United States District Court, S.D. New York
CENGAGE LEARNING, INC., ELSEVIER, INC., MCGRAW-HILL GLOBAL EDUCATION HOLDINGS, LLC, PEARSON EDUCATION, INC., and JOHN WILEY & SONS, INC., Plaintiffs,
MIKE SHI, a/k/a YI SHI, JENNY LI, JACKIE OSWALD, and DOES 1-10 d/b/a BOL TEBOOKS.COM and EBOOKA VE.COM, Defendants.
S. BRODERICK, United States District Judge:
Cengage Learning, Inc., Elsevier, Inc., McGraw-Hill Global
Education Holdings, LLC, Pearson Education, Inc., and John
Wiley & Sons, Inc., (collectively
“Plaintiffs”) brought this copyright and
trademark action against Defendant Mike Shi
(“Shi”), doing business as BolteBooks.com and
eBookAve.com (the “Websites, ” and collectively
with Shi, “Defendants”). Before me is the
detailed and thorough Report and Recommendation of Magistrate
Judge Frank Maas issued on September 3, 2015, (Doc. 45
(“Report” or “R&R”)),
recommending that Plaintiffs be awarded $5 million in
statutory damages under the Copyright Act, plus prejudgment
interest from the date the Complaint was filed, calculated at
the rate set forth in 28 U.S.C. § 1961. (R&R at 14.)
The Report also recommends that a permanent injunction be
entered against further infringing activities by Defendants.
(Id.) Plaintiffs filed an objection to the Report on
September 16, 2015, arguing that they are entitled to the
full $16, 590, 000 in statutory damages which they requested,
but otherwise agreeing with the Report's conclusions.
(See Pls.' Resp. at 2; Pls.' Proposed
Findings & Conclusions ¶¶ 62,
63.)Because I agree with Magistrate Judge
Maas's determination that Plaintiffs statutory damages
should be limited to those under the Copyright Act, and that
$5, 000, 000 is an appropriate amount to compensate
Plaintiffs for their losses and to deter Defendants'
infringing conduct, I ADOPT the Report and Recommendation in
its entirety, and grant Plaintiffs' Motion for Default
Judgment and Permanent Injunction Against Defendants.
Factual and Procedural Background
facts set forth in the Report are incorporated herein by
reference unless otherwise noted. On November 1, 2013,
Plaintiffs initiated this action by filing their complaint,
asserting claims against Defendants for trademark and
copyright infringement. (“Compl.”). While the precise
nature of the claims is laid out in more detail in the
Report, the Complaint broadly alleges that Plaintiffs are
educational publishers and that Defendants are repeated
infringers of Plaintiffs' intellectual rights who
advertise and sell unauthorized copies of Plaintiffs'
materials in the United States through the Websites.
(Id. ¶¶ 2, 3.)
never answered Plaintiffs' Complaint. On May 20, 2014,
Plaintiffs filed a request for default against Defendants,
(Doc. 23), and a declaration in support of the request for
default, (Doc. 24). The Clerk of Court entered a Certificate
of Default against Defendants on May 23, 2014. (Doc. 25.)
Plaintiff sought, and I issued, an Order to Show Cause on
August 26, 2014, (Doc. 27), which was served on Defendants
via electronic mail on September 3, 2014, (Doc. 36),
directing Defendants to show cause why an order should not be
issued granting Plaintiff a default judgment. I held a show
cause hearing on October 14, 2014, for which Defendant failed
to appear, and I referred the action to Magistrate Judge
Frank Maas for an inquest as to liability and damages.
(See 10/14/2014 Tr.)
October 29, 2014, Magistrate Judge Maas issued a Scheduling
Order instructing that by December 23, 2014, Plaintiffs file
an inquest memorandum, accompanied by supporting affidavits
and exhibits, setting forth Plaintiff's proof of damages,
including the costs of this action and, if applicable,
Plaintiff's reasonable attorney's fees, together with
proposed findings of fact and conclusions of law. (Doc. 41.)
