FLAG FABLES v. Jean Ann's Country Flags & Crafts

• Decision Date: 16 February 1990
• Docket Number: Civ. A. No. 89-30109-F.
• Citation: 730 F. Supp. 1165
• Parties: FLAG FABLES, INC., Plaintiff, v. JEAN ANN'S COUNTRY FLAGS AND CRAFTS, INC., Jean Ann Fede and Michael Fede, Defendants.
• Court: U.S. District Court — District of Massachusetts

730 F. Supp. 1165

FLAG FABLES, INC., Plaintiff, v. JEAN ANN'S COUNTRY FLAGS AND CRAFTS, INC., Jean Ann Fede and Michael Fede, Defendants.

Civ. A. No. 89-30109-F.

United States District Court, D. Massachusetts.

June 23, 1989.

Opinion on Motion for Bond December 12, 1989.

Opinion on Motions to Vacate and for Summary Judgment February 16, 1990.

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COPYRIGHT MATERIAL OMITTED

Donald S. Holland, Malcolm J. Chisholm, Jr., Longmeadow, Mass., for plaintiff.

William S. Strong, Kotin, Crabtree and Strong, Boston, Mass., for defendants.

MEMORANDUM AND ORDER

FREEDMAN, Chief Judge.

I. INTRODUCTION

This is an action for copyright infringement, brought under federal law. The plaintiff, Flag Fables, Inc. ("Flag Fables"), alleges that the defendants, Jean Ann's Country Flags and Crafts, Inc. ("Country Flags"), and Jean Ann and Michael Fede ("the Fedes"), violated the Copyright Act of 1976, 17 U.S.C. §§ 101 et seq. This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338.

This matter is presently before the Court upon plaintiff's motion for a preliminary injunction. Following a one-day hearing held on June 18, 1989, and for the reasons set forth below as required by Fed.R.Civ.P. 65(d), the Court will allow the plaintiff's motion.

II. RELEVANT FACTS

A. Flag Fables

The plaintiff, Flag Fables, is a Massachusetts corporation based in Longmeadow, engaged in the business of designing and selling decorative banners. The business was started by Pam Stewart ("Stewart") in the fall of 1984, and incorporated some time in the following spring. The business has grown rapidly; evidence was received by the Court that Flag Fables currently grosses over $100,000 per year. Flag Fables' products range in price from $42 to $65, depending on the complexity of the design on the banner.

Stewart testified that she originated most if not all of Flag Fables' designs in the early years of the business. Most of the designs at that time, however, were not marked with the copyright symbol, a "c" enclosed in a circle. Stewart's first brochure, issued in 1985, also lacked a copyright mark, but all subsequent brochures, beginning in late 1985, were so marked. At some point, (the exact date is unclear), Stewart also began sewing her name, the year and the copyright mark on her banners.

On August 22, 1988, Stewart registered three of her designs with the United States Copyright Office. The designs are entitled: "Sailboat" (VAu 137-693), "Pineapple" (VAu 137-694), and "Standing Welcome Goose" (VAu 137-689). In the fall of 1988, Stewart sold the company to her business manager, Wendy Diamond ("Diamond") in part, she said, because of the controversy with the Fedes.

Three more designs were registered by Diamond on January 3, 1989: "Shaker House" (VAu 146-284), "Welcome Spring" (VAu 145-945); and two designs on February 24, 1989: "Welcome Bear" (VAu 148-199), and "Mallard" (VAu 148-196). Since certain of Flag Fables' designs were registered in Stewart's name, Stewart transferred all rights, title and interest in her designs to Flag Fables on April 17, 1989. The transfer was registered with the U.S. Copyright Office on April 20, 1989.

Of the registered designs, the plaintiff claims the following have been infringed upon: "Sailboat" (also known as "Sailing, Sailing"), "Standing Welcome Goose," "Shaker House," "Shamrocks," "Welcome Bear," and "Mallard." In addition, the plaintiff sought an injunction with respect to two designs on which registration is pending, entitled "Watering Can" and "Scottie." Plaintiff introduced a side-by-side display with examples of both the Flag Fables and the Country Flags designs. The Court had ample opportunity during the five-hour hearing to compare the respective designs.

B. Jean Ann's Country Flags and Crafts

Jean Ann Fede ("Fede") testified that she began making and selling decorative banners in February or March of 1986. She testified that she did not copy the plaintiff's designs, but instead derived the pattern for her banners from a variety of other sources. She stated that she has been selling her contested designs since she began her business. When Fede was questioned by Don Holland, plaintiff's counsel, she said that the similarity between her banners and the plaintiff's was "mere happenstance."

