Summary
In Spectrum Creations, Inc. v. Catalina Lighting, Inc., 2001 WL 1910566 (W.D. Tex. 2001), the court considered the applicability of Magnussen Furniture to the copyright of a "graphic design in stained glass" embedded in a lampshade.
Summary of this case from Collezione Europa U.S.A. v. Hillsdale House, Ltd.Opinion
CIVIL ACTION NO. SA-00-CA-875-FB
July 31, 2001
MEMORANDUM AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
The matters before me are plaintiff's motion for summary judgement filed January 26, 2001, defendant's motion for summary determination of copyright invalidity and for attorney fees filed February 12, 2001, and defendant's motion for summary dismissal of count 2 — unfair competition and for attorneys' fees. I have jurisdiction to enter this Memorandum and Recommendation under 28 U.S.C. § 636(b) and the District Court's Order referring all pretrial matters in this proceeding to me for disposition by order, or to aid in their disposition by recommendation where my authority as a Magistrate Judge is statutorily constrained.
Docket no. 42.
Docket no. 43. The court will address this motion as one seeking summary judgment pursuant to FED. R. Civ.P. 56.
Docket no. 46. The court will address this motion as one seeking summary judgment pursuant to FED. R. Civ. P. 56.
Docket no. 35.
I. Jurisdiction
Jurisdiction is based on the Copyright Act of 1976, 28 U.S.C. § 1331 (federal question), 28 U.S.C. § 1332 (diversity jurisdiction), 28 U.S.C. § 1338 (jurisdiction to adjudicate cases involving copyright and accompanying claims of unfair competition), and 28 U.S.C. § 1367(a) (supplemental jurisdiction).II. Factual and Procedural Background
Plaintiff, Spectrum Creations, Inc. ("Spectrum"), instituted this action against defendant Catalina Lighting, Inc. ("Catalina"), alleging copyright infringement, unfair trade practices, unfair competition and seeking a preliminary injunction. Plaintiff brings this action as the holder of three registered copyrights for the stained glass design of its lampshades.
Docket no. 1.
Docket no. 1, at 4 and docket no. 42, at ¶ 2, Exhibits E, F, and G. In the original complaint, plaintiff stated it had received two registered copyrights, however in the plaintiff's motion for summary judgment, the plaintiff lists three registered copyrights of the lampshade design.
Plaintiff is a Texas corporation founded in 1997 under the business purposes of creating unique lampshade designs including works in stained glass. Plaintiff manufactures and sells a mission style lamp and lampshade under the name of "Sonoma, " and has entered into a distribution agreement with Home Depot home improvement retail stores for the sale of this line of products.
Docket no. 1, at 3.
Id.
Defendant is a corporation incorporated in Delaware doing business in the State of Texas and throughout the world. Defendant is also a manufacturer of lighting fixtures which produces a mission style lamp.
Docket no. 4, at 1.
Id. at 4. Defendant does not name the mission style lamp in the Answer and Counterclaim. Defendant later refers to the mission style lamp at issue as the `Braintree' style lamp. See docket no. 32, at 2.
Plaintiff asserts that defendant has infringed its copyrights by duplicating plaintiffs lampshade design and distributing defendant's shade in violation of plaintiffs copyrights and thereby engaging in unfair competition practices. Plaintiff claims that defendant knowingly duplicated plaintiffs copyrighted Sonoma design and continues to duplicate, sell and market the copyrighted design despite notice from plaintiff as to copyright protection. In the defendant's counterclaim, defendant alleges that plaintiff duplicated defendant's original design and that plaintiffs copyrights are invalid because the design was not originally created by the plaintiff. Defendant argues it was the creator of the copyrighted lamp shade and in that regard claims that it marketed the lampshade in August 1997 prior to plaintiffs incorporation and creation of the Sonoma design.
Docket no. 1, at 4.
Id. at 5.
Docket no. 4, at 4.
Id.
On January 26, 2001, plaintiff filed a motion for partial summary judgment with respect to count 1 of its original complaint in which it asked the court to determine if the defendant has infringed its copyrights. On February 12, 2001, defendant filed an opposition to plaintiff's motion arguing that plaintiff lacks independent evidence to support the validity of its registered copyrights. On February 26, 2001, plaintiff filed a reply to defendant's response asserting that defendant has failed to present a fact question, an affirmative defense, or challenge the authenticity of the plaintiffs copyrights.
Docket no. 42, at 1. Plaintiff requests the court to find that defendant infringed its copyrights, with the remaining issues regarding damages to be reserved for trial.
Docket no. 44.
Docket no. 50.
On February 12, 2001, defendant filed a motion for summary "determination" of copyright invalidity advancing three grounds in support of its request for dismissal of count 1 of plaintiff's complaint: (1) the plaintiffs copyrights are invalid because the subject matter is not copyrightable, (2) the copyright application was filed fraudulently and (3) the subject matter was not plaintiffs original creation. Plaintiff on February 26, 2001 filed a response, asserting that the lampshade is copyrightable subject matter and that the copyrighted lampshade is the original creation of the plaintiff. Defendant filed a reply to plaintiffs response on March 7, 2001, in which defendant contends that plaintiffs copyright is invalid because the design was not created by plaintiff but was rather the suggestion of the manufacturer.
Docket no. 43.
Docket no. 49.
Docket no. 54.
On February 23, 2001, defendant filed a motion for summary dismissal with respect of plaintiffs original complaint asserting that defendant had engaged in unfair competition practices. Defendant's motion is premised on the argument that unfair competition practices under Texas law are preempted by federal copyright and patent law, and since plaintiff cannot maintain a cause of action under those statutes, plaintiffs claim for unfair competition fails as well. On March 8, 2001, plaintiff filed a response claiming that the unfair competition claim is not preempted by federal laws because the rights available under the state law of unfair competition are not equivalent to federal copyright law and therefore cannot be preempted by the federal copyright laws. Defendant filed a reply to plaintiffs response on March 20, 2001, asserting that plaintiff has failed to establish the two elements of unfair competition: (1) likelihood of confusion between the two party's products and (2) an independent tort committed by the defendant against the plaintiff.
Docket no, 46.
Docket no. 46.
Docket no. 55.
Docket no. 56.
III. Issues Presented
The pending motions filed by both parties in this case present the following issues:• Whether the lamp design in question is copyrightable subject matter?
• Whether the defendant has properly asserted its affirmative defenses to plaintiff's claim for copyright infringement?
• Whether plaintiff's claims of unfair competition are preempted by federal copyright or patent laws?
IV. Analysis A. Summary Judgment Standard
A party is entitled to summary judgment upon motion if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Mere allegations of a factual dispute between the parties will not defeat an otherwise proper motion for summary judgment; the requirement is that there be no genuine issue of material fact. A fact is material if it might affect the outcome of the lawsuit under the governing law. A dispute about a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Therefore, summary judgment is proper if, under governing laws, there is only one reasonable conclusion as to the verdict; if reasonable finders of fact could resolve a factual issue in favor of either party, summary judgment should not be granted.
