Pearson Educ., Inc. v. Arora, 09 Civ. 5742(SAS)

717 F.Supp.2d 374

PEARSON EDUCATION, INC., John Wiley & Sons, Inc., Cengage Learning, Inc., and the McGraw-Hill Companies, Inc., Plaintiffs,

v.Mohit ARORA d/b/a Besteconomybooks and John Doe Nos. 1-5, Defendants.

No. 09 Civ. 5742(SAS).

United States District Court, S.D. New York.

June 7, 2010.

William Dunnegan, Esq., Laura Scileppi, Esq., Dunnegan LLC, New York, NY, for Plaintiffs.

Mohit Arora, North Brunswick, NJ, pro se.

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge:

I. INTRODUCTION

Pearson Education, Inc. ("Pearson"),¹ John Wiley & Sons, Inc. ("Wiley"), Cengage Learning, Inc. ("Cengage"), and The McGraw-Hill Companies, Inc. ("McGraw-Hill") bring this action for copyright and trademark infringement against Mohit Arora, doing business as Besteconomybooks and proceeding pro se, and against five John Doe defendants.² Pearson and McGraw-Hill (the "Publishing Companies") now seek summary judgment on their copyright claim under 17 U.S.C. § 602, seeking $50,250 in statutory damages representing $750 for each of the sixty-seven copyrights involved.³ For the reasons stated herein, the Publishing Companies' motion is granted.⁴

II. BACKGROUND

Pearson and McGraw-Hill are publishers of educational textbooks.⁵ Arora is a natural person also known by the username "besteconomybooks" and is associated with a website known as Abebooks.com.⁶ The identities and actions ofthe John Doe defendants are presently unknown.

The Publishing Companies own United States copyrights for their respective publications ("United States Books").⁷ Foreign editions of United States Books ("Foreign Editions") are virtually identical in content except for the lesser quality of the printing and binding and the location of printing outside the United States.⁸ Arora engaged in the business of purchasing Foreign Editions of educational books and reselling them in the United States using a website known as Abebooks.com.⁹ Specifically, Arora sold Foreign Editions of Pearson's copyrighted works (the "Pearson Works") in the United States after Pearson had registered United States copyrights.¹⁰ Arora also sold Foreign Editions of McGraw-Hill's works (the "McGraw Works") after McGraw-Hill had registered United States copyrights. ¹¹

On February 16, 2010, the parties signed a stipulation consenting to the permanent injunction of Arora from (1) "infringing the registered copyrights and trademarks" of Pearson, Wiley, Cengage, and McGraw-Hill; (2) "falsely designating the origin of their products or services in violation of the rights" of Pearson, Wiley, Cengage, and McGraw-Hill; and (3) infringing any copyright or trademark of Pearson, Wiley, Cengage, or McGraw-Hill "through the sale in the United States of any copy of any foreign edition of their works printed outside of the United States and marked to prohibit its importation into, or sale in, the United States." ¹²

III. APPLICABLE LAW

A. Summary Judgment

Summary judgment is appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." ¹³ " 'An issue of fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. A fact is material if it might affect the outcome of the suit under the governing law.' " ¹⁴ "[T]he burden of demonstrating that no material fact exists lies with the moving party...." ¹⁵ "When the burden ofproof at trial would fall on the nonmoving party, it ordinarily is sufficient for the movant to point to a lack of evidence to go to the trier of fact on an essential element of the non[-]movant's claim." ¹⁶

To defeat a motion for summary judgment, the non-moving party must raise a genuine issue of material fact.¹⁷ The non-moving party must do more than show that there is " 'some metaphysical doubt as to the material facts,' " ¹⁸ and it " 'may not rely on conclusory allegations or unsubstantiated speculation.' " ¹⁹ Nevertheless, " 'all that is required [from a non-moving party] is that sufficient evidence supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.' " ²⁰

