Kevin Barry Fine Art Assocs. v. Ken Gangbar Studio, Inc.
391 F. Supp. 3d 959
N.D. Cal.2019Background
- KGSI (Ken Gangbar Studio Inc.) sued KBFAA (Kevin Barry Fine Art Associates) and others in a declaratory/non-infringement action; KGSI counterclaimed for copyright infringement and civil RICO against KBFAA, Kevin Barry, John Johnson, Richard McCormack, and Studio McCormack.
- KGSI alleges KBFAA created and sold sculptures substantially similar to KGSI's copyrighted sculptural wall works (Star, Swish, Palomar, Fin Wave), and that KBFAA had access to KGSI works before producing the accused works.
- KGSI alleges McCormack/Studio McCormack solicited bids using a photograph of a KGSI work, awarded the job to KBFAA, and financially benefited—grounding vicarious liability allegations.
- KGSI predicates its civil RICO claims on criminal copyright infringement (added as a RICO predicate by the ACPA), asserting a RICO enterprise and a pattern of racketeering activity (copyright offenses) by the defendants.
- Motions to dismiss by the McCormack defendants and the KBFAA defendants challenged (1) the sufficiency of the copyright infringement allegations and (2) the sufficiency of the RICO allegations, including whether copyright infringement (absent counterfeiting/piracy) can serve as a RICO predicate and whether willfulness was adequately alleged.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether KGSI plausibly pleaded copyright ownership and copying/substantial similarity against KBFAA and Barry | KGSI alleges valid registrations, authorial creation/assignment, access (photos requested), side-by-side similarities, and willful copying | KBFAA argues works are not substantially similar and allegations insufficient to show copying/willfulness | Denied as to KBFAA/Barry: copyright claim adequately pleaded (ownership, access, extrinsic similarity); factual differences may be for jury |
| Whether McCormack/Studio McCormack can be vicariously liable for infringement | KGSI: soliciting bids using KGSI photo, awarding job, and financially benefitting shows control and profit | McCormack: did not supervise copying; lacked requisite control to stop infringement | Denied: KGSI plausibly alleged the control and financial-benefit elements for vicarious liability at pleading stage |
| Whether copyright infringement (outside counterfeiting/piracy) can be a RICO predicate | KGSI: statutory text and precedent permit criminal copyright infringement as a RICO predicate | KBFAA: Congress intended ACPA to target counterfeiting/piracy only; limiting reading needed for constitutional/First Amendment concerns | Denied: Court follows Ninth Circuit direction to read RICO broadly and rejects narrow Stewart approach; copyright infringement may serve as RICO predicate without limiting to counterfeiting/piracy |
| Whether KGSI adequately pleaded willfulness (criminal intent) for RICO predicate against each defendant | KGSI: alleges Barry/KBFAA acted willfully, specific admissions, warnings, and deceptive invoices support scienter; Johnson not implicated similarly | KBFAA: allegations show at most similarity, not willful copying; Johnson lacks allegations of willfulness | Partially granted: Willfulness adequately alleged as to Barry and KBFAA; insufficient as to Johnson, so RICO claims dismissed as to Johnson and McCormack/Studio McCormack (for lack of enterprise allegations) but preserved as to Barry/KBFAA (leave to amend) |
Key Cases Cited
- Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (discusses originality requirement and copyright subject matter)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (pleading standard: plausibility requirement)
- Ashcroft v. Iqbal, 556 U.S. 662 (application of plausibility in pleadings)
- Rentmeester v. Nike, Inc., 883 F.3d 1111 (extrinsic/intrinsic framework and access/copying analysis for visual works)
- Malibu Textiles, Inc. v. Label Lane International, Inc., 922 F.3d 946 (selection/coordination/arrangement protectable; comparison at pleading stage)
- Turkette, United States v. Turkette, 452 U.S. 576 (definition of an associated-in-fact RICO enterprise)
- Odom v. Microsoft Corp., 486 F.3d 541 (instructs that RICO should be read broadly; constraints on narrow readings)
- Sedima S.P.R.L. v. Imrex Co., 473 U.S. 479 (elements and remedial purpose of RICO)
- Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (control element for vicarious liability)
- H.J., Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229 (pattern of racketeering activity standard)