Opinion
FINDINGS OF FACT, CONCLUSIONS OF LAW
MARGARET M. MORROW, District Judge.
This matter came on before the Court on August 8, 2014 at 4 p.m. on the motion for a preliminary injunction filed by plaintiff Lions Gate Films Inc. ("Lions Gate"). The Court ordered that any opposition to Lions Gate's motion be filed and served on all parties no later than August 6, 2014 at 12 p.m. No oppositions were timely filed, nor has any been filed since that time. Having reviewed Lions Gate's motion and supporting documents, the Court makes the following findings of fact and conclusions of law:
FINDINGS OF FACT
1. The Film at issue in this case is "The Expendables 3, " which is the forthcoming third installment in the "The Expendables" motion picture franchise. The Film is scheduled for theatrical release in North America on August 15, 2014, and has not been released to date. (Declaration of Robert Wenokur ("Wenokur Decl."), ¶ 6.)
2. The cast of the Film includes many famous actors, including Sylvester Stallone, Jason Statham, Arnold Schwarzenegger, Mel Gibson, Harrison Ford, Wesley Snipes, Dolph Lundgren and Antonio Banderas, among others. (Wenokur Decl., ¶ 6.) The first two films in this franchise, "The Expendables" and "The Expendables 2" generated worldwide box office revenues in excess of $575 million. ( Id., ¶ 7.)
3. Lions Gate has obtained the sole and exclusive right to distribute and exploit the Film in the United States and throughout North America. (Wenokur Decl., ¶ 8.) Lions Gate's exclusive rights in the Film pursuant to this exclusive license include but are not limited to all rights in the United States and throughout North America to exploit the Film by means of direct exhibition in theaters, by means of the Internet and in all home video media. ( Id., ¶ 8, Exh. A (Agreement, ¶ 3).)
4. The Film is the subject of Copyright Registration No. Pau003734299 (Supplemental Declaration of Christopher Varas, Exhibit A.) In addition, the screenplay for the Film is the subject of United States Copyright Registration No. PAu003704583, issued on July 10, 2013, which is valid, subsisting and in full force and effect. (Wenokur Decl., Exhibit B.)
5. Given the success of the first two films, Lions Gate anticipates that the Film will be highly successful as well. (Wenokur Decl., ¶ 11.) Accordingly, Lions Gate has invested millions of dollars to acquire distribution rights to the Film and millions more in connection with marketing and promoting the Film's release. ( Id. )
6. Lions Gate has planned and has already begun to execute an extensive marketing and publicity campaign for the Film including television, radio and print advertising and promotion. (Wenokur Decl., ¶ 12.)
7. Lions Gate has not authorized anyone to distribute the Film within the United States or North America on the Internet or anywhere else prior to the planned release date. (Wenokur Decl., ¶ 13.)
8. As part of Lions Gate's customary anti-piracy efforts, the company retained outside vendors, including MarkMonitor, to identify and address as appropriate any potential or actual piracy relating to the Film. (Wenokur Decl., ¶ 14.)
9. On or about July 24, 2014, Lions Gate learned that a digital file containing a high quality reproduction of the Film had been uploaded to the Internet without its authorization or consent. (Wenokur Decl., ¶ 15.)
10. Although investigations are ongoing, Lions Gate has concluded that an individual unlawfully obtained a copy of the Film through fraudulent or otherwise unlawful means. (Wenokur Decl., ¶ 15.)
11. Lions Gate understands that only a single digital file containing the Film was stolen, and that every copy of the Film alleged in its complaint (and every copy available anywhere on the Internet) originated from and is a reproduction of that single original digital file (the "Stolen Film"). (Wenokur Decl., ¶ 16.)
12. Even a single unauthorized leak of a film property such as the one at issue in this action can have immediate and severe adverse consequences to film distribution companies such as Lions Gate. (Wenokur Decl., ¶ 17.) This is because digital technology enables exact duplication of copyrighted content at the press of a computer keypad or mouse. (Wenokur Decl., ¶ 17.) Accordingly, from a single digital copy of a work thousands of near exact copies of the work can quickly be made and proliferate. ( Id. )
13. Within days after Lions Gate detected the theft of a copy of the Film, copies of the Stolen Film in its entirety were available on hundreds of websites. (Wenokur Decl., ¶ 17.) As of July 31, 2014, the Stolen Film had been downloaded more than 2.1 million times worldwide on peer-to-peer networks, including approximately 247, 000 downloads in the United States. (Declaration of Edward Cho ("Cho Decl."), ¶¶ 6, 7.)
14. As of July 31, 2014, of peer-to-peer downloads in the United States, approximately 21, 000 (or 8.5%) were to individuals in the Los Angeles metropolitan area. (Cho Decl., ¶ 7.)
