Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-04875/USCOURTS-cand-4_04-cv-04875-1/pdf.json

Parties Involved:
BIC Productions
Defendant
IO Group, Inc.
Plaintiff
Patrick Lawlor
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.

BIC PRODUCTIONS, et al.,

Defendants.

 /

No. C 04-4875 SBA

ORDER

[Docket No. 8]

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

against Defendant BIC Productions ("Defendant BIC") [Docket No. 8]. 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

principalplace ofbusinesslocated at 121 Capp Street, Suite 200, San Francisco, California 94110. Compl.¶

2. Plaintiff produces and distributes adult entertainment products, including Internet website content,

photographs, videos, and DVDs. Id. ¶ 10.

Defendant BIC Productions ("Defendant BIC" or "BIC") is a California entity that produces and

distributes gay adult movies and runs and operates a website located at www.bicprod.com. Id. ¶ 4. 

Defendant Patrick Lawlor ("Defendant Lawlor") is an individual who resides in Pennsylvania. He

appears as a model/actor in adult films produced by BIC. Id. ¶ 3. He also owns and operates a website

located at www.glovdcopsf.com. Id. 

Plaintiff alleges that Defendant BIC and Defendant Lawlor illegally copied, distributed and publicly

displayed fifty-seven (57) images that belong to Plaintiff and for which Plaintiff holds valid Certificates of

Copyright Registration. Id. ¶¶ 23, 29. Specifically, Plaintiff alleges that forty-nine (49) acts of infringement

occurred fromthe base domain www.bicprod.com, which is registered to Defendant BIC, and eight (8) acts

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of infringement occurred from the base domain www.glovdcop.sf.com, which is registered to Defendant

Lawlor. Id. ¶ 24-25. Twenty-six of the infringed photographs contained Plaintiff's conspicuously displayed

copyright mark. Id. ¶ 26. 

OnNovember 6, 2002, Plaintiffsent to Defendant BIC a take-down notice and a letter demandingthat

BIC, and each and every person or company affiliated with BIC, cease and desist illegally copying, publishing

and publicly displaying Plaintiff's works. Declaration of Gill Sperlein ("Sperlein Decl.") ¶ 8; Exs. A, B. The

November 6, 2002 letter explained that Plaintiff believed thatBIC had used at least forty-nine (49) ofPlaintiff's

copyrighted images and that BIC's acts of infringement were willful. Id. at Ex. B. Plaintiff warned BIC that

it could be liable for up to $150,000 per infringed work. Id. ¶ 8. Through counsel, Plaintiff attempted to reach

a compromise and avoid litigation. Id. at Ex. B. BIC removed Plaintiff's images from the website but was

unwilling to compensate Plaintiff for use of the images. Id. ¶ 8. 

Plaintifffiled a Complaint against BIC and Lawlor on November 16, 2004. On November 17, 2004,

Plaintiff served on BIC a copy of the summons and complaint along with a request that it waive service of

process, two copies of a completed waiver forits execution and a self-addressed, stamped envelope. Sperlein

Decl. ¶ 11. BIC did not execute or return the waiver. Id. ¶ 12. Subsequently, Plaintiff engaged a process

server who served Defendant BIC by substitute service, proof of whichPlaintifffiled with this Court. Id. ¶ 13.

A response became due on February 4, 2005. On February 9, 2005, Plaintiff delivered to Defendant BIC by

United States mail and by e-mail a letter reminding BIC that a response was past due. Id. ¶ 14. Defendant

BIC failed to serve an answer or other response to the Complaint. Id. ¶ 15. Upon Plaintiff's request, the Clerk

entered default on February 14, 2005. Id. ¶ 16. 

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

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default was due to excusable neglect; and (7) the strong policyunderlyingthe 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).

ANALYSIS

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, 1996 U.S. Dist. LEXIS 1786, 1996 WL 75314,

at *2 (N.D. Cal. 1996). Since default has been entered against Defendant BIC, 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 claims for copyright infringement, contributory copyright infringement and vicarious

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 forty-nine

(49) photographs that it claims BIC reproduced. Compl. ¶¶ 24, 29. The Complaint further alleges that BIC

infringed these works by reproducing, distributing, and publicly displaying the works on the www.bicprod.com

website without the proper approval or authorization ofPlaintiff. Id. ¶ 34. Accordingly, Plaintiff has stated a

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1

 Contributory infringement requires that the secondary infringer "know, or have reason to know" of

direct infringement. Adobe Sys. v. Canus Prods., 173 F. Supp. 2d 1044, 1048 (C.D. Cal. 2001). Vicarious

liability exists when (1) a defendant has the right and ability to supervise the infringing conduct and (2) the

defendant has an obvious and directfinancial interest in the infringement. Id. The allegations ofthe Complaint

satisfy all of these requirements.

