Unicolors, Inc. v. Urban Outfitters, Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNICOLORS, INC., a California No. 15-55507
Corporation,
Plaintiff-Appellee, D.C. No.
2:14-cv-01029-
v. SJO-VBK
URBAN OUTFITTERS, INC., a
California Corporation, individually OPINION
and Beneficiary and Heir to the
Estate of Free People, LLC,
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
S. James Otero, District Judge, Presiding
Argued and Submitted January 13, 2017
Pasadena, California
Filed April 3, 2017
Before: Richard C. Tallman and Michelle T. Friedland,
Circuit Judges, and William Horsley Orrick *,
District Judge.
Opinion by Judge Orrick
*
The Honorable William H. Orrick, United States District Judge for
the Northern District of California, sitting by designation.
2 UNICOLORS V. URBAN OUTFITTERS
SUMMARY **
Copyright
The panel affirmed the district court’s judgment in favor
of the plaintiff in a copyright infringement case involving
fabric designs.
Affirming the district court’s summary judgment in
favor of the plaintiff on the issue of copyright infringement,
the panel held that the district court did not err in its
application of the subjective “intrinsic test.” The panel held
that where the extrinsic similarity of two works is so strong
that the works are near duplicates save for superficial
differences, the district court may properly conclude that no
reasonable jury could find that the works are not
substantially similar in their overall concept and feel. The
panel also held that it was permissible to infer copying in this
case, even absent evidence of access.
The panel held that the district court did not err in
concluding, on summary judgment, that the plaintiff had
validly registered a fabric design as part of a collection.
Affirming the district court’s judgment after a jury trial
on the issues of willful infringement and damages, the panel
held that substantial evidence supported the jury’s verdict
because the evidence showed that the defendant acted with
reckless disregard for the possibility that the fabric it
sampled was protected by copyright.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
UNICOLORS V. URBAN OUTFITTERS 3
The panel addressed additional issues in a concurrently
filed memorandum disposition.
COUNSEL
Stephanie P. Alexander (argued), Tara L. Martin, and Miles
D. Scully, Gordon & Rees LLP, Irvine, California, for
Defendants-Appellants.
Scott Alan Burroughs (argued), Trevor W. Barrett, and
Stephen M. Doniger, Doniger Burroughs, Venice,
California, for Plaintiff-Appellee.
OPINION
ORRICK, District Judge:
INTRODUCTION
Urban Outfitters, Inc. and Century 21 Department
Stores, LLC (collectively “Urban”) appeal the judgment
against them in a copyright infringement case involving
fabric designs. The district court granted plaintiff Unicolors
Inc.’s motion for summary judgment on the issue of
copyright infringement and, following a two-day trial, a jury
found Urban liable for willful infringement. We reject
Urban’s arguments that the district court erred in its
application of the subjective “intrinsic test” and in its
conclusion that Unicolors had validly registered the Subject
Design, and further conclude that there was substantial
4 UNICOLORS V. URBAN OUTFITTERS
evidence to support the jury’s verdict for willful
infringement. 1 We thus affirm.
I. BACKGROUND
Unicolors is a Los Angeles company in the business of
designing and selling fabrics to customers in the apparel
markets. Unicolors typically registers copyrights in its
designs to protect its investment and maintain a competitive
advantage in its artwork.
In September 2008, Unicolors purchased the intellectual
property rights to an original piece of work named “QQ-
692”created by art studio Milk Print, LLC. It used a
computer drafting utility program to reformat and make
minor alterations to the QQ-692 design so that it could be
printed onto bolts of fabric. It renamed this derivative design
“PE1130” (“Subject Design”). On November 26, 2008,
Unicolors registered its “Flower 2008” collection with the
Copyright Office. Under “Contents Titles,” Unicolors listed
several designs, including QQ-692, and it attached an image
of the design with the label “QQ-692 (PE1130).” Under
“Material excluded from this claim,” the application listed
“Milk Print: QQ-692.” Between 2008 and 2011, Unicolors
sold approximately 14,000 yards of fabric bearing the
Subject Design to customers in the United States.
