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Inc. v. Sweetwater Sound, Inc.

United States District Court, D. New Hampshire

January 14, 2019

D'Pergo Custom Guitars, Inc.
v.
Sweetwater Sound, Inc.

          ORDER

          Landya McCafferty, United States District Judge

         D'Pergo Custom Guitars, Inc. (“D'Pergo”) brings this suit against Sweetwater Sound, Inc. (“Sweetwater”), alleging claims of copyright and trademark infringement and violations of the New Hampshire Consumer Protection Act (“CPA”). D'Pergo alleges that Sweetwater used a copyrighted photograph of D'Pergo's trademarked custom guitar necks to promote and sell Sweetwater products on Sweetwater's website. Both D'Pergo and Sweetwater move to compel the opposing party to respond to discovery requests. For the reasons discussed below, both motions are granted in part and denied in part.

         STANDARD OF REVIEW

         “Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense . . . [which] need not be admissible at trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Fed.R.Civ.P. 26(b)(1). A party may serve on another party a request “to produce and permit the requesting party or its representative to inspect, copy, test, or sample” certain documents that are within the scope of Federal Rule of Civil Procedure 26(b) and are in the party's custody and control. Fed.R.Civ.P. 34(a)(1). “A party seeking discovery may move for an order compelling an answer, designation, production, or inspection. The motion may be made if . . . (iv) a party fails to respond that inspection will be permitted-or fails to permit inspection-as requested under Rule 34.” Fed.R.Civ.P. 37(a)(3)(B).

         BACKGROUND

         D'Pergo manufactures and sells custom guitars. In 2003, D'Pergo created a photograph showcasing a number of its unique guitar necks, which it published to its website. D'Pergo later registered the copyright for the photograph and registered its signature guitar neck headstock as a trademark.

         Sweetwater is a retailer that sells musical instruments, including guitars, through its website. D'Pergo alleges that Sweetwater copied D'Pergo's photograph and published it on Sweetwater's website. More specifically, Sweetwater used the photograph in an “Electric Guitar Buying Guide, ” in the section titled “Guitar necks explained.” The end of the Buying Guide features a number of guitars from various manufacturers for purchase, as well as a hyperlink to “Shop for Electric Guitars.” Sweetwater admits that it used the photograph as early as August 5, 2004, and claims that it discontinued using the photograph within two days of receiving notice from D'Pergo on January 4, 2016.[1] See doc. no. 63 at 5.

         D'Pergo asserts five claims in its amended complaint: 1) copyright infringement in violation of the Copyright Act (Count I); 2) unfair competition in violation of the CPA (Count II); 3) deceptive business practices in violation of the CPA (Count III); 4) false designation of origin and unfair competition in violation of the Lanham Act (Count IV); and 5) trademark infringement in violation of the Lanham Act (Count V).

         DISCUSSION

         D'Pergo moves for an order compelling Sweetwater to provide further responses to D'Pergo's Request for Production and its First Set of Interrogatories. See doc. no. 60. Sweetwater moves for an order compelling D'Pergo to provide further responses to Sweetwater's first and second requests for production of documents. See doc. no. 62. The court first addresses D'Pergo's motion and then turns to Sweetwater's motion.

         I. D'Pergo's Motion

         Broadly speaking, D'Pergo's motion focuses on the parties' disagreement over the effect of the three-year statute of limitations applicable to each of D'Pergo's claims in this case. Sweetwater refuses to produce any information prior to December 26, 2014, three years before D'Pergo filed this suit, arguing that such information is irrelevant because it is outside of the statute of limitations. In addition, Sweetwater contends that D'Pergo's requests are overbroad and that it would be unduly burdensome to respond.

         A. Applicable Limitations Period

         The parties agree that a claim under the Copyright Act must be brought within three years after the claim accrues. See 17 U.S.C. § 507(b). The parties further agree that D'Pergo's CPA claims and its trademark claims under the Lanham Act also have a three-year statute of limitations.[2] See RSA § 508:4, I. In addition, the parties agree for purposes of D'Pergo's motion that D'Pergo's action is timely, meaning that its claims accrued no earlier than December 26, 2014.[3]

         Although the parties agree as to the appropriate limitations period, they disagree as to its effect on discovery about D'Pergo's damages. D'Pergo asserts that it is entitled to discovery about information regarding Sweetwater's sales of electric guitars beginning two years before Sweetwater began using the image (in 2004) and continuing until it ceased using the image (in 2014). In response, Sweetwater contends that D'Pergo is entitled to no information for the period prior to December 26, 2014, the earliest possible date that D'Pergo's claims accrued.

