Judicial Notice of Internet Evidence: “The Court Generally Has the Discretion to Take Judicial Notice of Internet Material” (Good Quote)
Kennedy Stock, LLC v. NLS New York Inc., 2019 U.S. Dist. LEXIS 200811 (S.D.N.Y. Nov. 18, 2019) (Report and Recommendation):
REPORT AND RECOMMENDATION TO THE HON. PAUL G. GARDEPHE
BARBARA MOSES, United States Magistrate Judge.
Plaintiff Kennedy Stock, LLC (Kennedy Stock), a Missouri limited liability company owned and operated by professional photographer Stephen Kennedy, filed this action under the Copyright Act, 17 U.S.C. § 106, et seq., and the Digital Millennium Copyright Act, 17 U.S.C. § 1201, et seq. (DMCA), after defendant NLS New York Inc. (NLS) used six of Kennedy's copyrighted photographs on its website without permission, license, or payment. On January 10, 2019, the Hon. Paul G. Gardephe, United States District Judge, granted plaintiff's motion for entry of a default judgment against NLS and referred the action to me to conduct an inquest into damages. (Dkt. Nos. 27, 28.)
For the reasons that follow, I respectfully recommend that plaintiff be awarded $60,000 in statutory damages under the Copyright Act and $2,918 in attorneys' fees and costs.
A. Factual History
Kennedy Stock has "an exclusive license covering all [*2] rights to photographs created by Stephen Kennedy." Compl. (Dkt. No. 1) ¶ 29. Kennedy Stock, in turn, is the "sole distributor and exclusive licensor" of Kennedy's images, id. ¶ 4, including the six photographs at issue here (the Photographs), which plaintiff made available for licensing on its website at www.kennedystock.com (the Kennedy Stock Website). Id. ¶¶ 13-14 & Ex. 1. Like the other images displayed on the Kennedy Stock Website, the Photographs are professional portraits of unnamed men and women of assorted ages and races. Id. Ex. 1.1 Each Photograph contains a distinctive yellow watermark on the lower right-hand corner, reading "Stephen Kennedy Stock," and bears a copyright notice underneath the image, reading "© Stephen Kennedy. All Rights Reserved." Id. ¶¶ 14, 41 & Ex. 1. Kennedy owns the copyrights in the Photographs and registered them prior to defendant's infringing use. Id. ¶¶ 28, 30-31.
Defendant NLS is a business that provides chauffeur services. Compl. ¶ 7. NLS owns and/or operates the website www.nlsnewyork.com (the NLS Website), through which it markets and conducts its business. Id. ¶ 8. On or before March 20, 2018, NLS copied, published, and displayed the Photographs [*3] on the NLS Website without first requesting or obtaining a license. Id. ¶¶ 16-20 & Ex. 2.2 In displaying the Photographs on the NLS Website, defendant removed or digitally obscured plaintiff's watermark, or cropped the Photographs so as to effectively remove the watermark, thereby "removing critical copyright management information" and "conceal[ing] . . . its unauthorized use of the Photographs." Id. ¶¶ 41-42.
On or about March 20, 2018, Kennedy Stock's counsel sent a cease and desist letter to NLS, demanding that it remove the unauthorized copies of the Photographs from the NLS Website. Compl. ¶ 21. NLS removed the Photographs, but did not further respond to Kennedy Stock's inquiries or cooperate with Kennedy Stock's investigation of the matter, except to "contend that the [NLS] Website is 'under construction.'" Id. ¶ 22.3 This action followed.
B. Procedural History
Kennedy Stock filed suit on June 5, 2018. It alleges in Count I that NLS violated the Copyright Act, 17 U.S.C. § 106, by copying, publishing and displaying the Photographs on the NLS Website, without permission or a license, for commercial purposes. Compl. ¶¶ 27-38. In Count II, plaintiff alleges that NLS violated the DMCA, 17 U.S.C. § 1202(b) [*4] , by stripping Kennedy's watermark and copyright notice to conceal its unauthorized use of the Photographs. Compl. ¶¶ 39-44.
