Quant Frank Cout Scott SL v. Unknown Party

CourtDistrict Court, D. Arizona
DecidedNovember 26, 2024
Docket2:24-cv-00477
StatusUnknown

This text of Quant Frank Cout Scott SL v. Unknown Party (Quant Frank Cout Scott SL v. Unknown Party) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Quant Frank Cout Scott SL v. Unknown Party, (D. Ariz. 2024).

Opinion

1 WO 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE DISTRICT OF ARIZONA 7

Quant F rank Cout Scott SL, et al., ) No. CV-24-00477-PHX-SPL ) 8 ) 9 Plaintiffs, ) ORDER vs. ) 10 ) (EX PARTE AND UNDER SEAL) ) Unknown Party, ) 11 ) 12 Defendant. ) ) 13 ) 14 Before the Court is Plaintiffs’ Notice of Ex Parte Motion for Modification of the 15 Preliminary Injunction (Doc. 40). For the following reasons, the Motion will be granted in 16 part and denied in part. 17 I. BACKGROUND 18 This case arises out of the alleged infringement of Plaintiffs’ copyrighted software, 19 the “QuantV software,” by an unknown Defendant using the website domain name 20 “launcherleaks.com.” (Doc. 40 at 5). QuantV is a software used with certain popular video 21 games and is registered with the United States Copyright Office. (Doc. 3 at 6–7). Plaintiffs 22 require a paid subscription for users to obtain access to the software, but the unknown 23 Defendant (or Defendants) behind the LauncherLeaks website have been distributing 24 unauthorized copies of QuantV for free. (Id. at 7–9). 25 On March 6, 2024, Plaintiff filed an Ex Parte Emergency Motion for Temporary 26 Restraining Order (“TRO”) and request for Preliminary Injunction (“PI”) (Doc. 2) seeking 27 to enjoin LauncherLeaks from further infringement. The TRO was granted on March 7, 28 2024 (Doc. 14) and subsequently converted into a PI after the non-responsive Defendant 1 was deemed to have waived any argument opposing the Motion (Doc. 22 at 1). In granting 2 the TRO, the terms of which were later converted into the PI, the Court found that Plaintiffs 3 had sufficiently alleged that “both the users of LauncherLeaks who download QuantV, and 4 the managers of website itself, [are] infringers of at least two of Plaintiffs’ exclusive 5 copyright holder rights, namely the rights of reproduction, under [17 U.S.C. ] § 106(1), and 6 distribution, under § 106(3).” (Doc. 14 at 4–5). The Court therefore ordered Defendant to 7 (1) “deactivate and prevent the transfer of the domain names ;” (2) 8 “deactivate and permanently delete any website(s) at that domain name;” (3) delete all 9 copies of the copyrighted QuantV software “which have been uploaded to any third-party 10 websites associated with the domain name ;” and (4) “cease 11 providing all services for the maintenance and support of the websites at the 12 domain name.” (Id. at 9). At the time the PI Order (Doc. 22) was 13 issued, the Court noted that “it appears that Defendant does in fact have notice of this action 14 as the alleged infringing domain name has changed from ‘LauncherLeaks.com’ to 15 ‘LauncherLeaks.net’ in response to “being involved in [a] legal proceeding. . .” (Doc. 22 16 at 1 (quoting Doc. 20-1 at 2)). 17 Following entry of the PI Order, Plaintiffs moved for expedited discovery to identify 18 the unknown parties operating the LauncherLeaks website, and in September 2024, 19 Plaintiffs amended their complaint to name Anthony Wicklace as Defendant. (Doc. 40 at 20 7). On October 10, 2024, Defendant contacted Plaintiffs’ counsel by email, “in which he 21 confirmed that he had notice of this lawsuit and was attempting to view court filings in this 22 case through the PACER.” (Doc. 40-1 at 5; Doc. 35-1 at 4). About two weeks later, 23 however, Plaintiffs became aware that their “copyrighted QuantV software is once again 24 available for download on launcherleaks.net, without authorization.” (Id. at 3). Plaintiffs 25 argue that their “copyrighted Work is extremely popular, making it attractive to infringers 26 like Defendant,” and they therefore move this Court to “allow Plaintiffs to proceed ex parte 27 to modify the PI and schedule a further hearing,” as well as to impose an asset restraint on 28 Defendant. (Doc. 40 at 8). 