Fairey et al v. The Associated Press

Filing 242

JOINT PRETRIAL STATEMENT /Proposed Joint Pretrial Order. Document filed by One 3 Two, Inc., The Associated Press. (Attachments: # 1 Exhibit A - Part 1, # 2 Exhibit A - Part 2, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G)(Cendali, Dale)

Fairey et al v. The Associated Press

Doc. 242

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SHEPARD FAIREY and OBEY GIANT ART, INC., Plaintiffs, v. THE ASSOCIATED PRESS, Defendant/Counterclaim Plaintiff, v. SHEPARD FAIREY, et al., Counterclaim Defendants, And MANNIE GARCIA, Defendant, Counterclaim Plaintiff & Cross Claim Plaintiff/Defendant, v. SHEPARD FAIREY and OBEY GIANT ART, INC., Counterclaim Defendants, And THE ASSOCIATED PRESS, Cross Claim Plaintiff/Defendant. The parties to the above-captioned action submit this Proposed Joint Pre-Trial Order, pursuant to Rule 16 of the Federal Rules of Civil Procedure and the Court's Individual Rules. PROPOSED JOINT PRE-TRIAL ORDER

Case No.: ECF Case

09-CV-01123 (AKH)

Dockets.Justia.com

i.

The Full Caption of the Action:

SHEPARD FAIREY and OBEY GIANT ART, INC., Plaintiffs, v. THE ASSOCIATED PRESS, Defendant/Counterclaim Plaintiff, v. SHEPARD FAIREY, OBEY GIANT ART, INC., OBEY GIANT LLC, STUDIO NUMBER ONE, INC., and ONE 3 TWO, INC. (d/b/a OBEY CLOTHING), Counterclaim Defendants, And MANNIE GARCIA, Defendant, Counterclaim Plaintiff & Cross Claim Plaintiff/Defendant, v. SHEPARD FAIREY and OBEY GIANT ART, INC., Counterclaim Defendants, And THE ASSOCIATED PRESS, Cross Claim Plaintiff/Defendant.

Case No.: ECF Case

09-CV-01123 (AKH)

1

ii.

Contact Information for Trial Counsel:

Attorneys for Counterclaim Plaintiff the Associated Press Dale M. Cendali Claudia Ray Brendan T. Kehoe Kirkland & Ellis LLP 601 Lexington Avenue New York, NY 10002 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] [e-mail] Michael F. Williams Kirkland & Ellis LLP 655 Fifteenth Street, NW Washington, DC 20005 Telephone: [phone] Facsimile: [phone] [e-mail] Attorneys for Counterclaim Defendant One 3 Two, Inc. (d/b/a Obey Clothing) Robyn C. Crowther Jeanne A. Fugate Laurie C. Martindale Caldwell Leslie & Proctor, PC 1000 Wilshire Boulevard, Suite 600 Los Angeles, California 90017-2463 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] [e-mail] Theresa Trzaskoma Charles Michael Brune & Richard LLP 80 Broad Street New York, NY 10004 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] 2

iii.

Jurisdiction: This action asserts claims under the Copyright Act, 17 U.S.C. § 101 et seq., and the

Digital Millennium Copyright Act, 17 U.S.C. § 1202.

The Court has federal question In addition,

jurisdiction over the AP's claims pursuant to 28 U.S.C. §§ 1331, 1338.

Counterclaim Plaintiff the Associated Press is a New York not-for-profit corporation with its principal place of business at 450 West 33rd Street, New York, NY 10001. Counterclaim Defendant One 3 Two, Inc. d/b/a Obey Clothing is a California corporation with its principal place of business at 2313 Susan Street, Santa Ana, California 92704. The amount in

controversy is in excess of $75,000, exclusive of interest and costs. Accordingly, the Court also has federal diversity jurisdiction pursuant to 28 U.S.C. § 1332(a)(1). iv. (a) Brief Summary of Claims and Defenses:

