Opinion
No. CV-15-00110-PHX-DGC
01-30-2017
Origami Owl LLC, Plaintiff, v. Julie E Mayo, Defendant.
ORDER
Plaintiff Origami Owl LLC and Defendant Julie E. Mayo have filed cross-motions for summary judgment. Docs. 108, 110. The motions are fully briefed. Docs. 111, 112, 115, 120, 121. No party requests oral argument. The Court will grant Plaintiff's motion and deny Defendant's motion.
I. Background.
Plaintiff sells low-priced jewelry. Doc. 20, ¶ 13. The jewelry includes lockets, chains, dangles, tags, bracelets, and earrings. Id. Defendants West Coast Charms LLC ("WCC"), Julie Mayo, and Ann Mayo are also in the ornamental jewelry business. Id., ¶ 20. On December 10, 2011, Julie Mayo sent an email to Christian Weems, Plaintiff's Co-Founder and President, stating: "I like your charms. I will be making some of your designs also." Doc. 111, ¶ 6. Ms. Weems sent an email response the same day asking Julie Mayo not to copy Plaintiff's designs, noting that Plaintiff "spent thousands of dollars creating" them. Id., ¶ 7. On December 24, 2011, Julie Mayo sent a second email to Ms. Weems stating: "Customers are very interested in your designs for me to carry. I will not make them if can we [sic] work together." Id., ¶ 8.
Between April and November of 2012, Plaintiff's counsel sent three letters to Julie Mayo "asking her to cease and desist from making and selling jewelry that infringes on [Plaintiff's] copyrights." Id., ¶¶ 9-11. On September 23, 2014, Plaintiff's compliance department sent Julie Mayo another letter advising her that Plaintiff's audit of the internet had revealed that her business sold unauthorized copies of Plaintiff's copyrighted works, and again asked that she cease and desist from making and selling the jewelry. Id., ¶ 12.
On January 21, 2015, Plaintiff filed this lawsuit, claiming design patent infringement under 35 U.S.C. § 271, trademark infringement under 15 U.S.C. § 1114, copyright infringement under 17 U.S.C. § 501, and unfair competition under 15 U.S.C. § 1125. Doc. 20. WCC filed counterclaims against Plaintiff, including allegations of direct copyright infringement, trademark infringement, common law unfair competition, and attempted monopolization in violation of the Sherman Act, 15 U.S.C. §§ 1-2. Doc. 48, ¶¶ 38-124, 135-141. On February 11, 2016, the Court entered a default judgement against WCC and dismissed its counterclaims. Docs. 80, 81, 86. On January 17, 2017, the Court entered judgment against Ann Mayo pursuant to a stipulation for entry of judgment. Doc. 118. Julie Mayo is the last remaining defendant.
On March 14, 2016, Julie Mayo filed for bankruptcy. The Court stayed this matter until September 14, 2016, or until the bankruptcy stay was lifted. Doc. 85. Following a final decree from the bankruptcy court, the Court lifted the stay on September 23, 2016. Doc. 100. Plaintiff alleges that Julie Mayo has continued to offer and sell the infringing charms, dangles, and heart-shaped glass lockets. Doc. 110 at 17-19; Doc. 111, ¶ 20. Julie Mayo does not contest this assertion in her response. See generally Doc. 115.
Plaintiff moves for partial summary judgment on its copyright and patent infringement claims. Doc. 110 at 10-19. Plaintiff also seeks a permanent injunction to prevent Julie Mayo "from engaging in future copyright and patent infringement activities." Id. at 19-22. Julie Mayo seeks summary judgment in her favor. Doc. 108.
II. Legal Standard.
A party seeking summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, shows "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Summary judgment is also appropriate against a party who "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. Only disputes over facts that might affect the outcome of the suit will preclude the entry of summary judgment, and the disputed evidence must be "such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
III. Defendant Julie Mayo's Motion for Summary Judgment.
Defendant's motion fails to identify the claims, or parts of claims, on which she seeks summary judgment. See Doc. 108. Her motion is a steady stream of denials (id., ¶¶ 1, 6), unsupported accusations (id., ¶¶ 2-5, 8, 11), demands for a federal investigation (id., ¶¶ 5, 10), threats of bar complaints and criminal charges against Plaintiff's counsel (id., ¶¶ 5, 9, 11, 17), and much tangential and irrelevant information (id., ¶¶ 12-15, 18). Defendant's assertions do not show that Plaintiff's claims fail as a matter of law. Additionally, Defendant fails to submit any supporting documentation or to cite any portion of the record that would support her arguments or establish the absence of a genuine dispute. See Docs. 108, 120, 121. Accordingly, the Court will deny Defendant's motion for summary judgment. / / /
To the extent Defendant's assertions pertain to WCC's dismissed counterclaims, they are not material and will not be considered. See Anderson, 477 U.S. at 248.