         In support of its position, Sweetwater relies almost entirely on the Supreme Court's decision in Petrella v. MGM, 572 U.S. 663 (2014). In Petrella, the Supreme Court held that the equitable defense of laches does not apply to claims for copyright infringement brought within the limitations period under the Copyright Act.[4] See Id. at 687. Sweetwater seizes on the following language in Petrella:

In sum, Congress provided two controlling time prescriptions: the copyright term, which endures for decades, and may pass from one generation to another; and § 507(b)'s limitations period, which allows plaintiffs during that lengthy term to gain retrospective relief running only three years back from the date the complaint was filed.

Id. at 671 (emphasis added). Sweetwater interprets this language from Petrella as limiting D'Pergo's right to recover damages on its Copyright Act claim-and, therefore, it's right to discover information-to three years prior to the date it filed its complaint in this action.

         Sweetwater's argument is unpersuasive. The language from Petrella upon which Sweetwater relies is dicta, as it “was a case about laches, and the holding is limited to that issue.” Grant Heilman Photography, Inc. v. McGraw-Hill Companies, Inc., 28 F.Supp.3d 399, 411 (E.D. Pa. 2014). As D'Pergo notes, several defendants in Copyright Act cases have attempted to use the dicta quoted above from Petrella to limit a plaintiff's claim for damages. Courts have repeatedly rejected these attempts because the three-year look-back rule for damages does not apply when the discovery rule extends the limitation period. See PK Music Performance, Inc. v. Timberlake, No. 16-CV-1215 (VSB), 2018 WL 4759737, at *9-10 (S.D.N.Y. Sept. 30, 2018) (discussing and explaining damages under the discovery rule and discussing Petrella); Sohm v. Scholastic Inc., No. 16-CV-7098 (JPO), 2018 WL 1605214, at *11 (S.D.N.Y. Mar. 29, 2018) (The “Court rejects Scholastic's argument that damages [in a Copyright Action case] should be limited to three years before the filing of this case.”); Mitchell v. Capitol Records, LLC, 287 F.Supp.3d 673, 678 (W.D. Ky. 2017); Panoramic Stock Images, Ltd v. McGraw-Hill Glob. Educ. Holdings, LLC, No. 12 C 9881, 2015 WL 393381, at *2 (N.D. Ill. Jan. 27, 2015). Thus, information relating to a defendant's first infringing act, even when it occurs prior to the discovery of infringement, is discoverable. See Mitchell v. Universal Music Grp. Inc., No. 3:15-CV-174-JHM, 2018 WL 1573233, at *3 (W.D. Ky. Mar. 30, 2018), objections sustained in part and overruled in part sub nom. Mitchell v. Capitol Records, LLC, No. 3:15-CV-00174-JHM, 2018 WL 2011934 (W.D. Ky. Apr. 30, 2018) (“Mitchell's discovery requests for financial documents dating back to 1988 (or whatever date he believes defendants' first infringing act occurred on) are highly relevant to his claims, and defendants cannot impose a three-year limitation period on the financial records they produce in discovery.”).

         Because D'Pergo is entitled to discovery pertaining to its claim for damages beyond the three-year limitations period in the Copyright Act, the court need not address Sweetwater's similar arguments pertaining to the limitations period applicable to D'Pergo's Lanham Act claims.[5] The court notes, however, that Sweetwater does not cite any case in its objection to support its contention that damages for a timely-filed Lanham Act claim are limited by the analogous state statute of limitations. And, as both parties acknowledge, courts in this circuit have allowed claims for damages under the Lanham Act for periods of time beyond the applicable limitations period. See Venture Tape Corp. v. McGills Glass Warehouse, 540 F.3d 56, 64 (1st Cir. 2008) (upholding district court's award of three-and-a-half years' worth of damages in a Lanham Act case subject to a three-year statute of limitations); Santana-Cuesta v. Maldonado-Vargas, No. CV 14-1456 (CCC/BJM), 2016 WL 9459759, at *8 (D.P.R. Jan. 29, 2016) (awarding damages for seven years of infringing activity in a Lanham Act case), report and recommendation adopted, No. CV 14-1456CCC, 2016 WL 9458791 (D.P.R. Mar. 7, 2016).

         For those reasons, D'Pergo may seek information in support of its claim for ...


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