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Fischer v. Forrest

United States District Court, S.D. New York

February 16, 2018

JAMES H. FISCHER, Plaintiff,

          OPINION & ORDER

          Paul A. Engelmayer United States District Judge

         These consolidated cases arise out of the termination of a longstanding business relationship between plaintiff James H. Fischer and defendants Stephen T. Forrest, Jr., Sandra F. Forrest, Shane R. Gebauer, and Brushy Mountain Bee Farm, Inc. ("Brushy" and collectively, "Defendants"). Fischer alleges that the Defendants used his likeness and proprietary text and images to promote their own competing knock-off version of his product, Bee-Quick, a honey harvesting aid. He brings claims under the Copyright Act, 17 U.S.C. § 101 et seq., the Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. § 1201 et seq., and the Lanham Act, 15 U.S.C. § 1051 et seq., along with a claim under New York law for unfair competition.

         Pending now are Brushy's motions for summary judgment. In a thorough and persuasive Report and Recommendation, the Honorable Andrew J. Peck, United States Magistrate Judge, has recommended granting these motion. For the reasons that follow, the Court agrees, and grants these motions in their entirety.

         I. Background[1]

         A. Facts

         1. The Parties

         Since 1999, Fischer, an apiarist, has successfully sold the product Bee-Quick. TAC 04 ¶ 26.[2] Fischer promotes "Bee-Quick" as a unique "honey harvesting aid" that it is "food-safe, non-toxic, not foul smelling, and effective." Id.

         In 2000, Fischer began using the following four phrases, among others, in conjunction with the sale of Bee-Quick on his website:

1. "Are you tired of your spouse making you sleep in the garage after using Butyric Anhydride?"
2. "Are you tired of using hazardous products on the bees you love?"
3. "Fischer's Bee-Quick is a safe, gentle, and pleasant way to harvest your honey."
4. "A Natural, Non-Toxic Blend of Oils and Herbal Extracts."

See SAC 04 Ex. 5. Fischer has created non-website advertisements for Bee-Quick using some of the above phrases. See, e.g., id.

         Stephen and Sandra Forrest ("the Forrests") are the founders of Brushy Mountain Bee Farm Inc. ("Brushy"). Dkt. 175 ("Stephen Forrest Decl.") ¶ 2. Brushy is a mail-order business that primarily deals in bee-keeping supplies. Id. ¶¶ 2-3. In 2007, the Forrests hired Shane Gebauer, Brushy's current President. Dkt. 173 ("Gebauer Decl.") ¶ 1; Dkt. 180, Ex. B ("Gebauer Dep.") at 6.

         According to Gebauer, between 2008 and 2013, he worked collaboratively with the Forrests on the Brushy catalogue and website. Gebauer Dep. at 24, 26-29; Dkt. 180, Ex. D ("Sandra Forrest Dep. 2") at 6-7. This collaboration entailed, among other things, selecting photographs and text for the products Brushy sold online and through its catalogue. Gebauer Dep. at 27-31. To that end, Gebauer attests, Brushy "would draft its own copy [and] describe the products that it had purchased from other vendors that it was reselling." Id. at 29. Today, Gebauer works with others "to review and approve the Brushy Mountain Bee Farm catalogue." Id. at 31.

         The Forrests attest that, around 2009, they largely stopped working on the Brushy catalogue. Dkt. 180 Ex. C ("Stephen Forrest Dep. 2") at 26-27, Sandra Forrest Dep. 2 at 5; Dkt. 176 Ex. C ("Sandra Forrest Dep. 1") at 17. When they did work on the catalogue, however, they generally did so in the manner described by Gebauer. See Sandra Forrest Dep. 2 at 6 ("We would read what the supplier had to say and then we would write it up in a way that we thought would be best to describe the product to our customers."); id. Stephen Forrest Dep. 2 at 12 ("I believe we wrote [product descriptions] when Sandy and I were doing it.").

         As of 2014, the Forrests "ceased having any equity interest in Brushy Mountain Bee Farm, Inc." Gebauer Dep. at 9. Brushy Mountain Bee Farm Holdings, Inc. obtained the Forrests' equity in Brushy. Id. at 8.

         2. The Fischer-Brushy Relationship

         In 2002, Brushy began selling Bee-Quick. Dkt. 174 ("Sandra Forrest Decl") ¶ 2; Stephen Forrest Decl. ¶¶ 4-5. At that point, Fischer alleges, Brushy became an "Authorized Dealer" of the product. TAC 04 ¶ 32. Stephen Forrest denies this. He attests that Fisher and Brushy never had a written contract. Stephen Forrest Decl. ¶ 4; see also Dkt. 176 Ex. A ("Fischer Dep.") at 9; Gebauer Decl. ¶ 3.

