Opinion
Case No.: CV 21-09328-FWS-JPR
2022-08-04
MILKCRATE ATHLETICS, INC., Plaintiff, v. ADIDAS AMERICA, INC., Defendants.
David A. Erikson, Antoinette S. Waller, S. Ryan Patterson, Erikson Law Group, Los Angeles, CA, for Plaintiff. H. Forrest Flemming, III, Pro Hac Vice, Kilpatrick Townsend and Stockton LLP, New York, NY, Kollin J. Zimmermann, Kilpatrick Townsend and Stockton LLP, Los Angeles, CA, for Defendants.
David A. Erikson, Antoinette S. Waller, S. Ryan Patterson, Erikson Law Group, Los Angeles, CA, for Plaintiff. H. Forrest Flemming, III, Pro Hac Vice, Kilpatrick Townsend and Stockton LLP, New York, NY, Kollin J. Zimmermann, Kilpatrick Townsend and Stockton LLP, Los Angeles, CA, for Defendants.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S RENEWED MOTION TO DISMISS AND FOR COSTS AND FEES [24]
Fred W. Slaughter, UNITED STATES DISTRICT JUDGE
Before the court is Defendant Adidas America, Inc.'s ("Defendant") Renewed Motion to Dismiss Plaintiff Milkcrate Athletics, Inc.'s ("Plaintiff") First Amended Complaint and for Costs and Fees. (Dkt. 24 ("Motion" or "Mot.").) Plaintiff opposes the Motion. (Dkt. 25 ("Opposition" or "Opp.").)
The court finds this matter appropriate for resolution without oral argument. See Fed. R. Civ. P. 78(b) ("By rule or order, the court may provide for submitting and determining motions on briefs, without oral hearings."); L.R. 7-15 (authorizing courts to "dispense with oral argument on any motion except where an oral hearing is required by statute"). Based on the record, as applied to the applicable law, the court GRANTS IN PART AND DENIES IN PART the Motion. The court DISMISSES WITH LEAVE TO AMEND Plaintiff's claim for copyright infringement. The court further ORDERS (1) Plaintiff to file an amended complaint, if any, within twenty-one (21) days of this Order; (2) Defendant to file supplemental briefing on the relevant costs incurred in the parties' related proceedings in the Southern District of New York and all other information relevant under the applicable legal standards within twenty-one (21) days of this Order, exclusive of costs incurred that were potentially useful in this action; and (3) Plaintiff to file, within fourteen (14) days of the date on which Defendant's supplemental briefing is filed, any statement of opposition to Defendant's assertions therein regarding the usefulness of prior work product.
I. Background
A. Summary of Allegations
Plaintiff is a New York corporation, apparel brand, and "a major player in the streetwear industry." (Dkt. 21 ("FAC") ¶¶ 4, 9.) Since its founding in 1996, Plaintiff has "collaborat[ed] with international brands like Vans, New Balance, and Beats by Dre." (Id. ¶ 9.) Defendant is an Oregon corporation and "the second largest athletic apparel brand in the world." (Id. ¶¶ 5, 13.)
Plaintiff's logo for its brand "consists of an image of a plastic milkcrate at a 45-degree angle, with a vinyl LP record sleeve pointing upward out of the milkcrate" ("Logo"). (Id. ¶ 10.) Two manifestations of the Logo that are not at issue in the Motion are registered with the United States Patent and Trademark Office ("USPTO"). (Id.) Additionally, Plaintiff "has obtained copyright registration" for the following "iteration" of the Logo ("Copyright Logo"):
Image materials not available for display. (Id. ¶ 10.)
Plaintiff began using the Copyright Logo on apparel in 1994, (id. ¶¶ 12, 24), and it was registered with the United States Copyright Office at Registration No. VA0001261139 effective May 24, 2004, (id. ¶ 24). Plaintiff alleges several features of the Copyright Logo are "unusual," including that "[c]arrying records is not the primary use of a milk crate" which "is, in fact, illegal—under a network of laws pushed by the dairy industry designed to deter theft and illicit uses." (Id. ¶ 27.)
Plaintiff alleges Defendant uses logos that are "confusingly similar" to the Copyright Logo on its shoes released in 2020 (collectively, "Shoes"). (Id. ¶ 15.) The FAC sets forth the following two "[e]xamples" of Defendant's Shoes:
For sake of clarity, the court refers to the photograph depicting an orange basketball inside of a dark blue milkcrate as the "Orange Logo Shoe" and the photograph depicting a blue-and-black record inside of a pink milk crate as the "Pink Logo Shoe."
Image materials not available for display. (Id.)
Plaintiff alleges the logos on the tongues of Defendant's Shoes are "unusual in similar ways" to the Copyright Logo, in their respective "drawing style[s]," "disarming[ ] simpl[icity]," "use [of] lines to create the illusion of depth and three-dimensionality," and "us[e] [of] the techniques of perspective drawing," as well as because the " 'closest' element [in both works] is one corner of the milk crate, and a record is pulled up in the crate, as if being chosen." (Id. ¶ 27.) Plaintiff alleges that, "[y]ears ago, Plaintiff pitched the idea of using illustrations of a milkcrate to [Defendant]" and the parties were engaged in litigation over similar allegations of use in 2019 after that pitch. (Id. ¶ 28; see id. ¶ 13.) Plaintiff alleges Defendant's Shoes "infringed Plaintiff's copyright by copying and reproducing the artwork" without "the permission, license or consent of Plaintiff." (Id. ¶¶ 30-31.)
Based on the allegations above, Plaintiff brings claims against Defendant for: (1) copyright infringement, (id. ¶¶ 23-34); (2) violation of the Lanham Act, 15 U.S.C. § 1125(a), (id. ¶¶ 35-43); and (3) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq., (id. ¶¶ 44-51).
