Arista Records, Inc. v. Beker Enterprises, Inc.

• Decision Date: 19 December 2003
• Docket Number: No. 03-14158.,03-14158.
• Citation: 298 F.Supp.2d 1310
• Court: U.S. District Court — Southern District of Florida
• Parties: ARISTA RECORDS, INC., a corporation; BMG Music, a general partnership; Interscope Records, a general partnership; Sony Music Entertainment Inc., a corporation; UMG Recordings, Inc., a corporation; Virgin Records America, Inc., a corporation; and Zomba Recording Corporation, a corporation, Plaintiffs, v. BEKER ENTERPRISES, INC., a Florida corporation, d/b/a Central Food Mart/Becker—BP Gas; and Zakieh S. Becker, an individual, Defendants.

298 F.Supp.2d 1310

ARISTA RECORDS, INC., a corporation; BMG Music, a general partnership; Interscope Records, a general partnership; Sony Music Entertainment Inc., a corporation; UMG Recordings, Inc., a corporation; Virgin Records America, Inc., a corporation; and Zomba Recording Corporation, a corporation, Plaintiffs, v. BEKER ENTERPRISES, INC., a Florida corporation, d/b/a Central Food Mart/Becker—BP Gas; and Zakieh S. Becker, an individual, Defendants.

No. 03-14158.

United States District Court, S.D. Florida.

December 19, 2003.

Broad and Cassel, Karen L. Stetson, P.A., Miami, FL, Matthew J. Oppenheim, Linda J. Zirkelbach, Recording Industry, Association of America, Washington, DC, for Plaintiffs.

Beker Enterprises, Inc., Zakieh S. Becker, Avon Park, FL, for Defendants.

ORDER GRANTING FINAL DEFAULT JUDGMENT AND ENTERING PERMANENT INJUNCTION AGAINST DEFENDANTS

COHN, District Judge.

THIS CAUSE came before the Court on Plaintiffs' Motion for Final Default Judgment Against Defendants and accompanying Memorandum of Law [DE # 11]. The Court has reviewed the pleadings, accompanying affidavits, and entire file in this case, and has conducted oral argument on the legal and evidentiary issues relating to this Order, and is otherwise duly advised on the premises.

I. FACTUAL BACKGROUND

1. Plaintiffs own the copyrights to some of the most popular sound recordings in the music industry.

2. Defendants, the owners of a convenience store, have been selling obviously illegitimate CDs in their store.

3. Plaintiffs' investigator purchased ten (10) infringing CDs as samples (which included 54 of Plaintiffs' copyrighted recordings). The infringing product offered by Defendants appeared illegal on its face, failing to bear the usual and customary markings of legitimate CDs that any reasonable consumer would recognize. The unauthorized CDs contained some of the most popular music by recording artists.

4. Plaintiffs sent three separate demand letters to Defendants' store in an effort to address the illegal activity. When Defendants failed to respond to any of these letters, Plaintiffs filed the instant action alleging that Defendants infringed 54 of their copyrights.¹ Defendants continued to ignore the seriousness of Plaintiffs' claims and failed to appear in this action. On July 10, 2003, the Clerk of this Court entered a default against Defendants.

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW

A. Defendants are liable for Copyright Infringement

5. Defendants have infringed Plaintiffs' copyrights in their sound recordings. See Sony Music Entertainment, Inc. v. Global Arts Prod., 45 F.Supp.2d 1345, 1347 (S.D.Fla.1999) (in copyright infringement case, default establishes liability); Ortiz-Gonzalez v. Fonovisa, 277 F.3d 59, 62-63 (1st Cir.2002) ("A defaulting party is taken to have conceded the truth of the factual allegations in the complaint as establishing the grounds for liability as to which damages will be calculated") (internal quotations and citations omitted). Defendants are liable to Plaintiffs for copyright infringement as they have offered for sale and distributed unauthorized, and therefore illegal, pirated and/or counterfeit copies of Plaintiffs' Copyrighted Recordings on Defendants' premises. See Walt Disney v. Video 47, 972 F.Supp. 595, 601 (S.D.Fla.1996) (defendants infringed movie companies' copyrights in certain motion pictures because they held counterfeit copies of the movies out for rent to the public); Nintendo of Am. v. Ketchum, 830 F.Supp. 1443, 1444 (M.D.Fla.1993) (defendants held liable for copyright infringement for selling counterfeit video cartridges); Dive N' Surf v. Anselowitz, 834 F.Supp. 379, 382 (M.D.Fla.1993) (sale of counterfeit products by defendants constituted infringing activities and thus copyright plaintiffs proved each element of copyright infringement).

B. Plaintiffs are entitled to statutory damages per infringed work

6. Plaintiffs may elect statutory damages per infringed work instead of seeking either actual damages or disgorgement of profits by Defendants. This jurisdiction has awarded statutory damages pursuant to 17 U.S.C. § 504(c) for each individual work that was infringed. Nintendo of Am. v. Ketchum, 830 F.Supp. 1443, 1445 (M.D.Fla.1993) (awarding statutory damages for each video game infringed as to which Nintendo owned copyrights). Accord United Feature Syndicate, Inc. v. Sunrise Mold Co., Inc., 569 F.Supp. 1475, 1481 (S.D.Fla. 1983) (plaintiff permitted recovery of statutory damages for each separate copyrightable cartoon character that was illegally duplicated).

