Case 4:16-cv-02406 Document 22 Filed in TXSD on 07/13/17 Page 1 of 14
`United States District Court
`Southern District of Texas
`ENTERED
`July 13, 2017
`David J. Bradley, Clerk
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
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`CIVIL ACTION H-16-2406
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`§§
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`§§
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`§
`§
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`§§
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`§
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`MALIBU MEDIA, LLC.,
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`Plaintiff,
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`v.
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`JONATHAN GONZALES,
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`Defendant.
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`MEMORANDUM OPINION & ORDER
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`Pending before the court is plaintiff Malibu Media, LLC’s (d/b/a “X-Art.com”) (“Malibu
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`Media”) amended motion for default judgment. Dkt. 21. Having considered the amended
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`complaint, motion, record evidence, and applicable law, the court is of the opinion that the motion
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`should be GRANTED IN PART AND DENIED IN PART.
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`I. BACKGROUND
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`This case arises under the United States Copyright Act of 1976, as amended, 17 U.S.C. §§
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`101 et. seq. (the “Copyright Act”). Dkt. 10 at 1. Malibu Media brings this copyright infringement
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`action against defendant Jonathan Gonzales. Malibu Media alleges that it owns copyrights to
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`eighteen adult films (the “Copyrighted Works”) and that Gonzales used computer software known
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`as BitTorrent to illegally download, copy, and distribute the films. Dkt. 10 at 4.
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`Malibu Media is a California corporation engaged in the production and distribution of adult
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`erotic films through its website “X-Art.com.” See Dkt. 6-2 (Pelissier Dec.). Customers pay monthly
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`or annual subscription fees to access an online library of copyrighted video content. Id. at 3. Internet
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`subscription sales are Malibu Media’s primary source of revenue. Id. However, Malibu Media
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`claims its content is well-known and ranks as the most downloaded adult content on several popular
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`BitTorrent websites. Id. According to Malibu Media, it must “protect its copyrights in order to
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`survive and . . . hope for future revenue growth.” Id. at 4.
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`A.
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`BitTorrent
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`Malibu Media alleges that the copyright infringement occurred through the use of BitTorrent.
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`Malibu Media alleges that BitTorrent is one of the most common computer programs that allows
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`people to share files over the Internet. Dkt. 10 at 2–3. BitTorrent, a peer-to-peer file sharing system,
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`is primarily used for distributing large amounts of data, including digital movie files. Id. at 3.
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`Malibu Media claims that BitTorrent’s defining feature is that it allows files to be transferred among
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`multiple computers simultaneously without creating a heavy load on any individual source computer.
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`Id.
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`Malibu Media explains that in order to distribute a large file, the BitTorrent protocol breaks
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`a file into smaller pieces and assigns each piece a “hash,” a unique alphanumeric identifier, similar
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`to an electronic fingerprint. Id. Every digital file has one hash value correlating to it. Id. The
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`BitTorrent protocol uses the hash values to ensure each piece is properly routed among BitTorrent
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`users as they engage in file sharing. Id. The entire digital media file also has a hash value that acts
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`as a digital fingerprint to identify the media file or movie. Id. When a software user completes
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`downloading all the pieces of a digital media file, the BitTorrent software uses the file hash to
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`determine that the file is complete and accurate. Id. Once a BitTorrent file has been created, other
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`BitTorrent users may access and download the file. Id.
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`B.
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`Alleged Copyright Infringement
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`Malibu Media hired investigators, IPP International UG and Excipio GmbH (“IPP”), to
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`identify individuals who use BitTorrent to illegally download and distribute content. Id. IPP uses
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`software to detect the Internet Protocol (“IP”) addresses of BitTorrent users that distribute Malibu
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`Media’s Copyrighted Works within the BitTorrent File Distribution Network. See Dkt. 6-4 at 2
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`(Fieser Dec.). Infringement of Malibu Media’s copyrights can occur through the distribution of a
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`single movie file correlating to a copyrighted Malibu Media movie, or a large scale distribution of
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`“Unauthorized Packs.” Id. IPP claims it established a direct Transmission Control Protocol/Internet
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`Protocol (“TCP/IP”) connection with the assigned IP address of 98.195.133.204, belonging to
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`Gonzales. Dkt. 10 at 3; Dkt. 1-1. IPP claims it downloaded a full copy of each file hash from the
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`BitTorrent File Distribution Network and confirmed that the file hash matched files containing
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`Malibu Media’s Copyrighted Works. Dkt. 10 at 4. IPP claims its investigation revealed that
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`Gonzales had used BitTorrent to download, copy, and distribute the Copyrighted Works without
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`authorization. Dkt. 10 at 4.
