Appeals court to Urban Oufitters: Pay $530,000 after ‘reckless disregard’ of fabric copyright

Urban Outfitters Inc. lost its latest court battle, with a panel of judges ordering it to pay $530,000 for what it described as “reckless disregard” of a fabric design copyright owned by a small Los Angeles manufacturer.

The Ninth Circuit Court of Appeals on Tuesday rejected all of Urban’s attempts to undermine a finding by a California federal jury that the retailer had willfully infringed a fabric designed and protected under copyright by Unicolors Inc. The opinion was published by the court, which is somewhat rare and an indication that lower courts should look to the ruling to guide them in other copyright cases.

Urban is no stranger to infringement litigation and the retailer is facing a trademark suit by Coachella, claiming the retailer is using the goodwill of the annual music festival to sell “Coachella”-branded looks.

The fabric at issue in Unicolors’ case is an abstracted purple palm frond print on a black background that the company used for a dress in a blue and yellow color palette sold by its Free People unit. The style eventually made its way to discount retailer Century 21 Department Stores, a codefendant in the litigation.

In affirming the underlying verdict and related judgment — which are damages and attorney fees, nearly all of which will be paid by Urban — the appellate panel said “substantial evidence” showed Urban “acted with reckless disregard for the possibility that the fabric it sampled was protected by copyright.”

The panel reached this conclusion despite Urban’s arguments that the district court should not have relied on a “subjective” analysis of the fabrics and their similarity to conclude that Unicolors’ design was copied before the case went to trial in 2015.

“Urban’s position cannot be reconciled with our prior recognition that, in exceptional cases, works may be so identical that summary judgment in favor of a plaintiff is warranted,” the panel said in its opinion. “This is one of those exceptional cases.”

The Ninth Circuit went on to note that the district court “correctly observed that both the subject design and accused dress include complex patterns with nearly identical orientation, spacing and grouping of complicated florets and feathers,” according to the opinion.

“Although the colors vary slightly, each has an ombre color pattern and uses color in similar ways for highlight and contrast,” the panel added. “Given the intricacy of the designs and the objective overlap between them, the district court properly concluded that the works are ‘so overwhelmingly identical that the possibility of independent creation is precluded.’”

The appeals court also rejected Urban’s argument that there was not enough evidence showing it had any access to Unicolors’ design.

“Absent evidence of access, a ‘striking similarity’ between the works may give rise to a permissible inference of copying,” the panel said citing an earlier copyright infringement case. “Here, the works are virtually identical.”

With that, the Ninth Circuit affirmed the underlying ruling in its entirety, and ordered Urban to cover the costs of the appeal litigation.

Representatives for Urban and Unicolors could not immediately be reached for comment.

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