Skyros, Inc v. Mud Pie, LLC, 2:16-cv-02255

Background

Skyros, a designer of copyrighted dinnerware (Historia Collection), sued Mud Pie after discovering Mud Pie’s similar "Signature Collection." The parties settled in March 2015: Mud Pie received a limited license to sell through Aug. 31, 2015, and agreed to stop using/investing the old design after Sept. 1, 2015.
After Mud Pie redesigned the line and Skyros filed suit for breach, the court issued a preliminary injunction (June 3, 2016) prohibiting advertising, promoting, or offering for sale the "challenged Signature Collection" using images that violate the settlement, expressly covering internet/social media and paper advertising.
Skyros moved for contempt, alleging (1) an Instagram photo on Mud Pie’s account showed a prohibited piece and (2) at a June 23, 2016 Dallas trade show Mud Pie displayed a point-of-sale card with the prohibited image beside the new product.
Mud Pie admitted the Instagram photo (now removed) and that the point-of-sale card depicted the prohibited design; it contended the Instagram post was a charitable, non-advertising use and that it took extensive, reasonable steps to purge prohibited images across channels.
The Court found undisputed evidence that Mud Pie posted the Instagram photo and used the point-of-sale card at the trade show, concluding Mud Pie violated the unambiguous preliminary injunction and failed to show it was presently unable to comply.
Relief: Court held Mud Pie in civil contempt, awarded Skyros $10,000 in monetary sanctions (declining Skyros’s requested $50,000) and granted Skyros attorneys’ fees for the contempt motion (to be proven by fee petition).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Mud Pie violated the preliminary injunction by posting a photo of the prohibited design on Instagram	Instagram photo is advertising/promotional and violates the injunction	Photo was a charitable promotion and not advertising; removal shows compliance efforts	Court: Violation — Instagram photo constituted prohibited promotion on social media
Whether Mud Pie violated the preliminary injunction by using a point-of-sale card with the prohibited image at a trade show	Use of point-of-sale card at a major trade show is advertising/promotional and violates injunction	Card was pre-2015 stock used to facilitate orders, not advertising; Mud Pie took steps to remove such materials	Court: Violation — point-of-sale card displayed prohibited image and was used to facilitate orders; injunction breached
Whether Mud Pie showed inability to comply and what sanction is appropriate	(Implied) Mud Pie’s remedial efforts were reasonable; no punitive sanction warranted	Mud Pie argues it took substantial steps to purge images and compliance need be reasonable, not perfect	Court: Mud Pie failed to show detailed inability to comply; civil contempt found. Monetary sanction of $10,000 awarded (attorney fees also awarded to Skyros)

Key Cases Cited

Gompers v. Buck’s Stove & Range Co., 221 U.S. 418 (Sup. Ct.) (describing contempt power as essential to judicial independence)
United Mine Workers of Am. v. 330 U.S. 258 (Sup. Ct.) (civil contempt may compensate complainant and coerce compliance)
Gary’s Elec. Serv. Co. v. 340 F.3d 373 (6th Cir.) (burden to show present inability to comply; consider reasonableness of steps to comply)
CFE Racing Prods., Inc. v. BMF Wheels, Inc., 793 F.3d 571 (6th Cir.) (injunction enforcement via contempt derives from equitable powers)
Paterek v. Village of Armada, Mich., 801 F.3d 630 (6th Cir.) (ambiguities in prior order resolved in favor of the charged party)
Lorillard Tobacco Co. v. Amouri’s Grand Foods, Inc., 453 F.3d 377 (6th Cir.) (defendant’s state of mind relevant to mitigation of sanctions)
Rolex Watch U.S.A., Inc. v. Crowley, 74 F.3d 716 (6th Cir.) (standard for establishing contempt requires clear and convincing proof of violation)
McComb v. Jacksonville Paper Co., 336 U.S. 187 (Sup. Ct.) (good faith is not a defense in civil contempt proceedings)
Grace v. Center for Auto Safety, 72 F.3d 1236 (6th Cir.) (court decrees mean precisely what they say absent ambiguity)
Greene v. 437 F.3d 482 (6th Cir.) (good faith not a defense; contempt is remedial)