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Unicolors, Inc. v. Urban Outfitters, Inc.

United States Court of Appeals, Ninth Circuit

April 3, 2017

Unicolors, Inc., a California Corporation, Plaintiff-Appellee,
v.
Urban Outfitters, Inc., a California Corporation, individually and Beneficiary and Heir to the Estate of Free People, LLC, Defendant-Appellant.

          Argued and Submitted January 13, 2017 Pasadena, California

         Appeal from the United States District Court for the Central District of California D.C. No. 2:14-cv-01029-SJO-VBK S. James Otero, District Judge, Presiding

          Stephanie P. Alexander (argued), Tara L. Martin, and Miles D. Scully, Gordon & Rees LLP, Irvine, California, for Defendants-Appellants.

          Scott Alan Burroughs (argued), Trevor W. Barrett, and Stephen M. Doniger, Doniger Burroughs, Venice, California, for Plaintiff-Appellee.

          Before: Richard C. Tallman and Michelle T. Friedland, Circuit Judges, and William Horsley Orrick[*], District Judge.

         SUMMARY[**]

         Copyright

         The panel affirmed the district court's judgment in favor of the plaintiff in a copyright infringement case involving fabric designs.

         Affirming the district court's summary judgment in favor of the plaintiff on the issue of copyright infringement, the panel held that the district court did not err in its application of the subjective "intrinsic test." The panel held that where the extrinsic similarity of two works is so strong that the works are near duplicates save for superficial differences, the district court may properly conclude that no reasonable jury could find that the works are not substantially similar in their overall concept and feel. The panel also held that it was permissible to infer copying in this case, even absent evidence of access.

         The panel held that the district court did not err in concluding, on summary judgment, that the plaintiff had validly registered a fabric design as part of a collection.

         Affirming the district court's judgment after a jury trial on the issues of willful infringement and damages, the panel held that substantial evidence supported the jury's verdict because the evidence showed that the defendant acted with reckless disregard for the possibility that the fabric it sampled was protected by copyright.

         The panel addressed additional issues in a concurrently filed memorandum disposition.

          OPINION

          ORRICK, District Judge:

         INTRODUCTION

         Urban Outfitters, Inc. and Century 21 Department Stores, LLC (collectively "Urban") appeal the judgment against them in a copyright infringement case involving fabric designs. The district court granted plaintiff Unicolors Inc.'s motion for summary judgment on the issue of copyright infringement and, following a two-day trial, a jury found Urban liable for willful infringement. We reject Urban's arguments that the district court erred in its application of the subjective "intrinsic test" and in its conclusion that Unicolors had validly registered the Subject Design, and further conclude that there was substantial evidence to support the jury's verdict for willful infringement.[1] We thus affirm.

         I. BACKGROUND

         Unicolors is a Los Angeles company in the business of designing and selling fabrics to customers in the apparel markets. Unicolors typically registers copyrights in its designs to protect its investment and maintain a competitive advantage in its artwork.

         In September 2008, Unicolors purchased the intellectual property rights to an original piece of work named "QQ-692"created by art studio Milk Print, LLC. It used a computer drafting utility program to reformat and make minor alterations to the QQ-692 design so that it could be printed onto bolts of fabric. It renamed this derivative design "PE1130" ("Subject Design"). On November 26, 2008, Unicolors registered its "Flower 2008" collection with the Copyright Office. Under "Contents Titles, " Unicolors listed several designs, including QQ-692, and it attached an image of the design with the label "QQ-692 (PE1130)." Under "Material excluded from this claim, " the application listed "Milk Print: QQ-692." Between 2008 and 2011, Unicolors sold approximately 14, 000 yards of fabric bearing the Subject Design to customers in the United States.

         Urban Outfitters is a specialty retail company operating over 500 stores worldwide. Century 21 is a department store that purchases products from Urban Outfitters. In late 2010, Urban Outfitters developed a women's dress (the "Accused Dress") with a fabric design similar to the Subject Design. Unicolors sent a cease-and-desist letter to Urban's counsel two years later, asserting that the Accused Dress infringed Unicolors's PE1130 design. Unicolors then filed suit against Urban alleging copyright infringement of the Subject Design.

         At summary judgment, the district court concluded that both defendants were liable for copyright infringement. The court held that Unicolors owns and properly registered a copyright in the Subject Design and that Urban created and sold garments bearing a design that was substantially similar to the Subject Design.

         Following a two-day trial on the issues of willfulness and damages, a jury found that Urban had willfully infringed Unicolors's copyright in the Subject Design and awarded $164, 400 in damages. The court then granted Unicolors $366, 910.17 in fees and costs. Urban timely appealed the district court's grant of summary judgment and the jury's finding of willfulness.

         II. STANDARD OF REVIEW

         We review the district court's grant of summary judgment de novo. Benay v. Warner Bros. Entm't, Inc., 607 F.3d 620, 624 (9th Cir. 2010). In reviewing the jury's verdict, we ask whether the verdict is supported by substantial evidence. See Harper v. City of Los Angeles, 533 F.3d 1010, 1021 (9th Cir. 2008). "A jury's verdict must be upheld if it is supported by substantial evidence, which is evidence adequate to support the jury's conclusion, even if it is also possible to draw a contrary conclusion." Id. (quoting Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir. 2002)).

         III. ...


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