Not-So-Innocent Infringers

Fort Worth, Texas Peter Smythe © 2019

Fort Worth, Texas
Peter Smythe © 2019

Reno-Tahoe Specialists, Inc. was in the business of selling posters, postcards, etc. of Las Vegas. Sometime around 1997, it took pictures of a number of Las Vegas landmarks in the Strip, photoshopped them together, and created the "695 View." 
   RTSI began selling postcards of 695 View to gift shops in the area, and including the image in its annual Las Vegas calendars. Over time it added the image to things such as key chains, picture frames, and the like. 695 View quickly became RTSI's best-selling image. It obtained a valid copyright on an amended version of the 695 View in 1999. RTSI modified the image to include new construction occurring from time to time. 
   Mungchi was a competitor of RTSI who also sold souvenir merchandise in the Las Vegas souvenir market. It marketed a t-shirt that the court found "practically identical" to the 695 View (the infringing T-Shirt). The evidence presented at trial was that Mungchi had sold 193 t-shirts in some Walgreens stores and had netted approximately $1,350 from the sales. 
   Employing the Ninth Circuit's "extrinsic/intrinsic" test, Mattel v. MGA Entm't, Inc., 616 F.3d 904, 913 (9th Cir. 2010), the court found that the Infringing T-Shirt was substantially similar to 695 View. This was true even though the t-shirt included a few additions and repositioning of landmarks. The court determined that the infringing image was nothing less than an example of a cut-and-paste "in its rawest form." 
  The court found that Mungchi's violations were willful, despite its claims of innocence. To successfully prove "willfulness" in the copyright context, a plaintiff need only to show that "(a) that the defendant was actually aware of the infringing activity, or (b) that the defendant's actions were the result of 'reckless disregard' for, or 'willful blindness' to, the copyright holder's rights. The court found that Mungchi was on notice of RTSI's rights as far back as 2008 when 695 View was on the cover of a limited edition calendar. (Mungchi had testified that he and his employees had frequently visited the Walgreens stores where the calendar had been marketed.) In addition, and maybe more importantly, Mungchi failed to offer any evidence that it took any affirmative action to ascertain whether its purchase and use of the t-shirt's image would violate another's copyright. In light of this, the court said it was liable for the maximum statutory damages. 
   The court's final award included $150,000 for the copyright infringement claim, $25,000 as to the removal of copyright information, and $1,350 for unfair competition. It later awarded RTSI over $100,000 in attorneys' fees. 

Read the case here: Reno-Tahoe Specialty