PUBLIC VERSION UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK HARPERCOLLINS PUBLISHERS LLC, Plaintiff, v. OPEN ROAD INTEGRATED MEDIA, LLP, Defendant. ) ) ) ) ) ) ) ) ) ) ) Case No. 1:11-cv-09499-NRB MEMORANDUM OF LAW IN SUPPORT OF HARPERCOLLINS PUBLISHERS LLC’S MOTION FOR A PERMANENT INJUNCTION, STATUTORY DAMAGES, ATTORNEYS’ FEES, AND COSTS Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 1 of 31
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PUBLIC VERSION
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
HARPERCOLLINS PUBLISHERS LLC,
Plaintiff,
v.
OPEN ROAD INTEGRATED MEDIA, LLP,
Defendant.
)))))))))))
Case No. 1:11-cv-09499-NRB
MEMORANDUM OF LAW IN SUPPORT OF HARPERCOLLINS PUBLISHERS LLC’S MOTION FOR A PERMANENT INJUNCTION, STATUTORY DAMAGES,
ATTORNEYS’ FEES, AND COSTS
Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 1 of 31
I. THE COURT SHOULD ENTER A PERMANENT INJUNCTION ..................................7
II. HARPERCOLLINS IS ENTITLED TO A MAXIMUM STATUTORY DAMAGE AWARD, ENHANCED DUE TO OPEN ROAD’S CONTINUED WILLFUL INFRINGEMENT ...........................................................................................12
III. THE COURT SHOULD GRANT HARPERCOLLINS ITS REASONABLE ATTORNEYS’ FEES ........................................................................................................17
A. An Award of Attorneys’ Fees Is Warranted ..........................................................17
B. The Amount of Fees Requested Is Reasonable ......................................................21
IV. THE COURT SHOULD AWARD HARPERCOLLINS’ FULL COSTS ........................23
Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy,548 U.S. 291 (2006) .................................................................................................................24
Barrera v. Brooklyn Music, Ltd.,346 F. Supp. 2d 400 (S.D.N.Y. 2004) ................................................................................23, 24
Boosey & Hawkes Music Publ’rs, Ltd. v. Walt Disney Co.,145 F.3d 481 (2d Cir. 1998).................................................................................................6, 19
Bryant v. Media Right Prods., Inc.,603 F.3d 135 (2d Cir. 2010).....................................................................................................13
Complex Sys., Inc. v. ABN Amro Bank N.V.,No. 08 Civ. 7497 (KBF), 2014 U.S. Dist. LEXIS 64467 (S.D.N.Y. May 9, 2014) ......9, 10, 11
Contractual Obligation Prods., LLC v. AMC Networks, Inc.,546 F. Supp. 2d 120 (S.D.N.Y. 2008) ......................................................................................18
Crescent Publ’g Group, Inc. v. Playboy Enters., Inc.,246 F.3d 142 (2d Cir. 2001).....................................................................................................21
eBay Inc. v. MercExchange, L.L.C.,547 U.S. 388 (2006) ...................................................................................................................8
Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 3 of 31
iii
TABLE OF AUTHORITIES (cont’d)
Page(s)
Cases
EMI April Music Inc. v. 4MM Games, LLC,No. 12 Civ. 2080 (DLC)(JLC), 2014 WL 325933 (S.D.N.Y. Jan. 13, 2014), report and recommendation adopted, No. 12 Civ. 2080(DLC),2014 WL 1383468 (S.D.N.Y. Apr. 7, 2014).................................................................... passim
Fogerty v. Fantasy, Inc.,510 U.S. 517 (1994) ...........................................................................................................17, 18
Grant v. Martinez,973 F.2d 96 (2d Cir. 1992).......................................................................................................22
Harrell v. Van Der Plas,No. 08 Civ. 8252 (GEL), 2009 WL 3756327 (S.D.N.Y. Nov. 9, 2009) .......................... passim
Hensley v. Eckerhart,461 U.S. 424 (1983) .................................................................................................................21
Hounddog Prods., L.L.C. v. Empire Film Group, Inc.,826 F. Supp. 2d 619 (S.D.N.Y. 2011) ........................................................................................8
LaSalle Bank Nat’l Ass’n v. Nomura Asset Capital Corp.,424 F.3d 195 (2d Cir. 2005).....................................................................................................19
LeBlanc-Sterling v. Fletcher,143 F.3d 748 (2d Cir. 1998).....................................................................................................24
