Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 1 of 26 PagelD# 2737
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 1 of 26 PageID# 2737
`
`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`Alexandria Division
`
`UMG RECORDINGS,INC., ef al.,
`
`Plaintiffs,
`
`v.
`
`TOFIG KURBANOV,et al.,
`
`Defendants.
`
`NeeNeeNe?eeeeeeeeeeeeee
`
`Civil Action No. 1:18-cv-957 (CMH/TCB)
`
`REPORT AND RECOMMENDATION
`
`THIS MATTERisbefore the undersigned on UMG Recordings, Inc., Capitol Records,
`
`LLC, WarmerRecordsInc., Atlantic Recording Corporation, Elektra Entertainment GroupInc.,
`
`Fueled by Ramen LLC, Nonesuch RecordsInc., Sony Music Entertainment, Sony Music
`
`Entertainment US Latin LLC, Artista Records LLC, Laface Records LLC, and Zomba Recording
`
`LLC’s (“Plaintiffs”) Memorandum in Support of their Request for Damages, a Permanent
`
`Injunction, and Attorneys’ Fees and Costs (Dkt 131), Defendant Tofig Kurbanov’s
`
`(“Defendant”) Opposition to Plaintiffs’ Request for Damages, a PermanentInjunction, and
`
`Attorneys’ Fees and Costs (Dkt. 136), and Plaintiffs’ Reply Memorandum in Further Support of
`
`Their Request for Damages, a Permanent Injunction, and Attorneys’ Fees and Costs (Dkt. 137).!
`
`' The relevant filings before the undersigned include Plaintiffs’ Complaint (““Compl.”) (Dkt. 1);
`Judge Claude M.Hilton’s Order denying Defendant’s Motion to Dismiss (Dkt. 74); Plaintiffs’
`first Motion to Compel (Dkt. 91) and the Court’s Order granting that motion (Dkt. 97);
`Plaintiffs’ second Motion to Compel (Dkt. 98) and the Court’s Order granting that motion (Dkt.
`105); Plaintiffs’ Motion for Default Judgment Pursuant to Federal Rule of Civil Procedure 37
`(Dkt. 119) and accompanying memorandum (Dkt. 120); Defendant’s Opposition to Plaintiffs’
`Motion for Default Judgment Pursuant to Rule 37 (Dkt. 123); and Plaintiffs’ Reply
`Memorandum in Support ofPlaintiffs’ Motion for Default Judgment Pursuant to Federal Rule of
`Civil Procedure 37 (Dkt. 124).
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 2 of 26 PagelD# 2738
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 2 of 26 PageID# 2738
`
`For the reasons stated below, the undersigned U.S. Magistrate Judge recommendsthat the Court
`
`grant Plaintiffs’ request for damages, a permanent injunction, and attorneys’ fees and costs.
`
`A.
`
`Procedural Posture
`
`I. BACKGROUND
`
`Plaintiffs filed their Complaint on August 3, 2018 under the Copyright Act of 1976
`
`(“Copyright Act”) and Digital Millennium Copyright Act (‘DMCA”) bringing specific claims
`
`for direct copyright infringement, contributory copyright infringement, vicarious copyright
`
`infringement, inducementof copyright infringement, and circumvention of technological
`
`measures against Defendant. (See Dkt. 1.) Plaintiffs sought a declaration that Defendants
`
`willfully infringed Plaintiffs’ copyrights, equitable relief preventing further infringement,
`
`statutory or, alternatively, actual damages, Plaintiffs’ costs and attorneys’ fees, pre-judgment and
`
`post-judgmentinterest, and other relief deemed proper.” (See Dkt. 1.)
`
`After the Court granted Defendant an extension to respond, Defendantfiled a Rule
`
`12(b)(2) motion to dismiss on October1, 2018, requesting dismissal or transfer of venue. (See
`
`dkts. 17, 24.) The Honorable District Court Judge Claude M.Hilton granted the motion to
`
`dismiss for lack of personaljurisdiction on January 22, 2019. (Dkts. 30, 31.) Plaintiffs
`
`subsequently appealed Judge Hilton’s Memorandum Opinion and Orderto the United States
`
`Court of Appeals for the Fourth Circuit on January 29, 2019. (Dkt. 35.) The Fourth Circuit
`
`reversed Judge Hilton’s decision on June 26, 2020 and remandedfor further proceedings. (Dkt.
