Free Trial Brief - District Court of Arizona - Arizona

1 MESCHKOW & GRESHAM, P.L.C. 3 Suite 409 4
5727 North Seventh Street

2 Lowell W. Gresham (AZ Bar No. 009702)
Phoenix, Arizona 85014-5818 (602) 274-6996

Jordan M. Meschkow (AZ Bar No. 007454)

5 (602) 274-6970 (facsimile)
Attorneys for Plaintiff

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7 Nancy R. Giles (AZ Bar No. 020163) 8 Phoenix, Arizona 85007 9 (602) 252-1788 10 11 12 13 UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Case No.: CV-04-0621 PHX SRB
Attorney for Plaintiff 733 West Willetta Street

GILES LEGAL, P.L.C.

DAN COOGAN, doing business as 14 COOGAN PHOTOGRAPHIC, 15 16 17 v. 18 AVNET, INC., et al., 19 20 Defendants. Plaintiff,

PLAINTIFF DAN COOGAN'S RESPONSE TO DEFENDANTS' SUPPLEMENTAL TRIAL MEMORANDUM

Plaintiff Dan Coogan ("Coogan") hereby submits a Response to Defendants'

21 Supplemental Trial Memorandum because it is incorrect in its facts and its application of 22 law. 23 24 25 26 27
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I.

DEFENDANTS' ASSERTIONS THAT PLAINTIFF DISCLOSED TWO OR HIS ARGUMENTS FOR THE FIRST TIME EIGHT DAYS BEFORE TRIAL IS FALSE. 1 A. Plaintiff Has Disclosed and Pursued a Theory of Contributory Infringement, As Well As His Related Damages, Throughout This Case.

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Notably, the two theories that Defendants have chosen to attack on the eve of trial are the two theories upon which Plaintiff's highest damages calculations are based.
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In addition to providing pertinent information in his Amended Complaint, Plaintiff

2 also timely disclosed facts, holdings, and case law based solely on contributory and/or 3 vicarious theories of law, as well as damages calculations in excess of $20,000,000. 4 Moreover, Plaintiff disclosed evidence establishing that these legal theories and 5 calculations applied in April 2006, at the latest--Plaintiff could not establish contributory 6 or vicarious liability before Avnet complied with its discovery and made sufficient 7 admissions to trigger both theories' application. 2 As shown below, Plaintiff has made 8 more than 35 formal disclosures in this litigation, in which, inter alia, Plaintiff disclosed 9 his facts and legal theories supporting a finding of contributory and/or vicarious liability: 10 1. As one example in both the Complaint and the Amended Complaint,

11 Paragraph 54 states clearly, "All of Defendants' use of Plaintiff's photographs . . . in any 12 third party use... is infringing...." 13 2. In February 2005 Plaintiff sought electronic data regarding Avnet's use of

14 his photographs. After months of discovery disputes, on October 17, 2005, Defendants 15 sent a letter to Plaintiff explaining "Enclosed please find a number of documents as well 16 as a disc containing Avnet's electronic files relating to Avnet's uses of your client's 17 photographs... The enclosed disc contains copies of the log files showing the various 18 uses of the photographs at issue. It also includes electronic copies of the 2002 and 2003 19 Annual Report as well as the electronic log files for those documents. In an effort to 20 conserve paper (and based in part on our conversation the other day in which you 21 indicated that producing reams of paper was unnecessary), I have not provided hard 22 copies of the electronic log files. They are simply massive and, if printed, would easily 23 constitute several thousand pages worth of data." See Exhibit 1, Bates numbers CGN 24 07619 to CGN 07630. 25 26 27 Defendants' arguments regarding untimely disclosure are particularly egregious given their abhorrent behavior throughout this case with regard to discovery and refusing to 28 produce highly relevant documents.
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3.