Matthew Bender Co., Inc. v. West Publ’g Co.,240 F.3d 115 (2d Cir. 2001)...............................................................................................17, 18
Microsoft Corp. v. AGA Solutions, Inc.,No. 05 Civ. 5769(DRH)(MLO), 2010 WL 1049219 (E.D.N.Y. Mar. 22, 2010) .....................14
Miltland Raleigh-Durham v. Myers,840 F. Supp. 235 (S.D.NY. 1993)............................................................................................24
Miroglio S.P.A. v. Conway Stores, Inc.,629 F. Supp. 2d 307 (S.D.N.Y. 2009) ..........................................................................13, 18, 20
MiTek Holdings, Inc. v. Arce Eng’g Co.,198 F.3d 840 (11th Cir. 1999) .................................................................................................18
Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 4 of 31
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TABLE OF AUTHORITIES (cont’d)
Page(s)
Cases
Muller v. Twentieth Century Fox Film Corp.,No. 08 Civ. 02550(DC), 2011 WL 3678712 (S.D.N.Y. Aug. 22, 2011) .................................21
N.Y. State Ass’n for Retarded Children, Inc. v. Carey,711 F.2d 1136 (2d Cir. 1983)...................................................................................................23
Nat’l Football League v. Primetime 24 Joint Venture,No. 98 Civ. 3778LMM, 1999 WL 760131 (S.D.N.Y. Sept. 27, 1999) ...................................11
Omega Importing Corp. v. Petri-King Camera Co.,451 F.2d 1190 (2d Cir. 1971)...................................................................................................16
Pannonia Farms, Inc. v. USA Cable (“Pannonia I”), No. 03 Civ. 7841(NRB), 2004 WL 1276842 (S.D.N.Y. June 8, 2004) ...................................17
Pannonia Farms, Inc. v. USA Cable (“Pannonia III”), No. 03 Civ. 7841(NRB), 2006 WL 2872566 (S.D.N.Y. Oct. 5, 2006) .......................17, 21, 23
Paramount Pictures Corp. v. Carol Publ’g Group,11 F. Supp. 2d 329 (S.D.N.Y. 1998) ........................................................................................11
Pearson Educ., Inc. v. Ishayev,963 F. Supp. 2d 239 (S.D.N.Y. 2013) ........................................................................................8
Pearson Educ., Inc. v. Vergara,No. 09 Civ. 6832(JGK)(KNF), 2010 WL 3744033 (S.D.N.Y. Sept. 17, 2010) ........................9
Porto v. Guirgis,659 F. Supp. 2d 597 (S.D.N.Y. 2009) ......................................................................................18
Psihoyos v. John Wiley & Sons, Inc.,Nos. 12-4874-cv(L), 12-5069-cv(XAP), 2014 WL 1327937 (2d Cir. Apr. 4, 2014) ..............13
Random House, Inc. v. Rosetta Books LLC,150 F. Supp. 2d 613 (S.D.N.Y. 2001), aff’d, 283 F.3d 490 (2d Cir. 2002) ..................... passim
Salinger v. Colting,607 F.3d 68 (2d Cir. 2010).............................................................................................8, 11, 12
Scanlon v. Kessler,23 F. Supp. 2d 413 (S.D.N.Y. 1998) ........................................................................................13
Tom Doherty Assoc., Inc. v. Saban Entm’t., Inc.,60 F.3d 27 (2d Cir. 1995) ..........................................................................................................8
Tradescape v. Shivaram,77 F. Supp. 2d 408 (S.D.N.Y. 1999) ....................................................................................8, 10
Twin Peaks Prods., Inc. v. Publ’s Int’l, Ltd.,996 F.2d 1366 (2d Cir. 1993).............................................................................................12, 17
United States v. W.T. Grant Co.,345 U.S. 629 (1953) .................................................................................................................10
United States Football League v. Nat’l Football League,887 F.2d 408 (2d Cir. 1989).....................................................................................................24
Warner Bros. Entm’t Inc. v. RDR Books,575 F. Supp. 2d 513 (S.D.N.Y. 2008) ......................................................................8, 10, 11, 12
Williams v. Crichton,891 F. Supp. 120 (S.D.N.Y. 1994)...........................................................................................24
Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 6 of 31
Pursuant to the Court’s March 14, 2014 Memorandum and Order, 17 U.S.C. §§ 502, 504,
and 505, 28 U.S.C. § 1920, and Federal Rule of Civil Procedure 54(d)(1), Plaintiff HarperCollins
Publishers LLC (“HarperCollins”) respectfully submits this memorandum of law in support of its
motion for an award of a permanent injunction, statutory damages, attorneys’ fees, and costs.