`
`39, 40.)
`
`2 Plaintiffs’ Complaint names both Defendant Kurbanov and “Does 1-10;” however default
`judgmenthas only been entered against Defendant Kurbanov.
`
`2
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 3 of 26 PagelD# 2739
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 3 of 26 PageID# 2739
`
`The Court issuedits first Scheduling Order on September 4, 2020. (Dkt. 48.) Defendant
`
`filed a motion to stay, pending the ruling on personaljurisdiction in this Court and petition for
`
`certiorari in the Supreme Court. (Dkt. 50.) This Court granted the motion to stay on September
`
`18, 2020 (Dkt. 57), and Plaintiffs subsequently filed a motion for reconsideration ofthe stay,
`
`which the Court denied. (Dkts. 61, 67.) The Supreme Court denied Defendant’s petition for
`
`certiorari on January 11, 2021. (Dkt. 68.)
`
`On remand, Judge Hilton denied Defendant’s Motion to Dismiss, finding, in accordance
`
`with the Fourth Circuit’s decision, that Defendantis subject to the Court’s jurisdiction. (Dkt. 74
`
`at 8.) On April 1, 2021, the Court entered its second Scheduling Order, setting the initial pretrial
`
`conference for April 28, 2021, the final pretrial for August 19, 2021, and the close of discovery
`
`on August 13, 2021. (Dkt. 77.) Defendantfiled his Answer on April 21, 2021, and the parties
`
`submitted their Proposed Joint Discovery Plan Pursuant to Rule 26(f), which the Court approved.
`
`(Dkts. 81-82, 87.)
`
`Plaintiffs filed their first Motion to Compel on May 26, 2021, seeking documentsthat
`
`Defendant“initially agreed to produce but is now withholding”or claimed do not exist and
`
`properly unredacted documents. (Dkt. 91, 92.) The Court granted this motion, ordered Defendant
`
`to produce the requested discovery by June 11, 2021 and warned thatfailure to comply with the
`
`order could result in sanctions, including default judgment. (Dkt. 97.)
`
`Plaintiffs filed their second Motion to Compel on June 16, seeking to compel Defendant
`
`to preserve and produce webservice data. (Dkt. 98, 99.) Defendant failed to meet the deadline
`
`and Plaintiffs filed a status update on June 18 notifying the Court of this failure. (Dkt. 101.) After
`
`a hearing, the undersigned granted thePlaintiffs’ second Motion to Compel, reiterating that
`
`Defendant’s continued failure to comply could result in default judgmentsanctions. (Dkts. 105,
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 4 of 26 PagelD# 2740
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 4 of 26 PageID# 2740
`
`106.) Judge Hilton affirmed this ruling on the second Motion to Compel. (Dkts. 107, 113.)
`
`Defendant’s counsel moved to withdraw as attorney on July 23, 2021 andstated that his
`
`uncooperative client maintained a “firm conviction that he is not subject to personal jurisdiction
`
`in this Court.” (Dkts. 114, 115 at 2.) Counsel also stated that Defendant would notattend his
`
`deposition on July 28 and 29, 2021. (Dkt. 115 at 2.) The Court denied counsel’s motion to
`
`withdraw and suspendedthefinal pretrial conference pending Plaintiffs’ forthcoming motion for
`
`sanctions. (Dkt. 118.)
`
`Plaintiffs filed their Motion for Default Judgment as to Defendant Tofig Kurbanov
`
`Pursuant to Federal Rule of Civil Procedure 37 on August 4, 2021 for failure to comply with the
`
`discovery orders andto attend his deposition. (Dkt. 119.) Because Defendantrefused to
`
`meaningfully participate in discovery, the undersigned granted the motion at the August 27, 2021
`
`hearing. (Dkt. 125.) The undersigned thereafter issued a Report and Recommendation,
`
`recommendingthat the Court grant default judgment against Kurbanov pursuant to Federal Rule
`
`37. (Dkt. 128.) On October 1, 2021, the Honorable District Judge Claude M. Hilton adopted the
`
`Report & Recommendation and entered default judgment for Plaintiffs. (Dkt. 129.)
`
`Asdirected by the undersigned,Plaintiffs filed the instant memorandum detailing their
`
`requested remedies. (Dkts. 127, 131.) Defendant filed an Opposition to Plaintiffs’ Request for
`
`Damages, a Permanent Injunction, and Attorneys’ Fees and Costs on October 19, 2021. (Dkt.