In December 2005, Avnet admitted

· that the Stevie Award it won concerning its website covered the Avnet website for 2003. See Avnet's Response to Plaintiff's Third Request for Admission to Defendant Avnet, Inc., incorporated by reference herein to Document 180 ("Document 180"), at #33. · that the Reuters report on Avnet winning a Stevie Award, stating "Avnet was recognized for providing Avnet.com visitors with more comprehensive, helpful information than many other corporate sites, including expanded Investor Relations content and the addition of Press Room and Quality sections" was true. (Emphasis added). See Document 180 at #36. · that during the time the Avnet website provided "Avnet.com visitors with more comprehensive, helpful information than many other corporate sites, including expanded Investor Relations content and the addition of Press Room and Quality sections", at least one of Plaintiff's Photographs was on the Press Room page of Avnet's website. See Document 180 at #39. 4. In Plaintiff's Twenty-Sixth Disclosure Statement served April 14, 2006 3

17 Plaintiff disclosed to Defendants, among other items, the following: 18 19 20 21 22 23 24 25 26 27 28
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· The download histories Avnet has admitted to for each of Plaintiff's images, or documents with Plaintiff's images (excepting download histories from www.avnet.tv, which Defendants state are unavailable), Bates numbered CGN 01807 to CGN 07618; · A copy of the above 17 October 2005 letter from defense counsel detailing the above facts, as Bates numbers CGN 07619 to CGN 07630; · That Avnet requested that an Avnet cooperative entity purge records relating to Plaintiff's photographs, making them unavailable for discovery (Bates numbers CGN 07619 to CGN 07630);

A later updated version addressed an error in Bates No. identification only.
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· A copy of an 11 November 2005 letter from defense counsel detailing that the data on the CD-ROM provided by Avnet with the 17 October 2005 (17 November 2005 ­ sic) letter from defense counsel has some incorrect data and some data is unavailable for discovery (Bates numbers CGN 07631 to CGN 07633); · Avnet's website Home Page Press Room page, Bates numbered CGN 07634, stating to visitors "We hope you will find this site user-friendly and helpful in doing your job..." and explaining to them how Avnet has "...included links to our latest press releases and press coverage, and photos and logos that you can download and use for print purposes (.eps or .tif versions) or Web postings (72 dpi versions). You're able also to link to the Investor Relations and Community Relations Web pages." · Avnet's website Home Page Investor Relations page, Bates numbered CGN 07635, with a direct link to the Press Room page; · Avnet's website Home Page Community Relations page, Bates numbered CGN 07636, with a direct link to the Press Room page; · A proprietary tally 4 of the download histories Avnet has admitted to for each of Plaintiff's images or documents with Plaintiff's images (excepting downloads from www.avnet.tv, which records are unavailable) prepared by expert witnesses at Forensics Consulting Solutions, L.L.C., marked confidential and Bates numbered CGN 07637; Taken with Bates numbers CGN 07634, 07635 and 07636, this shows how willful copyright infringer

vallee_r_small.jpg (the home page image) @ 87,439; thumbnails_roy_vallee_board.jpg (aka roy_vallee_board.jpg, the Board of Directors page image) @ 7,287; vallee_r.jpg (the Bio page image) @ 6,246; 72dpi_roy_vallee_board.jpg (aka roy_vallee_board-big.jpg, the Bio page large image) @ 263; tif_300dpi_roy_vallee_board_tif (large size TIFF, aka tif_300dpi/roy_vallee_board.tif) @ 156; loginimage.gif @ 1,181; townhall_fy04q2.gif @ 64 and LaunchWebinar2.jpg @ 10; totaling 102,646, plus 63,970 downloads of 2002 Annual Reports and 15,950 of the later-issued 2003 Annual Report, both with Plaintiff's photograph, for a grand total of 182,566
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Avnet put forth a "device" (its website with the Press Room) with "the object of promoting its use to infringe copyright" in Plaintiff's photographs, "as shown by clear expression or other affirmative steps taken to foster infringement" of Plaintiff's photographs. See Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, LTD, 125 S.Ct. 2764 (2005). · IP address search facilities covering the IP addresses included in the download histories Avnet has admitted to for each of Plaintiff's images or documents with Plaintiff's images (excepting download histories from www.avnet.tv, which Defendants state are unavailable), Bates numbered CGN 07640 to CGN 07644; · IP address identifications for many of the IP addresses of the entities themselves, and many entity servers identified by the download histories Avnet has admitted to for each of Plaintiff's images or documents with Plaintiff's images whose subscribers downloaded Plaintiff's images or documents with Plaintiff's images from the Avnet, Inc. website (excepting download histories from www.avnet.tv, which Defendants' state are unavailable), Bates numbered CGN 07645 to CGN 08836, and others; In Plaintiff's Motion In Limine To Exclude Assertions By Defendants

