Bechler v. MVP Group International, Inc.

Background

MVP Group International, Inc. designed and manufactured private-label candles and related products under the Colonial Candle brand. Bed Bath & Beyond Inc., Wayfair LLC, and Jet.com, Inc. sold some of those products online. The dispute concerned MVP’s use of a photograph of a tropical hibiscus plant that Shane Bechler took and permitted iStock to license for a fee.

MVP downloaded the photograph from iStock and used it for Colonial Candle’s “Tropical Nectar” products. MVP entered into an iStock Content License Agreement granting a perpetual, nonexclusive, nontransferable, worldwide license for permitted uses, including “advertising and promotion projects,” “printed materials,” and “product packaging.” The agreement stated that uses outside the permitted uses would constitute copyright infringement.

Bechler originally sued MVP and the online retailers for copyright infringement and removal of copyright-management information. He alleged that MVP copied the photograph from FineArtsAmerica.com, an allegation he later acknowledged was untrue. After defendants repeatedly asserted that they had a license, they provided Bechler with a copy of the iStock license on September 20, 2018. Bechler did not dismiss the infringement claim, amend the complaint, or seek discovery. He later agreed to dismiss the copyright-management-information claim, leaving only copyright infringement for decision.

Summary-judgment ruling

The court treated the dispute as a contract-interpretation question: whether the iStock license covered MVP’s use of the photograph. Because the license’s existence was undisputed and the dispute concerned its scope, Bechler had to show that MVP’s use was unauthorized.

The court held that “product packaging” unambiguously included a label attached to the glass jar containing a candle. The label was a critical part of the packaging because it identified the variety of candle inside. The court also stated that the license permitted use on printed material, which independently covered the labels.

The court rejected Bechler’s alternative argument that the photograph was used as a design mark. It concluded that the Colonial Candle logo, not the photograph, identified and distinguished MVP’s goods. The photograph was instead a decorative feature of the packaging.

The court granted summary judgment to MVP. It also rejected Bechler’s claims against Bed Bath & Beyond, Wayfair, and Jet.com. The court explained that those retailers’ online sales did not show the deliberate, active participation needed for direct or secondary copyright liability. Because MVP did not directly infringe, the retailers could not be secondarily liable.

Costs, attorney’s fees, and sanctions

The defendants sought costs, attorney’s fees, and sanctions against Bechler and the Liebowitz Law Firm. Under Section 505 of the Copyright Act, the court could award costs and reasonable attorney’s fees to a prevailing defendant. Under 28 U.S.C. § 1927, the court could require an attorney to pay excess costs and fees caused by unreasonably and improperly multiplying the proceedings.

The court found that Bechler’s and his counsel’s continued prosecution of the case after receiving the iStock license was objectively unreasonable and amounted to conduct akin to bad faith. The court emphasized that the license undermined the original theory that MVP copied the photograph from FineArtsAmerica.com, and that Bechler and his counsel continued the case for nearly two years while advancing a different theory that was not supported by the pleadings and was meritless.

The court therefore granted the request for costs and attorney’s fees against Bechler under Section 505 and against the Liebowitz Law Firm under Section 1927. Bechler and the firm were made jointly and severally liable for defendants’ costs and fees incurred after September 20, 2018. The court did not determine the amount because defendants had not submitted sufficiently detailed, contemporaneous records to evaluate the requested rates, time, and costs.

Disposition

The court granted defendants’ motion for summary judgment, costs, attorney’s fees, and sanctions. The parties were directed to confer about the amount of costs and fees and, if they could not resolve the issue, propose a schedule for the court to decide it. The clerk was directed to close the motion.