IV. Plaintiff's Motion for Summary Judgment.
Plaintiff seeks summary judgment on its copyright and patent infringement claims, and a permanent injunction to prevent Defendant from engaging in infringing conduct in the future. Doc. 110 at 10-22.
A. Copyright Infringement.
"To establish copyright infringement, a plaintiff must prove two elements: '(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.'" Loomis v. Cornish, 836 F.3d 991, 994 (9th Cir. 2016) (quoting Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)).
1. Ownership.
Plaintiff asserts that it owns valid copyrights in the works at issue, and cites copyright certificates for each of the works. Doc. 110 at 10. Defendant responds by arguing that the copyright certificates were procured by fraud, but provides no evidence in support of fraud. Doc. 115, ¶ 3.
The Court notes that Defendant's response to Plaintiff's motion for summary judgment (Doc. 115) is in large part identical to Defendant's motion for summary judgment (Doc. 108). In fact, the only substantial difference between the two filings is a short section that was added to the first paragraph of the response restating accusations and threats contained elsewhere in the document. See Doc. 117-1 at 4-12 (redline copy comparing Doc. 108 and Doc. 115).
If a party presents a certificate of registration created less than five years after the first publication of the copyrighted work, the law recognizes a rebuttable presumption that the party's ownership of the copyright is valid. 17 U.S.C. § 410(c); United Fabrics Intern., Inc. v. C&J Wear, Inc., 630 F.3d 1255, 1257 (9th Cir. 2011). In this instance, Plaintiff provides copyright certificates covering all 42 items Plaintiff alleges to be infringed. See Doc. 110-1 at 103-72 (Christian Weems Declaration, Exhibit 13). Each certificate was issued within five years of what the certificate reports to be the product's first publication. Id. Thus, Plaintiff has established a presumption that its ownership of the copyrights is valid, and the burden shifts to Defendant to rebut that presumption. See United Fabrics, 630 F.3d at 1257.
Defendant has failed to meet her burden. In this Court's January 5, 2017 order instructing Defendant to respond to Plaintiff's motion, the Court advised Defendant that she "must show there is a genuine issue of material fact by setting out specific facts in declarations, depositions, answers to interrogatories, or authenticated documents as provided in Rule 56(e), that contradict the facts shown in Plaintiff's declarations or documents." Doc. 113 at 1-2; see also Celotex, 477 U.S. at 324. Defendant chose to do none of these things, and fails to provide any evidence to support the accusations made in her response. See Doc. 115. Accordingly, the Court finds that Plaintiff has established ownership of the copyrights Plaintiff alleges are infringed by Defendant. See Doc. 20-1 at 1-3 (Exhibit A of Amended Complaint showing all works alleged to be infringed); Doc. 110-1 at 103-72 (Certificates of Copyright for those works).
2. Copying of Plaintiff's Protected Works.
"Proof of copyright infringement is often highly circumstantial[.]" Three Boys Music Corp. v. Bolton, 212 F.3d 477, 481 (9th Cir. 2000). "Absent direct evidence of copying, proof of infringement involves fact-based showings that the defendant had 'access' to the plaintiff's work and that the two works are 'substantially similar.'" Id. (quoting Smith v. Jackson, 84 F.3d 1213, 1218 (9th Cir. 1996)); see also Funky Films, Inc. v. Time Warner Entm't Co., 462 F.3d 1072, 1076 (9th Cir. 2006). Plaintiff asserts that "there is no dispute that defendant copied [Plaintiff's] Copyrighted Works because it is undisputed that defendant had access to [Plaintiff's] Copyrighted Works and the striking similarities between defendant's jewelry and [Plaintiff's] Copyrighted Works is readily apparent." Doc. 110 at 11.
a. Access.
