreement to resolve the matter, and Plaintiffs commenced the
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`instant action.
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`The next afternoon, May 18, 2008, Defendants hosted a benefit concert for the
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 7 of 40
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`Diabetes Association (“the diabetes benefit”). Defendants donated all food and
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`beverage receipts generated during the diabetes benefit to the Diabetes Association.
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`1.
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`Standing
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`DISCUSSION
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`Although not raised by the parties, the court, in the interests of clarity and
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`completeness, first addresses whether Plaintiffs have standing to bring this action.
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`“The Copyright Act authorizes only two types of claimants to sue for copyright
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`infringement: (1) owners of copyrights, and (2) persona who have been granted
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`exclusive licenses by owners of copyrights.” Eden Toys, Inc. v. Florelee Undergarment
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`Co., Inc., 697 F.2d 27, 32 (2d Cir. 1982) (italics added) (citing 3 Nimmer on Copyright §
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`12.02 at 12-25 (1982)). A non-exclusive licensee does not have standing to commence
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`a copyright infringement action. Bertolino v. Italian Line, 414 F.Supp. 279, 284
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`(S.D.N.Y. 1976) (“In a suit under the copyright laws it is axiomatic that only the
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`proprietor of the copyright has standing to sue for its infringement.”). Defendants have
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`not disputed that Plaintiffs own the copyrights for the subject musical compositions,
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`Complaint ¶ 3, and that Plaintiffs have granted ASCAP, a performing rights licensing
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`organization, a nonexclusive right to license non-dramatic public performances of
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`Plaintiffs’ copyrighted musical compositions. Plaintiff’s Memorandum at 1.
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`In the instant case, because Plaintiffs are the owner of the copyrights at issue in
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`this action, Plaintiffs have standing to sue in their own names. Further, because
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`ASCAP’s right to license public performances of the musical compositions within its
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`repertoire is nonexclusive, ASCAP is without standing to bring this action.
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 8 of 40
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`2.
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`Default Judgment
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`Plaintiffs seek entry of a default judgment, awarding statutory damages for each
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`of the three copyright infringements, i.e., the performance on May 17-18, 2008, of three
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`musical compositions within ASCAP’s repertoire without obtaining the required license
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`for such compositions, the costs of this action, including reasonable attorneys’ fees,
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`and a permanent injunction against Defendants’ future performance of such
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`compositions. Plaintiffs’ Memorandum at 8-16. Plaintiffs’ motion for entry of a default
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`judgment against Defendants is predicated on the Stipulation by which Defendants
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`withdrew their Answer and admitted liability, thereby admitting to willfully violating
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`federal copyright law by presenting a musical performance at the Smokehouse on May
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`17-18, 2008, at which three copyrighted musical compositions within ASCAP’s
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`repertoire were performed, despite Defendants’ continued failure to execute a licensing
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`agreement with ASCAP to authorize lawful performance of the copyrighted works. Id.
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`at 5-7.
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`In opposition to Plaintiffs’ motion, Defendants do not challenge their admission of
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`liability in the Stipulation but, rather, maintain the Complaint fails to allege Defendants
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`derived any financial benefit as a result of the copyright infringements. Okay
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`Affirmation ¶¶ 10-32. Defendants also maintain that despite stipulating to the
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`allegations of the Complaint, Defendants have not admitted that the copyright
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`infringements were willful, which is a legal conclusion necessary to the determination of
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`both statutory damages and the award of costs, including attorney’s fees. Id., ¶¶ 33-48.
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`Alternatively, Defendants request an evidentiary hearing to determine the issues of
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`willfulness and costs, including attorneys’ fees. Id. ¶ 49.
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 9 of 40
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`In further support of their motion, Plaintiffs argue that Defendants have not only
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`stipulated to withdraw their Answer, but also to liability with regard to the copyright
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`infringements alleged in the Complaint. Plaintiffs’ Reply at 1-4. Plaintiffs further
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`maintain that Defendants are not innocent infringers, such that the minimum statutory
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`damages are insufficient to defer future infringing acts, and supporting Plaintiffs’
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`request for a permanent injunction. Id. at 4-8. Finally, Plaintiffs argue that because
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`Defendants’ copyright infringements were willful, Plaintiffs are entitled to the costs and
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`attorneys’ fees sought by Plaintiffs, for which no evidentiary hearing is necessary. Id.