`
`136.) Finding oral argument unnecessary, the undersigned cancelled the Friday, November 12,
`
`2021 hearing.* The undersignedissues this second Report and Recommendation to
`
`independently determine Plaintiffs’ requested remedies.
`
`3 An evidentiary hearing is unnecessary whenthe record presents an adequate basis for the relief
`requested. Mut. Fed. Sav. & Loan Ass'n v. Richards & Assoc., Inc., 872 F.2d 88, 91 (4th Cir.
`1989).
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 5 of 26 PagelD# 2741
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 5 of 26 PageID# 2741
`
`B.
`
`Jurisdiction and Venue
`
`Before the Court can render default judgment, it must have subject matter and personal
`
`jurisdiction over the defaulting parties, and venue must be proper.
`
`First, the Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §
`
`1332(a){1). A federal district court has subject matter jurisdiction when a dispute arises under
`
`federal law as shown onthe face of the complaint. 28 U.S.C. § 1331. The federal district courts
`
`also have subject matter jurisdiction over federal copyright cases. 28 U.S.C. § 1338(a). Here,
`
`Plaintiffs’ Complaintalleges (1) direct copyright infringement, (2) contributory copyright
`
`infringement, (3) vicarious copyright infringement, (4) inducement of copyright infringement,
`
`and (5) circumvention of technological measures. (Compl. at 18-25.) Counts (1)-(4) arise under
`
`the Copyright Act, 17 U.S.C. §§ 106 (1) and (3), and Count(5) arises under the Digital
`
`Millennium Copyright Act, 17 U.S.C. §§ 1201(a) and (b)(1)(A). Because these claimsarise
`
`under federal law, the Court has subject matter jurisdiction over Plaintiffs’ claims.
`
`Second, the Court has personaljurisdiction over Defendant. The Fourth Circuit found
`
`that Defendant’s actions sufficiently demonstrated that he purposefully availed himself of
`
`Virginia and thatthe Plaintiffs’ copyright claims arose from these actions. (Dkt. 39 at 14.) The
`
`court remanded to this Court to decide whetherspecific personal jurisdiction is constitutionally
`
`reasonable. On remand, this Court weighed the Burger King constitutionalfactors and foundthat
`
`the Court’s exercise of personal jurisdiction over Defendantdid not offend “substantial notions
`
`of fair play and substantial justice.” (Dkt. 74 at 4-8 (quoting Burger King Corp. v. Rudzewicz,
`
`471 U.S. 462 (1985)). Therefore, personal jurisdiction over Defendant Kurbanovin this case is
`
`well established.
`
`Lastly, Plaintiffs filed this lawsuit in the proper venue. Under 28 U.S.C. § 1391(b), venue
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 6 of 26 PagelD# 2742
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 6 of 26 PageID# 2742
`
`is proper in “(2) a judicial district in which a substantial part of the events or omissions giving
`
`rise to the claim occurred[] or(3) if there is no district in which an action may otherwise be
`
`brought in this section, any judicial district in which any defendantis subject to the court’s
`
`personaljurisdiction with respect to such action.” 28 U.S.C. § 1391(b)(2)-(3). Here, venueis
`
`proper under the second provision because a substantial part of the alleged copyright
`
`infringement on Defendant’s Websites occurred in Virginia. (Dkt. 74 at 2-3) (discussing how the
`
`Fourth Circuit found Defendant’s business contacts with Virginia to be “plentiful.”) And because
`
`this Court has established that the Defendantis subject to the Court’s personal jurisdiction, venue
`
`is nevertheless proper underthe third,“fallback venue” provision. § 1391(b)(3); (Dkt. 74.)
`
`IJ. FINDINGS OF FACT
`
`Upona full review ofthe pleadings andrecord in this case, the undersignedfindsthat
`
`Plaintiffs has established the following facts.
`
`A.
`
`Plaintiffs’ Copyrighted Recordings
`
`Plaintiffs are record companiesthat deal with most of the commercial audio recordingsin
`
`the United States. (Compl. P 1.) Plaintiffs manufacture, distribute, license, and sell these audio
`
`recordings through both tangible media and intangible medialike digital audio files performed
`
`on the internet. (Compl. P 27; Cohen Decl. { 7; Leak Decl. {| 7; McMullan Decl. § 7.) Plaintiffs
`
`work with legitimate downloading and streaming services like Apple Music, iTunes, Google
`
`Play, Amazon, Spotify, and others to lawfully distribute and perform these digital audiofiles.
