697 F.2d 27 (2nd Cir. 1982), 25, Eden Toys, Inc. v. Florelee Undergarment Co., Inc.

Docket Nº:25, 68, Docket 82-7188, 82-7236.
Citation:697 F.2d 27
Party Name:476 EDEN TOYS, INC., Plaintiff-Appellant Cross-Appellee, v. FLORELEE UNDERGARMENT CO., INC., Defendant-Appellee Cross-Appellant.
Case Date:December 02, 1982
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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697 F.2d 27 (2nd Cir. 1982)

476

EDEN TOYS, INC., Plaintiff-Appellant Cross-Appellee,

v.

FLORELEE UNDERGARMENT CO., INC., Defendant-Appellee Cross-Appellant.

Nos. 25, 68, Docket 82-7188, 82-7236.

United States Court of Appeals, Second Circuit

December 2, 1982

Argued Sept. 13, 1982.

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[Copyrighted Material Omitted]

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Samuel J. Stoll, New York City (Doris S. Hoffman, Robert S. Stoll, Stoll & Stoll P.C., New York City, of counsel), for plaintiff-appellant.

Jed R. Schlacter, New York City (Lauritano & Schlacter, New York City, of counsel), for defendant-appellee.

Before LUMBARD, MANSFIELD and VAN GRAAFEILAND, Circuit Judges.

MANSFIELD, Circuit Judge:

Eden Toys, Inc. ("Eden") appeals from an order of the Southern District of New York, 526 F.Supp. 1187, Robert L. Carter, Judge, granting summary judgment dismissing its claim against Florelee Undergarment Co., Inc. ("Florelee") for copyright infringement. Florelee cross-appeals from the district court's grant of summary judgment enforcing Eden's claim against it under the Lanham Act. We affirm in part and reverse and remand in part.

The subject of this case is the alleged copying of a drawing of the copyrighted fictional character Paddington Bear, the central figure in a series of children's books written by Michael Bond. 1 Paddington and Company, Limited ("Paddington"), a British corporation, holds all rights to these books, and to the characters therein. In 1975 Paddington entered into an agreement with Eden, an American corporation, granting Eden exclusive North American rights to

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produce and sell, and to sublicense the production and sale of, a number of Paddington products. 2 This agreement was amended in 1980 to grant Eden the exclusive North American rights to produce and sublicense all Paddington products except books, tapes and records, stage plays, motion pictures, and radio and television productions.

At some point between 1975 and 1977 Ivor Wood, the illustrator of the Paddington Bear books, drew a series of sketches ("the Ivor Wood sketches") for the use of Eden and its sublicensees. There is evidence in the record that in July 1980 Eden obtained in its own name U.S. copyright registration certificate No. TXU 50-185 for these sketches as "derivative" works. Using the Ivor Wood sketches as a point of departure, the C.R. Gibson Company ("Gibson"), pursuant to a sublicense from Eden, produced a design for gift wrap that included seven drawings of Paddington Bear ("the Eden/Gibson drawings"). This gift wrap was first published in January 1978. In March 1980, Eden registered the gift wrap design with the Copyright Office as a derivative work.

In November 1979, Eden discovered that Florelee was selling a nightshirt featuring a print of a bear later found by the district court to be "identical in almost all respects"

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to one of the Eden/Gibson drawings of Paddington Bear. The nightshirt bore the legend " CR Fred Original." After discovering a second nightshirt with the same apparent "knockoff" of the Eden/Gibson drawing Eden filed suit against Florelee in April 1980, alleging both that Florelee had violated Eden's rights under the Copyright Act and that Florelee had made a "false designation of origin" or "false description" of its product, in violation of Sec. 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a) (1976), by printing " CR Fred Original" on its shirts. Following cross-motions for summary judgment, Judge Carter granted Florelee's motion for summary judgment dismissing the copyright claim, and Eden's motion for summary judgment enforcing the Lanham Act claim.

Reprinted below are (1) a drawing from page 8 of The Great Big Paddington Book, copyrighted by Paddington; (2) the Ivor Wood sketch used as a model by Gibson, and apparently copyrighted by Eden; (3) the Eden/Gibson drawing, copyrighted by Eden and infringed by Florelee, and (4) Florelee's "Fred Bear" drawing.

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NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Drawing of original Paddington Bear, from pre-existing book copyrighted by Paddington. U.S. Copyright Reg. No. VA 11-588.

Ivor Wood sketch, apparently copyrighted by Eden. (See App. 165a-166a.) U.S. Copyright Reg. No. TXU 50-185.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Eden/Gibson drawing, copyrighted by Eden. U.S. Copyright Reg. No. VA 44-638.

Defendant's "Fred Bear" drawing.

