Itar-Tass Russian News Agency v. Russian Kurier, Inc. - No. 95 Civ. 2144(JGK) (S.D.N.Y. March 10, 1997)

Itar-Tass Russian New Agency, Itar-Tass USA, Inc., Argumenty i Fakty, Moskovskie Novosti, Komsomolskaya Pravda, Fromer & Associates, Inc., Express Gazeta, Nezavisimaya Gazeta, Balagan, Ekho Planety, Megalopolis Express, Moskvosky Komsomolets, AR Publishing Co., and the Union of Journalists of Russia, Plaintiffs

against

Russian Kurier, Inc. a/k/a Kurier, Inc., a/k/a Kurier Russian Weekly Newspaper, Oleg Pogrebnoy, Sverdlov, Inc., a/k/a Sverdlov Video, Veniamin Sverdlov, Linco Printing, John & Jane Does 1-10, Defendants.

95 Civ. 2144 (JGK)

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

1997 U.S. Dist; 42 U.S.P.Q.2D (BNA) 1810

March 10, 1997, Decided

March 11, 1997, FILED

DISPOSITION: UJR denied any relief for its claims against the defendants.

COUNSEL: APPEARANCES:

For Plaintiffs: Julian H. Lowenfeld, Esq., New York, New York. Al J. Daniel, Jr., Esq., New York, New York. Roland L. Trope, pro hac vice, Trope and Trope, New York, New York. For Fromer & Assoc., Inc. and Unlimited Brokerage: Robert J. Berman, Esq., Hackensack, New York. Yevgen I. Fromer, Plaintiff, pro se, Brooklyn, New York.

For Russian Kurier Inc.: Joel K. Bohmart, Esq., Bohmart & Sacks, P.C., New York, New York. Oleg Pogrebnoy, Defendant, pro se, New York, New York. For Linco Printing: Richard S. Peskin, Esq., New York, New York.

JUDGES: John G. Koeltl, United States District Judge

OPINIONBY: John G. Koeltl

OPINION: OPINION AND ORDER

JOHN G. KOELTL, District Judge:

This is a copyright infringement action in which the plaintiffs seek injunctive relief and damages for the wholesale unauthorized copying, for profit, of articles from their publications. The plaintiffs are Russian news organizations and publishers, their related or authorized United States companies, and an Israeli newspaper which was added as a party after the original lawsuit was brought. The plaintiffs include the publishers of some of the major Russian newspapers.

They have sued Russian Kurier, Inc. ("Kurier") and others for copying news articles and reports without authorization, and publishing the articles and reports in the United States in a newspaper called Kurier. They have also sued the printer who produced Kurier.

On May 13, 1995 this Court issued a preliminary injunction enjoining the continued copying of articles from several of the plaintiffs' publications. Itar-Tass Russian News Agency v. Russian Kurier Inc., 886 F. Supp. 1120 (S.D.N.Y. 1995). In issuing the injunction, this Court noted:


 * The present motion asks this Court to enjoin the continued open and blatant copying of copyrighted articles -- complete with photographs, headlines, and, in some cases, bylines -- from the plaintiff publications by the defendant publication. In their argument seeking the injunction, the plaintiffs rely on recently enacted Russian copyright law and request this Court's protection because this nation recognizes the copyright protections afforded by other nations under the Berne Convention. The defendants do not deny that they have stolen articles, that they have no permission from anyone
 * to copy them, and that they have lifted them, type face and all, from the plaintiff publications, but the defendants argue that only individual reporters can sue. Therefore, the defendants have asserted the right to continue to electronically cut and paste the articles that appear in the plaintiff publications and pass them off as their own. The defendants have underestimated the protections afforded by the laws of the Russian Federation and the United States for copyrighted materials. Id. at 1122.

Thereafter, the parties concluded discovery and tried this case to the Court in a non-jury trial. Having reviewed the evidence and assessed the credibility of the witnesses, pursuant to Federal Rule of Civil Procedure 52, the Court makes the following Findings of Fact and reaches the following Conclusions of Law.

