NYC Image International, Inc. v. RS USA, Inc.

Background

NYC Image International, Inc. brought a copyright-infringement action under Section 501 of the Copyright Act against RS USA, Inc. and MD Rustom Ali. The complaint alleged that NYC Image designed and sold apparel wholesale to retail shops in New York City and owned a design called the “Vintage American Flag Design.” The complaint alleged that the design had appeared on apparel since at least March 2014 and was registered with the Copyright Office under Copyright Number VA0002167568. The registration was made on July 24, 2019.

The complaint alleged that RS USA, at Ali’s direction, used an “Infringing Design” on apparel sold wholesale to retail shops in New York City. According to the complaint, customers reported that the defendants offered to sell apparel containing the Infringing Design at lower prices than NYC Image’s apparel. NYC Image alleged that it had never licensed its design to the defendants and had repeatedly asked them to stop using the Infringing Design. The complaint further alleged that Ali initially called the sales a “mistake,” but the defendants continued selling the products.

Motion and Legal Standard

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. They argued that NYC Image’s design was not entitled to copyright protection because it was a variation of the American flag, which is in the public domain, and that the designs were not substantially similar. They also questioned the validity of NYC Image’s copyright ownership because the registration occurred more than five years after the design’s first publication.

At the motion-to-dismiss stage, the court was required to accept well-pleaded factual allegations as true and draw reasonable inferences for NYC Image. To state a copyright-infringement claim, a plaintiff must plausibly allege ownership of a valid copyright and infringement. Infringement requires actual copying and illegal copying based on substantial similarity between the protectable parts of the works.

Court’s Analysis

The court rejected the argument that NYC Image’s design lacked sufficient originality. Although the American flag itself is in the public domain, the court explained that a distinguishable variation of a public-domain work may be protected. The court found that the complaint plausibly alleged original elements, including the design’s particular distressed appearance, coloring, shading, highlighting, tattered edge pattern, and arrangement of the words “New York City.” The court also rejected the defendants’ arguments based on the doctrines excluding certain standard elements or expressions from copyright protection.

The court also found that NYC Image plausibly alleged copying and substantial similarity. It observed that the layouts of the two designs were nearly identical and that the tattered edge pattern in the Infringing Design appeared to be a vertical mirror image of the pattern in NYC Image’s design. The court considered not only individual elements but also the designs’ overall concept and appearance, including the vintage-looking, tattered flag accompanied by the words “New York City.” It concluded that it could not decide as a matter of law that no reasonable jury could find the works strikingly similar.

The court stated that its references to the complaint’s allegations were not findings that those allegations were true. It also stated that, at this stage, NYC Image had adequately pleaded ownership of a valid copyright.

Disposition

The court denied the defendants’ motion to dismiss. The defendants were ordered to file an answer to the complaint within thirty days of the opinion’s filing. The Clerk was directed to terminate the open motions at Documents 11 and 19.