Bus. Casual Holdings v. TV-Novosti
| Docket Number | 21-CV-2007 (JGK) (RWL) |
| Decision Date | 08 February 2023 |
| Parties | BUSINESS CASUAL HOLDINGS, LLC, a Delaware limited liability company, Plaintiff, v. TV-NOVOSTI, a Russian autonomous non-profit organization, Defendant. |
| Court | U.S. District Court — Southern District of New York |
REPORT AND RECOMMENDATION TO HON. JOHN G. KOELTL DAMAGES INQUEST
This is a copyright case in which Plaintiff Business Casual Holdings LLC (“Plaintiff” or “Business Casual”) seeks damages and other relief against Defendant TV-Novosti (“Defendant” or “TV-Novosti”) for copying Business Casual's documentary video content, incorporating it into TV-Novosti's own documentary video content, replacing Business Casual's copyright management information with that of TV-Novosti, and submitting false notices to YouTube to obtain reinstatement of its infringing videos. Business Casual alleges that TV-Novosti has willfully violated the United States Copyright Act, 17 U.S.C. § 501 (the “Copyright Act”) and the Digital Millennium Copyright Act, 17 U.S.C. § 1202 (the “DMCA”). The Court previously entered a default against TV-Novosti, and the matter is now before me for an inquest on damages and other relief. Business Casual seeks (1) $75,000 in statutory damages pursuant to the DMCA; (2) attorney's fees in the amount of $137,215.64; (3) pre-judgment and post-judgment interest; and (4) the opportunity to take third-party damages discovery, along with leave to amend the judgment based on competent proof of actual damages for copyright infringement. For the reasons set forth below, I recommend that the Court award most of the relief requested.
Facts[1]
Business Casual, a Delaware limited liability company, creates original documentary content that it posts to its YouTube channel. (Dkt. 52, “TAC” ¶¶ 18-19.) Two of its documentary videos are the subject of this lawsuit: “How Rockefeller Built His Trillion Dollar Oil Empire” (the “Rockefeller Video”) and “J.P. Morgan Documentary: How One Man Financed America” (the “J.P. Morgan Video”) (together, the “Documentary Videos”). Business Casual first published the Rockefeller Video on YouTube on June 8, 2018, and the J.P. Morgan Video on June 25, 2020. (TAC ¶¶ 36-37.) Business Casual obtained federal copyright registrations for both Documentary Videos on March 8, 2021. (TAC ¶¶ 51-52 and Exs. F, G.)
Business Casual's Documentary Videos employ a number of processes to create original work. Although Business Casual often starts with public domain images, it transforms them by making a variety of modifications, such as restoring them using “digital paintbrushes.” (TAC ¶ 41.) In another process, known as “parallax,” Business Casual turns two-dimensional photographs into animated three-dimensional models. (TAC ¶ 38.) Business Casual often combines several different public domain images, from different eras, to create entirely new and original works. (TAC ¶ 42.) Both Documentary Videos contained a watermark identifying Business Casual as the author of the work. (See TAC ¶¶ 3, 58, 68, 70.)
TV-Novosti is a Russian autonomous non-profit organization. (TAC ¶ 20.) It operates Russia Today TV as well as the YouTube channel RT Arabic along with 38 associated YouTube channels. (TAC ¶ 21; see ¶¶ 2 (), 62 (email response to Business Casual from a copyright producer at Russia Today TV).) TV-Novosti's Editor-in-Chief has referred to its media outlets as “an information weapon” to be used against the United States. (TAC ¶ 113.)
During January, February, and March 2021, Business Casual became aware of three videos appearing on TV-Novosti's RT Arabic YouTube channel that copied portions of the Documentary Videos (the “Infringing Videos”). (TAC ¶¶ 57, 67, 69.) The first and third Infringing Video copied the exact same segments of Business Casual's J.P. Morgan Video. (TAC ¶¶ 57, 69, 176.) The second Infringing Video copied portions of Business Casual's Rockefeller Video. (TAC ¶ 67.)
In each of the Infringing Videos, TV-Novosti removed Business Casual's watermark from the copied portions and replaced it with TV-Novosti's own “RT” watermark. (TAC ¶¶ 58, 68, 70.) TV-Novosti also made other modifications to avoid detection of its copying. For example, before uploading its first and third Infringing Video to YouTube, TV-Novosti deliberately removed color saturation to circumvent YouTube's Content ID and Copyright Match tools. (TAC ¶¶ 59, 71.) Additionally, TV-Novosti deliberately slowed down segments of the J.P. Morgan Video. (TAC ¶ 60.)
