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Warner V Tusa Preliminary Inj Motion
Warner V Tusa Preliminary Inj Motion
1 TABLE OF CONTENTS
2 Page
3 MEMORANDUM OF POINTS AND AUTHORITIES............................................. 1
4 INTRODUCTION ....................................................................................................... 1
5 FACTUAL BACKGROUND...................................................................................... 3
6 A. Plaintiffs and Their Copyrighted Works ................................................. 3
7 B. Tusa’s History of Launching Infringing Streaming Services ................. 4
8 C. Altered Carbon Is Tusa’s Latest Infringing Streaming Service.............. 6
9 D. Tusa’s Expanding Network of Affiliates and Resellers Threatens
to Cause Plaintiffs Substantial, Ongoing, and Irreparable Harm............ 8
10
E. Tusa Knows What He Is Doing Is Illegal ............................................... 9
11
ARGUMENT ............................................................................................................. 10
12
I. PLAINTIFFS ARE LIKELY TO SUCCEED ON THE MERITS ................. 11
13
A. Plaintiffs Own or Control Valid Copyrights in the Works that
14 Tusa Exploits......................................................................................... 11
15 B. Tusa Directly Infringes Plaintiffs’ Exclusive Right of Public
Performance .......................................................................................... 12
16
II. PLAINTIFFS WILL SUFFER IRREPARABLE HARM ABSENT AN
17 INJUNCTION ................................................................................................. 14
18 III. THE BALANCE OF HARDSHIP FACTOR IS DECIDEDLY IN
PLAINTIFFS’ FAVOR. .................................................................................. 18
19
IV. AN INJUNCTION WILL SERVE THE PUBLIC INTEREST...................... 18
20
RELIEF REQUESTED ............................................................................................. 19
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A. Plaintiffs Request An Injunction That Protects Their Copyrights ........ 19
22
B. No Bond Should Be Required............................................................... 20
23
CONCLUSION .......................................................................................................... 20
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1 TABLE OF AUTHORITIES
2 Page(s)
3 FEDERAL CASES
4 Am. Broad. Cos., Inc. v. Aereo, Inc.,
5 573 U.S. 431 (2014) ....................................................................................... 12, 14
1 TABLE OF AUTHORITIES
(Continued)
2 Page(s)
3 Disney Enters., Inc. v. VidAngel, Inc.,
869 F.3d 848 (9th Cir. 2017) .......................................................................... 11, 19
4
5 Eldred v. Ashcroft,
537 U.S. 186 (2002) ............................................................................................. 19
6
Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC,
7
915 F. Supp. 2d 1138 (C.D. Cal. 2012) .............................................. 12, 14, 16, 17
8
Johnson v. Couturier,
9 572 F.3d 1067 (9th Cir. 2009) .............................................................................. 20
10
Kelly v. Primco Mgmt., Inc.,
11 No. CV-1407263 BRO, 2015 WL 10990368 (C.D. Cal. Jan. 12,
2015) ..................................................................................................................... 19
12
13 Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,
518 F. Supp. 2d 1197 (C.D. Cal. 2007) ................................................................ 18
14
Nat’l Football League v. PrimeTime 24 Joint Venture,
15
211 F.3d 10 (2d Cir. 2000) ................................................................................... 14
16
Paramount Pictures Corp. v. Omniverse World Television, Inc.,
17 No. 2:19-cv-01156-MWF-ASx, ECF No. 60 (C.D. Cal. Nov. 14,
18 2019) ....................................................................................................................... 2
19 Perfect 10, Inc. v. Amazon.com, Inc.,
20 508 F.3d 1146 (9th Cir. 2007) .............................................................................. 11
1 TABLE OF AUTHORITIES
(Continued)
2 Page(s)
3 Universal City Studios Prods. LLLP v. TickBox TV LLC,
No. 2:17-cv-07496-MWF-ASx, ECF No. 72 (C.D. Cal. Sept. 12,
4
2018) ........................................................................................................... 3, 12, 17
5
Warner Bros. Entm’t Inc. v. WTV Sys., Inc. (Zediva),
6 824 F. Supp. 2d 1003 (C.D. Cal. 2011) .............................................. 12, 14, 15, 16
7
Winter v. Nat. Res. Def. Council, Inc.,
8 555 U.S. 7 (2008) ..................................................................................... 11, 18, 19
9 WPIX, Inc. v. ivi, Inc.,
10 691 F. 3d 275 (2d Cir. 2012) ................................................................................ 14
11 FEDERAL STATUTES
12 17 U.S.C. § 101(2) ..................................................................................................... 12
13
17 U.S.C. § 106.......................................................................................................... 11
14
17 U.S.C. § 106(4) ........................................................................................... 3, 12, 14
15
17 U.S.C. § 117(c) ..................................................................................................... 18
16
17 17 U.S.C. § 410(c) ..................................................................................................... 11
18 17 U.S.C. § 502(a) ..................................................................................................... 10
19 17 U.S.C. § 504(c) ..................................................................................................... 17
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1 Plaintiffs have not authorized Tusa or any of his streaming services, including
