Navarro v. Procter & Gamble Co.

• Decision Date: 19 January 2021
• Docket Number: Case No. 1:17-cv-406
• Citation: Navarro v. Procter & Gamble Co., 515 F.Supp.3d 718 (S.D. Ohio 2021)
• Parties: Annette NAVARRO, et al., Plaintiffs, v. PROCTER & GAMBLE COMPANY, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

515 F.Supp.3d 718

Annette NAVARRO, et al., Plaintiffs,

v.PROCTER & GAMBLE COMPANY, et al., Defendants.

Case No. 1:17-cv-406

United States District Court, S.D. Ohio, Western Division.

Signed January 19, 2021

John Charles Greiner, Graydon Head & Ritchey LLP, Cincinnati, OH, Charles E. Fowler, Jr., Pro Hac Vice, McKool Smith, P.C., Austin, TX, Chelsea Priest, Pro Hac Vice, Gary Cruciani, Pro Hac Vice, McKool Smith, P.C., Dallas, TX, Robert E. Allen, Pro Hac Vice, Glaser Weil, Los Angeles, CA, for PlaintiffAnnette Navarro.

John Charles Greiner, Graydon Head & Ritchey LLP, Cincinnati, OH, Charles E. Fowler, Jr., Pro Hac Vice, McKool Smith, P.C., Austin, TX, Gary Cruciani, Pro Hac Vice, McKool Smith, P.C., Dallas, TX, Robert E. Allen, Pro Hac Vice, Glaser Weil, Los Angeles, CA, for PlaintiffNavarro Photography, LLC.

Andrew B. Barras, Department of Justice, Ft. Mitchell, KY, Brian Scott Sullivan, Jaci L. Overmann, Liane Harmon Rousseau, Karen Kreider Gaunt, Michael Joseph Wheeler, Robert Martin Zimmerman, Dinsmore & Shohl LLP, Cincinnati, OH, Benjamin C. Mizer, Pro Hac Vice, Charlotte H. Taylor, Pro Hac Vice, Jones Day, Washington, DC, for DefendantProcter & Gamble Company.

Andrew B. Barras, Department of Justice, Ft. Mitchell, KY, Brian Scott Sullivan, Jaci L. Overmann, Liane Harmon Rousseau, Karen Kreider Gaunt, Michael Joseph Wheeler, Dinsmore & Shohl LLP, Cincinnati, OH, for DefendantWalmart Inc.

OPINION AND ORDER

DOUGLAS R. COLE, UNITED STATES DISTRICT JUDGE

This cause is before the Court on DefendantsProcter & Gamble Company's and Walmart Inc.’s Motion for Summary Judgment(Doc. 185), and PlaintiffsAnnette Navarro McCall's and Navarro Photography, LLC's (collectively, "Navarro")Motion for Partial Summary Judgment(Doc. 188).The Court heard in-person oral argument on these motions on September 15, 2020.

For the reasons that follow, the CourtDENIESDefendants’ Motion for Summary Judgment(Doc. 185) on the issue of whether Navarro unambiguously assigned all her rights to Libby Perszyk Kathman Holdings, Inc.("LPK")(id. at #8337–42), and on the issue of whether Navarro and LPK were joint authors (id. at #8342–52).The Court similarly DENIES Walmart's motion for summary judgment on the direct infringement claims that Navarro has asserted against it.(Id. at #8355).As to P&G, the CourtDENIES summary judgment on Navarro's contributory infringement claim (id. at #8358–60), GRANTS summary judgment on Navarro's vicarious liability claim (id. at #8356–58), and DENIES summary judgment on Navarro's fraud claim (id. at #8352–55).

As to the damages issues in Defendants’ motion (Doc. 185), the CourtGRANTSDefendants partial summary judgment on their argument that Navarro's damages are limited to a three-year look-back period (id. at #8360–63), DENIESDefendants summary judgment on their broader argument that Navarro's request for profit-based damages fails as a matter of law in its entirety (id. at #8363–71), and GRANTS IN PART and DENIES IN PARTDefendants’ Motion for Summary Judgment as to particular categories of Navarro's profit-based damages (id. at #8371–78).

The Court then turns to Navarro's Motion for Partial Summary Judgment.(Doc. 188).Like Defendants, Navarro also moves for summary judgment on her direct copyright infringement claims.But, unlike Defendants, who ask for summary judgment on all of Navarro's claims, Navarro asks for summary judgment only for certain claims where she alleges that there is no issue of material fact as to whether Defendants exceeded their limited usage rights.(Pls.’Mem. at #9361–70).Because the Court finds that there is an issue of material fact as to whether Navarro assigned her rights to LPK through the Supplier Agreement, the Court also DENIES Navarro summary judgment on these limited infringement claims.

Navarro also moves for summary judgment on 28 of P&G's asserted affirmative defenses, 19 of which overlap with Walmart's asserted affirmative defenses.(Id. at #9377–9404).P&G and Walmart only meaningfully dispute summary judgment as to six of these defenses, namely (1) Assignment; (2) Extraterritoriality; (3) Failure to Mitigate; (4) Joint Authorship; (5) Implied License; and (6)Statute of Limitations.(SeeDefs.’ Resp. to Pls.’ Mem., ("Defs.’Resp."), Doc. 207, #9478–9501 (joint authorship and assignment), 9506–12 (statute of limitations, failure to mitigate, extraterritoriality, and implied license)).Starting with the first of those, as stated above, the CourtDENIES summary judgment as to the issue of whether Navarro assigned her licenses to LPK.