The Associated Press's Summary: Counterclaim Plaintiff the AP alleges that Counterclaim Defendant Obey Clothing has infringed the AP's copyright in a unique image of Barack Obama (the "Obama Photo") that was taken by AP photographer Mannie Garcia on April 26, 2006, and as to which the AP holds a copyright registration, Registration No. VA 1-356-885. Without the AP's authorization, Obey Clothing used a version of the Obama Photo in the sale, distribution, and marketing of more than 236,600 items of merchandise, including t-shirts, tank tops, and sweatshirts, in violation of the AP's exclusive rights under 17 U.S.C. §106. Additionally, Obey Clothing used a version of the Obama Photo on thousands of promotional materials, such as posters and magazine ads, in violation of the AP's exclusive rights under 17 U.S.C. § 106. Obey Clothing's unauthorized use of the AP's copyright generated direct revenues for Obey Clothing in the amount of $2,272,823 and indirect revenues for Obey Clothing worth more than $8,213,290.

3

The Court and the parties have significantly narrowed the issues remaining for trial. The Court has awarded summary judgment in favor of the AP with respect to Obey Clothing's affirmative defense of fair use. In an effort to streamline the trial, the AP has decided that it is not pursuing damages based upon the hypothetical license fee that it would have received for the Obama Photo if Obey Clothing had sought a license to use the Photo; rather, it will focus on recovery of Obey Clothing's profits and statutory damages. Obey Clothing has admitted that the AP owns a valid copyright in the Obama Photo, that Shepard Fairey had access to the Obama Photo, and that Shepard Fairey actually copied the Obama Photo. Accordingly, the remaining issues for trial are: 1. 2. Substantial Similarity. Whether an average lay observer would recognize the defendant's work as having been appropriated from the plaintiff's work. Contributory Infringement. Whether Obey Clothing had actual or constructive knowledge of, and materially contributed to, the sale and distribution of infringing copies of the AP's copyrighted work by its retailer customers. DMCA. Whether Obey Clothing distributed merchandise knowing that copyright management information had been removed, and knowing or having reason to know that such distribution would induce, enable, conceal, or facilitate the infringement of the AP's copyright in the Obama Photo. Profits (Direct and Indirect). The amount of Obey Clothing's profits (including indirect profits) that the AP may recover as damages because they are attributable to Obey Clothing's infringement, contributory infringement, and/or violations of the DMCA. Statutory Damages (Willfulness). Whether Obey Clothing's liability for statutory damages should be enhanced because Obey Clothing knew that its actions constituted infringement, contributory infringement, and/or violations of the DMCA, or whether Obey Clothing acted with reckless disregard for, or willful blindness to, the AP's rights.

3.

4.

5.

The AP disagrees with Obey Clothing's position that much of this trial will be about whether the Obama Image appropriated any protected expression in the Obama Photo. As the Court has recognized, the Second Circuit has established a straightforward test for determining

4

whether an infringing work is "substantially similar" to a copyrighted photograph--namely, whether an ordinary lay observer would recognize the defendant's work as having been appropriated from the plaintiff's work. The Second Circuit has expressly rejected analytic dissection of the copyrighted work at issue to determine whether it has been infringed. The AP also disagrees with Obey Clothing as to whether the process by which the copyrighted work was copied is relevant; as explained in more detail in the AP's motions in limine, the Supreme Court has said that "sweat of the brow" is not protectable. Rather, the relevant question focuses not on the means (especially where as here there is no dispute that the Obama Photo was copied as a factual matter), but rather on the infringing work itself. The statutes and cases relied upon by the AP are as follows: Substantial Similarity. Crown Awards, Inc. v. Discount Trophy & Co., Inc., 326 Fed. Appx. 575 (2d Cir. 2009). Tufenkian Import/Export Ventures v. Einstein Moomjy, Inc., 338 F.3d 127 (2d Cir. 2003). Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101 (2d Cir. 2001). Rogers v. Koons, 960 F.2d 301 (2d Cir. 1992). Silberman v. Innovation Luggage, 2003 WL 1787123 (S.D.N.Y. Apr. 3, 2003). Arnstein v. Porter, 154 F.2d 464, 468, aff'd after remand, 158 F.2d 795 (2d Cir. 1946). Yurman Design, Inc. v. Paj, Inc., 98 F. Supp. 2d 449 (S.D.N.Y. 2000). Singer v. Citibank, N.A., 1996 WL 200292 (S.D.N.Y. 1996). United Feature Syndicate, Inc. v. Koons, 817 F. Supp. 370 (S.D.N.Y. 1993). Campbell v. Koons, 1993 WL 97381 (S.D.N.Y. Apr. 1, 1993). Steinberg v. Columbia Pictures Indus., Inc., 663 F. Supp. 706 (S.D.N.Y. 1987). Silverman v. CBS, Inc., 632 F. Supp. 1344 (S.D.N.Y. 1986).

