Moonbug Entertainment Limited v. Babybus Network Technology Co., Ltd

Nature of the order

The court issued proposed final jury instructions in advance of the charging conference scheduled for July 21, 2023, and ordered them on July 20, 2023. This document sets out the legal standards and trial procedures the jury was to follow; it does not report a verdict or final judgment on the claims.

Copyright instructions

The court instructed the jury on the exclusive rights provided by copyright law, including reproduction, adaptation, distribution, public performance, and public display. For each disputed work, the plaintiffs had to prove that they owned a valid copyright and that the defendants copied original expression. The court had already determined that the plaintiffs owned valid copyrights in the 42 CoComelon works at issue.

The instructions explained that copying has two parts: factual copying, meaning that a defendant used the plaintiff’s work as a source rather than creating the work independently, and unlawful appropriation, meaning copying protected expression. The defendants did not dispute that they had access to the plaintiffs’ copyrighted works. The plaintiffs could prove factual copying directly or through access plus substantial similarities. Any copying also had to be more than a minimal or fragmentary amount.

The court instructed the jury to separate protected expression from unprotected material, such as ideas, public-domain material, actual events, and standard or common features of a genre. A selection and arrangement of unprotected elements could nevertheless receive protection if the selection and arrangement were sufficiently original. The court also stated that JJ, the main character in the CoComelon works, was sufficiently distinctive to receive copyright protection.

To determine unlawful appropriation, the jury was instructed to apply both an objective comparison, called the extrinsic test, and a subjective “total concept and feel” comparison, called the intrinsic test. Under the extrinsic test, the jury would identify similarities, filter out similarities based on unprotected elements, and then decide whether the remaining protected elements were sufficiently similar under the standard the court would select after trial. If the plaintiffs failed that test, the verdict would be for the defendants on that work. If the plaintiffs satisfied both tests, the verdict would be for the plaintiffs on that work.

Digital Millennium Copyright Act misrepresentation claim

The instructions also addressed a claim under section 512(f) of the Digital Millennium Copyright Act. That law concerns statements made in a response to an online copyright takedown notice. The plaintiffs had to prove that the defendants knowingly and materially misrepresented in a counter-notification that their material did not infringe the plaintiffs’ copyrights, and that the misrepresentation affected the online platform’s response to the takedown notice.

The instructions explained that a defendant could have acted knowingly if the defendant actually knew of the infringement, should have known through reasonable care or diligence, or would have had no substantial doubt while acting in good faith. They also included the qualification that a defendant’s subjective good-faith belief that it was not making a misrepresentation could matter. If the plaintiffs proved a knowing and material misrepresentation, the verdict would be for the plaintiffs; otherwise, it would be for the defendants.

Damages and defenses

The court instructed the jury on actual damages, defendants’ profits, statutory damages, willful infringement, and mitigation. Actual damages had to be proved by a preponderance of the evidence and could include the plaintiffs’ lost profits caused by infringement. Defendants’ profits could be awarded only when the plaintiffs showed a causal relationship between infringement and the defendants’ gross revenue; the defendants could reduce that amount by proving attributable expenses or other causes.

Statutory damages were generally available from $750 to $30,000 for each infringed work. The jury could award as little as $200 per work for innocent infringement and as much as $150,000 per work for willful infringement. The court instructed that the defendants had conceded willful infringement of seven CoComelon works by six videos, while the jury was to decide whether infringement of the remaining works was willful. The defendants also had the burden of proving the plaintiffs failed to make reasonable efforts to reduce their actual damages and the amount that could have been avoided.

For the misrepresentation claim, damages could include costs and attorneys’ fees incurred because YouTube relied on the alleged misrepresentations, such as costs and time spent on the takedown process.

General jury procedures

The remaining instructions covered the burden of proof, what constitutes evidence, witness credibility, direct and circumstantial evidence, electronic exhibits, unanimous deliberations, communications with the court, and restrictions on outside research, media, internet use, and communications about the case. The jury was told to decide the case only on the evidence received at trial and the law provided by the court.

Judge Chen’s order therefore established the standards and procedures for the upcoming jury proceedings, but the opinion does not state the jury’s eventual verdict or the final outcome of the claims.