2 Altered Carbon, to exercise any of their rights to the Copyrighted Works. Id. ¶ 4.
3 B. Tusa’s History of Launching Infringing Streaming Services
4 Altered Carbon is not Tusa’s first offering that infringes Plaintiffs’ rights.
5 Within the last year, Tusa has operated at least three other unauthorized streaming
6 services—Area 51, Singularity Media, and Digital UniCorn Media. Each time
7 Plaintiffs uncovered one of these services, Tusa took it offline, rebranded, and
8 launched a new service. Here is the history:
9 In June 2020, Plaintiffs confronted Tusa about his first infringing service,
10 which was called Area 51. Area 51 streamed live television channels over the
11 internet (an “IPTV,” or “Internet Protocol Television” service), as well as movies
12 and TV shows at the time customers demanded them (“VOD” for “video-on-
13 demand”). Van Voorn Decl. ¶ 30. Tusa used Area 51 to stream infringing
14 performances of the Copyrighted Works to Tusa’s paying subscribers via a custom
15 application and web player. Id. ¶ 30, Ex. 14. Tusa publicly flaunted his connections
16 to the illicit service and the apparent profits he was making. For example, his social
17 media profiles showed him purchasing luxury cars with customized Area 51
18 branding. Id. ¶ 31, Ex. 15.
19 Tusa shut Area 51 down soon after Plaintiffs contacted him. He then hired a
20 lawyer to negotiate a settlement with Plaintiffs. Id. ¶ 32.
21 At the same time he was professing to have learned his lesson, Tusa was
22 secretly rebranding his service so he could resume his infringing conduct. In July
23 2020, Tusa sent Area 51 subscribers an email, telling them a new service,
24 Singularity Media (“Singularity”), had “taken over” their accounts. Id. ¶¶ 33–34,
25 Ex. 16. The email provided instructions for downloading a Singularity IPTV
26 application, which Area 51 subscribers could access using their existing login
27 credentials. Id.
28
1 Plaintiffs learned what Tusa was up to and again demanded that he stop his
2 infringing activity. In July 2020, Tusa shut down Singularity. Id. ¶ 35, Ex. 17.
3 On October 12, 2020, Tusa entered into a settlement agreement with
4 Plaintiffs. Id. ¶ 36. Tusa agreed, among other things, to cease his infringing
5 conduct. Plaintiffs retained their right to sue Tusa in the event that he breached this
6 agreement (as he has done since). See Dkt. 1-1, Ex. B to Complaint (sealed).
7 Still, Tusa did not stop infringing. After the settlement agreement was
8 executed, Plaintiffs discovered that Tusa had launched yet another infringing
9 service—his third in less than six months. Tusa called this service Digital UniCorn
10 Media (“DUM”). Id. ¶ 37. DUM offered IPTV applications similar to Tusa’s two
11 preceding services. Id. ¶ 37, Ex. 18. Plaintiffs confirmed Tusa’s ownership of
12 DUM through his social media posts and registration of the DUM web domains, as
13 well as through internet protocol tracking. Id. ¶ 38, Ex. 19.
