DIAMONDS DIRECT, L.C. dba LASHBROOK v. MANLY BANDS, et al.
Case No. 2:23-cv-00870
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
November 18, 2024
District Judge Ann Marie McIff Allen; Magistrate Judge Jared C. Bennett
ECF Document 45; PageID.1139
INTRODUCTION
This is a case about two wedding ring companies going through a messy divorce. Defendant Manly Bands was once a customer of Plaintiff Diamonds Direct, L.C. dba Lashbrook, but the relationship soured when, according to Lashbrook, Manly Bands began misappropriating its ring designs and product images. Lashbrook filed suit against Manly Bands, its Co-CEOs (Defendants Johnathan Ruggiero and Michelle Luchese), and its President (Defendant Marshall Smith), alleging copyright infringement, among other things. Defendants now ask this Court to dismiss the bulk of Lashbrook‘s First Amended Complaint (the “Complaint“) for failure to state a claim upon which relief can be granted (the “Motion“). For the reasons outlined in this order, the Court will grant Defendants’ Motion in part and deny it in part.
Lashbrook and Manly Bands both sell men‘s wedding rings.2 Whereas Lashbrook has been in the jewelry business for over two decades, Manly Bands arrived on the scene more recently.3 For a time, the two businesses had a complimentary relationship, as Manly Bands would source and resell products from Lashbrook.4 This relationship continued until 2021 when Lashbrook discovered in the course of negotiations between the parties that Manly Bands was manufacturing knockoffs of some of the most popular Lashbrook designs through a third party in China.5 Lashbrook confronted Manly Bands, suggesting that it was infringing Lashbrook‘s copyright in the designs.6 Manly Bands insisted that the designs were not protected by copyright but nonetheless agreed not to use them.7 Subsequently, however, when Manly Bands started making rings in its own facilities, Lashbrook again observed copycat products in the Manly Bands collection.8
Lashbrook became even more concerned when it reviewed the “Custom Ring Builder” tool on the Manly Bands website.9 The Custom Ring Builder is exactly what it sounds like—it allows customers to design their own rings by starting with a basic product and then incorporating one or
These discoveries prompted Lashbrook to file this lawsuit, in which it asserts claims for copyright infringement, unlawful falsification and removal of copyright management information (“CMI“), unfair competition under the Lanham Act, and various state-law violations.13 Defendants now seek dismissal of all but one of these claims.14
DISCUSSION & ANALYSIS
Defendants filed their Motion under
I. Copyright Infringement of the Ring Designs.
The Court will first analyze Lashbrook‘s copyright infringement claims regarding its ring designs. To establish a claim for copyright infringement, a plaintiff must show “ownership of a valid copyright” and “copying of constituent elements of the work that are original.” Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 361 (1991). Both these elements are important to the discussion here, so the Court begins by elaborating on these principles and how they apply in the context of a motion to dismiss.
a. Copyright Validity.
To qualify for copyright protection, a work “must be original,” meaning that it must be independently created and “possess[] more than a de minimis quantum of creativity.” Id. at 345. While the amount of creativity required for copyright protection is low, there are still some works that fall below that threshold, see id. at 362, and there are certain types of content for which copyright protection is prohibited as a matter of law. Most notably, copyright law protects “original expression” but not “the ideas embodied in that expression.” Blehm v. Jacobs, 702 F.3d 1193, 1201 (10th Cir. 2012) (quoting Gates Rubber Co. v. Bando Chem. Indus., 9 F.3d 823, 836 (10th Cir. 1993)). In other words, where an author‘s expression and the corresponding idea “cannot be separated, the work cannot be protected by copyright.” Country Kids ‘N City Slicks, Inc. v. Sheen, 77 F.3d 1280, 1285 (10th Cir. 1996). This principle “is somewhat elusive,” but applying it becomes a more manageable task when one is focused on the overarching purpose of copyright law—that is, “to achieve a proper balance between competition based on public ideas and incentive to produce original work.” Id. Thus, in analyzing works of authorship, courts attempt to circumscribe the copyright holder‘s monopoly so that it only extends to “stylistic choices” that are “not dictated by the underlying idea.” Blehm, 702 F.3d at 1201 (quotations omitted); see also id. at 1204 (explaining that the district court did not err in concluding that plaintiff did not have a valid copyright “over the idea of a cartoon figure holding a birthday cake, catching a Frisbee, skateboarding, or engaging in other various everyday activities“). This means that courts will not award copyright protection to aspects such as the “the size, shape and medium” of a work, Country Kids, 77 F.3d at 1285, “basic utilitarian functions,” id., and “familiar symbols or designs,”
To be sure, a work composed of basic, unprotectable elements may, as a whole, be worthy of copyright protection, see Feist, 499 U.S. at 348 (explaining that, while facts are not protected by copyright, a compilation of facts may warrant protection if it reflects “choices as to selection and arrangement” that “entail a minimal degree of creativity“); Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 110 (2d Cir. 2001) (holding that defendant failed to rebut the presumption that plaintiff‘s registered copyrights in jewelry designs were valid because the designs involved creative choices in the recasting and arrangement of basic jewelry elements), but simply combining a few “commonplace” elements is not enough, Satava v. Lowry, 323 F.3d 805, 811-12 (9th Cir. 2003) (holding that plaintiff‘s “selection of the clear glass, oblong shroud, bright colors, proportion, vertical orientation, and stereotyped jellyfish form [for his sculptures], considered together, lack[ed] the quantum of originality needed“). Instead, copyright protection will only be warranted “if those [unprotectable] elements are numerous enough and their selection and arrangement original enough.” Id.
