Kerry Culpepper is a lawyer who works to stop piracy. He has won three $250,000 judgments against the owners of sites and apps that used the YTS trademark that his company owns. The Court initially threw out the case because it said it didn’t have authority over the foreign defendants. But a recent order from an appeals court in a separate piracy case changed that.
Hawaiian anti-piracy lawyer Kerry Culpepper took some of the most popular pirated brands and turned them into a powerful anti-piracy tool two years ago.
The director of the company “42 Ventures,” is also an attorney. He registered trademarks for “YTS” and “Popcorn Time,” in relation to piracy.
The company started a year ago. It legally claimed these marks and used them on a website that doesn’t get much traffic. What did get people’s attention, though, were the actions that followed.
YTS Enforcement of Trademarks
Shortly after giving the trademarks the go-ahead, Culpepper was able to shut down the Twitter account for a popular Popcorn Time fork. He offered to give it back in exchange for a licensing deal with Popcorn Time, but it didn’t work out.
In addition, the lawyer filed a YTS trademark infringement lawsuit on behalf of 42 Ventures. The complaint filed in a federal court in Hawaii, was an action against the owners of yst.lt, ytsag.me, yts.ae, ytsmovies.cc, and yts.ms, as well as apps like “Y Movies,” “YTS Movies Library,” and “YTS movies.”
People from India, China, and Egypt ran these sites. They used the YTS brand as a way to market their sites. This isn’t unusual, as YTS has been a famous pirate brand for years. It was part of a long-defunct release group, but now it is used to lure pirates.
As the case continued, a number of the defendants decided to settle out of Court on terms that weren’t public. But three others didn’t respond, so 42 Ventures asked for default judgments of $250,000 against the remaining defendants.
This didn’t work out as well as the trademark owner had hoped. There was no doubt that the YTS sites and apps used the trademark without permission. The Hawaiian federal Court decided it didn’t have power over the foreign defendants because they were based in other countries.
In order from almost two years ago, Judge Watson said that the fact that the defendants used US-based services. Services like Cloudflare, Amazon, and Namecheap doesn’t show that the site and app operators agreed to be ruled by US law. As a result, the case ended after this.
Appeal and Start Again
Kerry Culpepper, an attorney, didn’t give up. He won an appeal against the District Court’s decision on behalf of 42 Ventures. The Ninth Circuit court let him change the original complaint to fix the problems with jurisdiction.
The appeals court says that jurisdiction can be used if the defendants use servers in the US. They use it to make the site faster for people in the US.
“[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.
Early this year, this case went back to the Hawaii District Court, where a new complaint was filed. The Court looked at the case again. Just a few days ago, they decided that 42 Ventures was the clear winner.
Foreign Defendants Can Be Sued
District Court Judge Derrick Watson issued an order. He took the report and suggestions made by Magistrate Judge Wes Porter last month. He said that the Court has jurisdiction.
After looking at all of the arguments, including a recent appeals court decision on jurisdiction in the case against the Pakistani owner of the now-defunct torrent site MKVCage, the Court agrees that default judgments can be given 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.
42 Ventures showed that the actions took place in the United States and that this wasn’t just a coincidence. The company said that the defendants specifically used services from the United States. The reason is to make things faster and easier to get to
3X $250,000 YTS Trademark Infringement Damages
42 Ventures asked defendant Mav for $250,000 and Shan and Azzan for $2 million to make up for what it said were losses. In deciding on this request, the court agrees that it is right to give significant statutory damages.
After weighing the pros and cons, Magistrate Judge Wes Porter decided that each defendant should get $250,000 in damages for trademark infringement. Damages are now worth a total of $750,000.
Also, Judge Porter agreed to a permanent injunction that says Shan and Azzan can’t use the YTS trademark in the future. The defendant Mav doesn’t need an injunction because he has already shut down the YTS.MS website.