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Kevin Barry Fine Art Associates v. Ken Gangbar Studio, Inc.

United States District Court, N.D. California

June 24, 2019



          HAYWOOD S. GILLIAM, JR., United States District Judge.

         On June 6, 2018, Plaintiff Kevin Barry Fine Art Associates (“KBFAA”) brought this suit against Defendant Ken Gangbar Studio Inc. (“KGSI”) for a declaratory judgment of non-infringement. Dkt. No. 1 (“Compl.”). On August 7, 2018, KGSI submitted an answer and counterclaims against not only KBFAA but also its owner Kevin A. Barry, as well as John Johnson, Richard McCormack, and Richard McCormack Design d/b/a Studio McCormack (“Studio McCormack”), asserting copyright infringement, as well as conspiracy to commit and substantive violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968. Dkt. No. 18 (“Answer & Counterclaims”).

         Pending before the Court are two motions to dismiss KGSI's counterclaims. Counterclaim-Defendants Studio McCormack and Mr. McCormack (collectively, “the McCormack Counter-Defendants”) filed one motion, Dkt. No. 56 (“McCormack Mot.”); Counterclaim-Defendants KBFAA, Mr. Barry, and Mr. Johnson (collectively, “the KBFAA Counter-Defendants”) filed the other, Dkt. No. 60 (“KBFAA Mot.”). Briefing on these motions is complete. See Dkt. Nos. 65 (“McCormack Opp.”), 66 (“McCormack Reply”), 67 (“KBFAA Opp.”), 69 (“KBFAA Reply”).


         Federal Rule of Civil Procedure (“Rule”) 8(a) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.”[1] A defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted under Rule 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) motion, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         In reviewing the plausibility of a complaint, courts “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek, 519 F.3d at 1031. Nonetheless, Courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). And even where facts are accepted as true, “a plaintiff may plead herself out of court” if she “plead[s] facts which establish that [s]he cannot prevail on [her] . . . claim.” Weisbuch v. Cnty. of L.A., 119 F.3d 778, 783 n.1 (9th Cir. 1997) (quotation marks and citation omitted).


         Collectively, the counter-defendants move to dismiss both KGSI's copyright infringement claim and its civil RICO claims. The Court addresses these claims separately.

         A. Copyright Infringement

         KGSI argues that all counter-defendants “contributorily and/or vicariously infringed KGSI's copyrights.” Counterclaims ¶ 43. KGSI accuses the KBFAA Counter-Defendants of physically crafting infringing works and selling them without KGSI's authorization. Id. ¶¶ 17-27. KGSI also accuses Mr. Barry and KBFAA-but not Mr. Johnson-of creating digital renderings that depict infringing copies of KGSI's copyrighted works, which were used to support sales of infringing sculptures.[2] Id. at 28. And in at least one instance, a KBFAA customer allegedly displayed such a rendering on its website, to attract customers. Id. The KBFAA Counter-Defendants move to dismiss KGSI's infringement counterclaim for failure to state a claim of infringement. See KBFAA Mot. at 4-12.

         KGSI separately accuses the McCormack Counter-Defendants of vicarious infringement for soliciting bids to commission an infringing work, which Mr. Barry and his company KBFAA secured. Counterclaims ¶ 23. These counter-defendants move to dismiss KGSI's infringement counterclaim for failure to plead facts demonstrating vicarious liability. McCormack Mot. at 7-8. In other words, the McCormack Counter-Defendants do not dispute at this stage that the underlying commissioned work infringes KGSI's copyright; rather, they dispute whether vicarious liability for the infringement should extend to them.

         1. KGSI Has Adequately Stated a Claim for Infringement Against the KBFAA Counter-Defendants

         To state a claim for copyright infringement, KGSI must plausibly allege that (1) KGSI owns valid copyrights in the relevant works; and (2) the KBFAA Counter-Defendants copied protected aspects of KGSI's valid copyrights. See Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991); Malibu Textiles, Inc. v. Label Lane Int'l, Inc., 922 F.3d 946, 951 (9th Cir. 2019).

