United States District Court, D. Vermont
OPINION AND ORDER DENYING PLAINTIFF'S MOTION TO
DISMISS OR STRIKE DEFENDANT'S COUNTERCLAIM AND IN THE
ALTERNATIVE MOTION TO TRANSFER AND GRANTING PLAINTIFF'S
MOTION FOR VOLUNTARY DISMISSAL (DOCS. 31 &32)
CHRISTINA REISS, DISTRICT JUDGE
Exist, Inc. ("Plaintiff) is a Florida-based resort
apparel company which filed suit in the United States
District Court for the Southern District of Florida against
Defendant The Vermont Country Store, Inc.
("Defendant") seeking a declaration of rights with
regard to an alleged copyright infringement. On April 18,
2019, the case was transferred to this court after the
Southern District of Florida determined it did not have
personal jurisdiction over Defendant. Following the transfer,
on April 19, 2019, Defendant filed an Answer to Plaintiffs
Amended Complaint which interposed a counterclaim alleging
copyright infringement and seeking injunctive relief and
damages. (Doc. 25.)
M. Pocius, Esq. and Nancy J. Flint, Esq. represent Plaintiff.
Mark F. Werle, Esq., Matthew Scott Nelles, Esq., and Stacy O.
Stitham, Esq. represent Defendant.
Factual and Procedural Background.
facts are derived from the parties' pleadings, briefing,
and declarations. Plaintiff sells resort apparel imprinted
with original fabric designs that are the subject of
copyright registration with the United States Copyright
Office. One such design is the Fish Print Design, which
Plaintiff alleges was created in Florida in 1993 and was
registered with the United States Copyright Office in 1997.
The individual who created the Fish Print Design, Shaul
Ashkenazy, is still employed by Plaintiff and located in
Florida, as are all records related to the Fish Print Design.
Rock Fish Design was created and published in 1996 by Demy,
Inc., d/b/a M. Mac, Inc., a now dissolved California
corporation. Defendant acquired "all of the exclusive
rights" to the Rock Fish Design through assignment in
April of 2018. (Doc. 25 at 4, ¶ 8.) The timing of the
creation date of the Fish Print Design and the publication
date of the Rock Fish Design are disputed, as is whether
Plaintiff had access to the Rock Fish Design and copied it.
operates an interactive website through which apparel is
available for purchase. Plaintiff also sends mail-order
catalogs directly to merchants and attends a number of trade
shows in the United States and other locations at which it
advertises its apparel. Plaintiff asserts that it has not
sent any catalogs to any entity or person in Vermont, is not
registered to do business in Vermont, has not conducted any
business in Vermont, and has no agents conducting business on
its behalf in Vermont. Since 2015, Plaintiff has fulfilled
one purchase order for $489.00 for a customer located in
Vermont, which constituted less than 0.001% of Plaintiff s
gross revenues for that year.
summer 2018, Defendant "became aware" that
Plaintiff was selling clothing items with the Fish Print
Design. (Doc. 25 at 4, ¶ 9.) Defendant sent a cease and
desist letter to Plaintiff in September of 2018 asserting
that the Fish Print Design infringed upon the Rock Fish
Design copyright. Thereafter, Plaintiff filed its declaratory
judgment action in the Southern District of Florida
"with respect to Defendant's threat of copyright
infringement," seeking to clarify the parties'
respective copyright rights. (Doc. 5 at 2, ¶7.)
alleges that Defendant "has communicated an imminent
threat to Plaintiff regarding the infringement of the Rock
Fish Design copyright, which Plaintiff asserts was registered
on June 2, 1998. Id. at 1, ¶ 5. It further
alleges that Defendant "is not the owner of the ROCK
FISH Fabric Design copyright" and thus "has no
rights to enforce [it.]" Id. at 2, ¶ 6. In
the alternative, Plaintiff claims that it "has not
infringed any such alleged copyright," id., and
that the 1998 registration is "invalid."
Id. at 2, ¶ 9.
Southern District of Florida Proceedings.
March 19, 2019, Defendant filed a motion to dismiss or
transfer in the Southern District of Florida, seeking
dismissal for lack of personal jurisdiction under
Florida's long-arm statute and the Due Process Clause to
the Fourteenth Amendment of the United States Constitution.
Plaintiff opposed dismissal and transfer, arguing that the
Southern District of Florida had specific jurisdiction over
its copyright infringement claim and Defendant had sufficient
minimum contacts with Florida because of its website.
Plaintiff also asserted that the relevant factors for
transfer under 28 U.S.C. § 1404(a) favored Florida over
Vermont and addressed those factors at some length in its
briefing. In opposing Defendant's motion to dismiss or
transfer, Plaintiff did not argue that the District of
Vermont lacked personal jurisdiction over Plaintiff,
rendering that forum inappropriate as the transferee
April 18, 2019, the Southern District of Florida granted
Defendant's motion and transferred the case to the
District of Vermont. In doing so, the Southern District of
Florida analyzed Florida's long-arm statute, conducted a
due process analysis pursuant to the Fourteenth Amendment,
and concluded that it was "not a close call" to
find that the court lacked personal jurisdiction over
Defendant. (Doc. 21 at 4.) It ordered the case transferred to
the District of Vermont.
Defendant's Compulsory Counterclaim.
April 19, 2019, following transfer to this court, Defendant
filed an Answer and compulsory counterclaim alleging that
Plaintiffs distribution of clothing items with the Fish Print
Design infringes on Defendant's right to use the Rock
Fish Design copyright in violation of 17 U.S.C. § 501
et seq. and 17 U.S.C. § 106 of the Copyright
Act of 1976. Defendant alleges that the creator of the Rock
Fish Design "complied in all respects with the
requirements of the Copyright Act" in applying for and
receiving registration from the Register of Copyrights, and
that Defendant is "the present owner of all of the
exclusive rights to the 'ROCK FISH' copyright."
(Doc. 25 at 4, ¶¶ 7-8.) While Plaintiff "had
access" to and was "on notice" of the Rock
Fish Design, Plaintiff, without authorization, allegedly
"caused to be manufactured, has sold, continues to
sell..., and is causing to be distributed items of clothing
entitled 'Fish Print' that are copies of, and bear
constituent elements of, the 'ROCK FISH'
design." Id. at 5, ¶¶ 15-16.
Defendant further asserts that Plaintiff acted willfully and
recklessly and "has derived and continues to derive
substantial revenues from the sale of its 'Fish
Print' dresses and clothing." Id. at 6,
result of Plaintiff s alleged infringement, Defendant states
that it "has suffered and continues to suffer
irreparable harm, and is entitled to injunctive relief and an
order impounding all infringing materials." Id.
at 6, ¶ 22. Defendant seeks dismissal of Plaintiff s
claim with prejudice and an award of reasonable
attorney's fees incurred in defending against Plaintiffs
action. For further relief, Defendant asks that Plaintiff
"be enjoined and restrained during the pendency of this
action, and permanently, from infringing in any manner the
'ROCK FISH' design" and from using the Fish
Print Design. Id. at 6-7, ¶ 3. Defendant also
seeks an award of actual damages pursuant to 17 U.S.C. §
504(b); "[p]rofits derived by [Plaintiff] ...