8:13-cv-00351-LES-CRZ Doc # 141 Filed: 05/16/16 Page 1 of 16 - Page ID # 4805
`
`IN THE UNITED STATES DISTRICT COURT FOR THE
` DISTRICT OF NEBRASKA
`ORIENTAL TRADING COMPANY,
`)
`INC., a Delaware corporation, )
`and FUN EXPRESS LLC, a
`)
`Nebraska limited liability
`)
`corporation,
`
`))
`
`Plaintiffs,
`
` 8:13CV351
`
` MEMORANDUM AND ORDER
`
`)
`)
`
`v.
`YAGOOZON, INC., a Rhode
`)
`Island corporation,
`)
`)
`Defendant.
`)
`______________________________)
`
`))
`
`This matter is before the Court on plaintiffs’ Oriental
`Trading Company, Inc. and Fun Express, LLC (“plaintiffs”), three
`separate motions for partial summary judgment. See Filing No.
`64, Filing No. 103 and Filing No. 106. The first of plaintiffs’
`motions requests the Court conclude as a matter of law that the
`defendant, Yagoozon, Inc. (“defendant” or “Yagoozon”) is liable
`for copyright infringement, trademark infringement, unfair
`competition, and violations of two Nebraska state laws pertaining
`to seventeen items (“Set One”). See Filing No. 65. Plaintiffs’
`second motion seeks partial summary judgment as to each of
`defendant’s affirmative defenses. See Filing No. 104. Finally,
`plaintiffs ask the Court to grant summary judgment and find
`defendant liable for copyright infringement, trademark
`
`
`
`IN THE UNITED STATES DISTRICT COURT FOR THE
` DISTRICT OF NEBRASKA
`ORIENTAL TRADING COMPANY,
`)
`INC., a Delaware corporation, )
`and FUN EXPRESS LLC, a
`)
`Nebraska limited liability
`)
`corporation,
`
`))
`
`Plaintiffs,
`
` 8:13CV351
`
` MEMORANDUM AND ORDER
`
`)
`)
`
`v.
`YAGOOZON, INC., a Rhode
`)
`Island corporation,
`)
`)
`Defendant.
`)
`______________________________)
`
`))
`
`This matter is before the Court on plaintiffs’ Oriental
`Trading Company, Inc. and Fun Express, LLC (“plaintiffs”), three
`separate motions for partial summary judgment. See Filing No.
`64, Filing No. 103 and Filing No. 106. The first of plaintiffs’
`motions requests the Court conclude as a matter of law that the
`defendant, Yagoozon, Inc. (“defendant” or “Yagoozon”) is liable
`for copyright infringement, trademark infringement, unfair
`competition, and violations of two Nebraska state laws pertaining
`to seventeen items (“Set One”). See Filing No. 65. Plaintiffs’
`second motion seeks partial summary judgment as to each of
`defendant’s affirmative defenses. See Filing No. 104. Finally,
`plaintiffs ask the Court to grant summary judgment and find
`defendant liable for copyright infringement, trademark
`
`
`
`8:13-cv-00351-LES-CRZ Doc # 141 Filed: 05/16/16 Page 2 of 16 - Page ID # 4806
`
`infringement, unfair competition, and violations of two Nebraska
`state laws pertaining to thirty-seven additional items (“Set
`Two”). The matters have been fully briefed by the parties. See
`Filing Nos. 65, 75, 81, 104, 116, 107, 118, and 139. After
`review of the motions, the parties’ briefs, and the relevant law
`the Court finds as follows.
`BACKGROUND
`
`This case arises out of defendant’s business
`activities. Defendant utilizes Amazon.com, Inc. (“Amazon”) to
`advertise and sell various toys, party supplies, and other
`novelty products (Filing No. 35 at 3). On August 29, 2014,
`plaintiffs filed a second amended complaint
`seeking damages and injunctive
`relief for copyright infringement
`under the copyright laws of the
`United States, 17 U.S.C. §§ 101 to
`1332; for trademark infringement
`and unfair competition under
`§ 32(a) of the Lanham Act, 15
`U.S.C. § 1114; for unfair
`competition and false advertising
`under § 43(a) of the Lanham Act, 15
`U.S.C. § 1125(a); for deceptive
`trade practices under Nebraska's
`Uniform Deceptive Trade Practices
`Act, Neb. Rev. Stat. §§ 87-301 to
`87-306 (Reissue 2008); and for
`violations of the Nebraska's
`Consumer Protection Act, Neb. Rev.