FED. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Peel Company, Inc. v. Rug Market, 238 F.3d 391, 394 (5th Cir, 2001); King v. Ames, 179 F.3d 370, 373 (5thCir. 1999); Banc One Capital Partners Corp. v. Kneipper, 67 F.3d 1187, 1198 (5th Cir. 1995); Neff v. American Dairy Queen Corp., 58 F.3d 1063, 1065 (5th Cir. 1995),cert. denied, 516 U.S. 1045 (1996); and River Production Company, Inc. v. Baker Hughes Production Tools, Inc., 98 F.3d 857, 859 (5th Cir. 1996).
Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 247 (1986).
Id. at 248. See also Thomas v. LTV Corp., 39 F.3d 611, 616 (5th Cir. 1994).
Anderson, 477 U.S. at 248; Wise v. E.I. DuPont De Nemours Co., 58 F.3d 193, 195 (5th Cir. 1995); MacMillan v. United States, 46 F.3d 377, 380-81 (5th Cir. 1995).
Anderson, 477 U.S. at 249; Kunin v. Feofanov, 69 F.3d 59, 61 (5th Cir. 1995); Banc One Capital Partners Corp., 67 F.3d at 1198.
A party seeking summary judgment bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the record which it believes demonstrate the absence of a genuine issue of material fact. To satisfy this burden, the movant must either submit evidentiary documents that negate the existence of some material element of the nonmoving party's claim or defense, or if the crucial issue is one for which the nonmoving party will bear the burden of proof at trial, merely point out that the evidentiary documents in the record contain insufficient proof concerning an essential element of the nonmoving party's claim or defense. Regardless of whether the moving party accompanies its summary judgment motion with affidavits or other evidentiary materials, the motion must be granted if the evidence before the court demonstrates that the standard for entry of summary judgment, as set forth in Rule 56(c), is satisfied.
Celotex Corp., 477 U.S. at 323; Wise, 58 F.3d at 195; Burfield v. Brown Moore Flint Inc., 51 F.3d 583, 588 (5th Cir. 1995).
Edwards v. Aguillard, 482 U.S. 578, 595 n. 16 (1987);Celotex Corp., 477 U.S. at 325.
Celotex Corp., 477 U.S. at 325.
Once the moving party has carried the burden, the burden shifts to the nonmoving party to show that summary judgment is not appropriate. The nonmoving party cannot discharge this burden by referring to the mere allegations or denials of the nonmoving party's pleadings. Rather, the nonmoving party's response must, either by submitting opposing evidentiary documents or by referring to evidentiary documents already in the record, set out specific facts showing the existence of a genuine issue for trial.
Fields v. City of South Houston, 922 F.2d 1183, 1187 (5th Cir. 1991).
FED.R.Civ.P. 56(e); Anderson, 477 U.S. at 250;State of Texas v. Thompson, 70 F.3d 390, 393 (5th Cir. 1995).
Celotex Corp., 477 U.S. at 324; Fields, 922 F.2d at 1187; Neff, 58 F.3d at 1065; Engstrom v. First Nat'l Bank, 47 F.3d 1459, 1462 (5th Cir. 1995), cert. denied, 516 U.S. 818 (1995); and Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (holding that a nonmovant cannot discharge her burden with doubt as to the material facts, by conclusory allegations, unsubstantiated assertions, or by only a scintilla of evidence).
For example, when the parties use affidavits to support or oppose a motion for summary judgment, they "shall be made on personal knowledge, shall set forth facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Affidavits that are not based on personal knowledge or that are based merely on information and belief do not satisfy the requirements of Rule 56(e), and those portions of an affidavit that do not comply with Rule 56(e) are not entitled to any weight and cannot be considered in deciding a motion for summary judgment.
FED. R. Civ. P. 56(e); Beijing Metals Minerals Import/Export Corp. v. American Bus. Center. Inc., 993 F.2d 1178, 1182 (5th Cir. 1993).
Richardson v. Oldham, 12 F.3d 1373, 1378-79 (5th Cir. 1994).
Even though summary judgment is not generally favored in copyright cases, in instances such as this one, where evidence in support of summary judgment is so overwhelming as would warrant a directed verdict at trial, summary judgment should be granted. For these reasons, it is my opinion, based on the record presented before me, and particularly based on defendant's lack of competent summary judgment evidence, that the undisputed facts of this case warrant an entry of summary judgment for the plaintiff.
See Columbia Pictures Industries, Inc. v. Landa, 974 F. Supp. 1 (C.D. 111. 1997) (citing Hoehling v. Universal City Studios, Inc., 618 F.2d 972, 977 (2d. Cir. 1980)).
See Segrets, Inc. v. Gillman Knitwear Co., Inc., 20 F.3d 56, 60 (5th Cir. 2000) (citing 3 Melville B. Nimmer David Nimmer, Nimmer on Copyright § 12.10[A] at 12-150 to 12-151 (1999)) (granting summary judgment if the facts warrant such).
1. Objections to Defendant's Summary Judgment Evidence
Plaintiff has objected to defendant's use of unsworn evidentiary materials in defendant's motions for summary determination. Plaintiff contests defendant's arguments because they are unsupported by valid evidentiary materials. Plaintiff cites to Bickley v. Norfolk Western Ry., which holds that "statements contained in a litigant's pleading . . . cannot be used by that litigant in a summary judgment proceeding to prove or raise an issue of fact."
Docket no. 49, at 1-2; and docket no. 50, at 1-5.
60 F. Supp.2d 732, 735 (N.D. Ohio 1998), aff'd 187 F.3d 634 (6th Cir. 1999).
Id.
As already mentioned in the Factual and Procedural Background section of this MR, in responding to plaintiffs summary judgment motion, the defendant incorporated its motion for summary determination of copyright invalidity and attorneys' fees. Defendant did not provide any competent summary judgment evidence controverting plaintiffs motion. Furthermore, defendant did not provide any competent summary judgment evidence in defendant's motion for summary determination.
Docket no. 43; and docket no. 44, at 61.
Docket no. 44.
Docket no. 43.
For instance, defendant attached exhibits A through F to its motion for summary determination alleging copyright invalidity. These exhibits comprise unsworn copies of a history of mission style lamps, correspondence between counsel, copies of catalog pages of lamps, email correspondence, color photocopies of lamps, and "uncertified" copies of deposition testimony excerpts from plaintiffs president, Mr. Barnes. Exhibits are not attached to a corresponding affidavit. The Fifth Circuit Court of Appeals has not allowed litigants to oppose summary judgment by the use of unsworn materials.
See Zoslaw v. MCA Distributing Corp., 693 F.2d 870, 883 (9th Cir. 1982) ("All other documents not in the form of discovery, pleading or affidavits must be properly authenticated. An individual with personal knowledge must submit an affidavit authenticating the document.").
See e.g. Barker v. Norman, 651 F.2d 1107, 1123 (5th Cir. 1981).
Even though defendant has filed a response containing its arguments in opposition to summary judgment, it has not provided any valid evidentiary support for its response nor has it relied on evidence already in the record to controvert plaintiffs motion.
Based on defendant's lack of properly authenticated summary judgment proof, I hereby STRIKE this evidence from the record. Accordingly, in reviewing all pending summary judgment motions, the court will thus consider the competent summary judgment evidence provided by the plaintiff in support of its motion and the other competent evidence already of record.
