Great American Fun Corp. v. Hosung New York Trading
| Decision Date | 17 April 1997 |
| Docket Number | No. 96 Civ. 4100 (LAK).,96 Civ. 4100 (LAK). |
| Citation | 960 F.Supp. 815 |
| Parties | GREAT AMERICAN FUN CORP., Plaintiff, v. HOSUNG NEW YORK TRADING, INC. and Kingsland, Inc., Defendants, v. GREAT AMERICAN FUN CORP. and Great American Fun Corp. (Hong Kong), Counterclaim Defendants. |
| Court | U.S. District Court — Southern District of New York |
Kenneth A. Plevan, Stephanie J. Kamerow, Skadden, Arps, Slate, Meagher & Flom, Eric L. Brown, for Plaintiff.
Robert J. Kenney, Birch, Stewart, Kolasch & Birch, for Defendants.
Cuddly stuffed toys conjure up warm images of children's care free play. This case illustrates the fact that there is nothing warm or care free about the competition among the manufacturers of those toys. Each side accuses the other of copyright and trademark infringement. The action is before the Court for decision after trial.
Plaintiff Great American Fun Corporation ("GAF") is a toy manufacturer. Its principals are H. Brian Haney and Morton Rosenberg.
Defendant Hosung New York Trading Co. ("Hosung") also is a toy manufacturer of many years standing whose principal is John Chae. Defendant Kingsland Corporation ("Kingsland") in substance is a partnership owned 70 percent by Mr. Chae and 30 percent by Ronald Bonafato. Kingsland functions essentially as a commission sales agent for certain of Hosung's products.
The tale of the GAF products relevant here began on May 6, 1994 when Gene Gress of Coach House, a GAF customer, sent GAF a plush-covered marionette and asked whether GAF would be interested in making it for Coach House and, if so, at what price. Many of the details of what transpired are disputed, but the Court finds the following:
The marionette that Gress sent to OAF was made by an El Paso, Texas, company called Chico Arts and was called Walking Willie. (PX 3)
Walking Willie is a two-legged item, approximately 34 inches high, coated entirely in high-pile plush. It has a flattened round head about 7 inches in diameter, a pair of large two-piece plastic eyes consisting of a black disc encased in a larger clear outer covering and known as "googly" eyes, bushy eyebrows and a flat mouth consisting of a felt-like material, which gives Walking Willie a somewhat stunned look. The neck, in the shape of a backwards "L," accounts for approximately a third of the marionette's height. The body is roughly the same size and shape as the head. Affixed to the body is an 8 inch tail and a pair of spindly, jointed legs, terminating in round weighted feet. The legs can extend to 15 inches but are a few inches shorter when the creature is "walking." Walking Willie's most notable feature is its amusing elastic gait when it is manipulated by a puppeteer. Walking Willie does not resemble any animal with which the Court is familiar. The parties appropriately described it as a monster.
Gress bought two dozen Walking Willies from Chico and, when they sold quickly, decided on behalf of Coach House that he was interested in finding another, cheaper source. He sent samples both to GAF and another supplier. The Court finds that the sample that Gress sent to GAF bore a copyright notice indicating that the copyright belonged to Chico Arts' owner, Doyle C. Harden, and that Gress told GAF's Haney that Coach House had sold two dozen of the marionettes and asked among other things whether there would be a copyright problem in making and selling copies.1
Haney and Gress quickly agreed that GAF would manufacture the product, that GAF would own the copyright, and that Coach House would have an exclusive on the product for a period of time. GAF thereupon produced its own version of Walking Willie, which it called Limber Louie. (PX 5)
Limber Louie closely resembles its template, Walking Willie. The only significant differences between the two are that (1) Limber Louie has flat eyes made out of a felt-like material rather than plastic, googly eyes, (2) Limber Louie is lipless, although it possesses a tongue, (3) Limber Louie has tufts of fur of a second color in the general area of the mouth, and (4) Limber Louie's plush is softer and slightly longer than that of Walking Willie.
GAF applied for registration of copyright on its product. In the application, Haney swore that GAF had created the product and did not disclose the existence of Walking Willie, its prior sales in the United States, or its role in the creation of Limber Louie. (Def.Mem.Ex. E)
Limber Louie enjoyed considerable success. From the time of its introduction in late 1994 through August of 1996, over 650,000 of the items were sold, grossing over $3 million. (DX 48) Due to the success of Limber Louie, GAF developed several other puppets in the Limber series, including Limber Flamingo. (PX 8)
Limber Flamingo shares the size, dimensions, plush covering and distinctive gait of Limber Louie. It differs, however, in several respects: (1) its face is bird-like, including a narrow pink beak and black plastic eyes, (2) its feet are covered in short fur and are three-toed and (3) its tail is short, curved and colored differently from its body. Limber Flamingo's success was more modest, but still considerable: GAF sold approximately 80,000 of its Limber Flamingo marionettes, grossing over $350,000.