`Stat. §§ 59-1601 to 59-1603
`(Reissue 2008).
`
`(Id. at 1-2).
`
`-2-
`
`
`
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`
`On September 15, 2015, plaintiffs filed their first
`motion for partial summary judgment (Filing No. 64). Plaintiffs
`asked the Court “find that [d]efendant . . . infringed
`[p]laintiffs’ copyrights and trademarks, and engaged in unfair
`competition and deceptive trade practices with regard to [the]
`. . . ‘Set 1 Items.’” (Id. at 2). On November 12, 2015,
`plaintiffs filed a Daubert motion (Filing No. 90). Plaintiffs
`filed a second motion for partial summary judgment on December 2,
`2015 (Filing No. 103). The second motion for partial summary
`judgment asked the Court to conclude that defendant’s
`“affirmative defenses fail as a matter of law.” (Filing No. 103
`at 1).
`
`The same day, plaintiffs also filed a third motion for
`partial summary judgment (Filing No. 106). Plaintiffs’ third
`motion asks the Court to find that defendant’s actions
`“constitute copyright infringement, trademark infringement,
`unfair competition, and violations of Nebraska’s laws prohibiting
`deceptive trade practices and consumer fraud” as to thirty-seven
`additional products (“Set Two”). (Id. at 1).
`Before the plaintiffs filed their reply brief in
`support of the motion for partial summary judgment for Set 2, the
`parties entered into serious settlement negotiations and filed an
`unopposed motion to extend the progression order. See Filing No.
`
`-3-
`
`
`
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`
`121. The defendant subsequently filed a motion to enforce
`settlement (Filing No. 123). After defendant’s motion to enforce
`settlement was fully briefed, the Court held a hearing (Filing
`No. 130). The parties then filed a joint motion to stay existing
`deadlines pending resolution of defendant’s motion to enforce
`settlement (Filing No. 131). The Court denied defendant’s motion
`to enforce settlement and ordered the parties submit a joint
`proposal for progression of the case on or before March 31, 2016
`(Filing No. 136 at 8). On April 5, 2016, the Court granted the
`joint motion (Filing No. 137) to extend the progression order and
`gave plaintiffs until April 6, 2016 to file their reply brief in
`support of their motion for partial summary judgment for the Set
`2 Items (Filing No. 138). The briefing for all plaintiffs’
`motions for partial summary judgment is now complete. See Filing
`No. 139.
`LAW
`
`Summary judgment is only proper when the Court
`determines the evidence “show[s] that there is no genuine issue
`as to any material fact and that the movant is entitled to
`judgment as a matter of law.” Fed. R. Civ. P. 56(a),(c); Semple
`v. Federal Exp. Corp., 566 F.3d 788, 791 (8th Cir. 2009) (quoting
`Fed. R. Civ. P. 56(c)). The evidence must be viewed in the light
`most favorable to the nonmoving party, giving the nonmoving party
`
`-4-
`
`
`
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`
`the benefit of all reasonable inferences. Kenney v. Swift
`Transp., Inc., 347 F.3d 1041, 1044 (8th Cir. 2003). At the
`summary judgment stage, it is not the function of the Court to
`“weigh the evidence and determine the truth of the matter but to
`determine whether there is a genuine issue for trial.” Anderson
`v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 91 L.
`Ed. 2d 202 (1986).
`DISCUSSION
`I. Summary Judgment as to Sets One and Two
`The Court finds genuine issues of material fact exist.
`For reasons discussed more fully below, the Court finds that
`plaintiffs have failed to meet the stringent summary judgment
`standard as to all causes of action for both Set One and Set Two.
`Therefore, plaintiffs’ motions for partial summary judgment as to
`Set One and Set Two will be denied.
`A. Direct Copyright Infringement
`The Copyright Act of 1976, as amended, 17 U.S.C. §§ 101
`et seq. (the “Act”), provides copyright owners protection from
`infringement and relief if infringement is proved. See 17 U.S.C.
