Case 2:06-cv-00186-MAT Document 165 Filed 12/13/07 Page 1 of 9
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`CASE NO. C06-0186-MAT
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`ORDER GRANTING DEFENDANT’S
`MOTION FOR PERMANENT
`INJUNCTION AND FOR
`IMPOUNDMENT AND
`DESTRUCTION OF INFRINGING
`ARTICLES
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`))))))))))
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`PROPET USA, INC.,
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`Plaintiff,
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`v.
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`LLOYD SHUGART,
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`Defendant.
`____________________________________
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`INTRODUCTION
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`Following the jury determination in his favor, defendant Lloyd Shugart (hereinafter
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`Shugart) filed a Motion for Permanent Injunction and for Impoundment and Destruction of
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`Infringing Articles. (Dkt. 141.) Now, having considered the papers filed in support and in
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`opposition to this motion, along with the remainder of the record, the Court hereby finds and
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`concludes as follows.
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`DISCUSSION
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`Shugart seeks a permanent injunction enjoining plaintiff Propet USA, Inc. (hereinafter
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`ORDER
`PAGE -1
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`Case 2:06-cv-00186-MAT Document 165 Filed 12/13/07 Page 2 of 9
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`Propet) from directly or indirectly infringing his copyrights or further violating his rights under the
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`DMCA. He also seeks an order directing impoundment of all copies of catalogs, brochures,
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`promotional and other materials in which his images have appeared in violation of his rights, and
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`directing Propet to return copyright management information to his images and to remove all of
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`his digital images from its website. For the reasons described below, the Court finds an injunction
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`and impoundment warranted.
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`A.
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`Copyright Infringement:
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`The Copyright Act provides that a court may “grant temporary and final injunctions on
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`such terms as it may deem reasonable to prevent or restrain infringement of a copyright.” 17
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`U.S.C. § 502(a). The Act also provides that a court, as part of a final judgment, may order the
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`destruction or other reasonable disposition of all copies found to have been made or used in
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`violation of the copyright owner’s exclusive use. 17 U.S.C. § 503(b).
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`Shugart asserts that, upon the establishment of liability, an injunction should issue if
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`continued infringements are likely. See MAI Sys. Corp. v. Peak Computer, 991 F.2d 511, 520 (9th
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`Cir. 1993) (“As a general rule, a permanent injunction will be granted when liability has been
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`established and there is a threat of continuing violations.”); accord 4 Melville B. Nimmer & David
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`Nimmer, NIMMER ON COPYRIGHT § 14.06 (B) (“It is uncontroversial that a ‘showing of past
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`infringement and a substantial likelihood of future infringement’ justifies issuance of a permanent
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`injunction.”) (quoted source omitted). Shugart avers that, here, continued infringements are not
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`only likely, they are actually occurring.
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`Propet responds that an injunction does not necessarily follow a determination of copyright
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`infringement. Pointing to the United States Supreme Court decision in
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`eBay Inc. v.
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`ORDER
`PAGE -2
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`Case 2:06-cv-00186-MAT Document 165 Filed 12/13/07 Page 3 of 9
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`MercExchange, LLC , 126 S.Ct. 1837, 1839 (2006), Propet notes that, in order to obtain a
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`permanent injunction, Shugart must demonstrate: (1) that he has suffered an irreparable injury;
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`(2) that remedies available at law, such as monetary damages, are inadequate to compensate for
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`that injury; (3) that, considering the balance of hardships between the parties, a remedy in equity
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`is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
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`The decision to grant or deny a permanent injunction rests within the equitable discretion of this
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`Court, reviewable on appeal for abuse of discretion. Id.
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`Shugart rejects the applicability of the four-factor test outlined in eBay. He notes that
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`eBay addressed patent law and construes the Supreme Court’s decision in that case as tacitly
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`approving the standard for copyright cases he proffers.