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claim for copyright infringement. Plaintiff has also stated claims for contributory and vicarious copyright

infringement.1 Compl. ¶¶ 42-45, 47-50. 

b. Right to Publicity

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

law and 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., 50 Cal. App. 4th 1911, 1918

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

"A common law cause of action for appropriation ofname or likeness may be pleaded by alleging (1)

the defendant's use ofthe plaintiff'sidentity; (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 claims that Plaintiff's copyrighted works embody imagesofactors all ofwhomexecuted

written agreements with Plaintiff through whichPlaintiff became the exclusive proprietor ofthe actors' rights of

publicity in the performances embodied in Plaintiff's creative works. Id. ¶ 51; see KNB Enterprises v.

Matthews, 78 Cal. App. 4th 362, 368 (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 allegesthatBIC displayed photographs of the actors for commercial

gain without Plaintiff's consent. Id. ¶ 55. As a direct and proximate result of BIC's conduct, Plaintiff claims

that it was damaged. Id. ¶ 56. The Complaint further claims that BIC acted in conscious disregard of Plaintiff's

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2When $2,500 per image is multiplied by 49 images, the result $122,500. When this amount istrebled,

it results in Plaintiff's requested damages of $367,500.

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rights. Id. ¶ 57. 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 BIC's conduct. Here, Plaintiff is seeking $367,500 in statutory damages in relation

to its copyright claim and $54,000 in statutory damages in relation to its statutory misappropriation of the right

to publicity claim. Given that Defendant BIC never appeared in this action, and discovery was never taken,

it is unknown how this amount correlates with BIC's ill-gottengains. Plaintiff, however, has submitted evidence

sufficient to show that it sells its images at the prevailing rate of $2,500 per image. Webb Decl. ¶ 8; Compl.

¶ 13.2 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. The illegal distribution of

Plaintiff's works also decreasesthe uniquenessofthe works and damages Plaintiff's goodwill, thereby increasing

the amount of Plaintiff's loss. In light ofthe circumstances, this Court findsthat Plaintiff'srequest of$2,500 per

image is reasonable. 

Further, the amount ofdamagesrequested 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$750.00

to $30,000.00 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 $750 per photograph). Given this, the Court

finds that the third Eitel factor has been met. 

3. Possibility of Prejudice

The fourth Eitel factor considerswhetherPlaintiffwillsufferprejudice if default judgment is not entered.

Potential prejudice to Plaintiff favors granting a default judgment. Considering BIC's refusal to cooperate with

this case, ifthis Court were to deny Plaintiff's motion for default judgment, Plaintiff would likely be withoutother

recourse for recovery. Thus, the fourth Eitel factor is satisfied.

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4. Possibility of Dispute

The fifthEitel factor considers the possibility ofdispute as to any materialfacts in the case. Upon entry

ofdefault, all well-pleaded facts in the Complaint are taken as true. Accordingly, no genuine dispute ofmaterial

facts would preclude granting Plaintiffs' motion.

5. Possibility of Excusable Neglect

The sixth Eitel factor considers the possibility that the default resulted fromexcusable neglect. Plaintiff

sentBIC a cease-and-desist notice and letter on November 6, 2002 regarding the conduct alleged in the instant

action. Sperlein Decl. ¶ 8. BIC was also properly served with the summons and Complaint on January 15,

2005. Id. ¶ 13. Further, on February 9, 2005, Plaintiff delivered to BIC a letter and e-mail reminding BIC

that its response to the Complaint was past due. Id. Finally, BIC was served with the instant application.

Neither Plaintiff nor the Court has received any response from BIC. Thus, considering the numerous

opportunities for BIC to participate in this action, and its failure to do so, 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, "this preference, standing alone, is not dispositive."Kloepping, 1996 U.S. Dist. LEXIS 1786, 1996

WL 75314, at *3. Here, Defendant BIC's failure to answer the Complaint makes a decision on the merits

impractical, if not impossible. Under FederalRule Civil Procedure 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 U.S. Dist. LEXIS

1786, 1996 WL 75314, at *3. 