`
`(/d.) Streaming services like Google’s YouTubepayPlaintiffs in exchange for permission stream
`
`the copyrighted audio files and agreementto protectthe files from unauthorized access and
`
`copying. (/d.)
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 7 of 26 PagelD# 2743
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 7 of 26 PageID# 2743
`
`Plaintiffs have and continueto invest significant resources into their business of
`
`discovering recording artists and developing their audio recordings. (Compl. ? 28; Cohen Decl. §
`
`6; Leak Decl. | 6; McMullan Decl. { 6.) Plaintiffs, recording artists, and the music industry rely
`
`on the legitimate sale, distribution, and licensing of audio recordings for their compensation.
`
`(Id.) Amended Exhibit A to the Complaint identifies 1,618 audio recordingsthat Plaintiffs allege
`
`that Defendant infringed. (Compl. J 1, Dkt. 79-1.) Plaintiffs hold exclusive copyrighttitle to
`
`those recordings, and someare by well-known artists like Beyoncé, One Direction, Ariana
`
`Grande, Faith Hill, and Bruno Mars. (Dkt. 78-1; Cohen Decl. { 3; Leak Decl. § 3; McMullan
`
`Decl. ¢ 3; Mem.Supp., Ex. 1 at 2-3.)
`
`B.
`
`YouTube’s Technological Protections for Copyrighted Content
`
`YouTubeis a streamingservice that allows users to watch videos, including music videos
`
`with Plaintiffs’ audio recordings. (Compl. {{ 34, 37; Schumann Decl. {] 10, 12.) YouTube
`
`protects content through its standard service and Termsof Service, which prohibit users from
`
`engaging in unauthorized downloading and copying of content. (Compl. { 36; Schumann Decl.
`
`{7 13-15; Mem. Supp., Ex. 2.) Users also may not circumventorinterfere with YouTube’s
`
`features that prevent unauthorized uses of content. (Schumann Decl. 13, Mem. Supp., Ex. 2.)
`
`Onthe site, users can stream videos on the individual “watch page”for that video.
`
`(Schumann Decl. { 13, Ex. 2.) The watch pages contain authorized media players and an
`
`underlying source code. (Schumann Decl. § 14.) The authorized media player uses the source
`
`code to access and stream media files stored on YouTube’s servers. (Schumann Decl. { 11.)
`YouTube’s standard service does not allow users to download the videosor audiofiles streamed
`
`on the watch pages, and usersare faced with technological obstacles in accessing the media-file
`
`URLsin the media page source codes. (Schumann Decl. {ff 13-14.)
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 8 of 26 PagelD# 2744
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 8 of 26 PageID# 2744
`
`YouTubehas adopted additional “rolling cipher” protections for the media-file URLs of
`
`videos containing copyrighted content. (Schumann Decl. § 15.) The authorized media player uses
`
`YouTube’s proprietary cryptographic algorithm and othertools to identify and unscramble the
`
`rolling cipher. (Compl. { 36; Schumann Decl. J 15.) At least one foreign tribunal has found that
`
`YouTubeacts “as agent for, licensee of, or in conjunction with the copyright owner suchthat the
`
`cipher and key routine is an ‘effective’ technological measure in protecting copyrighted works.”
`
`(Mem.Supp., Ex. 3 { 28.)
`
`Cc.
`
`Defendant’s Design and Operation of the Websites
`
`Defendantis the designer, owner, and operator of www. FLVTO.biz and
`
`www.2conv.com (“the Websites”), where site users (“Users”) can freely download MP3s of
`
`Plaintiffs’ copyrighted audio recordings from streaming sites like YouTube. (Compl. P 1.) Over
`
`300 million individuals in the United States used the sites from October 2017 to May 2021.
`
`(Schumann Decl. § 30; Mem. Supp., Ex. 20 at 2, Ex. 21 at 2.) And over 300 million individuals
`
`globally used the sites from October 2017 to September 2018. (Mem. Supp., Ex. 19 at 12-28.)
