Copyright Law

Will Dollar Tree’s parent company be forced to forfeit nearly 22,000 fashion dolls imported from the Canadian border that allegedly infringe Mattel’s Barbie copyright?

In International Falls, Minnesota, agents with Customs and Border Protection seized nearly 22,000 counterfeit Barbie dolls worth almost $140,000 from a railcar. These dolls were imported by the parent company of Dollar Tree, Greenbrief International and were intended to be sold in Dollar Tree’s more than 15,000 stores operated in 48 states and five Canadian provinces. Dollar Tree is a Fortune 200 company that operates under the names Dollar Tree, Family Dollar, and Dollar TreeCanada. The fashion dolls were found in a shipping container aboard a Canadian National Railway train during an inspection at the Minnesota-Canada border. On the rail car’s manifest, “Other Toys” was simply written.

Upon showing Mattel, who is the owner of all copyrights and trademarks in and to Barbie, photographs of the seized toys, Mattel confirmed that the fashion dolls bore copyright protected markings of its “CEO Barbie” and that violate intellectual property laws. In particular, Mattel identified several features of the copyrighted Barbie head sculpt infringed by the fashion dolls. More specifically, the shape of the mouth and particularly the upturned upper lip and dimples at the corner thereof, and the nose, including the shape and proportions of the nostrils, were infringed by the imported dolls. To make matters worse, Mattel claims that the packaging of the fake fashion dolls violated Mattel’s trademark protections.

Copyright protects original works of authorship fixed in any tangible medium of expression, including sculptural works, which is how toys are classified. Even to the extent that a toy may feature individual components which are unoriginal and unprotectable by themselves, copyright does protect original compilations of unoriginal components. To prove copyright infringement, the claimant must show a valid copyright interest and that the accused engaged in the unauthorized reproduction, distribution, performance, or public display thereof.

The federal authorities have released a statement explaining that they seek to forfeit and recover the approximately 22,000 fashion dolls that infringe the registered copyright owned by Mattel. Civil forfeiture is a law enforcement tool that allows the government to protect its income from violation of customs and revenue laws. Relevantly, copyright law provides for the seizure of material violating a registered copyright.

This is not the first time Dollar Tree has imported dolls that federal authorities considered to be counterfeit, but rather, this is the second time they got caught. Indeed, in 2016, prosecutors made a similar seizure at the same port of entry of more than 13,000 counterfeit fashion doll mermaids. The mermaids were also found to have head sculpt that infringed on copyright and trademark protections afforded real Barbie dolls. In both instances, the counterfeit dolls originated from the same exporter/shipper located in Hong Kong.

If found guilty by federal authorities, pursuant to federal statute, Dollar Tree could be fined up to $5 million. Moreover, since this is the importer’s second offense, Dollar Tree’s liability could be increased up to $15 million. However, the civil forfeiture suit seeks only forfeiture of the 21,852 dolls and “costs and disbursements in this action, and for such other and further relief as this court deems proper and just.”

Can Gigi Hadid escape liability for copyright infringement arising out of her use of a photograph of herself taken by paparazzi?

On October 12, 2018, Gigi Hadid posted a photograph of herself on Instagram. The New York company, X-clusive Lee, Inc. (“X-clusive”), that allegedly owns the copyright to the photograph has since filed a copyright infringement lawsuit against the model seeking an injunction, statutory damages, any profits realized from the publication of the image, and attorney fees and costs. The lawsuit arises out of X-clusive’s allegation that Hadid uploaded this copyrighted photograph to her social media account without license or permission from X-clusive.

Gigi Hadid is perhaps best known for her modeling for the likes of Versace, Chanel, Eli Saab, Fendi, Marc Jacobs, Anna Sui, Miu Miu, Fenty, as well as, others. She has also starred in advertising campaigns for Guess, Versace, Topshop, Stuart Weitzman, and others. Currently, Hadid’s Instagram page has more than 47 million followers. At the time Gigi posted the photograph in question, her Instagram page had over 44 million followers. The disputed photograph received more than 1.6 million likes before it was taken down by Hadid.

