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1 ANNETTE L. HURST (Bar No. 148738) 2 ELISABETH R. BROWN (Bar No. 234879) 3 HELLER EHRMAN LLP 4 5 6 7
DANIEL N. KASSABIAN (Bar No. 215249)
333 Bush Street San Francisco, California 94104-2878 Telephone: +1.415.772.6000 Facsimile: +1415.772.6268 Email: [email protected] [email protected] [email protected]
8 Attorneys for Plaintiffs 9
GYM-MARK, INC. and THE GYMBOREE CORPORATION MARTHA C. LUEMERS (Bar No. 104658)
10 DORSEY & WHITNEY LLP 11 1717 Embarcadero Road
Palo Alto, California 94303
12 Telephone: +1.650.857.1717 13 Email: [email protected] 14 BRUCE R. EWING (pro hac vice) 15 DORSEY & WHITNEY LLP
250 Park Avenue Facsimile: +1.650.857.1288
16 New York, New York 10177-1500 17 Facsimile: +1.212.953.7201 18
Email: [email protected] CHILDREN'S APPAREL NETWORK, LTD. and MERVYN'S LLC UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA GYM-MARK, INC. and GYMBOREE, INC., Plaintiffs, v. CHILDREN'S APPAREL NETWORK, LTD. and Defendants. Case No.: C 07-03523 (JW) (HRL) JOINT CASE MANAGEMENT CONFERENCE STATEMENT Telephone: +1.212.415.9200
19 Attorneys for Defendants 20 21 22 23 24 25
26 MERVYN'S LLC, 27
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In accordance with the Court's Standing Order and the Order Setting Initial Case
2 Management Conference and ADR Deadlines, the parties hereby submit this Joint Case 3 Management Conference Statement in advance of the Case Management Conference scheduled for 4 December 3, 2007 at 10:00 a.m. 5 I. 6 7
JURISDICTION AND SERVICE A. Subject Matter Jurisdiction
The Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331,
8 1338(a) and 1367. 9 10 11 12
B. Venue
Venue is proper in this District pursuant to 28 U.S.C. § 1400(a). C. Personal Jurisdiction and Service
Plaintiffs have served all named defendants and defendants do not contest service. During
13 the Rule 26(f) conference Defendant CAN disclosed that, in addition to Mervyn's, it sold the 14 products that are at issue in this litigation to approximately 100 other retailers. Plaintiffs submit 15 that these retailers ("Additional Retailers") are potential defendants in this case. Plaintiffs have 16 requested identifying information concerning the Additional Retailers and may seek to add them as 17 additional defendants to this action as appropriate. 18
II. DESCRIPTION OF THE CASE A. Facts 1. Plaintiffs' Allegations of the Facts
19 20 21
Plaintiff The Gymboree Corporation ("Gymboree") is a highly regarded and widely
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recognized specialty retailer of children's apparel. For over twenty years, the Gymboree® brand
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has symbolized unique, high-quality children's clothing. Gymboree is the parent company of
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Plaintiff Gym-Mark, Inc. ("Gym-Mark) and is the exclusive licensee for copyrighted clothing
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designs owned by Gym-Mark. Among the unique designs Gym-Mark has licensed to Gymboree is
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the "GIRL/BABYGIRL/KIDGIRL SUMMER I FIESTA 2006" line (United States Copyright
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Registration No. VAu682-370, dated November 18, 2005), which includes "FIESTA FLOWERS &
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1 CROCHET INSET" and "FIESTA FLOWERS WITH LADYBUGS" ("Infringed Designs"). Both 2 Infringed Designs incorporate original and appealing fabric patterns for machine crewel 3 embroidery. The FIESTA FLOWERS & CROCHET INSET design features artful arrangements 4 of red, tangerine-color, and light purple flowers of different shapes and sizes with a garland of 5 leaves connecting the flowers in the arrangement. The FIESTA FLOWERS WITH LADYBUGS 6 design features an original red, tangerine-color, light purple and hibiscus-color flowers, with green 7 leaf and stem accents, and ladybugs with swirling broken-line trails as a fanciful indicator of their 8 flight amongst the flowers. 9
Plaintiffs contend that, by at least May 2007, Mervyn's began selling children's apparel
10 manufactured at the direction of CAN that bear embroidery designs substantially similar to, and 11 infringing of, the "FIESTA FLOWERS & CROCHET INSET" and "FIESTA FLOWERS WITH 12 LADYBUGS" copyrighted designs (the "Knockoffs"). In contrast to the high-quality Gymboree® 13 versions, the Knockoffs use less stitching and precision, are made of cheaper fabric, and were sold 14 at a lower price point in Mervyn's. Despite these quality differences, however, the overall 15 appearance of the Knockoffs is substantially similar to the Gymboree clothing, incorporating 16 similar arrangement, colors, shapes, sizes and placement of the unique shapes. 17
Defendants had access to the Infringed Designs by at least April 2006, when Gymboree®
18 began selling them nationwide throughout the approximately 550 Gymboree® stores and on its web 19 site located at
2. Defendants' Allegations of the Facts
Defendant CAN is a supplier and distributor of children's apparel that has been in business
23 for decades. Defendant Mervyn's is one of many retailers located around the United States and 24 overseas that markets children's apparel supplied by CAN. 25
Among the many styles of garments sold by CAN during its Spring 2007 season were two
26 styles of dress sets for toddler girls that are at issue in this action. These garments were designed 27 and developed by CAN without the assistance or involvement of Mervyn's and the "Additional
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28 Retailers," all of whom merely ordered and sold goods supplied by CAN.