`
`Users convert URLs from streamingsites like YouTube into free downloadable and
`
`distributable MP3s in seconds through a few simple steps. (Compl. {fj 40-44; Schumann Decl. {
`
`19.) This process is known as “stream ripping.” (Compl. 2.) The User first copies a URL ofa
`
`desired YouTubevideo, for example, and pastes the URL from into the text-entry box on either
`
`of the Websites’ homepages. (Compl. {9 42, 43; Schumann Decl. { 19.) The Useris then
`
`prompted to check a box and agree to the Website’s terms ofuse andto click a “convert” button.
`
`(Id.) The Website then converts the URL to an MP3 within seconds andthereafter displays a
`
`“download” button. (Schumann Decl. § 19.) The User then clicks the “download”button or a
`
`link, whichtriggers the file to download from the Website to the User’s computer. (Compl. {| 44;
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 9 of 26 PagelD# 2745
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 9 of 26 PageID# 2745
`
`Schumann Decl. J 19.)
`
`The Websites incorporate the youtube-dl software to convert protected YouTube
`
`content.‘ (Schumann Decl. { 29.) Youtube-dl is a third-party software engineered to bypass
`
`YouTube’s media file protection mechanisms,including the rolling cipher. (Schumann Decl. {
`
`16-17, 26-27; Mem. Supp.at 9, Ex. 8 at 5.) With the youtube-dl program, the Websites parse
`
`source code data and extract the protected YouTube content media file. (Schumann Decl. { 29.)
`
`The Websites also use the youtube-dl software to decrypt and disarm YouTube’s rolling cipher,
`
`which allows the Websites to extract copyrighted media files through a few additional steps. (/d.)
`
`Defendantprofits from the unauthorized reproduction and distribution of copyrighted
`
`audio recordings found on streamingsites like YouTube. (Compl. { 37; Schumann Decl. {if 16-
`
`17, 20.) Users of the Websites download copyrighted audio recordings for free without
`
`compensating Plaintiffs for their copyrighted content. (Schumann Decl. { 17.) Defendant sells
`
`advertisements on the Websites to harness the high volumeofsite traffic and profit from the
`
`Users’ activity. (See Mem. Supp., Exs. 7, 8 at 5.)
`
`Defendant’s Websites actively encourage Users to infringe copyrighted audio recordings,
`
`including those ownedby Plaintiffs. (Schumann Decl. {J 20, 22.) For example,
`
`www.FLVTO.biz displayed a list of the “Top 100 most converted and downloaded MP3s,” and
`
`www.2conv.com listed the “Most Watched Today” videos. (Schumann Decl. 21; Mem. Supp.,
`
`Ex. 9-12.) These lists included direct links to convert videos including Plaintiffs’ audio
`
`recordings to free MP3files. (/d.) The Websites describe their purpose as “Download[ing] Music
`
`from YouTube,” “download[ing] .
`
`.
`
`. favourite tracks,” and “Rip[ping] Music from YouTubeto
`
`iTunes.” (Mem. Supp., Exs. 4-6.) Additionally, Defendant’s Websites tell Users that they can
`
`4 Available at youtube-dl.org.
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 10 of 26 PagelD# 2746
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 10 of 26 PageID# 2746
`
`download “entire albums of Beatles Music” from streaming sites. (Schumann Decl. 4 23; Mem.
`
`Supp., Ex. 13, 14.) Onesite states “[NJot everyone knowsthat we do not haveto payfor this
`
`content[;] we can get free music. We can downloadall of the music, films, audiobooks, and other
`
`content absolutely for free and add it to our iTunes without paying for it.” (Mem. Supp., Ex. 17.)
`
`Also, Defendant’s social media accounts for the Websites have posted at least 31 times about
`
`Plaintiffs’ works at issue here. (Goler Decl. { 6; Mem. Supp., Ex. 18.)
`
`“Insertion orders” produced by Defendant and other third-party document production
`
`indicate that Defendant operates the Websites in concert with at least four individuals and two
`
`companies. (Compl. { 31; Mem. Supp.at 9, Exs. 7, 8.) The insertion orders appear to be
`
`advertising contracts related to advertising campaigns on the Websites. (Mem. Supp.at 9, Ex. 7.)
`
`Able Sun Holdings, Ltd. (“Able Sun”) and its Director, Natalia Kyriakidou signed the contract as
`
`“publisher.” (/d.) The insertion orders also identify Pavel Vasin, Daria Jones, and Alexandra
`
`Dimakosas parties related to the advertising contracts. (/d. at 2, 58, 102.) The third-party
`
`documents show that Pavel Vasin and Daria Jones are associated with Hotger Ltd. (“Hotger”), a
`
`Russian company that arranges advertising on the Websites and communicates with Users
`
`through the Websites’ social media. (Mem.Supp. at 10, Exs. 22-26.)
