TeamLab Inc. v. Museum of Dream Space, LLC

650 F.Supp.3d 934

TEAMLAB INC. v. MUSEUM OF DREAM SPACE, LLC et al.

Case No. CV 19-6906 PSG (GJSx)

United States District Court, C.D. California

Filed January 6, 2023

Benjamin S. Halperin, Pro Hac Vice, CeCe M. Cole, Pro Hac Vice, Elizabeth L. Safran, Pro Hac Vice, Scott J. Sholder, Pro Hac Vice, Cowen DeBaets Abrahams and Sheppard LLP, New York, NY, Daniel C. Posner, John Wall Baumann, Ryan S. Goldstein, Quinn Emanuel Urquhart and Sullivan LLP, Los Angeles, CA, Nancy E. Wolff, Cowan DeBaets Abrahams and Sheppard LLP, Beverly Hills, CA, for teamLab Inc.

Lawrence M. Hadley, Glaser Weil Fink Howard Avchen and Shapiro LLP, Los Angeles, CA, Christopher D. Lee, L.A. Commercial Attorney, APLC, Alhambra, CA, John M. Griem, Jr., Pro Hac Vice, Sarah H. Ganley, Nicholas William Tapert, Pro Hac Vice, Carter Ledyard and Milburn LLP, New York City, NY, Thomas P. Burke, Jr., Pietz and Shahriari, LLP, Culver City, CA, for Museum of Dream Space, LLC et al.

Proceedings (In Chambers): Order DENYING Plaintiff's motion to exclude expert testimony, DENYING Defendants' motion for summary judgment, and GRANTING IN PART and DENYING IN PART Plaintiff's motion for summary judgment.

Philip S. Gutierrez, United States District Judge

Before the Court are three motions. The first is a motion to exclude the expert testimony of Dr. Kimberly Connerton filed by Plaintiff teamLab Inc. ("Plaintiff"). See generally Dkt. # 152 ("Mot. to Exclude"). Defendants Dahooo American Corporation ("Dahoo") and Museum of Dream Space, LLC ("MODS") (collectively, "Defendants") opposed. See generally Dkt. # 163 ("Mot. to Exclude Opp."). Plaintiff replied. See generally Dkt. # 164 ("Mot. to Exclude Reply"). The remaining motions are Plaintiff's and Defendants' cross motions for summary judgment. See generally Dkt. # 150 ("Defs. MSJ"); Dkt. # 154 ("Pl. MSJ"). Both parties opposed each other's motions and replied. See generally Dkts. # 171 ("Defs. Opp."); 172 ("Pl. Opp."); 179 ("Pl. Reply"); 180 ("Defs. Reply"). The Court finds the matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; L.R. 7-15. Having considered the moving, opposing, and reply papers, the Court DENIES Plaintiff's motion to exclude Dr. Kimberly Connerton's expert testimony, DENIES Defendants' motion for summary judgment, and GRANTS IN PART and DENIES IN PART Plaintiff's motion for summary judgment.

I. Background

The facts have been heavily recounted in past orders, so the Court only briefly summarizes them here. Plaintiff is a Japanese interdisciplinary art collective that is internationally known for its immersive digital art exhibits. See Plaintiff's Statement of Uncontroverted Facts, Dkt. # 171-3 ("PSUF"), ¶¶ 1-7. Defendant MODS, a wholly owned subsidiary of Defendant Dahoo, owns and operates an art museum in Beverly Hills, California, called the Museum of Dream Space. Id. ¶ 44.

Plaintiff alleges that Defendants directly, contributorily, and/or vicariously infringed Plaintiff's digital art exhibits ("TL Exhibits" or the "Exhibits") and photos of them ("TL Images" or the "Images"), which are displayed on Plaintiff's website. See generally Second Amended Complaint, Dkt. # 75 ("SAC"). Specifically, Plaintiff claims that two of Defendants' exhibits—Galaxy Dream and Season Dream ("MODS Exhibits")—are substantially similar infringing versions of Plaintiff's exhibits Crystal Universe and Boundaries. Id. ¶¶ 32, 43. And related to this allegation, Plaintiff also claims Defendants vicariously and/or contributorily infringed on Crystal Universe and Boundaries by permitting the infringing MODS Exhibits to be featured in a Justin Bieber Music Video ("Bieber Music Video"). PSUF ¶¶ 116-18. Further, to attract attention to their own museum, Defendants posted pictures of Plaintiff's Boundaries and Crystal Universe as well as three other exhibits—Forest, Particles, and Wander—on their social media accounts. See Defendants' Statement of Uncontroverted Facts ("DSUF") ¶¶ 27-30; SAC ¶¶ 67, 83. The posted pictures included TL Images but also encompassed other photos of the TL Exhibits captured by unknown persons ("Other Images") (collectively, the "Photographed Works"). See PSUF ¶¶ 97-104.

Plaintiff sued in August 2019. See generally Dkt. # 1. Defendants moved to dismiss shortly thereafter, see generally Dkt. # 21, but Plaintiff amended its complaint before the Court ruled on the pending motion to dismiss, see generally Dkt. # 28. Defendants did not move to dismiss again, and the parties proceeded to discovery. In March 2022, the Court granted a motion for spoilation of evidence, awarding Plaintiff an adverse inference instruction at trial because Defendants destroyed various electronic messages that Plaintiff believed would have revealed Defendants' intent to infringe Plaintiff's works as well as Dahoo's involvement in any infringing activity. See Dkt. # 149 at 6-7; see also PSUF ¶¶ 333, 335-39.