Findings of fact
 Plaintiff Itar-Tass Russian News Agency ("Itar-Tass") is a news wire service and news gathering corporation with its principal place of business in Moscow, Russia. A majority of its shares are owned by the government of the Russian Federation. Itar-Tass gathers news from its bureaus, and transmits dispatches to Moscow, where these dispatches are edited. Itar-Tass then transmits them to subscribers throughout the world, including major news organizations in the United States. (Joint Pre-Trial Order Undisputed Facts ("UF") at P1). Plaintiff Itar-Tass USA, Inc. ("Itar-Tass USA") is the wholly owned subsidiary of Itar-Tass. Itar-Tass USA is a New York corporation, and is the authorized distributor of the products and copyrighted works of Itar-Tass in the United States. Its principal place of business is located in New York City. (UF at P2). Plaintiff Argumenty i Fakty ("Fakty") is a privately owned corporation that publishes Argumenty i Fakty, a weekly newspaper. Its principal place of business is located in Moscow, Russia. (UF at P3). Argumenty i Fakty is not published in the United States, but it is distributed in small quantities in the United States. (Declaration of Dmitry Makarov at P2). Plaintiff Komsomolskaya Pravda ("Pravda") is a privately owned corporation which publishes Komsomolskaya Pravda ("Pravda"), a daily newspaper. Its principal place of business is located in Moscow, Russia. (UF at P4). Plaintiff Moskovskiye Novosti is a private corporation which publishes Moskovskiye Novosti ("Moscow News"), a weekly newspaper. Its principal place of business is located in Moscow, Russia. (UF at P5). Plaintiff Ekho Planety ("Ekho of the Planet") is a Russian weekly news magazine published by Itar-Tass. Ekho Planety is a publicly held corporation, and 51% of its stock is owned by Itar-Tass. The principal place of business of Ekho Planety is located in Moscow, Russia. (UF at P6). Plaintiff Megapolis Express ("Megapolis") is a privately held corporation that publishes the weekly Russian newspaper Megapolis Express ("Megapolis"). Its principal place of business is located in Moscow, Russia. (UF at P7). Plaintiff Moskovsky Komsomolets publishes Moskovsky Komsomolets, a Russian language daily newspaper, in Russia. Its principal place of business is located in Moscow, Russia. (UF at P8).</li> <li>Plaintiff AR Publishing Co., Inc. ("AR"), is a wholly owned subsidiary of Moskovsky Komsomolets. Its principal place of business is located in Moscow, Russian. AR publishes a weekly newspaper, entitled V Novom Svete ("In the New World"), in New York City. (UF at P9).</li> <li>AR has an exclusive agreement with Moskovsky Komsomolets which authorizes AR to republish materials in the United States that were originally published in Moskovsky Komsomolets. (Declaration of Emil Bazinian at P2; Plaintiff's Exhibit ("PX") 348).</li> <li>Plaintiff Union of Journalists of Russia ("UJR") is the professional writers union of the accredited print and broadcasting media journalists of the Russian Federation. Its principal place of business is located in Moscow, Russia. (UF at P10). UJR is a voluntary organization whose membership consists of Russian journalists who have published several articles in Russian periodicals and have been nominated and elected to membership. (July 3, 1996 Trial Transcript ("Tr.") at 970-72 [Khozin]). UJR's purpose is to protect the economic, creative and professional rights of its members, including its members' copyrights. (July 3, 1996 Tr. at 973-74 [Khozin]). </li> <li>Plaintiff Heslin Trading Ltd., referred to herein as "Balagan" for the periodical it publishes, is a privately held corporation. Its principal place of business is Tel Aviv, Israel. Balagan is a Russian language, comic magazine published monthly in Israel. (Declaration of Alexander Kanevsky ("Kanevsky Decl.") at PP1-3).</li> <li>Yevgen I. Fromer is the sole owner and principal of plaintiff Fromer & Associates, Inc. (Affirmation of Yevgen I. Fromer ("Fromer Aff.") at P2). On December 27, 1994, Fromer & Associates, Inc. entered into an exclusive agency agreement with Pravda. (Fromer Aff. at PP3-4). Pursuant to this agreement, Pravda was to send Fromer & Associates, Inc. copy models of its newspaper, ready to format and print, for publication in the United States. (Fromer Aff. at P5; PX 175; PX 175A). Fromer & Associates, Inc. had the exclusive rights to publish the United States edition of Pravda and to use the articles taken from Pravda. (Fromer Aff. at P3; PX 175A). This agreement was to continue for one year. (Fromer Aff. at P5; PX 175A).</li> <li>Kurier is a New York corporation with its principal place of business in New York City. Since October, 1992 it has been publishing a weekly newspaper in the Russian language known as Kurier. Kurier is distributed throughout New York City, and in certain states other than New York. (UF at P11).</li> <li>Defendant Oleg Pogrebnoy is the president, owner, and sole shareholder of Kurier. (UF at P12). (Kurier and Pogrebnoy are sometimes referred to in this opinion as the "Kurier defendants"). Pogrebnoy is the editor-in-chief of Kurier. As editor-in-chief, Pogrebnoy is entirely responsible for Kurier's editorial policy because Kurier has no editorial board. Pogrebnoy decides which materials and news articles are to be printed in Kurier. (UF at P15).</li> <li>Kurier has published no more than approximately ten original articles in the past three years. (UF at P16). Kurier and Pogrebnoy employ no staff writers, columnists, photographers, cartoonists, graphic artists, interviewers, or journalists. (UF at PP17-19).</li> <li>The circulation of Kurier in the New York area is approximately 20,000 per week. (UF at P20). Kurier derives its income from the creation, publishing, sale, and distribution of Kurier, and from the sale of advertising for Kurier. (UF at P21).</li> <li>Defendant Linco Printing, Inc. ("Linco") is a New York corporation engaged in commercial printing, including the printing of newspapers. Its principal place of business is located in Long Island City, New York. Since October 1994, except for the March 26, 1996 and April 2, 1996 issues, Linco has printed Kurier each and every week. Linco has no other relationship or affiliation with any of the defendants in this case. (UF at PP13, 13(h)).</li> <li>Kurier is printed principally in the Russian language. Linco is provided with layout sheets it shoots with a camera and then prints. The layout sheets contain articles which have been physically cut out and pasted to the layout sheets. Linco does not prepare, edit, or modify the layout sheets. Linco also prints newspapers in Arabic, French, Spanish, Japanese, Korean, Thai, Hebrew and Chinese. (UF at PP13(c)-P13(g)).</li> <li>It is undisputed that more than 500 articles were first published in the plaintiffs' publications and later republished in Kurier. Kurier republished these articles in substantially similar or verbatim form. (UF at P22). Kurier reprinted these articles for profit and commercial realization. (UF at P23).</li> <li>At some point, Fromer became aware that Pogrebnoy was copying articles from Pravda. He had his attorney send a letter demanding that Pogrebnoy cease and desist from publishing such articles. (Fromer Aff. at PP7-10). Pogrebnoy did not stop. (Fromer Aff. at P11). In July, 1995, Fromer stopped publishing the United States edition of Pravda and terminated his agreement with Pravda. (Fromer Aff. at P13).</li> <li>The defendants never obtained any prior permission, license or copyright from the plaintiffs to publish any articles. The only permission from the plaintiffs alleged by the Kurier defendants is their assertion that they received permission to copy articles published in Megapolis after March 1, 1996. They assert that Vladimir Volin, the editor-in-Chief of Megapolis, gave Pogrebnoy permission during a telephone conversation. Pogrebnoy surreptitiously recorded this conversation. While Pogrebnoy did attempt to get concessions from Volin during this conversation, Pogrebnoy did not receive permission to reprint the articles from Megapolis. Volin testified that he did not give permission, and Volin's position is confirmed by a transcript of his telephone conversation with Pogrebnoy. The transcript shows that Volin refused to enter into any agreement with Pogrebnoy and told him to deal with Megapolis's lawyer. (June 24, 1996 Tr. at 71-72 [Volin]; Defendant's Exhibit ("DX") G).</li> <li>Pogrebnoy also failed, in all but a few cases, to obtain the permission of the authors of the articles. Although Kurier published more than 500 articles that had been first published elsewhere, Pobrebnoy testified that he had obtained the author's permission in only about six cases. (July 15, 1996 Tr. at 82-83 [Pogrebnoy].</li> <li>There is no dispute that Pogrebnoy identified articles from the plaintiffs' publication and had the articles physically cut out, pasted on layout sheets, and sent to Linco for printing. (July 9, 1996 Tr. at 1269-74 [Pogrebnoy]). On occasion, entire pages were taken from the plaintiffs' publications including the pictures, by-lines and graphics. (July 9, 1996 Tr. at 1293, 1318-19 [Pogrebnoy]. The Kurier defendants' unauthorized copying and republication for profit was open, blatant, and systematic.</li> <li>On April 19, 1995, this Court signed a temporary restraining order prohibiting the defendants from copying from the publications of Itar-Tass, Moskovsky Novosti, Fakty and Pravda. Itar Tass, 886 F. Supp. at 1120 n.1. On May 13, 1995, this Court issued a preliminary injunction enjoining the Kurier defendants from knowingly exploiting any works of these plaintiffs. Id. at 1131.</li> </ol>

