Court Opinion

ID: 7801275
Source: CourtListenerOpinion
Date Created: 2022-08-17 15:01:10.934391+00
Date Added: 2024-06-11T16:29:15.408868
License: Public Domain

USCA11 Case: 21-14236    Date Filed: 08/17/2022   Page: 1 of 12

                                          [DO NOT PUBLISH]
                           In the
         United States Court of Appeals
               For the Eleventh Circuit

                 ____________________

                        No. 21-14236
                 Non-Argument Calendar
                 ____________________

ALPER AUTOMOTIVE, INC.,
A Florida Corporation
d.b.a. AA Ignition,
                          Plaintiff-Counter Defendant-Appellee,
versus
DAY TO DAY IMPORTS, INC.,
A California Corporation,

                        Defendant-Counter Claimant-Appellant.
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2                         Opinion of the Court                     21-14236

                       ____________________

            Appeal from the United States District Court
                for the Southern District of Florida
               D.C. Docket No. 9:18-cv-81753-BER
                     ____________________

Before WILSON, JORDAN, and NEWSOM, Circuit Judges.
PER CURIAM:
       Defendant-Appellant Day To Day Imports, Inc. (DDI) ap-
peals the district court’s order, after a bench trial, that found DDI
violated Section 512(f) of the Digital Millennium Copyright Act
(DMCA). After careful review, we affirm.
                           I.     BACKGROUND
       The basis for this copyright litigation is a set of replacement
stickers for the dashboard climate controls for certain General Mo-
tors (GM) vehicles. In 2011, Harold Walters incorporated original
artwork behind the set of those replacement stickers. Walters be-
gan selling his stickers through online markets and submitted his
design to the U.S. Copyright Office in 2017. 1 The U.S. Copyright
Office granted a copyright for Walters’s design.
       In 2016, DDI began selling a similar set of climate control
stickers but without Walters’s artwork through online markets,

1In his application, Walters put 2017 as the date of original design, but that
was amended to 2011.
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21-14236                Opinion of the Court                         3

including Amazon. Walters submitted a Takedown Notice to Am-
azon. Under the DMCA, a person who believes his copyright is
being infringed can notify the online market in writing and must
identify the allegedly infringing listing with particularity. 17 U.S.C.
§ 512(c). DDI received notification that Amazon had taken down
the listing due to copyright infringement.
       DDI, through counsel, reached out to Walters to address
how DDI allegedly infringed Walters’s copyright. Walters ex-
plained to DDI that he had a valid copyright and provided DDI
with his copyright registration numbers. But Walters did not pro-
vide DDI with a copy of his design nor did DDI request a copy of
the design from the U.S. Copyright Office. After negotiating with
Walters, DDI paid Walters to license the copyrights and allowed
Walters to continue to sell his stickers on eBay while DDI would
sell the licensed stickers on Amazon. Walters permitted DDI to
submit a Takedown Notice to Amazon.
       In April 2018, Plaintiff-Appellee Alper Automotive, Inc.
(Alper) began selling a sticker that contained the same dashboard
climate controls as DDI and Walters but also included another de-
cal. On May 8, 2018, DDI’s counsel sent a Takedown Notice to
Amazon that identified Alper’s sticker as infringing DDI’s license of
Walters’s copyright. At first, Amazon did not remove the listing
until DDI sent another Takedown Notice on May 15, 2018. Ama-
zon took down Alper’s listing on May 17, 2018.
      On May 17, 2018, Alper received notice that DDI had re-
ported the copyright infringement and that Amazon had removed
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4                       Opinion of the Court                  21-14236

