Damages for Copyright Violation Can’t Be Wiped Out in Bankruptcy

Bloomberg Law’s® Bankruptcy Law News publishes case summaries of the most recent important bankruptcy law decisions, tracks major commercial bankruptcies, and reports on developments in bankruptcy...

By Diane Davis

A $4.4 million damages award for copyright and trademark infringement can’t be wiped out in a Chapter 7 debtor’s bankruptcy case, the U.S. Bankruptcy Court for the Middle District of Florida held ( China Cent. Television v. Bhalla (In re Bhalla) , 2017 BL 291130, Bankr. M.D. Fla., No. 8:16-ap-285-KRM, 8/18/17 ).

Amit Bhalla and his company Asha Media Group willfully and maliciously sold electronic devices with software that enabled customers to view for free television channels and programs sold by CCTV and TVB USA, the largest broadcasters of Chinese language television in mainland China and Hong Kong, Judge K. Rodney May wrote Aug. 18.

Bhalla and Asha Media intentionally engaged in acts that were certain to injure CCTV and TVB without just cause, the court said.

They sold an electronic device called “TVpad” with a USB drive pre-loaded with apps that enabled customers to access and view CCTV and TVB’s television programming without any fees or charges.

CCTV and TVB sued Bhalla and Asha Media in federal district court and obtained a judgment for $6.8 million for copyright damages, and $2.1 million for lost profits from trademark infringement.

After Bhalla filed for Chapter 7 liquidation, he tried to get the judgment discharged.

The court found that the judgment wasn’t dischargeable under Bankruptcy Code Section 523(a)(6) because Bhalla’s conduct was willful and malicious.

Bhalla knew that the TVpads and the infringing apps would be used by customers to gain free access to CCTV and TVB’s channels and protected programs, the court said. Bhalla deliberately and intentionally promoted their use, and continued selling them even after receiving several “cease and desist” letters, the court said.

The court also found that $5,000 per violation of the Copyright Act was appropriate, not $15,000. CCTV and TVB’s request for $2.1 million in profits from trademark infringement was reasonable based on sales revenues, the court said.

Sequor Law, PA, Miami, represented China Central Television, TVB Holdings (USA), Inc., Dish Network LLC; Astigarraga Davis Mullins & Grossman, PA, Miami, and Sequor Law, PA, Miami, represented China International Communications Co., LTD; Suzy Tate, P.A., Tampa, Fla., represented Amit Bhalla; Trustee Douglas N. Menchise, Clearwater, Fla., represented himself.

To contact the reporter on this story: Diane Davis in Washington at DDavis@bna.com

To contact the editor responsible for this story: Jay Horowitz at JHorowitz@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Bankruptcy Law News on Bloomberg Law