Lakedreams v. Taylor

Decision Date11 June 1991
Docket NumberNo. 90-1472,90-1472
Citation932 F.2d 1103
Parties1991 Copr.L.Dec. P 26,747, 19 U.S.P.Q.2d 1283 LAKEDREAMS, a Texas partnership, Plaintiff-Appellee, v. Steve TAYLOR, d/b/a California T's, Defendant-Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

Gregory V. Novak, Wendell Coffee and Richard Neal Burt, Coffee-Novack, Lubbock, Tex., for defendant-appellant.

Brian P. Quinn, Robin M. Green and Jack P. Driskill, McWhorter, Cobb & Johnson, Lubbock, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before BROWN, JOHNSON, and WIENER, Circuit Judges.

JOHNSON, Circuit Judge:

Defendant-Appellant Steve Taylor ("Taylor") appeals from the order of the district court granting a preliminary injunction precluding Taylor from distributing shirts and other tangible items containing a design and text substantially similar to the design and text as appears in the copyright application of Plaintiff-Appellee Lakedreams, a Texas partnership. Finding that the district court did not abuse its discretion in issuing the preliminary injunction, this Court affirms.

I. FACTS AND PROCEDURAL HISTORY

Four couples, while vacationing at Lake Buchanan, Texas, over the 1989 Labor Day weekend, created a mythical family with the surname "Schitt." The Schitt family, whose members had names that evoked one or another inelegant image, initially was nothing more than an inside joke between the couples. Gradually, however, the couples determined that the Schitt family was a marketable concept. They concluded that they could sell a number of printed t-shirts with a silkscreen design of the family tree ("Family Tree") 1 on one side and a silkscreen printing of the family genealogy (the "text") on the other side.

To market their product, the couples formed a partnership, known as Lakedreams. 2 The partners met periodically to discuss and revise their ideas. They created a number of drafts of the Family Tree design and wrote the text of the family history. One partner, JoAnn Harnar ("Harnar"), took some of these papers and drawings to Taylor. Harnar knew of Taylor's t-shirt business, California T's. Taylor agreed, for a fee, to prepare the silkscreens of Lakedreams' design and text. Taylor completed the artwork for the silkscreens based on the papers and drawings that Harnar gave him. Lakedreams' partners thoroughly reviewed Taylor's work and made a number of changes. The partners were satisfied that the final product embodied their original text and design. With Lakedreams' permission, Taylor began to print Family Tree t-shirts. Taylor then requested and received Lakedreams' permission to sell Family Tree t-shirts in his store.

While working with Taylor, the partners became concerned that they should attempt to obtain copyright protection of their Family Tree concept. Taylor suggested that they place a "c" within a circle and the name "Lakedreams" on the t-shirts. With the partners assent, Taylor's suggestion was incorporated as a part of the silkscreen artwork for both sides of the t-shirts. After marketing a number of shirts, the partners applied for a copyright. In January 1990, Lakedreams mailed an application for copyright registration to the Copyright Office of the Library of Congress, together with the appropriate fee and deposit. Though the fee check was cashed, Lakedreams apparently has never received a certificate of registration.

The t-shirts initially sold well. Eventually, the partners obtained a sales representative and decided to have another company print their shirts. After transferring to the new printer, Lakedreams discovered that Taylor was continuing to sell the Family Tree t-shirt in his own store. Taylor acquiesced to Lakedreams' demand to discontinue marketing the t-shirt. However, Taylor soon began to market a t-shirt substantially identical to Lakedreams' t-shirt, with the exception that Taylor replaced Lakedreams' copyright emblem with one of his own. Thereafter, Taylor's attorney contacted Lakedreams' new printer and distributor to warn them that the act of printing and selling Lakedreams' Family Tree t-shirt infringed Taylor's copyright. Despite Lakedreams' pending copyright application, Taylor applied for and received a copyright certificate in his own name, with an effective date of April 1990.

Lakedreams filed suit against Taylor, asserting a number of claims. 3 Lakedreams then filed a motion for a temporary restraining order and a preliminary injunction to enjoin Taylor from infringing Lakedreams' copyright. The district court issued a temporary restraining order and set a hearing on the motion for a preliminary injunction. After the hearing, the district court granted a preliminary injunction to remain in force until trial. 4 Taylor filed a timely notice of appeal.

