The Walt Disney Co. v. Video 47, Inc.

• Decision Date: 09 July 1996
• Docket Number: No. 94-1179-CIV.,94-1179-CIV.
• Citation: 972 F.Supp. 595
• Parties: THE WALT DISNEY COMPANY; Metro-Goldwyn-Mayer Inc.; Universal City Studios, Inc.; Paramount Pictures Corporation; Columbia Pictures Industries, Inc.; Warner Bros., a division of Time Warner Entertainment Company, L.P.; Twentieth Century Fox Film Corporation; Tristar Pictures, Inc.; Plaintiffs, v. VIDEO 47, INC. a/b/a Video 47, Silvia Celorio, individually, and Eduardo Celorio, individually, Defendants.
• Court: U.S. District Court — Southern District of Florida

972 F.Supp. 595

THE WALT DISNEY COMPANY; Metro-Goldwyn-Mayer Inc.; Universal City Studios, Inc.; Paramount Pictures Corporation; Columbia Pictures Industries, Inc.; Warner Bros., a division of Time Warner Entertainment Company, L.P.; Twentieth Century Fox Film Corporation; Tristar Pictures, Inc.; Plaintiffs, v. VIDEO 47, INC. a/b/a Video 47, Silvia Celorio, individually, and Eduardo Celorio, individually, Defendants.

No. 94-1179-CIV.

United States District Court, S.D. Florida.

July 9, 1996.

COPYRIGHT MATERIAL OMITTED

Lisa K. Bennett, Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., Fort Lauderdale, FL, for Plaintiffs.

Jeffrey D. Weinkle, Miami, FL, for Defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW AND FINAL JUDGMENT

UNGARO-BENAGES, District Judge.

THIS CAUSE came before this Court upon this Court's Order to Show Cause and for an evidentiary hearing on April 23, 1996, May 10, 1996, May 31, 1996, June 7, 1996 and June 17, 1996.

THE COURT, having heard the testimony of witnesses, the argument of counsel and having examined the record, and, being otherwise fully advised in the premises, hereby makes the following findings of fact and conclusions of law:

FINDINGS OF FACT

1. The Plaintiffs are THE WALT DISNEY COMPANY; METRO-GOLDWYN-MAYER INC.; UNIVERSAL CITY STUDIOS, INC.; PARAMOUNT PICTURES CORPORATION; COLUMBIA PICTURES INDUSTRIES, INC.; WARNER BROS., a division of Time Warner Entertainment Company; TWENTIETH CENTURY FOX FILM CORPORATION; TRISTAR PICTURES, INC.; COLUMBIA TRISTAR HOME VIDEO; FOX VIDEO, INC.; and LIVE HOME VIDEO (LIVE AMERICA INC.) (hereinafter collectively referred to as "Plaintiffs").

2. Defendants are VIDEO 47, INC., SILVIA CELORIO, and EDUARDO CELORIO (hereinafter collectively Defendants). Defendants operate a video store at 4735 West Flagler Street, Miami, Florida that rents videocassette tapes of motion pictures to the public. The store is operated by Defendant Eduardo Celorio, and Defendant Silvia Celorio is the Director and sole shareholder. In addition Defendant Silvia Celorio works in the store from time to time at the sales counter at the front of the store. These Defendants were named as defendants in at least three (3) lawsuits alleging the distribution of counterfeit videocassettes and copyright and trademark infringement. In each case, final judgments have been entered against Video 47 (or its predecessor PiWi Video, Inc.), Silvia Celorio (in two of the three judgments), and Eduardo Celorio (in two of the three judgments) in favor of the Plaintiffs.¹ In two of the previous judgments including this Court's Judgment in the case now before the Court, the Defendants were adjudged to have infringed upon Plaintiffs' copyrights in certain motion pictures by holding counterfeit copies of the motion pictures out for rent to the public, and the Defendants were enjoined from further infringing on Plaintiffs' rights in the future. In the third case, default judgment was entered in favor of the Plaintiffs for Defendants' failure to respond to the pleadings which asserted the same conduct, copyright infringement by holding counterfeit videos for rental.

3. Plaintiffs are the lawful owners of the exclusive right under the United States Copyright Act to reproduce, to distribute and to authorize the reproduction and distribution of thirteen (13) motion picture titles at issue in this action.² The lawful owner of the copyrights to the remaining three (3) titles is Time Warner Entertainment Company, L.P. ("Time Warner").³ Time Warner is not named as a Plaintiff in this case. However, Warner Bros., a division of Time Warner, is named as a Plaintiff. The copyright certificates reflect that Warner Bros, Inc. (Warner Bros.) was the original copyright owner of the three motion pictures at issue. (Plaintiff Exhibits 8,9,10, Copyright Registration Certificates and Affidavit of Sheldon W. Presser). Pursuant to the Second Restated Assignment, dated as of June 30, 1992, Warner Bros. Inc. assigned all of its rights (including copyrights), title and interest to all of its theatrical motion pictures to Time Warner. (Plaintiff Exhibit 10, Affidavit of Sheldon W. Presser).

