787 P.2d 1255 (N.M.App. 1990), 11459, Thompson v. Youart

Docket Nº:11459.
Citation:787 P.2d 1255, 109 N.M. 572, 1990 -NMCA- 012
Opinion Judge:[9] Bivins
Party Name:Ernest THOMPSON Fine Furniture Maker, Inc., a New Mexico Corporation, Plaintiff-Appellee, v. Tim YOUART and Jai Youart, d/b/a
Attorney:David J. Berardinelli, Berardinelli & Martinez, Santa Fe, for plaintiff-appellee., Barbera W. Stephenson, Barbera W. Stephenson, P.C., Albuquerque, for defendants-appellants. [7] David J. Berardinelli, Berardinelli & Martinez, Santa Fe, New Mexico, Attorneys for Plaintiff-Appellee. [8] Barbera W...
Judge Panel:ALARID and MINZNER, JJ., concur.
Case Date:February 06, 1990
Court:Court of Appeals of New Mexico
 
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Page 1255

787 P.2d 1255 (N.M.App. 1990)

109 N.M. 572, 1990 -NMCA- 012

Ernest THOMPSON Fine Furniture Maker, Inc., a New Mexico

Corporation, Plaintiff-Appellee,

v.

Tim YOUART and Jai Youart, d/b/a "Schelu," Defendants-Appellants.

No. 11459.

Court of Appeals of New Mexico.

February 6, 1990

Page 1256

[Copyrighted Material Omitted]

Page 1257

[109 N.M. 574] David J. Berardinelli, Berardinelli & Martinez, Santa Fe, for plaintiff-appellee.

Barbera W. Stephenson, Barbera W. Stephenson, P.C., Albuquerque, for defendants-appellants.

OPINION

BIVINS, Chief Judge.

Defendants own the Schelu gallery in Albuquerque's Old Town. The gallery sells southwestern style furnishings. In 1982, defendants began selling the furniture plaintiff designed and manufactured. Defendants used photographs of plaintiff's furniture in their advertisements. In 1988, defendants decided to carry a new line of furniture in place of plaintiff's furniture. Defendants based this decision on problems with receiving special orders from plaintiff and the placement of advertisements by plaintiff which competed with defendants' advertisements. Defendants advertised the decision to carry the new line of furniture in a radio announcement. The new line of furniture sold by defendants was similar to plaintiff's.

Plaintiff filed a petition, complaint, and order to show cause why defendants should not be enjoined from selling the new line of furniture. Plaintiff alleged violation of common law copyright, unfair competition, and unfair trade practices. The complaint sought an injunction and damages. Defendants filed a motion to dismiss due to lack of subject matter jurisdiction on the basis that the main question was one of copyright, which is under the exclusive jurisdiction of the federal courts. Prior to the combined hearing on the motions, plaintiff filed an amended complaint dropping his copyright claim.

At the motions hearing, plaintiff presented expert testimony to show that a person who had seen plaintiff's furniture would assume that the new line of furniture was also made by plaintiff. Defendants introduced evidence to show that many of plaintiff's designs have been used historically on colonial southwestern furniture.

The district court issued a letter ruling, in which it found that the furniture designs had aesthetic value belonging to plaintiff and deserved some degree of protection. The court informed the parties that it intended to grant a temporary restraining

Page 1258

[109 N.M. 575] order prohibiting defendants from selling furniture deceptively similar to that of plaintiff. It based jurisdiction on the court's duty to prevent trade practices which are unfair or overreaching. A presentment hearing was held to decide the wording of the restraining order. At the hearing, defendants also filed a motion to certify the order for interlocutory appeal.

The district court made findings of fact and conclusions of law and certified the order for interlocutory appeal. The court found that this action was not preempted by federal law. The court also found that this was a case of common law unfair trade practices, and the issue was one of first impression in New Mexico. The matter of damages was not heard. This court granted defendant's application for interlocutory appeal.

The issues before us are (1) whether plaintiff has a right to prevent defendants from selling furniture "deceptively similar" to that of plaintiff where plaintiff has no copyright on the furniture or contract with defendants to sell plaintiff's furniture exclusively; and (2) whether plaintiff's claim that defendants should be prevented from selling furniture similar to plaintiff's is preempted by federal law. These two issues are so closely related that we discuss them under one heading. We conclude that the protection plaintiff seeks is protection against copying designs and that his claim is preempted by federal law.

We reverse and remand the case to the district court.

Discussion

Rights that are equivalent to any of the exclusive rights within the subject matter of copyright are governed by the Copyright Act of 1976. 17 U.S.C.A. Sec. 301 (West 1977 & Supp.1989). Those rights governed by federal copyright law are under the exclusive jurisdiction of the federal courts. 28 U.S.C.A. Sec. 1338 (West 1976 & Supp.1989). Works that do not enjoy the protection of a copyright are in the public domain and, absent a valid claim of unfair competition under state law, may be freely copied. Towle Mfg. Co. v. Godinger Silver Art Co., 612 F.Supp. 986 (S.D.N.Y.1985); see Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 84 S.Ct. 779, 11 L.Ed.2d 669 (1964); Durham Indus., Inc. v. Tomy Corp., 630 F.2d 905 (2d Cir.1980). Imitation of items in the public domain is to be encouraged in order to permit " 'the normal operation of supply and demand to yield the fair price society must pay' " for a product. Towle Mfg. Co. v. Godinger Silver Art Co., 612 F.Supp. at 993 (quoting Gemveto Jewelry Co. v. Jeff Cooper, Inc., 568 F.Supp. 319, 334 (S.D.N.Y.1983)).

In order to avoid preemption by federal law, a state claim must go beyond the rights protected by copyright. Towle Mfg. Co. v. Godinger Silver Art Co., 612 F.Supp. at 995. To be governed by state law, the claim must have a fundamentally different element than those elements protected by copyright law. See Financial Information, Inc. v. Moody's Investors Serv., 808 F.2d 204 (2d Cir.1986), cert. denied, 484 U.S. 820, 108 S.Ct. 79, 98 L.Ed.2d 42 (1987).

Plaintiff in this case dropped his copyright claim. He claims that the relationship of the parties to each other and the product provides the extra element which defines this cause of action as common law unfair competition. Plaintiff claims that, in light of the long-standing relationship, the copying of his designs constitutes palming off because the conduct by defendants was a continuing representation that the furniture being sold in their gallery was plaintiff's furniture.

Although the trial court and the parties argue that this is a case of common law unfair...

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