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

Background

Moonbug Entertainment Limited and Treasure Studio, Inc. held copyrights connected to the CoComelon franchise, including the JJ character, family and animal characters, videos, and other works. BabyBus operated a competing YouTube channel under the Super JoJo brand, featuring the JoJo character. Moonbug alleged that BabyBus copied protected elements of CoComelon and made false statements in copyright takedown counternotices.

Before trial, the court ruled that JJ was copyrightable because the combination of his physical and conceptual traits was sufficiently distinctive. The court left other protectability and infringement questions for the jury. After a 10-day trial, the jury found BabyBus liable for copyright infringement and for knowingly and materially misrepresenting in a counternotice that its material had been removed or disabled by mistake or misidentification. The jury found infringement involving JJ, the family and animal characters, and 36 of 39 specific copyrighted works. It also found JoJo virtually identical to JJ. The jury awarded Moonbug $4,168,546 in damages and $13,539,568 in BabyBus’s profits for copyright infringement, and $10,000 for the misrepresentation claim. The court had also entered a permanent injunction.

BabyBus filed a renewed motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b) and a motion for a new trial under Rule 59(a).

Judgment as a Matter of Law

A judgment as a matter of law may be entered only when the evidence permits one reasonable conclusion contrary to the verdict. The court must treat substantial evidence as supporting the verdict, draw reasonable inferences for the nonmoving party, and avoid weighing evidence or deciding witness credibility.

Copyright infringement

The court rejected BabyBus’s argument that the evidence was legally insufficient to show infringement. BabyBus did not contest that it had access to the CoComelon works or that there was evidence of factual copying. The trial record included admissions that BabyBus copied portions of six CoComelon videos and evidence that BabyBus employees had viewed JJ while developing JoJo.

The court explained that copyright infringement requires copying protected expression, not merely copying ideas or unprotected features. The jury was instructed to use the extrinsic test, an objective comparison that identifies similarities, filters out unprotected material, and then considers whether the remaining protected elements are substantially similar. The jury also had to apply the intrinsic test, which asks whether an ordinary observer would find the works substantially similar in their overall concept and feel.

The court held that substantial evidence supported the jury’s finding that the JJ character contained protectable selection and arrangement. Selection and arrangement theory can protect a sufficiently numerous and original combination of individually unprotected elements. Evidence described numerous similarities in JJ and JoJo’s physical features, personalities, relationships, maturity, mood, movement, and clothing. The court also found sufficient evidence regarding the family characters, animal characters, videos, and thumbnail images. BabyBus had admitted plagiarizing 15 thumbnails, and the evidence showed similarities in the composition and expression of the thumbnail artwork.

The court noted that BabyBus did not challenge the intrinsic-test finding in its motion. It nevertheless stated that the characters and videos supported the jury’s conclusion under that test as well. The court therefore denied judgment as a matter of law on the copyright claims.

Digital Millennium Copyright Act misrepresentation

The court also rejected BabyBus’s challenge to the misrepresentation verdict. Section 512(f) of the Digital Millennium Copyright Act imposes liability for knowingly and materially misrepresenting in a counternotice that material was removed or disabled by mistake or misidentification. The court found substantial evidence that BabyBus should have known its counternotice was inaccurate because it submitted a counternotice for material that included a video it had conceded was infringing. The court concluded that the jury reasonably could reject the explanation that the error resulted from workload and oversight.

Damages

The court held that substantial evidence supported the copyright damages. Moonbug’s expert presented calculations based on revenue data, including lost profits, BabyBus’s profits, and an alternative calculation based on Super JoJo revenues. The jury’s $17,718,114 award fell within the range supported by the expert’s testimony and was not legally deficient merely because it was lower than the full amount Moonbug requested.

The court also upheld the $10,000 award for the misrepresentation claim. Although Moonbug had requested one dollar, the court concluded that the evidence supported a finding of unquantifiable harm, including audience dilution and the public availability of infringing material. The court stated that nominal damages are not limited to one dollar and that the verdict form and instructions supported treating the award as compensatory.

Motion for a New Trial

BabyBus argued that a new trial was required because of erroneous jury instructions, an irreconcilable verdict, improper testimony, and unsupported damages. A new trial may be granted when the verdict is contrary to the clear weight of the evidence, rests on false evidence, or would result in a miscarriage of justice. The court found none of those circumstances.

The court held that the instructions adequately explained copyrightable and unprotected material, the filtering process required by the extrinsic test, scenes that are standard to a genre, and selection and arrangement. The court was not required to provide an exhaustive list of every unprotected element. It also held that the instruction applying the substantial-similarity standard was correct because the court had determined that JJ was entitled to broad, or “thick,” copyright protection. In any event, the jury separately found JJ and JoJo virtually identical, so any error concerning the level of protection would have been harmless.

The court rejected BabyBus’s argument that the verdict was inconsistent because the jury found infringement of JJ and the family characters but not of the Soccer Song. A character copyright and a video copyright protect different subject matter, and the jury could reasonably find that a character was copied without finding that the entire video was substantially similar.

The court also found no prejudicial error in the challenged testimony concerning CoComelon’s style, BabyBus’s independent-development theory, or the “look and feel” of the works. Finally, the court held that the damages award was supported by substantial evidence and was not improperly speculative.

Disposition

The court DENIES BabyBus’s Renewed Motion for Judgment as a Matter of Law and Motion for New Trial. The order disposes of Docket Nos. 651 and 652.