B. Plaintiff's Claim of Copyright Infringement
Plaintiff argues that the summary judgment evidence conclusively shows that there are no genuine issues of material fact regarding each and every element of its claim of copyright infringement, and that as such, it is entitled to judgment with respect to that claim as a matter of law.
Docket no. 42, at 8.
In order to prove copyright infringement, the plaintiff must show"(1) ownership of a valid copyright and (2) unauthorized copying." Evidence of direct copying is rarely available, therefore "factual copying may be inferred from (1) proof that the defendant had access to the copyrighted work prior to creation of the infringing work and (2) probative similarity."
Peel Company, Inc. v. Rug Market, 238 F.3d 391, 394 (5th Cir. 2001); see Alcatel USA, Inc v. DGI Technologies, Inc., 166 F.3d 772, 790 (5th Cir. 1999); Norma Ribbon Trimming, Inc., 51 F.3d at 47.
Peel Company Inc., 238 F.3d at 394; see Engineering Dynamics, Inc., 26 F.3d at 1340; Apple Barrel Productions, Inc. v. Beard, 730 F.2d 384, 387 (5th Cir. 1984).
A successful copyright infringement action "requires that the plaintiff show `ownership' of the material and `copying' by the defendant," In a copyright infringement claim, the plaintiff must prove ownership of a valid copyright. "Ownership of a valid copyright is established by proving the originality and copyrightability of the material in compliance with the statutory formalities." Copyright certificates of registration "constitute prima facie evidence of the validity of the copyright[s]." Certificate of copyright registration only creates a rebuttable presumption of copyright validity. Once the plaintiff has shown a certificate of copyright registration, the burden of proof shifts to the defendant to show copyright invalidity. 1. Burden of Proof of Copyright Invalidity
Lakedreams v. Taylor, 932 F.2d 1103, 1107 (5th Cir. 1991) (quoting Apple Barrel Productions, Inc., 730 F.2d at 387).
Lakedreams, 932 F.2d at 1107.
Norma Ribbon Trimming, Inc. v. Little, 51 F.3d 45, 47 (5th Cir. 1995); see Engineering Dynamics, Inc. v. Structural Software, Inc., 26 F.3d 1335, 1340 (5th Cir. 1994), opinion supplemented and reh'g denied, 46 F.3d 408 (5th Cir. 1998); Allied Mktg. Group, Inc. v. CDL Mktg., Inc., 878 F.2d 806, 810-11 (5th Cir. 1989); Apple Barrel Productions, Inc., 730 F.2d at 387.
17 U.S.C. § 410 (c); see Norma Ribbon Trimming, Inc., 51 F.3d at 47.
Norma Ribbon Trimming, Inc., 51 F.3d at 47;Lakedreams, 932 F.2d at 1108 n.l0.
See DSC Communications Corp. v. DGI Technologies, Inc., 898 F. Supp. 1183, 1187 (N.D. Tex. 1995) (citing Lotus Development Corp. v. Borland Int'l, Inc., 49 F.3d 807, 812-13 (1st Cir. 1995), aff'd by 516 U.S. 233 (1996)); 17 U.S.C. § 410(c).
A work that has been properly copyrighted with the Register of Copyrights shall "constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate." If the plaintiff has successfully proved its prima facie case, and if "the defendant offers evidence of independent creation, the plaintiff has the burden of proving that the defendant in fact copied the protected material."
Copyright certificate has been issued within five years after first publication of the work and otherwise fulfilled all statutory requirements. See 17 U.S.C. § 410.
Peel Company, Inc., 238 F.3d at 395 (citingMiller v. Universal Studios, Inc., 650 F.2d 1365, 1375 (5th Cir. 1981)); R. Ready Productions, Inc. v. Cantrell, 85 F. Supp.2d 672, 682 (S.D. Tex. 2000) (stating that defendant must offer proof that plaintiff's product was not original; if defendant meets that burden, plaintiff must then offer proof of originality).
As stated above, the plaintiff has successfully proved its prima facie case by producing certificates of copyright registration issued for three Sonoma style graphic designs. The defendant, in asserting independent creation of the design by stating that the design was created either by a third party or by the defendant itself, effectively shifted the burden of proving that defendant in fact, did copy the design. The plaintiff has produced competent summary judgment evidence to reflect that the alleged infringing version of the defendant's lamp was not set out for production until May 1999 at which time the defendant would have had access to copy the plaintiffs lamp. Defendant has not produced sufficient or competent evidence in support of independent creation of the copyrighted design. As a result, defendant has failed to meet its burden to properly assert independent creation, therefore, the burden of independent creation did not shift to the plaintiff
Docket no. 42, Exhibits E, F, and G; and docket no. 49, Exhibit F.
Id. at Exhibits I, J and K. Exhibit I contains depictions of the alleged infringing version of plaintiff's design, whereas exhibits J and K contain depictions of previous versions of defendant's lamps not containing plaintiff's claimed three constituent elements.
2. Copyrightable Subject Matter
Plaintiffs first prima facie element for copyright infringement is ownership of a valid copyright. Defendant challenges the validity of the plaintiff's copyrights claiming that the copyrighted lamp designs are not copyrightable subject matter.
Docket no. 43.
Contrary to defendant's assertions, plaintiff has established that the graphic designed used in its Sonoma lampshade is copyrightable subject matter. Copyright protection is afforded to original works of authorship under 17 U.S.C. § 102. Original works include: "(1) literary works; (2) musical works, including any accompanying words; (3) dramatic works, including any accompanying music; (4) pantomimes and choreographic works; (5) pictorial, graphic, and sculptural works; (6) motion pictures and other audiovisual works; (7) sound recordings; and (8) architectural works."
Copyright protection is granted to works in which the author has affixed an idea in a tangible form of expression. The author of a copyright is the individual who affixes an idea into a tangible medium. Copyright registration is afforded to work that is originally created by the copyright applicant. The term `original' as used in copyright "means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity." A work may be entitled to copyright protection even if the work "is based on . . . something already in the public domain if the author, through his skill and effort, has contributed a distinguishable variation from the older works." A variation made to a prior work must be substantial in nature and "not merely trivial." The existence of a prior identical work in the field does not preclude issuance of a copyright if the plaintiff can show that creation of the work was a product of independent design and effort on the part of the author.
§ 102(a).
See Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989); Lakedreams v. Taylor, 932 F.2d 1103, 1108 (5th Cir. 1991).
§ 102(a); Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 345 (1991); Norma Ribbon Trimming, Inc. v. Little, 51 F.3d 45, 47 (5th Cir. 1995).
Feist Publications, Inc., 499 U.S. at 345 (citing 1 Melville B. Nimmer David Nimmer, Nimmer on Copyright §§ 2.01[A], [B] (1990)).
Donald v. Zack Meyer's T.V. Sales Serv., 426 F.2d 1027, 1029 (5th Cir. 1970), cert. denied, 400 U.S. 992 (1971).
Id. at 1030.
See Novelty Textile Mills, Inc. v. Joan Fabrics Corp., 558 F.2d 1090, 1093 (2nd Cir. 1977) (citing 1 Melville B. Nimmer David Nimmer, Nimmer on Copyright § 10.1 at 34 (1976)).