Immediately thereafter, the parties filed their respective motions for summary judgment, and Plaintiff filed a Daubert motion to exclude the opinions of Defendants' expert, Dr. Kimberly Connerton. See generally Pl. MSJ; Defs. MSJ; Mot. to Exclude. On July 12, 2022, the Court denied Plaintiff's summary judgment motion, granted summary judgment to Defendants on the issue of standing alone, and denied Defendants' summary judgment motion and Plaintiff's Daubert motion as moot. See generally Dkt. # 193 ("Summ. J. Order"). Specifically, 17 U.S.C. § 411(a) requires registration with the United States Copyright Office ("USCO") before filing suit for infringement, and it is undisputed that Plaintiff never registered any of its works. See Pl. MSJ 11:11-12:10. The Court initially held that Plaintiff had failed to establish that its works qualified as foreign works and were thus exempt from the pre-suit registration requirement. See Summ. J. Order at 4-6. Plaintiff subsequently filed a motion for reconsideration, see generally Dkt. # 203 ("Recons. Mot."), which the Court granted and accordingly took the parties' motions under submission, see generally Dkt. # 221 ("Recons. Order").

II. Plaintiff's Daubert Motion

The Court first resolves Plaintiff's motion to exclude the expert opinions of Dr. Kimberly Connerton. See generally Mot. to Exclude.

Federal Rule of Evidence 702 governs the admissibility of expert opinion. See Fed. R. Evid. 702(b)-(d). Expert opinion must involve scientific or technical knowledge. See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 590, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). And the opinion is admissible if it is based on sufficient facts or data, it is the product of reliable principles and methods, and the expert reasonably applies the principles and methods to the facts of the case. See Fed. R. Evid. 702(b)-(d); see also City of Pomona v. SQM N. Am. Corp., 750 F.3d 1036, 1043 (9th Cir. 2014). The Rule 702 factors are broadly summarized as requiring "reliability, relevancy, and assistance to the trier of fact." In re ConAgra Foods, Inc., 302 F.R.D. 537, 549 (C.D. Cal. 2014) (citing Sementilli v. Trinidad Corp., 155 F.3d 1130, 1134 (9th Cir. 1998)).

The trial court is vested with broad discretion in assessing the admissibility of an expert's opinion. See United States v. Espinosa, 827 F.2d 604, 611 (9th Cir. 1987). "The trial court must act as a 'gatekeeper' to exclude junk science that does not meet Federal Rule of Evidence 702's reliability standards by making a preliminary determination that the expert's testimony is reliable" and relevant. Ellis v. Costco Wholesale Corp., 657 F.3d 970, 982 (9th Cir. 2011). It is Defendants' burden to prove by a preponderance of the evidence that their expert's testimony meets these admissibility requirements. See Lust By & Through Lust v. Merrell Dow Pharm., Inc., 89 F.3d 594, 598 (9th Cir. 1996).

Plaintiff argues that Defendants' expert, Dr. Connerton, who is set to opine about the objective differences between the TL and MODS Exhibits, should be excluded for two reasons: (1) Dr. Connerton applied an incorrect standard when analyzing the parties' works; and (2) Dr. Connerton issued her report without considering later-produced evidence. See Mot. to Exclude 1:6-17; see also Declaration of Benjamin S. Halperin, Dkt. # 153 ("Halperin Decl."), ¶ 3, Ex. B (Dr. Kimberly Connerton Expert Report), 2 ("Connerton Rep."); see also id. ¶ 4, Ex. C (Dr. Kimberly Connerton Expert Rebuttal Report) ("Connerton Rebuttal Rep."). The Court, however, finds that Dr. Connerton's expert opinion is admissible because it is based on reliable principles and sufficient data.

First, the Court does not find the standard Dr. Connerton applied problematic. Specifically, Dr. Connerton applied a standard that the Court would ultimately have to apply should it find that Crystal Universe and Boundaries are entitled to only "thin" copyright protection. See Mot. to Exclude Opp. 10:8-27. Dr. Connerton's analysis is only going to be used by the Court in evaluating the objective differences between the TL and MODS Exhibits; it cannot be used to aid a jury. See Skidmore as Trustee for Randy Craig Wolfe Trust v. Led Zeppelin, 952 F.3d 1051, 1064 (9th Cir. 2020) ("[T]he intrinsic test," which is left to the jury, "test[s] for similarity of expression from the standpoint of the ordinary reasonable observer, with no expert assistance." (citation omitted)). And regardless of what standard the Court applies, Dr. Connerton's insight into how the Exhibits relate to works of other artists and their differences can still be useful.

The Court is also unpersuaded by Plaintiff's second argument that Dr. Connerton failed to consider later-produced materials. See Mot. to Exclude 7:5-10. "[A]n expert need not consider every possible factor to render a 'reliable' opinion." Biltmore Assocs., L.L.C. v. Thimmesch, No. 2:02-cv-2405-HRH, 2007 WL 5662124, at *8 (D. Ariz. Oct. 15, 2007) (quoting MicroStrategy Inc. v. Bus. Objects, S.A., 429 F.3d 1344, 1355 (Fed. Cir. 2005)). Dr. Connerton relied on the facts...