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`at 8-10.
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`The Federal Rules of Civil Procedure provide a two-step process for obtaining a
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`default judgement in federal district court. New York v. Green, 420 F.3d 99, 104 (2d
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`Cir. 2005). First, the party seeking a default judgment must obtain a default by bringing
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`to the court’s attention the fact that the party against whom affirmative relief is sought
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`has failed to appear or to otherwise defend against the action, “and Rule 55(a)
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`empowers the clerk of the court to enter a default against a party who has not appeared
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`or defended.” Id. See also Pinaud v. County of Suffolk, 52 F.3d 1139, 1157 n. 11 (2d
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`Cir. 1995) (noting “the ‘entry of a default is largely a formal matter and is in no sense a
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`judgment by default.’” (quoting 6 JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE
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`¶ 55.03[2], at 55-21 (2d ed. 1994))). In the instant case, after filing on June 23, 2010,
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`the Stipulation in which Defendants withdrew their Answer with prejudice and admitted
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`liability with regard to the copyright infringements, Plaintiffs filed on July 6, 2010, their
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`Request for Entry of Default, which was granted on July 23, 2010 (Doc. No. 32). As
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`such, Plaintiffs have completed the first step to obtain a default judgment.
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 10 of 40
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`”Having obtained a default, a plaintiff must next seek a judgment by default
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`under Rule 55(b).” Green, 420 F.3d at 104. Upon entry of default, all the well-pleaded
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`allegations of the complaint are accepted as true. Greyhound Exhibitgroup v. E.L.U.L.
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`Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). The court, however, must still
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`determine whether, based on the complaint’s well-pleaded allegations, the complaint
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`states a claim upon which relief can be granted. Au Bon Pain Corp. v. Artect, Inc., 653
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`F.2d 61, 65 (2d Cir. 1981) (holding “a district court has discretion under Rule 55(b)(2)
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`once a default is determined to require proof of necessary facts and need not agree
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`that the alleged facts constitute a valid cause of action”); see also Garden City Boxing
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`Club, Inc. v. Giambra, 2004 WL 1698633, at * 1 (W.D.N.Y. July 27, 2004) (“Prior to
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`entering default judgment, the court must determine whether the facts alleged in the
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`Complaint are sufficient to state a claim for relief as to each cause of action.”). “When
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`the plaintiff’s claims clearly lack merit, denial of a default judgment is the proper course
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`of action for a court.” MOORE’S FEDERAL PRACTICE § 55.31 (3d ed. 2011). A default
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`judgment entered on the well-pleaded allegations of the complaint establishes a
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`defendant’s liability. Bambu Sales, Inc. v. Ozak Trading Inc., 58 F.3d 849, 854 (2d Cir.
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`1995) (citing Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 69 (2d Cir. 1971), rev’d
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`on other grounds, 409 U.S. 363 (1973)). Upon establishing a defendant’s liability, the
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`only remaining question is whether the plaintiff has provided adequate evidentiary
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`support for the damages sought. Greyhound Exhibitgroup, Inc., 973 F.2d at 158.
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`Fed.R.Civ.P. 55(b) provides that upon application to the court by the party
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`entitled to a default judgment, the court may enter a judgment by default against the
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`defaulting party. Because the damages Plaintiffs seek in the instant case are not a sum
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 11 of 40
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`certain, Rule 55(b)(2) “requires a party seeking judgment by default to apply to the court
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`for entry of a default judgment.” Id. It is within the sound discretion of the District Court
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`whether to enter a default judgment pursuant to Rule 55(b)(2), based on the
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`assessment of the circumstances of the case and an evaluation of the parties’
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`credibility and good faith. Shah v. New York State Department of Civil Service, 168
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`F.3d 610, 615 (2d Cir. 1999) (citing Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d
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`Cir. 1993)).
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`In considering a motion for default judgment, the District Court is guided by the
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`same three factors that apply to a motion to set aside entry of a default judgment.
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`Enron Oil Corp. v. Diakuhara, 10 F.3d at 95. Specifically, the court considers “1)
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`whether the defendant’s default was willful; 2) whether defendant has a meritorious
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`defense to plaintiff’s claims; and 3) the level of prejudice the non-defaulting party would
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`suffer as a result of the denial of the motion for default judgment.” Mason Tenders
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`District Council v. M & M Contracting & Consulting, 193 F.R.D. 112, 114-15 (S.D.N.Y.
