HDRB&B Wins Key Rulings in High-Profile Copyright Case in Southern District of NY

On January 9, 2020, HDRB&B won important rulings on a motion to dismiss it filed in a federal copyright lawsuit pending in the U.S. District Court for the Southern District of New York, on behalf of its New York-based fashion client, Kiini, LLC, which sells a popular line of women’s swimwear. The Plaintiff, a Brazilian national, alleges in her amended complaint that Kiini appropriated Plaintiff’s bikini design as its own, claiming (i) copyright infringement, and (ii) violation of California’s unfair competition law (California Business Code § 17200, et seq.), conversion and/or civil theft under California and New York common law, and intentional interference with prospective economic advantage.

After successfully moving to transfer the case from federal court in Los Angeles to the Southern District of New York, HDRB&B then moved to dismiss Plaintiff’s amended complaint, arguing that Plaintiff’s state law claims were preempted by the federal Copyright Act, and that her copyright infringement claim was actually an ownership claim barred by the applicable three-year statute of limitations (17 U.S.C. § 507(b)). The Court agreed with HDRB&B that Plaintiff’s state law claims were all preempted by federal law because they sought to vindicate rights that were protected exclusively by the federal Copyright Act, and that several otherwise failed to state a cause of action. The District Court noted that Plaintiff’s allegations of “reverse passing off,” which formed the basis of her unfair competition claim, may not have been subject to preemption in California, under Ninth Circuit precedent, but were preempted in New York by Second Circuit case law. Had HDRB&B not earlier won its motion to transfer the case across the country, Plaintiff’s unfair competition claim may have survived Plaintiff’s motion to dismiss.

Although the District Court declined to decide the copyright statute of limitations issue on Defendant’s motion to dismiss, the Court nevertheless agreed with HDRB&B that the amended complaint alleged a copyright ownership claim, not a copyright infringement claim. Under the Copyright Act, a claim for infringement can be brought within three years of any infringing act, whereas a copyright ownership claim accrues only once, when a reasonably diligent plaintiff would have been put on inquiry notice as to the existence of a right to enforce its copyright, thereby allowing HDRB&B eventually to argue on summary judgment that evidence in the record establishes that Plaintiff’s ownership claim accrued more than three years before the bar date.

Kiini is represented by HDRB&B litigators Mark A. Berman (Chair of the Litigation Department), Jeremy B. Stein, and Matthew T. Reynolds. The court’s motion to dismiss opinion is available at Ferrarini v. Irgit, et al., Civil No. 19-0096 (LGS), 2020 U.S. Dist. LEXIS 6377 (S.D.N.Y. Jan. 9, 2020).  The court’s motion to transfer decision is available at Ferrarini v. Irgit, et al., Civil No. 18-5250 FMO (GJSx), 2018 U.S. Dist. LEXIS 222787 (C.D. Cal. Dec. 28, 2018).