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Dudnikov v. Chalk & Vermilion Fine Arts

United States Court of Appeals for the Tenth Circuit

January 28, 2008, Filed

No. 06-1458

Opinion

 [*1067] 

 [***1706]  GORSUCH, Circuit Judge.

Plaintiffs are eBay "power sellers." Through the Internet auction site, they sell a variety of fabrics from their home in Colorado. This case concerns two of plaintiffs' prints, both of which play on famous images by the artist Erte, Symphony in Black and Ebony on White. While Erte's images depict elegant women walking aquiline dogs, plaintiffs' prints portray Betty Boop next to her aptly named canine companion, Pudgy.

Defendants, owners of the rights to the Erte images, saw plaintiffs' eBay auction page (which disclosed plaintiffs' Colorado location), and came to the conclusion that plaintiffs' prints infringed their copyrights. Defendants promptly contacted eBay in California and successfully suspended plaintiffs' auction, an action that allegedly had adverse consequences for plaintiffs' business and future dealings with the auction  [**2] site. By e-mail, defendants also threatened plaintiffs with suit in federal court. Before defendants could carry out that threat, however, plaintiffs initiated [***1707]  this action in federal district court in Colorado seeking a declaratory judgment that their prints do not infringe defendants' copyrights. Defendants responded with a motion to dismiss, arguing that the court  [*1068]  lacked personal jurisdiction over them. The district court concurred and dismissed plaintiffs' complaint. For reasons we explore below, we reverse.

Taken in the light most favorable to plaintiffs, as they must be at this stage in the litigation, the facts of this case establish that Karen Dudnikov and Michael Meadors, a husband-and-wife team, operate a small and unincorporated Internet-based business from their home in Colorado. Together, they sell fabric and handmade crafts such as aprons, blankets, and placemats under the name "Tabber's Temptations." The majority of their income is derived from selling these products on eBay, whose operations are based in California. Tabber's Temptations is described by eBay as a "power seller," and has received over 6,000 "feedback messages" in the past year from its eBay customers,  [**3] and over 13,000 positive feedback messages since 1998. Ms. Dudnikov's and Mr. Meadors's eBay auction pages clearly list the location of their merchandise as Hartsel, Colorado, and link to their personal website which contains more information about their business, including its location in Colorado.

In October 2005, Ms. Dudnikov and Mr. Meadors launched an auction on eBay offering fabric for sale with the imprint of the cartoon character Betty Boop wearing various gowns. One of these gowns, Ms. Dudnikov and Mr. Meadors concede for purposes of defendants' motion to dismiss, is easily recognizable as a design of the artist known as Erte, a 20th century Russian-born French artist and fashion designer. In Erte's original works, Symphony In Black and Ebony On White, a tall, slender woman is pictured wearing a floor length form-fitting dress that trails her feet, and holding the leash of a thin, regal dog. The fabric offered for sale by Ms. Dudnikov and Mr. Meadors replaced the rather elegant woman in Erte's images with the rather less elegant Betty Boop, and substituted Erte's svelte canine with Betty Boop's pet, Pudgy.

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514 F.3d 1063 *; 2008 U.S. App. LEXIS 1870 **; 85 U.S.P.Q.2D (BNA) 1705 ***; Copy. L. Rep. (CCH) P29,518

KAREN DUDNIKOV, and MICHAEL MEADORS, Plaintiffs-Appellants, v. CHALK & VERMILION FINE ARTS, INC., a Delaware corporation, and SEVENARTS, LTD., a British corporation, Defendants-Appellees.

Subsequent History: Motion granted by Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 2008 U.S. Dist. LEXIS 27230 (D. Colo., Mar. 24, 2008)

Prior History:  [**1] Appeal from the United States District Court for the District of Colorado. (D.C. No. 05-cv-02505-WDM-MEH).

CORE TERMS

plaintiffs', eBay, auction, defendants', forum state, infringement, contacts, personal jurisdiction, fabric, purposefully, effects, district court, rights, contest, aimed, motion to dismiss, cancellation, unilateral, residents, terminate, cases, litigate, courts, notice, declaratory judgment, minimum contact, federal court, cease-and-desist, out-of-state, disputes

Civil Procedure, In Rem & Personal Jurisdiction, In Personam Actions, General Overview, Appeals, Standards of Review, De Novo Review, Jurisdiction, Constitutional Limits, Minimum Contacts, Purposeful Availment, Responses, Defenses, Demurrers & Objections, Motions to Dismiss, Parties, Pro Se Litigants, Pleading Standards, Substantial Contacts, Copyright Law, Civil Infringement Actions, Remedies, Declaratory Judgments