Joint Stock Co. Channel One Russ. Worldwide v. Infomir LLC
| Decision Date | 17 August 2022 |
| Docket Number | 16-CV-1318 (GBD) (BCM) |
| Parties | JOINT STOCK COMPANY "CHANNEL ONE RUSSIA WORLDWIDE," et al., Plaintiffs, v. INFOMIR LLC, et al., Defendants. |
| Court | U.S. District Court — Southern District of New York |
AMENDED REPORT AND RECOMMENDATION TO THE HONORABLE GEORGE B. DANIELS
Plaintiffs Joint Stock Company "Channel One Russia Worldwide" (Channel One), Closed Joint Stock Company "CTC Network" (CTC), Limited Liability Company "Global Entertainment TV" (GETV), as successor to Limited Liability Company "Comedy TV" (Comedy TV), Closed Joint Stock Company "TV DARIAL" (Darial), Closed Joint Stock Company "New Channel" (New Channel) and Limited Liability Company "Rain TV-Channel" (Rain) are a group of Russian television broadcasters suing to redress the "pirating" and resale of their programming at cut-rate prices to Russian-speaking consumers in the United States, via Internet Protocol Television (IPTV), without authorization or license fees.
In their First Amended Complaint (FAC) (Dkt. No. 211) plaintiffs allege that they produce and broadcast multiple Russian-language television channels (the Channels), offering a variety of original and licensed content (the Programming) which defendants unlawfully "re-transmit . . . over the internet to paying subscribers in the U.S. using password-protected streaming services," thus undercutting sales of the "fully-licensed international versions" of the Channels. FAC ¶¶ 1-4. One such defendant is S.K. Management of New York Inc. (SKM), headquartered in Brooklyn, which owns and operates the website www.gudzon.tv (the Website), through which it provides "unauthorized access to video streams of pirated versions of the Programming" to its paying subscribers in New York. Id. ¶ 44.
SKM freely admits much of the charged conduct. At deposition, its sole owner and chief executive Samuel Katsman testified that SKM provides its customers access to what Katsman calls plaintiffs' "signal," via IPTV, and conceded that SKM has no license or other authorization from plaintiffs (or any agent of plaintiffs) to do so. Katsman Dep. Tr. (Dkt. No. 914-6) at 11-12, 42-43, 61-62, 169. Since 2016, SKM has obtained the signal "from Ukraine," through an individual identified as Oleg Horbatjuk, who "provides service to us and we pay him money." Id. at 38-41, 139, 143-45. SKM, in turn, charges its customers in the U.S. a monthly subscription fee (starting at $19.99 plus tax) to receive a package of 140 to 150 Russian-language TV channels, including at least some of plaintiffs' Channels, which SKM streams to them over the internet. Id. at 31-32, 37-39, 102, 121, 130, 138-39, 143. Katsman emphasized, at deposition, that SKM offers its customers only "local Russian channels," which are "free to air" in Russia, "not the international version[s]" produced for licensed broadcast in the United States and elsewhere. Id. at 39-41.
Now before me for report and recommendation are two motions for partial summary judgment against SKM. Plaintiff Channel One filed its motion on July 29, 2021 (Dkt. No. 913), seeking summary judgment pursuant to Fed.R.Civ.P. 56 on its claim against SKM under § 605(a) of the Federal Communications Act (FCA), 47 U.S.C. § 605(a), including injunctive relief, up to $18.3 million in statutory damages, prejudgment interest, and attorneys' fees. See Ch. One Mem. (Dkt. No. 916) at 10-14, 25. Channel One also seeks summary judgment on SKM's affirmative defenses. Id. at 15-25. The remaining plaintiffs (who refer to themselves as the Broadcaster Plaintiffs and are separately represented),[1] filed their motion on July 30, 2021 (Dkt. No. 924), seeking summary judgment as to SKM's liability under FCA § 605(a) and for direct copyright infringement under the Copyright Act, 17 U.S.C. §§ 101, et seq. See Br. Pl. Mem. (Dkt. No. 926) at 6-8. The Broadcaster Plaintiffs also ask the Court to dismiss SKM's affirmative defenses, apparently pursuant to Fed.R.Civ.P. 12(c), for failure to allege facts sufficient to state any cognizable defense. Id. at 8-14. However, the Broadcaster Plaintiffs do not seek summary judgment as to their damages or other remedies.
For the reasons that follow, Channel One's motion should be granted, judgment should be entered in its favor on its claim under FCA § 605(a), and it should be awarded injunctive relief, $3,666,000 in damages, and its reasonable attorneys' fees. However, the Broadcaster Plaintiffs have not established their entitlement to summary judgment under either FCA § 605(a) or the Copyright Act. Consequently, their motion should be denied, except with respect to SKM's affirmative defenses, which should be dismissed.
