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World Trading 23, Inc v. Edo Trading

April 24, 2013

WORLD TRADING 23, INC., PLAINTIFF,
v.
EDO TRADING, INC.; EDVIN KARAPETIAN; EDVARD MINASYAN; LENA AMERKHANIAN; DOES 1--9, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Otis D. Wright, II United States District Judge

ORDER DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT [12]

I.INTRODUCTION

Plaintiff World Trading 23, Inc. brought this copyright-infringement action alleging that Defendants EDO Trading, Inc., Edvin Karapetian, Edvard Minasyan, and Lena Amerkhanian copied the design of World Trading's impact-resistant, remote-controlled toy helicopter. Defendants initially moved for judgment on the pleadings and argued that a broadly worded Settlement Agreement executed by World Trading's affiliate in another case barred this claim. But since the Court finds that there is no nexus between this case and the previous one, the Court DENIES Defendants' Motion for Summary Judgment.*fn1

II.FACTUAL BACKGROUND

World Trading and EDO Trading are incorporated and have their principal places of business in California. (Compl. ¶¶ 1--2.) World Trading believes that Defendants Edvin Karapetian and Edvard Minasyan are the owners or officers of EDO Trading. (Id. ¶ 3.) Defendant Lena Amerkhanian is affiliated with Karapetian, Minasyan, or both. (Id. ¶ 4.)

Toyriffic, LLC, an affiliate of World Trading, settled a previous lawsuit with Karapetian and Minasyan (Toyriffic I*fn2 via a Settlement Agreement and Mutual General Release. (Minasyan Decl. Ex. A.) Karapetian and Minasyan agreed to cease operations of their business, HobbyChase.com, and transfer the business's assets to Toyriffic. (Id. Ex. A, at 4--5.) Toyriffic, Karapetian, Minasyan, and others agreed to "absolutely, forever and fully, generally and specifically release and discharge each other and their respective" affiliates and associates "from any and all claims, administrative claims, demands, and/or causes of action [t]heretofore or [t]hereafter arising out of, connected with, or incidental to" Toyriffic I. (Id. Ex. A, at 5.) The parties also agreed to "fully, finally, and forever settle and release all [claims that might arise in the future with respect to Toyriffic I], and all claims relative thereto." (Id. Ex. A, at 9.)

In late 2011, World Trading designed and developed an impact-resistant, remote-controlled toy helicopter. (Id. ¶ 15.) World Trading then began manufacturing the helicopter and showing it to some of World Trading's customers. (Id. ¶ 16.) In February 2012, World Trading debuted the helicopter at the New York Toy Fair and has been selling the product ever since online. (Id. ¶¶ 17--18.)

Around November 22, 2012, World Trading's representatives noticed that Defendants had listed an allegedly similar impact-resistant, remote-controlled helicopter on Amazon.com, Buy.com, and Airsoftrc.com (Defendants' own website). (Id. ¶ 19.) World Trading then obtained a copyright registration on the helicopter's "ornamental design" effective November 23, 2012. (Opp'n Ex. 1; see also Compl. ¶ 21.)

On December 21, 2012, World Trading filed this Complaint against Defendants, alleging one claim for copyright infringement. Defendants answered and then moved for judgment on the pleadings on March 11, 2013. (ECF No. 13.) But since Defendants' relied heavily upon the Settlement Agreement involved in Toyriffic I and Toyrrific II*fn3 , which was not appended to the Complaint or judicially noticeable, the Court converted the Motion to one for summary judgment. (ECF No. 24.) The converted summary-judgment motion is now before the Court for decision.

III.LEGAL STANDARD

Summary judgment should be granted if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The moving party bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323--24 (1986). Once the moving party has met its burden, the nonmoving party must go beyond the pleadings and identify specific facts through admissible evidence that show a genuine issue for trial. Id.; Fed. R. Civ. P. 56(c). Conclusory or speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary judgment. Thornhill's Publ'g Co. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979).

A genuine issue of material fact must be more than a scintilla of evidence, or evidence that is merely colorable or not significantly probative. Addisu v. Fred Meyer, 198 F.3d 1130, 1134 (9th Cir. 2000). A disputed fact is "material" where the resolution of that fact might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1968). An issue is "genuine" if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party. Id. Where the moving and nonmoving parties' versions of events differ, courts are required to view the facts and draw reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007).

IV.DISCUSSION

Defendants argue that the Settlement Agreement emanating from Toyriffic I bars World Trading's current action. Defendants contend that World Trading is Toyriffic's "affiliate," and thus subject to the agreement, and that there is a nexus between the copyright claim here and the claims at issue in Toyriffic I. World Trading disagrees, arguing that since World Trading's helicopter was not yet in existence or even contemplated at the time the parties executed the Settlement ...


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