MICHAEL M. MIHM, District Judge.
Now before the Court is Plaintiffs Broadcast Music, Inc., et al.'s ("BMI") Motion for Summary Judgment. For the reasons set forth below, Plaintiffs' Motion [# 24] is GRANTED.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1338(a), as the claims asserted in the Amended Complaint present federal questions under the United States Copyright Act of 1976, 17 U.S.C. § 101 et seq.
Plaintiff BMI is a non-profit organization that licenses the public performances of copyrighted musical works. A BMI license provides its recipient the ability to publicly perform the music of various songwriters, composers, and publishers in compliance with United States copyright laws. BMI represents that it has more than 6.5 million musical works in its repertoire. The other Plaintiffs are the copyright owners of the songs involved in this case.
Between March 8, 2004, and April 16, 2009, BMI sent Defendants letters explaining that Goodfellas must obtain a license in order to publicly perform the music of various songwriters, composers, and publishers at its establishment. The letters
Public performances of BMI-licensed music occurred after BMI sent Goodfellas the correspondence regarding the need for a BMI Music License. On March 26, 2008, BMI sent to Swoik a letter informing him that because he had not responded to correspondence and still did not have a licensing agreement with BMI, the letter would serve as formal notice to cease all use of BMI licensed music at Goodfellas and that continued use would result in copyright infringement. Plf's Motion for Summary Judgment Exh. 2, attached Exh. B. BMI authorized investigators to visit Goodfellas and make written reports about the music being publicly performed there. On December 12, 2008, January 16, 2009, and January 17, 2009, BMI's investigators went to Goodfellas and noted the performance of songs owned by the various Plaintiffs. The investigators completed Certified Infringement Reports. The Reports included information about the physical establishment, whether dancing was permitted there, details about music equipment and speakers, and details about the musical performances, to the extent those details were known by the investigators. See Plf's Exh. 2, attached Exh. A. The BMI-represented copyrighted songs that bands, hired by Defendants, performed at Goodfellas on December 12, 2008, January 16, 2009, January 17, 2009, and January 18, 2009, are those that form the basis of BMI's claims of copyright infringement. Plaintiffs allege a total of thirteen (13) separate acts of infringement.
On May 11, 2009, Plaintiffs filed their Complaint for copyright infringement, and filed their Amended Complaint changing the corporate defendant to CDZ, Inc., on June 15, 2009. Plaintiffs filed their Motion for Summary Judgment on March 24, 2010. In addition to an order granting summary judgment, Plaintiffs seek a permanent injunction against Defendants from further infringement, statutory damages for each act of infringement, Plaintiffs' costs, and their reasonable attorney's fees. The matter is fully briefed, and this Order follows.
Summary judgment should be granted where the "pleadings, the discovery and disclosure materials on file, and any affidavits
Federal Rule of Civil Procedure 56(e) requires the nonmoving party to go beyond the pleadings and produce evidence of a genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). This Court must then determine whether there are any genuine factual issues that can properly be resolved only by a finder of fact because they may be reasonably resolved in favor of either party. Anderson, 477 U.S. at 249; 106 S.Ct. 2505; Hedberg v. Indiana Bell Tel. Co., Inc., 47 F.3d 928, 931 (7th Cir.1995). Where a party bears the burden of proof on an issue, he or she must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact requiring trial. Sarsha v. Sears, Roebuck & Co., 3 F.3d 1035, 1041 (7th Cir.1993).
I. Copyright Infringement
Section 106(4) of the Copyright Act provides that the owner of a copyright has the exclusive rights to do and to authorize the public performance of musical works. 17 U.S.C. § 106(4). A plaintiff claiming copyright infringement must establish two elements: 1) ownership of a valid copyright, and 2) copying of constituent elements of the work that are original. Janky v. Lake County Convention and Visitors Bureau, 576 F.3d 356, 361 (7th Cir.2009) (citing Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991)). Copying of an original work occurs when one publicly performs the work without the copyright owner's authorization. Janky, 576 F.3d at 361; ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1454 (7th Cir. 1996).
Here, the first element is not at issue. BMI included a detailed schedule of the relevant songs, including the publishers, dates of copyright registration, and the registration numbers.
