State St. Global Advisors Trust Co. v. Visbal, 1:19-cv-01719-GHW

• Decision Date: 03 January 2020
• Docket Number: 1:19-cv-01719-GHW
• Citation: 431 F.Supp.3d 322
• Parties: STATE STREET GLOBAL ADVISORS TRUST COMPANY , Plaintiff, v. Kristin VISBAL , Defendant.
• Court: U.S. District Court — Southern District of New York

431 F.Supp.3d 322

STATE STREET GLOBAL ADVISORS TRUST COMPANY , Plaintiff,

v. Kristin VISBAL , Defendant.

1:19-cv-01719-GHW

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

Signed January 3, 2020

Kristen A. McCallion, John Stephen Goetz, Vivian Chiwing Cheng, Michael Frank Autuoro, Fish & Richardson P.C., New York, NY, Bobby Gene Hampton, III, Fish & Richardson, Boston, MA, for Plaintiff.

Steven John Mitby, Pro Hac Vice, Megan Bibb Rapp, Seiler Mitby, PLLC, The Woodlands, TX, Alexander Gigante, Sara Marie Gates, Nancy Evelyn Wolff, Cowan, Debaets, Abrahams & Sheppard LLP, New York, NY, Michael Mickey Mills, The Mills Law Firm, Houston, TX, for Defendant.

MEMORANDUM ORDER AND OPINION

GREGORY H. WOODS, United States District Judge:

Fearless Girl—a bronze statue that became a viral sensation after it was placed at Bowling Green in New York City—stands at the center of the dispute in this case. In 2017, State Street Global Advisors ("SSGA") commissioned sculptor Kristen Visbal to create an original statue for International Women's Day. After it was unveiled, that statue became known as "Fearless Girl" and received wide media attention. SSGA and Visbal then executed a set of contracts that governed the use of the Fearless Girl copyright and trademark. When SSGA learned that Visbal sought to sell replicas of the statue to buyers in Australia and Germany in ways that allegedly violated the terms of these contracts, SSGA commenced this litigation. Visbal has subsequently counterclaimed against SSGA, alleging a breach of those same contracts.

There are two motions pending before the Court. First, SSGA moves to amend its complaint. Dkt No. 82. Because SSGA's direct copyright infringement and trademark infringement claims are not futile and would not unduly prejudice Visbal, SSGA's motion to amend is GRANTED as to these claims. However, Plaintiff's claims for secondary copyright liability are extraterritorial as alleged. Consequently, Plaintiff's motion to amend is futile as to these claims and Plaintiff's motion to amend is DENIED in part. Second, SSGA moves to dismiss a subset of Visbal's counterclaims and to strike a subset of Visbal's affirmative defenses. Dkt No. 120. Because Visbal has not adequately alleged the elements of tortious interference with contract, fraud in the inducement, copyright infringement, or contributory copyright infringement, SSGA's partial motion to dismiss and partial motion to strike is GRANTED.

I. PLAINTIFF'S MOTION TO AMEND

A. BACKGROUND

1. Facts¹

The proposed Second Amended Complaint ("SAC") alleges that "SSGA conceived and launched its Fearless Girl campaign"—"a global campaign through which SSGA initiates corporate change to support gender diversity and woman leadership on corporate boards"—to "demand[ ] support of corporate gender diversity." SAC, Dkt No. 83-4, ¶¶ 5, 7. Plaintiff "unveiled Fearless Girl" on March 8, 2017 to promote a fund it manages that is "designed to measure the performance of U.S. large, successful companies that are ‘gender diverse[.]’ " Id. ¶¶ 2, 25-26. Fearless Girl was installed at Bowling Green in New York City and was originally slated to stand for one month. Id. ¶ 27. However, given the statue's popularity, it remained at Bowling Green until December 10, 2018 when it was moved to a new location outside the New York Stock Exchange ("NYSE"). Id.

"SSGA owns U.S. Trademark Registration No. 5,728,466 (the ‘466 Registration’) for FEARLESS GIRL in connection with ‘promoting public interest in and awareness of gender and diversity issues, and issues pertaining to the governance of corporations and other institutions’ ... and ‘funds investment; financial management services; financial investment advisory services; financial administration of donor-advised funds for charitable purposes; accepting and administering monetary charitable contributions; and financial information’ ... [i]n addition to its common law rights in the FEARLESS GIRL mark[.]" Id. ¶ 34 (brackets omitted). "SSGA also owns pending U.S. Trademark Application Serial No. 87/570,401 (the ‘401 Application’) for FEARLESS GIRL in connection with ‘providing recognition and incentives by the way of awards to demonstrate excellence in the field of gender and diversity issues[.]’ " Id. ¶ 35 (brackets omitted). Defendant has also "obtained a copyright registration for the three-dimensional Fearless Girl sculpture from the U.S. Copyright Office, Registration No. VAu001281157, effective March 16, 2017." Id. ¶ 41.

