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AMENDED COMPLAINT FOR DECLARATORY AND

INJUNCTIVE RELIEF CONCERNING COPYRIGHT - 1

SEADOCS:219643.1 MILLER NASH LLP

ATTORNEYS AT LAW

TELEPHONE (206) 622-8484

4400 TWO UNION SQUARE

601 UNION STREET, SEATTLE, WASHINGTON 98101-2352

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

PROPET USA, INC.,

Plaintiff,

v.

LLOYD SHUGART,

Defendant.

Civil No. C06-0186 MAT

AMENDED COMPLAINT FOR

DECLARATORY AND INJUNCTIVE

RELIEF CONCERNING COPYRIGHT

Plaintiff Propet USA, Inc. (“Propet”) hereby alleges as follows:

I. PARTIES, JURISDICTION, AND VENUE

1. Propet is a Washington state corporation, with its principal place of

business in Auburn, Washington. Propet is in the business of selling and distributing shoes to the

public.

2. Defendant Lloyd Shugart (“Shugart”) is a professional photographer doing

business in Seattle, Washington, under the trade names “Lloyd Shugart Fashion Photography”

and/or “Studio 413.” Shugart provides professional photography services to the public,

including within this judicial district.

3. This is an action for declaratory relief that arises under the copyright laws

of the United States, namely 17 U.S.C. § 101 et seq. This Court has subject matter jurisdiction

Case 2:06-cv-00186-MAT Document 7 Filed 03/20/06 Page 1 of 5
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AMENDED COMPLAINT FOR DECLARATORY AND

INJUNCTIVE RELIEF CONCERNING COPYRIGHT - 2

SEADOCS:219643.1 MILLER NASH LLP

ATTORNEYS AT LAW

TELEPHONE (206) 622-8484

4400 TWO UNION SQUARE

601 UNION STREET, SEATTLE, WASHINGTON 98101-2352

over this action pursuant to 28 U.S.C. §§ 1331, 1338(a), and 2201 because this action involves

(1) Shugart’s overt threats of copyright infringement made against Propet, under 17 U.S.C. § 101

et seq., and (2) Propet’s need for an adjudication that Propet is either licensed to use certain

photographic works produced by Shugart or Propet otherwise owns these works.

4. Venue is proper in this jurisdiction pursuant to 28 U.S.C. § 1391(a)

5. The Court has personal jurisdiction over Shugart who resides and transacts

business in Seattle, Washington.

II. FACTS

6. Propet sells and distributes “Propet” brand shoes throughout the United

States. Like other shoe companies, Propet advertises its shoes in various media that require

product photographs. In some cases, these photographs show a model wearing a shoe. More

often, the photographs are purely a product image, such as the Propet “WindsorWalker” shoe

model shown below:

7. From about 1999 through 2005, Propet regularly hired Shugart to take

product photos, like the above image, for use in Propet’s advertising (“Propet Photos”). There

apparently was no written agreement between Propet and Shugart concerning rights, licenses, or

ownership of the copyright to the Propet Photos.

Case 2:06-cv-00186-MAT Document 7 Filed 03/20/06 Page 2 of 5
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AMENDED COMPLAINT FOR DECLARATORY AND

INJUNCTIVE RELIEF CONCERNING COPYRIGHT - 3

SEADOCS:219643.1 MILLER NASH LLP

ATTORNEYS AT LAW

TELEPHONE (206) 622-8484

4400 TWO UNION SQUARE

601 UNION STREET, SEATTLE, WASHINGTON 98101-2352

8. Shugart invoiced Propet for his services. His invoices reflected charges

for his time and expenses on a per project basis. In some cases, Shugart charged Propet hourly

rates for his services (approximately $225 to $275 per hour). More frequently, he charged a flat

rate for a full day’s work (approximately $1800 - $2000 per day).

9. From 2003 – 2005, Propet paid Shugart more than $100,000 for his

services. All of Shugart’s invoices were paid in full by Propet. Propet decided to terminate its

relationship with Shugart and use other photographers sometime during 2005.

10. Propet used Shugart’s photos in the way shoe companies conventionally

use shoe photos in their advertising. That is, the Propet Photos appear on Propet’s website and in

related catalog and other print media.

11. During the years Propet utilized Shugart’s services, he never suggested or

complained that Propet was using his photos in an inappropriate way, or that Propet was making

“unlicensed” use of his photos, or that any limitations existed on how Propet could use these

photos to advertise Propet’s shoes.