Where the U.S. Copyright Office has rejected an application to register a work, a court is not required to defer to that decision in an infringement action regarding that work. See OddzOn Prods. v. Oman, 924 F.2d 346, 348 (D.C. Cir. 1991) (citing Atari Games Corp. v. Oman, 888 F.2d 878, 886-87, 889 (D.C. Cir. 1989) (Silberman, J., concurring) for the proposition that a court “is not obliged to defer to an agency‘s action or interpretation” in a copyright infringement action). Even so, the conclusions of the Copyright Office may be helpful in assessing copyrightability. See Garcia v. Google, Inc., 786 F.3d 733, 741-42 (9th Cir. 2015) (en banc) (crediting the Copyright Office‘s determination that plaintiff‘s short appearance in a film was not copyrightable).
b. Copying of Original Elements.
Once a plaintiff has established ownership of a valid copyright, it must next show that the defendant copied “constituent elements of the work that are original.” Feist, 499 U.S. at 361. This portion of the analysis has two steps. Initially, the plaintiff must establish that the defendant copied the work at issue “as a factual matter.” Savant Homes, Inc. v. Collins, 809 F.3d 1133, 1138 (10th Cir. 2016) (quoting Blehm, 702 F.3d at 1199). Defendants have not raised any dispute as to factual copying, so the Court‘s analysis of any alleged copying here will turn on the second step, at which “a plaintiff must demonstrate substantial similarity between the allegedly infringing work and the
In assessing substantial similarity, the Court employs the “abstraction-filtration-comparison” test by (1) separating the ideas underlying the work from the particular expression, (2) filtering out the unprotectable elements of the work, and then (3) comparing the protectable elements to the allegedly infringing work to see “whether the defendants have misappropriated substantial elements” of the plaintiff‘s work. Gates Rubber, 9 F.3d at 834. At the final step of this analysis, the Court determines “whether the accused work is so similar to the plaintiff‘s work that an ordinary reasonable person would conclude that the defendant unlawfully appropriated the plaintiff‘s protectable expression by taking material of substance and value.” Blehm, 702 F.3d at 1202 (quoting Country Kids, 77 F.3d at 1288). Thus, if the similarities between the plaintiff‘s work and the allegedly infringing work only involve unprotectable elements, then there is no infringement. See Blehm, 702 F.3d at 1204 (concluding that plaintiff did not have a successful infringement claim because the similarities between his cartoon figures and defendants’ only involved unprotectable common elements (e.g., arms, legs, faces, etc.) and “poses attributable to an associated activity“); Country Kids, 77 F.3d at 1285-87 (concluding that plaintiff did not have an infringement claim because its dolls were only similar to defendant‘s in their size, shape, and medium—attributes inherent in an unprotected idea).
c. Procedural Considerations.
