Ys Built LLC v. Ya Hsing Chiang Cindy Huang

• Court: Court of Appeals for the Ninth Circuit
• Decided: June 27, 2018
• Docket: 17-35044
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUN 27 2018 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

YS BUILT LLC, No. 17-35044

Plaintiff-Appellant, D.C. No. 2:15-cv-01411-BJR

v. MEMORANDUM* YA HSING CHIANG CIND HUANG and GEORGE HUANG, and their marital community,

Defendants-Appellees.

Appeal from the United States District Court for the Western District of Washington Barbara Jacobs Rothstein, District Judge, Presiding

Argued and Submitted June 7, 2018 Seattle, Washington

Before: BYBEE and N.R. SMITH, Circuit Judges, and HUCK,** District Judge.

Appellant YS Built LLC (“YS”) appeals the district court’s judgment in favor

of Appellees Ya Hsing Chiang Huang and Sheng Tan Huang (“the Huangs”) on YS’s

copyright infringement and breach of contract claims related to the construction of

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Paul C. Huck, United States District Judge for the U.S. District Court for Southern Florida, sitting by designation. a home on the Huangs’ lot in Bellevue, Washington, entered after a three-day bench

trial. YS also appeals the district court’s award of attorney’s fees and costs to the

Huangs under § 505 of the Copyright Act. The parties are familiar with the facts

and proceedings, and we will not state them except as necessary to explain our

decision.

We have jurisdiction under 28 U.S.C. § 1291. And for the reasons below, we

affirm.

I. Copyright Infringement

The Huangs and YS spent almost a year negotiating a potential construction

agreement. During their negotiation, the Huangs worked with and paid YS’s

architect to prepare architectural plans for their home (“Schneider Plans”). The

parties ultimately failed to finalize the agreement, mostly because they could not

agree on a price, and the Huangs hired Stanbrooke Custom Homes (“Stanbrooke”)

to build the home for them. Stanbrooke developed a new set of architectural plans

for the Huangs (“Stanbrooke Plans”). YS alleged that the Stanbrooke Plans infringed

upon the copyrighted Schneider Plans.1

In order to prove infringement, “a plaintiff must show that (1) he or she owns

the copyright in the infringed work, and (2) the defendant copied protected elements

1 Though the Huangs had paid for the Schneider Plans, the architect transferred the Schneider Plans copyright to YS at no cost.

2 of the copyrighted work,” which may be proven by “fact-based showings that the

defendant had ‘access’ to the plaintiff’s work and that the two works are

‘substantially similar.’” Williams v. Gaye, 885 F.3d 1150, 1163 (9th Cir. 2018).

Because the Huangs do not dispute the validity of YS’s copyright or that they had

access to the Schneider Plans, the only relevant issue is whether the Stanbrooke

Plans are substantially similar to the Schneider Plans. The district court’s substantial-

similarity findings are findings of fact, reviewable for clear error. Data E. USA, Inc.

v. Epyx, Inc., 862 F.2d 204, 206 (9th Cir. 1988).

This Circuit “use[s] a two-part test for [determining] substantial similarity: an

extrinsic test and an intrinsic test.” Williams, 885 F.3d at 1163. In order to prevail,

YS must satisfy both the extrinsic and intrinsic similarity tests. Id. “The intrinsic test

. . . is subjective” and considers “whether the ordinary, reasonable person would find

the total concept and feel of the works to be substantially similar.” Id. “Since the

intrinsic test for expression is uniquely suited for determination by the trier of fact,

this court must be reluctant to reverse it.” Sid & Marty Krofft Television Prods., Inc.

v. McDonald’s Corp., 562 F.2d 1157, 1166 (9th Cir. 1977), superseded in part on

other grounds, 17 U.S.C. § 504(b).

The district court did not clearly err in finding that the Stanbrooke Plans

were not intrinsically similar to the Schneider Plans. The district court explained

that unlike the Stanbrooke Plans, the Schneider Plans were elegant and artistic,

3 showing “an airy, light structure focused on aesthetic value rather than utility as a

dwelling,” and had a “relatively minimalistic and spare” floor plan. The

Stanbrooke Plans, on the other hand, were “more utilitarian and pragmatic[ly]

focus[ed],” and incorporated a “closed,” “walled,” and more “confin[ed]” floor

plan driven by “cost-conscious[] and practical[]” considerations. These intrinsic

differences rendered “the total concept and feel of each . . . not substantially

similar.” On review, we find no clear error in the district court’s intrinsic-similarity

findings, and, as the district court noted, that finding alone “[wa]s determinative

for [this] decision . . . .” We therefore need not reach YS’s arguments as to the

district court’s finding that the plans also lacked extrinsic similarity.

II. Breach of Contract

YS also alleged that by hiring Stanbrooke instead of YS, the Huangs breached

a letter of intent (“LOI”) and a land-purchase agreement (“Land Agreement”) that

bound the Huangs to use only YS to build the home.

The district court did not err in holding that YS and the Huangs did not form

an enforceable construction agreement. As the record reveals, the parties never

mutually assented to an enforceable construction agreement, despite expressing in

the LOI and Land Agreement that they intended to enter into one in the future.

Keystone Land & Dev. Co. v. Xerox Corp., 94 P.3d 945, 949 (Wash. 2004)

(explaining that under Washington law, “for a contract to form, the parties must

4 objectively manifest their mutual assent.”). References to what the Huangs “will,”

“wish[] to,” or “shall be required to” do at some later time show only their future—

not a then-present—intention of entering into a construction agreement with YS.

Also, the parties’ continued negotiations, particularly over a price, further

demonstrate that they had not yet reached a final, mutually-assented-to construction

agreement when they executed the LOI and Land Agreement. The district court was

therefore correct that the clauses on which YS’s breach-of-contract claim rests

merely established an “agreement to agree,” which is not enforceable under

Washington law. P.E. Sys., LLC v. CPI Corp., 289 P.3d 638, 644 (Wash. 2012).

We thus affirm.

III. Attorney’s Fees and Costs

The district court did not abuse its discretion in awarding the Huangs their

attorney’s fees and costs under § 505 of the Copyright Act. See Smith v. Jackson, 84

F.3d 1213, 1221 (9th Cir. 1996). The district court carefully weighed the five non-

exclusive factors set out in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994).

Specifically, as for the degree of success obtained, the district court noted that the

Huangs prevailed completely against YS’s copyright claim. As for the frivolousness

and reasonableness of YS’s claim, it found that “Plaintiff[’s] [claim] did not have a

reasonable likelihood of success,” because the Schneider and Stanbrooke Plans

shared few meaningful similarities, and “the lack of overall similarity between [the

5 Plans] was apparent.” That rendered YS’s claim “objectively unreasonable, if not

frivolous.” As for YS’s motivation, the district court found that rather than “advance

the public good envisioned by the Copyright Act,” YS leveraged its copyright to

“bully [the Huangs] into building a project they did not want to be part of.” Lastly,

as for the need to compensate and deter, the district court found that “a fee award

[wa]s appropriate to deter similar abuses of copyright and to compensate the Huangs

for time spent defending against this suit,” which, it stressed, was “improperly

motivated.”

The district court appropriately assessed the Fogerty factors and made

findings well within the range of its discretion. We thus affirm the district court’s

award of attorney’s fees and costs.

AFFIRMED.