12. However, after Propet terminated its relationship with Shugart, he voiced

complaints that Propet was in violation of historical agreements and was using his photos outside

the scope of alleged limits placed on Propet’s right of use. Specifically, Shugart claimed that

Propet was permitted to use the Propet Photos in Propet’s own advertising, but Propet was not

allowed to permit certain “third party” uses. According to Shugart, unlicensed “third party” uses

include (1) Propet’s international distributors (e.g., Propet Canada, Inc.) that market the same

shoes in other countries, including Canada and Europe; and (2) Propet’s on-line retail partners

who have used photos of Propet shoes as stock photos in their advertising Propet shoes.

III. CLAIM FOR RELIEF

(Declaratory Relief – Noninfringement of Copyright)

13. Propet refers to and incorporates the preceding paragraphs herein as

though set forth in full.

Case 2:06-cv-00186-MAT Document 7 Filed 03/20/06 Page 3 of 5
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AMENDED COMPLAINT FOR DECLARATORY AND

INJUNCTIVE RELIEF CONCERNING COPYRIGHT - 4

SEADOCS:219643.1 MILLER NASH LLP

ATTORNEYS AT LAW

TELEPHONE (206) 622-8484

4400 TWO UNION SQUARE

601 UNION STREET, SEATTLE, WASHINGTON 98101-2352

14. Propet either owns the Propet Photos it paid Shugart to produce or Propet

has an unlimited license to use these works in all reasonable ways related to the sale of Propetbrand shoes, including the right to provide Shugart’s photos of Propet-brand shoes to third-party

users who have need to advertise these products.

15. An actual controversy has arisen and now exists between Propet and

Shugart involving the use of and copyright to Shugart’s photos under the applicable copyright

statutes, 17 U.S.C. § 101 et seq.

16. Propet is entitled to injunctive relief:

(a) prohibiting Shugart from selling or offering for sale any Propet

Photos on E-bay;

(b) prohibiting Shugart from transferring any right, title or interest in

Propet Photos to third parties without advance written approval; and

(c) prohibiting Shugart from threatening Propet customers with

copyright infringement relating to their use of Propet Photos.

17. Propet has been overtly threatened and has reasonable apprehension that it

will be sued for copyright infringement by Shugart. Not only has Shugart threatened Propet with

suit, but Shugart has also threatened to sue Propet’s customers and others.

18. Propet desires a judicial determination of the copyright to the Propet

Photos pursuant to 28 U.S.C. § 2201.

IV. PRAYER FOR RELIEF

WHEREFORE, Propet requests the following relief:

A. That the court find that Propet’s historical use of Shugart’s photos of

Propet-brand shoes has not violated Shugart’s rights to the photos;

B. That the court find that Propet is not infringing any right owned by

Shugart;

Case 2:06-cv-00186-MAT Document 7 Filed 03/20/06 Page 4 of 5
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AMENDED COMPLAINT FOR DECLARATORY AND

INJUNCTIVE RELIEF CONCERNING COPYRIGHT - 5

SEADOCS:219643.1 MILLER NASH LLP

ATTORNEYS AT LAW

TELEPHONE (206) 622-8484

4400 TWO UNION SQUARE

601 UNION STREET, SEATTLE, WASHINGTON 98101-2352

C. That Shugart be permanently enjoined from selling or offering for sale any

Propet Photos on E-bay;

D. That Shugart be permanently enjoined from transferring any right, title or

interest in Propet Photos to third parties without advance written approval; and

E. That Shugart be permanently enjoined from threatening Propet customers

with copyright infringement relating to their use of Propet Photos.

F. That Shugart be required to pay Propet’s attorney’s fees and costs in

bringing this action; and

G. That Propet be entitled to such further relief as the court deems just and

equitable.

DATED this 20th day of March, 2006.

MILLER NASH LLP

/s/ James L. Phillips

James Phillips

WSB No. 13186

Adele Conover

WSB No. 34405

OF COUNSEL:

Bruce Kaser

WSB No. 13532

Vantage Law PLLC

355 NW Gilman Blvd, Suite 203

Issaquah, WA 98027

Direct: (425) 391-8741

Fax: (425) 391-8754

Attorneys for Plaintiff

Case 2:06-cv-00186-MAT Document 7 Filed 03/20/06 Page 5 of 5