B. Procedural History
Prior to commencing the present action, Plaintiff instituted proceedings against Defendant in the Southern District of New York ("New York Action"). (Dkt. 24-2 ("Flemming Decl.") ¶ 2 & Exh. 1.) In the New York Action, Plaintiff brought claims against Defendant for (1) trademark infringement in violation of 15 U.S.C. § 1114; (2) false designation of origin in violation of 15 U.S.C. § 1125(a); (3) New York common law trademark infringement; (4) violation of New York General Business Law § 360-1; (5) deceptive acts and practices under New York General Business Law § 349; (6) common law unfair competition; (7) copyright infringement under 15 U.S.C. §§ 510, et seq.; (8) statutory damages under 17 U.S.C. § 504(c); (9) "reverse passing off" under Lanham Act § 43(a), 15 U.S.C. § 1125(a); (10) unjust enrichment; (11) an accounting; and (12) vicarious copyright infringement, based on allegations that Defendant improperly used Plaintiff's Copyright Logo and other iterations of the Logo in Defendant's apparel. (See generally id., Exh. 1.)
Attached to the Motion are several filings and discovery materials from the New York Action: (1) Plaintiff's complaint, (Flemming Decl., Exh. 1); (2) the parties' joint Rule 26(f) report, (Flemming Decl., Exh. 2); and Defendant's responses and objections to Plaintiff's first set of interrogatories, (Flemming Decl., Exh. 3). Though neither party requests the court take judicial notice of these documents, the parties do not dispute their authenticity, and Exhibits 1 and 2 are relevant to the parties' arguments regarding costs and fees under Federal Rule of Civil Procedure 41, as discussed infra. Accordingly, the court takes judicial notice of plaintiff's complaint and the parties' joint Rule 26(f) Report in the New York Action, Exhibits 1 and 2. See, e.g., Fed. R. Evid. 201(c)(1), (d) (courts may take judicial notice sua sponte at any stage of the proceeding); Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (courts "may take judicial notice of court filings and other matters of public record"). The court will not consider Exhibit 3, however, because it is not necessary to the court's determination of issues relevant to the Motion, and "[d]iscovery items such as requests for discovery and responses to requests for discovery are not proper subjects for judicial notice because they are not 'self-authenticating' and thus cannot be verified." United Safeguard Distribut. Ass'n, Inc. v. Safeguard Bus. Sys., Inc., 145 F. Supp. 3d 932, 942 (C.D. Cal. 2015) (citations omitted); see id. ("Further, the court may deny a request for judicial notice of facts that are not relevant to the question at issue."). The court considers the proceedings in the New York Action only to the extent they are relevant to the parties' arguments regarding costs and fees.
The parties proceeded through discovery in the New York Action, including jointly filing a Rule 26(f) Report. (Id. ¶¶ 3-6 & Exh. 2.) Defendant "drafted a motion to dismiss" Plaintiff's copyright claims in that action, (id. ¶ 7), before Plaintiff "informed [Defendant] that [Plaintiff] had voluntarily dismissed the New York Action and re-filed in the Central District of California" on December 1, 2021, two days before Defendant's motion to dismiss was due, (id. ¶ 11).
Defendant avers "a portion of [the motion to dismiss] had to be re-done for this action, given that [Defendant's] prior motion relied upon Second Circuit law and addressed the three copyrights asserted in the New York Action." (Id. ¶ 8.) Defendant also submits that Plaintiff "informed" Defendant of its substitution of counsel on November 11, 2021, and Plaintiff's then-new counsel "informed [Defendant] that he was having trouble with his pro hac vice application in the Southern District of New York" on November 29, 2021, three days prior to the dismissal. (See id. ¶¶ 9-10.)
Plaintiff filed the Complaint in this action on December 1, 2021, asserting the same three claims in the FAC against Defendant. (See generally Dkt. 1.) After Defendant moved to dismiss Plaintiff's Complaint on February 18, 2022, (Dkt. 16), Plaintiff filed the FAC on March 4, 2022, (FAC). In response, Defendant brought the Motion on March 18, 2022. The matter is fully briefed. (Dkts. 24-26.)
II. LEGAL STANDARD
A. Motion to Dismiss Pursuant to Rule 12(b)(6)
Rule 12(b)(6) permits a defendant to move to dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Generally, the court's review is limited to the contents of the complaint. Campanelli v. Bockrath, 100 F.3d 1476, 1479 (9th Cir. 1996). To withstand a motion to dismiss brought under Rule 12(b)(6), a complaint must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). While "a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations," a plaintiff must provide "more than labels and conclusions" and "a formulaic recitation of the elements of a cause of action" such that the factual allegations "raise a right to relief above the speculative level." Id. at 555, 127 S.Ct. 1955 (citations and internal quotation marks omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (reiterating that "recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice").
"Establishing the plausibility of a complaint's allegations is a two-step process that is 'context-specific' and 'requires the reviewing court to draw on its judicial experience and common sense.' " Eclectic Props. E., LLC v. Marcus & Millichap Co., 751 F.3d 990, 995-96 (9th Cir. 2014) (quoting Iqbal, 556 U.S. at 679, 129 S.Ct. 1937). "First, to be entitled to the presumption of truth, allegations in a complaint . . . must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively." Id. at 996 (quoting Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011)). "Second, the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation." Id. (quoting Baca, 652 F.3d at 1216); see also Iqbal, 556 U.S. at 681, 129 S.Ct. 1937. But " '[w]here a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.' " Id. (quoting Iqbal, 556 U.S. at 678).
In Sprewell v. Golden State Warriors, the Ninth Circuit described legal standards for motions to dismiss made pursuant to Rule 12(b)(6):
Review is limited to the contents of the complaint. See Enesco Corp. v. Price/Costco, Inc., 146 F.3d 1083, 1085 (9th Cir. 1998). All allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party. See id. The court need not, however, accept as true allegations that contradict matters properly subject to judicial notice or by exhibit. See Mullis v. United States Bankr. Ct., 828 F.2d 1385, 1388 (9th Cir. 1987). Nor is the court required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. See Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994).266 F.3d 979, 988 (9th Cir. 2001).
III. DISCUSSION
A. Plaintiff's Copyright Claim
To state a claim for copyright infringement, Plaintiff must show that (1) it owns a valid copyright in its work and (2) Defendant copied protected aspects of the work. Skidmore as Tr. for Randy Craig Wolfe Tr. v. Led Zeppelin, 952 F.3d 1051, 1064 (9th Cir. 2020) (en banc); see also Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991). "The second prong of the infringement analysis contains two separate components: 'copying' and 'unlawful' appropriation.' " Id. (citation omitted). Under the first prong, "a plaintiff must prove that a defendant copied the work." Id. (citing Feist, 499 U.S. at 345-46, 111 S.Ct. 1282). In the absence of direct evidence of copying, a plaintiff must show that a defendant had "access" to the work. Gray v. Hudson, 28 F.4th 87, 96 (9th Cir. 2022) (citation omitted). "On the other hand, the hallmark of 'unlawful appropriation' is that the works share substantial similarities." Skidmore, 952 F.3d at 1064 (citation omitted).
