Coquico, Inc. v. Rodríguez-Miranda

• Citation: 562 F.3d 62
• Decision Date: 06 April 2009
• Docket Number: No. 07-2786.,07-2786.
• Parties: COQUICO, INC., Plaintiff, Appellee, v. Ángel Edgardo RODRÍGUEZ-MIRANDA and Identiko, Inc., Defendants, Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

562 F.3d 62

COQUICO, INC., Plaintiff, Appellee, v. Ángel Edgardo RODRÍGUEZ-MIRANDA and Identiko, Inc., Defendants, Appellants.

No. 07-2786.

United States Court of Appeals, First Circuit.

Heard March 5, 2009.

Decided April 6, 2009.

Samuel F. Pamias-Portalatín, with whom Carla Ferrari-Lugo, was on brief, for appellants.

Marie Elsie López-Adames, with whom González-López & López-Adames, was on brief, for appellee.

Before TORRUELLA, SELYA and LEVAL,^* Circuit Judges.

SELYA, Circuit Judge.

A famous fairy tale, of ancient vintage, tells of an ugly frog who, when befriended by a beautiful damsel, turns into a handsome prince, marries his rescuer, and (presumably) lives happily ever after. See Jacob Grimm & Wilhelm Grimm, The Frog-King, reprinted in 17 The Harvard Classics 47 (Charles W. Eliot ed., P.F. Collier & Son 1909). The coquí is a tree frog indigenous to Puerto Rico. Plaintiff-appellee Coquico, Inc. has not yet managed to turn the coquí into an imperial presence. It has, however, fashioned a popular stuffed-animal rendering of the coquí and, thus, turned the frog into dollars.

Coquico secured a copyright on its stuffed animal to protect this amphibian revenue source. When the defendants, Ángel Edgardo Rodríguez-Miranda (Rodríguez) and Identiko, Inc., began selling a competing coquí, Coquico sued for, among other things, copyright infringement. The district court preliminarily enjoined the defendants from infringing Coquico's copyright.

The defendants appeal. Concluding, as we do, that the district court did not abuse its discretion in granting the preliminary injunction, we affirm.

I. BACKGROUND

We rehearse the factual and procedural antecedents of this appeal, "credit[ing] the undisputed facts presented below and adopt[ing] the district court's findings as to controverted matters to the extent they are supported by the record and not clearly erroneous." United Elec., Radio & Mach. Workers v. 163 Pleasant St., 960 F.2d 1080, 1083 (1st Cir.1992).

Coquico manufactures and distributes plush-toy depictions of animals. Pertinently, it produces a line of plush toys portraying the coquí común, a small brown tree frog much beloved in Puerto Rico. This litigation concerns Coquico's standard plush-toy coquí, registered as a work of visual art with the United States Copyright Office on June 22, 2001, under the appellation "Común by Coquico."

In designing Común, Coquico hired a scientist, a photographer, and a recording engineer with an eye toward reproducing key features of the coquí's appearance and avoiding zoological anomaly. This effort was successful to a degree and Común displays notable features of the anuran on which it is modeled. But Común nonetheless possesses several features that do not have their genesis in the frog's physiognomy. These features include a brass button, a bonita bandera (the Puerto Rican flag) stitched onto the frog's underbelly, and an informational hang tag.¹

Rodríguez worked for Coquico for four years, beginning in 2001. Sometime in 2002 Coquico gave him access to sensitive information anent its design criteria, manufacturing processes, and profit margins. In return, Rodríguez signed a non-disclosure/non-competition agreement.

That same year, Rodríguez founded Identiko, with the evident purpose of designing products that would be identified with political candidates and campaigns, social movements, and the like. But in February of 2006 (shortly after leaving Coquico), Rodríguez contacted a manufacturer in China to explore the feasibility of producing plush toys. Within months, Identiko began to distribute plush-toy coquíes under the label "Wild Encantos." Its standard plush-toy incarnation of the coquí strongly resembles Común.

On May 18, 2007, Coquico brought suit alleging, among other causes of action, that the defendants had infringed its copyright. Following an evidentiary hearing, the district court entered an order preliminarily enjoining Rodríguez and Identiko from continuing to market the Encantos coquí or otherwise infringing Coquico's copyright in plush-toy coquíes.² See Coquico, Inc. v. Rodríguez-Miranda, Civ. No. 07-1432, 2007 WL 3034259, at *6 (D.P.R. Oct. 15, 2007). This interlocutory appeal ensued. We have jurisdiction under 28 U.S.C. § 1292(a)(1).

II. ANALYSIS

On appeal, the defendants insist that the Encantos coquí does not copy any original elements of Común and, thus, that Coquico is unlikely to succeed on its claim of copyright infringement. In the pages that follow, we lay the necessary legal foundation and then address the merits of this controversy.

A.