Urban Outfitters is a specialty retail company operating
over 500 stores worldwide. Century 21 is a department store
that purchases products from Urban Outfitters. In late 2010,
Urban Outfitters developed a women’s dress (the “Accused
1
In a memorandum disposition filed concurrently with this
published opinion, we also reject Urban’s arguments that the district
court improperly relied on inadmissible evidence and abused its
discretion when it ruled on a variety of evidentiary and procedural
matters.
UNICOLORS V. URBAN OUTFITTERS 5
Dress”) with a fabric design similar to the Subject Design.
Unicolors sent a cease-and-desist letter to Urban’s counsel
two years later, asserting that the Accused Dress infringed
Unicolors’s PE1130 design. Unicolors then filed suit against
Urban alleging copyright infringement of the Subject
Design.
At summary judgment, the district court concluded that
both defendants were liable for copyright infringement. The
court held that Unicolors owns and properly registered a
copyright in the Subject Design and that Urban created and
sold garments bearing a design that was substantially similar
to the Subject Design.
Following a two-day trial on the issues of willfulness and
damages, a jury found that Urban had willfully infringed
Unicolors’s copyright in the Subject Design and awarded
$164,400 in damages. The court then granted Unicolors
$366,910.17 in fees and costs. Urban timely appealed the
district court’s grant of summary judgment and the jury’s
finding of willfulness.
II. STANDARD OF REVIEW
We review the district court’s grant of summary
judgment de novo. Benay v. Warner Bros. Entm’t, Inc.,
607 F.3d 620, 624 (9th Cir. 2010). In reviewing the jury’s
verdict, we ask whether the verdict is supported by
substantial evidence. See Harper v. City of Los Angeles,
533 F.3d 1010, 1021 (9th Cir. 2008). “A jury’s verdict must
be upheld if it is supported by substantial evidence, which is
evidence adequate to support the jury’s conclusion, even if
it is also possible to draw a contrary conclusion.” Id.(quoting Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir. 2002)).
6 UNICOLORS V. URBAN OUTFITTERS
III. DISCUSSION
“To prove copyright infringement, a plaintiff must
demonstrate (1) ownership of the allegedly infringed work
and (2) copying of the protected elements of the work by the
defendant.” Pasillas v. McDonald’s Corp., 927 F.2d 440,
442 (9th Cir. 1991). Urban asserts that the district court
erred in concluding at summary judgment that these
elements were met.
A. Copying
A plaintiff must show “copying” of a protected work to
prove copyright infringement. Id. If there is no direct
evidence of copying, a plaintiff may prove this element
through circumstantial evidence that (1) the defendant had
access to the copyrighted work prior to the creation of
defendant’s work and (2) there is substantial similarity of the
general ideas and expression between the copyrighted work
and the defendant’s work. Sid & Marty Krofft Television
Prods., Inc. v. McDonald’s Corp., 562 F.2d 1157, 1162 (9th
Cir. 1977), superseded on other grounds by 17 U.S.C.
§ 504(b). Circumstantial evidence of access is generally
shown through either evidence of a “chain of events . . .
between the plaintiff’s work and defendants’ access to that
work” or evidence that “the plaintiff’s work has been widely
disseminated.” Three Boys Music Corp. v. Bolton, 212 F.3d
477, 482 (9th Cir. 2000). If there is no evidence of access, a
“striking similarity” between the works may allow an
inference of copying. Baxter v. MCA, Inc., 812 F.2d 421,
423 (9th Cir. 1987).
