Disenos Artisticos E Industriales, SA v. Work

• Decision Date: 15 December 1987
• Docket Number: CV-84-1964.,No. CV-83-4149,CV-83-4149
• Citation: 676 F. Supp. 1254
• Parties: DISENOS ARTISTICOS E INDUSTRIALES, S.A., A Spanish corporation, Plaintiff, v. Edward WORK, an individual; Dolores Work, an individual; Karen-Leslie Co., a partnership; and Karen-Leslie Co., Inc., a New York corporation, Defendants. KAREN-LESLIE CO., INC., a New York corporation, Counterplaintiff, v. DISENOS ARTISTICOS E INDUSTRIALES, S.A., a Spanish corporation; Weil Ceramics & Glass, Inc., A New York corporation; and Lladro, S.A., a Spanish corporation, Counterdefendants. WEIL CERAMICS & GLASS, INC., a New York corporation, Plaintiff, v. Edward WORK, an individual; Dolores Work, an individual; Karen-Leslie Co., a partnership; and Karen-Leslie Co., Inc., a New York corporation, Defendants.
• Court: U.S. District Court — Eastern District of New York

676 F. Supp. 1254

DISENOS ARTISTICOS E INDUSTRIALES, S.A., A Spanish corporation, Plaintiff, v. Edward WORK, an individual; Dolores Work, an individual; Karen-Leslie Co., a partnership; and Karen-Leslie Co., Inc., a New York corporation, Defendants.

KAREN-LESLIE CO., INC., a New York corporation, Counterplaintiff, v. DISENOS ARTISTICOS E INDUSTRIALES, S.A., a Spanish corporation; Weil Ceramics & Glass, Inc., A New York corporation; and Lladro, S.A., a Spanish corporation, Counterdefendants.

WEIL CERAMICS & GLASS, INC., a New York corporation, Plaintiff, v. Edward WORK, an individual; Dolores Work, an individual; Karen-Leslie Co., a partnership; and Karen-Leslie Co., Inc., a New York corporation, Defendants.

Nos. CV-83-4149, CV-84-1964.

United States District Court, E.D. New York.

December 15, 1987.

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Anthony F. LoCicero, Amster, Rothstein & Engelberg, New York City, Bernard R. Gans, Eugene H. Valet, Poms, Smith, Lande & Rose, Los Angeles, Cal., for plaintiffs and counterdefendants.

David Brown, Garden City, N.Y., Eric H. Weisblatt, Burns, Doane, Swecker & Mathis, Alexandria, Va., for defendants and counterplaintiffs.

GLASSER, District Judge.

The motions currently before the Court arise out of a dispute concerning the sale and distribution of Lladro porcelain figurines in the United States ("U.S."). In September 1983, plaintiff Disenos Artisticos E Industriales, S.A. ("DAISA") commenced a civil action, 83 CV 4149, against defendants, Edward Work, Dolores Work, and Karen-Leslie Co., alleging copyright infringement. Karen-Leslie Co., Inc. was added as a new party defendant in December 1983. In December 1983, Karen-Leslie Co., Inc. counterclaimed against DAISA, Weil Ceramics & Glass, Inc. ("Weil"), and Lladro, S.A. asserting antitrust violations. In May 1984, Weil commenced a civil action, 84 CV 1964, against Edward Work, Dolores Work, Karen-Leslie Co., and Karen-Leslie Co., Inc., alleging trademark infringement. In May 1984, Karen-Leslie Co., Inc. again counterclaimed against DAISA, Weil, and Lladro, S.A. repeating the antitrust assertions. The two civil actions were consolidated in July 1984.

I. THE PARTIES

Plaintiff and counterdefendant DAISA, a Spanish corporation, designs Lladro porcelain and alleges that it owns the U.S. and foreign copyrights on these products. Counterdefendant Lladro, S.A., another Spanish corporation, manufactures Lladro porcelain in Spain. Plaintiff and counterdefendant Weil, a New York corporation, alleges that it is the designated exclusive importer and distributor of Lladro figurines in the U.S. and that it is the registered owner of the U.S. trademark. Weil is wholly owned by Lladro Exportadora, S.A., a Spanish corporation. Lladro Exportadora, S.A., DAISA, and Lladro, S.A. are each wholly owned by Sodigei, S.A.,¹ a Spanish corporation. Sodigei is owned by the Lladro brothers. See Memorandum and Order dated February 18, 1986, 110 F.R.D. 500 (Scheindlin, Mag.) at 501.

Defendant and counterplaintiff Karen-Leslie Co., a partnership that was located in New York, apparently ceased doing business on December 31, 1980. See Counterdefendants' Memorandum of Points and Authorities in Support of the Motion for Summary Judgment Regarding the Antitrust Issues; and for Dismissal of the Counterclaims, Exhibit B. Defendant and counterplaintiff Karen-Leslie Co., Inc., a New York corporation incorporated on December 10, 1980, see id., acquires giftware and resells it to retailers. Defendants Edward Work and Dolores Work are officers of Karen-Leslie Co., Inc.

