Getty Images v. Advernet Decision (Southern District of NY)

8/3/2019 Getty Images v. Advernet Decision (Southern District of NY)

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GETTY V. ADVERNET 09CV1895 SOUTHERN DISTRICT OF NY

MEMORANDUM AND ORDER

KEVIN NATHANIEL FOX, United States Magistrate Judge.

PROCEDURAL BACKGROUND

*1 Getty Images (US) Inc., commenced this copyright infringement action, pursuant to 17U.S.C. 501, seeking monetary damages and injunctive relief against Advernet, Inc., formerlyknown as VR Marketing, Inc., due to the defendant's alleged unauthorized use of the plaintiff'sphotographic images. The defendant made a motion to dismiss the complaint, pursuant to Rule12 of the Federal Rules of Civil Procedure, claiming the: (a) plaintiff lacked standing to bringthis action, because it did not allege that the licenses it obtained from the various photographersinclude an exclusive right to bring this action; and (b) complaint failed to state a cause of action,because it did not allege that the plaintiff has an exclusive right to enforce the rights in the

images. On July 6, 2009, the defendant withdrew its motion to dismiss and filed an answer. Theparties consented to proceed before the Court for all purposes, pursuant to 28 U.S.C. 636(c)andFed.R.Civ.P. 73. On May 19, 2010, the Court granted defense counsel's motion to withdrawfrom representing the defendant, based on the defendant's failure to pay legal fees. By that order,the Court also: (i) directed the defendant to engage new counsel, on or before June 1, 2010,because, as a corporate entity, it could not proceedpro se; (ii) directed the defendant to have itsnew counsel file, with the Clerk of Court, a notice of appearance on behalf of the defendant; (iii)informed the parties that a telephonic status conference would be held with them on June 7,2010, and that counsel to the plaintiff should initiate the telephonic conference; and (iv) directedthe relieved defendant's counsel to serve a copy of this order on the defendant expeditiously andto file proof of service with the Clerk of Court, which he did. The defendant failed to participate

in the telephonic status conference on June 7, 2010. No attorney filed a notice of appearance onbehalf of the defendant.

On June 23, 2010, the plaintiff filed a motion for judgment, by default, pursuant toRule 55 ofthe Federal Rules of Civil Procedure. On November 2, 2010, 2010 WL 4536995, the Courtdenied the plaintiff's motion, without prejudice, because, inter alia, no default had been enteredby the Clerk of Court and, by a separate order, directed: (a) the Clerk of Court to enter thedefendant's default; (b) the plaintiff to file proof of service on the defendant of a copy of theClerk's Certificate noting the default, the entry of default and the Court's November 2, 2010order; (c) the defendant to file a motion to set aside the default, pursuant toFed.R.Civ.P. 55(c);and (d) absent a Fed.R.Civ.P. 55(c) motion, the plaintiff to file its motion for judgment, by

default. No motion to set aside the default was filed.

On December 9, 2010, the plaintiff filed a motion for judgment, by default, pursuant toFed.R.Civ.P. 55(b)(2). The plaintiff seeks: (a) a default judgment against the defendant; (b)damages of $24,275.00, with interest; (c) an order permanently enjoining Advernet frominfringing Plaintiff's copyrighted images; (d) prejudgment interest on the amount of theaward; and (e) such other and further relief as this Court deems just and proper. On December16, 2010, the Court ordered that an inquest hearing be conducted, pursuant to Fed.R.Civ.P. 55(b)
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(2), in connection with the plaintiff's motion, in order to establish: (a) the truth of the allegationsin the complaint; and (b) the amount of damages, and to investigate any other pertinent matter.The Court required: (i) evidence of the plaintiff's exclusive license to each of the thirty-fiveimages at issue, demonstrating the plaintiff's alleged rights to bring this action; (ii) evidence ofthe period during which the infringement is alleged to have occurred respecting each of the

thirty-five images; (iii) evidence of the information provided to [the plaintiff] by defendant inresponse to [the plaintiff's] demand letters regarding the infringing use; and (iv) any otherevidence in connection with the defendant's liability and damages. The court also directed theplaintiff to serve the defendant with a copy of the December 16, 2010 order, with which theplaintiff complied. Only the plaintiff appeared at the inquest hearing, held on February 1, 2011,and presented evidence in support of its motion. The motion is not opposed.

