SARL LOUIS FERAUD INTERNATIONAL, Plaintiff-Appellant,
S.A. Pierre Balmain, Consolidated-Plaintiff-Appellant,
v.
VIEWFINDER, INC., doing business as Firstview, Defendant-Appellee.
Docket No. 05-5927-CV.
United States Court of Appeals, Second Circuit.
Argued: January 30, 2007.
Decided: June 5, 2007.
James P. Duffy, III (John Bekian, on the brief), Berg & Duffy LLP, Lake Success, NY, for Appellants.
Steven J. Hyman (Paul H. Levinson and David Blasband, on the brief), McLaughlin & Stern LLP, New York, NY, for Appellee.
Wendy Seltzer, Brooklyn, N.Y. for Amici Curiae Electronic Frontier Foundation, Center for Democracy & Technology, and the American Civil Liberties Union in support of Appellee.
Before: POOLER and RAGGI, Circuit Judges, and SAND, District Judge.*
POOLER, Circuit Judge.
Plaintiffs-appellants Sarl Louis Feraud International ("Feraud") and S.A. Pierre Balmain ("Balmain") appeal from the September 29, 2005, order of the United States District Court for the Southern District of New York (Lynch, J.) dismissing plaintiffs' action to еnforce two judgments issued by the Tribunal de grande instance de Paris ("the French Judgments") against defendant-appellee Viewfinder, Inc. ("Viewfinder"). Plaintiffs challenge the district court's conclusion that enforcement of the French Judgments would be repugnant to the public policy of New York under N.Y. C.P.L.R. § 5304(b)(4) because it would violate Viewfinder's First Amendment rights. Because the district court did not conduct the full analysis necessary to reach this conclusion, we vacate its order and remand for further proceedings consistent with this opinion.
BACKGROUND
Plaintiffs-appellants Feraud and Balmain are French corporations that design high-fashion clothing and other items for women. Defendant-appellee Viewfinder is a Delaware corporation with a principal place of business in New York. Viewfinder operates a website called "firstView.com," on which it posts photographs of fashion shows held by designers around the world, including photographs of plaintiffs' fashion shows. Donald Ashby, the president of Viewfinder, is a professional fashion photographer. Viewfinder styles itsеlf as an Internet fashion magazine akin to the online version of Vogue. The firstView website contains both photographs of the current season's fashions, which may be viewed only upon subscription and payment of a fee, and photographs of past collections, which are available for free. An annual subscription to firstView costs $999. See http://www.firstview.com/subscribe_info.php (last visited June 1, 2007). Users can also view the content for one hour for $5.95. See http://www. firstview.com/subscribe.php (last visited June 1, 2007). Viewfinder does not sell clothing or designs.
In January 2001, Feraud and Balmain, along with several other design housеs, each filed suit against Viewfinder in the Tribunal de grande instance de Paris seeking money damages from Viewfinder for alleged unauthorized use of their intellectual property and unfair competition. These civil actions stemmed from Viewfinder displaying photographs of the designers' fashion shows, which revealed designs from their upcoming collection, on the firstView.com website. Viewfinder was served in New York in accordance with the terms of the Hague Convention on the Service of Judicial and Extrajudicial Documents in Civil or Cоmmercial Matters. Viewfinder failed to respond to the complaints, however, and therefore, on May 2, 2001, the French court issued default judgment against Viewfinder. The French court found that plaintiffs' "ready-to-wear" and "haute couture" collections from 1996-2001 were available on the firstView.com website. The court further found that Viewfinder's posting of these photographs of plaintiffs' designs was "without the necessary authorization" and thus "constitute[d] counterfeit and violation of royalties pursuant to articles L 716-1 and L 122-4 of the Intellectual [P]roperty Code." The court also found with respect to each of the plaintiffs that Viewfinder had committed "parasitism" under French law because it had "take[n] advantage of plaintiff's reputation and commercial efforts creating confusion between the two companies." The French court ordered Viewfinder to remove the offending photographs, and awarded damages of 500,000 francs for each plaintiff, costs of the action, and a fine ("astreinte") of 50,000 francs a day for each day Viewfinder failed to comply with the judgment.1
On October 6, 2003, Viewfinder appealed these judgments to the Cour d'appel de Paris, but subsequently withdrew its appeal without opposition after plaintiffs filed their brief. The French appellate court accordingly dismissed the appeal in February 2004. In December 2004, plaintiffs filed separate complaints in the United States District Court for the Southern District of New York to enforce the French Judgments. Plaintiffs sought enforcement under New York's Uniform Foreign Money Judgment Recognition Act, which provides that, subject to certain exceptions, foreign judgments that are "final, conclusive and enforceable" in the country where rendered are deemed conclusive between the parties and enforceable by U.S. courts. N.Y. C.P.L.R. §§ 5302, 5303. The district court consolidated these actions and also granted plaintiffs' request for an order of attachment. Federal jurisdiction is based on diversity of citizenship.