Before analyzing Lashbrook‘s copyright claims for the ring designs, the Court must make some observations about how the procedural posture of this case affects its analysis. Copyrightability and substantial similarity are both mixed questions of law and fact. Zahourek Sys. v. Balanced Body Univ., LLC, 965 F.3d 1141
As the Tenth Circuit has explained, when, as here, the works at issue in a copyright case have been presented to the Court, “the legal effect of the works [is] determined by the works themselves rather than allegations in the complaint.” Jacobsen v. Deseret Book Co., 287 F.3d 936, 941-42 (10th Cir. 2002). This means that even where a plaintiff alleges that its work is copyrightable and that the defendant‘s work is substantially similar, a court may not need to defer to those allegations at the motion-to-dismiss stage if it can review the works. See id. at 941-48 (assessing whether defendant appropriated protected expression, as opposed to unprotected facts, from plaintiff‘s book in reviewing a district court‘s grant of a motion to dismiss); Peter F. Gaito Architecture, LLC v. Simone Dev. Corp., 602 F.3d 57, 64 (2d Cir. 2010) (holding that a district court did not err in granting defendants’ motion to dismiss because it was permitted to rule on substantial similarity at the pleading stage by visually comparing the works at issue, which were incorporated into plaintiff‘s complaint).
Of course, there may be some circumstances where it is inappropriate to assess copyrightability or substantial similarity in this posture, see, e.g., Peter F. Gaito, 602 F.3d at 64 (“[T]here can be certain instances of alleged copyright infringement where the question of substantial similarity cannot be addressed without the aid of discovery or expert testimony.“); Tracy Anderson Mind & Body, LLC v. Roup, No. CV 22-4735-RSWL-Ex, 2022 WL 17670418, at *1, 3 (C.D. Cal. Dec. 12, 2022) (concluding that it was inappropriate at the motion-to-dismiss stage
d. The Ring Designs.
Applying the principles discussed above, the Court concludes that Lashbrook‘s infringement claims regarding its ring designs should be dismissed because (1) most of the designs are not entitled to copyright protection and (2) even where the designs are entitled to copyright protection, the corresponding Manly Bands designs are not substantially similar.
Lashbrook alleges that Manly Bands has infringed the ring designs pictured above. The Copyright Office found that each of these designs was insufficiently creative to qualify for registration. Although these conclusions are not dispositive, the Court finds them persuasive. See Garcia, 786 F.3d at 741-42. Each of these designs reflects a combination of a few different materials, but choices as to medium are not protectable. See Country Kids, 77 F.3d at 1285. Many of the designs have a contrasting inlay or inner band, but such basic shapes are not protectable
Lashbrook contends—correctly—that designs made up of unprotectable elements may be copyrightable, but that is only the case where the elements are sufficiently “numerous” and creatively arranged. See Satava, 323 F.3d at 811-12. The designs pictured above do not meet this threshold. Instead, these designs are more like the sculptures at issue in Satava—they are simple works made from basic combinations of a few commonplace elements. See id. Indeed, if these designs were copyrightable, it is hard to image how anyone other than Lashbrook could, for example, make a wedding ring with a titanium exterior and an inner band made of hardwood. When an idea and an expression merge in this manner, copyright protection does not attach. See Country Kids, 77 F.3d at 1285. Thus, in the interest of preserving the competitive balance that copyright law seeks to achieve, see id., the Court grants Defendants’ Motion as to the above-pictured designs.
ii. There is no substantial similarity between Lashbrook‘s protectable designs and the allegedly infringing designs.
Each of the remaining designs underlying Lashbrook‘s claims is presented below to the left of its allegedly infringing counterpart. For the sake of argument, the Court will assume without deciding that each of these Lashbrook designs is subject to a valid copyright registration and proceed directly to the question of substantial similarity.15
The first of these designs is, at an abstract level, a steel and silver ring with woodgrain etching and a thin inlay, set slightly off center, with a contrasting color and a smooth texture. While these basic concepts are not protectable and may be filtered out of the analysis, the specific expression of the woodgrain etching reflects stylistic choices that may be copyrightable. See Blehm, 702 F.3d at 1201; Gates Rubber, 9 F.3d at 834. Even so, no reasonable person would conclude that Manly Bands appropriated this expression, as the woodgrain striations in the Manly Bands design are wider, more spaced, higher contrast, and oriented differently from those in the Lashbrook design. Accordingly, Lashbrook has failed to establish substantial similarity between these two designs. See Blehm, 702 F.3d at 1202.
