Viral DRM LLC v. Navez

Background

Viral DRM LLC sued Judith Liduvina Alfaro Navez for allegedly downloading and copying Viral DRM’s copyrighted materials from YouTube and re-uploading infringing versions to the YouTube channel Huguitoo. After Navez failed to respond to the amended complaint, the clerk entered default. Viral DRM then moved for default judgment.

At the hearing on that motion, the court questioned whether Viral DRM had standing—the legal right to bring the copyright claims. The court directed Viral DRM to provide its license agreement with the copyright holders.

Standing issue

The Copyright Act allows the legal or beneficial owner of an exclusive copyright right to sue for infringement of that right. The opinion explains that an assignment or exclusive license can transfer a copyright right, while a nonexclusive license cannot confer standing. The relevant exclusive rights include reproducing, preparing derivative works, distributing, publicly performing, publicly displaying, and authorizing others to do those things.

The copyright registration attached to Viral DRM’s amended complaint identified Michael Brandon Clement as the registrant, rather than Viral DRM. Clement’s declaration stated that his works were exclusively licensed to Viral DRM under written agreements that gave Viral DRM the rights needed to sue for the alleged infringements.

The agreement submitted to the court gave Viral DRM “exclusive agency rights” to manage and administer the content, search for infringements, register copyrights, authorize attorneys to negotiate settlements, issue takedown notices, file claims, and display, store, transmit, and distribute the works as needed to fulfill the agreement. Clement otherwise retained the copyright and ownership rights.

The court compared the agreement with an agreement discussed in Ninth Circuit precedent that gave an agent the exclusive power to authorize third parties to reproduce, distribute, and display the copyrighted works. The court concluded that managing and administering content are not themselves among the exclusive rights listed in the Copyright Act. It also concluded that rights to enforce the copyright and to display, store, transmit, and distribute the works as needed under the agreement were not the same as an exclusive right to authorize third parties to reproduce, distribute, and display the videos.

Order

The court ordered Viral DRM to show cause—meaning to provide a written explanation—as to how it had standing to bring the copyright infringement claims, including claims under 17 U.S.C. §§ 512(f) and 1202(a) and (b). Viral DRM was ordered to file its written response by January 6, 2025. The order did not decide the pending motion for default judgment or finally resolve Viral DRM’s standing.

Viral DRM’s administrative motion to seal was GRANTED IN PART and DENIED IN PART. The court found compelling reasons to seal portions of the agreement, but not the agreement’s title or paragraph 1, which were discussed in the publicly filed declaration. The order disposed of Docket No. 51.