1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 9 VIRAL DRM LLC, Case No. 3:24-cv-00746-JSC
10 Plaintiff, ORDER TO SHOW CAUSE 11 v. REGARDING VIRAL DRM’S STANDING 12 YAROSLAV LEPETYUK,
Defendant. 13
14 15 Plaintiff Viral DRM LLC brings copyright infringement claims against Defendant 16 Yaroslav Lepetyuk alleging she downloaded and copied Viral DRM’s copyrighted materials from 17 YouTube, and then re-uploaded infringing versions of its copyrighted media content to her 18 YouTube channel Open Your Eyes. This is one of several related copyright infringement actions. 19 See Case Nos. 23-4300, 23-5045, 23-5594, 23-5977, 23-6261, 23-6598, 24-731, 24-733, 24-739, 20 24-747. While Defendant initially appeared and answered the complaint, she subsequently ceased 21 responding to the Court’s Orders and refused to participate in the action so the Court struck her 22 answer and entered her default. (Dkt. No. 35. 1) Viral DRM then filed the now pending motion 23 for default judgment. (Dkt. No. 36.) At the hearing on Viral DRM’s motion for default judgment, 24 the Court raised an issue regarding Viral DRM’s standing to bring the copyright infringement 25 claims and directed Viral DRM to submit a copy of its license with the copyright holders. (Dkt. 26 No. 40.) Having considered the supplemental submission, the Court ORDERS Viral DRM to 27 1 SHOW CAUSE as to its standing to enforce the copyrights at issue. 2 Section 501(b) of the Copyright Act specifies who has standing to sue for infringement: 3 “The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the 4 [registration] requirements of section 411, to institute an action for any infringement of that 5 particular right committed while he or she is the owner of it.” 17 U.S.C. § 501(b). Section 106 6 sets forth an “exhaustive list” of those exclusive rights. Silvers v. Sony Pictures Entm’t., Inc., 402 7 F.3d 881, 887 (9th Cir. 2005) (en banc) (citing 17 U.S.C. § 106). These include:
8 the rights “to do and to authorize” others to do six things with the copyrighted work: to reproduce the work, to prepare derivative works 9 based upon the work, to distribute copies of the work, to perform the work publicly, to display the work publicly, and to record and perform 10 the work by means of an audio transmission. 11 Minden Pictures, Inc. v. John Wiley & Sons, Inc., 795 F.3d 997, 1002 (9th Cir. 2015) (quoting 17 12 U.S.C. § 106). In Minden, the Ninth Circuit held “either an assignment (which transfers legal title 13 to the transferee) or an exclusive license (which transfers an exclusive permission to use to the 14 transferee) qualifies as a ‘transfer’ of a right in a copyright for the purposes of the Act.” Minden, 15 795 F.3d at 1003 (emphasis in original). In contrast, a “‘nonexclusive license’ does not constitute 16 a ‘transfer of copyright ownership’ and therefore cannot confer standing to assert an infringement 17 claim.” DRK Photo v. McGraw-Hill Glob. Educ. Holdings, LLC, 870 F.3d 978, 983 (9th Cir. 18 2017) (citing 17 U.S.C. § 101). 19 Viral DRM’s other copyright-based claims for violation of 17 U.S.C. § 512(f) and 17 20 U.S.C. §§ 1201, 1202, respectively, also have limitations on who may bring a claim. See 17 21 U.S.C. § 512(f) (authorizing claims for damages for material misrepresentations by the “copyright 22 owner or copyright owner’s authorized licensee”); 17 U.S.C. § 1203 (“Any person injured by a 23 violation of section 1201 or 1202 may bring a civil action in an appropriate United States district 24 court for such violation). 25 This action is brought by Viral DRM “a syndicator of award-winning videographic content 26 created by talented videographers.” (Dkt. No. 1 at ¶ 14.) According to the Complaint, “Viral 27 DRM was the exclusive licensee of the Works at issue in this case” and “Viral DRM registered the 1 ¶¶ 38, 39.) The Registration Certificates attached to the Complaint, however, show the three 2 works at issue are registered to (1) “Jonathan Petramala,” (2) “Michael Brandon Clement,” and (3) 3 “Michael Brandon Clement” and “Jonathan Petramala” jointly. (Dkt. No. 1-2.) According to Mr. 4 Clement’s declaration in support of the motion for default judgment, he is a principal and one of 5 the owners of Viral DRM LLC. (Dkt. No. 36-2 at ¶ 1.) Mr. Clement attests “[a]ll the works are 6 exclusively licensed to Viral DRM for distribution and syndication pursuant to written agreements 7 that provide Viral DRM with the necessary rights to sue for the infringements at issue in this 8 case.” (Id. at ¶ 8.) 