The Infringer Sourced The Infringing Goods in China, So Infringement Was Willful, Right?

No.

Washington Shoe Company ("WSC") has sold certain shoes in Target.  (There is debate through the opinion discussed below whether WSC sold its shoes through Target "for years," but I will not get into that factual dispute.)  WSC sent an initial demand letter to Olem Shoe Corp. concerning the below boots:

Olem responded that it was investigating the claim, but WSC had not identified any copyright registrations.  WSC responded with registration information, but the Copyright Office was unable to locate the deposit copies corresponding to the boots.  WSC then filed supplementary registrations to address certain issues.

WSC obtained summary judgment that Olem had infringed, but the district court refused to find the infringement willful.  WSC appealed.  Olem cross-appealed the infringement finding.

Willfulness

Concerning willfulness, WSC argued that it was entitled to a jury determination as to whether or not Olem's infringement was willful.  WSC argued the following facts inferred willfulness:

• Cease and desist letters;
• "Striking similarity" of the infringing boots
• Olem's sourcing of the boots from China because "it is ... well known that China is a source of infringing goods"
• Olem's inability to point to any other works on which its shoes were based

Neither the district court nor the Eleventh Circuit were convinced.  As to the letters, the Court noted that Olem undertook a serious investigation, and identified issues with WSC's copyright registrations, which required WSC to file supplementary registrations.  As to the similarity of the boots, the court noted that "striking similarity" is a standard for finding infringement, but that did not mean Olem had the necessary state of mind to support a finding of willfulness:

[WSC]'s asserting that the similarity of Olem's boot designs to those of [WSC] "makes it more likely that the work was copied" is, of course true.  [WSC] has indicated no authority, however, that supports its argument that the similarity of the designs is evidence that the copying was willful.  Generally, establishing a reckless state of mind in a copyright case requires a showing that the infringer possessed particular knowledge from which willfulness could be inferred, such as evidence demonstrating that the infringer was given samples of the copyrighted work prior to producing the infringing work.  See Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 112, 113 (2d Cir. 2001) [parenthetical omitted]

As to sourcing the infringing boots in China, the Eleventh Circuit appeared hesitant to follow such an approach:

Although [WSC] notes that Olem did not design its boots and purchased them from China, it does not point to any record evidence to substantiate its claim that these facts "increase[] the probability of infringement" such that a jury could infer that Olem acted recklessly.  This argument, if effective, would impute reckless disregard to any company purchasing and selling products from China that it did not design itself that turned out to be copyrighted by another.  Thus, it is unpersuasive.

The Court was also not persuaded by WSC's argument attempting to attribute a reckless state of mind to Olem for its inability to point to other works on which the boots were based.

Cross-Appeal - Finding of Infringement

Olem's cross appeal attempted to negate the infringement finding based in part on challenging WSC's evidence suggesting broader access to WSC's boots based on purported misrepresentations.  The Court analyzed the WSC boots and Olem boots and concluded the Olem boots were "strikingly similar" to WSC's.  As such, the infringement finding stands.

Olem Shoe Corp. v. Washington Shoe Corp., Case Nos. 12-11227, 12-11356 (11th Cir. Jan. 12, 2015)