         From 2002 onwards, Brushy used the following words (or ones similar to it) to promote Bee-Quick in advertisements:

This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go and it smells good! Fischer's Bee Quick is a safe, gentle, and pleasant way to harvest your honey. Are you tired of your spouse making you sleep in the garage after using Bee Go? Are you tired of using a hazardous product on the bees you love? Then this is the product for you!

         Sandra Forrest Decl. ¶ 3; Gebauer Decl. ¶ 14 & Ex. F. Sandra Forrest claims that she wrote the above text, although she and Stephen Forrest recalled with certainty only that they wrote the phrase: "Are you tired of your spouse making you sleep in the garage?" Sandra Forrest Dep. 1 at 8-9; Dkt. 176 Ex. D ("Stephen Forrest Dep. 1") at 19. Fischer attests that the Forrests did not author this text. See Dkt. 180 Ex. E ("Fischer Aff.") at 1.

         3. Termination of the Fischer-Brushy Relationship

         Around 2010, Brushy allegedly began having trouble obtaining Bee-Quick and decided to sell its own version of the product, Natural Honey Harvester, which it obtains from a third-party vendor. Gebauer Dep. at 54-56, 71; Stephen Forrest Dep. 2 at 36. As a result, on December 10, 2010, a Brushy employee sent Fischer an email stating that Brushy would not be selling Bee-Quick in its 2011 catalogue and asking for an address to which it could ship back its remaining Bee-Quick supply. See SAC 04 Ex. 3b (December 10, 2010 Email).

         Fischer asserts that, as a result of the December 10, 2010 email, "Defendants immediately lost any right, license, or permission to use any of [his] intellectual property, as all such use was permitted solely in the selling of Plaintiff s product." See TAC 04 ¶ 35; TAC 07 ¶ 47. Defendants accept this proposition in their motions for summary judgment. On the bases of the parties' common attestations, the Court, for purposes of this lawsuit, assumes that as of December 10, 2010, Brushy no longer had any "right, " "license, " or "permission" to use Fischer's intellectual property.

         Fischer did not, however, communicate to Brushy that it no longer had such permission to use his intellectual property until April 2011, when Fischer sent a cease and desist letter, alleging, inter alia, that Brushy was engaged in "copyright infringement." See Gebauer Decl. Ex. D. In a letter dated April 14, 2011, Gebauer replied that "there [did] not seem to be grounds for [Fischer's] request, " and that Brushy would "review" Fischer's concerns if he was more "specific." Gebauer Decl. Ex. E. Fischer does not appear to have responded.

         After Brushy's December 10, 2010 email, Brushy did not immediately remove Bee-Quick from its website. Gebauer Decl. ¶¶ 13-14 & Ex. F. On December 26, 2010, Bee-Quick was still listed for sale there. See Id. And photos of Bee-Quick remained on Brushy's website until at least January 28, 2011, at which point they appeared to have been replaced by photos of Natural Honey Harvester. Gebauer Decl. ¶ 15. Further, Fischer has adduced exhibits indicating that an image of Bee-Quick remained on Brushy's website until at least March 3, 2014. See SAC 04 Exs. 9-12; see also Fischer Aff. at 10 (attesting that links to images of Bee-Quick on Brushy website were still operable as of May 8, 2017).

         On January 21, 2011, Brushy shipped its 2011 catalogue advertising Natural Honey Harvester. Def Br. Ex. 6 at 2-3; Def. Br. Ex. 7 ("Twete Aff") ¶¶ 3-4 & Exs. A-B. The text in the 2011 catalogue was as follows:

For years we have promoted the use of a natural product to harvest honey but an unreliable supply of such a product has forced us to come out with our own. This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go® and it smells good! Natural Honey Harvester™ is a safe, gentle, and pleasant way to harvest your honey. Are you tired of your spouse making you sleep in the garage after using Bee Go®? Are you tired of using hazardous products on the bees you love? Then this is the product for you!

Def. Br. Ex. 6 at 3. Gebauer attests that Stephen Forrest came up with the name "Natural Honey Harvester" and that he and Stephen Forrest collaborated on the catalogue text. Gebauer Dep. at 55, 23. In contrast, Stephen Forrest attests that Gebauer came up with this wording. Stephen Forrest Dep. 1 at 37. Between 2012 and 2014, the above text remained largely unchanged in Brushy's catalogues, see SAC 07 Ex. 20 (excerpts from Brushy's catalogues), and it remained online until at least December 28, 2011, id. Ex. 8. Two of Brushy's third-party vendors, The Honey Hole and C&T Bee Supply, used this advertisement in 2012 and 2014. See SAC 07 Exs.21-22.