`§§ 101 et seq. Anyone who violates one of the exclusive rights
`listed in the Act is an infringer. Broadcast Music, Inc. v.
`Ottis, Inc., No. 8:09CV402, 2010 WL 5288106, at *3 (D. Neb. Dec.
`16, 2010) (internal citations omitted). For a plaintiff to prove
`
`-5-
`
`
`
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`
`copyright infringement two elements must be shown: “(1) ownership
`of a valid copyright and (2) copying of original elements of the
`copyrighted work.” Warner Bros. Entertainment, Inc. v. X One X
`Productions, 644 F.3d 584, 595 (8th Cir. 2011) (internal citation
`omitted); see also Taylor Corp. v. Four Seasons Greetings, LLC,
`315 F.3d 1039, 1042 (8th Cir. 2003). The second element of
`copyright infringement may “be shown either by (1) direct
`evidence of copying, or (2) access to copyrighted material and
`substantial similarity” between the works. Warner Bros., 644
`F.3d at 595 (internal citation omitted).
`Plaintiffs fail to meet the summary judgment standard
`for direct copyright infringement. Although the first element is
`uncontested, the Court is unconvinced that plaintiffs have shown
`as a matter of law that the second element has been satisfied.
`The parties dispute whether Yagoozon, Amazon, or another third-
`party seller is responsible for the displaying of the copyrighted
`photographs. Plaintiffs allege “two of Yagoozon’s decisions
`demonstrate” defendant’s direct copyright infringement: (1)
`defendant’s selection of the Amazon product detail pages on which
`to sell its products; and (2) defendant’s “continued displaying
`[of] the product detail pages whenever it sold inventory.”
`(Filing No. 81 at 9). The evidence before the Court however,
`shows that genuine issues of material fact exist as to whether
`
`-6-
`
`
`
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`
`defendant created the product detail pages at issue, edited the
`pages, and/or is ultimately responsible for the displaying of
`plaintiffs’ copyrighted photographs. An overview of information
`from Amazon’s website pertaining to the setting up and
`maintenance of product detail pages provides guidance in the
`Court’s analysis.
`The parties have submitted conflicting affidavits
`concerning how a product is listed on Amazon and how a product
`detail page can be edited and by whom. Compare Filing Nos. 66,
`82, 108, 140 with Filing Nos. 74, 117. However, according to
`Amazon’s own documents, in order to create a product detail page,
`the seller/creator must be advertising a product that is not
`already available on Amazon. See Filing No. 74-3 at 13 (stating
`“[y]ou can create product detail pages for products not available
`in the Amazon.com catalog . . . .”). Amazon’s website further
`explains: “[t]he Add a Product tool lets you create new product
`detail pages on Amazon.com. Detail pages become a permanent part
`of the Amazon catalog, and you -- along with other sellers -- can
`create listings for these products . . . .” (Id. at 7) (emphasis
`added). Plaintiffs have not submitted any evidence allowing the
`Court to conclude as a matter of law that defendant created the
`product detail pages at issue. The Court therefore finds that a
`genuine issue of material fact exists as to whether defendant is
`
`-7-
`
`
`
`8:13-cv-00351-LES-CRZ Doc # 141 Filed: 05/16/16 Page 8 of 16 - Page ID # 4812
`
`the creator of the product detail pages that ultimately displayed
`plaintiffs’ copyrighted photographs.
`In addition, Amazon allows its product detail pages to
`be edited after their creation. Amazon’s website indicates:
`“[t]he product page you see . . . may reflect details you provide
`as well as those of others who contribute to that product’s
`information.” (Id. at 9) (emphasis added). Amazon’s
`representative testified in his deposition that an algorithm
`determines which of all the sellers of a particular product has
`control over the product detail page when multiple sellers
`request edits. See Filing No. 117-12 at 6. The Court is also
`unable to conclude as a matter of law that plaintiffs have
`satisfied Rule 56's standard to show that defendant is
`responsible for plaintiffs’ copyrighted photographs being copied
`and displayed on the product detail pages at issue. Therefore,
`plaintiffs’ motions for summary judgment as to direct copyright
`infringement will be denied as to both Set One and Set Two.
