United Fabrics International, Inc. (“United Fabrics”) manufactures a collection of fabric designs titled “Ethnic Collection X” to which it holds a copyright. As part of that collection, United Fabrics purchased a fabric design from an Italian design house and then modified the purchase design. It then sued Macy’s (and several others) for infringing on its copyright by selling infringing fabric and garments. Macy’s moved for summary judgment and the court sua sponte dismissed the case claiming that United Fabrics did not have standing to pursue a copyright infringement claim. The court held that United Fabrics had failed to establish the crucial element of ownership of a valid copyright.
The Ninth Circuit found that the District Court and Macy’s were incorrect as a matter of law and reversed the dismissal of the case. The Ninth Circuit began by recognizing that the registration of a copyright, such as the one registered by United Fabrics, was “prima facie evidence of the validity of the copyright and the facts stated in the certificate.” Therefore, the Ninth Circuit held that Macy’s had the burden of rebutting the facts set forth in the copyright certificate and that it “must simply offer some evidence or proof to dispute or deny the plaintiff’s prima facie case of infringement.”
Macy’s argued that United Fabrics had failed to establish its ownership of a valid copyright. The Court held, however, that Macy’s had failed to set forth facts to rebut the presumption of validity. The Ninth Circuit ruled that the lower court’s ruling contained the same defect.
Although Macy’s argued that it had rebutted the presumption of copyright validity, its attorney was unable to identify any evidence in the record sufficient to rebut the presumption. The Ninth Circuit recognized, “although such evidence may be present in the lengthy and extensive record, it is not our place to find it … or to provide an argument on behalf of Macy’s as to how that evidence rebuts the presumption of validity.”
The Court rejected Macy’s arguments that United Fabrics had not provided evidence that the assignment of the fabric design by the Italian design house was proper because “as the copyright claimant, United is presumed to own a valid copyright and the facts stated therein including the chain of title and the source artwork are entitled to the presumption of truth.” Thus, the burden was on Macy’s to point to evidence in the record that indicated the copyright to be invalid or otherwise rebut the presumption.
The Ninth Circuit continued by recognizing that the lower court had also erred because it had ignored the statutory presumption of copyright validity in concluding that United Fabrics had failed to present a prima facie case of infringement. The Ninth Circuit stated that it was unaware of any authority that “the presumption of validity of the copyright does not apply when standing is at issue.”
The Ninth Circuit concluded that although United Fabrics is presumed to own a valid copyright in its fabric design, it was not holding that it in fact owns a valid copyright. In fact, Macy’s may still prevail on this issue upon further proceedings.
The District Court had also dismissed United Fabrics claim because it had failed to register its collection of fabric designs in a single copyright. The Ninth Circuit recognized that when one registers a collection of works in a single copyright, it can be registered as either a published or unpublished collection. “A necessary element of a published collection copyright is that the collection is sold, distributed or offered for sale concurrently.” However, the Ninth Circuit recognized that there is no such requirement for an unpublished collection. Because United Fabrics contended that it registered its collection of fabric designs as an unpublished collection of works, this requirement did not apply and therefore the Ninth Circuit concluded that United Fabrics had registered a valid copyright in an unpublished collection of works.
The Ninth Circuit’s ruling in the United Fabrics case demonstrates the importance that a litigant must present or point to evidence of copyright invalidity in moving for summary judgment. Merely claiming that the plaintiff has failed to produce evidence may result in a reversal of any favorable ruling.