IP Law Daily Malibu Textiles survives another challenge to sufficiency of infringement claims
Thursday, April 25, 2019

Malibu Textiles survives another challenge to sufficiency of infringement claims

By Pamela C. Maloney, J.D.

Two infringement actions filed by Malibu Textiles, Inc., should not have been dismissed because Malibu sufficiently alleged ownership of registered copyrights in two floral lace designs and striking similarity between its designs and those of the defendants.

A textile company’s two infringement actions that had been filed against a number of defendants sufficiently had alleged ownership of valid, registered copyrights in two floral lace designs and also successfully pled striking similarity between its designs and those of the defendants to designs, the U.S. Court of Appeals for the Ninth Circuit has decided, reversing the dismissal of those actions by the federal district court in Los Angeles. The Ninth Circuit panel further held that the district court abused its discretion by denying the textile company leave to amend its allegations of access in support of its theory of substantial similarity (Malibu Textiles, Inc. v. Label Lane International, Inc., April 24, 2019, Zouhary, J.).

Malibu Textiles Inc., a textile company claiming to be the copyright owner for two lace designs consisting of flowers, vines, leaves, and other elements arranged in a pattern, filed copyright infringement lawsuits against Label Lane International, Entry, and H&M Hennes & Mauritz (the defendants) alleging that these companies had illegally copied Malibu’s lace designs. The Ninth Circuit previously had determined that the federal district court in Los Angeles erred in two separate copyright infringement cases filed by Malibu by granting the defendants’ motion to dismiss with prejudice and in failing to allow Malibu Textiles to amend its complaint. The case was before the Ninth Circuit for a second time after the district court again denied leave to amend and dismissed the case with prejudice. The Ninth Circuit again reversed the district court’s dismissal of the infringement actions.

Ownership. Although the district court’s decision was based on the copying element of an infringement claim, the defendants urged the Ninth Circuit to affirm based on Malibu’s failure to allege ownership. The Ninth Circuit rejected that argument, finding that Malibu had alleged that it owned two original two-dimensional artworks—Designs 1967 and 1717—which were registered with the Copyright Office under numbers VA 1-159-155 and VA9230008. These allegations plausibly stated that Malibu owned registered copyrights for the artwork in Designs 1967 and 1717 and its use of the shorthand label "Subject Work" in its complaint in referring to that artwork did not change that fact, the Ninth Circuit admonished.

Copying. The district court had determined that most of the similarities between Malibu’s designs and those of the defendants consisted of non-protectible elements, such as the natural appearance of a Bengal Clockvine flower. Acknowledging that copyright law did not protect the natural appearance of that flower, the Ninth Circuit found that it did protect the original selections, coordination, and arrangement of the floral elements in a lace pattern, adding that the copyright protection afforded Malibu’s designs was broad because there was a wide range of expression for selecting, coordinating and arranging floral elements in stylized fabric designs.

Striking similarity. In assessing whether Malibu had adequately pleaded striking similarity between its designs and those of the defendants, the Ninth Circuit found that the post-remand complaint stated that the patterns were "identically arranged" and that the elements were "arranged exactly the same in relation to each other." The complaint also described, in detail, some of the similarities between the patterns and, most importantly, provided side-by-side pictures that made the similarities apparent. Although the pictures did show some minor differences in color, netting, and shape curvature, a jury could find that those differences were the result of the fabric printing process or, as asserted by Malibu, were the result of the defendants’ use of cruder, lower quality techniques and machinery. At this stage, Malibu had successfully pleaded striking similarity, and the district court erred in dismissing the complaint on this ground.

Substantial similarity. The Ninth Circuit further determined that district court erred in denying Malibu’s proposed amendments to the access allegations supporting its substantial similarity theory that were proffered in response to the Ninth’s Circuit’s earlier decision. The prior panel had instructed that Malibu could meet the substantial similarity pleading requirements by alleging a chain of events that linked the protected pattern with the allegedly infringing patterns, or by providing sales figures accompanied by dates and geographic distribution information plausibly showing access via widespread dissemination.

The proposed amendments alleged a number of ways in which the defendants could have had access to Malibu’s two designs including that (1) the defendants did business in California and thus had access to the designs through Malibu’s California showrooms; (2) when the mills that had produced Malibu’s lace were acquired by other mills, those mills offered the original mills’ libraries of patterns, including Malibu’s patterns, to customers without regard to whether those patterns were protected by copyright law; (3) Malibu’s customers had sold garments and other products featuring its designs in the same domestic and international markets as the defendants; and (4) several clothing retailers operating in the same market as the defendants collectively sold hundreds of thousands of garments featuring reproductions of the two designs at issue. These allegations, if taken as true, plausibly alleged that the defendants had reasonable opportunities to view that subject designs and, therefore, the district court abused its discretion in denying Malibu’s request to amend its complaint to add the access allegations.

Attorney fees. One of the defendants had filed a cross-appeal, arguing that the district court erred in denying its request for attorney fees. In light of the errors in the district court’s decision, the defendant was no longer a prevailing party eligible for attorney fees; therefore, its request for attorney fees was moot, the Ninth Circuit concluded.

This case is Nos. 17-55983, 17-55984, and 17-56531.

Attorneys: Stephen Doniger (Doniger Burroughs APC) for Malibu Textiles, Inc. Neal J. Gauger (Nixon Peabody LLP) for Label Lane International, Inc and Entry, Inc. d/b/a Alt B.

Companies: Malibu Textiles, Inc; Label Lane International, Inc.; Entry, Inc. d/b/a Alt B

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