The Copyright Act of 1976 excludes copyright protection from "useful articles," which the Act defines as any article "having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information." A work does not lose its copyrightability merely for containing utilitarian aspects, but rather copyright protection is afforded as long as the art's "sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article." If the utilitarian article contains features of "artistic sculpture, carving, or pictorial representation," which may be identified separately from the utilitarian aspects, the "features will be eligible for registration."
17 U.S.C. § 101; Magnussen Furniture, Inc. v. Collezione Europa USA, Inc., 43 U.S.P.Q.2d 1218, 1219 (Fed. Cir. 1997).
17 U.S.C. § 101; Magnussen Furniture, Inc., 43 U.S.P.Q.2d at 1220; Norris Industries, Inc. v. International Tel. and Telegraph Corp., 696 F.2d 918, 921 (11th Cir. 1983).
Carol Barnhart, Inc. v. Economy Cover Corp., 773 F.2d 411, 416 (2nd Cir. 1985); see Norris Industries, Inc., 696 F.2d at 922.
The United States Supreme Court found in Mazer v. Stein , that creation of an article for "the intended use or use in industry" precluded valid copyright registration. Congress further defined separability in the House Report concerning copyrightable works of art and noncopyrightable utilitarian articles:
347 U.S. 201 (1954).
Id. at 218.
The test of separability and independence from `the utilitarian aspect of the article' does not depend upon the nature of the design — that is, even if the appearance of an article is determined by esthetic (as opposed to functional) considerations, only elements, if any, which can be identified separately from the useful articles as such are copyrightable. And even if the three dimensional design contains some such element (for example, a carving on the back of a chair or a floral relief design on silver ware), copyright protection would extend only to that element and would not cover the over-all configuration of the utilitarian article as such.
H. Rep. No. 1476, 94th Congress, 2d Sess. 55 (1976);Custom Chrome, Inc. v. Ringer, 35 U.S.P.Q.2d 1714, 1716 (1995).
The courts have further expanded the discussion of separability by discussing "conceptual separability" or "the pictorial, graphic, or sculptural features, while physically inseparable by ordinary means from the utilitarian item, are nevertheless clearly recognizable as a pictorial, graphic, or sculptural work" and therefore entitled to copyright protection.
Custom Chrome, Inc., 35 U.S.P.Q.2d at 1717.
In this case, the Sonoma lampshade design falls under "pictorial, graphic, and sculptural works" of the Copyright Act. Plaintiff contends that it is the original creator of the Sonoma design. Defendant, on the other hand, asserts that plaintiff is not the original author of the design and the design is not unique to the plaintiff. The defendant fails to present competent summary judgment evidence in support of these arguments.
U.S.C. § 102.
Docket no. 1, at ¶ 14 and docket no. 42, at 5. Plaintiff asserts that it was the first to produce the lamp containing the three constituent elements contained in the copyrighted design. The three constituent elements claimed by the plaintiff are (1) a fingree border on the lampshade, consisting of several small, interconnected diamonds elongated horizontally with repeating squares with two small lines of rectangles running horizontally across the top and bottom of each square, (2) an olive green color band, and (3) staggered mid-line on cream-colored glass.
Docket no. 4, at ¶ 10; docket no. 14; docket no. 34; docket no. 43, at 8 (defendant claims in each pleading that the lamp was designed by a third party) and docket no. 43, at 4 (defendant claims that it was the creator of the lamp design prior to the creation of the Sonoma design).
Plaintiff counters defendant's arguments by alleging that the copyrights in question are not concerned with lamps but rather a "graphic design in stained glass." Plaintiff contends the design is copyrightable as a graphic depiction, but admits the lamp in which the design is displayed is not copyrightable subject matter. The plaintiff further asserts that the lamp is not what it is at issue, but rather the copyrightability of the graphic design.
Docket no. 49, at 2, Exhibit F.
Id. at 3.
Id.
The Sonoma graphic design is separable from the functionality of the lamps in question. Defendant's argument that the design is not copyrightable because the combination of the three constituent elements "cannot be separated from the lamp shade because it is the lamp shade" is incorrect. As evidenced, the plaintiff has utilized the Sonoma design on more than 35 items, including, but not limited to, lighting fixtures and lamps.
Docket no. 43, at 3.
Docket no. 49, at 5, Exhibit A.
The defendant relies on various case authorities to assert that the plaintiffs copyrights are invalid based on the utilitarian characteristics of the lamps. I have read the case decisions cited by defendant and have found them either factually distinguishable from the case at hand or legally inapplicable.
Docket nos. 43 and 44.
Among the cases discussed by defendant is Magnussen Furniture, Inc. v. Collezione Europa USA, Inc., ("Magnussen"). In this case, the Fourth Circuit Court of Appeals denied plaintiff's requests for injunctive relief based on copyright infringement, holding that it was unlikely plaintiff would recover on the merits. Plaintiff and defendant were competing makers of "value" furniture. Plaintiff created a line of ironed based tables topped with glass, however, plaintiff failed to obtain a copyright or patent on the designs. Defendant began making similar ironed based tables, which caused plaintiff to lose business. In an effort to stop defendant from copying plaintiffs iron table design, plaintiff applied for, and received, a copyright on the design. It then filed suit claiming copyright infringement against defendant. The district court denied plaintiffs requests for a preliminary injunction, and the Court of Appeals affirmed stating that plaintiffs line of tables was not entitled to copyright protection because the ironed designs did not appear to be created for any other purpose other than as a table. The Court found that because there was no separability of the expressive artistic form from the utility of the table, injunctive relief was not proper as the copyright was not valid because of their utilitarian functions. Magnussen is distinguishable from the case at bar because the claimed copyrighted lampshade contains three constituent elements and is registered as a "graphic design in stained glass" and not registered as the lampshade itself. Had the plaintiffs sought copyright of the lampshade design and form, Magnussen and its holding would apply to preclude copyright validity. However, because the copyrighted design is one of "stained glass" and not the lampshade itself, the court's findings in Magnussen do not directly apply to the Sonoma design at issue in this case.
43 U.S.P.Q.2d 1218 (4th Cir. 1997).
Id. at 1218 (the trial court denied injunctive relief based on plaintiff's probable lack of success in a trial on the merits).
Id.at 1219.
Id.
Id.
Id. at 1220.
Id.
Defendant further relies on the cases of Carol Barnhart, Inc. v. Economy Cover Corp., ("Barnhart") and Esquire, Inc. v Ringer ("Esquire") to show the plaintiff's lampshade is not copyrightable subject matter. In Barnhart, the Second Circuit Court of Appeals found that plaintiff's four "human torso" display forms were not entitled to copyright protection and therefore defendant did not infringe on the plaintiff's copyrights. The court reasoned in Barnhart, that the four human torso forms designed by the plaintiff in 1982, and copied by the defendant in 1983, were not eligible for copyright protection because the aesthetic features of the plaintiff's forms could not be separated from their form as utilitarian articles. Regarding the overall shape and form of the mannequins, the court stated "in the case of the Barnhart forms . . . the features claimed to be aesthetic or artistic, e.g., the life-size configuration of the breasts and the width of the shoulders, are inextricably intertwined with the utilitarian feature." The Court further stated that although legislative history has expanded the copyrightability of useful articles, copyright protection is not extended to those articles in which the "aesthetic or artistic features cannot be identified separately from the useful article." The Second Circuit Court of Appeals found that plaintiffs forms could not be separated into a utilitarian article and its aesthetic features, and therefore it denied copyright protection.