II. THE MOTIONS

Prior motions, if relevant, will be discussed below under the appropriate subject headings. Currently before the Court are the following motions: defendants have moved for summary judgment on plaintiff DAISA's copyright causes of action and plaintiff Weil's trademark causes of action; plaintiff Weil has cross-moved for summary judgment on its trademark causes of action; and counterdefendants have moved for summary judgment on the antitrust counterclaims.

III. SUMMARY JUDGMENT

Pursuant to rule 56(c) of the Federal Rules of Civil Procedure, counterdefendants' motion may be granted only if the court determines "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." In reaching this determination, "the court's responsibility is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party." Knight v. U.S. Fire Insurance Co., 804 F.2d 9, 11 (2d Cir.1986) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2509-11, 91 L.Ed.2d 202 (1986); Eastway Construction Corp. v. City of New York, 762 F.2d 243, 249 (2d Cir.1985)), cert. denied, ___ U.S. ___, 107 S.Ct. 1570, 94 L.Ed.2d 762 (1987). While "the movant bears the initial burden of demonstrating `the absence of a genuine issue as to any material fact,'" this burden may be met by "simply ... pointing out that the plaintiff has failed to present any evidence to establish a necessary element of the cause of action." Apex Oil Co. v. DiMauro, 822 F.2d 246, 252 (2d Cir.1987) (citations omitted). The nonmoving party then bears the burden of "setting forth specific facts showing that there is a genuine issue for trial." Fed.R. Civ.P. 56(e); Apex Oil, 822 F.2d at 252 (citations omitted). As enunciated by the Supreme Court in a recent antitrust decision, the nonmoving party's burden requires "more than simply showing that there is some metaphysical doubt as to the material facts." Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed. 2d 538 (1986) (citations omitted).

With these general principles in mind, the Court will review each of the claims and the evidence submitted by both sides.

IV. COPYRIGHT ISSUES

Defendants have moved for summary judgment on plaintiff DAISA's copyright cause of action. Defendants assert, first, that their sale in the U.S. of lawfully made copies of Lladro goods is not an infringement of plaintiff DAISA's copyrights.² Second, defendants assert that plaintiff DAISA has no valid copyright in the Lladro figurines sold by defendants.

A. BACKGROUND

The following facts appear to be largely undisputed, at least for purposes of this motion. DAISA first published the thirty-one sculptural works at issue in January 1978 and January 1979 and for three or four years thereafter these items were manufactured and distributed without any notice of copyright. These works were registered with the U.S. Copyright Office in April 1982. Just before registration, the omission of the required copyright notice was discovered by DAISA. According to plaintiffs, "DAISA and the factory quickly instituted new manufacturing procedures to place the proper copyright notice on the porcelain that was thereafter manufactured and distributed." Plaintiffs' Opposition to Defendants' Motion for Summary Judgment on the Copyright and Trademark Causes of Action at 10. As discussed below, no copyright notice was added to those items already manufactured but not yet sold to the public.

B. DISCUSSION

For the reasons set forth below, this Court finds that plaintiff DAISA does not have a valid copyright in the works at issue. Because the works at issue are thus not protected by the U.S. Copyright Act, plaintiffs' claim of infringement is not cognizable as a matter of law, and defendants' motion for summary judgment as to plaintiff's copyright claim is granted.

1. Validity of the Copyright

In support of their argument that DAISA does not have a valid copyright in any of the Lladro figurines sold by defendants, defendants argue that for three to four years the Lladro group distributed copies of these works without the copyright notice required by statute and that the Lladro group made no effort to add proper notice to those copies distributed to the public after the omission was discovered. Defendants' Memorandum in Support of Motion for Summary Judgment at 2.

Under the 1976 Copyright Act, a notice of copyright must be placed on all publicly distributed works protected by the Act. See 17 U.S.C. ? 401(a). A work published without proper notice is, in general, injected into the public domain. See id.; Shapiro & Son Bedspread Corp. v. Royal Mills Associates, 764 F.2d 69, 72 (2d Cir. 1985); 2 M. Nimmer, Nimmer on Copyright ? 7.14A2 (1987). However, omission of the required notice can be cured under section 405(a) of the Act if one of the following conditions is met:

(1) the notice has been omitted from no more than a relatively small number of copies ... distributed to the public; or

(2) registration for the work has been made before or is made within five years after the publication without notice, and a reasonable effort is made to add notice to all copies ... that are distributed to the public in the United States after the omission has been discovered; or

(3) the notice has been omitted in violation of an express requirement in writing that, as a condition of the copyright owner's authorization of the public distribution of copies ..., they bear the prescribed notice.

17 U.S.C. ? 405(a).

In this case, it is undisputed that only the second provision of ? 405(a) is applicable.³ The parties apparently agree, at least for purposes of this motion, that the thirty-one works at issue were registered within five years of the publication without notice. The sole issue, therefore, is whether plaintiffs made a reasonable effort to add notice to all copies distributed to the public in the United States after the omission was discovered.

Plaintiffs cite Shapiro & Son Bedspread Corp. v. Royal Mills Associates, 764 F.2d 69 (2d Cir.1985), as controlling authority on this issue, but that case is clearly distinguishable. In Shapiro, the district court had...