Jovani Fashion, Ltd. v. Cinderella Divine, Inc. et al
Filing
111
OPINION AND ORDER. The Court has considered all of the arguments raised by the parties. To the extent not specifically addressed, the arguments are either moot or without merit. Fiesta's motion for costs and attorney's fees is denied. The Clerk is directed to close Docket No. 90. (Signed by Judge John G. Koeltl on 10/22/11) (rjm)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
────────────────────────────────────
JOVANI FASHION, LTD.,
Plaintiff,
- against -
10 Civ. 7085 (JGK)
CINDERELLA DIVINE, INC., ET AL.,
OPINION AND ORDER
Defendants.
────────────────────────────────────
JOHN G. KOELTL, District Judge:
The plaintiff, Jovani Fashion, Ltd. (the "plaintiff" or
"Jovani"), a manufacturer of prom dresses, sued several
competitors, including Fiesta Fashions ("Fiesta"), principally
under the Copyright Act, 17 U.S.C. § 101 et seq., for allegedly
infringing a copyrighted dress design or copyrighted elements of
that design.
In July, this Court granted Fiesta’s motion to
dismiss under Rule 12 of the Federal Rules of Civil Procedure.
See Jovani Fashion, Ltd. v. Cinderella Divine, Inc., No. 10 Civ.
7085, 2011 WL 2671584, at *8 (S.D.N.Y. July 7, 2011).
Fiesta
now moves for costs and attorney’s fees.
I.
The following facts are undisputed, unless otherwise
indicated.
Jovani is a designer and manufacturer of women's dresses,
particularly evening dresses, pageant gowns, prom dresses, and
1
cocktail dresses.
Jovani, 2011 WL 2671584, at *2.
Between May
and August 2010, Jovani filed copyright registration
applications on and received copyright registrations for ten
catalogs that Jovani claims show artwork incorporated in
dresses. Id.
On September 15, 2010, Jovani filed a lawsuit in
this Court against eleven competing dressmakers or retailers,
among others, alleging that dresses which these defendants made
or sold incorporated artwork that is substantially similar to
and was copied from Jovani’s designs.
Id.
In its initial complaint, Jovani alleged three causes of
action against the defendants: (1) copyright infringement claims
under the Copyright Act, 17 U.S.C. § 101 et seq.; (2) trademark
claims and claims for other violations of the Lanham Act, 15
U.S.C § 1051 et seq.; and (3) unfair competition claims under
New York state common law.
(Compl. ¶ 119-148, Jovani Fashion,
Ltd. v. Cinderella Divine, Inc., No. 10 Civ. 7085, Docket No. 1)
With regard to Fiesta specifically, the Complaint alleged only
that, “[u]pon information and belief, Fiesta has manufactured,
imported, advertised, publicly displayed, offered for sale and
sold Infringing Dresses in the United States.”
(Compl. ¶ 99 &
Ex. S.)
Fiesta moved to dismiss Jovani’s claims in December 2010.
On January 13, the Court heard oral argument.
2
At that argument,
the Court granted the plaintiff permission to amend its
complaint, and denied the first motion to dimiss as moot.
The
Court noted that if a future motion to dismiss was successful it
would be granted with prejudice.
(Order dated Jan. 14, 2011,
Jovani Fashion, Ltd. v. Cinderella Divine, Inc., No. 10 Civ.
7085, Docket No. 61.)
In its First Amended Complaint, Jovani asserted only claims
under the Copyright Act, and no longer asserted claims under the
Lanham Act or New York state common law.
Jovani asserted 26
counts of copyright infringement, alleging that the various
defendants had infringed 25 of its designs. (Am. Compl. ¶ 99370, Jovani Fashion, Ltd. v. Cinderella Divine, Inc., No. 10
Civ. 7085, Docket No. 64.)
With regard to Fiesta, the amended
complaint alleged that Fiesta “ha[d] manufactured, imported,
advertised, publicly displayed, offered for sale, and sold
Infringing Dresses in the United States, including Fiesta
Fashions’ style no. FI50021.” (Am. Compl. ¶ 82; see also Am.
Compl. ¶¶ 80-81 & Ex. M.)