At the abstraction level, this next Lashbrook design is a cobalt ring with an inner band made of hardwood and an engraved silhouette of a coniferous tree line. Filtering these ideas out,
Next, we have a steel ring with woodgrain etching and a cerakote interior band in a contrasting color. When these ideas and general concepts are filtered from the equation, we are left with the specific expression of the woodgrain etching. The Lashbrook and Manly Bands designs at issue here have some notable similarities. Specifically, both designs feature a prominent ovular grain pattern near the center of the outer band with emanating concentric striations. Even so, this type of pattern is an inherent feature in woodgrain and, therefore, not protectable. See Blehm, 702 F.3d at 1201. Thus, Lashbrook‘s expression of the woodgrain pattern should, at most, have a thin copyright that protects only against the closest approximations. See id. at 1202; Country Kids, 77 F.3d at 1285-87. With this principle in mind, a reasonable person would not see Lashbrook‘s protectable expression in the Manly Bands design, as there are key differences in the shape and orientation of the grains in the two designs. Therefore, these two designs are not substantially similar. See Blehm, 702 F.3d at 1202.
In the abstract, Lashbrook‘s next design is a titanium ring with an engraved mountain range design against a black backdrop. Filtering out these general concepts leaves the specific expression of the mountain range design for comparison to the allegedly infringing ring. Upon review, no reasonable observer would say that Manly Bands appropriated Lashbrook‘s expression because the Manly Bands iteration has less contrast, more sloped mountainsides, and sharper peaks in a more rugged arrangement. Thus, there is no substantial similarity between these two designs. See id.
At an abstract level, this next Lashbrook design is a cobalt ring with a wide meteorite inlay outlined in black. Filtering out these basic elements, the only remaining characteristic in the design is the finishing pattern on the inlay. Even assuming this pattern is the result of creative decision making and not dictated by Lashbrook‘s choice of material,16 the finish in the corresponding Manly Bands design is quite different in its markings, coloring, and overall orientation. Thus, no
In the abstract, the next Lashbrook design is a black zirconium ring with a wide meteorite inlay. Filtering out these general concepts, we are again left with the finishing on the inlay as the lone element that could be protectable.17 No reasonable person would observe Lashbrook‘s expression in the corresponding Manly Bands design, as the markings in the Manly Bands design are more sparse and more pronounced than those in the Lashbrook design. Thus, these two designs are not substantially similar. See Blehm, 702 F.3d at 1202.
Finally, we arrive at the final Lashbrook design, which is a black zirconium ring with engraving on the outer band depicting a waving American flag. This general concept, including the use of simple shapes like stars and stripes, is not protectable and may be filtered out of the
Thus, for the reasons laid out above, the Court will grant Defendants’ Motion as to Lashbrook‘s copyright infringement claims regarding the ring designs.
II. Vicarious and Contributory Liability.
Lashbrook asserts copyright infringement claims regarding the product images as well, contending that Manly Bands is subject to direct, vicarious, and contributory liability. Though Defendants are not asking the Court to dismiss the direct infringement claim, they argue that Lashbrook has failed to state claims for vicarious and contributory liability.
The theories of contributory liability and vicarious liability present two distinct ways in which a defendant may be held responsible for a third party‘s copyright infringement. See Greer, 83 F.4th at 1287. “[C]ontributory liability attaches when the defendant causes or materially contributes to another‘s infringing activities and knows of the infringement.” Id. (quoting Diversey v. Schmidly, 738 F.3d 1196, 1204 (10th Cir. 2013)). Thus, to establish a claim for contributory infringement, a plaintiff must show that (1) a third party committed direct infringement, (2) the defendant knew of the direct infringement, and (3) the defendant caused or materially contributed
Here, Defendants contend that Lashbrook has failed to plead any direct predicate infringement to support its claims for contributory and vicarious liability. The Complaint may not detail any specific third-party infringement, but it contains allegations that infringing copies of certain product images were made each time a consumer accessed the Custom Ring Builder. Thus, unless Defendants intend to assert that no consumer has ever accessed the Custom Ring Builder, Lashbrook has plausibly alleged a third-party infringement to support a finding of contributory and vicarious liability. See Greer, 83 F.4th at 1292; Intell. Rsrv., Inc., 75 F. Supp. 2d at 1294.
Turning to the other elements of contributory liability, the Complaint contains allegations that Manly Bands knew that infringing copies of the product images were made each time a consumer used the Custom Ring Builder, and that Manly Bands contributed to those infringements by making the product images available on its website. Thus, Lashbrook has pleaded each element of a contributory liability claim. See Greer, 83 F.4th at 1287.
