Pearson Education, Inc. v. Labos

District Court, S.D. New York·Decided September 30, 2021·No. 1:19-cv-00487·Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ---------------------------------------------------------------------- X : PEARSON EDUCATION, INC. et al., : : Plaintiffs, : : 19 Civ. 487 (JPC) -v- : : OPINION GEOFFREY LABOS et al., : AND ORDER : Defendants. : : ---------------------------------------------------------------------- X

JOHN P. CRONAN, United States District Judge: This action is brought by major publishers of educational materials against several Defendants for allegedly infringing their copyrights and trademarks by selling counterfeit textbooks on eBay.com and other online marketplaces. Plaintiffs have resolved their claims against several of these online booksellers. Four Defendants remain, each of whom is in default: Geoffrey Labos, Dien T. Truong, Emuejevoke Oduma, and Miyoshi Massington (collectively, the “Defaulting Defendants”). Plaintiffs Pearson Education, Inc., McGraw-Hill Global Education Holdings, LLC, and Cengage Learning, Inc.1 now seek a default judgment as to the Defaulting Defendants.2 On February 4, 2021, the Court held a default judgment hearing, at which it found that each of the Defaulting Defendants had notice of the filing of the case against and of that hearing, yet had failed to appear in this action or otherwise respond to the claims against them.

1 This lawsuit also was brought by a fourth Plaintiff, Bedford, Freeman & Worth Publishing Group, LLC (“Macmillan Learning”). Macmillan Learning has not joined in the instant default judgment motion because it has no claims against any of the Defaulting Defendants. Accordingly, the Court’s references to “Plaintiffs” in this Opinion and Order do not include Macmillan Learning. 2 Plaintiffs previously also sought a default judgment as to Defendant Krystyna Szymanska, but they recently settled their claims as to her. See Dkt. 101. On September 22, 2021, the Court entered a final judgment and permanent injunction with respect to Szymanska. Dkt. 102. For reasons explained below, the Court grants Plaintiffs’ motion. The Court therefore will enter a final default judgment and permanent injunction as to the Defaulting Defendants and award damages to Plaintiffs. The Court, however, denies Plaintiffs’ request for a post-judgment asset freeze.

I. Background A. Facts In default judgment proceedings, “the [C]ourt . . . accept[s] as true all of the factual allegations of the complaint, except those relating to damages.” Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). The Court summarizes those facts relevant to Plaintiffs’ motion for a default judgment. Plaintiffs are “leading educational publishers in the United States.” Dkt. 29 (“Am. Compl.”) ¶ 2. Their publications include physical and digital textbooks, which are available for sale and rent from brick-and-mortar and online bookstores. Id. ¶ 27. Plaintiffs’ textbooks are protected by copyrights registered with the United States Copyright Office, and the trademarks

and service marks they bear are protected by registrations with the United States Patent and Trademark Office. Id. ¶¶ 31-32; Dkt. 59 (“Fleischman Declaration”) ¶¶ 6-7. Plaintiffs own or are the exclusive licensees of the marks at issue in this case. Am. Compl. ¶ 32; Fleischman Declaration ¶ 7. Plaintiffs invest significant resources in not just publishing their works, but also advertising their textbooks, promoting customer goodwill, and maintaining their reputation in the market for producing high-quality educational materials. Am. Compl. ¶ 29; Fleischman Declaration ¶ 8. Not surprisingly, Plaintiffs also “expend great effort combatting textbook counterfeiting worldwide.” Am. Compl. ¶ 45; accord Fleischman Declaration ¶ 9. Each of the Defaulting Defendants engaged in the unauthorized sale of Plaintiffs’ copyrighted textbooks. Plaintiffs’ proof comes from purchases Plaintiffs made from various online storefronts operated by the Defaulting Defendants. See Fleischman Declaration ¶¶ 10-11. Plaintiffs purchased approximately seventeen copyrighted works from Labos, which he sold at

“too good to be true” prices that were far below market value. Am. Compl. ¶¶ 52, 54; id., Exh. B; Fleischman Declaration ¶ 14.3 After the Honorable Colleen McMahon enjoined Labos from continuing to violate Plaintiffs’ copyrights on January 17, 2019, Dkt. 3, the Honorable Ronnie Abrams found that Labos violated that injunction earlier this year, Pearson Educ., Inc. v. ABC Books Ltd., No. 19 Civ. 7642 (RA), 2021 WL 1577766, at *1-2 (S.D.N.Y. Apr. 21, 2021). Plaintiffs also purchased eleven counterfeit works from Truong. Am. Compl. ¶ 58; id., Exh. B; Fleischman Declaration ¶ 23. Truong operated on eBay under a fictitious name and using a fictitious address, and that account was linked to a PayPal account in the same fake name. Am. Compl. ¶ 59. Truong’s PayPal account, in turn, was linked to a fraudulent bank account in an apparently unwitting person’s name. See Fleischman Declaration ¶ 25. Finally, Plaintiffs

purchased seven counterfeit works from Oduma and Massington, who jointly operated an online storefront. Am. Compl. ¶ 73; see Fleischman Declaration ¶ 27. Oduma and Massington similarly registered the eBay and PayPal accounts associated with their online storefront under fictitious names and addresses. Am. Compl. ¶ 74; Fleishman Declaration ¶ 28. B. Procedural History Plaintiffs filed suit on January 17, 2019, bringing claims of copyright infringement in violation of 17 U.S.C. §§ 101, et seq., and trademark infringement in violation of 15 U.S.C. §

3 The Amended Complaint references eighteen counterfeit works sold by Labos, see Am. Compl. ¶ 54, but the exhibit attached to the Amended Complaint lists only seventeen works, see id., Exh. B, as does the motion for default judgment, see Dkt. 58 at 7. 1114(1)(a), against seven unnamed “Doe” defendants, identified by their online storefront names. Dkt. 1. On the same day, Judge McMahon issued a Temporary Restraining Order, enjoining those defendants from infringing any copyrighted work or trademark owned or exclusively controlled by Plaintiffs. Dkt. 3. Judge McMahon then entered Preliminary Injunctions on February 14, 2019

and April 23, 2019. Dkts. 22, 23, 35. On March 22, 2019, Plaintiffs filed the Amended Complaint, naming previously anonymous defendants who had been identified during expedited limited discovery. Dkt. 29. Plaintiffs have since voluntarily dismissed their actions against and/or settled with all Defendants aside from the Defaulting Defendants, Dkts. 46, 48, 64, 101.4 On September 29, 2020, the case was reassigned to the undersigned. As relevant to the Defaulting Defendants, Plaintiffs continue to allege fourteen instances of copyright infringement and three instances of trademark infringement committed by Labos, eight instances of copyright infringement and three instances of trademark infringement committed by Truong, and five instances of copyright infringement and two instances of trademark infringement committed by

each Oduma and Massington. See Am. Compl. ¶¶ 81-95; Dkt. 91, Exh. A. On November 19, 2020, the Clerk of Court entered a Certificate of Default as to the Defaulting Defendants. Dkt. 54.5 On December 11, 2020, Plaintiffs moved for a default judgment

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Pearson Education, Inc. v. Labos, (S.D.N.Y. 2021).

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