The first of the two allegedly infringing Hosung products is a plush-covered marionette known as Doozy Bird. (PX 12) Its provenance too is disputed. The Court finds the following.
Mr. Chae and an Australian customer, Peter Atkinson, discussed the possibility of Chae's making a bird-like marionette for Atkinson in the spring of 1994. Nothing happened, however, until March 1995 when Atkinson raised the issue again by sending Chae a sample of the sort of thing he had in mind. (DX 14) The sample quite obviously is an imperfect but nevertheless extremely close copy of Walking Willie.2 When the sample arrived, Chae made up two samples of his own for Atkinson's consideration. One was an exact or nearly exact copy of the Atkinson sample. The other was the marionette that later became known as Doozy Bird. (PX 12) In explaining the Doozy Bird sample to Atkinson, Chae later wrote that he wanted to make something that was not an exact copy of Atkinson's sample.
Doozy Bird's size and dimensions are substantially identical to those of the Walking Willie and Limber puppets and shares their distinctive gait. Doozy Bird, however, differs in several critical respects: it has a large, soft triangular beak and convex plastic eyes, and its plush covering is shorter and more fur-like than that of plaintiff's products.
The second accused product is another plush-covered marionette called Floozy Flamingo. (PX 13) It too is a four-string marionette and walks with the same distinctive gait as the other puppets. The shape of the head and the beak, however, differ significantly from any of the other puppets before the Court and are reminiscent of a cartoon flamingo. Its legs are covered in short fur and are a different color than the rest of the puppet's body.
In April 1996, GAF brought an action, No. 96 Civ. 2986(LAK), against Hosung, Kingsland and F.A.O. Schwarz, in which it claimed that the Doozy Bird marionette infringed OAF's Limber puppets' copyright and trade dress. GAF moved for a preliminary injunction. Its papers included affirmations of Haney and Rosenberg in which they claimed that Limber Louie was an original creation of Rosenberg. There was no reference whatever to Walking Willie or to the dealings with Gress.
Hosung discovered the facts concerning Walking Willie in advance of the scheduled preliminary injunction hearing. It filed papers laying out the role of Chico Arts in creating Walking Willie and describing Gress' role in the development of Limber Louie. Upon reading the opposing papers, Haney and Rosenberg advised their litigation counsel of what had transpired.3 The case was voluntarily discontinued prior to the hearing. GAF thereupon approached Chico Arts and procured an assignment of its Walking Willie copyright.
On March 20, 1997, the Court granted defendants' motion for attorney's fees and costs incurred in defending the first litigation. Great American Fun Corp. v. Hosung New York Trading, Inc., No. 96 Civ. 2986(LAK), 1997 WL 129399 (S.D.N.Y. Mar.20, 1997).
Hosung copyrighted a monkey hand puppet known as Huggable Monkey in the early 1980s. (Chae Dec. Exs. C, D) Huggable Monkey is a plush-covered monkey hand puppet, the body of which is approximately one foot in length. It has long arms and legs, both measuring approximately 18 inches. Upon the hands and feet are small patches of velcro, which enable one playing with the toy to wrap and fix the extremities around him or herself. The face is plainly simian. It has raised ears, a mouth which opens, a red tongue, a squeaker and a pair of black plastic eyes.
GAF also produces a monkey hand puppet, known as Huggy Harry, which features a similarly proportioned body and head. Its arms are 14 inches long and its legs are 22 inches in length. Its hands and feet terminate in velcro-coated hands and feet and it too has a squeaker. Huggy Harry is covered in a plush slightly higher than that of Huggable Monkey, has a long tail, is tongue-less and possesses a stuffed snout.
GAF brought this suit on May 31, 1996 against defendants and Shilla International Company4 claiming that Doozy Bird and Floozy Flamingo infringed on the Walking Willie copyright, the Limber puppets' derivative copyright and the Limber puppets' trade dress. Defendants counterclaimed,5 alleging that Huggy Harry infringes on the copyright and trade dress of Huggable Monkey. The case was tried to the Court in November 1996.
GAF asserts claims for infringement of both the Walking Willie and Limber copyrights, the Limber puppets' trade dress, and unfair competition.6
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