14 Plaintiffs demanded that Tusa shut down DUM. Id. ¶ 39. Through counsel,
15 Tusa denied responsibility for DUM so Plaintiffs sent a second cease-and-desist
16 letter, outlining his obvious ties to the service. The day after Plaintiffs sent this
17 letter, DUM went offline and Tusa posted the following farewell message to his
18 Instagram account:
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28 Id. ¶ 40, Ex. 20.
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11 Id.
12 Altered Carbon offers major networks, including ABC, NBC, CBS, and Fox,
13 as well as paid channels, such as BET, SyFy, USA Network, and premium channels
14 like HBO and Showtime. Id. ¶ 18. In addition, Altered Carbon provides daily
15 access to hundreds of live sportscasts and pay-per view events. Id. All of this
16 content is streamed in high definition and with little to no delay. Id. ¶ 18, Ex. 5.
17 Here is a screen capture of Columbia’s Spider-Man 2 streaming through one of the
18 fourteen Starz channels available on Altered Carbon, with even more of Plaintiffs’
19 popular Copyrighted Works—including Universal City Studios’ Miami Vice and
20 Knight Rider—listed as upcoming programming.
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10 Id. ¶ 17, Ex. 4.
11 Altered Carbon admits that it is the source of the infringing streams. In online
12 forums, Altered Carbon has distinguished itself from other IPTV services by stating,
13 “[w]e source everything ourselves” and claiming to be “one of two main suppliers
14 of all US channels.” Id. ¶ 21, Ex. 8. Tusa has even posted videos on social media
15 that show him sourcing Altered Carbon’s infringing content by wiring together
16 cable boxes. Id. ¶ 22, Ex. 9.
17 Tusa’s disregard for the law is flagrant. Tusa’s recidivism makes it clear that
18 he will not live up to his word to be out of the infringement business.
19 D. Tusa’s Expanding Network of Affiliates and Resellers Threatens to
Cause Plaintiffs Substantial, Ongoing, and Irreparable Harm
20
21 In addition to his own direct-to-consumer offering, Tusa is growing a network
22 of “affiliates” and “resellers” who market and promote Altered Carbon to attract
23 new subscribers to the illegal service. Van Voorn Decl. ¶ 25. Tusa uses his
24 affiliate/reseller network to expand the reach of his illegal service in two ways:
25 First, Tusa operates an affiliate referral program, which pays a commission to
26 any affiliate who encourages another individual to subscribe to Altered Carbon. Id.
27 ¶ 26. Affiliates register to participate in this program through the Altered Carbon
28 Websites and receive a customized sign-up link from Tusa. Id. ¶ 26, Ex. 12.
1 Affiliates then advertise Altered Carbon to members of their own social networks
2 and earn a commission whenever customers subscribe using the affiliates’ unique,
3 sign-up links. Id. ¶ 26.
4 Second, Tusa allows individuals to become resellers of Altered Carbon
5 subscriptions. Tusa’s “Reseller Plans,” available through the Altered Carbon
6 Websites, offer bundles of monthly subscription “credits.” Id. ¶ 27. The resellers
7 then sell the subscription credits to their own network of clients, who can exchange
8 each credit for a month of access to Tusa’s IPTV Service. Id. Tusa encourages
9 resellers to buy more credits by offering volume discounts. Id. For example, the
10 standard reseller plan includes 70 credits and wholesales for $450.00 ($6.42 per
11 credit); an “enhanced” reseller plan includes 150 credits and wholesales for $700.00
12 ($4.66 per credit). Id. ¶ 27, Ex. 13. Resellers can market and sell these credits to
13 end purchasers at a markup and pocket the difference. For example, if an
14 “enhanced” reseller buys 150 credits and resells them for $10 each, the reseller
15 makes $5.44 per credit. Id. Tusa, of course, makes money regardless of whether the
16 subscription credits actually get resold.
17 The affiliate/reseller programs benefit Tusa in two ways: (1) they expand his
18 customer base and profits, since every end purchaser has an incentive to continue
19 paying a monthly subscription to continue their illegal access to Tusa’s IPTV
20 Service; and (2) the affiliates and resellers put a buffer between Tusa and the end
21 purchasers, allowing him to operate in what he believes to be a clandestine fashion.
