Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_02-cv-02028/USCOURTS-casd-3_02-cv-02028-0/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:101 Copyright Infringement

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02CV2028

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MASTERSON MARKETING, INC.,

Plaintiff,

v.

KSL RECREATION CORPORATION, et

al.,

Defendants

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Civil No. 02-CV-2028-L(CAB)

ORDER GRANTING

DEFENDANTS’ MOTION FOR

PARTIAL SUMMARY JUDGMENT 

[doc. # 197]

Defendants move for partial summary judgment on the issue of remedies available to

plaintiff, specifically whether plaintiff may obtain an accounting of profits from defendants’

infringing use in advertising of plaintiff’s images. Defendants contend plaintiff is not entitled to

any portion of defendants’ profits as a matter of law. Plaintiff opposes defendants’ motion. The

matter has been fully briefed.

Factual Background

Plaintiff Masterson Marketing, Inc. (“Masterson”) filed this action alleging copyright

infringement and breach of contract based upon Agency Agreements and Licensing Agreements

entered into with the Arizona Biltmore Resort & Spa (“Resort”) for, inter alia, the taking of

various photos of the resort. In 2000 and 2001, Masterson licensed certain photographs, film,

negatives, images, art, digital art, designs, stock photographs, and other marketing materials

(collectively “Images”) to defendants. (Third Amended Complaint (“TAC”), ¶ 51 ). Plaintiff

Case 3:02-cv-02028-CAB Document 237 Filed 03/09/07 Page 1 of 6
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contends that the Licensing Agreements included a provision that the Resort would not use the

photos outside the scope or usage and upon the expiration of the Licensing Agreement; and the

Resort would return the Materials to plaintiff. (TAC, ¶¶ 52, 53). 

Plaintiff alleges that KSL infringed plaintiff’s copyrights when KSL continued to use the

Images after the expiration of the license agreements in the fall of 2001 for its corporate

advertising in domestic and international publications, and on its website homepage. (TAC, ¶¶

61-62, 64(a)(b), 87). In his requested relief, plaintiff seeks disgorgement of defendants’ profits. 

(TAC, ¶ 99(c)).

Summary Judgment Standard

Federal Rule of Civil Procedure 56 empowers the court to enter summary judgment on

factually unsupported claims or defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 327

(1986). Summary judgment is appropriate “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to judgment as a matter

of law.” Fed. R. Civ. P. 56(c). A fact is material when, under the substantive governing law, it

affects the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986);

Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). 

The party moving for summary judgment bears the initial burden of establishing the

absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. If the moving party does

not have the burden of proof at trial, it may carry its initial burden by “produc[ing] evidence

negating an essential element of the nonmoving party’s case, or, after suitable discovery, the

moving party may show that the nonmoving party does not have enough evidence of an essential

element of its claim or defense to carry its ultimate burden of persuasion at trial.” Nissan Fire &

Marine Ins. Co., v. Fritz Cos., 210 F.3d 1099, 1106 (9th Cir. 2000). When the moving party

bears the burden of proof on an issue — whether on a claim for relief or an affirmative defense

— the party “must establish beyond peradventure all of the essential elements of the claim or

defense to warrant judgment in its favor.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th

Cir. 1986); see S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885, 889 (9th Cir. 2003).

Case 3:02-cv-02028-CAB Document 237 Filed 03/09/07 Page 2 of 6
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If the moving party fails to discharge its initial burden of production, summary judgment

must be denied and the court need not consider the nonmoving party’s evidence, even if the

nonmoving party bears the burden of persuasion at trial. Adickes v. S.H. Kress & Co., 398 U.S.

144, 159-60 (1970); Nissan Fire, 210 F.3d at 1102-03. When the moving party carries its initial

burden of production, the nonmoving party cannot “rest upon mere allegation or denials of his

pleading.” Anderson, 477 U.S. at 256. Rather, the non-movant must “go beyond the pleadings

and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on

file, designate specific facts showing that there is a genuine issue for trial.” Celotex, 477 U.S. at

324 (internal quotations omitted); Anderson, 477 U.S. at 256; Nissan Fire, 210 F.3d at 1103. 

A “genuine issue” of material fact arises if “the evidence is such that a reasonable jury

could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. “Disputes over

irrelevant or unnecessary facts will not preclude a grant of summary judgment.” T.W. Elec.

Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). When ruling on a

summary judgment motion, the court cannot engage in credibility determinations or weighing of

the evidence; these are functions for the jury. Anderson, 477 U.S. at 255; Playboy Enters., Inc.

v. Welles, 279 F.3d 796, 800 (9th Cir. 2002). The court must view the evidence in the light most

favorable to the nonmoving party, and draw all reasonable inferences in favor of the nonmovant. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Gibson v.

County of Washoe, Nev., 290 F.3d 1175, 1180 (9th Cir. 2002), cert. denied, 537 U.S. 1106

(2003). The court is not required “to scour the record in search of a genuine issue of triable

fact,” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996), but rather “may limit its review to

the documents submitted for purposes of summary judgment and those parts of the record

specifically referenced therein.” Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026,

1030 (9th Cir. 2001). 