BACKGROUND

Pleadings

*2 The plaintiff alleges, through the complaint, that it is one of the world's leading contentproviders, supplying high quality, relevant imagery and related services to advertising agencies,graphic design firms, and film and broadcasting companies, to editorial customers involved innewspaper, magazine, book, CDROM and online publishing, and to corporate marketingdepartments and other business customers. The plaintiff contends:

Most of the images in [its] creative collections are obtained from independent photographers andfilmmakers on an exclusive basis. Professional photographers and filmmakers prefer to retainownership of their work. As a result, copyright to an image remains with the contributingphotographer or filmmaker in most cases .... Getty Images was the first company to license

imagery via the Internet and today delivers virtually all of its visual content digitally.... Visitorsto Getty Images's web site can search through and view hundreds of thousands of images andobtain licenses for those images online.

According to the plaintiff, the defendant owns and operates a web site and holds itself to be aone stop shop to handle all of your web site needs ... [f]rom website production to hosting to 3Danimation. Among other things, the defendant lists Photography and Aerial Photography ascategories of products and services it offers. The plaintiff alleges that, on June 2, 2006, it notifiedthe defendant of an alleged instance of unauthorized use, on its Web site, of Image No.wa0173001. On July 5, 2006, the parties entered into a settlement and release agreement withrespect to the use of that image and the plaintiff reserved the right to seek redress for any

unauthorized use of photographs or images not disclosed by the defendant previously and for anyinfringement occurring after June 13, 2006, including the infringement of the image numberwa0173001.

In September 2006, the plaintiff claims it discovered that the defendant had obtained copiesof eight images exclusively licensed to Getty Images (and not covered by the settlement andrelease agreement) and had incorporated those images into a web site designed, published andmanaged by [the defendant] for Coquina Hotel, Ltd., at http://www.holidayinmyrtlebeach.com.
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This use was continuous until at least September 25, 2006. According to the plaintiff, thedefendant began using at least four of these images in August 2004 and had been using all ofthe eight images at least since May 18, 2006. In December 2006, the plaintiff discovered copiesof an (sic) additional two images exclusively licensed to Getty Images (and not covered by thesettlement and release agreement) incorporated into the web site of Coquina Hotel, Ltd. at

http://www.holidayinmyrtlebeach.com/hotel_vacation_packages.html and http://www.holidayinmyrtlebeach.com/hotel_meeting_rooms.htm. The plaintiff maintains that thedefendant's use of the ten images was unauthorized and violated the rights of Getty Images andof the authors of those images.

The plaintiff alleges further that, [i]n September 2007, [it] discovered an additional thirty-three images exclusively licensed to Getty Images (and not covered by the settlement and releaseagreement) of which [the defendant] had obtained copies and incorporated into seven web sites,designed, published, and managed by [it]. According to the plaintiff, [t]hirty-five of the images[the defendant] copied and incorporated into the web sites it designed, publishes, and manageshave been registered with the United States Copyright Office. The thirty-five images alleged to

have been infringed are as follows:

Name Image Number CollectionDate ofRegistration

RegistrationNumber

1 Back of woman in pool CA33374 Taxi 12/21/2007 VA1624579

2 For Sale sign outsidehouse, closeup

BA60210 Taxi 12/27/2007 VA1625002

3 Woman lying on raft inswimming pool,overhead view

AB22261 Taxi 1/3/2008 VA1625008

4 Calendar pages, close-

up (grainy)

BA17693 Taxi 1/2/2008 VA1625100

5 Business womancatching falling money

200167546004Photographer'sChoice

1/3/2008 VA1625102

6 Woman having a facial CA08409 Taxi 1/3/2008 VA1625110

7 Maid holding towels byindoor pool, portrait

200218729001 Taxi 1/3/2008 VA1625115

8 Street signssuperimposed on dollarsigns, low angled (B &W)


1/3/2008 VA1625118

9 Crowd Cheering atbaseball game

10197811 The Image Bank 1/3/2008 VA1625122

10

Jetty extending into sea,Cancun, Yucatan,Mexico

10197228 Stone 1/3/2008 VA1625123

11

Young man with eyeopen wide, closeup


1/3/2008 VA1625124

1 Couple making a toast BA62505 Taxi 1/3/2008 VA1625126


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2 in wine [close-up ofhands and glasses]

