Stabile v. Paul Smith Ltd.

• Decision Date: 31 July 2015
• Docket Number: Case No. CV 14–3749 DMG (SHx)
• Citation: 137 F.Supp.3d 1173
• Court: U.S. District Court — Central District of California
• Parties: Judy Stabile, Plaintiff, v. Paul Smith Limited; Paul Smith Los Angeles, LLC; The Rug Company Limited; The Rug Company, Ltd. (CA), Defendants.

137 F.Supp.3d 1173

Judy Stabile, Plaintiff,

v.Paul Smith Limited; Paul Smith Los Angeles, LLC; The Rug Company Limited; The Rug Company, Ltd. (CA), Defendants.

Case No. CV 14–3749 DMG (SHx)

United States District Court, C.D. California.

Signed July 31, 2015

Marc Karish, A. Eric Bjorgum, Karish and Bjorgum PC, Pasadena, CA, for Plaintiff.

George Gottlieb, Jonathan M. Purow, Gottlieb Rackman and Reisman PC, New York, NY, Mark D. Kremer, Zachary T. Page, Conkle Kremer and Engel PLC, Santa Monica, CA, for Defendants.

ORDER RE: DEFENDANTS' MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION [35]

DOLLY M. GEE, UNITED STATES DISTRICT JUDGE

I.PROCEDURAL BACKGROUND

On May 15, 2014, Plaintiff Judy Stabile filed a Complaint against Defendants Paul Smith Limited, Paul Smith Los Angeles, LLC, The Rug Company Limited, and the Rug Company, LTD. (CA) alleging (1) copyright infringement; (2) vicarious copyright infringement; and (3) contributory copyright infringement. [Doc. # 1.]

On May 1, 2015, Defendants filed a motion for summary judgment for non-infringement of Stabile's allegedly copied paintings or, in the alternative, summary adjudication of the facts and conclusions set forth in Defendants' [Proposed] Statement of Uncontroverted Facts and Conclusions of Law ("MSJ"). [Doc. # 35.] On May 29, 2015, Stabile filed an opposition ("Opp."). [Doc. # 41.]¹ On June 12, 2015, Defendants filed a reply ("Reply"). [Doc. # 50.]

II.FACTUAL BACKGROUND²

A. The Parties

Judy Stabile is an abstract artist based in Los Angeles, California who has been a professional artist since 1973. Defendants' Reply Statement of Facts and Conclusions of Law in Support of Defendants' Motion for Summary Judgment ("Reply SUF") ¶¶ 17, 88. [Doc. # 50–1.] Stabile registered three of her "Cylinder" paintings with the U.S. Copyright Office in 2014: Extrapolations # 3 (created in 1982), Extrapolations # 1 (created in 1981), and Westside Story (created in 2006). (Id. ¶¶ 18, 95.) Extrapolations # 3 is the subject of this lawsuit. (Id. ¶ 18)³

Paul Smith Limited ("Paul Smith") is a United Kingdom entity headquartered in London and Nottingham, England. (Id. 2.) Paul Smith products are manufactured, sold, and distributed throughout the world. (Id. ¶ 3.) Paul Smith is a wholly owned subsidiary of Paul Smith Group Holdings. (Id. ¶ 6.) Paul Smith is the owner of the U.S. copyright registration for the design "Carnival" registered on January 23, 2012. (Id. ¶ 5.)

Paul Smith Los Angeles LLC is a California limited liability company with its principal place of business in Los Angeles, California and is also a wholly owned subsidiary of Paul Smith Group Holdings. (Id. ¶¶ 7–8.) Paul Smith Los Angeles LLC is one of the retail locations operated by Paul Smith. (Id. ¶ 9.)

The Rug Company Limited is a United Kingdom entity with its principal place of business in London, England. (Id. 10.) The Rug Company Limited is a manufacturer of high fashion, luxury rugs, and related home accessories. (Id. ¶ 11.) Like Paul Smith, it conducts business throughout most major commercial cities in the world. (Id. )

The Rug Company Ltd. (CA) is a California corporation and an affiliate of The Rug Company Limited (collectively "The Rug Company"). (Id. ¶¶ 12–13.) The Rug Company has had a significant business relationship with Paul Smith for over fifteen years. (Id. ¶ 14.) The Rug Company is the exclusive licensee of the "Carnival" design, and markets rugs with this design internationally, including at its retail store in Los Angeles, California. (Id. ¶¶ 15–16.)

B. Extrapolations # 3

Stabile created the painting Extrapolations # 3⁴ in 1982. (Reply SUF ¶ 95.) The original work is approximately 45? x 33? (Id. ¶ 96.) Extrapolations # 3 was displayed in the California restaurants Spago in Hollywood and Spago in Beverly Hills for approximately fifteen years before being sold to a private collector around 2003. (Id. ¶¶ 51, 96.) A large print of the painting (78? x 43?) was installed in Hal's Restaurant in Venice, California in 2003, and an image of the painting has appeared on the front cover of Hal's menu since 2003. (Id. ¶¶ 51, 97.)

Approximately 18 prints of Extrapolations # 3 have been made in various sizes. (Id. ¶¶ 53, 97.) One of those prints was sold to someone in London. (Id. ¶ 97.) Stabile is not sure where the other prints were sold or where they are now. (Id. ¶¶ 53, 97.)