Discussion 

1. Availability of Profits Under the Copyright Act

A plaintiff may recover “any profits of the infringer that are attributable to the

infringement and are not taken into account in computing the actual damages.” 17 U.S.C. §

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1 “Section 504(b)does not differentiate between “direct profits” – those that are

generated by selling an infringing product – and “indirect profits” – revenue that has a more

attenuated nexus to the infringement.” Mackie, 296 F.2d at 914. In other words, indirect profits

arise when the alleged infringer does not sell the copyrighted work itself but rather uses the

copyrighted work to sell another product. Andreas v. Volkwagen of America, Inc., 336 F.3d 789

(8th Cir. 2003).

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504(b). In order to recover an alleged infringer’s profits, the plaintiff must establish a causal

connection between the alleged infringer’s revenues and the alleged infringement. Polar Bear

Prods., Inc. v. Timex Corp., 348 F.3d 700, 708 (9th Cir. 2004). 

Here, plaintiff is seeking indirect profits1

 from the use of his Images in defendants’

advertising contending that he is entitled to defendants’ profits that are attributable to the

infringement. But defendants assert that plaintiff has not, and cannot, establish the requisite

causal connection between the alleged infringement and defendants’ revenues. Defendants,

citing Polar Bear, further argue that even if causation could be established, a claim for indirect

profits will fail if the relationship between the purported infringement and the profits is too

speculative. Id. at 710-711; see also Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d

514, 522-25 (4th Cir. 2003)(summary judgment is appropriate if “despite the existence of a

conceivable connection [between the infringement and recovery sought, the plaintiff] offered

only speculation as to the existence of a causal link between the infringement and the

revenues.”) In other words and as both parties acknowledge, in order “to survive summary

judgment on a demand for indirect profits pursuant to § 504(b), a copyright holder must proffer

sufficient non-speculative evidence to support a causal relationship between the infringement

and the profits generated indirectly from such an infringement.” Mackie v. Rieser , 296 F.3d

909, 915-16 (9th Cir. 2002).

2. Causal Relationship

Plaintiff contends he has demonstrated the nexus between defendants’ infringement and

their profits. Plaintiff first points to a letter he received from Randolph Wilcott, the Director of

Marketing for the Arizona Biltmore in which Wilcott stated:

I just received our year end sales report. Our new advertising direction has

increased our leisure and group occupancy by 38% over the past nine months. We

at the Arizona Biltmore Sales and Marketing Department tip our hats to Masterson

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2 Mr. Feder testified that “the signature shot is obviously used over and over because

it is a – it is a great shot. It does a good job at depicting the qualities in sending the right image

to constituency that you’re looking to go after.” (Exh. 2, Feder Depo. at 55-56).

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Marketing.

(Plaintiff’s Exh. 1). Although plaintiff believes this note “clearly” shows the infringing use of

his images caused defendants’ increased profits, it does not. The Wilcott note is dated May 17,

2000, which is within the time period of the parties’ Licensing Agreement and approximately a

year and a half prior to the termination of the Licensing Agreement. Only after the termination

of the Licensing Agreement does any alleged infringing activity occur. Thus, the Wilcott note

cannot demonstrate a connection between alleged infringement and defendants’ profits. 

Moreover, the Wilcott note does not assert a connection between the use of plaintiff’s images

and defendants’ profits. Rather, the note speaks of “[o]ur new marketing direction” and not the

specific use of plaintiff’s images that were incorporated in defendants’ advertising. Id.

Plaintiff also relies on the testimony of David Feder who stated that the photos at issue

were “signature shots”2

 and “almost becomes a little bit like a brand” for the Arizona Biltmore. 

(Exh. 2, Feder Depo. at 54, 56) But as defendants correctly discuss, even if plaintiff’s images

are “signature shots”, there is nothing in the record demonstrating that plaintiff’s photos

appearing within general advertising materials that featured infringing images and other noninfringing materials influenced consumers’ decisions to stay at the Arizona Biltmore. 

Speculation does not suffice to show a nexus between infringement and profits.

Here, plaintiff has provided no evidence to support his claim that the infringing use of his

images in advertising increased defendants’ profits.

Conclusion

Plaintiff has failed to offer any nonspeculative evidence creating a triable issue of fact

showing that the alleged infringement at least partially caused the profits that the infringer

generated as a result of the infringement. 

. . .

. . .

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Based on the foregoing, IT IS ORDERED granting defendants’ motion for partial

summary judgment [doc. #197].

IT IS SO ORDERED. 

DATED: March 9, 2007

M. James Lorenz

United States District Court Judge

COPY TO: 

HON. CATHY ANN BENCIVENGO

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

Case 3:02-cv-02028-CAB Document 237 Filed 03/09/07 Page 6 of 6