Edmark v. S. Asia Int'l and Azad

Case Title and Citation:  Edmark Indus. v. S. Asia Int'l Ltd., 89 F. Supp. 2d 840 (E.D. Tex. 2000)

Court: United States District Court, E.D. Texas, Beaumont Division

Document status: Court order on Plaintiff’s Motion for Summary Judgment on its claims against Defendant for copyright infringement.

Issue or relevant points: 1) When is a claim for copyright infringement claim barred by the three year statute of limitations set forth in 17 U.S.C. § 507(b); 2) Did Plaintiff exercise reasonable diligence sufficient to toll the statute of limitations; 3) Does Plaintiff hold a valid copyright?

Ruling:  The court held there was no genuine issue of material fact that Edmark owned a valid copyright on the brochures and that Azad copied them.  However, the Court denied the motion for summary judgment on the copyright infringement claim because a genuine issue of material fact existed as to whether Edmark exercised reasonable diligence sufficient to toll the statute of limitations.

Summary

Background

The facts showed Edmark as the creator, patent holder, manufacturer and a distributor of a vegetable slicer known as the "Super Slicer".  Edmark was also indicated as the author, creator, and copyright holder of the brochures titled "Easy to Follow Instruction Guide" and "Optional Garnishing Accessories Guide".  Between October and December 1994, Azad sold and distributed Edmark's brochures and counterfeit slicers to Telebrands, a company located next door to Azad.  Edmark never authorized Azad to copy or distribute the brochures.

In 1996, Edmark filed a suit against Telebrands and third parties for distributing and selling counterfeit slicers and brochures.  During the discovery process of that suit, Edmark discovered Azad’s involvement.  Thereafter, Edmark sued Azad for copyright infringement.

Statute of Limitations

As one defense, Azad argued the claim for infringement claim was barred by the three year statute of limitations set forth in 17 U.S.C. § 507(b), since the suit was not filed until April 2, 1998 and the infringing acts occurred between October and December 1994.  The Defendant further argued Edmark did not exercise reasonable diligence to toll the statute.

The Court recognized the standard for reasonable diligence is not merely based on a plaintiff's knowledge.[1]  And whether one has exercised sufficient diligence is a fact question usually submitted to the jury.[2]  In this case, even though the Plaintiff submitted evidence by way of affidavit that it “was not aware” of the acts, the Court declined to hold there was no genuine issue of material fact as to whether Edmark exercised reasonable diligence sufficient to toll the statute of limitations.

Copyright Infringement: (i) Ownership of a (ii) Valid Copyright; and iii) Copying

To establish copyright infringement under the Copyright Act of 1976, 17 U.S.C. §§ 1-708 (1998), a plaintiff must establish ownership of a valid copyright and copying by the defendant.[3]

In the present case, it is undisputed that Azad copied and distributed Edmark's brochures along with the counterfeit slicers.  In response, Azad raised the issue of the validity of the copyright.  The evidence showed Edmark applied for and received copyright registrations in February, 1996.[4] 

Under appropriate circumstances, copyright registration is sufficient to create a rebuttable presumption of validity and the facts stated in the certificate.[5]  The Defendant thus has the burden to rebut this presumption of validity.[6]

Azad argued first that the brochures were not original works.  However, the Court recognized principles long ago established in Feist: the threshold for originality is very low—an author need only to make choices as to which facts to include; while facts themselves may not be copyrighted, their presentation and display may be; only the components of the work which are original to the author, may be protected; "even a directory that contains absolutely no protectable written expression, only facts, meets the constitutional minimum for copyright protection if it features an original selection or arrangement."[7]  In the present case, Edmark's brochures were viewed as being sufficiently original in nature and subject to copyright protection.

Azad next argued Edmark's brochures were not original because a brochure for a German slicer existed when Edmark filed its registrations.  The Court was unpersuaded by this because while the brochures had similarities, there were also notable differences, such as the color scheme, layout, and the slicer design itself.  

Azad also argued that failure on the part of Edmarks to disclose the German slicer brochure invalidated the registrations. However, the Court noted, failure of the copyright owner to disclose information is not sufficient for its own sake to overcome the presumption of validity; rebuttal of the presumption also requires evidence of intent to deceive.[8]  In the instant case, Azad failed to present any evidence or argument that Edmark intended to deceive.

Azad’s remaining argument was that the brochures were descriptive methods of operation and, hence, not subject to copyright protection.  Alas, Edmark’s descriptions or explanations of the processes on how to operate the slicer (which would be "literary works") can be protected.

The Gist

At the summary judgment stage, if the statute of limitations is at issue, look for evidence as to whether reasonable diligence was undertaken to be aware of the infringing act.  This case illustrates that without such a showing, there may be a ground for denying summary judgment.

Also at the summary judgment stage it takes beyond mere assertion to overcome a rebuttable presumption of validity.  And when it comes to a failing of disclosure at the time of the registration application, the fact of failing of the disclosure is not enough – there must be evidence of an intent to deceive.  Otherwise, the presumption of validity will not be overcome and the Plaintiff will have satisfied its burden.