Viral DRM, LLC v. Shubstorsky

• Court: District Court, N.D. California
• Decided: March 14, 2025
• Docket: 3:24-cv-00733
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 VIRAL DRM, LLC, Case No. 3:24-cv-00733-JSC

8 Plaintiff, ORDER DENYING MOTION FOR DEFAULT JUDGMENT AND 9 v. DISMISSING ACTION FOR LACK OF STANDING 10 ANTON SHUBSTORSKY, Re: Dkt. Nos. 31, 41 Defendant. 11

12 13 Plaintiff Viral DRM LLC brings copyright infringement and related claims against 14 Defendant Anton Shubstorsky alleging he downloaded and copied Viral DRM’s copyrighted 15 materials from YouTube, and then re-uploaded infringing versions of its copyrighted media 16 content to his YouTube channel WAHR. This is one of several related copyright infringement 17 actions. See Case Nos. 23-4300, 23-5045, 23-5594, 23-5977, 23-6261, 23-6598, 24-731, 24-739, 18 24-746, 24-747. After Defendant failed to respond to the Complaint, Viral DRM moved for entry 19 of default, which the Clerk granted, and now moves for entry of default judgment. (Dkt. Nos. 25, 20 31.1) At the hearing on Viral DRM’s motion for default judgment, the Court raised an issue 21 regarding Viral DRM’s standing to bring the copyright infringement claims and directed Viral 22 DRM to submit a copy of its license with the copyright holders. (Dkt. No. 38.) After reviewing 23 Viral DRM’s response, the Court issued an Order to Show Cause (OSC) as to Viral DRM’s 24 standing to bring the copyright infringement claims at issue here. (Dkt. No. 41.) 25 Viral DRM has filed the exact same OSC response in each case—without any citations to 26 the record or even tailoring the responses to the facts of the particular case. See Case Nos. 23- 27 1 4300, Dkt. No. 112; Case No. 23-5045, Dkt. No. 78; Case No. 23-5594, Dkt. No. 75; Case No. 23- 2 5977, Dkt. No. 61; Case No. 23-6598, Dkt. No. 56; Case No. 24-731, Dkt. No. 39; Case No. 24- 3 733, Case No. 24-739, Dkt. No. 42; Case No. 24-746, Dkt. No. 49; Case No. 24-747, Dkt. No. 42. 4 Viral DRM’s response fails to demonstrate it has standing to bring the claims here. Thus, for the 5 reasons set forth below and in its prior OSC, the Court DENIES the motion for default judgment 6 and DISMISSES this action. 7 DISCUSSION 8 Viral DRM is “a syndicator of award-winning videographic content created by talented 9 videographers.” (Dkt. No. 1 at ¶ 14.) According to the Complaint, Viral DRM is “affiliated” with 10 WXChasing LLC, “a video production company that creates some of the videographic Works that 11 Viral DRM syndicates and licenses,” and Live Storms Media LLC, “a licensing broker of video 12 content owned by or exclusively licensed to Viral DRM and WXchasing.” (Id. at ¶ 15.) Viral 13 DRM alleges it “was the exclusive licensee of the Works at issue in this case” and it “registered 14 the Works at issue in this case with the Register of Copyrights pursuant to 17 U.S.C. § 411(a).” 15 (Id. at ¶¶ 38, 39.) The Registration Certificates, however, show that five of the works at issue are 16 registered to “Michael Brandon Clement” and the other work is registered to “Michael Brandon 17 Clement” and “Jonathan Petramala” jointly. (Dkt. No. 28-1.) 18 According to Mr. Clement’s declaration in support of the motion for default judgment, he 19 is a principal and one of the owners of Viral DRM LLC. (Dkt. No. 31-2 at ¶ 1.) Mr. Clement 20 attests “[a]ll the works are exclusively licensed to Viral DRM for distribution and syndication 21 pursuant to written agreements that provide Viral DRM with the necessary rights to sue for the 22 infringements at issue in this case.” (Id. at ¶ 8.) Following the hearing on the motion for default 23 judgment, Viral DRM filed its “Exclusive Management Agreement” purportedly with the 24 videographer holding the copyright. (Dkt. No. 39-1.) But in what has been a common practice in 25 this action, Viral DRM only submitted one Agreement—the one with Clement and not also the 26 one with Petramala. Viral DRM has since filed the additional Agreement and a response to the 27 Court’s Order to Show Cause as to its standing to bring the claims here. (Dkt. No. 42-1; Dkt. No. A. Copyright Infringement under Section 501(b) Section 501(b) of the Copyright Act specifies who has standing to sue for infringement: 2 “The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the 3 [registration] requirements of section 411, to institute an action for any infringement of that 4 particular right committed while he or she is the owner of it.” 17 U.S.C. § 501(b). Section 106 sets 5 forth an “exhaustive list” of those exclusive rights. Si/vers v. Sony Pictures Entm'’t., Inc., 402 F.3d 6 881, 887 (9th Cir. 2005) (en banc) (citing 17 U.S.C. § 106). These include: 4 the rights “to do and to authorize” others to do six things with the 8 copyrighted work: to reproduce the work, to prepare derivative works based upon the work, to distribute copies of the work, to perform the 9 work publicly, to display the work publicly, and to record and perform 10 the work by means of an audio transmission. Minden Pictures, Inc. v. John Wiley & Sons, Inc., 795 F.3d 997, 1002 (9th Cir. 2015) (quoting 17 11 U.S.C. § 106). In Minden, the Ninth Circuit held “either an assignment (which transfers legal title 12