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`2000). “[B]ecause defaults are generally disfavored and are reserved for rare
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`occasions, when doubt exists as to whether a default should be granted or vacated, the
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`doubt should be resolved in favor of the defaulting party.” Enron Oil Corp., 10 F.3d at
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`96. Nor is the court bound by the Stipulation as to matters of law. Becker v. Poling
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`Transportation Corporation, 356 F.3d 381, 390 (2d Cir. 2004) (citing Kamen v. Kemper
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`Financial Services, Inc., 500 U.S. 90, 99 (1991)).
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`A plaintiff asserting copyright infringement may be granted a default judgment
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`where the defendant has failed to answer or to move against the Complaint. Broadcast
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`Music, Inc. v. R Bar of Manhattan, Inc., 919 F.Supp. 656, 659 (S.D.N.Y. 1996). Here,
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 12 of 40
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`Defendants have not moved against the Complaint and, by withdrawing their Answer,
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`have failed to answer. Accordingly, Plaintiffs may be granted the default judgment they
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`seek, provided the well-pleaded allegations of the Complaint establish the alleged
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`copyright violations. “[P]erformances, made without a license or authorization from the
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`copyright owners, constitute copyright infringements in the works.” Broadcast Music,
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`Inc., 919 F.Supp. at 659 (citing cases). To prove a copyright infringement claim based
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`on a live performance requires a plaintiff establish “(1) originality and authorship; (2)
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`compliance with the formalities of the Copyright Act; (3) their ownership of the
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`copyrights involved; (4) the defendant’s public performance of the compositions for
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`profit; and (5) the latter’s failure to obtain permission from the plaintiffs or their
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`representatives for such performances.” Shapiro, Bernstein & Co., Inc. v. Club Lorelei,
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`Inc., 1995 WL 129011, at * 2 (W.D.N.Y. Mar. 14, 1995) (citing Bourne Co. v. Hunter
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`Country Club, Inc., 990 F.3d 934, 938 n. 9 (7 Cir.), cert. denied, 510 U.S. 916 (1993)).
`th
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`Further, “[c]opyright infringement is in the nature of a tort, for which all who
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`participate in the infringement are jointly and severally liable.’” Sygma Photo News, Inc.
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`v. High Society Magazine, Inc., 596 F.Supp. 28, 33 (S.D.N.Y. 1984) (quoting Screen
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`Gems-Columbia Music, Inc. v. Metlis and Lebow Corp., 453 F.2d 552, 554 (2d Cir.
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`1972)). Joint and several liability has been imposed on defendants who have promoted
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`or induced the infringing acts of another, despite the absence of the defendant’s actual
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`knowledge of the copyright violation. Id. (citing Gershwin Publishing Corp. v. Columbia
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`Artists Management, Inc., 443 F.2d 1159, 1162 (2d Cir. 1971); and MCA Inc. v. Wilson,
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`425 F.Supp. 443, 456 (S.D.N.Y. 1976), aff’d, 677 F.2d 180 (2d Cir. 1981)). As such, a
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`defendant may be held liable for copyright infringement “if he has the right and ability to
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 13 of 40
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`supervise the infringing activity and also has a direct financial interest in such activities.”
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`Gershwin Publishing Corp., 443 F.2d at 1162.