773 F.2d 411 (2nd Cir. 1985).
591 F.2d 796 (D.C. Cir. 1978).
See Carol Barnhart, Inc., 773 F.2d 411.
Id. at 414.
Id. at 419.
Id. at 418.
Id.
Comparing Barnhart to the case at hand reveals that the court in Barnhart relied on the functional aspects of the human torso forms as an utilitarian article and not as a separate work of art, whereas the Sonoma design is incorporated in the utilitarian article of a lamp, but its entire function is not to serve as a lampshade. The Sonoma design is distinguishable from Barnhart's human torso forms because if the Sonoma design is removed from the lampshade, the design is still copyrightable as a pictorial, graphic or sculptural form, whereas removing the human torso form from its utilitarian aspects, does not qualify the human torso form to act independently as a pictorial, graphic or sculptural work.
In Esquire, the Court of Appeals for the District of Columbia determined whether the "overall shape of certain outdoor lighting fixtures" were eligible for copyright protection. Plaintiff applied for three copyrights on what it described as "artistic design(s) for lighting fixture(s)." The Copyright Office denied issuing the copyrights to the lighting fixtures based on the utilitarian features of the article and the then current version of the applicable federal regulations denying copyright protection to lighting fixtures "when all of the design elements are directly related to the useful functions of the article. . . ." The plaintiff sought recourse in the district court, which issued a writ of mandamus directing the Register of Copyrights to enter plaintiff's claim for a copyright. The Court of Appeals for the District of Columbia reversed the district court's finding that the plaintiff was entitled to copyright protection. In doing so, the Court found a distinction between the cases cited by the district court which involved specific aspects of utilitarian articles as opposed to the overall shape of a utilitarian article such as the outdoor lighting fixtures presented in Esquire. The Court declined to afford copyright protection to the overall shape of the outdoor lighting fixtures in Esquire because the aesthetic characteristics were not separable from the utilitarian aspects.
See Esquire, Inc., 591 F.2d at 798.
Id. at 798.
Id. at 798; 37 C.F.R. § 202.10(c) (1976). This federal regulation provision, as quoted above, is no longer in effect.
See Esquire, Inc., 591 F.2d at 798.
Id.
Id. at 804.
Id. at 804-805.
Distinguishing Esquire with the plaintiffs Sonoma design, the makers of the lamps in Esquire sought copyright protection of the entire shape and design of the outdoor lamp whereas the plaintiffs Sonoma design holds copyrights merely to the "graphic design in stained glass" which is used as a lampshade. The plaintiff admits that the Sonoma design is copyrightable while the lamp it appears on is not. The plaintiff, unlike the plaintiff in Esquire, did not seek copyright protection for the shape of the lamps bearing the Sonoma design, rather the plaintiff sought copyright for the graphic design containing the three constituent elements embodied in the lampshade.
Docket no. 49, at 3.
Defendant also relies on the useful wheel covers at issue inNorris Industries Inc. v. International Telephone and Telegraph Corp., ("Norris). The sole issue in that case was whether wheel covers were copyrightable subject matter. The district court in Norris held that the plaintiffs wheel covers were useful articles and the ornamental features were not able to be separated from the utilitarian aspects, therefore invalidating certificates of copyright registration and denying issuance of copyright protection on subsequent wheel covers. The court found that because the wire wheel covers did not contain "superfluous sculptured design" and served no function apart from a wheel cover, copyright protection was unavailable to the plaintiff because the wheels were not separable "works of art."
696 F.2d 918 (11th Cir. 1983).
Id. at 919.
Id.
Id. at 924.
In a similar case, quoted by the defendant, the Eleventh District Court of Appeals in Custom Chrome, Inc. v. Ringer ("Ringer") discussed plaintiff's request for judicial review of the Copyright Office's denial of copyright protection for twenty-three sculpted motorcycle parts. The Copyright Office refused to register the sought copyrights based on the utility of the motorcycle parts and that the parts "lacked separable copyrightable sculptural or artistic features." The court concluded that the parts were designed for functional or mechanical purposes, not as separable "works of art." The court held that the Copyright Office acted reasonably in rejecting copyright protection to the twenty-three motorcycle parts and that the parts were not copyrightable subject matter.
35 U.S.P.Q.2d 1714 (D.C. Dist. 1995).
Id. at 1714.
Id. at 1715.
Id. at 1716.
Id. at 1718.
Both Norris and Ringer are distinguishable from the plaintiff's case, in that the plaintiffs in Norris andRinger both sought copyright protection for utilitarian articles for motor vehicles in which the courts held that the ornamental features were not separable from their function on the motor vehicles. The court concluded that because the parts were made for functional or mechanical purposes on the motor vehicles, they were not eligible for copyright protection. The plaintiffs Sonoma design is not made as a functional or mechanical purpose, but may exist separate from its function as a lampshade and be entitled to copyright protection as a pictorial, graphic or sculptural work. As plaintiff argues, if the Sonoma design were painted on a cloth napkin, the design would still be entitled to copyright protection "despite the fact that the design now `is' the cloth napkin."
Docket no. 49, at 4.
The United States Supreme Court decision in Mazer v. Stein is instructive in this case. In Mazer, the plaintiffs created a statuette of male and female dancing figures and submitted the statuette for copyright registration. The plaintiffs then utilized the statuette for the base of lamps and sold the lamps to the public. Without permission, the defendants copied the statuettes and used the copied art as the base for their lamps. Plaintiffs filed suit alleging copyright infringement, which the district court dismissed based on the copyright invalidity of the statuettes. The Court of Appeals reversed the lower court's decision, finding instead the copyrights were valid. The Supreme Court held that the statuette copyright was valid and that the intended use of the copyrighted work of art to be incorporated into the useful article of a lamp did not preclude the item from copyright registration.
347 U.S. 201 (1954).
Id. at 202.
Id.
Id. at 203.
Id. at 204.
Id. at 204.
Id. at 218.
Similar to Mazer, the plaintiffs Sonoma design is copyrighted in many other alternative forms other than a lampshade; thus, bearing a copyright for a graphic design in stained glass. Simply because plaintiff utilized the stained glass Sonoma design as a lampshade does not alter the fact that the design alone is copyrightable as an independent pictorial, graphic or sculptural work.
