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Date: 07-16-2019

Case Style:

Gold Value Int'l Textile, Inc. dba Fiesta Fabric v. Gypsy 05, Inc.; Eminent, Inc. dba Revolve

Case Number: 2:18-cv-08934-GW-E

Judge: George H. Wu

Court: United States District Court for the Central District of California (Los Angeles County)

Plaintiff's Attorney: Scott A. Burroughs, Justin M. Gomes, Stephen M. Doniger, Trevor William Barrett

Defendant's Attorney: Pamela Koslyn


Plaintiff alleged copyright infringement and vicarious and/or contributory copyright infringement of 3 fabric designs, which designs plaintiff claimed to have registered for copyrights. Plaintiff alleged that defendants had access to such designs, and that defendants manufactured and/or sold identical or substantially similar designs that infringed on plaintiff's designs. Plaintiff sought sought an injunction, disgorgement of profits or if elected, statutory damages, up to $150,000 per work for willful infringement, attorney's fees and costs, a constructive trust over defendants' profits, an accounting, and pre-judgment interest.

Defendants asserted that plaintiff had already sued these two defendants for one of the three designs in 2015, and that case had been settled and dismissed with prejudice in 2016 such that the 2016 Settlement Agreement provided that the any party needing to enforce that Settlement Agreement would be entitled to its fees and costs. (Finally, in May, 7 months after commencing this lawsuit, plaintiff finally agreed to dismiss the claim for this design with prejudice again.) Defendants asserted that plaintiff's registrations for the two remaining designs were invalid and unenforceable, as plaintiff had knowingly applied for copyrights for such designs as unpublished, despite the fact that such designs were in fact published since plaintiff had offered such designs for sale before plaintiff applied for copyright protection. The Copyright Act's definition of "publication" at 17 U.S.C. section 101 includes "offering to distribute copies." 17 U.S.C. section 411(b)(1) provides that copyright registration is invalid if (1) the inclusion of inaccurate information in an application for copyright registration with knowledge that it is inaccurate; and (2) the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration. Very recently, in a case involving this same plaintiff and this same plaintiff's law firm, the 9th Circuit held that Gold Value's owner's factual knowledge of the inaccuracy of the copyright application, knowing that samples of the design had been sold, provided no reasonable basis for the belief that such sales were not "publication." Specifically, Morris Ajnassian stated under oath that he knew a sample of the design at issue in Sanctuary had been sold, but he did not believe that sample sales constituted publication. The trial court said, and the 9th Circuit affirmed, that ignorance of the law is no excuse. The Copyright Office stated that it would not have granted a copyright registration with such an error, and the court ruled that a copyright registration granted based on an inaccurate application cannot support a copyright claim. Gold Value International Textile, Inc. dba Fiesta Fabric v. Sanctuary Clothing, LLC et al, No. 17-55818, 2019 WL 2347390 (9th Cir. June 4, 2019).

Outcome: The case settled for $25,000 on June 26, 2019, and the non-confidential nature of the settlement was specifically bargained for.

MEDIATION REPORT Filed by Mediator (ADR Panel) Michael R Diliberto: Mediation held on June 26, 2019 and the case has been completely settled. With the filing of this Report, the parties are advised that they must notify the trial judge's deputy courtroom clerk of the fact of settlement and to promptly file documents regarding the final disposition of the case.

Plaintiff's Experts: None

Defendant's Experts: None


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