United Fabrics Int'l Inc. v. C&j Wear Inc.

• Decision Date: 26 January 2011
• Docket Number: No. 09–56499.,09–56499.
• Citation: 630 F.3d 1255
• Parties: UNITED FABRICS INTERNATIONAL, INC., a California Corporation, Plaintiff–Appellant,v.C&J WEAR, INC., a California Corporation individually and doing business as “Justified”; S–Twelve, a Business Entity of Form Unknown; Wear Well Knit Corporation, a Tennessee Corporation; Groove Theory, a Business Entity of Form Unknown, Defendants,andMacy's, Inc. an Ohio Corporation Erroneously Sued as Macy's Retail Holdings, Inc.; A.R.B. Inc., a New York Corporation; Lucky Kim International, Inc., a California Corporation, Defendants–Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

630 F.3d 1255

2011 Copr.L.Dec. P 30,031

97 U.S.P.Q.2d 1730

11 Cal. Daily Op. Serv. 1168

2011 Daily Journal D.A.R. 1489

UNITED FABRICS INTERNATIONAL, INC., a California Corporation, Plaintiff–Appellant,

v.C&J WEAR, INC., a California Corporation individually and doing business as “Justified”; S–Twelve, a Business Entity of Form Unknown; Wear Well Knit Corporation, a Tennessee Corporation; Groove Theory, a Business Entity of Form Unknown, Defendants,andMacy's, Inc. an Ohio Corporation Erroneously Sued as Macy's Retail Holdings, Inc.; A.R.B. Inc., a New York Corporation; Lucky Kim International, Inc., a California Corporation, Defendants–Appellees.

No. 09–56499.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Nov. 2, 2010.Filed Jan. 26, 2011.

Scott A. Burroughs (argued) and Stephen M. Doniger, of Doniger/Burroughs APC, Culver City, CA, for plaintiff-appellant United Fabrics International, Inc.Mark L. Eisenhut, Melinda Evans, and Scott P. Shaw (argued), of Call & Jensen, P.C., Newport Beach, CA, for defendants-appellees Macy's Retail Holdings, Inc. and A.R.B., Inc.Appeal from the United States District Court for the Central District of California, James V. Selna, District Judge, Presiding. D.C. No. 2:08–cv–01085–JVS–AJW.Before: J. CLIFFORD WALLACE and SUSAN P. GRABER, Circuit Judges, and RICHARD MILLS, Senior District Judge.^*

OPINION

WALLACE, Senior Circuit Judge:

United Fabrics International, Inc. (United) holds a copyright to a collection of fabric designs entitled “Ethnic Collection X.” One of the fabric designs within that collection (the Design), and the collection itself, are the focus of this appeal.

United sued C&J Wear, Inc., Lucky Kim International, Inc. and Macy's, Inc. (collectively, Macy's) for infringing its copyright in the Design. United alleged that Macy's sold copyright-infringing fabric and garments. United's action made it as far as the summary judgment phase, at which point the district court dismissed the case sua sponte, concluding that United lacked standing to pursue its copyright claims. The district court ruled that United failed to establish an element that is crucial to all copyright infringement actions: ownership of a valid copyright. According to United, it purchased a fabric design from an Italian design house, Contromoda, through an agent, Sergio Giacomel. United then modified the purchased design and registered it as part of Ethnic Collection X. The district court held that the evidence of the transfer of the source artwork from Contromoda to United was insufficient to establish ownership of the underlying design and, for that reason, dismissed the action: “United has not clearly established the chain of title giving it rights in the source artwork and, in turn, the subject matter that was derived from it. United therefore lacks standing.” The district court also held that United's copyright registration was invalid because United failed to publish its fabric designs concurrently, a requirement of a published single-work copyright that consists of a collection of works.

United appeals the district court's order dismissing this case. We have jurisdiction pursuant to 28 U.S.C. § 1331. We review de novo the district court's dismissal for lack of standing, Rattlesnake Coalition v. EPA, 509 F.3d 1095, 1100 (9th Cir.2007), and we reverse.

I.

