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 Inventor Acted as Own Lexicographer

In an August 6, 2015 ruling, Judge Richard J. Sullivan found that the inventor of the family of patents-in-suit acted as his own lexicographer by submitting unsolicited “remarks” during the prosecution of one of the later patents in the family (the ‘010 patent). The Court wrote:

There is no dispute that the “remarks” Joao [the inventor] to the USPTO are part of the prosecution history for the ‘010 Patent, and although Defendants question his motives – noting that the constructions contained in the “remarks” simply echoed the constructions proposed in the claim construction brief of an unrelated case – for purposes of claim construction, the “remarks” appear sufficiently clear, deliberate, and precise.

Judge Sullivan then considered whether the “remarks” were pertinent to one of the earlier patents in the same family that had an identical specification, and used “the ‘remarks’ as extrinsic evidence for purposes of construing the terms of” that patent “to the extent those remarks do not directly contradict the plain meaning of those terms and such terms cannot be construed without the aid of extrinsic evidence.”

Court Denies, in Part, Ex Parte TRO in Counterfeit Action

In a June 15, 2015 ruling, Judge Richard J. Sullivan denied in part the plaintiff’s application for an ex parte temporary restraining order to enjoin the defendants’ sale of allegedly counterfeit goods and for related relief. As to enjoining the sale of goods, Judge Sullivan wrote that “Plaintiff fails to explain why Defenants’ alleged conduct, ongoing since at least November 2014, . . . is of a type where advance notice of the relief sought ‘would itself be likely to trigger irreparable injury.’” The Court also denied ex parte relief “locking and transferring” the defendants’ infringing websites, finding that the plaintiff has again failed to explain why notice would be harmful. Judge Sullivan did, however, freeze the defendants’ PayPal account, and permitted service by email.

Court Denied Defendant’s Motion To Dismiss For Lack of Personal Jurisdiction Where A Hong Kong Based Website Shipped A Single Allegedly Counterfeit Good Into New York.

In a February 18, 2014 ruling, Judge Richard J. Sullivan ruled that New York’s Long Arm statute conferred personal jurisdiction over Defendant Dress Market Ltd., a Hong Kong based dress distributor which sells its dresses through its interactive website, when it shipped a single, allegedly counterfeit product into New York in response to an order from plaintiff’s counsel. The defendant did not challenge whether it been properly served with process. Rather, the defendant argued that it did not have “sufficient contacts” with New York for the court to exercise personal jurisdiction.

Pursuant to Federal Rule of Civil Procedure 4(k)(1)(A), a federal court has jurisdiction over a defendant that has been properly served if the defendant "is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located." Fed. R. Civ. P. 4(k)(1)(A). Absent personal service within the state, New York state courts may exercise personal jurisdiction over a non-domiciliary only as permitted by New York's long-arm statute. N.Y. C.P.L.R. § 302. In addition, even if New York law allows for jurisdiction, personal jurisdiction in the case must "comport with the Due Process Clause of the United States Constitution" – i.e., there must be minimum contacts with the forum jurisdiction.

The Court deemed it unnecessary to engage in a detailed “minimum contacts” analysis because it found that the facts in this matter were legally indistinguishable from the facts of the Second Circuit’s controlling decision in Abc v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 161 (2d Cir. 2010). In Queen Bee, the Second Circuit found that New York's long-arm statute and the "minimal contacts" inquiry of Due Process were satisfied when the defendant (l) shipped a single, allegedly counterfeit product into New York; (2) "operated a highly interactive website offering such [products] for sale to New York customers"; and (3) "engaged in fifty-two other transactions where merchandise was shipped to New York." Here, defendant shipped at least one dress into New York that allegedly infringes Plaintiffs' Sherri Hill’s copyrights, albeit in response to an order from plaintiffs' attorneys.

The only distinction between the fact pattern in this matter and Queen Bee was that plaintiff had not shown evidence of fifty-two other transactions in New York. The Court found, however, that this difference was irrelevant. Queen Bee emphasized that the crux of the long-arm statute and the Due Process Clause was whether the defendant had "purposefully availed himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws." That requirement was met, the court ruled, where the defendant has "developed and served a market for its products" within New York, and "might well be" satisfied by the shipping of a single product alone. Accordingly, the Court determined that personal jurisdiction was appropriate under New York’s long-arm statute and the Due Process “minimal contacts” inquiry.