Plaintiffs argue that Defendants are liable for the acts of infringement committed at Goodfellas where the unlicensed performances occurred, and that the independent contractor defense, which Defendants seem to rely upon, has long been rejected by courts. Defendants argue that a factual issue remains as to Defendants' knowledge and notice of infringement precluding summary
Defendants are mistaken to assert that summary judgment in Plaintiffs' favor on the issue of copyright infringement is precluded because material questions of fact exist regarding Defendants' knowledge of the infringement committed at Goodfellas. Defendants seem to argue that because Plaintiffs have alleged willful infringement in Paragraph 13 of their Complaint, knowledge is a necessary element that must be established before Defendants can be held liable. Plaintiffs' allegation of willfulness goes to the question of whether it is entitled to increased damages pursuant to 17 U.S.C. § 504(c)(2), and does not place the additional requirement on them that they establish Defendants' knowledge in order to succeed on their claims of copyright infringement. See Chi-Boy Music v. Charlie Club, Inc., 930 F.2d 1224, 1227 (7th Cir.1991) (explaining that evidence of notice to the alleged infringer is not necessarily an essential element, but such evidence is likely most persuasive evidence of willfulness); and MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 931 n. 9, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005) (citing Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304 (2d Cir.1963) and Dreamland Ball Room, Inc. v. Shapiro, Bernstein & Co., 36 F.2d 354 (7th Cir. 1929)) (vicarious liability can be imposed "even if the defendant initially lacks knowledge of the infringement").
One can be held vicariously liable for copyright infringement where: 1) the defendant profits directly from the infringement, and 2) has a right and ability to supervise the direct infringer. MGM Studios, Inc., 545 U.S. at 931, n. 9, 125 S.Ct. 2764 (2005). Defendants argue that BMI is off the mark in attempting to establish corporate liability under the doctrine of respondeat superior. Defendants further argue that because no specific evidence establishes their right of supervision and control over the infringing activity, nor establishes contributory actions on their part, they cannot be vicariously liable at the summary judgment stage.
Defendants cite Shapiro, Bernstein & Co. v. H.L. Green Co., Inc., and Gershwin Publ'g Corp. to support their contention that a factual basis sufficient to support a finding of Defendants CDZ's, Mullen's, and Swoik's liability is lacking. In Gershwin, the defendant's "pervasive participation" in the programming of an association's compositions led the court to conclude that the lower court's finding of contributory infringement was amply supported. Gershwin Publ'g Corp., 443 F.2d at 1162-63 (2d Cir.1971) (applying
Courts elsewhere have rejected Defendants' argument that they cannot be held vicariously liable for copyright infringement where they exercised no control or supervision over their hired bands. See Broadcast Music, Inc. v. Peppermint Club, 229 U.S.P.Q. 534, 538 (N.D.Ohio 1985) (immaterial whether or not the defendant exerted actual control over the musicians and their selections where he controlled, or had the right to control, the management, supervision, and operations of the venue where the musicians played); MOB Music Publ'g v. Zanzibar on the Waterfront, LLC, 698 F.Supp.2d 197, 206-07 (D.D.C.2010) (holding that the defendants' contention that the song selection was determined by non-employee, independent contractors, did not absolve individual defendant of vicarious liability). This Circuit has rejected an argument similar to the one that Defendants make here.
In Dreamland Ball Room v. Shapiro, Bernstein & Co., the Seventh Circuit considered whether dance hall operators were liable for copyright infringement where an orchestra they hired played copyrighted music without authorization. 36 F.2d 354, 355 (7th Cir.1929). The operators argued that they did not direct that any musical selection be played, did not know that the orchestra played copyrighted music, and did not know that it was without authorization to play the copyrighted music. Id. They further argued that the orchestra was an independent contractor and alone was liable. Id. The Seventh Circuit rejected the independent contractor argument, and explained that the authorities were unanimous in holding dance hall owners liable under such circumstances where the playing was for the profit of the dance hall's proprietor. Id.; see also Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 157, 95 S.Ct. 2040, 45 L.Ed.2d 84 (1975) (explaining that an entrepreneur who sponsors the performance of musicians in a public place, such as a theater or restaurant, for profit, is an infringer—direct or contributory).
