Stockart.Com, LLC v. Engle
| Decision Date | 18 February 2011 |
| Docket Number | Civil Action No. 10-cv-00588-MSK-MEH |
| Parties | STOCKART.COM, LLC, Plaintiff, v. JONATHAN ENGLE, Defendant. |
| Court | U.S. District Court — District of Colorado |
RECOMMENDATION ON MOTION FOR DEFAULT JUDGMENT
Before the Court is Plaintiff's Motion for Entry of Default Judgment against Defendant pursuant to Fed. R. Civ. P. 55 [filed September 28, 2010; docket #29]. Pursuant to 28 U.S.C. § 636(b)(1)(B) and D.C. Colo. LCivR 72.1.C, the motion was referred to this Court to conduct an evidentiary hearing and to submit proposed findings of fact and a recommendation for the disposition of the motion [docket #36]. The Court held a hearing on January 5, 2011 at which the Plaintiff appeared, represented by counsel, and no one appeared for Defendant. For the reasons stated herein, the Court recommends that the Motion be granted in part and denied in part.1
1. Plaintiff Stockart.com, LLC, (hereinafter "Stockart") is a Colorado-based limited liability company that is organized in, and at all times material to this Complaint, operated from within, the State of Colorado.
2. Stockart is in the business of licensing "rights managed" downloadable "high end" digital imagery through the Internet. That is, Stockart obtains copyrights for illustrations created by various artists and offers the illustrations for sale on its website. The Stockart image database is available online via the Internet at www.stockart.com.
3. Users who log on to the database can cause the database program to search the database to find images that might be suitable for their purposes.
4. The database includes ten (10) images that are referred to herein as "Plaintiff's Registered Works," which are attached to the Complaint as Exhibit A. Stockart typically registers a work if there has been a history of "theft" or appropriation without permission or payment.
5. All authorized publications of Plaintiff's Registered Works have been published with copyright notice pursuant to the Copyright Laws of the United States.
6. Plaintiff's Registered Works have been registered with the United States Copyright Office, by filing with the Copyright Office of the United States within the District of Columbia Forms VA and all materials and fees necessarily accompanying the same for the purposes of acquiring registration.
7. Certificates of Registration were issued for Plaintiff's Registered Works and the registration information is attached as part of Exhibit A.
8. Plaintiff Stockart.com, LLC is the sole owner of the copyright in Plaintiff's Registered Works, and all claims for infringement appurtenant thereto.
9. Stockart has also been the owner of exclusive rights in the Plaintiff's Registered Works, and a beneficial owner of rights in the Plaintiff's Registered Works, at the times relevant to this matter.
10. Stockart is also the owner of copyright in twenty-six (26) images referred to as "Plaintiff's Unregistered Works," which are attached to the Complaint as Exhibit B.
11. Plaintiff's Registered Works and Plaintiff's Unregistered Works appear on Stockart's website with Stockart's copyright notices and licensing information.
12. The copyright management information is electronically connected to the images on the website. As a condition of using the website, users acknowledge that they will not remove the copyright management information from the works appearing on the website.
13. Defendant Jonathan Engle is an individual whose last known residence was located in Los Lunas, New Mexico.
14. Engle is a Graphic Designer, who does business as Relevant Studio. He is engaged in the business of, among other things, selling corporate identity logos via the Internet.
15. On or about January 11, 2007, Engle registered to do business with Stockart.com in Fort Collins, Colorado, by sending a check from Relevant Studio for the $350.00 registration fee.
16. Subsequently, Engle engaged in extensive use of the www.stockart.com database to conduct searches of the images in the database.
17. In the course of using the database, Engle received the "intentional infringer" warning which is displayed on the website when a user requests a search of the database. The warning states:
Important Copyright Management Information Pursuant to l7 U.S.C. Chapter l2.This Web Site is Copyright Stockart.com, LLC 2007, Fort Collins, Colorado. The individual images on this site are copyright Stockart.com, LLC, (in behalf of the individual proprietors) 2007-1978. All Rights-Reserved. Images on this site may not be used without the express written consent of Stockart.com, LLC. Licenses are expressly conditioned upon payment to Stockart.com, LLC, of license fees in advance of use. Fee quotes are valid for 30 days from insurance, and are then void if not then paid in-full. Licenses are granted only by Stockart.com, LLC, from its Fort Collins, Colorado, offices. Disputes concerning use of any image on this site will be resolved in the Courts of Colorado. Please note: Only Stockart.com LLC, and no other party, is authorized or permitted to grant licenses or permissions for the use of the images on this site. Any party relying upon any other license or permission, express or implied, will be violating copyright law. Removal of images from this site, or their separation from the copyright management information on this site, or this notice, is not authorized and is a violation copyright law. Click below to acknowledge that you understand and agree.
