D'Pergo Custom Guitars, Inc. v. Sweetwater Sound, Inc.D'Pergo Custom Guitars, Inc. v. Sweetwater Sound, Inc.
ORDER
D‘Pеrgo Custom Guitars, Inc. (“D‘Pergo“) brings this suit against Sweetwater Sound, Inc. (“Sweetwater“), alleging claims of copyright and trademark infringement and violations of the New Hampshire Consumer Protection Act (“CPA“). D‘Pergo alleges that Sweetwater used a copyrighted photograph of D‘Pergo‘s trademarked custom guitar necks and headstock to promote and sell Sweetwater products on Sweetwater‘s website. Sweetwater moves for summary judgment on all of D‘Pergo‘s claims. Doc. no. 111. D‘Pergo moves for summary judgment on its copyright infringement claim. Doc. no. 112. The opposing party objects to each motion.
STANDARD OF REVIEW
A movant is entitled to summary judgment if it “shows that there is no genuine dispute as to any material fact and [that it]
BACKGROUND1
D‘Pergo manufactures and sells custom guitars. In 2003, D‘Pergo‘s owner, Stefan Dapergolas, created a photograph showcasing a number of D‘Pergo‘s unique guitar necks and headstock, which D‘Pergo published to its website (the “Photograph“). D‘Pergo used the Photograph on its website frоm 2003 - 2006, after which it took down the Photograph and replaced it with professional photography.
Sweetwater is a retailer that sells musical instruments, including guitars, through its website. In 2004, Sweetwater copied the Photograph and published it on Sweetwater‘s website. More specifically, Sweetwater used the Photograph in its “Electric Guitar Buying Guide” (the “Buying Guide“), in the section titled “Guitar necks explained.”2 The end of the Buying Guide features a number of guitars from various manufacturers for purchase (not D‘Pergo‘s), as well as a hyperlink to “Shop for Electric Guitars.”
In January 2015, Dapergolas learned that Sweetwater was using the Photograph in the Buying Guide. D‘Pergo later applied for and was granted a copyright registration for the Photograph from the Copyright Office.
In January 2016, D‘Pergo contacted Sweetwater about the Photograph and Sweetwater removed the Photograph from its website. D‘Pergo subsequently tradеmarked its headstock design depicted in the Photograph.
D‘Pergo then brought this lawsuit in December 2017. It asserts five claims: (1) copyright infringement in violation of the Copyright Act (Count I); (2) unfair competition in violation of the CPA (Count II); (3) deceptive business practices in violation of the CPA (Count III); (4) false designation of origin and unfair competition in violation of the Lanham Act (Count IV); and (5) trademark infringement in violation of the Lanham Act (Count V).
DISCUSSION
Sweetwater moves for summary judgment on all of D‘Pergo‘s claims. D‘Pergo moves for summary judgment on its copyright infringement claim in Count I. The opposing party objects to each motion.
I. Sweetwater‘s Motion
Sweetwater states in its motion for summary judgment that it concedes it used the Photograph without permission in the Buying Guide. It contends, however, that it is entitled to summary judgment on D‘Pergo‘s claims for various reasons. The court addresses each claim in turn.
“To establish copyright infringement under the Copyright Act, ‘two elements must be proven: 1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.‘” Johnson v. Gordon, 409 F.3d 12, 17 (1st Cir. 2005) (quoting Feist Publ‘ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)). Once a plaintiff establishes both elements, it may seek to recover statutory damages, actual damages, and infringing profits under the Copyright Act. See
Sweetwater does not address the elements of a copyright infringement claim in its motion. Instead, it argues that it is entitled to summary judgment because D‘Pergo cannot recover damages for that claim.
As Sweetwater notes, the court held in a previous order that D‘Pergo is not entitled to statutory damages because D‘Pergo did not register its copyright before Sweetwater‘s alleged infringement began. See doc. no. 43 at 8 (citing
1. Actual damages
In a copyright infringement case, actual damages “consist of all income and profits lost as a consequence of the infringement.” Bruce v. Weekly World News, Inc., 310 F.3d 25, 28 (1st Cir. 2002). In addition, in “some cases, a hypothetical license fee is a permissible basis for determining a plaintiff‘s ‘actual damages’ arising from an infringement.”3 Real View, LLC. v. 20-20 Techs., Inc., 811 F. Supp. 2d 553, 556 (D. Mass. 2011); see also 4 Melville B. Nimmer & David Nimmer, Nimmer on Copyright, §§ 14.02[A]-[B] (1999). A “reasonable licensing fee is generally computed by determining the fair market value. ‘Fair market value’ is defined as the reasonable license fee on which a willing buyer and a willing seller would have agreed for the use taken by the infringer.” World Wide Video, 2009 WL 10693580, at *1 (internal citations and quotation marks omitted).
Sweetwater argues that there is no evidence in the record that D‘Pergo suffered actual damages. Specifically, Sweetwater states that D‘Pergo‘s claim for actual damages is based on a hypothetical license fee, but that it cannot recover such damages because: (1) it cannot prove that anyone would have paid for a license to use the Photograph; and (2) D‘Pergo‘s damages expert, Jeffrey Sedlik, relies on improper calculations and assumptions to establish a hypothetical license fee.
