The US Court of Appeals for the Ninth Circuit reversed a district court’s dismissal with prejudice where a lace textile manufacture pleaded that a popular fashion retailer and other defendants infringed on the manufacturer’s copyright by using a strikingly similar arrangement and coordination of naturally occurring floral elements. Malibu Textiles, Inc. v. Label Lane Int’l, Inc., Case Nos. 17-55983, -55984, -56531 (9th Cir. Apr. 24, 2019) (Zouhary, J). The Ninth Circuit further found that the district court abused its discretion in denying leave to amend the complaint where proposed amendments would have cured a perceived pleading deficiency.

Malibu Textiles sued Label Lane, H&M and Entry for copyright infringement, alleging that the defendants illegally copied Malibu’s lace pattern. The pattern consisted of flowers, vines, leaves and other elements arranged in a pattern. After failing to plead substantial similarity in its initial complaint, Malibu filed another action that resulted in the instant appeal. Although Malibu bolstered is similarity allegations, it mistakenly omitted allegations concerning whether the defendants had opportunities to view and access Malibu’s designs. The district court denied leave to amend and granted the defendants’ motion to dismiss with prejudice after determining that the lace designs contained differences, most of the design elements were non-protectable elements, and Malibu failed to plausibly allege access. Malibu appealed.

The Ninth Circuit reversed. To state a claim for copyright infringement, a plaintiff must plausibly allege ownership and that the alleged infringer copied protected elements of the work.

Regarding ownership, the Ninth Circuit reasoned that a plaintiff must plead a valid copyright registration, which Malibu satisfied by alleging that it owned two original artworks registered with the US Copyright Office. The Court found that Malibu need not include registration materials or a complete deposit of the design in the complaints. Rather, once Malibu alleged that the infringement action was based on two registered designs, it was entitled to protect all components of that artistic expression whether original or derivative.

As to copying, a plaintiff must show either striking similarity or substantial similarity and access to the protected work. Striking similarity occurs where the similarities between two works are so substantial that it is highly unlikely that the works were created independently. At the motion to dismiss stage, the Court applied an extrinsic test to objectively compare the expressive elements of the protected work for articulable similarities such as colors, shapes, materials and arrangement. The Ninth Circuit reasoned what while copyright law does not protect elements found in nature, it does protect the selection, coordination and arrangement of such elements. Because a wide range of creative choices may be made regarding floral elements in fabric designs, the copyright protection for the original design is broad.

Although the defendants argued that the lace patterns simply included the same flower, the Ninth Circuit found that the two lace patterns contained nearly identical floral, leaf, boteh and dot elements arranged in nearly the exact same way. Any minor differences in the patterns may have been the result of lower-quality techniques in the copied design or willful modifications to avoid detection of copying. Thus, the Court found that Malibu had sufficiently alleged striking similarity.

Even if Malibu had only plead substantial similarity, it still would have stated a claim for copyright infringement because its proposed amended complaint alleged the defendants had sufficient access to view Malibu’s designs. The Ninth Circuit reasoned that dismissal with prejudice is warranted only where it is clear that the complaint could not be saved by amendment. Here, Malibu’s proposed amendment to the complaint contained the very allegations the court found were lacking in granting dismissal. Malibu alleged that the defendants do business in California where Malibu’s showrooms are located; that numerous textile mills, including mills in China, have manufactured more than 1 million yards of lace bearing Malibu’s designs; and that its customers sold clothing bearing Malibu’s designs, including at retailers operating in the defendants’ market. Since these allegations plausibly allege that the defendants had reasonable opportunities to view Malibu’s lace pattern, the district court abused its discretion in denying leave to amend.