         a. Valid Copyrights

         First, KGSI has plausibly alleged it owns valid copyrights in the relevant sculptures: Star, Swish, Palomar, and Fin Wave (collectively, “KGSI Works”). KGSI alleges that Mr. Gangbar created the KGSI Works and assigned all copyrights to Ken Gangbar Studio Inc. Counterclaims ¶¶ 14-16. The KGSI Works are undoubtedly subject to copyright protection, as they are “fixed in [a] tangible medium of expression.” 17 U.S.C. § 102(a); see also Id. § 102(a)(5) (including “sculptural works” as a category of copyright protectable work). The KGSI Works are also “original work[s] of authorship, ” given the several specific “creative decisions” Mr. Gangbar made in crafting them. See Rentmeester v. Nike, Inc., 883 F.3d 1111, 1117-18 (9th Cir. 2018); see also Satava v. Lowry, 323 F.3d 805, 810 (9th Cir. 2003) (explaining that “the amount of creative input by the author required to meet the originality standard is low”). Finally, KGSI alleges it registered the KGSI Works with the Copyright Office, which is generally a prerequisite for a civil copyright infringement action. See Counterclaims ¶ 41 (noting copyright registration numbers); 17 U.S.C. § 411(a) (noting that, generally, “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title”).

         b. Copying Protected Aspects

         As the Ninth Circuit recently explained, the second element itself has two components: (1) copying, and (2) unlawful appropriation. See Rentmeester, 883 F.3d at 1117. The Court first finds that KGSI has pled facts sufficient to create a presumption that the accused works (collectively, “KBFAA Works”) were the result of copying. KGSI alleges that before outright copying the KGSI Works, a KBFAA associate emailed KGSI-attaching photographs of Mr. Gangbar's sculptures, including Star-and asked about commissioning a similar piece. Counterclaims ¶¶ 17-18. These alleged facts demonstrate “a reasonable opportunity to view [the KGSI Works].” Rentmeester, 883 F.3d at 1118 (quoting L.A. Printex Indus., Inc. v. Aeropostale, Inc., 676 F.3d 841, 846 (9th Cir. 2012)). Such access, “combined with the obvious conceptual similarities between” KGSI's and KBFAA's Works, is enough to “create a presumption . . . of copying rather than independent creation.” Id.

         Turning next to unlawful appropriation, a copyright infringement claim does not lie against a person who copies only “ideas” or “concepts” of another's original work. 17 U.S.C. § 102(b). An infringing party must instead “copy enough of the [other's] expression of those ideas or concepts to render the two works ‘substantially similar.'” Rentmeester, 833 F.3d at 1117 (citing Mattel, Inc. v. MGA Entm't, Inc., 616 F.3d 904, 913-14 (9th Cir. 2010)).

         The Ninth Circuit employs a two-part test to determine substantial similarity: the “extrinsic test” and the “intrinsic test.” Id. at 1118. “At the pleading stage, this Court considers only the extrinsic test.” See Malibu Textiles, Inc., 922 F.3d at 952. The extrinsic test is an objective, analytical inquiry between only the protectable elements of a copyrighted work and the accused work. Id. This is unlike the intrinsic test, which is “a more holistic, subjective comparison of the works” that considers the “total concept and feel.” Rentmeester, 833 F.3d at 1118 (quoting Cavalier v. Random House, Inc., 297 F.3d 815, 822 (9th Cir. 2002)). Although a party alleging infringement must ultimately prove substantial similarity under both tests, only the extrinsic test involves a matter of law subject to inquiry on a motion to dismiss. See Christianson v. West Publ'g Co., 149 F.2d 202, 203 (9th Cir. 1945) (holding that a court may assess substantial similarity on a motion to dismiss where “the copyrighted work and the alleged infringement are both before the court, capable of examination and comparison”); Williams v. Gaye, 895 F.3d 1106, 1119 (9th Cir. 2018) (“[T]he intrinsic test is reserved exclusively for the trier of fact.”). The extrinsic test itself includes a two-step analysis. See Malibu Textiles, Inc., 922 F.3d at 952.

         i. Step One: Protectable Elements

         The “extrinsic test” first requires courts to “filter out” unprotectable elements of the copyrighted work and to determine the “breadth” of copyright protection available for the protectable elements. Id. The filtering-out process ensures copyright protection does not extend to general ideas-e.g. the idea of an animated mouse or an animated animal wearing clothes-but covers the unique expression of those ideas-e.g. Mickey Mouse. And even if a work is solely comprised of unprotected elements, copyright protection may extend to a sufficiently original compilation or integration of those elements. Rentmeester, 833 F.3d at 1119-20. For example, although an author cannot claim copyright protection over facts, a sufficiently original compilation of those facts is within the subject matter of copyright. See Feist, 499 U.S. at 344-45. ...

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