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IN THE UNITED STATES DISTRICT COURT
KAREN DUDNIKOV, a/k/a TABBERONE, v.
MGA ENTERTAINMENT, INC, a California Corporation, Plaintiffs Reply to Defendant's Opposition To Summary Judgment
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(main body of reply)
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Plaintiffs Karen Dudnikov and Michael Meadors hereby submit their Reply to
Defendant's Opposition to Plaintiffs' Motion for Summary Judgment or in the Alternative
Declaratory Judgment ("Opposition").
I. INTRODUCTION Defendant falsely claims that the Plaintiffs' motives are to force IP owners to license their activities. The Plaintiffs have never sought a license from any IP owner. Under the F.R.C.P. 56(a) either party may move for Summary Judgment at any time provided it does not delay the anticipated trial, making the Motion For Summary judgment timely and proper under these rules. II. STATEMENT OF FACTS A. Response To Statement of Undisputed Facts 1. Plaintiffs lack information sufficient to contradict the numerous "facts" alleged by defendant MGA Entertainment ("MGA") and therefore Plaintiffs in general deny them all. Most of the "facts" are nothing more than attempts at argument instead of presenting the court with specific undisputed facts and as such should be discarded. Plaintiffs shall address certain specific Statements in following paragraphs. 2. MGA claims child safety as an issue yet their own products are small enough to be swallowed by a child (see Opposition ¶A13 and Dudnikov Affidavit ¶13). MGA makes and distributes products that encourage others to "decorate and design just about anything, any way you want" (see Dudnikov Affidavit Exhibit #1) and then they claim the person cannot. B. Defendant's Response to Undisputed facts 3. Opposition ¶B8 is refuted by Caplan Affidavit Exhibit A-5 page 1 where the eBay page plainly states "My listing was removed at the request of the VeRO Program participant", Exhibit A-5 page 2 where the eBay page plainly states "The Verified Rights Owner (VeRO) Program lets intellectual property rights owners request the removal of listings on eBay that offer items or contain materials that infringe upon their rights". By notifying eBay, MGA was requiring eBay to remove the listing (see Dudnikov Decl Exhibit #2). This is a flagrant distortion of fact and should not be allowed. MGA knows very well that the VeRO Program, modeled after Digital Millennium Copyright Act, requires eBay to terminate an auction when notified of alleged infringing activity. C. Defendant's Additional Disputed facts. 4. Defendant's Additional Disputed Facts are addressed in the Rule 56(f) Affidavit of Michael Meadors.. III. ARGUMENT A. Discovery 5. As detailed in the Rule 56(f) Affidavit of Michael Meadors, discovery by the Defendant will have no bearing on the issue of whether or not the Plaintiffs had the right to make the fleece hat using the MGA appliques and then sell it. 6. Nothing in F.R.C.P. 26 prohibits a Motion for Summary Judgment before discovery and nothing in F.R.C.P. 56 delays the motion until after discovery. The Plaintiffs believe the simplicity of the matter makes a lengthy court procedure unnecessary. Indeed, the lack of counterclaims and the initial emails from MGA concerning the auction indicate MGA simply will not allow this activity, not that it is illegal or prohibited by law. B. Privilege 7. The Defendant claims privilege but misstates the California privilege law. A communication is only privileged if it is in contemplation of , or part of, a legal action. No where has the Defendant claimed MGA was contemplating a lawsuit against the Plaintiffs. No statements or supporting documents have been submitted to support this claim and therefore this claim should be disallowed. Any subsequent production of documents to support this claim should be considered suspect and inadmissible. C. Perjury 8. Plaintiffs are not seeking a civil claim for perjury but a declaratory judgment that the claims by MGA to eBay constitute perjury and misrepresentation as defined in U.S.C. 512. 9. David Oakes is the Senior Counsel for MGA. As such, he knew, or reasonably should have known, the selling of the fleece hat was not infringing. There are significant court cases supporting the right of the Plaintiffs to sell the hat. These cases are not just recent but go back years. His notice to eBay (see Decl Oakes ¶22) was to protect MGA's licensees (see Complaint ¶34). D. Contract Existed. 10. Whether a contract existed between the Plaintiffs and any buyer is clearly demonstrated and answered by Caplan Affidavit Exhibit A-6, a copy of the Plaintiffs' auction listing, which plainly shows the listing had six bids, and by Caplan Affidavit Exhibit A-9, the eBay User Agreement ¶5.2. eBay also warns potential bidder that their bid is a binding contract (see Dundikov Aff Exhibit #3). 11. MGA's action caused eBay to terminate the auction thus interfering with an existing contract. E. Misrepresentations. 12. MGA's action misrepresented the facts to eBay. This misrepresentation was deliberate and caused harm. F. Initial Interest Confusion. 