In 2017, Plaintiff and Defendant entered into three contracts: a Master Agreement, Dkt No. 16-2, at 2-12, a Copyright License Agreement, Dkt No. 16-2, at 16-19, and a Trademark License Agreement, Dkt No. 16-2, at 23-30 (collectively, the "Agreements"), "concerning the promotion and use of Fearless Girl." SAC ¶¶ 22, 36.² According to the SAC, "under the Agreements, SSGA owns exclusive rights to use the Fearless Girl artwork in connection with financial services and with gender diversity issues in corporate governance." Id. ¶ 37. Defendant "cannot sell, license, or distribute copies of the Fearless Girl artwork (i) for any commercial and/or corporate purpose with very limited exceptions, (ii) to any third party to use in connection with gender diversity issues in corporate governance or in the financial services sector, or (iii) to any political party, politician, activist, or activist group with very limited exceptions." Id. (citing Agreements at 16 (Copyright License Agreement § 1); id. at 5 (Master Agreement § 7(c))).

a. The Australian and German Sales

The SAC alleges that Defendant sold a Fearless Girl replica to three Australian firms (the "Australian Sale"). Plaintiff alleges that it learned from "news sources" that Fearless Girl was "being brought to Melbourne[, Australia] by lawyers Maurice Blackburn and industry super funds HESTA and Cbus, as a symbol of the fight for gender equality." Id. ¶ 48 (quotation omitted). The SAC alleges that "Maurice Blackburn is a large Australian law firm whose specialties include personal injury, class actions, superannuation, insurance, and financial services." Id. ¶ 49. HESTA is the "Health Employees Superannuation Trust Australia, which is a super fund managed by H.E.S.T. Australia Limited." Id. ¶ 50 (quotation omitted). Cbus is the "Construction and Building Unions Superannuation, and is one of Australia's largest super funds." Id. ¶ 51. "These Australian firms promoted Fearless Girl in corporate press releases that" allegedly "suggested that it was SSGA's statue that was arriving in Australia, rather than" a replica. Id. ¶ 52. The SAC alleges that "Maurice Blackburn's Instagram account, which depicts the company's trademarks, slogans, and branding, boasted a photograph of the unauthorized Fearless Girl replica and made prominent use of SSGA's FEARLESS GIRL trademark alongside its own[.]" Id. ¶ 53. Plaintiff alleges that "[u]pon information and belief, Visbal, or an individual acting on Visbal's behalf, took the photograph of the Fearless Girl replica" that was displayed on Maurice Blackburn's Instagram Account "while [the replica] was in the U.S. and supplied it to Maurice Blackburn prior to sending the replica from the U.S. to Australia." Id. ¶ 54.

Plaintiff alleges that "[a]fter SSGA filed this lawsuit, Visbal participated in a promotional event hosted by Maurice Blackburn, HESTA, and Cbus at Federation Square in Melbourne, Australia, to unveil the unauthorized Fearless Girl replica she sold and shipped from the U.S." Id. ¶ 60. This replica allegedly "d[id] not give attribution to SSGA, as required under Section 1(d) of the Master Agreement." Id. ¶ 61. The SAC alleges that "Visbal delivered two speeches as part of the unveiling event" during which she "commended and promoted Maurice Blackburn, Cbus and HESTA and spoke about gender diversity issues in corporate governance and in the financial services sector[.]" Id. ¶ 63. Plaintiff further alleges that "[a]fter Visbal's and the Australian firms' unveiling ceremony, the Australian firms continued to publicize the unauthorized replica in connection with gender equality in the workplace and alongside prominent displays of their corporate branding[.]" Id. ¶ 64.

The SAC also alleges that Defendant sold, or planned to sell, a replica to "an unknown German buyer or buyers [ (the ‘German Sale’] ... and that there would be an event to unveil the replica in Germany, likely at or around the same time as the event in Australia." Id. ¶ 73. However, no unveiling has occurred in Germany. See Section I.B, infra (describing the preliminary injunction entered by the Court to block both the sale to the undisclosed German buyer to the extent that it had not already been completed and the public unveiling in Germany).

b. Defendant's Website

Plaintiff alleges that Defendant has created a website "to sell smaller-size statuette replicas to prospective buyers[.]" Id. ¶ 80. The SAC alleges that Defendant "has used and is using an automated sales form and/or web-based sales system on her website to accept orders for a Fearless Girl statuette from any buyer who completes the sales form, provides a valid address, and pays the purchase price." Id. (emphasis omitted). This website allegedly "includes no safeguard to reasonably ensure that replicas of Fearless Girl do not end up in the wrong hands and are not used for a purpose prohibited by the parties' Agreements." Id. (emphasis omitted). The SAC alleges that, via her website, "Visbal sold a statuette to an employee of the financial institution Edward Jones who, upon information and belief, was acting on behalf of Edward Jones for use at a corporate-sponsored event[.]" Id. ¶ 87. Thus, Plaintiff alleges that Defendant "displayed two-dimensional images of the Fearless Girl artwork on social media" and "displayed a three-dimensional statuette of the Fearless Girl artwork at a conference all in connection with gender diversity issues in corporate governance and in the financial services...