Joe Hand Promotions, Inc. v. Yakubets
3 F. Supp. 3d 261
E.D. Pa.2014Background
- Joe Hand Promotions purchased exclusive commercial distribution rights to a pay-per-view boxing match and licensed sublicenses to commercial establishments; Café Nostalgie showed the match without a sublicense on Aug. 21, 2010, observed by Plaintiff’s investigator.
- Defendants Café Nostalgie and Victor Yakubets (listed on the venue’s liquor license with multiple officer/manager titles) were served but did not answer; the Clerk entered default and Plaintiff moved for default judgment under 47 U.S.C. § 553.
- The Court previously denied default judgment under § 605 because Plaintiff did not plead or prove the means of interception (satellite vs. cable) and instructed Plaintiff to proceed under § 553 if appropriate.
- Plaintiff sought statutory damages (or actual), enhanced damages for willful violations for commercial advantage, and leave to seek attorneys’ fees and costs; Plaintiff submitted affidavits (investigator and company president) and the liquor license.
- The Court (Pratter, D.J.) evaluated (1) how to measure statutory damages under § 553(c)(3)(A)(ii), (2) the standard and proof for willful enhanced damages under § 553(c)(3)(B), and (3) when an individual may be vicariously liable for a § 553 violation.
- Judgment: Court awarded $4,880 total ($1,220 statutory — $500 license + $720 estimated profits — plus $3,660 enhanced damages (treble the statutory award)). Yakubets was jointly/severally liable only for $500; Café Nostalgie liable for the remainder. Plaintiff was granted leave to move for attorneys’ fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper statute and proof of interception (§ 553 v. § 605) | Proceed under § 605 or § 553; damages available | No evidence of satellite interception; § 553 presumptively applies | Where means not shown, apply § 553 (cable) not § 605; Court limited claim to § 553 |
| Measure of statutory damages under § 553(c)(3)(A)(ii) | Statutory damages should include deterrence and can exceed licensing fee | Statutory damages should estimate actual damages, not penalize; deterrence belongs in enhanced damages | Statutory damages must be an estimate of actual damages (rate-card or per-patron proxy); deterrence reserved for enhanced damages |
| Enhanced damages — proof of "willfully" and "commercial advantage" under § 553(c)(3)(B) | Willfulness can be presumed from default and the deliberate nature of descrambling; enhanced damages needed for deterrence | Default alone insufficient; must show intent plus knowledge or reckless disregard and commercial purpose | Willfulness requires intentional interception plus knowledge or reckless disregard of unlawfulness; showing venue is commercial and broadcast to patrons supports commercial advantage; here willfulness and commercial purpose inferred |
| Individual vicarious liability for § 553 violations | Yakubets had right/ability to supervise and direct financial interest (liquor license supports) | Mere ownership or title insufficient; must plead factual content showing control and direct financial benefit | Adopted Softel test: vicarious liability if (1) right and ability to supervise (need not have actual knowledge) and (2) direct financial interest tied to the violation; here license plus allegations suffice to hold Yakubets jointly liable only for the $500 sublicense fee (not profits or enhanced damages) |
Key Cases Cited
- TKR Cable Co. v. Cable City Corp., 267 F.3d 196 (3d Cir. 2001) (distinguishes § 605 (satellite) from § 553 (cable) and informs statutory scheme)
- Charter Commc’ns Entm’t I, DST v. Burdulis, 460 F.3d 168 (1st Cir. 2006) (statutory damages under § 553 should estimate actual damages; deterrence belongs in enhanced damages)
- Softel, Inc. v. Dragon Medical & Scientific Communications, Inc., 118 F.3d 955 (2d Cir. 1997) (vicarious liability test: right/ability to supervise plus direct financial interest)
- McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988) (willfulness in civil context requires intent plus knowledge or reckless disregard standard guidance)
- Zubik v. Zubik, 384 F.2d 267 (3d Cir. 1967) (corporate officers who participate in torts are personally liable; officer liability principles)
- Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) (secondary liability doctrines (vicarious/contributory) grounded in common law and applicable across intellectual property contexts)
- Comcast of Ill. X v. Multi-Vision Elecs., Inc., 491 F.3d 938 (8th Cir. 2007) (examines individual liability in cable piracy context; discussed as contrasting approaches to individual culpability)