McGraw Hill LLC v. Doe 1

Background

McGraw Hill LLC, Pearson Education, Inc., and Cengage Learning, Inc. are educational publishers. They alleged that Rosa Pineda and Ozodbek Abdulazizov advertised, offered, and sold counterfeit copies of the publishers’ textbooks through online storefronts on eBay and Amazon.

The publishers asserted copyright-infringement claims against the defendants. Cengage and McGraw Hill also asserted trademark claims; Pearson asserted copyright claims only in the motion. The defendants did not appear or participate in discovery. The Clerk issued a certificate of default, and the publishers later filed an amended motion for default judgment against Pineda and Abdulazizov.

Default Judgment Standard

Under Federal Rule of Civil Procedure 55, default judgment is a two-step process: entry of default followed by a judgment. A default admits well-pleaded factual allegations, but the court must still decide whether those allegations establish legal liability. A plaintiff must also prove damages rather than receiving every amount requested automatically.

Liability

The court held that the publishers established copyright liability by showing ownership of valid copyrights, unauthorized copying, and substantial similarity between the publishers’ works and the counterfeit books. The court also found that Cengage and McGraw Hill established trademark liability by showing protected marks and use likely to confuse consumers about the source of the goods.

The court determined that it had personal jurisdiction over both defendants under New York’s law governing business transactions in the state. The publishers alleged that each defendant sold and shipped infringing goods into New York, and the defendants’ defaults admitted those allegations.

Damages

The publishers requested $6,150,000 against Pineda and $610,000 against Abdulazizov. The court considered sales records, estimated lost revenue, the value of the copyrights and marks, the scale of the online sales, the defendants’ willful conduct, their use of multiple accounts and false names, and the need for deterrence.

The court awarded $900,000 against Pineda: $200,000 for each of three trademark claims and $100,000 for one copyright claim. It awarded $93,000 against Abdulazizov: $22,000 for two trademark claims and $7,000 for each of seven copyright claims. The court explained that duplicative recovery for the same injury was not permitted, but that trademark and copyright violations could support separate recovery because they involved different legal injuries.

Permanent Injunction and Post-Judgment Relief

The court granted a permanent injunction barring the defendants from directly or indirectly infringing the publishers’ copyrights and trademarks. The injunction also covered the defendants’ agents and people acting in concert or participating with them who received actual notice.

The court granted the request to dissolve the automatic stay so the judgment could be enforced immediately. It ordered the defendants to deliver all infringing copies of the publishers’ works for destruction. The court also released the $4,000 bond to the publishers’ counsel and retained jurisdiction to enforce the order.

Other Rulings and Disposition

The court granted the request to seal documents containing the defendants’ full financial account numbers. The opinion initially states that the motion was “granted in part and denied in part,” but the conclusion states: “The motion for default judgment is GRANTED.” The court directed the publishers to submit a proposed judgment by July 29, 2022.