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IP/Entertainment Case Law Updates

Stockwire Research Group, Inc., et al. v. Lebed, et al.

Defendants downloaded a multi-media documentary called Stockumentary from the copyright holder’s website and without permission converted Stockumentary to a Windows Media Video which could be distributed without technical protections. The defendants also removed all copyright notices from Stockumentary, removed all references to plaintiff Stockwire from Stockumentary, and modified the audio track on Stockumentary. By intentionally removing the Stockwire technical protection measures, the defendants enabled third parties to access, copy, redistribute and create derivative works of Stockumentary without the plaintiffs’ consent. Also, without permission, the defendants uploaded the unauthorized video to and

The district court granted the plaintiffs’ motion for final default judgment, found the defendants jointly and severally liable for any damages to the plaintiff resulting from defendants’ violation of the Digital Millennium Copyright Act (DMCA), and awarded statutory and actual damages, plus interest to the plaintiffs.

Section 1202(b)(1) of the DMCA prohibits intentional removal of “copyright management information,” including the title of the work, the author’s name, and the information set forth in the copyright notice. The court determined that the defendants violated Section 1202(b)(1) through their removal or alteration of copyright management information and awarded plaintiffs their requested equitable relief, as well as $75,000 in statutory damages.

The court explained that Section 1203(c)(3)(B) allows a complaining party to elect to recover an award of statutory damages for “each violation” of Section 1202(b)(1). The court followed McClatchey v. Associated Press, 2007 WL 1630261 (W.D.Pa. 2007), as to the meaning of the phrase “each violation.” In McClatchey, the Associated Press posted an unauthorized work on its website, thereby allowing unlawful access to 1,147 Associated Press subscribers. In analyzing the phrase “each violation,” the McClatchey court stated that “the term ‘each violation’ is best understood to mean ‘each violative act performed…’[thus, a defendant] would violate the DMCA each time it wrongfully distributed a [copyrighted work] to its subscribers.” The McClatchey court concluded that the defendant committed only one violative act by distributing the unauthorized work to its subscribers, even through there were 1,147 recipients of the work.

As in McClatchey, the defendants posted an unauthorized work onto a website, allowing multiple viewers unlawful access. The court explained that under the McClatchey analysis, however, the number of unlawful recipients is immaterial for purposes of statutory damages under the DMCA because Section 1202(b)(1) focuses solely on defendants’ conduct, or, in other words, the number of times the unauthorized video was posted on the Internet for distribution, regardless of the number of end recipients. Accordingly, for purposes of the DMCA, the court found that defendants posted the unauthorized video onto the Internet on three separate occasions, and thereby committed three violations of Section 1202(b)(1) and awarded the maximum statutory award of $25,000 for each of the three violative acts..

The court also found that defendants violated Section 1201(a)(1)(A) of the DMCA, which prohibits the circumvention of a technological measure that effectively controls access to a work. For this violation the court granted plaintiffs their requested injunctive relief and awarded $2,357,200 in statutory damages. The court explained that, unlike Section 1202(b)(1), for a violation of this section of the DMCA, each copy of the unauthorized video distributed by defendants was a violation. As such, the court concluded that defendants violated this section 11,786 times, the number of times the unauthorized video was viewed through defendants' YouTube account.

In addition, the court awarded plaintiffs $135,000 in treble damages because the court found defendants’ actions were willful but denied plaintiffs’ request for disgorgement of defendants’ profits and damages related to misappropriation.

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