J.P. STADTMUELLER, District Judge.
This matter is before the court on plaintiffs' motion for a default judgment and motion for a permanent injunction against defendants Super Spring Orthodontics, LLC ("Super Spring"), Speedaligners, LLC ("Speedaligners"), and Nightshift LLC ("Nightshift"). (Docket #125). This case arises out of a protracted dispute over the defendants' allegedly improper use of photographs of orthodontic patient progress taken by plaintiff, Dr. Velton C. White ("Dr. White"), that are the subject of fourteen copyright registrations. The plaintiffs contend that the copyright infringement committed by the three limited liability companies continued for more than three years in a variety of forms in total disregard of plaintiffs' rights.
Dr. White, an orthodontist, has made a patented orthodontic device that uses springs. Dr. White offers the orthodontic device for sale and use in his own practice. In order to demonstrate the effectiveness of his orthodontic device, Dr. White took "before" and "after" photographs of his patients, and he uses these photographs in promotional materials. White has obtained federal copyright registration for these photographs. Defendant Michael C. Marshall ("Marshall") assisted Dr. White in promoting the orthodontic devices. In 2004, Marshall, Nancy Phillips ("Phillips"), and defendant Daniel Bishop ("Bishop") formed defendant Super Spring, a company that provides orthodontic devices and services. Dr. White alleges that Super Spring launched a promotional website, www.speedaligners.com, which, according to plaintiff, displays his copyrighted "before" and "after" patient photographs. Dr. White also alleges that defendant Speedaligners, a company created by Phillips, Marshall, and Bishop to hold intellectual property, identifies the content of that website as its copyrighted property.
In 2004, Phillips filed a lawsuit against Dr. White, her father, for having been wrongfully omitted as an inventor of the patented orthodontic device, and Dr. White counterclaimed against Phillips, Super Spring, and Marshall alleging infringement of the patent, infringement of Dr. White's copyrighted photographs, and unfair competition. That case was resolved after the parties reached a settlement agreement in June 2006. Pursuant to the parties' agreement, in exchange for monetary compensation of $250,000, Dr. White
Under Fed.R.Civ.P. 55, the court may enter a default judgment when a party against whom affirmative relief is sought fails to plead or otherwise defend. The decision to enter default judgment lies within the district court's discretion. O'Brien v. R.J. O'Brien & Assocs., Inc., 998 F.2d 1394, 1398 (7th Cir. 1993) (citation omitted). As a general rule, a "default judgment establishe[s], as a matter of law, that defendants [are] liable to plaintiff as to each cause of action alleged in the complaint." Breuer Electric Mfg. Co. v. Toronado Systems of America, Inc., 687 F.2d 182, 186 (7th Cir.1982). Upon entry of default, the court takes all well-pleaded allegations in plaintiffs' complaint relating to liability as true. Graham v. Satkoski, 51 F.3d 710, 713 (7th Cir.1995).
The clerk has already entered, on April 6, 2010, defendant Nightshift's default pursuant to an April 1, 2010 Order. (Docket # 97). The court now finds it appropriate to enter default judgments against defendants Super Spring and Speedaligners pursuant to Fed.R.Civ.P. 55, as both have failed to plead or otherwise defend in this lawsuit. Both defendants were served with an amended complaint on October 1, 2009. (Docket #57).
To prove copyright infringement, a plaintiff must show: "(1) ownership of a valid copyright; and (2) copying of constituent elements of the work that are original." JCW Invs., Inc. v. Novelty, Inc., 482 F.3d 910, 914 (7th Cir.2007). A certificate of copyright registration provides a prima facie presumption of validity. Mid Am. Title Co. v. Kirk, 59 F.3d 719, 721 (7th Cir.1995). Based on the allegations contained in the amended complaint, the court finds that the plaintiffs owned the registered copyrights in a series of photographs showing the treatment progress of Dr.
A copyright owner may choose to recover one of two different forms of relief against an infringer. First, the owner may recover actual damages and lost profits that are attributable to the infringement. See 17 U.S.C. § 504(b). However, because these damages are often virtually impossible to prove, a copyright owner may elect instead to recover statutory damages. See 17 U.S.C. § 504(c). Under § 504(c), the court has the discretion to award damages in the amount of $750 to $30,000 per infringement. Moreover, if the court concludes that willful infringement occurred, it may increase the amount awarded up to a sum of $150,000 per infringement. See 17 U.S.C. § 504(c)(1)-(2).
