McGraw-Hill Global Educ. Holdings, LLC v. Khan
McGraw-Hill Global Educ. Holdings, LLC v. Khan
Opinion of the Court
Plaintiffs McGraw-Hill Global Education Holdings, LLC, Elsevier, Inc., John Wiley & Sons, Inc., Cengage Learning, Inc., and Pearson Education Inc. publish educational works. In this action, Plaintiffs allege that Defendants Farukh Khan, Joonwon Park, Jeong Hyun Chu, Masud Karim, Rabiul Islam, and John Does 1-10 have infringed on Plaintiffs' copyrights in their educational works, in violation of
Plaintiffs allege that Defendants own, control, and operate multiple illegal online websites and forums to create, store, and sell unauthorized digital copies of Plaintiffs' works. (Id. ¶¶ 23-28) Defendants operate these infringing websites under multiple names or aliases and through the use of multiple email addresses. (Id. ¶¶ 24-25) At Defendants' websites, purchasers or potential purchasers can search for listings of unauthorized digital copies of Plaintiffs' instructor solutions manuals and test banks. (Id. ¶ 28) Defendants also host "product *493pages" where visitors can download free sample copies of the instructor solutions manuals and test banks. (Id. ¶¶ 29-30) Defendants have also registered multiple domain names and established corresponding websites, some with identical or duplicative content, all to avoid interruption of their illegal business should any one website or payment account be shut down. (Id. ¶ 39)
Plaintiffs have made test purchases and downloaded free samples from Defendants' websites, confirming that Defendants are providing customers with digital copies of Plaintiffs' instructor solutions manuals and test banks. (Id. ¶ 33) Plaintiffs allege that Defendants' reproduction and distribution of Plaintiffs' copyrighted works has occurred without authorization and without compensation to Plaintiffs, their authors, and others in the legitimate chain of commerce. (Id. ¶ 35)
PROCEDURAL HISTORY
This action was commenced on November 21, 2016. (See
On December 5, 2016, this Court held a hearing on Plaintiffs' request for a preliminary injunction, and the Court subsequently entered an order granting Plaintiffs' motion for a preliminary injunction. (Order (Dkt. No. 15) ) The preliminary injunction (1) enjoined Defendants from infringing Plaintiffs' works; (2) enjoined Defendants from transferring ownership or control of the websites or domain names associated with Defendants' websites; and (3) directed Defendants to locate all accounts connected to Defendants websites and refrain from transferring or withdrawing any funds from therein. (Order (Dkt. No. 3) at 4-7)
On February 27, 2017, Plaintiffs moved for entry of default against Defendants, given their failure to appear or otherwise respond to the Complaint. (Request for Default (Dkt. No. 19) ) On February 28, 2017, the Clerk of Court issued a certificate of default. (Clerk's Certificate of Default (Dkt. No. 21) )
On June 8, 2018, this Court issued an Order to Show Cause why a default judgment and permanent injunction should not be entered against Defendants. (Order to Show Cause (Dkt. No. 22) ) This Court ordered that service by email be made by June 11, 2018, and scheduled a hearing for June 22, 2018 at 10:00 a.m. (Id. at 2) On June 8, 2018, Plaintiffs filed an Affidavit of Service, attesting that copies of this Court's Order to Show cause and the accompanying memorandum of law and declaration had been served on Defendants via electronic mail in accordance with this Court's November 21, 2016 Order authorizing alternative service. (Aff. of Service (Dkt. No. 25) )
Defendants have not filed an opposition and did not appear at the June 22, 2018 hearing.
DISCUSSION
I. PERSONAL JURISDICTION
"A plaintiff's factual allegations, except those relating to damages, must be *494accepted as true where, as here, the defendant defaults." Gucci Am., Inc. v. Tyrrell-Miller,
A. New York's Long-Arm Statute
1. New York CPLR § 302(a)(1)
New York's long-arm statute provides, in relevant part, that a court may exercise specific personal jurisdiction over a non-domiciliary who "transacts any business within the state or contracts anywhere to supply goods or services in the state."