Conclusions of Law
<ol> <li>The plaintiffs' claims arise under the Copyright Act of 1976, as amended, 17 U.S.C. §101 et seq. This Court has jurisdiction pursuant to 28 U.S.C. §§1331 and 1338. The plaintiffs have withdrawn all state law claims.</li> <li>A claim of copyright infringement consists of only two elements. The plaintiff must show that it owns a valid copyright and that the defendant has engaged in unauthorized copying. See ABKCO Music, Inc. v. Stellar Records, Inc., 96 F.3d 60, 64 (2d Cir. 1996); Hasbro Bradley, Inc. v. Sparkle Toys, Inc., 780 F.2d 189, 192 (2d Cir. 1985). The copying must be shown to be so extensive that there is a substantial similarity between the defendant's work and the protectable elements of the plaintiff's work. See Knitwaves, Inc. v. Lollytogs Ltd., 71 F.3d 996, 1002 (2d Cir. 1995); Fisher-Price, Inc. v. Well-Made Toy Manufacturing Corp., 25 F.3d 119, 122-23 (2d Cir. 1994).</li> <li>In this case, substantial similarity is not an issue, because the allegedly infringing articles are either identical to the articles originally published in the plaintiffs' publications or the differences are so small that it is unquestionable that the articles are substantially similar. The parties have stipulated to a summary chart of the articles copied, which shows that the articles from the plaintiffs' publications were published in verbatim or substantially verbatim form. (PX 1A). Pogrebnoy freely admitted that he cut out articles that appeared in the plaintiffs' newspapers and used them in publishing Kurier. (July 9, 1996 Tr. at 1269-74 [Pogrebnoy]).</li> <li>Because this Court found that Pogrebnoy did not obtain permission from Megapolis, and the defendants do not even claim to have received permission from any of the other plaintiffs, whether the copying was unauthorized is not an issue in this case. The defendants were plainly engaging in unauthorized copying. The only question is whether the plaintiffs have a protectable copyright interest in the articles taken from their publications.</li> </ol>

Works Registered Under United States Copyright Law
<li> A certificate of copyright registration is prima facie evidence of the existence of a valid copyright. See 17 U.S.C. §410(c); see also Fonar Corp. v. Domenick, 105 F.3d 99, 1997 *6 (2d Cir. 1997); Folio Impressions, Inc. v. Byer California, 937 F.2d 759, 763 (2d Cir. 1991). The plaintiffs have obtained copyright registrations for 167 of the articles at issue in this case. </li> <li>The defendants argue that the plaintiffs' copyrights are invalid because the plaintiffs initially applied for the copyrights on the wrong forms. However, after the initiation of this lawsuit, the plaintiffs corrected any errors in their prior registrations and received valid copyrights. A copyright infringement action need not be dismissed simply because registration occurs after the filing of the complaint. See Weissmann v. Freeman, 684 F. Supp. 1248, 1250 n.2 (S.D.N.Y. 1988); Frankel v. Stein and Day, Inc., 470 F. Supp. 209, 212 n.2 (S.D.N.Y.), aff'd., 646 F.2d 560 (2d Cir. 1980); see also Melville B. Nimmer and David Nimmer, 2 Nimmer on Copyright §7.20 (errors in initial registration can be corrected).</li> <li>The defendants also assert that some of the registrations are invalid because the plaintiffs listed the works as "works made for hire" and Russian law does not recognize that concept for articles published in newspapers. This argument is misplaced because the plaintiffs registered their copyrights under United States law, not Russian law. In registering the works, the concept of a "work made for hire" set by United States law was the most appropriate item to be listed.</li> <li>Under United States copyright law, a work made for hire includes "a work prepared by an employee within the scope of his or her employment ..." 17 U.S.C. §101; see also Aymes v. Bonelli, 980 F.2d 857, 860 (2d Cir. 1992). The articles published in the plaintiffs' publications were primarily written by staff writers employed by newspapers and wire services. These articles were works prepared by employees within the scope of their employment. Thus, these articles were most appropriately registered as works made for hire on the applications filed with the United States Copyright Office. In any event, there is no evidence that any of the applications were filed in bad faith, that they misled the Copyright Office or that the defendants have been prejudiced in any way. See 2 Nimmer on Copyright at §7.20 ("If ... the claimant willfully misstates or fails to state a fact that, if known, might have caused the Copyright Office to reject that application, such fraud may well be regarded as grounds for invalidating the registration"). Thus, there is no basis to invalidate the registrations.</li> <li>The defendants also assert that the plaintiffs that licensed articles from other plaintiffs lack standing to bring this action. This argument is without merit. The two plaintiffs who are licensees, AR and Fromer & Associates, Inc., were assigned the exclusive rights to publish certain articles in the United States. "The exclusive licensee of any right under the Copyright Act has standing to sue in his own name." See 3 Nimmer on Copyright §10.02[B][1]; see also 17 U.S.C. §501(b); Abkco Music, Inc. v. Harrisongs Music, Ltd. 944 F.2d 971, 980 (2d Cir. 1991). An exclusive right to publish in a specific location is sufficiently exclusive to establish standing. 3 Nimmer on Copyright at §10.02[A]. The licensees therefore have standing.</li> <li> In sum, therefore, in regard to those articles that have been registered, the defendants have not presented any valid defense to liability. The plaintiffs have shown that they have valid copyrights and that the defendants engaged in unauthorized copying. Therefore, for the registered articles, the plaintiffs have established the defendants' liability for copyright infringement.</li> </ol>