In assessing whether particular works are substantially
similar, or strikingly similar, this Circuit applies a two-part
analysis: the extrinsic test and the intrinsic test. Three Boys
Music Corp., 212 F.3d at 485. The extrinsic test requires
UNICOLORS V. URBAN OUTFITTERS 7
plaintiffs to show overlap of “concrete elements based on
objective criteria,” id., while the intrinsic test is subjective
and asks “whether the ordinary, reasonable person would
find ‘the total concept and feel of the works’ to be
substantially similar,” Pasillas, 927 F.2d at 442 (quoting
Krofft, 562 F.2d at 1164). Because “substantial similarity is
usually an extremely close issue of fact . . . summary
judgment has been disfavored in cases involving intellectual
property.” Litchfield v. Spielberg, 736 F.2d 1352, 1355 (9th
Cir. 1984). However, “[a] grant of summary judgment for
[the] plaintiff is proper where works are so overwhelmingly
identical that the possibility of independent creation is
precluded.” Twentieth Century-Fox Film Corp. v. MCA,
Inc., 715 F.2d 1327, 1330 (9th Cir. 1983).
1. The District Court’s Substantial Similarity
Analysis
At summary judgment in this case, the evidence
regarding access was relatively limited. Unicolors conceded
that it could not show a chain of events linking its design to
Urban, but it contended that the design had been widely
disseminated because it had sold 14,000 yards of the fabric
bearing the design for a three-year period prior to Urban’s
creation of the Accused Dress. Alternatively, Unicolors
argued that the court could grant summary judgment because
the Subject Design and Accused Dress were so strikingly
similar that Urban’s design could only be attributed to
copying.
The district court determined that there was insufficient
evidence to conclude on summary judgment that the Subject
Design had been widely disseminated. It focused instead on
whether the designs were strikingly similar. The court
reviewed Exhibits 3 and 5 submitted by Unicolors, which
showed both the Subject Design as it was submitted to the
8 UNICOLORS V. URBAN OUTFITTERS
Copyright Office and photos of the Accused Dress. In
applying both the extrinsic and intrinsic tests, the court
analyzed the designs as follows:
Extrinsically, [the two designs] both feature
crowded arrangements of splayed floral or
feather motifs. The presentations of the petal
groups, the overlays, shading and layout are
all nearly identical. The floral or feather
motifs have nearly identical cracks and
spaces. Both designs use ombre colors. The
two designs have some minor differences: for
example, the color palettes are different, with
the Subject Design having a red-purple-white
palette on a black background and the
Accused Dress[] having a blue-yellow palette
on a dark blue background. However those
differences are little more than artifacts from
imperfect copying of the fabric or minor
modification.
The intrinsic test also suggests that the two
designs are extremely similar. Looking at
two designs as a whole, the arrangements,
shapes and details of all the floral or feather
motifs are almost exactly the same. The
colors are different, and only the Subject
Design has white parts outlined in a different
color, but otherwise the arrangement, shape,
and details of all the floral or feather motifs
appear to be almost exactly the same.
Unicolors, Inc. v. Urban Outfitters, Inc., No. CV 14-01029
SJO (VBKx), 2015 WL 12733470, at *7 (C.D. Cal. Feb. 17,
UNICOLORS V. URBAN OUTFITTERS 9
2015). The court concluded that “the design on the Accused
Dress is substantially similar to [the] Subject Design.” Id.
2. The “Intrinsic Test”
Urban asserts that the district court erred by applying the
subjective “intrinsic test.” Urban argues that only a jury may
apply the intrinsic test, and that because a plaintiff must
satisfy both the extrinsic and intrinsic tests to prove copying,
copyright cases such as this one cannot be resolved at
summary judgment. Its position has been adopted by one
district court. See Reno-Tahoe Specialty, Inc. v. Mungchi,
Inc., No. 2:12-cv-01051-GMN-VCF, 2014 WL 553181, at
*8 (D. Nev. Feb. 10, 2014). But Urban’s position cannot be
reconciled with our prior recognition that, in exceptional
cases, works may be so identical that summary judgment in
favor of a plaintiff is warranted. Twentieth Century-Fox
Film, 715 F.2d at 1330 (“A grant of summary judgment for
plaintiff is proper where works are so overwhelmingly
identical that the possibility of independent creation is
precluded.”). This is one of those exceptional cases.