In light ofthe foregoing analysis, the Court concludes that itmayproperly enter default judgment against

Defendant BIC. 

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 ofthe right to publicityunder California CivilCode § 3344. Plaintiff seeks statutory damages

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in the amount of $367,500 for defendants' willful infringement of plaintiff's copyrighted works and statutory

damages in the amount of $54,000 for statutory misappropriation of the 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 ofthe infringement, and any profits of the infringer that are attributable to the

infringement. Alternatively, at the election of the plaintiff, the Court may award statutory damages in the

amount of $750 to $30,000 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 BIC's illicit profits or the actualamount of

Plaintiff'sloss. Specifically, Plaintiff contends that it cannot determine the amount of BIC's profits because BIC

failed to respond to this action. Plaintiff also alleges that its actual losses cannot be readily determined given

that the value of Plaintiff's works lies in their uniqueness and given that BIC's actions have resulted in harm to

Plaintiff's reputation. Plaintiff further notes that BIC apparently took no precautions to prevent further

distribution of Plaintiff's works, and thus BIC may have allowed Plaintiff's images to be further distributed to

an unknown number of other persons. Webb Decl. ¶¶ 6- 9. Plaintiff has submitted evidence showing that it

charges a licensing fee of $2,500 per image. Webb Decl. ¶ 8. Plaintiff therefore asserts that $2,500 should

constitute the minimum amount of statutory damages awarded per work.

Plaintiff further asserts that because of the willfulness of BIC's infringing acts, the statutory damages

should be trebled to $7,500 per work, for a total of $367,500. "Willful" infringement means "with knowledge

that the defendant's conduct constitutes copyrightinfringement." PeerInt'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., 1989 U.S. Dist. LEXIS 16594, at *12 (N. D. Cal. 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., 2000 U.S. Dist. LEXIS 4564 (C.D. Cal. 2000),

the plaintiff, a magazine publisher,sued a website for publishing its adult photographs on the Internet. The court

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found that the infringement was willful because: (1) the magazine from which the photographs were taken

displayed a clear copyright notice; and (2) the photographs themselves displayed the names of the models and

other information. Id. at *10-11. The court then ordered an award of statutory damages in the amount

$100,000 per infringing photograph. Id. at *11.

Here, the photographs at issue were displayed on a website maintained by Plaintiff. Plaintiff allows

individuals who pay a subscription fee to download these photographs to their home computers. The website

contains a "Legal Statement of Intellectual Property Rights." Webb Decl., Ex. 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 fromthe 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 fromthe 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 controlaccess on our site to protect our materials . . . and [doing so] is considered theft.

Theft of any ofthe 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. Additionally, twenty-six of the infringed photographs contained Plaintiff's

conspicuously displayed copyright mark. Compl. at ¶ 26. 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 BIC a cease-and-desist letter before the filing of the instant Complaint,

specifically informing BIC 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 that if BIC failed to satisfy itsfinancial obligation, Plaintiff would file a complaint in federal court

seeking damages. Id. While BIC removed the offending images, BIC nevertheless failed to respond to

Plaintiff. Id. ¶ 9.

In light of the foregoing, the Court finds that BIC's 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 in

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3

 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) (California Civil Code §

3344 not preempted by Copyright Act).

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 $50,250 is equal to sixty-seven (67) photographs at $750 each.

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damages per image is reasonable. Therefore, Plaintiff'srequest for a total of $367,500 in statutory damages

for willful copyright infringement 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, orsolicitingpurchases ofproducts,merchandise, goods orservices, withoutsuch person's prior consent

. . . shall be liable for any damages . . . equal to the greater ofseven 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. § 3344(a); see Perfect 10, 2000 U.S. Dist. LEXIS

4564, at *11-12 (awarding statutory damages of $750 for each model's rights violated). Plaintiff argues that

it should therefore be awarded damages in the amount of $54,000 because seventy-two (72) unique images

of recognizable models appeared on BIC's website. In support of this, Plaintiff has provided the Court with

forty-eight (48) photographs that BIC published on its website. Declaration of Gill Sperlein I.S.O.

SupplementalMemorandum ("Supp. Sperlein Decl.") at ¶¶ 5-8, Exs. A and B. Plaintiff contends that thirty of

the photographs contain one identifiable modeleach; nine ofthemcontain two readily identifiable models; and

eight photographs contain three readily identifiable models. Id. at ¶ 6. Plaintiff admits that a person is not

"readily identifiable" if his face is obscured and there are no other unique characteristics, such as a tattoo. Id.

