American Greetings Corp. v. Easter Unlimited, Inc., 83 CIV 7690 (LBS).
| Citation | 579 F. Supp. 607 |
| Decision Date | 12 December 1983 |
| Docket Number | No. 83 CIV 7690 (LBS).,83 CIV 7690 (LBS). |
| Parties | AMERICAN GREETINGS CORPORATION and CPG Products Corp., Plaintiffs, v. EASTER UNLIMITED, INC., d/b/a Fun World, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Cowan, Liebowitz & Latman, P.C., New York City, for plaintiffs; Carol Simkin, William Hart, New York City, of counsel.
Wolder, Gross & Yavner, New York City, for defendant; Stanley Yavner, Jay A. Bondell, Meyer A. Gross, New York City, of counsel.
Plaintiffs are co-venturers in the creation and marketing of a line of stuffed plush bears, known as "Care Bears." The "Care Bears" are six pastel-colored plush stuffed toys, each carrying a different pictorial representation on its chest. In addition to these stuffed bears, plaintiffs also license or sell a number of other products—such as greeting cards and plastic toys—which utilize the Care Bear concept.1 A one-half hour cartoon featuring Care Bear characters was aired on nationwide television in April 1983 and rebroadcast last month. The 1983 advertising budget for Care Bear related products is approximately 9.2 million dollars. By year's end, sales of these products will exceed $250,000,000.
Defendant is an importer and seller of what we will here call "Message Bears,"2 also a line of stuffed bear toys. Defendant's four bears carry various messages across their chests. For example, the blue bear's chest reads "Have a Happy Day." The bears come in four colors, several of which are close in shade to a Care Bear color.3 Both plaintiffs' bears and defendant's bears are produced in approximately ten and six inch versions.4 In an appendix, we have included copies of exhibits plaintiffs offered in their preliminary injunction application. These reproductions, while not including plaintiffs' distinctive trade dress, offer a rough idea of the appearance of stuffed Care Bears and Message Bears.
Plaintiffs claim that defendant's Message Bears infringe the Care Bear copyright, see 17 U.S.C. §§ 101 et seq., violate Section 43(a) of the Lanham Trademark Act, 15 U.S.C. § 1125(a) and the New York State law of unfair competition. On October 25, 1983, we denied plaintiffs' application for a preliminary injunction, holding that plaintiffs had failed to establish a likelihood of success on the merits and that the balance of hardships tilted decidedly toward defendant. At that time, we granted plaintiffs leave to renew their application for a preliminary injunction in connection with an expedited trial on the merits. A bench trial commenced on November 21, 1983 and ended on December 7, 1983. The following shall constitute the Court's findings of fact and conclusions of law, pursuant to Fed.R.Civ.P. 52(a).
In January and February of 1981, marketing executives and various creative groups employed by plaintiffs convened with the purpose of developing a multicharacter plush bear line, as a follow-up to their highly successful co-venture marketing the doll "Strawberry Shortcake." During the summer of 1981, internal presentations of Care Bear artwork and marketing plans were made before personnel employed by the Kenner, Fun Dimensions and Parker Brothers Divisions of plaintiff CPG Products Corp. For approximately one year, through the summer of 1982, plaintiffs attempted to translate two dimensional Care Bear artwork into attractive and saleable three dimensional plush bear toys. Throughout most of this period, certain prospective licensees were invited to view the evolving Care Bear product line and promotional plans, and, after a June 24, 1982 seminar in New York City for 26 licensees already committed to the Care Bear project, "word began to get out somewhat that American Greetings and General Mills the parent company of plaintiff CPG were joining forces on a second project." Testimony of John Chojnacki, Co-president of American Greetings licensing group, Trial Transcript ("Tr.") at page 94.
The Care Bears project was introduced to the marketplace in August 1982, as "teams from General Mills and MAD the "Marketing and Design" division of CPG went out into the marketplace and gave individual presentations to approximately 50 major retailers throughout the country...." Id. at 96. On September 24, 1982, The Wall Street Journal published a detailed article about the project, and in October 1982, an introductory trade ad, a fold-out brochure depicting color cartoon drawings of the Care Bears, entitled "Introducing a Story About Love," appeared in "a variety of trade journals covering the toy business, ready-to-wear, domestic and stationery, greeting card business." Id.