On January 18, 2005, Viewfinder filed a motion to dismiss or, in the alternative, a motion for summary judgment and a motion to vacate the attaсhment order. Viewfinder raised a variety of arguments in its motion papers, one of which was found meritorious by the district court.2 The district court found that enforcing the French Judgments would be repugnant to the public policy of New York because it would violate Viewfinder's First Amendment rights. See Sarl Louis Feraud Int'l v. Viewfinder Inc.,
DISCUSSION
The question presented by this appeal is whether the district court properly found that the French Judgments were unenforceable under New York law. In order to address this question, we begin with the language of the relevant state statute: "A foreign country judgment need not be recognized if ... the cause of action on which the judgment is based is repugnant to the public policy of this state." N.Y. C.P.L.R. § 5304(b)(4) (emphasis added). As the plain language of the statute makes clear, the first step in analyzing whether a judgment is unenforceable under Section 5304(b)(4) is to identify the "cause of action on which the judgment is based." The district court never identified the French statutes that underlie the judgments at issue in this case. Nor does Viewfinder do so in its submission. In fact, Viewfinder contends that "there is simply no way for this Court to know what substantive law was actually applied in France and on what grounds Defendant was found liable." See Br. of Appellee Viewfinder, at 48. We find this argument curious considering that Viewfinder, as the party invoking Section 5304(b), had the burden to prove that the public policy excеption applied. See, e.g., CIBC Mellon Trust Co. v. Mora Hotel Corp.,
We cannot second-guess the French court's finding that Viewfinder's actions were "without the necessary authorization." Viewfinder had the opportunity to dispute the factual basis of plaintiffs' claims in the French court, but it chose not to respond to the complaint. As this court has held: "By defaulting [in the foreign adjudication], a defendant ensures that a judgment will be entered against him, and assumes the risk that an irrevocable mistake of law or fact may underlie that judgment." Ackermann v. Levine,
The "public policy inquiry rarely results in refusal to enforce a judgment unless it is inherently vicious, wicked or immoral, and shocking to the prevailing moral sense." Sung Hwan Co. v. Rite Aid Corp.,
Laws that are antithetical to the First Amendment will create such a situation. Foreign judgments that impinge on First Amendment rights will be found to be "repugnant" to public policy. See, e.g., Bachchan v. India Abroad Publ'ns Inc.,
The district court's decision appears to rest on the assumption that if Viewfinder is a news magazine reporting on a public event, then it has an absolute First Amendment defense to any attempt to sanction such conduct. The First Amendment does not provide such categorical protection. Intellectual property laws co-exist with the First Amendment in this country, and the fact that an entity is a news publication engaging in speech activity does not, standing alone, relieve such entities of their obligation to obey intellectual property laws. While an entity's status as a news publication may be highly probative on certain relevant inquiries, such as whether that entity has a fair use defense to copyright infringement, it does not render that entity immune from liability under intellectual property laws. In rejecting a First Amendment defense to a lawsuit by a confidential informant against a newspaper under a promissory estoppel theory, the Supreme Court stated:
This case ... is ... controlled ... by the ... well-established line of decisions holding that generally applicable laws do not offend the First Amendment simply because their enforcement against the press has incidental effects on its ability to gather and report the news .... The press may not with impunity break and enter an office or dwelling to gather news .... The press, like others interested in publishing, may not publish copyrighted material without obeying the copyright laws.... It is, therefore, beyond dispute that [t]he publisher of a newspaper has no special immunity from the application of general laws. He has no special privilege to invade the rights and liberties of others. . . .
. . . .
. . . The dissenting opinions suggest that the press should not be subject to any law, including copyright law for example, which in any fashion or to any degree limits or restricts the press' right to report truthful information. The First Amendment does not grant the press such limitless protection.