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`C.
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`Procedural History
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`On August 9, 2016, Malibu Media filed a complaint against an unnamed individual who
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`allegedly used BitTorrent to copy and distribute the Copyrighted Works without Malibu Media’s
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`consent, thereby infringing its copyright. Dkt. 1. The original complaint alleged that the defendant
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`John Doe, a subscriber with an IP address of 98.195.133.204, infringed on Malibu Media’s registered
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`copyrights using BitTorrent. Dkt. 1. After filing the complaint, Malibu Media moved for leave to
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`serve a third-party subpeona on John Doe’s Internet Service Provider, commanding it to provide the
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`subscriber’s name and contact information. Dkt. 8. The court granted the motion, after which
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`Malibu Media filed an amended complaint naming Gonzales as the infringer. Dkt. 10. Malibu
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`Media then moved for entry of default judgment (Dkt. 17), but the court granted an order striking
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`the motion for failing to comply with filing requirements. Dkt. 20. The original motion for default
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`judgment failed to serve Gonzales by certified mail with a return receipt. Id. On January 24, 2017,
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`Malibu Media properly served Gonzales with certified mail and a return receipt. Dkt. 21-1. On
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`January 26, 2017, Malibu Media filed an amended motion for default judgment against Gonzales.
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`Dkt. 21. Malibu Media’s attorney provides a sworn declaration stating that Gonzales is not a minor,
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`incompetent, or in active military service. Dkt. 19.
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`II. LEGAL STANDARD
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`Under Federal Rule of Civil Procedure 55(a), “[w]hen a party against whom judgment for
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`affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by
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`affidavit or otherwise, the clerk must enter the party’s default.” Fed. R. Civ. P. 55(a). Under Rule
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`55(b)(2), a party may apply for the court to enter a default judgment, and the “court may conduct
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`hearings or make referrals—preserving any federal statutory right to a jury trial—when, to enter or
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`effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount of damages;
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`(C) establish the truth of any allegation by evidence; or (D) investigate any other matter.” Fed. R.
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`Civ. P. 55(b)(2). Rule 4 of the Federal Rules of Civil Procedure requires the plaintiff to serve a copy
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`of the summons and complaint on the defendant. Fed. R. Civ. P. 4(c)(1). Under Local Rule 5.5, a
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`motion for default judgment must be served upon the defendant via certified mail, return receipt
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`requested. S.D. Tex. L.R. 5.5.
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`A default judgment is a “drastic remedy, not favored by the Federal Rules[,] and resorted to
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`by courts only in extreme situations.” Sun Bank of Ocala v. Pelican Homestead & Sav. Ass’n,
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`874 F.2d 274, 276 (5th Cir. 1989). “The Federal Rules of Civil Procedure[s] are designed for the
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`just, speedy, and inexpensive disposition of cases on their merits, not for the termination of litigation
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`by procedural maneuver.” Id.
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`Gonzales has failed to plead or otherwise defend against this lawsuit. Malibu Media properly
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`served Gonzales with this lawsuit under the Federal Rules and with the amended motion for default
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`judgment under the Local Rules. Dkt. 11; Dkt. 21; see Tex. L.R. 5.5. Given Gonzales’ failure to
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`answer the complaint in a timely manner, the court: (1) has the authority to enter default against
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`Gonzales, (2) accept all well-pleaded facts in Malibu Media’s complaint as true, and (3) award the
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`relief sought by Malibu Media in this action. See Nishimatsu Constr. Co. v. Hous. Nat’l Bank, 515
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`F.2d 1200, 1206 (5th Cir. 1975).