Magistrate Judge Maas further directed that Defendants file
any opposition on or before January 6, 2015. (Id.)
filed their Proposed Findings of Fact and Conclusions of Law
on December 23, 2014. (Doc. 44.) Plaintiffs sought $13, 590,
000 dollars in statutory damages under the Copyright Act,
(Pls.' Proposed Findings & Conclusions ¶ 62),
$3, 000, 000 in statutory damages under the Lanham Trademark
Act, (id. ¶ 63), and an injunction permanently
barring Defendants from engaging in a host of allegedly
infringing activities, (id. ¶ 64).
September 3, 2015, Magistrate Judge Maas issued the Report
recommending $5, 000, 000 in damages under the Copyright Act,
along with prejudgment interest from the date the Complaint
was filed, November 1, 2013, and that Defendants be
permanently enjoined from further infringing on
Plaintiffs' copyrights and trademarks. (R&R at 14.)
The Report notified the parties that written objections were
due within fourteen days of the service of the Report. On
September 16, 2015, Plaintiffs filed an objection to the
Report. (Doc. 46.)
November 22, 2016, Plaintiffs submitted a letter identifying
subsequent authority supporting an award of statutory damages
under both the Copyright Act and the Lanham Act. (Doc. 47.)
The authority at issue is Innovation Ventures, LLC v.
Ultimate One Distrib. Corp., 176 F.Supp.3d 137 (E.D.N.Y.
2016). The Court in Innovation Ventures awarded
statutory damages under both the Copyright Act and the Lanham
The court finds that the injuries suffered by plaintiffs for
trademark and copyright infringement are distinct, as
contemplated by Congress in enacting two separate statutory
schemes, neither of which precludes recovery under both
statutes. Here, the damages sustained from defendants'
copyright and trademark infringement are separate even though
they arose from the same product.
Id. at 175. Plaintiffs requested that I consider
their objection in light of Innovation Ventures,
decline to adopt those aspects of Magistrate Judge Maas's
Report finding Plaintiffs should not be awarded statutory
damages under both the Copyright Act and the Lanham Act,
(R&R at 9), and “award them statutory damages under
the Lanham Act, in addition to the Copyright Act.”
(Doc. 47 at 3.)
reviewing a magistrate judge's report and recommendation,
a district court “may accept, reject, or modify, in
whole or in part, the findings or recommendations made by the
magistrate judge.” 28 U.S.C. § 636(b)(1). Parties
may raise specific, written objections to the report and
recommendation within fourteen days of being served with a
copy of the report. Id; see also Fed. R. Civ. P.
72(b)(2). When a party submits a timely, specific objection,
a district court reviews de novo the parts of the
report and recommendation to which the party objected. 28
U.S.C. § 636(b)(1); see also Fed. R Civ. P.
72(b)(3). With regard to a report and recommendation that is
not objected to, or the unobjected-to portions of a report
and recommendation, a district court reviews the report and
recommendation, or the unobjected-to portion thereof, for
clear error. DiPilato v. 7-Eleven, Inc., 662
F.Supp.2d 333, 339 (S.D.N.Y. 2009); Lewis v. Zon,
573 F.Supp.2d 804, 811 (S.D.N.Y. 2008); Wilds v. United
Parcel Serv., Inc., 262 F.Supp.2d 163, 169 (S.D.N.Y.
2003). When a party makes only conclusory or general
objections, or simply reiterates the original arguments, the
Court will review the Report strictly for clear error.
See Pearson-Fraser v. Bell Atl., No. 01-CV-2343,
2003 WL 43367, at *1 (S.D.N.Y. Jan. 6, 2003).
when a default judgment is warranted based on a party's
failure to defend, the allegations in the complaint with
respect to the amount of damages are not deemed true.”
Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183
F.3d 151, 155 (2d Cir. 1999). “A default judgment must
not differ in kind from, or exceed in amount, what is
demanded in the pleadings.” Fed.R.Civ.P. 54(c). The
Court “should take the necessary steps to establish
damages with reasonable ...