Verch v. Blockchain Technologies Corporation

Background

Marco Verch, described in the opinion as a professional photographer based in Germany, licenses photographs to online and print media for a fee. He photographed an image of a golden bitcoin and the South Korean flag and registered that photograph with the United States Copyright Office. The copyright became effective on March 13, 2018.

Blockchain Technologies Corporation, described as a New York corporation with its principal place of business in New York City, published an article on its website and Twitter page on July 24, 2018. The article featured Verch’s photograph, and the photograph was also featured on the company’s website. Verch alleged that Blockchain Technologies did not obtain a license to use it.

Procedural history and jurisdiction

Verch filed the complaint in the Southern District of New York on March 28, 2020, alleging copyright infringement. Blockchain Technologies was served on April 3, 2020, but did not answer. On August 12, 2020, the Clerk entered a Certificate of Default. Verch then moved for a default judgment under Federal Rule of Civil Procedure 55(b)(2).

The court held that it had subject-matter jurisdiction because the claim arose under the Copyright Act and personal jurisdiction because the complaint alleged that Blockchain Technologies was a New York corporation that transacted business in New York.

Liability

For purposes of the motion, the court accepted the complaint’s factual allegations as true. It concluded that those allegations were sufficient to establish copyright infringement. The court relied on the two required elements identified in the opinion: ownership of a valid copyright and copying of original elements of the work. Verch attached an image of the photograph and an image showing its use on the defendant’s website, and the court stated that the images were identical.

Statutory damages

Verch requested $30,000 in statutory damages under 17 U.S.C. § 504(c)(1). The statute permits statutory damages of between $750 and $30,000, in an amount the court considers just. The court considered six factors: the alleged infringer’s state of mind; expenses saved and profits earned; revenue lost by the copyright owner; deterrence; the alleged infringer’s cooperation in providing evidence about the material’s value; and the parties’ conduct and attitude.

The court found that Verch had not provided evidence showing that the infringement was willful. He also provided no evidence or calculation of his losses or the defendant’s unlawful gains. His statement that he sought damages to deter willful infringers did not establish that the defendant was a serial infringer or continued infringing after receiving repeated notices. The court also did not treat the defendant’s default as sufficient evidence of non-cooperation, and found that the final factor did not favor either party.

Because the case involved a single use of the copyrighted work and the record lacked evidence of actual losses or willfulness, the court concluded that $2,000 was appropriate. It noted that the analysis occurred without full, adversarial briefing and that a different result could occur in a case where both sides presented their positions.

Attorney’s fees and costs

Verch also requested $1,275 in attorney’s fees and $440 in costs. The court found the fee request warranted. Counsel submitted billing records showing three hours of work at $425 per hour, including drafting the complaint, preparing the default-judgment motion, and related activities. The court found the total fee of $1,275 reasonable. It also granted $440 in costs, consisting of a $400 filing fee and a $40 personal-service fee.

Disposition

The court granted default judgment against Blockchain Technologies Corporation in the amount of $2,000. It also granted Verch’s request for $1,275 in attorney’s fees and $440 in costs. The Clerk was directed to enter judgment, close the motion, and close the case.