"When analyzing whether a defendant's internet activity rises to the level of purposeful activity sufficient to satisfy Section 302(a)(1), courts apply a 'sliding scale' test based on the level of a website's interactivity." Audiovox Corp. v. S. China Enter., Inc., No. 11 Civ. 5142 (JS) (GRB),
Here, Plaintiffs allege and have proffered evidence that Defendants own and operate "highly interactive" online websites and forums, through which Defendants distribute digital copies of Plaintiffs' works to customers for a fee. (Cmplt. (Dkt. No. 1) ¶¶ 23-26, 28; Lichtman Decl. (Dkt. No. 5) ¶¶ 5, 8-10, 12-17) Defendants' websites have received thousands of visits from customers located throughout the *495United States, including in this District. (Cmplt. (Dkt. No. 1) ¶ 34; Lichtman Decl. (Dkt. No. 5) ¶ 10) Moreover, Defendants' websites are "highly interactive," allowing prospective customers in New York to browse and purchase unauthorized digital copies of Plaintiffs' works. (Cmplt. (Dkt. No. 1) ¶¶ 26-34; Lichtman Decl. (Dkt. No. 5) ¶¶ 10-16) Because Defendants' "website is interactive and allows a buyer in New York to submit an order online," Audiovox,
2. New York CPLR § 302(a)(3)(ii)
Here, the situs of Plaintiffs' injury is New York, where the majority of Plaintiffs have their principal place of business, or are incorporated. (See id.; Cmplt. (Dkt. No. 1) ¶¶ 6-10) "It is [also] reasonably foreseeable that the provision of materials that infringe the copyrights and trademarks of a New York company will have consequences in New York." McGraw-Hill Companies, Inc. v. Ingenium Techs. Corp.,
B. Due Process
The Court concludes that application of New York's long arm statute is consistent with the limits of due process. See D.H. Blair & Co. v. Gottdiener,
II. PLAINTIFFS' APPLICATION FOR A DEFAULT JUDGMENT
In moving for a default judgment, Plaintiffs seek the following relief: (1) statutory damages in the amount of $9,150,000, plus post-judgment interest; and (2) a permanent *496injunction. (Proposed Default Judgment (Dkt. No. 24-10) at 3-4)
"[A] party's default is deemed to constitute a concession of all well pleaded allegations of liability." Sub-Zero, Inc. v. Sub Zero NY Refrigeration & Appliances Servs., Inc., No. 13 Civ. 2548 (KMW) (JLC),
A. Copyright Infringement
Plaintiffs contend that Defendants infringed Plaintiffs' copyrights in the test banks, instructor solutions, and textbooks listed in Exhibit A to the Complaint. (See Cmplt. (Dkt. No. 1) ¶¶ 41-46, Ex. A (Dkt. No. 1-1) ) Plaintiffs allege that they own the copyrights for these works, and are the exclusive licensees of all rights, title and interest in their respective copyrights. (Cmplt. (Dkt. No. 1) ¶ 41) Plaintiffs further allege that to the extent some of the instructor solutions manuals listed in Exhibit A have not been independently registered with the Copyright Office, they are "derivative works of the underlying textbook" and Plaintiffs therefore "rely upon their copyright registration for the underlying textbook." (Id. )
"To establish copyright infringement, 'two elements must be proven: (1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.' " Williams v. Crichton,
1. Ownership of a Valid Copyright
"With regard to ownership, "[a] certificate of registration from the United States Register of Copyrights constitutes prima facie evidence of the valid ownership of a copyright." Mint, Inc. v. Amad,
While Plaintiffs have not attached Certificates of Registration for the sixty-one works at issue, Plaintiffs have alleged that they own copyrights for the textbooks, test banks, and instructor solutions manuals at issue, and they have submitted a schedule listing the copyright registration numbers for each work in Exhibit A to the Complaint. (See Cmplt. (Dkt. No. 1) ¶ 41, Ex. A (Dkt. No. 1-1) ) Plaintiffs have also submitted five publisher declarations alleging ownership of the works.
A "derivative work" is defined in the Copyright Act as "a work based upon one or more preexisting works ... [including a] work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship."
A majority of courts in this District have held that copyright registration of a textbook protects a corresponding unregistered instructor solutions manual to the extent the solutions manual contains protected material from the registered textbook. See Pearson Educ., Inc. v. Ishayev,
Here, Plaintiffs allege that the instructor solutions manuals that are not independently registered are "derivative works of the underlying textbook." (Cmplt. (Dkt. No. 1) ¶ 41) Plaintiffs allege that the instructor solutions manuals "contain significant protected expression from the textbook." (Id. ¶ 20) "In some instances, these supplementary materials repeat the original questions or other original content verbatim from the textbook. But, even without word-for-word copying, the supplementary materials are based upon, and necessarily copy from, the original questions and other protected expression from the textbook." (Id. )
The Court further concludes that the allegations in the Complaint are sufficient to establish that all of the works listed in Exhibit A to the Complaint are protected by Plaintiffs' copyrights.