1 II. LEGAL STANDARD 2 Courts have broad discretion under the Copyright Act to grant injunctive relief “on 3 such terms as it may deem reasonable to prevent or restrain infringement of a copyright.” 4 17 U.S.C. § 502. A “district court has the power to supervise compliance with an injunction 5 and to ‘modify a preliminary injunction in consideration of new facts.’” State v. Trump, 6 871 F.3d 646, 654 (9th Cir. 2017) (quoting A&M Recs., Inc. v. Napster, Inc., 284 F.3d 7 1091, 1098 (9th Cir. 2002)). This includes the power to find a party in civil contempt for 8 willfully violating the Court’s orders. Davies v. Grossmont Union High Sch. Dist., 930 9 F.2d 1390, 1393 (9th Cir. 1991). 10 III. ANALYSIS 11 In their omnibus Motion, Plaintiffs make various requests of the Court: (1) they ask 12 that the Motion (Doc. 40) be granted on an ex parte basis (Doc. 40 at 8–10); (2) they ask 13 for modification of the PI to include a temporary restraint of Defendant’s assets (Id. at 10– 14 13); (3) they request release of the $20,000 bond Plaintiffs had to post as part of this Court’s 15 TRO (Id. at 13–14); and (4) they request a further hearing to determine potential civil 16 contempt sanctions against Defendant (Id. at 14–15). 17 A. Ex Parte Motion 18 At the time this Court issued its ex parte TRO in favor of Plaintiffs, it found that 19 they had complied with Rule 65(b)’s requirements to warrant that the TRO be issued 20 without notice to Defendant. (Doc. 14 at 6). Plaintiffs had filed a verified complaint 21 showing immediate irreparable harm, certified that they attempted to locate the identity of 22 the owner of the LauncherLeaks website, and further alleged that notice to LauncherLeaks 23 would likely result in the site being transferred to facilitate continued infringement, which 24 would frustrate the purpose of their requested relief. (Id. at 6–7). 25 Similarly, now, Plaintiffs have presented the Court with reasons to believe that 26 “notice only serves to motivate Defendant further to hide his activities and/or continue 27 disobeying this Court.” (Doc. 40 at 9). This Court previously noted that Defendant likely 28 had notice of this lawsuit based on the message posted to his website (Doc. 22 at 1); now, 1 it is clear that Defendant is on notice of this lawsuit given that he contacted Plaintiffs’ 2 counsel directly by email in October (Doc. 40-1 at 4). Based on these facts, it is probable 3 that if the Court were to require the Defendant receive notice before modifying the 4 preliminary injunction, the Defendant would simply transfer the LauncherLeaks website to 5 another domain name and/or transfer his assets to avoid compliance with this Order. The 6 Court therefore finds it warranted for Plaintiffs to proceed ex parte in this instance. 7 B. Asset Restraint 8 Plaintiffs’ primary proposed modification of the PI is to seek a temporary restraint 9 on Defendant’s assets. (Doc. 40 at 10–11). They argue that “the proposed asset restraint 10 falls squarely within this Court’s inherent authority to issue a prejudgment asset restraint 11 in a case such as this one in which a party seeks relief in equity.” (Id. at 11). Furthermore, 12 they argue that there is high need to impose an asset restraint because “Defendant has gone 13 to great lengths to conceal his identity, location, and proceeds from Plaintiffs’ and this 14 Court’s detection” and because “the accounts Defendant maintains with at least CashApp 15 and Stripe represent not simply the proceeds of Defendant’s copyright infringement but the 16 instrumentalities that further and/or support the ongoing infringement.” (Id. at 11–12).

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Quant Frank Cout Scott SL v. Unknown Party, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quant-frank-cout-scott-sl-v-unknown-party-azd-2024.