In awarding statutory damages, the court is not required to follow any rigid formula. Chi-Boy Music v. Charlie Club, Inc., 930 F.2d 1224, 1229 (7th Cir. 1991). Instead, the court enjoys wide discretion in setting a statutory damage award within the prescribed range. Broadcast Music, Inc. v. Star Amusements, Inc., 44 F.3d 485, 489 (7th Cir. 1995). The court may consider various factors such as "`the difficulty or impossibility of proving actual damages, the circumstances of the infringement, and the efficacy of the damages as a deterrent to future copyright infringement.'" Chi-Boy Music, 930 F.2d at 1229 (quoting F.E.L. Publications v. Catholic Bishop of Chicago, 754 F.2d 216, 219 (7th Cir.1985) (citations omitted)). Moreover, "when the infringement is willful, the statutory damages award may be designed to penalize the infringer and to deter future violations." Id. (citing Illinois Bell Tel. Co. v. Haines & Co., 905 F.2d 1081, 1089 (7th Cir.1990)).
Furthermore, a finding of willfulness is justified "if the infringer knows that its conduct is an infringement or if the infringer has acted in reckless disregard of the copyright owner's right." Video Views, Inc. v. Studio 21, Ltd., 925 F.2d 1010, 1020 (7th Cir.1991). "[E]vidence that notice had been accorded to the alleged infringer before the specific acts found to have constituted infringement occurred is perhaps the most persuasive evidence of willfulness...." Chi-Boy Music, 930 F.2d at 1227. Additionally, statutory damages have been held to be appropriate on a motion for default judgment because the defaulting party has the information needed to prove actual damages. Wondie v. Mekuria, 742 F.Supp.2d 118, 124-25 (D.D.C.2010); Lifted Research Grp., Inc. v. Behdad, Inc., 591 F.Supp.2d 3, 8 (D.D.C. 2008).
In this case, due to the default and lack of response of Super Spring, Speedaligners, and Nightshift, there is no evidence available of the sales volume or revenue from sales of their removable appliances comparable to Dr. White's removable appliances. Therefore, it is difficult, if not impossible, to determine the profits reaped and expenses saved by the defendants as well as the revenues lost by the plaintiff. Though the court is unable to compute actual damages, the record before the court provides some guidance as to what an appropriate monetary award should be under the statute. First, as part of a
The plaintiffs have also offered evidence that Super Spring agreed that $500 per day was a reasonable sum for liquidated damages for specified violations of a separation agreement entered into by Phillips, Marshall, and Bishop.
Taking into account all of the factors discussed above, the court finds it appropriate to award plaintiffs $10,000 for each of the fourteen works infringed. The court concludes that awarding the full statutory amount for each copyrighted work would be improper because the commercial value of the photographs stems from their combined use as "before and after" pictures. Also, the license agreement between Dr. White and Marshall, Bishop, and Phillips, while somewhat helpful in determining the monetary value assigned by the parties to the photographs, is not an ideal guideline because the $250,000 received by Dr. White was in exchange for not only use of the photographs for one year, but also for use of one of his patents for an indefinite period. Thus, it would
Additionally, the court finds it is proper to enhance the award by $10,000 for each work infringed because the defendants engaged in willful infringement. The record contains ample evidence of willful infringement. The defendants entered into a licensing agreement covering their use of the photographs which expired in June of 2007. As previously noted, notice accorded to an alleged infringer before the acts of infringement occurred is "perhaps the most persuasive evidence of willfulness." Chi-Boy Music, 930 F.2d at 1227. Thus, the continued use of the copyrighted photos for more than three years after the license expired is without a doubt willful infringement. See Schmitt v. VAG Group, Inc., 2010 WL 331782 (D.Or.2010) (defendant who continued to display plaintiff's copyrighted photos on website to promote apparel sales for months after license to utilize the photos expired willfully infringed). Therefore, the court awards plaintiffs $20,000 per photograph infringed, inclusive of an enhancement for defendants' willful infringement, for a total of $280,000 in statutory damages.
In addition to their motion for default judgment as to the LLC defendants, the plaintiffs have also requested the court to issue a permanent injunction. The Copyright Act allows a court to enter injunctive relief when it deems it reasonable to prevent future copyright infringement. 17 U.S.C. § 502(a). Moreover, a plaintiff seeking a permanent injunction must demonstrate:
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006). Additionally, there is a presumption in copyright cases that copyright infringement constitutes irreparable injury. Atari, Inc. v. Phillips Consumer Elec. Corp., 672 F.2d 607, 620 (7th Cir.1982).