“Count 21” of Jovani’s amended
complaint applied specifically to Fiesta’s alleged infringement
on “Jovani style 154416.”
(Am. Compl. ¶¶ 318-326.)
Jovani had
registered a copyright for that dress style with the United
States Copyright Office in September 2009.
3
(Am. Compl. ¶¶ 319-
321 & Ex. C at 10; Sofer Decl. Ex. B.)
In the amended
complaint, Jovani alleged that the style encompassed
original artwork [that] includes the ornamental design and
arrangement on the face of the fabric of the depicted
dress, including but not limited to the selection and
arrangement of sequins and beads and their respective
patterns on the bust portion, as well as the wire-edged
tulles added to the lower portion of the depicted dress.
Such original artwork is physically and conceptually
separable from the functional aspects of the dress that is
depicted, primarily because such artwork is purely
aesthetic and serves no functional purpose in the depicted
dress.
(Am. Compl. ¶ 320)
Count 21 was the only claim of copyright
infringement alleged against Fiesta in the amended complaint.
Fiesta and another defendant then moved to dismiss the
amended complaint pursuant to Rule 12 of the Federal Rules of
Civil Procedure.
This Court denied the other defendant’s motion
to dismiss because that defendant “ha[d] not made any argument
that the particular dresses or design elements that it is
alleged to have infringed are unprotectable.”
2671584, at *5 (emphasis in original).
Jovani, 2011 WL
The specific allegations
of unprotectability in Fiesta’s motion, by contrast, “allow[ed]
the Court to assess the separability of the allegedly protected
elements in the dress at issue.”
Id.
On July 7, 2011, this
Court granted the motion to dismiss the claim against Fiesta;
the Court found that the elements of Jovani style # 154416, the
only dress design that Fiesta had allegedly infringed, were
4
neither physically nor conceptually separable from dress as
whole.
Id. at *5-*8.
Fiesta then brought the present motion for costs and
attorney’s fees pursuant to § 505 of the Copyright Act, 17
U.S.C. § 505, and § 32(a) of the Lanham Act, 15 U.S.C. §
1117(a).
In defending this case through the successful motion
to dismiss, Fiesta incurred total attorney’s fees of $35,498.75,
and costs of $2,302.10.
(Choi Decl. ¶¶ 4-6 & Ex. A-I.)
Fiesta
also incurred attorney’s fees of $10,582.50, and additional
costs of $2,101.74, in litigating the present motion for costs
and attorney’s fees.
(Choi Supp. Decl. ¶¶ 4-5 & Ex. A.)
Fiesta
has asserted, and Jovani has not challenged, that those fees and
costs are based on a reasonable hourly rate for the lawyers who
worked on this case, that the number of hours worked was itself
reasonable, and that the fees and costs were justified by
contemporaneously recorded time records.
(Ross Decl. ¶ 10;
Hogan Decl. ¶¶ 6-7.)
II.
Section 505 of the Copyright Act provides:
In any civil action under this title, the court in its
discretion may allow the recovery of full costs by or
against any party other than the United States or an
officer thereof. Except as otherwise provided by this
title, the court may also award a reasonable attorney's fee
to the prevailing party as part of the costs.
5
17 U.S.C. § 505.
Jovani does not dispute that Fiesta is a prevailing party
under the terms of § 505 by virtue of its securing dismissal
with prejudice.
Moreover, the Supreme Court has made clear that
defendants may be prevailing parties for the purposes of § 505,
and should be treated the same as a prevailing plaintiff.
See
Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994) (“Prevailing
plaintiffs and prevailing defendants are to be treated alike . .
. .”); see also id. at 527 (“[A] successful defense of a
copyright infringement action may further the policies of the
Copyright Act every bit as much as a successful prosecution of
an infringement claim by the holder of a copyright.”); Polsby v.
St. Martin's Press, Inc., 8 F. App’x. 90, 92 (2d Cir. 2001) (“A
defendant who prevails in a copyright action may be awarded
attorneys' fees under 17 U.S.C. § 505 as a matter of the
district court's equitable discretion, consistent with the
purposes of the copyright laws”).
