Has Amazon Revived the Recall Remedy?

     Recall is a seldom used remedy in intellectual property infringement cases, often due to the difficulties and costs associated with a recall. However, with the downloadable nature of many copyrighted works, the burdens associated with recalls are being minimized. As evidenced by Amazon’s recent recall of George Orwell books, recall may be a remedy worth a second look.

BACKGROUND

     In June 2009, Amazon learned of certain unauthorized copies of George Orwell novels, Animal Farm and 1984 (hereafter, “Infringed Works”) which were available for sale for Amazon’s electronic book reader, the Kindle.[1]

     Between July 16th and 17th, 2009, Amazon voluntarily went into their customers’ personal Kindle devices and remotely removed versions of George Orwell’s “1984” and “Animal Farm,” without prior notice. In an email Amazon justified the recall by explaining that the legal copyright holder of the Orwell works had notified them that their purchased versions were not authorized. Amazon refunded all money that Kindle users paid for the Infringed Works. No court ordered Amazon to undertake this task. Purportedly, Amazon has also recalled books by Ayn Rand and J.K. Rowling in 2009 by simply removing them from customers’ Kindle readers.[2]

     Despite two separate apologies issued by Amazon and a promise to refrain from conducting additional recalls, many Kindle customers voiced their displeasure and frustration with Amazon’s actions.[3] One such customer, 17-year-old Justin Gawronski, had bought “1984” for his summer reading project. When Amazon took his copy back, Mr. Gawronski only retained his notes, which were useless without the text that went along with them.[4]

     Mr. Gawronski bought his copy of the book for 99 cents sometime during June 2009. Another customer, Antoine J. Bruguier, purchased another version of the same book on April 25, 2009 for $3.20. Different prices and different copies on the Amazon e-book store might have been an early indicator to Amazon that it may have been selling copies from questionable or infringing sources.

     Mr. Gawronski and Mr. Bruguier filed a lawsuit against Amazon.com, Inc. and Amazon Digital Services, Inc., which runs the portion of the company that sells the Kindle. The case was filed in U.S. District Court in Seattle on July 30, 2009.[5] They claimed trespass to chattel, conversion, breach of contract, and violation of both the Computer Fraud and Abuse Act and the Washington Consumer Protection Act. The pair requested the court award them unspecified damages and asked to be certified as a class. The suit alleged, “…Amazon violated [The Computer Fraud and Abuse Act] by intentionally accessing Plaintiffs’ Kindles, protected computers, without authorization, and as a result, caused damage to Plaintiffs’ Kindles by remotely deleting content stored on them."[6] The suit also requested that the company remove its ability to remotely delete material off users’ Kindle devices.[7]

     In response to the Gawronski/Bruguier lawsuit, the parties entered into a settlement agreement approved by the Court.[8] The settlement terms include Amazon’s offer to provide a copy of the e-book they purchased at no charge, or a check, or an Amazon gift card in the amount of $30. In addition, Amazon agreed not to remove e-books in the future unless (1) the consumer consents; (2) the consumer fails to pay; (3) removal is necessary to protect the Kindle or the network; or (4) it is required by a court or regulator to do so.[9]

     While potentially appeasing its customers with modifications to its Terms of Service, did Amazon in the process revive the remedy of recall?

RECALL AS A REMEDY

     Courts have infrequently imposed recall of infringing items upon violators (more often used in the context of trademark and unfair competition than copyright infringement actions). Courts often find such a remedy “unduly burdensome”.

     Courts derive their power to impose a recall from the broad equitable powers inherent in Federal Court jurisdiction. See Hecht Co. v. Bowles, 321 U.S. 321, 329, 64 S.Ct. 587 (1944). In Perfect Fit Industries, Inc. v Acme Quilting Co., Inc., 646 F.2d 800 (2d Cir. 1981), the court imposed a recall under New York state unfair competition and trademark infringement laws. In this case, the defendant infringed the plaintiff’s mattress pad design. The district court ordered a recall, and the defendant appealed. The Second Circuit affirmed the lower court’s order, stating that a recall is “well within the district’s court’s broad powers as a court of equity…” and that recall was a proper remedy and exercise of the district court’s power. Id. at 805. The court decided recall was appropriate because it would “naturally hasten the removal of the offending materials …and therefore seek to end quickly the injury to Perfect Fit.” Id. at 807. The court rejected Acme’s argument against recall as “unduly burdensome.” The court stated:

Finally, we note that there is federal precedent for use of the recall remedy in cases such as this. See Kiki Undies Corp. v. Promenade Hosiery Mills, Inc., 308 F.Supp 489 (S.D.N.Y. 1969) (on remand from 411 F.2d 1097 (2d Cir. 1969), cert. dismissed, 396 U.S. 1054, 90 S. Ct. 707, 24 L. Ed. 2d 698 (1970)); Sweetarts v. Sunline, Inc., 299 F. Supp. 572 (E.D. Mo. 1969) aff’d in part and rev'd in part on other grounds, 436 F.2d 705 (8th Cir. 1971); Clairol Inc. v. Shapiro, 158 U.S.P.Q. 427 (C.D. Cal. 1968). See also Cutler-Hammer, Inc. v. Standard Relay Corp., 328 F. Supp. 868, 881 (S.D.N.Y.1970), aff'd per curiam, 444 F.2d 1092 (2d Cir. 1971). The circumstances in Kiki Undies were remarkably similar to those of the present case, except that the plaintiff's claim was decided under federal trademark laws rather than under state laws of unfair competition. The injunctive order fashioned by the district court required the defendant, inter alia, to use its best efforts, on a continuing basis, to withdraw the offending materials from all customers, retailers and other persons.

     Recall has also been fashioned as a remedy in copyright infringement cases. See Gund v. Golden Bear Co., Ltd., 1992 U.S. Dist. LEXIS 18712 (S.D.N.Y. 1992). In Gund, the plaintiff moved for an injunction against defendant Golden Bear seeking to enjoin it from selling its version of a stuffed dog toy, alleging copyright infringement. Id. at *1. The infringing toys were already widely distributed to K-Mart. A prior order granting Gund’s motion for a temporary restraining order and recall order had been granted by the court. Id. Golden Bear opposed the motion for preliminary injunction and requested that the recall order be vacated. Id. at *2. The court conducted a balance of the hardships and granted Gund’s motion for an injunction and continued the recall order. Id. Since Golden Bear had only one order from K-Mart for the toys and no other pending offers, the Court found greater injury to Gund. The Court did require a $75,000 bond be posted by Gund.

     Expressly rejecting defendant’s argument that a recall was unduly burdensome, the court went on to state that the benefit to Gund of removing the infringing toys from K-Mart’s shelves during the busy holiday season outweighed any burden to the defendant. Id. at *15. In fact, the court expressly found recall “as the only effective remedy.” Id. at *14.

     Some courts have found recall to be an unacceptable remedy. See NBA Props. v. Untertainment Records LLC, 1999 U.S. Dist. LEXIS 7780 (S.D.N.Y. May 25, 1999). In support of its decision to deny a recall against defendant Untertainment for its use of an infringing mark in magazine ads, the court cited to a long line of cases:

Recall orders involving books and magazines are generally denied. See, e.g., Thomas Nelson, Inc. v. Cherish Books, Ltd., 595 F. Supp. 989, 992 (S.D.N.Y. 1984) (granted permanent prohibitory injunction but denied a request for a recall order of the infringing books where the burden and expense to the infringer outweighed the benefits to the trademark owner and the court ordered that the losing party pay for a corrective advertisement); Harlequin Enterprises Limited v. Gulf & Western Corp., 503 F. Supp. 647, 653 (S.D.N.Y. 1980) (granting preliminary injunction against defendant publisher for future publications but denying recall for books not yet shipped which contained infringing cover design and format), aff'd, 644 F.2d 946 (2d Cir. 1981); Orion Pictures Co., Inc. v. Dell Pub. Co., Inc., 471 F. Supp. 392, 397 (S.D.N.Y. 1979) (granting preliminary injunction against subsequent printings of the infringing book but denying plaintiff's request for a recall order because it was impractical to recapture books "already in the hands of retailers and the reading public"); Casa Editrice Bonechi, S.R.L. v. Irving Weisdorf & Co., Ltd., 1995 U.S. Dist. LEXIS 12849, 1995 WL 528001, at *12 (S.D.N.Y. Sept. 6, 1995) (finding a likelihood of success on the merits on plaintiff's claims under section 43(a) and New York's anti-dilution statute for infringement and dilution of its travel books but rejecting the plaintiff's request for a recall order); Universal City Studios, Inc. v. Ideal Publishing Corp., 1977 U.S. Dist. LEXIS 13682 at *6 (S.D.N.Y. Sept. 30, 1977) (recall order denied in part because magazines were already distributed to wholesalers and were on the stands "making recall a practical impossibility").

