Viral DRM LLC v. Asghar

Background

Viral DRM LLC brought copyright-related claims against Faisal Asghar, alleging that he downloaded and copied Viral DRM’s copyrighted materials from YouTube and re-uploaded infringing versions to his YouTube channel, 4 Ever Green. Asghar did not respond to the amended complaint. The Clerk entered default, and Viral DRM moved for default judgment.

At the default-judgment hearing, the court questioned whether Viral DRM had standing—the legal authority to bring the claims. The court directed Viral DRM to submit a copy of its license with the copyright holders.

Standing Analysis

The court explained that the Copyright Act allows the legal or beneficial owner of an exclusive copyright right to sue for infringement of that right. The exclusive rights listed in the Act include reproducing, preparing derivative works, distributing, publicly performing, publicly displaying, and making certain audio transmissions of a copyrighted work.

The Ninth Circuit has held that either an assignment or an exclusive license can transfer a copyright interest sufficient to support standing. A nonexclusive license, however, does not transfer copyright ownership and cannot confer standing to sue for infringement.

Viral DRM’s amended complaint alleged that it owned valid copyrights in the works at issue and had registered them. But the attached registration certificate identified Michael Brandon Clement as the registered copyright holder. Clement stated that the works were exclusively licensed to Viral DRM for distribution and syndication, and Viral DRM submitted an “Exclusive Copyright Management Agreement.”

The agreement 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. The agreement also stated that the content creator retained all copyright and ownership rights.

The court concluded that managing and administering content was not one of the exclusive rights listed in the Copyright Act. It also concluded that the agreement’s limited rights to display, store, transmit, and distribute the works did not give Viral DRM the exclusive right to authorize third parties to reproduce, distribute, and display the copyrighted videos. The court distinguished an agreement in a prior related proceeding that gave an agent the exclusive power to authorize those uses.

Order

The court ordered Viral DRM to show cause—that is, to explain in writing—how it had standing to bring the copyright infringement claims, including claims under 17 U.S.C. §§ 512(f), 1202(a), and 1202(b). Viral DRM’s written response was due January 6, 2025. The order did not enter default judgment or finally decide the claims against Asghar.

Viral DRM also sought to file the agreement under seal. The court held that compelling reasons supported sealing portions of the agreement, but not its title or paragraph 1, because those portions were discussed in a publicly filed declaration. The court therefore granted in part and denied in part Viral DRM’s administrative motion to seal. The order disposed of Docket No. 56.