Besides the Mazer decision, the plaintiff also relies onSunset Lamp Corp. v. Alsy Corp. ("Sunset Lamp"). In that case, the district court held that the original manufacturer of a lamp did hold valid copyrights on the lamp design. The plaintiff filed suit against the defendant for copyright infringement, specifically regarding their banana leaf table lamp design and banana leaf floor lamp design. The plaintiff had secured copyrights on both designs in 1987, and in 1988 defendants began to manufacture and distribute the banana leaf design lamps bearing a "false copyright notice in Alsy's [defendant's] name." The district court found that the banana leaf design was copyrightable, however, because the plaintiff failed to sufficiently post copyright notices on the table lamp model, the copyright was found to be invalid. The plaintiffs floor lamp design, bearing proper copyright notice, was found to be a valid copyright and relief was granted on behalf of the plaintiff. As evidenced by the holding in Sunset Lamp, the artistic base of a lamp is entitled to copyright protection, as is the artistic rendition of the Sonoma design in stained glass as a lampshade. Failure to find infringement of one of the plaintiffs lamps in Sunset Lamp was due to a lack of copyright notice, which is not at issue in this case.
698 F. Supp. 1146 (S.D.N.Y. 1988).
Id.
Id. at 1148.
Id. at 1148-49.
Id. at 1149.
Id.
For the reasons discussed above, it is my opinion that there is no genuine issue of material fact with respect to the originality of the Sonoma design. Defendant has failed to produce competent summary judgment evidence to refute plaintiffs evidence supporting originality.
3. Fraudulently Filed Copyright Application
Aside from challenging the copyrightability of the lamp, defendant further contests plaintiff's ownership of the copyrights asserting that the copyright applications were filed fraudulently. The Federal Rules of Civil Procedure require averments of fraud or mistake be plead with particularity. The defense of fraud on the Copyright Office is typically brought in an infringement claim as an affirmative defense. Existence of a certificate of copyright registration creates a rebuttable presumption as to copyright validity. The defendant must prove fraud in order to rebut the presumption of validity in this defense.
FED. R. Civ. P. 9.
See Lennon v. Seaman, 84 F. Supp.2d 522, 525 (S.D.N.Y. 2000).
Id.; Whimsicality, Inc. v. Rubie's Costume Co., Inc., 891 F.2d 452, 455 (2d Cir. 1989).
See Lennon, 84 F. Supp.2d at 525; see also Santrayll v. Burrell, 993 F. Supp. 173, 173 (S.D.N Y 1998).
The party seeking invalidity of the copyright through proof of fraud on the Copyright Office "bears a heavy burden." To fulfill this burden, the defendant "must establish that the application for copyright registration is factually inaccurate, that the inaccuracies were willful or deliberate . . . and that the Copyright Office relied on those misrepresentations." Other courts have required that the party alleging fraud be made to prove that the Copyright Office was prejudiced or suffered some damage as a result of the alleged fraud.
See Lennon, 84 F. Supp.2d at 525 (citing 2 Melville B. Nimmer David Nimmer, Nimmer on Copyright § 7.20[B] at 7-207 (1997)).
Id. (citing Whimsicality, Inc., 891 F.2d at 455; Santrayll, 993 F. Supp. at 176).
Id. (citing S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081 (9th Cir. 1989)).
Defendant has been unsuccessful in pleading fraud on the Copyright Office with particularity in accordance to the Federal Rules of Civil Procedure. More specifically, defendant has failed to provide competent evidence showing that the plaintiffs use of inaccuracies on the copyright registration application were willful or deliberate and that the Copyright Office relied on those inaccuracies in approving copyright registration. As a result, a finding of fraudulent application to the Copyright Office cannot be found in light of the summary judgment record presented.
Docket no. 43, at 2 (allegation contained in the motion that copyright registrations were fraudulently filed because the subject matter was created by someone other than the plaintiff);See Wallace v. Texas Tech Univ., 80 F.3d 1042, 1047 (5th Cir. 1996) (it is well established, however, that pleadings and legal memoranda are not competent summary judgment evidence unless the document qualifies as an affidavit).
4. Derivative Work
Defendant also challenges the plaintiff's ownership of the copyrighted material arguing that the lamp was a derivative work of the defendant's lamp design. A derivative work is defined as:
a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent and original work of authorship, is a `derivative work'.
The Copyright Act affords copyright protection to authors of a "derivative work." However, the Act does not extend copyright protection to derivative works that incorporate preexisting works obtained unlawfully. Authors of derivative works are granted copyright protection to the portions or contributions made to preexisting works that are distinguishable from preexisting works. Derivative work copyrights are not issued to "enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material."
A typical derivative work defense involves the defendant claiming that the alleged work is not a derivative work but rather an independent creation and entitled to copyright protection as an original work. In order for a work to be a derivative work, the underlying preexisting work must be copyrightable. Congress addressed the copyrightability of the preexisting work by requiring that a derivative work based on a preexisting work "must come within the general subject matter of copyright set for in section 102 [ 17 U.S.C. § 102], regardless of whether it is or was ever copyrighted." By design, a derivative work must incorporate the preexisting work.
See Durham Industries, Inc. v. Tomy Corp., 630 F.2d 905, 909-11 (2d Cir. 1980).
Ets-Hokin v. Skyy Spirits, Inc., 225 F.3d 1068, 1078 (9th Cir. 2000).
H.R. Rep. No. 94-1476, at 57 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5670 (emphasis omitted); see Ets-Hokin, 225 F.3d at 1079.
Ets-Hokin, 225 F.3d at 1079 (citing Melville B. Nimmer David Nimmer, Nimmer on Copyright, § 3.01, at 3-3 n. 10).
Defendant asserts that plaintiffs Sonoma design is a derivative work of defendant's Braintree design. The defendant maintains, however, that the design is not proper copyrightable subject matter. In order for defendant to prove that plaintiffs work is a derivative work of defendant's Braintree lamp, defendant must show that the Braintree lamp is copyrightable subject matter under 17 U.S.C. § 102. In other words, although defendant disputes the validity of plaintiffs design for failure to be proper copyrightable subject matter, the defendant must prove that the Braintree lamp constitutes proper copyrightable subject matter to succeed on its derivative work claim. Because the defendant has not provided evidence regarding the copyrightability of the Braintree design as a preexisting work, the elements regarding the derivative nature of the plaintiffs Sonoma design are not fulfilled.
Docket no. 43, at 9 (claiming that if plaintiff's design were to be found as copyrightable subject matter, the copyright would be invalid for failure to state the correct authors of the design or to identify the Sonoma as a derivative work).
Id. at 2.
5. Copying
Once ownership of a valid copyright is established, the second prima facie element to prove copyright infringement is unauthorized copying by the defendant. To prove copying of the copyrighted work, the court reviews "whether the person who created the allegedly infringing work had a reasonable opportunity to view the copyrighted work." Copying may be inferred where the alleged infringer had access to the copyrighted work and the two works are substantially similar. To prove actionable copying, the plaintiff must show that the defendant used plaintiffs copyrighted work to produce its own work.
Peel Company, Inc., 238 F.3d at 394.
Szabo v. Errisson, 68 F.3d 940, 944 (5th Cir. 1995) (citing Engineering Dynamics, Inc., 26 F.3d at 1340).
Id. (citing Engineering Dynamics, Inc., 26 F.3d at 1340).
Despite proof of copying, not all copying is legally actionable. In determinating whether copying is "legally actionable, a side-by-side comparison must be made between the original and the copy to determine whether a layman would view the two works as `substantially similar.'" Substantial similarity is determined by the "ordinary observer" test. Under that test, substantial similarity is found when the average lay observer can compare the works and acknowledge that the alleged copy had "been appropriated from the copyrighted work."