5

Contributory Infringement. Metro-Goldwyn Mayer Studios Inc. v. Grokster, Ltd., 545 U.S.913 (2005). A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). Gershwin Publ'g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159 (2d Cir. 1971). Arista Records LLC v. Usenet.com, Inc., 633 F. Supp. 2d 124 (S.D.N.Y. 2009). Screen Gems-Columbia Music Inc. v. Mark-Fi Records, Inc., 256 F. Supp. 399 (S.D.N.Y. 1966). DMCA. 17 U.S.C. § 1202(b-c). Associated Press v. All Headline News Corp., 608 F. Supp. 2d 454 (S.D.N.Y. 2009). Gregerson v. Vilana Financial, Inc., 2008 WL 451060 (D. Minn. Feb. 15, 2008). Propet USA, Inc. v. Shugart, 2007 WL 4376201 (W.D. Wash. Dec. 13, 2007). Profits (Direct and Indirect). 17 U.S.C. § 504(b).

17 U.S.C. § 1202(c)(2).
William A. Graham Co. v. Haughey, 568 F.3d 425 (3d Cir. 2009). Andreas v. Volkswagen of Am., Inc., 336 F. 3d 789 (8th Cir. 2003). Davis v. The Gap, Inc., 246 F.3d 152 (2d Cir. 2001). Hamil Am., Inc. v. GFI, 193 F.3d 92 (2d Cir. 1999). Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505 (9th Cir. 1985). Semerdjian v. McDougal Littell, 641 F. Supp. 2d 233 (S.D.N.Y. 2009). Thorton v. J. Jargon Co., 580 F. Supp. 2d 1261 (M.D. Fla. 2008). Akrie v. Avis Rent A Car System, Inc., 2006 WL 2583609 (N.D. Cal., Sept. 7, 2006). Hamil Am. Inc. v. GFI, 193 F.3d 92 (2d Cir. 1999).

6

Island Software and Computer Serv., Inc. v. Microsoft Corp., 413 F.3d 257 (2d Cir. 2005). Caffey v. Cook, 409 F. Supp. 2d 484 (S.D.N.Y. 2006). Statutory Damages (Willfulness). 17 U.S.C. § 504(c). 17 U.S.C. § 1203(c)(3)(B). Island Software and Computer Service, Inc. v. Microsoft Corp., 413 F.3d 257 (2d Cir. 2005) Caffey v. Cook, 409 F. Supp. 2d 484 (S.D.N.Y. 2006).

Obey Clothing's Summary: Obey Clothing contends that Shepard Fairey did not infringe the AP's copyright and that the profits Obey Clothing generated from the sales of merchandise displaying Mr. Fairey's illustration of Barack Obama (the "Obama Illustration") were the result of the popularity of Barack Obama, Mr. Fairey's artistic work, and the experience and expertise that Obey Clothing has in manufacturing, marketing and selling apparel, and not any intellectual property of the AP. Mr. Fairey used the Obama Photo as a visual reference to create his illustration, which he then provided to Obey Clothing with permission to reproduce the illustration on apparel. Obey Clothing never had access to the Obama Photo itself, and only reproduced it to the extent that the Obama Photo was copied into the Obama Illustration. Much of the trial will therefore be about whether the Obama Illustration appropriated any protected expression in the Obama Photo. Copyright Infringement. As an initial point, Obey Clothing's position with regard to Mr. Fairey's "actual copying," is that Shepard Fairey used the Obama Photo as a reference work when he created the Obama Illustration, and Obey Clothing agrees that this is sufficient to establish the "actual copying" element of a claim for copyright infringement. Obey Clothing does not stipulate, and 7