to the transferee) or an exclusive license (which transfers an exclusive permission to use to the 13 transferee) qualifies as a ‘transfer’ of a right in a copyright for the purposes of the Act.” Minden, 14 795 F.3d at 1003 (emphasis in original). In contrast, a “‘nonexclusive license’ does not constitute 15 a ‘transfer of copyright ownership’ and therefore cannot confer standing to assert an infringement 16 claim.” DRK Photo v. McGraw-Hill Glob. Educ. Holdings, LLC, 870 F.3d 978, 983 (9th Cir. 17 ws 5 ig 2017) (citing 17 U.S.C. § 101). According to the Agreements between Viral DRM and Clement and Viral DRM and 19 Petramala, the copyright holders—teferred to as a “Content Creator”—grants Viral DRM: 20 1. Grant of Exclusive Agency Rights. Content Creator hereby grants to 21 VDEM the exclusive agency rights to manage and administer any content submitted by Content Creator to VORM (the “Works”), including but not limited to the right to search 22 for copyright infringements of the Works, to register copyrights for the Works with the United States Copyright Office; to authorize VORM's attorneys to negotiate settlements, issue takedown notices pursuant to the Digital Millennium Copyright Act or otherwise 23 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, 24 transmit, and distribute Works as needed to fulfill obligations set forth in this agreement 25 (Dkt. No. 42-1 p. 3 at 41, p. 10 at § 1.) The Content Creator otherwise retains all copyright and 26 ownership rights in the work. Ud. at | 3.) 27 In response to the Court’s OSC, Viral DRM circularly argues “[t]he grant of ‘exclusive 28

1 agency rights’ in the agreements between videographers and Viral DRM are sufficient to appoint 2 Viral as exclusive owner of at least one of the § 106 rights and provide Viral with standing to sue” 3 because in order to “fulfill its responsibility to ‘manage and administer any content’” Viral DRM 4 “must be empowered to ‘display, store, transmit, and distribute Works as needed to fulfill 5 obligations set forth in this agreement.’” (Dkt. No. 45 at 4-5.) That Viral DRM believed its 6 licensing agreements would allow it to bring the copyright infringement claims before the Court 7 does not confer standing under Section 501. Statutory standing cannot be willed into existence. 8 In this case, it is a matter of contract and it exists or it does not. As the Court previously noted:

9 Giving Viral DRM the rights necessary to enforce the videographer’s copyright, is not the same as the exclusive right to “authorize third 10 parties to reproduce, distribute, and display the photographs” required to have standing to bring a copyright infringement action. Minden 11 [Pictures, Inc. v. John Wiley & Sons, Inc., 795 F.3d 997, 1005 (9th Cir. 2015)]; see also Silvers [v. Sony Pictures Ent., Inc., 402 F.3d 881, 12 884 (9th Cir. 2005)] (“The right to sue for an accrued claim for infringement is not an exclusive right under § 106.”). Unlike the 13 agreement in Minden, the Agreement does not give Viral DRM the exclusive right to authorize third parties to reproduce, distribute, and 14 display the copyrighted video. 15 (Dkt. No. 41 at 4.) Accordingly, under binding Ninth Circuit precedent, Viral DRM lacks 16 standing to bring a copyright infringement claim under Section 501(b). 17 B. DMCA False Counternotices under Section 512(f) 18 Viral DRM’s second claim for relief alleges Defendant violated the Digital Millennium 19 Copyright Act (“DMCA”), 17 U.S.C. § 512(f), by submitting false counternotices in response to 20 Viral DRM’s takedown notice. 21 While the copyright registrations in this case indicate the authors and copyright claimants 22 are either Michael Brandon Clement, or Michael Brandon Clement and Jonathan Petramala 23 jointly, many of the takedown notices represent the copyright owner is “WxChasing LLC” for 24 whom Michael Clement lists himself as “Executive Director of Content.” (Compare Dkt. No. 28- 25 1 at 3-13 with Dkt. No. 28-1 at 3-4, 7-10.) According to Clement’s supplemental declaration in 26 support of default judgment, he is the “principal and owner of Viral DRM” and the CEO of 27 WXChasing LLC and “Viral DRM is affiliated with WXchasing LLC.” (Dkt. No. 40-1 at ¶ 1.) 1 license agreements in the record are between Clement and Viral DRM and Petramala and Viral 2 || DRM. (Dkt. No. 42-1.) For the one non-registered work for which a counternotification is 3 attached (https://www.youtube.com/watch?v=ICOx3BY V_QQ), the corresponding takedown 4 notice reads as follows: 5 © Voulube 6 Copyright Infringement Notification Confirmation 7 Thank you for your submission. It is under review to ensure it is valid and includes all required elements. We will reply to this email when we've taken action on your 8 request. You can also check on the status of your takedown request in the ‘Removal requests’ tab which is found in the Copyright section of your channel. 9 Here is the information you filled in: 10 © Copyright Owner Name (Company Name if applicable): Reed Timmer e Your Full Legal Name (Aliases, usernames or initials not accepted): Michael Brandon Clement 11 © Your Title or Job Position (What is your authority to make this complaint?): Executive Director of Content e Address: a 12 o 1315 Carroll Dr ‘a o Terry. Ms 39170 o US 13 Username: WXChasing Email Address: bclemms(@gmail.com 14 ¢ Secondary Email Address: copyright(@wxchasing.com e Phone: (601) 260-3170

15 * URL of allegedly infringing video to be removed: = https://www.youtube.com/watch?v=ICOx3BYV_QO

16 □□□ 17 (Dkt. No. 28-1 at 5.) It thus appears Clement is acting on behalf of WXChasing in claiming a

. . Z 18 || DMCA violation on behalf of WXChasing for a work owned by Mr. Timmer. The record, 19 || however, does not include a license agreement between Mr. Timmer and WXChasing. Instead, 20 || Mr. Timmer has submitted a declaration in response to the OSC wherein he attests he has an 21 agreement with Viral DRM. (Dkt. No. 45-4 at 4 4 (reciting language identical to that quoted 22 || above in Paragraph 1 of Clement’s Agreement with Viral DRM).) 23 Section 512(f) authorizes the “copyright owner or copyright owner’s authorized licenseet” 24 || to obtain damages for material misrepresentations by the alleged infringer to the online provider. 25 17 U.S.C. § 512(f). Because the record is confusing and does not establish who the copyright 26 owner or any authorized licensee is for the Works at issue, Viral DRM has not demonstrated it has 27 standing under Section 512(f). As a threshold matter, the Amended Complaint does not actually 28 identify the Works at issue for each claim, including the Section 512(f) claim. And neither the