Berne Convention, Russian Works
<li>The plaintiffs also assert that those articles that were initially published in Russia after March 13, 1995, but which they did not register in the United States, are also entitled to copyright protection. March 13, 1995 is the date that Russia effectively acceded to the Berne Convention, to which the United States was already a signatory. (June 25, 1996 Tr. at 259-60 [Newcity]). A work is considered a Berne Convention work if "in the case of a published work, one or more of the authors is a national of a nation adhering to the Berne Convention on the date of first publication; the work was first published in a nation adhering to the Berne Convention, or was simultaneously first published in a nation adhering to the Berne Convention and in a foreign nation that does not adhere to the Berne Convention. ..." 17 U.S.C. §101.</li> <li> The plaintiffs have demonstrated that the allegedly infringed upon works were first published in the United States or Russia and that the authors of the works were Russian nationals. Therefore, the plaintiffs have shown that the allegedly infringed upon articles that were initially published after March 13, 1995 are Berne Convention works under 17 U.S.C. §101. Under the Berne Convention, holders of copyrights under Russian law are afforded the same protection under United States law as holders of copyrights under United States law. See Berne Convention (Paris text), art. 5; see also Creative Technology, Ltd v. Aztech System PTE, Ltd., 61 F.3d 696, 700 (9th Cir. 1995). Thus, protection as Berne Convention works depends on the protection the copyright law of Russia affords these works. While the defendants do not dispute that the works at issue are Berne Convention works, they argue that the works are not entitled to protection under Russian law and therefore should not be afforded protection under United States law.</li> <li> The current Russian Federation Law on Copyright and Neighboring Rights was adopted in July, 1993 (the "Russian Copyright Law") (PX 7-9). There have been no authoritative interpretations of this legislation by any Russian court and there are only two relevant Russian administrative decisions. Therefore, this Court has relied upon the text of the statute itself, the guidance provided by the two administrative decisions, and the testimony of the expert witnesses presented by both parties. </li> <li> Article 9, paragraph 1 of the Russian Copyright Law provides: "A copyright to a work of science, literature, or art shall originate by the fact of its creation. Invoking and conveying a copyright shall not require registration of the work, other special formulation of the work, or observance of formalities." Although no registration or use of the copyright sign is necessary to acquire rights to a work, the plaintiffs demonstrated that copyright notices were included in their publications.</li> <li> Article 8 excludes from copyright protection the "communication of events and facts containing an informative character." The most reasonable interpretation of Article 8 is that works that communicate both facts and original commentary are protectable. Advisory Opinion Number 4 of the Judicial Chambers for Media Disputes of the President of the Russian Federation of 14 October 1994, Moscow, ("Opinion 4") reached this same conclusion. (PX 11) It found that "Reports of events and facts of an informative character, in accordance with Article 8, are not objects of copyright law. In cases where the material goes beyond reports of informative character, in other words, it contains commentary, analysis or is the product of creative activity of others beside the author, the material becomes the object of copyright."</li> <li> The testimony and evidence presented at trial indicates that the articles that were infringed upon contained commentary and analysis. The defendants did not merely republish facts that had been reported in the plaintiffs' publications. They appropriated the entire way in which the plaintiffs described and commented on the facts. Therefore, the material in the infringed upon works is protectable.</li> <li> While the material in the articles is protectable, the plaintiffs still must demonstrate that they, rather than just the articles' authors, posses a copyright to the works. Articles 15 and 16 of the Russian Copyright Law provide Property and Non-Property Rights, respectively, to the authors of works. Article 4 provides that only a natural person can be an author. Consequently, for an organization such as a publisher to acquire the rights to a work, there must be a transfer from an author, pursuant to the provisions of the copyright law providing for contractual assignments, or there must be a specific provision of the copyright law allowing for the vesting of such rights in such an entity.</li> <li>Article 14, paragraph 2, provides an example of a provision of law that vests copyright rights in an entity. It vests in employers the exclusive rights to works produced by their employees in the scope of their employment, unless the right is otherwise assigned by contract. </li> <li>However, this provision is qualified by Article 14, paragraph 4, which provides that "In the course of fulfilling official duties or official assignments of an employer for the creation of ... newspapers, magazines, and other periodic publications ..., the provisions of this Article shall not apply." Therefore, because they fall within the exception provided by Article 14, paragraph 4, the Russian newspaper publisher plaintiffs cannot, based on Article 14 of the Russian Copyright Law, claim rights to articles that appear in their publications.</li> <li> Itar-Tass on the other hand, is a news agency, not a newspaper, magazine or other periodic publication covered by Article 14, paragraph 4. Opinion 4 reached the same conclusion: "According to Article 14 of the law of Russian Federation on Copyright and Neighboring Rights, exclusive rights [to] works created by [an] author in the course of fulfilling his employment duties and service assignments, belong to ITAR-TASS, unless there are specific provisions otherwise in the agreement between it and the author." (PX 11). Itar-Tass has therefore established that it had the exclusive rights under the Russian Copyright Law, pursuant to Article 14, to its works that were republished by the defendants. Because these works are Berne Convention works, and because they are protected by the Russian Copyright Law, Itar-Tass has shown that the defendants violated United States copyright law when they copied these works.</li> <li> While the plaintiffs who are Russian newspaper publishers are not entitled to copyright protection under Article 14, those publishers are entitled to copyright protection under Article 11, paragraph 2. That section provides:
 * A publisher of ... newspapers, magazines, or other periodical publications shall own exclusive rights of use of such publications. A publisher shall have the right, under any use of such publications, to show its name or request that it be shown


 * Authors of works included in such publications shall retain exclusive rights of use of their works independently from the publication as a whole.

