Bernina of America, Inc. v. Imageline, Inc. et al

Filing 92

MOTION by Plaintiff Bernina of America, Inc. for judgment order (Amended Final), MOTION by Plaintiff Bernina of America, Inc. for attorney fees (Attachments: # 1 Exhibit A-B)(Beck, Norman)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BERNINA OF AMERICA, INC.,

)
)
)
)
)
)
)
)
)
)
)
)

Plaintiff,
v.
IMAGELINE, INC., ISLANDVIEW
TECHNOLOGIES LLC, ISLANDVIEW
DESIGNS LLC, and GEORGE
P. RIDDICK, III,
Defendants.

Case Number: 1:10-cv-4917
Judge Milton I. Shadur
Magistrate Judge Martin C. Ashman

PLAINTIFF’S MOTION FOR AN AMENDED FINAL
JUDGMENT ORDER AND AWARD OF ATTORNEYS’ FEES
NOW COMES Plaintiff, Bernina of America, Inc. (“Bernina”), by and though
counsel, and respectfully requests that the Court enter an amended final judgment order and
award of attorneys’ fees pursuant to 17 U.S.C. § 505.
At the status hearing held on June 28, 2011, the Court requested that Bernina
submit a proposed amended judgment order reflecting the posture of the case in light of
Defendant George P. Riddick, III’s (“Riddick”) recent representations to the Court that he does
not personally maintain any legal rights to any images implicated in this litigation. Bernina
submits that, based on the default judgment entered against Imageline, Inc., Islandview
Technologies LLC, and Islandview Designs LLC (collectively, “Defaulting Defendants”) and
based on Riddick’s representations to the Court, this case can be fully disposed of, as outlined

1

below and reflected in Bernina’s proposed amended final judgment submitted in conjunction
with this motion.1
Specifically, Bernina moves the Court to: (1) enter judgment against Riddick as to
Count I of Bernina’s Amended Complaint (declaratory judgment of non-infringement);2 (2)
deem as other just relief that Riddick personally be permanently enjoined (under the same terms
as the injunction against the Defaulting Defendants) from making public allegations that Bernina
has engaged in copyright infringement, including but not limited to making such statements to
Bernina’s network of qualified dealers; and (3) enter an award of attorneys’ fees and costs in the
amount of $146,727.53 against the Defendants, jointly and severally.
Should the Court deem this proposed amended final judgment order and request
for attorneys’ fees to be appropriate, Bernina would forego any further prove-up of damages
associated with the judgment against the Defaulting Defendants on its state law claims for
defamation, defamation per se, and tortious interference, and would also voluntarily dismiss
without prejudice Counts II and III as they pertain to Riddick, individually. Such would resolve
all issues in the case.
I.

Final Judgment Against Riddick on Count I
In Count I of its Amended Complaint, filed November 23, 2010, Bernina sought a

declaratory judgment of non-infringement holding that Bernina has not infringed upon any
protectable creative authorship in copyright lawfully owned by Defendant Imageline Inc. and/or
1

Pursuant to the Court’s standing order, Bernina has not filed the proposed final judgment order,
but rather has submitted a copy to the court electronically though the Court’s proposed order
procedures.
2

The Court has already entered judgment against Imageline on Count I. Now that Riddick has
disclaimed any personal right to the images in question, judgment is appropriate against Riddick
as well as to Count I.
2

Riddick. Bernina was forced to bring this claim due to the numerous public allegations and
representations to this Court made by Riddick, falsely suggesting that both he and Imageline
possessed rights to copyrighted materials that had been infringed by Bernina. It has been
Bernina’s contention throughout this lawsuit that (1) neither Imageline nor Riddick possess any
protectable rights in the individual underlying images contained in Imageline’s copyright
registrations; (2) Bernina has not infringed or otherwise engaged in any activities that are
reserved for the owner of copyright pursuant to 15 U.S.C. § 106 with respect to Imageline’s
copyright registrations; and (3) Imageline’s copyright registrations themselves are invalid
because they were obtained as a result of misrepresentations made to the Copyright Office in the
copyright applications.
On June 28, 2011, the Court entered final default judgment against Imageline on
Count I. See Doc. No. 90. Thus, the only outstanding issue as to Count I is whether Riddick
personally possesses any rights to images at issue in this litigation (as Riddick has previously
represented to this Court) and, if so, whether such images were infringed by Bernina. At the
Court’s status hearing held May 25, 2011, the Court ordered Riddick to confirm in writing (and
produce any supporting documentation) what rights, if any, Riddick personally possesses with
respect to the images at issue in this litigation. Riddick responded in letters dated June 20, 2011,
and June 27, 2011 (subsequently filed by Bernina, per the Court’s request, see Doc. No. 88),
confirming that he personally owns no legal or proprietary rights to any images at issue in this
litigation and that all such images are owned by Imageline.3 Accordingly, based on Riddick’s

