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Olem Shoe Corp. v. Washington Shoe Corp.

Eleventh Circuit affirms district court’s summary judgment rulings finding that Olem infringed Washington Shoe’s copyrights in women’s rain boot designs, but did not do so with actual knowledge or reckless disregard.

This appeal stems from a dispute between Washington Shoe Corp. and Olem Shoe Corp. regarding the sale of women’s rain boots. In 2009 and 2010, Washington Shoe sent Olem cease-and-desist letters claiming that Olem was infringing copyrights in Washington Shoe’s design of its “Ditsy Dots” and “Zebra Supreme” boots. In response, Olem filed a declaratory judgment action in Florida district court for non-infringement, and Washington Shoe counterclaimed for copyright infringement as well as other state and federal claims not raised on appeal. On summary judgment, the district court found that Olem had infringed Washington Shoe’s copyrights, given access to Washington Shoe’s designs through wide dissemination of the rain boots in retail stores and the substantial similarity of the parties’ designs. The court, however, found that Olem had not infringed willfully. Olem moved for relief from the judgment and for sanctions, but the district court denied these motions, finding that, irrespective of Olem’s access, the parties’ designs were strikingly similar and Washington’s evidence independently supported a finding of infringement.

Both parties appealed, and the Eleventh Circuit affirmed the district court’s rulings in all respects. As to the question of willful infringement, the court agreed that Olem acted with neither actual knowledge nor reckless disregard of infringement. Notably, the court adopted a test for copyright infringement based upon “reckless disregard,” requiring a plaintiff to demonstrate that the alleged infringer acted despite an “objectively high likelihood” that its actions constituted infringement, and that this risk was either known to, or so obvious that it should have been known to, the infringer. Applying that standard, the court held that there was no genuine issue of material fact demonstrating reckless disregard by Olem because (1) Washington Shoe’s cease-and-desist letters neither identified the registration numbers for, nor provided samples of, the allegedly infringed designs and therefore provided no information from which Olem could have determined that the infringement claim was legitimate; (2) the designs’ striking similarity did not constitute evidence as to Olem’s state of mind; and (3) Olem’s knowledge or lack thereof regarding the source of its boots, which it did not design, could not be used to impute reckless disregard.

The Eleventh Circuit also affirmed the finding that Olem copied Washington Shoe’s “Ditsy Dots” design based upon access and substantial similarity, and further affirmed the finding that Olem copied the “Zebra Supreme” design based upon striking similarity. Indeed, the panel noted that Olem’s designs were “virtually identical” to Washington Shoe’s, a finding that the district court was competent to make without resorting to expert testimony.

Finally, the Eleventh Circuit held that the district court properly exercised its discretion in denying Olem’s motions for relief from the judgment and for sanctions. Not only did the designs’ striking similarity serve as a sufficient ground for granting summary judgment in Washington’s favor on its copyright infringement claim, but Olem had not conclusively demonstrated the falsity of Washington’s representations.