Viral DRM LLC v. Lepetyuk

Background

Viral DRM LLC sued Yaroslav Lepetyuk for copyright infringement, alleging that she downloaded and copied Viral DRM’s copyrighted materials from YouTube and re-uploaded infringing versions to her YouTube channel, Open Your Eyes. The opinion states that the action is one of several related copyright-infringement cases.

Lepetyuk initially appeared and answered the complaint, but later stopped responding to court orders and refused to participate. The court struck her answer and entered her default. Viral DRM then filed a motion for default judgment.

At the hearing on that motion, the court questioned whether Viral DRM had standing—the legal right to bring the claims. The copyright registrations attached to the complaint identified Jonathan Petramala, Michael Brandon Clement, and, for one work, both Petramala and Clement as the registered copyright holders. Viral DRM alleged that it was the exclusive licensee and submitted a declaration stating that the works were exclusively licensed to it under written agreements that gave it the necessary enforcement rights.

Standing analysis

The court explained that a copyright infringement plaintiff generally must be the legal or beneficial owner of an exclusive copyright right. The Copyright Act lists exclusive rights including reproduction, preparation of derivative works, distribution, public performance, public display, and certain audio transmissions. Under Ninth Circuit precedent discussed in the order, an assignment or exclusive license can transfer a copyright right, while a nonexclusive license cannot confer standing.

Viral DRM submitted an “Exclusive Copyright Management Agreement” between itself and Jonathan Petramala. The court noted, however, that the registrations for the works at issue also identified Michael Brandon Clement, or Clement and Petramala jointly. The submitted agreement therefore did not match all the registered copyright holders. Because Viral DRM had filed an agreement with Clement in related actions and the agreements were otherwise identical, the court considered that agreement for purposes of this order but required Viral DRM to file the correct license or licenses for this action.

The court concluded that the agreement’s grant of an “exclusive agency right to manage and administer” content did not itself match one of the exclusive rights listed in the Copyright Act. The provisions allowing Viral DRM to display, store, transmit, and distribute works as needed to fulfill the agreement also did not establish exclusive ownership rights. The court distinguished a right to enforce a copyright from the exclusive right to authorize third parties to reproduce, distribute, and display the copyrighted videos. It found that the agreement did not give Viral DRM that exclusive authorization right.

The court also questioned Viral DRM’s standing to bring its claims under 17 U.S.C. §§ 512(f), 1202(a), and 1202(b), which have their own limits on who may sue.

Orders

The court ordered Viral DRM to show cause regarding its standing to bring the copyright claims and required a written response by January 6, 2025. It separately ordered Viral DRM to file the correct licensing agreement or agreements within seven days of the order.

The court’s administrative motion to seal was GRANTED IN PART and DENIED IN PART. The court stated that compelling reasons supported sealing portions of the agreement, but not the agreement’s title or paragraph 1, which was discussed in a publicly filed declaration. The order disposed of the sealing motion, Docket No. 41. This order did not rule on Viral DRM’s pending motion for default judgment.