Summary
noting that "many courts" use a "multiplier of three to five times the license fee" for determining statutory damages, and awarding approximately four times the license fees owed
Summary of this case from Broad. Music, Inc. v. Pamdh Enters., Inc.Opinion
CIVIL ACTION NO. 03-304, SECTION "R" (4).
July 16, 2003.
ORDER AND REASONS
Before the Court is the motion of plaintiff Broadcast Music Inc. ("BMI") and various copyright owners for a default judgment against defendants Barflies, Inc. d/b/a Parkway Tavern and Scot C. Craig. For the following reasons, the Court GRANTS plaintiffs' motion and enters a default judgment in this case. However, plaintiffs' request for statutory damages is GRANTED only IN PART.
I. BACKGROUND
According to plaintiffs' evidence, the Parkway Tavern was licensed to publicly perform musical works from the BMI repertoire from May 1, 1993 until May 31, 1999. ( See Lawrence Stevens Suppl. Decl. ¶ 2.) On May 31, 1999, after sending Parkway a termination letter, BMI cancelled Parkway's license because Parkway owed BMI licensing fees for the periods of May 1997 through April 1998 and May 1998 through April 1999. ( See id.) Once it learned that defendants were offering musical entertainment without a license or permission from the copyright owners, BMI made numerous attempts by mail and telephone, and once by a personal visit, between May of 1999 and October of 2002 to convince defendants to execute a new licensing agreement with BMI and to cease performing BMI's musical works without a license. ( See Stevens Decl. S 3, 8; Pls.' Br. at 4.) Defendants did not reply to BMI's repeated requests. ( See id. ¶ 3.)
Based on these facts, plaintiffs filed a complaint in this Court seeking statutory damages in the amount of $28,500, or $1,500 for each of 19 infringing performances heard by the BMI representative pursuant to 17 U.S.C. § 504(c). Plaintiffs also ask for a permanent injunction against further infringement of their copyrights, pursuant to 17 U.S.C. § 502. Finally, plaintiffs seek costs and reasonable attorneys fees, as provided by 17 U.S.C. § 505. Defendants have had notice of the action since February 3, 2003, but have failed to make an appearance. Therefore, plaintiffs now move for default judgment.
II. DISCUSSION
A. Default Judgment
Based on the plaintiffs' evidence, the Court finds that plaintiffs have properly supported their motion for a default judgment under Federal Rule of Civil Procedure 55(b)(2). The Court finds that defendants have wilfully infringed plaintiffs' copyrights as contemplated by 17 U.S.C. § 504(c)(2). Accordingly, the Court awards statutory damages against defendants, jointly and severally. Furthermore, because there appears to be a danger of continuing infringement, based on defendants' refusal over the course of several years to comply with BMI's requests, the Court permanently enjoins defendants from further violations of BMI's copyrights. See 17 U.S.C. § 502(a); see also, e.g., Broadcast Music, Inc. v. DeGallo, Inc., 872 F. Supp. 167 (N.J. 1995).
The Court must make a determination as to the amount of statutory damages to be awarded. FED. R. CIV. P. 55(b). The factual record before the Court is sufficient to make this determination. A plaintiff may elect to receive statutory damages for infringement of a copyright in an amount not less than $750 and not more than $30,000 per infringement. 17 U.S.C. § 504(c)(1). If the infringement is willful, the Court may increase the damages to $150,000. Id. § 505(c)(2). In cases of asserted willful infringement, the Court considers, among other things, the amount of loss to the copyright holder and the need to deter future violations. See, e.g., Broadcast Music, Inc. et al. v. R Bar of Manhattan, Inc., 919 F. Supp. 656, 660 (S.D.N.Y. 1996); DeGallo, 872 F. Supp. at 169; Rodgers v. Eighty Four Lumber Co., 623 F. Supp. 889, 892 (W.D. Pa. 1985). The court has broad discretion as to the damages actually awarded. See F.W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228, 231-32, 97 L.Ed. 276, 73 S.Ct. 222 (1952).
In assessing statutory damages against nightclubs, restaurants, private clubs, and other places open to the public that have infringed copyrights in musical works by allowing the works to be performed without paying the copyright holder a licensing fee, courts typically arrive at an amount that is three to five times the licensing fee the copyright holder originally sought from the infringer. See, e.g., Chi-Boy Music v. Charlie Club, Inc., 930 F.2d 1224, 1227, 1229 (7th Cir. 1991) (three times the license fee); DeGallo, 872 F. Supp. at 169 (five times the license fee); Fermata Int'l Melodies, Inc. v. Champions Golf Club, Inc., 712 F. Supp. 1257, 1264 (S.D. Tex. 1989) (three times the license fee), aff'd, 915 F.2d 1567 (5th Cir. 1990); Golden Torch Music Corp. v. Pier III Cafe, Inc., 684 F. Supp. 772, 774 (Conn. 1988) (five times the license fee). As plaintiffs note, the courts' goal is to ensure that defendants are "put on notice that it costs less to obey the copyright laws than to violate them." (Pls.' Br. at 7 (quoting Rodgers, 623 F. Supp. at 892)).