3

Specifically, Riddick represents to Bernina and the Court that in 2009, Imageline assigned
1,200 unidentified images from among Imageline’s registrations to Riddick, but that all of these
unidentified images were subsequently reassigned back to Imageline on December 9, 2010.
Riddick confirmed that “all of the images at issue in this matter whose legal or proprietary
3

representation to the Court, Riddick does not possess any protectable rights to images infringed
by Bernina. It is appropriate, therefore, to amend the final judgment on Count I to include an
entry of judgment against Riddick, personally.
II.

Permanent Injunction Against Riddick
The existing default judgment order entered by the Court enjoins the Defaulting

Defendants (along with any agent acting on behalf of the Defaulting Defendants who has actual
notice of the injunction) from making defamatory allegations about Bernina inconsistent with the
Court’s judgment of non-infringement in favor of Bernina and from making contact with
Bernina’s authorized dealers for the purpose of making such false allegations or to interfere with
Bernina’s contractual relationships with those dealers. Riddick, as a member or shareholder of
each of the Defaulting Defendants, is already bound under this injunction when acting in his
capacity as an agent for any of the Defaulting Defendants. The Court should likewise find that in
the interests of justice, Riddick should be similarly enjoined when acting in his personal
capacity, particularly in light of his representation to the Court that he personally possesses no
individual rights in any of the images at issue.
As the Court concluded when it preliminarily enjoined all of the Defendants under
these terms, there is no prejudice to any of the Defendants by such an injunction because they are
only enjoined from making representations or allegations inconsistent with the Court’s judgment
or from engaging in otherwise tortious conduct. Such relief against Riddick in his personal
capacity is just in light of the Court’s judgment in Bernina’s favor on its declaratory judgment
claim of non-infringement and based on the other circumstances in this case.

rights were assigned by Imageline to [Riddick] at any point in the past have now been
reassigned back to Imageline.” See Doc. No. 88, Ex. C (emphasis in original).
4

III.

Award of Costs and Attorneys’ Fees in Favor of Bernina
Bernina seeks an award of attorneys’ fees against Defendants in the amount of

$146,727.53, consisting of $135,522.00 in attorneys’ fees and $11,205.53 in other recoverable
expenses. Attached hereto as Exhibit A4 is an affidavit from Norman K. Beck detailing each of
these expenses and attaching supporting documentation, including time sheets with entries of the
tasks performed for which Bernina is seeking recovery. Bernina is entitled to recover such fees
as the prevailing party under the Copyright Act, 17 U.S.C. § 505 (“Section 505”). Additionally,
the fees and expenses sought are reasonable and recoverable. As detailed below and in Exhibit
A, in an effort to minimize controversy, Bernina only seeks a portion of the actual fees and
expenses incurred by Bernina and paid to Winston & Strawn LLP.
Pursuant to Local Rule 54.3, Bernina informed Mr. Riddick by email and Federal
Express, on July 20, 2011, of its intention to seek such fees and expenses in the instant motion
and provided him with a draft of Exhibit A and all of the supporting paperwork attached thereto.
Bernina’s July 20, 2011 correspondence to Mr. Riddick is attached hereto as Exhibit B. As of
the filing of this motion, Bernina has received no response from Mr. Riddick with any position as
to the reasonable fees that Bernina is entitled to recover.
A.

Bernina is Entitled to Recover Attorneys’ Fees Under Section 505.

As the prevailing party in this litigation, Bernina should be awarded costs and fees
pursuant to Section 505, which provides in pertinent part that in any copyright action, the court
in its discretion “may allow the recovery of full costs by or against any party. . . [and] the court
may also award a reasonable attorney’s fee to the prevailing party as part of the costs.” 17
U.S.C. § 505. As both this Court and the Seventh Circuit have previously acknowledged,
4

Bernina has contemporaneously filed a motion for leave to file Exhibit A under seal.
5

plaintiffs and defendants alike may be entitled to awards of fees and that “‘there should be no
thumb on the scales’” between parties prosecuting copyright claims and those defendant against
copyright claims.