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The garments sold by CAN contain floral embroidery patterns (sometimes accompanied by
2 ladybugs) that CAN believed to be commonplace and not subject to copyright protection, and CAN 3 was unaware of the existence of the copyright registration asserted by Plaintiffs in this proceeding 4 until after this lawsuit was brought. 5
While there are certain similarities between the CAN garments at issue in this action and the
6 garments sold by Plaintiffs upon which their claims are premised, most of those similarities in 7 terms of colors, fabric patterns and textures involve non-protectable elements. The only aspect of 8 Plaintiffs' garments that could theoretically be protectable is the floral embroidery patterns that are 9 subject to United States Copyright Registration No. VAu682-370, but these patterns are so 10 commonplace and unoriginal that they too are not protectable. 11
To the extent Plaintiffs' embroidery patterns possess any degree of originality, the patterns
12 used on CAN's garments are dissimilar and certainly not "virtually identical," as the law requires in 13 a case where "thin" copyright protection is at issue. 14 15
B. Legal Issues
Plaintiffs Gym-Mark and Gymboree have asserted claims against Defendants CAN and
16 Mervyn's LLC for copyright infringement and unfair competition arising from the alleged 17 infringement outlined supra in section II.A.1. 18
Defendants dispute the originality, and therefore the protectability, of Plaintiffs' allegedly
19 copyrighted designs and further deny that the parties' respective designs are sufficiently similar to 20 give rise to a claim of copyright infringement. Defendants further submit that Plaintiffs' claim for 21 unfair competition is preempted by the U.S. Copyright Act. 22 23
C. Relief Sought
Plaintiffs assert that they are entitled to a judgment that Defendants have infringed
24 Plaintiff's copyright in the Infringed Designs and a permanent injunction prohibiting Defendants 25 from further infringement of Plaintiff's copyrights and engaging in unlawful, unfair, and fraudulent 26 business acts. Plaintiffs seek to recover all profits attributable to the infringement, both direct and 27 indirect, or enhanced statutory damages, whichever is greater. Plaintiffs further seek an award of
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1 2 III. 3
Defendants assert that Plaintiffs are not entitled to any relief whatsoever. MOTIONS At present, no motions have been filed. Defendants may seek dismissal of Plaintiffs'
4 second claim for unfair competition on the ground that it is preempted by the U.S. Copyright Act. 5 In addition, motions may be necessary should discovery disputes arise. 6 IV. 7
AMENDMENT OF PLEADINGS Plaintiffs anticipate filing an Amended Complaint following CAN's identification of the
8 Additional Retailers who, like Mervyn's, sold allegedly infringing apparel manufactured by CAN. 9 V. 10
EVIDENCE PRESERVATION The parties have taken reasonable steps to preserve documents within their possession. In
11 addition, the parties have met and conferred concerning what Plaintiffs contend is CAN's 12 obligation to notify the Additional Retailers of the above-captioned litigation and inform them of 13 their duty to preserve evidence relevant thereto. Plaintiffs described to CAN the type of discovery 14 they intend to request from the Additional Retailers and expect CAN to work with the Additional 15 Retailers to ensure preservation efforts are underway. CAN disputes that it has the obligation to 16 ensure that third-party retailers who are not under its control are advised of this lawsuit or that they 17 must preserve materials that Plaintiffs contend are relevant to this lawsuit. Defendants further 18 dispute the relevance of certain materials that Plaintiffs contend must be preserved. 19 VI. 20 21 VII. 22 23
INITIAL DISCLOSURES The parties have agreed to exchange Initial Disclosures on November 29, 2007. DISCOVERY A. Discovery Schedule
No discovery has taken place to date. The parties propose the following schedule which
24 includes specific deadlines and an approximate trial date: 25 26 27
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Event Last Day to Amend Pleadings / Add Parties Initial Disclosures Produce all Documents and Privilege Logs 5
Date May 5, 2008 November 29, 2007 June 13, 2008
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1 2 3 4 5 6 7 8 9 10 11 12 13 14
Close Fact Discovery Expert Discovery Each party identifies experts on issues for which party bears the burden of proof Opening Reports Rebuttal Reports Close of Expert Discovery Last Date to File Dispositive Motions Trial B. Discovery Limits
July 25, 2008
August 15, 2008
August 15, 2008 September 15, 2008 October 15, 2008 November 17, 2008 February 2009
Plaintiffs' Position: The default limit on depositions set forth in Federal Rules of Civil Procedure 30 and 31 is
15 going to be too low in light of CAN's disclosure that there are 100 Additional Retailers who sold 16 the Knockoffs. Gymboree has requested identifying information regarding the Additional Retailers 17 in an effort to fashion a discovery proposal, but CAN refused to provide it. Accordingly, at this 18 time Gymboree requests that the Court permit it to take up to 10 depositions of witnesses affiliated 19 with the current Defendants, and place no limit on the number of depositions necessary to conduct 20 discovery of the Additional Retailers. Plaintiffs contend the Additional Retailers are potential 21 defendants to this litigation and anticipating discovery directed toward them is appropriate. 22 Plaintiffs further contend that whether the parties can craft limitations to avoid cumulative 23 testimony from the Additional Retailers can only be determined after CAN discloses their 24 identities. 25 26 27
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Defendants' Position: Defendants have voluntarily turned over to Plaintiff their complete sales information for the
28 goods at issue, along with detailed calculations of their costs. They have declined, however, to
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1 identify by name the "Additional Retailers" in the absence of a formal discovery request. 2
Defendants see no need to vary the presumptive limits on depositions set forth in Fed. R.