As Plaintiff notes, Defendant does not meaningfully dispute the validity of Plaintiff's copyright for the Copyright Logo or Plaintiff's allegations regarding Defendant's access to it. (Opp. at 4.) Accordingly, "[f]or purposes of this motion, Defendant[ ] assume[s] Plaintiff has established copyright ownership and access, but argue[s] that the [Copyright Logo] [is] not substantially similar as a matter of law." See Ricketts v. CBS Corps., 439 F. Supp. 3d 1199, 1211 (C.D. Cal. 2020), aff'd sub nom. Ricketts v. Berlanti Prods., 2022 WL 1046252 (9th Cir. Apr. 7, 2022). Instead, Defendant argues the Copyright Logo is entitled to "thin" protection and that it is not virtually identical to the logos on Defendant's Shoes. (See Mot. at 3-11; Opp. at 4.) Therefore, the court's analysis concerns Defendant's arguments regarding the scope of copyright protection on Plaintiff's Copyright Logo and unlawful appropriation.
The court observes Plaintiff has pleaded it began using the Copyright Logo on apparel in 1994 and it was registered with the United States Copyright Office at Registration No. VA0001261139, effective May 24, 2004. (FAC ¶¶ 12, 24.) Additionally, the Compliant includes allegations that Defendant was previously aware of the Copyright Logo by means of Plaintiff's "pitch" and the related litigation in 2019. (Id. ¶ 28; see id. ¶ 13.)
1. "Thin" or "Broad" Protection of Plaintiff's Copyright
"Before analyzing substantial similarity," the court "determine[s] whether a copyright is entitled to 'thin' or 'broad' protection." Desire, LLC v. Manna Textiles, Inc., 986 F.3d 1253, 1260 (9th Cir. 2021), cert. denied, — U.S. —, 142 S. Ct. 343, 211 L.Ed.2d 183 (2021) (citing Mattel, Inc. v. MGA Entm't, Inc., 616 F.3d 904, 913-14 (9th Cir. 2010)). Where "there's a wide range of expression . . . , then copyright protection is broad and a work will infringe if it's 'substantially similar' to the copyrighted work." Id. (alteration in original) (quoting Mattel, 616 F.3d at 913-14). But "[i]f there's only a narrow range of expression . . . , then copyright protection is 'thin' and a work must be 'virtually identical' to infringe." Id. (alteration in original) (quoting Mattel, 616 F.3d at 914).
Defendant argues that the Copyright Logo is entitled to "thin" protection at most because it "is a simple drawing of a milk crate that incorporates the standard elements of that object[,]" that "consists of a black-and-white drawing of a rectangular milk crate holding a sleeved vinyl record." (Mot. at 4-5.) Plaintiff argues that Defendant does not sufficiently demonstrate that the Copyright Logo "incorporates significant amounts of unprotectable elements" such that "thin" protection is warranted. (Opp. at 9-10.) Specifically, Plaintiff asserts that "virtually all visual depictions of a given object incorporate the standard features of that object," and that "an original selection and arrangement of otherwise unprotectable elements is copyrightable." (See Opp. at 9-10.)
Based on the state of the record, as applied to the applicable law, the court finds the Copyright Logo is entitled to "thin" protection. The Copyright Logo essentially consists of an arrangement of everyday two objects: a record and a milk crate. There are some design choices in the Copyright Logo that involve creative expression, such as the placement of the record and milk crate, its coloring, and its shading. (See, e.g., FAC ¶ 27). However, the court finds there is only a "narrow range of expression" with respect to the Copyright Logo's two constituent, commonplace elements and it is thus entitled to "thin" protection. See Mattel, 616 F.3d at 914 ("[F]or example, there are only so many ways to paint a red bouncy ball on blank canvas."); Satava v. Lowry, 323 F.3d 805, 812 (9th Cir. 2003) (holding plaintiff's "artistic choices [that] were not governed by jellyfish physiology or the glass-in-glass medium" were entitled to "thin" protection under copyright law); Ets-Hokin v. Skyy Spirits, Inc., 225 F.3d 1068, 1077 (9th Cir. 2000) ("[T]he types of decisions Ets-Hokin made about lighting, shading, angle, background, and so forth have been recognized as sufficient to convey copyright protection."); cf. Rentmeester v. Nike, Inc., 883 F.3d 1111, 1120 (9th Cir. 2018), overruled on other grounds by Skidmore, 952 F.3d 1051 (9th Cir. 2020) (photograph was "undoubtedly entitled to broad rather than thin protection" where "[t]he range of creative choices open to [plaintiff] in producing his photo was exceptionally broad; very few of those choices were dictated by convention or subject matter."). While the court acknowledges the "original selection, coordination, and arrangement" of unprotected elements may be broadly protectable, that scope of protection is limited to situations in which there is "a wide range of expression for selecting, coordinating, and arranging [those] elements." See L.A. Printex Indus., Inc. v. Aeropostale, Inc., 676 F.3d 841, 850 (9th Cir. 2012), abrogated on other grounds as recognized by Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 959 F.3d 1194, 1198 (9th Cir. 2020) (citation and internal quotation marks omitted).
2. Unlawful Appropriation
Courts in the Ninth Circuit "have 'traditionally determined whether copying sufficient to constitute infringement has taken place under a two-part test having "extrinsic" and "intrinsic" components.' " Gray, 28 F.4th at 96 (quoting Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435, 1442 (9th Cir. 1994)). The Ninth Circuit recently delineated the differences between the two tests in Gray:
The extrinsic test considers whether two works share a similarity of ideas and expression as measured by external, objective criteria. The extrinsic test requires . . . breaking the works down into their constituent elements, and comparing those elements for proof of copying as measured by substantial similarity. Because the requirement is one of substantial similarity to protected elements of the copyrighted work, it is essential to distinguish between the protected and unprotected material in a plaintiff's work." Swirsky v. Carey, 376 F.3d 841, 845 (9th Cir. 2004) (cleaned up); accord Skidmore, 952 F.3d at 1064. The intrinsic test focuses on "similarity of expression from the standpoint of the ordinary reasonable observer, with no expert assistance." Apple, 35 F.3d at 1442.Id.
