Urban Textile, Inc. v Rue 21 Inc. et al, No. 2:2014cv08285 - Document 112 (C.D. Cal. 2016)
Court Description: ORDER DENYING PLAINTIFFS MOTION FOR PARTIAL SUMMARY JUDGMENT 62 by Judge Otis D. Wright, II .(lc). Modified on 11/28/2016 (lc).
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Urban Textile, Inc. v Rue 21 Inc. et al Doc. 112 O 1 2 3 4 5 6 7 United States District Court Central District of California 8 9 10 11 Plaintiff, 12 13 Case 2:14-cv-08285-ODW (FFMx) URBAN TEXTILE, INC., v. ORDER DENYING PLAINTIFF’S MOTION FOR PARTIAL 14 15 RUE 21, INC.; MARK EDWARDS 16 APPAREL, INC.; and DOES 3-100, 17 inclusive, 18 SUMMARY JUDGMENT [62] Defendants. 19 20 21 I. INTRODUCTION 22 This case involves a fabric designer suing a manufacturer and a retailer for 23 copyright infringement. Plaintiff Urban Textile (“Urban”) contends that since some 24 time after December 5, 2013, Defendants Mark Edwards Apparel, Inc. (“Mark 25 Edwards”) and rue21, Inc. (“rue21”) have been making and distributing garments 26 featuring designs strikingly similar to Urban’s. 27 Uncontroverted Facts and Conclusions of Law (“SUF”) ¶¶ 15–22.) 28 (Plaintiff’s Statement of On November 25, 2015, Urban filed a Motion for Partial Summary Judgment, Dockets.Justia.com 1 asking this Court to find that Defendants willfully infringed its copyright as a matter 2 of law. (ECF No. 62.) At the parties’ request, the Court continued the hearing date 3 for the Motion for Partial Summary Judgment. (ECF No. 66.) On March 28, 2016, 4 the same day that the parties concluded their briefing for the Motion for Partial 5 Summary Judgment, Defendants filed a Motion for Issuance of a Request to the 6 Register of Copyrights and to Stay the Case Pending Response. (ECF No. 87.) The 7 Court granted the request, and on September 16, 2016, the Copyright Office filed its 8 response. (Response of the Register of Copyrights (“Response”), ECF No. 104.) 9 Taking into account the Copyright Office’s response and for the reasons 10 discussed below, the Court DENIES Plaintiff’s Motion for Partial Summary 11 Judgment. II. 12 FACTUAL BACKGROUND 13 There are twelve designs at issue in this case; their design names (as designated 14 by Urban) are: UB-4345; UB-4492; UB-4564; UB-5430; UB-4638; UB-4609; UB- 15 4670; UB-4672; UB-4701; UB-4690; UB-4694; and UB-4672. (SUF ¶ 2; see also 16 Opp’n Appendix, “Garment Chart,” ECF No. 77.) These designs are two-dimensional 17 artworks composed of various geometric patterns, brush strokes, and hand-drawn 18 ornamentations. (SUF ¶ 3.) Urban’s designer-employees created the designs, taking 19 inspiration and “source works” from paintings crafted by other design studios. (Id. 20 ¶ 4.) Urban purchased the source material and all corresponding rights from the 21 design studios. (Id. ¶ 5.) 22 A. Copyright Registration and Distribution of Designs 23 Urban registered its designs with the U.S. Copyright Office and received 24 registrations and U.S. Copyright numbers for each design. (Id. ¶ 11.) However, 25 Defendants argue that Urban failed to include signed assignments of the underlying 26 designs it used to create its own designs, falsely represented that the designs were 27 original and previously unpublished, and failed to disclose that certain elements of the 28 design are uncopyrightable or in the public domain. (See Opp’n 4–10.) Defendants 2 1 thus claim that the registrations are invalid. (Id.) 2 After registering the designs with the copyright office, Urban sent computer 3 files containing the designs to California Blue, Inc. (“CB”), a garment manufacturer, 4 for purposes of soliciting fabric purchases from CB. (Id. ¶ 15.) CB had a practice of 5 transmitting computer files of Urban’s designs to ultimate buyers of CB’s garments 6 for approval before deciding to purchase wholesale fabric from Urban. (Id. ¶ 16.) 7 Urban alleges that rue21 was one of CB’s buyers and that CB had a practice of 8 transmitting to rue21 examples of designs in deciding whether to purchase fabric. 9 (Id.) However, Urban does not specifically allege that CB transmitted the designs at 10 issue in this case to rue21. (See id.) 11 Neither CB nor rue21 ultimately purchased the designs from Urban. (Id. ¶¶ 17– 12 18.) However, after Urban transmitted the designs it learned that rue21 was selling 13 garments bearing designs that resembled Urban’s. (Id. ¶ 19.) rue21 received the 14 garments from manufacturer Mark Edwards, and it has sold the clothes featuring the 15 suspect designs in its retail locations nationwide and through its online store. (Id. 16 ¶ 20.) 17 B. 18 Ensuing Litigation and Copyright Office’s Response After discovering the garments resembling its designs, Urban commenced the 19 present action. 