The Court denied the defendant’s motion to dismiss.

Court Rejects Patent Infringement and Unfair Competition Claims

In a December 9, 2013 ruling, Judge Richard J. Sullivan granted the defendants' motion for summary judgment of non-infringement in plaintiff Enzo Biochem, Inc.'s patent infringement action.  Enzo entered into a distribution agreement with PerkinElmer to manufacture and distribute Enzo's patented biotechnology inventions.  PerkinElmer appointed defendants Molecular Probes, Inc. and Orchid Biosciences, Inc. as sub-distributors.  In dismissing the patent infringement claims against Molecular Probes and Orchid Biosciences, the Court noted that "[b]ecause the features of the accused product are not in dispute, the Court may construe Claim 1 and then compare it to the undisputed features" of the accused product. 

Judge Sullivan rejected the defendants' argument that Enzo's proposed construction was limited solely by statements made to the PTO during prosecution of the patent-in-suit, and instead looked both to the language of the claim, and to the prosecution history.  The Court wrote that as "it turns out, though, the language of Claim 1 aligns with Enzo's statements to the PTO," and concluded that "[b]ased on the record before the Court, Enzo's statements to the PTO have not been wrenched from their context or mischaracterized; rather, they clearly set forth a difference -- evident on the face of Claim 1 -- between the accused features" of the challenged product.

Court Finds Use Might Be Authorized By Agreement, Denies Summary Judgement of Patent Infringement

In a December 9, 2013 ruling, Judge Richard J. Sullivan denied plaintiff Roche Diagnostics GMBH's motion for summary judgment to dismiss, among other claims, defendant Enzo Biochem, Inc.'s patent infringement counterclaims.  Enzo alleged that Roche breached a distribution agreement authorizing "Roche to use Enzo's patented property."  The Court wrote that to "the extent that Roche can show that its use of the Products was permitted under the terms of the Distribution Agreement, Roche may well be insulated from liability for patent infringement."  Since Judge Sullivan found that he could not "conclude as a matter of law that Roche's activities fell within the Agreement's use authorization" and denied Roche's motion for summary judgment for breach of the distribution agreement finding that, the Court ruled that "Enzo's patent infringement claims remain viable."

Court Denies Belated Supplementation of Patent Invalidity Contentions

In a November 12, 2013 ruling, Judge Richard J. Sullivan denied plaintiff Roche Diagnostics GMBH's motion to supplement its invalidity contentions in its patent infringement action against Enzo Biochem, Inc.  The Court noted that the dates for the service of infringement and invalidity contentions were originally proposed by Roche because, as Roche urged, early contentions streamline discovery and simplify patent cases.  In denying the motion to supplement, Judge Sullivan noted that the Court had previously denied Enzo's motion to supplement its infringement contentions, and that although the parties jointly sought discovery extensions, they did not seek to extend either of the contention deadlines.  Thus, the Court concluded:  "If Roche needed more time to research or respond to Enzo's accusations, then it should have sought an extension before the may 17, 2013 deadline -- an interim deadline Roche emphatically advocated -- or at the very least before now, nearly half a year later."

Court Denies Motion to Dismiss Patent Infringement Complaint, Citing Relaxed Pleading Standard

In a November 8, 2013 ruling, Judge Richard J. Sullivan declined to dismiss plaintiff Joao Control & Monitoring Systems, LLC's third amended patent infringement complaint against Digital Playground, Inc. and others.  First, the Court denied the defendants' motion to dismiss the direct infringement claim.  In doing so, Judge Sullivan wrote:

Direct infringement claims operate under a unique legal standard.  The Federal Circuit has held that any direct infringement claim mirroring Form 18 of the Federal Rules of Civil Procedure is sufficient to state a claim.  This is so even if the pleadings would otherwise not satisfy the plausibility-pleading standard that applies to all other claims.

(citation omitted)  The Court also applied the relaxed pleading standard to the allegations against all "Defendants" generally, noting that there is "no reason not to interpret every allegation that 'Defendants' did something as a stand in for an allegation that 'Defendant A, Defendant B, . .  .and Defendant Z' each did something."