PRELIMINARY STATEMENT
This copyright infringement action arose out of the publication by Defendant Open Road
Integrated Media Inc. (“Open Road”) of an electronic edition of acclaimed children’s novel Julie
of the Wolves by Jean Craighead George (the “Work”), despite HarperCollins’ exclusive right to
publish or license publication of electronic editions of the Work under its 1971 agreement with
George (the “Agreement”). Although HarperCollins advised Open Road repeatedly that such
conduct would violate HarperCollins’ exclusive rights, Open Road – fully aware of the legal risk
– nevertheless proceeded to publish its e-book version of the Work in or about August 2011.
In granting HarperCollins’ motion for summary judgment on its infringement claim and
denying Open Road’s cross-motion, the Court found that the Agreement unambiguously granted
HarperCollins the exclusive right to license e-book versions of the Work. In so holding, the
Court declined Open Road’s invitation to ignore both the plain meaning of the 1971 Agreement
and the interpretive principles established by this Circuit’s “new use” precedents, which, the
Court held, strongly supported HarperCollins’ position. Notwithstanding the Court’s emphatic
rejection of Open Road’s arguments, Open Road to this day (more than two months later)
persists in violating HarperCollins’ exclusive electronic rights by continuing to hold itself out as
an authorized publisher of the Work.
HarperCollins seeks entry of a permanent injunction to protect its exclusive rights in the
Work and statutory damages of not less than $30,000 for Open Road’s blatant infringement. As
the prevailing party, and particularly in light of the objective unreasonableness of Open Road’s
Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 7 of 31
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litigation position, HarperCollins also seeks an award of attorneys’ fees in the amount of
$1,089,371.50 and costs in the amount of $7,040.62. As explained below and in the
accompanying Declaration of R. Bruce Rich, dated May 23, 2014 (“Rich Decl.”), HarperCollins
believes these remedies are necessary and appropriate to compensate it for harm sustained as the
result of Open Road’s infringing conduct; to prevent such conduct from continuing with respect
to Julie of the Wolves and from occurring in the future with respect to that and other works; and
to deter Open Road and others from acting without regard for clear grants of electronic
publication rights to third parties and thereby interfering with the rightful exploitation of those
rights.
BACKGROUND
A. Factual Background and the Parties’ Arguments
HarperCollins learned of George’s intention to enter into an agreement with Open Road,
a digital book publisher, for the publication of an e-book version of Julie of the Wolves in
approximately December 2010. See Rich Decl. ¶ 3. Over the ensuing months, HarperCollins
repeatedly advised George and her literary agent, Ginger Knowlton of Curtis Brown, Ltd., that
HarperCollins held the exclusive right to license electronic publishing rights in the Work to third
parties and that any publication of the Work by Open Road would constitute copyright
infringement. Id. ¶ 4, 7 & Ex. F. In a meeting between the parties’ counsel, HarperCollins’
counsel identified the specific provisions of the Agreement that unambiguously granted these
rights exclusively to HarperCollins, gave Open Road fair notice of HarperCollins’ reservation of
all its legal rights, and indicated HarperCollins’ intent to sue for copyright infringement should
Open Road proceed with its plan to publish a Julie of the Wolves e-book. Id. ¶ 8.
The relevant provisions of the Agreement granted HarperCollins the exclusive English
language rights to publish the Work “in book form” and also granted HarperCollins the exclusive
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take and defend six depositions. See id. ¶ 19. In addition, after Open Road insisted on
submitting expert reports, HarperCollins was required to work extensively with its expert, Dr.
Andries van Dam, in connection with the preparation of his responsive report. See id. ¶ 20. On
March 18, 2013, the parties cross-moved for summary judgment comprising nearly 100 pages of
briefing and more than 140 exhibits. Id. ¶ 21. HarperCollins’ motion was supported by
declarations from one fact witness and one expert witness.
In its summary judgment papers, Open Road argued that HarperCollins itself had not
been granted the right to publish e-book versions of the Work because, according to Open Road,
e-books were not encompassed by the Agreement’s broad grant of rights to publish the Work “in
book form.” Dkt. 22 at 11-19. This argument – in addition to being irrelevant, because only
HarperCollins’ right to license third parties was at issue – was premised on the factually
distinguishable, more-than-decade-old case Random House, Inc. v. Rosetta Books LLC, 150 F.
