Summary
stating "the statute and Second Circuit precedent explicitly require registration as a prerequisite to an infringement claim."
Summary of this case from I.M.S. Inquiry Manag. Systems v. Berkshire InformOpinion
99 CV 10456 (RCC)
March 23, 2001
OPINION AND ORDER
Defendants King Overseas Corp., Debbie Feldstein, Naum Feldchtein and Sarita Feldchtein ("Defendants") bring this motion to dismiss for failure to state a cause of action, pursuant to Federal Rule of Civil Procedure 12(b)(6). They also request the costs of this motion and attorney fees. For the reasons explained below, the motion is granted, but the request for costs and fees is denied.
I. Background
Plaintiff City Merchandise ("Plaintiff) brings this suit claiming copyright infringement, Lanham Act and New York statute violations, unfair competition and unjust enrichment. In January 1997, Plaintiff commissioned a design to be imprinted on a variety of goods, including mugs. Complaint at ¶ 6. The wording on the design is "NY" and "New York." Plaintiff maintains that it is the exclusive owner of the right, title, interest in and copyright pertaining to the design. Id. at ¶ 7. Plaintiff applied for copyright registration in October 1999, but it has not yet sought leave to amend its complaint to reflect such registration. Id. at ¶ 8.
Plaintiff alleges that Defendants obtained access to the design without permission in January 1998, and produced and distributed through interstate commerce various goods depicting the design. Id. at ¶ 9. On September 1, 1999, counsel for Plaintiff wrote to Defendant Sarita Feldchtein, an officer of Defendant Kings International, and stated that if Defendants desired to avoid a lawsuit they should (1) list all of their items depicting the design; (2) provide an accounting of their sales, costs and profits associated with the design; (3) produce invoices representing sales of the design; (4) deliver the infringing items; and (5) make payment in the greater amount of either $2,500 or their profits from the allegedly infringing items. Max Aff., Ex. A. When Defendants did not respond, Plaintiff filed its complaint on October 12, 1999.
II. Discussion
A. Standard for Motion to Dismiss
In reviewing a motion to dismiss for failure to state a cause of action, the court must accept as true the allegations in the complaint and draw all inferences in favor of the complainant. Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir. 1996). A complaint may not be dismissed under Rule 12(b)(6) unless it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Thus, the issue is not whether plaintiff will ultimately prevail, rather whether plaintiff is entitled to offer evidence to support its claims. GMA Accessories, Inc. v. Idea Nuova, 2000 WL 1848478, at *2 (S.D.N.Y. Dec. 18, 2000) (quoting Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir. 1995)). Nonetheless, "the complaint must contain allegations concerning each of the material elements necessary to sustain recovery under a viable legal theory." Yurman Design Inc. v. Chaindom Enters., Inc., 2000 WL 897141, at *4 (S.D.N.Y. July 5, 2000).
B. Copyright Infringement Claim
Plaintiff claims the design in question is an original work under the Copyright Act of 1976, 17 U.S.C. § 102, and that the Defendants' appropriation of the design infringes on Plaintiffs copyright. The party claiming copyright infringement must prove ownership of a valid copyright and unauthorized copying by the putative infringer. Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991); Hamil Am., Inc. v. GFI, 193 F.3d 92, 98 (2d Cir. 1999); Marvullo v. Gruner Jahr AG Co. 2001 WL 40772, at *2 (S.D.N.Y. Jan. 17, 2001) (stating copyright infringement claim must allege original work, ownership of copyright in work, registration of copyright, and infringing acts). Registration of the work is "prima facie" evidence of ownership. Marvullo, 2001 WL 40772, at *2. Copying can be demonstrated with either direct evidence or "circumstantially by showing access to the copyrighted work, and substantial similarity as to protectible material in the two works."Franklin Elec. Publishers. Inc. v. Unisonic Prods. Corp., 763 F. Supp. 1, 4 (S.D.N.Y. 1991).
The Copyright Act states in part, "no action for infringement . . . shall be instituted until registration of the copyright claim has been made in accordance with this title." 17 U.S.C. § 411 (a). If the registration has been refused, the applicant may bring an infringement claim after giving notice to the Register of Copyrights. Id. Here, Plaintiff has applied for copyright registration, but has not, to this Court's knowledge, received such registration. It is well settled that the court lacks subject matter jurisdiction unless the claimant has a registration or its registration has been refused. See e.g., Whimisicality, Inc. v. Rubie's Costume Co., 891 F.2d 452, 453 (2d Cir. 1989) (stating registration is prerequisite to copyright infringement claim); Tuff-N-Rumble Mgmt., Inc. v. Sugarhill Music Publ'g Inc., 49 F. Supp.2d 673, 677 (S.D.N Y 1999) ("[D]istrict courts are without subject matter jurisdiction to hear claims for federal copyright infringement unless a party asserts in its pleadings that he has received an actual certificate of registration or its denial from the Copyright Office."); Noble v. Town Sports Int'l. Inc., 1998 WL 43127, at *1 (S.D.N.Y. Feb. 2, 1998) (dismissing Copyright Act claim because plaintiff had only applied for registration and had not received it); National Ass'n of Freelance Photographers v. Associated Press, 1997 WL 759456, at *12 (S.D.N.Y. Dec. 10, 1997) ("[A]n action for copyright infringement cannot be asserted unless a certificate of registration has been issued; the mere filing of an application is simply insufficient to support such a claim.") Robinson v. Princeton Review, 1996 WL 663880, at *7-8 (S.D.N.Y. Nov. 15, 1996) (same); Demetriades v. Kaufmann, 680 F. Supp. 658, 661 (S.D.N.Y. 1988) ("Receipt of an actual certificate of registration or denial of same is a jurisdictional requirement, and this court cannot prejudge the determination to be made by the Copyright Office.").