20 Judgment, Urban argues that it has proved as a matter of law its ownership of a valid 21 copyright and Defendants’ impermissible copying. (See Mot. 7–25.) Defendants 22 attacked these arguments and especially disputed whether Urban owned a valid 23 copyright. (See Opp’n 4–12.) Defendants also moved the Court pursuant to 17 24 U.S.C. § 411(b)(2) to inquire with the Register of Copyrights whether the allegedly 25 inaccurate and incomplete information in Urban’s copyright registration applications 26 would have caused the Register to refuse registration. (Mot. for Issuance.) The Court 27 granted Defendants’ Motion. (ECF No. 96.) 28 (See Compl., ECF No. 1.) In its Motion for Partial Summary In its Response, the Register states that it assumes the truth of Defendants’ 3 1 allegations for purposes of the Response but does not decide the truth of the 2 allegations. (Response 5.) The Register notes that based on the information provided 3 in Urban’s applications to register its copyrighted designs, the Copyright Office had 4 no reason to question the information and thus accepted it as true and accurate. (Id. at 5 6–9.) 6 The Response provides relevant rules and regulations pertaining to copyright 7 registration, particularly with respect to the issues at stake in this case. (Id. at 12–14.) 8 According to the Register, an applicant for a copyright registration who has been 9 assigned the rights to a copyrightable work must provide a brief statement that 10 explains “how the claimant obtained ownership of the copyright.” (Id. at 9.) The 11 Register outlines the Copyright Act’s definition of “published” for purposes of 12 registration, which is that works may be published through the “distribution of copies 13 or phonorecords of a work to the public by sale or other transfer of ownership, or by 14 rental, lease or lending.” (Id. at 9–10.) In addition, familiar symbols and designs such 15 as the chevron stripe are not eligible for copyright protection. (Id. at 10.) Further, 16 while a registration applicant need not exclude from his or her claim uncopyrightable 17 elements in a work (such as familiar symbols), the applicant should exclude 18 “previously published material, previously registered material, material that is in the 19 public domain, and material owned by someone other than the claimant named on the 20 application.” (Id.) 21 The Response describes the meaning of an “unpublished collection” in the 22 copyright registration context; this is the type of registration Urban used for all but 23 one (UB-4276) of the works at issue. (Id. at 11.) An unpublished collection is a type 24 of registration that the U.S. Copyright Office allows where an applicant can register 25 several previously unpublished works with only one application, filing fee, and set of 26 deposit copies. (Id.) 27 In their moving papers, Defendants argue that designs UB-4530, UB-4694, and 28 UB-4276 (“Published Designs”) are works that third parties had previously published, 4 1 then sold to Urban, and then Urban registered them to the Copyright Office without 2 altering the designs. (Id. at 5.) With respect to designs UB-4345, UB-4492, UB- 3 4638, UB-4609, UB-4670, UB-4672, UB-4701, and UB-4690 (“Derivative Designs”), 4 defendants further argue that those designs had previously been published by third 5 parties, that Urban then purchased them, that Urban made alternations, and that it then 6 registered the altered designs. (Id.) Finally, Defendants attack the registration for 7 design UB-4564 by alleging that it failed to disclaim the basic (uncopyrightable) 8 chevron element that is part of the design. (Id.) 9 In response, the Register found that it would have refused registration of the 10 Published Designs and the Derivative Designs if the Defendants’ assertions regarding 11 inaccurate and omitted information on the registration applications were true. (Id. at 12 12.) However, it found that Urban’s failure to disclaim the uncopyrightable portion of 13 UB-4564 (the chevron stripe) would not have been a basis for refusing registration, 14 because the design includes more than simply the stripe, and there are no other 15 contentions of inaccurate or omitted information as to the application for this design. 16 (See id.) 17 III. LEGAL STANDARD 18 Federal Rule of Civil Procedure 56(a) mandates that “the court shall grant 19 summary judgment if the movant shows that there is no genuine dispute as to any 20 material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. 21 P. 56(a). The moving party bears the initial burden of establishing the absence of a 22 genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 23 (1986). “When the party moving for summary judgment would bear the burden of 24 proof at trial, it must come forward with evidence which would entitle it to a directed 25 verdict if the evidence went uncontroverted at trial. In such a case, the moving party 26 has the initial burden of establishing the absence of a genuine issue of fact on each 27 issue material to its case.