D.C. Comics Inc. v. Mini Gift Shop
| Decision Date | 16 August 1990 |
| Docket Number | 1187 and 1188,Nos. 1149,s. 1149 |
| Citation | 912 F.2d 29 |
| Court | U.S. Court of Appeals — Second Circuit |
| Parties | , 1990 Copr.L.Dec. P 26,620, 15 U.S.P.Q.2d 1888 D.C. COMICS INC. and Warner Bros. Inc., Plaintiffs-Appellants, v. MINI GIFT SHOP; Beyia Ling d/b/a Mini Gift Shop; New York Gift Shop; Beom Soo Lim d/b/a New York Gift Shop; Kay's Trading; G. Kwang Kay d/b/a Kay's Trading; Continental Shop; Woo Sik Yi d/b/a Continental Shop; J.C. Boutique; "John Doe" d/b/a J.C. Boutique; B & K Gifts; "John Doe" d/b/a B & K Gifts; Glory Gift Shop; Chang Kim d/b/a Glory Gift Shop; Sun Gift; "John Doe" d/b/a Sun Gift; Jina Gift/New Gift Duri Dur; Mr. Cho d/b/a Jina Gift/New Gift Duri Dur; Stevens; Mrs. Sung d/b/a Stevens; Jamaica Shoe Center; S. Han d/b/a Jamaica Shoe Center; Sam's Fashions; and Samuel Son d/b/a Sam's Fashions, Defendants-Appellees. D.C. COMICS INC. and Warner Bros. Inc., Plaintiffs-Appellants, v. Jin CHEN, I Ping Hu, Sechul Choi, Jagdish Singh, Jyun Sook Hong, Mr. Yoon, David Lipper, Tae Hwan, Ahn, Ralph D'Alessandro, Gene Chow, Mr. Chud, Wa Chung, Mr. Chi, Lin Chau, Lea Lea Chung, T. Sinyeone U, Weichyuan Pien, Susan Ye, Karen Lin, Mr. Ghu and Sao Jin, Defendants-Appellees. D.C. COMICS INC. and Warner Bros. Inc., Plaintiffs-Appellants, v. Edward EULNER, Harold Sarrett, John Cooper, Sung Il Sim, Diane Kalensky, Kai Winden, Paul Levy, Cathy Marsale, Beverly Allen and "John" Sangirsin, Defendants-Appellees. Dockets 89-9264, 89-9166 and 89-9168. |
J. Joseph Bainton, New York City (William Dunnegan, Stephen R. Palmer, Shea & Gould, New York City, and Bruce G. Filgen, Warner Communications, Inc., New York City) for plaintiffs-appellants.
Glen Caldwell appeared at oral argument, and Karen Lin, Flushing, N.Y., submitted a brief pro se for defendant-appellee Lin.
Kai Winding, named herein as "Kai Winden," pro se, appeared at oral argument.
Before TIMBERS, PRATT and MINER, Circuit Judges.
Plaintiffs-appellants D.C. Comics Inc. and Warner Bros. Inc. (collectively "Warner") appeal from judgments entered in the United States District Court for the Eastern District of New York (Glasser, J.) permanently enjoining defendants from selling merchandise infringing on certain Warner copyrights. The district court refused to award any statutory damages under the Copyright Act, 17 U.S.C. Sec. 504(c) (1988), against certain defendants who consented to permanent injunctions. The court awarded reduced statutory damages of $200 against other defendants who either went to trial or defaulted, finding that any infringement was innocent. See 17 U.S.C. Sec. 504(c)(2).
Warner contends that the district court did not have discretion to award reduced statutory damages against defendants who defaulted or failed to present any evidence at trial, because the burden was on the defendants to prove that any infringement was innocent. Warner also asserts that the evidence presented by defendants who testified at trial was insufficient to sustain a finding of innocent infringement, and that the court erred in refusing to award any statutory damages against defendants who consented to permanent injunctions.
For the reasons that follow, we modify the judgment in docket number 89-9264 to increase the damages against each of the defaulting defendants to $500 and affirm as modified. We vacate the judgments against certain defendants in docket numbers 89-9166 and 89-9168, modify the judgments to increase the damages against each of the defaulting defendants whose defaults were entered by the clerk to $500, and affirm the judgments against the defendants who consented to injunctions in those actions.