         On February 7, 2011, Fischer filed a copyright registration for the "text and images of [his] website." TAC 04 ¶ 41; Def. Br. Ex. 4.

         According to Fischer, Defendants removed Copyright Management Information ("CMI") from his photographs and other unspecified copyrighted works. Fischer Dep. at 133, 137. As to the photographs, Fischer claims that Defendants removed metadata from a Bee-Quick photo he provided them, Fischer Dep. at 137, and put their own watermark over his photo, TAC ¶ 141.

         With respect to non-photographic materials, although Fischer's claims as to the precise source of the CMI at issue are elusive, [3] Fischer alleges that when Defendants began selling Natural Honey Harvester, they altered their online and print advertisements by replacing, inter alia, the term "Fischer's Bee-Quick" with "Natural Honey Harvester" in a sentence describing the product. See Fischer Dep. at 131-33, 137; Fischer Aff. at 6; see also Fischer v. Forrest, 14 Civ. 1304, 2015 WL 195822 at *8 (S.D.N.Y. Jan. 13, 2015) ("[T]he Bee-Quick brochure attached to the complaints . . . stated that 'Fischer's Bee-Quick is a safe, gentle, and pleasant way to harvest your honey.' . . . Brushy Mountain replaced the textual reference to 'Fischer's Bee-Quick' with the words 'Natural Honey Harvester.'"). Fischer argues that these acts constitute unlawful CMI removal. Defendants deny ever removing any CMI or metadata. Gebauer Deck ¶ 8; Sandra Forrest Decl. ¶ 8; Stephen Forrest Deck ¶ 9.

         B. Procedural History

         1. Earlier Proceedings

         On July 9, 2014, defendants Stephen and Sandra Forrest moved to dismiss Fischer's pro se complaints. In a decision issued January 13, 2015, the Court denied those motions. 14 Civ. 1304, Dkt. 45; 14 Civ. 1307, Dkt. 65 (collectively, "First MTD"). On December 28, 2015, Fischer filed a Third Amended Complaint in each action. See TAC 04; TAC 07. After Defendants moved to dismiss various claims, see 14 Civ. 1304, Dkts. 102-110; 14 Civ. 1307, Dkts. 123-129, the Court referred the motions to dismiss to the Honorable Henry Pitman, United States Magistrate Judge, for a Report and Recommendation, having earlier referred the cases to Judge Pitman for general pretrial supervision. On December 15, 2016, these referrals were reassigned to Judge Peck.

         On January 13, 2017, Judge Peck issued a Report and Recommendation, 14 Civ. 1304, Dkt. 132; 14 Civ. 1307, Dkt. 147 ("R&R 1"), as to the pending motions to dismiss. On January 27, 2017, Fischer filed objections to R&R 1, 14 Civ. 1304, Dkt. 137; 14 Civ. 1307, Dkt. 150, and on February 10, 2017, Defendants filed responses to these objections, 14 Civ. 1304, Dkt. 141; 14 Civ. 1307, Dkt. 151. On March 21, 2017, this Court adopted the entirety of R&R 1 in a written opinion. 14 Civ. 1304, Dkt. 153; 14 Civ. 1307, Dkt. 161. The Court thereby dismissed Fischer's trademark infringement claims and his New York right of publicity claim against all defendants. The Court also dismissed Fischer's copyright infringement claims against Gebauer that had accrued before February 3, 2012 and those against Brushy that had accrued before December 28, 2012.

         2. Defendants' Motions for Summary Judgment

         On April 19, 2017, following discovery, Defendants filed motions for summary judgment, 14 Civ. 1304, Dkt. 170; 14 Civ. 1307, Dkt. 172, as well as memoranda of law in support, 14 Civ. 1304, Dkt. 175; 14 Civ. 1307, Dkt. 177 ("Def. Br."). On May 8, 2017, Fischer filed memoranda in opposition. 14 Civ. 1304, Dkt. 178; 14 Civ. 1307, Dkt. 179 ("PL Br."). On May 15, 2017, Defendants filed reply memoranda. 14 Civ. 1304, Dkt. 180; 14 Civ. 1307, Dkt. 181 ("Def. Reply Mem.").

         On July 14, 2017, Judge Peck issued a thorough (59-page) Report and Recommendation on the motions for summary judgment. 14 Civ. 1304, Dkt. 184; 14 Civ. 1307, Dkt. 185 ("R&R 2" or "the Report"). The Report recommends granting these motions in their entirety. On August 11, 2017, Fischer filed objections. 14 Civ. 1304, Dkt. 191; 14 Civ. 1307, Dkt. 188 ("Obj."). On August 25, 2017, Defendants filed a response. 14 Civ. 1304 Dkt. 193; 14 Civ. 1307, Dkt. 189 ("Def. Obj. Resp."). On September 12, 2017, Fischer filed a reply. 14 Civ. 1304, Dkt. 196; 14 Civ. 1307, Dkt. 192 ("Pl. Obj. Reply").

