Michael Grecco Productions, Inc. v. Enthusiast Gaming, Inc.

Background

Michael Grecco Productions, Inc. said it owned the copyright in a promotional photograph of Nana Visitor portraying Kira Nerys, a fictional character from “Star Trek: Deep Space Nine.” The photograph was registered with the Copyright Office. The plaintiff alleged that Enthusiast Gaming, Inc., doing business as Destructoid, published the photograph on its website on October 15, 2017, without authorization or a license, as part of an article. The plaintiff also alleged that the photograph remained on the website until earlier in 2020.

The complaint asserted two claims: direct copyright infringement and vicarious or contributory copyright infringement. The plaintiff sought an injunction, statutory damages, attorneys’ fees, and costs. Enthusiast Gaming did not appear, answer, or otherwise defend the action, and the Clerk entered default.

Service and Jurisdiction

The court had previously denied the plaintiff’s first motion for default judgment without prejudice because the plaintiff had not shown compliance with California’s requirements for substitute service. In the renewed motion, the plaintiff submitted a declaration from Joseph Buchanan, the person who served the defendant. The declaration stated that the summons and complaint were left with a person authorized to accept mail and deliveries at the defendant’s office and were then mailed with sufficient prepaid postage. It also stated that the summons contained the notice required for substitute service on a corporation.

The court concluded that the plaintiff cured the earlier service deficiencies. It found subject-matter jurisdiction because the action arose under the federal Copyright Act. It also found general personal jurisdiction because the plaintiff alleged that the defendant’s principal and only official place of business was in San Francisco, California.

Default Judgment Analysis

Under Federal Rule of Civil Procedure 55, a court may enter default judgment after the Clerk enters default. The court considered the factors commonly used to decide whether default judgment is appropriate, including prejudice, the merits and sufficiency of the claims, the amount at stake, the possibility of factual disputes, whether the failure to appear was excusable, and the policy favoring decisions on the merits.

The court addressed only the direct copyright-infringement claim because the plaintiff’s motion did not address the vicarious or contributory infringement claim. For the direct claim, the court found that the plaintiff adequately alleged ownership of a valid copyright and that the defendant violated the plaintiff’s exclusive rights by copying and publicly displaying the photograph without authorization. Six factors favored default judgment, while the policy favoring decisions on the merits weighed slightly against it. The court concluded that the six factors outweighed that policy.

Relief Awarded and Denied

The court denied the request for a permanent injunction because the plaintiff had not shown a continuing threat of future infringement. The defendant had removed the photograph from its website, and the plaintiff had not alleged that the defendant had copied or had the means to copy other copyrighted works belonging to the plaintiff.

The court found that the alleged infringement was willful because the defendant’s own terms of use instructed users not to use other people’s work and present it as their own, yet the defendant used the photograph without authorization. The plaintiff stated that a license for the photograph would have cost at least $12,500. The court awarded $62,500 in statutory damages, representing five times that licensing amount, and concluded that the award was reasonably related to the plaintiff’s actual damages and would provide deterrence.

The court denied the request for $15,500 in attorneys’ fees without prejudice because counsel did not provide billing records showing how much time was spent on each task. The court granted the request for $1,032.23 in costs. The plaintiff could file a renewed motion for attorneys’ fees with the requested information within 30 days. The award also included post-judgment interest at the rate specified by federal law.

Disposition

Judge Lucy Koh granted the motion for default judgment on the direct copyright-infringement claim, denied default judgment on the vicarious or contributory infringement claim, denied a permanent injunction, awarded $62,500 in statutory damages and $1,032.23 in costs, and denied the attorneys’ fee request without prejudice.