expressly disputes, that Mr. Fairey's reference of the Obama Photo is sufficient to establish improper or unlawful appropriation, which is a separate element of a claim for copyright infringement that must be proven by the Associated Press. While the AP has a registered copyright in the Obama Photo, the copyright did not prevent Mr. Fairey or anyone else from referencing or using the non-protected elements of the photograph. The only elements that the photograph shares with the illustration are elements that are not protected by law because: (1) they are ideas, not expression, (2) they naturally flow from the unprotected idea and therefore are not protected under the scenes a faire doctrine, or (3) they were not chosen, created or otherwise the original work of the AP's photographer. The AP could therefore not prevent Mr. Fairey or anyone else from referencing those elements of the Obama Photo in future works. Obey Clothing also asserts that the AP's claims are barred by the affirmative defenses of Laches and Unclean Hands, among others. Violation of the DMCA. If there is no copyright infringement, then there is no viable claim under the DMCA. In addition, Obey Clothing had no knowledge of any violation by Mr. Fairey of the DMCA, and because Obey Clothing only received the Obama Illustration and not the Obama Photo, there was no opportunity for Obey Clothing to stop the alleged violation in any event. Obey Clothing also denies that it has the right or ability to supervise or control Mr. Fairey's creation of artwork, and therefore denies that Obey Clothing is liable under the DMCA. Willfulness. Obey Clothing's good faith belief that its actions were lawful, both because they infringed no rights or were protected by the fair use doctrine, defeats the finding of willfulness.

8

Damages. Obey Clothing denies that its alleged infringement caused it to generate any profits whatsoever and further contends that minimal statutory damages are appropriate given the small amount of actual revenue that the AP lost and Obey Clothing's state of mind, among other factors. The statutes and cases primarily relied upon by Obey Clothing are as follows: Substantial Similarity: Satava v. Lowry, 323 F.3d 805 (9th Cir. 2003) Psihoyos v. The National Geographic Society, 409 F.Supp.2d 268 (S.D.N.Y. 2005) Bill Diodato Photography, LLC v. Kate Spade, LLC, 388 F.Supp.2d 382 (S.D.N.Y. 2005) Kaplan v. The Stock Market Photo Agency, Inc., 133 F.Supp.2d 317 (S.D.N.Y. 2001) Hoehling v. The Universal City Studios, Inc., 618 F.2d 972 (2d Cir.), cert. denied, 449 U.S. 841 (1980) Reece v. Island Treasures Art Gallery, 468 F. Supp. 2d 1197, 1207 (D. Haw. 2006). Boisson v. Banian, Ltd., 273 F.3d 262, 268 (2d Cir. 2001) Yurman Designs, Inc. v. PAJ, Inc., 262 F.3d 101, 109 (2d Cir. 2001) Knitwaves, Inc. v. Lollytogs, Ltd., 71 F.3d 996, 1002 (2d Cir. 1995) (citing Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 350, 358 (1991)) Cabell v. Sony Pictures Entertainment, Inc., 714 F. Supp. 2d 452 (S.D.N.Y. 2010) Kerr v. New Yorker Magazine, Inc.,63 F. Supp. 2d 320 (S.D.N.Y. 1999) Pavlica v. Behr, 397 F. Supp. 2d 519 (S.D.N.Y. 2005) Peter F. Gaito Architecture, LLC v. Simone Development Corp., 602 F.3d 57 (2d Cir. 2010) Straus v. DVC Worldwide, Inc., 484 F. Supp. 2d 620 (S.D.Tex. 2007) Williams v. Crichton, 84 F.3d 581 (2d Cir. 1996) Campbell v. Koons, 1993 WL 97381 (S.D.N.Y. 1993) 9