The district court detailed the various objective factors
and elements that are common between the Subject Design
and Accused Dress. It correctly observed that both the
Subject Design and Accused Dress include complex patterns
with nearly identical orientation, spacing, and grouping of
complicated florets and feathers. Although the colors vary
slightly, each has an ombre color pattern and uses color in
similar ways for highlight and contrast. Given the intricacy
of the designs and the objective overlap between them, the
district court properly concluded that the works are “so
overwhelmingly identical that the possibility of independent
creation is precluded.” Id.10 UNICOLORS V. URBAN OUTFITTERS
Moreover, the cases relied upon by Urban are
distinguishable. Urban relies primarily on L.A. Printex
Indus., Inc. v. Aeropostale, Inc., 676 F.3d 841, 852 (9th Cir.
2012), and Funky Films, Inc. v. Time Warner Entm’t Co.,
L.P., 462 F.3d 1072, 1077 (9th Cir. 2006), but neither of
those cases dealt with works that were virtually identical. In
each, the trial court granted summary judgment for
defendants because it found that no reasonable jury could
find the works substantially similar. In L.A. Printex, after
conducting an independent review of the works, we
determined that there were sufficient objective similarities
between the works to create a genuine dispute of material
fact under the extrinsic test. 676 F.3d at 852. We then held
that “in light of our conclusion that the competing designs
present a triable issue of fact under the extrinsic test . . . the
issue of substantial similarity must go to the jury.” Id. at
852. In Funky Films, we affirmed the district court’s grant
of summary judgment, concluding that there were
insufficient objective similarities between the works to meet
the extrinsic test and, as a result, to find substantial
similarity. 462 F.3d at 1081. The rationale behind these
decisions is clear: if the court concludes that there are
sufficient articulable objective similarities between the two
works for plaintiffs to meet the extrinsic test, it is
inappropriate for the court to then make a subjective
determination that the works, nevertheless, are not
substantially similar in their total concept and feel. In other
words, once the objective threshold is met, it is the role of
the jury to make a nuanced subjective determination under
the intrinsic test.
However, L.A. Printex and Funky Films dealt with
situations in which there was a triable issue about whether
the works were similar enough to suggest copying, not a
situation in which the works are “so overwhelmingly
UNICOLORS V. URBAN OUTFITTERS 11
identical that the possibility of independent creation is
precluded.” Twentieth Century-Fox Film, 715 F.2d at 1330.
Where the extrinsic similarity is so strong that the works are
near duplicates save for superficial differences, the court
may properly conclude that no reasonable jury could find
that the works are not substantially similar in their overall
concept and feel. In such a case, the court need not delve
into a complex subjective analysis of the works to assess
substantial similarity and does not risk supplanting the jury’s
subjective interpretation with its own.
Allowing district courts to grant summary judgment for
plaintiffs in copyright cases plays an important role in
preserving the effect and weight of Rule 56. When the works
are “so overwhelmingly identical that the possibility of
independent creation is precluded,” id., there is simply “no
genuine dispute as to any material fact,” Fed. R. Civ. P.
56(a). As we have previously emphasized, “if Rule 56 is to
be of any effect, summary judgment must be granted in
certain situations.” Twentieth Century-Fox Film, 715 F.2d
at 1330 n.6. If courts were never permitted to grant summary
judgment in favor of plaintiffs on the issue of copying, even
for identical works, the effect of Rule 56 would be
substantially diluted.
We conclude that a district court may grant summary
judgment for plaintiffs on the issue of copying when the
works are so overwhelmingly similar that the possibility of
independent creation is precluded. The works at issue in this
case meet this standard. The objective similarities between
the works are stark: the shapes, motifs, arrangements,
spacing, and colors of the images in each design are nearly
identical. Because of the decisive objective overlap between
the works, no reasonable juror could conclude under the
intrinsic test that the works are not substantially similar in
12 UNICOLORS V. URBAN OUTFITTERS
total concept and feel. Therefore, the district court properly
granted summary judgment. 2
3. Finding “copying” when there is no evidence of
access
Urban asserts that even if a court finds striking similarity,
it cannot find “copying” without some evidence of access.