As discussed in the court‘s order denying Sweetwater‘s motion to exclude Sedlik, see doc. no. 138, D‘Pergо may offer Sedlik‘s opinion at trial. Sweetwater is entitled to cross-examine Sedlik about his opinion and methodology, and present the opinion of its rebuttal expert, Ellen Boughn. Because Sedlik‘s opinion is not excluded, the court must take it into account in ruling on Sweetwater‘s motion. Viewing the evidence in the light most favorable to D‘Pergo, there is a genuine issue of material fact as to whether D‘Pergo suffered actual damages from Sweеtwater‘s copyright infringement. Therefore, the court denies Sweetwater‘s motion for summary judgment as to D‘Pergo‘s request for actual damages for its copyright infringement claim.
A copyright owner is entitled to recover “any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.”
The parties disagree as to the burden the Copyright Act places on a plaintiff to prove infringing profits. Sweetwater argues that the majority of courts have held that
D‘Pergo counters that Sweetwater overstates a plaintiff‘s burden under
Regardless of whether a plaintiff must meet an initial burden to a show a “legally sufficient causal link” between the infringement and a defendant‘s gross revenues, viewing the evidence in the light most favorable to D‘Pergo, there is a genuine issue of material fact as to whether D‘Pergo can establish such a nexus. D‘Pergo does not merely point tо Sweetwater‘s gross revenues and put the burden on Sweetwater to prove that its profits are not attributable to the infringement. Rather, through its expert, Dr. Michael Einhorn, D‘Pergo offers as evidence of Sweetwater‘s gross revenues only the profits Sweetwater purportedly derived from customers who purchased electric guitars online after viewing the Buying Guide, which contained the Photograph.4 See doc. no. 115-2 at 7-11.
B. Lanham Act Claims (Counts IV and V)
Counts IV and V allege claims for violation of
(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which-
(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by аnother person . . .
Shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
The “Lanham Act extends protection not only to words and symbols, but also to ‘trade dress,’ defined as the design and appearance of a product together with the elements making up the overall image that serves to identify the product presented to the consumer.” Yankee Candle Co. v. Bridgewater Candle Co., LLC, 259 F.3d 25, 37-38 (1st Cir. 2001) (citing cases) (internal quotation marks omitted). “The primary purpose of trade dress protection is to protect that which identifies a product‘s source.” Id. at 38; see also I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27, 35 (1st Cir. 1998).
D‘Pergo has consistently represented thаt it seeks to recover from Sweetwater for infringement of its trademark, not its trade dress. Based on these representations, Sweetwater moves for summary judgment on Counts IV and V, contending that the Headstock Design Trademark is not a “word, term, name, symbol, or device, or any combination thereof” and, therefore, is not entitled to trademark protection. The court agrees. And because D‘Pergo has waived a trade
The Headstock Design Trademark‘s registration states that the “mark consists of a product configuration consisting of a two dimensional guitar headstock.” Doc. no. 44-4 at 2. Thus, as the registration shows and D‘Pergo alleges in its amended complaint, the Headstock Design Trademark protects D‘Pergo‘s “distinctive design mark . . . for use with electric guitars.” Doc. no. 45 at 21. D‘Pergo alleges in the amended complaint that “the Headstock Design Trademark has become exclusively identified with” D‘Pergo. Id. at 67.
D‘Pergo concedes that its Headstock Design Trademark, which protects the “design” and “product configuration” of its guitar headstock, can be classified as trade dress. See doc. no. 125 at 23 (stating that D‘Pergo could have brought trade dress infringement claims). D‘Pergo argues, however, that even if the Headstock Design Trademark could be entitled to protection as a trade dress, it is also еntitled to protection as a trademark.
In support of its argument, D‘Pergo cites the Supreme Court‘s decision in Qualitex Co. v. Jacobson Prod. Co., 514 U.S. 159 (1995). In Qualitex, the Supreme Court stated:
The language of the Lanham Act describes that universe in the broadest of terms. It says that trademarks “includ[e] any word, name, symbol, or device, or any combination thereof.” § 1127. Since human beings might use as a “symbol” or “device” almost anything at all that is capable of carrying meaning, this language, read literally, is not restrictive.
Id. at 162. D‘Pergo notes that the United States Patent and Trademark Office (“USPTO“) has authorized trademarks for the designs of various shapes, including the Coca-Cola bottle (Registration No. 696147), which shows that its headstock design can be protected under trademark, rather than trade dress, law.
