United States District Court, W.D. Washington, Seattle
ORDER GRANTING MOTION FOR PARTIAL SUMMARY JUDGMENT
ROBERT S. LASNIK, District Judge.
This matter comes before the Court on "Defendant's Motion For Summary Judgment." Dkt. # 17. Having reviewed the memoranda and exhibits submitted by the parties, and the arguments presented at the January 12, 2015 hearing on this motion, the Court finds as follows.
Plaintiff and defendant operate in the hospitality industry, providing catering and event planning services to the Seattle/Bellevue area. Dkt. # 17 at 1. For a number of years, plaintiff leased a facility on Shilshole Bay in Seattle, WA owned by the Ballard Elks. Dkt. # 22 (Roberts Decl.) ¶¶ 1, 4. Operating a business called the Shilshole Bay Beach Club, plaintiff offered the facility as a venue for social, corporate and non-profit events. Id. ¶ 4. Plaintiff's efforts to market this venue included the use of two photographs of the venue, known as the "His and Her Event View" and the "Bay View" images (the "Images" at issue), in plaintiff's online and print advertising. Id. ¶¶ 17-23; Dkt. # 9-3 (Am. Compl. Exh. C) (depicting "His and Her Event View" image); Dkt. # 9-4 (Am. Compl. Exh. D) (depicting "Bay View" image). Plaintiff claims that it had exclusive rights to the Images prior to January 2014. Dkt. # 22 ¶ 14; Dkt. # 20 at 7 n. 1. Plaintiff registered copyright in the Images in April 2014. Dkt. # 9-1 (Am. Compl. Exh. A); Dkt. # 9-2 (Am. Compl. Exh. B).
In December 2013, plaintiff's tenancy of the Ballard Elks' facility ended, Dkt. # 20 at 4, and defendant took over the facility in January 2014, Dkt. # 19 (Evans Decl.) ¶¶ 7-8. Plaintiff never sold assets associated with the Shilshole Bay Beach Club (including its rights to the Images) to defendant or to the Ballard Elks, although at some point a sale was discussed. Dkt. # 20 at 7; Dkt. # 22 ¶¶ 7-8. Defendant opened a new business at the venue called "Beach Club At Shilshole Bay" (which has since been renamed), and on January 10, 2014 posted the Images on its website in order to promote the venue. Dkt. # 21-5 (Resp. to Interrogatories) at 9. Defendant also posted ten other images of the venue on its website, which are not the subject of the current dispute. Dkt. # 19 ¶ 9.
Plaintiff brought this action on April 26, 2014, seeking to recover actual damages sustained in connection with defendant's infringement of plaintiff's copyright in the Images along with "all profits attributable" to the infringement. Dkt. # 1 (Compl.). Plaintiff also sought a permanent injunction prohibiting any further infringement related to the Images. Id. Defendant removed the Images from its website on April 30, 2014. Dkt. # 21-5 at 9. Plaintiff is also pursuing other claims against defendant and the Ballard Elks in King County Superior Court related to defendant's efforts to open a new business at the venue, including (among other things) trademark infringement, unfair competition and conversion. Dkt. # 20 at 4. At the January 12, 2015 hearing on this motion, defendant suggested that plaintiff would try to introduce the Images as evidence in the state court action, but asserted that there was no material overlap between that state court action and the action before this Court.
Defendant has moved for summary judgment on plaintiff's claim to "indirect profits" stemming from defendant's alleged infringement, Dkt. # 17 at 9, arguing that under Ninth Circuit law plaintiff's evidence is insufficient to establish the necessary causal connection between the alleged infringement and defendant's revenues during the infringement period (January-April 2014), id. at 6-10.
II. LEGAL STANDARD
Summary judgment is appropriate if, viewing the evidence and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party, the moving party shows that "there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Torres v. City of Madera, 648 F.3d 1119, 1123 (9th Cir. 2011). The moving party "bears the initial responsibility of informing the district court of the basis for its motion." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On an issue where the nonmoving party will bear the burden of proof at trial, the moving party can prevail by pointing out that the nonmoving party lacks evidence to support its case. Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). If the moving party meets its initial burden, the opposing party must then set out "specific facts" showing a genuine issue for trial in order to defeat the motion. Id. "The mere existence of a scintilla of evidence in support of the nonmoving party's position" is not sufficient; this party must present probative evidence in support of its claim or defense. Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 919 (9th Cir. 2001). An issue is genuine only if there is a sufficient evidentiary basis on which a reasonable finder of fact could find for the nonmoving party. In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008).
A. Indirect Profits for Copyright Infringement in the Ninth Circuit
Under 17 U.S.C. § 504(b), a copyright owner "is entitled to recover the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages." In establishing the infringer's profits, "the copyright owner is required to present proof only of the infringer's gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work." Id. In the Ninth Circuit, to survive summary judgment, a copyright infringement plaintiff seeking to recover indirect profits "must proffer some evidence to create a triable issue regarding whether the infringement at least partially caused the profits that the infringer generated as the result of the infringement." Mackie v. Rieser, 296 F.3d 909, 911 (9th Cir. 2002). Awarding indirect profits is inappropriate where "they are only remotely or speculatively attributable to the infringement." Id. at 914.
Two cases in particular (both authored by Circuit Judge Margaret M. McKeown) guide this Court's analysis. In Mackie, plaintiff was an artist who specialized in creating public works. Id. at 911. Defendant Seattle Symphony Orchestra Public Benefit Corporation (the "Symphony") contracted with defendant Rieser, a graphic artist, to help design a direct-mail subscription campaign. Id. at 912. Rieser created a collage of combined images which incorporated plaintiff's works into the design; the Symphony, in turn, incorporated Rieser's artwork into a 24-page promotional brochure for a concert series that was mailed to approximately 150, 000 individuals. Id. Plaintiff sued for copyright infringement seeking recoupment of profits that the Symphony generated during the advertised season and future seasons. Id. at 912-13. The district court granted the Symphony's motion for partial summary judgment on the issue of indirect profits. Id. at 911.
The Ninth Circuit affirmed the district court's ruling on the grounds that plaintiff had failed to proffer "sufficient non-speculative evidence" of the causal relationship between the Symphony's profits and the infringement. Id. at 916. The court emphasized that plaintiff's expert had not seen how it would be possible to establish a causal link between the Symphony's infringing use of plaintiff's work and any revenues generated by its use of Rieser's collage in its advertising materials. Id. The court noted that subscribers to the concert series could have been motivated by any number of factors completely unrelated to the artwork in question, such as the Symphony's reputation or the concert series' conductor. Id. Finally, the court rejected a supplemental declaration from plaintiff's expert (which the Court felt ...