13

Young woman floatingin swimming pool,elevated view

200134384001 Taxi 1/3/2008 VA1625127

14

Crowd of peoplewalking on city street.Fifth Avenue, NewYork City, New York,USA

AB16310 Taxi 1/3/2008 VA1625134

15

Soaring profits andcosts with banknote inflight

10026633 The Image Bank 1/3/2008 VA1625138

16

Woman on rocks byocean

AB91664 Taxi 1/9/2008 VA1625140

17

USA, Nevada, Route 50and cloudy sky (B &W)

10189032 Stone 1/4/2008 VA1625141

18

Financial still life/stocklistings, graphs & glassglobe

AB15395 Taxi 1/3/2008 VA1625144

19

Man getting backmassaged, close-up,elevated view (blurredmotion)

AB70475 Taxi 1/4/2008 VA1625158

2

0

Spain, Barcelona,

crowd in La Rambla

BA11057 Taxi 1/4/2008 VA1625160

21

People placing bets ongaming table, closeup

CA28987 Taxi 1/9/2008 VA1625304

22

Manhattan at night,elevated view

10193683 Riser 1/2/2008 VA1625489

23

Woman embracingman, close-up (B & W)

CA32378 Taxi 1/9/2008 Va1625490

24

Young man lying onbed with heated blackstones on back, elevatedview

889907001 Stone 1/2/2008 VA1625491

25

Boeing 747 and sunset AB64768 Taxi 1/2/2008 VA1625522

26

Finance, investments,global markets, money

10131999 Stone 1/3/2008 VA1625839

27

Boy (46) withrubberring in water

AB32869 Taxi 1/3/2008 VA1625854

2 Towels, soap, and brush 886165001 Stone 1/3/2008 VA1625855


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8 on wooden table

29

Desk in office, close-up 200270761001Photodisc 1/9/2008 VA1626053

30

Grandfather andgrandson (68) arm

wrestling on grass

DA60478 Taxi 1/9/2008 VA1626056

31

China, Hong Kong,Convention andExhibition Centre atdusk

BA01292 Taxi 1/9/2008 VA1626059

32

USA, Hawaii, Oahu,Waikiki Beach,Diamond Head inbackground

786033001 Stone 2/14/2008 VA1627564

33

Woman wearingbathrobe and towelaround head, portrait

AB35519 Taxi 2/14/2008 VA1627566

34

View of Las Vegas atnight Nevada

CA16423 Taxi 2/14/2008 VA1627567

35

Woman writing andhaving cup of coffeeCorsica

AB25548 Taxi 2/14/2008 VA1627572

*3 The plaintiff submitted, as Exhibit A to its complaint, copies of registration certificates forthese thirty-five images. The plaintiff alleges that the defendant also copied into web sites itdesigned, publishes, and manages ten other images exclusively licensed to [the plaintiff] without

authorization or license. Screen shots of the defendant's web sites showing web pages thatincorporate unauthorized copies of images exclusively licensed to Getty Images were attachedto the complaint as Exhibit B.FN1 The plaintiff alleges the defendant's unauthorized use ofimages exclusively licensed to Getty Images ... has caused Getty Images to suffer damages, andseeks damages and injunctive relief.

In its answer, the defendant denied the allegations that any use of the plaintiff's images wasunauthorized. It asserted the following affirmative defenses: (a) any unauthorized use wasinadvertent and innocent and did not constitute willful infringement; (b) [s]ome of theplaintiff's claims are barred by the applicable statute of limitation; (c) any unauthorized usewas de minimus [sic] and should not result in a damages award; (d) any unauthorized use

occurred prior to any registration of the images so that plaintiff may only seek actual damages;(e) [t]he images may have been available through means other than plaintiff's website; and (f)[t]he plaintiff's claims for relief are barred under the doctrine of laches.