On September 10, 2018, Kennedy Stock served NLS via the New York Secretary of State. See Aff. of Service filed Sept. 24, 2018 (Dkt. No. 11), at 1. NLS did not appear, answer, or otherwise respond. On October 15, 2018, at Kennedy Stock's request (Dkt. No. 14), the Clerk of Court issued a Certificate of Default (Dkt. No. 15), and on November 28, 2018, also at Kennedy Stock's request, Judge Gardephe ordered NLS to show cause "why a Judgment of Default should not be entered in favor of Plaintiff for the relief requested in the Complaint." Order to Show Cause (Dkt. No. 24) at 1. Kennedy Stock promptly served the Order to Show Cause and supporting papers on NLS via the Secretary of State. (Dkt. No. 25.) Despite an adjournment of the show cause hearing from December 20, 2018, to January 10, 2019, (Dkt. No. 26), NLS failed to respond or appear. Judge Gardephe thereupon granted plaintiff's motion and referred the case to me for a damages inquest.
By Order dated January 11, 2019 (Dkt. No. 29), I directed Kennedy Stock to file its Proposed Findings of Fact and Conclusions [*5] of Law no later than February 10, 2019, including all affidavits and documentary evidence necessary to support its proposed damages amount, and to serve its inquest papers on defendant by mail "at its last known address." Id. ¶ 7. Plaintiff submitted its Proposed Findings on February 11, 2019 (Dkt. No. 30), supported by a declaration from its counsel, Nathaniel Kleinman (Dkt. No. 31), and a Certificate of Service (Dkt. No. 32) showing that it served NLS by mail at 2357 East 83d Street, East Elmhurst, New York 11370, which is the address listed for NLS on the website of the New York Department of State, Division of Corporations. Kleinman Decl. Ex. 2. Plaintiff seeks statutory damages under the Copyright Act, 17 U.S.C. § 504(c), in the amount of $900,000, attorneys' fees in the amount of $2,268, and costs in the amount of $650. See Prop. Findings ¶¶ 11, 21; Kleinman Decl. ¶ 17.
Once again, NLS failed to respond.
Since neither party has requested a hearing on the issue of damages, and since defendant did not submit any written materials, I have conducted the inquest based solely upon the materials submitted by plaintiff. See Action S.A. v. Marc Rich & Co., 951 F.2d 504, 508 (2d Cir. 1991) ("affidavits, evidence, and oral presentations by opposing counsel" constitute [*6] a "sufficient basis from which to evaluate the fairness of the . . . sum" without the need for a hearing on damages) (internal citations omitted); De Lage Landen Fin. Servs. v. Universal Wilde, Inc., 2019 U.S. Dist. LEXIS 139323, 2019 WL 4195441, at *3 n.2 (S.D.N.Y. Aug. 15, 2019) (finding that a hearing was not required because plaintiff's sworn declarations were a sufficient basis on which to make a damages calculation).
II. JURISDICTION AND VENUE
I am also satisfied as to personal jurisdiction over the defendant, which is "a necessary prerequisite to entry of a default judgment." Sheldon v. Plot Commerce, 2016 U.S. Dist. LEXIS 116135, 2016 WL 5107072, at *6 (E.D.N.Y. Aug. 26, 2016), report and recommendation adopted, 2016 U.S. Dist. LEXIS 127414, 2016 WL 5107058 (E.D.N.Y. Sept. 19, 2016). The Copyright Act does not contain its own personal jurisdiction or service provision. Thus, I must first "determine whether the defendant is subject to jurisdiction under the law of the forum state — here, New York," and then "consider whether the exercise of personal jurisdiction over the defendant comports with the Due Process Clause of the United States Constitution." Sonera Holding B.V. v. Cukurova Holding A.S., 750 F.3d 221, 224 (2d Cir. 2014). These questions are both easily answered.
NLS is a New York corporation with its principal place of business in Queens, New York. Compl. ¶ 6. The website of the New York Division of Corporations corroborates this allegation. Kleinman Decl. Ex. 2. Because [*7] NLS is incorporated in New York and has its principal place of business in Queens, New York, it is amenable to general personal jurisdiction throughout the state. N.Y. C.P.L.R. § 301; Magdalena v. Lins, 123 A.D.3d 600, 601, 999 N.Y.S.2d 44, 45 (1st Dep't 2014). Similarly, because NLS is "at home" in New York, the exercise of such jurisdiction comports with the requirements of the Due Process Clause. Sonera Holding, 750 F.3d at 225 (quoting Daimler AG v. Bauman, 571 U.S. 117, 134 S. Ct. 746, 760, 187 L. Ed. 2d 624 (2014)) ("the place of incorporation and the principal place of business" are the "paradigm bases" for determining that a corporation is "at home" and therefore "amenable to all-purpose jurisdiction").
"Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied." Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104, 108 S. Ct. 404, 98 L. Ed. 2d 415 (1987). See also 5B Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure, § 1353 (3d ed. 2019) (service of process is "the means by which a federal court gives notice to the defendant and asserts jurisdiction over him"). Where the defendant has defaulted, the plaintiff must establish adequate service in order to obtain a default judgment. See Sheldon, 2016 U.S. Dist. LEXIS 116135, 2016 WL 5107072, at *6 ("failure to adequately prove proper service of court documents . . . bars the entry of a default judgment"); Lliviganay v. Cipriani 110 LLC, 2009 U.S. Dist. LEXIS 37052, 2009 WL 1044606, at *1 (S.D.N.Y. Apr. 14, 2009) (lack of proof of proper [*8] service "is an independent obstacle to a default judgment").
Service may be made on a domestic or foreign corporation by following state law in the state where the district court is located. Fed. R. Civ. P. 4(h)(1)(A), 4(e)(1). New York law permits service on a domestic corporation by personal delivery of the required papers (together with the statutory fee) to the Secretary of State, or any person authorized by the Secretary to receive such service, in Albany, New York. N.Y. C.P.L.R. § 311(a); N.Y. Bus. Corp. L. § 306(b)(1). Service is complete when the Secretary of State is "so served," N.Y. Bus. Corp. L. § 306(b)(1); there is no mailing or other follow-up requirement. Plaintiff's initial Affidavit of Service demonstrates that it complied with § 306(b)(1) on September 10, 2018. The record therefore reflects adequate service of process.
Finally, venue is proper pursuant to 28 U.S.C. § 1400(a), which provides that a copyright action may be brought in "the district in which the defendant or his agent resides or may be found." See also 28 U.S.C § 1391(b)(1) (a civil action may be brought in the district "in which any defendant resides, if all defendants are residents of the State in which the district is located"). "Where the defendant is an entity, it is deemed to reside in a district where it is subject to the court's personal jurisdiction with respect [*9] to the civil action in question." Heritage Lace, Inc. v. Underwraps Costume Corp., 2019 U.S. Dist. LEXIS 139147, 2019 WL 3858585, at *2 (S.D.N.Y. Aug. 16, 2019) (quotations omitted); 28 U.S.C. § 1391(c)(2). Since NLS is subject to personal jurisdiction throughout New York State, it is deemed to reside in this district.
Following a default, the court must accept all well-pleaded factual allegations in the complaint as true, except those relating to damages. Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009); Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). If those well-pleaded allegations establish the defaulting party's liability, the only remaining issue is whether plaintiff has provided adequate support for its requested damages or other relief. Gucci Am., Inc. v. Tyrrell-Miller, 678 F. Supp. 2d 117, 119 (S.D.N.Y. 2008) (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)). "Conversely, if the well-pleaded factual allegations in the complaint fail to state a claim upon which relief can be granted, no damages can be awarded, even if the post-default inquest submissions supply the missing information." Mondragon v. Keff, 2019 U.S. Dist. LEXIS 92704, 2019 WL 2551536, at *4 (S.D.N.Y. May 31, 2019) (collecting cases), report and recommendation adopted, 2019 U.S. Dist. LEXIS 103533, 2019 WL 2544666 (S.D.N.Y. June 20, 2019).
A. The Copyright Act
To establish a violation of the Copyright Act, a plaintiff must demonstrate its ownership of a valid copyright and defendant's infringement — that is, copying — of original elements of the copyrighted work. Arista Records LLC v. Doe 3, 604 F.3d 110, 117 (2d Cir. 2010); Malibu Media, LLC v. Doe, 2015 U.S. Dist. LEXIS 141127, 2015 WL 6116620, at *3 (S.D.N.Y. Oct. 16, 2015). Both requirements are satisfied here. The well-pleaded allegations of plaintiff's Complaint, accepted as true, demonstrate that Kennedy registered [*10] valid copyrights in the Photographs, Compl. ¶¶ 28, 30; that he granted plaintiff Kennedy Stock an "exclusive license covering all rights to photographs created by [him], including the Photographs," id. ¶ 29; and that defendant NLS infringed Kennedy Stock's rights in the Photographs by copying, publishing, and displaying unauthorized copies of them on the NLS Website. Id. ¶ 33.4
B. The DMCA
Kennedy Stock's well-pleaded allegations also establish a DMCA violation. 17 U.S.C. § 1202(b) states:
No person shall, without the authority of the copyright owner or the law
(1) intentionally remove or alter any copyright management information,
(2) distribute . . . copyright management information knowing that the copyright management information has been removed or altered without authority of the copyright owner or the law, or
(3) distribute . . . copies of works . . . knowing that copyright management information has been removed or altered without authority of the copyright owner or the law, knowing, or, with respect to civil remedies under section 1203, having reasonable grounds to know, that it will induce, enable, facilitate, or conceal an infringement of any right under this title.