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`Shugart fails to support his narrow reading of eBay. The Supreme Court described the
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`four-factor test as required by “well-established principles of equity” and stated that applying the
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`approach in patent cases was “consistent with [its] treatment of injunctions under the Copyright
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`Act.” Id. at 1839-40. The Supreme Court further noted that it “has consistently rejected
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`invitations to replace traditional equitable considerations with a rule that an injunction
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`automatically follows a determination that a copyright has been infringed.” Id. at 1840. At least
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`one Circuit Court of Appeals has construed eBay as applying equally to patent and copyright
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`cases. Christopher Phelps & Assocs., LLC v. Galloway , 492 F.3d 532, 543 (4th Cir. 2007).
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`Moreover, the Ninth Circuit Court of Appeals has applied the four-factor eBay test to trademark
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`cases. Reno Air Racing Ass’n v. McCord, 452 F.3d 1126, 1137-38 & n.11 (9th Cir. 2006).
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`Accordingly, in order to justify a permanent injunction, Shugart must satisfy eBay’s four-
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`factor test. As discussed below, the Court finds a permanent injunction appropriate upon
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`ORDER
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`Case 2:06-cv-00186-MAT Document 165 Filed 12/13/07 Page 4 of 9
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`consideration of the eBay factors in relation to this case.1
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`First, Shugart demonstrates irreparable harm and that remedies available at law are
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`inadequate to compensate for the injury. The Court finds pertinent to this inquiry the issue of
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`ongoing infringement – the very infringement proved by Shugart in Court – as opposed to merely
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`speculative future harm, as well as Propet’s continued obfuscation as to such infringement. As
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`to the latter, Propet states at one point in its response that the Court should find its use of the
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`images at issue as licensed, and later that “the record is clear that Propet sought to discontinue
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`further use of any Shugart photographs[,]” and elsewhere that it “currently believes that all the
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`photographs used in its advertising are not Shugart’s.” (Dkt. 150 at 3, 4 & 7.) The jury in this
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`case accepted Shugart’s contention of ongoing infringement and it is appropriate for the Court to
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`prohibit the continuation of that infringement.
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`Second, considering the balance of hardships between the parties, a remedy in equity is
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`warranted. Again, the Court finds significant the issue of ongoing infringement of Shugart’s
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`copyrights. At the same time, the Court acknowledges concerns raised by Propet as to its ability
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`to comply with a permanent injunction. Accordingly, Propet’s concerns as to the specific content
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`1 Shugart proffered an alternative argument on the four
`eBay factors in his reply to
`Propet’s response. (Dkt. 152 at 3-6.) In a surreply, Propet seeks to strike this argument, asserting
`it would be unjust for Shugart to be allowed to raise the argument for the first time in reply,
`foreclosing Propet’s opportunity to offer a rebuttal. (Dkt. 153.) However, it hardly seems unjust
`to allow this alternative argument given that, as argued by Propet, the four factors must be
`considered in addressing Shugart’s motion. The Court also rejects Propet’s request to strike
`Shugart’s assertion in his reply that, as of the date of that reply, Propet’s website continues to use
`several of his images. Shugart’s original motion implicitly asserts the continued use of his images
`by Propet in seeking the relief sought and Propet responded as to its belief that all of the images
`currently used in its advertising are not Shugart’s images. For these reasons, Propet’s motion to
`strike (Dkt. 153) is DENIED.
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`ORDER
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`Case 2:06-cv-00186-MAT Document 165 Filed 12/13/07 Page 5 of 9
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`of the injunction are discussed below.
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`Finally, the public interest would not be disserved by a permanent injunction. The Court
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`sees no basis for concluding that an injunction in this case would result in any public injury. To
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`the contrary, the public interest is served by upholding copyright protections. See, e.g., Autoskill,
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`Inc. v. Nat’l Educ. Support Sys., 994 F.2d 1476, 1499 (10th Cir. 1993) (“In copyright cases, we
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`think this factor normally weighs in favor of the issuance of an injunction because the public
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`interest is the interest in upholding copyright protections.”)