Here, Defendant CDZ admits that it does own, operate, maintain, and control Goodfellas, and Defendants Mullen and Swoik admit that they are primarily responsible for the operation and management of CDZ and Goodfellas. Defendants further admit that they hire bands to perform music at Goodfellas, and that they have a financial interest in that establishment. Accordingly, Defendant CDZ, as owner of Goodfellas, is liable for thirteen
II. Statutory Damages
Under Section 504(c)(1) of the Copyright Act, a copyright owner may recover statutory damages, instead of actual damages, for "a sum of not less than $750 or more than $30,000 as the court considers just" for each infringement. 17 U.S.C. § 504. Section 504(c)(2) provides that where the infringement is proven to have been committed willfully, the court may increase the award of statutory damages to not more than $150,000. Id. Alternatively, if the Court finds the infringement was committed by an infringer who was not aware and had no reason to believe that its acts constituted copyright infringement, the court may reduce the award of statutory damages to a sum of not less than $200. Id.
Here, Plaintiffs request that the Court increase the award of statutory damages based upon Defendants' willfulness in committing the thirteen acts of copyright infringement. Plaintiffs argue that the record supports a finding that Defendants willfully and deliberately violated Plaintiffs' rights where BMI continued to inform Defendants of their need to enter into a license agreement with BMI. Defendants strenuously assert that BMI did not provide them with specific notice or information, but rather generic, unspecific suggestions of the need for a license. Citing Chi-Boy Music v. Charlie Club, Inc., Defendants further argue that genuine issues of fact remain as to the sufficiency and adequacy of the notice by BMI in regard to Defendants' knowledge of copyright infringement occurring at Goodfellas. See Chi-Boy Music, 930 F.2d 1224 (7th Cir. 1991). In Chi-Boy Music, the Seventh Circuit explained that a district court's finding of willfulness is a factual determination. Id. at 1227. The court upheld the district court's finding of willfulness where the defendant received one letter from the American Society of Composers, Authors and Publishers ("ASCAP"), another performing rights licensing organization, which specifically informed the defendant of the activity that necessitated a license, and where other evidence provided that the owner/operator deliberately ignored the obvious facts before him. Id. at 1228.
Here, Defendants' reliance on Chi-Boy Music in attempting to defeat Plaintiffs' motion for summary judgment is misplaced, as the case actually supports a finding of willfulness under these circumstances. The facts in the record show that BMI sent Defendants 38 letters informing them of their need to enter into license agreements between March 8, 2004, and April 16, 2009. See Plf's Motion for Summary Judgment, Exh. 2, attached Exh. B. Many times, BMI included a "blanket" license agreement which Defendants could sign and return to BMI in order to ensure compliance with U.S. copyright laws. See
Plf's Motion for Summary Judgment, Exh. 2, attached Exh. B. On October 25, 2004, BMI wrote Defendant Swoik: "In correspondence and phone calls directed to you on numerous occasions, the need for ... a [BMI Music] License was clearly stated." Id. In late 2008 and early 2009, after BMI sent the letters and made the phone calls, BMI investigators noted the performance of the thirteen songs at issue here at the Goodfellas establishment. Plf's Motion for Summary Judgment, Exh. 2, attached Exh. A. Defendants do not create a genuine issue of material fact as to willfulness by pointing to the affidavits of Swoik and Mullen, nor by pointing to the March 26, 2008, letter from BMI to Defendant Swoik.
In the course of five years, BMI notified Defendants of their need to obtain a BMI Music License,
So while they allege they were not aware of what specific conduct occurring at Goodfellas amounted to copyright infringement, they certainly were on notice that infringement was occurring at their establishment and did not attempt to correct it. There is evidence in the record that Defendants did, at certain times, make inquiries to BMI regarding the license they were sent to sign, and that Defendants held a license with ASCAP at some point.