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`In the instant case, Defendants, in opposing the entry of a default judgment,
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`dispute only the fourth element of Plaintiffs’ case, arguing the Complaint fails to allege
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`that Defendants’ derived any financial benefit from the three copyright infringing
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`performances. Okay Affirmation ¶ 10. Defendants further maintain that the
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`Smokehouse was the venue for a Diabetes Association benefit held in the afternoon of
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`Sunday, August 18, 2008, with all food and beverage receipts generated during said
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`benefit donated to the Diabetes Association, such that Defendants did not derive any
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`profits from the benefit. In further support of their motion, Plaintiffs reference the
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`Complaint in which Plaintiffs allege that because Defendant Smokehouse is a business
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`establishment that provides entertainment, Complaint ¶ 4, and given that Defendants
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`Cregg and Scott Paul are officers and principals of the Smokehouse, Defendants
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`derived financial benefit from the performance of the three musical compositions on
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`May 17 and 18, 2008. Complaint ¶ 5 and attached Schedule “A.” Plaintiffs further rely
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`on the statements made by ASCAP General Licensing Department Manager of
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`Litigation Services Douglas Jones (“Jones”) who, upon reviewing the reports prepared
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`by DeMarco after investigating the Smokehouse performance on May 17-18, 2008,
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`stated that the three copyright infringements for which Plaintiffs seeks to recover
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`damages occurred during the late evening of May 17, 2008, and ended early in the
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`morning of May 18, 2008, well before the Diabetes Association benefit commenced
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`later in the day on May 18 . Plaintiffs’ Reply at 2-3 (citing Jones Declaration ¶¶ 19-21
`th
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`and Exh. C). The court, however, considers only the Complaint’s “well-pleaded
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 14 of 40
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`allegations” in considering whether to enter default judgment. Au Bon Pain Corp., 653
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`F.2d at 65; Garden City Boxing Club, Inc., 2004 WL 1698633, at * 1. Accordingly,
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`because the times the three copyright infringements occurred are not alleged in the
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`Complaint, the court does not consider such facts as established based on Defendants’
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`execution of the Stipulation.
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`Nevertheless, Defendants by “admit[ting] liability as to all allegations contained in
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`the Complaint,” have admitted to the three copyright infringements on May 17 and 18,
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`2008, as well as “at other times prior and subsequent thereto.” Complaint ¶¶ 11-13 and
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`Schedule “A” (alleging Defendants, on May 17 and 18, 2008, infringed the copyrights
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`for the musical compositions Stars on the Water, Tulsa Time, and Route 66, because
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`such performances were unauthorized given that Defendants did not obtain a license
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`for the performance despite numerous contacts by ASCAP informing Defendants of
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`their liability under Copyright Law). Defendants admitted having derived financial
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`benefit from such infringement activity. Complaint ¶ 5 (alleging Defendants derived
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`financial benefit from the alleged copyright infringements). Furthermore, given that
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`Defendants Cregg and Scott Paul admit to being owners and principals of the
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`Smokehouse, with authority to supervise the three copyright infringements, Complaint
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`¶¶ 4-5, all Defendants are jointly and severally liable for the infringing acts. Gershwin
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`Publishing Corp., 443 F.2d at 1162. Defendants’ belated reliance on the Diabetes
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`Association benefit in an attempt to avoid liability in this case strikes the court as an
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`unworthy afterthought.
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`As such, Plaintiffs’ motion should be GRANTED as to the request for entry of a
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`default judgment finding Defendants liable for the three copyright infringements. The
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 15 of 40
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`court thus addresses to what relief Plaintiffs are entitled based on Defendants’
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`infringing activities.
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`3.
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`Copyright Infringement Remedies
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`Plaintiffs seeks as relief in connection with the default judgment statutory (1) a
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`permanent injunction prohibiting Defendants from future infringing performances; (2)
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`statutory damages pursuant to § 504(c)(1) in the amount of $ 10,000 for each of the
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`three copyright infringements, for a total of $ 30,000 in statutory damages; and (3)
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`based on a finding Defendants’ infringement was willful, an award of costs, including
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`attorneys’ fees, incurred in connection with this action. Plaintiffs’ Memorandum at 8-16.
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`In opposition, Defendants maintain that they were only innocent infringers, thus urging
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`the court to award no more than the minimum statutory damages available under
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`§ 504(c)(1), that no permanent injunction is necessary, and that Plaintiffs cannot
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`establish the necessary willfulness to support an award of costs, including attorneys’
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`fees. In further support of their request for relief, Plaintiffs maintain that Defendants, by
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`executing the Stipulation, have admitting their copyright infringement conduct was
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`willful, and the record establishes Defendants are not innocent infringers, Plaintiffs’
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`Reply at 4-6; the issue of willfulness is irrelevant to the award of statutory damages
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`under § 504(c)(1), id. at 6-8; and that the amount of costs, including attorneys’ fees, is
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`justified. Id. at 8-9.
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`A.
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`Permanent Injunction
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`Plaintiffs seek a permanent injunction prohibiting Defendants from further
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 16 of 40
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`infringing performances. Plaintiffs’ Memorandum at 8-9. Defendants maintain no such
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`injunction is necessary because Plaintiffs, who have not suffered irreparable harm as a
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`result of the copyright infringements, have an adequate remedy at law. Okay
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`Affirmation ¶¶ 50. In further support of their request for a permanent injunction,
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`Plaintiffs argue that recent case law from this court supports such request. Plaintiffs’
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`reply at 6.