15. The Stolen Film is also available on the Internet for downloading and streaming through websites that do not constitute peer-to-peer networks. (Cho Decl., ¶ 6.) Lions Gate estimates that the Film has been downloaded and/or streamed hundreds of thousands, if not millions, of times worldwide outside peer-to-peer networks. ( Id. )
16. After Lions Gate learned of the theft, it instructed MarkMonitor to devote substantial resources to cataloging all websites and online services offering pirated copies of the Stolen Film. (Wenokur Decl., ¶ 18.) Further, Lions Gate instructed MarkMonitor to follow up with take-down requests to the operators of the sites in question. ( Id. )
17. As of July 31, 2014, MarkMonitor had sent approximately 2, 770 take-down requests covering, cumulatively, 10, 846 unique host URLs (since a single website often has multiple URLs hosting the Stolen Film, MarkMonitor can and does request that the operator of a single website remove multiple unique host URLs). (Cho Decl., ¶ 9.)
18. In the vast majority of instances the recipients responded by taking down the Stolen Film and otherwise taking steps to avoid the piracy of the Stolen Film. (Cho Decl., ¶ 9.)
19. While many of the sites in question complied with take-down requests, certain sites, including those which are the subject of this action, did not. (Wenokur Decl., ¶ 18.)
20. In particular, Defendants in this case, who operate websites at the domain names, , , , , and, failed to respond to the demands that MarkMonitor has sent on Lions Gate's behalf. (Cho Decl., ¶¶ 10-18.)
21. On July 25, 2014, MarkMonitor first became aware that the website was disseminating the Stolen Film using the peer-to-peer file-sharing "BitTorrent" protocol. (Cho Decl., ¶ 11.)
22. Websites that use the BitTorrent protocol, including host small files called "torrent" files. (Cho Decl., ¶ 11.) Each torrent file contains an instruction set including a unique "hash value" that allows the end user's client program to locate and connect to a group of other users (called a "swarm") who are all simultaneously sharing copies of, in the case of, the Stolen Film with one another. ( Id. )
23. By downloading one of these torrent files associated with the Stolen Film from, users join a "swarm" where they download parts of the Stolen Film from many different users and also upload to other users parts of the Stolen Film they have already received, until eventually they have reproduced the entire Stolen Film on their own hard drives and, in most cases, have also uploaded all or a substantial part of the Stolen Film to others. (Cho Decl., ¶ 11.)
24. MarkMonitor, on Lions Gate's behalf, issued take-down requests to the operator of the website on July 26, 30, and 31, but received no response. (Cho Decl., ¶¶ 17, 18; Ex. G.)
25. On July 25, 2014, MarkMonitor first became aware that the website was hosting copies of the Stolen Film in one or more directories where users could download copies of the Stolen Film directly to their computers. (Cho Decl., ¶ 12.)
26. MarkMonitor, on Lions Gate's behalf, issued take-down requests to the operator of the website on July 25, 26, 27, 28, 29, 30 and 31, but received no response prior to Lions Gate filing its motion. (Cho Decl., ¶¶ 17, 18; Ex. G.)
27. On July 25, 2014, MarkMonitor first became aware that the website was hosting copies of the Stolen Film in one or more directories where users could download copies of the Stolen Film directly to their computers. (Cho Decl., ¶ 13.)
28. MarkMonitor, on Lions Gate's behalf, issued take-down requests to the operator of the website on July 26, 30 and 31, but received no response. (Cho Decl., ¶¶ 17, 18; Ex. G.)
29. On July 25, 2014, MarkMonitor first became aware that the website was hosting copies of the Stolen Film in one or more directories where users who signed up for the website's service could download copies of the Stolen Film directly to their computers. (Cho Decl., ¶ 14.)
30. MarkMonitor, on Lions Gate's behalf, issued take-down requests to the operator of the website on July 26, 27, 28, 29, 30, and 31 but received no response. (Cho Decl., ¶¶ 17, 18; Ex. G.)
31. On July 25, 2014, MarkMonitor first became aware that the website was hosting copies of the Stolen Film in one or more directories and displaying an embedded viewing window in which users could stream copies of the Stolen Film directly to their screens. (Cho Decl., ¶ 15.)
32. MarkMonitor, on Lions Gate's behalf, issued take-down requests to the operator of the website on July 25, 26, 27, 28, 29, 30 and 31, but received no response prior to Lions Gate filing its motion. (Cho Decl., ¶¶ 17, 18; Ex. G.)