Alper’s listing. Alper’s counsel contacted DDI’s counsel to address
the alleged copyright infringement. Throughout the discussion,
DDI explained that it did not have a copy of Walters’s design sub-
mitted to the U.S. Copyright Office but had seen the work and
claimed Alper’s stickers were identical. Ultimately, Alper and DDI
did not resolve the alleged copyright infringement.
       On June 7, 2018, Alper emailed Amazon and disputed the
Takedown Notice, specifically that the work was not identical to
DDI’s work nor was DDI’s work entitled to copyright protection
because it was standard dashboard icons. Amazon reinstated
Alper’s listing on June 22, 2018. This cycle of DDI sending a
Takedown Notice and Alper disputing that notice occurred with
DDI’s August 2 and November 1 Takedown Notices. 2
       On November 19, 2018, DDI again sent a Takedown Notice
that again included Alper’s reinstated listing. On November 29,
2018, Amazon removed Alper’s listing, and Alper immediately ap-
pealed. Alper’s counsel contacted DDI’s counsel at this time to dis-
cuss the changes Alper made to its sticker and to hopefully settle.
Amazon reinstated Alper’s listing on December 2, 2018. On De-
cember 5, 2018, after discussing the issue with other attorneys and
Amazon Legal, Alper’s counsel rescinded the settlement proposal.
Alper’s counsel explained that Alper’s listing does not infringe on

2These Takedown Notices also included listings from other companies that
were not reinstated by Amazon.
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21-14236                 Opinion of the Court                             5

DDI’s copyright and that if DDI continued to file invalid Takedown
Notices, Alper would take legal action.
      On December 23, 2018, DDI’s counsel received an email
from Amazon stating it received DDI’s reports of infringement and
had acted against the infringers, including Alper. Alper appealed
and Amazon reinstated Alper’s listing. 3
        On December 27, 2018, Alper sued DDI in the Southern Dis-
trict of Florida for five claims, including 17 U.S.C. § 512(f) about
DDI’s submitted Takedown Notices. DDI counterclaimed for cop-
yright infringement and joined Walters to the suit. Relevant to this
appeal, the district court conducted a three-day bench trial on
Alper’s Section 512(f) claim only.4
      After the bench trial, the district court entered its Findings
of Facts and Conclusions of Law. Ultimately, the district court
found that the May, August, and November 1 Takedown Notices
did not violate Section 512(f). However, the district court found:
        12. When it submitted the November 19 DMCA
        Takedown Notice, Defendant [DDI] had a subjective

3As the district court noted, the December emails were a technical glitch by
Amazon but would not have happened but for the November 19, 2018
Takedown Notice.
4 Alper’sremaining claims and DDI’s counterclaims were handled either by
settlement or through summary judgment.
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6                     Opinion of the Court                 21-14236

     belief that Plaintiff’s [Alper’s] Sticker Sheet infringed
     the Subject Design.
     13. That subjective belief was the result of willful
     blindness.
     14. By this point, in addition to the information
     known to Defendant after the May DMCA
     Takedown Notice, Defendant knew that Plaintiff’s
     Amazon listing had been reinstated three times. De-
     fendant had not tried to find out why Amazon kept
     reinstating Plaintiff’s listing. Defendant had not ob-
     tained the Deposit Design from the Copyright Office.
     And, the November 19 DMCA Takedown Notice
     acknowledged that many of the ASINs listed in the
     Notice were ones that had already been taken down
     and are “back up somehow.” All of these facts placed
     Defendant on actual notice that it was highly likely
     that, in fact, Plaintiff’s Sticker Sheet was not infring-
     ing the Subject Design. It also put Defendant on
     acute notice that there was a problem with its copy-
     right infringement claim. Therefore, Defendant’s de-
     cision to not pursue information that would have
     helped confirm whether Plaintiff was infringing on a
     protected copyright constituted willful blindness.
     15. I further find that by November 19, 2018, Defend-
     ant had a motive not to investigate further – filing
     DMCA Takedown Notices was less expensive and
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21-14236               Opinion of the Court                        7

