Civility Experts Worldwide v. Molly Manners, LLC

167 F.Supp.3d 1179

Civility Experts Worldwide, Plaintiff and Counterclaim Defendant,andCathy Hulshof, April Rollins, and Tanya Maclin, Intervenor Plaintiffs and Counterclaim Defendants,

v. Molly Manners, LLC, Defendant and Counterclaim Plaintiff,andFelicia Knowles, Shannon Combs, and Monika Virta-Gupta, Defendants.

Civil Action No. 15-cv-0521-WJM-MJW

United States District Court, D. Colorado.

Signed March 7, 2016

Michael D. Schwartz, Schwartz Law Firm, Oakdale, MN, for Plaintiff and Counterclaim Defendant.

Brandon Michael Schwartz, Schwartz Law Firm, Oakdale, MN, for Plaintiff and Counterclaim Defendant/Intervenor Plaintiffs and Counterclaim Defendants.

David James Nowak, Adam Joseph Goldstein, White & Steele, P.C., Denver, CO, Darrell J. O'Neal, Darrell J. O'Neal, Law Office of, Memphis, TN, John Joseph Coomes, John J. Coomes, Attorney at Law, Milford, OH, for Defendants.

ORDER GRANTING DEFENDANT MOLLY MANNERS' EARLY MOTION FOR PARTIAL SUMMARY JUDGMENT

William J. Martínez, United States District Judge

Plaintiff Civility Experts Worldwide (“Civility Experts”) sues Defendant Molly Manners, LLC (“Molly Manners”) for copyright infringement and related causes of action. (See ECF No. 47.) Currently before the Court is Molly Manners' Early Motion for Partial Summary Judgment (“Motion”) attacking only Civility Experts' copyright infringement claim. (ECF No. 85.) For the reasons explained below, Molly Manners' Motion is granted, but, contrary to Molly Manners' view, this outcome does not automatically dispose of Civility Experts' claim for breach of the contract.

I. LEGAL STANDARD

Summary judgment is warranted under Federal Rule of Civil Procedure 56 “if the movant shows that 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) ; see also Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248–50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is “material” if, under the relevant substantive law, it is essential to proper disposition of the claim. Wright v. Abbott Labs., Inc. , 259 F.3d 1226, 1231–32 (10th Cir.2001). An issue is “genuine” if the evidence is such that it might lead a reasonable trier of fact to return a verdict for the nonmoving party. Allen v. Muskogee , 119 F.3d 837, 839 (10th Cir.1997).

In analyzing a motion for summary judgment, a court must view the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Adler v. Wal–Mart Stores, Inc. , 144 F.3d 664, 670 (10th Cir.1998) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ). In addition, the Court must resolve factual ambiguities against the moving party, thus favoring the right to a trial. See Houston v. Nat'l Gen. Ins. Co. , 817 F.2d 83, 85 (10th Cir.1987).

II. FACTS¹

The following facts are undisputed unless otherwise noted.

Civility Experts “is in the business of providing civility training solutions.” (ECF No. 85 at 2, ¶ 2.)² Civility Experts offers, among other things, lesson manuals for teaching manners to children. (Id. ) Three of those lesson manuals are at issue here: Macaroni and Please (designed for ages 3–7), Confidence is Cool (designed for ages 8–12), and Proud to Be Polite (also designed for ages 8–12) (collectively, “Civility Experts' Lessons”). (See ECF No. 86-6 at 1; ECF No. 86-7 at 1; ECF No. 86-8 at 1.) Civility Experts has registered copyrights for each of these Lessons. (ECF No. 115 at 5, ¶¶ 1–3.)

Molly Manners was formed in 2010, and is also in the business of teaching manners to children. (ECF No. 85 at 2, ¶ 4.) Molly Manners purchased Civility Experts' Lessons sometime in 2011. (Id. at 3, ¶¶ 6–9.) Molly Manners claims it also purchased permission to distribute Civility Experts' Lessons to Molly Manners' licensees. (Id. ¶¶ 6–7.) Civility Experts denies this, but it appears undisputed that Molly Manners incorporated at least portions of Civility Experts Lessons into three of Molly Manners' own lesson manuals. (Compare id. at 2, ¶ 4 with ECF No. 115 at 3, ¶ 4.)

“In the spring of 2013, a dispute arose wherein [Civility Experts] accused Molly Manners of copyright infringement.” (ECF No. 85 at 4, ¶ 11.) Molly Manners denied the accusation. (Id. ) In April 2013, Civility Experts and Molly Manners entered into a Settlement Agreement (without litigation, apparently). (Id. ¶ 12.) Through the Settlement Agreement, Molly Manners agreed to

remove all references to [Civility Experts'] copyright[ed] materials from the main/home website including... verbatim lesson names and will stop including such content, in whole or in part, in Molly Manners programs, except for those certain existing licensees of Molly Manners previously granted usage rights who may continue to use such copyright[ed] content....[Civility Experts'] copyright [ed] content will not be extracted, distributed, or duplicated, in print, electronically, or verbally, in whole or in part, for any purpose by Molly Manners.

(ECF No. 86-10 ¶ 1.)

Molly Manners says that it then “modified its teacher guides and materials” to remove any of Civility Experts' copyrighted content. (ECF No. 85 at 4, ¶ 14.) Civility Experts denies this and alleges that three Molly Manners lesson manuals continue to infringe Civility Experts' copyrights, and are also a violation of the Settlement Agreement. (See ECF No. 47 ¶¶ 54, 90–107; ECF No. 86-36 at 8–23; ECF No. 115 at 6–11, ¶¶ 1–13.) The three relevant Molly Manners lesson manuals are: Nice is Right (aimed at ages 3–6), Kool to Be Kind (aimed at ages 7–11), and The Young Sophisticate (aimed at ages 12–17) (collectively, “Molly Manners' Lessons”). (See ECF No. 86-11 at 1; ECF No. 86-15 at 1; ECF No. 86-24 at 1.)

In this lawsuit, Civility Experts accuses Molly Manners of breaching the settlement agreement (Count 1), and accuses Molly Manners and some of its licensees of tortious interference with prospective economic advantage (Count 2), copyright infringement (Count 3), unfair competition (Count 4), and false advertising (Count 5).³ (ECF No. 47 ¶¶ 90–131.)

III. CONSIDERATIONS REGARDING EARLY SUMMARY JUDGMENT

The undersigned permits an early motion for summary judgment if filed “within 30 days after entry of the initial scheduling order,” and if the motion “presents a substantial and well-supported argument for significantly reducing the claims or issues in the case.” WJM Revised Practice Standard III.E.2. Civility Experts interprets “within 30 days after entry of the initial scheduling order” to mean that a party may file an early summary judgment motion no earlier than the date on which the scheduling order is entered. (ECF No. 115 at 12–13.) Because Molly Manners filed the present Motion on August 14, 2015, and the scheduling order did not enter until September 29, 2015, Civility Experts argues that Molly Manners' Motion should be denied as procedurally improper. (Id. )

Civility Experts' interpretation of Practice Standard III.E.2 is incorrect. “[W]ithin 30 days after entry of the initial scheduling order” only places limits on how late a party may file an early summary judgment motion, not how early. See MPVF Lexington Partners, LLC v. W/P/V/C, LLC , 148 F. Supp. 3d 1169, 1172 n. 1, 2015 WL 5444297, at *1 n. 1 (D.Colo. Sept. 16, 2015). The Court accordingly rejects Civility Experts' argument that Molly Manners did not file its Motion at the proper time.

Nonetheless, the Motion must “present[ ] a substantial and well-supported argument for significantly reducing the claims or issues in the case.” WJM Revised Practice Standard III.E.2. In this case, it does. Civility Experts' copyright infringement claim (Count 3) will likely be a major portion of this case. Furthermore, Civility Experts specifically links its unfair competition and false advertising claims (Counts 4 and 5) to its copyright infringement allegations. (See ECF No. 47 ¶¶ 118, 121–22, 127, 129–30.) Early summary judgment on the question of copyright infringement is therefore appropriate.

IV. COPYRIGHT INFRINGEMENT STANDARD

The basic elements of a copyright claim are twofold: “(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.” Feist Publ'ns, Inc. v. Rural Tel. Serv. Co. , 499 U.S. 340, 361, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991).

The second element is itself broken down into multiple inquiries. It begins with an analysis of “copying,” meaning sufficient proof that the defendant actually “used the plaintiff's material as a model, template, or even inspiration,” as opposed to coincidentally creating the same or a similar work. 4-13 Nimmer on Copyright § 13.01[B]; see also Alan Latman, “Probative Similarity” as Proof of Copying: Toward Dispelling Some Myths in Copyright Infringement , 90 Colum. L. Rev. 1187, 1189 (1990) (“ ‘copying'...is the obverse of independent creation”).

A plaintiff may attempt to prove copying through “direct evidence.” Gates Rubber Co. v. Bando Chem. Indus., Ltd. , 9 F.3d 823, 832 (10th Cir.1993). Direct evidence usually requires “a witness to the physical act of copying.” 4-13 Nimmer on Copyright § 13.01[B] (footnote omitted); see also American Bar Association, Model Jury Instructions: Copyright, Trademark, and Trade Dress Litigation § 1.5.2 (2008) (“An example of direct evidence would be an admission by defendant that part or all of the work was copied. Direct evidence may also be the credible testimony of a witness who saw the work being copied.”). But “[d]irect proof of copying is rare,” so “plaintiffs will typically rely on the indirect method of proof.” Gates Rubber , 9 F.3d at 833.

The indirect method requires (1) evidence that the defendant had access to the copyrighted work, and (2) “probative similarities between the copyrighted material and the allegedly copied material.” Id. at 832. “Probative similarity” is also sometimes phrased as “substantial similarity.” See Country Kids 'N City Slicks, Inc. v. Sheen , 77 F.3d...