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