A blog about patent, copyright and trademark law in the U.S. District Court
for the Southern District of New York

Court Denies Waiver of Plaintiffs' Right to Seek Actual Copyright Damages

In a February 6, 2017 ruling, Judge Richard J. Sullivan rejected the defendant's claim that the plaintiffs waived their right to actual copyright infringement damages by failing to request them in their initial disclosures.  The Court wrote:
Although Plaintiffs “corrected” this disclosure a mere five days later . . . , Defendant argues that this purported correction was “void because Plaintiffs cannot reverse their prior election for statutory damages.” . . . None of the authority cited by Defendant supports a rule so strict that it would bar a plaintiff from recovering actual damages due to an election made in initial disclosures and corrected days later, particularly where Defendant has not articulated any prejudice. Rather, the closest examples cited by Defendant involve elections made much later in litigation. See Marano v. Aaboe, No. 05-cv-9375 (BSJ) (RLE), 2010 WL 6350785, at *4 (S.D.N.Y. Oct. 20, 2010) (plaintiff “elected to seek statutory damages instead of actual damages in his initial brief” in connection with an inquest on damages, which “came more than one year after a default judgment had been entered and more than six weeks after the conclusion of fact discovery on the issue of damages”), adopted by 2011 WL 1157553 (S.D.N.Y. Mar. 28, 2011); Homkow v. Musika Records, Inc., No. 04-cv-3587 (KMW), 2008 WL 508597, at *4 (S.D.N.Y. Feb. 26, 2008) (plaintiff “clearly elected to pursue statutory damages” by requesting such damages in his amended complaint and repeating that request in a submission made in connection with an inquest on damages after entry of default judgment). The Court sees no legal or logical basis for applying the “gotcha” rule envisioned by Defendant, and thus declines to find that Plaintiffs have “irreversibly” elected statutory damages by referencing such damages in their initial disclosures and quickly correcting that reference.
Judge Sullivan nevertheless ruled that "Plaintiffs’ failure to introduce any evidence of actual damages is a de facto election of statutory damages," and limited the Plaintiffs to recovering statutory damages only if Plaintiffs are able to prove infringement.

Court Finds Personal Jurisdiction Based on Sales Through Amazon.com

In a July 8, 2016 ruling, Judge Lorna G. Schofield upheld personal jurisdiction at the motion to dismiss stage based in part on allegations that the defendants, who were based in Michigan, sold their allegedly infringing goods in New York through the Amazon.com Marketplace.  Construing New York's long-arm statute, CPLR § 302, Judge Schofield wrote:
The Complaint also alleges that Defendants sold goods that were shipped to New York
via Amazon.com. This conduct provides an alternative basis for personal jurisdiction over Defendants. Regularly offering and selling goods via an online marketplace such as Amazon.com can provide a basis for personal jurisdiction under CPLR § 302(a), even though Defendants do not control their Amazon.com “storefront” or its interactivity to the same extent that they control their own highly interactive website. . . . For internet sellers who use an internet storefront like Amazon, courts generally distinguish between two categories. First are commercial vendors who use it “as a means for establishing regular business with a remote forum.” . . . Jurisdiction is proper as to these defendants. In the second category are occasional sellers who use an internet service once to sell goods to the highest bidder who happens to be in the forum state. . . . Jurisdiction is improper as to these sellers assuming no additional contacts with the forum state. Defendants here are alleged to fall into the first category. They allegedly conduct their business of selling infringing garments on the Amazon platform; their sales are nationwide and include New York.  Consequently, jurisdiction is proper under § 302(a).
 The Court further found that the assertion of jurisdiction would comport with due process, and denied the motion to dismiss, ruling that "the allegations in the Complaint make a prima facie showing of personal jurisdiction over Defendants under CPLR § 302(a)(1), within the constitutional limits of due process."

Court Dismisses Copyright Infringement Claim Based on Choice of Law Provision in Contract

In a June 21, 2016 ruling, Judge Jesse M. Furman dismissed the plaintiff's copyright claim because of a choice of law provision in the parties' contract calling for the application of English law.  The plaintiff publishes a website with copyrighted content.  Subscribers are licensed to use it by being provided with a user name and password.  The defendant subscribed, but then allowed a number of its employees to use the single licensed user name and password.  The parties' agreement had a choice of law provision providing:
Where you visit, register and/or subscribe to a [Metal Bulletin] Site . . . these Terms (and any dispute or claim arising out of or in connection with these terms, including non-contractual disputes or claims), to the maximum extent permissible under the law of the territory that you are located in, will be governed by the laws of England and Wales and will be subject to the non-exclusive jurisdiction of the English courts.
The plaintiff sued the defendant in the Southern District, asserting U.S. copyright infringement and breach of contract claims.  Judge Furman dismissed the copyright claim based on the parties' choice of law provision.  In dismissing the claim, the Court reasoned:
As an initial matter, there is no question that [the plaintiff's] copyright claim falls within the scope of the parties’ choice-of-law clause. That clause provides broadly that English law applies to the Terms and, significantly, to “any dispute or claim arising out of or in connection with these terms, including non-contractual disputes or claims.” (Terms § 22.1). Where, as here, a defendant is alleged to have infringed a copyright by exceeding the scope of a license, “the copyright owner bears the burden of proving that the defendant’s copying was unauthorized under the license.” . . . Thus, the question of whether [the defendant] infringed [the plaintiff's] copyrights will necessarily turn, at least in part, on the Terms. . . . It follows that [the plaintiff's] copyright claim arises “in connection with” the Terms and thus falls within the scope of the choice-of-law clause.
Judge Furman also rejected the plaintiff's contention that the clause -- which the plaintiff drafted -- was somehow unenforceable, noting the high burden required to support such a contention.

Court Denies Preliminary Injunction in Trademark Infringement Action

In a June 17, 2016 ruling, Judge Coleen McMahon denied the plaintiff's motion for a preliminary injunction against trademark infringement, and ordered the plaintiff to show cause why the entire action should not be dismissed.  Despite two registration's for the plaintiff's mark with the PTO, the Court found that the mark was essentially a copy of the flag of the former Kingdom of Laos.  Judge McMahon ruled that "[i]t is axiomatic that a design comprising a flag cannot be trademarked."  The Court rejected the plaintiff's argument that the former Kingdom had abandoned the flag in 1975, similarly finding that under the PTO's Trademark Manual of Examining Procedures, "'former flags of existing countries, states or municipalities are refused.'"  Without a protectible mark, Judge McMahon noted that none of the plaintiff's claims appeared to state a claim for relief, and issued the order to show cause as to why they should not be dismissed.

Court Finds Registration of Domain Name Not Use in Commerce of a Trademark

In an April 12, 2016 ruling, Judge John G. Koetl ruled that a party’s registration of a domain name was not considered the use of a trademark in commerce, and so the party that actually first used the mark in commerce in connection with the offering and sale of goods was the legal owner of the mark. Judge Koetl wrote:
Without an offering of goods or services identified with the mark, a website that displays the . . . mark and contains simply a welcome page is insufficient to establish that the mark was used to identify goods to the public.
The general information and thoughts posted to this blog are provided only as an informational service to the web community and do not constitute solicitation or provision of legal advice. Nothing on this blog is intended to create an attorney-client relationship and nothing posted constitutes legal advice. You should understand that the posts by the author, who is an attorney at U.S. law firm Allegaert, Berger & Vogel, may or may not reflect the views of that firm and that the author of this blog is only authorized to practice law in the jurisdictions in which he is properly licensed to do so. For additional information, click here.