Proof of access requires "an opportunity to view or to copy plaintiff's work." Sid and Marty Krofft Television Prods., Inc. v. McDonald's Corp., 562 F.2d 1157, 1172 (9th Cir. 1977), superseded on other grounds by 17 U.S.C. § 504(b). "To prove access, a plaintiff must show a reasonable possibility, not merely a bare possibility, that an alleged infringer had the chance to view the protected work." Art Attacks Ink, LLC v. MGA Entm't Inc., 581 F.3d 1138, 1143 (9th Cir. 2009). "Where there is no direct evidence of access, circumstantial evidence can be used to prove access either by (1) establishing a chain of events linking the plaintiff's work and the defendant's access, or (2) showing that the plaintiff's work has been widely disseminated." Id.
A direct link between Plaintiff's works and Defendant's access is shown in the email exchange between Defendant and Ms. Weems in December 2011. Defendant specifically stated that she intended to use Plaintiff's designs. See Doc. 110 at 11-12; Doc. 110-1 at 12-16 (Weems declaration, Exhibits 1-3). This link is further shown through the multiple cease and desist letters sent to Defendant between early 2012 and late 2014. Doc. 110-1 at 17-23, 58-63 (Weems declaration, Exhibits 4-5, 8-9). Plaintiff alleges that Defendant ignored the letters and continued to manufacture and sell the infringing jewelry. Doc. 110 at 12.
Defendant does not offer any response or opposing explanation of the December 2011 emails or the multiple letters notifying her of the alleged infringement. Nor does she argue that these records are inaccurate in any way. The Court finds that the emails and letters provide uncontested evidence sufficient to show that Defendant had access to Plaintiff's copyrighted works.
b. Substantial Similarity.
In determining whether two works are substantially similar, courts in the Ninth Circuit employ a two-part analysis: an objective extrinsic test and a subjective intrinsic test. Swirsky v. Carey, 376 F.3d 841, 845 (9th Cir. 2004). "The 'extrinsic' test considers whether two works share a similarity of ideas and expression based on external, objective criteria." Smith, 84 F.3d at 1218. In applying the extrinsic test, courts require a lower standard of proof to find substantial similarity when a high degree of access is shown. Id. (citing Shaw v. Lindheim, 919 F.2d 1353, 1359 (9th Cir. 1990)).
A side-by-side comparison of Plaintiff's copyrighted works and Defendant's allegedly infringing works shows them to be identical in subject matter, shape, color, and arrangement. See, e.g., Doc. 20-1 at 1-3; Doc. 110 at 6-7. In fact, Defendant concedes as much. See Doc. 110-2 at 7. Defendant was shown a side-by-side comparison of charms from Exhibit A of the amended complaint during her deposition and asked if the charms were identical. Defendant responded: "They appear so." Id. The Court finds the extrinsic test easily satisfied.
"The 'intrinsic test' is a subjective comparison that focuses on 'whether the ordinary, reasonable audience' would find the works substantially similar in the 'total concept and feel of the works.'" Benay v. Warner Bros. Entm't, 607 F.3d 620, 624 (9th Cir. 2010) (quoting Cavalier v. Random House, Inc., 297 F.3d 815, 822 (9th Cir. 2002)). This test is also easily satisfied. Defendant's allegedly infringing works are identical in all respects to Plaintiff's copyrighted jewelry. See, e.g., Doc. 20-1 at 1-3; Doc. 110 at 6-7. As noted above, Defendant admitted as much in her deposition. Although the intrinsic test can be difficult to apply in some cases, such as when literary works are at issue, the products in this case, although creative, are not complex. They are simple items of jewelry with a single purpose. As the Ninth Circuit has explained:
A determination that a bee fashioned by a jeweler, or a stuffed animal produced by a toymaker, embodies an idea—the form of a natural creature—that cannot be separated from its expression, primarily involves the observer's physical senses. Where idea and expression merge, a court is well-suited to make the required determination of similarity on a motion for summary judgment.Shaw, 919 F.2d at 1360-61. The Court finds that no reasonable juror could conclude that the products are not substantially similar in the "total concept and feel of the works." Benay, 607 F.3d at 624; Liberty Lobby, 477 U.S. at 248.
