MARINA B CREATION SA v. De Maurier

• Decision Date: 19 May 1988
• Docket Number: No. 86 Civ. 9748 (RWS).,86 Civ. 9748 (RWS).
• Citation: 685 F. Supp. 910
• Parties: MARINA B CREATION S.A., Marina B S.A., and Marina B., Inc., Plaintiffs, v. Ada de MAURIER and Ada de Maurier International, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

685 F. Supp. 910

MARINA B CREATION S.A., Marina B S.A., and Marina B., Inc., Plaintiffs, v. Ada de MAURIER and Ada de Maurier International, Inc., Defendants.

No. 86 Civ. 9748 (RWS).

United States District Court, S.D. New York.

May 19, 1988.

Olwine, Connelly, Chase, O'Donnell & Weyher, New York City, for plaintiffs; William F. Sondericker, E. Sherrell Andrews, of counsel.

White & Case, New York City, for defendants; Robert R. Slaughter, Allan L. Gropper, Michael Hess, of counsel.

OPINION

SWEET, District Judge.

Plaintiffs Marina B Creation S.A. ("Creation"), Marina B S.A., and Marina B, Inc. ("MBI") (collectively "Marina B") and defendants Ada de Maurier and Ada de Maurier International, Inc. (collectively "de Maurier") have objected to the report and recommendation of Magistrate Michael Dolinger (the "Magistrate") on damages in an action between the parties. Additionally, de Maurier objects to Marina B's copyright action against it, and hence the Magistrate's recommendation, on the ground that this court lacks subject matter jurisdiction over the claim pursuant to 17 U.S.C. § 205(d). For the reasons set forth below, de Maurier's objection to the copyright action for want of subject matter jurisdiction is overruled, and the magistrate's report and recommendation is adopted in part and rejected in part.

Procedural Posture

In an order dated October 13, 1987, this court held de Maurier liable to Marina B by default and ordered that the case be forwarded to a magistrate for findings on damages in accordance with the order. That report was signed by the Magistrate on December 15, 1987, and received by this court on December 17, 1987. By way of formal motion papers as well as supplementary letters, the parties filed their objections to the report, the last letter having been received on February 22, 1988.

Subject Matter Jurisdiction

In a supplemental objection dated February 8, 1988, de Maurier, for the first time, challenged this courts' subject matter jurisdiction over Marina B's copyright claim. It claims that under the Copyright Act, recordation of a transfer agreement is a prerequisite to filing an action for infringement, and that since MBI never filed their exclusive license to sell Marina B designs in the United States, they cannot maintain this action.

Under 17 U.S.C. § 205(d),

No person claiming by virtue of a transfer to be the owner of copyright or of any exclusive right under a copyright is entitled to institute an infringement action under this title until the instrument of transfer under which such person claims has been recorded in the Copyright Office, but suit may be instituted after such recordation on a cause of action that arose before recordation.

MBI, the holder of the exclusive license to market Marina B designs in the United States, did not record the instrument of transfer until February 16, 1988.

However, under 17 U.S.C. § 501(b), the legal or beneficial owner of the copyright may sue in its own behalf. Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27, 32 (2d Cir.1982) (Copyright Act authorizes two types of claimants: owners of copyrights and exclusive licensees); Kamakazi Corp. v. Robbins Music Corp., 534 F.Supp. 69, 74 (S.D.N.Y.1982) (one who transfers legal title in exchange for license fees may maintain an action as beneficial owner).

Here, contrary to de Maurier's assertion, Creation can and did bring this action on its own behalf as owner of the copyright. By granting a license to MBI, it did not assign all of its ownership rights. Thus, regardless of the status of MBI due to its late recordation, this court has jurisdiction over the asserted copyright infringement by virtue of ownership.

Damages

The Magistrate's report and recommendation awards $200,000 in statutory damages on Marina B's copyright claim, $474,000 in trebled compensatory damages on plaintiffs' patent claims, $234,150.00 in compensatory damages on plaintiffs' Lanham Act claim, $100 on their common law unfair competition claim, $100,000 in punitive damages on their common law unfair competition claim, $28,412 in prejudgment interest on the patent claim, $60,000 in attorney's fees, and costs in a sum to be taxed by the Clerk of the Court.

Marina B objects to the Magistrate's assessment of lost profits on the patent claim, of Lanham Act damages, of prejudgment interest, and of attorneys' fees. de Maurier objects to the trebling of patent damages, to statutory copyright damages, to Lanham Act damages, and to any punitive measures, including trebling and punitive damages, for want of proof of wilfulness.

The Magistrate's report is carefully drawn and thorough and thus is adopted insofar as it relates to the copyright claims, the common law unfair competition claims including punitive damages, interest, costs, and attorneys' fees. However, the Magistrate's recommendations pertaining to patent damages is amended, and his assessment on Lanham Act damages is rejected.

Rule 54(c), of the Federal Rules of Civil Procedure states that "a judgment by default shall not be different in kind from or exceed in amount that prayed for in the demand for judgment." However, the portion of the ad damnum clause in Marina B's amended complaint seeking damages for patent infringement prays for

all profits received by the defendants and all damages sustained by plaintiffs or any of their licensees on account of defendants' infringement of plaintiffs patented jewelry creations....

No demand for treble damages is made. Thus, this court will not increase damages beyond what was originally sought. See, e.g., National Discount Corp. v. O'Mell, 194 F.2d 452 (6th Cir.1952).

Although at least one court in this district has refused to rule out the possibility of permitting increased damages on default when the notice of default contains notice of the increase, see IPEC, Inc., v. Magenta Films Ltd., 81 Civ. 3341 (S.D.N.Y. January 25, 1983), Marina B's notice and motion for default did not contain the required notice. The request for treble damages appeared in the...