13. MGA's claim of Initial Interest Confusion is without basis. Initial Interest Confusion is defined under trademark law as applied to using META Tags and deceptive web site addresses to draw traffic to a web site with the intention of drawing that traffic away from the legitimate web site. 14. The use of "Bratz" and "Sasha" in the auction title was fair use under trademark law as it accurately described the product as "Girl's Fleece Hat w/Bratz Applique of Sasha" (see Decl David Caplan Exhibit A-6). The title was not misleading. G. Post Sale Confusion. 15. MGA markets kits for ages four and up. (see Dudnikov Aff Exhibit #1 pg 4). These kits encourage kids to make things and be creative (see Dudnikov Aff Exhibit #1 pg 3). MGA has released these kits with the intention that a variety of items be made from the materials in the kit. Persons later seeing the items, or receiving them as gifts, or purchasing them at a yard sale, would not know that the items were not "licensed" but hand-made. There is a built-in "post sale confusion" to these kits. 16. MGA's objection is not to the fleece hat being made but to the Plaintiffs attempt to sell it. MGA cannot say there is not post sale confusion when a six-year old child makes the item and gives it away but there is post sale confusion when the Plaintiffs make the hat and sell it. H. Derivatives. 17. MGA wrongly asserts that eBay's User Agreement establishes jurisdiction in California and this Court should follow the Ninth Circuit in determiningg what constitutes a derivative. 18. The eBay User Agreement (see Decl David Caplan Exhibit A-9), in ¶17 Resolution of Disputes, states that the Agreement is between the eBay member and eBay and that resolution of disputes between the eBay member and eBay shall be in a court in Santa Clara County, California, and under their jurisdiction. 19. This dispute is not between the eBay member and eBay therefore the Ninth Circuit decisions do not apply. 20. MGA cites Mirage and Munoz to support it's contention the hats are derivatives yet the American Bar Association, and copyright scholars, criticize these decisions as being flawed (see Meadors Aff Exhibit #4). 21. The Supreme Court has said copyright "protection has never accorded the copyright owner complete control over all possible uses of his work. See Fogerty v. Fantasy, Inc., 510 U.S. 517, 526 (1994). 22. Originality was addressed in Lee v. Deck the Walls Inc., 925 F.Supp. 576 (N.D.Ill. 1996). Plaintiff Annie Lee, an artist, sued defendants for gluing her notecards to ceramic tiles and covering the images on the tiles with clear epoxy resin. The court in Lee rejected the holding of Mirage Editions and Munoz, observing that to be an infringing derivative work an object must be original enough that, if lawful, it would qualify for protection as a derivative work. The Lee court cited Woods v. Bourne Co., 60 F.3d 978 (2nd Cir. 1995), for the rule that to be a derivative work a thing must be "independently copyrightable." The court found no "creative spark" in the "mundane act of placing notecards onto a ceramic tile." The court also cited in support of its finding the case of Paramount Pictures v. Video Broadcasting System, 724 F.Supp. 808 (D. Kan. 1989), in which the addition of commercials at the beginning of videocassette movies was not found to create infringing derivative works. 23. In Quality King Distributors, Inc. v. L'Anzaresearch Int'l, Inc (98 F.3d 1109, reversed), Justice Stevens noted for a unanimous court: "The whole point of the first sale doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution." I. Disclaimers 24. The Defendant cites Charles of the Ritz Group, Ltd. v. Quality King Distribs., Inc., 832 F.2d 1317, 1324 (2d Cir. 1987), selectively quoting "disclaimers are 'generally ineffective' " while omitting the more relevant portions of the decision. 25. The Second Circuit Court more accurately stated" "However, we also have noted that while disclaimers may prevent consumer confusion, a 'growing body of academic literature has concluded that disclaimers, especially those . . . which employ brief negator words such as `no' or `not,' are generally ineffective.' " This was in reference to an advertising slogan which stated: "If You Like Opium, a fragrance by Yves Saint Laurent, You'll Love OMNI, a fragrance by Deborah Int'l Beauty. Yves Saint Laurent and Opium are not related in any manner to Deborah Int'l Beauty and Omni." 26. The issue in Charles was also the size and placement of the disclaimer. As noted, the Plaintiffs' auction disclaimer was part of the listing, easily seen, same size font and in bold, and back-highlighted (see Decl David Caplan Exhibit A-6). The disclaimer stated: This is not a licensed Bratz Product. It is however hand-crafted with care Using a licensed Bratz applique. I am not affiliated with Bratz or MGGA Entertainment. 27. Since MGA submitted the auction in black and white, the back-highlighted aspect doesn't show in the exhibit. However, a simple request from MGA, as a VeRO member, to eBay and eBay will provide MGA with access to the original listing to print it in color. 27. The Court in Charles actually required a prominently displayed disclaimer as part of the ruling. IV. CONCLUSION For the foregoing reasons, this Court should grant Plaintiffs' Motion For Summary Judgment. Respectively submitted this 4th day of May, 2004
Karen Dudnikov
303-913-4702
(end of complaint)
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