As to five remaining defenses, the CourtDENIES Navarro's Motion as to Defendants’ extraterritoriality defense, finding that there are disputed issues of fact as to whether Navarro can collect damages based on Defendants’ international sales (id. at #8520), DENIES Navarro's Motion as to Defendants’ failure to mitigate defense (id. at #8517–18), GRANTS-IN-PART(as to the images) and DENIES-IN-PART(as to the packaging design) Navarro's Motion as to Defendants’ joint authorship defense (id. at #9395–9402), GRANTS Navarro's Motion as to Defendants’ implied license defense (id. at #9390–92), and GRANTS Navarro's Motion as to Defendants’ statute of limitations defense, (id. at #9386–87).

As to those affirmative defenses on which Defendants have not opposed summary judgment, the Court holds that Defendants have waived those defenses.Accordingly, the CourtGRANTS Navarro summary judgment on 21 of P&G's Defenses and 13 of Walmart's defenses.¹The Court, however, finds that one of the "affirmative defenses"—Defendants’ claim for attorneys’ fees—is not in fact an affirmative defense, but rather a mislabeled counterclaim.As to that claim, the Court finds that Navarro has failed to meet her burden at summary judgment, and accordingly DENIES summary judgment on that issue.²

Finally, the CourtGRANTS Navarro's Motion for Partial Summary Judgment on Defendants’ breach of contract counterclaim, finding that, as a matter of law, Defendants cannot prove damages, which are an essential element of their claim (Doc. 188, #8496–8502).

The sole remaining issue, then, is Navarro's request for Rule 37 Sanctions, which the CourtDENIES .

BACKGROUND

A picture, the old saying goes, is worth a thousand words.In this action, Navarro seeks a determination as to the value of her photographs instead in dollars.In June of 2017, PlaintiffAnnette Navarro McCall filed this copyright action on behalf of herself and her company, Navarro Photography, LLC, claiming copyright infringement in twelve photographs that she took.(SeeCompl., Doc. 1, #1–33).She named a host of companies as defendants, some of which are no longer part of this action.But two remain part of this case and are relevant for purposes of this opinion.The first is DefendantProcter & Gamble Company, commonly known as P&G.The second is DefendantWalmart, Inc., or just Walmart.A third company, Libby Perszyk Kathman Holdings, Inc., or LPK, which once was a third-party defendant but is no longer, also plays an important role.The summary judgment motions currently before the Court are primarily based on the activities of three of these four parties—Navarro, LPK, and P&G.

A. Procter& Gamble And LPK Enter Into The 2007 Master Services Agreement; Navarro Signs The 2007 Supplier Agreement With LPK.

Procter & Gamble is one of Cincinnati's largest companies and is responsible for some of the world's most recognizable consumer-goods brands.P&G's brands include Crest, Charmin, Bounty, Pampers, Dawn, Febreze, Tide, and Swiffer, just to name a few.This litigation relates to one of P&G's brands, Olay, and the company's efforts to revitalize the image of that product line.That is where another Cincinnati company, LPK, comes in.LPK is a design firm specializing in, among other services, product package design.LPK and P&G have a long history dating back to at least the 1950's.(GeigerDep., Doc. 155, #5180).At one point, P&G was LPK's largest client, accounting for twenty to thirty percent of LPK's annual revenue.(Id. ).³

In 2007, P&G and LPK executed an agreement to define the terms of their relationship.This took the form of an overarching contract, the 2007 Master Services Agreement, which LPK executed on June 27, 2007, and P&G countersigned on June 29, 2007.(OttDep. Ex. 68(the "2007 MSA"), Doc. 183-13, #8285).The 2007 MSA was initially for a term of about three years—June 1, 2007, through June 30, 2010—but the parties later extended it through June 30, 2012.(Pls.’ Responses to Defs.’ Proposed Statement of Undisputed Facts and Proposed Disputed Issues of Material Facts ("Defs.’SOUF"), at ¶¶ 23–24, Doc. 209-1, #10129).

Consistent with its title, this contract served as a master agreement that governed every engagement between P&G and LPK.The 2007 MSA contains several provisions that are relevant here.The first describes the type of design services that LPK would provide to P&G:

2.1 SPECIFICATIONS . SELLER[LPK] shall perform and BUYER [P&G] shall purchase Design Services to include, but are not limited to: graphic and brand identity design, packaging design, brand and strategy consultancy, product and packaging innovation design, in-store and environmental design in support of specific project, brand, and//or category engagements in accordance with the terms and conditions set forth in this AGREEMENT and/or Designs produced by SELLER or resulting from such Design Services ("SERVICES") in strict compliance with the specifications as set forth in BUYER's Design Brief or other similar description of scope of work ....

(2007 MSA at #8276).In the agreement, the parties also specifically addressed intellectual property rights, with LPK warranting that P&G's "use ... of such SERVICES and any parts thereof, do not infringe on any copyrights":

8.3 INTELLECTUAL PROPERTY RIGHTS[.]Notwithstanding anything to the contrary in this AGREEMENT, SELLER (1) represents and warrants to the best of SELLER's

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