3 Civ. P. 30 and 31, in part because any discovery needed from the Additional Retailers would 4 consist primarily of sales records for which no deposition testimony should be necessary, and in 5 part because allowing Plaintiffs to take more than 100 depositions would be cumulative and 6 wasteful. In any event, there is no need for the Court to address this issue at this time. If, as 7 discovery progresses, Plaintiffs believe they need more than the ten depositions per side 8 contemplated by the Federal Rules, they are free to seek such relief at the time and offer a 9 particularized showing to the Court as to why they need to exceed the limit. 10 11
C. Electronic Discovery and Document Production
The parties agree to produce electronic information and documents in a TIFF format with
12 certain metadata included if available (i.e., file location, author/sender, recipient, date created, last 13 date modified, date sent, attachment cross-reference, page breaks), and that parties produce 14 electronic documents in a text searchable format, to the extent the original documents are text 15 searchable. The parties further agree to produce specifically identified documents in native format, 16 to the extent such document is not reasonably readable in a TIFF format. With respect to hard copy 17 documents, the parties agree either to scan and produce these documents in a TIFF format, with 18 appropriate page breaks, or produce said documents in paper format. These documents should be 19 produced in an order that replicates how they were kept in the ordinary course of business, and the 20 production will include associated file folder headings, post-it notes, etc. 21 VIII. CLASS ACTIONS 22 23 IX. 24
This case is not a class action. RELATED CASES There are no related cases or proceedings pending before another judge of this court, or
25 before another court or administrative body. 26 X. 27
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SETTLEMENT AND ADR The parties have engaged in informal settlement discussions and, pursuant to Local ADR
28 Rule 3-5, have agreed to court-sponsored mediation. The parties anticipate holding a settlement
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1 conference after the beginning of the year, although Plaintiffs believe that Defendants should 2 provide Plaintiffs with sufficient information to have reasonable certainty as to the value of their 3 claims. 4 XI. 5
CONSENT TO MAGISTRATE JUDGE FOR ALL PURPOSES Defendants do not consent to have a magistrate judge conduct all further proceedings
6 including trial. 7 XII. 8
OTHER REFERENCES The Court appointed Magistrate Judge Lloyd for discovery issues. The parties see no need
9 for any other reference. 10 XIII. NARROWING OF ISSUES 11
This is a fairly simple and straightforward case. The parties agree it is neither necessary nor
12 desirable to bifurcate issues for trial. 13 XIV. EXPEDITED SCHEDULE 14
The Parties do not believe this is the type of case that can be handled on an expedited basis
15 with streamlined procedures. 16 XV. 17 18 weeks. 19 XVI. DISCLOSURE OF NON-PARTY INTERESTED ENTITIES OR PERSONS 20
The parties have filed their respective "Certifications of Interested Entities or Persons" as TRIAL Plaintiffs have requested a trial by jury and the parties estimate the trial will last one to two
21 required by Local Civil Rule 3-16. Plaintiff Gym-Mark, Inc. is a wholly owned subsidiary of 22 Plaintiff The Gymboree Corporation. The Gymboree Corporation is a publicly traded company, of 23 which more than 10% is owned by the FMR Corporation and Goldman Sachs Asset Management, 24 L.P. The parent company of Defendant Mervyn's is Mervyn's Holdings, LLC and no publicly held 25 corporation owns more than 10% of its stock. CAN has no parent company and no publicly held 26 corporation owns more than 10% of its stock. 27 //
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Once CAN discloses the identities of the Additional Retailers, Plaintiffs anticipate the list of
2 interested parties will grow. 3 Date: November 26, 2007 4 5 By: 6 7 8 9
ATTESTATION OF E-FILED SIGNATURE I, Annette L. Hurst, attest that Bruce R. Ewing has read and approved the Joint Case /s/ Annette L. Hurst_________ Annette L. Hurst Attorney for Plaintiffs By: ____/s/ Bruce R. Ewing_______________ Bruce R. Ewing Attorney for Defendants
10 Management Conference Statement. I will maintain records of Mr. Ewing's concurrence in our 11 files that can be made available for inspection upon request. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
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/s/Annette L. Hurst________ Annette L. Hurst
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