`
`D.
`
`Plaintiffs’ Efforts to Combat Defendant’s Piracy
`
`Several other countries, including the United Kingdom, Australia, Italy, Denmark,
`
`Russia, and Spain, have ordered service providers to block Defendant’s Websites because of
`
`their stream-ripping functions. (Mem. Supp.at 10; Ex. 3 ff 2-3, 39, 56-57, 93, 103, Ex. 28 ff] 35-
`
`42.) The Recording Industry Association of America (“RIAA”) sent seven notices between July
`
`2016 and August 2017 demandingthat the Websites disable Users from infringing Plaintiffs’
`
`copyrighted works. (Mem. Supp.at 10-11, Ex. 29.) The RIAAsent a cease anddesistletter to
`
`10
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 11 of 26 PagelD# 2747
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 11 of 26 PageID# 2747
`
`Defendant’s registered DMCAagent in May 2018, demanding that the Websites disable the
`
`stream-ripping functions that enable Users to circumvent YouTube’s technological protections of
`
`copyrighted content. (Mem. Supp. at 11, Ex. 30.) Defendant did not disable the stream-ripping
`
`functionalities and instead responded that the “company’s policy is aimed at protecting the
`
`interests ofall rights holders and compliance with applicable law.” (Mem. Supp.at 11, Ex. 31.)
`
`RIAAalso sent notices to Google in October 2019, which prompted Googleto delist the
`
`homepagesof the Websites from the search engine results. (Mem. Supp.at 11, Ex. 32.)
`
`E,
`
`Defendant’s Refusal to Comply with Discovery and Court Orders
`
`In the Report and Recommendation adopted by Honorable Claude M.Hilton, the
`
`undersigned recommendedthat the Court should enter default judgment sanctions against
`
`Defendant. (Dkts. 128, 129.) There, the undersigned found that Defendant failed comply with the
`
`Court’s two orders requiring him to respondto Plaintiffs’ discovery requests fully and
`
`completely and by refusing to attend his scheduled deposition. (Dkt. 128.) The undersigned’s
`
`prior orders warned Defendantthat a failure to obey would subject him to default judgment
`
`sanctions under Federal Rule of Civil Procedure 37. (/d.) Nevertheless, Defendant continued to
`
`insist that he is not subject to the Court’s jurisdiction and indicated nointention to cooperate with
`
`discovery. (id.) The undersigned accordingly found that (1) Defendant acted in badfaith, (2)
`
`Defendant substantially prejudiced Plaintiffs’ ability to litigate the case, (3) Defendant’s conduct
`
`should be deterred, and (4) less drastic sanctions would not salvage the case. (/d.)
`
`11
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 12 of 26 PagelD# 2748
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 12 of 26 PageID# 2748
`
`III. EVALUATION OF PLAINTIFFS’ COMPLAINT
`
`Whena defendant has defaulted, the well-pleaded allegations of facts set forth in the
`
`plaintiff's complaint are deemed admitted. JTH Tax, Inc. v. Grabert, 8 F. Supp. 3d 731, 736
`
`(E.D. Va. 2014) (citing Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001)).
`
`However,the defaulting party is not deemed to admit conclusions of law or “allegations
`
`regardingliability that are not well-pleaded.” Balt. Line Handling Co. v. Brophy, 771 F. Supp. 2d
`
`531, 540 (D. Md. 2011) (internal quotation marksand citations omitted)). Consequently, before
`
`entering default judgment, the Court must evaluate the plaintiff's complaint against the standards
`
`of Federal Rule of Civil Procedure 12(b)(6) to ensure that the complaint properly states a claim
`
`upon whichrelief can be granted. GlobalSantaFe Corp. v. Globalsantafe.com, 250 F. Supp. 2d
`
`610, 612 n.3 (E.D. Va. 2003) (citations omitted).
`
`Plaintiffs claim direct, contributory, and vicarious copyright infringement, inducement of
`
`copyright infringement, and circumvention of technological measures under the DMCA. The
`
`undersigned will consider each elementof the relevant causes ofaction in turn.
`
`A.