</li> <li> At trial, the defendants argued that this provision gives publishers a copyright only to their publication as a whole. However, the plaintiffs argued that Article 11 also provides publishers with rights to prevent the copying of individual articles. </li> <li> The most reasonable interpretation of Article 11 was provided by the plaintiffs' expert, Professor Michael Newcity. He explained that newspaper publishers have an exclusive right to use articles that appear in their publications, including the right to reproduce and distribute those articles. (June 25, 1996 Tr. at 266-67 [Newcity]). Newcity testified that given their property right in the articles that appear in their publications, the publishers have a sufficient interest in those articles to sue for a copyright violation. (June 25, 1996 Tr. at 279 [Newcity]).</li> <li> Professor Newcity based his analysis on the text and history of Article 11. He pointed out that the legislation that preceded the Russian Copyright Law, particularly Article 485 of the Russian Civil Code of 1964, provided that organizations publishing magazines and other periodical publications "shall possess the copyright to these publications as a whole." (June 25, 1996 Tr. at 281-82 [Newcity]). Thus, under Article 485, the publishers only had copyrights in their publication "as a whole," not to individual articles contained therein. (June 25, 1996 Tr. at 282-83 [Newcity]). But, as Professor Newcity explained, the current version of Article 11(2) no longer contains the phrase "as a whole" in the first paragraph. (June 25, 1996 Tr. at 282-83 [Newcity]). "As a whole," now appears only in the second paragraph of Article 11(2), which specifies the rights of the authors, not the publishers. (June 25, 1996 Tr. at 282-83 [Newcity]). Therefore, publishers' rights are no longer limited to their publications as a whole, they have rights to the individual articles that appear in their publications.</li> <li> Professor Newcity's opinion is consistent with the only Russian governmental interpretation of the rights of newspaper publishers under Article 11. In its decision of June 8, 1995, the Judicial Chambers for the Informational Disputes of the President of the Russian Federation opined as follows:
 * In accordance with Article 11, part 2 of the RF Copyright Law, the publisher has the exclusive right to use of its published material. The publisher has the right in any use by a newspaper to demand the indication of its name. In the event of a violation of its rights, including the improper reprinting of one or two articles, the publisher has the right to petition a court for defense of its rights  (see art. 49 of the RF Copyright Law). In addition, under Art. 49, part 1, the publisher has the right to seek recognition of these rights against the infringer, a restoration of the status quo prior to the infringement of the right, a cessation of the actions, as well as a compensation for losses and a levy against income received by the infringers of such rights. ... (PX 13).</li>

<li> The Judicial Chambers for Informational Disputes concluded by noting its concern for overseas piracy of printed materials. (Id.). The defendants' interpretation of the Russian Copyright Law, which would give publishers no right to prevent infringements of individual articles appearing in their publications, would be wholly inconsistent with this goal of preventing piracy. Under Article 30, paragraph 1, of the Russian Copyright Law, an author may transfer his rights to a work to his employer by an Author's Agreement. But, pursuant to Article 31, paragraph 5, an author cannot transfer the rights to works not yet created. Therefore, authors can only assign works after they have been created, making it difficult for newspaper reporters to assign their rights to their publishers. However, it is the publishers that have the real economic incentive to prevent wholesale unauthorized copying. Therefore, if the publishers could not, without a specific assignment, enforce the authors' copyrights, the result would be an invitation to widespread infringement.</li> <li> The defendants also argue that the Russian publisher plaintiffs do not have the proper publishing licenses from the Ministry of Mass Information and therefore are not "publishers" as defined by Article 11 of the Russian Copyright Law (See July 15, 1996 Tr. at 102-04 [Rozina]; July 12, 1996 Tr. at 39 [Solton]). This argument is without merit. Each of the Russian publishers testified that it had the licenses required. Moreover, Article 60 of the Russian Law on Mass Media specifies the sanctions that can be imposed for the failure to obtain a license. Loss of copyright protection is not a specified sanction. (PX 27; June 26, 1996 Tr. at 349-50 [Newcity]). Finally, the Russian Copyright Law does not define publisher in Article 11 by reference to a registration under the Mass Media Law, nor does it provide for a loss of copyright protection for the failure to register. (June 26, 1996 Tr. at 348-49 [Newcity]). The Russian publishers  are therefore entitled to protection under the Russian Copyright Law.</li> <li> Thus, the Russian publisher plaintiffs have established that they have valid copyrights under Russian law to the articles that were republished by the defendants. The defendants violated these Russian copyrights and therefore, because the works are Berne Convention works, they have also violated United States copyright law.</li> </ol>

UJR's Claims
<li> In regard to the UJR's claims, the defendants argue that this organization lacks standing. An organization has standing "to bring suit on behalf of its members when: a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit." Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 343, 53 L. Ed. 2d 383, 97 S. Ct. 2434 (1977); see also Sun City Taxpayers' Association v. Citizens Utilities Co., 45 F.3d 58, 61 (2d Cir.), cert denied, 131 L. Ed. 2d 557, 115 S. Ct. 1693 (1995).</li> <li> UJR meets the first requirement because some members of the UJR had their work republished by the defendants without their permission. (July 3, 1996 Tr. at 985-86 [Khozin]). As explained above, these authors have standing to enforce their copyrights. The second requirement is satisfied because protecting its members' copyrights is a primary purpose of the UJR. The third requirement is satisfied because this lawsuit has been litigated without the need for the participation of UJR's members. Therefore, the UJR has standing.</li> <li> The only relief sought by UJR is injunctive relief. However, to issue an injunction on behalf of UJR, this Court must be able to identify specifically the scope of that injunction. See Fonar, 1997 at *4 (injunctions in copyright cases must be specifically identifiable); see also Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41, 50 (2d Cir. 1996) (injunctive relief must be narrowly tailored to redress specific violations). While UJR seeks an injunction on behalf of its members, it has refused to provide a list of its membership. Without this information, this Court cannot issue an injunction that is both narrowly tailored, and sufficient to put the defendants on notice as to its scope. To the extent that any articles by UJR's members are published in the plaintiffs' publications, the injunction will prevent publishing such articles. To the extent that UJR members who have not been identified may publish articles in publications other than the plaintiffs', UJR has failed to suggest any means of the defendants being provided with the names of the authors who are members of the UJR and whose articles they are prohibited from publishing. Therefore UJR's request for an injunction is denied.</li> </ol>