The parties agree that only the extrinsic test is relevant at the pleadings stage. (Mot at 8; Opp. at 5.) See also Nike, 883 F.3d at 1118. Defendant argues that Plaintiff must show "virtual identity" rather than "substantial similarity" because the Copyright Logo "depicts everyday, known objects with standard elements" while pointing to nine differences between the Copyright Logo and Defendant's Shoes. (Mot at 9-10; id., App'x A.) Plaintiff argues that the FAC "pleads more than enough similarities in the arrangements, selections, and other plausibly protectable elements of the [Copyright Logo] to survive a motion to dismiss." (Opp. at 8.)
Defendant argues in its Reply that Plaintiff has "concede[d]" the specific differences identified by Defendant in the Motion because Plaintiff did not address them specifically in the Opposition. (See Reply at 2-3.) While the court notes the Opposition does not squarely address the differences Defendant identified, the court observes that Defendant cites as authority Gadh v. Spiegel, in which the court explained it still undertook "a careful examination of each of these elements." See 2014 WL 1778950, at *6 (C.D. Cal. Apr. 2, 2014).
Before applying the extrinsic test, the court "must filter out and disregard the non-protectable elements in making its substantial similarity determination," keeping in mind that "[c]opyright law only protects expression of ideas, not the ideas themselves." Cavalier v. Random House, Inc., 297 F.3d 815, 822 (9th Cir. 2002) (citation omitted). The "unprotectable elements" of Plaintiff's work are "primarily ideas and concepts, material in the public domain, and scènes à faire (stock or standard features that are commonly associated with the treatment of a given subject)." See Nike, 883 F.3d 1111, 1118 (citing Cavalier, 297 F.3d at 822-23).
However, in an analogous context, the Ninth Circuit observed that "[p]hotographs cannot be dissected into protected and unprotected elements in the same way." Id. at 1119. "[P]hotos can be broken down into objective elements that reflect the various creative choices the photographer made in composing the image—choices related to subject matter, pose, lighting, camera angle, depth of field, and the like" but "none of those elements is subject to copyright protection when viewed in isolation." Id. Conversely, though, "[w]hat is protected by copyright is the photographer's selection and arrangement of the photo's otherwise unprotected elements. If sufficiently original, the combination of subject matter, pose, camera angle, etc., receives protection, not any of the individual elements standing alone." Id.
Acknowledging this, the court observes that the Copyright Logo is a picture of two objects—a sleeved record and a milk crate—and includes elements of shading, positioning of the crate, a black-and-white motif, and the placement of the record inside of the crate. Accordingly, the court will consider the artistic elements of the Copyright Logo—Plaintiff's choice in shading, positioning of the milk crate and record, and the black and white motif—that are clearly protectable under copyright law. See Nike, 883 F.3d at 1119 ("What is protected by copyright is the photographer's selection and arrangement of the photo's otherwise unprotected elements."); Satava v. Lowry, 323 F.3d 805, 811 (9th Cir. 2003) (holding "elements [that] are so commonplace in glass-in-glass sculpture and so typical of jellyfish physiology" were unprotected).
Plaintiff makes several arguments regarding the "mischievous" connotations of the Copyright Logo and how it "calls to mind the notion of a DJ in the underground club scene of the late twentieth century" and the "history and lore of basketball." (See, e.g., Opp. at 2-3.) Even crediting those statements as true, Plaintiff's assertions of these general thematic elements associated with the Copyright Logo are insufficient to demonstrate protectable "expression[s] of ideas." See, e.g., Cavalier, 297 F.3d at 823 (citing 17 U.S.C. § 102(b)).
Because the court has found the Copyright Logo is "thinly" protected, the court next considers whether the protectable elements in the Copyright Logo are "virtually identical" to the logos in Defendant's Shoes. Apple, 35 F.3d at 1439 ("When the range of protectable and unauthorized expression is narrow, the appropriate standard for illicit copying is virtual identity."). Based on the record, as applied to the applicable law, the court finds Plaintiff has the use of the logos in Defendant's Shoes is not "virtually identical" to the Copyright Logo. The Pink Logo Shoe includes a record inserted into a milk crate, but, otherwise, differs at least in its coloring, shading, angle, accompanying words, and the fact the record is not sleeved. The Orange Logo Shoe and the Copyright Logo differ in the same ways, and, additionally, because the former reflects an entirely different object inserted into a milk crate than the latter (a basketball instead of a record). See Cub Club Inv., LLC v. Apple Inc., 2022 WL 469378, at *1 (N.D. Cal. Feb. 16, 2022) (finding "Apple's emoji [we]re not 'virtually identical' to Cub Club's' based on differences in "coloring," "shape," use of "shadows," and shading); Pretty in Plastic, Inc. v. Bunn, 793 F. App'x 593, 594 (9th Cir. 2020) (affirming dismissal where copyright protection was "thin" and there were "notable differences between the unicorn and rainbow elements" in the works).
As discussed earlier, "[t]he second prong of the infringement analysis contains two separate components: 'copying' and 'unlawful appropriation.' " Skidmore, 952 F.3d at 1064. The Ninth Circuit has noted "these requirements are too often referred to in shorthand lingo as the need to prove 'substantial similarity,' " yet "are distinct concepts." Id. But while "[t]he standard is always substantial similarity . . . the degree of overlap in original expression that is required for the similarity to be substantial is determined by the range of possible protectable expression." Id. at 1076 n.13. "Thus, for works where there is a narrow range of available creative choices, the defendant's work would necessarily have to be 'virtually identical' to the plaintiff's work in order to be substantially similar." Id. The court refers to "this result as the work having a 'thin' copyright." See id.