Plaintiffs calculated the amount they request by setting a price of $1,500 per work, which is twice the statutory minimum, and multiplying it by the 19 works heard by their representative during his visit to defendants' place of business. In cases involving musical performances in a single public place, however, the practice of assessing a certain amount per work is not always appropriate because the number of documented infringements is just a function of how much time plaintiffs' representative chooses to spend in defendants' establishment. See DeGallo, 872 F. Supp. at 170. This follows because virtually every copyrighted song is subject to licensing by BMI or the American Society of Composers Authors and Publishers. See id. Moreover, plaintiffs' use of licenses with blanket annual license fees indicates that the value of many performances can be reflected by a single figure. Thus, in this case, the Court finds that the number of works infringed is not an accurate indicator of damage to the plaintiffs or of the culpability of the defendants.
Plaintiffs seek an award of $28,500 to penalize defendants for refusing to pay $4,362 in license fees from May 1997 to September 2003. (See Stevens Suppl. Decl. ¶¶ 2, 4, 5; Exs. A, C.) This is more than six times the amount defendants saved by refusing to pay license fees. This award is in excess of the maximum amount that the Court would arrive at using a multiplier of three to five times the license fee, a formula used by many courts. Therefore, the Court will reduce the damages requested by plaintiffs to $17,448. The Court finds that this sum is the proper compromise between the factors discussed above. It is four times more than the license fees owed, and so will serve to put defendants on notice that they cannot ignore plaintiffs' statutory rights with impunity.
B. Attorney's Fees Costs
Plaintiffs also request that defendants pay their costs and reasonable attorney's fees in the amount of $2,2281.75, plus interest on these awards pursuant to 28 U.S.C. § 1961. The Copyright Act authorizes recovery of costs and "a reasonable attorney's fee to the prevailing party as part of the costs," to be determined in the court's discretion. 17 U.S.C. § 505. The Fifth Circuit has held that "although attorney's fees are awarded in the trial court's discretion, [in copyright cases] they are the rule rather than the exception and should be awarded routinely." Alameda Films S a De C v. V Authors Rights Restoration, 2003 U.S. App. LEXIS 9594, *30 (5th Cir. 2003) (quoting McGaughey v. Twentieth Century Fox Television, 12 F.3d 62, 65 (5th Cir. 1994). In exercising its equitable discretion, the court may consider, among other things, "frivolousness, motivation, objective reasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence." Fogerty v. Fantasy, Inc., 127 L.Ed.2d 455, 114 S.Ct. 1023, 1033 n. 19 (1994) (quoting Lieb v. Topstone Indus., Inc., 788 F.2d 151, 156 (3d Cir. 1986)). Considerations of deterrence support an award of attorney's fees to the prevailing parties here, because defendants willfully refused to pay license fees to plaintiffs despite plaintiffs' numerous requests and demands, necessitating this lawsuit. At the same time, none of the factors that might justify denying such an award, e.g., the presence of complex or novel issues, the defendants' innocent state of mind, or prosecution of the case in bad faith, seems to be present.
Plaintiffs have submitted the declaration of Mark Balkin, BMI's attorney, stating that a total of 11.6 hours were spent working on this case, all but 1.3 hours of which were expended by him, totaling $2,087 in attorney's fees. ( See Balkin Decl.) This total reflects a rate of approximately $180 per hour for Balkin's and his associate's services. Further, Balkin states that costs in this case total $194.75. ( See id.) The Court finds these declared attorney's fees and costs to be reasonable.
III. CONCLUSION
IT IS ORDERED that plaintiffs' motion for default judgment is hereby GRANTED IN PART. The Court DENIES plaintiffs' request for statutory damages in the amount of $28,500. The Court finds defendants liable jointly and severally to plaintiffs in the amount of $17,448 in statutory damages for copyright infringements, $2,087 in attorney's fees, and $194.75 in costs, plus interest in the full amount of this judgment from the date of this judgment, pursuant to 28 U.S.C. § 1961. Further, the defendants and their agents, servant, employees and all persons acting under their permission or authority are permanently enjoined and restrained from infringing, in any manner, the copyrighted musical compositions licensed by BMI.