DISCUSSION

The Copyright Act authorizes only two types of claimants to sue for copyright infringement: (1) owners of copyrights, and (2) persons who have been granted exclusive licenses by owners of copyrights. 3 17 U.S.C. Sec. 501(b) (Supp. IV 1980); 3 M. Nimmer, Nimmer on Copyright Sec. 12.02, at 12-25 (1982). Within the first category are both those who hold copyrights on wholly new material, and those who hold copyrights on derivative works, based substantially on pre-existing materials. 17 U.S.C. Sec. 103(a) (Supp. IV 1980).

In the present case, Eden claims to be the owner of the copyrights in certain derivative works--the Eden/Gibson drawing

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(No. 3 above) and the Ivor Wood sketch (No. 2 above), upon which No. 3 is based--and the exclusive licensee of certain rights under Paddington's original copyrights. We discuss each of these in turn. Eden's complaint is limited to claims based on its ownership of the Eden/Gibson copyrighted drawing (No. 3 above); by express or implied consent of the parties, see F.R.Civ.P. 15(b), Eden's claims as exclusive licensee of certain rights under the original copyrighted Paddington drawings (No. 1 above) were also considered by the court. Eden's later motion to add a claim based on its ownership of the Ivor Wood copyrighted drawings was denied but will be granted on remand. 4

Eden's Claims as Copyright Owner

Assuming that, upon remand and amendment of the complaint to add its claim based upon the Ivor Wood copyrighted sketch (No. 2 above) derived from pre-existing Paddington Bear drawings (such as No. 1), Eden were found to be the owner of U.S. Copyright No. TXU 50-185, registered July 22, 1980, which covers the Ivor Wood sketch, Eden would be entitled to copyright protection for any novel additions made by this work to the existing copyrighted drawings of Paddington. G. Ricordi & Co. v. Paramount Pictures, 189 F.2d 469, 471 (2d Cir.1951). The fact that Eden apparently did not register this copyright (or the Eden/Gibson copyright) until after Florelee's alleged infringement does not preclude Eden from recovering for infringement of these copyrights occurring before the date of registration. See 17 U.S.C. Sec. 411 (Supp. IV 1980); H.Rep. No. 94-1476, 94th Cong., 2d Sess. 157 (1976); 3 M. Nimmer, supra, Sec. 12.08, at 12-59 (1982). However, Eden's delay in registering the copyrights would preclude it from claiming either attorney's fees or statutory damages. 17 U.S.C. Sec. 412 (Supp. IV 1980). 5

Similarly, Eden's copyrighted Eden/Gibson drawing (No. 3 above) registered on March 7, 1980, as No. VA 44-638 and the balance of its gift wrap design represent derivative works based on the copyrighted Ivor Wood sketches (including No. 2 above).

The district court's finding that Paddington rather than Eden holds the copyrights in the Ivor Wood sketch appears to be incorrect. The record contains a copy of an apparently valid U.S. Copyright Certificate, Reg. No. TXU 50-185, dated July 22, 1980, issued to Eden for "adaptation of designs and additional artistic work" based on "the copyrighted Paddington Bear series of books by Michael Bond, including 'The Great Big Paddington Book.' " We therefore remand the issue to the district court for redetermination of ownership following amendment of the complaint to add the claim based on the copyrighted Ivor Wood sketch. In addition, the district court found or at least strongly implied that Eden's copyright in the Eden/Gibson drawing was invalid because the changes made by Gibson

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to the pre-existing Ivor Wood sketch were too insignificant to qualify the drawing as an "original work" under the Copyright Act, 17 U.S.C. Sec. 102 (Supp. IV 1980). 6 In so finding, however, the district court applied a test that erroneously mingled the standard for sufficient originality and the test for infringement. The standard for sufficient originality is whether a work contains "some substantial, not merely trivial, originality." L. Batlin & Sons, Inc. v. Snyder, 536 F.2d 486, 490 (2d Cir.) (en banc), cert. denied, 429 U.S. 857, 97 S.Ct. 156, 50 L.Ed.2d 135 (1976); Chamberlin v. Uris Sales Corp., 150 F.2d 512, 513 (2d Cir.1945). The standard for copyright infringement, by contrast, is whether the defendant's work is "substantially similar" to the plaintiff's work. Warner Bros., Inc. v. American Broadcasting Co., 654 F.2d 204, 208 (2d Cir.1981); see also Peter Pan Fabrics, Inc. v. Martin Weiner Corp., 274 F.2d 487, 489 (2d Cir.1960) ("same aesthetic appeal").

The difference between these two tests is not merely academic. A work which makes non-trivial contributions to an existing one may be copyrighted as a derivative work and yet, because it retains the "same aesthetic appeal" as the original work, render the holder liable for infringement of the original copyright if the derivative work were to be published without permission from the owner of the original copyright. An example is the second edition of a textbook, which is copyrightable even though it makes only minor revisions of or additions to the first edition. By its very nature a "derivative" work, which is copyrightable as such, borrows substantially from existing works, and is so...

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