Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-04174/USCOURTS-cand-4_04-cv-04174-1/pdf.json

Parties Involved:
IO Group, Inc.
Plaintiff
Aryeh Meir
Defendant

Document Text:

United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IO GROUP INC.,

Plaintiff,

v.

ARYEH MEIR,

Defendant. _______________________________________

No. C 04-4174-SBA

ORDER

[Docket No. 34]

This matter comes before the Court on Plaintiff IO Group, Inc.'s application for default

judgment against Defendant Aryeh Meir [Docket No. 34.] Having fully considered Plaintiff’s

application, the allegations contained in the Complaint, the declarations and exhibits filed in support

of Plaintiff’s application, the factors enunciated in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986),

and for good cause appearing, the Court hereby GRANTS Plaintiff's application as set forth in this

Order.

BACKGROUND

Plaintiff IO Group, Inc. ("Plaintiff") is a California corporation doing business as "Titan

Media," with its principal place of business located at 121 Capp Street, Suite 200, San Francisco,

California 94110. Complaint ¶ 2. Plaintiff produces and distributes adult-oriented entertainment

products, including Internet website content, audiovisual works, photographs, videos and DVDs. Id.

¶ 9.

Defendant Aryeh Meir ("Defendant") is an individual who resides in British Columbia,

Canada who owned and operated www.icravedick.com, a highly-interactive, commercial Internet

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1 www.icravedick.com was registered using the fictitious business Archer Consulting. Plaintiff

later subpoenaed the payment processor for the site and learned that all funds were being paid to

Defendant.

2

website. Complaint ¶¶ 3, 14.

Plaintiff alleges that Defendant illegally copied, distributed and publicly displayed on 

www.icravedick.com, and other websites owned or operated by the Defendant, one hundred and

sixty-seven (167) images that belong to Plaintiff and for which Plaintiff holds valid Certificates of

Copyright Registration. Complaint ¶¶ 18, 21. 

On April 16, 2004, Plaintiff sent to Archer Consulting, Inc., the fictitious entity to whom the

website icravedick was registered at the time, a take-down notice and a letter demanding that it cease

and desist illegally copying and publishing Plaintiff's works.1

 Declaration of Gill Sperlein ("Sperlein

Decl.") ¶ 8; Exs. A & B. The April 16, 2004 letter explained that Plaintiff believed the website

owned or controlled by Archer Consulting, Inc. infringed upon Plaintiff's copyrights. Id. at Ex. B. 

The operator removed Plaintiff's images from the website. Id. ¶ 9. Through counsel, Plaintiff

attempted to reach a compromise and avoid litigation, but Defendant refused to negotiate a

settlement. Id.

On October 1, 2004, Plaintiff filed the instant action. Defendant was served with a copy of

the Summons and Complaint on November 1, 2004. Id. ¶ 12. A response became due on November

21, 2004. On November 28, 2004, Plaintiff delivered to Defendant by United States mail and by email a letter reminding Defendant that a response was past due and that Plaintiff intended to ask the

Clerk of the Court to enter default against Defendant. Defendant failed to serve an answer or

otherwise respond to the Complaint. Id. ¶ 14. Upon Plaintiff's request, the Clerk entered default on

January 21, 2005 [docket no. 7.]

On February 25, 2005, without first having moved to set aside the entry of default,

Defendant, proceeding in pro per, and Plaintiff filed a Joint Case Management Statement and

Proposed Order in which Defendant contested all of the facts in Plaintiff's Complaint, and Plaintiff

expressed a willingness to postpone discovery upon Defendant's providing credible and verifiable

information that he was not the owner of the allegedly offending website [docket no. 16.] On March

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10, 2005, the parties appeared before the Court in a telephonic Case Management Conference,

stipulated to set aside the default, and agreed to have the matter referred to a magistrate judge for an

early settlement conference. On March 21, 2005 the Court entered Plaintiff's and Defendant's

Stipulation in which they stipulated to set aside the default and appear before a magistrate judge for

an early settlement conference. In addition, the parties stipulated to a further case management

conference on May 12, 2005, and agreed that Defendant would file an answer to the Complaint, or

other responsive pleading, within thirty (30) days of the stipulation and order. Defendant failed to

appear for the scheduled settlement conference and failed to file an answer or other responsive

pleading by April 20, 2005, as required by the order. Moreover, Defendant failed to make himself

available for the May 12, 2005 telephonic Case Management Conference. 

