Goldman-Morgen, Inc. v. Dan Brechner & Co., Inc.

• Decision Date: 30 March 1976
• Docket Number: No. 72 Civil 17.,72 Civil 17.
• Citation: 411 F. Supp. 382
• Parties: GOLDMAN-MORGEN, INC., Plaintiff, v. DAN BRECHNER & CO., INC., Defendant.
• Court: U.S. District Court — Southern District of New York

411 F. Supp. 382

GOLDMAN-MORGEN, INC., Plaintiff, v. DAN BRECHNER & CO., INC., Defendant.

No. 72 Civil 17.

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

March 30, 1976.

COPYRIGHT MATERIAL OMITTED

Ostrolenk, Faber, Gerb & Soffen, New York City, for plaintiff; Robert C. Faber, New York City, of counsel.

Amster & Rothstein, New York City, for defendant; Jesse Rothstein, New York City, of counsel.

OPINION, FINDINGS OF FACT

and

CONCLUSIONS OF LAW.

LEVET, District Judge.

Plaintiff, Goldman-Morgen, Inc. (hereinafter "Goldman"), complains of defendant, Dan Brechner Co., Inc. (hereinafter "Brechner") in substance as follows: That on or about July 21, 1964 plaintiff was duly issued a Certificate of Registration, Class G, Registration No. Gp 43212, covering a work of art and in particular a coin bank, Plaintiff's Exhibit 3, and that defendant has copied said bank and sold said copies in infringement of plaintiff's copyright.

Defendant Brechner, on the other hand, contends that plaintiff does not have a copyright on its commercially sold item, Plaintiff's Exhibit 3. Defendant further contends that plaintiff's copyright is invalid for failure to comply with the statutory requirements.

At a hearing for a preliminary injunction before Judge MacMahon of this Court on Jan. 25, 1972, a consent order for a preliminary injunction was entered into between the attorneys for the parties.

The issues in this case are whether plaintiff's copyright is valid and, if so, whether defendant infringed upon plaintiff's copyright.

After hearing the evidence presented by the parties, examining the exhibits, the pleadings, the briefs and the Proposed Findings of Fact and Conclusions of Law submitted by counsel, this court makes the following Findings of Fact and Conclusions of Law:

FINDINGS OF FACT

1. This action arises under the United States Copyright Law, Title 17 U.S.C. (1947) as amended and Title 28 U.S.C. § 1338.

2. Plaintiff and defendant are corporations, incorporated under the laws of the State of New York, and both are engaged in the business of importing

and distributing novelties and giftware. Tr. 9-10, 143-144.¹

3. Goldman & Morgen, the plaintiff, was established in 1962 and Leo Goldman has been the president since its founding. Tr. 8-9.

4. Leo Goldman devised a novelty item in the form of a child's bank with four comic faces, each face depicting a different mood. Pl. Ex. 3,² Tr. 11, 14, 107, 110.

5. In the fall of 1963, Leo Goldman traveled to Japan Tr. 11-12 and met there with Maruyoshi Seitosho, a designer, mold maker and manufacturer Tr. 15-16.

6. Leo Goldman prepared rough sketches of his proposed bank Tr. 10. While Mr. Goldman observed, an artist for Maruyoshi Seitosho made sketches of the proposed bank Tr. 15, 109 using Mr. Goldman's rough sketches and ideas. From the sketches, a clay model of the bank was made Tr. 15. Leo Goldman reviewed the clay model of the bank and suggested some changes Tr. 16. Following this, a papier mache sample was prepared Tr. 16-17. Mr. Goldman reviewed and approved the sample Tr. 18, which was designated the "Moody Mary Bank." Thereafter, a production mold was made and production of these banks commenced. Tr. 18.

7. I find that Leo Goldman, in his capacity as president of the plaintiff corporation, commissioned the design and manufacture of the Moody Mary bank and participated in its design.

8. The Moody Mary bank has an exit hole in its base, which is sealed either by a glued-on felt pad or by a rubber plug. Tr. 24, 25, Pl. Ex. 2, Pl. Ex. 3.

9. All copies of the Moody Mary bank that were sold in the U.S.A. by plaintiff carried the copyright notice "© Lego." Tr. 20, 29-30.

10. When a felt pad was used as a plug, the copyright notice was stamped in ink on the pad Tr. 20, 21, Pl. Ex. 3. When a rubber plug was used, the copyright notice was stamped in ink on the base of the bank adjacent to the plug Tr. 25-26, Pl. Ex. 2.

11. I find that the copyright notice "© Lego" was properly and permanently affixed to all copies of plaintiff's Moody Mary bank.

12. Copies of the Moody Mary bank were exported from Japan to plaintiff in the United States Tr. 19.

13. Plaintiff first published the Moody Mary bank, with the aforesaid copyright notice, on October 25, 1961 Tr. 31, Pl. Ex. 1.

14. On July 21, 1964, plaintiff obtained from the Copyright Office a Certificate of Copyright Registration for the Moody Mary bank, Class G, Registration No. Gp 43212 Pl. Exs. 1 & 2.