3. Copyright infringement summary.
Plaintiff has shown, as a matter of undisputed fact, that it owns valid copyrights in the works and that Plaintiff has copied constituent elements of the works that are original. Loomis, 836 F.3d at 994. The Court accordingly will grant Plaintiff's motion for summary judgment on the issue of copyright infringement. / / /
4. Defendant's liability for post-bankruptcy infringement.
Plaintiff moves for summary judgment on the issue of whether Defendant can be held liable for infringement occurring after her discharge from bankruptcy. Doc. 110 at 15. Plaintiff has submitted uncontested evidence that Defendant's former website, www.westcoastcharms.net, now redirects viewers to a new website, www.snap-it.net, that is owned and maintained by Defendant and continues to sell the infringing works. Id. at 8-9; Doc. 110-2 at Exhibit D (declaration of Dennis Meraz and attachments showing images of the infringing works for sale on www.snap-it.net).
A bankruptcy discharge applies only to debts and claims that arose before the bankruptcy. See 11 U.S.C. § 727(b) ("[a] discharge under subsection (a) of this section discharges a debtor from all debts that arose before the date of the order for relief under this chapter, and any liability on a claim that is determined . . . if such claim had arisen before the commencement of the case[.]" (emphasis added)); Partners for Health and Home, L.P. v. Yang, 488 B.R. 109, 119 (C.D. Cal. 2012) ("A bankruptcy discharge cannot discharge liabilities for acts that the debtor committed or continued post-petition, or at least post-discharge."); see also O'Loghlin v. Cnt'y of Orange, 229 F.3d 871, 874-75 (9th Cir. 2000) (holding that a plaintiff could state a claim for the defendant's continuing violation post-bankruptcy, despite the fact that the defendant was granted a discharge from identical violations occurring prior to bankruptcy.).
Defendant has continued to sell the infringing works following her discharge from bankruptcy. Defendant is liable for any infringing conduct committed post-discharge.
5. Statutory damages.
Defendant's copyright infringement entitles Plaintiff to statutory damages. See 17 U.S.C. § 504(c)(1) ("the copyright owner may elect . . . an award of statutory damages for all infringements involved in the action . . . in a sum of not less than $750. . . . For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work."). Plaintiff's 42 infringed works are covered by eleven copyrights. Doc. 111, ¶¶ 1-2. Plaintiff asks the Court to award $750 for each of the eleven infringed copyrights, totaling $8,250. Doc. 110 at 16.
The issue of damages may be decided on summary judgment when a plaintiff seeks minimum statutory damages. See GoPets Ltd. v. Hise, 657 F.3d 1024, 1034 (9th Cir. 2011) ("there is no right to a jury trial when a judge awards the minimum statutory damages.") (citing In BMG Music v. Gonzalez, 430 F.3d 888, 892-893 (7th Cir. 2005) ("[I]f there is no material dispute and a rule of law eliminates discretion in selecting the remedy, then summary judgment is permissible.")). The Court will award Plaintiff the minimum statutory damages for each of the eleven counts of copyright infringement, totaling $8,250.
B. Patent Infringement.
Plaintiff is the owner of U.S. Patent No. D.711.278 ("the '278 patent"), "a design patent for a heart-shaped glass locket." Doc. 110 at 16. A defendant infringes a design patent by "appl[ying] the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or [by] sell[ing] or expos[ing] for sale any article of manufacture to which such design or colorable imitation has been applied." 35 U.S.C. § 289. Defendant does not dispute Plaintiff's allegations that she currently is manufacturing and selling the allegedly infringing product on her website, www.snap- it.com. Thus, the Court need only determine if "the patented design, or any colorable imitation thereof" has been applied to the accused "article of manufacture" - or, simply put, whether Defendant's locket actually infringes on Plaintiff's patented design. Id.
A quick search reveals that the infringing product is still in-stock and for sale on Defendant's website. See Snap-It Website, http://www.snap-it.net/catalog/CZ_ ROSE_Sweetheart_Stainless_Steel_Locket_ONLY.html (last visited Jan. 26, 2017). --------
"In determining whether an accused product infringes a patented design, this court applies the 'ordinary observer' test." Crocs, Inc. v. Int'l Trade Comm'n, 598 F.3d 1294, 1306 (Fed. Cir. 2010) (citations omitted). Infringement occurs if "an ordinary observer, familiar with the prior art designs, would be deceived into believing that the accused product is the same as the patented design." Id. Ultimately, what matters is the "overall ornamental visual impression." OddzOn Prods., Inc. v. Just Toys, Inc., 122 F.3d 1396, 1405 (Fed. Cir. 1997). Courts should not try to compare the designs strictly element-by-element. Crocs, 598 F.3d at 1303. "[I]nfringement can be found even if the accused and patented designs are not identical." OddzOn, 122 F.3d at 1405.