This argument is in direct conflict with the statement in
Baxter that “[a]bsent evidence of access, a ‘striking
similarity’ between the works may give rise to a permissible
inference of copying.” Baxter, 812 F.2d at 423 (citing Selle
v. Gibb, 741 F.2d 896, 901 (7th Cir. 1984)).
Urban attempts to dismiss Baxter and focuses on the
Seventh Circuit’s decision in Selle v. Gibb, in which the
court explained that while striking similarity can lead to an
inference of copying, “striking similarity is just one piece of
circumstantial evidence tending to show access and must not
be considered in isolation.” 741 F.2d at 901. Urban
mistakenly asserts that Selle establishes that both access and
striking similarity are required to find copying. In Selle, the
Seventh Circuit reviewed whether the district court had
properly directed verdict for the defendants, overturning the
jury’s decision that plaintiff Ronald Selle’s song “Let it End”
infringed the Bee Gee’s song “How Deep Is Your Love.” Id.
at 896. In its discussion, the court expressed skepticism that
a finding of “striking similarity” on its own could establish
copying and suggested that plaintiffs must, at a minimum,
show that there was some opportunity for the defendants to
access its work. Id. at 901 (“[I]f the plaintiff admits to
having kept his or her creation under lock and key, it would
2
The district court held that the works are substantially similar. In
our review of this issue de novo, we clarify that the works are not only
substantially similar, but strikingly similar.
UNICOLORS V. URBAN OUTFITTERS 13
seem logically impossible to infer access through striking
similarity.”). However, the court ultimately concluded that
striking similarity can allow a reasonable inference of access
when “the similarity is of a type which will preclude any
explanation other than that of copying.” Id. at 905.
Selle is precisely in line with Baxter on this issue, which
is not surprising given the Baxter court cited Selle in
asserting that “[a]bsent evidence of access, a ‘striking
similarity’ between the works may give rise to a permissible
inference of copying.” Baxter, 812 F.2d at 423. Here, the
works are virtually identical. Given the complexity of these
works and the striking similarity between them, “[i]t was . . .
unnecessary to consider the possibility that . . . [the Accused
Dress] was the product of independent creation, coincidence,
a prior common source, or any source other than copying.”
Id. at 424 n.2 (citing Selle, 741 F.2d at 901). In short, it is
permissible to infer copying in this case, even absent
evidence of access. 3
B. Whether the Subject Design was Included in
Unicolors’s Registration
Next, Urban argues that the district court erred in
granting summary judgment because there were disputed
facts as to whether the Subject Design was included in
Unicolors’s copyright registration. We disagree, because we
3
Although plaintiffs need not show evidence of access to
demonstrate copying where the works are strikingly similar, Unicolors
did present evidence that the Subject Design was not kept under lock and
key: Unicolors sold approximately 14,000 yards of fabric with the
Subject Design in the years before Urban created the Accused Dress.
Urban represented that it created its dress design by making alterations
to a fabric swatch of unknown origin that it found in its studio. This
evidence demonstrates that Urban could have accessed and copied the
Subject Design.
14 UNICOLORS V. URBAN OUTFITTERS
conclude that the undisputed facts show that the Subject
Design was registered as part of Unicolors’s “Flower 2008”
collection.
Unicolors was required to show registration as an
element of an infringement claim. See Cosmetic Ideas, Inc.
v. IAC/Interactivecorp., 606 F.3d 612, 615 (9th Cir. 2010)
(citing Reed Elsevier, Inc. v. Muchnick, 599 U.S.166
(2010)). A certificate of registration from the U.S.
Copyright Office raises the presumption of copyright
validity and ownership. Micro Star v. Formgen Inc.,
154 F.3d 1107, 1110 (9th Cir. 1998).
The Subject Design was registered as part of a collection.