`
`Defendant’s Infringementof Plaintiffs’ Audio Recordings
`
`ThePlaintiffs assert claims of direct, contributory, and vicarious copyright infringement
`
`against Defendantpursuant to the Copyright Act. (See Compl. { 4.) It is unnecessary to address
`
`all four alleged basesofliability, as Plaintiff seeks to recover the same relief on each basis. The
`
`following recommendationsare limited to the alleged direct and contributory copyright
`
`infringements. The Copyright Act provides that a copyright ownerhasexclusiverightstoits
`
`copyrighted works. See 17 U.S.C. §§ 101, 106(1), (3)-(5), 501. In other words, the owner has the
`
`exclusive right to reproduce the works; distribute copies to the public bysale, rental, lease,
`
`lending, or other transfer of ownership; publicly perform the works; or display the works. See id.
`
`12
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 13 of 26 PagelD# 2749
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 13 of 26 PageID# 2749
`
`One whoviolates any of the copyright owner’s exclusive rights is considered an infringer. See id.
`
`For a claim of copyright infringement,a plaintiff must show (1) its ownership ofa valid
`
`copyright for the allegedly infringed material and (2) “copying of constituent elements of the
`
`work that are original.” See Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)
`
`(citation omitted).
`
`First, Plaintiffs have sufficiently alleged that they own valid copyrights for the 1,618
`
`audio recordingsatissue. Plaintiffs allege and Defendantdoes not dispute that Plaintiffs own
`
`copyrights for the non-exhaustive list of works provided in Amended ExhibitA to the
`
`Complaint. (See Compl. { 1; Dkt. 79-1; Mem. Supp., Ex. 1 at 2-3.)
`
`Second,Plaintiffs allege that Defendant violated the Plaintiffs’ exclusive rights to
`
`reproduceand distribute their copyrighted audio recordings. 17 U.S.C. §§ 106(1), (3), 501; Gee
`
`Compl. | 54.) Copyright holders have the exclusive right to make copies of their works. §
`
`106(1). As outlined in detail above, the Websites recreate Plaintiffs’ audio recordings without
`
`authorization, converting URLs to downloadable MP3s. This replication violates Plaintiffs’
`
`exclusive rights to reproduce their Works. See § 106(1). A defendantviolates a copyright-
`
`holder’s distribution rights when that defendant disseminates the work or makes the work
`
`generally available to the public. See Hotaling v. Church ofJesus Christ ofLatter-Day Saints,
`
`118 F.3d 199, 203 (4th Cir. 1997). Defendant makesand distributes unauthorized copies of
`
`Plaintiffs’ audio recordings available to the public. See § 106(3); (Compl. § 54.) Accordingly, the
`
`undersignedfinds that Plaintiffs have sufficiently pled a direct infringement claim underthe
`
`Copyright Act.
`
`B.
`
`Defendant’s Contributory Infringement of the Audio Recordings
`
`Plaintiffs’ Complaintalleges contributory liability against Defendant for infringementof
`
`13
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 14 of 26 PagelD# 2750
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 14 of 26 PageID# 2750
`
`Plaintiffs’ exclusive rights. (Compl. {{ 60-64.) Commonlaw contributory copyright
`
`infringement may be found where someone “intentionally induc[es] and encourage[es] direct
`
`infringement” of a copyrighted work by another. Metro-Goldwyn-Mayer Studios Inc., et al. v.
`
`Grokster, Ltd., et al., 545 U.S. 913, 930 (2005). Mere knowledgeofinfringing uses by third
`
`parties is insufficient to establish intentional inducement. /d. at 937. Instead, a “clear expression
`
`or other affirmative steps taken to foster infringement”is required. /d. at 936-37.
`
`Here, Plaintiffs have sufficiently alleged that Defendant has intentionally induced the
`
`Users’ infringement ofthe Plaintiffs’ audio recordings. (See Compl. ff 51-52.) As discussed
`
`above, the Websites explicitly encourage Usersto infringe the Plaintiffs’ rights by instructing
`
`them to “downloadentire albums”for free and by providing links to convert and download
`
`videos that include Plaintiffs’ audio recordings. (Schumann Decl. J] 21, 23; Mem. Supp., Ex. 9-
`
`14.) Additionally, the Websites’ social media accounts have posted about Plaintiffs’ works at
`
`least thirty-one (31) times. (Goler Decl. § 6; Mem. Supp., Ex. 18.) The Websites’ statements,
`
`links, and posts explicitly encourage Users to make unauthorized copies of their audio recordings
`
`and violate Plaintiffs’ copyrights. Because ofthese affirmative steps, the undersignedfindsthat
`
`Plaintiffs sufficiently pled a claim of contributory copyright infringement.