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 28 F.3d 474, 480 (9th Cir. 2000) (citations omitted). “In contrast, when the nonmoving 5 1 party bears the burden of proving the claim or defense, the moving party does not 2 need to produce any evidence or prove the absence of a genuine issue of material 3 fact.” See Novelty Textile Inc. v. Wet Seal Inc., No. CV1305527SJOMRWX, 2014 4 WL 10987396, at *2 (C.D. Cal. Sept. 9, 2014) (citing Celotex Corp., 477 U.S. at 325). 5 Rather, the moving party’s initial burden “may be discharged by ‘showing’–that is, 6 pointing out to the district court–that there is an absence of evidence to support the 7 nonmoving party’s case.” Id. 8 Once the moving party meets its burden, the opposing party must set out 9 specific facts showing a genuine issue for trial; merely relying on allegations or 10 denials in its own pleading is insufficient. See Anderson v. Liberty Lobby, Inc., 477 11 U.S. 242, 247–48 (1986). A party cannot manufacture a genuine issue of material fact 12 simply by making assertions in its legal briefs. S.A. Empresa de Viacao Aerea Rio 13 Grandense v. Walter Kidde & Co., Inc., 690 F.2d 1235, 1238 (9th Cir. 1982). Rather, 14 there must be specific, admissible evidence identifying the basis for the dispute. Id. 15 The Supreme Court has held that “[t]he mere existence of a scintilla of evidence . . . 16 will be insufficient; there must be evidence on which the jury could reasonably find 17 for [the opposing party].” Anderson, 477 U.S. at 252. IV. 18 DISCUSSION 19 To establish copyright infringement, a plaintiff must prove: (1) ownership of a 20 valid copyright; and (2) copying of the original elements of the work. See Acmet, Inc. 21 v. Wet Seal, Inc., No. CV1400048TJHAJWX, 2015 WL 10939901, at *1 (C.D. Cal. 22 May 12, 2015) (citing L.A. Printex Indus., Inc. v. Aeropostale, Inc., 676 F.3d 841, 846 23 (9th Cir. 2012)). 24 To meet its burden at the summary judgment stage, Urban must show the 25 existence of both elements for each of the designs at issue. The Court finds that it has 26 not met this burden as to at least one of the elements for each of the designs. The 27 Court organizes its analysis using the Register of Copyrights’ groupings of designs 28 (Published Designs, Derivative Designs, and UB-4564). 6 1 A. Published Designs 2 For this group of designs, the Court finds that Urban has not met its burden as 3 to the first element—ownership of a valid copyright. While Urban is correct that its 4 registration of the designs within five years of their publication constitutes prima facie 5 evidence of the validity of the copyrights, 17 U.S.C. § 410(c), Defendants have 6 provided adequate evidence to overcome this prima facie case and raise a genuine 7 question as to the validity of Urban’s copyrights. 8 copyright registrations, which state that the designs are each original, unpublished 9 works made for hire and authored by Urban (Copyright Registrations, ECF No. 78 10 Exs. 2–11), with receipts from assignments of copyright, establishing that Urban 11 acquired by assignment pre-published works that it later registered. (See Assignments 12 of Copyright, Exs. 15–25, ECF No. 78.) Defendants compare Urban’s 13 This contrasting evidence shows that there is a real issue as to whether Urban 14 should have been allowed to register its copyrights, and thus whether it owns valid 15 copyrights on the designs at issue. The Register of Copyrights has affirmed that if 16 Defendants’ claims are true and had been known to the Copyright Office at the time of 17 registration, it would have refused registration. (Response 12.) 18 Importantly, however, Defendants’ evidence does not go so far as to establish 19 invalidity of the copyrights. Questions of fact remain as to whether and to what extent 20 Urban did alter the designs it acquired by assignment, and whether those alterations 21 made the designs registrable as new, unpublished copyrights. But Defendants raise 22 issues sufficient to make summary judgment inappropriate as to the Published 23 Designs. 24 Because the Court finds that there is a genuine issue of fact as to the first 25 element of copyright infringement, it declines to reach the second element for the 26 Published Designs. 27 B. 28 Derivative Designs The Court finds that there is also a genuine issue of fact as to the first element 7 1 of copyright infringement for the Derivative Designs. Again, Urban’s ownership of 2 copyright registrations is prima facie evidence of its ownership of a valid copyright, 3 but Defendants successfully raise issues of fact surrounding the registrations for the 4 Derivative Designs. Defendants note that the designs are based on source material 5 that Urban acquired by assignment (SUF ¶¶ 4–5) and that Urban failed to disclose the 6 existence of the underlying published designs in its applications. (See Copyright 7 Registrations.) 