United States District Court, D. Arizona
Honorable Susan M. Brnovich United States District Judge.
issue is Defendants' Motion for Summary Judgment (Doc.
43, “Mot.”). Plaintiff responded to the motion
(Doc. 53, “Resp.”), and Defendants replied. (Doc.
60). For the reasons that follow, Defendants' motion is
denied in part and granted in part.
Powers (“Powers” or “Plaintiff”)
created 56 drawings entitled “Dogs of the West aka Dog
Country” in 1997 and 1998. In 2002, Powers entered into
an agreement with Caroline Treasure's, Inc.
(“CTI”) to license these works for use on
CTI's products for two years (the “2002
License”). (Resp. at Exh. B). CTI is an Alabama
Corporation that retails home items. (Doc. 31 ¶ 64).
Defendants Ronald Rutherford (“Rutherford”) and
Walter Knight (“Knight”) are officers of CTI.
(Doc. 31 ¶¶ 65-66). The 2002 License included a
clause that said the agreement could be renewed in one-year
increments if both parties agreed. (Resp. at Exh. B). The
2002 License ended on May 29, 2004.
after the license expired, the parties stayed in contact and
Defendants continued to use Plaintiff's works and their
business relationship continued under the same terms. (Mot.
at 4; Resp. at 1). In November 2006, Powers and CTI entered
into a new two-year licensing agreement (the “2006
License”). The 2006 License had a same renewal clause
as the 2002 License. (Resp. at Exh. D). When the license
lapsed in November 2008, CTI continued selling licensed
products. (Mot. at 5). In November 2009, Powers contacted CTI
requesting a payment for royalties, which CTI paid by check.
(Id.). In the memo line for that check, it noted it
was for royalties from October 2008 to October 2009.
parties present different characterizations of their business
relationship between 2002 and 2009. Defendants argue that it
was established practice that they would pay Powers royalties
whenever she requested. (Mot. at 3-6). Powers argues this was
a constant frustration for her, and she attaches emails from
2003, 2004, and 2007 asking for payment. (Resp. at 9, Exh. E,
F, G). In a May 30, 2007, email, Powers wrote, “If you
are not going to send me what is owed on a timely basis
without me hounding you . . . I wish to terminate our
relationship . . . .” (Resp. at Exh. F). A week later,
she seems to walk back her demand in another email: “I
would like to not have to ask to be paid, that's all. As
far as pulling the designs, that is up to you. As long as you
don't disappear into the night on me!” (Resp. at
claims she thought the agreement lapsed November 26, 2008,
and Defendants would stop selling her works at that point.
(Resp. at Declaration of Suzanne Powers, “Powers Decl.,
” ¶ 14). She further alleges that even though the
last check for her royalties went through “Oct. 2009,
” she thought it was just for October 2008 and November
2008, the last two months of the license agreement.
(Id. ¶¶ 15-16). She alleges she only found
out about the continued use of her images in June 2017 and
immediately contacted CTI. (Id. ¶ 21). When she
contacted CTI at that time, they sent her a check for
post-October 2008 royalties. (Mot. at 8, Exh. M-1). She did
not deposit the check, because she “decided to look
into a lawsuit.” (Id. at M-1).
argue that Powers impliedly consented to continuing the
license by following the same course of conduct that followed
the 2002 License's lapse. Plaintiff contends that she
believed their business relationship was over once the 2006
License ended and Defendants continuing to sell past the
expiration date of the 2006 License constitutes breach of
contract and copyright infringement. Powers also alleges
violations of the Digital Millennium Copyright Act. Pub. L.
No. 105-304, 112 Stat. 2860 (1998) (codified in scattered
sections of Title 17). Powers alleges she sent all 56 of the
copyrighted works to Defendants digitally with her signature
and the copyright symbol (©), which constitutes
copyright management information (“CMI”) under 17
U.S.C. § 1202. (Resp. at 5). When the images were posted
online to sell the goods, the signature and copyright symbol
were not shown. Defendants say they posted the images as they
received them and did not remove a signature or copyright
symbol, and they provide website archives from June 2002
through April 2004 and June 2004 through May 2006 that show
the images without a signature or copyright symbol on their
website and crediting Powers as creating the artwork. (Reply
at 2; Doc. 56). Powers notes that when she saw her images
replaced with a new background on various websites in June
2017, none of the sites credited her and instead had
references to Caroline's Treasures. (Resp. at 6, Exh. H).