Rogers v. Koons, 960 F.2d 301 (2d Cir. 1992) Scanlon v. Kessler, 11 F. Supp. 2d 444 (S.D.N.Y. 1998) Schaffer v. A.O. Smith Harvestore Products, Inc., 74 F.3d 722 (6th Cir. 1996) Sheldon Abend Revocable Trust v. Spielberg, 2010 WL 3701345 (S.D.N.Y. 2010) SHL Imaging, Inc. v. Artisan House, Inc., 117 F. Supp. 2d 301 (S.D.N.Y. 2000) Silberman v. Innovation Luggage, Inc., 2003 WL 1787123 (S.D.N.Y. Apr. 3, 2003) Singer v. Citibank N.A., 1996 WL 200292 (S.D.N.Y. Apr. 25, 1996) Steinberg v. Columbia, 663 F. Supp. 706 (S.D.N.Y. 1987) 1 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 2.08[E][1] (Matthew Bender, Rev. Ed.) Derivative Liability A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001) Andersson v. Sony Corp. of America, 1997 WL 226310 (S.D.N.Y. May 2, 1997) Arista Records LLC v. Usenet.com, Inc., 633 F. Supp. 2d 124 (S.D.N.Y. 2009) MGM, Inc. v. Grokster, Ltd., 518 F. Supp. 2d 1197 (C.D. Cal. 2007) Perfect 10 v. Amazon.com, 508 F.3d 1146 (9th Cir. 2007) Perfect 10, Inc. v. Visa Int'nl Service Ass'n, 494 F.3d 788 (9th Cir. 2007) DMCA Gordon v. Nextel Communications & Mullen Advertising, 345 F.3d 922, 923 (6th Cir. 2003). Princeton University Press v. Michigan Document Services, Inc., 99 F.3d 1381, 1392 (6th Cir. 1996) Getaped.Com, Inc. v. Cangemi, 188 F. Supp. 2d 398, 403 (S.D.N.Y. 2002) 17 U.S.C. Section 1202(b) Damages: 10

Davis v. The Gap, Inc., 246 F.3d 152, 160 (2d Cir. 2001) Mackie v. Reiser, 296 F.3d 909 (9th Cir. 2002) Polar Bear Productions, Inc. v. Timex Corp., 384 F.3d 700 (9th Cir. 2004) Semerdjian v. McDougall Littell, 641 F. Supp. 2d 233 (S.D.N.Y 2009) Shine v. Childs, 382 F. Supp. 2d 602 (S.D.N.Y. 2005) Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) Roy Export Co. Establishment of Vaduz, Liechtenstein v. Columbia Broadcasting System Inc., 503 F. Supp. 1137 (S.D.N.Y. 1980) Sid & Marty Krofft Television Prods., Inc. v. McDonald's Corp., 1983 WL 1142 (C.D. Cal. Jan. 12, 1983) Taylor v. Meirick, 712 F.2d 1112 (7th Cir. 1983) Thornton v. J Jargon Co., 580 F. Supp. 2d 1261 (M.D. Fla. 2008) William A. Graham Co. v. Haughey, 568 F.3d 425 (3d Cir. 2009) Rainey v. Wayne State University, 26 F. Supp. 2d 963 (E.D. Mich. 1998) Orgel v. Clark Boardman Co. Ltd., 128 U.S.P.Q. 531 (S.D.N.Y. 1960) Latimer v. Roaring Toyz, Inc., 2010 WL 3747148 (M.D. Fla. Sept. 21 2010) Estate of Vane v. The Fair Inc., 849 F.2d 186 (5th Cir. 1988) Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505 (9th Cir. 1985) Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 886 F.2d 1545 (9th Cir. 1989) Gershwin Publ'g Corp. v. Columbia Artists Mgmt., 443 F.2d 1159 (2d Cir. 1971) Images Audio Visual Productions, Inc. v. Perini Building Co., Inc., 91 F. Supp. 2d 1075 (E.D. Mich. 2000) Andreas v. Volkswagen of America, Inc., 336 F.2d 789 (8th Cir. 2003) Burns, M.D. v. Imagine Films Entertainment, Inc., 2001 WL 34059379 (W.D.N.Y. Aug. 23, 2001) Business Trends Analysts, Inc. v. The Freedonia Group, 887 F.2d 399 (2d Cir. 1989) 11