Gentieu v. Tony Stone Images/Chicago, Inc., No. 00 C 269, 2003 WL

22048059, at *4 (N.D. Ill. 2003) (Shadur, J.) (quoting Gonzales v. Transfer Tech., Inc., 301 F.3d
608, 609 (7th Cir. 2002)); see also Fogerty v. Fantasy, Inc., 510 U.S. 517, 527 (1994) (rejecting
the “dual standard” approach by which plaintiffs were more likely to recover their attorneys’ fees
than defendants, holding that “defendants who seek to advance . . . meritorious copyright
defenses should be encouraged to litigate them to the same extent that plaintiffs are encouraged
to litigate meritorious claims of infringement”).5 In Gentieu, this Court found that, based on
Section 505 and the Supreme Court precedent of Fogerty, a party who successfully defended
against a “bootless” copyright claim was the “prevailing party” and entitled to reasonable
attorneys’ fees and expenses. 2003 WL 22048059, at *4.
Bernina is clearly the prevailing party in this action, having achieved judgment on
all of its claims, obtained a permanent injunction, and exposed Defendants’ public allegations of
copyright infringement as false and defamatory. In an action where a defendant has defaulted,
the plaintiff is routinely considered to be the “prevailing party” for the purposes of an award of
attorneys’ fees. See Weinraub/OKUN Music v. Atlantic Fish & Chips, Inc., No. 90 C 4938, 1991
WL 34713, at *5-6 (N.D. Ill. Mar. 13, 1991) (Rovner, J); Salton, Inc. v. Micom Computer, Inc.,
No. 85 C 6374, 1986 WL 10066, at *1 (N.D. Ill. Sept. 2, 1986) (Williams, J.); Broadcast Music,
Inc. v. Hasley’s, Inc., No. 85 C 5122, 1985 WL 5966, at *4 (N.D. Ill. Oct. 29, 1985) (Holderman,
J.); see also White v. Marshall, No. 07-CV-892, 2011 WL 703937, at *6-7 (E.D. Wis. Feb. 18,
5

Bernina, as a declaratory judgment plaintiff whose claims were brought based on a legitimate
controversy stemming from Defendants’ public allegations of tortious behavior and threats of
litigation, is more akin to the defendants in Gentieu, Gonzales, and Fogerty.
6

2011); Aggressive Music v. P.A.R. Power Washing, Inc., No. 1:08-CV-0274 PPS, 2010 WL
2772347, at *4-5 (N.D. Ind. July 9, 2010); Divine Mill Music v. Blackmon’s, Inc., No. 08-cv501-JPG, 2008 WL 4853575, at *3-4 (S.D. Ill. Nov. 5, 2008).
As reflected in the Court’s June 28, 2011 default judgment order, Defendants
have willfully refused to participate in this litigation and have made no effort to either defend
against Bernina’s claims or prosecute their counterclaims against Bernina.

Bernina is the

prevailing party with respect to both its affirmative claim and Defendants’ counterclaims brought
under the Copyright Act. As such, the Court is empowered by the Copyright Act with discretion
to award attorneys’ fees, and that discretion should be exercised to forward the policies of the
Act. Fogerty, 510 U.S. at 534-35. Parties “who seek to advance a variety of meritorious
copyright defenses should be encouraged to litigate them,” in part because such defense
ultimately encourages the promotion of “broad public availability of literature, music and the
other arts.” Id. at 526-27.
In Fogerty, the Supreme Court highlighted a list of nonexclusive factors to guide
a district court’s exercise of discretion in awarding attorneys’ fees, including “frivolousness,
motivation, objective unreasonableness (both factual and in the legal components of the case)
and the need in particular circumstances to advance considerations of compensation and
deterrence.” Id. at 535, n.19. Not all factors must be met to support an award of attorneys’ fees,
nor should the court use them to restrict awards of attorneys’ fees to cases where the losing party
was somehow culpable or acted in bad faith, since blameworthiness is not a prerequisite to
awarding fees to a prevailing defendant. Id. Indeed, exceptional circumstances are not a
prerequisite to an award of attorneys’ fees in copyright actions. See, e.g., Historical Research v.
Cabral, 80 F.3d 377, 378 (9th Cir. 1996) (granting attorneys’ fees to defendants for successfully

