Saturday, November 20, 2010, 6:45 AM

DMCA Infringement Notices Results In Finding Of Utilitarian Copyright Claims

On Oct. 21, 2010, the United States District Court for the Eastern District of California, Civil Action No. 2:10-cv-2765 (Judge Wm. B. Shubb) entered a temporary restraining order prohibiting Zen Path, LLC from submitting infringement notices to eBay claiming that Design Furnishings, Inc.'s wicker furniture infringes Zen Path's copyrights in numerous articles of wicker furniture.

Zen Path and Design Furnishings both sell wicker furniture from the same Chinese manufacturer on eBay. Zen Path requested that Design Furnishings stop selling the furniture, claiming copyright and patent violations. Design Furnishings refused unless presented with proof of Zen Path's intellectual property protection for the furniture. Zen Path then filed for copyright applications for (1) a round sectional wicker furniture collection, (2) a U-shaped sectional wicker furniture collection, (3) a modern boxy sectional wicker furniture collection, and (4) a Capri sectional wicker furniture collection. The applications identified the works as "sculpture/3-D artwork, Ornamental Design" and attached black and white photocopies of pictures of the furniture "some more viewable than others" (according to the court's order).

Zen Path then notified eBay that Design Furnishings was selling furniture within the scope of Zen Path's copyrights. Pursuant to eBay's policies, eBay then suspended Design Furnishing's account based on the claim of infringement resulting in the termination of 35 auctions and preventing Design Furnishings from listing new items, even non-furniture items. In total, Zen Path submitted 63 notices of infringement to eBay.

In its complaint against Zen Path, originally filed in state court, Design Furnishings alleged (1) misrepresentation of intellectual property infringement in violation of 17 U.S.C. 512(f) of the Digital Millennium Copyright Act ("DMCA"), (2) tortious interference with a contract, (3) tortious interference with prospective economic advantage, (4) violation of California's unfair competition law, and (5) declaratory and injunctive relief. The state court denied Design Furnishing's request to order Zen Path to notify eBay that Design Furnishings had not infringed Zen Path's intellectual property rights. Zen Path then removed the action to federal court.

In ruling on Design Furnishing's request for a TRO, the federal court assessed Zen Path's likelihood of success on its copyright infringement claims and analyzed whether Zen Path's copyright extends to the furniture shown in the photographs attached to its copyright appplications. The court, relying heavily on the Fourth Circuit's recent holdings in Universal Furniture Int'l., Inc. v. Collezione Europa USA, Inc., Nos. 07-2180, 09-1437, 2010 WL 3278404 (4th Cir. Aug. 20, 2010), held that:

defendant's applications for copyright protection claimed the works were sculptures or 3-D artwork or ornamental designs, indicating that defendant knew the limits of copyright protection. The pictures of the furniture, though, suggest that defendant impermissibly sought protection of the 'industrial design' of the furniture. Moreover, the internal contradiction in the applications raises a strong inference that defendant subjectively knew it did not have a copyright infringement claim when it notified eBay.

The court then held that Zen Path did not have a likelihood of success on the merits of its copyright infringement claims and granted Design Furniture's TRO after considering the other factors. The court, in particular, focused on how the DMCA notices to eBay effectively shut down a competitor's business without any proof of infringement.

The decision is a good reminder of the need to properly claim copyright in furniture and to be careful when sending out DMCA take-down notices. You never know where such notices will lead!

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