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`As noted above, Shugart also seeks an order impounding all copies of catalogs, brochures,
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`promotional and other materials in which his images have appeared in violation of his rights.
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`Although acknowledging the Copyright Act provision allowing for such an order, Propet contends
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`that this measure is not appropriate here given the lack of any clear identification as to what should
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`be destroyed or whether the destruction of anything would make a difference to Shugart. As with
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`the injunction, the Court below addresses Propet’s concerns regarding identification of Shugart’s
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`copyrighted images. Also, given that Shugart has moved for an order of impoundment, his interest
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`in such an order is apparent.
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`Given all of the above, the Court finds warranted both a permanent injunction prohibiting
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`the continued infringement of Shugart’s copyrighted images and an order requiring impoundment
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`of at least some materials in which Shugart’s copyrighted images have appeared in violation of his
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`rights. The Court clarifies, however, that such an injunction and order extends only to the
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`instances of infringement at issue in this case; that is, infringement of copyrighted images
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`contained within the copyright registrations dated April 10, 2006. ( See Dkt. 119 (concluding
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`Shugart could only pursue claims of infringement as to copyrighted images for which he has a
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`ORDER
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`Case 2:06-cv-00186-MAT Document 165 Filed 12/13/07 Page 6 of 9
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`certificate of registration and citing Corbis Corp. v. Amazon.com, Inc. , 351 F. Supp. 2d 1090,
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`1111-13 (W.D. Wash. 2004) (“A district court does not have subject matter jurisdiction over an
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`infringement claim until the Copyright Office grants the registration application and issues a
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`certificate of registration.”) and Berry v. Penguin Group, Inc., 448 F. Supp. 2d 1202, 1203 (W.D.
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`Wash. 2006) (same).)
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`As noted by Propet, a permanent injunction must be specific and narrowly tailored. See
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`Fed. R. Civ. P. 65(d) (“Every order granting an injunction . . . shall be specific in terms [and] shall
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`describe in reasonable detail, and not by reference to the complaint or other document, the act or
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`acts sought to be restrained[.]”); Waldman Publishing Corp. v. Landoll, Inc., 43 F.3d 775, 785
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`(2d Cir. 1994) (“Injunctive relief should be narrowly tailored to fit specific legal violations.”) An
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`order of impoundment may be directed towards copies “found to have been made or used in
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`violation of the copyright owner’s exclusive rights[.]” 17 U.S.C. § 503(b).
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`In this case, because Shugart presented testimony specific only as to a portion of the
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`infringements alleged, Propet raises a legitimate concern as to the specificity required in order to
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`allow for its compliance with an injunction and order of impoundment. As such, at least in relation
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`to images appearing on Propet’s website, the Court finds it appropriate to place an initial burden
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`on Shugart to identify all specific instances of ongoing infringement. See, e.g., A&M Records v.
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`Napster, Inc., 239 F.3d 1004, 1027 (9th Cir. 2001) (“The preliminary injunction which we stayed
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`is overbroad because it places on Napster the entire burden of ensuring that no ‘copying,
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`downloading, uploading, transmitting, or distributing’ of plaintiffs’ works occur on the system.
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`As stated, we place the burden on plaintiffs to provide notice to Napster of copyrighted works and
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`files containing such works available on the Napster system before Napster has the duty to disable
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`ORDER
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`Case 2:06-cv-00186-MAT Document 165 Filed 12/13/07 Page 7 of 9
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`access to the offending content. Napster, however, also bears the burden of policing the system
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`within the limits of the system.”) In so doing, he can utilize the same approach used at trial; that
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`is, a comparison of each copyrighted image as contained within one of the two copyright
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`registrations at issue in this case, with the image included on Propet’s website.