19 Contrary To Prior Admissions and Reply thereto, Documents #180 and #194, 20 respectively, as well as Plaintiff's Response to Defendants' Motion to Withdraw 21 Admissions..., Document #196, incorporated herein by reference, Plaintiff set forth 22 detailed arguments about Defendants' web uses of Plaintiff's photographs, and the 23 extensive damages that would arise due to these photographs having been available for 24 thousands of free downloads. 25 6. In Plaintiff's Proposed Findings of Fact and Conclusions of Law, filed June

26 22, 2006, Plaintiff included the following under Actual Damages: 27 28 · Avnet displayed Plaintiff's photographs, and made them available for download on its home page and secondary web pages, knowing and inviting
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visitors to avnet.com, and knowing its sub-domains would display Avnet's web pages and Plaintiff's photographs on its home page, and would place secondary web pages on visitors' screens, and in visitors' video display memory, random access memory, and or/or fixed disk memory, thus causing each visitor to infringe. Avnet caused, allowed, benefited, profited and contributed to each visitor's infringement(s) while declining to exercise the right to stop or limit it. "One who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another," is held liable as a contributory infringer. Casella v. Morris, 820 F.2d 362, 365 (11th Cir. 1987). Avnet is, therefore, jointly and severally liable for each visitor's infringement and all visitors' infringements. Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 261 (9th Cir. 1996). · Avnet provided its website to the public, including a virtual Press Room, a feature not only allowing display of Plaintiff's photographs, but also download capability of the photographs on its home page and secondary web pages, and knowingly invited visitors to avnet.com and sub-domains to display Avnet's web pages and Plaintiff's photographs and to download Plaintiff's photographs. Avnet benefits from its website in providing information to customers that buy its goods and services, investors, analysts that sell its stock, and others, and is certainly vicariously liable for each visitor's infringement. Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, LTD, 125 S. Ct. 2764 (2005). Even during the brief time period from February 5 to February 25, 2004, Avnet had over one million visitors to its web site on which Plaintiff's Photograph was displayed and available. · Avnet logs show that it allowed at least 105,323 5 downloads of Plaintiff's photographs from its website(s). 2,677 of these downloads inadvertently included Annual Reports, which by themselves total an additional 79,920 downloads.
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· Maag, in his time-of-contract email, offered to pay $500 if the photos were "used by a publication outside our industry", thus indicating "what a willing buyer would have been reasonably required to pay to a willing seller for [the owner's] work." Mackie v. Riser, 296 F.3d 909, 917 (9th Cir. 2002) (quoting Sid & Marty Krofft Television Prods., Inc. v. McDonald's Corp., 562 F.2d 1157, 1174 (9th Cir. 1977)). Such Press Room and website download "use" encompasses these multiple distributions, each of which is worth a minimum of the $500 fee offered by Maag. · Plaintiff's damages are $5,266,500.00 6 , according to Avnet's allowed downloads and its offered amount of $500 each. 7 7. In Plaintiff's Trial Memorandum, filed June 26, 2006, Plaintiff stated

12 "Here, indirect profits apply, as Defendants certainly derived vicarious and/or 13 contributory value from them. Casella v. Morris, 820 F.2d 362, 365 (11th Cir. 1987); 14 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, LTD, 125 S. Ct. 2764 (2005). Avnet is 15 jointly and severally liable for each and all such infringements (Fonovisa, Inc. v. Cherry 16 Auction, Inc., 76 F.3d 259, 261 (9th Cir. 1996)), and Plaintiff has shown the requisite 17 causal nexus for recovering Avnet's indirect profits..." 18 8. Defendants have known since this litigation began that Al Maag offered to

19 pay $500 if the photos were "used by a publication outside our industry." See Amended 20 Complaint, Exhibit 53. Putting these images out to downloaders is use (reproduction) by 21 a publication (i.e., a distribution) outside Avnet's industry and, therefore, entitled 22 Plaintiff to damages. 23 9. In Plaintiff's Second Updated Rule 26(A)(1) Disclosure Statement dated