A copyright registration is “prima facie evidence of the validity of the copyright and the facts stated in the certificate.” 17 U.S.C. § 410(c); see also S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1085 (9th Cir.1989). Macy's therefore has the burden of rebutting the facts set forth in the copyright certificate. S.O.S., 886 F.2d at 1085–86 (explaining that section 410(c)'s presumption shifts the burden of coming forward with evidence to the defendant); see also Lamps Plus, Inc. v. Seattle Lighting Fixture Co., 345 F.3d 1140, 1144 (9th Cir.2003). “ ‘To rebut the presumption [of validity], an infringement defendant must simply offer some evidence or proof to dispute or deny the plaintiff's prima facie case of infringement.’ ” Lamps Plus, Inc., 345 F.3d at 1144, quoting Entm't Research Grp., Inc. v. Genesis Creative Grp., Inc., 122 F.3d 1211, 1217 (9th Cir.1997).

Macy's argues that United failed to establish the chain of title to the underlying artwork and therefore does not have a valid copyright. But Macy's skips a step; nowhere does it set forth facts that rebut the presumption of validity to which United's copyright is entitled, and Macy's does not even argue that it has rebutted that presumption. The district court's ruling suffers from the same defect. Although such evidence may be present in the lengthy and extensive record, it is not our place to find it, see Forsberg v. Pac. Nw. Bell Tel. Co., 840 F.2d 1409, 1418 (9th Cir.1988), or to provide an argument on behalf of Macy's as to how that evidence rebuts the presumption of validity, see Renderos v. Ryan, 469 F.3d 788, 800 (9th Cir.2006), citing Acosta–Huerta v. Estelle, 7 F.3d 139, 144 (9th Cir.1992); Fed. R.App. P. 28(b).

It is true that, at oral argument, counsel for Macy's asserted that it had rebutted the presumption of copyright validity. But, when we asked Macy's attorney to identify evidence in the record sufficient to rebut the presumption of copyright validity, he merely argued, inter alia, that a United representative testified at a deposition that its designs “were not published as a true collection” and that “there is also no evidence that [these designs] met the requirements of an unpublished collection.” Counsel also asserted that Macy's introduced evidence “that the transfer was completely invalid,” but to support this assertion, he did nothing more than contend that United failed to provide evidence of the transfer. By repeatedly mentioning that United provided “no evidence,” we are skeptical that Macy's understands that it bears the burden of providing “some evidence” of invalidity. Regardless, Macy's cites no authority that such facts rebut the presumption of copyright validity.

Thus, Macy's does not get very far with its argument that United's copyright is invalid because “[United] did not produce any evidence that the person who assigned the [D]esign was a ‘duly authorized agent.’ ” United did not have to produce any evidence. As the copyright claimant, United is presumed to own a valid copyright, 17 U.S.C. § 410(c), and the facts stated therein, including the chain of title in the source artwork, are entitled to the presumption of truth. 3 M. Nimmer & D. Nimmer, Nimmer on Copyright § 12.1 [C] (2005). By failing to point to any evidence indicating that the copyright was invalid, see, e.g., Lamps Plus, 345 F.3d at 1144, Macy's has failed to rebut the presumption.

The district court similarly ignored the statutory presumption of copyright validity when it reasoned that “[t]he burden to show standing is not a mere pleading requirement, but rather an indispensable part of the plaintiff's case.” No cases were cited to us, and we are not aware of any authority, stating that the presumption of validity of a copyright does not apply when standing is at issue. Indeed, such cases do not exist because this rule would render 17 U.S.C. § 410(c)'s presumption of copyright validity meaningless.

Of course, our conclusion that United is presumed to own a valid copyright of the Design is not tantamount to holding that United in fact owns a valid copyright. That issue may still need to be resolved as this case moves forward. Nevertheless, at this stage of the litigation, United has satisfied its burden of proof to establish standing by introducing its copyrights. See Oregon v. Legal Servs. Corp., 552 F.3d 965, 969 (9th Cir.2009) (“The plaintiff bears the burden of proof to establish standing with the manner and degree of evidence required at the successive stages of the litigation” (internal quotation marks omitted)). Because of our holding, we need not discuss United's argument that the district court's sua sponte dismissal of its claim violated its due process rights, or its argument that Macy's did not have standing to challenge the transfer of rights in the Design.

II.

The presumption-of-validity analysis likewise applies to the argument, pressed by Macy's, that the Design was not deposited with the United States Copyright Office. Macy's contends that “[United] bore the burden of proving that it complied with the Copyright Act in order to have standing to sue or seek damages or attorney fees.” Again, Macy's skips...