On May 18, 2005, this Court issued an Order to Show Cause why sanctions should not be

imposed and/or default re-entered against Defendant for his failure to comply with the Court’s

March 21, 2005 Order. Defendant failed to appear for the show cause hearing. Consequently, the

Court re-entered default against Defendant on June 21, 2005 and ordered Plaintiff to file a motion

for default judgment by July 18, 2005. On July 1, 2005, Plaintiff filed the instant application for

default judgment [docket no. 34.] 

LEGAL STANDARD

The decision of whether to grant or deny a request for default judgment lies within the sound

discretion of the district court. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (affirming

denial of motion for default judgment and sua sponte dismissal of plaintiff’s claims). In exercising

its discretion, the district court is guided by consideration of the following factors:

(1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive

claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action;

(5) the possibility of a dispute concerning material facts; (6) whether the default was due

to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil

Procedure favoring decisions on the merits.

Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986) (affirming denial of motion for default

judgment where district court had serious reservations concerning the substantive merit of the

claims, a large amount of damages were at issue, and there was a factual dispute with regard to the

matters alleged in the pleadings).

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A. The Eitel Factors

1. Substantive Merits and Sufficiency of the Complaint

The first two Eitel factors are (1) the merits of plaintiff's substantive claim, and (2) the

sufficiency of the complaint. Eitel, 782 F.2d at 1471-72. These two factors require that a plaintiff

"state a claim on which the [plaintiff] may recover." Kloepping v. Fireman's Fund, No. C 94-2684

TEH, 1996 WL 75314, at *2 (N.D. Cal. Feb. 13, 1996). Since default has been entered against

Defendant, the factual allegations of the Complaint, with the exception of the allegations regarding

damages, will be taken as true. Geddes v. United Financial Group, 559 F.2d 557, 560 (9th Cir.

1977).

a. Copyright Infringement

Plaintiff alleged a claim for copyright infringement.

The Copyright Act, 17 U.S.C. § 106, protects the owner of a copyright by granting him or

her exclusive rights to "reproduce, distribute, and publicly display copies of the work." Mattel Inc.

v. Walking Mt. Prods., 353 F.3d 792, 799 (9th Cir. 2003) (citation omitted). "A prima facie case of

copyright infringement by reproduction is established by showing ownership by the plaintiff and

copying by the defendant." Id.

The Complaint alleges that Plaintiff holds properly registered copyright certificates for the

one hundred and sixty seven (167) photographic and audiovisual works that it claims Defendant

reproduced. Complaint ¶¶ 23, 25. The Complaint further alleges that Defendant infringed these

works by reproducing, distributing and publicly displaying the works on the www.icravedick.com

and other websites without proper approval or authorization of Plaintiff. Id. ¶ 26. Accordingly,

Plaintiff has stated a claim for copyright infringement. 

b. Right to Publicity

The Complaint also alleges a claim for misappropriation of the right to publicity under both

common law and under California Civil Code § 3344. 

Under California law, an individual's right to publicity is invaded if another appropriates for

his advantage the individual's name, image, identity or likeness. Fleet v. CBS, Inc., 58 Cal. Rptr. 2d

645, 649 (1996). "This is an actionable tort under both common law and Civil Code section 3344." 

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Id.

"A common law cause of action for appropriation of name or likeness may be pleaded by

alleging (1) the defendant's use of the plaintiff's identity; (2) the appropriation of plaintiff's name or

likeness to defendant's advantage, commercially or otherwise; (3) lack of consent; and (4) resulting

injury." Id. (citations omitted). "In addition, to plead the statutory remedy provided in Civil Code

section 3344, there must also be an allegation of a knowing use of the plaintiff's name, photograph

or likeness for purposes of advertising or solicitation or purchases." Id. "Furthermore . . . [a] 'direct'

connection must be alleged between the use and the commercial purpose." Id.

The Complaint alleges that Plaintiff's copyrighted works embody images of actors all of

whom executed written agreements with Plaintiff through which Plaintiff became the exclusive

proprietor of the actors' rights to publicity in the performances embodied in Plaintiff's creative

works. Complaint ¶ 35; see KNB Enterprises v. Matthews, 92 Cal. Rptr. 2d 713, 721-23 (2000)

(where models assigned right to publicity to owner of copyrighted photo, copyright owner could

bring claim under section 3344 for unauthorized use of the model's human likeness). The Complaint

further alleges that Defendant displayed photographs of the actors for commercial gain without

Plaintiff's consent. Id. ¶ 37. As a direct and proximate result of Defendant' conduct, Plaintiff claims

that it was damaged. Id. ¶ 38. The Complaint further claims that Defendant acted in conscious

disregard of Plaintiff's rights. Id. ¶ 39. Thus, Plaintiff has stated a claim for both common law and

statutory misappropriation of the right to publicity.