24 May 27, 2005, Plaintiff stated "Defendants' actions have caused Plaintiff irreparable 25 harm, as well as economic damages; however the amount of damages has not yet been 26 Plaintiff's counsel apologizes for a typographical error and a math error. The number 27 should have read $52,665,000.00 and, at the correct tally of 102,646, this should be $51,323,000. 28 7 See Amended Complaint at pages 12, 13, and 30-32.
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1 fully ascertained. Moreover, since part of Plaintiff's damages are based on defendants' 2 profits over and above Plaintiff's actual damages, and because Plaintiff can elect instead, 3 statutory damages, these amount of damages have not yet been fully ascertained either, 4 but both are estimated to over $20,000 and as much as over $1,000,000.00." (Bold used 5 in original to indicate change.) 6 II. 7 8 DOWNLOADS OF PLAINTIFF'S PHOTOGRAPHS FROM AVNET'S WEB SITE ARE RELEVANT TO PLAINTIFF'S DAMAGES FOR BREACH OF CONTRACT. As Plaintiff has stated repeatedly, Plaintiff's damages are between $20,000 and

9 $51,323,000 for damages under the contract, as well as actual damages under the 10 Copyright Act. See, e.g., Plaintiff's Second Updated Rule 26(A)(1) Disclosure Statement, 11 dated May 27, 2005. As Defendants also are fully aware, these numbers arise in large 12 part from the parties' contract strict prohibition of third party transfers. See, e.g., 13 Amended Complaint (clearly setting forth Defendants' breach of the no-third-party 14 transfer provision of the contract in Count IV, beginning at paragraph 89). In direct

15 violation of the contract, as pointed out since Plaintiff filed his Amended Complaint in 16 this case, Avnet, among other things, actively encouraged infringing third-party transfers 17 on its website, posting Plaintiff's photographs there, in flagrant disregard of Plaintiff's 18 contract and copyright rights and must pay damages for such. Thus, Defendants'

19 statements that a damage claim and theory of liability based on contributory or vicarious 20 liability is new, or first disclosed in a revised draft of the parties' Proposed Joint Pre-trial 21 Order, are false. 22 III. 23 24 25 26 27 28
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AS PART OF HIS COPYRIGHT INFRINGEMENT ACTION, PLAINTIFF CAN RECOVER ACTUAL DAMAGES ON A PER-THIRD-PARTY BASIS BECAUSE AVNET WAS CONTRIBUTING TO THIRD PARTIES' INFRINGEMENT WHILE AVNET WAS ALSO COMMITTING ITS OWN INFRINGEMENT. In addition to, or in place of, breach of contract damages, as Plaintiff has stated

repeatedly, Plaintiff's $20,000 to $51,323,000 also arise from Defendants' willful

1 copyright infringement. See Plaintiff's Second Updated Rule 26(A)(1) Disclosure 2 Statement, dated May 27, 2005 and the Amended Complaint. 3 Defendants cite no less than three cases for the proposition that "[i]f Plaintiff

4 elects statutory damages he is entitled to only one award for infringement of a single 5 work." Defendants' Supplemental Trial Memorandum, Document #259, at 3. 6 Defendants, however, in an apparent attempt to limit their immense exposure in this case 7 right before trial, completely misstate the issue. Plaintiff does not seek multiple statutory 8 awards from this Court, as Defendants claim. Rather, Plaintiff seeks to have the statutory 9 minimum value used as a baseline value for actual damages for each third party infringer. 10 In other words, the $200 statutory minimum, of which Defendants admit awareness, is 11 not be used for multiple statutory awards; it is being used for a "floor" value. 8 12 Avnet not only permitted third parties to infringe, but through press releases and

13 award announcements over its Press Room actively invited them to download and 14 infringe, with Avnet contributing to their infringement just by putting up Plaintiff's 15 photographs and inviting third-parties to visit its site and download such. See Metro16 Goldwyn-Mayer Studios, at 801; see also Amended Complaint ¶¶ 50-53, 90-112, and 17 115-133 (showing, as has been shown throughout this case, that Avnet should have to pay 18 either (1) both Actual Damages and Profits for willfully using Plaintiff's photograph on 19 its products and services catalog-like website or (2) statutory damages for its willful 20 infringement). Thus, Plaintiff is seeking damages from Avnet, as he has sought