The complaint was filed in federal district court in Brooklyn, New York. Therein, X-clusive cites at least 50 “unaccredited photographs” that Hadid had allegedly published to her Instagram account. These photographs include Gigi in public, at press events, or on the runway. The complaint further accuses Hadid of acting willfully, noting another lawsuit filed against the model in 2017 based on very similar facts. In that case, Hadid had published another copyrighted photograph of herself to her social media accounts without permission. However, that case settled out of court prior to the parties conducting discovery.

In an unusual action, lawyers on behalf of Hadid filed a letter addressed to Judge Chen, the presiding judge in the case, requesting a “pre-motion conference on an anticipated motion to dismiss.” In this letter, Hadid’s lawyer sets forth numerous arguments as to why Hadid is not liable and this litigation is not sustainable. First, the letter cites to a recent Supreme Court case, Fourth Estate Pub. Benefit Corp. v. Wall-Street.com, LLC, 139 S. Ct. 881, 888 (2019), which sets forth that a copyright must be registered in order to bring an action for infringement thereof and that registration occurs when the Copyright Office registers the copyright, not when the application is filed. Since X-clusive’s copyright appears to remain a mere application and not yet a registration, X-clusive cannot maintain suit for infringement.

The letter also points out that X-clusive’s complaint does not name or point to any particular individual photographer who actually snapped the photograph in dispute. Further, the complaint does not explain the relationship, if any, between the photographer and X-clusive. Rather, the complaint merely states that X-clusive is the copyright holder for the photograph. In this way, the letter argues, the complaint fails to establish facts to allege that X-clusive had a right to bring this action.

Additionally, the letter sets forth Hadid’s fair use argument. In particular, Hadid’s attorney claims that the photograph was not disseminated for commercial purposes and Hadid has not deprived X-clusive of any significant revenue. Interestingly, the model’s attorney argues that Hadid herself contributed to the copyrightable elements of the photographs, that is, Hadid smiled and posed. Thus, the photographer did not attempt “to convey ideas, emotions, or in any way influence the subject’s post, expression or clothing” and therefore, cannot claim a copyright to the photograph. Overall, the correspondence seeks to establish that the paparazzi was taking advantage of Hadid by surveilling her, taking photographs of her every public movement, and selling them for profit. In this manner, the letter goes on, the plaintiff paparazzi seeks to make their living by exploiting Hadid’s image and selling it for profit.

Gigi Hadid is not the first celebrity to face a lawsuit over posting a copyrighted image of themselves to social media. As one example, in 2016, Khloe Kardashian published a photo of herself on Instagram, which was owned by Xposure Photos and exclusively licensed  to the Daily Mail. Xposure, in that case, claimed Kardashian’s conduct was egregious because she or someone on her social media team scrubbed the image clean of copyright information prior to posting. Xposure eventually dismissed the case, presumably after a settlement had been reached.

In these cases, the defendant typically argues right of publicity. More specifically, individuals generally have a right to control the use of their own name, image, likeness, and identity. Additionally, individuals are entitled to prohibit others from using the same for commercial gain without permission. However, there is a well-established exception to this general right of publicity for newsworthy subjects or matters of public interest. New York law interprets these phrases quite broadly giving individuals wide discretion in using other people’s identity even for commercial gain when the use is newsworthy. Moreover, New York law specifically protects photographers from lawsuits against right of publicity lawsuits by their subjects. It remains to be seen whether the court will be persuaded by the arguments set forth in the letter filed by Hadid’s lawyers.

Can Peloton be held responsible for hundreds of millions in damages to music publishers based on its unlicensed inclusion of certain musical works in its exercise videos?