Copyright management information [*11] (CMI) includes the name of and other identifying information about the author or copyright owner of a work, "the information set forth on a notice of copyright," the "[t]erms and conditions for use of the work," and "links to such information." 17 U.S.C. § 1202(c)(1), (2), (3), (6), (7). Thus, to establish a violation under § 1202(b)(1), a plaintiff must show "(1) the existence of CMI on the [infringed work]; (2) removal and/or alteration of that information; and (3) that the removal and/or alteration was done intentionally." Banxcorp v. Costco Wholesale Corp., 723 F. Supp. 2d 596, 609 (S.D.N.Y. 2010) (collecting cases).5 The plaintiff must also establish that the removal or alteration "was done knowing that it would induce, enable, facilitate, or conceal an infringement." Mango v. BuzzFeed, Inc., 356 F. Supp. 3d 368, 377 (S.D.N.Y. 2019).
Plaintiff alleges that the Photographs were offered for licensing only through the Kennedy Stock Website, where they bore CMI in the form of a watermark on the image itself (as well as a copyright notice just below the image), Compl. ¶¶ 13-14, and that NLS, without authorization, "intentionally removed and/or digitally obscured Plaintiff's watermark from the Photographs prior to publishing them to its Website, thereby removing critical copyright management information." Id. ¶ 41. Moreover, NLS "copied the Photographs directly from [the [*12] Kennedy Stock Website], despite the express copyright notice and license information displayed thereon." Id. ¶ 19. These allegations, taken as true, establish all of the elements of a § 1202(b)(1) violation, including that NLS acted intentionally and that it knew, or had "reasonable grounds to know," that by removing the CMI it would "induce, enable, facilitate, or conceal" its copyright infringement. Cf. Craig v. UMG Recordings, Inc., 380 F. Supp. 3d 324, 338 (S.D.N.Y. 2019), reconsideration denied, 2019 U.S. Dist. LEXIS 113771, 2019 WL 2992043 (S.D.N.Y. July 9, 2019) (plaintiff failed to establish that defendants intentionally removed CMI from copyrighted photographs where the same images "appeared without CMI in a music tour book" prior to defendants' alleged infringement and where there was no evidence that "there was any CMI on the Photographs when Defendants obtained them").
After defendant removed plaintiff's CMI from the Photographs, it displayed the altered images on the NLS Website, thereby violating § 1202(b)(3) as well. See Reilly v. Plot Commerce, 2016 U.S. Dist. LEXIS 152154, 2016 WL 6837895, at *11 (S.D.N.Y. Oct. 31, 2016) (after stripping the CMI, "[defendant] posted the altered image to [its] Website, thereby distributing a work with the knowledge that its CMI was removed in violation of subsection 1202(b)(3)."); cf. Michael Grecco Prods., 2019 U.S. Dist. LEXIS 41738, 2019 WL 1368731, at *3 (conclusory assertion that defendant "intentionally" published images with false CMI failed to establish a violation [*13] of § 1202(b) where there was no allegation that defendant itself altered the CMI and where plaintiff's remaining allegations were consistent with innocent as well as culpable conduct).
As discussed in more detail below, plaintiff seeks enhanced statutory damages for copyright infringement, which are available only if the infringement "was committed willfully." 17 U.S.C. § 504(c)(2). "A copyright holder seeking to prove that a copier's infringement was willful must show that the infringer 'had knowledge that its conduct represented infringement or . . . recklessly disregarded the possibility.'" Bryant v. Media Right Prods., 603 F.3d 135, 143 (2d Cir. 2010) (quoting Twin Peaks Prods., Inc. v. Publications Int'l, Ltd., 996 F.2d 1366, 1382 (2d Cir. 1993)); accord Island Software & Comput. Serv., Inc. v. Microsoft Corp., 413 F.3d 257, 263 (2d Cir. 2005); Reilly, 2016 U.S. Dist. LEXIS 152154, 2016 WL 6837895, at *8.