22 Meanwhile, the affiliate/reseller program multiplies the harms to Plaintiffs by
23 increasing the infringing reach of Tusa’s IPTV Services.
24 E. Tusa Knows What He Is Doing Is Illegal
25 Plaintiffs have confronted Tusa with evidence of his infringing conduct
26 multiple times. Each time, Tusa claims he is permanently shutting down his illegal
27 operation, only to resume it with a different name. Van Voorn Decl. ¶¶ 34, 37, and
28 41.
1 Tusa has tried to conceal his connections to Altered Carbon. See id. ¶ 42. For
2 example, Tusa has privacy protected all of the Altered Carbon Websites, relied on
3 cryptocurrency-based transactions with subscribers, and limited his personal
4 communication regarding the service to a private group on the encrypted messaging
5 platform, Telegram. Id. ¶ 42, Ex. 22.
6 Despite Tusa’s efforts to conceal his involvement with Altered Carbon, the
7 evidence makes it clear that he is responsible for this service, as he was for each of
8 its predecessors. Altered Carbon’s public-facing website (2pmtoforever.com) looks
9 virtually identical to the DUM website (dum.world). Accessing the Altered Carbon
10 service through a particular platform (“BlueStacks”) even results in a viewer/player
11 that features the same DUM logo, along with the Altered Carbon branding.
12 Likewise, Altered Carbon’s IP address, hosting service, and channel offerings 3 are
13 all consistent with Tusa’s past infringing services. See, e.g., id. ¶¶ 45–48, Exs. 24–
14 25. In his online chats, Tusa has made clear that he is the force behind Altered
15 Carbon. Id. ¶ 44, Ex. 23 (Tusa speaking on behalf of Altered Carbon in a Telegram
16 chat using his personal username (@krazinabox)). Additional evidence that
17 decisively identifies Tusa as Altered Carbon’s owner and operator is detailed in the
18 Declaration of Jan van Voorn (paragraphs 41 to 48).
19 Tusa’s ineffectual attempts to disguise his infringing activity do not change
20 his liability. Rather, his increased efforts to hide his involvement in Altered Carbon
21 show that he knows his conduct is unlawful.
22 ARGUMENT
23 The Copyright Act authorizes courts to grant injunctive relief “to prevent or
24 restrain infringement of a copyright.” 17 U.S.C. § 502(a). Plaintiffs meet the
25 standard for preliminary injunctive relief: “(1) [they are] likely to succeed on the
26
27 Altered Carbon’s channel offerings generally track those of Tusa’s past services,
3
and many of the advertisements that appear through those channels run in Naples,
28 Florida, where Tusa is located.
-10- Case No. 2:21-cv-05456-VAP-AS
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY INJUNCTION
Case 2:21-cv-05456-VAP-AS Document 13 Filed 07/08/21 Page 18 of 28 Page ID #:107
1 merits, (2) [they are] likely to suffer irreparable harm in the absence of preliminary
2 relief, (3) the balance of equities tips in [their] favor, and (4) an injunction is in the
3 public interest.” Disney Enters., Inc. v. VidAngel, Inc. (VidAngel II), 869 F.3d 848,
4 856 (9th Cir. 2017) (internal quotations omitted) (quoting Winter v. Nat. Res. Def.
5 Council, Inc., 555 U.S. 7, 20 (2008)).
6 I. PLAINTIFFS ARE LIKELY TO SUCCEED ON THE MERITS
7 Plaintiffs will succeed on the merits of their infringement claim because they
8 can easily show (1) “ownership of the allegedly infringed material” and (2) that