BALANCING THE HARDSHIPS

     As with any equitable remedy, the court is likely to craft a remedy balancing the hardships on a case by case basis. See Kraft General Foods, Inc. v Friendship Dairies, Inc., 1991 U.S. Dist. LEXIS 18213, *15 (S.D.N.Y. June 26, 1991). Despite finding intentional copying, recognizing the perishable nature of the goods (sour cream) sought to be recalled, the court rejected the effectiveness of imposing a recall, weighing the burdens and impact on the parties at the preliminary stage in the proceedings. Id. As explained above, another main reason recall was denied as a remedy for infringement was due to impracticability. See National Research Bureau, Inc. v. Kucker, 481 F. Supp. 612, 615 (S.D.N.Y. 1979) (court declines to order a recall of defendant’s already distributed directory).

     While there will be myriad arguments on both sides as to why recall may or may not be a proper remedy,[10] it seems that Amazon has demonstrated that in this technological era, the “unduly burdensome” argument against recalls has eroded sharply for many forms and methods of distribution for copyrighted works such as movies, music, and books.

     Downloads of electronic works are readily available. Purchase by download also makes it easier to keep track of where and to whom downloaded copies are sold. Clearly, Amazon’s fairly remarkable actions show that certain recalls can be effected on a large scale with the distributor’s click of a single button. (Discovery requests during litigation may be used to learn how easy or difficult it would be for any defendant in a lawsuit to recall infringing materials.)

     Amazon may have unwittingly changed the framework by which recall is imposed as a remedy. It may now be an implausibility for an electronic provider to argue that imposing recall is an undue burden on an infringing party.

CONCLUSION

     With the changes in technology as evidenced by Amazon’s ability to retract infringing books from users of its Kindle readers, recall may no longer be unduly burdensome but instead a more common remedy in infringement actions.
[Are recalls possible through other devices such as the Sony Reader, Barnes & Noble’s Nook, iPod, Zune, video game consoles, and cell phones? Is anyone aware of any other recalls of copyrighted works from electronic devices?]

[1] See Gawronski v. Amazon.com, Inc., Sept. 25, 2009 Stipulation of Settlement, 09-CV-01084 (JCC) (W.D. Wash.) D.E. # 15.
[2] Brad Stone, Amazon Erases Orwell Books from Kindle, http://www.nytimes.com/2009/07/18/technology/companies/18amazon.html (July 17, 2009).
[3] Id.
[4] Id.
[5] Amazon Sued for Kindle Deletion of Orwell, http://www.cbsnews.com/stories/2009/07/31/tech/main5201198.shtml
(August 10, 2009).
[6] David Sarno, Highlights from the ‘1984’ Lawsuit Against Amazon, http://latimesblogs.latimes.com/technology
/2009/07/highlights-from-the-1984-lawsuit-against-amazon.html (August 10, 2009).
[7] Plaintiff’s complaint, page 2.
[8] See Oct. 7, 2009 Order of Dismissal, 09 CV 01984 JCC (W.D. Wash. 2009) [D.E. #16] and Sept. 25, 2009 Stipulation of Settlement [D.E. # 15].
[9] Id.
[10] In the case of e-books, some authors such as J.K. Rowling do not allow their books to be made available through electronic means. See http://www.usatoday.com/life/books/news/2005-06-14-rowling-refuses-ebooks_x.htm. Recall would be an effective remedy where e-books were not an authorized distribution method by the author and/or publisher.