R.F.M.A.S., Inc. v. Mimi So

619 F.Supp.2d 39

R.F.M.A.S., INC., Plaintiff, v. MIMI SO et al., Defendants.

No. 06 Civ. 13114(VM).

United States District Court, S.D. New York.

May 13, 2009.

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Kenneth S. Feldman, Law Offices of Stephen E. Feldman, P.C., Stephen Edward Feldman, Paul J. Burgo, Steven Michael Crosby, Feldman Law Group, New York, NY, Kevin P. Crosby, Brinkley, Morgan, Solomon, Tatum, Stanley, Lunny & Crosby, Fort Lauderdale, FL, Steven Michael Crosby, Kilgore & Kilgore, PLLC, Dallas, TX, for Plaintiff.

Paul J. Sutton, David Jonathan Saenz, Greenberg, Traurig, L.L.P., Barry George Magidoff, Sutton Magidoff, LLP, Evan Gourvitz, Fross Zelnick Lehrman & Zissu, P.C., New York, NY, for Defendants.

DECISION AND AMENDED ORDER

VICTOR MARRERO, District Judge.

TABLE OF CONTENTS

PAGE
I. BACKGROUND .................................................................. 47
   A. CREATION OF THE STELLA JEWELRY LINE ...................................... 48
   B. RHI'S ACQUISITION OF MSI ................................................. 49
   C. RICHEMONT'S POSSIBLE ACQUISITION OF RFMAS ................................ 49
   D. CREATION OF THE GATE B9 JEWELRY LINE ..................................... 49
   E. RFMAS'S SUPPLEMENTARY REGISTRATION ....................................... 50
II. DISCUSSION ................................................................. 50
    A. LEGAL STANDARD .......................................................... 50
    B. SPOLIATION .............................................................. 51
    C. RFMAS'S OWNERSHIP OF A VALID COPYRIGHT .................................. 51
       1. Originality .......................................................... 51
       2. Presumption of Validity of the Copyright and Facts Stated in the
            Certificate......................................................... 52
       3. Registration of a Jewelry Collection In a Single Application ......... 58
       4. First Publication in Italy ........................................... 60
    D. UNAUTHORIZED COPYING OF THE STELLA PIECES ............................... 61
       1. Access ............................................................... 61
       2. Substantial Similarity ............................................... 63
       3. Liability of the Riehemont Defendants For Copyright Infringement ..... 66
          a. Direct Infringement by the Richemont Defendants ................... 66
          b. Indirect Infringement by the Richemont Defendants ................. 69
             i. Vicarious Infringement by the Richemont Defendants ............. 71
             ii. Contributory Infringement by the Richemont Defendants ......... 72
    E. TRADE DRESS INFRINGEMENT ................................................ 74
       1. Legal Standard ....................................................... 74
       2. Articulation of Trade Dress .......................................... 76
       3. Functionality ........................................................ 80
       4. Secondary Meaning .................................................... 81
       5. Likelihood of Confusion .............................................. 82
       6. Liability of the Richemont Defendants For Trade Dress Infringement ... 83
          a. Direct Infringement by the Richemont Defendants ................... 83
          b. Contributory Infringement by the Richemont Defendants ............. 84
    F. UNFAIR COMPETITION ...................................................... 85
    G. MISAPPROPRIATION OF TRADE SECRETS ....................................... 86
    H. BREACH OF CONTRACT ...................................................... 87
    I. UNJUST ENRICHMENT ....................................................... 89
III. ORDER .......................................................... 89

Plaintiff R.F.M.A.S., Inc. ("RFMAS") brought this action against defendants Mimi So, Mimi So International, Inc., Richemont SA, Compagnie Financière Richemont SA, Richemont North America, Richemont Holdings I, and Richemont International, Ltd. (collectively, "Defendants"), alleging, among other things, that Defendants infringed RFMAS's copyright in nine pieces of its "Stella" jewelry line (the "Stella Pieces") and infringed the trade dress of the "look" of the Stella collection.

On August 11, 2008, RFMAS filed a motion for summary judgment against Mimi So ("So") and Mimi So International, Inc. ("MSI") (collectively, the "So Defendants"), alleging that certain pieces in the So Defendants' "Gate B9" jewelry line directly infringe RFMAS's copyright in the Stella Pieces. In addition, RFMAS's motion asks the Court to rule as a matter of law that RFMAS's copyright in the Stella Pieces is valid, and that the So Defendants accessed the jewelry. On the same date, RFMAS filed a separate motion for summary judgment¹ against Richemont SA, Compagnie Financière Richemont SA ("Compagnie Financière"), Richemont North America ("Richemont NA"), Richemont Holdings I ("RHI"), and Richemont International, Ltd. ("Richemont Int'l") (collectively, the "Richemont Defendants"), alleging that the Richemont Defendants contributorily and vicariously infringed RFMAS's copyright in the design of the Stella Pieces, and again asks the Court to rule as a matter of law that its copyright in the Stella Pieces is valid, and that the Richemont Defendants accessed the jewelry. Both of RFMAS's motions discuss at length the alleged spoliation of evidence committed by Defendants. RFMAS asks the Court to grant summary judgment in RFMAS's favor or to strike Defendants' answers to the complaint as a sanction for the alleged spoliation.

Also on August 11, 2008, the So Defendants and the Richemont Defendants each filed a motion for summary judgment against RFMAS. The So Defendants assert that: (1) RFMAS's copyright registration is not valid and that RFMAS is not entitled to any presumption of validity based on the registration; (2) RFMAS's copyright infringement claim fails for lack of substantial similarity; and (3) as a matter of law, RFMAS's trade dress and unfair competition claims must fail. The Richemont Defendants ask the Court to rule that: (1) they did not directly or indirectly infringe the copyright in the Stella Pieces; and (2) they are not liable for trade dress infringement, misappropriation of trade secret information, breach of contract, or unjust enrichment.

By Order dated March 30, 2009 (the "March 30 Order") the Court denied RFMAS's motions, granted in part and denied in part the So Defendants' motion, and granted in part and denied in part the Richemont Defendants' motion. The Court now sets forth its findings, reasoning, and conclusions in support of the March 30 Order.

I. BACKGROUND²

While very few facts are undisputed by the parties in this action, the Court now presents a brief summary of the general history of this case, and will present further details where relevant in its analysis of the issues.

A. CREATION OF THE STELLA JEWELRY LINE

Amedeo Scognamiglio ("Scognamiglio") and Roberto Faraone Mennella ("Mennella")³ are the founders, principals, and sole shareholders of RFMAS, a company that designs, markets, and sells jewelry. Scognamiglio and Mennella allege that they designed, created, and first published a collection of jewelry in Italy in 2001, which included several pieces they refer to as the "Stella" collection. Defendants, however, contend that the Stella collection may have been created and first published in the United States in 2002.

On April 28, 2004, RFMAS filed a copyright application (the "Application") with the United States Copyright Office. In the Application, RFMAS provided the following information:

Section 1: Under the heading "Title of This Work," the Application provides "COLLECTIONS I," and under "Nature of This Work," the Application provides "JEWELRY DESIGNS."

Section 2(a): Under the heading "Name of Author," the Application provides "R.F.M.A.S., INC. D/B/A FARAONE MANNELLA." Under the question "Was this contribution to the work a `work made for hire'?" the box marked "Yes" is checked. Under "Author's Nationality or Domicile," the Application provides that the author is a citizen of "USA." Section 2(b) is not completed.

Section 3(a): Under the heading "Year in Which Creation of This Work Was Completed," the Application provides "2002."

Section 3(b): Under the heading "Date and Nation of First Publication of This Particular Work," the Application provides "MAY 1, 2002." The Application does not provide the nation of first publication.

Attached to the Application, as the deposit for the registration, are fifty-four photographs of various items of jewelry, including necklaces, earrings, bracelets, and rings. The Copyright Office assigned RFMAS Copyright Registration No. VA-1-260-162 (the "Registration") on April 28, 2004. (See Declaration of Christopher B. Prescott, dated August 11, 2008 ("Prescott Aug. Decl."), Ex. 5.)

B. RHI'S ACQUISITION OF MSI

On or about December 31, 2003, RHI acquired a 40% interest in MSI's stock in exchange for $6 million. As part of the acquisition, RHI had the power to designate two of the initial directors of MSI's five-person board. Edwin McQuigg ("McQuigg"), a Richemont executive, and Christopher Colfer ("Colfer"), Director of Richemont Int'l, were chosen to fill these positions. Colfer was later replaced on MSI's board by Daniel Mawicke ("Mawicke"), President and Chief Executive Officer of Richemont NA.

The parties dispute the level of oversight and input provided by RHI into MSI's day-to-day business. RFMAS argues that RHI exercised control over MSI's day-to-day operations, including supervision of jewelry designs. The Richemont Defendants, however, argue that RHI "had no input into how MSI was run on a day-to-day...