Cohen v. Cowles Media Co.,
Rather, because Section 5304(b) requires courts to examine the cause of action on which the foreign judgment was based, the district court should have analyzed whether the intellectual property regime upon which the French Judgments were based impinged on rights protected by the First Amendment. This is consistent with the two-step analysis courts apply in deciding whether foreign libel judgments are repugnant to public policy: (1) identifying the protections deemed constitutionally mandatory for the defamatory sрeech at issue, and (2) determining whether the foreign libel laws provide comparable protection. See, e.g., Bachchan,
With regard to the protections provided by the First Amendmеnt for the unauthorized use of copyrighted material, this court has held that absent extraordinary circumstances, "the fair use doctrine encompasses all claims of first amendment in the copyright field." Twin Peaks Prods., Inc. v. Publ'ns Int'l, Ltd.,
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
17 U.S.C. § 107. As the Supreme Court has explained: "The task [of applying the fair use doctrine] is not to be simplified with bright-line rules, for the statute, like the doctrine it recognizes, calls for case-by-case analysis. . . . Nor may the four statutory factors be treated in isolation, one from another. All are to be explored, and the results weighed together, in light of the purposes of copyright." Campbell v. Acuff-Rose Music, Inc.,
In this case, the district court dispensed with the issue of fair use in a single sentence: "Similarly, even were plaintiffs' designs copyrightable, the copyright law similarly provides, as a matter of First Amendment necessity, a `fair use' exception for the publication of newsworthy matters." Viewfinder,
While both parties urge this court to resolve the issue of fair use, the record before us is insufficient to determine fair use as a matter of law. See Harper & Row,
The record is similarly unclear as to the manner of protection afforded plaintiffs' fashion shows by French law as well as the protections afforded to alleged infringers generally, and photographers specifically, under French law. The minutes of the French criminal judgment contained in the record6 suggest that photographers may well enjoy some protection. These minutes indicate that the "Law covers a right to the benefit of the fashion designers that coexists with that of the photographers." Memorandum from Jean-Marc Fedida to Don Ashby, June 17, 2005, at 3 (emphasis added). Moreover, Article L 122-5(3) of the French Intellectual Property Code permits unauthorized use of copyrighted material in limited circumstances similar to uses deemed "fair use" under United States law. See Code de la propriete intellectuelle art. L 122-5(3)(Fr.), available at http://www.legifrance.gouv.fr.7 Whether such protections arе sufficiently comparable to that required by the public policy of New York is a question best addressed in the first instance by the district court on a fully-developed record.
CONCLUSION
For the foregoing reasons, we vacate the judgment of the district court and remand for further proceedings consistent with this opinion. Because we remand for a new analysis by the district court, we do not address the other grounds of alleged error raised by plaintiffs.
Notes:
Notes
The Honorable Leonard B. Sand, United States District Judge for the Southern District of New York, sitting by designаtion
In the district court, Viewfinder argued that the French Judgments were not final because of theastreinte. Plaintiffs then commenced proceedings before the Juge de l'exécution of the French court to reduce the astreinte to a fixed amount. Viewfinder no longer contends that the French Judgments are not final.
On appeal, Viewfinder does not challenge the district court's rejection of its other grounds for dismissal
For this reason, we reject the argument advanced by Viewfinder and amici that holding Viewfinder liable under French copyright laws would bе repugnant to public policy because plaintiffs' dress designs are not copyrightable in the United States. While it is true that United States law does not extend copyright protection to dress designs,see Knitwaves, Inc. v. Lollytogs Ltd.,
We note that in some circumstances the repugnancy of the foreign judgment may be so patently obvious that a court need not engage in a detailed analysis of the foreign law at issue. This case, however, does not present such a scenario
On appeal, plaintiffs contend that the district court made a clearly errоneous factual finding that only a "few isolated photographs" were posted by Viewfinder. We do not read the district court's opinion to have made this finding. While it is true that the district court stated that "only isolated still photographs" were posted by Viewfinder, the district court made this reference when distinguishing the posting of photographs from the posting of a videotape of the entire fashion showSee Viewfinder,
Criminal proceedings were initiated in France against certain Viewfinder employees for the same conduct аt issue in this case. In June 2005, the French criminal court found each of the defendants not guilty
We reject Viewfinder's contention that the French Judgments violate public policy because they failed to analyze any "fair use" defense. Even in the United States, fair use is an affirmative defense that a defendant bears the burden of provingSee Infinity Broad. Corp. v. Kirkwood,
