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Brighton Collectibles, Inc. v. Coldwater Creek Inc.

September 20, 2010

BRIGHTON COLLECTIBLES, INC., PLAINTIFF,
v.
COLDWATER CREEK INC., DEFENDANT.



The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court

ORDER (1) DENYING MOTION FOR SUMMARY JUDGMENT OF NO LIABILITY FOR ALLEGED INFRINGEMENT OF THE LAGUNA DESIGN; (2) GRANTING MOTION FOR SUMMARY ADJUDICATION OF LIMITED LIABILITY FOR ALLEGED INFRINGEMENT OF THE MELANIE DESIGN; (3) DENYING MOTION FOR SUMMARY JUDGMENT REGARDING BRIGHTON'S ACTUAL DAMAGES; (4) DENYING WITHOUT PREJUDICE MOTION TO EXCLUDE EXPERT REPORTS AND TESTIMONY

On July 12, 2010, Defendant Coldwater Creek Inc. ("Coldwater") filed a motion for summary adjudication of no liability for alleged infringement of the Laguna Design and of no or limited liability for alleged infringement of the Melanie Design for summary adjudication.

(Doc. No. 109.) On August 16, 2010, Plaintiff Brighton Collectibles, Inc. ("Brighton") filed its response in opposition. (Doc. No. 129.) On September 2, 2010, Coldwater filed its reply. (Doc. No. 150.)

On July 12, 2010, Coldwater filed a motion for summary adjudication regarding Plaintiff's alleged actual damages. (Doc. No. 112.) On August 23, 2010, Brighton filed its response in opposition. (Doc. No. 138.) On September 3, 2010, Coldwater filed its reply. (Doc. No. 153.)

On July 12, 2010, Coldwater filed a motion to exclude the expert reports and testimony of Robert Wunderlich. (Doc. No. 113.) On August 23, 2010, Brighton filed its response in opposition. (Doc. No. 139.) On September 3, 2010, Coldwater filed its reply. (Doc. No. 154.)

The Court held a hearing on the matter on September 14, 2010. Peter Ross and Keith Wesley appeared for the Plaintiff. Robert Gerber and Michael Murphy appeared for the Defendant. For the following reasons, the Court GRANTS in part and DENIES in part Coldwater's motion for summary judgment of no liability. The Court DENIES Coldwater's motion for summary judgment of no liability for alleged infringement of the Laguna Design. The Court GRANTS Coldwater's motion for summary adjudication of limited liability for alleged infringement of the Melanie Design to the extent it is based on the statute of limitations, and DENIES the motion to the extent it is based on laches. The Court DENIES Coldwater's motion for summary judgment regarding Brighton's actual damages. The Court DENIES Coldwater's motion to exclude expert report and testimony of Brighton's expert Dr. Wunderlich without prejudice subject to renewal at trial.

Background

Plaintiff Brighton Collectibles ("Brighton") is a manufacturer and retailer of women's handbags and accessories. It sells its products in boutique or specialty stores and advertises extensively throughout the United States. (Doc. No. 1 at 3-4.) Defendant Coldwater Creek ("Coldwater") is Brighton's competitor. Coldwater sells its products in catalogs, online and in its stores. (Doc. No. 138 at 5.) On December 12, 2008, Brighton filed a complaint against Coldwater, alleging causes of action for: (1) infringement of Brighton's "Melanie," "Carolina," and "Laguna" copyrights; (2) infringement of Brighton's trade dress; (3) false designation of origin; (4) common law unfair competition; and (5) statutory unfair competition. (Doc. No. 1.)

Discussion

I. Summary Judgment Standard

Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure if the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute is genuine if a reasonable jury could return a verdict for the nonmoving party. Anderson, 477 U.S. at 248.

A party seeking summary judgment always bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to establish an essential element of the nonmoving party's case on which the nonmoving party bears the burden of proving at trial. Id. at 322-23. "Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment." T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). Once the moving party establishes the absence of genuine issues of material fact, the burden shifts to the nonmoving party to set forth facts showing that a genuine issue of disputed fact remains. Celotex, 477 U.S. at 322. The nonmoving party cannot oppose a properly supported summary judgment motion by "rest[ing] on mere allegations or denials of his pleadings." Anderson, 477 U.S. at 256. "The 'opponent must do more than simply show that there is some metaphysical doubt as to the material fact.'" Kennedy v. Allied Mut. Ins. Co., 952 F.2d 262, 265--66 (9th Cir. 1991) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)). Furthermore, the nonmoving party generally "cannot create an issue of fact by an affidavit contradicting his prior deposition testimony." Kennedy, 952 F.2d at 266; see Foster v. Arcata Assocs., 772 F.2d 1453, 1462 (9th Cir. 1985), cert. denied, 475 U.S. 1048 (1986); Radobenko v. Automated Equip. Corp., 520 F.2d 540, 543--44 (9th Cir. 1975).

