Actava TV, Inc. v. Joint Stock Co. "Channel One Russ. Worldwide"

OPINION AND ORDER

ANDREW L. CARTER, JR., United States District Judge:

Plaintiffs Actava TV, Inc., Master Call Communications, Inc., Master Call Corporation, and Rouslan Tsoutiev (“Actava” OR “Plaintiffs”) bring this action against Defendants Joint Stock Company "Channel One Russia Worldwide," Closed Joint Stock Company "CTC Network," Closed Joint Stock Company "New Channel," Limited Liability Company "Rain TVChannel," Closed Joint Stock Company “TV DARIAL,” Open Joint Stock Company “ACCEPT”, Limited Liability Company “Comedy TV,” and Kartina Digital GmbH (“Channels” or “Defendants”) for malicious prosecution, tortious interference, breach of contract, and unfair competition in violation of New York state law. Defendants also filed counterclaims against Plaintiffs for tortious interference, breach of contract, and constructive fraud. For the reasons stated below, the Parties' motions for summary judgment are GRANTED in part and DENIED in part, motions to seal are GRANTED in part and DENIED in part, motions to strike are DENIED, and motions for judicial notice are GRANTED.^[1]

BACKGROUND

I. Facts

The following facts are drawn from the Parties' 56.1 Statements, the documents relied upon therein, the Second Amended Complaint, and Defendants' Answer and Counterclaims.

A. Parties

Plaintiff Actava TV, Inc. is an internet protocol television (“IPTV”) company that sold and streamed Russian language programming and set-top boxes (“STBs”) primarily in the northeastern United States through at least late February 2016. ECF No. 587 (“Defs. 56.1”) ¶ 15. President Master Call Communications and Master Call Corporate are companies which purchased server space and performed work for Actava TV, Inc. Id. at ¶¶ 18, 20. Plaintiff Rouslan Tsoutiev is owner, CEO, and President of Actava TV, Inc. and Master Call Corporation. Id. ¶ 16.

Defendants Channel One Russia Worldwide, CTC Network, New Channel, Rain, Darial, and Comedy TV are joint stock companies organized under the laws of the Russian Federation which each generated, owned, and/or operated television broadcasts and/or channels. Id. at ¶¶ 112. With the exception of Channel One Russia Worldwide, the remaining Channel Defendants have previously entered into license agreements with third parties to distribute their respective programming via IPTV in the United States and around the world. Id. at ¶¶ 8-12. Defendant Kartina Digital GmbH is an IPTV company which distributes programming in the United States and elsewhere. Id. at ¶13.

Non-party Matvil is an IPTV company that sells and streams Russian language television to customers in Canada and the United States which has been licensed to distribute Channel One, CTC, New Channel, Rain, and Comedy TV. Id. at ¶¶ 21-28.

B. Facts

Actava TV began broadcasting Russian television, including Defendant Broadcasters, in 2011 or 2012 without appropriate broadcasting licenses. Id. at ¶¶ 35, 37-38. In November 2015 (“Actava” action) and February 2016 (“Infomir” action), several of the Defendant Broadcasters sued Actava and others alleging that they had pirated their content in violation of the Federal Communications Act and copyright and trademark laws. Id. at ¶¶ 48-50. The Parties entered into a Settlement Agreement to resolve these two actions in April 2016. Id. at ¶ 51. While Actava agreed in the Settlement Agreement to “not in the future broadcast, copy, distribute or otherwise use the Broadcasts in any manner,” they also stated that they “ha[d] not previously broadcast, copied, distributed or otherwise used the Broadcasts other than through” its own platform or website other than as identified in the Broadcasters' pleadings and that Actava did not have any interest in any other IPTV service. Id. at ¶ 53. The Agreement stated that Tsoutiev, Actava's CEO could seek a license agreement with any of the Plaintiff-Broadcasters, but that entry into such a license was not mandatory upon any Plaintiff-Broadcaster. Id. at ¶ 54. The Agreement also included, as an exhibit, a form letter that Actava was to use when requesting a license from one of the Broadcasters. Id. Additionally, the Agreement required that any Channel Plaintiff suspecting that any Defendant was in breach provide written notice of the suspected breach. Id. at ¶ 104. Upon giving notice, a Channel could then seek judicial relief only if the Defendant fails to remedy the suspected breach within ten business days of receiving written notice. Id. Following entry of the Settlement Agreement, in early June 2016, permanent injunctions (“Injunctions”) were entered in both the Actava and Infomir actions which barred Actava from:

a.) broadcasting, re-broadcasting or otherwise transmitting Plaintiffs' Broadcasts as identified in Annex 1 or any other channel that Plaintiffs may in the future broadcast via any medium, including but not limited to internet protocol television (“IPTV”) and social media, without authorization

b.) directly or indirectly infringing or making any use, in any manner whatsoever, of Plaintiffs' Broadcasts including any associated programs without authorization;

c.) directly or indirectly infringing or making any, in any manner whatsoever, of Plaintiffs' Marks as identified in Annex 1 without authorization; [or]

d.) publishing or distributing any promotional materials referring to Plaintiffs' Broadcasts or marks; in any medium, including but not limited to the internet (including IPTV and social media), television, radio, newspapers, magazines, direct mail or oral communications without authorization).

Id. at 56-59. The Injunctions do not define the terms “broadcasting,” “re-broadcasting,” “transmitting,” “infringing,” or “authorization,” but does identify the Broadcasters' “marks” in an Annex. Id. at ¶¶ 227-232. That annex identifies the marks by listing the Channels' English names and displaying their respective colorized visual logos. Id. The Injunctions also barred Actava from “register[ing], purchas[ing], manag[ing] or hav[ing] any ownership interest in any website or device” that pirated the Plaintiff-Broadcaster's broadcasts. Id. at ¶ 60. Failure to comply with the Injunctions would result in a finding of contempt of Court. Id.

Later that year, all the Defendant Broadcasters except Darial entered into licensing agreements with third-party Matvil to distribute their respective broadcasts via Matvil's IPTV service. Id. at ¶ 62-63; SAC ¶ 40. Alongside the broadcast rights, Matvil was also permitted to promote and advertise the programming subject to the Channels' approval of promotional materials. Id. at ¶ 65. These licenses did not grant Matvil the power to sublicense the Channels' content. Id. at ¶¶ 67-68; see also ECF No. 606 at 21.

In June 2016, shortly after entry of the Injunctions, Actava and Matvil began negotiating a new Referral Agreement. Id. at ¶¶ 70, 75. The Parties executed the new agreement in September 2016. Id. Under the Referral Agreement, Actava would promote and advertise Matvil's offerings, sign up and register customers to Matvil's site, provided customer and

technical support related to STBs, and manage customer payment. SAC ¶ 50. In exchange, Actava would receive a split of the monthly revenue of each subscriber that Actava referred or signed up. Id. at ¶ 51. Additionally, Actava transferred hundreds of its prior customers to Matvil's service for a portion of the subscription fee Matvil charged those customers. ECF No. 672 at ¶ 63. Matvil also provided assurances that its agreements with the Broadcaster Defendants permitted it to engage Actava in such a manner and that Matvil was fully licensed to use all of the Broadcaster Defendants' “trademarks, logos, and names.” SAC at ¶52. A Second Addendum to the Referral Agreement, enacted by both Actava and Matvil, stated that Actava could “advertise and offer 1-year subscription[s] priced at [Actava]'s discretion without approval from [Matvil].” ECF No. 697, Ex. B at 2.

While the instant Parties quibble with the other's characterization of Actava's involvement in Matvil's presentation of Broadcaster content to its customers, Plaintiffs state that, at minimum, Actava provided “initial authorization” to Matvil customers accessing video content. Id. at 80. This “initial authorization” was part of Actava's “dual authentication module” by which, Plaintiffs maintain Actava “authorized subscribers only to seek further authorization from Matvil.” Id. at ¶ 82. While Plaintiff maintains that “Actava does not provide the stream of programming to [Matvil] customers,” SAC ¶ 56, both sides do agree that “Actava TV middleware allowed Actava to authenticate the STBs it sold and configured for the Matvil service.” Id. at ¶ 82.

A review of the Actava source code also established that Actava's middleware was at least capable of accessing Channel One's electronic programming guides (“EPGs”) which

provides a schedule of upcoming broadcasts^[2] and was also at least marginally involved in the collection of Matvil consumers' billing information.^[3] ECF No. 672 (“Pls 56.1 CounterStatement”) at ¶ 170.

Actava also produced advertising for Matvil's services on Russian-language radio and in newspapers in September 2016. These advertisements ran from September to December 2016. Id. at ¶¶ 86, 94. A November 2016 translated radio advertisement stated:

Actava TV offers an annual subscription to the best television service in America. The package includes all the leading TV channels, such as the Perviy, TNT, TVC, Dozhd, CTC, Domashniy, ....and many others. We are together again! As they say: with clear conscience and confidence in today and tomorrow. The TV service is licensed, so we have no need to hide behind