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Infringement Found, Injunction Denied In Copyright Suit Over Wrist Watch Designs

Friday, October 25, 2013
By Tamlin H. Bason

Oct. 23 --A watch maker that prevailed on a copyright infringement suit against a competitor was not entitled to a permanent injunction barring the defendant from using numerous watch designs because none of the equitable injunctive factors weighed in favor of granting such relief, the U.S. District Court for the Southern District of California ruled Oct. 21 (Brighton Collectibles, Inc. v. Pedre Watch Co., S.D. Cal., No. 3:11-cv-006370-AJB-WVG, 10/21/13).

The plaintiff argued that because the instant infringement action is the second time that the defendant has copied the plaintiff's design, a broad permanent injunction was warranted to prevent future instances of infringement. The court, however, noted that both in the instant case and in the previous action the defendant willingly pulled its challenged design from the market, and sales of the defendant's watches were limited in both instances. Moreover, “watch designs are a combination of common design elements,” and “the requested injunction would not encourage innovation, instead it would stifle fair competition and in turn, impair the public interest,” the court said.

Less Than 200 Infringing Watches Sold
Brighton Collectibles Inc. is a California-based company that designs, manufactures and sells accessories. Brighton sells a number of wrist watches. The watches are sold in Brighton's retail stores in the United States, and the watches are also listed in a catalog that Brighton publishes. Some of the watch designs are copyrighted.

In 1998, Brighton sent a cease-and-desist letter to Pedre Watch Company Inc., a New York-based watch manufacturer and importer. Brighton alerted Pedre that Pedre's Style 552L/J watch infringed Brighton's copyrighted design for its Daytona watch. At the time, Pedre claimed that it had received the Style 552L/J watch from Full Field Industrial Limited, a Hong Kong supplier.

After receiving the letter, Pedre voluntarily stopped selling the alledgedly infringing design. Brighton nonetheless filed a copyright infringement lawsuit against Pedre. The parties settled the dispute, though Pedre never admitted to any wrongdoing.

In 2008, Pedre approached another Hong Kong supplier, Universe Watch Trading Co. Prior to purchasing a design, Pedre informed the supplier that it was not interested in purchasing any designs that resembled any of Brighton's watches. The supplier informed Pedre that the design selected, called the Cimarron design, had been made for a South American customer and was not being sold in the United States. Pedre consulted Brighton's website and confirmed that the Cimarron design was not similar to any watches currently being sold by Brighton. Pedre then purchased the design.

Pedre made a single sale of 287 Cimarron watches to a customer, retailer Coldwater Creek. Coldwater Creek in turn advertised the watches in its national catalogs and ultimately sold 181 of the watches.

Brighton contacted Coldwater Creek and alleged that the Cimarron watch infringed Brighton's Laguna watch design. Coldwater Creek informed Pedre of the allegations and Pedre repurchased and destroyed the remaining Cimarron watches.

Brighton then filed copyright infringement lawsuits against both Pedre and Coldwater Creek. The action against Coldwater Creek settled. The action against Pedre went to trial and a jury returned a verdict in favor of Brighton. However, the jury determined that the infringement was not willful and it thus ordered Pedre to pay Brighton just $16,719.50 in statutory damages. Brighton then moved for a permanent injunction that would bar Pedre from copying any of the designs that appeared in Brighton's catalog.

eBay Factors not Met
The court had no trouble denying Brighton's motion for a permanent injunction. Such relief, the court noted, is only warranted where a plaintiff can demonstrate that all four equitable factors outlined ineBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 78 U.S.P.Q.2d 1577 (2006) weigh in favor of injunctive relief.

In this case, Brighton could not show that any of the equitable factors weighed in its favor, the court ruled.

With respect to the first factor, demonstration of irreparable injury, the court rejected Brighton's argument that the factor weighed in its favor due to the fact that Pedre has twice infringed Brighton's designs, which has resulted in costly litigation.

“First, the 'history' of litigation between the two parties is not as contentious as Plaintiff paints it to be,” Judge Anthony J. Battaglia said. The court noted the 1998 case settled without an admission of liability. Additionally, the court noted that Brighton is not now selling the Laguna watch. Moreover, Pedre took steps to avoid infringing Brighton's designs, and it pulled the Cimarron watches as soon as it learned of Brighton's complaint, the court noted. Thus, there is no evidence of irreparable harm, the court said.

The court also determined that the balance of the hardships weighed heavily in Pedre's favor. The injunction that Brighton requested would preclude Pedre from using any of the designs found in Brighton's catalog. But, the court noted, “Plaintiff has not established that it owns copyrights to all of the watch designs featured.” The court said:

It doesn't take a detailed survey of the watch display case in any department store to realize that many different manufacturers use common design elements. To order such broad injunction may effectively put Defendant out of business.

Brighton was represented by Keith J. Wesley of Browne George Ross LLP, Los Angeles. Pedre was represented by Robert Frank Helfing of Sedgwick Detert Moran and Arnold, Los Angeles.

To contact the reporter on this story: Tamlin Bason in Washington at tbason@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com


Text is available at http://www.bloomberglaw.com/public/document/Brighton_Collectibles_Inc_v_Pedre_Watch_Company_Inc_et_al_Docket_.

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