21 throughout this case, for not only Avnet's infringement, but the third-party infringements 22 Avnet facilitated. 23 IV. 24 25 26
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THE THIRD-PARTY DOWNLOADS OF PLAINTIFF'S PHOTOGRAPHS FROM AVNET'S WEB SITE ARE RELEVANT TO CALCULATING PLAINTIFF'S INDIRECT PROFITS DAMAGES. As Plaintiff has argued throughout this case, the owner of an infringed copyright

Alternatively, rather than a $200 baseline value, Plaintiff is willing to use the $500 per27 unit publication fee originally offered by Maag for Avnet's providing of Plaintiff's 28 photographs to any third party. See Exhibit 53 to the Amended Complaint.
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1 can recover the amount of the infringer's "direct" and "indirect" profits causally related 2 to the infringement. 17 U.S.C. § 504(c)(1); Polar Bear Productions, Inc. v. Timex Corp., 3 384 F.3d 700, 707 (9th Cir. 2004); Mackie v. Riser, 296 F.3d 909, 914 (9th Cir. 2002). 4 "Direct profits", which do not apply in this case, are generated by sales of the infringed 5 product. Mackie, 296 F.3d at 914; Polar Bear, 384 F.3d at 707-08. "Indirect profits", 6 however, are where the infringer "used the copyrighted work to sell another product". 7 Brian Andreas v. Volkswagen of America, Inc., 336 F.3d 789, 796 (8th Cir. 2003). Here, 8 indirect profits apply, as Defendants certainly derived vicarious and/or contributory value 9 from them. Casella v. Morris, 820 F.2d 362, 365 (11th Cir. 1987); Metro-Goldwyn-Mayer 10 Studios, Inc. v. Grokster, LTD, 125 S. Ct. 2764 (2005). While Plaintiff's Trial

11 Memorandum could be the first time Plaintiff has used the word "contributory", Plaintiff 12 has pursued his theory of indirect profits arising from the value the photographs added to 13 Avnet's business since the beginning of this case and, indeed, the expert report of 14 Richard Weisgrau discusses this theory in detail, pointing out the benefit of "branding" a 15 company with a CEO's photograph and, thus, deriving indirect benefits and, indeed, 16 profits. See Supplemental Expert Witness Report of Richard Weisgrau covering copyright 17 damages and profits, and documents #184, 192, 208, 214, 219, and 231. Defendants have done 18 nothing more than taken the word "contributory" and attempted to persuade the court that 19 it somehow introduces a brand new theory of damages into the case. This assertion is 20 simply false. 21 Respectfully submitted this 16th day of July, 2006, 22 23 s/Jordan M. Meschkow 24 MESCHKOW & GRESHAM, P.L.C. 5727 North Seventh Street 25 Suite 409 26 ATTORNEYS FOR PLAINTIFF 27 28
Case 2:04-cv-00621-SRB 8050-01314003602 Document 261 10 Filed 07/16/2006 Page 10 of 11 Phoenix, Arizona 85014 Jordan M. Meschkow Nancy R. Giles GILES LEGAL, P.L.C. 733 West Willetta Street Phoenix, Arizona 85007 ATTORNEY FOR PLAINTIFF

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CERTIFICATE OF SERVICE I hereby certify that on July 16, 2006 I electronically transmitted the attached

3 document to the Clerk's Office using the ECF System for filing and transmittal of a 4 Notice of Electronic Filing to the following ECF registrants: 5 6 7 8 9 10 11 12 13 14 15 16 17 /s Jordan M. Meschkow 18 19 20 21 22 23 24 25 26 27 28
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Jordan Green Lawrence Palles FENNEMORE CRAIG 3003 North Central Avenue, Suite 2600 Phoenix, Arizona 85012-2913 Attorneys for Defendants and Nancy R. Giles GILES LEGAL, P.L.C. 733 West Willetta Street Phoenix, Arizona 85007 Attorney for Plaintiff