The Complaint alleges that NLS's violations of the Copyright Act — that is, the copying, publication, and display of the Photographs without a license — were "intentional, knowing, and willful," Compl. ¶ 35. "Through [its] default [NLS] has admitted that allegation." Cengage Learning, Inc. v. Shi, 2015 U.S. Dist. LEXIS 119322, 2015 WL 5167775, at *5 (S.D.N.Y. Sept. 3, 2015). See also Noble v. Crazetees.com, 2015 U.S. Dist. LEXIS 130391, 2015 WL 5697780, at *6 (S.D.N.Y. Sept. 28, 2015) ("Where, as here, the defendant has defaulted, the complaint's allegations of willfulness may be taken as true."); accord CJ Prods. LLC v. Your Store LLC Online LLC, 2012 U.S. Dist. LEXIS 96450, 2012 WL 2856068, at *3 (S.D.N.Y. July 12, 2012), report and recommendation adopted, 2012 U.S. Dist. LEXIS 143336, 2012 WL 4714820 (S.D.N.Y. Oct. 3, 2012); Blue Moon Media Group., Inc. v. Field, 2011 U.S. Dist. LEXIS 108066, 2011 WL 4056068, at *7 (E.D.N.Y. Apr. 11, 2011), report and recommendation adopted, 2011 U.S. Dist. LEXIS 102263, 2011 WL 4056088 (E.D.N.Y. Sept. 12, 2011); Peer Int'l Corp. v. Max Music & Entm't, Inc., 2004 U.S. Dist. LEXIS 12760, 2004 WL 1542253, at *3 (S.D.N.Y. July 9, 2004). Plaintiff's allegation that NLS intentionally removed its CMI from the Photographs before displaying them on its [*14] own website further supports its charge that defendant acted willfully. See Reilly, 2016 U.S. Dist. LEXIS 152154, 2016 WL 6837895, at *9 ("The act of removing plaintiff's CMI from the Photograph before displaying it on [defendant's] Website not only establishes a violation of the DMCA . . . it also demonstrates that defendant knew that its conduct was infringing."). Willfulness has therefore been adequately established.
Although plaintiff's Complaint prays for a variety of relief, both legal and equitable, in its Proposed Findings it asks only for statutory damages for copyright infringement under 17 U.S.C. § 504(c), together with costs and fees under 17 U.S.C. § 505. Prop. Findings at 1, 6; id. ¶¶ 21-22. Plaintiff seeks $900,000 in heightened statutory damages for willful copyright infringement of the Photographs, $2,268 in attorneys' fees, and $650 in costs. Id. at 6; Kleinman Decl. ¶ 17.
A. Statutory Damages Under the Copyright Act
Under the Copyright Act, a plaintiff electing statutory damages is entitled to an award of between $750 and $30,000 per work infringed, "as the court considers just." 17 U.S.C. § 504(c)(1). Where the infringement was "willful," the maximum permissible award per infringed work rises to $150,000. Id. § 504(c)(2).6
The Copyright Act affords the trial court "wide discretion" in setting the [*15] amount of statutory damages, Fitzgerald Publ'g Co. v. Baylor Publ'g Co., 807 F.2d 1110, 1116 (2d Cir. 1986); accord Noble, 2015 U.S. Dist. LEXIS 130391, 2015 WL 5697780, at *7; Arista Records LLC v. Usenet.com, Inc., 2010 U.S. Dist. LEXIS 103022, 2010 WL 3629688, at *4 (S.D.N.Y. Feb. 2, 2010), report and recommendation adopted, 2010 U.S. Dist. LEXIS 96957, 2010 WL 3629587 (S.D.N.Y. Sept. 16, 2010). Moreover, "[c]ase law reflects a wide range of awards where there have been infringing uses of photographs." Myeress v. Elite Travel Grp. USA, 2018 U.S. Dist. LEXIS 193895, 2018 WL 5961424, at *3 (S.D.N.Y. Nov. 14, 2018) (quoting Burch v. Nyarko, 2007 U.S. Dist. LEXIS 55345, 2007 WL 2191615, at *3 (S.D.N.Y. July 31, 2007) (collecting cases)). In this Circuit, courts look to the following factors to determine the appropriate measure of statutory damages for copyright infringement: (i) the expenses saved and profits earned by the infringer; (ii) the revenues lost by the plaintiff; (iii) the value of the copyright; (iv) the deterrent effect on those other than the infringer; (v) the willfulness of the infringer's conduct; (vi) whether the infringer cooperated in providing records to assess the value of the material infringed; and (vii) the likelihood the award will discourage the defendant from repeating its infringement. See Bryant, 603 F.3d at 144; Noble, 2015 U.S. Dist. LEXIS 130391, 2015 WL 5697780, at *6; Usenet.com, 2010 U.S. Dist. LEXIS 103022, 2010 WL 3629688, at *4. "Awards of statutory damages serve two purposes—compensatory and punitive." Fitzgerald Publ'g Co., 807 F.2d at 1117. At the punitive end of the scale, the statutory maximum is typically reserved for "truly egregious conduct such as where a defendant has been adjudged to have willfully infringed, yet continued the same pattern of behavior in contravention of court order." EMI April Music Inc. v. 4MM Games, LLC, 2014 U.S. Dist. LEXIS 11448, 2014 WL 325933, at *5 (S.D.N.Y. Jan. 13, 2014) (quoting Tips Exps., Inc. v. Music Mahal, Inc., 2007 U.S. Dist. LEXIS 22508, 2007 WL 952036, at *5 (E.D.N.Y. Mar. 27, 2007)), report and [*16] recommendation adopted, 2014 U.S. Dist. LEXIS 48184, 2014 WL 1383468 (S.D.N.Y. Apr. 7, 2014).