The testimony of Fede, Stewart and others revealed that the defendant Fede sells her flags at the same craft fairs as the plaintiff. However, all Country Flags are priced at $40, below the prices charged by Flag Fables.

Examination of the exhibits during the hearing reveals that Fede has begun placing copyright symbols on her banners, but has not applied for registration of her designs at this time.

C. Relationship Between the Parties

Stewart testified that she first became aware of the defendants' banners in the fall of 1986, when she saw Fede's banners displayed in a crafts store called Blue Bird Acres in Springfield, Massachusetts. After Stewart saw Fede and her banners at two craft fairs in the spring of 1987, her husband, Bob Stewart, wrote the Fedes a letter requesting that they stop selling flags which infringed on the Flag Fables product line. The Stewarts received no reply to this letter.

Just over a year later, on July 28, 1988, Attorney Holland wrote a "cease and desist" letter to the Fedes, giving notice of the copyrighted status of the Flag Fables designs and warning of possible penalties for continued infringement. Attorney Holland received a reply from Attorney Leonard Michelman, the defendants' attorney, on August 9, 1988. In his reply, Attorney Michelman stated that since objects in nature cannot be copyrighted, Stewart had no right to protection.

Flag Fables' new owner, Wendy Diamond ("Diamond"), also wrote the Fedes on January 31, 1989, stating that in light of the Fedes' persistent sale of infringing flags, she had no choice but to initiate legal proceedings. On February 10, 1989, Michael Fede replied by reiterating the earlier contention that Stewart or Flag Fables had no right to protection, and requesting that all future correspondence be directed to Attorney Michelman. Further efforts at communication were unavailing in resolving this matter.

III. DISCUSSION

A. Standard for Granting a Preliminary Injunction

The standard for granting a preliminary injunction in the First Circuit is well established.

In the First Circuit, a plaintiff must satisfy four criteria in order to be entitled to a preliminary injunction. The Court must find: (1) that the plaintiff will suffer irreparable injury if the injunction is not granted; (2) that such injury outweighs any harm which granting injunctive relief would inflict on the defendant; (3) that plaintiff has exhibited a likelihood of success on the merits; and (4) that the public interest will not be adversely affected by the granting of the injunction.

Planned Parenthood League of Mass. v. Bellotti, 641 F.2d 1006, 1009 (1st Cir.1981), quoting Women's Community Health Ctr., Inc. v. Cohen, 477 F.Supp. 542, 544 (D.Me.1979). The Court will consider each of these elements, but in a slightly altered order.

B. Flag Fables Has Demonstrated a Likelihood of Success on the Merits

In order for Flag Fables to demonstrate a likelihood of success on the merits, it must show strong support for two elements: (1) that it was the owner of valid copyrights, and (2) that there was copying of the protected works by the defendants. Concrete Machinery Co. v. Classic Lawn Ornaments, 843 F.2d 600, 605 (1st Cir. 1988).

1. Validity of Flag Fables' Copyrights

Defendants argue that the plaintiff's copyrights may have become invalid under 17 U.S.C. § 405, which states in relevant part:

(a) Effect of omission on copyright. With respect to copies and phonorecords publicly distributed by authority of the copyright owner before the effective date of the Berne Convention Implementation Act of 1988, the omission of the copyright notice described in sections 401 through 403 17 U.S.C. §§ 401-403 from copies or phonorecords publicly distributed by authority of the copyright owner does not invalidate the copyright in a work if —

(1) the notice has been omitted from no more than a relatively small number of copies or phonorecords 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 or phonorecords that are distributed to the public in the United States after the omission has been discovered....

Defendants state that since each of Stewart's original designs was "published without notice" of copyright, the plaintiff bears the burden of showing that the omission has been "cured." Curing is accomplished by registering the work within five years of publication without notice, which under these circumstances occurred when Stewart sold her first banner containing each design.

The testimony at the hearing and in the record tends to show that each design at issue was first published without notice in late 1984 or early 1985. With the exception of two of those designs, on which registration is pending, all of the relevant works were registered by April of 1989. Clearly, the plaintiff has met the statutory requirement. The Court also received testimony which suggested that the plaintiff has been marking its banners as copyrighted for at least three years. While that suggests that Stewart sold her flags for as much as two years without copyright notice, the Court does not feel that the evidence supports a finding that she intentionally published without notice and that, therefore, she is somehow estopped from asserting her rights due to a form of laches. The Court must take into consideration that it is not uncommon for inexperienced new business owners to be unaware of their legal rights. Moreover, the Court finds that Stewart and Diamond have acted promptly as they have become aware of the steps necessary...