Accordingly, the Court finds that the first two Eitel factors are satisfied.

2. Amount at Stake

Under the third Eitel factor, the court must consider the amount of money at stake in relation

to the seriousness of Defendant's conduct. Here, Plaintiff is seeking $1,252,500 in statutory

damages in relation to its copyright claim, and $125,250 in statutory damages in relation to its

statutory misappropriation of right to publicity claim. Given that Defendant never filed a responsive

pleading in this action, and discovery was never taken, it is unknown how this amount correlates

with Defendant's ill-gotten gains. Plaintiff has, however, submitted evidence sufficient to show that

it sells its images at the prevailing rate of $2,500 per image. Declaration of Keith Webb ("Webb

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 When $2,500 per image is multiplied by 167 images, the result is $417, 500. When this

amount is trebled, it results in Plaintiff's requested damages of $1,252,500. 

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Decl.") ¶ 8; Complaint ¶ 12.2 Plaintiff also states that it uses these images to drive subscriptions to

its own website and thus illegal distribution of these images decreases the overall value of its site. 

Webb Decl. ¶ 5. Illegal distribution of Plaintiff's works also decreases the uniqueness of the works

and damages Plaintiff's goodwill, thereby increasing the amount of Plaintiff's loss. In light of the

circumstances, this Court finds that Plaintiff's request of $2,500 per image is reasonable.

Further, the amount of damages requested by Plaintiff are within the range that is specifically

authorized by statute. See 17 U.S.C. § 504 (providing that court may award statutory damages in the

amount of $750 to $30,000 per work, increased to $150,000 in cases of willful infringement); Cal.

Civ. Code § 3344(a) (providing that court may award statutory damages in the amount of $750 per

photograph). Given this, the Court finds that the third Eitel factor has been met.

3. Possibility of Prejudice

The fourth Eitel factor considers whether Plaintiff will suffer prejudice if default judgment is

not entered. Potential prejudice to Plaintiff favors granting default judgment. Considering

Defendant's refusal to cooperate in this case, if Court were to deny Plaintiff's application for default

judgment, Plaintiff will likely be without other recourse for recovery. Thus, the fourth Eitel factor is

satisfied.

4. Possibility of Dispute

The fifth Eitel factor considers the possibility of dispute as to any material facts in the case. 

Upon entry of default, all well-pleaded facts in the Complaint are taken as true. Accordingly, no

genuine dispute of material facts would preclude granting Plaintiff's application.

5. Possibility of Excusable Neglect

The sixth Eitel factor considers the possibility that the default resulted from excusable

neglect. Plaintiff sent the fictitious entity that registered Defendant's website a cease-and-desist

notice and letter on April 16, 2004 regarding the conduct alleged in the instant action. Sperlein

Decl. ¶ 8. Defendant was also properly served with summons and Complaint on November 1, 2004. 

Further, on November 28, 2004, Plaintiff mailed to Defendant a letter regarding the Complaint and

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reminding Defendant that its response was past due. Defendant briefly appeared before this Court in

a Case Management Conference held on March 10, 2005, at which time the case was referred to an

early settlement conference. Defendant never appeared for the settlement conference, or ever again

for that matter. Finally, Defendant has been served with the instant application. Neither Plaintiff

nor the Court has received any response from Defendant. Thus, considering the numerous

opportunities for Defendant to participate in this action the possibility of excusable neglect in this

action is remote.

6. Policy for Deciding on the Merits

"Cases should be decided upon their merits whenever reasonably possible." Eitel, 728 F.2d

at 1472. However, the mere existence of Fed. R. Civ. P. 55(b) indicates that "this preference,

standing alone, is not dispositive." Kloepping, 1996 WL 75314, at *3. Moreover, Defendant's

failure to answer the Complaint makes a decision on the merits impractical, if not impossible. Under

Fed. R. Civ. P. 55(a), termination of a case before hearing the merits is allowed whenever a

defendant fails to defend an action. Thus, "the preference to decide cases on the merits does not

preclude a court from granting default judgment." Kloepping, 1996 WL 75314, at *3. 