         II. Legal Standards

         A. Reports and Recommendations

         After a magistrate judge has issued a Report and Recommendation, a district court may "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1). To accept the portions of a report to which no timely objection has been made, "a district court need only satisfy itself that there is no clear error on the face of the record." Acevedo v. Lempke, No. 10 Civ. 5285 (PAE) (HBP), 2014 WL 4651904, at *3 (S.D.N.Y. Sept. 17, 2014) (quoting King v. Greiner, No. 02 Civ. 5810 (DLC), 2009 WL 2001439, at *4 (S.D.N.Y. July 8, 2009)). When a timely and specific objection has been made, the court is obligated to review the contested issues de novo. See id.; Fed. R. Civ. P. 72(b)(3); Hynes v. Squillace, 143 F.3d 653, 656 (2d Cir. 1998). But when the objections simply reiterate previous arguments or make only conclusory statements, the court should review the Report and Recommendation for clear error. Dickerson v. Conway, No. 08 Civ. 8024 (PAE) (FM), 2013 WL 3199094, at *1 (S.D.N.Y. June 25, 2013); see also Kirk v. Burge, 646 F.Supp.2d 534, 538 (S.D.N.Y. 2009) (collecting cases). Further, "[c]ourts generally do not consider new evidence raised in objections to a magistrate judge's report and recommendation." Tavares v. City of New York, No. 08 Civ. 3782 (PAE), 2011 WL 5877548, at *2 (S.D.N.Y. Nov. 23, 2011); see also Pan Am. World Airways v. Int'l Bhd. of Teamsters, 894 F.2d 36, 40 n.3 (2d Cir. 1990) ("A district judge is not required to hear or rehear any witness, and Pan Am had no right to present further testimony when it offered no justification for not offering the testimony at the hearing before the magistrate.").

         B. Motions for Summary Judgment

         To prevail on a motion for summary judgment, the movant must "show . . . 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). The movant bears the burden of demonstrating the absence of a question of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

         When the movant has properly supported its motion with evidentiary materials, the opposing party must establish a genuine issue of fact by "citing to particular parts of materials in the record." Fed.R.Civ.P. 56(c)(1); see also Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009). An issue of fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. SCR Joint Venture L.P. v. Warshawsky, 559 F.3d 133, 137 (2d Cir. 2009). "[A] party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment." Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (internal quotation marks and citation omitted). "Only disputes over facts that might affect the outcome of the suit under the governing law" will preclude a grant of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether there are genuine issues of material fact, the Court is "required to resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought." Johnson v. Killian, 680 F.3d 234, 236 (2d Cir. 2012) (quoting Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir. 2003)).

         III. Discussion

         Fischer makes several objections to the Report. See Obj. at 1-2.

         A. Fischer's Claim for Statutory Damages for Direct Copyright Infringement

         Fischer objects on two grounds to the Report's recommendation that he cannot obtain statutory damages for direct copyright infringement. First, he argues that Judge Peck, in determining the date of Brushy's first infringing act, wrongly relied on an affidavit that should have been excluded. Obj. at 2-4. Second, he argues that the Report is wrong that he cannot recover statutory damages because Brushy's first infringing act predated Fischer's copyright registration. Id. at 4-6. The Court reviews these arguments in turn, after first reviewing the background legal standards.

         1. Applicable Legal Standards

         "Under the Copyright Act, a copyright infringer can be held accountable for either actual damages and profits of the infringer or statutory damages." Solid Oak Sketches, LLC v. 2K Games, Inc., No. 16 Civ. 724 (LTS), 2016 WL 4126543, at *2 (S.D.N.Y. Aug. 2, 2016) (citing 17 U.S.C. § 504(a)). Statutory damages under the Act are designed to "discourage wrongful conduct, " as well as to provide "reparation for injury." F. W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228, 233 (1952).

         "In order to obtain statutory damages and attorneys' fees, a plaintiff must have registered its copyright prior to the alleged infringement." Solid Oak Sketches, LLC, 2016 WL 4126543 at *2 (citing 17 U.S.C. § 412 and Knitwaves, Inc. v. Lollytogs Ltd.,71 F.3d 996, 1012 (2d Cir. 1995)). "Courts in this district have held that Section 412 of the Copyright Act imposes a bright-line rule that precludes recovery of statutory damages and attorneys' fees where the first act ...

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