Supp. 2d 613 (S.D.N.Y. 2001), aff’d, 283 F.3d 490 (2d Cir. 2002). See Dkt. 22 at 11-18. In that
case, the district court refused to enjoin another e-book publisher, Rosetta Books, from
publishing novels to which Random House held the rights to “print, publish and sell” “in book
form”; none of the publishing contracts at issue in that case mentioned electronic publication.
Concerning the salient portions of Paragraph 20 of the Agreement, Open Road urged the
Court to effectively rewrite it by striking the “and/or” so that the language concerning
“information and storage and retrieval systems” was merely “modified” by the remainder of the
provision – “whether through computer, computer-stored, mechanical or other electronic means
now known or hereafter invented” – rather than the “electronic means” clause having
independent significance. See Dkt. 35 at 8-10. So interpreted, Open Road maintained that
Paragraph 20 did not compass e-books because “information and storage and retrieval systems”
Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 10 of 31
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was limited to “systems in which books and other publications would be analyzed, indexed,
classified, and abstracted, including by computers.” Dkt. 22 at 21; Dkt. 25 (Declaration of
Michael J. Boni In Support of Defendant Open Road’s Motion for Summary Judgment) Ex. 33
(Amended Declaration and Expert Report of David Farber (“Farber Decl.”)) ¶ 18. Such systems,
Open Road contended, were confined to “the functional equivalent of a more advanced library
card retrieval system.” Farber Decl. ¶ 18.
B. The Court’s Summary Judgment Ruling
On March 14, 2014, the Court granted HarperCollins’ motion for summary judgment and
denied Open Road’s cross-motion for summary judgment. In doing so, the Court squarely
rejected each of Open Road’s arguments. Dkt. 46.
First, the Court rejected Open Road’s attempt to “redirect the Court’s attention” away
from Paragraph 20 to Paragraph 1 and to Rosetta Books – a case that, the Court noted, “did not
directly address” the issues in this case. Id. at 20. The Court found that the Agreement’s broad
and unqualified grant to HarperCollins of the right to “publish” the Work “in book form” was
distinguishable from the arguably more limited “print, publish and sell” grant language that
Rosetta Books had successfully argued denoted a paper copy. Id. at 16 (emphasis added).3
The Court determined, however, that it did not need to decide whether the “in book form”
grant by itself covered e-book publication rights because Paragraph 20 left no doubt that
HarperCollins held the exclusive right to license third parties to publish electronic editions of the
Work. Paragraph 20, the Court explained, “explicitly grant[ed] HarperCollins certain rights
3 The Court’s suggestion that Open Road’s attempt to avoid Paragraph 20 was disingenuous (see id. at 20 (attributing Open Road’s focus on Paragraph 1 to its “apparent[] recogni[tion of] the breadth of the language in Paragraph 20”)) is bolstered by the fact that Open Road’s counsel, who also was counsel to Rosetta Books, argued in Rosetta Books that e-book rights had not been conveyed to Random House because none of the contracts anywhere addressed electronic rights. See Dkt. 23 Ex. 46 at 19-20. The Agreement contains the very reference to electronic rights that Open Road’s counsel thus recognized would have dictated a different result in Rosetta Books.
Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 11 of 31
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associated with use by ‘electronic means,’” thereby creating “a critical distinction from Rosetta
Books, whose contract made no mention of electronic exploitation at all.” Dkt. 46 at 17. The
Court further found that Paragraph 20, by encompassing “the forward-looking reference to
technologies ‘now known or hereafter invented,’” was “sufficiently broad to draw within its
ambit e-book publication.” Id. E-book technology, the Court stated, “encompasses a later-
invented version of the very ‘computer, computer-stored, mechanical or other electronic means’
provided by Paragraph 20.” Id.
The court held this conclusion was reinforced by this Circuit’s “new use” cases, as the
“expansive contractual language” in the Agreement was at least as broad as that previously found
to be “sufficient to encompass a later-developed new use.” Id. at 18. Indeed, the Court noted
that by expressly providing for anticipated electronic means that might be “hereafter invented,”
Paragraph 20 was “greater in breadth” with respect to new uses than contracts at issue in the
“new use” cases that lacked such a future-use provision but nonetheless were found to be broad
enough to encompass new electronic uses. Id. at 19.4
To the extent Open Road did address Paragraph 20, the Court found that it “attempt[ed]
to rewrite” it by excising the “and/or” language that George’s own literary agent had insisted on
including and by limiting its analysis to the portion of the provision addressing “information and
storage and retrieval systems.” Id. at 20-22. The Court noted that it was, in any event, far from
clear that treating the “electronic means” language as a mere modifier would support Open
Road’s position, finding it “plausible” that “storage and retrieval and information systems” alone
could encompass e-book technology under the “new use” precedents. See id. at 22.