also raise a statute of limitations defense. Defendants
believe Powers was on notice that they were continuing to use
the images based on their previous business dealings and the
royalty check noting it went through October 2009. Thus, any
damages that accrued more than three years prior to filing
suit are time-barred. Additionally, Defendants believe Knight
and Rutherford should be granted summary judgment on the
breach of contract claim even if CTI is not, because only the
corporate entity is liable. The Court will take each argument
judgment is appropriate when “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a). A
material fact is any factual issue that might affect the
outcome of the case under the governing substantive law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). A dispute about a fact is “genuine” if
the evidence is such that a reasonable jury could return a
verdict for the nonmoving party. Id. “A party
asserting that a fact cannot be or is genuinely disputed must
support the assertion by . . . citing to particular parts of
materials in the record” or by “showing that
materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.” Fed.R.Civ.P.
56(c)(1)(A), (B). The court need only consider the cited
materials, but it may also consider any other materials in
the record. Id. 56(c)(3). Summary judgment may also
be entered “against a party who fails to make a showing
sufficient to establish the existence of an element essential
to that party's case, and on which that party will bear
the burden of proof at trial.” Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986).
the movant bears the burden of demonstrating to the Court the
basis for the motion and “identifying those portions of
[the record] which it believes demonstrate the absence of a
genuine issue of material fact.” Id. at 323.
If the movant fails to carry its initial burden, the
nonmovant need not produce anything. Nissan Fire &
Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102-03
(9th Cir. 2000). If the movant meets its initial
responsibility, the burden then shifts to the nonmovant to
establish the existence of a genuine issue of material fact.
Id. at 1103. The nonmovant need not establish a
material issue of fact conclusively in its favor, but it
“must do more than simply show that there is some
metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). The nonmovant's bare
assertions, standing alone, are insufficient to create a
material issue of fact and defeat a motion for summary
judgment. Liberty Lobby, 477 U.S. at 247-48.
Additionally, the Ninth Circuit “has refused to find a
‘genuine issue' where the only evidence presented
is ‘uncorroborated and self-serving'
testimony.” Villarimo v. Aloha Island Air,
Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (quoting
Kennedy v. Applause, Inc., 90 F.3d 1477, 1481 (9th
Cir. 1996)). “If the evidence is merely colorable, or
is not significantly probative, summary judgment may be
granted.” Libberty Lobby, 477 U.S. at 249-50
(citations omitted). However, in the summary judgment
context, the Court believes the nonmovant's evidence,
id. at 255, and construes all disputed facts in the
light most favorable to the nonmoving party, Ellison v.
Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004). If
“the evidence yields conflicting inferences [regarding
material facts], summary judgment is improper, and the action
must proceed to trial.” O'Connor v. Boeing N.
Am., Inc., 311 F.3d 1139, 1150 (9th Cir. 2002).
The DMCA Claim Under 17 U.S.C. § 1202(b)-Removal of
No person shall, without the authority of the copyright owner
or the law-
(1) intentionally remove or alter any [CMI],
(2) distribute or import for distribution [CMI] knowing that
the [CMI] has been removed or altered without authority of
the copyright owner . . . knowing or . . . having reasonable
grounds to know that it will induce, enable, facilitate or
conceal an infringement of any right under this title.
“information conveyed in connection with” a work.
17 U.S.C. § 1202(c). It includes the name of and
identifying information about the author of a work.
Id. § 1202(c)(2). Powers alleges Defendants
removed her signature and a copyright symbol from the
copyrighted works and replaced them with a notation that said
“Caroline's Treasures.” She argues this
constitutes two DMCA violations regarding CMI-one for
removing her CMI and one for adding false CMI.
party has submitted the original images, which were sent
electronically to the Defendants in 2002. The only evidence
Powers presented that her signature and a copyright symbol
were on the images when Defendants received them is her
statement that it was her business practice to put them on
her copyrighted works. (Resp. at 5; Powers Decl. ¶ 5).
Defendants do not contest that a signature and copyright
symbol are CMI. Rather they allege they received the images
without the signature and copyright symbol on them.
Therefore, they could not have removed them. Defendants have
also presented website archives showing the alleged CMI
missing from the images they posted on their store website
while the licensing agreement was still in place. (Mot. at
Exh. M-4 & M-5). They argue this shows both that the CMI
was not there ...