The registration certificate for Unicolors’s “Flower 2008”
collection lists “Flower 2008(11)” as the title of the
collection, and then lists the titles of several works within the
collection. Although the title list includes the name of
Unicolors’s source artwork, QQ-692, it does not include the
name of the Subject Design, PE1130. Moreover, the
“Material excluded from this claim” section lists “Milk
Print: QQ-692” among its entries.
Unicolors properly submitted a copy of PE1130, the
Subject Design, with its application for the Flowers 2008
collection, 4 and neither party disputes that Unicolors owns
all rights in PE1130 and its source work, QQ-692.
Nonetheless, Urban asserts that there is a question of fact as
to whether the Subject Design is included in the Flower 2008
registration because the name of PE1130 is not included on
4
At oral argument, counsel for Urban asserted that Unicolors did
not submit a copy of PE1130 with its Flowers 2008 application and
instead only submitted a copy of QQ-692. This assertion is not supported
by the record. The record shows that the copy of the Subject Design
submitted to the Copyright Office included both names and was labeled
as “QQ-692 (PE1130).TIF.”
UNICOLORS V. URBAN OUTFITTERS 15
the certificate and because the Subject Design’s source
material, QQ-692, is listed as excluded material. We address
these arguments in turn.
1. Omitting the title of a work in a registration
collection
An applicant does not need to list the names of the
component works in a collection to register them as long as
it holds the rights to the component works. Alaska Stock,
LLC v. Houghton Mifflin Harcourt Publ’g Co., 747 F.3d
673, 683 (9th Cir. 2014). In Alaska Stock, we considered
whether a stock photo company had properly registered
copyright claims for the individual photos in a larger
collection by registering the collection even though it did not
list the names of the individual photos and only listed the
names of some of the photos’ authors. Following decisions
from the Second, Third, Fourth, and Fifth Circuits, and the
rule backed by the Copyright Office, we concluded that
“collective work registrations [are] sufficient to permit an
infringement action on behalf of component works, at least
so long as the registrant owns the rights to the component
works as well.” Id. (quoting Metro. Reg’l Info. Sys., Inc. v.
Am. Home Realty Network, Inc., 722 F.3d 591, 598 (4th Cir.
2013)).
The record is clear that Unicolors submitted the PE1130
design as a component work in its application to register the
Flower 2008 collection. Therefore, under Alaska Stock,
Unicolors’s registration of the Flower 2008 collection was
sufficient to register the component design PE1130 even
though the name of PE1130 was not listed on the registration
itself.
Urban highlights that the registration certificate lists the
names of the other works in the collection but excludes
16 UNICOLORS V. URBAN OUTFITTERS
PE1130, and argues that this creates a question of fact as to
whether PE1130 is included in the registration at all. Urban
does not cite any precedent for this assertion, which runs
contrary to our holding in Alaska Stock that it is not
necessary to list the names of component works in a
collection. See id. There is no reason that listing some but
not all of the component works would create a question of
fact as to whether the omitted works are covered by the
registration. Indeed, the registration certificate in Alaska
Stock included the names of some, but not all, of the authors
of the component works, but this had no bearing on our
analysis or ultimate conclusion that the registration included
all of the component works. See id.The PE1130 design was submitted to the Copyright
Office as part of the Flower 2008 collection and is a valid
component work in that collection. The omission of PE1130
on the registration certificate has no impact on the status of
PE1130’s registration.
2. Listing the source work in the “materials
excluded” section
Urban next argues that Unicolors did not properly
register PE1130 because the source artwork was listed as an
excluded work on the registration certificate. This argument
fails because Unicolors’s infringement action is based on the
derivative work and because good faith mistakes do not
invalidate registration of a derivative work.
The Copyright Act defines a derivative work as “a work
based upon one or more preexisting works, such as a[n] . . .
art reproduction, abridgment, condensation, or any other
form in which a work may be recast, transformed, or
adapted[, and] . . . consisting of editorial revisions,
annotations, elaborations, or other modifications which, as a
UNICOLORS V. URBAN OUTFITTERS 17
whole, represent an original work of authorship.” 17 U.S.C.