When ruling on a summary judgment motion, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The Court does not make credibility determinations with respect to evidence offered. See T.W. Elec., 809 F.2d at 630-31 (citing Matsushita, 475 U.S. at 587). Summary judgment is therefore not appropriate "where contradictory inferences may reasonably be drawn from undisputed evidentiary facts." Hollingsworth Solderless Terminal Co. v. Turley, 622 F.2d 1324, 1335 (9th Cir. 1980).

II. Validity of the Laguna Copyright

Coldwater argues that the Court should grant summary adjudication against Brighton's allegations of copyright infringement of the Laguna design because Brighton cannot enforce its Laguna copyright. (Doc. No. 109-1 at 6.) Specifically, Coldwater contends that the Laguna copyright was obtained by fraud in failing to inform the Copyright Office of a prior rejection of the Laguna design. (Id.)

In 1998, Brighton's predecessor in interest, Leegin Creative Leather Products, Inc., submitted applications to register the Laguna copyright. (Doc. No. 110-1, Ex. A, Freedman depo. at 80:2-13.) On January 20, 1999, the copyright examiner issued a letter refusing registration for the Laguna design. (Doc. No. 110-3, Ex. C, Refusal Letter.) The refusal letter stated that the decision may be appealed. (Id.) Brighton did not appeal the decision; instead, on March 17, 2000, Brighton reapplied to register the Laguna design. (Doc. No. 110-6, Ex. F.) The 2000 application enclosed a photograph of the Laguna design, while the 1998 application contained a drawing of Laguna. (Doc. No. 110-8, Ex. H at 5.) The 2000 application did not include any information regarding Brighton's prior application. (Doc. No. 110-6, Ex. F.) The Laguna design was registered with the Copyright Office on March 20, 2000. (Doc. No. 110-7, Ex. G.)

Registration is not a prerequisite to a valid copyright, although it is a prerequisite to suit.

17 U.S.C. §§ 408(a), 411; S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1085 (9th Cir. 1989). Inaccuracies in copyright registration may bar actions for infringement. S.O.S., Inc., 886 F.2d at 1086. However, enforcement of a copyright is precluded only if the inaccuracies were entered with the intent to defraud and the infringing party was prejudiced by such inaccuracies. Id. (citing Harris v. Emus Records Corp., 734 F.2d 1329, 1335 (9th Cir. 1984)). The Copyright Act provides that inaccuracies in the certificate of registration do not invalidate the copyright unless "(A) the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate; and (B) the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration." 17 U.S.C. § 411(b)(1).

Coldwater argues that Brighton deliberately circumvented the Copyright Office's appeal procedure and intentionally omitted any reference to the initial rejection of the Laguna design on the 2000 application. (Doc. No. 109-1 at 12-13.) Coldwater argues that the omission was material, because had Brighton included the reference to the prior rejection, the examiner might not have allowed the Laguna design to register without further inquiry or the initiation of an appeal process. (Id. at 12.) In opposition, Brighton points out that no authority precludes an applicant from resubmitting a work for registration despite a prior rejection. (Doc. No. 129 at 9-10.) Additionally, Brighton notes that Coldwater's claim that Brighton should have referenced a prior rejection in its resubmission materials is not supported by any statute or regulation. (Id.) Finally, Brighton points out that its second application to register Laguna did not contain any inaccurate statements or misrepresentations, and contained the same name of the copyrights claimant, date of first publication, and title of the work. (Id. at 11.) The Court notes that nothing prohibits an applicant from resubmitting an application to the Copyright Office. The Court also notes that Brighton's second application attached a photograph, rather than a drawing of the Laguna design. The second application did not contain any information that concealed the prior application's existence. Brighton argues that the second application was more complete. Coldwater argues that Brighton's failure to reference the prior application amounts to an intent to deceive the Copyright officer. These factual disputes are for the jury to resolve.

The Court concludes that a genuine issue of fact exists whether Brighton intended to commit fraud on the Copyright Office when it submitted a second application for the Laguna design. Summary judgment is not appropriate where the movant failed to demonstrate the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Celotex, 477 U.S. at 322. Accordingly, the Court ...


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