Defendant also argues the allegations Plaintiff added to the FAC regarding the usefulness of expert testimony and Defendant's alleged access to Plaintiff's "ideas" are "unhelpful" or "irrelevant" to the disposition of Plaintiff's copyright claim. (See Mot. at 11-13.) Plaintiff counters that dismissals based on the extrinsic test are disfavored because "discovery, investigation, and expert analysis" are typically required to determine if a reasonable juror could find substantial similarity. (See Opp. at 6.) While the court observes that, in some situations, "the Ninth Circuit disfavors dismissals on the ground of substantial similarity at the Rule 12(b)(6) stage," Segal v. Segel, 2022 WL 198699, at *13 (S.D. Cal. Jan. 21, 2022) (collecting cases), "a motion to dismiss is proper when '[n]othing disclosed during discovery could alter the fact that the allegedly infringing works are as a matter of law not substantially similar[,]' " Masterson v. Walt Disney Co., 821 F. App'x 779, 781 (9th Cir. 2020) (quoting Nike, 883 F.3d at 1123). Having considered the images provided by the parties of the use Plaintiff argues is infringing and the Copyright Logo itself, the court agrees with Defendant that further discovery would not alter its analysis above. See Christianson v. West Pub. Co., 149 F.2d 202, 203 (9th Cir. 1945) ("[W]hen the copyrighted work and the alleged infringement are both before the court, capable of examination and comparison, non-infringement can be determined on a motion to dismiss.").
Accordingly, for the reasons set forth above, the court GRANTS the Motion to the extent it concerns Plaintiff's claim for copyright infringement and DISMISSES Plaintiff's claim for copyright infringement accordingly.
3. Leave to Amend
After the time to amend a complaint as a matter of right has expired, it "may only be amended with the opposing party's written consent or the court's leave," the latter of which is "freely give[n] when justice so requires." Fed. R. Civ. P. 15(a)(2). "In assessing whether leave to amend is proper, courts consider the presence or absence of undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, undue prejudice to the opposing party and futility of the proposed amendment." Kroessler v. CVS Health Corp., 977 F.3d 803, 814-15 (9th Cir. 2020) (citation and internal quotation marks omitted). Courts may find amendment futile where "no amendment would allow the complaint to withstand dismissal as a matter of law," and "[f]utility of amendment can, by itself, justify the denial of a motion for leave to amend." Id. at 815 (citation and internal quotation marks omitted). But "[i]f a complaint does not state a plausible claim for relief, a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Perez v. Mortg. Elec. Registration Sys., Inc., 959 F.3d 334, 340 (9th Cir. 2020) (citation and internal quotation marks omitted).
Considering the court has not previously ruled on a motion to dismiss, the court is hesitant to find "the [FAC] could not possibly be cured by the allegation of other facts" at this stage of the litigation. See Perez, 959 F.3d at 340. Accordingly, the court will grant leave to amend the SAC. See Cub Club, 2022 WL 469378, at *2 (granting leave to amend "in the interest of caution" despite noting the court's "skeptic[ism]" that plaintiff would "be able to allege copyright or trade dress infringement in an amended complaint"). Accordingly, the court GRANTS Plaintiff LEAVE TO AMEND the FAC.
B. Award of Costs and Fees
Defendant argues the court should order Plaintiff to pay Defendant's costs and fees under 17 U.S.C. § 505 and Federal Rule of Civil Procedure 41(d). (Mot. at 13-20.) Defendant submits it has incurred approximately $8,000 in attorneys' fees and costs in connection with the New York Action. (Flemming Decl. ¶ 8.) In the Motion, Defendant estimates it has sustained approximately $9,500 in attorneys' fees and costs in bringing its original motion to dismiss and will incur roughly $8,500 in additional fees and costs in connection with this Motion, its Reply, and a hearing. (Mot. at 16.)
1. Award of Costs and Fees Under the Copyright Act
The Copyright Act provides that, "[i]n any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof" and "may also award a reasonable attorney's fee to the prevailing party as part of the costs." 17 U.S.C. § 505. § 505 gives "broad leeway" to district courts, but the Supreme Court has "also established several principals and criteria to guide their decisions." Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 197, 202, 136 S.Ct. 1979, 195 L.Ed.2d 368 (2016) (citing Fogerty v. Fantasy, Inc., 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994)). In making a " 'particularized, case-by-case assessment,' " id. (quoting Fogerty, 510 U.S. at 533, 114 S.Ct. 1023), courts may consider "several nonexclusive factors," id. (quoting Fogerty, 510 U.S. at 534 n.19, 114 S.Ct. 1023).
In the Ninth Circuit, "[t]hese factors are (1) the degree of success obtained, (2) frivolousness, (3) motivation, (4) reasonableness of losing party's legal and factual arguments, and (5) the need to advance considerations of compensation and deterrence." Shame On You Prods., Inc. v. Banks, 893 F.3d 661, 666 (9th Cir. 2018) (citation omitted); see also Fogerty, 510 U.S. at 534 n.19, 114 S.Ct. 1023 (courts may consider "frivolousness, motivation, objective unreasonableness[,] and the need in particular circumstances to advance considerations of compensation and deterrence"). Courts "afford substantial weight to the fourth factor." Id. (citing Kirtsaeng, 579 U.S. at 209-10, 136 S.Ct. 1979). "These factors 'are not exclusive and need not all be met.' " Moi v. Chihuly Studio, Inc., 846 F. App'x 497, 500 (9th Cir. 2021) (quoting Fantasy, Inc. v. Fogerty, 94 F.3d 553, 558 (9th Cir. 1996)). Courts may also consider "the purposes of the Copyright Act" and "whether the chilling effect of attorney's fees may be too great or impose an inequitable burden on an impecunious [litigant]." Glacier Films (USA), Inc. v. Turchin, 896 F.3d 1033, 1037 (9th Cir. 2018) (citation and quotation marks omitted).