In determining whether a genuine issue of material fact exists, the court must "constru[e] the evidence in the light most favorable to the non-moving party and draw all reasonable inferences" in that party's favor.²¹ Even so, " 'only admissible evidence need be considered by the trial court in ruling on a motion for summary judgment.' " ²² " 'Credibility assessments, choices between conflicting versions of the events, and the weighing of evidence are matters for the jury, not for the court on a motion for summary judgment.' " ²³ Summary judgment is therefore "appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." ²⁴

When the non-moving party " 'chooses the perilous path of failing to submit a response to a summary judgment motion, the district court may not grant the motion without first examining the moving party's submission to determine if it has met its burden of demonstrating that no material issue of fact remains for trial.' " ²⁵ If the movant does not meet its burden of production, then the court must deny summary judgment even if the non-movant does not oppose the motion.²⁶ Moreover, the court may not rely solely on the movant's statement of undisputed facts contained in its Rule 56.1 statement.²⁷ The court must be satisfied that the movant's assertions are supported by the evidencein the record.²⁸

B. The Copyright Act ²⁹

"A claim of copyright infringement under federal law requires proof that (1) the plaintiff had a valid copyright in the work allegedly infringed and (2) the defendant infringed the plaintiff's copyright by violating one of the exclusive rights that 17 U.S.C. § 106 bestows upon the copyright holder." ³⁰ Section 106 provides, in relevant part, that

the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: (1) to reproduce the copyrighted work in copies or phonorecords; (2) to prepare derivative works based upon the copyrighted work; (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending .... ³¹

The provisions of section 106 are qualified by the "first sale" doctrine, now codified in Section 109(a) of Title 17:

the owner of a particular copy ... lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy .... ³²

In essence, "once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution." ³³

Despite this broad "first sale" language, the Copyright Act also provides in section 602(a)(1) that:

Importation into the United States, without the authority of the owner of copyright under this title, of copies ... of a work that [has] been acquired outside the United States is an infringement of the exclusive right to distribute copies ... under section 106, actionable under section 501. ³⁴

In light of the seemingly-contradictory provisions of section 109 and section 602, the Supreme Court held in Quality King Distributors, Inc. v. L'anza Research Int'l, Inc. that a copyright owner's section 602 right to control the importation of United States-manufactured copies of a work is subject to the "first sale" doctrine given that the "first sale" provision governssection 106, which is in turn directly implicated in the language of section 602.³⁵

Prior to Quality King, courts had been divided on the geographic implications of the phrase "lawfully made under this title" as regards a foreign manufacturing location of a United States copyrighted work: ³⁶

On one hand, some courts have held that because a U.S. copyright holder cannot sue a foreign manufacturer for violating [the U.S. holder's] exclusive right to reproduce a copyrighted work ... a copy manufactured abroad is born in a state of legal limbo, neither legal nor illegal as a matter of U.S. law. On this view, a copy of a copyrighted work is not "lawfully made under this title" unless it also is "legally manufactured ... within the United States." Other courts have confessed some uneasiness with this construction, implicitly suggesting that "lawfully made under this title" refers not to the place a copy is manufactured, but to the lawfulness of its manufacture as a function of U.S. copyright law.³⁷

Though the Supreme Court did not specifically address the question of whether section 109 would also apply to a United States-copyrighted work manufactured abroad, the Court suggested in dicta that "presumably only those [copies] made by the publisher of the U.S. edition would be 'lawfully made under this title' within the meaning of § 109(a)." ³⁸ The Second Circuit has neither cited nor commented on Quality King or the applicability of section 109 to section 602. This Court has-albeit unenthusiastically-followed the Supreme Court's suggestion that the "first sale" rule does not apply to works copyrighted in the United States, manufactured abroad, and subsequently imported and sold in the United States. ³⁹

C. Statutory Damages

Section 504(c)(1) provides the following statutory guidelines for damages resulting from copyright infringement:

The copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $750 or more than $30,000 as

...