IP Law Daily French astreinte award for infringement of Picasso images not enforceable in California
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Monday, September 16, 2019

French astreinte award for infringement of Picasso images not enforceable in California

By Thomas Long, J.D.

A French court’s monetary award was repugnant to public policy because a California publisher’s use of the images was protected by the Copyright Act’s fair use defense, and French law did not contain a similar protection.

A French court’s two-million euro award enforcing a French legal remedy called an astreinte—which had been issued against a fine-arts bookseller and publisher for selling books containing copyrighted photographs of Pablo Picasso artworks—was repugnant to U.S. policy and was not legally recognizable under California’s Uniform Foreign Money-Judgments Recognition Act, the federal district court in San Jose has decided. The bookseller engaged in fair use under U.S. law because the challenged books were reference works, they contained additional information about the underlying Picasso works not present in the copyrighted photographs, and the challenged books did not compete in the same market as the copyrighted photos. Because French law did not provide for a fair use defense, the French court’s judgment was at odds with the U.S. public policy promoting criticism, teaching, scholarship, and research, the court determined (De Fontbrune v. Wofsy, September 12, 2019, Davila, E.).

French judgment. Yves Sicre de Fontbrune—who held the copyrights to certain works by Pablo Picasso—first sued fine-arts bookseller and publisher Alan Wofsy and Alan Wofsy & Associates (together, "Wofsy") in France in the late 1990s for publishing volumes of a book, The Picasso Project, that reproduced copyright-protected photographs of Picasso’s works. In 2001, de Fontbrune prevailed on the appeal of that suit, and the French court issued a French legal remedy, called an astreinte, that would subject the defendants to damages for any further acts of infringement. About 10 years later, de Fontbrune discovered copies of The Picasso Project in a French bookstore and initiated legal proceedings in France to liquidate the astreinte. An enforcement judge at the High Court of Paris in 2012 awarded de Fontbrune holder two million euros plus costs.

Previous district court ruling. The next year, de Fontbrune sued Wofsy in California, seeking to enforce the French judgment under California’s Uniform Foreign Money-Judgments Recognition Act (the "Recognition Act"). The district court found that the French remedy of astreinte was not cognizable under the Uniform Recognition Act because astreinte functioned as "fine or other penalty" that was not recognized by the Act.

Appellate court holding. A panel of judges in the Ninth Circuit decided that the district court had erred in ruling that the plaintiff’s award of an astreinte was a "fine or other penalty" for the purpose of California’s Uniform Recognition Act. Significantly, the astreinte was awarded in the context of a civil action to enforce a civil remedy under the French Intellectual Property Code; no criminal or penal proceedings were involved. In the panel’s view, the astreinte was not a punishment of an offense against the public; it was a private remedy to the plaintiff, who had been injured by the defendant’s misconduct. Although the defendant proffered dictionary translations of the word "astreinte" as "a fine for noncompliance with a judgment," the panel had to determine whether the essential character and effect of the astreinte was that of "a punishment of an offense against the public, or a grant of a civil right to a private person."

Because the court found that the French remedy of astreinte was, in this case, a private remedy that was awarded to a person who had been injured by the defendant’s violation of an injunction that prohibited further use of the plaintiff’s copyrighted materials, the court concluded that the astreinte under review was a judgment that merely "granted a sum of money." It was not, as Wofsy had argued, a "penalty" that was beyond the scope of the Recognition Act.

Dispute on remand. During the appeal, de Fontbrune died, and his heirs continued the litigation as plaintiffs. The case was remanded to the district court, and both sides moved for summary judgment. The plaintiffs sought recognition of the French judgment under the Recognition Act. The court explained that to enforce a judgment under the Recognition Act, the party seeking enforcement must establish that the judgment grants a sum of money; is final, conclusive, and enforceable under the law of the country where it was rendered; and is not a judgment for taxes, a fine or other penalty, or a judgment arising from domestic relations. The Ninth Circuit held previously that the astreinte did not qualify as a fine or penalty. Wofsy did not dispute that the other criteria of the Recognition Act were met, but argued that two of three mandatory grounds for nonrecognition in the statute applied: the French court lacked personal jurisdiction over him, and the French court lacked subject matter jurisdiction. Wofsy asserted that the following defenses under Section 1716(b) of the Recognition Act barred recognition of the 2012 French judgment: (1) Wofsy received insufficient notice to defend in the astreinte proceeding; (2) the plaintiffs obtained the French judgment through fraud; (3) the plaintiffs’ claim underlying the judgment was repugnant to U.S. policy; (4) the judgment conflicted with another final and conclusive judgment rendered in 2013; (5) circumstances around the 2013 judgment raised substantial doubt as to integrity of the French court in the astreinte proceeding; and (6) the 2012 judgment was not compatible with due process.