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`III. ANALYSIS
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`To receive a default judgment, a plaintiff must state a plausible claim for relief. Id. Malibu
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`Media argues that Gonzales committed direct copyright infringement. Copyright infringement
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`requires two elements to be proven: (1) ownership of a valid copyright, and (2) copying of
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`constituent elements of the work that are original. Feist Publications, Inc. v. Rural Tel. Serv. Co.,
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`499 U.S. 340, 361, 111 S. Ct. 1282(1991).
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`A.
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`Ownership of a Valid Copyright
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`First, Malibu Media alleges that it is the registered owner of the eighteen Copyrighted Works
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`listed in Exhibit B. Dkt. 10-2. Exhibit B provides an overview of the Copyrighted Works, including
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`a hit date, date of first publication, registration date, and registration number issued by the United
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`States Copyright Office. Dkt. 10 at 4; Dkt. 10-2. However, the court observes that Malibu Media
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`lists three of the registration numbers as “pending” Dkt. 10-2.
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`Section 411 of the Copyright Act governs registration and civil infringement actions of
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`copyrights. 17 U.S.C. § 411 (2012). A copyright claim cannot be instituted until preregistration or
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`registration of the copyright claim has been made. 17 U.S.C. § 411(a) (2012). The Supreme Court
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`has “declined to address whether Section 411(a)’s registration requirement is a mandatory
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`precondition to suit that . . . district courts may or should enforce sua sponte by dismissing copyright
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`infringement claims involving unregistered works.” Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154,
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`130 S.Ct. 1237, 1240 (2010). However, in the Fifth Circuit, a copyright infringement claim may be
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`dismissed if a plaintiff does not comply with Section 411(a)’s registration requirement. Real Estate
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`Innovations, Inc. v. Hous. Ass’n of Realtors, Inc., 422 F. App’x 344, 348 (5th Cir. 2011).
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`A plaintiff does not need a certificate of registration from the Copyright Office before
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`bringing a suit and the Office does not need to consider the application for registration. Starr v.
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`DaimlerChrysler Corp., 252 F. App’x 590, 590 (5th Cir. 2007); see Positive Black Talk, 394 F.3d
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`at 365. The Fifth Circuit “requires only that the Copyright Office actually receive the application,
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`deposit, and fee before a plaintiff files an infringement action” to comply with Section 411(a).
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`Positive Black Talk, Inc. v. Cash Money Records, Inc., 394 F.3d 357, 365 (5th Cir. 2004); see also
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`Apple Barrel Prods., Inc. v. Beard, 730 F.2d 384, 386 (5th Cir. 1984) (holding that plaintiff must
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`only “prove payment of the required fee, deposit of the work in question, and receipt by the
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`Copyright Office of a registration application” to state a claim for copyright infringement.).
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`Here, Malibu Media does not allege that it complied with Section 411(a)’s registration
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`requirement, or even the Fifth Circuit’s interpretation of the requirement. Malibu Media has not
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`claimed it was in the process of sending an application to the Copyright Office or that it was
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`intending to do so. Instead, Malibu Media merely claimed to be the owner of all eighteen
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`Copyrighted Works and provided three as “pending” in lieu of providing copyright registration
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`numbers. Dkt. 10-2. The three works, listed as the first, second, and seventh works respectively,
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`all have a registration date asserted in Exhibit B. Id. However, Malibu Media has failed to include
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`any factual basis for asserting its copyright ownership for these audiovisual works, such as proof of
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`the required Copyright Office fee, deposit, or receipt by the Copyright Office of a registration
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`application. See e.g., Apple Barrel Prods., 730 F.2d at 386; see also Breadmore v. Jacobson, No.
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`4:13-cv-361, 2014 WL 3543726, at *5–6 (S.D. Tex. July 14, 2014) (Harmon, J.) (holding that the
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`plaintiff’s copyright claim failed for lack of compliance with the Fifth Circuit’s registration
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`requirement); Atl. Recording Corp. v. Anderson, No. H-06-3578, 2008 WL 2316551, at *6 (S.D.
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`Tex. Mar. 12, 2008) (Gilmore, J.) (holding that copies of registration certificates are prima facie
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`evidence of copyright ownership).
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`Therefore, the court finds that Malibu Media has failed to allege copyright ownership over
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`these three works. However, the court finds that Malibu Media has demonstrated ownership of a
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`valid copyright of the fifteen Copyrighted Works which have a registration number.