II. DISCUSSION
A. Jurisdiction

As an initial matter, we must determine whether appellate jurisdiction exists to review this case. Taylor attempts to appeal both the order granting a preliminary injunction and the denial of his motion to dismiss Lakedreams' copyright infringement claim.

To be appealable, an order must be final, 5 it must fall within the specific class of interlocutory orders made appealable by statute, 6 or it must fall within some jurisprudential exception. 7 An order granting a preliminary injunction comes within the second category, i.e., an interlocutory order made appealable pursuant to 28 U.S.C. Sec. 1292(a)(1). 8 An order denying a defendant's motion to dismiss, however, does not qualify under any of the appealability alternatives. Save the Bay, Inc. v. United States Army, 639 F.2d 1100, 1103 (5th Cir.1981). The mere fact that Taylor moved to dismiss during the injunction hearing does not provide a basis for review. There is no indication that the district court consolidated the preliminary injunction with a trial on the merits. In addition, the order granting the preliminary injunction makes no mention of the motion to dismiss. Hence, this Court has jurisdiction to review the preliminary injunction order, but we lack jurisdiction to review the district court's denial of Taylor's motion to dismiss. See generally, EEOC v. Kerrville Bus Co., 925 F.2d 129 (5th Cir.1991).

B. Preliminary Injunction

A preliminary injunction is an extraordinary remedy. Mississippi Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 618, 621 (5th Cir.1985). To obtain a preliminary injunction, the moving party must establish four factors: (1) a substantial likelihood of success on the merits, (2) a substantial threat that failure to grant the injunction will result in irreparable injury, (3) the threatened injury outweighs any damage that the injunction may cause the opposing party, and (4) the injunction will not disserve the public interest. Allied Marketing Group, Inc. v. CDL Marketing, Inc., 878 F.2d 806, 809 (5th Cir.1989).

The decision to grant or deny a preliminary injunction lies within the discretion of the district court. Apple Barrel Productions, Inc. v. Beard, 730 F.2d 384, 386 (5th Cir.1984). Accordingly, an order granting or denying a preliminary injunction will be reversed only upon a showing that the district court abused its discretion. White v. Carlucci, 862 F.2d 1209, 1211 (5th Cir.1989). The district court's findings of fact are subject to the clearly erroneous standard of review. Fed.R.Civ.P. 52(a). Any legal determinations are subject to plenary review on appeal. Griffin v. Box, 910 F.2d 255, 259 (5th Cir.1990).

The district court in the instant case properly applied the four factor test for determining whether a preliminary injunction is justified. Taylor argues that the district court erred in reaching its conclusions on each of the four factors. We will discuss each factor in turn.

1. Substantial Likelihood of Success

Lakedreams' complaint alleges a number of causes of action. The district court found that Lakedreams had shown a substantial likelihood that it would succeed on the merits of two of its claims: copyright infringement and misappropriation of ideas. Since this Court concludes that Lakedreams has shown a substantial likelihood that it would succeed on the copyright infringement claim, we need not address the merits of the misappropriation claim.

A copyright infringement action requires that the plaintiff show "ownership" of the material and "copying" by the defendant. Apple Barrel Productions, 730 F.2d at 387. To establish "ownership," the plaintiff must prove that the material is original, that it can be copyrighted, and that he has complied with statutory formalities. Id. To establish "copying," the plaintiff generally must show that the defendant had access to the material and that there is a substantial similarity between the two works. Id. at 387 n. 3.

a. Ownership

In asserting that Lakedreams failed to establish any element of the test for ownership in the Family Tree design and text, Taylor advances three arguments. 9 First, Taylor contests the district court's finding that the Family Tree was original with Lakedreams. While conceding that Lakedreams conceived of many of the ideas for the Family Tree design and text, Taylor asserts that he and his employees also contributed original ideas. The final product, Taylor contends, was drafted with his own originality. Despite Taylor's assertions concerning his contribution, though, the evidence supports the finding that Lakedreams' partners developed the Family Tree design and text, with only perfunctory assistance from Taylor.

Second, Taylor argues that Lakedreams merely had ideas, which are not in and of themselves copyrightable. See 17 U.S.C. Sec. 102(b). Copyright protection is available only for works of authorship which are fixed in a tangible medium of expression. 17 U.S.C. Sec. 102(a). The copyright's author, therefore, is the person who reduces an idea to a fixed, tangible expression. Community for Creative Non-Violence v. Reid, 490 U.S. 730, 109 S.Ct. 2166, 2171,...

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