However, costs and attorney’s fees for prevailing parties
under § 505 “are not automatic.” Medforms, Inc. v. Healthcare
Mgmt. Solutions, Inc., 290 F.3d 98, 117 (2d Cir. 2002).
Rather,
they are a matter for a district court’s “equitable discretion.”
Id.; see also Fogerty, 510 U.S. at 534 (“[A]ttorney's fees are
6
to be awarded to prevailing parties only as a matter of the
court's discretion.”); 17 U.S.C. § 505 (“[T]he court in its
discretion may allow the recovery of full costs . . . .”)
(emphasis added).
The nonexclusive Fogerty factors guide a district court’s
analysis with regard to the question of fees under § 505.
“When
determining whether to award attorneys fees, district courts may
consider such factors as (1) the frivolousness of the nonprevailing party's claims or defenses; (2) the party's
motivation; (3) whether the claims or defenses were objectively
unreasonable; and (4) compensation and deterrence.”
Bryant v.
Media Right Productions, Inc., 603 F.3d 135, 144 (2d Cir. 2010),
cert. denied, 131 S. Ct. 656 (2010) (citing Fogerty, 510 U.S. at
534 n.19).
These factors, and any others weighed by a district
court, must be applied in a manner “faithful to the purposes of
the Copyright Act.”
Fogerty, 510 U.S. at 534 n.19.
In this
circuit, “[t]he third factor -- objective unreasonableness -should be given substantial weight.”
Bryant, 603 F.3d at 144.
Here, the Fogerty factors counsel against a fee-shifting award.
A.
First, and most importantly, the Court cannot conclude that
Jovani’s claim was objectively unreasonable.
7
The grant of a
motion to dismiss does not in itself render a claim
unreasonable; rather, “only those claims that are clearly
without merit or otherwise patently devoid of legal or factual
basis ought to be deemed objectively unreasonable.”
Silberstein
v. Fox Entm’t Grp., Inc., 536 F. Supp. 2d 440, 444 (S.D.N.Y.
2008) (internal quotation marks omitted).
Here, Jovani’s claim
was supported by a valid copyright registration for Jovani style
# 154416.
See Am. Compl. Ex. C; Sofer Decl. Ex. B; see also
Jovani, 2011 WL 2671584, at *3.
As a legal matter, while “[i]t
is well settled that dress designs are useful articles for the
purposes of the Copyright Act and thus are not typically
copyrightable,” id. at *4 (internal quotation marks omitted), in
deciding the motion to dismiss this Court noted that the degree
to which the Copyright Act protects the design elements of
clothing is a matter that has divided the courts and proven
“difficult to apply.”
Id.
Fiesta argues that, because Jovani’s
theory of copyrightability shifted over the course of litigating
the motion, from the dress design, to two design elements, to
five design elements, to the “compilation” of the elements,
Jovani never had a reasonable claim in the first place.
However, given the intricacy and closeness of the “separability”
analysis which was required to distinguish between the
noncopyrightable useful elements of a dress, and its potentially
8
copyrightable design elements, Jovani’s varied attempts at
articulating a successful theory of copyrightability for style #
154416, without more, do not establish that Jovani’s claim was
“clearly without merit or otherwise patently devoid of legal or
factual basis.”
Silberstein, 536 F. Supp. 2d at 444. 1
Second, the Court cannot conclude that Jovani’s claim was
improperly motivated and in bad faith.
Fiesta argues that
Jovani brought this lawsuit in order to dominate its smaller
competitors in the prom dress market, including Fiesta.
However, Fiesta does not point to any direct or even
circumstantial evidence of Jovani’s alleged ulterior motive.
The bare allegation that Jovani brought its claim in bad faith
or due to an improper motive is outweighed by the generally
respectful conduct of the litigation thus far, and, as described
above, by the fact that Jovani clearly had -- and, as against
some of the other defendants, continues to have – a copyright
1
Jovani offered with its opposition to Fiesta’s motion to
dismiss, and offers again in support of its opposition to
Fiestas’s motion for attorney’s fees and costs, the expert
report of former United States Register of Copyrights Ralph
Oman. (Sofer Decl. Ex. A.) The Court did not rely on the Oman
report, upon which the complaint did not rely, in deciding the
motion to dismiss, see Kramer v. Time Warner, Inc., 937 F.2d
767, 773 (2d Cir. 1991), and the Court does not rely on that
report now in concluding that Jovani’s claim against Fiesta was
not objectively unreasonable.