The Care Bears themselves did not reach retailers' shelves until March 1983, over two years after the project was first conceived. The product, promoted extensively in national magazine and television advertisements, was an instant success, "by about five times the most successful introductory launch of a new product" in American Greetings history. Id. at 82. We understand that demand far outpaces supply, and that the Care Bear may become the stuffed animal equivalent of the Cabbage Patch Kid Doll.5
The Care Bear, in both pictorial and sculptural forms, has several primary physical characteristics, which we shall describe below in the approximate order of their importance to the toy's selling and emotional appeal.
Each of the bears has a prominent symbol on its chest. The symbols reflect each bear's distinct personality and emotion. As described by Mr. Chojnacki, "Care Bears are designed to be the embodiment of what traditionally would be intangible human emotions," Tr. at 108. See also id. at 105, 110. This theme has been reinforced by a multimillion dollar marketing campaign. Focusing only on the stuffed bears, we note the appearance of the following graphics:
Name of Bear Graphic
Bedtime Bear Sun and moon
Birthday Bear Cupcake with candle
Cheer Bear Rainbow
Friend Bear Entwined sunflowers
Grumpy Bear Cloud
Tenderheart Bear Heart
The chest graphic generally correlates with the toy's facial expressions. Hence, Grumpy Bear has a frown on his face; and Bedtime Bear has half-closed eyelids.
The bears have pear-shaped heads and overstuffed jowls. Their eyes are set relatively close together; a plastic heart-shaped nose appears near the top of their white muzzles. The bears' heads are approximately the same size as their torsos.
Most of each bear's body is covered by a soft, low-pile, pastel-colored fur.6 The back paws of these animals are delineated with heart-shaped pieces of white plush; this white material is also the backdrop for the symbols on the bears' chests. Small tufts of hair protrude from the top of the heads of both the stuffed and pictorial versions of the bears. Each bear wears a tiny red plastic heart, carrying the designation "Care Bear," on its bottom and described by plaintiffs' witnesses as a "toushee tag."
The ten inch Care Bear sits in cardboard boxes on retailers' shelves. The name of each bear is prominently featured on each box. A small brochure is attached to each bear. This brochure describes each bears' peculiar attributes. Thus, the "Birthday Bear" sits in a box labelled "Birthday Bear" and carries a brochure stating, inter alia,
It is defendant's contention that its bear was created independently from the Care Bear. In support of this position, defendant denies that it had any access to the Care Bear character prior to late October of 1982, by which time defendant's bear was well along in the developmental process. Defendant has offered testimonial and documentary evidence to this effect. Plaintiff contends that defendant's testimony is fabricated, questions the authenticity of defendant's key documentation, and contends that this fabrication is itself an indication of defendant's awareness that it is an infringer. However, we find the following to have occurred.
In accordance with his usual practice, Stanley Geller, defendant's president, travelled to the Orient in early October, 1982, in order to meet with various toy manufacturers and to attend Korean and Taiwan toy fairs. According to Mr. Geller, he brought with him a small brown stuffed bear which was part of defendant's toy line. This bear, which was introduced as an exhibit, is approximately eight inches tall and has a head similar in shape to the Message Bear head. Mr. Geller contends that he told Luke Yao, the proprietor of "Superone," a Taiwanese stuffed toy manufacturer, that he wanted Mr. Yao to make up samples with similar shaped heads, in "bright colors" and larger sizes, for possible use in defendant's line. Mr. Geller says he combed Mr. Yao's well-stocked showroom, designating various features found in samples on display which he wished to incorporate in the Message Bear. In particular, he claims the floppy legs with flat, knob-like "paws" and roughly delineated "claws," a distinctive characteristic of the Message Bear, derived from another animal in Yao's showroom.
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