Kennedy Stock seeks to recover $150,000 for each infringed work, for a total of $900,000, which is the maximum permissible award under the Copyright Act for willful infringement of copyrights in six separate works. Prop. Findings at 6. Although plaintiff's well-pleaded allegations support the conclusion that NLS acted willfully, not all willful conduct constitutes the kind of "truly egregious conduct," EMI April Music, 2014 U.S. Dist. LEXIS 11448, 2014 WL 325933, at *5, that justifies maximum damages. In this case, NLS removed the Photographs from the NLS Website after it received a demand letter from plaintiff's counsel. See Compl. ¶¶ 21-22. Moreover, there is no allegation that NLS is a repeat offender, or that it acted "in contravention of [a] court order." EMI April Music, 2014 U.S. Dist. LEXIS 11448, 2014 WL 325933, at *5. An award of $150,000 per Photograph — or anything close to that figure — would therefore be inappropriate. Compare Sheldon, 2016 U.S. Dist. LEXIS 116135, 2016 WL 5107072, at *17 (awarding maximum statutory damages where, notwithstanding plaintiff's cease-and-desist letter, followed by negotiations between the parties' counsel, defendant continued to display the infringing photograph on its website with false CMI) with Reilly, 2016 U.S. Dist. LEXIS 152154, 2016 WL 6837895, at *9 (awarding $15,000 in statutory damages where the same defendant "removed the Photograph from its website as soon as it received [*17] a demand letter from plaintiff's counsel").
Where the infringement was willful but not "truly egregious," courts in this Circuit frequently award statutory damages "of between three and five times the cost of the licensing fees the defendant would have paid." Broad. Music, Inc. v. Prana Hosp., Inc., 158 F. Supp. 3d 184, 199 (S.D.N.Y. 2016) (collecting cases and awarding "approximately five times the sum of BMI's unpaid licensing fees"). See also Cengage Learning, 2015 U.S. Dist. LEXIS 119322, 2015 WL 5167775, at *4 (quoting Van Der Zee v. Greenidge, 2006 U.S. Dist. LEXIS 400, 2006 WL 44020, at *2 (S.D.N.Y. Jan. 6, 2006)) (the statutory award should bear "some relation to actual damages suffered"). In this case, however, plaintiff has proffered no evidence concerning its licensing fees. Nor has it submitted evidence of the expenses saved or profits earned by NLS, the value of the copyrights, or any other economic factors bearing on actual damages. The Court therefore must base its decision upon a little more than the facts alleged in the Complaint itself: that defendant willfully infringed six copyrighted photographs, for commercial gain, but has no known history of similar violations, and responded to plaintiff's cease and desist letter by taking down the offending images. I conclude that an award of $10,000 per infringed Photograph, for a total of $60,000, adequately serves the purposes of statutory damages, including both compensation [*18] and deterrence.
B. Attorneys' Fees and Costs
The Copyright Act expressly permits an award of "full costs," including "a reasonable attorneys' fee," to the prevailing party. 17 U.S.C. § 505, see also 17 U.S.C. § 1203(b)(4)-(5). Attorneys' fees are generally warranted where the defendant acted willfully. See Hollander Glass Tex., Inc. v. Rosen-Paramount Glass Co., Inc., 291 F. Supp. 3d 554, 560 (S.D.N.Y. 2018); Myeress, 2018 U.S. Dist. LEXIS 193895, 2018 WL 5961424, at *4 (citing Kepner-Tregoe, Inc. v. Vroom, 186 F.3d 283, 289 (2d Cir. 1999)). An award of fees "lies within the sole and rather broad discretion of the Court." Baker v. Urban Outfitters, Inc., 431 F. Supp. 2d 351, 357 (S.D.N.Y. 2006). Given defendant's willful misconduct, together with its failure to offer any defense to plaintiff's claims, I recommend that attorneys' fees and costs be awarded to plaintiff Kennedy Stock.