Stabile stated during her January 13, 2015 deposition that Extrapolations # 3 has appeared on her website, but she could not remember when it appeared, and it does not appear there now. (Stabile Depo. 108:24–109:6.) Stabile states in her declaration that the website launched in 2007. (Stabile Decl. ¶ 4.) Defendants have used the "Wayback Machine"⁵ to capture stored screen shots of Stabile's website from 2001⁶ to 2011. (Purow Decl. ¶¶ 11–15.) Extrapolations # 3 does not appear on any of these archived URLs. (Id. ¶ 16.) On June 6, 2015, Defendants' counsel found a single marketplace listing for a work entitled Extrapolations # 3 on the One Kings Lane website. (Id. ¶ 18.)

The following is a copy of Stabile's Extrapolations # 3:

?

Judy Stabile, Extrapolations # 3 (1982), Stabile Decl., Ex. A [Doc. # 41–1].

C. The Paul Smith Design Process

Paul Smith's "Multi Stripe" design was created in 1996 and used on menswear and accessories. (Reply SUF ¶ 20.) As its popularity increased, it was used on clothing, bags, accessories, rugs, and stationary, and has been sold continuously throughout the world since that time. (Id. ; see also Defs.' Ex. 168 [Doc. # 35–4] (showing colorful striped patterns on Paul Smith scarves, belts, mugs, key chains, and purses)).

The following is a representation of Paul Smith's "Multi Stripe" design:

?

Paul Smith, Multi Stripe Design (1996), Defs.' Ex. 155 [Doc. # 35–2].

Paul Smith directs and supervises his company's designers and designs. (Reply SUF ¶ 22.) In 2008, the Paul Smith Print Department in London created an "inspiration board" that collected all of the items to be used as an inspiration for that season's prints. (Id. ¶ 26.) In late 2008, the Paul Smith Print Department met with Smith to review the inspiration board before preparing actual designs. (Id. ¶ 27.) Smith provided the Print Department with a letter written on stationary he had purchased at Pandolfini Casa d'Aste in Florence, Italy which featured colorful wide stripes aligned in different directions on its left and right sides. (Id. ¶ 28.)⁷ The letter was added to the inspiration board. (Id. ) During this meeting, Smith noted that he particularly liked another item on the inspiration board—a photograph of a swatch of fabric featuring transparent intersecting colored lines. (Id. ¶ 30). He stated that the photograph reminded him of the 2008 Christmas season window display at the Paul Smith jeans store, which also featured overlapping transparent lines of different colors. (Id. ) Smith instructed the Print Department to visit the Paul Smith jeans store and use the window display as inspiration. (Id. ¶ 32.) The Paul Smith Nottingham store featured similar window displays with overlapping transparent lines of different colors for the 2008 Christmas season. (Id. ¶ 33.)

D. The Carnival Rug

Niamh Gillespie was the primary designer responsible for creating a colored stripe design that was ultimately called "Carnival." (Id. ¶ 36.) Monach Brittain supervised the creation of all designs during the fashion season that Carnival was created. (Id. ¶ 37.) Neither Gillespie nor Brittain has ever visited Los Angeles or Beverly Hills. (Id. ¶ 52.) Gillespie and Brittain assert that they have never visited Stabile's website. (Id. ¶ 66.) Stabile responds that "[it] is impossible for Defendants' employees to remember every website they have ever visited," but presents no evidence to contradict their assertion or to pinpoint the period in time when an image of Extrapolations # 3 appeared on her website. (Id. )

In January of 2009, Gillespie created numerous drafts of a design of colorful horizontal stripes stacked in vertical rows, first with felt tip markers, then watercolors, then using Photoshop to further alter the design. (Id. ¶¶ 38–46.) A record of each step of the design process for "Carnival" was contemporaneously entered into the Paul Smith design database. (Id. ¶ 47.)⁸ The final version of the design was sent to The Rug Company Limited so that it could be utilized as the design on a rug that ultimately became the Carnival Rug. (Id. ¶ 48.) The Rug Company manufactured and sold the Carnival Rug worldwide, including at its Los Angeles store. (Id. ¶ 50.)

A copy of Paul Smith's Carnival Rug is shown below:

?

Paul Smith, Carnival Rug (2009), Defs.' Ex. 180 [Doc. # 35–4].⁹

In 2008, Paul Smith had a policy limiting access to the Internet at work for its designers. (Reply SUF ¶ 69; Gillespie Depo. at 14:8–15:1 [Doc. # 59–1] ). Gillespie used the Internet at home in 2008. (Id. ¶ 69; Gillespie Depo at 16:5–14.) There was no rule in 2008 that would have prevented Paul Smith designers from using the Internet on their own time and finding images that inspired subsequent designs without reporting this Internet use. (Gillespie Depo. at 16:8–14.)

E. Expert Reports

Both parties have submitted expert reports and declarations. Stabile has submitted the Declaration and Expert Report of Mumsey Nemiroff ("Nemiroff Report") in support of her Opposition. [Doc. # 65.]¹⁰ Paul Smith has submitted the Declaration and Expert Report of Denise Mullen ("Mullen Decl.") and the Declaration and Rebuttal Expert Report of Denise Mullen ("Mullen Rebuttal") in support of its MSJ. [Doc. ## 35–2, 50–2.]

In her Declaration, Mullen provides her opinion of the characteristic elements of both the Stabile cylinder paintings and the Paul Smith rug, and key differences between them:

The Stabile cylinder paintings appear to be representations of growing forms in a landscape, or an abstraction from nature.... The cylinders suggest reeds or stems in a space close to the viewer against an atmospheric background ... of a

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