In light of the foregoing analysis, the Court concludes that it may properly enter default

judgment against Defendant. 

B. Damages

Since default judgment is proper, the Court must next assess Plaintiff's requested award of

damages. Here, Plaintiff seeks monetary damages for two claims: (1) copyright infringement; and

(2) statutory misappropriation of right of publicity under California Civil Code § 3344. Plaintiff

seeks statutory damages in the amount of $1,252,500 for Defendant's willful infringement of

plaintiff's copyrighted works and statutory damages in the amount of $125,250 for statutory

misappropriation of right to publicity.

1. Copyright Claim

In an action for copyright infringement, the copyright owner is entitled to recover the actual

damages suffered by him or her as a result of the infringement, and any profits of the infringer that

are attributable to the infringement. Alternatively, at the election of the plaintiff, the Court may

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award statutory damages in the amount of $750.00 to $30,000.00 per work as it considers just,

increased to $150,000 in cases of willful infringement. 17 U.S.C. § 504.

In this case, Plaintiff argues that it should be awarded statutory damages in the amount of

$2,500 per work because it is too difficult to determine the amount or extent of Defendant's illicit

profits or the actual amount of Plaintiff's loss. Specifically, Plaintiff contends that it cannot

determine the amount of Defendant's profits because Defendant failed to respond in this action, and

discovery did not occur. Additionally, Plaintiff alleges its actual losses cannot be readily determined

given that the value of Plaintiff's works lies in their high quality and uniqueness and given that

Defendant's actions have resulted in harm to Plaintiff's reputation. Plaintiff further notes that

Defendant apparently took no precautions to prevent further distribution of Plaintiff's works, and

thus Defendant may have allowed Plaintiff's images to be further distributed to an unknown number

of other persons. Webb Decl. ¶ 9. Plaintiff has submitted evidence showing that it charges a

licensing fee of $2,500 per image. Webb Decl. ¶ 10. Plaintiff therefore asserts that $2,500 should

constitute the minimum amount of statutory damages awarded per work. In light of the absence of

objective evidence of harm and the difficulty in determining actual damages, statutory damages is an

appropriate measure.

Plaintiff further asserts that because of the willfulness of Defendant's infringing acts, the

statutory damages should be trebled to $7,500 per work, for a total of $1,252,500. "Willful"

infringement means "with knowledge that the defendant's conduct constitutes copyright

infringement." Peer Int'l Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1335 & 1335 n.3 (9th Cir.

1990). This includes constructive knowledge. See Spectravest, Inc. v. Fleet Street, Ltd., No.

C-88-4539 RFP, 1989 WL 135386, at *5 (N. D. Cal. Aug. 23, 1989) ("To find [an infringer's]

actions willful, we need only determine whether she should have known that her actions would

constitute infringement.").

In Perfect 10, Inc. v. Talisman Communs., Inc., No. CV99-10450 RAP MCX, 2000 WL

364813 (C.D. Cal. Mar. 27, 2000), plaintiff, a magazine publisher sued a website for publishing its

adult photographs on the Internet. The court found that the infringement was willful because: (1) the

magazine from which the photographs were taken displayed a clear copyright notice; and (2) the

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photographs themselves displayed the names of the models and other information. Id. at *4. The

court then ordered statutory damages in the amount $100,000 per infringing photograph. Id.

Here, the photographs at issue were displayed on a website maintained by Plaintiff. Highresolution versions of its photographic works and audiovisual content can be viewed by individuals

who pay a monthly subscription fee. Complaint ¶ 9. Users are allowed to view only and are not

allowed to download or save materials to their home computers. Id. The website contains a "Legal

Statement of Intellectual Property Rights." Webb Decl., Exh. B. The statement provides in relevant

part:

[a]ll web pages text and accompanying code is intellectual property and is

copyrighted, having a retail value of $6000.00 US and is only available when

ordered directly from the author. Each individual photograph or image

contained on our web pages or portion thereof contained in this site has a

retail value of $2,500 U.S. and is only available when ordered from the

author . . . No portion of this site may be used or redistributed for commercial

or personal purposes.

