Malibu Textiles, Inc. v. Label Lane Int'l, Inc. - 922 F.3d 946 (9th Cir. 2019)

Rule:

In the second step of the extrinsic test, the protectable elements that remain are then compared to corresponding elements of the defendant's work to assess similarities in the objective details of the works. The court does not have a well-defined standard for assessing when similarity in selection and arrangement becomes substantial or striking, and in truth no hard-and-fast rule could be devised to guide determinations that will necessarily turn on the unique facts of each case. In comparing fabric designs, the court examines the similarities in their objective details in appearance, including, but not limited to, the subject matter, shapes, colors, materials, and arrangement of the representations.

Facts:

In 2014, Malibu sued Defendants for copyright infringement. Malibu alleges it owns copyrights for two lace designs, consisting of flowers, vines, leaves, and other elements arranged in a pattern. Malibu refers to these two designs collectively as the Subject Work and alleges Defendants infringed on both. The first appeal came after the district court dismissed the cases with prejudice for failure to state a claim. This Court reversed, stating that "[d]ismissal with prejudice is appropriate only if the complaint 'could not be saved by any amendment.'" This Court concluded that Malibu could fix its Complaints by adding more allegations of similarity between the Subject Work and Defendants' works and how Defendants had access to the Subject Work. On remand, Malibu filed new Complaints with additional similarity allegations, including side-by-side photos of the Subject Work and Defendants' works. But the Malibu attorneys mistakenly omitted new access allegations. When they realized their error, the parties filed a joint stipulation seeking leave to file amended versions of the post-remand Complaints. Malibu included a declaration explaining the mistake and provided the district court with redlined copies of the new Complaints with the missing access allegations. In a one-sentence, handwritten order, the district court denied leave to amend: "Denied[,] no good cause is shown." Defendants again moved to dismiss, and the district court again dismissed with prejudice. The district court determined that most of the similarities between Malibu's designs and Defendants' designs consisted of non-protectable elements, such as "the natural appearance of a Bengal Clockvine flower." The district court identified differences in the side-by-side images, concluding that the designs were not strikingly similar. The district court further held that Malibu failed to plausibly allege access, without mentioning whether the proposed amendments would have cured this deficiency.

Issue:

Did the trial court err in denying leave for Malibu to amend its petition?

Answer:

Yes.

Conclusion:

Re: striking similarity—Here, the similarities between the lace patterns go well beyond their mutual inclusion of the Bengal Clockvine flower. The works contain nearly identical floral, leaf, boteh, and dot elements, and those elements are arranged in virtually the same way. The post-remand Complaints state that the patterns are "identically arranged" and that the elements "are arranged exactly the same in relation to each other." They describe, in detail, some of the similarities between the patterns. And most importantly, they provide side-by-side pictures that make the similarities apparent. To be sure, the pictures do show some minor differences between the Subject Work and Defendants' works, such as in color, netting, and shape curvature. "But a rational jury could find that these differences result from the fabric-printing process generally and are 'inconsequential,' or could credit [Malibu]'s assertion that these differences result in part from 'print[ing] using cruder, lower-quality techniques and machinery.'" Alternatively, a jury could find these to be knowing modifications, which could be evidence of willful copying.

Re: substantial similarity—Here, the proposed amended Complaints allege several ways Defendants had access to the Subject Work. Malibu first alleges that Defendants do business in California and that they had access to the Subject Work through Malibu's California showrooms. Malibu next states that, since 1998, it has produced "approximately 1 million yards of lace bearing the Subject Work," which have been manufactured in "over twenty mills, including numerous mills in China." Those mills' libraries of patterns, containing the Subject Work, have since been acquired by other mills, who in turn "have offered those patterns to customers without regard to whether those patterns were protected by copyright law." Malibu further alleges that its customers have "sold garments and other products featuring the Subject Work . . . in the same markets (domestically and internationally) as Defendants." Finally, Malibu specifies several clothing retailers "operating in the same market as Defendants" that collectively "have sold hundreds of thousands of garments featuring reproductions of the Subject Work." These allegations, taken as true, plausibly allege Defendants had reasonable opportunities to view the Subject Work. The proposed amendments would have sufficiently alleged access.