Copyright Case Ends in a Trial-Court Win for LA Printex

Over the past several years, LA Printex Industries Inc. has carved out a small claim to fame.

In a span of a mere five years, the Los Angeles textile company, owned by Jae Soon Nah, has filed more than 200 federal lawsuits in Los Angeles, suing everyone from retailers such as Macy’s, Mervyns and TJ Maxx to apparel makers such as Stony Apparel Corp., Just for Wraps, Forever 21 and Topson Downs of California and textile ventures such as Fabritex Inc., Seoul Texprint Inc. and Pacesetter Fabrics. LA Printex’s complaint is that these companies are using its copyrighted print designs, ending up in shirts, dresses, skirts and shorts.

Many of these copyright-infringement cases have been settled out of court. Others have been dropped when defendants argued that Printex couldn’t prove its case.

But for the first time ever, one of those cases went to trial in U.S. District Court, with LA Printex winning a $236,600 judgment on Sept. 10 against Target Corp., childrenswear maker Kandy Kiss of California and Paramount Textiles.

“The jurors deliberated for four hours on the case, and at the end of the case, they told us the only reason the deliberations took so long is that they were searching for a way to award the plaintiff more money,” said Douglas Linde, LA Printex’s attorney at the five-day trial. “As it stands, the jury awarded us every penny we asked for.”

Kandy Kiss’s attorneys, Mark Brutzkus and Todd Lander, said the case in U.S. District Court was a difficult case to defend. “At the end of the day, the two designs were essentially identical,” Lander said. “Because of that, there was really no viable defense to liability. Our client did nothing wrong from our perspective. They were not aware of the fact that this was a design that LA Printex claimed an interest in. But nevertheless, innocence is not really a defense in the copyright laws. An infringement is an infringement.”

Paramount Textiles has already paid its $36,000 portion of the bill, Linde said. The rest falls on the shoulders of Kandy Kiss and Target, who have turned around and sued Paramount Textiles in Los Angeles Superior Court over the textile pattern Paramount sold to Kandy Kiss, whose goods were later sold in Target stores.

In legal papers, Kandy Kiss maintains that Paramount salespeople in 2007 showed them an Arabic paisley design with a fabric-style number that Paramount said it had the right to sell free and clear of any claims.

Kandy Kiss said that Paramount, through a related company named L’Amour, acquired the paisley design in 2005 from LA Printex, which had notified Paramount of its claim to the copyrighted design. Changing the copyright laws

LA Printex’s penchant for filing copyright-infringement lawsuits has earned it criticism from attorneys and apparel companies that claim the company makes its money by suing scores of people. But LA Printex maintains it is only guarding its copyrighted designs.

A group of Los Angeles attorneys, whose clients are frustrated with some textile companies filing questionable lawsuits over copyright designs, has requested that Congress amend the U.S. Copyright Act and the U.S. Copyright Office procedures to prevent companies from “exploiting loopholes in U.S. copyright laws and extracting extortionary settlements from defendants.”

The attorneys note that many companies chose to settle out of court rather than spend enormous amounts of money on attorneys’ fees, which often surpass the profits made on a collection.

“The cost of defense is very high,” said attorney Staci Riordan, who currently is defending a client sued by LA Printex. “Up to trial, it can cost $150,000, and then the trial can cost another $150,000 in attorney fees.”

She said that five or six years ago, out-of-court settlements on these copyright issues were modest, ranging from $5,000 to $7,500. Now they are ten times that amount.

In an Oct. 9 letter addressed to U.S. Rep. Mary Bono Mack (R–Palm Springs, Calif.) and sent to 35 congressional members, the attorneys said they want to change the bulk registration of copyrighted patterns that often includes designs that shouldn’t be under copyright protection.

“[Some textile companies] have discovered they can easily and cheaply obtain bulk registrations of designs, especially of ’unpublished’ designs,” the attorneys wrote. “Because registration is sought for the collection of designs, the Copyright Office does not make any determination whether each of the designs included within the collection is copyrightable. It is sufficient for Copyright Office purposes that at least one of them satisfies the originality requirement.”

In the letter, the 11 attorneys request that Congress amend the Copyright Act so that litigation cannot take place until a fabric pattern has been registered with the Copyright Office as an individual work. Also, they want the Copyright Office to invalidate any registrations of a pattern involved in a lawsuit if inaccuracies in the registration appear. Furthermore, they want the plaintiffs to be denied any actual or statutory damages from a defendant, such as a retailer, if the plaintiff had not done business with them in the transaction.

The letter’s signatories included Mark Brutzkus, Todd Lander and J. Alison Grabell of Ezra Brutzkus Gubner; Mark Eisenhut and Scott Shaw of Call, Jensen & Ferrell; and Michael Heimbold of Steptoe & Johnson. Textile talk

At the recent GlobalTex seminar in Los Angeles, apparel-industry veterans shared their expertise on how to deal with copyright issues.

Mitch Naidrich, owner of Malibu Textiles Inc., a lace, embroideries and novelty knits supplier, noted that retailers are putting pressure on manufacturers to deliver cheaper goods. In turn, manufacturers are cutting corners and trying to save money by searching out overseas factories.

“[When] we sample a line, we put a lot of money into it. We color it for you, and then what happens is that as full packages are getting stronger, the textile manufacturer is getting cut out. We are left without an order,” Naidrich said, referring to the fact that manufacturers will sample his company’s goods and then maybe use inspiration from his samples for ideas.

He and his staff constantly frequent stores to make sure someone is not knocking off Malibu Textiles’ designs. “We cannot sit back and not go after the manufacturer,” he said. Lonnie Kane, president of Los Angelesshy;–based Karen Kane, said manufacturers using overseas textile factories often don’t know that print designs have been copied from other textile companies.

He told the tale of purchasing a print from a Los Angeles converter to have fabric made in China. One season after shipping the product, he gets a cease-and-desist order from a New York company. “First, I called the converter. He is shocked. He calls China. They are shocked. Meanwhile, I am now incurring the expense of a lawyer,” Kane said. “The short end of the story is that China had made the print for the New York company five years earlier. The Chinese company didn’t own the print. The converter knew nothing about it.”

In the end, the issue was resolved between the New York venture and the Chinese factory.