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Mpd Accessories B.V. v. Urban Outfitters

United States District Court, S.D. New York

May 30, 2014

MPD ACCESSORIES B. V. Plaintiff,
v.
URBAN OUTFITTERS et al., Defendants.

MEMORANDUM OPINION AND ORDER

LAURA TAYLOR SWAIN, District Judge.

In this copyright infringement action, Plaintiff MPD Accessories B.V. ("MPD" or "Plaintiff") sues Defendant Urban Outfitters, Inc. ("Urban Outfitters") and Defendant GMA Accessories Inc. d/b/a Capelli New York ("GMA") (collectively, "Defendants"), alleging that Defendants have infringed upon Plaintiff's exclusive right to reproduce and sell scarves decorated with certain designs. Plaintiff moves, pursuant to Federal Rule of Civil Procedure 56, for summary judgment, arguing that it has valid copyrights in both designs and that Defendants have infringed upon those copyrights by producing and selling scarves printed with the two designs.[1] Plaintiff seeks the recovery of Defendants' profits as damages; a permanent injunction against Defendants; and an order directing Defendants to surrender the remaining scarves to MPD. The Court has subject matter jurisdiction of the case pursuant to 28 U.S.C. §§ 1331 and 1338(a). Having reviewed carefully the parties' submissions and arguments, the Court grants Plaintiff's motion for summary judgment in its entirety.

BACKGROUND[2]

MPD is an Amsterdam-based accessories company that creates or purchases original textile designs for products that it sells to the global market. (Menke Aff. ¶ 1.) GMA buys and markets accessories and clothing in the United States and internationally. Urban Outfitters sells clothing and accessories around the world. On or about February 7, 2011, MPD acquired a stripe textile pattern from Whiston & Wright (W&W), a United Kingdom textile design studio. (Pl.'s 56.1 St. at ¶ 1.) In March 2011, utilizing that pattern, Corrine Kamp, a textile designer employed by MPD, created a design of "brightly colored block stripes, variegated color combinations and bold and small stripes, interlinking horizontal and vertical stripes and parallel and perpendicular striping" (the "Stripe Design"), from which MPD produced a scarf. (Id. at ¶ 2.) By an agreement dated May 3, 2012 (the "W&W Agreement"), Whiston & Wright acknowledged that MPD had purchased the original stripe design ("Original Design") on February 8, 2011, and purported to assign to MPD "all intellectual property rights in and to the [Original] Design with retroactive effect to the date of delivery of the Design." (Menke Aff., Ex A ¶ 1.1). The W&W Agreement further provided that the assignment "constitute[d] a transfer to MPD of the full and sole ownership of the intellectual property rights in and to the [Original] Design, including, but not limited to, all rights to reproduce, adapt, distribute and license, in any form whatsoever without limitation." (Id. ¶ 1.2.) Whiston & Wright represented and warranted that "it [wa]s the sole owner of the intellectual property rights in and to the [Original] Design and that all these rights are unencumbered and free of any claims by third parties." (Id. ¶ 3.1.) MPD's designer, Ms. Kamp, also created an "oblong double face lace-wool star [design] scarf" with stars that vary in size and spacing on top of a stylized floral pattern (the "Star Design") in March 2011, without using any pre-existing pattern. (Pl.'s 56.1 St. ¶ 6, See Menke Aff., Ex. J.)

The Star Design was approved by MPD and first manufactured for MPD by Tongshi Factory in China in April 2011. (Pl.'s 56.1 St. ¶ 7.) Ms. Kamp stated, that, in accordance with her practice, she gave Tongshi Factory her designs to use for manufacturing purposes. (See Gusy Decl., Ex. B., Kamp Dep. Tr. 63:12-25, 64:2-9.) In addition, e-mails were sent between Ms. Kamp and employees of Tongshi Factory discussing manufacturing and formatting adjustments. (See Mizra Decl, Ex. A.) MPD originally published and distributed the Star Design in Europe in April 2011, and the Stripe Design in May 2011. (Menke Aff. at ¶¶ 5-7, 11-13.) MPD has not licensed the Stripe Design or Star Design to Urban Outfitters, GMA, or to any other United States company. (Menke Aff. ¶¶ 8, 14.)