4 The Court also rejected Open Road’s contention that a “foreseeability” analysis was required as part of the “new use” contract assessment, noting that, contrary to Open Road’s contention, whether foreseeability of the new use is required “remains an open question.” Id. at 25 (quoting Boosey & Hawkes Music Publ’rs, Ltd. v. Walt Disney Co., 145 F.3d 481, 486 (2d Cir. 1998)).
Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 12 of 31
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Finally, the Court readily disposed of Open Road’s remaining arguments, concluding
that:
Open Road’s claims regarding the purported lack of a publication grant or a royalty rate in Paragraph 20 were irrelevant attempts to “redirect attention to . . . a question not before this Court and not germane to this litigation,” id. at 23;
the parties’ course of performance under the Agreement did not favor Open Road (and in fact likely favored HarperCollins), as Open Road’s only examples of George licensing electronic uses of the Work were undertaken without HarperCollins’ knowledge or consent, id. at 27; and
Open Road’s argument that subsequent contracts containing different language should bear on the construction of the 1971 Agreement had no merit, id. at 28.
C. Open Road’s Subsequent Conduct
Despite the Court having found its publication of the Work to be infringing, Open Road
continues to hold itself out to the public as an authorized publisher of the Julie of the Wolves e-
book. As of the date of this motion, Open Road’s website continues to invite consumers to “Buy
the EBook” of the Work through a variety of channels, including Amazon, Apple, and Google.
See Rich Decl. ¶ 15 & Ex. K. As recently as May 1, 2014 (some six weeks after this Court’s
summary judgment decision), the Julie of the Wolves e-book remained available for sale on each
of these channels. Id. ¶ 14 & Ex. I. Even today, Google Play continues to display Open Road’s
version of the e-book and invites consumers to add it to their “Wishlist.” Id. ¶ 16 & Ex. L.
Based on the Court’s ruling in its favor, as well as Open Road’s subsequent continued
infringing conduct, HarperCollins now moves for appropriate remedies as the prevailing party in
this action.
ARGUMENT
I. THE COURT SHOULD ENTER A PERMANENT INJUNCTION
HarperCollins seeks the entry of a permanent injunction against Open Road’s continuing
and future infringement of HarperCollins’ exclusive electronic publishing rights. Section 502 of
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the Copyright Act authorizes the Court to enter a final injunction “on such terms as it may deem
reasonable to prevent or restrain infringement of a copyright.” 17 U.S.C. § 502. A plaintiff
seeking a permanent injunction must demonstrate: (1) that it has suffered an irreparable injury;
(2) that remedies available at law, such as monetary damages, are inadequate to compensate for
that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a
remedy in equity is warranted; and (4) that the public interest would not be disserved by a
permanent injunction. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006).5
HarperCollins easily meets this standard.
First, there can be little question that HarperCollins will suffer irreparable harm without
an injunction. Harm may be irreparable “for many reasons, including that a loss is difficult to
replace or difficult to measure, or that it is a loss that one should not be expected to suffer.”
Salinger, 607 F.3d at 81; see also Tom Doherty Assoc., Inc. v. Saban Entm’t, Inc., 60 F.3d 27, 38
(2d Cir. 1995) (affirming grant of injunction based on finding that publishing company would be
irreparably harmed by being prevented from taking advantage of market opportunity to which it
had a right and finding damages caused by lost opportunity would be difficult to quantify);
Tradescape v. Shivaram, 77 F. Supp. 2d 408, 411 (S.D.N.Y. 1999) (finding irreparable harm
where “long-term damage to plaintiff’s market share and reputation would be impossible to
quantify”); accord EMI April Music Inc. v. 4MM Games, LLC, No. 12 Civ. 2080(DLC)(JLC),
2014 WL 325933, at *9 (S.D.N.Y. Jan. 13, 2014), report and recommendation adopted, No. 12
5 Although the Second Circuit has not expressly held that the eBay standard applies to permanent injunctions in the copyright context, it has held that it applies to preliminary injunctions in copyright cases, Salinger v. Colting, 607 F.3d 68, 77 (2d Cir. 2010), and there would appear to be no basis for finding it inapplicable to a copyright permanent injunction. Indeed, courts in this District have held that it applies. See, e.g., Pearson Educ., Inc. v. Ishayev, 963 F. Supp. 2d 239, 254 (S.D.N.Y. 2013); WarnerBros. Entm’t Inc. v. RDR Books, 575 F. Supp. 2d 513, 551-52 (S.D.N.Y. 2008); Hounddog Prods., L.L.C. v. Empire Film Grp., Inc., 826 F. Supp. 2d 619, 632 (S.D.N.Y. 2011).
Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 14 of 31
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inter alia, defendant had “refused to properly license” works at issue, and plaintiff could not
control defendant’s illegal use of copyrighted works); Pearson Educ., Inc. v. Vergara, No. 09
harm based on determination that plaintiff publisher should not be expected to suffer decline in
sales and profits of books due to defendant’s infringement).
HarperCollins plainly is suffering irreparable harm, and will continue to do so if a
permanent injunction is not entered. Open Road’s continued unlicensed offering and sale of the
Work following the summary judgment ruling, and its ongoing representation to consumers that
it is an authorized publisher of the Work, in violation of what the Court found to be
HarperCollins’ exclusive electronic publication rights, interfere with HarperCollins’ ability to
sell or license publication of the Work and thus its ability to take advantage of a market
opportunity that it – and only it – is entitled to exploit. By its unlawful competition, Open Road
has harmed HarperCollins to an extent that is impossible to quantify and that HarperCollins
cannot control. See Complex Sys., Inc. v. ABN Amro Bank N.V., No. 08 Civ. 7497 (KBF), 2014
U.S. Dist. LEXIS 64467, at *39 (S.D.N.Y. May 9, 2014) (“Direct competition may . . . constitute
irreparable harm.”) (citation omitted). HarperCollins should not be expected to continue to
incur this harm as a result of Open Road’s ongoing infringing conduct.
Second, HarperCollins has no adequate remedy at law. A plaintiff has no adequate
remedy at law where, absent an injunction, the defendant is likely to continue the infringement.
See EMI April Music, 2014 WL 325933, at *9 (finding no evidence defendant would stop its
infringing activities where it “failed to cease its infringing activities even after being notified of
its infringement”); Pearson Educ. v. Vergara, 2010 WL 3744033, at *4 (finding award of
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monetary damages would not adequately compensate plaintiffs where there was no evidence to
suggest defendant would cease infringing activity).
Open Road has shown no sign it will stop its infringing conduct unless it is enjoined from
doing so. Even following issuance of the Court’s strongly worded summary judgment ruling,
Open Road continued to make the Work available for sale through links on its website to various
online retailers until at least May 1, 2014 – some six weeks after the Court’s ruling. Rich Decl.
Ex. ¶ 14 & Ex. I. Even today, Open Road continues to represent that consumers can “Buy the
EBook” via its website, and at least one of its vendors maintains a page dedicated to Open
Road’s e-book edition of the Work and permits putative purchasers to place it on their
“Wishlist,” implicitly suggesting that the e-book will be available from Open Road in the future.
Id. ¶¶ 15-16 & Exs. K-L. Hence, it is clear that if an injunction is not issued, Open Road is
likely to continue infringing HarperCollins’ copyright rights.6 See Warner Bros., 575 F. Supp.
2d at 553. Given the “significant threat of future infringement” in this case, it is apparent that
HarperCollins “cannot be compensated by monetary relief alone.” EMI April Music, 2014 WL
325933, at *9.7
The principle that injunctive relief should be granted where denying it “would amount to
a forced license to use the creative work of another,” see Silverstein v. Penguin Putnam, Inc.,
368 F.3d 77, 84 (2d Cir. 2004); Complex Sys., 2014 U.S. Dist. LEXIS 64467, at *34-35, further
6 The fact that Open Road appears to have instructed its retailers to cease actually selling the Julie of the Wolves e-book does not lessen the need for a permanent injunction: Open Road’s prior conduct indicates its proclivity for flouting the Court’s summary judgment ruling, and voluntary cessation of illegal or infringing conduct does not prevent the granting of a permanent injunction. See, e.g., Tradescape.com, 77 F. Supp. 2d at 410 n.2 (granting permanent injunction in copyright action, noting “[v]oluntary cessation of unlawful conduct alone does not moot an application for an injunction”) (citing United States v. W.T. Grant Co., 345 U.S. 629, 633 (1953)).7 HarperCollins is concerned not only with Open Road’s continued infringement of its rights in Julie of the Wolves but also with protecting its rights to other works as to which it holds comparable exclusive rights.
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compels entry of an injunction. Indeed, the failure to issue an injunction would be “tantamount
to the creation of a compulsory license, future damages . . . becoming a sort of royalty.”