4. Plaintiffs are members of the Motion Picture Association of America (MPAA), a trade association whose film security office investigates unlawful duplication and distribution of videocassette tapes whose copyrights are owned by members of the MPAA.

5. Based upon a tip to the MPAA, an investigation of Defendants was conducted from October 10, 1995 to October 11, 1995 as testified to by Robert W. Butler ("Butler"), presently a field representative for the Film Security office of the MPAA and formerly a Special Agent in Charge of the Tampa Office for the Federal Bureau of Investigation ("FBI").

6. The investigation of VIDEO 47 was conduced by Patrick R. Cooney ("Cooney"), a former FBI agent who currently works for the anti-piracy office of the MPAA. Cooney employed a "stringer" from the neighborhood to rent tapes from VIDEO 47. Initially, six (6) tapes were rented and five (5) were counterfeit based on the examination of the exterior appearance of the videocassette tapes, according to Cooney's visual examination.

7. Cooney testified that counterfeit copies of videocassette tapes are identifiable because they differ from authorized videocassette tapes which are professionally packaged and labeled. The authentic packaging and labeling contains distinctive art work and the trademarks of the distributing company. Often, legitimate copies also have a distinct mark embedded in the plastic cassette called a "heat stamp" that is not generally present on an unauthorized copy.

8. Butler testified that the Plaintiffs diligently pursue infringers to protect their copyrights and trademarks. Plaintiffs' goodwill and reputation are irreparably damaged by counterfeit copies of inferior quality videocassette tapes. Furthermore, the bootleg distribution of infringing videocassette tapes deprives the Plaintiffs of substantial revenue and violates the Plaintiffs' exclusive rights to show and distribute those copyrighted titles.

9. Plaintiffs' Ex Parte Motion to Hold Defendants in Contempt (hereinafter referred to as "Motion for Contempt") in the instant action was filed on March 8, 1996. On March 22, 1996, the Court, on Plaintiffs' Ex Parte Motion for an Order to Temporarily Seal the Motion and for an Order of Seizure and Impoundment (the "Motion"), issued an Order of Seizure authorizing the seizure of any and all unauthorized videocassette tapes identified in Exhibit "B" to the Motion as well as any other counterfeit videocassette tapes for which any Plaintiff is a copyright owner.

10. On March 28, 1996 the seizure took place under the auspices of the U.S. Marshal Service. An inventory was made of the 53 tapes seized. (See Plaintiffs' Exhibit No. 2.) The tapes were boxed and transported by investigator Cooney to the offices of Plaintiffs' counsel, Steams Weaver Miller Weissler Alhadeff & Sitterson, P.A., where they were stored until they were shipped to California for testing.

11. In May, 1996, counsel for Plaintiffs shipped the box of the seized videocassette tapes from Stearns Weaver to the MPAA offices in California for electronic testing. The tests were conducted by Linda Sheer ("Sheer"), an MPAA employee, who the Court accepted as an expert in the area of videocassette tape piracy. Sheer conducted cosmetic and electronic examinations of the 53 tapes seized from Video 47 on March 28, 1996 and found each of the tapes to be bootleg product. (Sheer depo, page 33, lines 13-19.) The tapes were returned to counsel for Plaintiffs after thorough tapes remained in storage until offered as evidence in this proceeding on May 10, 1996.

12. Sheer testified, as an expert, about the various methods of analyzing a videocassette tape to ascertain the authenticity of the cassettes including the use of a cross-pulse monitor, which reveals whether the tapes have been illegally copied. (Sheer Depo page 10, lines 15-25 through page 11 lines 1-19; page 21, lines 20-22 and page 22, lines 3-6).

13. Furthermore, Sheer stated that industry standards for authorized copies of Plaintiffs' copyrighted motion pictures provide for a uniformity of quality both for videocassette tapes produced in the United States and for those manufactured overseas. Those standards provide a basis for identification of unauthorized copies produced overseas. Sheer described the high quality of authorized videotapes — both those made in the United States and in South America — compared to the poor quality of bootleg cassette tapes. (Sheer depo page 93, lines 19-25 through page 94, lines 1-7; page 98, lines 1-16).

14. Defendants did not produce any documentation that showed any authorization by Plaintiffs or any of their distributors to distribute copies of the Plaintiffs' copyrighted motion pictures.

15. Defendant Eduardo Celorio testified and stated that he had been present at three of the seizures which were executed and that he had spoken with MPAA representatives during those seizures regarding the characteristics of legitimate versus illegitimate product produced by Plaintiffs. Mr. Celorio further testified that he met with Cooney again at a later date and was instructed further on the distinguishing characteristics of legitimate product produced by Plaintiffs. Mr. Celorio acknowledged that Cooney advised him to purchase videocassette tapes from legitimate distributors, including but not limited to Baker and Taylor. Despite Mr. Celorio's prior experiences he testified he purchased tapes from individuals who sold videocassettes from their cars and that he contacted his distributors by beeper.

16. Defendant Eduardo Celorio testified that the 16 videocassettes at issue were not available for rental to the public, whereas Mr. Cooney testified that these videocassettes were seized from the portion of the store where the videocassettes were available for rental. The Court...