15. Plaintiff sold the Moody Mary bank during the period 1963 through 1973 Tr. 32-33.

16. In 1971 defendant introduced its item no. 98/109 Pl. Ex. 9 for sale into the United States. It is a novelty bank with four comic faces, each face depicting a different mood. Defendant's bank is the subject of this infringement action. Defendant's Answers to Plaintiff's Interrogatories Nos. 6, 7 and 9.

17. Defendant did not itself design its accused item no. 98/109, but instead purchased item no. 98/109 off the shelf of a supplier in Japan toward the end of 1970 Tr. 145, Defendant's Answer to Plaintiff's Interrogatory No. 13.

18. Both plaintiff's Moody Mary bank Pl. Ex. 3 and defendant's item no. 98/109 Pl. Ex. 9 are novelty coin banks. They depict a comic girl with four faces, under a tuft of yellow hair. There are captions under each face, and these captions are identical on each bank. In both banks, the money is inserted into a slot just under the hair, on the face captioned "I am happy today." This face and the three others are identical in design and coloring. The two banks are also identical in size. There is an inconsequential difference of shading on the buttons and collars of the figures. I therefore find that the two banks are identical in every respect.

19. The manufacture of both plaintiff's and defendant's banks occurred in the same geographical area, namely Japan Tr. 33-34, 85-86, Defendant's Answer to Plaintiff's Interrogatory No. 11e. Over the ten-year life of its Moody Mary bank plaintiff used a number of manufacturers Tr. 85-86. Plaintiff's manufacturers in Japan often subcontracted out parts of the job to other manufacturers Tr. 131-132.

20. I find that because plaintiff's copyrighted item was manufactured by a number of Japanese contractors and subcontractors over a ten-year period beginning in 1963, and because defendant purchased its accused item in Japan in 1971, together with the fact that defendant's accused item is virtually identical in all respects with plaintiff's item, that defendant had access to plaintiff's copyrighted item and that the accused item imported and sold by defendant is a copy of plaintiff's copyrighted item.

21. Plaintiff has proved by a fair preponderance of the credible evidence that defendant's item no. 98/109 Pl. Ex. 9 is a copy of plaintiff's copyrighted item.

22. Defendant's total sales of its item no. 98/109 are stipulated as $3,151.25 Tr. 5, Defendant's Answer to Plaintiff's Interrogatory No. 9.

23. Plaintiff incurred attorney's fees throughout the prosecution of this action.

24. Plaintiff's counsel sought to terminate this action on several occasions by seeking payment in settlement of plaintiff's claim. Shortly after the entry of the preliminary injunction, plaintiff offered to take $700 in settlement of the claim, which offer was refused by defendant. Tr. 221-222. According to defendant, the amount then offered by plaintiff was $4500. Tr. 162. At a pretrial conference during the winter of 1972-1973, plaintiff again offered to settle this action for between one and two thousand dollars Tr. 168, which offer was again rejected by defendant. At a pretrial conference in September 1975 before this court, defendant made a written offer of settlement of $315.13, which was orally raised on the eve of trial to $500. Tr. 210. At the time of trial, plaintiff made one other attempt to settle for between five and seven thousand dollars or any "reasonable offer." Tr. 206. This was refused by defendant, who made no further counteroffer. Tr. 219.

I find that defendant's refusal at all times during the pendency of this action to make any reasonable offer of settlement or to accept a reasonable offer by plaintiff, constituted bad faith on the part of defendant.

25. Plaintiff is entitled to a reasonable award of attorney's fees incurred in the prosecution of this infringement action.

26. Plaintiff's attorneys have devoted 62.2 hours to the prosecution of this action. I find that the reasonable value of the services performed by them is $4500.

DISCUSSION

The issue upon which plaintiff's infringement claim must stand or fall is that of the validity of the copyright it obtained upon its Moody Mary bank. Clearly, there may be infringement of copyrighted works of art by reproduction of the objects themselves. Mura v. Columbia Broadcasting System, Inc., 245 F.Supp. 587 (S.D.N.Y.1965).

Plaintiff introduced its Certificate of Copyright Registration of the copyright relating to its bank, and under 17 U.S.C. § 209 said certificate is prima facie evidence of the facts stated therein and, absent contradictory evidence, is sufficient to establish a valid copyright. 17 U.S.C. § 209; United Merchants and Manufacturers, Inc. v. Sarne Company, 278 F.Supp. 162 (S.D.N.Y.1967); Van Cleef & Arpels, Inc. v. Schechter, 308 F.Supp. 674 (S.D.N.Y.1969); H. M. Kolbe Co. v. Armgus Textile Company, 184 F.Supp. 423 (S.D.N.Y.), aff'd, 279 F.2d 555 (2d Cir. 1960). Initially, therefore, the burden is upon defendant to produce sufficient evidence to overcome the presumption of validity. National Institute, Inc. v. Nutt, 28 F.2d 132 (D.Conn.1928), aff'd, 31 F.2d 236 (2d Cir. 1929). It is this threshold burden that defendant has not met.

Defendant contends that the copyright notice on plaintiff's commercial item was inadequate and that copyright protection thereon does not exist. Defendant argues that the pasted-on felt label on which the copyright notice was stamped was not permanently affixed to the item as per ...