Defendant argues awarding costs and fees incurred in relation to its original motion to dismiss and the Motion would "would vindicate an 'essential goal' of the Copyright Act: the explicit prohibition on copyrighting ideas, as opposed to expressions." (Mot. at 14 (emphasis removed).) Further, Defendant argues "a fee award is particularly appropriate here because [Plaintiff's] claim is objectively unreasonable based on the 'distinct lack of similarity between' its claimed work and [Defendant's] designs." (Mot. at 15.) Defendant also argues dismissal would be a "complete success" on Plaintiff's copyright claim and deter "meritless copyright cases." (Mot. at 15-16.) Plaintiff argues an award of costs and fees under the Copyright Act before a final judgment in this case is improper, and, "[r]egardless of the outcome of Adidas's Motion, Plaintiff will have remaining claims pending against Adidas for Lanham Act violations and unfair competition." (Opp. at 11.)
i. First Factor: Degree of Success
"[A] party entitled to attorney's fees as a prevailing party on a particular [copy-right] claim, but not on other claims in the same lawsuit, can only recover attorney's fees incurred in defending against that one claim or any 'related claims.' " The Traditional Cat Ass'n, Inc. v. Gilbreath, 340 F.3d 829, 833 (9th Cir. 2003) (alteration in original) (citation omitted). The court has found that the FAC does not plausibly state claim for copyright infringement, and thus Defendant is the prevailing party on Plaintiff's sole claim under the Copyright Act. Accordingly, this factor weighs in favor of granting Defendant's requested costs and fees.
ii. Second and Fourth Factors: Frivolousness and Reasonableness
" 'Objective unreasonableness' is generally used to describe claims that have no legal or factual support." Washington v. ViacomCBS, Inc., 2021 WL 6134375, at *2 (C.D. Cal. Dec. 9, 2021) (citations omitted). Relatedly, "a claim is appropriately considered to be frivolous when the result is obvious or the arguments are wholly without merit." Id. (citations and internal quotation marks omitted). While the court has found Plaintiff has not plausibly stated a claim for copyright infringement, the court does not find Plaintiff's claim was "wholly without merit" or entirely lacking in "legal or factual support." As noted above, the logo on Defendant's Shoes and the Copyright Logo are not entirely devoid of similarities, though these are insufficient for the court to find the works are "virtually identical." Regarding the other elements of copyright infringement, the validity of the Copyright Logo is undisputed, and Defendant does not challenge Plaintiff's allegations related to Defendant's access to the Copyright Logo. Because the court finds Plaintiff's claim for copyright infringement was not "frivolous" or so deficient as to be "objectively unreasonable" these factors weigh against granting Defendant's requested costs and fees.
iii. Third Factor: Motivation
Defendant argues it was "forced to brief and file this Renewed Motion because [Plaintiff] filed its First Amended Complaint on the day [Plaintiff's] response was due." (Mot. at 14.) But here, the court finds "[t]here is no persuasive evidence that plaintiff brought the [copyright infringement] claim, or the case generally, for an improper motive." See Velasquez v. 2048 Partners, LLC, 2020 WL 3035791, at *1 (N.D. Cal. June 5, 2020). As set forth above, Plaintiff alleges it has used the Copyright Logo on apparel since 1994; it registered the Copyright Logo with the USPTO with an effective date of May 24, 2004; and it brought claims against Defendant based on allegations of similar use in the Shoes. Stated differently, "[t]his was not an action by a copyright troll or pirate," and this factor also weighs against awarding Defendant costs and fees. See id.
iv. Compensation and Deterrence
Finally, Defendant asserts that an award of attorneys' fees and costs will further the purposes of the Copyright Act and deter future meritless claims. While "[t]he successful defense against a plaintiff's copyright infringement claims may assure that a defendant's literary work remains available to the public, thus furthering the goal of stimulating artistic creativity for the general public good and perhaps lead to further creative pieces . . . it is not the purpose of the Copyright Act to deter litigants from bringing potentially meritorious claims, even though those claims may be ultimately unsuccessful." Smith v. Weeknd, 2020 WL 8174617, at *4 (C.D. Cal. Sept. 4, 2020) (cleaned up). Again, while the court has found Plaintiff has not plausibly stated a claim for copyright infringement, Plaintiff's claim is based on a copyright neither party disputes, and the parties' works are not without any similarities. Stated differently, the court finds Plaintiff's claims does not rise to the level of frivolity. Accordingly, the court does not view this action as a case in which an award of costs or fees would serve the Copyright Act's deterrent purpose, and this factor weighs against awarding costs and fees to Defendant.
Considering the applicable law, totality of the relevant factors, and record, the court DENIES Defendant's Motion to the extent it seeks costs and fees under 17 U.S.C. § 505.
2. Award of Costs and Fees Pursuant to Federal Rule of Civil Procedure 41(d)
Rule 41(d) provides that:
If a plaintiff who previously dismissed an action in any court files an action based on or including the same claim against the same defendant, the court: (1) may order the plaintiff to pay all or part of the costs of that previous action; and (2) may stay the proceedings until the plaintiff has complied.Fed. R. Civ. P. 41(d).
Defendant argues the court should award it the attorneys' fees and costs it sustained in connection with the New York Action under Rule of Civil Procedure 41(d) based on Plaintiff's voluntary dismissal of the New York Action prior to refiling in this court. (Mot. at 16-20.) Defendant argues that Plaintiff previously "filed essentially the same lawsuit against [Defendant] asserting trademark infringement, copyright infringement, and New York state-law claims" in the New York Action, which progressed to the point that the parties had "negotiated a waiver of service, a case schedule, and a joint discovery plan." (Mot. at 16; Flemming Decl. ¶¶ 2-5 & Exhs. 1-2.) Further, Defendant "drafted a motion to dismiss Milkcrate's copyright claims using case law from the Second Circuit" before Plaintiff voluntarily dismissed the New York Action two days prior to Defendant's deadline to file that motion to dismiss. (Mot. at 16, Flemming Decl. ¶¶ 6-7 & Exh. 3.)
Defendant notes the New York Action had been pending for four months prior to Plaintiff's dismissal. (Mot. at 16-17; see Flemming Decl. ¶¶ 2, 11 & Exh. 1.) Plaintiff argues an award of costs is improper because Defendant did not incur any "needless expenditures" during the New York Action "as it had not even filed a responsive pleading in the New York action at the time it was dismissed." (Opp. at 12.) Plaintiff also argues that awarding attorneys' fees under Rule 41(d) "has been flatly rejected as contrary to the plain wording of the statute." (Opp. at 12 n.3.) Defendant notes in Reply that Plaintiff does not address its argument that "the only possible reason for the voluntary dismissal and refiling was Milkcrate's new counsel's failure to timely obtain admission to practice in the Southern District of New York." (Reply at 11; see also Mot. at 18; Opp. at 12; Flemming Decl. ¶ 10.)
i. Costs Under Rule 41(d)
An "award under Rule 41(d) is appropriate" where "the [movant] has failed to present a persuasive explanation for the course of litigation" and the non-movant shows it has "incurred needless expenditures as a result." Esquivel v. Arau, 913 F. Supp. 1382, 1388 (C.D. Cal. 1996).