9
infringement claim that the Court cannot say is objectively
unreasonable or frivolous.
Third, Fiesta argues that “the need in particular
circumstances to advance the considerations of compensation and
deterrence,” Fogerty, 510 U.S. at 534 n. 19, warrant a fee
award.
Fiesta notes that it is a small company without a
litigation budget.
Yet this fact alone does not mean that it
must be compensated for the cost of defending against a not
unreasonable copyright infringement claim.
Compensation and
deterrence may be required where a party is forced to prosecute
willful infringement, U2 Home Entertainment, Inc. v. Hong Wei
Intern. Trading, Inc., 04 Civ. 6189, 2008 WL 3906889, at *17
(S.D.N.Y. Aug. 21, 2008) (collecting cases), or defend against
objectively unreasonable claims, Muller v. Twentieth Century Fox
Film Corp., No. 08 Civ. 2550, 2011 WL 3678712, at *3 (S.D.N.Y.
Aug. 22, 2011), or where a party engages in misconduct, see
Crown Awards, Inc. v. Discount Trophy & Co., Inc., 564 F. Supp.
2d 290, 296-97 (S.D.N.Y. 2008), aff’d, 326 F. App’x. 575 (2d
Cir. 2009) (summary order).
In those circumstances, there is an
interest in disincentivizing behavior that either violates the
Copyright Act or exploits it for objectively baseless
litigation.
However, “the imposition of a fee award against a
copyright holder with an objectively reasonable litigation
10
position will generally not promote the purposes of the
Copyright Act.” Matthew Bender & Co., Inc. v. West Publ’g. Co.,
240 F.3d 116, 122 (2d Cir. 2001).
Jovani’s claim, and Fiesta’s motion to dismiss, presented a
close case concerning the application of the separability
doctrine to the prom dress at issue.
See Jovani, 2011 WL
2671584, at *3 (“The question of whether the constituent design
. . . elements of Jovani's style # 154416[] can be copyrightable
requires much . . . analysis.”).
As such, neither party should
be deterred from raising the respective claims and defenses
raised here.
See Matthew Bender, 240 F.3d at 122 (“When close
infringement cases are litigated, copyright law benefits from
the resulting clarification of the doctrine's boundaries.
But
because novel cases require a plaintiff to sue in the first
place, the need to encourage meritorious defenses is a factor
that a district court may balance against the potentially
chilling effect of imposing a large fee award on a plaintiff,
who, in a particular case, may have advanced a reasonable,
albeit unsuccessful, claim.”) (quoting Lotus Development Corp.
v. Borland Intern., Inc., 140 F.3d 70, 75 (1st Cir. 1998). 2
2
Moreover, compensation appears to be particularly inappropriate
here, where Fiesta exacerbated the costs of the litigation by
filing the present motion. There was only modest activity in
this case, and Jovani’s claim against Fiesta was dismissed on a
11
B.
Fiesta argues that an additional factor, “the amount at
stake in the litigation,” weighs in its favor.
564 F. Supp. 2d at 294.
Crown Awards,
In Crown Awards, the court, following
an opinion by Judge Posner of the Court of Appeals for the
Seventh Circuit, found that “the prevailing party in a copyright
case in which the monetary stakes are small should have a
presumptive entitlement to an award of attorneys' fees.”
Id. at
295 (quoting Assessment Techs. of WI, LLC v. WIREdata, Inc., 361
F.3d 434, 437 (7th Cir. 2004).
The gist of this argument is
that such a presumption in small-dollar, potentially negative
value cases is necessary to prevent parties, and defendants in
particular, from being “forced into a nuisance settlement or
deterred altogether from exercising [their] rights,” because
pressing a meritorious defense is more costly than surrendering
it.
Assessment Techs., 361 F.3d at 437.