8 sufficiently departed from the underlying source material such that Urban need not 9 have declared the source in its applications, and thus summary judgment is 10 inappropriate for the Derivative Designs. Like the Published Designs, the Court 11 declines to address the second element of copyright infringement because summary 12 judgment would not be granted regardless of the outcome on that element. 13 C. There remains a question of fact as to whether Urban’s designs UB-4564 14 Unlike the other designs at issue, the Register of Copyrights did not find that it 15 would have refused to register this design if Defendants’ claims are true. UB-4564 16 consists of groupings of chevron stripes, with varying spacing between them, on a 17 dark background. An image of the fabric pattern is copied below. 18 19 20 21 22 23 24 25 26 27 28 8 1 2 The Register of Copyrights did note that the chevron stripe is a familiar symbol 3 that is uncopyrightable. (Response 10.) But while the Copyright Office will not 4 register claims in familiar symbols and designs by themselves, it will register a claim 5 that includes a familiar symbol but as a whole contains a sufficient amount of creative 6 authorship. (Id.) 7 Even still, the Court agrees with Defendants that UB-4564 is likely only entitled 8 to “thin” copyright protection. (See Def. Supp. Br. 6, ECF No. 108); Ets-Hokin v. 9 Skyy Spirits, Inc., 323 F.3d 763, 766 (9th Cir. 2003). The Ninth Circuit has found that 10 where copyrighted material consists primarily of unprotectable, unoriginal elements, 11 the copyright holder is left with only a “thin” copyright. Ets-Hokin, 323 F.3d at 766; 12 see also Apple Comp. Corp. v. Microsoft Corp., 35 F.3d 1435, 1439 (9th Cir. 1994). 13 A “thin” copyright protects against only virtually identical copying. Id. 14 The “virtually identical” standard is narrower than the traditional standard for 15 assessing similarity between two works. See L.A. Printex Indus., Inc., 676 F.3d at 16 846. 17 disfavored. Spectravest, Inc. v. Mervyn’s Inc., 673 F. Supp. 1486, 1492 (N.D. Cal. 18 1987). The Ninth Circuit recently took this concept one step further, finding that it is 19 inappropriate for a district court to consider the issue of intrinsic similarity on a 20 motion for summary judgment because the test is quintessentially one for the trier of 21 fact. L.A. Printex Indus., Inc., 676 F.3d at 852 (“on a summary judgment motion, a 22 court’s attempt to apply this subjective and fact-oriented standard, bypassing decision 23 by the trier of fact, is not correct”); see also Braham v. Sony/ATV Music Publ’g, No. 24 215CV8422MWFGJSX, 2015 WL 7074571, at *5 (C.D. Cal. Nov. 10, 2015) (ruling 25 that the intrinsic test is always left to the factfinder). Under the traditional standard, summary judgment on the issue is usually 26 In light of the Ninth Circuit’s determination, the Court cannot determine, as a 27 matter of law, that the allegedly infringing garments bear a pattern that is “virtually 28 identical” to Urban’s fabric design UB-4564. As such, the Court denies Plaintiff’s 9 1 Motion for Partial Summary Judgment as to this design. Because summary judgment 2 is not appropriate on the issue of similarity, the Court does not address the other 3 required elements for a finding of infringement. 4 D. Defendants’ Request for Summary Judgment 5 As discussed above, while Defendants’ claims raise questions of fact sufficient 6 to overcome Urban’s Motion for Partial Summary Judgment, they do not prove that 7 the copyrights for the designs are invalid or that the UB-4564 design is unprotectable. 8 Questions remain as to whether and how much Urban altered the designs it acquired 9 by assignment, and whether those alterations made the designs registrable as new, 10 unpublished copyrights. Further, a trier of fact must decide the issue whether UB- 11 4564 is “virtually identical” to the allegedly infringing garments. 12 preclude summary judgment from being entered in Defendants’ favor as much as they 13 preclude summary judgment in favor of Urban. These issues 14 As a final matter, the Court declines to invalidate Urban’s copyright designs as 15 Defendants have requested. (See Def. Supp. Br. 8.) While discrepancies do appear on 16 Urban’s registration applications as compared with other source material regarding its 17 fabric designs, they are not such that the Court can decide with certainty at this time 18 that Urban’s registrations are invalid. 19 20 21 22 23 24 25 26 27 28 10 V. 1 2 3 CONCLUSION For the reasons discussed above, the Court DENIES Plaintiff’s Motion for Partial Summary Judgment. (ECF No. 62.) 4 5 IT IS SO ORDERED. 6 7 November 28, 2016 8 9 10 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11
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