Olem Shoe Corp. v. Washington Shoe Corp.

In an unpublished decision, the Court of Appeals for the Eleventh Circuit clarified its standard for willful copyright infringement when it affirmed the district court’s grant of summary judgment finding that the defendants infringed copyrights in two different rain boot designs, but that such infringement was not willful.  Olem Shoe Corp. v. Washington Shoe Corp. Case No. 12-11227 (11th Cir., Jan. 12, 2015) (Eaton, J.) (non-precedential).

In 2009 and 2010, Washington Shoe sent cease-and-desist letters to Olem regarding its sales of women’s rain boots that infringed copyright registrations in Washington Shoe’s own “Zebra Supreme” and “Ditsy Dots” boot designs.  Olem filed an action for a declaration of non-infringement of Washington Shoe’s copyrights, and Washington Shoe counterclaimed to obtain relief for copyright infringement and other state and federal claims. The court granted summary judgment to Washington Shoe for Olem’s copyright infringement, but also granted summary judgment to Olem on Washington Shoe’s claims of willful copyright infringement by adopting a rule from a 1999 U.S. Court of Appeals for the Second Circuit case which states that willfulness can be found only where a party “recklessly disregarded the possibility” that it was infringing a copyright.  Both sides appealed.

On appeal, the 11th Circuit reviewed the “reckless disregard” standard that was adopted by the district court and determined that the proper standard for willfulness should be taken from patent decisions, such as the 2007 en banc Federal Circuit decision in In re Seagate Ten which require the intellectual property rights holder to show “that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent… [and to] also demonstrate that this objectively-defined risk…was either known or so obvious that it should have been known to the accused infringer.”  (See IP Update, Vol. 10, No. 8.)

Using this revised standard, the 11th Circuit found no evidence that Olem knew of Washington Shoe’s copyrights and chose to violate them.  First, the initial cease-and-desist letters sent by Washington Shoe to Olem did not create a triable issue of fact with regard to the question of willfulness, because those letters did not include reference to Washington Shoe’s copyright registration numbers or deposit copies filed with the U.S. Copyright Office, nor did the letters provide samples of the boot designs that Washington Shoe claimed were infringed.  Therefore, the letters provided nothing from which Olem could have determined that the copyright claim was legitimate.  Furthermore, after receiving the cease-and-desist letters, Olem stopped certain shipments and requested further information from Washington Shoe to try to determine whether Washington Shoe’s assertions of copyright infringement were true.  Accordingly, the 11th Circuit found that a reasonable jury could find that Olem did not have “sufficient credible information to provide an ‘objectively high likelihood’ that it was infringing Washington Shoe’s copyrights.”

The 11th Circuit rejected Washington Shoe’s contention that because the Olem boots were “strikingly similar” to Washington Shoe’s “Zebra Supreme” and “Ditsy Dots” boots, such similarity should have been a “signpost” that objectively increased the probability of infringement.  Instead, the 11th Circuit found that the striking similarity between the parties’ boots may be a basis for finding that the boots had been copied, but it does not give rise to the inference that Olem recklessly disregarded the likelihood that it was infringing Washington Shoe’s copyrights—otherwise, under this argument, all infringements become willful infringements.  Washington Shoe also argued that Olem’s sourcing of its boots from China, a “well-known . . . source of infringing goods,” provided evidence of reckless disregard of infringement, which the 11th Circuit found to be unpersuasive.

Finding no evidence in the record that Olem actually knew it was infringing Washington Shoe’s copyrights, and because the evidence cited by Washington Shoe did not raise a genuine issue of material fact with respect to Olem’s reckless disregard, the 11th Circuit concluded that the district court did not err in granting summary judgment to Olem on the issue of willfulness.

With respect to Olem’s cross-appeal on the issue of copyright infringement, the 11th Circuit affirmed the district court’s decision and found that Washington Shoe owned valid copyrights for the boot designs at issue, and that Washington Shoe had established copying of the boots by demonstrating that its original works and Olem’s infringing works were “strikingly similar.”  This degree of similarity between the boots made it unnecessary to determine whether Olem had access to the original boots, since such “striking similarity” of the works allows a presumption of copying which precludes the possibility of independent creation, coincidence or prior common source.  In affirming the district court’s full decision, the 11th Circuit also denied Olem’s motions for relief from the judgment and for sanctions.