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U.S. Vinyl Manufacturing Corp. v. Colour & Design, Inc.

United States District Court, N.D. Georgia, Rome Division

September 26, 2013

U.S. VINYL MANUFACTURING CORPORATION, Plaintiff/Counter-Defendant,
v.
COLOUR & DESIGN, INC., Defendant/Counter-Plaintiff

For U.S. Vinyl Manufacturing Corporation, Plaintiff, Counter Defendant, Counter Claimant: Bobby Lee Cook, Christopher Sutton Connelly, LEAD ATTORNEYS, Cook & Connelly, Summerville, GA; Jeffrey Garrett Granillo, Richard W. Bethea , Jr., LEAD ATTORNEYS, Chambliss Bahner & Stophel, P.C., Chattanooga, TN.

For Colour & Design, Inc., Defendant: Chiaman Wang, Craig Edward Bertschi, LEAD ATTORNEYS, Kilpatrick Townsend & Stockton, LLP-GA, Atlanta, GA; Marc Lieberstein, LEAD ATTORNEY, PRO HAC VICE, Kilpatrick Stockton, LLP-NY, New York, NY; Andrew David Head, Jeffrey H. Fisher, William Andrew Pequignot, Kilpatrick Townsend & Stockton, LLP-ATL, Atlanta, GA.

For Colour & Design, Inc., Counter Claimant: Chiaman Wang, Craig Edward Bertschi, LEAD ATTORNEYS, Kilpatrick Townsend & Stockton, LLP-GA, Atlanta, GA; Andrew David Head, William Andrew Pequignot, Kilpatrick Townsend & Stockton, LLP-ATL, Atlanta, GA.

For Colour & Design, Inc., Counter Defendant: Chiaman Wang, Craig Edward Bertschi, LEAD ATTORNEYS, Kilpatrick Townsend & Stockton, LLP-GA, Atlanta, GA; Andrew David Head, Kilpatrick Townsend & Stockton, LLP-ATL.

For Colour & Design, Inc., Counter Defendant: Chiaman Wang, Craig Edward Bertschi, LEAD ATTORNEYS, Kilpatrick Townsend & Stockton, LLP-GA, Atlanta, GA; Marc Lieberstein, LEAD ATTORNEY, Kilpatrick Stockton, LLP-NY, New York, NY; Andrew David Head, William Andrew Pequignot, Kilpatrick Townsend & Stockton, LLP-ATL, Atlanta, GA.

Page 1254

ORDER

HAROLD MURPHY, UNITED STATES DISTRICT JUDGE.

This case is before the Court on Plaintiff/Counter-Defendant's (" Plaintiff') Motion for Partial Summary Judgment [70].

I. Background

A. Procedural Background

On August 16, 2012, Plaintiff filed a Complaint in the Superior Court of Walker County, Georgia. (Docket Entry No. 1 (Compl.) at 1.) Plaintiff alleged various claims: breach of contract (id. ¶ ¶ 32-35); tortious breach of fiduciary duty (id. ¶ ¶ 36-39); and constructive fraud (id. ¶ ¶ 40-45); Plaintiff also sought punitive damages (id. ¶ ¶ 46-48). Regarding its constructive fraud claim, Plaintiff asked the Court to " equitably enjoin Defendant from enforcing any copyright royalties against [Plaintiff] related to any [P]atterns produced by [Defendant] under the [Contract] for [Plaintiff]." (Compl. at 15; see also Compl. ¶ 45.) On September 17, 2012, Defendant removed the Complaint to this Court, citing the Court's federal question jurisdiction. (Docket Entry No. 1 at 3.)

On September 24, 2012, Defendant filed its Answer to the Complaint as well as its Counterclaims. (Docket Entry No. 3.) Defendant sought relief for several claims: copyright infringement (Counterclaim (Docket Entry No. 3) ¶ ¶ 48-57); trademark infringement (id. ¶ ¶ 58-64); breach of contract (id. ¶ ¶ 65-68); and conversion (id. ¶ ¶ 71-75). Defendant also sought an accounting for amounts due under the Contract (id. ¶ ¶ 69-70) and asked the Court to preliminarily and permanently enjoin Plaintiff, and its associated parties and entities, from, among other things, " reproducing, displaying, distributing copies of, preparing derivative works based upon, selling or otherwise using [the Patterns] or any other design substantially similar to any design in which Defendants hold the copyright." (Answer and Counterclaims at 33-34.)

In Plaintiff's Answer to Defendant's Counterclaim, Plaintiff first asserted full ownership of the copyright for SATO. (Docket Entry No. 5 ¶ 25.) On November 5, 2012, Defendant responded, asserting its own rights in the SATO pattern, and filed its own Counterclaim, requesting that Plaintiff account to Defendant for profits earned from the SATO pattern. (Docket Entry No. 17 ¶ ¶ 6-9.) Plaintiff filed its Answer to that Counterclaim on July 22, 2012. (Docket Entry No. 22.)

On January 22, 2013, Plaintiff filed a Motion to Dismiss Defendant's copyright infringement Counterclaim. (Docket Entry No. 31.) Defendant in turn filed a Motion for Judgment on the Pleadings, asking the Court to dismiss Plaintiff's constructive fraud claim. (Docket Entry No. 34.) On March 25, 2013, the Court granted Plaintiff's Motion to Dismiss and dismissed without prejudice Defendant's copyright infringement counterclaim. (Order of Mar. 25, 2013 (Docket Entry No. 39) at 73.) The Court also granted Defendant's Motion for Judgment on the Pleadings and dismissed without prejudice Plaintiff's constructive fraud claim. (Id.)

On May 24, 2013, Plaintiff submitted a Motion to Amend (Docket Entry No. 46) and Motion to Deposit (Docket Entry No. 45). On August 5, 2013, the Court granted

Page 1255

Plaintiff's Motion to Amend and Motion to Deposit. (Order of Aug. 5, 2013 (Docket Entry No. 65). In that Order, the Court directed Plaintiff, within thirty days, to deposit ten percent of Plaintiffs customer invoiced price on all the Patterns, including the SATO pattern [1], that Plaintiff sold from March 31, 2012, to the date of that Order; the Court further directed Plaintiff to deposit, on a monthly basis until the conclusion of this case (or ...


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