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SILBERMAN v. INNOVATION LUGGAGE INC.

March 31, 2003

HENRI SILBERMAN AND WIZARD & GENIUS-IDEALDECOR, AG, PLAINTIFFS,
v.
INNOVATION LUGGAGE, INC., AND PETER LOMBARDI, DEFENDANTS.



The opinion of the court was delivered by: Gerard E. Lynch, United States District Judge.

OPINION AND ORDER
This action involves claims under the Copyright Act of 1976, 17 U.S.C. § 501 ("Copyright Act"), the Visual Artists Rights Act of 1990, 17 U.S.C. § 106A ("VARA"), and the New York common law of unfair competition,*fn1 concerning a black and white photograph of the Manhattan skyline at dusk. Plaintiffs are the photographer, Henri Silberman, and his licensee, Wizard & Genius Idealdecor, AG ("Wizard"), who claim that defendants violated their intellectual property rights by using an unauthorized reproduction of a portion of the photograph in the interior decoration of the defendants' retail luggage stores in and around New York City for some weeks or months starting in November 2000.

Plaintiffs seek a permanent injunction prohibiting further infringement; delivery to plaintiffs of all infringing articles; attorney's fees and statutory damages of at least $150,000 under 17 U.S.C. § 504 (c) and 505; actual damages and infringing profits under 17 U.S.C. § 504 (b); and punitive damages under VARA and the Copyright Act.

The parties have filed a barrage of motions. Plaintiffs have moved for partial summary judgment on their claims under the Copyright Act and VARA. Defendants have moved to dismiss the VARA claims, and cross-moved for summary judgment on the copyright infringement claims. In addition to these dispositive motions, each side has moved for sanctions against the other under Rule 11 of the Federal Rules of Civil Procedure, and the defendants have moved to strike Plaintiffs' Memorandum of Law in Opposition to Defendants' Cross-Motion for Summary Judgment as well as Plaintiffs' Response to Defendants' Statement of Undisputed Material Facts.

For the reasons set forth below, defendants' motion to dismiss is granted as to the VARA claims and all of plaintiff Wizard's claims. Plaintiff Silberman's motion for summary judgment on the copyright infringement claims is granted as to liability. However, because the infringing actions occurred prior to registration of the copyright, all claims for attorney's fees and statutory damages under the Copyright Act are dismissed, as are all claims for punitive damages. The computation of actual damages and infringing profits, and the extent of any injunctive relief, are reserved for trial. Defendants' motion to strike is denied, as is plaintiffs' motion for sanctions. Defendants' motion for sanctions, however, is granted, to the extent stated below.

BACKGROUND

The following facts are taken from the record submitted by the parties on their respective motions. As might be suspected from the submission multiple affidavits and briefs, including statements of allegedly undisputed material facts that have been followed by counter-statements, replies and even motions to strike statements of allegedly undisputed facts, the parties do not agree on every detail. However, the essential facts are not in dispute. Given the procedural posture of the case, the following do not constitute findings of fact; rather, we simply outline the largely undisputed facts regarding the nature and history of the dispute, as a context for resolving the legal issues at hand.

The Photograph

Plaintiff Silberman is a professional photographer living in New York City, who makes his living by selling photographic works that he creates. Plaintiff Wizard is a Swiss company located in Switzerland that holds the exclusive license to manufacture and sell poster reproductions in certain sizes of the photograph created by Silberman that has become the subject of this litigation — a black and white photograph of the lower Manhattan skyline and the Brooklyn Bridge, taken at dusk from a vantage point in Brooklyn (the "Skyline Photograph").*fn2

Silberman created the Skyline Photograph in 1982. (Defs.' R. 56.1 Stmt. at ¶ 1.) At some point, Silberman created 200 high-quality numbered and signed prints of the Skyline Photograph, a small number of which were sold as artworks. (Pls.' Mem. Supp. Summ. J. and Opp. to Defs.' Mot. Dismiss, at 6.)

In 1989, Silberman entered into an exclusive license agreement with Wizard to reproduce the Skyline Photograph as posters of various sizes. In the license agreements in effect at the time of the alleged infringement (the "License Agreements"), Wizard received the "sole exclusive right to copy, print, reproduce, publish and sell" the Skyline Photograph "throughout the world" in the form of posters of the following sizes: 90 by 120 centimeters (approximately 35.5 by 47.2 inches); 60 by 80 centimeters (approximately 23.6 by 31.5 inches); "small format"; and "wall murals." (License Agreements dated February 5, 2000 and March 18, 2000, attached as Ex. B. to Am. Cmplt.) In exchange for granting the exclusive license to Wizard, Silberman received a licensing fee, as well as royalties from the sale of Wizard's products based on the Skyline Photograph.

Wizard subsequently manufactured, marketed and sold a wall mural-sized poster (12 feet 7 inches by 8 feet 8 inches) reproduction of the Skyline Photograph (the "Skyline Wall Mural") which consisted of essentially the entire photograph, slightly cropped. (Pls.' Mem. Opp. Defs.' Mot. Partial Summ. J. and Supp. Pls.' Mot. Summ. J. at 15.) In order to market its products, Wizard produces a catalogue containing pictures of the posters it manufactures. A picture of the Skyline Wall Mural (the "Skyline Catalogue Picture") was included as image number 262 in a Wizard catalogue ("Wizard Catalogue") that was distributed to Wizard's wholesale customers. (Catalogue Picture attached as Ex. A to Defs.' R. 56.1 Counterstmt.)

