Overseas Media, Inc. v. Skvortsov

• Decision Date: 03 January 2006
• Docket Number: No. 04 Civ. 5133(RJH).,04 Civ. 5133(RJH).
• Citation: 407 F.Supp.2d 563
• Parties: OVERSEAS MEDIA, INC., Winburgh Holdings, Ltd. and OOO Novyi Russkii Serial, Plaintiffs, v. Sergei SKVORTSOV and OOO Fenix Film, Defendants.
• Court: U.S. District Court — Southern District of New York

Page 563

407 F.Supp.2d 563

OVERSEAS MEDIA, INC., Winburgh Holdings, Ltd. and OOO Novyi Russkii Serial, Plaintiffs, v. Sergei SKVORTSOV and OOO Fenix Film, Defendants.

No. 04 Civ. 5133(RJH).

United States District Court, S.D. New York.

January 3, 2006.

Bradley J. Nash, C. William Phillips, Daniel Michael Mandil, Robert Haney, Theodore P. Lazarus, Covington & Burling (NYC), New York, NY, for Plaintiffs.

Gerard A. Riso, Mark Ira Chinitz, Stein & Stein, Haverstraw, NY, for Defendants.

MEMORANDUM OPINION AND ORDER

HOLWELL, District Judge.

Plaintiffs Overseas Media, Inc. ("Overseas Media"), Winburgh Holdings, Ltd. ("Winburgh"), and OOO Novyi Russkii Serial ("NRS") bring this action against Sergei Skvortsov and Phoenix Film (sued as "OOO Fenix Film," hereinafter, "Phoenix"), alleging violations of federal and New York copyright and trademark law, as well as unfair competition under New York law, and request a preliminary injunction enjoining defendants from promoting, marketing, licensing, broadcasting or otherwise attempting to sell or to distribute a Russian television program, Nashtoyashie Menty, within the United States. Phoenix, a Russian television production company, moves to dismiss the complaint for lack of personal jurisdiction. For the following reasons, the motion to dismiss is granted.

BACKGROUND

The following facts are taken from the pleadings, moving papers, and affidavits in this matter, and have been construed in the light most favorable to plaintiffs. Ulitsy Razbitykh Fonarei: Menty (translated into English, Streets of Broken Street-lights: The Cops, and popularly known as "Menty") is a hit Russian television series following the professional and personal lives of its characters, four St. Petersburg police officers. (Compl. ¶¶ 2-3, 34.) According to plaintiffs, the program is both critically acclaimed and popular with Russian viewership; within Russia, more viewers watch Menty than any other locally-produced television drama series, and the Academy of Russian Television awarded the show a prize for best television series in 1999. (Id. at ¶¶ 4-5.)

Plaintiff Overseas Media asserts, among other rights, exclusive ownership over the satellite and cable broadcast rights to Menty in the United States. (Sept. 13, 2004 Decl. of Daniel M. Mandil, ¶ 3.) Plaintiff Winburgh claims it holds the "exclusive right to prosecute infringement actions in respect of home video rights to Menty in the United States ... and the exclusive over-the-air broadcast rights to Menty within the United States." (Id.) Plaintiff NRS asserts ownership over "all rights to Menty within the United States ... that are not held by either Overseas Media or Winburgh," including so-called "continuation rights" to the further development of the series. (Id. at ¶ 50.)

Defendant Sergei Skvortsov is the former Chairman of the Board of Directors of TNT, a Russian over-the-air channel. In that capacity, he had primary responsibility for TNT's original purchase of the rights to Menty and production of its initial episodes. (Compl. ¶ 10.) In September 1999, Skvortsov played a role in the founding and development of plaintiff NRS, and was primarily responsible for NRS's subsequent purchase of rights to Menty (presumably from TNT). (Id. at ¶ 50.) Following a brief stint at another Russian television network, Skvortsov founded defendant Phoenix in July of 2001. (Id. at ¶ 51-52, 54; Aug. 4, 2005 Supp. Decl. of Sergei Skvortsov, ¶ 2.) According to Skvortsov's declaration, it is a company "created under, and governed by, the laws of the Russian Federation." (July 23, 2004 Decl. of Sergei Skvortsov, ¶ 5 ("July 23, 2004 Skvortsov Decl.").)

According to plaintiffs, Skvortsov and Phoenix thereafter decided to create an "unauthorized sequel" to Menty, entitled Nastoyashie Menty (in English, "The Real Cops"). (Id. at ¶ 55.) The new program, episodes of which had already been produced at the time the complaint was filed in this matter in June 2004 (Id. at ¶ 78), "features the same leading characters as Menty, Larin and Dukalis, and two of the same supporting characters ... It stars the same leading actors, Alexei Nilov and Sergei Selin, and the same supporting actors ... It follows the same storyline. Like Menty, it is set primarily in St. Petersburg and follows both the professional and the private lives of its characters, St. Petersburg police officers. In effect, without license, permission, right or authorization, [Phoenix] is filming new episodes of Menty and labeling these episodes Nastoyashie Menty." (Id. at ¶ 55.) Skvortsov allegedly held meetings in St. Petersburg, Russia in the spring of 2003 in an effort to attract Menty cast and other personnel to the new production. (Feb. 28, 2005 Decl. of Julia Sobolevskaya, translated from the Russian, ¶¶ 12-14 ("Sobolevskaya Decl."); Dec. 6, 2004 Decl. of Mikhail Trukhin, translated from the Russian, ¶ 8 ("Trukhin Decl.").) He successfully induced members of the original Menty cast to join the Nastoyashie Menty production, as well as other members of the creative team behind the original series. (Compl., ¶¶ 62-73.)