9 Tusa “violate[s] at least one exclusive right granted to copyright holders under 17
10 U.S.C. § 106.” VidAngel II, 869 F.3d at 856 (quoting Perfect 10, Inc. v.
11 Amazon.com, Inc., 508 F.3d 1146, 1159 (9th Cir. 2007)).
12 A. Plaintiffs Own or Control Valid Copyrights in the Works that Tusa
Exploits
13
14 Plaintiffs have included certificates of registration issued by the Copyright
15 Office for the Copyrighted Works identified in the Complaint with this filing. 4
16 Declaration of Rose Leda Ehler, ¶¶ 2-110; Exs. 1-109. The certificates create a
17 presumption of copyright validity and ownership. 17 U.S.C. § 410(c); United
18 Fabrics Int’l, Inc. v. C&J Wear, Inc., 630 F.3d 1255, 1257 (9th Cir. 2011); Disney
19 Enters., Inc. v. VidAngel, Inc. (VidAngel I), 224 F. Supp. 3d 957, 969 (C.D. Cal.
20 2016) (“Plaintiffs have sufficiently demonstrated ownership of the copyrighted
21 works identified in the complaint by providing certificates of registration issued by
22 the Copyright Office.”), aff’d, 869 F.3d 848 (9th Cir. 2017).
23
24
25
26 Exhibit A to the Complaint includes copyright registration information for Works
4
27 Warnerby
owned the Plaintiffs seeking preliminary injunctive relief (Disney, Paramount,
Bros., Universal, and Columbia) that have been publicly performed on
28 Altered Carbon.
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id. ¶ 22, Ex. 9. 7 Further, Tusa has acknowledged that “[w]e source everything
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ourselves.” Id. ¶ 21, Ex. 8. And an alias associated with the Altered Carbon
15
account on a private chat channel also explained that Altered Carbon is the source
16
for the streams:
17
just to let you know we are one of two main suppliers of all US
18 channels there are no others they just buy from us two. They are either
restreaming or reselling. We are the main directs for all US.
19
Tusa’s admissions that he is both the source of the infringing streams and the
20
party responsible for transmitting them to end users show he is directly liable for
21
violating Plaintiffs’ public performance right. 17 U.S.C. § 106(4); Am. Broad. Cos.,
22
573 U.S. at 443 (streaming copyrighted works over the internet to members of the
23
public violates the public performance right); see also Nat’l Football League v.
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7
“Courts have consistently relied upon evidence of downloads by a plaintiff’s
26 investigator to establish both unauthorized copying and distribution of a plaintiff’s
work.”
27 1641978, at *8Records
Arista LLC v. Lime Grp. LLC, No. 06 CV 5936 (KMW), 2011 WL
(S.D.N.Y. Apr. 29, 2011) (collecting cases); Arista Records LLC v.
28 Usenet.com, Inc., 633 F. Supp. 2d 124, 150 n.16 (S.D.N.Y. 2009) (“Courts routinely
base findings of infringement on the actions of plaintiffs’ investigators.”).
-13- Case No. 2:21-cv-05456-VAP-AS
MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY INJUNCTION
Case 2:21-cv-05456-VAP-AS Document 13 Filed 07/08/21 Page 21 of 28 Page ID #:110
1 PrimeTime 24 Joint Venture, 211 F.3d 10, 11 (2d Cir. 2000) (“a public performance
2 . . . includes ‘each step in the process by which a protected work wends its way to its
3 audience’” (citation omitted)).
4 II. PLAINTIFFS WILL SUFFER IRREPARABLE HARM ABSENT AN
INJUNCTION
5
6 The Altered Carbon service—like other online streaming services that courts
7 have analyzed—threatens the Plaintiffs’ business with irreparable harm. See, e.g.,
8 WPIX, Inc. v. ivi, Inc., 691 F. 3d 275, 285–87 (2d Cir. 2012) (finding extensive
9 irreparable harms caused by unlicensed internet retransmissions of live television
10 channels); BarryDriller, 915 F. Supp. 2d at 1147 (same); Nitro TV, 2020 WL
11 3124347, at *2 (finding Plaintiffs’ demonstrated irreparable harm for similar IPTV
12 service).
13 First, Tusa interferes with Plaintiffs’ basic right as copyright holders to
14 control “when, where, to whom, and for how much they will authorize transmission
15 of their Copyrighted Works to the public.” Zediva, 824 F. Supp. 2d at 1012. Tusa
16 usurps Plaintiffs’ control over the exercise of their exclusive rights by interfering
17 with Plaintiffs’ distribution strategies. Perkins Decl. ¶¶ 11–15. For example, Tusa
18 offers more channels and content than are available on any legitimate service. Tusa
19 is currently offering nearly 2,600 live channels. No licensed could offer a channel
20 package of that size, let alone at the same price. Van Voorn Decl. ¶¶ 17–19.