"The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cty. of Albany, 522 F.3d 182, 186 (2d Cir. 2008) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S. Ct. 1933, 76 L. Ed. 2d 40 (1983)). The burden is on the fee applicant to provide evidence that "the requested hourly rates are the prevailing market rates." Farbotko v. Clinton Cty. of N.Y., 433 F.3d 204, 209 (2d Cir. 2005). A "prevailing market rate" should be "in line with those [rates] prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation." Noble, 2015 U.S. Dist. LEXIS 130391, 2015 WL 5697780, at *9 (quoting Blum v. Stenson, 465 U.S. 886, 896 n.11, 104 S. Ct. 1541, 79 L. Ed. 2d 891 (1984)) (alteration in the original).
Plaintiff requests $2,268 in attorneys' fees. Its request is supported by a declaration from its attorney, [*19] Nathaniel Kleinman, containing a detailed chart concerning the work he and his paralegal, Lesly Ayala, performed in this matter. Kleinman is a 2013 law school graduate and an associate at The McCulloch Law Firm, PLLC. Kleinman Decl. ¶ 19. He has been practicing in the area of copyright and trademark law for nearly five years. Id. His hourly rate for this case is $225. Id. ¶¶ 19-20 & Ex. 4. Kleinman spent 7.2 hours working on this case. Id. Ex. 4. Ayala, whose hourly rate is $90, id. ¶¶ 17-18, also spent 7.2 hours working on this case. Id. Ex. 4. The time expended and rates requested appear reasonable. See, e.g., TufAmerica Inc. v. Diamond, 2016 U.S. Dist. LEXIS 30645, 2016 WL 1029553, at *6 (S.D.N.Y. Mar. 9, 2016) (approving junior associate rates of $375 and $425 in a copyright infringement action); Tiffany & Co. v. Costco Wholesale Corp., 2019 U.S. Dist. LEXIS 2844, 2019 WL 120765, at *10 (S.D.N.Y. Jan. 7, 2019) (approving hourly rates from $315 to $585 for associates depending on experience); Harley v. Nesby, 2012 U.S. Dist. LEXIS 61576, 2012 WL 1537881, at *10 (S.D.N.Y. May 2, 2012) (approving a billing rate of $265 per hour for a mid-level associate with five to six years of experience); see also Craig v. UMG Recordings, Inc., 2019 U.S. Dist. LEXIS 113771, 2019 WL 2992043, at *5 (S.D.N.Y. July 9, 2019) (finding that, in this district, a paralegal's hourly billing rate of $200 is reasonable in a copyright infringement action); TufAmerica, 2016 U.S. Dist. LEXIS 30645, 2016 WL 1029553, at *6 (finding that "in this district . . . the prevailing rate for paralegals is between $100 and $200 per hour").
Kennedy Stock also seeks reimbursement of its out-of-pocket [*20] expenses in the amount of $650, including a $400 filing fee and fees for service of process. Kleinman Decl. ¶ 17 & Ex. 4. These costs are also reasonable, and should be included in the award.
For the reasons set forth above, I respectfully recommend that plaintiff Kennedy Stock be awarded (i) statutory damages under the Copyright Act, 17 U.S.C. § 504(c), in the amount of $60,000; and (ii) attorneys' fees and costs in the amount of $2,918.7
1 For example, the first two Photographs are labeled "[p]ortrait of a woman in tan trenchcoat" and "[a]n outdoor portrait of a man in a blue shirt and leather jacket." Compl. Ex. 1. According to the "Stock Photo Purchase Info" tab on the Kennedy Stock Website, "KennedyStock is a premium stock photography collection of real people ideally suited for commercial testimonials and portrayals." Stephen Kennedy Stock, https://www.kennedystock.com/contact (last visited Nov. 18, 2019). See Michael Grecco Prods. v. Function(X) Inc., 2019 U.S. Dist. LEXIS 41738, 2019 WL 1368731, at *3 (S.D.N.Y. Mar. 11, 2019) (quoting Boarding Sch. Review, LLC v. Delta Career Educ. Corp., 2013 U.S. Dist. LEXIS 48513, 2013 WL 6670584, at *1 n.1 (S.D.N.Y. Mar. 29, 2013)) ("The Court generally has the discretion to take judicial notice of internet material.").