§ 101. The copyright protections for a derivative work are
limited to the changes and contributions made by the
derivative work’s author and are distinct from the copyright
protections for the source work. Section 103(b) of the
Copyright Act states that “[t]he copyright [of a derivative]
work is independent of, and does not affect or enlarge the
scope, duration, ownership, or subsistence of, any copyright
protection in the preexisting material.” 17 U.S.C. § 103(b).
As this section makes clear, the author of a derivative work
cannot obtain a copyright interest in the source work by
registering a derivative work; rather, the author of the source
work retains all rights and copyright protections in the
source work independent of the creation or registration of
any derivative works.
Presumably to make this distinction clear and to clarify
the scope of a derivative work’s copyright protections, the
Copyright Act requires applicants registering a derivative
work to provide “an identification of any preexisting work
or works that it is based on or incorporates, and a brief,
general statement of the additional material covered by the
copyright claim being registered.” 17 U.S.C. § 409(9). The
current application form 5 for visual arts registrants addresses
Section 409(9) requirement via “Space 6.” However, Space
6 is a minefield for applicants attempting to properly register
a derivative work. Applicants are instructed to complete
Space 6 if the work is a changed version, compilation, or
derivative work “and if it incorporates one or more earlier
works that have already been published or registered for
copyright, or that have fallen into the public domain.” The
implication is that applicants should not fill out Space 6 if
5
United States Copyright Office, Form VA (2016),
https://www.copyright.gov/forms/.
18 UNICOLORS V. URBAN OUTFITTERS
their derivative work incorporates an earlier work that has
not been published, registered, or is in the public domain.
All this is to say that Unicolors’s claim that it
inadvertently excluded QQ-692 is plausible. Although all
works listed in Space 6 are eventually listed as “materials
excluded from this claim” on the final registration
certificate, Space 6 is the only place where applicants are
able to identify source work. Thus, it was arguably
reasonable for Unicolors to believe that it was required to list
QQ-692 in Space 6 in order to comply with Section 409(9),
even though it did not intend to exclude that work.
But regardless of whether Unicolors’s mistake was
reasonable, Unicolors’s infringement claim is based on the
derivative PE1130 design—not the source artwork. Thus,
Urban’s claim that QQ-692 was not registered is irrelevant
because the registration of a derivative work “is independent
of . . . any copyright protection in the preexisting material.”
17 U.S.C. § 103(b). As discussed above, Unicolors properly
registered PE1130 by submitting a copy of the design with
its registration application for the Flower 2008 collection.
Nonetheless, Urban argues that because Unicolors
excluded the source QQ-692 artwork, it somehow
invalidated registration of the derivative PE1130 design.
Contrary to Urban’s contention, a registration error does not
bar an infringement action unless “the inaccurate
information was included on the application [ . . .] with
knowledge that it was inaccurate” and the inaccuracy, “if
known, would have caused the Register of Copyrights to
refuse registration.” 17 U.S.C. § 411(b)(1). Good faith
mistakes in copyright applications do not preclude an
infringement action. See Urantia Found. v. Maaherra,
114 F.3d 955, 963 (9th Cir. 1997) (“[I]nadvertent mistakes
on registration certificates do not invalidate a copyright and
UNICOLORS V. URBAN OUTFITTERS 19
thus do not bar infringement actions, unless . . . the claimant
intended to defraud the Copyright Office by making the
misstatement.”); L.A. Printex, 676 F.3d at 853 (“[A]
misstatement or clerical error in the registration application,
if unaccompanied by fraud, should neither invalidate the
copyright nor render the registration certificate incapable of
supporting an infringement action.” (alteration in original)
(quoting 2 Nimmer on Copyright § 7.20[B][1])). Here,
Unicolors’s exclusion of QQ-692 was a good faith mistake.
Moreover, it is clear that the mistake would not have caused
the copyright office to refuse registration because the
copyright office later approved Unicolors’s request to
correct the inadvertent exclusion.
In sum, Unicolors bases its infringement claim on
PE1130, which was properly registered as part of a
collection even though it was not named in the application.