Plaintiffs filed this action on February 19, 2016, originally suing nine defendants, including "Goodzone TV." See Compl. (Dkt. No. 1) ¶ 62. Plaintiffs alleged that all defendants engaged in the "unauthorized interception, copying and distribution" of plaintiffs' Channels and Programming in violation of, inter alia, FCA § 605(a) and the Copyright Act. Compl. ¶¶ 5-6, 92-101, 123-39. In their direct copyright infringement claim, plaintiffs alleged that they (or their affiliates) were the "legal or beneficial owners of the copyrights" in the Channels and Programming; that defendants' "infringing services" violated plaintiffs' exclusive rights under 17 U.S.C. § 106 (); and that they were not required to register their copyrights with the United States Copyright Office (which is ordinarily a precondition to suit under the Copyright Act, see 17 U.S.C. § 411(a)) because the Berne Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, S. Treaty Doc. No. 99-27, entered into force Dec. 5, 1887 (revised at Paris July 24, 1971; amended 1979) (Berne Convention) "requires member states, including the United States, to recognize the copyrights issued with respect to works created in other member states." Compl. ¶¶ 124-33.
On June 24, 2016, after defendant Infomir LLC (Infomir) filed a motion to dismiss the Complaint, plaintiffs cross-moved for leave to amend. (Dkt. No. 78.) On February 15, 2017, I recommended that the cross-motion be granted, see Joint Stock Co. Channel One, 2017 WL 696126, at *24, and on March 27, 2017, the Hon. George B. Daniels, United States District Judge, adopted my recommendation and granted plaintiffs leave to amend. Joint Stock Co. Channel One, 2017 WL 2988249, at *1-2.
As relevant here, the Court held that FCA § 605(a), which "generally prohibits the unauthorized use or publication of wire or radio communications," Int'l Cablevision, Inc. v. Sykes, 997 F.2d 998, 1007 (2d Cir. 1993) (Sykes I), reaches "the unauthorized retransmission of a signal that originated as a satellite transmission, even when it is thereafter received or transmitted over the internet," and even if the defendant did not itself "intercept" the communication. Joint Stock Co. Channel One, 2017 WL 696126, at *7-10. The plaintiff must, however, plead and prove (among other things) that the signal was "transmitted by satellite (or some other form of radio communication) at some point along its journey." Id. at *10 (emphasis in the original). See also Int'l Cablevision, Inc. v. Sykes, 75 F.3d 123, 131 n.5 (2d Cir. 1996) (Sykes II) ().
The Court further held that, in order to state a claim for infringement of their Russian copyrights, plaintiffs must "identify the works allegedly infringed," "demonstrate that [they] possess exclusive rights in those works under Russian law," and - if the copyrights are unregistered - establish that the underlying works are not "United States works," as that term is used in the Copyright Act. Joint Stock Co. Channel One, 2017 WL 696126, at *12-13. A copyright plaintiff "must also establish that it meets the standing test of 17 U.S.C. § 501(b), which accords standing only to the legal or beneficial owner of an exclusive right." Id. at *13 (quoting Itar-Tass Russian News Agency v. Russian Kurier, Inc., 153 F.3d 82, 91 (2d Cir. 1998)) (internal quotation marks omitted). "[T]he holder of a nonexclusive license may not sue others for infringement." Id. (quoting Davis v. Blige, 505 F.3d 90, 101 (2d Cir. 2007)) (alteration in the original).
Plaintiffs filed their current pleading on April 5, 2017, naming a total of thirteen defendants, including "Goodzone TV." FAC ¶ 44. Like the original Complaint, the FAC asserts a claim under FCA § 605(a) (Count One) and a direct infringement claim under the Copyright Act (Count Eight). FAC ¶¶ 204-15, 272-91.
Count One alleges that plaintiffs "initially broadcast their programming through various satellites that are intended only for authorized recipients"; that they "license the rights to broadcast and re-broadcast their programs to certain third parties in exchange for a fee"; that defendants "have not received a license from any Plaintiff to de-encrypt[,] broadcast[,] or re-broadcast its programs, nor [have they] received any other permission, express or otherwise, to do so"; but that defendants nonetheless, through their websites, "intentionally pirate, retransmit and publish [plaintiffs'] programs for the sole purpose of their own economic gain and to the detriment of [plaintiffs] and their licensees." FAC ¶¶ 206, 208-09.
Count Eight alleges that plaintiffs (or their affiliates) "are the legal or beneficial owners of the copyrights in the Channels and...
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