1 license agreements, the videographer declarations, nor the OSC response specifically identify the 2 Works at issue and/or the videographer associated with any particular Work; instead, they refer to 3 the “Works” and the “videographer,” generally. For example, the videographers have each 4 submitted generic declarations attesting “I am an extreme weather videographer and 5 cinematographer. The copyrighted work at issue in this case is an extreme weather video I filmed 6 and created.” (Dkt. No. 45-3, Clement Decl. at ¶ 1; Dkt. No. 45-4, Trimmer Decl. at ¶ 1; Dkt. No. 7 45-5, Timmer Decl. at ¶ 1.) Nor is there any clarity as to the relationship between the different 8 “affiliated” entities—Viral DRM, WXChasing, and Live Storms Media—to whom the 9 videographers might have licensed their work. To further complicate things, Viral DRM’s 10 response to the OSC indicates “[s]ince this case was filed, Viral DRM’s status as a partner with 11 L[ive Storms Media] in the syndication and distribution business underwent a change” and 12 because of “disagreements” between Clement and Brett Adair, the manager of [Live Storms 13 Media]” Mr. Adair has assigned his interest in Viral DRM to Clement. (Dkt. No. 45 at 2-3.) 14 On this record, it is impossible to unravel the web of connections between all the entities 15 and individuals here and determine the relationship between the entities and individuals involved 16 with the copyrighted works at issue. Viral DRM has thus not demonstrated its standing to bring a 17 claim under Section 512(f). 18 C. Removal and Misrepresentation of CMI under Sections 1202(a), (b) 19 Viral DRM’s 17 U.S.C. §§ 1201, 1202 claims allege the CMI watermarks identify the 20 Works as the property of Live Storms Media. (Dkt. No. 1 at ¶ 67.) Under 17 U.S.C. § 1203, [a]ny 21 person injured by a violation of section 1201 or 1202 may bring a civil action in an appropriate 22 United States district court for such violation.” For the reasons discussed above and the lack of 23 clarity regarding Live Storms Media’s relationship with Viral DRM, the videographers, or the 24 Works at issue, Viral DRM has not demonstrated it has standing to bring a claim regarding the 25 removal of Live Storms Media’s watermark from the Works. 26 *** 27 Accordingly, Viral DRM’s motion for default judgment is denied and this action is 1 videographers as “nominal Plaintiffs,” it is unclear what this even means. (Dkt. No. 45 at 6.) In 2 support, Viral DRM cites a Supreme Court case from 1897 discussing in whose name a wrongful 3 death action should be brought. See Stewart v. Baltimore & O.R. Co., 168 U.S. 445, 449 (1897) 4 || (describing the person in whose name a wrongful death suit is brought a “nominal plaintiff.”). 5 When considering whether to grant leave to amend, the Court considers five factors: “bad faith, 6 || undue delay, prejudice to the opposing party, futility of amendment, and whether the plaintiff has 7 || previously amended the complaint.” United States v. Corinthian Colleges, 655 F.3d 984, 995 (9th 8 || Cir. 2011). “Although a district court ‘should freely give leave [to amend] when justice so 9 || requires,’ the court’s discretion to deny such leave is ‘particularly broad’ where the plaintiff has 10 || previously amended its complaint.” Ecological Rts. Found. v. Pac. Gas & Elec. Co., 713 F.3d 11 502, 520 (9th Cir. 2013) (quoting Fed. R. Civ. P. 15(a)(2); Miller v. Yokohama Tire Corp., 358 12 || F.3d 616, 622 (9th Cir. 2004)). Viral DRM has previously been granted leave to amend and has 13 been afforded several opportunities to clarify its claims and the evidence in support of its claims. 14 || Each successive filing raises more questions than it answers. It is impossible to tell whether this is 3 15 sloppiness or something nefarious, but the Court has expended tremendous resources trying to a 16 || figure it out and has given Viral DRM chance after chance to clarify the record, but each response 3 17 only muddies the record. Accordingly, the Court in its discretion denies leave to amend. CONCLUSION 19 For the reasons stated above, the Court DENIES the motion for default judgment and 20 || DISMISSES this action given Viral DRM’s failure to demonstrate standing to bring the copyright 21 infringement and related claims at issue here. 22 This Order disposes of Docket No. 31. 23 IT IS SO ORDERED. 24 Dated: March 13, 2025

26 ne JACQUELINE SCOTT CORLE 27 United States District Judge 28