Israeli Works
<li> Each of the works copied by the defendants from Balagan was authored by a staff writer or a free-lancer who was paid for producing the work. (Kanevsky Aff. at 4). Under Israeli law, "Subject to any agreement to the contrary, where an author is in the employment of some other person under a contract of service or apprenticeship and a work is made in the course of his employment, the person by whom the author is employed shall be the first owner of the copyright in that work." Joshua Weisman, "Israel" §4(1)(b) in 2 International Copyright Law and Practice (Paul Edward Geller ed. 1995); see also Israeli Copyright Act of 1911 §5(1)(b). Under Isreali law, no formal registration is required. Weisman, at §5(2). Therefore, the articles the defendants copied from Balagan and republished in Kurier are protected by Isreali copyright law.</li> <li> Israel has been a Berne Convention signatory since March 24, 1950. Id. at §3. As explained above, given that the articles copied from Balagan were first published in the United States or Isreal after 1950, and were written by Isreali nationals, they are Berne Convention works. Thus, the defendants have violated United States copyright law by reproducing those works without permission.</li> </ol>

The Defendants' Counterclaim
<li>The Kurier defendants have brought a counterclaim against the plaintiffs for tortious interference with contract. "Tortious interference with contract requires the existence of a valid contract between the plaintiff and a third party, defendant's knowledge of that contract, defendant's intentional procurement of the third-party's breach of contract without justification, actual breach of the contract, and damages resulting therefrom." Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 424, 646 N.Y.S.2d 76, 81-82, 668 N.E.2d 1370 (1996).</li> <li> The Kurier defendants allege that the plaintiffs interfered with an advantageous printing contract with Stellar Printing Company. However, at trial the Kurier defendants failed to provide any credible evidence that Kurier actually entered into such a contract with Stellar Printing Company to print other issues of Kurier, or that Steller Printing Company breached such a contract. Moreover, it cannot be reasonably argued that the plaintiffs would not have been justified in bringing the Kurier defendants' infringing activities to the attention of a printer who was about to print an infringing publication. Thus, the Kurier defendants failed to establish the elements of their claim for tortious interference with contract. The counterclaim is therefore dismissed. </li> </ol>

Damages
<li> As infringers of the plaintiffs' works, the defendants are liable for either 1) the plaintiffs' actual damages and the defendants' profits attributable to the infringements; or, at the plaintiffs' election prior to judgment, 2) an award of statutory damages with respect to those works that have been registered under the Copyright Act. 17 U.S.C. §504; see also Twin Peaks Productions, Inc. v. Publications International, Ltd., 996 F.2d 1366, 1380 (2d Cir. 1993); Rogers v. Koons, 960 F.2d 301, 312 (2d Cir.), cert. denied, 506 U.S. 934, 121 L. Ed. 2d 278, 113 S. Ct. 365 (1992). In this case, the plaintiffs have not attempted to prove actual damages. Moreover, of the 345 works for which the plaintiffs seek damages, they concede that they only registered 28 in a timely fashion, and are therefore only entitled to an election of statutory damages with respect to the 28 registered works. See July 18, 1986 letter of Al J. Daniel, Jr. to the Court. </li> </ol>