See Peel Company, Inc., 238 F.3d at 395;Creations Unlimited, Inc. v. McCain, 112 F.3d 814, 816 (5th Cir. 1997); Szabo, 68 F.3d at 944; Engineering Dynamics, Inc., 26 F.3d at 1340.
Creations Unlimited, Inc., 112 F.3d at 816 (citingEngineering Dynamics, 26 F.3d at 1341) (emphasis in original);see also Peel Company, Inc., 238 F.3d at 395; King, 179 F.3d at 376.
Baxter v. MCA Inc. 812 F.2d 421, 424 (9th Cir. 1987) (stating "`[a]nalytic dissection' and expert testimony are not called for; the gauge of substantial similarity is the response of the ordinary lay hearer") (quoting Sid Marty Krofft Television Productions, Inc. v. McDonald's Corp., 562 F.2d 1157, 1164 (9th Cir. 1977)); see Novelty Textile Mills, Inc. v. Joan Fabrics Corp., 558 F.2d 1090, 1093 (2d Cir. 1977).
Campbell v. Osmond, 917 F. Supp. 1574, 1580 (M.D. Fla. 1996) (quoting Durham Industries, Inc., 630 F.2d at 9ll).
The plaintiff's copyright registration of three Sonoma designs is prima facie evidence of copyright validity and therefore ownership of the graphic design. The second element of copyright infringement, copying by the defendant, is satisfied in this case by the competent summary judgment evidence provided by the plaintiff. While direct copying is not a prerequisite to prove actual copying by the defendant, the plaintiff here has produced evidence to show direct copying. The affidavit of Queta Dregely, a former employee of the defendant, indicates that defendant obtained a sample of plaintiffs Sonoma style lamps and copied the lamps, which were later sold in Menards home improvement stores. Defendant has failed to produce any controverting evidence. Where there is no evidence of direct copying, factual copying may be shown through defendant's access to the plaintiffs products and the substantial similarity in the plaintiffs and defendant's products. Here, defendant had access to the plaintiffs product because the Sonoma design was sold exclusively through the nationwide home improvement retail outlet, Home Depot. Ms. Dregely's affidavit indicates that an employee of defendant purchased several of plaintiffs Sonoma lamps directly from Home Depot, and the lamps were later sent to a manufacturer in China for duplication. Defendant has been unable to controvert Ms. Dregely's sworn testimony. Although defendant argues that Ms. Dregely's testimony is not credible because she is a former "disgruntled" employee, defendant has failed to produce any competent summary judgment evidence denying the factual allegations made in Ms. Dregely's affidavit. In addition, the substantial similarity of the defendant's and plaintiffs products is evident by conducting a side-by-side comparison of the products. The court in determining whether the products are substantially similar is required to compare the products in question with a layman's eye. I have compared the two lamps at issue in this case by looking at the side by side photographs provided by plaintiff as exhibits to its motion for summary judgment and find them to be substantially similar.
Docket no. 42, Exhibits E, F, and G; and docket no. 49, Exhibit F.
Docket no. 42, at 5.
Id. Exhibit H.
Id. at 5-6.
Id. at 6. Plaintiff's president in deposition testimony indicated its company had an exclusive agreement with Home Depot. Docket no. 49, Exhibit E, page 49: 23-25, page 53: 9-22.
Id., Exhibit H.
Id., Exhibits A, B, and C.
Id.
In summary, I recommend that the court find that the plaintiff has established ownership of valid copyrights through copyright registration and has shown, through competent summary judgment evidence, that defendant had access to the plaintiffs products and the alleged infringing products are substantially similar to the plaintiffs copyrighted works. Accordingly, I recommend that plaintiffs summary judgment motion for copyright infringement begranted.
C. Plaintiff's Claim of Unfair Competition Practices
Defendant filed a motion for "summary dismissal of count 2 — unfair trade practices and unfair competition and for attorneys fees." I have considered the motion, as has the plaintiff, as one brought under FED. R. Civ. P. 56. For the reasons discussed more fully below, I recommend that the motion be denied on the basis that plaintiffs unfair competition claims under both state and federal laws are not preempted by the Copyright Act. 1. Texas Unfair Competition Laws
Docket No. 46.
State and federal unfair competition claims are addressed because the plaintiff has not specified under which it seeks recovery.
The Supremacy Clause of the United States Constitution requires that a state law that obstructs the objectives of a federal law adopted by Congress is preempted. The Copyright Act provides that common and state laws are not limited by federal copyright laws so long as the common and state laws are not equivalent in right to the federal copyright laws.
See Brown v. Ames, 201 F.3d 654, 659-60 (5th Cir. 2000).
In order for a state law to be preempted by the Copyright Act under section 301, first the "content of the protected right must fall in the subject matter of copyright" and second, the rights granted under state law must be equivalent to any exclusive rights granted under the federal copyright laws.
Brown, 201 F.3d at 657; Daboub v. Gibbons, 42 F.3d 285, 289 (5th Cir. 1995); see also Donald Frederick Evans and Associates, Inc. v. Continental Homes, Inc., 785 F.2d 897, 914 (11th Cir. 1986).
To establish unfair competition under Texas law, there must be a likelihood of confusion between the plaintiffs product and the defendant's product. Furthermore, "a ruling on the likelihood of confusion under the Lanham Act also controls an unfair competition claim under state law." A claim for unfair competition under Texas law "is the umbrella for all statutory and nonstatutory causes of action arising out of business conduct which is contrary to honest practice in industrial or commercial matters." Texas tort law requires that the plaintiff show an "illegal act by the defendant," albeit not necessarily in violation of criminal law, as an independent tort interferes with the plaintiffs business practices.
See Blue Bell Bio-Medical v. CIN-BAD, Inc., 864 F.2d 1253, 1261 (5th Cir. 1989) (citing Miller v. Lone Star Tavern, Inc., 593 S.W.2d 341, 344 (Tex.Civ.App.-Waco, 1979)).
Blue Bell Blo-Medical, 864 F.2d at 1261 (citingChevron Chemical Co. v. Voluntary Purchasine Groups, Inc., 659 F.2d 695, 706 (5th Cir. 1981), cert. denied, 457 U.S. 1126 (1982)).
Taylor Publishing Co. v. Jostens, Inc., 216 F.3d 465, 486 (5th Cir. 2000) (quoting American Heritage Life Ins. Co. v. Heritage Life Ins. Co., 494 F.2d 3, 14 (5th Cir. 1974)).
Taylor Publishing Co., 216 F.3d at 486.
Accordingly, I recommend that because Texas unfair competition law is not preempted by the federal copyright laws, the plaintiff is entitled to present this claim before a jury.
2. Preemption by the Lanham Act (Unfair Competition)
To the extent that plaintiff has also asserted a federal unfair competition claim, that claim is not preempted by the Copyright Act. The Copyright Act in section 301(d) states "[n]othing in this title annuls or limits any rights or remedies under any other Federal statute." The Copyright Act does not preempt a Lanham Act claim.