7

defending against a copyright claim). As the Seventh Circuit noted, “[w]hen the prevailing party
is the defendant . . . the presumption in favor of awarding fees is very strong.” Assessment
Techs. of Wi., LLC v. WIREData, Inc., 361 F.3d 434, 439 (7th Cir. 2004) (citing Diamond Star
Bldg. Corp. v. Freed, 30 F.3d 503, 506 (4th Cir. 1994)). “For without the prospect of such an
award, the party might be forced into a nuisance settlement or deterred altogether from
exercising his rights.” Id. at 439.
All of these considerations favor an award of attorneys’ fees for Bernina in this
case. The allegations and threats against Bernina advanced by the Defendants both prior to and
during this litigation were objectively frivolous. As documents submitted to this Court clearly
show, Defendants based their public threats and allegations against Bernina on a false claim to
individual copyright for tens of thousands of rudimentary depictions of commonplace things
such as the flags of every nation in the world, numbers, letters, balls, everyday objects, and the
exact likenesses of public figures and national landmarks. See Am. Compl. ¶ 28. They did so
despite having been on direct notice from the Copyright Office as of May 31, 1996, that they did
not possess copyright protection over the individual underlying images within the copyright
registrations. See Am. Compl. ¶ 27; see Dundee Cement Co. v. Howard Pipe & Concrete
Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983) (noting that when there has been a default “the
factual allegations of a complaint relating to liability are taken as true”).
In this case, Defendants have also threatened, accused, harassed, and bullied at
least hundreds of other individuals and entities based on these false claims—most of whom
lacked the resources and capabilities to question or challenge Defendants. Defendants’ abuse of
the copyright system should be deterred by this Court. Deterrence is an additional factor district
courts should consider in deciding whether to award fees under the Copyright Act. See Fogerty,

8

515 U.S. at 535, n.19. An award of attorneys’ fees to Bernina is imperative to deter Defendants
from continuing to file and/or threaten to file vexatious lawsuits seeking staggering damages
without any reasonable basis. An award of attorneys’ fees also serves to filter the would-be
litigant pool to those whose claims are built upon the good faith that the Federal Rules of Civil
Procedure require, and would put other potential plaintiffs on notice that there are consequences
to threatening or filing hyper-aggressive lawsuits that lack factual and legal support. Copyright
law was not meant as a means for individuals and companies like Defendants to extort massive
copyright infringement damages and/or settlements based on tenuous (or nonexistent) legal
theories. Thus, Bernina’s meritorious defense against these allegations by prosecuting this action
and defending against Defendants’ counterclaims furthered the purpose of the Copyright Act.
Accordingly, based on the above and in the Court’s discretion, Bernina is entitled to an award of
reasonable attorneys’ fees against the Defendants jointly and severally.
B.

The Fees and Costs Sought by Bernina Are Reasonable

Bernina seeks an award of $146,727.53 in fees and expenses associated with this
litigation. In truth, Bernina has incurred and actually paid substantially more fees and costs,
both during this litigation and over the past two years, than Riddick has been threatening Bernina
with litigation and tortiously interfering with Bernina’s contractual relationships with its dealers
(as well as untold other damages as a result of the loss of goodwill and damage to its reputation
as a result of Defendants’ allegations). Bernina has, however, tailored its request only to the fees
and costs directly related to the central and imperative aspects of this litigation.
As the Court is well aware, this action has been proceeding for nearly a year.
There have been more than a dozen status and motion hearings held. Bernina successfully
briefed and prevailed on a motion for temporary restraining order and also a preliminary

9

injunction. Two separate sets of counsel have made appearances on behalf of Defendants and
subsequently withdrawn, necessitating motions for default judgment, the more recent of which
was granted. Defendants also filed unsupported counterclaims against Bernina requiring the
briefing of a motion to dismiss by Bernina which was granted in full by the Court. In addition to
all of these proceedings, Defendant Riddick has also inundated with Court and Bernina with pro
se documents and filings that required extensive review and response.
Because the fees and expenses sought by Bernina are reasonable and are
supported by the documentation in Exhibit A, Bernina respectfully requests an award of $146,
727.53 against all Defendants, jointly and severally.
IV.

Conclusion
WHEREFORE, based on the foregoing, Bernina respectfully requests that the

Court enter an amended final judgment, as set forth in Bernina’s proposed final judgment order.

Date: July 25, 2011

Respectfully submitted,
BERNINA OF AMERICA, INC.
By:

/s/ Norman K. Beck

Norman K. Beck (ARDC 2425205)
Marc H. Trachtenberg (ARDC 6290927)
Kevin P. McCormick (ARDC 6294455)
Winston & Strawn LLP
35 W. Wacker Drive
Chicago, IL 60601
[phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Bernina of America, Inc.

10

CERTIFICATE OF SERVICE
The undersigned, an attorney, hereby certifies that a copy of the foregoing PLAINTIFF’S
MOTION FOR AN AMENDED FINAL JUDGMENT ORDER AND AWARD OF
ATTORNEYS’ FEES was served on:
George P. Riddick, III
319 MacMurdo Street
Ashland, VA 23005
[e-mail]
[e-mail]
[e-mail]
[e-mail]
via electronic mail before 4:00 p.m. CT and Federal Express Overnight Mail this July 25,
2011.
By:
/s/ Kevin P. McCormick
One of the Attorneys for Plaintiff