George Altirs, CEO of GMA ("Mr. Altirs"), testified that he went to Tongshi Factory, where he saw scarves with a stripe design and with a star design. (Gusy Decl., Ex. A, Altirs Dep. Tr. 46:8-10, 21-24.) Mr. Altirs represents that the scarves were presented to him as the work product of Tongshi Factory and that he determined, based on his own examination, that the scarves were not creative enough to qualify for any copyright protection since they consisted of basic shapes. (See Id . Altirs Dep. Tr. 51:4-16, 21-25.) Between 2011 and 2012, Tongshi Factory sold to GMA scarves with the same or a strikingly similar Stripe Design as MPD's scarves and with the same or a strikingly similar Star Design as MPD's scarves. (Pl.'s 56.1 St. ¶¶ 19-20; see also, Feb. 11, 2013, Gusy Decl., Ex. C.) GMA then re-sold 4, 008 scarves with the Stripe Design and 5, 083 scarves with the Star Design. (Id.) Urban Outfitters purchased from GMA 3, 200 units of scarves with the same or a strikingly design to the Stripe Design scarves and 5, 059 units of scarves with the same or a strikingly similar design to MPD's Star Design scarves. (Pl.'s 56.1 St. ¶¶ 19-20; Kim Decl. Opp. at Ex. 2.)

MPD contends that, in May and June 2012, it discovered that Urban Outfitters' online store was selling scarves that were the same as or strikingly similar to the Stripe Design. (Pl.'s 56.1 St. ¶ 10.) In May 2012, GMA was informed that the United Kingdom's branch of Urban Outfitters UK Ltd. had received a cease and desist letter from Plaintiff related to sales of scarves with the Stripe Design. (Id. ¶ 12.) On June 21, 2012, MPD's attorneys purchased a scarf with a design that they contend was identical or nearly identical to the Star Design from Urban Outfitters' online store. (Id. ¶ 13.) On July 6, 2012, MPD's attorneys sent Urban Outfitters another cease and desist letter - this time in connection with the Star Design. (Id. ¶ 14.) On July 18, 2012, MPD's attorneys purchased two scarves from the Urban Outfitters store located at 521 Fifth Avenue, New York, New York, with designs that were identical or nearly identical to both the Stripe Design and Star Design. (Id. ¶ 15.) On October 1, 2012, MPD's attorneys purchased from Defendant GMA's retail store located at 475 Fifth Avenue, New York, New York a scarf with a pattern identical or nearly identical to the Star Design. (Id. ¶ 18.) Defendants do not dispute that the scarves they purchased from Tongshi Factory and offered for sale are identical or at least strikingly similar to MPD's Stripe Design and Star Design scarves.

DISCUSSION

Summary judgment is appropriate if the movant can show that there is no genuine dispute as to a material fact and that "the moving party is entitled to judgment as a matter of law." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247-48 (1986). "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248. When considering a motion for summary judgment, "[a]s a general rule, all ambiguities and inferences to be drawn from the underlying facts should be resolved in favor of the party opposing the motion, and all doubts as to the existence of a genuine issue for trial should be resolved against the moving party." Binder v. LILCO , 933 F.2d 187, 191 (2d Cir. 1991) (internal quotations and citations omitted). "Viewing the evidence produced in the light most favorable to the nonmovant, if a rational trier could not find for the nonmovant, then there is no genuine issue of material fact and entry of summary judgment is appropriate." Id . However, a party cannot survive a motion for summary judgment based merely on speculation or conjecture because "[m]ere conclusory allegations or denials... cannot by themselves create a genuine issue of material fact where none would otherwise exist." Comm. Trade USA, Inc., v. INTL FCStone, Inc., No. 13 Civ 3998, 2014 WL 787912, at *3 (S.D.N.Y. Feb. 27, 2014) (internal quotation marks and citation omitted).

Ownership of the Designs

Validity of Assignment from Whiston & Wright

Defendants assert in a conclusory fashion that, because the W&W Agreement, on which Plaintiff relies for its assertion of ownership of the Original Design underlying its Stripe Design, was executed a year after Plaintiff's acquisition of the Original Design, it is ineffective as a retroactive transfer of rights. Defendants cite no law in support of this argument, which is patently inconsistent with the parties' agreement as spelled out on the face of the W&W Agreement, the authenticity of which is not challenged. Similarly, Defendants assert that the assignment provision of the W&W Agreement is invalid because it is not signed by an individual designer. This objection is also ineffectual, as the W&W Agreement includes Whiston & Wright's representation that it owned all of the necessary rights, and Defendants have proffered no evidence that any other individual or entity claims ownership of such rights.