The Supreme Court‘s holding in Qualitex does not support D‘Pergo‘s contention that it can proceed under a theory of trademark, rather than trade dress, infringement. As Sweetwater notes, the Lanham Act does not define trade drеss. Rather, a cause of action for trade dress infringement arose because courts held that the Lanham Act “embrace[d] not just word marks, such as ‘Nike,’ and symbol marks, such as Nike‘s ‘swoosh’ symbol, but also ‘trade dress‘—a category that encompass[es] the design of a product.” Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 209 (2000). In other words, trade dress became protectable under the Lanham Act because courts assumed “that trade dress constitutes a ‘symbol’ or ‘device’ for purposes of the relevant sections.” Id. D‘Pergo offers no persuasive support for its theory that it can protect its “product design” and “configuration“—categories that courts have consistently held are protectable under the Lanham Act as trade dress—under a theory of trademark infringement. Id.; Tracey Tooker & TT Ltd., Inc. v. Whitworth, 212 F. Supp. 3d 429, 434 (S.D.N.Y. 2016) (noting that the Lanham Act “protects trade dress, which includes ‘what is at issue in this case: the design or configuration of the product itself.‘” (quoting Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 114 (2d Cir. 2001))); see also 1 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 8:1 (5th ed. 2019) (stating that trade dress encompasses “the shape and design of the product itself“).
D‘Pergo‘s argument concerning the Coca-Cola bottle‘s shape does not support its theory. Although Coca-Cola
To be clear, there is no dispute that the Lanham Act protects trade dress, and that D‘Pergo may have been able to recover under a theory of trade dress infringemеnt. But, as the court has noted in prior orders and D‘Pergo does not dispute, D‘Pergo has waived any claim for trade dress infringement in this case. See, e.g., doc. no. 92 at 4-7. D‘Pergo‘s Headstock Design Trademark, which protects the “design” and “product configuration” of its guitar headstock, is protectable as trade dress, not a trademark. Therefore, Sweetwater is entitled to summary judgment on Counts IV and V.
C. Consumer Protection Act Claims (Counts II and III)
D‘Pergo asserts two claims under the New Hampshire Consumer Prоtection Act,
It shall be unlawful for any person to use any unfair method of competition or any unfair or deceptive act or practice in the conduct of any trade or commerce within this state. Such unfair method of competition or unfair or deceptive act or practice shall include, but is not limited to, the following:
I. Passing off goods or services as those of another;
II. Causing likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services.
D‘Pergo alleges in Count II that Sweetwater‘s use of the Photograph in the Buying Guide effectively passed off D‘Pergo‘s
Sweetwater contends that D‘Pergo‘s CPA claims are identical to its Lanham Act claims. It argues that because it is entitled to summary judgment on D‘Pergo‘s Lanham Act claims, it is also entitled to judgment on the CPA claims.
Sweetwater is mistaken. The CPA is “a comprehensive statute whose language indicates that it should be given broad sweep.” Ne. Lumber Mfrs. Assoc. v. N. States Pallet Co., 710 F. Supp. 2d 179, 188 (D.N.H. 2010). By “its plain language, the scope of unlawful activity covered by the CPA is broader than the trademark infringement claims governed by the Lanham Act.” Id. Thus, evеn when a defendant‘s conduct may be insufficient to establish a claim under the Lanham Act, it may still violate the CPA. Id. (granting plaintiff‘s motion for summary judgment on its CPA claim but denying plaintiff‘s motion as to its Lanham Act claim because “[r]egardless of what the scope of [plaintiff‘s] marks are,” defendant passed off his goods as having approval or certification that they did not have).
For these reasons, Sweetwater is not entitled to summary judgment on D‘Pergo‘s CPA claims.
D. Summary
Sweetwater is entitled to summary judgment on D‘Pergo‘s claims for trademark infringement (Counts IV and V). It is not entitled to summary judgment as to D‘Pergo‘s claim for violation of the Copyright Act (Count I) or the CPA (Counts II and III).
II. D‘Pergo‘s Motion for Partial Summary Judgment
D‘Pergo moves for summary judgment on its claim for copyright infringement in Count I. As discussed supra, to prevail on a copyright infringement claim under the Copyright Act, a plaintiff must prove two elements: “1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.” Johnson 409 F.3d at 17 (internal quotation marks and citation omitted).
D‘Pergo asserts that there is no genuine issue of material fact that it has established both elements of a copyright infringement claim. In response, Sweetwater does not dispute that assertion. Instead, it argues that D‘Pergo is not entitled to summary judgment on Count I because there is a genuine issue of material fact as to whether D‘Pergo is entitled to damages for that claim.
Although, as discussed supra, the extent of D‘Pergo‘s damages as to Count I is an open question, that fact does not preclude the entry of summary judgment in favor of D‘Pergo as to liability for purposes of that claim. To establish liability for copyright infringement, a plaintiff must prove two elements. Once a plaintiff establishes both elements, it may seek to recover damages under the Copyright Act. See
Because the undisputed facts in the record show that Sweetwater infringed D‘Pergo‘s copyright, D‘Pergo is entitled to summary judgment on Count I.8 Whether and to what extent D‘Pergo is entitled to damages on that claim is a question that, for
CONCLUSION
For the foregoing reasons, Sweetwater‘s motion for summary judgment (doc. no. 111) is granted as to Counts IV and V but is otherwise denied. D‘Pergo‘s motion for summary judgment as to Count I (doc. no. 112) is granted.
SO ORDERED.
Landya McCafferty
United States District Judge
January 6, 2020
cc: Counsel of Record