Viral DRM LLC v. Navez

Background

Viral DRM LLC alleged that Judith Liduvina Alfaro Navez downloaded and copied Viral DRM’s copyrighted materials from YouTube and re-uploaded infringing versions to her 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, the court questioned whether Viral DRM had standing, meaning a sufficient legal interest to bring the claims. The court ordered Viral DRM to provide its license with the copyright holders and later ordered it to explain why it had standing. Viral DRM submitted agreements and declarations, including an agreement with Michael Brandon Clement and a declaration from Reed Timmer.

Claims dismissed for lack of standing

For the copyright-infringement claim under 17 U.S.C. § 501(b), the court explained that a plaintiff generally must own or hold an exclusive license to one of the copyright rights listed in § 106. The court found that Viral DRM’s agreement gave it exclusive agency rights to manage and administer content, search for infringement, register copyrights, authorize attorneys, send takedown notices, and file claims. But the agreement did not give Viral DRM the exclusive right to authorize third parties to reproduce, distribute, or display the copyrighted videos. Because the agreement did not transfer an exclusive § 106 right, the court held that Viral DRM lacked standing for the § 501(b) claim.

The court also held that Viral DRM had not shown standing for its claims under 17 U.S.C. §§ 1201 and 1202 concerning removal or falsification of copyright-management information, including Live Storms Media’s watermark. The court noted that the agreements in the record did not mention Live Storms Media and that the relationships among Live Storms Media, Viral DRM, the videographers, and the works were unclear. The court therefore dismissed the § 501(b), § 1201, and § 1202 claims without leave to amend. It also denied Viral DRM’s motion for default judgment on those claims.

Section 512(f) claim and default judgment

The court found that Viral DRM had standing to pursue its claim under 17 U.S.C. § 512(f), which addresses material misrepresentations in a copyright-related counternotification. The court relied on evidence of licensing agreements involving Viral DRM and Clement, the fact that Clement submitted the takedown notice as the identified copyright owner, and copies of the counternotification.

The court concluded that default judgment was appropriate on the § 512(f) claim. It found that the amended complaint adequately alleged the claim, Viral DRM submitted supporting evidence, Navez was properly served and never appeared, and Navez’s failure to respond meant that a decision based on a contested factual record was not possible.

The court rejected Viral DRM’s request for $2,500 because Viral DRM had not shown that it suffered harm caused by the counternotification. YouTube had taken down the video after the original takedown notice, and the record did not show that YouTube restored it after receiving the counternotification. The court also found that the stated employee time involved preparing takedown notices rather than responding to the allegedly false counternotification. The court awarded $1 in nominal damages and post-judgment interest at the federal rate.

Disposition

Default judgment was granted on Viral DRM’s § 512(f) claim, with an award of $1 in nominal damages plus post-judgment interest. The motion for default judgment on the § 501(b), § 1201, and § 1202 claims was denied, and those claims were dismissed without leave to amend for lack of standing. The court separately denied leave to amend those claims and stated that a separate judgment would follow.