Personal jurisdiction. Wofsy argued that the French court had no personal jurisdiction because Wofsy lacked minimum contacts with France, Wofsy was never properly served, Wofsy did not have adequate notice and opportunity to defend the action, and Wofsy did not consent to jurisdiction. The district court concluded that Wofsy had waived this challenge by voluntarily seeking review of the 2012 proceeding.

Subject-matter jurisdiction. The plaintiffs had transferred the rights to the copyrights underlying the astreinte in 2001 to a third party. Wofsy argued that, at this time, they also transferred the right to liquidate the astreinte, making the enforcement action "inadmissible" in French court—a contention that was analogous to arguing that the plaintiffs lacked standing. After considering submissions from experts on French law, the district court found that whether the French court had subject matter jurisdiction over the astreinte proceeding turned on the question of whether the plaintiffs owned the right to liquidate the astreinte. The parties agreed that an astreinte can be transferred in general, but whether the astreinte at issue in this case was part of the 2001 transfer was subject to a genuine issue of material fact, in the court’s view. The transfer agreement did not expressly address whether the astreinte was transferred. A 2011 document that purportedly addressed the rights arising from the 2001 judgment was ambiguous, referring to unspecified "residual rights" retained by de Fontbrune. Accordingly, this issue could not be decided on summary judgment.

Sufficiency of notice. The Recognition Act provided that a court may decline to recognize a foreign money judgment if the defendant in the proceeding in the foreign court did not receive notice of the proceeding in sufficient time to enable the defendant to defend. Service of process upon Wofsy was delayed because the plaintiffs had attempted to mail notice to an out-of-date address, although Wofsy’s business address was listed in the public phone book. However, there was a factual question as to whether Wofsy received the mailing in sufficient time to defend in the astreinte proceeding, so the court denied summary judgment on this ground.

Fraudulently obtained judgment. Wofsy argued that the plaintiffs engaged in fraud on the French court by representing that they owned the copyrights to the at-issue photographs and the right to liquidate the astreinte. If the plaintiffs did not own the right to liquidate the astreinte and if they intentionally misled the French court as to that fact, then those facts could constitute extrinsic fraud, the court said. Therefore, there were genuine disputes of material fact that precluded summary judgment on this defense.

Repugnancy to public policy—fair use. The Recognition Act provided that a court is not required to recognize a foreign judgment when "[t]he judgment or the cause of action or claim for relief on which the judgment is based is repugnant to the public policy of this state or of the United States." Wofsy argued that the district court should decline to recognize the 2012 judgment because it was repugnant to U.S. public policy favoring (1) free speech and (2) promotion of the arts. The plaintiffs contended that any differences between U.S. and French law did not meet the stringent standard for repugnancy.

The standard for repugnancy under California law was whether the foreign judgment was so offensive to local public policy as to be prejudicial to recognized standards of morality and to the general interests of the citizens. The foreign judgment or the law on which it was based must be "so antagonistic to California or federal public policy interests as to preclude the extension of comity," the court explained.

The 2012 judgment arose, through the 2001 judgment, from French copyright law. According to Wofsy, it was repugnant to public policy set forth in the U.S. Constitution because (1) it conflicted with the fair use doctrine, which was rooted in the First Amendment, and (2) it conflicted with policy favoring the promotion of the arts as articulated in the Intellectual Property Clause of the U.S. Constitution. With respect to the first argument, Wofsy argued that its use of the photos at issue should qualify as fair use because the challenged books were reference works intended for libraries, academic institutions, art collectors, and auction houses, and they contained additional information, making them transformative. The court agreed that these factors strongly favored a finding of fair use. In addition, Wofsy’s books did not compete in the same with the original catalogue of the images, which sold at a considerably higher price, occasionally for approximately 25 times the price of Wofsy’s set of books. Accordingly, the court found that Wofsy’s use of the photographs fell within the fair use exception.

The plaintiffs conceded that the French intellectual property regime made no exception for the fair use of copyright-protected works. Therefore, in the court’s view, the 2012 judgment was at odds with the U.S. public policy promoting criticism, teaching, scholarship, and research, and the court concluded that it was in the interest of justice to deny recognition of the 2012 judgment.

Other arguments. The court granted partial summary judgment to the plaintiffs on Wofsy’s defense regarding inconsistency with the 2013 judgment because the two judgments arose from different facts and were not in conflict. The court declined to grant summary judgment on Wofsy’s due process defense because factual issues remained as to whether Wofsy had been given sufficient notice to defend in the astreinte proceeding.

This case is No. 5:13-cv-05957-EJD.

Attorneys: Richard James Mooney (RJM Litigation Group) for Vincent Sicre de Fontbrune. Neil A. Friedman Popovic (Sheppard Mullin Richter & Hampton LLP) for Alan Wofsy and Alan Wofsy & Associates.

Companies: Alan Wofsy & Associates

MainStory: TopStory Copyright CaliforniaNews

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