*4982. Unauthorized copying
"Plaintiffs in copyright infringement actions are permitted to prove the second element of their claim-unauthorized copying by the defendant-indirectly by demonstrating access and substantial similarity.... Access may be inferred when the defendant has had a 'reasonable opportunity to view' plaintiff's work before creating his own." Arica Inst., Inc. v. Palmer,
Here, Plaintiffs have alleged that Defendants own, control, and operate multiple illegal online sites and other forums. (Cmplt. (Dkt. No. 1) ¶ 23) Defendants create and store unauthorized digital copies of solutions manuals and test banks, including the works listed in Exhibit A. (Id. ¶ 26) Plaintiffs made test purchases and downloaded multiple samples from Defendants' websites. (Id. ¶ 33) These purchases and downloads confirm that, as Defendants advertise on their websites, they provide customers with complete digital copies of Plaintiffs' instructor solutions manuals and test banks. (Id. ) Upon payment of a fee from their customers, Defendants distribute copies to the public in violation of Plaintiffs' copyrights. (Id. ¶ 26) Defendants also offer free sample copies of the test banks and instructor solutions manuals. (Id. ¶ 30) As Defendants state in the "FAQ" section of their websites, Defendants provide a "free sample chapter for each test bank" and "[i]n most cases, the sample will contain the first or second chapter from the test bank." (Id. ) "Many of the files Defendants distribute on their infringing websites contain the publishers' copyright notice on each and every page of the sample, warning that the material '[m]ay not be copied, scanned, or duplicated, in whole or in part.' " (Id. ) Plaintiffs allege that, collectively, the infringing websites' inventories total "tens of thousands of unauthorized digital copies of Plaintiffs' and other publishers' works." (Id. ¶ 32)
The Court concludes that Plaintiffs have demonstrated unauthorized copying, and have demonstrated Defendants' liability for copyright infringement.
B. Statutory Damages
Plaintiffs also seek statutory damages in the amount of $9,150,000-consisting of the maximum amount of $150,000 in statutory damages under Section 504(c) of the U.S. Copyright Act
III. PERMANENT INJUNCTION
Plaintiffs ask this Court to enter a permanent injunction against Defendants under the Copyright Act (1) enjoining Defendants from infringing any copyrighted work that is owned or controlled by Plaintiffs; (2) ordering Defendants to destroy all unauthorized copies of Plaintiffs' works that Defendants have in their possession, custody, or control; and (3) ordering Defendants to transfer the domain names they used in conjunction with Defendants' infringing websites to Plaintiffs' ownership and control within seven days. (Proposed Default Judgment (Dkt. No. 24-10) at 3-4)
A court may issue an injunction only where first,
the plaintiff has demonstrated "either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation...." Second, the court may issue the injunction only if the plaintiff has demonstrated "that he is likely to suffer irreparable injury in the absence of an injunction." ... Third, a court must consider the balance of hardships between the plaintiff and defendant and issue the injunction only if the balance of hardships tips in the plaintiff's favor. Finally, the court must ensure that the "public interest would not be disserved" by the issuance of a[n] ... injunction.
Salinger v. Colting,
A. Injunctive Relief under the Copyright Act
As previously stated, Plaintiffs are entitled to a default judgment on their copyright infringement claims under the Copyright Act. The Copyright Act provides for injunctive relief. See
B. Prerequisites for Issuance of an Injunction
The Court concludes that Plaintiffs have satisfied all of the prerequisites for the issuance of a permanent injunction.
First, Plaintiffs' success on the merits of their copyright infringement claims has been established.
Second, it appears that Plaintiff will suffer irreparable harm if an injunction is not issued. Accepting Plaintiff's factual allegations as true, they are sufficient to establish irreparable harm, because Plaintiffs have demonstrated that lost profits *500alone would not compensate them for the unauthorized use of their copyrights. In the absence of a permanent injunction, Defendants may continue to distribute unauthorized copies of Plaintiffs' instructor solutions manuals and test banks, thus preventing Plaintiffs from controlling the distribution of their products and recovering associated profits.