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`B.
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`Direct Copyright Infringement
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` Second, Malibu Media alleges that Gonzales infringed on its copyrights. The second
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`element of a copyright infringement claim requires proof of unauthorized copying of the original
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`work. Peel & Co. v. The Rug Market, 238 F.3d 391, 395 (5th Cir. 2001). “Copyright infringement
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`actions . . . ordinarily require no showing of intent to infringe. Instead, knowledge and intent are
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`relevant in regard to damages.” Chavez v. Arte Publico Press, 204 F.3d 601, 607 (5th Cir. 2000).
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`Malibu Media claims that Gonzales used the BitTorrent protocol to illegally “download,
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`reproduce, distribute, perform[,] and display” Malibu Media’s copyrighted audiovisual works.
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`Dkt. 18 at 3. Malibu Media alleges that its investigators established a direct TCP/IP connection with
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`Gonzales’ IP address and downloaded one or more pieces of the digital media files identified by the
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`file hashes in Exhibit A. Id. Each file hash listed in Exhibit A correlates to a copyrighted film in
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`Exhibit B. Id. Each digital media file listed in Exhibit A was allegedly verified to be a copy
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`identical or similar to Malibu Media’s corresponding original work. Id. Malibu Media claims that
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`Gonzales copied and distributed the original works listed in Exhibit B without Malibu Media’s
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`authorization, thereby violating Malibu Media’s exclusive copyrights. Id.
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`Downloading and distributing audiovisual works without authorization through peer-to-peer
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`networks such as BitTorrent is a “distribution” prohibited by the Copyright Act. See Atl. Recording
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`Corp., 2008 WL 2316551, at *8 (holding that making copyrighted works available for download
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`through a peer-to-peer network constituted a violation). Using an online file-sharing system
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`contemplates “further distribution” and therefore satisfies the second element of a copyright
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`infringement claim. Id. Malibu Media argued that Gonzales’ unauthorized use of BitTorrent
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`violated the Copyright Act. Dkt. 18 at 3–4. Furthermore, Gonzales’ IP address was documented
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`distributing multiple pieces of a Malibu Media copyrighted movie. See Dkt. 6-4 at 3 (Fieser Dec.).
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`Because Malibu Media pled enough facts, when taken as true, to support the allegation of
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`unauthorized copying and distribution of its original work, the court finds that Malibu Media has
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`satisfied the second element of copyright infringement.
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`C.
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`Default Judgment
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`Although a default judgment is a “drastic remedy, not favored by the Federal Rules[,] and
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`resorted to by courts only in extreme situations,” Gonzales failed to respond to Malibu Media’s
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`complaint. Sun Bank of Ocala, 874 F.2d at 276. The court finds that Malibu Media made a
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`sufficient showing with respect to the two elements of copyright infringement for fifteen of the
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`Works. The court therefore GRANTS IN PART Malibu Media’s motion and enters default
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`judgment against Gonzales for fifteen of the Copyrighted Works and DENIES IN PART Malibu
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`Media’s motion for default judgment for the three copyright-pending works.
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`IV. DAMAGES
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`In its complaint, Malibu Media requests that the court issue an injunction against Gonzales,
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`and requests relief in the form of statutory damages, costs, attorney’s fees, and pre- and post-
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`judgment interest. Dkt. 10 at 6. The court will address each of these requests for relief in turn.
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`A.
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`Injunctive Relief
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`Malibu Media requests the court to enter an injunction against Gonzales as proposed in its
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`complaint. Id. Specifically, Malibu Media seeks an order enjoining Gonzales and all other persons
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`who are in active concert or participation with Gonzales from continuing to infringe on Malibu
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`Media’s copyrighted works. Id. Further, Malibu Media seeks a court order that Gonzales delete and
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`permanently remove all infringing copies of Malibu Media’s works on Gonzales’ computer. Id.
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`Under section 502(a), a court may grant a permanent injunction on terms it finds reasonable
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`to prevent or restrain copyright infringement. 17 U.S.C. § 502(a). For a permanent injunction, a
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`party must demonstrate: (1) actual success on the merits; (2) no adequate remedy at law; (3) that the
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`threatened injury outweighs any damage to the defendant; and (4) that the injunction will not
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`disserve the public interest. See DSC Comms. Corp. v. DGI Tech., Inc., 81 F.3d 597, 600 (5th Cir.