Deltak v. Advanced Sys., Inc., 574 F. Supp. 400 (N.D. Ill. 1983) 17 U.S.C. § 101(b) 17 U.S.C. § 504(b)

iv.

(b)

Marked Pleadings:

The parties have attached a copy of their marked pleadings to the Joint Proposed PreTrial Order. Counterclaim Defendant Obey Clothing's marked copy of The Associated Press's First Amended Answer, Affirmative Defenses and Counterclaims (Docket No. 54) is attached as Exhibit A. Counterclaim Plaintiff the AP's marked copy of Answer and Affirmative Defenses by Counterclaim Defendant One 3 Two, Inc. d/b/a Obey Clothing to The Associated Press's First Amended Answer, Affirmative Defenses and Counterclaims(Docket No. 71) is attached as Exhibit B. v. Jury Trial Statement and Estimated Number of Trial Days: This case is to be tried to a jury. Counterclaim Plaintiff the AP anticipates that the trial will last 10 trial days and takes the position that a timed trial granting 20 hours to each of the parties would be appropriate. Counterclaim Defendant One 3 Two anticipates the trial will last 15 trial days and takes the position that a timed trial granting 30 hours to each of the parties would be appropriate. vi. Trial by Magistrate Judge: The parties have not consented to trial of this case by a magistrate judge. vii. Stipulations: A list of stipulations is attached as Exhibit C to the Joint Proposed Pre-Trial Order.

12

viii.

Witness Lists: A copy or each party's witness list is attached to this Joint Pre-Trial Order. Counterclaim

Plaintiff the AP's Witness List is attached as Exhibit D.

Counterclaim Defendant Obey

Clothing's Witness List is attached as Exhibit E. Counterclaim Plaintiff the AP's Deposition Designations, Counter-Designations, and Objections to Obey Clothing's Designations and Counter-Designations are attached as Exhibit F. Counterclaim Defendant Obey Clothing's

Deposition Designations, Counter-Designations, and Objections to AP's Designations and Counter-Designations are attached as Exhibit G. ix. Exhibit Lists: The parties are continuing to meet and confer with regard to their respective exhibit lists and anticipate providing these lists to the Court at the March 16, 2011 Pre-Trial Conference.

Dated: March 11, 2011

Respectfully submitted,

/s/ Dale M. Cendali Dale M. Cendali Claudia Ray Brendan T. Kehoe KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022 Tel: [phone] Fax: [phone] [e-mail] [e-mail] [e-mail] Michael F. Williams KIRKLAND & ELLIS LLP 655 15th Street, NW Washington, DC 20005 Tel: [phone]

Fax: [phone] [e-mail] Attorneys for Counterclaim Plaintiff THE ASSOCIATED PRESS

14

Dated: March 11, 2011

Respectfully submitted,

/s/ Robyn C. Crowther Robyn C. Crowther Jeanne A. Fugate Laurie C. Martindale Caldwell Leslie & Proctor, PC 1000 Wilshire Boulevard, Suite 600 Los Angeles, California 90017-2463 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] [e-mail] Theresa Trzaskoma Charles Michael Brune & Richard LLP 80 Broad Street New York, NY 10004 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] Attorneys for Counterclaim Defendant ONE 3 TWO, INC. D/B/A OBEY CLOTHING

SO ORDERED:

_____________________________________ The Honorable Alvin K. Hellerstein United States District Judge

15