Plaintiff submits the following side-by-side comparison in support of its patent infringement allegations:
| Plaintiff's Patent D711,278 | Defendant's InfringingHeart-Shaped Lockets |
|---|---|
| Image materials not available for display.Fig. 2 | Image materials not available for display. |
| Image materials not available for display.Fig. 1 | Image materials not available for display. |
| Image materials not available for display.https://www.origamiowl.com/shop/categories/living-lockets | Image materials not available for display.http://www.snap-it.net/index.php?cat=174 |
The Court finds that summary judgment in favor of Plaintiff is warranted. Defendant does not deny that she has made and sold the allegedly infringing product. Nor does Defendant assert that the works are not substantially similar. As shown by the side-by-side comparison, the '278 patent and the Defendant's heart-shaped glass locket are virtually identical. "If the claimed design and the accused designs were arrayed in matching colors and mixed up randomly, this court is not confident that an ordinary observer could properly restore them to their original order[.]" Crocs, 598 F.3d at 1306.
C. Permanent Injunction.
Plaintiff seeks a permanent injunction barring Defendant from infringing on Plaintiff's copyrights and design patent in the future. Doc. 110 at 19. A plaintiff seeking a permanent injunction must show: "(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction." eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006). "While '[t]he decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court,' the 'traditional principles of equity' demand a fair weighing of the factors listed above, taking into account the unique circumstances of each case." La Quinta Worldwide LLC v. Q.R.T.M., S.A. de C.V., 762 F.3d 867, 880 (9th Cir. 2014) (quoting eBay, 547 U.S. at 391, 394). .
Plaintiff argues that it has suffered an irreparable injury that cannot be adequately compensated by an award of damages because "the harm caused to [Plaintiff's] reputation, goodwill, and brand is difficult, if not impossible, to quantify." Doc. 110 at 20 (citing Liberty Media Holdings, LLC v. Vingay.com, No. 11-CV-280-PHX-LOA, 2011 WL 7430062 at *14 (D. Ariz. Dec. 28, 2011)). The Court agrees that irreparable harm has been shown in this case. Defendant makes and sells products identical to Plaintiff's works, and has done so continuously for years. And it is clear that Defendant has no regard for Plaintiff's copyright or patent interests or the federal law requiring that they be honored. She has ignored multiple warnings, notices, and requests to cease the infringement. Following the filing of this lawsuit and her bankruptcy discharge, she simply created a new website and resumed selling her infringing products. It is clear that only an injunction will stop Defendant's infringement and protect Plaintiff's rights. See Broad. Music, Inc. v. McDade & Sons, Inc., 928 F. Supp. 2d 1120, 1136 (D. Ariz. 2013) ("Because Defendants received numerous calls, letters, and cease and desist notices from [Plaintiff] but did not cease infringement, a permanent injunction is warranted to prevent future copyright violations."). Moreover, given Defendant's recent bankruptcy, it seems unlikely that Plaintiff will recover even the modest monetary damages awarded here. Accordingly, the Court finds that the first two factors - whether Plaintiff has suffered irreparable injury and whether remedies available at law are inadequate - favor injunctive relief.
The third factor - the balance of hardships between Plaintiff and Defendant - also favors a permanent injunction. Entering the injunction and preventing Defendant from engaging in clearly unlawful conduct would impose no legitimate hardship on her, while denying the injunction and allowing Defendant to continue trading on Plaintiff's creations would impose a clear and unreasonable hardship on Plaintiff. See Liberty Media Holdings, 2011 WL 7430062 at *14.
Lastly, a permanent injunction against Defendant that is reasonably tailored serves the public interest because it is consistent with policies underlying the federal laws against infringement. The Court finds that a permanent injunction against Defendant is appropriate in this case.
IT IS ORDERED:
1. Plaintiff's motion for summary judgment (Doc. 110) is granted.
2. Plaintiff is awarded $8,250 in damages against Defendant Julie E. Mayo.
3. Defendant Julie E. Mayo and her officers, agents, servants, employees, and attorneys, as well as all persons who are in active concert with her, are permanently enjoined from infringing Plaintiff's copyrighted works.
4. Defendant's motion for summary judgment (Doc. 108) is denied.
5. The Clerk is directed to enter judgement consistent with this order and terminate this action.
Dated this 30th day of January, 2017.
/s/_________
David G. Campbell
United States District Judge