Silverstein, 368 F.3d at 84; see also Paramount Pictures Corp. v. Carol Publ’g Grp., 11 F. Supp.
2d 329, 338 (S.D.N.Y. 1998) (rejecting argument that damages would be sufficient remedy for
infringing publication, since “[a]llowing this argument to prevail would, in effect, make any
copyright holder an involuntary licensor of the copyright to any entity that could be relied on to
pay damages”). Such a judicially-sanctioned, involuntary “license” is neither a desirable practice
nor consistent with the objectives of the Copyright Act. See Nat’l Football League v. Primetime
Plainly, without an injunction, HarperCollins will effectively become a forced licensor of Open
Road, with any future damages obtained through litigation its only “royalty.”
Third, the balance of hardships weighs heavily in favor of HarperCollins. The harm to
HarperCollins in the absence of an injunction – the deprivation of its exclusive right to publish or
license publication of the Work in electronic form – is clear, while any harm an injunction would
cause to Open Road would consist solely of its inability to continue infringing HarperCollins’
copyright rights. The law “does not protect this type of hardship.” Warner Bros., 575 F. Supp.
2d at 553; see also Complex Sys., 2014 U.S. Dist. LEXIS 64467, at *51 (finding balance of
hardships weighed in favor of permanent injunction where defendant’s only hardship was being
“prevent[ed] . . . from doing that which it has no right to do”).
Fourth, the public interest will be served by entry of a permanent injunction. The
purpose of copyright law is “to promote the store of knowledge available to the public.”
Salinger, 607 F.3d at 82. To the extent copyright law accomplishes this end “by providing
individuals a financial incentive to contribute to the store of knowledge,” the public interest
Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 17 of 31
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“may well be already accounted for by the plaintiff’s interest.” Id. In order to advance the
public interest in access to literary works, copyright law “must prevent the misappropriation of
the skills, creative energies, and resources which are invested in the protected work.” Warner
Bros., 575 F. Supp. 2d at 553. Here, a permanent injunction protecting HarperCollins’ exclusive
electronic rights in the Work, as well as in any other works to which it holds commensurate
rights, will enable and encourage HarperCollins to continue to meet public demand for digital
versions of important backlist literary works like Julie of the Wolves without the threat of
unlawful direct competition.
Toward this end, HarperCollins’ proposed permanent injunction (see Rich Decl. Ex. A)
would enjoin Open Road from publishing or contracting to publish the Work and holding itself
out as an authorized publisher of the Work. It would require Open Road to discontinue the sale
and offering for sale of the Work through any and all sales channels; to delete or destroy all
copies of the Work (or any portion thereof) in its possession, custody, or control; and to remove
the Work from the sales catalogs, websites, and any other sources that list works available for
sale or download from Open Road. It would require Open Road to notify all third parties with
which it has contracted or otherwise arranged to offer the Work for sale to promptly stop doing
so. Finally, it would prevent Open Road from publishing, or contracting to publish, any other
work for which HarperCollins holds the exclusive right to publish “in book form” together with
the exclusive electronic rights conveyed to HarperCollins in the Agreement.
II. HARPERCOLLINS IS ENTITLED TO A MAXIMUM STATUTORY DAMAGE AWARD, ENHANCED DUE TO OPEN ROAD’S CONTINUED WILLFUL INFRINGEMENT
HarperCollins has elected to recover statutory damages in lieu of actual damages under
section 504 of the Copyright Act. See 17 U.S.C. § 504(c); see also, e.g., Twin Peaks Prods., Inc.
v. Publ’ns Int’l, Ltd., 996 F.2d 1366, 1380-81 (2d Cir. 1993). Statutory damages are available
Case 1:11-cv-09499-NRB Document 50 Filed 05/23/14 Page 18 of 31
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without proof of actual damages. All-Star Mktg. Grp., LLC v. Media Brands Co., 775 F. Supp.