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`“Pursuant to 17 U.S.C. § 502, a permanent injunction may issue on such terms
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`as the court deems ‘reasonable to prevent or restrain infringement of a copyright.’”
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`Lipton v. Nature Co., 71 F.3d 464, 474 (2d Cir. 1995) (quoting 17 U.S.C. § 502). A
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`permanent injunction has been found “appropriate when infringement by unauthorized
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`public performances has been proven.” Gladys Music v. Bilbat Radio, Inc., 2007 WL
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`3033960, at *2 (W.D.N.Y. Oct. 15, 2007). Permanent injunctions have been granted
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`under circumstances in which tavern owners like Defendants, after refusing to sign a
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`licensing agreement for the performance of copyrighted musical compositions, provided
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`a venue for a musical performance that included musical compositions within the
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`licensing company’s repertoire. See id. (granting permanent injunction against
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`defendant bar owners who permitted copyrighted music to be performed despite
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`knowledge of such copyrights and repeated refusal to sign licensing agreement);and
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`Broadcast Music, Inc. v. Sonny Investment Associates, Inc., 865 F.Supp. 110, 114
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`(W.D.N.Y. 1994) (same). See also Barnaby Musci Corp. v. Catoctin Broadcasting
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`Corp. of New York, 1988 WL 84169, at * 3 (W.D.N.Y. Aug. 10, 1988) (granting
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`permanent injunction against defendant radio station that, after being confronted with
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`copyright infringing conduct, continued to remain unlicensed, establishing the threat of
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 17 of 40
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`continued copyright violations).
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`Nevertheless,
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`According to well-established principles of equity, a plaintiff seeking a permanent
`injunction must satisfy a four-factor test before a court may grant such relief. A
`plaintiff must demonstrate: (1) that is has suffered an irreparable injury; (2) that
`remedies available at law, such as monetary damages, are inadequate to
`compensate for that injury; (3) that, considering the balance of hardships
`between the plaintiff and defendant, a remedy in equity is warranted; and (4) that
`the public interest would not be disserved by a permanent injunction.
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`eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006) (“eBay”) (considering
`whether to award permanent injunction in patent infringement case).
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`The same four factors articulated in eBay, have been applied by the Second Circuit in
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`considering whether to grant a preliminary injunction in a copyright infringement action,
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`with the court stating, in dicta, “nothing in the text or logic of eBay suggests that its rule
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`is limited to patent cases. On the contrary, eBay strongly indicates that the traditional
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`principles of equity it employed are the presumptive standard for injunctions in any
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`context.” Salinger v. Colting, 607 F.3d 68, 77-78 (2d Cir. 2010) (citing cases whether
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`the same four factors were applied by federal courts in considering whether to grant
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`either preliminary or permanent injunctive relief). Significantly, the Second Circuit
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`instructed that an injunction may issue “only if the plaintiff has demonstrated that he is
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`likely to suffer irreparable injury in the absence of an injunction . . .[and] [t]he court must
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`not adopt a categorical or general rule or presume that the plaintiff will suffer irreparable
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`harm.” Salinger, 607 F.3d at 80 (internal quotation marks omitted). Here, the
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`uncontroverted factual allegations of the Complaint to which Defendants have
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`stipulated, along with other evidence in the record, establish that absent a permanent
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`injunction, Plaintiffs will suffer irreparable injury, that cannot be compensate solely by
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`Case 1:09-cv-00872-RJA-LGF Document 44 Filed 04/18/11 Page 18 of 40
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`monetary damages, that a permanent injunction should be preferable to Defendants
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`than being repeatedly subject to litigation for future violations, and that the public
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`interest would not be disserved by enjoining Defendants from future conduct infringing
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`on Plaintiffs’ copyrights.
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`In particular, Defendants have infringed Plaintiffs’ copyrights despite being
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`repeatedly advised, since March 2002, by ASCAP of the need for a licensing
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`agreement to be able to lawfully present live performances of musical compositions
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`within ASCAP’s repertoire, but that despite such notices, Defendants’ permitted the
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`band to perform three musical compositions in violation of the Act, documented by
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`Plaintiffs and undisputed by Defendants, and that since being advised