Moreover, because Unicolors’s exclusion of QQ-692 was
inadvertent and not fraudulent, the district court properly
held that Unicolors had a valid registration in the Subject
Design.
C. The Jury’s Willfulness Verdict
Finally, Urban seeks reversal of the jury’s finding of
willfulness. “[T]o prove willfulness under the Copyright
Act, the plaintiff must show (1) that the defendant was
actually aware of the infringing activity, or (2) that the
defendant’s actions were the result of reckless disregard for,
or willful blindness to, the copyright holder’s rights.” Wash.
Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 674 (9th
Cir. 2012) (quotation marks omitted) (quoting Louis Vuitton
Malletier, S.A. v. Akanoc Sols., Inc., 658 F.3d 936, 944 (9th
Cir.2011)). In reviewing a jury’s verdict, the court asks
whether the verdict is supported by substantial evidence.
20 UNICOLORS V. URBAN OUTFITTERS
Gilbrook v. City of Westminster, 177 F.3d 839, 856 (9th Cir.
1999).
At trial, Unicolors presented evidence that Urban
adopted a reckless policy with regard to copyright
infringement because it made no attempt to check or inquire
into whether any of the designs it used in its apparel were
subject to copyright protections. Unicolors showed that
Urban keeps thousands of fabric swatches at its design studio
that it has purchased from art studios or taken from vintage
clothing remnants; Urban’s designers use these swatches to
create thousands of apparel designs each year; Urban pays
tens of thousands of dollars each year to purchase art and has
a general awareness that fabric designs may be copyrighted;
and that Urban does not take any affirmative action to
determine if the specific designs it is using are copyrighted.
Unicolors also showed that Urban did not attempt to
discover the origin of the Subject Design in this case. These
facts are sufficient to show that Urban acted with reckless
disregard for the possibility that the fabric it sampled was
protected by copyright, and such conduct is sufficient
evidence of willful infringement to support the jury’s
verdict.
Urban responds that these facts cannot support a finding
of willfulness because there is no evidence that Urban had
knowledge that its conduct constituted infringement. This
argument relies on an improperly strict standard of
willfulness; “merely reckless behavior” can support a
finding of willful infringement. Barboza v. New Form, Inc.
(In re Barboza), 545 F.3d 702, 707 (9th Cir. 2008) (quotation
marks omitted). As we have repeatedly held, a finding of
willful infringement does not require a showing of actual
knowledge; a showing of recklessness or willful blindness is
sufficient. See e.g., Wash. Shoe Co., 704 F.3d at 674.
UNICOLORS V. URBAN OUTFITTERS 21
Urban also argues that its conduct was not reckless
because it is unreasonable to expect companies like Urban to
exhaustively investigate whether any particular fabric design
is protected by a copyright registration. It asserts that trying
to definitively prove whether any individual design is
copyrighted would require it to contact every fabric
manufacturer or attempt to review over 10,000 works
deposited with the Copyright Office—even though such
deposits are unavailable for viewing. It contends that
requiring Urban to make this type of exhaustive inquiry
would be absurd and that Urban’s failure to engage in this
type of investigation cannot result in a finding of willfulness.
Urban’s argument is inapposite. Regardless of how difficult
it may be to determine whether particular designs have been
registered with the Copyright Office, a party may act
recklessly by refusing, as a matter of policy, to even
investigate or attempt to determine whether particular
designs are subject to copyright protections. Unicolors
presented substantial evidence of such conduct to support a
finding that Urban acted recklessly or with willful blindness
to Unicolors’s copyright. The jury’s verdict finding willful
infringement is therefore supported by substantial evidence.
In sum, none of Urban’s arguments on appeal, discussed
above and in the memorandum disposition, has any merit.
The district court properly granted summary judgment on the
issue of copyright infringement, and there was substantial
evidence to support the jury’s verdict.
Appellants shall bear the costs of appeal. See Fed. R.
App. P. 39(a)(2).
AFFIRMED.