2d 613, 626 (S.D.N.Y. 2011). For each work infringed, a prevailing copyright plaintiff may
recover statutory damages of from $750 to $30,000, and the award may be increased up to
$150,000 per work where the infringement is willful. 17 U.S.C. § 504(c)(1)-(2). Courts “enjoy
wide discretion in setting the amount of statutory damages.” Bryant v. Media Right Prods., Inc.,
603 F.3d 135, 143 (2d Cir. 2010) (quotation and alteration omitted); see also EMI April Music,
2014 WL 325933, at *4.
Notwithstanding Open Road’s blatant infringement, HarperCollins initially was not
inclined to seek enhanced statutory damages based on willful infringement. However, Open
Road’s continued infringing conduct following the Court’s summary judgment ruling has led
HarperCollins to believe that a statutory damages award should incorporate a willfulness
component. Accordingly, HarperCollins requests a statutory damage award of at least the
maximum for non-willful infringement ($30,000) but urges the Court to enhance that award by
an amount in its discretion in view of Open Road’s continued infringing conduct.8
In setting an award of statutory damages under section 504, courts in this Circuit consider
the following factors: “(1) the infringer’s state of mind; (2) the expenses saved, and profits
earned, by the infringer; (3) the revenue lost by the copyright holder; (4) the deterrent effect on
the infringer and third parties; (5) the infringer’s cooperation in providing evidence concerning
the value of the infringing material; and (6) the conduct and attitude of the parties.” Bryant, 603
F.3d at 144; see also Psihoyos v. John Wiley & Sons, Inc., Nos. 12-4874-cv(L), 12-5069-
8 The appropriateness of an award of attorneys’ fees, as discussed in Section III, infra, is unaffected by the Court’s determination as to willfulness. See Miroglio S.P.A. v. Conway Stores, Inc., 629 F. Supp. 2d 307, 310-11 (S.D.N.Y. 2009); see also Scanlon v. Kessler, 23 F. Supp. 2d 413, 416 (S.D.N.Y. 1998) (“[T]he court’s finding of lack of wilfulness on the part of [the defendant] does not prevent plaintiff from being awarded attorney’s fees and costs. Wilfulness goes to the issue of damages and not to the ultimate issue of determining whether defendants violated the Act by infringing on [the plaintiff’s] copyrights.”).
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Ex. 41 at OR000560-61; see also Dkt. 19 (Declaration of Kate Jackson In Support of
HarperCollins’ Motion for Summary Judgment) ¶¶ 28-29. Open Road nonetheless proceeded
with publication of the e-book version of the Work notwithstanding the evident reservations of
its counsel and of George’s agent as to the potential violation of HarperCollins’ contractual
rights. See Dkt. 23 Ex. 21 at OR000739; id. Ex. 18 at OR000504; id. Ex. 4 (Deposition of
Ginger Knowlton, dated Nov. 29, 2013), at 73:24-74:3. Indeed, it was not until Open Road
that Open Road’s publication of the Work moved forward. Id. Ex. 21 at OR000120.
In short, Open Road’s infringement was hardly innocent.
Deterrence (Factor 4) also strongly favors a significant statutory award. Courts “must
consider the deterrent effect on both other potential infringers as well as Defendants themselves,”
Arista Records LLC v. Usenet.com, Inc., No. 07 Civ. 8822(HB)(THK), 2010 WL 3629688, at *6
Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy, 548 U.S. 291, 298 (2006)). Recoverable costs
also may include “reasonable out-of-pocket expenses incurred by attorneys and ordinarily
charged to their clients.” LeBlanc-Sterling v. Fletcher, 143 F.3d 748, 763 (2d Cir. 1998)
(quoting United States Football League v. Nat’l Football League, 887 F.2d 408, 416 (2d Cir.
1989)); see also Miltland Raleigh-Durham v. Myers, 840 F. Supp. 235, 239 (S.D.N.Y. 1993)
(“Attorneys may be compensated for reasonable out-of-pocket expenses incurred and
customarily charged to their clients, as long as they ‘were incidental and necessary to the
representation of those clients.’”).
As set out more fully in the accompanying Rich Declaration, HarperCollins seeks
recovery of its taxable costs in the amount of $7,040.62.
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CONCLUSION
For the foregoing reasons, HarperCollins respectfully requests that the Court: (1) enter a
permanent injunction in the form attached as Exhibit A to the Rich Declaration; (2) award
HarperCollins statutory damages in the amount of at least $30,000.00; and (3) award
HarperCollins reasonable attorneys’ fees in the amount of $1,089,371.50 and costs in the amount
of $7,040.62.
Dated: New York, New York May 23, 2013 Respectfully submitted,
WEIL, GOTSHAL & MANGES LLP
By: /s/ R. Bruce Rich R. Bruce Rich (RBR-0313) Jonathan Bloom (JB-7966) Sabrina A. Perelman (SP-2268) 767 Fifth AvenueNew York, New York 10153Tel: (212) 310-8000 Fax: (212) 310-8007
Attorneys for Plaintiff HarperCollins Publishers LLC
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