Murakami-Wolf-Swenson, Inc. v. Cole

District court holds defendants willfully infringed plaintiff’s copyright in animated film, finding defendants acted recklessly by manufacturing film without searching Copyright Office’s records, and by concluding that film was in public domain based on its appearance on YouTube.

Murakami Wolf Productions, Inc., predecessor to plaintiff Murakami-Wolf-Swenson, Inc., originally produced the animated short film “The Point” for television in 1970, and ABC broadcast the film the following year with Dustin Hoffman as the film’s narrator. In 1985, Murakami’s licensee released a version of the film on VHS, which was identical to the 1971 version except it was narrated by Ringo Starr. In 1987, Murakami registered a copyright in the work, noting in its registration a first publication date of 1970, and filed a supplemental registration in 2014, changing the date of first publication to 1985. The Ringo Starr-narrated version rereleased on VHS in 1993, and on DVD in 2004. The Disney Channel broadcast yet another version of “The Point” in 1988 with Alan Thicke as narrator.

Defendant Lawrence Cole, who operated Acme-TV, a division of Magnum Productions LLC, sold his own versions of the film without clearing the rights for its use. Cole obtained a copy of the 1985 VHS release, and parts of the film on YouTube. Cole produced his version under the alleged belief that the film’s availability on YouTube meant that it was in the public domain. Cole also allegedly relied on the fact that the final frame of the 1988 version of the film contained a copyright notice dated 1971. Cole corresponded with a non-attorney who owned the website “copyrightdata.com,” but he did not contact the Copyright Office or Murakami to confirm the film’s copyright status. Cole then proceeded to manufacture his own versions of the film, using audio and video obtained from YouTube, and audio from a VHS copy of the 1988 version. He sold those versions on Amazon.com and eBay.

After issuing a cease-and-desist letter, Murakami sued Cole and his related entities for willful copyright infringement. After concluding on a motion for summary judgment that defendants had infringed plaintiff’s copyright, the court conducted a bench trial on the issue of defendants’ willfulness. The court concluded that defendants acted unreasonably and in reckless disregard of plaintiff’s rights by: (1) failing to check the copyright registration records of the U.S. Copyright Office; (2) concluding that the film’s availability on YouTube indicated that it was in the public domain; (3) relying on the copyright notice in the 1988 version of the film, which was never intended for publication and thus did not require a copyright notice; (4) failing to contact anyone mentioned in that copyright notice in order to ascertain the copyright status of the film; and (5) failing to completely remove versions of the film from eBay after Murakami advised defendants of the film’s copyright status in 2013. According to the court, by entering into the business of finding films defendants believed to be in the public domain and releasing them for sale without the benefit of legal education or the assistance of legal counsel, defendants “took obvious risks in disregard of copyright standards generally.” Ultimately, the court awarded only $5,000 in statutory damages given the small size of defendants’ business and the small amount of revenues it generated from the film. The court also entered a permanent injunction and awarded plaintiffs their reasonable and necessary attorneys’ fees.