In March 2004, counsel for Plaintiffs notified Skvortsov by letter that production of Nastoyashie Menty constituted "an infringement of the property interests of Menty rights holders and demanded that Defendants cease from production immediately." (Id. at ¶ 74.) Following this letter on or about March 23, 2004, Skvortsov met with Overseas Media's Russian-based attorney, Alexsandr Berezin, in Moscow, Russia. (June 28, 2004 Decl. of Alexsandr Berezin, ¶ 6 ("Berezin Decl.").) After some indication from Skvortsov that efforts to prevent the production of Nastoyashie Menty in Russia would be fruitless (allegedly due to assurances received from Russian officials), Skvortsov then "offered to sell the United States broadcasting rights to Nastoyashie Menty to Overseas Media." (Id. at ¶ 8.) In April 2004, Berezin informed Skvortsov that Overseas Media refused to purchase these United States broadcast rights. (Id. at ¶ 12.)

Plaintiffs aver that Phoenix, via its head of sales, Davletkahanov Ildar Ravil'evich, then offered the United States broadcasting rights to Nastoyashie Menty to Overseas Media on a second occasion.¹ According to Mikhail Galkin, Overseas Media's Vice President for Acquisitions and Programming, Davetkahanov called him on May 14, 2004 to discuss offers he had previously made regarding the broadcast rights of various television programs, and then "offered Overseas Media the opportunity to purchase broadcast rights to Nastoyashie Menty." (June 28, 2004 Decl. of Mikhail Galkin, ¶ 11-13 ("June 28, 2004 Galkin Decl.").) Galkin was "surprised that Davletkhanov would offer to sell Overseas Media the rights to Nastoyashie Menty because I was aware that Nastoyashie Menty is a blatantly infringing replica of Menty and that counsel ... had demanded that Phoenix cease production ... I therefore asked Davletkhanov if he was certain he could sell the rights to Nastoyashie Menty to Overseas Media. Davletkhanov assured me that he was authorized to sell the rights." (Id. at ¶ 14.) In an additional declaration, Galkin recalled that he received the call on his business cellular phone from Davletkhanov "at some point during my daily morning commute from my home in Guttenberg, New Jersey to the Overseas Media office ... in Manhattan." (Mar. 30, 2005 Decl. of Mikhail Galkin, ¶ 2 ("Mar. 30, 2005 Galkin Decl.").)²

On June 29, 2004, plaintiffs brought the instant action, moving two days later for a preliminary injunction to prevent any further attempts to produce, promote, license or broadcast Nastoyashie Menty anywhere in the world. On July 15, 2004, the parties entered into a Stipulation, so ordered on the record by this Court on October 8, 2004, that the defendants would not broadcast, license, or promote Nastoyashie Menty in the United States, pending resolution of the preliminary injunction motion. At that time, plaintiffs confirmed through counsel that they were not challenging in this action the production, marketing and distribution of Nastoyashie Menty in Russia under Russian law. Rather, plaintiffs were seeking to redress alleged violations of United States law arising from the infringement of plaintiffs' United States distribution rights. (Oct. 8, 2004 Tr. 5.) Thereafter, the parties engaged in extensive discovery on jurisdictional issues, and made supplemental submissions to the Court on the subject of personal jurisdiction over Phoenix.

DISCUSSION

I. Applicable Law

As this Court has "allowed the parties to conduct discovery on the jurisdictional issue, [plaintiffs bear] the burden of proving by a preponderance of the evidence that personal jurisdiction exists." Landoil Res. Corp. v. Alexander & Alexander Services, Inc., 918 F.2d 1039, 1043 (2d Cir.1990). However, since the parties did not request a hearing on defendant's Rule 12(b)(2) motion, "all pleadings and affidavits must be construed in the light most favorable to [plaintiffs] and all doubts must be resolved in the [plaintiffs'] favor." Id. Where jurisdictional discovery has taken place, plaintiffs' "prima facie showing, necessary to defeat a jurisdiction testing motion, must include an averment of facts that, if credited by the trier, would suffice to establish jurisdiction over the defendant ... [and this] prima facie showing must be factually supported." Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.1990); see also Brown v. Grand Hotel Eden, 2003 WL 21496756, at *3 (S.D.N.Y.2003).

As a foreign corporation, Phoenix's amenability to suit in this Court regarding plaintiffs' claims of copyright and trademark infringement, as well as unfair competition, will be determined in accordance with New York law. "Because there is no specific federal statute governing personal jurisdiction on a copyright claim, this Court must look to the provisions of state law, namely, [New York's CPLR §§ 301-302 (McKinney 2005).]"...