33. On July 25, 2014, MarkMonitor first became aware that the website was hosting copies of the Stolen Film in one or more directories where users can download copies of the Stolen Film directly to their computers and displaying an embedded viewing window in which users could stream copies of the Stolen Film directly to their screens. (Cho Decl., ¶ 16.)
34. MarkMonitor, on Lions Gate's behalf, issued take-down requests to the operator of the website on July 26, 27, 28, 29, 30, and 31, but received no response. (Cho Decl., ¶¶ 17, 18; Ex. G.)
35. Defendants' unlawful distributions impair the marketability of the Film because they provide consumers with an opportunity to view the Film in its entirety for free before its theatrical release. (Wenokur Decl., ¶ 20.)
36. Individuals who view the Film in this manner may not pay for tickets at the box office when the Film is released later this month. (Wenokur Decl., ¶ 20.)
37. Similarly, such individuals may not purchase or rent copies of the Film when it is released to the home entertainment market after its theatrical run. (Wenokur Decl., ¶ 20.)
38. Further, the pre-release unlawful distributions impair Lions Gate's ability to control the publicity surrounding the Film. (Wenokur Decl., ¶ 21.)
39. Lions Gate planned for discussions concerning the Film to coincide with the theatrical release of the Film on August 15, 2014. (Wenokur Decl., ¶ 21.) Now, many news articles are reporting on the Film weeks before the release and are doing so with reference to the unauthorized copies available on the Internet rather than the content of the Film. ( Id., Ex. D.)
40. The pre-release unlawful distributions impair Lions Gate's relationships with its licensees including theater operators. (Wenokur Decl., ¶ 22.) Specifically, Lions Gate has negotiated licenses with theater operators to exhibit the Film in theaters. ( Id. ) Lions Gate relies on royalties from these licenses to stay in business, just as its licensees rely on ticket sales to stay in business. ( Id. )
41. The leak of the Film at this time threatens irreparable harm to Lions Gate's relationships with its licensees and with potential customers. (Wenokur Decl., ¶ 23.)
42. Those relationships depend on Lions Gate's ability to control when, where and under what conditions the Film is distributed and yet Defendants, through their unlawful conduct, are determining when and how the Film is distributed. (Wenokur Decl., ¶ 23.)
CONCLUSIONS OF LAW
1. This Court has the authority to "grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright." 17 U.S.C. § 502(a).
2. A preliminary injunction requires the plaintiff to establish: "(1) a likelihood of success on the merits; (2) a likelihood of irreparable harm to the moving party in the absence of preliminary relief; (3) that the balance of equities tips in favor of the moving party; and (4) that an injunction is in the public interest." Rovio Entm't Ltd. v. Royal Plush Toys, Inc., 907 F.Supp.2d 1086, 1092 (N.D. Cal. 2012) (citing Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008), Stuhlbarg Int'l Sales Co., Inc. v. John D. Brush & Co., 240 F.3d 832, 839 n. 7 (9th Cir.2001), and Lockheed Missile & Space Co. v. Hughes Aircraft, 887 F.Supp. 1320, 1323 (N.D. Cal. 1995)). All four requirements are satisfied in this case.
3. Lions Gate is likely to prevail on its claim for direct infringement. To prevail on this claim, Lions Gate must prove: 1) that it is the legal or beneficial owner of a valid copyright; and 2) that the defendant violated at least one of the exclusive rights owned by the plaintiff as the legal or beneficial copyright holder. See 15 U.S.C. § 501(b); see also A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001); D.C. Comics v. Towle, 989 F.Supp.2d 948, 961 (C.D. Cal. 2013).
4. Lions Gate is likely to establish that the Film is the subject of valid copyright protection and that it has standing to bring this action because it is the exclusive licensee of those rights. Motion pictures such as the Film are such quintessentially protectable creative works that the Copyright Act specifically references them in the section specifying the exclusive rights granted to copyright owners. See 17 U.S.C. § 106. Moreover, the copyright for the Film issued by the United States Copyright Office is prima facie evidence that the copyright in the Film is valid. See Triad Sys. Corp. v. Se. Exp. Co., 64 F.3d 1330, 1335 (9th Cir. 1995) (granting preliminary injunction), superseded by statute on other grounds as stated in Apple Inc. v. Psystar Corp., 658 F.3d 1150, 1158 (9th Cir. 2011).
5. The license agreement grants Lions Gate the exclusive license to distribute and otherwise exploit the Film within the United States and North America in theaters, on the Internet and over home video media (among other rights). Lions Gate is therefore likely to establish it has standing to bring this action. Righthaven LLC v. Hoehn, 716 F.3d 1166, 1170 (9th Cir. 2013) ("[I]f a copyright owner grants an exclusive license of particular rights, only the exclusive licensee and not the original owner can sue for infringement of those rights"); see also 17 U.S.C. § 501(b).
