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Lego v. Best-Lock Construction Toys, Inc.

United States District Court, D. Connecticut

December 21, 2017

LEGO A/S and LEGO SYSTEMS, INC., Plaintiffs,
v.
BEST-LOCK CONSTRUCTION TOYS, INC., and BEST-LOCK LIMITED, HONGKONG, Defendants. BEST-LOCK CONSTRUCTION TOYS, INC., BEST-LOCK LIMITED, HONGKONG, and BEST-LOCK GROUP LIMITED, Counterclaim Plaintiffs,
v.
LEGO A/S and LEGO SYSTEMS, INC., Counterclaim Defendants.

          RULING ON DEFENDANTS' MOTION TO DEFER CONSIDERATION OF PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND TO COMPEL PRODUCTION OF DOCUMENTS, DEPOSITIONS, AND SUPPLEMENTAL INTERROGATORY RESPONSES

          CHARLES S. HAIGHT, JR. SENIOR UNITED STATES DISTRICT JUDGE

         Defendants Best-Lock Construction Toys, Inc. and Best-Lock Limited (collectively "Best-Lock") have filed a motion [Doc. 150] to defer consideration of the pending motion of Plaintiffs Lego A/S and Lego Systems, Inc. (collectively "Lego") for partial summary judgment.

         This motion to defer consideration is Best-Lock's renewed effort to persuade the Court that additional discovery is essential to enable Best-Lock to oppose Lego's partial summary judgment motion. Best-Lock anticipates that the additional discovery it has in mind will create genuine issues of material fact with respect to Lego's motion. Lego opposes Best-Lock's motion to defer, and contends that the Court should adjudicate Lego's partial summary judgment motion on the present record. The motion has been elaborately briefed, the Court heard oral argument, and the question is ripe for decision. This Ruling resolves Best-Lock's motion.

         I. BACKGROUND

         On October 14, 2011, Lego initiated this action, alleging infringement of two copyrights filed in 1994, VA 655-104 and VA 655-230 (the "Minifigure Copyrights"). The Complaint, as amended on August 30, 2012, alleges that Best-Lock infringed the Minifigure Copyrights through its actions producing and selling similar minifigures in the United States. Specifically, Lego asserts claims for (1) infringement of the Minifigure Copyrights under 17 U.S.C. § 101, et seq.; (2) defamation; and (3) violation of the Connecticut Unfair Trade Practices Act ("CUPTA"), Conn. Gen. Stat. § 42-110a, et seq. See Second Amended Complaint. [Doc. 84]. Lego seeks to enjoin and restrain Best-Lock from manufacturing or selling its minifigures, and asserts claims for actual damages. See Id. at 10-11.

         Best-Lock has asserted affirmative defenses and Counterclaims, claiming, inter alia, that: (1) the Minifigure Copyrights are invalid and unenforceable; (2) Best-Lock is entitled to a declaratory judgment that the sale of Best-Lock's minifigures does not infringe on the Minifigure Copyrights; and (3) Best-Lock is entitled to an injunction requiring Lego to consent to the importation and delivery of Best-Lock's goods in the United States. See Best-Lock's Answer. [Doc. 86]. Best-Lock also added Best-Lock Group Limited as a Counterclaim Plaintiff. See Id. ¶ 87.

         Familiarity is assumed with the Court's prior decisions in this matter, reported at: 874 F.Supp.2d 75 (ruling on the parties' cross-motions for preliminary injunctions); 886 F.Supp.2d 65 (ruling on Plaintiffs' motion to amend its complaint); 2012 WL 6156129 (ruling on the parties' request for a protective order); 2013 WL 1611462 (ruling on the motion for reconsideration of the ruling on the protective order); and 319 F.R.D. 440 (ruling on Defendants' motion to dismiss and on Plaintiffs' motion for reconsideration of the Court's Order staying its motion for partial summary judgment).

         Relevant here, a time came when Best-Lock filed a Motion to Dismiss for Lack of Prosecution. [Doc. 128]. On April 13, 2016, Lego filed a Motion for Partial Summary Judgment as to liability for its infringement claims under Count One of its Second Amended Complaint, as well as on several of Best-Lock's affirmative defenses and Counterclaims. [Docs. 130]. Best-Lock then filed an Emergency Motion to Deny, Dismiss or Stay Lego's Motion for Partial Summary Judgment [Doc. 135], arguing that Lego's Motion for Partial Summary Judgment should be denied or stayed in light of the fact that Best-Lock's Motion to Dismiss was pending, and discovery was incomplete.

         The Court initially granted Best-Lock's Emergency Motion, denying Lego's Motion for Summary Judgment without prejudice to refiling once the Motion to Dismiss was resolved. [Doc. 136]. Lego then sought reconsideration of the Court's Order. [Doc. 137]. The Court vacated its Order and stayed the requirement for Best-Lock to file an opposition to Lego's Motion for Partial Summary Judgment until resolution of Lego's Motion to Reconsider. [Doc. 139]. On January 18, 2017, the Court granted Lego's Motion to Reconsider, and upon reconsideration, granted Best-Lock's Emergency Motion in part, staying the proceedings to provide Best-Lock an opportunity to re-file a motion pursuant to Fed.R.Civ.P. Rule 56(d), and providing a schedule for the making of such a motion ("January 18 Ruling") [Doc. 143], thereby setting stage for the present motion before the Court.