¶ 7. Upon reviewing Plaintiff's evidence, the Court findsthat Plaintiff's evidence is sufficient to show that sixtyseven (67) readily identifiable images are present in the photographs. With respect to six ofthe photographs,

however, the Court disagrees with Plaintiff and finds that the model's face or body is not readily identifiable.

Accordingly, Plaintiff has proven that it is entitled to damages amounting to $50,250.4

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C. Injunctive Relief.

Plaintiff has also requested that the Court enter a permanent injunction against Defendant BIC.

Specifically, Plaintiffrequests that the Court enjoin Defendant BIC from:(1) reproducing Plaintiff's copyrighted

works; (2) preparing derivative works based upon Plaintiff's copyrighted works; (3) distributing copies or

phonorecords ofPlaintiff's copyrighted works to the public by sale or other transfer ofownership, or by rental,

lease, or lending; (4) performing any of Plaintiff's literary, musical, dramatic, or choreographic copyrighted

works publicly; (5) displaying any ofPlaintiff'sliterary, musical, dramatic, or choreographic copyrighted works

publicly; and (6) performing any of Plaintiff's copyrighted sound recordings publicly. See Supp. Memo. at

3:19-4:5. 

Section 502 of the Copyright Act provides in pertinent part: "[a]ny court having jurisdiction of a civil

action arising under this title may, subject to the provisions of § 1948 of title 28, grant temporary and final

injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright." 17

U.S.C. § 502. A court may issue an injunctionas part of a default judgment. See Sony Music Entertainment

Inc. v. Elias, 2004 WL 141959 * 4 (C.D. Cal. 2004). 

To establish that it is entitled to a permanent injunction, Plaintiff must show that Defendant BIC's

conduct is causing irreparable injury that cannotfully be compensated or measured in money, and that Plaintiff

will continue to suffersuchinjury unlessthe Court enjoins BIC's continuing infringement ofPlaintiff's copyrights.

Id. In copyright claims, irreparable harmis presumed upon a showing of reasonable likelihood of success on

the merits. Id. Since the default against Defendant BIC satisfiesthe element of success on the merits, Plaintiff

need not show irreparable harm. Id. 

Plaintiff must also show that it continues to suffer irreparable harm. Although it is significant that

Plaintiff's supporting evidence establishes that three years have lapsed since Defendant BIC engaged in any

infringing activities, BIC's failure to respond to this lawsuit suggeststhatDefendant does not take seriously the

illegality of the infringing activity and therefore may continue to infringe. Thus, Plaintiff has demonstrated that

an injunction is warranted. 

However, despite this Court's explicit instructions, Plaintiff still has not clearly articulated a cognizable

request for injunctive relief. In fact, the request for injunctive relief that is set forth in Plaintiff's Supplemental

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Memorandum greatly exceeds the scope of Plaintiff's Complaint. Specifically, although Plaintiff's Complaint

concerns photographs or moving images, Plaintiff is requesting that the Court enjoin Defendant BIC from

displaying or performing any and all copyrighted "literary, musical, dramatic, and choreographic works." See

Supp. Memo. at 3:26-4:5. However, Plaintiff has not demonstrated that it even owns any copyrighted "literary,

musical, dramatic, or choreographic works." Accordingly, the Court hereby GRANTS Plaintiff's request for

injunctive relief as follows:DefendantBIC is permanently enjoined from:(1) reproducing Plaintiff's copyrighted

works; (2) preparing derivative works based upon Plaintiff's copyrighted works; and (3) distributing copies of

Plaintiff's copyrighted works to the public by sale, transfer of ownership, rental, lease, or loan.

CONCLUSION

Plaintiff's Application for Default Judgment is GRANTED as follows: 

(1) Plaintiff is awarded damages in the amount of $417,750; and

(2) Defendant BIC is permanently enjoined from (a) reproducing Plaintiff's copyrighted works; (b)

preparing derivative works based upon Plaintiff's copyrighted works; and (c) distributing copies of Plaintiff's

copyrighted works to the public by sale, transfer of ownership, rental, lease, or loan.

IT IS SO ORDERED.

 /s/ Saundra Brown Armstrong 

Dated: 5-16-05 SAUNDRA BROWN ARMSTRONG

United States District Judge

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