The party opposing a motion for summary judgment "must offer concrete evidence from which a reasonable juror could return a verdict in his favor.'" Vargas v. Transeau , 514 F.Supp.2d 439, 442 (S.D.N.Y. 2007) (internal quotation marks and citation omitted). "The nonmovant may not rely on conclusory allegations or unsubstantiated speculation, but must support the existence of an alleged dispute with specific citation to the record materials." Hughes v. U.S., No. 12 Civ 5109, 2014 WL 929837, at *3 (S.D.N.Y. Mar. 7, 2014) (internal quotation marks and citation omitted). Defendants do not cite any evidence or make any supported legal arguments in aid of their assertion that the assignment is invalid. Accordingly, the Court finds that Defendants have not raised a genuine issue as to the validity of Plaintiff's ownership of the rights transferred by Whiston & Wright.

Whether Tongshi Factory is an Author of the Stripe or Star Designs

Solely on the basis of references in the above-described emails to samples and design alterations in connection with Tongshi Factory's fabrication of Stripe Design and Star Design scarves for MPD, Defendants allege that Tongshi Factory is the sole or joint author of both the Stripe Design and the Star Design. "The non-moving party must [, however, ] do more than simply show there is some metaphysical doubt as to the material facts" and "may not rely on conclusory allegations or unsubstantiated speculation." Vargas , 514 F.Supp.2d at 442 (internal quotation marks and citations omitted).

The Copyright Act defines a "joint-work" as "a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole." See 17 U.S.C.S. § 101 (LexisNexis 2011). The doctrine is not, however, meant to eliminate sole authorship in situations in which another party has merely "rendered some form of assistance." See Childress v. Taylor , 945 F.2d 500, 504 (2d Cir. 1991). The Second Circuit has established a two-part test for joint authorship: "each putative co-author must have (1) intended, at the time of creation, to be a co-author and (2) made independently copyrightable contributions to the work." Maurizio v. Goldsmith , 84 F.Supp.2d 455, 465 (S.D.N.Y. 2000). "[O]nly tangible forms of expression are protected by the Copyright Act. Ideas, refinements, and suggestions, standing alone are not the subjects of copyright.'" Id. at 466 (citations omitted).

The email messages on which Defendants rely are insufficient to demonstrate that Tongshi Factory made any independently copyrightable contribution to the Star Design or the Stripe Design. Read in the light most favorable to Defendants, the messages suggest, at best, that Tongshi Factory suggested and changed some of the spacing and sizing of the patterns on the Star Design after receiving instructions from MPD. (See Mirza Decl., ¶¶ 5-10, Exs. A-C.) Such ideas are not protectable. See Maurizio , 84 F.Supp.2d at 466 ("ideas and suggestions are not copyrightable"). Nor is the fact that Tongshi Factory ultimately produced patterns on textiles, rather than paper, sufficient to support independent copyrightability. L. Batlin & Son Inc. v. Snyder , 536 F.2d 486, 489 (2d Cir. 1976) ("the variations found in appellants' plastic bank were merely trivial' and [] it was a reproduction of [a public domain] metal bank made as simply as possible for the purposes of manufacture. In other words, there were no elements of difference that amounted to significant alteration or that had any purpose other than the functional one of making a more suitable (and probably less expensive) figure in the plastic medium."). Transforming a work from one medium to another does not necessarily create a new protectable work. Id. at 491.

Defendants have likewise failed to produce evidence sufficient to create any issue of fact regarding the intent of the Plaintiff to credit Tongshi Factory as a joint author. The record before this Court merely reflects communications and arrangements consistent with fabrication and production issues. There is no evidence that Plaintiff contemplated shared design credit with Tongshi Factory, nor is there any evidence that the issue was ever brought up between the two. Indeed, Plaintiff's designer has specifically denied any intention to share ownership. (See Gusy Decl., Ex. B. Kamp Dep. Tr. 66:16-25.) ("It is not up to the manufacturer to change the design... It is my testimony they [Tongshi Factory was] not allowed to ...


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