United States District Court, D. Arizona
Honorable Steven P. Logan United States District Judge
Merola Sales Company, Inc. (“Merola”) filed suit
against Tabarka Studio, Inc. (“Tabarka”) seeking
a declaratory judgment against any copyright infringement
claims and other relief. (Doc. 1) Tabarka filed counterclaims
against Merola for copyright infringement and injunctive
relief. (Doc. 29) Before the Court is Merola's motion to
dismiss (the “Motion”) seeking dismissal of
Tabarka's infringement counterclaims against it. The
Court's ruling is as follows.
Zenati (“Zenati”) is a designer that creates
hand-painted tiles, pottery, furniture, and other housewares.
(Doc. 29 at 14) Zenati has created many collections of
hand-painted tiles, which he manufactures and sells to
several of the largest tile distributors throughout the
United States. (Doc. 29 at 15) At issue in this case are four
of Zenati's designs, Paris Metro 1 (“PM 1”)
created in 2008, Casablanca 2 (“C2”) created in
2007, Paris Metro 11 (“PM 11”) created in 2008,
and Touareg 6 created in 2011.
2009, Zenati formed Tabarka, of which he remains president
and CEO. Upon the formation of Tabarka, Zenati transferred
the ownership rights to PM 1, PM 11, and C2 to the
corporation through an oral agreement. (Doc. 29 at 15) Zenati
and Tabarka memorialized this oral agreement in a writing on
May 1, 2018. (Doc. 29 at 15) In 2017, Tabarka began the
process of obtaining registered copyrights for PM 1, PM 11,
C2, and Touareg 6 with the U.S. Copyright Office. (Doc. 29 at
16) In each of the copyright applications, Darna, Inc.
(“Darna”), an inactive California corporation
owned by Zenati, was listed as the author of the works. (Doc.
36 at 7) On August 15, 2017, PM 1, PM 11 and Touareg 6 were
issued copyright registrations for the artwork on the tiles.
(Doc. 29 at 16) However, the registration application for C2
was denied on March 22, 2018. (Doc. 29 at 17)
2015, prior to the filing of the copyright registration
applications, Tabarka became aware that several of its
designs, including PM 1, PM 11, and C2, were being copied and
sold in nearly-identical tiles throughout the United Kingdom.
(Doc. 29 at 17) In 2017, Tabarka became aware that Merola,
along with third-party defendants Home Depot Product
Authority, LLC and Home Depot U.S.A., Inc. (together,
“Home Depot”), was selling unlicensed tiles that
were identical copies of Tabarka's tiles. (Doc. 29 at 22,
January 23, 2018, Merola initiated this lawsuit seeking a
declaratory judgment that it did not infringe on
Tabarka's copyright interests. (Doc. 1 at 12-13) On May
1, 2018, Tabarka filed its answer and asserted counterclaims
against Merola and Home Depot for copyright infringement and
injunctive relief. (Doc. 29 at 12-34) Merola filed the Motion
on May 15, 2018, seeking dismissal of Tabarka's
infringement counterclaims pertaining to PM 1, PM 11, and C2.
(Doc. 36 at 13)
Dismissal for Lack of Subject Matter Jurisdiction Pursuant to
motion to dismiss for lack of subject matter jurisdiction
brought pursuant to Rule 12(b)(1) may facially attack the
existence of subject matter jurisdiction or may challenge the
truth of the alleged facts that would confer subject matter
jurisdiction on the court. Renteria v. United
States, 452 F.Supp.2d 910, 919 (D. Ariz. 2006) (citing
Thornhill Publ'g Co. v. Gen. Tel. & Elecs.
Corp., 594 F.2d 730, 733 (9th Cir. 1979)). Courts are
permitted to consider evidence to decide a factual attack on
subject matter jurisdiction. Thornhill, 594 F.2d at
733. The party asserting jurisdiction has the burden of proof
to show that the court has subject matter jurisdiction.
Indus. Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090,
1092 (9th Cir. 1990). Where a claimant lacks standing, the
court must dismiss the action for lack of subject matter
jurisdiction pursuant to Rule 12(b)(1). Ervine v. Desert
View Reg. Med. Ctr. Holdings, LLC, 753 F.3d
862, 868 (9th Cir. 2014).
federal courts, federal question jurisdiction exists for any
claim that sounds in copyright law, because copyright is a
right granted exclusively by federal law. Humphreys &
Partners Architects LP v. Atl. Dev. & Investments
Inc., 2016 WL 1535175, at 4 (D. Ariz. Apr. 15, 2016)
(citing Bean v. McDougal Littell, 538 F.Supp.2d
1196, 1199 (D. Ariz. 2008). A claimant must still have the
core component of standing under Article III of the
Constitution for a federal court to have jurisdiction.
Humphreys, 2016 WL 1535175 at 4 (citing Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992)). To
satisfy Article III's standing requirement, a claimant
must show that he suffered a “concrete and
particularized” injury that is “fairly traceable
to the challenged action of the defendant, ” and that a
favorable decision would likely redress the injury.
Humphreys, 2016 WL 1535175 at 4 (citing Friends
of the Earth, Inc. v. Laidlaw Env. Servs. (TOC), Inc.,
528 U.S. 167, 180-81 (2000)). The complaint must allege
sufficient specific facts to establish standing for that
claimant, and a court must dismiss a complaint if the
claimant fails to provide facts sufficient to establish
standing. Humphreys, 2016 WL 1535175 at 4 (citing
Schmier v. U.S. Court of Appeals for Ninth Circuit,
279 F.3d 817, 821 (9th Cir. 2002); Chandler v. State Farm
Mut. Auto. Ins. Co., 598 F.3d 1115, 1123 (9th Cir.
501(b) of the Copyright Act of 1976 establishes who has
standing to sue for infringement: “The legal or
beneficial owner of an exclusive right under a copyright is
entitled, subject to the [registration] requirements of
section 411, to institute an action for any infringement of
that particular right committed while he or she is the owner
of it.” 17 U.S.C. § 501(b). “Any of the
exclusive rights comprised in a copyright, including any
subdivision of any of the rights specified by section 106,
may be transferred ... and owned separately.” 17 U.S.C.
§ 201(d)(2). “[E]ither an assignment (which
transfers legal title to the transferee) or an exclusive
license (which transfers an exclusive permission to use to
the transferee) qualifies as a ‘transfer' of a
right in a copyright for the purposes of the Act.”
Minden Pictures, Inc. v. John Wiley & Sons,
Inc., 795 F.3d 997, 1003 (9th Cir. 2015) (stating that
under the 1976 Copyright Act, any party to whom such a right
has been transferred-whether via an assignment or an
exclusive license-has standing to bring an infringement
action based on that right); 17 U.S.C. § 101; DRK
Photo v. McGraw-Hill Glob. Educ. Holdings, LLC, 870 F.3d
978, 983 (9th Cir. 2017).
argues that Tabarka lacks standing to bring copyright
infringement claims for PM 1 and PM 11 because Tabarka has
not demonstrated that it is the owner of valid copyright
interests for these works. (Doc. 36 at 6) Specifically,
Merola argues that the registered copyright applications for
PM 1 and PM 11 state that the works are owned by Darna, a
non-existent corporate entity for at least one year prior to
the creation of the works. (Doc. 36 at 7) Furthermore, Merola
argues that because Darna was not a viable corporation at the
time the works were created Darna could not have obtained
valid copyrights for the works, and Darna could not have
validly transferred its ...