Esquivel, cited by both parties, is persuasive on the court's potential award of costs. In Esquivel, plaintiff instituted two actions: one in a New York state court and the other in the U.S. District Court for the Southern District of New York. Id. at 1385. After the parties agreed to stay the action in the New York state court, defendants brought a motion to dismiss against plaintiff in the Southern District of New York; plaintiff then filed a First Amended Complaint. Id. Defendants filed a renewed motion to dismiss, and plaintiff noticed a voluntary dismissal under Rule 41(a)(1) on "the day that defendants allege[d] plaintiff's opposition to the motion to dismiss was due." Id. Plaintiff then filed a similar action in the Central District of California that "involve[ed] the same transactions and parties" and asserted substantially the same claims against substantially the same defendants. Id. Defendants brought a motion for costs and fees incurred in the Southern District of New York action under Rule 41(d). Id.
The Esquivel court noted that "[c]osts may be imposed under Rule 41(d) where the plaintiff has brought a second identical, or nearly identical, claim and has requested identical, or nearly identical, relief." Id. at 1387 (citation omitted). Finding that the "new action in the Central District incorporate[d] all the claims previously brought in the Southern District Action[;]" both alleged "essentially the same" operative facts; and "[t]he only substantial change was the addition of claims for constructive fraud, invasion of privacy, commercial misappropriation, and unfair competition," the court awarded costs under Rule 41(d) to defendant. See id. at 1388. However, the Esquivel court agreed with plaintiff that it "should not impose any costs associated with work that will still be useful to defendants in the instant litigation." Id.
The instant course of this litigation is materially similar to that in Esquivel. The parties do not dispute that they progressed through the New York Action, filed a joint Rule 26(f) report, and that Plaintiff voluntarily dismissed its complaint two days before Defendant's motion to dismiss or answer was due. It is also undisputed that Plaintiff filed the instant action in this District on the same date. Having reviewed the complaint in the New York Action and the FAC, the court also notes that, while the factual allegations and claims brought in the New York Action were more extensive than those in the FAC, both concern the same operative facts and include the same copyright infringement claim at issue in the Motion. Defendant contends that at least some of its previous work product from the New York Action is not useful because it was created pursuant to inapplicable Second Circuit law, the Local Rules of the Southern District of New York, and the Rules and Procedures of the Judge in the New York Action. In rebuttal, Plaintiff broadly argues that Defendant cannot establish it "suffered prejudice in the form of 'needless expenditures.' " (See Opp. at 12.) But this could be resolved by the court, for instance, after supplemental briefing regarding Defendant's costs, pursuant to Defendant's unopposed request that "the Court first decide [Plaintiff's] liability for fees, then receive [Defendant's] 'submissions on the value of services.' " (Mot. at 20 (citation omitted).)
Based on the record, as applied to the applicable law, the court GRANTS the Motion to the extent it seeks costs under Rule 41(d). Accordingly, the court ORDERS Defendant to file supplemental briefing on the relevant costs incurred in the parties' related proceedings in the Southern District of New York and all other information relevant under the applicable legal standards within twenty-one (21) days of this Order, exclusive of costs incurred that were potentially useful in this action. Plaintiff shall file, within fourteen (14) days of the date on which Defendant's supplemental briefing is filed, any statement of opposition to Defendant's assertions therein regarding the usefulness of prior work product. Neither party shall file a reply unless ordered by the court.
ii. Fees Under Rule 41(d)
Based on the record, applicable law, and the parties' arguments, the court declines to award attorneys' fees to Defendant under Rule 41(d). Though the court in Esquivel concluded, as matter of first impression, that attorneys' fees may be available to a defendant under Rule 41(d), see id. at 1388-1392, the Ninth Circuit recently held that "Rule 41(d) 'costs' do not include attorney's fees as a matter of right," Moskowitz v. Am. Sav. Bank, F.S.B., 37 F.4th 538, 545 (9th Cir. 2022). In Moskowitz, the Ninth Circuit noted it "ha[d] not previously decided whether attorney's fees are available under Rule 41(d) as part of 'costs,' and other circuits have decided cases in which attorney's fees were sought as part of Rule 41(d) 'costs' in four ways." Id. at 543. After analyzing the "four ways" other Circuits have interpreted the term "costs" in Rule 41(d), see id. at 543-45, the Ninth Circuit "join[ed] every published circuit court opinion that has meaningfully considered this issue" in holding that costs under Rule 41(d) do not include attorneys' fees "as a matter of right," id. at 545.
The court observes that the Ninth Circuit in Moskowitz expressly declined to decide whether: (1) "bad faith is sufficient to allow a party to recover attorney's fees as 'costs' under Rule 41(d)"; or (2) attorneys' fees are properly awarded in situations where "the underlying statute so provides." 37 F.4th at 546. It was undisputed in Moskowitz that the statute at issue did not provide for an award of fees to the prevailing party, and defendant did not allege plaintiff acted in bad faith. See id. By contrast, the Motion potentially implicates both unaddressed questions. Defendant seeks costs and fees under the Copyright Act, which provides for an award of attorneys' fees to the prevailing party, and asserts Plaintiff litigated materially similar claims before voluntarily dismissing the New York Action. Defendant also argues that Plaintiff only brought this action because Plaintiff's counsel did not gain timely admission to the Southern District of New York, which Plaintiff does not address in the Opposition.
