Desire, LLC v. Manna Textiles, Inc.

• Decision Date: 02 February 2021
• Docket Number: No. 17-56641,17-56641
• Citation: 986 F.3d 1253
• Parties: DESIRE, LLC, a California limited liability company, Plaintiff-Appellee, v. MANNA TEXTILES, INC., a New York corporation; A.B.N., Inc., dba Wearever, Inc., a New York corporation; Top Fashion of N.Y., Inc., a New York corporation; Pride & Joys, Inc., a New York corporation; 618 Main Clothing Corp., dba 10 Spot, dba Madgra, a New Jersey corporation, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

986 F.3d 1253

DESIRE, LLC, a California limited liability company, Plaintiff-Appellee,

v.MANNA TEXTILES, INC., a New York corporation; A.B.N., Inc., dba Wearever, Inc., a New York corporation; Top Fashion of N.Y., Inc., a New York corporation; Pride & Joys, Inc., a New York corporation; 618 Main Clothing Corp., dba 10 Spot, dba Madgra, a New Jersey corporation, Defendants-Appellants.

No. 17-56641

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 5, 2019 Pasadena, California

Filed February 2, 2021

BENNETT, Circuit Judge:

Desire, LLC ("Desire") sued Manna Textiles, Inc. ("Manna"), A.B.N., Inc. ("ABN"), Top Fashion of N.Y., Inc. ("Top Fashion"), Pride & Joys, Inc. ("Pride & Joys"), and 618 Main Clothing Corp. ("618 Main"), as well as others who are no longer parties, for copyright infringement. The district court held, on summary judgment, that Desire owned a valid copyright in the fabric design that was the subject of the action (the "Subject Design"), and that the Subject Design was entitled to broad copyright protection. The jury returned a verdict for Desire, finding that Manna, ABN, and Top Fashion willfully infringed the Subject Design, and that Pride & Joys and 618 Main innocently infringed the Subject Design. Desire elected to claim statutory damages in lieu of actual damages, and the district court, based on a pretrial ruling on the question, assessed five statutory damages awards totaling $480,000 (with that entire amount assessed jointly and severally against Manna).

On appeal, Manna, ABN, and Top Fashion challenge the district court's orders on summary judgment as well as its holding that Desire is entitled to receive multiple awards of statutory damages. Although we hold that the district court did not err in granting summary judgment for Desire on the validity of its copyright and the scope of the Subject Design's copyright protection, we disagree with the district court's holding that Desire is entitled to multiple statutory damages awards. We therefore affirm in part, reverse in part, vacate the judgment awarding Desire multiple awards of statutory damages, and remand to the district court for further proceedings.

I. FACTUAL BACKGROUND AND PROCEEDINGS BELOW

Desire is a Los Angeles-based fabric supplier. Desire purchased the Subject Design, which is a two-dimensional floral print textile design identified as "CC3460," and all rights to the Subject Design from Cake Studios, Inc. ("Cake") for $475. Desire registered the Subject Design with the United States Copyright Office on June 26, 2015.

A Cake designer "created [the Subject Design] using their own imagery" in Adobe Photoshop. "CC3460 is an original pattern created in Adobe Photoshop using an original flower image created by [a Cake] designer which was then imported into Photoshop so that the Photoshop editing tools could be used to adjust, stylize and arrange the floral elements into the original artwork that became CC3460. There is no pre-existing artwork from Photoshop in design CC3460."

On October 15, 2015, Top Fashion, a women's clothing manufacturer, purchased four yards of fabric bearing the Subject Design from Desire. Top Fashion used this fabric to secure a garment order from Ashley Stewart, Inc. ("Ashley Stewart"), a women's clothing retailer. However, Top Fashion and Desire had a dispute over the fabric price. Top Fashion then showed the Subject Design to Manna, a fabric supplier. Manna gave the Subject Design to its independent designer, Matty Mancuso, who in turn sent the design to Longwell Textile ("Longwell") in China with instructions to modify it. Upon receiving the modified design from Longwell, Mancuso replied, "After looking at this—don't know if you change [sic] it enough?" A Longwell representative responded: "I changed 30–40% on original, pls kindly approve ...." Manna registered the design (the "Accused Design") with the United States Copyright Office on December 1, 2015.

Between October 2015 and May 2016, Manna sold fabric bearing the Accused Design to ABN, Top Fashion, and Pride & Joys (the "Manufacturer Defendants"), all women's clothing manufacturers. These manufacturers created garments from that fabric and sold them to women's clothing retailers 618 Main, Burlington Coat Factory Direct Corp. ("Burlington"), and Ashley Stewart (the "Retail Defendants").