18. This warning appears on the screen prior to a search of the images in the www.stockart.com database. Users must acknowledge their understanding of the content of the warning by clicking the "OK" button before they can perform a search.
19. The www.stockart.com database tracks numbers of searches made by its registered users. According to the database program, Engle searched the database a total of ninety-two (92) times.
20. Consequently, Engle clicked the "OK" button approximately 92 times acknowledging the content of the warning and agreeing not only that all disputes concerning use of the images on the website were to be resolved in Colorado, but also not to use Stockart's images without the express written consent of Stockart.
21. By clicking "OK," Engle induced Stockart to transmit images to Engle for viewingwith the understanding that their use would be subject to Stockart's prior approval and licensing fees. 22. On or about June 27, 2008, Stockart ascertained that Engle had used one of Stockart's images without a license. Stockart contacted Engle regarding the nonpayment, and Engle paid a license fee for the work, $395.00.
23. Thereafter, Stockart discovered that Engle extracted a number of images, including the thirty-six (36) of Plaintiff's Registered Works and Plaintiff's Unregistered Works at issue here, from Stockart's database without paying the license fees (likely by using the "printscreen" function) and posted them on various websites offering them for sale to the public. These websites include, without limitation, www.relevantstudio.com, www.coroflot.com, and www.logopond.com.
24. In the course of extracting Plaintiff's Works from the Stockart database, Engle excised the copyright management information from Plaintiff's Registered Works and Unregistered Works, including the copyright notices, warnings against infringement (including the intentional infringer warning), licensing information connected with the work, and the artist information appearing on Plaintiff's website.
25. In or about July 2008, Stockart notified Engle concerning payment for his use of the extracted images and issued an invoice for $18,700.00, which amounted to a reduced per image price of $275.00, which was less than the per image price previously paid by Engle, and less than what Engle, himself, was charging for use of Stockart's images.
26. Engle refused Plaintiff's request for payment, ignored Plaintiff's certified mailings to reach him, and ignored Plaintiff's efforts to obtain payment.
27. By offering Plaintiff's Registered and Unregistered Works to others via the various websites for reproduction and sale without the Plaintiff's copyright management information (i.e.,copyright notice, Stockart's express warnings against infringement, and Stockart's clear statement that its permission was required for use), Engle knew that his removal of the information would induce, facilitate, and conceal that his publication of the works, and the subsequent reproduction, use, and sale of the Plaintiff's Registered and Unregistered Works, would infringe Stockart's copyrights.
28. Thereafter, Stockart ascertained that Engle had, in fact, sold some of Stockart's images to various third parties, including, in one instance, for a product packaging scheme, and in another, as a corporate logo for an equestrian center. Stockart contacted the purchasers of the images, who, in turn, contacted Engle.
29. In response to these contacts, on or about April 3, 2009, Engle began to post statements on Internet blogs, including www.jonengle.com, LogoPond, and Twitter, saying that Stockart had engaged a lawyer to sue Engle, that Stockart sent him a bill for $18,000.00 for artwork he himself had created, that the Stockart artwork was stolen from him - that is, copied from his Logopond "showcase" and posted on Stockart's website - and that Stockart was contacting all of his clients with allegations of copyright infringement and ruining his reputation. The blogs contain links to a Twitter account, through which bloggers were able to contribute to Engle's legal defense fund in his purported counter-suit against Stockart.
30. Engle's statements were false at the time they were published. For example, Stockart had not sued Engle. Also, the artwork was neither stolen nor copied from Engle, but was obtained from the artists named in Exhibit A, and a long list of other artists who authored the Unregistered Works identified in Exhibit...
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