6. Lions Gate is likely to establish the second element of its claim for direct infringement because it has adduced evidence that Defendants are distributing and/or publicly performing the Film in its entirety. See A&M Records, Inc., 239 F.3d at 1014 (users who make digital copies of copyrighted works available for others to download violate the exclusive distribution right); see also Warner Bros. Entm't v. WTV Systems, Inc., 824 F.Supp.2d 1003, 1008-1012 (C.D. Cal. 2011) (provider of unauthorized on-demand movie streaming service violated the performance right of copyright owners).
7. Defendants' conduct in distributing the Film before its theatrical release has impaired Lions Gate's exclusive control over one of its most valuable intellectual property assets - its right of first publication - and disrupted Lions Gate's marketing and publicity campaign for the Film.
8. In so doing, Defendants have also interfered with Lions Gate's relationships with its business partners, damaged Lions Gate's goodwill among consumers by preventing Lions Gate from exercising control over the presentation of the Film, and deprived both Lions Gate and many others of revenue that will be impossible to calculate because there is no way of knowing how many people would have paid to see the Film but for Defendants' infringement.
9. The harm that Defendants are causing is irreparable and justifies the imposition of preliminary injunctive relief. Warner Bros., 824 F.Supp.2d at 1012-14; see also Grokster, 518 F.Supp.2d at 1217.
10. Defendants' infringement also causes irreparable harm to Lions Gate because their unchecked dissemination renders the Film "vulnerable to continuing infringement on an enormous scale" that cannot be redressed with money damages. Grokster, 518 F.Supp.2d at 1217.
11. The balance of equities also tips sharply in Lions Gate's favor. The Ninth Circuit has long held that a defendant "cannot complain of the harm that will befall it when properly forced to desist from its infringing activities. Where the only hardship that the defendant will suffer is lost profits from an activity which has been shown likely to be infringing, such an argument in defense merits little equitable consideration[.]'" Triad Sys. Corp., 64 F.3d 1330 at 1338 (quoting Concrete Mach. Co. v. Classic Lawn Ornaments, Inc., 843 F.2d 600, 612 (1st Cir.1988) (final, internal quotation marks omitted)).
12. An injunction is in the public interest. "[I]t is virtually axiomatic that the public interest can only be served by upholding copyright protections and correspondingly, preventing the misappropriation of skills, creative energies, and resources which are invested in the protected work.'" Warner Bros., 824 F.Supp.2d at 1015 (quoting Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1255 (3rd Cir. 1983)). Any interest the public may have "in receiving copyrighted content for free is outweighed by the need to incentivize the creation of original works." Grokster, 518 F.Supp.2d at 1222.
13. It is appropriate to dispense with the filing of a bond. It is well established in the Ninth Circuit that "Rule 65(c) invests the district court with discretion as to the amount of security required, if any. '" Jorgensen v. Cassiday, 320 F.3d 906, 919 (9th Cir. 2003) (quoting and adding emphasis to Barahona-Gomez v. Reno, 167 F.3d 1228, 1237 (9th Cir. 1999)). In particular, "[t]he district court may dispense with the filing of a bond when it concludes there is no realistic likelihood of harm to the defendant from enjoining his or her conduct." Jorgensen, 320 F.3d at 919. The Court finds no realistic likelihood that a preliminary injunction will harm Defendants.
14. An order preventing the transfer of Defendants' assets is appropriate. Such a preliminary asset freeze is "authorized by the district court's inherent equitable power to issue provisional remedies ancillary to its authority to provide final equitable relief." Reebok Int'l, Ltd. v. Marnatech Enterprises, Inc., 970 F.2d 552, 559 (9th Cir. 1992); see al so Federal Trade Commission v. United States Oil & Gas Corp., 748 F.2d 1431, 1433-1434 (11th Cir. 1984) (District Court may exercise its full range of equitable powers, including a preliminary asset freeze, to ensure that permanent relief will be possible). Where profits are available as a final remedy - as they are under 17 U.S.C. § 504 - a preliminary asset freeze is an appropriate provisional remedy. See, e.g., Datatech Enters. LLC v. FF Magnat Ltd., 2012 WL 4068624, at *4-5 (N.D. Cal. Sept. 14, 2012) (granting a preliminary injunction including an asset freeze in a lawsuit for copyright infringement).
15. Such an asset freeze is appropriate in this case to preserve Lions Gate's right to such recovery against Defendants, who are trafficking in the Stolen Film and may secret assets to insulate them from judgment.
Based on these findings of fact and conclusions of law, the Court grants Lions Gate's motion for preliminary injunction.