Leroy-Garcia v. Licensing

ANNE-STEPHANIE LEROY-GARCIA, Plaintiff,

v.BRAVE ARTS LICENSING, et al., Defendants.

No. C 13-01181 LB

UNITED STATES DISTRICT COURT Northern District of California San Francisco Division

Dated: August 5, 2013

ORDER GRANTING DEFENDANTS'

MOTION TO DISMISS OR,

ALTERNATIVELY, TO TRANSFER

ACTION

[Re: ECF Nos. 10, 21, 24, 30]

INTRODUCTION

Plaintiff Anne-Stephanie Le Roy-Garcia, a visual artist who lives and works in Spain, filed this copyright and trademark infringement case against eight entities and four individuals affiliated with some of the entities. Complaint, ECF No. 1.¹ The entity defendants are located or have a principal place of business in either the Central District of California (Brave Arts Licensing, Inc.; Innovating Business Group ("IBG"); My Tribe (a subsidiary of IBG); California Apparel; and HauteLook, Inc.), Texas (Neiman Marcus Group, Inc.), or Washington state (Zulily, Inc.), although the complaint alleges that they all regularly do business in the Northern District of California. See id. at 2-5. The individual defendants are related to each other and affiliated with entities located in the Central District: Gabriel Guez and Yvette Guez (Yvette is Gabriel's mother and both are affiliated with Brave Arts Licensing, Inc.), Jean Pierre Guez (Jean Pierre is Gabriel's father and is affiliated withIBG), and Jonathan Guez (Jonathan is Gabriel's brother and is affiliated with My Tribe). See id.

The defendants move to dismiss or transfer the case for improper venue or alternatively for transfer for forum non conveniens. Motion, ECF No. 10; Joinder (Neiman Marcus and Zulily), ECF No. 21; Joinder (Ideeli), ECF No. 24; Joinder (HauteLook), ECF No. 30. Upon consideration of the briefs submitted, the arguments of counsel at the August 1, 2013 hearing, and the record in this action, the court GRANTS Defendants' motion and TRANSFERS this action to the Central District of California.

STATEMENT

I. THE PARTIES

According to the complaint, Plaintiff "is a prominent visual artist who was born and now lives and creates her works in Almeria, Spain." Complaint, ECF No. 1 ¶ 2.

Defendant Brave Arts is a California limited liability company and is located in the Central District of California. Id. ¶ 3. Brave Arts regularly does business with customers located in the Northern District of California. Id. Defendants Gabriel Guez and Yvette Guez are individuals who reside in the Central District of California and are owners of Brave Arts. Id. ¶¶ 4-5; Gabriel Guez Declaration, ECF No. 10-2 ¶ 2; see also Motion, ECF No. 10 at 8 (stating that Gabriel Guez and Yvette Guez reside in Los Angeles County); but see Jean Pierre Guez Declaration, ECF No. 10-3 ¶¶ 2 (stating that Yvette Guez is his ex-wife and that she has never resided in the United States).² Brave Arts, Gabriel Guez, and Yvette Guez collectively will be referred to as the "Brave Arts Defendants."

Defendant IBG is a California corporation and is located in the Central District of California. Complaint, ECF No. 1 ¶ 7. IBG regularly does business with customers located in the NorthernDistrict of California. Id. Defendant Jean Pierre Guez is an individual who resides in the Central District of California and is an owner of IBG. Id. ¶ 8; Jean Piere Guez Declaration, ECF No. 10-3 ¶ 1. Defendant My Tribe is a business entity that operates as a subsidiary of IBG and is located in the Central District of California. Complaint, ECF No. 1 ¶ 9. My Tribe regularly does business with customers located in the Northern District of California. Id. Defendant Jonathan Guez is an individual who resides in the Central District of California and exercises management and control over the business activities of My Tribe. Id. ¶ 10; Jean Pierre Guez Declaration, ECF No. 10-3 ¶ 4 (stating that Jonathan Guez resides in Los Angeles County). IBG, Jean Pierre Guez, My Tribe, and Jonathan Guez collectively will be referred to as the "IBG Defendants."

Defendant California Apparel is a California corporation and is located in the Central District of California. Complaint, ECF No. 1 ¶ 12. California Apparel regularly does business with customers located in the Northern District of California. Id.

Defendant Ideeli is a Delaware corporation and is located in the Southern District of New York. Id. ¶ 14. Defendant Neiman Marcus is a Delaware corporation and is located in the Northern District of Texas. Id. ¶ 15. Defendant HauteLook is a Delaware corporation and is located in the Central District of California. Id. ¶ 16. Defendant Zulily is a Delaware corporation and is located in the Western District of Washington. Id. ¶ 17. Ideeli, Neiman Marcus, HauteLook, and Zulily regularly do business with customers located in the Northern District of California. Id. ¶¶ 14-17. Ideeli, Neiman Marcus, HauteLook, and Zulily collectively will be referred to as the "Retail Defendants."

II. THE PARTIES' PRIOR RELATIONSHIP

Plaintiff creates works in various media, including original paintings, drawings, and prints. Id. ¶ 23. She has developed a unique artistic style which she calls "L'art Nouveau Andaluz." Id. ¶ 24. Since at least as early as 1998, she adopted and has continuously used the artist's name "ALMERIANE" as her pseudonym and designation of source for her artworks (the "ALMERIANE Mark"). Id. She signs her works using ALMERIANE in a stylized form comprising a reproduction of her handwritten signature (the "ALMERIANE Stylized Mark"). Id., Exh. 1. Her artworks have been exhibited and sold worldwide, including in the United States, under the ALMERIANEpseudonym, word mark, and ALMERIANE Stylized Mark since at least as early as 1998. Id. The ALMERIANE Mark and the ALMERIANE Sty¥zed Mark collectively will be referred to as the "ALMERIANE Marks." Id.

Plaintiff is the sole owner of all rights, including copyrights, in her L'Art Nouveau Andaluz works and of all rights, including trade name and trademark rights, in the ALMERIANE Marks. Id. ¶ 26. In or about April 2011, Defendant Gabriel Guez, who represented to Plaintiff that he was experienced and successful in the business of the sourcing, manufacture, design, sale and distribution of garments and that he routinely sourced artwork for such purposes, approached Plaintiff about a licensing deal. Id. ¶ 27. Plaintiff and Gabriel Guez entered into a business relationship and executed three documents: (1) a "Manager & Representation Agreement"; (2) a "Trademark Authorization Consent"; and (3) a "Copyright/Worldwide Master License Agreement." Id. ¶¶ 28, 31, Exh. 3 (the three agreements). Under these agreements, "[Gabriel] Guez, individually, was granted, for an initial term of 7 years, a non-exclusive license to sell Plaintiff's original artwork for a 10% commission payable to [Gabriel] Guez, and an exclusive license as Plaintiff's 'Worldwide Master Licensee' to create and market prints and merchandise featuring Plaintiffs 'L' Art Nouveau Andaluz' paintings under the ALMERIANE Marks (the 'Licensed Products'), for payment on a quarterly basis off 8% royalty to Plaintiff, and to sublicense manufacturing and distribution of the Licensed Products, for payment of a 6% royalty to Plaintiff, subject to certain terms and conditions." Id. ¶ 32. "Those explicit conditions, inter alia, required [Gabriel] Guez to obtain Plaintiff's prior written approval before assigning any of his rights to another party; to obtain Plaintiff's pre-approval prior to marketing each Licensed Product and promotional materials therefor; to disclose to Plaintiff all sublicenses; and to account for and timely pay all commissions and royalties due to Plaintiff." Id. The agreements "also authorized [Gabiel] Guez, individually, to use and register, as Plaintiffs agent and on Plaintiff's behalf, the ALMERIANE mark in connection with the Licensed Products." Id. The agreements explicitly provide for termination immediately by Plaintiff upon [Gabriel] Guez's breach of the limitations on transfer of his rights, and upon sixty days' notice upon [Gabriel] Guez's breach of his pre-approval and payment obligations; that upon termination all rights revert to Plaintiff; and the prevailing party in any actions to enforce the provisions of the [a]greement[s] shallrecover attorneys' fees." Id. ¶ 33.

Plaintiff alleges that soon after the agreements were executed, if not before, the Brave Arts Defendants and the IBG Defendants began arranging for the manufacture of Licensed Products, organizing promotional events including participation in trade shows, taking orders, and distributing Licensed Products to wholesale and retail customers across the United States, including at least the following retailers within the Northern District of California: Emily Lee in San Francisco, California; Channel 910 in San Francisco, California; New Threads in Corte Madera, California; Daisy in St. Helena, California; Forget Me Not in Aptos, California; Safari in Mendocino, California and other online vendors. Id. ¶ 34.

Plaintiff provided Gabriel Guez with hundreds of high definition images of her artwork for use on Licensed Products. Id. ¶ 35. The Brave Arts Defendants had access to these images. Id.

Plaintiff alleges that, in late 2011, the Brave Arts Defendants (including Gabriel Guez) and the IBG Defendants then began violating the agreements by:

• assigning Gabriel Guez's personal contract rights to others;

• violating the agreements' sublicensing provisions;

• failing to obtain Plaintiff's prior approval before displaying and offering for sale items featuring Plaintiff's artwork and failing to meet Plaintiff's quality control requirements;

• failing to promote in good faith the ALMERIANE brand;

• failing to pay the full amount due on the sale of original artwork;

• failing to adequately and accurately report merchandise royalties;

• failing to pay merchandise royalties;

• selling Licensed Products at severely discounted prices;

• attempting to register the ALMERIANE Stylized Mark in Brave Arts's name.

Id. ¶¶ 37-56.

In late May 2012, Plaintiff told Gabriel Guez that...