Urban Textile, Inc. v Rue 21 Inc. et al

Filing 139

ORDER GRANTING DEFENDANTS MOTION FOR PARTIAL SUMMARY JUDGMENT 113 by Judge Otis D. Wright, II (lc). Modified on 3/31/2017 (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 GRANTING

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DEFENDANTS’ MOTION FOR

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RUE 21, INC.; MARK EDWARDS

PARTIAL SUMMARY JUDGMENT

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APPAREL, INC.; and DOES 3-100,

[113]

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inclusive,
Defendants.

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I.

INTRODUCTION

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Following the Court’s denial of Plaintiff Urban Textile, Inc.’s (“Urban”) motion

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for summary judgment (ECF No. 112), Defendants filed a motion for partial summary

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judgment.

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judgment in their favor with respect to eleven of the twelve designs at issue in this

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case: UB-4694; UB-4701; UB-4690; UB-4276; UB-4345; UB-4492; UB-4350; UB-

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4638; UB-4609; UB-4670; and UB-4672 (“the subject designs”). (See id.) They do

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not ask for summary judgment on the one remaining design, UB-4564, presumably

(ECF No. 113.)

Defendants request that the Court enter summary

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because the Court denied Urban’s motion with respect to that design on the basis that

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whether or not Defendants copied it is a question for the trier of fact. (See Order 9–

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10.)

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recommendation regarding sanctions (ECF No. 136), the Court GRANTS

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Defendants’ motion for partial summary judgment.

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II.

For the reasons discussed below, and based on Magistrate Judge Mumm’s

FACTUAL BACKGROUND

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Urban is a textile design company, and it registered all of the subject designs

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with the U.S. Register of Copyrights between 2012 and 2014. (Second Am. Compl.

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(“SAC”) ¶ 4, ECF No. 55.) Defendant Mark-Edwards Apparel, Inc., is a manufacturer

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and distributor of women’s apparel, and it has sold products to Defendant rue21, Inc.,

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which is a retailer of women’s apparel. (Statement of Uncontroverted Facts (“SUF”)

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¶ 2, ECF No. 113-46.) Urban claims to have valid registrations for the designs at

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issue, and it contends that Defendants copied those designs after acquiring them

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impermissibly through a third-party vendor called California Blue. (See generally

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SAC.) These and other basic facts of the case remain undisputed since the Court ruled

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on Urban’s motion for summary judgment in November 2016.

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However, there has been an important development in the posture of this case.

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On March 9, 2017, Magistrate Judge Mumm recommended that sanctions be imposed

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against Urban for its failure to comply with Judge Mumm’s prior discovery order.

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(ECF No. 136.) The Court adopted Judge Mumm’s recommendation. (ECF No. 137.)

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The sanctions establish a presumption that Urban placed copies of the subject designs

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in its “Look Books,” which are essentially catalogues of Urban’s designs that it offers

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to prospective buyers, within two days of obtaining the design from a vendor. (See

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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)). If Defendants can show that either of these elements is not present as

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a matter of law, then they will be entitled to summary judgment as to the designs at

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issue. Here, the element that Defendants argue is missing is ownership of a valid

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copyright, and the Court agrees.

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While Urban registered the subject designs as part of an “unpublished

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collection,” the recently-entered sanctions have the effect of establishing that Urban

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did publish the designs prior to registration. (See SUF ¶¶ 26–44.) Whether or not a

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work was published prior to registration matters because the U.S. Copyright Office

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has different rules for registering published versus unpublished works. See 37 C.F.R.

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§ 202.3(b)(4)(i). If a work registered as part of an unpublished collection turns out to

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have been previously published, then it is not validly registered as part of that

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collection. U.S. Copyright Office, Compendium of U.S. Copyright Office Practices

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(“Compendium”) § 1802.7(C) (3d ed. 2014)1; see also L.A. Printex Indus., 676 F.3d at

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852–53.

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Publication occurs when “fabric, carpet, or wallpaper samples are offered to

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sales representatives for the purpose of selling those works to wholesalers and

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retailers.” Compendium § 1906.1. Urban argues strenuously in its Opposition brief

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and in open court (and misquotes the Compendium in the process) that simply

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displaying a fabric or textile design in a storefront does not constitute publication.

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(See Opp’n 15, ECF No. 119.) The Compendium does provide that “displaying a

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fabric design, wallpaper design, or textile design in a store front” does not in itself

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constitute publication. Compendium § 1908. However, display in a storefront is not

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Courts routinely cite the Compendium as a prominent authority on copyright law, giving it weight
beyond that of a typical secondary source. See, e.g., Star Athletica, L.L.C. v. Varsity Brands, Inc., __
S. Ct. __, 14 n.2 (2017) (decided March 22, 2017); Alaska Stock, LLC v. Houghton Mifflin Harcourt
Publ’g Co., 747 F.3d 673, 679–80 (9th Cir. 2014); Inhale, Inc. v. Starbuzz Tobacco, Inc., 755 F.3d
1038, 1041–42 (9th Cir. 2014); Batjac Productions, Inc. v. GoodTimes Home Video Corp., 160 F.3d
1223, 1230 (9th Cir. 1998).

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what occurred here. The sanctions entered against Urban establish a presumption

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(which Urban has not rebutted) that Urban placed copies of the subject designs in its

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Look Books, which are available to customers in Urban’s store for purposes of selling

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fabric bearing those designs. (See SUF ¶ 12.) Providing a compilation of designs

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available for sale in a format designed to facilitate purchases of the designs is not

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synonymous with “display[] . . . in a store front,” as Urban would like this Court to

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believe. (See Opp’n 15); Compendium § 1908. To the contrary, the Court concludes

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that Urban’s placement of the subject designs in its Look Books constituted

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publication consistent with the Compendium’s publication definition of “offer[ing]

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[designs] to sales representatives for the purpose of selling those works to wholesalers

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and retailers.” See Compendium § 1906.1. As such, the Court finds that Urban

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published the works prior to registering them as part of unpublished collections,

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therefore making the registrations invalid. Because Urban cannot, as a matter of law,

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prove the first element required for a claim of copyright infringement, Defendants are

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entitled to summary judgment on Urban’s copyright infringement claim regarding the

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subject designs.

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V.

CONCLUSION

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For the reasons discussed above, the Court GRANTS Defendants’ motion for

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partial summary judgment on Urban’s copyright infringement claim as to Urban’s

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designs UB-4694; UB-4701; UB-4690; UB-4276; UB-4345; UB-4492; UB-4350;

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UB-4638; UB-4609; UB-4670; and UB-4672. (ECF No. 113.)

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IT IS SO ORDERED.

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March 31, 2017

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____________________________________
OTIS D. WRIGHT, II
UNITED STATES DISTRICT JUDGE

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