`B. Contributory Copyright Infringement
`In addition to liability for direct copyright
`infringement, liability can also be found for indirect
`infringement. See e.g., Metro-Goldwyn-Mayer Studios, Inc. v.
`Grokster, Ltd., 545 U.S. 913, 929-30, 125 S. Ct. 2764, 162 L. Ed.
`2d 781 (2005); Gershwin Publ’g Corp. v. Columbia Artists Mgmt.,
`
`-8-
`
`
`
`8:13-cv-00351-LES-CRZ Doc # 141 Filed: 05/16/16 Page 9 of 16 - Page ID # 4813
`
`Inc., 443 F.2d 1159, 1161-62 (2d Cir. 1971). “One infringes
`contributorily by intentionally inducing or encouraging direct
`infringement.” Grokster, 545 U.S. at 930 (internal citations
`omitted).1
`Plaintiffs argue “if Amazon is to blame for copyright
`. . . infringement, then Yagoozon is liable as a contributory
`infringer.” (Filing No. 81 at 7). The evidence before the Court
`demonstrates the existence of genuine issues of material fact
`whether defendant intentionally induced or encouraged either
`Amazon or any other third-party seller to directly infringe
`plaintiffs’ copyrighted photographs. Plaintiffs’ motions for
`summary judgement as to contributory copyright infringement will
`be denied as to both Set One and Set Two.
`
`1 Plaintiffs allege contributory infringement. See Filing
`Nos. 35 at 20-22, 65 at 33-40, 107 at 42-49. The United States
`Supreme Court stated in Sony Corp. of America v. Universal City
`Studios, Inc., 464 U.S. 417, 104 S. Ct. 774, 78 L. Ed. 2d 574
`(1984) that “the lines between direct infringement, contributory
`infringement, and vicarious liability are not clearly drawn
`. . . .” Sony, 464 U.S. at 435, n.17 (internal quotations
`omitted). However, because the plaintiffs’ complaint and briefs
`allege only direct and contributory infringement, the Court’s
`analysis will not consider vicarious infringement, its legal
`standard, or whether plaintiffs have established vicarious
`infringement as a matter of law.
`-9-
`
`
`
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`
`C. Direct Trademark Infringement
`Trademarks are governed by the Lanham Act, 15 U.S.C.
`§§ 1051 et seq. and protect against “false advertising and unfair
`competition.” United Industries, Corp. v. Clorox Co., 140 F.3d
`1175, 1179 (8th Cir. 1998) (citing Two Pesos, Inc. v. Taco
`Cabana, Inc., 505 U.S. 763, 767-68, 112 S. Ct. 2753, 120 L. Ed.
`2d 615 (1992) (quoting 15 U.S.C. § 1127)). To prove trademark
`infringement an owner of a trademark must “prove that [he] has
`ownership or rights in the trademark and that the defendant has
`used the mark in connection with goods or services in a manner
`likely to cause consumer confusion as to the source or
`sponsorship of the goods or services.” Cmty. of Christ Copyright
`Corp. v. Devon Park Restoration Branch of Jesus Christ’s Church,
`634 F.3d 1005, 1009 (8th Cir. 2011) (emphasis added) (internal
`citations omitted). Courts utilize six factors to determine
`whether a likelihood of confusion exists. See Cmty. of Christ
`Copyright Corp., 634 F.3d at 1009. Those six factors are: (1)
`the strength of the trademark owner’s mark; (2) the similarity
`between the trademark owner’s mark and the alleged infringing
`mark; (3) the degree to which the allegedly infringing products
`compete with the trademark owner’s products; (4) the alleged
`infringer’s intent to confuse the public; (5) the degree of care
`reasonably expected of potential customers; and (6) evidence of
`
`-10-
`
`
`
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`
`actual confusion. Id. No single factor is outcome determinative
`and “the inquiry is inherently case-specific.” Id.
`It is uncontested that plaintiffs own the “Fun Express”
`and “Oriental Trading” marks. Both marks are federally
`registered (Filing No. 66-1 at 2-3). The “OTC” mark however, is
`not federally registered (Filing No. 65 at 41). Plaintiffs ask
`the Court to “determine the validity of [the OTC] mark” by
`deciding if the OTC mark is “generic, descriptive, suggestive, or
`arbitrary.” (Filing No. 107 at 53). The Court finds the
`determination of whether plaintiffs have ownership rights in the
`OTC mark to be unnecessary for purposes of the present motions.