Thus, as alleged, Manna infringed Desire's copyright by selling fabric bearing the Accused Design to the Manufacturer Defendants. The Manufacturer Defendants then each allegedly committed a separate act of infringement in their sales to the individual Retail Defendants, who in turn allegedly committed acts of infringement in their sales to consumers. However, Desire does not allege that the Manufacturer Defendants infringed in concert, nor that the Retail Defendants acted in concert to infringe Desire's copyright.

Below is a chart showing the three "chains" of infringement that Desire alleged here.

In June 2016, Desire sued Manna, ABN, Top Fashion, Burlington, and Ashley Stewart, and later added Pride & Joys and 618 Main, alleging that all had willfully infringed Desire's copyright by manufacturing and/or selling fabric and garments bearing the Accused Design.

All parties moved for summary judgment. The district court partly granted Desire's motion and denied defendants’ motion. The district court concluded that there were no triable issues of fact as to (1) Desire's ownership of the Subject Design, rejecting defendants’ arguments that the design was not original, or (2) whether Manna, ABN, and Top Fashion had access to the Subject Design. The district court also concluded that the Subject Design was entitled to broad copyright protection. The court identified triable issues of fact as to (1) whether the Accused Design was substantially similar to the Subject Design; and (2) whether defendants willfully infringed the Subject Design. The court also held that if Desire prevailed, it would be potentially entitled to a maximum of seven awards of statutory damages with joint and several liability imposed as follows:

(1) Against Manna individually, for copying the Subject Design and distributing fabric bearing the Accused Design to the Manufacturer Defendants.

(2) Against Manna and Top Fashion jointly and severally, for Top Fashion's sale of infringing garments to Ashley Stewart.

(3) Against Manna, Top Fashion, and Ashley Stewart, jointly and severally, for Ashley Stewart's display and sale of infringing garments to consumers.

(4) Against Manna and ABN, jointly and severally, for ABN's sale of infringing garments to Burlington.

(5) Against Manna, ABN, and Burlington, jointly and severally, for Burlington's display and sale of infringing garments to consumers.

(6) Against Manna and Pride & Joys, jointly and severally, for Pride & Joys's sale of infringing garments to 618 Main.

(7) Against Manna, Pride & Joys, and 618 Main, jointly and severally, for 618 Main's display and sale of infringing garments to consumers.

The jury returned a verdict in favor of Desire, finding that Manna, ABN, and Top Fashion willfully infringed the Subject Design, and that Pride & Joys and 618 Main innocently infringed the Subject Design.¹ The jury awarded statutory damages to Desire: $150,000 against Manna, $150,000 against ABN, $150,000 against Top Fashion, $20,000 against Pride & Joys, and $10,000 against 618 Main. Although the jury's verdict form did not specify joint and several liability for any of its damages awards, the judgment read alongside the district court's pretrial order on the parties’ potential liability, establishes the parties’ joint and several liability for each award: $150,000 against Manna alone; $150,000 against ABN (jointly and severally with Manna); $150,000 against Top Fashion (jointly and severally with Manna); $20,000 against Pride & Joys (jointly and severally with Manna); and $10,000 against 618 Main (jointly and severally with Pride & Joys and Manna). The parties do not dispute this.

Manna, ABN, Top Fashion, Pride & Joys, and 618 Main ("Appellants") timely appealed.²

II. DISCUSSION

A. Standard of Review

"We review the district court's grant of summary judgment de novo." Goodman v. Staples The Office Superstore, LLC , 644 F.3d 817, 822 (9th Cir. 2011). We review for abuse of discretion the district court's rulings on motions in limine . Branch Banking & Tr. Co. v. D.M.S.I., LLC , 871 F.3d 751, 759 (9th Cir. 2017). We review questions of statutory interpretation de novo. United States v. Youssef , 547 F.3d 1090, 1093 (9th Cir. 2008) (per curiam).

B. The District Court Correctly Held that Desire Owned a Valid Copyright.

Desire must prove its ownership of a valid copyright to establish copyright infringement. Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., Inc. , 499 U.S. 340, 361, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991). "To qualify for copyright protection, a work must be original to the author." Id . at 345, 111 S.Ct. 1282. "Original, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity." Id . ; see 1 M. Nimmer & D. Nimmer, Copyright ("Nimmer") §§ 2.01[A], [B] (2020). The parties do not dispute that Desire's copyright registration for the Subject Design "constitute[s] prima facie evidence of the validity of the copyright and of the facts stated in the certificate." 17 U.S.C. § 410(c). To rebut the presumption of validity, Appellants "must simply offer some evidence or proof to dispute or deny [Desire]’s prima facie case ...." United Fabrics Int'l, Inc. v. C&J Wear, Inc. , 630 F.3d 1255, 1257 (9th Cir. 2011) (citations omitted).

Appellants’ challenge is based on Deborah Young's expert report, which concluded that "[t]he flower motif/arrangement of Desire's design is similar to numerous floral motifs found in many prior art materials in the public domain." But Appellants misapprehend the appropriate standard. The "similar...