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`To the extent directed towards catalogs, brochures, promotional and other materials, all
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`of which are presumably within Propet’s control, Shugart may not be able to take on a similar
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`burden. However, where Shugart is aware of and can demonstrate continuing instances of
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`infringement in such materials, he should advise Propet accordingly. Further, Propet may utilize
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`the information provided by Shugart in relation to Propet’s website in order to identify instances
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`of infringement in its materials, and may further look to the testimony provided by Shugart at trial,
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`as well as, of course, the copyright registrations themselves.
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`The issue of impoundment raises additional concerns. That is, the Court can conceive of
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`instances in which Shugart’s copyrighted images may constitute only a small portion of some form
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`of advertising, such as a catalog or brochure. It may, in such a circumstance, be appropriate for
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`the Court to order Propet to not engage in future production of such materials, rather than
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`requiring their destruction. See, e.g., TVT Records v. Island Def Jam Music Group, 279 F. Supp.
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`2d 366, 408-09 (S.D.N.Y. 2003) (declining to order destruction of existing CDs containing only
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`a small portion of infringing content and, instead, ordering defendant to not engage in future
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`production of works containing the infringing content), rev’d on other grounds, 412 F.3d 82 (2d
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`Cir. 2005), cert. denied, 126 S.Ct. 2968 (2006).
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`As indicated below, the parties should consider and address all of the above in a stipulated
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`order entering a permanent injunction and directing impoundment.
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`ORDER
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`Case 2:06-cv-00186-MAT Document 165 Filed 12/13/07 Page 8 of 9
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`B.
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`DMCA:
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`The DMCA provides that a court:
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`(1) may grant temporary and permanent injunctions on such terms as it deems
`reasonable to prevent or restrain a violation, . . . ;
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`(2) at any time while an action is pending, may order the impounding, on such terms
`as it deems reasonable, of any device or product that is in the custody or control of
`the alleged violator and that the court has reasonable cause to believe was involved
`in a violation; [and]
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`. . .
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`(6) may, as part of a final judgment or decree finding a violation, order the remedial
`modification or the destruction of any device or product involved in the violation that
`is in the custody or control of the violator or has been impounded under paragraph
`(2).
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`17 U.S.C. § 1203(b).
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`Shugart asserts that, given the jury’s finding that Propet knowingly or intentionally
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`removed his copyright management information from his digital images, an injunction preventing
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`further violations is warranted. He also avers that it would be both permissible and appropriate
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`for the Court to order Propet to return the copyright management information to his images and
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`to remove his digital images from Propet’s website.
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`For the same reasons outlined above, the Court finds warranted an injunction prohibiting
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`Shugart from further violations of the DMCA; that is, prohibiting Shugart from removing
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`copyright management information from any of Shugart’s digital images. Likewise, Propet should
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`remove any offending images from its website. Again, the Court finds it appropriate to place an
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`initial burden on Shugart to identify such images. However, the Court finds no basis for granting
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`Shugart’s request that Propet return copyright management information to his images and declines
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`ORDER
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`Case 2:06-cv-00186-MAT Document 165 Filed 12/13/07 Page 9 of 9
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`to order such relief.
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`C.
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`Stipulated Order Entering Permanent Injunction and Directing Impoundment:
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`As reflected above, the Court has several concerns regarding the appropriate content for
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`an order entering a permanent injunction and directing impoundment. As such, taking all of the
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`issues addressed in this Order into consideration, the parties are directed to meet and confer as to
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`a stipulated order entering a permanent injunction and directing impoundment. The stipulation
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`should be filed with the Court within twenty (20) days of the date of this Order. Should the
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`parties be unable to reach an agreement, they must alternatively submit individual
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`proposed orders containing specific language for inclusion in the Court’s final order.
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`CONCLUSION
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`For the reasons described above, the Court hereby GRANTS Shugart’s motion for a
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`permanent injunction and order of impoundment. (Dkt. 141.) The parties are directed to proceed
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`as indicated above. The Clerk is directed to send copies of this Order to counsel for Propet and
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`Shugart.
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`DATED this 13th day of December, 2007.
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`AM
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`ary Alice Theiler
`United States Magistrate Judge
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`ORDER
`PAGE -9