Here, even despite the presumption, there is no question that the plaintiffs have suffered irreparable injury and that monetary damages are inadequate to compensate for the injury. The plaintiffs correctly note that they have suffered harm as demonstrated by the court's entering of default judgment in their favor. They also continue to suffer harm as the defendants have persisted in displaying the infringing photographs on their websites throughout this three year dispute. Such blatant disregard for the allegations of infringement against the defendants demonstrates that copyright infringement is likely to continue unless enjoined. See Twist and Shout Music v. Longneck Xpress, N.P., 441 F.Supp.2d 782, 785 (E.D.Tex.2006) (noting that defendant's continued use of plaintiffs' musical recordings demonstrates that threat of suit or statutory damages was not an effective deterrent); see also Virgin Records America, Inc. v. Johnson, 441 F.Supp.2d 963, 966 (N.D.Ind.2006) ("Defendant's failure to respond to the complaint likely suggests Defendant does not take seriously the illegality of the infringing
Furthermore, the court finds that it is not a burden on defendants to follow the law and stop their unauthorized use of the plaintiffs' photographs. The injunction will not bar the companies from conducting their businesses, including the selling of competing orthodontic appliances. Finally, the public interest is advanced by enforcing compliance with the copyright laws. See Nintendo of America, Inc. v. Lewis Galoob Toys, Inc., 16 F.3d 1032, 1038 (9th Cir.1994) ("[g]enerally, public policy favors the issuance of permanent injunctive relief in cases of infringement of intellectual property rights."). Accordingly, the plaintiff is entitled to injunctive relief and, thus, the court will issue a permanent injunction against defendants Super Spring, Speedaligners, and Nightshift.
The plaintiffs also assert they are entitled to an award of their costs, including reasonable attorney's fees pursuant to 17 U.S.C. § 505. Though the award of attorney's fees is within the sound discretion of the district court, the prevailing party in copyright litigation "is presumptively entitled to an award of fees under § 505." Mostly Memories, Inc. v. For Your Ease Only, Inc., 526 F.3d 1093, 1099 (7th Cir.2008). Moreover, a finding of willful infringement will support an award of fees. Chi-Boy Music, 930 F.2d at 1227. In this case, the defendants' willful infringement of the copyright laws warrants an award of fees. Additionally, though the court's award of statutory damages is sizable, an award of attorney's fees is still proper because the court's aim is to deter future infringement both in general and by the defendants.
After consideration of the plaintiffs' submissions concerning attorney's fees, the court will grant plaintiffs' requested costs and attorney's fees totaling $55,582.25. Though it is true that "hours spent reviewing records, talking to other lawyers or experts, preparing legal documents, etc., cannot be fully verified and require the court to trust the lawyer's word that the hours claimed represent necessary work actually performed," Coulter v. Tennessee, 805 F.2d 146, 150 (6th Cir.1986), the court finds there is a substantial basis for crediting the accuracy of the time records submitted by the plaintiffs. Though the court has previously noted that this is a case in which the proverbial train was never properly on track (Order 1) (Docket # 97), in the end, the fee request is for services rendered in the prosecution of copyright infringement claims against three LLC defendants over a period of approximately three years, with the ultimate conclusion that the LLC defendants willfully infringed the plaintiffs' copyrights. The docket sheet reflects 140 entries and numerous substantive motions. It is not for the court to engage in an ex post facto determination of whether attorney hours were necessary to the relief obtained. Rather the court must determine whether, at the time the work was performed, a reasonable attorney would have engaged in similar time expenditures. The court concludes that under the facts of this case, the
Accordingly,
1. Nightshift LLC, Super Spring Orthodontics, LLC and Speedaligners, LLC and their officers, agents, servants, employees and/or representatives and all other persons in active concert or participation with them, shall be and hereby are permanently enjoined from continued infringement of Copyright Reg. Nos. VA 1-277-047, VA 1-277-063, VA 1-277-064, VA 1-277-065, VA 1-278-589, VA 1-279-084, VA 1-279-086, VA 1-279-087, VA 1-279-088, VA 1-279-090, and TX 6-369-883 and more specifically from the reproduction, display, distribution, or creation of works derived from any of the works that are the subject of the identified copyright registrations;
2. Nightshift, LLC, Super Spring Orthodontics, LLC and Speedaligners, LLC shall take immediate action to remove copies of any of the images that are the subject of the identified copyright registrations identified in Paragraph 1 or images derived therefrom from the website with the URL http://www.nightshiftortho.com and any other location, physical or internet-based where they are displayed;
3. Nightshift, LLC, Super Spring Orthodontics, LLC and Speedaligners, LLC shall surrender to plaintiffs all printed matter that contains copies of any of the images that are the subject of the identified copyright registrations identified in Paragraph 1 or images derived therefrom;
4. Defendants Nightshift, LLC, Super Spring Orthodontics, LLC and Speedaligners, LLC shall pay, jointly and severally, the plaintiffs
5. Defendants Nightshift, LLC, Super Spring Orthodontics, LLC and Speedaligners, LLC shall pay, jointly and severally, plaintiffs' attorney's fees and costs in the amount of
The clerk of court is directed to enter judgment accordingly.