7. Statutory damages may be assessed in the range of $750 to $30,000 per infringement in the Court's discretion or, upon a finding of willfulness, statutory damages may be assessed up to $150,000 per infringement. 17 U.S.C. Section 504(c). "The statutory rule, formulated after long experience, not merely compels restitution of profit and reparation for injury but is also designed to discourage wrongful conduct." F.W. Woolworth Co. v. Contemporary Arts, 344 U.S. 228, 233, 73 S.Ct. 222, 97 L.Ed. 276 (1952).²

C. Defendants' infringement was willful

8. The Court finds that Defendants willfully infringed Plaintiffs' copyrights. Plaintiffs' investigator purchased the pirated and/or counterfeit recordings of the Copyrighted Recordings listed on Exhibit "A" to Plaintiffs' Complaint as examples of the pirate and/or counterfeit recordings being offered for sale to the public. Willful infringement has been described as when the infringer acted with "actual knowledge or reckless disregard for whether its conduct infringed upon the plaintiff's copyright." Original Appalachian Artworks, Inc. v. J.F. Reichert, Inc., 658 F.Supp. 458, 464 (E.D.Pa.1987).

9. It was evident by the following that the CDs offered for sale by Defendants were unauthorized copies:

(a) Most of the CDs at issue read "Buy the Jewel Case, get the CD for Free" and "For Promotional Use Only." These are not statements that would accompany an authorized CD intended by the copyright owner to be sold.

(b) All the CDs purchased bore handmade adhesive identification labels instead of the professionally printed labels on a genuine CD and the CDs were encased in brightly colored jewel cases approximately one-half the width of the standard jewel cases used by the record companies. The very look of the packaging is an immediate "red flag" that the CDs were not legitimate.

(c) The CDs purchased by the investigator did not have the standard packaging, including any art work (such as photographs of the featured artists), nor insert cards (including credits and lyrics) and did not contain copyright notices, all of which any reasonable consumer would expect to accompany a lawful CD.

(d) All the CDs purchased by the investigator were CD-Rs (compact disc recordables). A CD-R is a compact disc coated with special dyes that facilitate the recording of digital data directly upon the disc. CD-Rs are the "blank" discs that one can purchase in office supply stores, drugstores and discount stores to "burn" a copy of an album, or tracks of an album, from another source. CD-Rs are not used by any of the major record companies and are often used by counterfeiters.

(e) All of the CDs were offered for sale at an average price of $7.00, which is well below the average retail price. The sales price alone, as with many counterfeit goods, is good evidence that the Defendants knew they were selling illegal goods.

10. In addition, Plaintiffs repeatedly contacted Defendants regarding their infringing conduct and Defendants ignored Plaintiffs' communications. Defendants had ample opportunity to proclaim their innocence or agree to cease and desist the infringing conduct, but refused to do so. Plaintiffs' first two cease and desist letters to Defendants' store dated December 13, 2002 and January 10, 2003 went unanswered. Finally, a third and final Intent to Sue letter was hand-delivered on March 7, 2003. Defendants ignored this letter as well. Defendants also failed to attend the December 17, 2003 hearing before this Court on Plaintiff's Motion for Final Judgment Against Defendants, in violation of this Court's December 9, 2003 Order setting such hearing.³

11. Moreover, this Court may infer that Defendants willfully infringed Plaintiffs' copyrights because of Defendants' default. Microsoft Corp. v. Wen, 2001 WL 1456654, *4-5, 2001 U.S. Dist. LEXIS 18777, *14-17 (N.D.Cal.2001) (default alone established willfulness based on allegations of willfulness in plaintiff's complaint); Sony Music Entertainment v. Cassette Production, 1996 WL 673158 *3 (D.N.J.1996) (defendant admitted plaintiff's claim that infringements were willful by virtue of his default); see also Fallaci v. The New Gazette Literary Corp., 568 F.Supp. 1172, 1173 (S.D.N.Y.1983) (inference of willfulness drawn by "defendant's failure to appear and defend this action," particularly in light of plaintiff's allegation of willfulness); Original Appalachian v. Yuil Int'l Corp., 1987 WL 123986, 5 U.S.P.Q.2d (BNA) 1516, 1524 (S.D.N.Y. 1987) ("willfulness may be inferred from a defendant's failure to appear and defend in an action such as this").

12. Although Plaintiffs will never know the true extent of Defendants' profits since they have been effectively deprived of discovery on this issue by Defendants' default, whatever profits Defendants derived from the infringing activity were derived without incurring the costs associated with producing the recordings. Defendants selected the best, most popular or marketable of Plaintiffs' recordings and did not pay royalties or fees to the record company owners, the recording artists, songwriters, musicians, or producers. Defendants did not make the large expenditures necessary to discover artists and record and market a "hit" record or bear the risk of the many recordings which fail and lose money. See generally Tape Industries Association of America v. Younger, 316 F.Supp. 340,...