Viral DRM LLC v. Asghar

Background

Viral DRM LLC alleged that Faisal Asghar downloaded and copied its copyrighted materials from YouTube and re-uploaded infringing versions to his YouTube channel, 4 Ever Green. After Asghar failed to respond to the amended complaint, the clerk entered default. Viral DRM then moved for default judgment.

At the hearing, the court questioned whether Viral DRM had standing—the legal right to bring the claims. The court ordered Viral DRM to provide its licensing agreement and later required it to explain why it had standing. The copyright registrations identified Michael Brandon Clement, rather than Viral DRM, as the copyright owner. Clement stated that he was a principal and owner of Viral DRM and that the works were exclusively licensed to Viral DRM. The agreements, however, gave Viral DRM exclusive agency and management rights while the content creators retained their copyright ownership.

Claims under Sections 501(b), 1201, and 1202

Section 501(b) of the Copyright Act permits the legal or beneficial owner of an exclusive copyright right to sue for infringement of that right. The court explained that an assignment or exclusive license can transfer a copyright interest sufficient to support standing, while a nonexclusive license cannot.

The court concluded that Viral DRM’s agreements did not give it the exclusive right to authorize third parties to reproduce, distribute, and display the copyrighted videos. Giving Viral DRM enforcement rights was not the same as giving it an exclusive copyright right under Section 106. Viral DRM therefore lacked standing to pursue its Section 501(b) infringement claim.

Viral DRM’s Sections 1201 and 1202 claims concerned removal and falsification of watermarks identifying the works as property of Live Storms Media. The court found that Viral DRM had not shown it was entitled to pursue claims concerning Live Storms Media’s watermark. The agreements submitted by Viral DRM did not mention Live Storms Media, and the record did not clearly establish the relationships among Live Storms Media, Viral DRM, the videographers, and the works. Viral DRM therefore failed to demonstrate standing for these claims as well.

Section 512(f) claim

The court found that Viral DRM had standing to pursue its claim under Section 512(f), which addresses material misrepresentations in copyright-related counternotices. Viral DRM provided licensing agreements, showed that Michael Clement submitted the takedown notices on its behalf, and submitted copies of the counternotifications.

The court then granted default judgment on this claim. It found that the allegations were adequately pleaded, the supporting evidence was reliable, Asghar was properly served, and he never appeared. Viral DRM sought $7,500 but did not justify that amount. The court found no evidence that Viral DRM suffered actual harm because of the counternotifications: YouTube had already removed the videos, and the record did not show that YouTube restored them after receiving the counternotifications.

The court also found that Clement’s description of employee time concerned preparing the takedown notices, not responding to the counternotifications. Because Viral DRM did not show harm caused by the alleged misrepresentations, the court awarded nominal damages of $1 for each of three false counternotifications, for a total of $3, plus post-judgment interest at the federal rate. The opinion states that Viral DRM waived any claim for prejudgment interest, attorney fees, and costs.

Disposition

The court granted default judgment on Viral DRM’s Section 512(f) claim and awarded $3 in nominal damages plus post-judgment interest. It denied Viral DRM’s motion for default judgment on the Sections 501(b), 1201, and 1202 claims and dismissed those claims without leave to amend for lack of standing. The court also denied leave to amend those claims after considering Viral DRM’s previous amendment and repeated opportunities to clarify its claims and supporting evidence. A separate judgment was to follow.