Generally, the " 'basic point of reference' when considering the award of attorney's fees is the bedrock principle known as the 'American Rule': Each litigant pays his own attorney's fees, win or lose, unless a statute or contract provides otherwise." Peter v. Nantkwest, Inc., — U.S. —, 140 S. Ct. 365, 370, 205 L.Ed.2d 304 (2019). "To determine whether Congress intended to depart from the American Rule presumption, the Court first 'look[s] to the language of the section' at issue." Id. at 372 (quoting Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 254, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010)). Several other courts have confronted the issue at hand. The "Second Circuit, Fourth Circuit, and Tenth Circuit have each held that courts have the discretion to award attorney's fees pursuant to Rule 41(d) whenever there is proof of bad faith, vexatiousness, wanton actions, or forum shopping in the filing of the original action," Moskowitz, 37 F.4th at 544 (citing Horowitz v. 148 S. Emerson Assocs. LLC, 888 F.3d 13, 25-26 (2nd Cir. 2018); Andrews v. Am.'s Living Ctrs., LLC, 827 F.3d 306, 311 (4th Cir. 2016); Meredith v. Stovall, 2000 WL 807355, at *1 (10th Cir. June 23, 2000) (unpublished)), and "[t]he Third Circuit, Fourth Circuit, Fifth Circuit, and Seventh Circuit have each held that courts may award attorney's fees as costs under Rule 41(d) if the substantive statute underlying the claim provides for attorney's fees," id. (citing Garza v. Citigroup Inc., 881 F.3d 277, 279 (3rd Cir. 2018); Andrews, 827 F.3d at 311; Portillo v. Cunningham, 872 F.3d 728, 739 (5th Cir. 2017); Esposito v. Piatrowski, 223 F.3d 497, 501 (7th Cir. 2000)).
As noted above, Rule 41(d) provides that the court "may order the plaintiff to pay all or part of the costs of that previous action" and "may stay the proceedings until the plaintiff has complied" where "a plaintiff who previously dismissed an action in any court files an action based on or including the same claim against the same defendant." Fed. R. Civ. P. 41(d). As recognized in Judge Wardlaw's concurrence in Moskowitz, "Congress granted courts discretion to award costs under Rule 41(d) 'as [they] may deem proper'—language that supports a court's right to award attorney's fees if such an award was 'proper' to disincentivize the conduct of vexatious litigants" and the "intentional inclusion of this discretionary language sufficiently demonstrates the 'specific and explicit' intent to overcome the typical American Rule." Moskowitz, 37 F.4th at 549 (Wardlaw, J., concurring) (alteration in original).
Guided by the authorities above, the court concludes there is persuasive support for a court's discretion to award attorneys' fees pursuant to Rule 41(d) under certain circumstances. As Judge Wardlaw further explained in her concurrence in Moskowitz:
The court is aware of only one other district court in the Ninth Circuit to have considered a motion for costs under Rule 41(d) after the Ninth Circuit decided Moskowitz; there, however, the court declined to order payment of costs and did not separately analyze its authority to award attorneys' fees. See generally Davis v. Voorhees, 2022 WL 2718122, at *2-3 (D. Ariz. July 13, 2022).
As the Esquivel district court reasoned, "[i]t seems consistent with the overall purpose of Rule 41, therefore, to understand the term 'costs' in Rule 41(d) as a means to designate recovery of litigation-related expenditures as the only 'condition' that a district court has the discretion to impose in situations where Rule 41(d) applies, rather than as a limit on the nature of expenses recoverable." Esquivel, 913 F. Supp. at 1390. Any other interpretation would create an illogical inconsistency where "a court has discretion to condition Rule 41(a)(2) voluntary dismissal without prejudice on payment of attorneys' fees, but that a court does not have discretion to exact the same payment from a plaintiff who has noticed a Rule 41(a)(1) dismissal in a previous case." Id. at 1391. Given that, "[i]n either situation, the plaintiff has required the defendant to incur expenses that may be substantial[,] [i]t would be anomalous to require the plaintiff to internalize the full costs of its
conduct in one context but not the other." Id. Any interpretation of Rule 41(d) excluding attorney's fees would therefore be in plain tension, or even outright conflict, with our longstanding precedent about the availability of attorney's fees under Rule 41(a)(2).Moskowitz, 37 F.4th 538, 550 (Wardlaw, J, concurring).
Indeed, "if Rule 41(d)'s purpose is to prevent undue prejudice to a defendant from unnecessary or vexatious litigation, there does not seem to be a clear reason why Rule 41(d) would provide only for an award of costs exclusive of attorneys' fees, since the typical defendant cannot adequately defend a case without incurring such fees." Esquivel, 913 F. Supp. at 1391.
As applied to the present matter before it, the court's observations above are principally academic. Ultimately, the court views the above weight of authority as constraining the upper bound of the court's discretion to award fees to situations in which (1) there is proof of bad faith, vexatiousness, wanton actions, or forum shopping in the filing of the original action; or (2) if the substantive statute underlying the claim provides for attorney's fees. As relevant here, costs and fees are available under the Copyright Act, but, as analyzed above, the court has declined to award them. Elsewise, Defendant notes Plaintiff does not dispute "the only possible reason for the voluntary dismissal and refiling was [Plaintiff's] new counsel's failure to timely obtain admission to practice in the Southern District of New York." (Reply at 11.) The court declines to infer bad faith, vexatiousness, wanton action, or forum shopping form this, considering Defendant submits Plaintiff's then-new counsel was added to the New York Action less than three weeks prior to informing Defendant of his troubles securing pro hac vice admission, and initiated proceedings in this court three days after providing that notice. (See Flemming Decl. ¶¶ 10-12.) As noted above, an award of costs under Rule 41(d) does not require a showing of bad faith, Esquivel, 913 F. Supp. at 1388, but the weight of authority suggests an award of fees under that Rule requires a heightened showing owing to its roots as an exception to the American Rule, see Moskowitz, 37 F.4th at 545 (holding "that Rule 41(d) 'costs' do not include attorney's fees as a matter of right."). Accordingly, the court DENIES Defendant's Motion to the extent it seeks attorneys' fees under Rule 41(d).
IV. DISPOSITION
For the reasons set forth above, the court GRANTS IN PART AND DENIES IN PART the Motion. The court DISMISSES WITH LEAVE TO AMEND Plaintiff's claim for copyright infringement. The court further ORDERS (1) Plaintiff to file an amended complaint, if any; within twenty-one (21) days of this Order; (2) Defendant to file supplemental briefing on the relevant costs incurred in the parties' related proceedings in the Southern District of New York and all other information relevant under the applicable legal standards within twenty-one (21) days of this Order, exclusive of costs incurred that were potentially useful in this action; and (3) Plaintiff to file, within fourteen (14) days of the date on which Defendant's supplemental briefing is filed, any statement of opposition to Defendant's assertions therein regarding the usefulness of prior work product.
IT IS SO ORDERED.