Rule 12(b) motion. The total litigation costs for Fiesta’s
defense of the present case, up to this motion for attorney’s
fees and costs, was $37,800.85. (Choi Decl. ¶ 6.) Fiesta’s
subsequent litigation of this motion increased its costs by
another $12,684.24, an over 30% increase in Fiesta’s total
costs. (Choi Supp. Decl. ¶ 6.) These added costs include
$1,620.68 in computerized library research, $418.00 in train
fare, $13.06 in overtime meals, and $50.00 in “other travel
expenses.” (Choi Supp. Decl. Ex. A at 3.)
12
This argument is unpersuasive in this case.
As an initial
matter, it is not clear that the potential monetary stakes in
this action were indeed “small.”
Moreover, this “refinement of
the Fogerty standard,” id., has not been endorsed by the Supreme
Court, or by a precedential opinion of the Court of Appeals for
this circuit.
Indeed, to the extent that it sets a presumption
of a fee award and applies this presumption more forcefully in
the case of prevailing defendants, the rule of Assessment
Technologies appears to conflict with the Supreme Court’s
holding in Fogerty that fee-shifting is a matter for the
district court’s discretion, that prevailing defendants and
plaintiffs are to be evaluated “alike” and “in an evenhanded
manner,” and that the Copyright Act did not adopt “the British
Rule for automatic recovery of attorney's fees by the prevailing
party.”
Fogerty, 510 U.S. at 534 & n.19.
In any event, even if
such a presumption did exist, it has been overcome in this case,
because Jovani’s claim lay in a murky area of copyright law, was
supported by a valid copyright registration, and was litigated
in good faith.
Fiesta’s motion for attorney’s fees and costs under § 505
of the Copyright Act is therefore denied.
13
III.
Fiesta also moves for attorney’s fees and costs under the
Lanham Act, which provides that “[t]he court in exceptional
cases may award reasonable attorney fees to the prevailing
party.”
15 U.S.C. § 1117(a).
In this circuit, courts may find
such an exceptional case where there is “evidence of fraud or
bad faith” on the part of the non-prevailing party.
Gordon and
Breach Sci. Publishers S.A. v. Am. Inst. of Physics, 166 F.3d
438, 439 (2d Cir. 1999) (per curiam) (internal quotation marks
omitted).
claim.
Bad faith requires more than simply an unpersuasive
See, e.g., Universal City Studios, Inc. v. Nintendo Co.
Ltd., 615 F. Supp. 838, 864 (S.D.N.Y. 1985) (“The trademark case
. . . was initiated for reasons other than a sincere belief in
the merits of the underlying claims, and the investigation, or
lack thereof, that preceded filing the complaint was designed to
avoid discovery of the lack of substance of the complaint.
These factors establish that this case was exceptional within
the meaning of 15 U.S.C. § 1117 both because it was initiated in
bad faith and because the suit was designed to serve ulterior
business motives.”), aff’d, 797 F.2d 70 (2d Cir. 1986).
Here, as described above, there is no evidence that Jovani
brought its claim in bad faith.
While Fiesta has alleged that
Jovani possessed an ulterior motive for bringing suit, namely to
14
bully its commercial competition, such allegations remain
unsubstantiated.
Moreover, Jovani voluntarily withdrew its
Lanham Act claims early in the litigation, when it filed its
amended complaint, which did not contain Lanham Act claims.
Assuming that § 1117{a) still applies despite the early
withdrawal of the Lanham Act claims, that claim, in the context
of this case,
udid not add significantly to the factual or legal
burdens on defendants' attorneys," and this is therefore not the
type of "exceptional case" for which fees should be awarded
under the Lanham Act.
355 (S.D.N.Y. 2002).
Hoepker v. Kruger, 200 F. Supp. 2d 340,
The Court declines to exercise its
discretion to award attorney's fees and costs for Jovani's
withdrawn Lanham Act claim against Fiesta.
CONCLUSION
The Court has considered all of the arguments raised by the
parties. To the extent not specifically addressed, the arguments
are either moot or without merit.
Fiesta's motion for costs and
attorney's fees is denied. The Clerk is directed to close Docket
No. 90.
SO ORDERED.
Dated:
New York, New York
October 22, 2011
John G. Koeltl
States District Judge
15
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?