Rule 55(b)(2) Hearing
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At the hearing, the plaintiff's employee, David Wojtczak [Wojtczak], a supervisor on thecopyright compliance team, testified that he manages a team that works to protect the plaintiff'scontent and pursue unauthorized use of it. He testified that the plaintiff's Exhibit B consists of theunauthorized use reports generated by PicScout, a company hired by the plaintiff to assist withidentifying the plaintiff's content appearing on the web. His understanding is that PicScout's

method involves something along the lines of a digital fingerprint technology, facial recognitiontype of software, where [the plaintiff's] content is provided to PicScout. They have a database ofall of our images, they go out on the web to a number of websites, and from there they identifycontent that is on the web and match it against our database that we've provided them.According to Wojtczak, PicScout sends its reports to the plaintiff regularly, in order to enable theplaintiff to identify any content that is out there that may be in breach of license, may beunlicensed, or may require additional licensing, and from there we look to protect the rights ofthe photographers and seek fees for uses that have already occurred. Where the plaintiffdetermines that PicScout reports relate to individuals or businesses that do not have arelationship with the plaintiff, Wojtczak and his team gather all of the evidence that's providedand we prepare everything into a letter. We send a letter to the company that's been identified,

and within that letter we include copies of the proofs that are delivered to us by PicScout, andExhibit B is exactly what those look like to the end user. Wojtczak testified that the purpose ofcontacting the end users is to notify them that we've identified our images that we representexclusively on their website, to request that they provide any confirmation of valid licenses,while pointing out that we have thoroughly searched our records and to date have been unable toidentify any licenses remotely related to those uses. His team then attempts to recover fees forany usage identified as unlicensed.

*4 Wojtczak described the details of a PicScout report by using page 3 of Exhibit BFN2 as anexample. He explained that, on that page, the heading: (a) Name indicates the end usercompany where the image was reported; (b) Home Page indicates that company's home pageon its Web site; (c) Screen Capture shows a copy of the actual page in question where theimage appeared, relative in size to the page on which it appeared; and (d) Catalog Image No.shows a copy of [the plaintiff's] digital original of that image. Wojtczak also used Exhibit 2,introduced in evidence and labeled Transaction Details, to demonstrate the way [the plaintiff]receive[s] the information related to the use in question. He explained that [t]his report hasinformation related to the date of upload and also information related to image size, which is oneof the parameters in the license model. Exhibit 2 shows September 6, 2007, as the date of theuploading, which is the date that the report is delivered to Getty Images by PicScout.Wojtczak explained that Exhibit B is the PicScout report as it is sent by the plaintiff to the enduser, after his team strip[s] out some of the information, while Exhibit 2 is an example of aPicScout report received by the plaintiff.

The plaintiff introduced into evidence Exhibit 3, a summary file that [Wojtczak put] togetherfor the photographers related to this case and the 35 specific images.... It's a summary of theiragreement dates and also terms of the contracts and exclusive nature of representations.According to Wojtczak, the summary contains information about the contract for eachphotographer associated with the 35 images. In some cases there are multiple entries for certainphotographers because we have had prior contracts and then newer contracts that supersede.However, he noted, one exception existed, [t]here is a wholly owned image of the 35.... We
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don't have a contributor contract for that because we whollywe wholly own it and there's noroyalty payment. The plaintiff's Exhibit 3 summary is a table, consisting of the followingcategories, explained by Wojtczak: (1) Image Number, which will match up to the imagesidentified in the complaint; (2) the image collection that the image belongs to, on the GettyImages website; (3) the name of the photographer that owns the copyright to the image; (4)

the contract detail for the original contract company or brand that the photographer first signedthe agreement; (5) [t]he corresponding agreement date; and (6) the three columns to theright, I have reviewed each contract to ensure that, number one, the content is exclusive to GettyImages, theGetty Images has the right to control claims, specifically unauthorized use claims,and Getty has the obligation to pay a percentage of either net or gross fees, depending on thecontract and circumstance for each of these contributors. The three columns to which Wojtczakreferred are: (i) Accepted Content is Exclusive?, to which the answer is Yes for all entries onthe summary, except for Image Number AB35519, for which the answer is n/a, because it iswholly owned; (ii) Getty Images Has Rights to Control Claims?, to which the answer isYes for all entries on the summary, except for Image Number AB35519, where the answer isn/a, and Image Number 200270761001, for which the answer is Implied, Superseded by

Unified Agreement; and (iii) Getty Images has obligation to pay percentage of net or grossfees?, to which the answer is Yes, except for Image Number AB35519, where the answer isn/a. He explained:

*5 Accepted content is content per terms of the contributor contract that Getty Images agreed torepresent on behalf of the photographer, and once we accept that content, the terms of that arethat it is exclusively available to Getty Images and the photographer will not make it availablethrough any other stock photo agency or any other source.