Court Grants Copyright Ownership to the Plaintiff and Awards Attorneys' Fees

In a September 30, 2013 ruling, Judge Richard J. Sullivan granted summary judgment and attorneys' fees to plaintiff 16 Casa Duse, LLC in its copyright declaratory judgment action against defendant Alex Merkin over the ownership of the copyright in the short film entitled "Heads Up."  The plaintiff purchased all rights to the screenplay for the film, and then assembled a cast and crew.  Every member of the cast and crew, except Merkin, the director, signed agreements specifically assigning all intellectual property rights to the plaintiff.  After a director's cut of the film had been completed, a dispute about copyright ownership developed between the plaintiff and Merkin.  When the parties' relationship completely broke down, Merkin obtained a copyright registration in the director's cut of the film, listing his authorship as "direction/director."  Plaintiff commenced this action, and its amended complaint asserted, among other claims, declaratory judgments that the plaintiff is not liable for copyright infringement and that Merkin has no ownership in any copyright to the film, and to invalidate Merkin's registration.  Merkin counterclaimed with various declaratory judgment claims relating to the copyright issues.  Both parties moved for summary judgment.

Judge Sullivan easily disposed of the plaintiff's claim of non-liability for copyright infringement, ruling that the plaintiff was -- at the very least -- a joint author of the work, so the plaintiff could not "be liable for copyright infringement because co-authors each own an undivided interest in the work." 

The Court next considered whether the plaintiff was the sole or co-author of the work under the Second Circuit's two-pronged test which looks at whether "'each of the putative co-authors (1) made independently copyrightable contributions to the work; and (2) fully intended to be co-authors.'"  Regarding the first prong, Judge Sullivan found that the plaintiff did "not contest that Merkin made independently copyrightable contributions to the Film."  Judge Sullivan, however, strongly found against Merkin on the second prong, finding that "the record uniformly establishes that Plaintiff, through its principal, . . . never intended to share authorship of the film with Merkin or anyone else." 

The Court concluded the plaintiff "is entitled to a declaratory judgment that Merkin holds no copyright ownership interest in the Film."  Judge Sullivan rejected Merkin's counterclaims based largely on the conclusion that Merkin has no copyright interest in the film, and likewise invalidated Merkin's registration in the director's cut to the film that Merkin had obtained.

Addition to Infringement Contentions Denied

In a July 17, 2013 ruling, Judge Richard J. Sullivan denied plaintiff Princeton Digital Image Corporations request to add infringement contentions against defendant Hewlett-Packard, Co.  Judge Sullivan cited the standard applied by other Courts in the District -- that "infringement contentions may only be amended to add claims '(1) on stipulation of the parties; (2) upon showing of excusable subsequent discovery of new information; or (3) upon a showing of clearly excusable neglect'" -- and ruled that "Plaintiff has provided no explanation, much less a sufficient one -- for its delayed request." 

Interlocutory Appeal Denied in Copyright Action

In a June 21, 2013 ruling, Judge Richard Sullivan denied defendant Redigi Inc.'s motion to certify an interlocutory appeal of Judge Sullivan's grant of partial summary judgment on plaintiff Capitol Records LLC's copyright claim. After first noting that Redigi's three month delay in filing the motion weighs against the request, the Court found that the issue Redigi intended to appeal -- whether Redigi violated Capitol's exclusive right of reproduction and distribution -- was no a "'controlling' question of law," nor "a matter of pure law." In denying the motion, Judge Sullivan also found that the intended appellate issue was not "an ephemeral matter" needing immediate review, and noted that the issue "will not escape review at the conclusion of this litigation."

Motion for Reconsideration on Attorneys' Fees Denied

In a June 4, 2013 ruling, Judge Richard Sullivan denied reconsideration of a $10,000 award of attorneys’ fees against a pro se copyright plaintiff.  The plaintiff had argued that reconsideration was warranted because the Court incorrectly applied the Visual Artists Rights Act (VARA) to the works at issue, and that the Court had erred in concluding that the plaintiff had intentionally manipulated certain images to make them appear more similar to images made by the defendant.  In denying reconsideration, Judge Sullivan noted “the upshot of the Court’s analysis of VARA was to reject one of Defendants’ arguments in favor of fees,” and that “there can be no question that Plaintiff did intentionally manipulate images to enhance alleged similarities between her work” and that of the defendant.