Warner, through its subsidiaries, owns and licenses certain copyrights related to the comic book character "Batman." Immediately prior to release of the movie Batman in the summer of 1989, Warner discovered that merchandise infringing on its copyrights was being sold at various flea markets. At about the same time, Warner discovered that infringing goods were also being sold in retail stores. After making some informal efforts to discourage the sale of such goods, Warner commenced the three actions involved in this appeal seeking permanent injunctions, destruction of the infringing goods, monetary relief and attorney's fees under the Copyright Act. Since the facts and issues differ, the retail store action and flea market actions will be addressed separately.
On September 20, 1989, Warner commenced an action against twenty-one retail stores and their owners for infringement of its copyrights. Shortly after commencing the action, Warner obtained a temporary restraining order, an order to show cause for a preliminary injunction and an order for accelerated discovery. The summons and complaint in the action, along with the order to show cause, were served on the defendants on September 22, and a hearing on the preliminary injunction was held four days later. On October 5, the district court issued a preliminary injunction by consent, denied Warner's motion for accelerated discovery and set the trial on all remaining At the trial on November 14, the defendants appeared pro se and first engaged in a colloquy with the district court in which the judge ascertained whether or not each defendant spoke English and understood the nature of the proceeding. All of the defendants were recent immigrants from Asia who spoke little or no English. The district court explained, through interpreters, that it wanted the defendants' consent to impose an injunction "permanently prohibiting [them] from dealing in goods that display or depict the Batman symbol," and that the plaintiffs also sought damages and attorney's fees. When none of the defendants objected to this request, the court said it would enter an injunction against all defendants and instructed Warner to begin its case.
issues for November 14. 1 On November 9, the clerk of the district court filed a certificate of default listing the defendants who had not yet answered the complaint or otherwise appeared in the action. 2
Warner introduced into evidence infringing merchandise, which its investigators testified was purchased at each of the defendants' stores. The owners of Glory Gift Shop, Jina Gift/New Gift Duri Dur and Stevens each admitted sales of the merchandise in evidence. The owner of Kay's Trading denied selling the merchandise offered into evidence. The owner of Glory Gift Shop said he had put the merchandise in storage after Warner's investigator visited his store and advised him of the infringement, but that the investigator specifically requested the product on a subsequent visit. The investigator who had made the purchase could not recall whether the merchandise was openly displayed, but denied coercing the sale.
Cheryl Rubin, the licensing director for D.C. Comics, testified that she had examined the merchandise introduced into evidence and determined that the goods were not licensed by Warner. Her determination was based on the absence of "proper trademark and copyright notices" and the fact that "the art work was not directly from [D.C. Comics'] style guide." When asked whether a layman could distinguish between licensed and infringing goods, Rubin replied, "Probably not."
The district court found that the defendants had infringed on Warner's copyrights, but that any infringement was innocent. This finding was based, in part, on the court's determination that each of the defendants "did not have the sophistication or level of understanding to move them to make [an] inquiry ... for the purpose of determining whether he is or is not violating some copyright law." The court found that, in light of the lack of intent to violate the copyright laws, an injunction and $200 in statutory damages would sufficiently deter any possibility of future infringements. A single judgment was entered enjoining all defendants from selling infringing merchandise and awarding $200 in statutory damages against both consenting and defaulting defendants.
Warner commenced two actions against "John Does 1-25" and "Jane Does 1-25" doing business at the Aqueduct Flea Market and the Roosevelt Raceway Flea Market by filing complaints in the United States District Court for the Eastern District of New York on June 7, 1989. It thereafter obtained orders to show cause seeking "preliminary injunctive relief pending final disposition of" the actions. Eleven defendants appeared pro se at the hearing After the defendants' names were noted for the record, Warner's attorney represented to the court his understanding that some of the defendants were willing to consent to a preliminary injunction. The court advised the defendants that if they sold Batman products that were not licensed by Warner, then they violated federal law. The court then asked whether the defendants would consent to an order directing them not to sell Batman merchandise. At the defendants' request, the court clarified its inquiry by stating "what they're facing at the present time is an order from me directing them not to sell things with Batman on it." When the defendants asked whether any penalty was involved, the court responded that it would not grant any monetary award if the defendants consented to the injunction:
for a preliminary injunction before Judge Glasser on June 14, 1989. 3 Many of these defendants did not speak any English, and all statements had to be translated informally into Korean and at least two Chinese dialects. The hearing revealed that, when serving the summons, complaint and order to show cause, Warner's investigators intimidated defendants, wrote down the license plate numbers of defendants' vehicles, took pictures of defendants and their children, and refused to identify themselves or give any explanation for their acts. Some of the defendants...To continue reading
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