Plaintiff urges that this long line of cases should be ignored in favor of a statement in Lennon v. Seaman in which the district court stated the jurisdictional registration requirement could be met by filing an application for registration. 63 F. Supp.2d 428, 432 (S.D.N.Y. 1999). The Court is not persuaded. First, this statement is not controlling on this Court's decision. Second, rather than relying on case law within this Circuit for support, the statement cites only a copyright treatise. See id. Third, in a subsequent decision in the same case, the cases cited by the court do not support the proposition that the filing of an application meets the jurisdictional requirement. See Lennon v. Seaman, 84 F. Supp.2d 522, 524 (S.D.N.Y. 2000) (listing cases). In all of the cited cases, the claimant had complied with the statute by either obtaining a registration or a refusal. For example, in Demetriades v. Kaufmann, when the plaintiff filed the complaint he had an application for registration, at which time the court did not have jurisdiction.Demetriades 680 F. Supp. at 661. The Copyright Office issued a registration before the court made its determination, however, hence giving the court jurisdiction. Id.
The statute and Second Circuit precedent explicitly require registration as a prerequisite to an infringement claim. Plaintiff has not alleged ownership, i.e., registration, of the copyright, therefore it has not met the jurisdictional requirements for a copyright claim. Its claim for copyright infringement must be dismissed.
C. Lanham Act Claim
Plaintiffs second claim alleges false designation of origin in violation of § 43(a) of the Lanham Act. 15 U.S.C. § 1125 (a). Section 43(a) affords protection for unregistered marks by providing a cause of action for the use of "any word, term, name, symbol, or device . . ., or any false designation of origin . . . which is likely to cause confusion . . ., as to the origin . . ., of . . . goods." Id. Courts have expanded the Act's protection to "encompass the design of a product" or its "trade dress." Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 209 (2000). To be entitled to this protection, the mark must be distinctive. Id. at 210; GMA Accessories, Inc., 2000 WL 1848478, at *3.
A mark is inherently distinctive if its inherent nature serves to identify a particular source. Wal-Mart, 529 U.S. at 210 (quoting § 43(a)). Courts have found word marks to be inherently distinctive if they are "arbitrary," fanciful" or "suggestive." Id. (citing Abercrombie Fitch Co. v. Hunting World, Inc. 537 F.2d 4, 10-11 (2d Cir. 1976)). However, "in an action for infringement of unregistered trade dress under § 43(a) of the Lanham Act, a product's design is distinctive, and therefore protectible, only upon a showing of secondary meaning."Wal-Mart Stores, 529 U.S. at 216. A mark has secondary meaning "when, `in the minds of the public, the primary significance of a [mark] is to identify the source of the product rather than the product itself.'" Id. at 211 (quoting Inwood Labs., Inc. v. Ives Labs., Inc. 456 U.S. 844, 851, n. 11 (1982)). Here, there is no allegation of distinctiveness generally or secondary meaning specifically. Therefore, the Lanham Act claim is dismissed.
D. Remaining Claims
Plaintiffs remaining claims include unfair competition, unjust enrichment and violation of New York's General Business Law § 349. These claims all arise under state law and the Court declines to retain jurisdiction over them. See Historical Truth Prods. v. Sony Pictures Entm't. Inc., 1995 WL 693189, at *13 (S.D.N.Y. Nov. 22, 1995) (declining jurisdiction over unfair competition, misappropriation and unjust enrichment claims after Copyright Act claim had been dismissed). A federal court hearing a federal question may exercise supplemental jurisdiction over state law claims that arise under the same "case or controversy." 28 U.S.C. § 1367 (a). Once the federal question claim is dismissed, however, the court may decline to retain jurisdiction over the remaining claims. Historical Truth Prods., 1995 WL 693189, at *13 (citing 28 U.S.C. § 1367 (c)(3) and United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 (1966) (suggesting that district court is obliged to dismiss the remaining state law claims under these circumstances)). Further, the corporate parties are both New York corporations and there is not complete diversity here. See Complaint at ¶¶ 1-3. Accordingly, the remaining claims are dismissed.
III. Conclusion
For the reasons forgoing reasons, Defendants' motion to dismiss is granted. As Defendants did not provide any support for their request for costs and attorney fees, the request is denied. The Clerk of the Court is directed to close the case.
So ordered.