On January 2, 2021, Business Casual submitted a DMCA takedown notice requesting that YouTube remove TV-Novosti's first Infringing Video. (TAC ¶ 57.) On January 11, 2021, YouTube removed the first Infringing Video and applied what is known as a “copyright strike” against TV-Novosti's YouTube Channel. (TAC ¶ 61.) Under its policy, YouTube will shut down a channel that receives three copyright strikes. (TAC ¶ 86.)
On January 18, 2021, Business Casual received an email from Russia Today TV asking why “We got a strike on our RT Arabic [YouTube] account.” (TAC ¶ 62.) That same day, Business Casual responded with an email stating, (TAC ¶ 63.) The next day, January 19, 2021, a representative of Russia Today TV responded (TAC ¶ 64.) Defendant then withdrew a DMCA counter-notification it had sent to YouTube, purportedly by “mistake,” and by which it had sought reinstatement of the first Infringing Video. (TAC ¶¶ 65-66.)
That did not end TV-Novosti's infringing activity, however. On February 9, 2021, Business Casual submitted a DMCA takedown notice to YouTube requesting removal of the second Infringing Video. (TAC ¶ 67.) And, on February 15, 2021, Business Casual submitted a DMCA takedown notice requesting removal of the third Infringing Video. (TAC ¶ 69.) Acting first with respect to the third Infringing Video, on February 18, 2021, YouTube removed TV-Novosti's third Infringing Video and applied a second copyright strike to TV-Novosti's YouTube channel. (TAC ¶ 73.)
On February 20, 2021, Business Casual sent a letter to Defendant concerning the repeated infringements and proposing a settlement. (TAC ¶ 74.) Defendant, however, never responded to the overture. (TAC ¶ 75.)
Apparently not having heard from YouTube with respect to its takedown notice concerning the second Infringing Video, Business Casual re-submitted it on February 25, 2021. (TAC ¶ 76.)
On February 28, 2021, TV-Novosti filed a DMCA counter-notification with respect to the third Infringing Video - notwithstanding TV-Novosti's purported earlier “mistake” in submitting its counter-notification regarding the first Infringing Video. (See TAC ¶ 77.) In notifying Business Casual of TV-Novosti's counter-notification, YouTube indicated that it would reinstate the third Infringing Video if Business Casual did not seek a court order to restrain TV-Novosti's infringing activity within ten business days, the period prescribed by the “safe harbor” provision of the DMCA. (TAC ¶ 77.)
On March 2, 2021, Business Counsel made additional efforts to resolve the dispute, but TV-Novosti once again ignored them. (TAC ¶¶ 78-79.)
On March 4, 2021, YouTube removed the second Infringing Video and applied a third copyright strike against TV-Novosti's YouTube channel. (TAC ¶ 82.)
Given Defendant's apparent refusal to engage in settlement discussions, and Business Casual's desire to prevent reinstatement of the third Infringing Video, Business Casual filed the instant action on March 9, 2021. (Dkt. 2.)
On March 12, 2021, YouTube notified Business Casual that Defendant had filed a DMCA counter-notification with respect to the second Infringing Video and would reinstate that video if Business Casual did not seek a court order to restrain the infringing activity within ten business days. (TAC ¶ 83.) Accordingly, Business Casual amended its Complaint to prevent reinstatement of the second Infringing Video. (TAC ¶ 83.)
On March 31, 2021, YouTube terminated Defendant's YouTube Channel “because we received multiple third-party claims of copyright infringement regarding material the user posted.” (TAC ¶ 86.) Just a few hours later, however, YouTube reinstated Defendant's YouTube channel “following public outcry from the Kremlin - including, but not limited to, public backlash from Maria Zakharova, Spokeswoman of the Ministry of Foreign Affairs, who accused Business Casual of being an ‘internal American terrorist.'” (TAC ¶ 87.) That same day, a representative of Defendant “thank[ed] our partners at YouTube Russia” for helping to restore the RT Arabic YouTube channel. (TAC ¶ 88.)
Over the course of the period from March 6, 2021, two days after Defendant's YouTube channel received its third copyright strike, to April 1, 2021, the day after the channel was reinstated, Defendant deleted thousands of videos from the channel with a collective count of billions of views. (TAC ¶¶ 90-101.) Before Business Casual's DMCA takedown notices, Defendant had never before engaged in such wholesale video purging activity. (TAC ¶ 102.)
On April 19, 2021, counsel for Defendant emailed Business Casual's counsel concerning a potential “pre-litigation resolution” but...
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