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`1996).
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`In the present case, Malibu Media has succeeded on the merits against Gonzales. Malibu
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`Media also has no adequate remedy at law because Malibu Media’s injury cannot be fully
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`compensated or measured in a dollar amount because the extent of distribution cannot be measured.
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`Atl. Recording Corp., 2008 WL 2316551, at *10. Without enjoining Gonzales from further
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`infringing on Malibu Media’s copyrighted content, Malibu Media would remain vulnerable to
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`continued infringement. The injunction does not burden Gonzales, as he is merely required to
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`comply with the law, and the public interest is served by upholding Malibu Media’s copyright
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`protections.
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`The court finds that Malibu Media has shown it is entitled to injunctive relief based on
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`Gonzales’ alleged violation of federal copyright law. Generally, an injunction must be narrowly
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`tailored to remedy only the specific harms shown by Malibu Media, rather than to enjoin all possible
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`breaches of the law. Fed. R. Civ. P. 65(d); see Daniels Health Sciences, L.L.C. v. Vascular Health
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`Sciences, L.L.C., 710 F.3d 579, 587 (5th Cir. 2013). The court has reviewed the injunction Malibu
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`Media proposed and finds that it is not over-broad and merely enjoins Gonzales from engaging in
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`further offending conduct. The court GRANTS Malibu Media’s request for an injunction.
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`B.
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`Statutory Damages
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`Malibu Media is seeking statutory damages as outlined in 17 U.S.C. § 504. A copyright
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`owner may elect to recover statutory damages for all infringements “with respect to any one
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`work . . . in a sum of not less than $750 or more than $30,000 as the court considers just.” 17 U.S.C.
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`§ 504(c)(1). A finding of willful infringement may “increase the award of statutory damages to a
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`sum or not more than $150,000.” 17 U.S.C. § 504(c)(2).
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`Malibu Media requests an award of $13,500 in statutory damages ($750 per work). Dkt. 18
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`at 9. Malibu Media argues that the requested amount is reasonable because Gonzales aided other
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`BitTorrent users by distributing the copyrighted material. Id. The actual damages due to lost
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`subscriptions relates to the thousands of infringers that have access to the copyrighted material. Id.
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`Although Malibu Media discusses willful infringement and possible recovery of $150,000,
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`Malibu Media ultimately only requests statutory damages of $13,500. The court finds that Malibu
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`Media’s request of $750 per work is reasonable. However, the court is only granting default on
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`fifteen of the Works. Therefore, the court GRANTS IN PART Malibu Media’s request for statutory
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`damages in the amount of $11,250 ($750 per work) for the fifteen Copyrighted Works.
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`C.
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`Attorney’s Fees and Costs
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`In any civil action under this title, the court in its discretion may allow the recovery of full
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`costs and award reasonable attorneys’ fees to the prevailing party. 17 U.S.C. § 505 (2012). To
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`collect costs, parties must maintain their own record of taxable costs and an application for costs
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`shall be made by filing a bill of costs within 14 days of the entry of a final judgment. S.D. Tex.
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`L.R. 54.2.
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`Courts use a two-step process to calculate reasonable attorney’s fees. Migis v. Pearle Vision,
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`Inc., 135 F.3d 1041, 1047 (5th Cir. 1998). First, the court calculates a “lodestar” fee by multiplying
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`the reasonable number of hours spent on the case by the reasonable hourly rates for the participating
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`lawyers. Id. Second, the court considers whether the lodestar should be adjusted upward or
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`downward depending on the circumstances of the case, under the twelve Johnson factors. Id. (citing
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`Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717–19 (5th Cir. 1974)).
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`The movant seeking attorneys’ fees bears the initial burden of submitting adequate
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`documentation of the hours expended and the hourly rates. Hensley v. Eckerhart, 461 U.S. 424, 437,
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`103 S. Ct. 1933 (1983). Plaintiffs seeking attorneys’ fees are charged with the burden of showing
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`the reasonableness of the hours billed, and therefore, are also charged with proving that the attorneys
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`exercised billing judgment. Saizan v. Delta Concrete Prods. Co., Inc., 448 F.3d 795, 799 (5th Cir.