      more immediate than pursuing a claim for copyright
      infringement on the merits. In making this finding I
      draw an adverse inference from Defendant’s failure
      to initiate litigation against Plaintiff. In a May corre-
      spondence, Mr. Kaufman said, “We are a few weeks
      away from filing suit against all the infringers.” Yet,
      as of the November 19, 2018, seven months later, De-
      fendant had not filed suit against Plaintiff, even
      though Plaintiff was persisting in having its Amazon
      listing reinstated. See Online Policy Group v.
      Diebold, Inc., 337 F. Supp. 2d 1195, 1204–05 (N.D.
      Cal. 2004) (“The fact that Diebold never actually
      brought suit against any alleged infringer suggests
      strongly that Diebold sought to use the DMCA's safe
      harbor provisions—which were designed to protect
      [Internet Service Providers], not copyright holders—
      as a sword to suppress publication of embarrassing
      content rather than as a shield to protect its intellec-
      tual property.”). I find that by November 19, 2018,
      Defendant was using the DMCA Takedown Notices
      to suppress a market competitor rather than to en-
      force a legitimate good faith claim of copyright in-
      fringement.
      16. The November 19, 2018, DMCA Takedown No-
      tice violated § 512(f). I find by a preponderance of the
      evidence that Defendant knowingly and materially
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8                       Opinion of the Court                    21-14236

      misrepresented that Plaintiff was infringing a valid
      copyright, that Amazon relied on that misrepresenta-
      tion, and that Plaintiff was injured as a result of its list-
      ing being down from November 29, 2018 to Decem-
      ber 2, 2018.
The district court awarded Alper $351.95 in lost profits and $45 for
Alper’s counsel’s time in getting the Amazon listing reinstated.
DDI timely appealed.
                 II.    STANDARD OF REVIEW
       “On appeal of a district court order from a bench trial, we
review the court’s conclusions of law de novo and its findings of
fact for clear error.” HGI Assocs., Inc. v. Wetmore Printing Co.,
427 F.3d 867, 873 (11th Cir. 2005). “We will not find clear error
unless our review of the record leaves us ‘with the definite and firm
conviction that a mistake has been committed.’” Coggin v.
Comm’r of Internal Revenue, 71 F.3d 855, 860 (11th Cir. 1996)
(quoting United States v. Gypsum Co., 333 U.S. 364, 395 (1948)).
                          III.      ANALYSIS
        DDI argues the district court erred in two ways. First, the
district court erred in using the willful blindness standard to sup-
port DDI’s liability for a knowing misrepresentation under 17
U.S.C. § 512(f). Second, even if the willful blindness standard ap-
plies, the district court clearly erred in finding DDI was willfully
blind. We will address each argument in turn.
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21-14236                Opinion of the Court                          9

                                   A.
        DDI argues that it is unprecedented for the district court to
use the willful blindness standard as this court has not addressed
the knowledge requirement under Section 512(f). Although DDI
is correct that this court has not addressed the willful blindness
standard under Section 512(f), the parties stipulated to this standard
as the law that the judge would use during the bench trial. Specif-
ically, in the Amended Joint Pretrial Stipulation, the parties agreed
that “[w]illful blindness serves as a substitute for actual knowledge
for a DMCA misrepresentation claim.” DDI also discussed the will-
ful blindness standard to the district court in its opening and closing
statements. DDI further argued in its closing that Alper failed to
meet the requirements for willful blindness.
      Although DDI argues that the district court should have not
used the willful blindness standard, it does not argue that holding
DDI to that standard is manifest injustice. As a general rule, parties
are bound by stipulations made before trial. G.I.C. Corp., Inc. v.
United States, 121 F.3d 1447, 1449–50 (11th Cir. 1997). “Before
agreeing to a stipulation, a litigant has a duty to satisfy himself con-
cerning the matters which his opponent proposes for stipulation.
Down v. Am. Employers Inc. Co., 423 F.2d 1160, 1164 (5th Cir.
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10                       Opinion of the Court                    21-14236