Plaintiffs seek a total statutory award of $52,000, or $4,000 per infringement, for the thirteen separate acts of infringement identified in this case. The affidavit of Lawrence E. Stevens, Assistant Vice-President, General Licensing for BMI, provides that had the Defendants entered into an agreement at the time BMI first contacted them in March, 2004, the estimated total lost license fees would have been $37,147.50 between March, 2004, and February, 2010. Plaintiffs note that the $52,000 figure is less than one and one-half times the license fees that Defendants would have paid had they been properly licensed. The statutory award Plaintiffs seek is within the range other courts have granted within this circuit. See Broadcast Music, Inc. v. Star Amusements, Inc., 44 F.3d 485, 488, 489 (7th Cir.1995) (upholding the statutory award of nearly two times what the copyright registration fees would have been); Canopy Music Inc. v. Harbor Cities Broadcasting, Inc., 950 F.Supp. 913, 917 (E.D.Wis.1997) (statutory award of $4,000 for each of ten willful infringements reasonable where the $40,000 total award was less than twice the amount of $22,969.76 defendant would have otherwise paid in licensing fees); Chi-Boy Music, 930 F.2d at 1229 (upholding district court's grant of statutory award for willful infringement that was approximately three times the amount due under past license agreements). The Court finds an award of $4,000 for each of the thirteen infringements in this case, or $52,000 in total, reasonable as the award is well within the statutory range, Defendants would have otherwise had to pay $37,147.50 in licensing fees to BMI, and Defendants acted willfully. See F.W. Woolworth Co. v. Contemporary Arts, 344 U.S. 228, 233, 73 S.Ct. 222, 97 L.Ed. 276 (1952) (explaining that the statutory rule providing for recovery of damages restores profit to the copyright owner, compensates for the injury suffered as a result of the infringement, and is designed to discourage wrongful conduct).
III. Attorney's Fees and Costs
Plaintiffs finally request attorney's fees and costs pursuant to Section 505 of the Copyright Act. Section 505 provides that the "court may also award a reasonable attorney's fee to the prevailing party as part of the costs." 17 U.S.C. § 505. Attorney's fees may be awarded in order to encourage the assertion of colorable copyright claims, to deter infringement, and to make the plaintiff whole. Roulo v. Russ Berrie & Co., Inc., 886 F.2d 931, 942 (7th Cir.1989). A finding of willfulness will support an award of attorney's fees, but such a finding is not a prerequisite. Id. at 942; Chi-Boy Music, 930 F.2d at 1230. Here, Plaintiffs are entitled to their reasonable attorney's fees and costs in litigating this case. They brought a colorable copyright claim against Defendants following five years of attempts to have Defendants enter into BMI Music License agreements so that Defendants would be in compliance with U.S. copyright laws. After continuous notices to Defendants failed to secure a license from
IV. Injunctive Relief
Plaintiffs request permanent injunctive relief against Defendants pursuant to 17 U.S.C. § 502(a). Section 502(a) provides that "Any court having jurisdiction of a civil action arising under this title may ... 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). In considering whether to grant permanent injunctive relief, the Court must consider: 1) whether the plaintiff has suffered or will suffer an irreparable injury, 2) whether there are inadequate remedies at law available to compensate for the injury, 3) the balance of hardships, and 4) the public interest. Sierra Club v. Franklin County Power of Ill., LLC, 546 F.3d 918, 935 (7th Cir.2008).
In considering all the factors, the Court finds that a permanent injunction is appropriate under these circumstances and is therefore granted. Specifically, the remedies at law may not be adequate if Plaintiffs are forced to continually monitor Goodfellas and litigate further infringements. The hardship to Defendants in obtaining a BMI license is not great, as it appears that they have previously obtained a license from ASCAP, and have been provided numerous copies of the BMI license agreement for them to sign and return to BMI. On the other hand, BMI will likely have to spend more time and money to monitor the Goodfellas establishment to ensure that Defendants do not continue to vicariously infringe BMI-licensed musical compositions. Also, given the evidence in the record of Defendants' reluctance in obtaining a BMI license, there is a threat of continuing infringement, and so permanent injunctive relief is warranted here. See Broadcast Music, Inc. v. Niro's Palace, 619 F.Supp. 958, 963 (N.D.Ill.1985) ("A permanent injunction is especially appropriate where a threat of continuing infringement exists.")
For the reasons set forth above, Plaintiffs' Motion for Summary Judgment against Defendants CDZ, Inc., Dennis J. Mullen, Craig J. Swoik, each individually, is GRANTED, and: