794 F. Supp. 2d 634
E.D. Va.2011Background
- Tattoo Art, Inc. sued TAT International, LLC and Kirk Knapp in the E.D. Va. for copyright infringement and breach of a license agreement.
- The December 29, 2005 license granted TAT exclusive rights to 16 pages of Tattoo Art designs for airbrush stencils, covering 711 designs drawn from 24 registered Books.
- Royalties were 12.5% of Gross Sales, with quarterly statements and a minimum annual royalty of $6,000; books/works were not registered as compilations/derivative works by Tattoo Art.
- TAT initially paid some royalties but subsequently provided inaccurate 2006–2009 statements and stopped reporting after 2007, while continuing to sell Licensed Articles.
- In 2008–2009 TAT created Original Collection – recolored designs derived from Tattoo Art images – without plaintiff’s license and without paying royalties.
- Tattoo Art terminated the license on May 14, 2009 and sought injunctive relief and damages; court later held liability for infringement and awarded statutory damages, breach damages, prejudgment/postjudgment interest, and a permanent injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What is the proper measure of damages for infringement? | Tattoo Art seeks statutory damages for registered images and actual damages for unregistered ones. | Damages depend on whether works are compilations/derivative and on registration status. | Twenty-four separate statutory awards for 24 books; total statutory damages $480,000; no actual damages for unregistered works. |
| Were the infringements willful or innocent for purposes of statutory damages? | Defendants knowingly infringed by marketing Original Collection despite breaches. | No clear evidence of willful infringement; could be negligent or in-between. | Insufficient evidence to prove willfulness; damages falls within the standard statutory range (not enhanced). |
| Did the 'best efforts' clause authorize the Original Collection? | Article VIII supports continuous design efforts; infringement exceeded license. | Best efforts clause could justify some scope; not clearly illegal at the time. | Not a valid basis to authorize infringement; infringement found beyond the license; but this factor did not mandate willfulness. |
| Whether the injunction can extend to unregistered designs and how to frame relief? | Injunction should cover all Tattoo Art designs (registered and unregistered). | Scope should be limited to registered works; unregistered may be restricted only where authorized. | Court enjoins infringement of both registered and unregistered designs under controlling precedent; retains jurisdiction for enforcement. |
Key Cases Cited
- XOOM, Inc. v. Imageline, Inc., 323 F.3d 279 (4th Cir. 2003) (registration is not jurisdictional; affects whether damages/injunction cover registered vs unregistered works)
- Bryant v. Media Right Prods., Inc., 603 F.3d 135 (2d Cir. 2010) (rejects independent-economic-value test; one award per compilation for statutory damages)
- Gamma Audio & Video, Inc. v. Ean-Chea, 11 F.3d 1106 (1st Cir. 1993) (regulations permitting single registration for multiple works; analyses of compilation vs separate works)