`The Court will assume that the first element of direct trademark
`infringement is satisfied as to both federally registered marks
`and the OTC mark.
`Even though the first element of direct trademark
`infringement is met as to the federally registered marks and
`assumed as to the “OTC” mark, the Court will deny plaintiffs’
`motion for partial summary judgment as to plaintiffs’ direct
`trademark infringement claims. Defendant argues “[t]he same
`genuine issues of material fact [preventing summary judgment as
`to plaintiffs’ copyright claims] preclude summary judgment on
`[p]laintiffs’ trademark claims.” (Filing No. 75 at 31). The
`Court agrees. The evidence presented and previously discussed
`
`-11-
`
`
`
`8:13-cv-00351-LES-CRZ Doc # 141 Filed: 05/16/16 Page 12 of 16 - Page ID # 4816
`
`shows that genuine issues of material fact exist precluding
`summary judgment. Plaintiffs’ motions for partial summary
`judgment as to direct trademark infringement claims will be
`denied.
`D. Contributory Trademark Infringement
`“Just as liability for copyright infringement can exist
`beyond those who actually manufacture or sell infringing
`materials, our law recognizes liability for conduct that assists
`others in direct trademark infringement.” Fonovisa, Inc. v.
`Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996). To prove
`contributory trademark infringement a plaintiff must show that
`the defendant “(1) intentionally induce[d] another to infringe on
`a trademark or (2) continue[d] to supply a product knowing that
`the recipient [wa]s using the product to engage in trademark
`infringement.” Fonovisa, 76 F.3d at 264 (citing Inwood
`Laboratories v. Ives Laboratories, 456 U.S. 844, 854-55, 102 S.
`Ct. 2182, 72 L. Ed. 2d 606 (1982)).2
`
`2 As with plaintiffs’ copyright claims, the complaint and
`briefs allege only direct and contributory trademark
`infringement. See Filing Nos. 35 at 23-27, 65 at 50-51, and 107
`at 55-56. Plaintiffs do not allege vicarious trademark
`infringement. The Court will therefore forego any analysis of
`vicarious trademark infringement. However, the Court notes that
`“‘[c]ontributory trademark infringement liability is more
`narrowly circumscribed than contributory copyright
`infringement.’”
`
`-12-
`
`
`
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`
`Plaintiffs contend “[t]hroughout this litigation,
`Yagoozon has attempted to avoid liability for trademark
`infringement by arguing that Amazon is responsible . . . .
`Yagoozon’s argument fails because it chose to use the product
`detail pages at issue . . . and sold competitor products under
`[plaintiffs’] marks.” (Filing No. 65 at 44) (emphasis in
`original). The evidence before the Court shows the existence of
`genuine issues of material fact as to whether defendant
`intentionally induced Amazon or any other third-party seller to
`infringe plaintiffs’ trademarks. The evidence also shows genuine
`issues of material fact exist as to whether defendant continued
`to supply products knowing that the recipient was using the
`product to engage in trademark infringement. Plaintiffs’ motions
`for partial summary judgment as to defendant’s contributory
`trademark infringement of Set One and Set Two will be denied.
`E. Unfair Competition and State Law Claims
`“‘Trademark infringement is but a part of the broader
`law of unfair competition, and facts supporting a suit for
`infringement and one for unfair competition are substantially
`identical.’” WWP, Inc. v. Wounded Warriors, Inc., 566 F. Supp.
`
`Coach, Inc. v. Sapatis, 994 F. Supp. 2d 192, 202 (D.N.H. 2014)
`(quoting Fonovisa, 76 F.3d at 264 (citing Hard Rock Café
`Licensing Corp. v. Concession Servs., Inc., 955 F.2d 1143, 1149
`(7th Cir. 1992))).