Third, the balance of hardships favors Plaintiffs. "[I]t is axiomatic that an infringer ... cannot complain about the loss of ability to offer its infringing product." Rovio Entm't, Ltd. v. Allstar Vending, Inc.,
Finally, the public interest would not be disserved by the issuance of an injunction. While the public has an interest in free expression, that interest is severely attenuated where the material being unlawfully distributed is readily available from Plaintiffs.
Accordingly, Plaintiffs are entitled to a permanent injunction regarding Defendants' use of Plaintiffs' copyrighted works.
C. Scope of Injunction
In addition to enjoining Defendants from further infringement, Plaintiffs also request that the injunction include (1) an order requiring destruction of all unauthorized copies of Plaintiffs' works that Defendants have in their possession, and (2) an order directing Defendants, as well as the applicable registrars and registries overseeing the domain names that Defendants have used to infringe Plaintiffs' copyrighted works, to transfer to Plaintiffs the domain names associated with Defendants' infringing websites. (See Proposed Default Judgment Order (Dkt. No. 24-10) at 3-4)
As an initial matter, the Copyright Act authorizes courts to order the destruction of infringing products. See
With respect to Plaintiffs' request for an order transferring Defendants' domain names to Plaintiffs, a number of courts have found that a transfer of domain names is an appropriate remedy to prevent further infringement of a copyright holder's rights. See Paramount Pictures Corp. v. Does, No. 15 Civ. 5819,
Acknowledging that some courts have declined to issue an injunction transferring *501a defendant's domain names to plaintiff absent proof that defendant continues to sell infringing products on its websites, see, e.g., Gucci Am., Inc.,
CONCLUSION
For the reasons stated above, Plaintiffs' motion for a default judgment and permanent injunction is granted. This matter is referred to the assigned magistrate judge for purposes of conducting an inquest as to damages. An order of default and permanent injunction will follow.
SO ORDERED.
(Morris Deck (Dkt. No. 6) ¶ 10); (Murphy Decl. (Dkt. No. 7) ¶ 10); (Rosenthal Deck (Dkt. No. 8) ¶ 10); (Tardif Decl. (Dkt. No. 10) ¶ 10); (Stitt (Dkt. No. 9) Decl. ¶ 10)
Plaintiffs further allege that "the supplementary materials necessarily copy various creative decisions of the textbook author, including but not limited to: (a) what knowledge or skills to test versus not test, and to what degree to test; (b) what examples, fact patterns, and hypotheticals to use to test and reinforce the material that the author chose to include in the book; and (c) the relationship and progression among the questions in the book and the material the author chose to include in the book versus omit. Notably, instructor solutions manuals and test banks are specific to a given textbook. Even where a single publisher has multiple textbooks within a single subject, it produces separate solutions manuals and test banks unique to each title. It is tailored to the pedagogical approach, including the questions, of that particular book. If the supplementary materials did not need to so closely track the protected expression in the underlying textbook, they could be interchangeable across textbooks, which they are not." (Id. )
Under the Copyright Act, a "copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action ... in a sum of not less than $750 or more than $30,000 as the court considers just."
In assessing the appropriate amount of damages,
courts look to factors such as: (1) "the expenses saved and the profits reaped;" (2) "the revenues lost by the plaintiff;" (3) "the value of the copyright;" (4) "the deterrent effect on others besides the defendant;" (5) "whether the defendant's conduct was innocent or willful;" (6) "whether a defendant has cooperated in providing particular records from which to assess the value of the infringing material produced;" and (7) "the potential for discouraging the defendant."
Tiffany (NJ) Inc. v. Luban,
"As part of a final judgment or decree, the court may order the destruction or other reasonable disposition of all copies or phonorecords 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."
Reference
- Full Case Name
- MCGRAW-HILL GLOBAL EDUCATION HOLDINGS, LLC, Elsevier, Inc., John Wiley & Sons, Inc., Cengage Learning, Inc., and Pearson Education, Inc. v. Farukh KHAN, Joonwon Park, Jeong Hyun Chu, Masud Karim, Md. Rabiul Islam, and John Does 1-10 d/b/a/ www.testbanksolution.com, www.testbankpdfdownload.com, www.testbankonline.com, www.testbankcart.com, www.digitaltestbank.com, www.testbank007.com, www.solutionmanualcenter.com, www.testbankofficial.com, and www.solutionmanualonline.com
- Cited By
- 16 cases
- Status
- Published