9 In response to the Court’s hearing inquiry, Viral DRM filed its “Exclusive Copyright 10 Management Agreement” purportedly with the videographer holding the copyrights.2 (Dkt. No. 11 41-3.) Not so. Although the copyright registrations for the work at-issue in this action are held by 12 Michael Brandon Clement, Jonathan Petramala, and Clement and Petramala jointly, the 13 Agreement offered here is only between Viral DRM and Jonathan Petramala. (Compare Dkt. No. 14 1-2 with Dkt. No. 41-3.) However, because Viral DRM filed the Agreement with Clement in the 15 related actions, see, e.g., Case No. 23-5594, Dkt. No. 70-3, and the agreements are otherwise 16 identical, the Court will consider it here, but ORDERS Viral DRM to file the correct license(s) for 17 this action within seven days of the date of this Order. 18 As relevant here, the copyright holder—referred to as a “Content Creator”—grants Viral 19 DRM: 20 21 2 Viral DRM requests leave to file the Agreement under seal because its agreements with the 22 videographers “are confidential with its photographers, not only to protect Viral DRM’s assets and terms, but also to protect the photographer’s private information.” (Dkt. No. 41.) A party seeking 23 to file documents under seal “bears the burden of overcoming [the] strong presumption” in favor of public access to court records. Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 24 (9th Cir. 2016). “[C]ompelling reasons must be shown to seal judicial records attached to a dispositive motion.” Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1179 (9th 25 Cir.2006); see also Koninklijke Philips Electronics, N.V. v. KXD Tech., Inc., 347 F. App’x 275, 276 (9th Cir. 2009) (stating default judgment is “case dispositive”). While the Court agrees there 26 are compelling reasons for sealing portions of the Agreement, this does not include the Agreement’s title or paragraph 1 of the Agreement which is discussed in the publicly filed 27 Clement Declaration. (Dkt. No. 42-1 at ¶ 3.) So, the motion to seal is GRANTED except as to 1 1. Grant of Exclusive Agency Rights.
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1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 9 VIRAL DRM LLC, Case No. 3:24-cv-00746-JSC
10 Plaintiff, ORDER TO SHOW CAUSE 11 v. REGARDING VIRAL DRM’S STANDING 12 YAROSLAV LEPETYUK,
Defendant. 13
14 15 Plaintiff Viral DRM LLC brings copyright infringement claims against Defendant 16 Yaroslav Lepetyuk alleging she downloaded and copied Viral DRM’s copyrighted materials from 17 YouTube, and then re-uploaded infringing versions of its copyrighted media content to her 18 YouTube channel Open Your Eyes. This is one of several related copyright infringement actions. 19 See Case Nos. 23-4300, 23-5045, 23-5594, 23-5977, 23-6261, 23-6598, 24-731, 24-733, 24-739, 20 24-747. While Defendant initially appeared and answered the complaint, she subsequently ceased 21 responding to the Court’s Orders and refused to participate in the action so the Court struck her 22 answer and entered her default. (Dkt. No. 35. 1) Viral DRM then filed the now pending motion 23 for default judgment. (Dkt. No. 36.) At the hearing on Viral DRM’s motion for default judgment, 24 the Court raised an issue regarding Viral DRM’s standing to bring the copyright infringement 25 claims and directed Viral DRM to submit a copy of its license with the copyright holders. (Dkt. 26 No. 40.) Having considered the supplemental submission, the Court ORDERS Viral DRM to 27 1 SHOW CAUSE as to its standing to enforce the copyrights at issue. 2 Section 501(b) of the Copyright Act specifies who has standing to sue for infringement: 3 “The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the 4 [registration] requirements of section 411, to institute an action for any infringement of that 5 particular right committed while he or she is the owner of it.” 17 U.S.C. § 501(b). Section 106 6 sets forth an “exhaustive list” of those exclusive rights. Silvers v. Sony Pictures Entm’t., Inc., 402 7 F.3d 881, 887 (9th Cir. 2005) (en banc) (citing 17 U.S.C. § 106). These include:
8 the rights “to do and to authorize” others to do six things with the copyrighted work: to reproduce the work, to prepare derivative works 9 based upon the work, to distribute copies of the work, to perform the work publicly, to display the work publicly, and to record and perform 10 the work by means of an audio transmission. 11 Minden Pictures, Inc. v. John Wiley & Sons, Inc., 795 F.3d 997, 1002 (9th Cir. 2015) (quoting 17 12 U.S.C. § 106). In Minden, the Ninth Circuit held “either an assignment (which transfers legal title 13 to the transferee) or an exclusive license (which transfers an exclusive permission to use to the 14 transferee) qualifies as a ‘transfer’ of a right in a copyright for the purposes of the Act.” Minden, 15 795 F.3d at 1003 (emphasis in original). In contrast, a “‘nonexclusive license’ does not constitute 16 a ‘transfer of copyright ownership’ and therefore cannot confer standing to assert an infringement 17 claim.” DRK Photo v. McGraw-Hill Glob. Educ. Holdings, LLC, 870 F.3d 978, 983 (9th Cir. 18 2017) (citing 17 U.S.C. § 101). 19 Viral DRM’s other copyright-based claims for violation of 17 U.S.C. § 512(f) and 17 20 U.S.C. §§ 1201, 1202, respectively, also have limitations on who may bring a claim. See 17 21 U.S.C. § 512(f) (authorizing claims for damages for material misrepresentations by the “copyright 22 owner or copyright owner’s authorized licensee”); 17 U.S.C. § 1203 (“Any person injured by a 23 violation of section 1201 or 1202 may bring a civil action in an appropriate United States district 24 court for such violation). 25 This action is brought by Viral DRM “a syndicator of award-winning videographic content 26 created by talented videographers.” (Dkt. No. 1 at ¶ 14.) According to the Complaint, “Viral 27 DRM was the exclusive licensee of the Works at issue in this case” and “Viral DRM registered the 1 ¶¶ 38, 39.) The Registration Certificates attached to the Complaint, however, show the three 2 works at issue are registered to (1) “Jonathan Petramala,” (2) “Michael Brandon Clement,” and (3) 3 “Michael Brandon Clement” and “Jonathan Petramala” jointly. (Dkt. No. 1-2.) According to Mr. 4 Clement’s declaration in support of the motion for default judgment, he is a principal and one of 5 the owners of Viral DRM LLC. (Dkt. No. 36-2 at ¶ 1.) Mr. Clement attests “[a]ll the works are 6 exclusively licensed to Viral DRM for distribution and syndication pursuant to written agreements 7 that provide Viral DRM with the necessary rights to sue for the infringements at issue in this 8 case.” (Id. at ¶ 8.) 9 In response to the Court’s hearing inquiry, Viral DRM filed its “Exclusive Copyright 10 Management Agreement” purportedly with the videographer holding the copyrights.2 (Dkt. No. 11 41-3.) Not so. Although the copyright registrations for the work at-issue in this action are held by 12 Michael Brandon Clement, Jonathan Petramala, and Clement and Petramala jointly, the 13 Agreement offered here is only between Viral DRM and Jonathan Petramala. (Compare Dkt. No. 14 1-2 with Dkt. No. 41-3.) However, because Viral DRM filed the Agreement with Clement in the 15 related actions, see, e.g., Case No. 23-5594, Dkt. No. 70-3, and the agreements are otherwise 16 identical, the Court will consider it here, but ORDERS Viral DRM to file the correct license(s) for 17 this action within seven days of the date of this Order. 18 As relevant here, the copyright holder—referred to as a “Content Creator”—grants Viral 19 DRM: 20 21 2 Viral DRM requests leave to file the Agreement under seal because its agreements with the 22 videographers “are confidential with its photographers, not only to protect Viral DRM’s assets and terms, but also to protect the photographer’s private information.” (Dkt. No. 41.) A party seeking 23 to file documents under seal “bears the burden of overcoming [the] strong presumption” in favor of public access to court records. Ctr. for Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 24 (9th Cir. 2016). “[C]ompelling reasons must be shown to seal judicial records attached to a dispositive motion.” Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1179 (9th 25 Cir.2006); see also Koninklijke Philips Electronics, N.V. v. KXD Tech., Inc., 347 F. App’x 275, 276 (9th Cir. 2009) (stating default judgment is “case dispositive”). While the Court agrees there 26 are compelling reasons for sealing portions of the Agreement, this does not include the Agreement’s title or paragraph 1 of the Agreement which is discussed in the publicly filed 27 Clement Declaration. (Dkt. No. 42-1 at ¶ 3.) So, the motion to seal is GRANTED except as to 1 1. Grant of Exclusive Agency Rights. Content Creator hereby grants to VDRM the exclusive agency rights to manage and administer any content submitted by 2 Content Creator to VORM (the “Works”), including but not limited to the right to search for copyright infringements of the Works, to register copyrights for the Works with the 3 United States Copyright Office; to authorize VDRM's attormeys to negotiate settlements, issue takedown notices pursuant to the Digital Millennium Copyright Act or otherwise 4 file claims on behalf of the Content Creator in an effort to enforce the copyrights in and to the Works; Content Creator grants VORM exclusive agency rights to display, store, 5 transmit, and distribute Works as needed to fulfill obligations set forth in this agreement. 6 (Dkt. No. 41-3 at §] 1; Case No. 23-5594, Dkt. No. 70-3 at 4] 1.) The Content Creator otherwise 7 ‘|| retains all copyright and ownership rights in the work. (Ud. at { 3.) 8 In Minden, the photography stock company “entered into agency agreements with its 9 contributing photographers under which the photographers authorized Minden to license and sell 10 || certain photographs to third parties.” DRK Photo, 870 F.3d at 983-84 (citing Minden, 795 F.3d at 11 999-1000). “Importantly, in those licensing agreements, the photographers agreed to appoint 12 || Minden ‘as sole and exclusive agent and representative with respect to the Licensing of any and all
13 uses of [specified photographs].’” DRK Photo, 870 F.3d at 984 (quoting Minden, 795 F.3d at
v 14 1000). “The key to determining whether Minden’s agency agreements conferred a nonexclusive © 15 or exclusive license [] was not whether the photographers retained some fractional right but
Q 16 || instead that the photographers promised ‘that Minden, and only Minden, will have the power, as
17 the photographers’ licensing agent, to authorize third parties to reproduce, distribute, and display
2 . . . . Z 18 the photographs.’” Jd. (quoting Minden, 795 F.3d at 1005) (emphasis in original)). 19 The Agreement here gives Viral DRM the “exclusive agency right to manage and 20 || administer any content.” (Dkt. No. 41-3 at J 1; Case No. 23-5594, Dkt. No. 70-3 at J 1.) 21 Managing and administering content is not among the exhaustive list of exclusive rights which 22 || confer ownership under 17 U.S.C. § 106. The Agreement provision giving Viral DRM “the 23 exclusive agency rights to display, store, transmit, and distribute Works as needed to fulfill 24 obligations set forth in this agreement,” also does not confer exclusive ownership rights. (Dkt. 25 No. 41-3 at 4 1; Case No. 23-5594, Dkt. No. 70-3 at 4] 1 (emphasis added).) Giving Viral DRM 26 || the rights necessary to enforce the videographer’s copyright, is not the same as the exclusive right 27 || to “authorize third parties to reproduce, distribute, and display the photographs” required to have 28 standing to bring a copyright infringement action. Minden, 795 F.3d at 1005; see also Silvers, 402
1 F.3d at 884 (“The right to sue for an accrued claim for infringement is not an exclusive right under 2 § 106.”). Unlike the agreement in Minden, the Agreement does not give Viral DRM the exclusive 3 right to authorize third parties to reproduce, distribute, and display the copyrighted video. 4 Accordingly, Viral DRM is ORDERED TO SHOW CAUSE as to how it has standing to 5 || bring the copyright infringement claims at issue here including its standing to bring claims under 6 17 U.S.C. §§ 512), 1202(a), (b). Viral DRM shall file a written response to this Order by 7 January 6, 2025. 8 Within seven days of this Order Viral DRM shall file the correct licensing agreement(s). 9 Viral DRM’s administrative motion to seal is GRANTED IN PART and DENIED IN 10 PART as set forth in this Order. (Dkt. No. 41.) 11 This Order disposes of Docket No. 41. 12
= 13 IT IS SO ORDERED. 14 || Dated: December 9, 2024
16 Jagat □ 5 i CQUELINE SCOTT CORLE nited States District Judge 18 19 20 21 22 23 24 25 26 27 28