The Act of Copying

Defendant Innovation Luggage, Inc. ("Innovation") is a Delaware corporation with its principal place of business in Secaucus, New Jersey, which owns or operates at least seven retail luggage stores in New York City, and other stores in Connecticut, New Jersey, Massachusetts and New Hampshire. (Defs.' Revised Responses to Pls.' First Notice to Admit, Req. Nos. 13, 17.) Defendant Peter Lombardi was the manager of visual displays for Innovation for 22 years until he retired in late 2001. (Deposition of Peter Lombardi dated June 3, 2002 ("Lombardi Tr.") at 5.)

Sometime in November 2000, in the course of his employment at Innovation, Lombardi received a copy of a Wizard catalogue from a paint store, and used a computer scanner to copy a portion of the Skyline Catalogue Picture from the center of the Picture. (Lombardi Tr. 17, 19, 26-27, 43.) The portion scanned depicts a section of the skyline (about six to seven buildings). (Ex. B to Defs.' R. 56.1 Counterstmt.) The computer-scanned image was enlarged and turned into black and white posters sized 30 by 40 inches (the "Innovation Posters"). (Defs.' R. 56.1 Stmt. ¶ 8) (Innovation Poster attached as Ex. C to Defs.' R. 56.1 Counterstmt.) Some of those posters were tinted green. (Defs.' R. 56.1 Counterstmt. ¶ 4.) Innovation also copied a smaller portion of the scanned image (two buildings) onto pricing cards sized 8.5 by 11 inches ("Pricing Cards"). (Defs.' R. 56.1 Stmt. ¶ 10) (Pricing Card attached as Ex. D to Defs.' R. 56.1 Counterstmt.) At no time did defendants seek or receive permission from Wizard or Silberman to create reproductions of the Catalogue Picture. (Defs.' Revised Responses to Pls.' First Notice to Admit, Req. No. 3.)

In November and December 2000, Innovation displayed the items it had made from the Skyline Photograph in all of its retail stores. (Defs.' Revised Responses to Pls.' First Notice to Admit, Req. No. 12.) Silberman discovered that a reproduction of part of his Skyline Photograph was on display in the Innovation stores quite by chance: While walking on Sixth Avenue in Manhattan, he recognized his own work in the window of an Innovation Luggage store. (Deposition of Henri Silberman dated Feb. 4. 2002 ("Silberman Tr."), at 19-23.) Silberman contacted the defendants in mid-December 2000 and claimed that they had infringed his copyright. (Am. Cmplt. ¶ 36.) Silberman's attorney renewed that claim in a letter to the defendants dated January 5, 2001. (Am. Cmplt. ¶ 37, Ex. E thereto.)

There is some dispute as to how long the Innovation Posters and Pricing Cards were on display. Defendants claim that the posters were on display for 6 weeks, and that all posters were removed by December 27, 2000, following Silberman's phone call to Innovation claiming copyright infringement. (Defs.' R. 56.1 Stmt. ¶ 12, Lombardi Tr. 54.) Silberman claims that the use of the Innovation Posters and Pricing Cards at the East 34th Street Innovation store continued for at least four months after he requested that Innovation cease using the image. (Decl. of Henri Silberman, dated June 25, 2002, at 3.) Defendants, in response, claim that Innovation was not responsible for the East 34th Street commercial space during those months because Innovation had closed that store and lost the lease as of December 28, 2000. (Supp. Decl. of Peter Lombardi, dated October 4, 2002, at ¶ 7.)

Copyright Registration and Commencement of Litigation

Silberman registered his copyright for the Skyline Photograph with the U.S. Copyright Office after he discovered the allegedly infringing use by defendants. (Am. Cmplt. ¶ 12, Silberman Tr. 66.) The effective date of Silberman's copyright registration is January 8, 2001. (Copyright Registration No. VA 1-080-021, attached as Ex. B to Am. Cmplt.) Wizard has not registered a copyright for its rights to the Skyline Photograph under the License Agreement.

The original complaint in this action was filed on August 2, 2001, by Silberman against Innovation. An amended complaint was filed on April 4, 2002, by Silberman and Wizard against Innovation and Lombardi.

DISCUSSION

I. Silberman's Claim for Violation of Moral Rights

In Count IV of the Amended Complaint, Silberman claims that defendants' copying of a portion of the Skyline Catalogue Picture violates his moral rights to attribution and integrity of the artwork under the Visual Artists Rights Act of 1990. Defendants move under Fed.R.Civ.P. 12(b)(6) for dismissal of the VARA claim for failure to state a cause of action, and Silberman moves for summary judgment on the VARA claim under Fed.R.Civ.P. 56. For the reasons stated below, defendants' motion to dismiss is granted and plaintiffs' motion for summary judgment is denied.

A. Standard for Dismissal under Federal Rule of Civil Procedure 12(b)(6)

In the context of a motion to dismiss, the Court accepts "as true the facts alleged in the complaint," Jackson Nat'l Life Ins. Co. v. Merrill Lynch & Co., 32 F.3d 697, 699-700 (2d Cir. 1994), and may grant the motion only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Thomas v. City of New York, 143 F.3d 31, 36 (2d Cir. 1998) (internal citations omitted). The "issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir. 1996) (internal quotation marks and citations omitted).

B. Protections under the Visual Artists Rights Act of 1990

The term "moral rights" originates in continental European law, and "is meant to capture those rights of a spiritual, non-economic and personal nature. The rights spring from a belief that an artist in the process of creation injects his spirit into the work and that the artist's personality, as well as the integrity of the work, should therefore be protected and preserved." Carter v. Helmsley Spear, Inc., 71 F.3d 77, 81 (2d. Cir. 1995) (internal references omitted).*fn3

Section 106A of VARA provides, in relevant ...


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