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`2006). Billing judgment requires documentation of the hours charged and the hours written off as
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`unproductive, excessive, or redundant. Id.
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`17 U.S.C. § 505 allows the court to award costs and reasonable attorneys fees to the
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`prevailing party, Malibu Media. Malibu Media has submitted adequate documentation of the hours
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`its attorney and attorney support staff have spent pursuing this claim. Dkt. 19. The invoice lists
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`Malibu Media’s attorney as spending 1.9 hours on this claim at a rate of $300.00 per hour. Id.
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`Additionally, the invoice indicates that a paralegal working on behalf of Malibu Media has spent 7.2
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`hours on this claim at a rate of $85.00 per hour. Id. The total amount of attorney’s fees that Malibu
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`Media requests is $1,182.00. Id. The court finds this request to be reasonable and GRANTS Malibu
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`Media attorney’s fees in the amount of $1,182.00. Additionally, the court GRANTS Malibu Media
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`costs of court in accordance with S.D. Tex. L.R. 54.2.
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`D.
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`Interest on the Judgment
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`Interest is allowed on any money judgment in a civil case recovered in a district court.
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`28 U.S.C. § 1961 (2000). Malibu Media is entitled to post-judgment interest, but the Copyright Act
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`does not specifically authorize an award of pre-judgment interest. Granville v. Suckafree Records,
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`Inc., No. H-03-3002, 2006 WL 2520909, at *5 (S.D. Tex. June 28, 2006) (Werlein, J.). The Fifth
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`Circuit has not addressed the issue, but precedent of this court is that pre-judgment interest is not
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`available on an award comprised entirely of statutory damages under 17 U.S.C. § 504(c). Granville,
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`2006 WL 2520909 at *6; see also Blackmer v. Monarch Holdings (USA), Inc., No. H-00-4290, 2002
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`WL 32361935, at *5 (S.D. Tex. July 11, 2002) (Hittner, J.) (concluding that a plaintiff could not
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`recover pre-judgment interest on his recovery of statutory damages under the Copyright Act).
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`Malibu Media is entitled to recover damages against Gonzales as detailed above, plus
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`post-judgment interest at the rate of 1.22% per annum in accordance with 28 U.S.C. § 1961(a).
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`There shall be no award of pre-judgment interest.
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`V. CONCLUSION
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`For the foregoing reasons, the court GRANTS IN PART Malibu Media’s motion for default
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`judgment with respect to the fifteen Copyrighted Works and DENIES IN PART Malibu Media’s
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`motion for default with respect to the three copyright-pending works. The court GRANTS IN PART
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`the request for damages.
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`It is ORDERED that judgment by default be entered in favor of plaintiff Malibu Media
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`against defendant Jonathan Gonzalez as follows:
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`1. Statutory damages in the amount of $11,250
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`2. Post-judgment interest at the rate of 1.22% per annum from entry of judgment until the
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`judgment is paid in full;
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`3. Attorneys’ fees and costs in the amount of $1,182; and
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`4. All costs of court as provided by law.
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`The court also ENJOINS the defendant as follows:
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`1. Defendant Johathan Gonzalez is enjoined from directly, contributorily or indirectly
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`infringing Plaintiff’s rights under federal or state law in the Works, including, without limitation,
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`by using the internet, BitTorrent or any other online media distribution system to reproduce (e.g.,
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`download) or distribute the Works, or to make the Works available for distribution to the public,
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`except pursuant to a lawful license or with the express authority or Plaintiff; and
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`2. Defendant Jonathan Gonzalez is ordered to destroy all copies of Plaintiff’s works that the
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`Defendant Jonathan Gonzales has downloaded onto any computer hard drive or server without
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`Plaintiff’s authorization, and shall destroy all copies of the Works transferred onto any physical
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`medium or device in Defendant Jonathan Gonzales’s possession, custody, or control.
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`Signed at Houston, Texas on July 13, 2017.
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`___________________________________
` Gray H. Miller
` United States District Judge
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`14
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`