With respect to the plaintiff's rights to control claims, Wojtczak stated that the plaintiffrepresents the photographer for pursuit of unauthorized use claims or other legal claimsassociated with that content. He explained that, under the column Getty Images Has a Right toControl Claims?, Image 200270761001 states Implied superseded by unified agreementbecause [t]here is language in that particular contract from 2005 that suggests and implies thatwe pursue on their behalf for unauthorized use ... we do have a newer contract with thiscontributor.... The newer contract ... does specifically state that Getty Images has the right tocontrol a claim. Wojtczak stated, with respect to the column about the plaintiff's obligation topay a percentage of net or gross fees, that any license transaction has a specific royalty rateassigned to it, and in some of the contracts, there are different situations where gross fees mayapply or net fees may apply.

The plaintiff also introduced in evidence Exhibit 4, consisting of redacted copies of each ofthe contracts summarized in [Exhibit 3 summary], and royalty rates contained in this particular

copy of that set and certain other terms that [the plaintiff] considers proprietary have beenredacted out. Wojtczak used, as an example, image number AB70475, from the Taxicollection, by Laubacher, Kevin/BaileyLaubacher Inc., to explain the corresponding redactedportions of the GETTY IMAGES CONTRIBUTOR AGREEMENT, contained in Exhibit 4.He stated that he looked at the following sections of the Getty Images Contributor Agreementpertaining to this image number, to confirm that the language was in there with respect to theaccepted ... content being exclusive to Getty Images: (1) Exclusivity; and (2) Section 1.4Right to Control Claims which reads You authorize Getty Images and Distributors at their


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expense the exclusive right to make, control, settle and defend Claims related to AcceptedContent. Wojtczak explained that the FPG International, LLC and Visual CommunicationsGroup, Ltd. are the previous contract, entitled VCG Brand Agreement. He stated, that isthe reason why we have two entries on my worksheet. We have VCG, which was a company thatwas acquired by Getty Images, and postacquisition, we have the more recent Getty Images

contributor contract. He testified that FPG and VCG are ... related. I believe FPG was the U.S.division of VCG, Visual Communications Group. However, I'm not entirely sure on therelationship. Wojtczak did not know when Visual Communications Group, Ltd. was acquiredby the plaintiff, but believed it was sometime around 1999, and that, in acquiring VisualCommunications Group, Ltd., the plaintiff also acquired FGP International, LLC. The reasonWojtczak used both, the Getty Images Contributor Agreement and The VCG BrandAgreement, was

*6 to pull any prior contributor contracts that would have been in place at the time that theseinfringements occurred and then also provide you with any additional contracts that may haveupdated that relationship, and the Getty Images contributor agreement is an attemptmy

understanding of it is, it is an attempt to streamline and bring all these different agreements allunder the same standard agreement, and I brought that to show the representation of thecontributor was continuous throughout this period.

Wojtczak testified that the Getty Images Contributor Agreement did not have signatures. It is adigitally accepted agreement. The contributor signed via our online contributor contract portal.The following ensued:

THE COURT: And where, if anywhere, does a representative form Getty execute, sign thedocument, digitally or otherwise?

THE WITNESS: You know, I'm not entirely familiar with where in the process that happens. AllI know is the contributor agrees to the terms at the time of submission, and from that moment thecontract becomes viewable as that contributor having a revised agreement, essentially. Anycontributor that has not entered into the newer Getty Images contributor agreement as of yet,when viewing their information, when I went in to look for their contract, I could tell whowhohad executed and who had not, but I am not familiar with the process in terms of the actualexecution.

THE COURT: So you don't know if Getty representative executed the contributor agreement thatis part of Exhibit 4 that you were discussing with me.

THE WITNESS. I know that that is our normal business. I'm not personally involved in

execution of the contracts. But to answer your question, I do not physically view anyoneexecuting these agreements.

I am not familiar with the process in terms of the actual execution.

With respect to Exhibit 3's column labeled Getty Images Has Obligation to Pay Percentageor Net Gross Fees, Wojtczak explained that he personally went through each of the contractsthat have been gathered for these specific contributors and went through the unredacted versions


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and verified that there was the corresponding royalty fee language. And what drives that is thereare different collections, there are different rates based on where content is accepted.