2 On March 20, 2018, plaintiff took screenshots of the pages of the NLS Website displaying plaintiff's Photographs. Compl. Ex. 2. As can be seen from those screenshots, NLS used the Photographs as small "thumbnail" images underneath six testimonials, each attributed to an NLS customer. For example, plaintiff's "woman in tan trenchcoat" was identified on defendant's website as "Lauren Kim," the "Travel Team Supervisor for the New York Liberty." Id. Above the image is a large quote bubble reading (in part): "You guys are amazing. Drivers like Abdul are a credit to your organization and make me very happy that we chose you as our corporate car service. Keep up the good work guys." Id. Plaintiff's "man in a blue shirt and leather jacket" appeared on the NLS Website as "Michael Moretti" of "Blackstone Corp.," who was quoted as saying, in part, "Helpful staff, clean comfortable vehicles. They make all my visits to Manhattan much more pleasant and convenient." Id.
3 As of the date of this Report and Recommendation, the NLS Website continues to display the same six testimonials shown in plaintiff's screenshots, attributed to the same six customers, but without the Photographs or any other images of the purported customers. See NLS, https://nlsnewyork.com (last visited Nov. 18, 2019).
4 An exclusive license covering "all rights" in the Photographs also conveys to the licensee — in this case, Kennedy Stock — the right to bring suit against an alleged infringer of the copyrights. See 17 U.S.C. § 501(b) ("The legal or beneficial owner of an exclusive right under a copyright is entitled . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it."); Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27, 32 (2d Cir. 1982) ("The Copyright Act authorizes only two types of claimants to sue for copyright infringement: (1) owners of copyrights, and (2) persons who have been granted exclusive licenses by owners of copyrights."). Cf. John Wiley & Sons, Inc. v. DRK Photo, 882 F.3d 394, 398-99 (2d Cir.), cert. denied, 139 S. Ct. 237, 202 L. Ed. 2d 129 (2018) (an "assignee of the bare right to sue for infringement," who "neither has, nor has ever had, an exclusive right under copyright in any of [the allegedly infringed] photographs," may not pursue a copyright infringement claim). Because Kennedy Stock has an exclusive license to "all rights" in the Photographs, Compl. ¶ 29, including the rights set out at 17 U.S.C. § 106, it also has the right to sue for infringement of the copyrights in those Photographs.
5 17 U.S.C. § 1202(a) makes it unlawful to knowingly provide or distribute "false copyright management information . . . with the intent to induce, facilitate, or conceal infringement." Since NLS stripped plaintiff's CMI from the Photographs but did not replace it with any false CMI, subsection (a) is not directly relevant here.
6 Statutory damages are also available under the DMCA, see 17 U.S.C. §§ 1203(c)(1)(B), but the range is lower: "At any time before final judgment is entered, a complaining party may elect to recover an award of statutory damages for each violation of section 1202 in the sum of not less than $2,500 or more than $25,000." 17 U.S.C. § 1203 (c)(3)(B). Moreover, courts have been reluctant to allow plaintiffs to recover duplicative damages under both the Copyright Act and the DMCA. See, e.g., Indu Craft, Inc. v. Bank of Baroda, 47 F.3d 490, 497 (2d Cir. 1995) ("A plaintiff seeking compensation for the same injury under different legal theories is of course only entitled to one recovery"); Tu v. Tad Sys. Tech., 2009 U.S. Dist. LEXIS 82410, 2009 WL 2905780, at *5 (E.D.N.Y. Sept. 10, 2009) ("Plaintiffs are not entitled to duplicative statutory damages under the Copyright Act, DMCA, and the Lanham Act"); Adobe Sys. Inc. v. Feather, 895 F. Supp. 2d 297, 303 n.5 (D. Conn. 2012) (awarding statutory damages under the Copyright Act after noting that plaintiffs "do not seek separate damages for their DMCA claim, nor could they"). Consequently, I have not considered whether statutory damages under the DMCA should be awarded either instead of or in addition to statutory damages under the Copyright Act.
7 Kennedy Stock does not request prejudgment interest, which in any event would not be warranted where, as here, the plaintiff requested a statutory award, which can be set at a figure which already compensates that plaintiff for the time that has elapsed since the infringement. Reilly, 2016 U.S. Dist. LEXIS 152154, 2016 WL 6837895, at *12.
Share this article: