Playboy v. Sanfilippo

(S.D. Cal. 1998)

UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF CALIFORNIA

1998 U.S. Dist. LEXIS 5125

Decided March 24, 1998

IRMA E. GONZALEZ, Judge, United States District Court.

BACKGROUND

On April 14, 1997, plaintiff Playboy Enterprises, Inc. ("PEI") filed a complaint against defendants Francesco Sanfilippo ("Sanfilippo") and Five Senses Productions ("Five Senses") for copyright infringement under the Copyright Act of 1976. Plaintiff alleges that defendants operated a website at http://www.5senses.com through which they provided and sold access to thousands of unauthorized copies of plaintiff's copyrighted images. Plaintiff alleges that (a) defendants' website is divided into public and private sections; (b) the public area is a free-of-charge part of the site in which defendants advertise images available in the private area; (c) the private area is accessible through a password which is provided for a fee to interested parties; and, (d) defendants provided access through this website to twenty-seven (27) separate series of files containing copies of 7475 of plaintiff's copyrighted images.

Plaintiff further alleges that (a) on October 30, 1996, plaintiff sent an e-mail cease and desist letter to defendants based on the defendants' use of the scanmaster images; (b) on November 1, 1996, plaintiff's outside counsel sent defendants' another cease and desist letter concerning the scanmasters file; (c) on November 1, 1996, defendant Sanfilippo acknowledged that the scanmaster images were scanned directly from plaintiff's publication, did not dispute that the scanmaster images were protected by plaintiff's copyright, and stated that he would remove the images forthwith; (d) defendants continued to post plaintiff's images on their website; (e) on January 7, 1998, plaintiff's outside counsel contacted defendants with another cease and desist letter; (e) Sanfilippo stated that he would remove the images within twenty-four hours; (f) plaintiff continued to monitor defendants' website; (g) in late February 1997, defendants' website continued to display unauthorized copies of plaintiff's images; and, (h) defendants began to offer for sale through their website CD-ROMs containing unauthorized copies of plaintiff's images.

On January 30, 1998, plaintiff filed the instant motion for summary judgment. Plaintiff argues that there is no genuine issue of material fact that defendants infringed on plaintiff's copyrights in 7475 images. Plaintiff further contends that, with respect to 1699 images, defendants' infringement was willful. As a result, plaintiff is seeking the following relief: (a) a permanent injunction; (b) destruction of the infringing data files; (c) statutory damages; and, (d) attorney's fees and costs.

DISCUSSION

A. Legal Standard for Summary Judgment

Summary judgment is proper where the moving party demonstrates "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." A moving party who bears the burden of proof at trial is entitled to summary judgment only when the evidence indicates that no genuine issue of material fact exists. If the moving party does not bear the burden of proof at trial, he may discharge his burden of showing that no genuine issue of material fact remains by demonstrating that "there is an absence of evidence to support the non-moving party's case." The moving party is not required to produce evidence showing the absence of genuine issue of material fact on such issues, nor must the moving party support its motion with evidence negating the non-moving party's claim. To avoid summary judgment, the nonmoving party must go beyond the pleadings and offer "specific facts showing that there is a genuine issue for trial."

Throughout the review of a motion for summary judgment, the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. "Finally, if the factual context makes the non-moving party's claim implausible, that party must come forward with more persuasive evidence than would otherwise be necessary to show that there is a genuine issue for trial."

B. Analysis

1. Copyright Infringement

Plaintiff brings a claim for copyright infringement, in violation of 17 U.S.C. § 106. Plaintiff alleges that defendants have violated the Copyright Act by reproducing, distributing, and displaying publicly PEI's images without authority. To prove copyright infringement, plaintiff must prove both (a) ownership of a valid copyright and (b) infringement of that copyright by invasion of one of the five exclusive rights.

a. Ownership of Copyright

To support its claims of ownership of valid copyrights for these images, plaintiff includes the first and second declarations of Michelle A. Kaiser, intellectual property counsel for PEI. In her declarations, Kaiser establishes that plaintiff owns valid copyrights for all of the disputed images. Furthermore, Sanfilippo has admitted that plaintiff owns valid copyrights to all of these images. Therefore, there is no factual dispute with respect to plaintiff's ownership of valid copyrights for the disputed images.

b. Copying

In addition to ownership, a plaintiff alleging copyright infringement also must prove that the defendant copied plaintiff's copyrighted work. Sanfilippo admitted that he copied 16 files containing plaintiff's copyrighted images directly from a third-party source onto his hard drive and CD-ROM without plaintiff's authorization. Sanfilippo also admitted that the other 11 files were uploaded to his hard drive by a third party via a File Transfer Protocol exchange. Plaintiff argues that although Sanfilippo may not have made those copies directly himself, Sanfillipo provided that third party with authorization to copy those images to his site and, therefore, these uploads are the equivalent of copying by Sanfilippo himself. The Court agrees with plaintiff's contention concerning the 11 uploaded files. Under §106 of the Copyright Act, the owner has the exclusive right to both (a) copy the protected work and (b) authorize others to copy it. Therefore, defendant did not have the authority to allow the third party to upload unauthorized copies of plaintiff's images. Consequently, there is no genuine issue of material fact with respect to defendant's copying of the 27 files containing plaintiff's protected images. Accordingly, plaintiff's motion for summary judgment with respect to copyright infringement of 7475 of plaintiff's protected images is GRANTED .

2. Relief

a. Permanent Injunction

Section 502(a) of the Copyright Act provides that "any court having jurisdiction of a civil action arising under this title may . . . grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringment of a copyright." "As a general rule, a copyright plaintiff is entitled to a permanent injunction when liability has been established and there is a threat of continuing violations." Plaintiff contends that a permanent injunction is appropriate based on the uncontroverted evidence of Sanfilippo's past infringement and the threat of future violations. Plaintiff requests that the Court permanently enjoin defendants and their agents from copying, reproducing, distributing, displaying or preparing any derivative works of any copyrighted images owned by plaintiff. Based on the Court's finding of infringement with respect to the 7475 images, the Court finds permanent injunctive relief appropriate under the circumstances. Accordingly, the Court hereby ORDERS defendants and their agents, servants, employees and attorneys, and all persons acting for, by, with, through, or under them enjoined and restrained from copying, reproducing, distributing, displaying or preparing any derivative works of any copyrighted images owned by plaintiff.

b. Destruction of the Data files

Section 503(b) provides "as part of a final judgment or decree, Court may order the destruction or other reasonable disposition of all copies . . . found to have been made or used in violation of the copyright owner's exclusive rights, and of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies or phonorecords may be reproduced." Plaintiff argues that destruction of the infringing data files is appropriate in this case because the files are (a) highly portable and (b) easy to copy and disseminate. As plaintiff is currently in possession of the infringing data files pursuant to this Court's April 14, 1997 order of seizure, plaintiff now asks to for permission to either destroy the infringing files or permanently retain them. Given the Court's determination that defendant violated plaintiff's copyright on 7475 images, the Court finds an order of destruction appropriate in this case. Therefore, the Court hereby ORDERS that plaintiff is authorized to retain or destroy, at its election, the data files comprising the 7475 infringed images and the electronic storage media upon which the data files reside.

c. Statutory Damages

Under §504(a), the copyright owner may elect to recover either (a) actual damages plus defendants' profits or (b) statutory damages. In the instant case, plaintiff is seeking statutory damages under §504(c). Section 504(c)(1) provides for statutory damages for each act of infringement "in a sum of not less than $500 or more than $20,000, as the court considers just." Section 504(c)(2), which grants authority for the imposition of greater damages where the infringer's conduct is willful, provides, in pertinent part: In a case where the copyright owner sustains the burden of proving, and the court finds, that infringment was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more that $100,000. In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringment of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200.

In electing to recover statutory damages, plaintiff argues for the imposition of maximum damages based on a number of factors. First, plaintiff argues that defendant has admitted to willful infringement with respect to nine of the twenty-seven files. Therefore, plaintiff requests the imposition of the $100,000 maximum penalty for each of the 1699 images contained in these files. "Willful" within the meaning of §504(c)(2) means "with knowledge that the defendant's conduct constitutes copyright infringement."

To support that claim, plaintiff refers to Sanfilippo's admission that between November 1, 1996 and April 15, 1997, he believed that these nine files "contained images with a copyright owned by [plaintiff]." Plaintiff also relies on defendant's deposition testimony that he knew that copying plaintiff's images from his hard drive onto CD-ROMs for sale to clients amounted to copyright infringment. Furthermore, plaintiff admitted that he sold access to all of these nine files from his website. The Court finds that defendant's retention, display and sale of the these files in light of these admissions amounts to willfulness with respect to these files.

Aside from defendant's willfulness with respect to the display and distribution of certain files (1699 images), plaintiff argues that maximum damages of $20,000 should be awarded with respect to the other 5776 images. Plaintiff contends that the maximum penalty is appropriate because (a) defendant conducted his website as a for-profit business venture; (b) defendant sold access to ten of the twenty-seven files; (c) defendant's gross income from the sale of these images in the four month's leading up to the seizure amounted to $35,000; and, (d) defendant persisted in his copyright infringement in spite of repeated cease and desist letters from plaintiff which put him on notice of the risks of his business. Therefore, plaintiff requests the following damage award: (a) non-willful infringement= 5776 images x $20,000/image = $115,520,000 and (b) willful infringement= 1699 images x $100,000/image = $169,900,000. Together, these damages total $285,420,000.

At oral argument, defendant did not contest either that he made unauthorized copies of 7475 of plaintiff's images nor that he offered thousands of these images for sale on his website. Defendant argued, however, that he did not consider each of these images to amount to a separate copyright violation for purposes of the statutory damage calculation under 17 U.S.C. § 504(c)(1). Section 504(c)(1) provides for statutory damages "for all infringements involved in the action, with respect to any one work." Section 504(c)(1) further provides "for purposes of this subsection, all the parts of a compilation or derivative work constitute one work." Defendant argues that, in awarding damages, the Court should consider the fact that the images defendant copied were images taken from compilations and, therefore, should not be counted separately. Defendant contends that because the images were collectively included in one of plaintiff's copyrighted magazines, then defendant should only be liable for a singular violation of that particular magazine's copyright and not for separate violations of each image included in that magazine issue.

The Court, however, disagrees with defendant's approach. In Gamma Audio & Video, Inc. v. Ean-Chea, the First Circuit rejected a similar argument on statutory damages by an infringer of several episodes of a television series. In finding that infringement of each episode amounted to a separate statutory violation under §504(c)(1), the Gamma Court looked at whether each episode "has an independent economic value and is, in itself, viable" and noted that "separate copyrights are not distinct works unless they can 'live their own copyright life.'" In Twin Peaks Productions v. Publications Intern., the Second Circuit adopted a similar approach in finding that eight television episodes constituted eight separate works for purposes of §504(c)(1). In the instant case, the Court finds that each one of these images has an "independent economic value" and is viable on its own. As plaintiff's counsel represented, although each of these images may have appeared in a singular issue of one of plaintiff's copyrighted publications, these images are subject to re-use and redistribution in accordance with various licensing arrangements. Furthermore, each image represents a singular and copyrightable effort concerning a particular model, photographer, and location. The fact that many of these images appeared together should not detract from the protection afforded to each individual effort. Furthermore, defendant marketed each one of these images separately. Based on these circumstances, the Court finds it appropriate to award statutory damages for each separate image under §504(c)(1).

In awarding damages, the Court recognizes that the purpose of the Copyright Act is to provide adequate compensations and to discourage and deter infringements. The Court finds that an award of $500 on each of the 7475 incidents of infringement is a sufficient to adequately compensate plaintiff and deter any future infringement by defendant. Accordingly, the Court ORDERS defendants Sanfilippo and Five Sense Productions to pay plaintiff $3,737,500. . . .

CONCLUSION

Based on the preceding discussion, the Court hereby GRANTS plaintiff's motion for summary judgment on his copyright infringement claim. The Court hereby ORDERS defendants and their agents, servants, employees and attorneys, and all persons acting for, by, with, through, or under them enjoined and restrained from copying, reproducing, distributing, displaying or preparing any derivative works of any copyrighted images owned by plaintiff. IT IS FURTHER ORDERED that plaintiff is authorized to retain or destroy, at its election, the data files comprising the 7475 infringed images and the electronic storage media upon which the data files reside. The Court FURTHER ORDERS defendants Sanfilippo and Five Sense Productions to pay plaintiff $3,737,500 in statutory damages. IT IS FURTHER ORDERED that plaintiff's request for attorney's fees and costs is GRANTED. Within 30 days of the file-stamped date of this order, plaintiff shall file and serve a declaration with documentation substantiating reasonable attorney's fees and costs. Defendants may file and serve any objections to this declaration within 15 days after service. Plaintiff may file and serve a reply to these objections within 7 days after service.

IT IS SO ORDERED.

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