The plaintiff introduced Exhibit 5, SCI Shopping Cart DetailSEADCSI03, whichWojtczak explained is a printout view of a shopping cart from the Getty Images website. This is

the back-end view of that. He explained that the shopping cart on Getty Images Web site is theweb interface where our clients go to transact, to search for our content, to license our content,and to complete the actual license transaction. After the buyer pays for its shopping cart, [t]hemajority of the time [the buyer is] led to a download page and [can] download a digital file, andthe buyer is also granted rights per the terms of the transaction. Wojtczak testified that allthirty-five items in the Exhibit 5 shopping cart

*7 were put into the shopping cart at the time that the case was being handled.... Typically [theshopping cart] is created on some level, either manually or via automation, shortly after thereport is received from PicScout and after we verify that the use is indeed unauthorized.... We aretaking the evidence that's been provided to us, and through the course of the case investigation or

even during the course of discussions with the end user, we are determining what and how theimages were used, and from there we are using the shopping cart functionality that is used on thefront end for ourfor our customer to calculate license fees for the uses that have beenidentified.

In determining the price by using the shopping cart details, Wojtczak testified, he considers:

The use field; the size field, the start date; and end date; thein some cases territory, if there area number of territories; duration; placement; and also exclusivity.... [I]f the customer wanted tocalculate a license fee, they [sic] would go to the website, either search for the content or alreadyknow the content that they wanted to calculate before, they would pull up the price calculator;from within the price calculator there are a series of dropdown options, and you essentially goand choose the corresponding uses and parameters that match your needs.... There are additionalfees for copyright enforcement. In this particular case the fees in this Exhibit are the exact ratesthat applied at the time the infringements were identified.

The plaintiff also introduced in evidence Exhibit 6, illustrated partially in Appendix 1 to thisMemorandum and Order. Exhibit 6 is a summary of the uses and the durations in question foreach of the 35 images in this complaint, and its purpose was to provide information supportingthe dates that were used in the previous calculations[, in Exhibit 5]. Exhibit 6 is a table,reflecting, for each of the thirty-five images at issue, the following categories: (1) Name; (2)Image Number; (3) Date of Registration; (4) Registration Number; (5) Image Size; (6)Image Placement; (7) Dates of Use for Calculation; (8) License Duration Required; and

(9) Evidence of duration of use. Wojtczak explained that duration, in License DurationRequired, is the duration of use that would have been required based on thebased on theevidence of duration of use. For example, for image number CA33374, License DurationRequired is indicated as Up to 2 years, which means potentially anything over up to one yearwould fall in the up to two years category. The range of duration the plaintiff offers to itscustomers is [u]p to one month; up to three months; up to six months; up to one year; up to twoyears; up to three years; and up to five years, according to Wojtczak. He explained that for eachentry on Exhibit 6, he compared the information from the shopping cart and also the evidence


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that was provided by PicScout and also information from WebArchive. He used thatinformation [t]o determine the correct duration that would have been required had a licensebeen obtained prior to the start of the use. The following ensued:

*8 Q. Okay. Now the PicScout information alone, does that evidence use for a particular period?

A. Generally that would be for a minimum of up to one month.

Q. The PicScout report itself shows that the image was being used at least on the day PicScoutacquired it; right?

A. Exactly. So if you're using an image for one day, the corresponding license duration is up toone month.

Q. Now, for any image for which you didn't have any duration of use information other than thePicScout report, what duration of use did you set for the licensing?

A. The up to one month.

Q. And is that the least expensive license that Getty offers?

A. It is, at the time of

Q. At that time.

A. Yes.

Q. Now you mentioned that you also use the Internet Archive toas evidence of duration?

A. Correct.

Q. What is the Internet Archive?

A. It is a nonprofit website that essentially captures websites for historical purposes, and thewebsites are essentially stored and displayed as they appeared at a previous point in time.

...

Q. With respect to the information obtained from the Internet Archive, did you yourself replicatethe Internet Archive searches relating to those images in Plaintiff's Exhibit 6 for which youreferred to that Internet Archive as the source of data on duration?

A. I did.

Q. And when did you do that?


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A. Last week.

The plaintiff introduced in evidence Exhibit 7, the screen captures from WebArchive fromlast week. Wojtczak explained:

In the URL section at the top, immediately after the web.archive.org/web portion is a date. Thedate is in year format. So in this first example, image number CA16423, this is from 2004,December 4th. And then to the right of that is the actual website in question, which in this case isadreamtrip.com.