`
`-13-
`
`
`
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`
`2d 970, 977 (D. Neb. 2008) (quoting Heaton Distrib. Co. v. Union
`Tank Car Co., 387 F.2d 477, 483 (8th Cir. 1967)). “Likelihood of
`confusion is the hallmark of any mark infringement claim, and is
`necessary to prevail on claims for mark infringement under
`§ 1114(1) and unfair competition under § 1125(a).” Kuper
`Industries, LLC v. Reid, 89 F. Supp. 3d 1005, 1010 (D. Neb. 2015)
`(citing Min. Min. & Mfg. Co. v. Rauh Rubber, Inc., 130 F.3d 1305,
`1308 (8th Cir. 1997); A & H Sportswear, Inc. v. Victoria’s Secret
`Stores, Inc., 237 F.3d 198, 210 n.5 (3d Cir. 2000)).
`Under the Nebraska Uniform Deceptive Trade Practices
`Act (“NUDTPA”), Neb. Rev. Stat. § 87-302, “a person engages in a
`deceptive trade practice when, in the course of business, he
`causes a likelihood of confusion or misunderstanding as to the
`source, sponsorship, approval, or certification of goods or
`services, or causes likelihood of confusion or misunderstanding
`as to affiliation, connection, or association with another.”
`Peter Kiewit Sons’, Inc. v. Wall Street Equity Group, Inc., No.
`8:10CV365, 2014 WL 4843674, at *8 (D. Neb. Sept. 29, 2014)
`(citing Neb. Rev. Stat. § 87-302; Prime Home Care, LLC v.
`Pathways to Compassion, LLC, 809 N.W.2d 751, 764 (Neb. 2012);
`Stenberg v. Consumer’s Choice Foods, Inc., 755 N.W.2d 583, 591-92
`(Neb. 2008); Reinbrecht v. Walgreen Co., 742 N.W.2d 243, 247
`
`-14-
`
`
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`
`(Neb. Ct. App. 2007)). To demonstrate a violation of the NUDTPA,
`a plaintiff must show “that a likelihood of confusion exists
`. . . .” Lovely Skin, Inc. v. Ishtar Skin Care Products, LLC,
`745 F.3d 877, 887 (8th Cir. 2014). This likelihood of confusion
`standard is the same as for claims of trademark infringement.
`See Lovely Skin, 745 F.3d at 887.
`The Nebraska Consumer Protection Act (“NCPA”), Neb.
`Rev. Stat. § 59-1602 makes “[u]nfair methods of competition and
`unfair deceptive acts or practices in the conduct of any trade or
`commerce” unlawful. Neb. Rev. Stat. § 59-1602. To prove a
`violation of the NCPA a plaintiff must show that the defendant
`(1) “engaged in an act or practice that constitutes an unfair
`method of competition or a deceptive trade practice in the
`conduct of any trade or commerce”; (2) that the defendant’s
`“conduct affected the public interest”; (3) that the plaintiff
`“was injured in its business or property by [the defendant’s]
`unfair method of competition or deceptive trade practice”; and
`(4) that plaintiff suffered damages. WWP, Inc. v. Wounded
`Warriors Family Support, Inc., 628 F.3d 1032, 1042 (8th Cir.
`2011) (internal quotations omitted).
`Because the Court will deny plaintiffs’ motions
`pertaining to direct and contributory trademark infringement, the
`Court will likewise deny plaintiffs’ motion as to the unfair
`
`-15-
`
`
`
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`
`competition and Nebraska state law claims. The Court finds the
`same reasoning applicable.
`II. Summary Judgment as to Defendant’s Affirmative Defenses
`Defendant’s answer to plaintiffs’ complaint put forth
`eleven affirmative defenses (Filing No. 43 at 13-14). Plaintiffs
`sought partial summary judgment with respect to each of those
`affirmative defenses (Filing No. 103). Defendant’s brief in
`response advises the Court of defendant’s “intent and voluntary
`agreement to withdraw [the] affirmative defenses at issue.”
`(Filing No. 116). Accordingly, plaintiffs’ motion for summary
`judgment as to defendant’s affirmative defenses will be granted.
`Accordingly,
`1) Plaintiffs’ partial motion for summary judgment as
`to Set One is denied.
`2) Plaintiffs’ partial motion for summary judgment as
`to Set Two is denied.
`3) Plaintiffs’ partial motion for summary judgment as
`to defendant’s affirmative defenses is granted.
`DATED this 16th day of May, 2016.
`BY THE COURT:
`/s/ Lyle E. Strom
`____________________________
`LYLE E. STROM, Senior Judge
`United States District Court
`
`-16-
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