Two years ago, Hawaiian anti-piracy lawyer Kerry Culpepper turned some of the most popular piracy brands into a powerful anti-piracy tool.
The attorney, who is listed as director of the company ’42 Ventures,’ registered several piracy-related trademarks, including ‘YTS’ and ‘Popcorn Time.’
The company, which was founded a year earlier, legally claimed these marks and uses them on a website that doesn’t draw any significant traffic. What did get people’s attention, however, were the enforcement actions that followed.
YTS Trademark Enforcement
Shortly after the trademarks were granted, Culpepper managed to suspend the Twitter account of a popular Popcorn Time fork. He offered to return it in exchange for a Popcorn Time licensing deal, which failed.
In addition, the attorney also filed a YTS trademark infringement lawsuit on behalf of 42 Ventures. The complaint, filed at a Hawaii federal court, targeted the operators of yst.lt, ytsag.me, yts.ae, ytsmovies.cc, and yts.ms, plus apps such as “Y Movies,” “YTS Movies Library” and “YTS movies.”
The people behind these sites, who are believed to be from India, China and Egypt, used the YTS brand as a promotional tool. This isn’t uncommon, as YTS has been a popular pirate brand for years. After originally belonging to a long-defunct release group, others now use it to lure in pirates.
Case Dismissed
As the lawsuit progressed, several defendants chose to settle the matter under undisclosed terms. Three others failed to respond completely, however, which prompted 42 Ventures to request $250,000 default judgments against all of the remaining defendants.
This didn’t go as smoothly as the trademark owner would have hoped. While there was no doubt that the YTS sites and apps used the trademark without permission, the Hawaiian federal court concluded that it didn’t have jurisdiction over the foreign defendants.
In an order issued nearly two years ago, Judge Watson wrote that the defendants’ connections with US-based services including Cloudflare, Amazon, and Namecheap, don’t prove that the site and app operators subjected themselves to US jurisdiction. As such, the case was dismissed.
Appeal and Do-over
Attorney Kerry Culpepper didn’t give up. On behalf of 42 Ventures, he appealed the District Court’s decision and won. The Ninth Circuit court granted him the option to amend the original complaint to address the jurisdiction shortcomings.
According to the appeals court, jurisdiction can be invoked if the defendants deliberately use US-based servers to improve speeds for US visitors.
“[D]eliberately choosing servers in the United States to enable faster service to U.S.-based customers could indicate purposeful direction to the United States,” the Ninth Circuit Court wrote.
Earlier this year, the case went back to the Hawaii District Court where an amended complaint was filed. The court looked at the issue again and, a few days ago, this resulted in a clear win for 42 Ventures.
Foreign Defendants Can be Sued
The order, released by Hawaii District Court Judge Derrick Watson, adopts the report and recommendations issued by Magistrate Judge Wes Porter last month and concludes the court has jurisdiction.
After reviewing all the arguments, which also cite a recent appeals court jurisdiction decision in the case against the Pakistani owner of the defunct torrent site MKVCage, the court agrees that default judgments can be issued against the three defendants.
“Based on Plaintiff’s allegations that Defendants have chosen to host their infringing websites and apps on servers located in the United States, and these websites and apps use or display Plaintiff’s YTS mark in connection with Defendants’ goods and services, the Court finds Plaintiff has sufficiently alleged Defendants’ tortious actions occurred in the United States.
“This is underscored by the allegations that Defendants also distribute pirated copies of motion pictures with file names that include Plaintiff’s mark to individuals in the United States,” Magistrate Judge Wes Porter adds.
In addition to showing that the actions took place in the United States, 42 Ventures also showed that this wasn’t a mere coincidence. The defendants specifically used US-based services to improve speed and accessibility, the company asaid.
3X $250,000 YTS Trademark Infringement Damages
As compensation for its alleged losses, 42 Ventures requested $250,000 from defendant Mav, and $2 million from Shan and Azzan. Ruling on this request, the court agrees that a meaningful statutory damages award is appropriate.
After weighing the pros and cons, Magistrate Judge Wes Porter decided that a $250,000 trademark infringement damages award against each defendant is appropriate here. That brings total damages to $750,000.
In addition, Judge Porter also approved a permanent injunction that prohibits defendants Shan and Azzan from using the YTS trademark going forward. An injunction against defendant Mav is not needed, as he has already shut down the YTS.MS website previously.
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All the Magistrate’s recommendations (pdf) were taken over by District Court Judge Derrick Watson late last week. That order is available here (pdf)