He testified that, on the page he was describing, the image belonging to the plaintiff is the LasVegas image at the bottom of the screen capture. When asked how the information from theWebArchive correlates to the information in Exhibit 6 and his determination respecting licenseduration, Wojtczak explained: The duration of use, since it falls in a period that equated the twoyears, would require an up to two year license for that. He testified that he confirmed that thedurations contained in the shopping cart are accurate, with a few exceptions ... that did not have

any recoding in WebArchive or may have been blocked by something, which is indicated onExhibit 6, and which prompted him to use the calculation for the lowest resolution size, eventhough the use was larger than that. When asked how he determined that duration was up tothree years for image number BA60210 in the shopping cart, Wojtczak testified:

Based on the evidence that was available at the time, the use was determined to fall in the up tothree years category. From time to time information that is stored in WebArchives may notremain there, and I am not aware of when exactly the activity took place. However, we do seethat from time to time after we present notification of infringement.

*9 The plaintiff introduced into evidence Exhibits 8 and 9, its counsel's communication withdefense counsel concerning the alleged infringement. On September 14, 2007, the plaintiff'scounsel informed defense counsel that certain Web sites contained the plaintiff's images andsought evidence of legitimate purchases by the defendant for the use of those images. OnSeptember 24, 2007, defense counsel responded, informing that the defendant has in good faithremoved all alleged unauthorized images referenced in [counsel's September 14, 2007] emailand requested copyright registration numbers for the allegedly unauthorized images. Theplaintiff also introduced in evidence Exhibit 10, a license history summary that [Wojtczak] puttogether for the 35 images in this complaint ... from the period between 2001 through about aweek, week and a half ago, and from there we identified that there were a little over 1300 totalindividual license records for 35 images combined. That summary provided examples oflicensing fees for specific images, during the period indicated in it.

DISCUSSION

Legal Standard

[1] Strong public policy favors resolving disputes on the merits.American Alliance Ins.Co. v. Eagle Ins. Co., 92 F.3d 57, 61 (2d Cir.1996). [T]he entry of a judgment by default [is a]
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drastic remed[y], and should be applied only in extreme circumstances.Independent Prods.Corp. v. Loew's Inc., 283 F.2d 730, 733 (2d Cir.1960). When a party against whom a judgmentfor affirmative relief is sought has failed to plead or otherwise defend, and that failure is shownby affidavit or otherwise, the clerk must enter the party's default. Fed.R.Civ.P. 55(a). Where aclerk has entered a party's default, and the plaintiff's claim is not for a sum certain or a sum that

can be made certain by computation, ... the [plaintiff] must apply to the court for a defaultjudgment. Fed.R.Civ.P. 55(b).

[2] [3] [A] party's default is deemed to constitute a concession of all well pleadedallegations of liability. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155,158 (2d Cir.1992). [A]n allegation made indefinite or erroneous by other allegations in the samecomplaint is not a well-pleaded allegation. Trans World Airlines, Inc. v. Hughes, 449 F.2d 51,63 (2d Cir.1971), rev'd on other grounds,Hughes v. Trans World Airlines, Inc., 409 U.S. 363, 93S.Ct. 647, 34 L.Ed.2d 577 (1973). [A] district court has discretion underRule 55(b)(2) once adefault is determined to require proof of necessary facts and need not agree that the alleged factsconstitute a valid cause of action.Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d

Cir.1981).

[4] Even when a default judgment is warranted based on a party's failure to defend, theallegations in the complaint with respect to the amount of damages are not deemed true. Thedistrict court must instead conduct an inquiry in order to ascertain the amount of damages withreasonable certainty.Credit Lyonnais Sec. (USA) v. Alcantara, 183 F.3d 151, 155 (2d Cir.1999)(citations omitted). The dispositions of motions for entries of defaults and default judgmentsand relief from the same underRule 55(c) are left to the sound discretion of a district courtbecause it is in the best position to assess the individual circumstances of a given case and toevaluate the credibility and good faith of the parties.Enron Oil Corp. v. Diakuhara, 10 F.3d 90,95 (2d Cir.1993).

*10 [5] It has been the law for the better part of two centuries ... that a corporation mayappear in the federal courts only through licensed counsel.Rowland v. Ca. Men's Colony, UnitII Men's Advisory Council, 506 U.S. 194, 20102, 113 S.Ct. 716, 721, 121 L.Ed.2d 656 (1993).[W]here a corporation repeatedly fails to appear by counsel, a default judgment may be enteredagainst it pursuant to Rule 55 [of the Federal Rules of Civil Procedure]. SEC v. ResearchAutomation Corp., 521 F.2d 585, 589 (2d Cir.1975).

[6] In determining whether judgment by default is warranted, a court may consider anumber of factors, including: (a) whether the grounds for default are clearly established; (b)

whether the default was willful; (c) the extent of any prejudice to the plaintiff; (d) whethermaterial issues of fact or issues of substantial public importance are at issue; (e) whether thedefault is largely technical; (f) whether a meritorious defense is presented; (g) the amount ofmoney at stake in the action; and (h) whether the default was caused by a good-faith mistake orby excusable or inexcusable neglect on the part of the defendant. SeeEnron Oil Corp., 10 F.3d at96; 10A CHARLES ALAN WRIGHT & ARTHUR R. MILLER,supra 2685.
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13/43

Liability

Whether the Grounds for Default Are Clearly Established

[7] Copyright in a work protected under [the Copyright Act] vests initially in the author or

authors of the work. 17 U.S.C. 201(a). In the case of a work made for hire, the employer orother person for whom the work was prepared is considered the author for purposes of [theCopyright Act], and, unless the parties have expressly agreed otherwise in a written instrumentsigned by them, owns all of the rights comprised in the copyright. 17 U.S.C. 201(b). Subjectto certain limitations of the Copyright Act, not applicable here, a copyright owner has theexclusive rights to do and to authorize any of the following: (1) to reproduce the copyrightedwork; (2) to prepare derivative works; (3) to distribute copies of the copyrighted work; (4) toperform the copyrighted work publicly; and (5) to display the copyrighted work publicly. See17U.S.C. 106.

The ownership of a copyright may be transferred in whole or in part by any means of

conveyance or by operation of law.... Any of the exclusive rights comprised in a copyright,including any subdivision of any of the rights specified bysection 106, may be transferred ... andowned separately. 17 U.S.C. 201(d). An owner may also convey his interest in prosecutingaccrued causes of action for infringement.Davis v. Blige, 505 F.3d 90, 99 (2d Cir.2007). Atransfer of copyright ownership is an assignment, mortgage, exclusive license, or any otherconveyance, alienation, or hypothecation of a copyright or of any of the exclusive rightscomprised in a copyright, whether or not it is limited in time or place of effect, but not includinga nonexclusive license. 17 U.S.C. 101. A transfer of copyright ownership, other than byoperation of law, is not valid unless an instrument of conveyance, or a note or memorandum ofthe transfer, is in writing and signed by the owner of the rights conveyed or such owner's dulyunauthorized agent. 17 U.S.C. 204(a). Any transfer of copyright ownership or other

document pertaining to a copyright may be recorded in the Copyright Office if the documentfiled for recordation bears the actual signature of the person who executed it, or if it isaccompanied by a sworn or official certification that it is a true copy of the original, signeddocument. 17 U.S.C. 205(a).

*11 Anyone who violates any of the exclusive rights of the copyright owner as provided bysections 106 through 122 ... is an infringer of the copyright or right of the author, as the case maybe. 17 U.S.C. 501(a). The legal or beneficial owner of an exclusive right under a copyright isentitled, subject to the requirements of section 411, to institute an action for any infringement ofthat particular right committed while he or she is the owner of it.17 U.S.C. 501(b). TheSecond Circuit has recognized that an owner of an exclusive right is entitled to institute an action

for infringement of that right committed prior to a grant of copyright from the grantor, providedthat the document granting the particular right states explicitly that it includes the causes ofaction with respect to that right, accrued prior to the grant. SeeABKCO Music, Inc. v.Harrisongs Music, Ltd., 944 F.2d 971, 980 (2d Cir.1991) (Thus, a copyright owner can assignits copyright but, if the accrued causes of action are not expressly included in the assignment, theassignee will not be able to prosecute them.);see also MELVILLE B. NIMMER & DAVIDNIMMER, NIMMER ON COPYRIGHT 10.03. Once the copyright owner grants an exclusivelicense of particular rights, ... only the exclusive licensee, and not his grantor, may sue for later-
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