Ten publishing companies that represent songwriters behind hits by the likes of Lady Gaga, Drake, and Rihanna filed a lawsuit against Peloton, the fitness technology company, alleging copyright infringement. Specifically, the publishers complain that the fitness company has used over 1,000 of its copyrighted musical works without permission since 2017. In response, Peloton began removing classes from its repertoire that feature songs the publishers claim were being used without proper licenses.

Peloton is one of the world’s most successful fitness and technology companies. Since its inception in 2012, Peloton has more than 600,000 subscriber members and is reported to be valued in excess of $4 billion. In 2018, Peloton eclipsed cycling giant, SoulCycle, in sales. As a result, Peloton is preparing for its initial public offering (IPO) later this year. The company offers both hardware in the form of a bike or treadmill, as well as, a subscription service that allows consumers to replicate the experience of a high-end exercise studio in the convenience of one’s home. Users are enabled to participate in instructor-led video workouts, while competing against other class participants and viewing performance metrics. In addition to its initial cycling classes, the company has expanded its offering to include yoga, strength, and other exercise classes, all of which are available via live and streaming video. Each of Peloton’s over 13,000 workout videos features music from start to finish, thereby providing a tempo, as well as, an atmosphere for a treadmill run or stationary bike ride.

The lawsuit, filed in the United States District Court for the Southern District of New York, seeks up to $150 million in damages for Peloton’s alleged copyright infringement. Copyright Infringement involves the reproduction, distribution, performance, public display, or making of a derivative work of copyrighted work without the permission of the copyright owner. The United States Copyright Act grants copyright owners exclusive rights in their copyrighted works, including the right to reproduce, perform publicly and distribute and authorized others to do the same those copyrighted works. Pursuant to this, the publishing company plaintiffs had previously licensed the public performance, reproduction, synchronization and distribution of many musical works in their catalogs.

The publishers claim Peloton used more than 1,000 musical works, including songs by Drake, Rihanna, Kanye West, Lady Gaga, Tiesto, Benny Benassi, Avicii in addition to many others, over a period of years in the videos that it makes available to its hundreds of thousands of customers. Each of these works has been registered with the United States Copyright Office. Moreover, many of these musical works are featured in multiple workout videos. For example, the complaint states that Rihanna’s famous “Umbrella” is played in at least 55 separate workout videos since late 2017. Each of these uses would have required a separate synchronization license and Peloton obtained none.

The crux of this lawsuit is that the New York-based start-up failed to secure a synchronization license for a single one of the more than 1,000 songs. The right to license the synchronization of a musical work is derived from the copyright owner’s exclusive right of reproduction. Synchronization licenses, or sync licenses, permit the licensee to lawfully reproduce a protected work in connection with or in timed relation with a visual image, such as the videos that Peloton records, archives and makes available to its customers. In this way, use of the same musical composition in a different context or in a different audiovisual work would require a separate license, carrying an additional fee.

Based on the fact that Peloton has previously obtained licenses for other songs it features in its videos, the plaintiffs claim Peloton is a “textbook willful infringer.” Peloton is allegedly well aware of and fully understands copyright law requirements due to the existence of these other licenses. In this manner, the publishers claim “there is no doubt that Peloton’s infringement was and continues to be knowing and reckless.” Willful infringement involves instances when the named defendants knew or should have known of their wrongful conduct.

Copyright law allows a maximum statutory damages in the amount of $150,000 for each willful infringement. The publishing companies seek this maximum amount for each of the 1,000 works infringed. Alternatively, plaintiffs may be entitled to actual damages, including Peloton’s profits from its infringement of the copyrighted works. It remains to be seen if Peloton’s removal of the infringing videos will allay the publishing companies’ concerns. However, in a letter that went out to Peloton subscribers, Peloton claimed that prior to the filing of the lawsuit, “fruitful discussions” had been ongoing with these publishing companies. Nonetheless, Peloton goes on, the classes were removed “out of an abundance of caution.”