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Spanski Enterprises, Inc. v. Telewizja Polska, S.A.

United States District Court, District of Columbia

December 2, 2016

SPANSKI ENTERPRISES, INC., Plaintiff,
v.
TELEWIZJA POLSKA, S.A., Defendant.

          MEMORANDUM OPINION SETTING FORTH FINDINGS OF FACT AND CONCLUSIONS OF LAW

          TANYA S. CHUTKAN United States District Judge

         Plaintiff Spanski Enterprises, Inc. (“SEI”) sued Defendant Telewizja Polska, S.A. (“TVP”) for copyright infringement under 17 U.S.C. §101 et seq., alleging that TVP displayed television show episodes in the United States over which Plaintiff holds exclusive rights.

         The court held a five-day bench trial from February 22, 2016 through February 26, 2016, and the parties filed post-trial briefs on April 1, 2016.

         Based upon the evidence presented at trial, and having reviewed the parties' submissions, the court makes the findings of fact and conclusions of law set forth below. Based on these findings of fact and conclusions of law, the court concludes that Plaintiff has sustained its burden of proof on its copyright claim, and that judgment must therefore be entered in favor of SEI.

         Specifically, the court finds that Plaintiff has carried its burden of establishing by a preponderance of the evidence that: (1) SEI was the exclusive licensee and owner of valid copyrights over 51 TVP Polonia episodes discussed herein; (2) TVP infringed SEI's exclusive copyright on the 51 shows by making them available in the U.S. via the website www.tvp.pl from the period of December 2011 to March 1, 2012; (3) TVP's infringement was volitional and intentional, and not due to a failure of its geoblocking system or an effort at circumventing geoblocking by SEI; and (4) Defendant did not carry its burden of establishing by a preponderance of the evidence that SEI should be equitably estopped from bringing this claim.

         I. FINDINGS OF FACT

         A. Whether Plaintiff held valid copyrights for TVP Polonia episodes

         Three witnesses testified about the facts and circumstances surrounding SEI's claim that it held an exclusive copyright for TVP Polonia programming in the United States: (i) SEI President Boguslaw Spanski; (ii) former Loeb & Loeb attorney Michael Barnett; and (iii) former Loeb & Loeb paralegal Christian Jensen. The court finds that all three witnesses testified credibly regarding Plaintiff's copyright.

         The court makes the following findings of fact regarding whether SEI held a copyright for TVP Polonia episodes in the United States:

1. TVP is Poland's national public television broadcasting company and is owned by the Polish Treasury. (Tr. 280:22-23).
2. TVP owns and operates twelve national and sixteen regional Polish-language television channels, including the channel TVP Polonia. (Stipulated Facts ¶ 3; Tr. 280:21-281:7).
3. TVP distributes TVP Polonia content, as well as content from TVP's other channels, through its www.tvp.pl website (or “TVP website”) in Poland, some of which is free and some of which is offered on a pay-per-view basis. (Tr. 283:22-284:11).
4. TVP creates all TVP Polonia content, and while it owns a copyright in the material it created, TVP licenses some of its material to other distributors. (PX 1, § 2; Tr. 282:5-10, 283:4-11).
5. SEI is a Canadian corporation which, together with its subsidiaries and affiliated companies, distributes Polish-language television and radio content in North and South America via satellite, cable television, and the internet. (Stipulated Facts ¶ 1).
6. On December 14, 1994, TVP and SEI entered into an agreement in which TVP granted SEI the exclusive right to one-time use of TVP Polonia (then called “TV Polonia”) shows in its programming in North and South America (the “Territory”). (PX 1, § 2).
7. TVP and SEI executed an Addendum to the 1994 Agreement in 1999, giving SEI the exclusive right to use-e.g., distribute, broadcast, and display-TVP Polonia content over the internet within the Territory. (PX 2, § 1).
8. SEI and TVP engaged in discussions involving geoblocking content as early as 2000. (PX 44; Tr. 26:4-16).
a. Geoblocking is a method to prevent user access to a network, based on the geographic location of that user. (DX 7 at 6)
9. Beginning in 2007, TVP and SEI engaged in litigation in the Southern District of New York, which resulted in a 2009 Settlement Agreement specifying that SEI is the exclusive licensee of TVP Polonia, including its copyrighted content, in the Territory. SEI therefore has the exclusive right to distribute, broadcast, perform, and display TVP Polonia content, including over the internet and mobile devices, in the United States. (PX 10§ II.A-B; see also Tr. of Motions Hearing, dated July 9, 2015 [ECF No. 33] at 73:15-18; DX 9; Tr. 46:19-25-47:4).
10. TVP Polonia's individual episodes are all foreign works. (Tr. 20:25-21:9; Tr. 283:4-11).
11. SEI registered 51 separate individual TVP Polonia episodes for copyright in 2012. (PX 34, 35, 36).
a. Between January 18, 2012 and February 14, 2012, SEI, through then Loeb & Loeb attorney Michael Barnett and then Loeb & Loeb paralegal Christian Jensen, filed pre-registration applications with the U.S. copyright office for 51 TVP Polonia episodes. (PX 34, 49).
b. SEI pre-registered these episodes prior to having any knowledge that they were available in the United States on TVP's website. (Tr. 202:9-25).
c. The 51episodes are Galeria episodes 4 - 25, Gleboka woda episode 13, M jak Milosc episodes 884 - 895, Plebania episodes 1825 - 1829, and Rezydencja episodes 48 - 58. (Stipulated Facts para 15; PX 34).
d. Between February 8, 2012 and March 8, 2012, SEI registered the 51 episodes with the U.S. Copyright Office. (PX 34 and 35).
e. Between February 13, 2012 and March 13, 2012, the U.S. Copyright Office issued copyright registration certificates for the 51 Episodes. (PX 35).
f. The original copyright registrations were made under the name “Euro Vu, S.A., ” and on May 31, 2012, the U.S. Copyright Office issued supplemental registrations changing the copyright claimant name for the 51 episodes from “Euro Vu, S.A.” to “Spanski Enterprises, Inc.” (PX 36). Euro Vu, S.A. is a subsidiary of SEI. (Compl. ¶ 17).
12. As part of the copyright process, Christian Jensen made recordings in the U.S. of 36 of the 51 episodes for the purpose of having deposit copies. The 36 episodes are Galeria episodes Nos. 4-14; M jak Milosc episodes Nos. 884-894; Plebania episodes Nos. 1825-1829; and Rezydencja episodes Nos. 48-56. (PX 38, Tr. 223:18-228:19). The remaining 15 episodes of the 51 were filmed outside of the U.S. for deposit copy purposes. (Tr. 190:8-17; PX 38, 45).

         B. TVPs geoblocking capability

         Three witnesses testified about the facts and circumstances surrounding TVP's geoblocking capability: (i) TVP Deputy Director for Informatics or Computer Technology in the department of TVP technology Jacek Terlicki; (ii) TVP expert witness Dr. Phillip Hallam-Baker; and (iii) SEI expert witness Dr. Matthew Edman. The court finds the testimony of Terlicki on the subject of whether there was a failure of geoblocking to have been severely undermined by other credible testimony and evidence. Similarly, as set forth in more detail below, the court finds that much of Dr. Hallam-Baker's testimony was not supported by the evidence, and that on cross-examination, he was unable to provide credible explanations for many of his conclusions.

         The court makes the following findings of fact regarding TVP's geoblocking capability:

1. TVP uses an online video-on-demand (“VOD”) system to make programming available to the public through the internet. (Tr. 283:22-24). Individuals access content by entering the web portal at www.tvp.pl, then selecting an episode from a list of programming. (Tr. 284:3-11).
2. The VOD function works through an online distribution system that has four main components: (a) the Workflow System, which accepts video content in various source formats and converts those formats to the formats required for online distribution; (b) the Content Management System (“CMS”), which allows descriptive information to be added to material loaded to the Workflow System; (c) the Web Portal Engine (“Portal Engine”), which creates the internet user's website viewing experience (except for the video content, which is separately handled) from information supplied by the CMS system, and (d) the Content Delivery Network, which delivers the video content to internet users. (DX 7 at 4-5).
3. First, the workflow system receives the actual video of TVP programming that will be displayed online. Audio/visual (“AV”) technicians receive the video of an episode from the production department, and then convert it into video formats which can be viewed from computers, smart phones, or other devices that can access the internet. (DX 7 at 4-6).
a. When AV technicians receive a new program to load into the workflow system, the technicians create a file with a basic format that is used as a template from which other formatted files are created. (Tr. 290: 2-9).
b. At times, TVP programming is released through the VOD system first as a pay-per-view episode, before it is broadcast to the general public. (Tr. 284:12-23).
c. Each episode receives a format in the workflow system. If the episode is first released on a pay-per-view basis, it receives one format, and then after the episode has been broadcast and is available for free viewing, it is given a second format. (Tr. 290:2-291:1, 421:17-21).
d. As technology evolved, and demand for higher quality video grew, TVP modified formats in the workflow system to be MP4 formats, a type of video formatting that allows video to be streamed on a smartphone. TVP AV technicians were engaged in changing episode formats in the workflow system to MP4 during the period of alleged infringement at issue. (Tr. 290:17-291:1, DX 3, 26).
e. Modifications to formats in the workflow system are retained by TVP for an extended period of time, and TVP was able, after the initiation of this litigation, to print out and save workflow logs from the infringing period. (Tr. 317:18-23, 318:12-17, 340:5- 350:4).
i. TVP argues that the workflow system logs displayed in DX 5 show that no modifications were made to the geographic restrictions in workflow, but, as Plaintiff points out, DX 5 is incomplete. (Compare DX 3 at TVP-Internet 066222 which shows the deletion of format number 342670 for Episode 9 of Galeria, with DX 5 at TVP-internet 000078, which shows the creation and distribution of format number 342670 for Episode 9 of Galeria, but not its deletion).
f. While the court finds that TVP actively engaged in changing video formats over the infringing period, as discussed below, reformatting to MP4 was not the reason why multiple formats for the same episode, some containing a minus “minus ameryki” (minus America) restriction-e.g., the episode was geoblocked from being shown in the Territory-and some not, were created. Rather, the court finds by a preponderance of the evidence that the reason was to intentionally make the programming available in the U.S. (PX 57, Tr. 438:5-440:24).
4. The second part of the system is the CMS. Program editors receive information such as schedules, show descriptions, plot summaries, etc., and enter this information into CMS. Program editors also enter a “digitization card” for each episode of a show, which is a set of instructions for the AV technicians who operate the workflow system. The digitization card contains any territorial restrictions applicable to the episode, such as minus America. (Tr. 288:3-289:6).
a. The CMS system's default setting is minus ameryki, which blocks access to the VOD system from IP addresses associated with any country in the Territory. (Tr. 299:2-23, 514:1-3).
b. In order for the default of minus ameryki to be removed in the CMS, a program editor must take the volitional step of selecting a different setting from a drop-down menu. (Tr. 299:12-300:4, 514:10-21).
c. CMS also logs entries in its system, similar to the workflow system, but CMS logs are saved only for one month, then overwritten. Thus, no logs from the infringing period were saved. (Tr. 315:22-25, 316:14-317:17, 500:6-501:14, 513:3-16).
d. Workflow entries for territorial restrictions could also be seen by the program editors, but they could not edit the information. (Tr. 291:9-19).
5. The third part of the system is the portal engine, which takes information entered into CMS, and displays it on a webpage that can be read in a user's web browser. In addition to providing all of the visual and text elements of the TVP website, except for the actual video of the episode, the portal engine also provides the interface for a user to log in and access VOD, as well as make payments if the video is pay-per-view. (Tr. 292:19-293:20).
a. The portal engine also logs the IP addresses of users who request to view VOD materials through the TVP website, and whether access to the programming was blocked because it came from an area that is geo-blocked. However, during the infringing period, this information was automatically overwritten after 14 days, and was therefore not available. (Tr. 311:1-13, 312:5-314:24, DX 1, 2).
b. The portal engine interfaces with TVP's external payment system, which accepts credit card payment for pay-per-view access. The portal engine logs this information, and during the infringing period, according to logs provided by the Defendant, did not show any IP addresses located in either North or South America. (DX 24). However, entries 1466 through 4198 show IP addresses that have no listed country of origin. (Id.).
6. The fourth part of the system is the Content Delivery Network, which delivers the video content that is pushed from the workflow system, and displays it on a user's screen. (Tr. 293:21-294:1, 305:1-24).
7. Devices such as computers and smartphones have unique IP addresses that show where they are located, and, when they access the internet, allow content to reach the device. (Tr. 558:14-22, 560:2-561:17).
8. Geoblocking is used to prevent user access to a network, based on the geographic location of that user. (DX 7 at 6).
a. In VOD systems, such as TVP's, the video content is stored on servers and delivered in response to a request for access. Geoblocking works by comparing the IP address of the user requesting access with a third party database. If the programming is designated to be blocked in the geographic region where the IP address of a requesting device originates, then access is denied. (Tr. 284:3-11, 295:21-296:4, 602:2-10).
b. Geoblocking is an automated process, and as such, can have inherent flaws. TVP uses the MaxMind database for its geoblocking system, which is at least 98% accurate in blocking IP addresses on a country ...

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