III. Falsification and Removal of CMI.
The Court now turns to Lashbrook‘s claims for falsification and removal of CMI. The Copyright Act‘s definition of CMI encompasses various types of information that may be presented in connection with a copyrighted work, such as “[t]he name of, and other identifying information about, the copyright owner of the work.”
In Mango v. Buzzfeed, the Second Circuit interpreted
Here, Defendants do not dispute that Manly Bands, without Lashbrook‘s consent, intentionally removed CMI from the product images and, knowing that Lashbrook‘s CMI had been removed, distributed the images alongside its own CMI. Thus, the only outstanding issue for the CMI claims is whether Lashbrook has properly alleged the remaining intent and knowledge requirements of
As to
Defendants likewise argue that the
In addition, contrary to Defendants’ arguments, Stevens does not demand a different result. As an initial matter, nowhere in Stevens did the Ninth Circuit say that a third party must commit the predicate infringement for a
IV. Utah Unfair Competition.
Next, the Court will examine Lashbrook‘s claim under
Here, Lashbrook places its claim in the category of “malicious cyber activity,” which includes, among other things, “accessing a computer without authorization or exceeding authorized access” and “willfully communicating, delivering, or causing the transmission of a program, information, code, or command without authorization or exceeding authorized access.”
V. Lanham Act § 43(a).
Lashbrook has also raised a claim under
Here, Lashbrook has not alleged that the product images are non-functional. Thus, Lashbrook has not pleaded each required element under
VI. Utah Pattern of Unlawful Activities.
The Court now turns to Lashbrook‘s claim under
Here, Lashbrook asserts that Manly Bands has engaged in a pattern of unlawful activity because its alteration, appropriation, and use of the product images violates
Finally, Lashbrook asserts that Manly Bands, Ruggiero, Luchese, and Smith conspired with one another to engage in the various unlawful acts alleged in the Complaint. To establish a civil conspiracy claim under Utah law, a plaintiff must show “(1) a combination of two or more persons, (2) an object to be accomplished, (3) a meeting of the minds on the object or course of action, (4) one or more unlawful, overt acts, and (5) damages as a proximate result thereof.” Israel Pagan Estate v. Cannon, 746 P.2d 785, 790 (Utah Ct. App. 1987). Utah courts have recognized, however, that “it is not possible for a single legal entity consisting of the corporation and its agents to conspire with itself.” Tomlinson v. NCR Corp., 296 P.3d 760, 768 (Utah Ct. App. 2013), rev‘d on other grounds, 345 P.3d 523 (Utah 2014) (quoting McAndrew v. Lockheed Martin Corp., 206 F.3d 1031, 1036 (11th Cir. 2000)). This principle is sometimes referred to as the “intracorporate conspiracy doctrine.” See, e.g., Hatfield v. Cottages on 78th Comty. Ass‘n, No. 21-4035, 2022 WL 2452379, at *5 (10th Cir. July 6, 2022) (internal quotation marks omitted).
Here, Lashbrook‘s civil conspiracy claim is barred because Manly Bands, as a business entity, cannot conspire with its own Co-CEOs (Ruggiero and Luchese) and President (Smith). See Tomlinson, 296 P.3d at 768. Lashbrook urges the Court to apply an exception to this rule for situations where a business‘s agents act outside the scope of the entity‘s lawful purposes, but this exception would swallow the rule, as a civil conspiracy—by definition—involves at least one unlawful act. See Israel Pagan Estate, 746 P.2d at 790. Accordingly, the Court will grant Defendants’ Motion as to Lashbrook‘s civil conspiracy claim.
For the reasons discussed above, Defendants’ Motion (ECF No. 34) is GRANTED as to Counts 1 through 23 and Counts 30 through 33 of the Complaint (ECF No. 29) and DENIED as to Counts 24, 26, 28, and 29 of the Complaint. Because the Court is dismissing Count 33, the Clerk of Court is directed to terminate Ruggiero, Luchese, and Smith as parties. Lashbrook and Manly Bands are directed confer and file either a proposed scheduling order or a motion for a scheduling conference within 35 days of this order.
DATED this 18th day of November 2024.
Ann Marie McIff Allen
United States District Judge