         In these circumstances, Best-Lock filed the instant Motion to Defer Consideration of Plaintiff's Motion for Partial Summary Judgment and to Compel Production ("Motion to Defer"). [Doc. 150]. Lego filed a memorandum in opposition, [Doc. 155], and Best-Lock filed a reply. [Doc. 156]. A hearing was held before the Court, at which both parties presented their arguments on the Motion to Defer. Subsequently, Best-Lock filed a Motion for Partial Summary Judgment of its own, [Doc. 164] which is also fully briefed and will be the subject of a later Ruling.

         II. LEGAL STANDARD

         Rule 56(d) permits a court, in the exercise of its discretion, to defer or deny a decision on summary judgment if a "nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition[.]" Fed.R.Civ.P. 56(d). "The affidavit must include the nature of the uncompleted discovery; how the facts sought are reasonably expected to create a genuine issue of material fact; what efforts the affiant has made to obtain those facts; and why those efforts were unsuccessful." Paddington Partners v. Bouchard, 34 F.3d 1132, 1138 (2d Cir. 1994)[1]; see also Alphonse Hotel Corp. v. Tran, 828 F.3d 146, 151 (2d Cir. 2016) (same). The affidavit must explain with specificity how the facts sought are reasonably expected to create a genuine issue of material fact. Alphonse Hotel Corp., 828 F.3d at 151.

         "'[A] court plainly has discretion to reject a request for discovery if the evidence sought would be cumulative or if the request is based only on speculation as to what potentially could be discovered, and a bare assertion that the evidence supporting plaintiff's allegations is in the hands of the moving party is insufficient to justify the denial of summary judgment." Crye Precision LLC v. Duro Textiles, LLC, 689 Fed.Appx. 104, 108 (2d Cir. 2017) (quoting In re Dana Corp., 574 F.3d 129, 148-48 (2d Cir. 2009)); see also Alphonse Hotel Corp. 828 F.3d at 151-52 ("[B]are, generalized assertions cannot justify delaying the resolution of a summary judgment motion."); Paddington Partners, 34 F.3d at 1138 ("A court can reject a request for discovery, even if properly and timely made through a Rule 56[d] affidavit, if it deems the request to be based on speculation as to what potentially could be discovered.").

         Thus, the party seeking to delay resolution of a summary judgment motion pursuant to Rule 56(d) must also provide the basis for believing that the discovery requested exists. Alphonse Hotel Corp. 828 F.3d at 151. "The requirement that a party identify what facts are sought and how they are to be obtained precludes the party from making purely speculative requests with the hope that beneficial evidence will serendipitously materialize." Am. Home Assur. Co. v. ZIM JAMAICA, 418 F.Supp.2d 537, 547 (S.D.N.Y. 2006) (citation omitted).

         III. PENDING MOTION

         Consideration of Best-Lock's Motion to Defer requires the Court to revisit the grounds upon which Lego has moved for Partial Summary Judgment.

         Lego seeks judgment as to liability on Count I of its Second Amended Complaint for copyright infringement. Motion for Partial Summary Judgment Br., Doc. 131 at 4-12. Lego claims that it holds certain valid copyrights that cover the sculpture of its Minifigures; that Best-Lock has copied the protectable elements of the Minifigures; and that such copying is illegal, in that there is a substantial similarity between Best-Lock's figures and the protectable elements of Lego's Minifigures. Id. at 11-18. Lego also asserts that it is entitled to summary judgment dismissing Best-Lock's affirmative defenses of invalidity, laches, and equitable estoppel, as well as summary judgment on several of Best-Lock's related Counterclaims, which assert the invalidity of the copyrights, non-infringement of the copyrights, and fraud on the copyright office, the CBP and this Court. Id. at 12-35. Specifically, Lego argues that Best-Lock cannot prove that the Minifigure Copyrights are invalid, because (1) the copyrights do not protect functional elements of the figures, and (2) Lego has not perpetuated fraud on the copyright office in filing for the copyrights. Id. at 13-19.

         Lego further asserts that Best-Lock's laches and equitable estoppel defenses depend upon inaction on Lego's part, which the facts of the case preclude Best-Lock from showing. Id. at 19-21. In addressing Best-Lock's laches defense, Lego argues that the defense fails as a matter of law, in light of the Supreme Court's decision in Pertrella v. Metro-Goldwyn-Mayer Inc., 134 S.Ct. 1962 (2014). Lego contends that Best-Lock's equitable estoppel defense also fails as a matter of law because Best-Lock cannot prove the necessary elements of that defense. Id. at 21-22. Lego assumes, for purposes of its motion only, that Best-Lock can satisfy the first element of the defense: That Lego had knowledge of Best-Lock's alleged continuing, historical infringement. Id. at 25-26. Nonetheless, Lego argues, Best-Lock cannot prove the other elements of the defense because (1) Best-Lock cannot show that Lego acted or failed to act in a manner that would justify ...


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