Actual Damages
<li>The plaintiffs bear the burden of proving the defendants' gross revenues. See 17 U.S.C. §504(b); see also In Design v. K-Mart Apparel Corp., 13 F.3d 559, 563-64 (2d Cir. 1994). The defendants then have the opportunity to demonstrate deductible expenses, and that some percentage of their profits was attributable to factors other than the use of the copyrighted works. See 17 U.S.C. §504(b); see also In Design, 13 F.3d at 564. "Any doubts resulting from an infringer's failure to present adequate proof of its costs are resolved in favor of the copyright holder." Id. at 564 (citing Gaste v. Kaiserman, 863 F.2d 1061, 1070-71 (2d Cir. 1988)); see also In Design v. Lauren Knitwear Corp., 782 F. Supp. 824, 832 (S.D.N.Y. 1991).</li> <li> The plaintiffs and the Kurier defendants were both woefully deficient in attempting to establish gross revenues and proper deductions. The plaintiffs attempted to show gross revenues by pointing to bank deposits. However, it is apparent that these calculations were inflated, because they failed to take into account transfers between accounts, withdrawals and redeposits. On the other hand, the plaintiffs' calculations were made difficult by the haphazard way in which Pogrebnoy kept his and Kurier's records. Pogrebnoy testified that he did not file a tax return in 1995. (July 16, 1996 Tr. at 296 [Pogrebnoy]). Pogrebnoy's accountant testified that Kurier has not filed tax returns for two years. (July 17, 1996 Tr. at 17 [Cohen]). When Pogrebnoy did file a tax return, he brought a shopping bag of miscellaneous records to the accountant from which to derive the necessary information. (July 17, 1996 Tr. at 19-21 [Cohen]).</li> <li> During his testimony, Pogrebnoy admitted that Kurier received about 10% of its income in cash, mainly from circulation and advertising revenue. (July 16, 1996 Tr. at 259 [Pogrebnoy]). He testified that he kept no records of any of this income because he deposited the money in a bank and believed that he could rely on the bank's records. (July 16, 1996 Tr. at 261 [Pogrebnoy]). He also testified that he does not bother to keep invoices, he just throws them away. (July 16, 1996 Tr. at 262-63 [Pogrebnoy]). This absence of records makes calculating the amount of cash Pogrebnoy received problematic.</li> <li> Pogrebnoy's calculation of Kurier's expenses was inflated and unreliable because he pays many of his personal expenses out of Kurier's income. For example, Pogrebnoy considers his apartment to be an office, even though his employees work out of a separate office, and Kurier pays a portion of his rent. (July 16, 1996 Tr. at 272-77 [Pogrebnoy]). Kurier also pays for his automobile. (July 16, 1996 Tr. at 291 [Pogrebnoy]). Kurier also pays the veterinary bills of guard dogs that are sometimes kept at Pogrebnoy's apartment. (July 16, 1996 Tr. at 303 [Pogrebnoy]). Kurier also pays the cable television and phone bills for Pogrebnoy's apartment. (July 16, 1996 Tr. at 304 [Pogrebnoy]).</li> <li> Despite this cavalier and less than credible testimony by Pogrebnoy, the plaintiffs have established that Kurier's profits were at least $ 2.0 million for the years 1994, 1995 and the first half of 1996, which is the period when the overwhelming amount of the infringements occurred. This estimate is based on Pogrebnoy's own testimony that Kurier earns $ 100,000 to $ 120,000 per month in advertising, that it earned less in the previous years, and that it loses money on its circulation revenues after taking into account costs such as printing. (July 15, 1996 Tr. at 56 [Pogrebnoy]). Kurier's printing costs in 1995 and 1996 totaled $ 696,158.24. (Affidavit of Anton Chan ("Chan Aff.") at P32).</li> <li> As explained above, the plaintiffs are entitled to the portion of this revenue that is attributable to the defendants' infringement, and the burden is on the defendants to prove that some portion of their profits was not the product of their wrongful conduct. While the Kurier defendants have infringed upon the plaintiffs' copyrights to hundreds of articles, this represents only a small percentage of the total number of articles published in Kurier. (July 15, 1996 Tr. at 32-33 [Pogrebnoy]). Nevertheless, the copying was plainly substantial, continuous, and systematic, and was used both to fill the publication and to build its sales.</li> <li> The Kurier defendants assert that they have continued profitably to publish and sell their newspaper after the preliminary injunction without using the publications that obtained the preliminary injunction. (July 15, 1996 Tr. at 29 [Pogrebnoy]). The Kurier defendants argue that this continued success demonstrates that the appropriation of the plaintiffs' articles was not responsible for Kurier's profitability. However, the fact remains that the Kurier defendants used the plaintiffs' publications to build their circulation and sell advertising in those issues. Having copied the plaintiffs' articles, the Kurier defendants cannot now prove that they would have achieved the same financial success had they not infringed on the plaintiffs' copyrights. Moreover, Kurier continued to publish, without permission, articles from the publications of plaintiffs not covered by the preliminary injunction.</li> <li> Courts have attributed very high percentages of an infringer's profits to the infringement when the infringing material was repackaged and sold by the infringer in almost the same form in which it was created. See Gaste, 863 F.2d at 1070 (affirming jury's decision that 88% of the infringer's profit was attributable to the infringing); see also Sygma Photo News, Inc. v. High Society Magazine, Inc., 778 F.2d 89, 96 (2d Cir. 1985) (finding that 50% of a magazine's sales could be attributed to the use of one infringing photo). A lower percentages is appropriate when the infringing material clearly only contributed to a small percentage of the profits. See Love v. Kwitny, 772 F. Supp. 1367, 1370-71 (S.D.N.Y.  1991), aff'd., 963 F.2d 1251 (2d Cir.), cert. denied, 506 U.S. 862, 121 L. Ed. 2d 127, 113 S. Ct. 181 (1992) (2.3% of profits attributable to infringement). Given the defendants' willful, blatant, continuous and extensive copying from the plaintiffs, 25% of the Kurier defendants' $ 2.0 million profits can reasonably be attributed to their infringement of the plaintiffs' copyrights. Therefore, the plaintiffs are entitled to an award of $500,000 in actual damages.</li> <li>Calculating Linco's profits is far more straight-forward, because Linco carefully kept its financial records. Linco only began printing Kurier in late 1994. (Chan Aff. at P16). The total net profit attributable to its printing of Kurier in 1995 was $ 6,588, and the total net profit attributable to Kurier in 1996 was $ 3,578, for a total net profit of $ 10,166. (Affidavit of Richard Pien at PP21-23).</li> <li> A lower percentage of Linco's profits from printing Kurier was attributable to the infringement of the plaintiffs' works than was true for the Kurier defendants. While the Kurier defendants used the infringing articles to sell and market Kurier as a whole, the presence of the infringing articles only affected Linco's profits to the extent that it increased the amount of pages Linco printed for Kurier. Therefore, only 10% of the $ 10,166 in profits Linco earned by publishing Kurier should be attributable to the infringement, and the plaintiffs are entitled to an award of actual damages of $ 1,017 against Linco.</li> </ol>