1970). 5 But a court may disregard issues of law stipulated by the
parties to grant a party relief from that stipulation to prevent man-
ifest injustice. Equitable Life Assurance Soc’y v. MacGill, 551 F.2d
978, 983–84 (5th Cir. 1977).
       Considering DDI stipulated to the use of willful blindness as
a substitute for actual knowledge before trial and then repeatedly
discussed that standard at the trial, we will hold DDI to that stipu-
lation. Nor was it manifestly unjust to use a willful blindness stand-
ard because we have adopted that doctrine to show knowledge in
other intellectual property cases. See Luxottica Grp., S.P.A. v. Air-
port Mini Mall, LLC, 932 F.3d 1303, 1312 (11th Cir. 2019) (applying
willful blindness in a contributory trademark infringement action);
see also Glob.-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 768
(2011) (applying willful blindness in induced patent infringement
case).
                                      B.
        DDI argues that the district court clearly erred in finding that
DDI was willfully blind for two reasons. First, DDI argues that the
district court’s order now requires any party, including DDI, to
contact the U.S. Copyright Office to determine whether there is a
valid copyright rather than go on the subjective belief of a licensor,
in this case Walters. DDI misrepresents what the district court

5 We are bound by decisions ofthe former Fifth Circuit handed down before
October 1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.
1981) (en banc).
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21-14236               Opinion of the Court                        11

order stated. The district court order did not hold that DDI, or
future parties, must contact the U.S. Copyright Office before filing
a Takedown Notice under the DMCA. Rather, the district court
explained that considering the many times Alper’s listing was taken
down and put back up that Alper’s sticker likely did not infringe on
DDI’s design. As a result, DDI should have pursued information
to determine whether Alper was actually infringing a protected
copyright. One way that DDI could have done so was to contact
the U.S. Copyright Office, but DDI could have also reached back
out to Walters to get as much information as it could have from his
copyright application, including Walters’s submitted designs.
       Next, DDI argues that the district court erred in applying the
willful blindness standard. In order to show willful blindness, a
party must establish two factors: “(1) the defendant must subjec-
tively believe that there is a high probability that a fact exists and
(2) the defendant must take deliberate actions to avoid learning of
that fact.” Glob.-Tech Appliances, 563 U.S. at 769.
       Looking at the first factor, the district court explained that
by November 19, DDI was placed on actual notice that Alper’s
sticker likely did not infringe on DDI’s sticker. Before making this
finding, the district court, in great detail, explained the many
Takedown Notices, Alper’s appeals of those notices, and ultimately
Amazon’s reinstatement of Alper’s listings. The district court also
noted that many of the other listings that DDI included in its
Takedown Notices were not being reinstated on Amazon, which
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12                      Opinion of the Court                21-14236

increases the probability that DDI knew there was likely no in-
fringement by Alper.
        After months of sending Takedown Notices, only for Alper’s
listings to be reinstated, DDI should have pursued information to
determine why Amazon kept allowing reinstatement. Further, in
one email, Amazon explained that it would not act on the
Takedown Notice because “the notices [DDI] reported to Amazon
are invalid and/or inaccurate.” These facts allow the inference that
DDI was intentionally insulating itself from knowledge about pos-
sible the likelihood that Alper was not infringing Walters’s copy-
rights. See United States v. Dean, 487 F.3d 840, 851 (11th Cir. 2007).
Therefore, there is substantial evidence to support the district
court’s finding of willful blindness.
                       IV.    CONCLUSION
       Thus, the district court’s comprehensive order is affirmed.
The district court did not err in using the willful blindness standard
as a substitute for actual knowledge in a misrepresentation claim
under 7 U.S.C. §512(f) and DDI has not shown manifest injustice
because DDI stipulated to the standard before trial and then made
arguments at trial using that standard. And the district court did not
clearly err in determining that DDI’s conduct for the November 18,
2018 Takedown Notice was willfully blind.
      AFFIRMED.