See Nash v. CBS, Inc., 704 F. Supp. 823, (N.D. Ill. 1989), judgment aff'd, 899 F.2d 1537; Tracy v. Skate Key, Inc., 697 F. Supp. 748, 750 (S.D.N.Y. 1988).
"The basic test under every type of "unfair competition' is the "likelihood of confusion' test." Likelihood of confusion is a question of fact and a court's determination is reversed only upon finding that the holding was clearly erroneous. The court in determining likelihood of confusion weighs several factors including: "similarity of products, identity of retail outlets and purchasers, identity or advertising media, type (i.e. strength) of trademark or trade dress, defendant's intent, similarity of design, and actual confusion."
Blue Bell Bio-Medical, 864 F.2d at 1258-59 (quotingChevron, 659 F.2d at 703).
Id. at 1259, 1260 (citing Falcon Rice Mill v. Community Rice Mill, 725 F.2d 336, 344 (5th Cir. 1984)).
Id. at 1259 n. 7.
The plaintiff does not need to prove actual confusion between the products in order to obtain equitable relief. The plaintiff is required to show that confusion is probable, not merely the possibility that some customers might mistake the defendant's product for the plaintiffs product. Plaintiff, is thus, also entitled to present this claim at trial.
Id. at 1260 (citing Chevron, 659 F.2d at 704).
Id. at 1260 (citing 2 McCarthy, Trademarks and Unfair Competition § 23:1 at 45-46 (2d ed. 1984)).
3. Preemption by Patent Laws
Defendant further asserts that plaintiff is not entitled to relief under the Copyright Act or unfair competition laws, but rather that the plaintiffs only relief is under federal patent laws. Since the passage of the Copyright Act, copyright protection may be simultaneously afforded to an item also protected by a patent. The Federal Circuit has recognized the independent claim of unfair competition by stating that "[u]nfair competition law and patent law have long existed as distinct and independent bodies of law." Furthermore, the courts have acknowledged that infringement of patents does not fall within the "rubric" of unfair competition law.
37 C.F.R. § 202.10(a) (1995); see also Zenith Electronics Corp v. Exzec, Inc., 182 F.3d 1340, 1350 (Fed. Cir. 1999) (holding that state law claims of unfair competition are not preempted by federal patent laws).
Mars, Inc. v. Kabushiki-Kaisha Nippon Conlux, 24 F.3d 1368, 1373 (Fed. Cir. 1994).
Id. at 1373; J.M. Huber Corp. v. Positive Action Tool of Ohio Co., Inc., 879 F. Supp. 705, 709 (S.D. Tex. 1995).
Unfair competition claims generally protect consumers from deceptive trade practices, and are based on the common law tort of deceit. In contrast, patent laws are designed to protect the unauthorized use of a patented product. Unfair competition laws "remain[s] largely free from federal exclusivity."
See Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989); Mars, Inc., 24 F.3d at 1373.
See Mars, Inc., 24 F.3d at 1373.
Id. at 1373; 35 U.S.C. § 1-376 (1988); 15 U.S.C. § 1125(a) (1988).
Plaintiff's claims of unfair competition are not preempted by the Copyright Act or federal laws regarding patents. The elements necessary to prove unfair competition are not equivalent with the claims of copyright infringement under the Copyright Act. Likelihood of confusion is not an element of copyright infringement and the finding of likelihood of confusion under unfair competition does not afford equivalent rights as the finding of copyright infringement under the Copyright Act.
In addition, the plaintiff needs to only establish that likelihood of confusion is possible, not that actual confusion has occurred. Plaintiff has produced evidence in the form of deposition testimony showing the possibility of consumer confusion.
Docket no. 55, at 2; and docket no. 49, Exhibit E.
Because the rights granted under unfair competition, both under Texas law and § 43 of the Lanham Act, are not equivalent to the rights exclusively provided by the Copyright Act, the plaintiffs claims of unfair competition are not preempted by the Copyright Act.
Furthermore, the laws regarding patents do not preempt the unfair competition claims asserted by the plaintiff. The defendant asserts that plaintiffs only remedy is under patent law. I do not address the issue whether plaintiffs only remedy is under patent law; rather, I find that the plaintiff's unfair competition claim is not preempted by patent law.
Docket no. 46, at 8.
4. Defendant's Request for Attorney's Fees and Costs
Defendant has requested the court for an award of attorneys' fees and costs. Under 17 U.S.C. § 505, the court may award the prevailing party "reasonable attorney's fee[s]" as well as full costs to a party of a civil copyright action. It is within the court's discretion whether to award a party attorneys' fees and costs. The Fifth Circuit Court of Appeals has ruled that "although attorney's fees are awarded in the trial court's discretion [in copyright cases], they are the rule rather than the exception and should be awarded routinely." Furthermore, the Fifth Circuit has found that awarding attorneys' fees and costs is not an abuse of discretion when awarded to the prevailing party.
Docket nos. 43 46.
17 U.S.C. § 505.
Id.
McGaughey v. Twentieth Century Fox Film Corp., 12 F.3d 62, 65 (5th Cir, 1994) (citing Micromanipulator Co. v. Bough, 779 F.2d 255, 259 (5th Cir. 1985)).
See Hogan Systems, Inc. v. Cybresource Int'l, Inc., 158 F.3d 319 (5th Cir. 1998); see also McGauahey, 12 F.3d 62.
Based on my recommendations discussed in this memorandum, defendant's request for an award of attorneys' fees and costs should be denied as defendant cannot be considered the "prevailing party" in this case.
V. Recommendation
Based on the foregoing, I recommend that plaintiff's motion for partial summary judgment (Docket No. 42) be GRANTED , and that defendant's motions for summary judgment (Docket Nos. 43 46) be in all things DENIED . If this Memorandum and Recommendation is adopted, the issue of damages as a result of defendant's copyright infringement, and plaintiffs substantive claims of unfair competition, entitling plaintiff, if successful, to equitable remedies, will proceed to trial.
Docket no. 42.
VI. Instructions For Service And Notice of Right to Object/Appeal
The United States District Clerk shall serve a copy of this Memorandum and Recommendation on each and every party either (I) by certified mail, return receipt requested, or (2) by facsimile if authorization to do so is on file with the Clerk. According to Title 28 U.S.C. § 636(b)(l) and FED. R. CIV. P. 72(b), any party who desires to object to this report must serve and file written objections to the Memorandum and Recommendation within 10 days after being served with a copy unless this time period is modified by the District Court. A party filing objections must specifically identify those findings, conclusions or recommendations to which objections are being made and the basis for such objections; the District Court need not consider frivolous, conclusive or general objections. Such party shall file the objections with the Clerk of the court and serve the objections on all other parties and the Magistrate Judge. A party's failure to file written objections to the proposed findings, conclusions and recommendations contained in this report shall bar the party from a de novo determination by the District Court. Additionally, any failure to file written objections to the proposed findings, conclusions and recommendations contained in this Report and Recommendation within 10 days after being served with a copy shall bar the aggrieved party, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the District Court.
See Thomas v. Arn, 474 U.S. 140, 150 (1985).
Douglass v. United States Automobile Ass'n, 79 F.3d 1415, 1428 (5th Cir. 1996).