Statutory Damages
<li>The plaintiffs are also entitled to an alternative award of statutory damages, against all of the defendants, for the twenty-eight articles that have been registered. (See July 18, 1996 letter of Al J. Daniel to the Court). Unless the violation is willful, statutory damages are awarded in an amount of not less then $ 500 or more than $ 20,000 for infringement of a work. 17 U.S.C. §504(c)(1); see also D.C. Comics, Inc. v. Mini Gift Shop, 912 F.2d 29, 34 (2d Cir. 1990). Where the infringement was willful, the award may be increased to not more than $ 100,000. 17 U.S.C. §504(c)(2). "In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe his or her acts constituted an infringement of copyright, the court [in] its discretion may reduce the award of statutory damages to a sum of not less than $ 200." 17 U.S.C. §504(c)(2).</li> <li> "Relevant factors in determining the amount of statutory damages include the expenses saved and profits reaped by the defendants in connection with the infringements, the revenues lost by the plaintiffs as a result of the defendant's conduct and the infringers' state of mind." Broadcast Music, Inc. v. R Bar of Manhattan, Inc., 919 F. Supp. 656, 659-60 (S.D.N.Y. 1996); see also Fitzgerald Publishing Co., Inc. v Baylor Publishing Co., Inc., 807 F.2d 1110, 1117 (2d Cir. 1986). Moreover, "the potential for discouraging the defendant is factored into the determination of the award." Fitzgerald Publishing, 807 F.2d at 1117 (citing F.W. Woolworth Co. v. Contemporary Arts, Inc. 344 U.S. 228, 233, 97 L. Ed. 276, 73 S. Ct. 222 (1952)).</li> <li> It is plain that the violation of the plaintiffs' copyrights by the Kurier defendants was willful. The Kurier defendants cut out articles from the plaintiffs' publications without permission and with absolutely no claim of any right to use the articles. (UF at P25). When the New York correspondent for Moscow News called Kurier in 1993 or 1994 to complain about the use of one of his articles without permission, a person identifying himself as "Oleg," who said he was "in charge," and who was plainly the defendant Pogrebnoy, said "We take all our articles from the Russian press without paying." When the Moscow News correspondent threatened to sue, Pogrebnoy responded: "Go ahead and try; you'll never get a penny." (Declaration of Dmitry E. Radyshevsky at PP13-18).</li> <li> Similarly, a representative of Itar-Tass called Pogrebnoy after Itar-Tass's articles began to appear in Kurier and offered him a subscription. (July 9, 1996 Tr. at 1209 [Klimentov]). When Pogrebnoy did not respond, the representative called Pogrebnoy back and told him it was not legal to use Itar-Tass's articles and that Itar-Tass would consider taking legal action if Pogrebnoy did not stop. ((July 9, 1996 Tr. at 1209 [Klimentov]). The representative testified that Pogrebnoy responded that "we could take any steps we found fit, but it will lead us nowhere and we will not get a penny." (July 9, 1996 Tr. at 1209-10 [Klimentov]). Pogrebnoy continued to copy the articles.</li> <li> Given that the Kurier defendants' violations were willful, the plaintiffs are entitled to statutory damages of up to $ 100,000 per infringement. While there are 28 eligible articles, each article is not separately compensable. "all parts of a compilation or derivative work constitute one work." [17 U.S.C. §504(c)(1); see also Twin Peaks, 996 F.2d at 1381. Therefore, the relevant issue is how many "works" were infringed upon, not how many copyrights were violated. See Twin Peaks, 996 F.2d at 1381. Copying a series of photographs that were originally published in one book is considered one infringement. See Stokes Limited v. Geo. W. Park Seed Co., Inc., 783 F. Supp. 104, 107 (W.D.N.Y. 1991). Therefore, the 28 registered articles, which originally appeared in 15 different publications of the plaintiffs, warrant 15 awards of statutory damages. </li> <li> Based on the factors enumerated above, the appropriate statutory award for each violation is $ 2,700. This figure is designed to reflect the portion of the Kurier defendants' profits that can be attributed to each infringement for which statutory damages can be awarded. It is also intended to provide the necessary deterrence. The five plaintiffs who are eligible to elect to receive statutory damages can therefore choose between actual or statutory damages. </li> <li> However, because the plaintiffs cannot receive both actual and statutory damages for any one infringement, any infringement for which the plaintiffs receive statutory damages cannot be considered in awarding actual damages. Because this Court used the same considerations in calculating both the actual and statutory damages, any award of statutory damages the plaintiffs elect to receive would reduce their award of actual damages dollar  for dollar. Therefore, whether or not the five eligible plaintiffs elect to receive statutory damages, or actual damages, the plaintiffs are entitled to a total award of $ 500,000 against Kurier and Pogrebnoy. </li> <li>These five plaintiffs are also entitled to an award of statutory damages against Linco. There is, however, no evidence of willfulness on the part of Linco. Linco is a major printer that prints newspapers in many foreign languages. (Chan Aff. at PP8-9). Linco's testimony is that it did not know that Kurier did not have the right to publish the articles. (Chan Aff. at P21). While the plaintiffs argue that Linco should have been on notice of the infringement from the cut-and-paste nature of the layout sheets, such layout sheets were also used by Fromer & Associates, Inc. in publishing Pravda in the United States with the permission of Pravda.   (July 10, 1996 Tr. at 69 [Fromer]). Therefore, the use of cut-and-paste layout sheets did not indicate that Kurier did not have authorization to republish the articles. Moreover, after the entry of the preliminary injunction in this action, which did not apply to Linco, Linco had every reason to believe that Pogrebnoy would obey the Court's injunction. (Chan Aff. at PP 27-28).</li> <li> While its conduct was not willful, Linco is still liable as an infringer. "Even an innocent infringer is liable for infringement. Under §501(a) intent or knowledge is not an element of infringement." Fitzgerald, 807 F.2d at 1113; see also Lipton v. Nature Co., 71 F.3d 464, 471 (2d Cir. 1995). However, given the Linco is an innocent infringer, this Court will exercise its discretion to award the minimum statutory amount of $ 200, for each of the 15 violations, for a total award of $ 3,000. As explained above, the plaintiffs are not entitled to an award of actual damages for any violation for which they receive statutory damages. Therefore, to account for this award of statutory damages, the award of actual damages against Linco must be reduced from $ 1,017 to $ 934. Thus, the plaintiffs are  entitled to a total award of $ 3,934 against Linco, $ 3,000 in statutory damages and $ 934 in actual damages.</li> </ol>

Other Relief
<li>The plaintiffs are also entitled to a permanent injunction against Pogrebnoy, Kurier and Linco, enjoining them from copying or republishing any articles that have or will appear in the plaintiffs' publications. The plaintiffs should submit a proposed judgment with notice to all parties within seven days of the date of this opinion. The defendants may submit objections to the plaintiffs' proposed judgment and counter-proposals five days thereafter.</li> <li>The plaintiffs may submit a separate application for modest attorneys' fees. This application should take into account the small number of articles that were actually registered, because only registered articles are entitled to an award of attorneys' fees. See  Knitwaves, 71 F.3d at 1011. In ruling on such an application this Court would be guided by the factors set forth in Fogerty v. Fantasy, Inc., 510 U.S. 517, 114 S. Ct. 1023, 1033, 127 L. Ed. 2d 455 (1994).</li> </ol>

Conclusion
UJR is denied any relief for its claims against the defendants. Kurier, Pogrebnoy and Linco are each liable for violating the copyrights of all other plaintiffs. These plaintiffs are entitled to an award of $ 500,000 in damages against Kurier and Pogrebnoy and an award of $ 3,934 in damages against Linco. These plaintiffs are also entitled to a permanent injunction against Kurier, Pogrebnoy and Linco, enjoining them from copying or republishing any articles that have or will appear in the plaintiffs' newspapers. The plaintiffs should submit a proposed judgment with notice to all parties within seven days of the date of this opinion. The defendants may submit objections to the plaintiffs' proposed judgment and counter-proposals 5 days thereafter. The plaintiffs may submit a separate application for attorneys' fees. SO ORDERED. Dated: New York, New York

March 10, 1997

John G. Koeltl

United States District Judge