`
`Cc.
`
`Defendant’s DMCA Circumvention Liability
`
`The Plaintiffs further allege that Defendantis liable under Digital Millennium Copyright
`
`Act. Section 1201(b)(1) of the DMCAstates:
`
`(1) No person shall manufacture, import, offer to the public,
`provide, or otherwise traffic in any technology, product, service,
`device, component,or part thereof, that—
`
`(A)is primarily designed or produced for the purpose of
`circumventing protection afforded by a technological measure that
`effectively protects a right of a copyright owner underthistitle in a
`workor a portion thereof;
`
`14
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 15 of 26 PagelD# 2751
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 15 of 26 PageID# 2751
`
`(B) has only limited commercially significant purpose or use other
`than to circumvent protection afforded by a technological
`measure that effectively protects a right of a copyright owner under
`this title in a work or a portion thereof; or
`
`(C) is marketed by that person or another acting in concert with
`that person with that person’s knowledgefor use in circumventing
`protection afforded by a technological measure that effectively
`protects a right of a copyright owner underthis title in a work or a
`portion thereof.
`
`17 U.S.C. 18 § 1201(b)(1). Plaintiffs sufficiently allege violations underall three provisions of
`
`section 1201(b).
`
`First, Plaintiffs allege that Defendant’s Websites are designed to circumvent YouTube’s
`
`technological measures for protecting copyrighted content. See § 1201(b)(1)(A); (Compl. {ff 88-
`
`89.) The Websites implement youtube-dl, a software designed to circumvent YouTube’s
`
`protections. This software enables Website Users to stream-rip copyrighted audio files from
`
`otherwise protected YouTube videos.
`
`Second, Plaintiffs allege that the Websites’ technology has limited other commercial
`
`purposesother than to circumvent these technological measures. See § 1201(b)(1)(B); (Compl.
`
`{{ 88, 90.) As oneforeign tribunal found, “the entire purpose of the technology offered by the
`
`[Websites] is to circumventthe [technological protection measures].” (Mem. Supp.at 10.) The
`
`Websites announcetheir purpose as enabling the free “Download[ing] Music from YouTube,”
`
`“download[ing] .
`
`.
`
`. favourite tracks,” and “Rip[ping] Music from YouTubeto iTunes.” (Mem.
`
`Supp., Exs. 4-6; Schumann Decl. § 17.) Defendantderives profit from the site activity generated
`
`by “free music” byselling advertisements on the Websites. (Mem. Supp., Exs. 7, 8 at 5.)
`
`Third, Plaintiffs allege that Defendant markets this stream-ripping technologyto
`
`circumvent the technological measures. See § 1201(b)(1)(C); (Compl, ff 88, 91.) As discussed
`
`15
`
`

`

`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 16 of 26 PagelD# 2752
`Case 1:18-cv-00957-CMH-TCB Document 139 Filed 12/16/21 Page 16 of 26 PageID# 2752
`
`above, Defendant’s Websites actively encourage Usersto infringe Plaintiffs’ copyrighted audio
`
`recordings by providing direct links to convert the videos that include Plaintiffs’ audio
`
`recordings. (Schumann Decl.20-22; Mem. Supp., Ex. 9-12.) Additionally, the Websites tell
`
`Users that they can download “entire albums” from streamingsites like YouTubeforfree or
`
`“without paying forit.” (Schumann Decl. 4 23; Mem. Supp., Ex. 13, 14, 17.) Therefore, the
`
`undersignedfindsthat Plaintiffs sufficiently stated a claim for circumvention under the DMCA
`
`against Defendant.
`
`IV. REQUESTED RELIEF
`
`Plaintiffs requests that the Court award (1) statutory damages under the Copyright Act,
`
`(2) statutory damages under the DMCA,(3)injunctiverelief under the Copyright Act, and (4)
`
`reasonable attorneys’ fees and costs. (Compl. {] 57-59; 65-67; 73-75; 84-86; 94-96.)
`
`A.
`
`Statutory Damages Underthe Copyright Act
`
`The Copyright Act al