The propriety of preliminary injunctive relief depends on an amalgam of four factors: (i) the likelihood that the movant will succeed on the merits; (ii) the possibility that, without an injunction, the movant will suffer irreparable harm; (iii) the balance of relevant hardships as between the parties; and (iv) the effect of the court's ruling on the public interest. Borinquen Biscuit Corp. v. M.V. Trading Corp., 443 F.3d 112, 115 (1st Cir.2006). The first of these four factors normally weighs heaviest in the decisional scales. New Comm Wireless Servs., Inc. v. SprintCom, Inc., 287 F.3d 1, 9 (1st Cir.2002). That is especially true in copyright cases because the resolution of the other three factors often turns on the plaintiff's likelihood of success. See, e.g., Concrete Mach. Co. v. Classic Lawn Orns., Inc., 843 F.2d 600, 611-12 (1st Cir.1988).

When an appeal is taken from the grant or denial of a preliminary injunction, appellate review is for abuse of discretion. Ross-Simons of Warwick, Inc. v. Baccarat, Inc., 102 F.3d 12, 16 (1st Cir.1996). Within that rubric, we assay the district court's findings of fact for clear error and its resolution of abstract legal questions de novo. Air Line Pilots Ass'n, Int'l v. Guilford Transp. Indus., Inc., 399 F.3d 89, 95 (1st Cir.2005). In the expanse between those two poles, we afford substantial deference to the lower court's "[j]udgment calls and ... balancing of conflicting factors," Wine & Spirits Retailers, Inc. v. Rhode Island, 418 F.3d 36, 46 (1st Cir. 2005); we will disturb such determinations only if the trial court is shown to have "ignored pertinent elements deserving significant weight, considered improper criteria, or, though assessing all appropriate and no inappropriate factors, plainly erred in balancing them," Ross-Simons, 102 F.3d at 16.

This is a rifle-shot appeal. The defendants take dead aim at the district court's handling of the first preliminary injunction factor: likelihood of success. We cabin our discussion accordingly.

B.

Copyright protection can subsist in original plush-toy designs. See 17 U.S.C. § 102(a)(5); see also Ty, Inc. v. Publ'ns Int'l Ltd., 292 F.3d 512, 515 (7th Cir.2002). The holder of a valid plush-toy copyright possesses exclusive rights to reproduce and distribute not only exact "copies" of the toy but also "derivative works" based upon it. 17 U.S.C. § 106. A person who trespasses upon any of these exclusive rights may be held liable for copyright infringement. Id. § 501.

To prevail on a copyright infringement claim, a party must prove both control of a valid copyright and copying of original elements of the work by the putative infringer. Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991). In this instance, the defendants concede that Coquico obtained a valid copyright. Thus, the ganglion of this appeal is the second requisite: copying of original elements.

That requirement itself involves a bifurcated inquiry. First, the copyright holder must show that, as a factual matter, the putative infringer copied the protected work. Segrets, Inc. v. Gillman Knitwear Co., 207 F.3d 56, 60 (1st Cir.2000). Second, the holder must show that the copying was so egregious as to render the allegedly infringing and infringed works substantially similar. Lotus Dev. Corp. v Borland Int'l, Inc., 49 F.3d 807, 813 (1st Cir.1995).

Of course, copyright law protects original expressions of ideas, not the ideas themselves. Johnson v. Gordon, 409 F.3d 12, 19 (1st Cir.2005). This originality requirement cuts across both the actual copying and substantial similarity branches of the second-step analysis. Thus, in conducting that analysis, an inquiring court must focus upon the "constituent elements of the [plaintiff's] work that are original." Feist, 499 U.S. at 361, 111 S.Ct. 1282. Accordingly, we turn to the binary appraisal that these principles require.

1. Actual Copying. A party may demonstrate actual copying through either direct or circumstantial evidence. Yankee Candle Co. v. Bridgewater Candle Co., 259 F.3d 25, 33 (1st Cir.2001). Coquico traversed the latter route, endeavoring to prove that the defendants enjoyed access to Común and that their later-created product (the Encantos coquí) is sufficiently similar to Común that a fair comparison of the two stuffed animals gives rise to an inference of actual copying.

Rodríguez testified that he had designed the Encantos coquí by making modifications to a prototype sent to him by a Chinese manufacturer and that any similarities between his plush toy and Coquico's were the result of his desire to replicate the coquí as it exists in nature. But the district court did not credit this testimony; and as the finder of fact, the court was not obliged to do so. In any event, the record offers ample circumstantial evidence to support the court's finding that Coquico was likely to succeed on the issue of actual copying.

It is undisputed that Rodríguez, through his prolonged tenure with Coquico, had access to proprietary design and manufacturing information concerning Común well before Identiko began fabricating the Encantos coquí. What we have called "probative similarity" can, when accompanied by proof of access, serve as a harbinger of actual copying, see Johnson, 409 F.3d at 18, and the record in this case fully supports a finding of...