Id. The statement further provides that "[u]sers may not circumnavigate any technological means

we have deployed to effectively control access on our site to protect our materials . . . and [doing so]

is considered theft. Theft of any of the above materials will result in swift and severe legal action

being taken . . . [including a civil suit for] copyright infringement." Id. In several places, the

statement indicates that the website is protected by federal copyright laws. Id. Given this, any

visitor to Plaintiff's site would or should have known that the material contained in the site was

protected by copyright.

Further, Plaintiff wrote a cease-and-desist letter before filing of the instant Complaint,

specifically informing the fictitious entity to whom the website icravedick was registered at the time

that it was violating Plaintiff's copyrights and listing each such alleged act of infringement. Sperlein

Decl. Exs. A & B. The letter also sought compensation for the acts of infringement and further

stated if the entity failed to satisfy its financial obligation, Plaintiff would file a complaint in federal

court seeking damages. While the offending images were removed, Defendant has been unwilling to

compensate Plaintiff for the illegal use. Further, Plaintiff attempted to reach a compromise with

Defendant in order to avoid litigation, but Defendant refused to negotiate in good faith in order to

reach a settlement.

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 It is well established that the Copyright Act does not preempt this section of the California

Code. See Downing v. Abercrombie & Fitch, 265 F.3d 994, 1004-05 (9th Cir. 2001) (section 3344 not

preempted by Copyright Act).

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In light of the foregoing, the Court finds that the infringement was willful. Since, the Court

is authorized to award up to $150,000 per copyright, the Court finds that Plaintiff's request for

$7,500 per copyright is reasonable. Therefore, Plaintiff's request for a total of $1,252,500 in

statutory damages is GRANTED.

2. Misappropriation Claim

California Civil Code § 3344 provides that, "[a]ny person who knowingly uses another's . . .

photograph . . . in any manner, on or in products, merchandise, or goods or for purposes of

advertising or selling, or soliciting purchases of products, merchandise, goods or services, without

such person's prior consent . . . shall be liable for any damages . . . equal to the greater of seven

hundred fifty dollars ($750) or the actual damages." Cal Civ. Code § 3344(a).3

 The remedies

provided for by § 3344 are cumulative and shall be in addition to any others provided for by law. 

Cal. Civ. Code § 3344(g).

Here, under California Civil Code § 3344, Plaintiff is entitled to statutory damages of $750

for each unauthorized use of Plaintiff's photographs. Cal. Civ. Code § 3344(a); see Perfect 10, 2000

WL 364813, at * 4-5 (awarding statutory damages of $750 for each model's rights violated). 

Plaintiff argues that it should therefore be awarded damages in the amount of $125,250 because one

hundred and sixty seven (167) unique images of recognizable models appeared on Defendant's

websites. In support of this, Plaintiff has provided the Court with a chart documenting the one

hundred and sixty seven url addresses and names of the recognizable models found on Defendant's

websites. Supplemental Declaration of Gill Sperlein ("Supp. Sperlein Decl.") Ex. A. Additionally,

Plaintiff provided a compilation of the images Defendant improperly and without prior authorization

distributed on his websites. Supplemental Declaration of Keith Webb ("Supp. Webb Decl.") Ex. A. 

Plaintiff contends that one hundred and seventeen (117) images contain at least one

identifiable model and twenty-five (25) images contain two readily identifiable models. Plaintiff

admits that a person is not recognizable where the face is obscured and there are no other unique

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 Of the one-hundred sixty seven images Plaintiff provided, twenty-five (25) of the photographs

did not present a readily identifiable image. Additionally, in three of the photographs, the model's face

or body was not readily identifiable. This results in one hundred and thirty-nine (139) readily

identifiable images.

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 $104,250 is equal to one hundred and thirty nine (139) photographs at $750 each.

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characteristics, such as a tattoo. Supp. Sperlein Decl. ¶6. Plaintiff concedes twenty-five (25) such

images contain unrecognizable models. Id. & Ex. A. Upon reviewing Plaintiff's evidence, the Court

finds Plaintiff's evidence is sufficient to show that one hundred and thirty nine (139) readily

identifiable images are present in the photographs. With respect to three of the photographs, the

Court disagrees that the model's face or body is readily identifiable.4

 Accordingly, Plaintiff has

proven it is entitled to damages under this section in the amount of $104,250.5

CONCLUSION

Plaintiff's Application for Default Judgment is GRANTED and Plaintiff is awarded damages

in the total amount of $1,356,750.

IT IS SO ORDERED.

Dated: January 27, 2006 SAUNDRA BROWN ARMSTRONG

United States District Judge

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