Klauber Brothers, Inc. v. Anthropologie, Inc.

Background

Klauber Brothers, Inc. alleged that Urban Outfitters, Inc., Anthropologie, Inc., BHLDN.COM LLC, and URBN US Retail LLC created, manufactured, and sold the Fleur and Nouvelle Fleur dresses using lace straps with patterns copied from Klauber’s lace design. Klauber asserted claims under the Copyright Act.

Klauber owned a copyright registration for Design 3886 but not for Design 3885. Klauber alleged that it had distributed or sold approximately 150,000 yards of lace bearing Design 3886 or related patterns and had sent Urban Outfitters samples of Design 3885. The opinion states that the samples did not include Design 3886.

In a prior related proceeding, the court found that the lace used in the Nouvelle Fleur dress was substantially similar to Klauber’s protected work but held that Klauber had not adequately pleaded its claim concerning the Fleur dress. The court allowed Klauber to amend. Klauber then filed the second amended complaint at issue here.

Rule 12(b)(6) Standard

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. The court accepted factual allegations as true for purposes of the motion but did not accept legal conclusions or unsupported, conclusory assertions. A claim had to be supported by enough factual detail to be plausible.

Direct Copyright Infringement

To plead copyright infringement, Klauber had to allege ownership of a valid copyright and infringement. Infringement required allegations of actual copying and substantial similarity between the defendant’s work and the copyright-protected elements of Klauber’s work.

The court held that Klauber had not adequately pleaded substantial similarity between Design 3886 and the lace on the Fleur dresses. It compared the images and identified differences in the flowers’ petals, the number of petals, and the arrangement of design elements. The court also noted that Design 3886 included stems, leaves, and a distinctive H-shaped pattern, while the corresponding area of the Fleur dresses had a plain background. In the court’s view, the differences were too significant for an ordinary observer to regard the designs’ overall appearance as the same.

The court rejected Klauber’s allegation that differences resulted from defendants’ use of cruder manufacturing techniques. It reasoned that manufacturing quality could explain some loss of detail but not the absence or presence of major design elements.

Because Klauber had not alleged substantial similarity, the court stated that it did not need to decide whether Klauber adequately pleaded actual copying. The court nevertheless addressed the issue briefly and held that the amended allegations did not cure the earlier deficiencies. Klauber’s allegation that Urban Outfitters received samples of Design 3885 did not establish access to Design 3886, the design Klauber claimed was infringed. The court also found that Klauber’s generalized allegations about access through showrooms, design libraries, vendors, samples, and the marketplace lacked specific facts.

The court further held that Klauber had not pleaded facts showing that Design 3886 was commercially successful, readily available, or distributed in a manner that would plausibly support an inference that defendants encountered it. Accordingly, the court held that Klauber had not plausibly alleged copyright infringement concerning the Fleur dresses.

Vicarious and Contributory Infringement

The court held that Klauber had not adequately pleaded vicarious or contributory infringement concerning either dress design. Secondary liability requires an adequately alleged underlying direct infringement, and the court stated that secondary liability could not be maintained without direct infringement.

The court also found that Klauber did not identify which defendants were allegedly primary or secondary infringers. Its allegations that defendants knowingly induced, participated in, profited from, supervised, or contributed to infringement were conclusory recitations of legal elements rather than specific facts. The court therefore dismissed the vicarious or contributory infringement claim as to all defendants.

Leave to Amend and Disposition

The court granted defendants’ motion to dismiss without leave to amend. Although courts generally allow amendment when justice requires, the court found that Klauber had already amended its complaint twice, that the latest amendments were minimal, and that Klauber had not explained how another amendment would cure the deficiencies.

In its conclusion, the court stated that defendants’ motion to dismiss Klauber’s copyright-infringement claim was granted with prejudice with respect to the Fleur dresses. It also stated that defendants’ motion to dismiss was granted with prejudice with respect to Klauber’s claim for vicarious or contributory copyright infringement. The Clerk was directed to terminate the pending motion. The opinion does not expressly state in its conclusion that the direct copyright-infringement claim concerning the Nouvelle Fleur dresses was dismissed in this order.