21 Moreover, when Tusa streams programming, he is not subject to any of the
22 limitations that apply to licensed services. For example, legitimate services are
23 subject to geographic restrictions, which only permit them to provide their
24 subscribers with those channels and Works authorized for each subscriber’s
25 particular geographic area. By contrast, Tusa streams multiple channels owned and
26 operated by the ABC, CBS, CW, NBC, and FOX networks, sourced from multiple
27 affiliate stations across the U.S., to Altered Carbon subscribers, wherever they are
28 located. This is not hypothetical—Altered Carbon streams Disney’s recent release,
1 Cruella, when that title is currently available in the United States only in theaters
2 and for streaming exclusively on Disney+ (subscribers pay an additional fee for this
3 particular work). Id. ¶ 20, Ex. 7.
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17 Licensed cable or satellite providers are not able to provide the offerings that
18 Tusa does. Tusa thus appropriates for himself an unlawful competitive advantage
19 over licensees who follow the law. Perkins Decl. ¶¶ 16–18. Courts have confirmed
20 repeatedly that services that operate “without the normal licensing restrictions . . .
21 interfere with Plaintiffs’ ability to control the use and transmission of their
22 Copyrighted works, thereby, causing irreparable injury.” VidAngel I, 224 F. Supp.
23 3d at 975 (quoting Zediva, 824 F. Supp. 2d at 1012–13); Nitro TV, 2020 WL
24 3124347, at *2 (“Not only is Defendant directly infringing Plaintiffs’ copyrights,
25 creating a financial loss to Plaintiffs, but Plaintiffs have provided evidence that the
26 unlawfully distributed Copyrighted Works may undermine the value of Plaintiffs'
27 legitimate licenses.”).
28
1 meaningless, and the plaintiff will have no substantive relief, where it will be
2 impossible to collect an award for past and/or future infringements perpetrated by a
3 defendant.”).
4 The scope of foregoing harms caused by Tusa and those acting in concert
5 with him continues to grow, as the Altered Carbon’s network of affiliates and
6 resellers expands. Perkins Decl. ¶ 31. This is further reason that an injunction is
7 necessary to prevent the irreparable harm to Plaintiffs from Tusa’s illegal activity.
8 III. THE BALANCE OF HARDSHIP FACTOR IS DECIDEDLY IN
PLAINTIFFS’ FAVOR.
9
10 Before issuing a preliminary injunction, a court “must balance the competing
11 claims of injury and must consider the effect on each party of the granting or
12 withholding of the requested relief.” Winter, 555 U.S. at 24 (citation omitted).
13 The threat of harm to Plaintiffs is substantial. See Section II, supra. By
14 contrast, Tusa “cannot complain of the harm that will befall [him] when properly
15 forced to desist from [his] infringing activities.” Triad Sys. Corp. v. Se. Express
16 Co., 64 F.3d 1330, 1338 (9th Cir. 1995), superseded by statute on other grounds, 17
17 U.S.C. § 117(c); see Cadence Design Sys., Inc. v. Avant! Corp., 125 F.3d 824, 830
18 (9th Cir. 1997) (“[W]here the only hardship that the defendant will suffer is lost
19 profits from an activity which has been shown likely to be infringing, such an
20 argument in defense merits little equitable consideration . . . .” (citations omitted));
21 Apple Inc. v. Psystar Corp., 673 F. Supp. 2d 943, 950 (N.D. Cal. 2009) (“Since
22 [small start-up defendant] does not (and cannot) claim any legitimate hardships as a
23 result of being enjoined from committing unlawful activities, and Apple would
24 suffer irreparable and immeasurable harms if an injunction were not issued, this
25 factor weighs strongly in favor of Apple’s motion.”).
26 IV. AN INJUNCTION WILL SERVE THE PUBLIC INTEREST
27 Enjoining Tusa serves the public interest. Winter, 555 U.S. at 24.
28