Jim Henson Productions v. Brady & Associates, 92 Civ. 5115(LAP).

• Decision Date: 09 October 1997
• Docket Number: No. 92 Civ. 5115(LAP).,92 Civ. 5115(LAP).
• Citation: 16 F.Supp.2d 259
• Parties: JIM HENSON PRODUCTIONS, INC. Jane Henson, and Albert Gottesman as Executor of the Estate of Jim Henson, Plaintiff, v. JOHN T. BRADY & ASSOCIATES, INC., and Coffee Associates, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

16 F.Supp.2d 259

JIM HENSON PRODUCTIONS, INC. Jane Henson, and Albert Gottesman as Executor of the Estate of Jim Henson, Plaintiff, v. JOHN T. BRADY & ASSOCIATES, INC., and Coffee Associates, Inc., Defendants.

No. 92 Civ. 5115(LAP).

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

October 9, 1997.

Carol F. Simkin, Lisa Pearson, James D. Silberstein, Rose Auslander, Fross Zelnick Lehrman & Zissu, P.C., New York City, for plaintiffs.

Peter D. Raymond, Jeffrey M. Tamarin, Hara K. Jacobs, Hall Dickler Kent Friedman & Wood LLP, New York City, for defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

PRESKA, District Judge.

This copyright action arises out of a disputed copyright assignment and the scope of the rights transferred pursuant to the assignment from plaintiffs (the "Hensons") to the defendants (the "Wilkins Company"). In a previous Memorandum and Order, I granted in part and denied in part the parties' cross-motions for summary judgment on plaintiffs' claims for trademark infringement, copyright infringement, infringement of right to publicity, unfair competition and breach of contract, disposing of several of these claims. Jim Henson Productions, Inc. v. John T. Brady & Assocs., Inc., 867 F.Supp. 175 (S.D.N.Y.1994) ("JHP, Inc."). The copyright claim was tried to the bench over seven days, and at the conclusion of the trial I reserved decision. Subsequent to the trial, the parties submitted proposed findings of fact and posttrial memoranda on the issue of current ownership to the copyright rights to certain muppets created by plaintiffs. Pursuant to Rule 52(a) of the Federal Rules of Civil procedure, I now issue the following findings of fact and conclusions of law in support of my decision in favor of plaintiffs.

FINDINGS OF FACT

1. This action arises out of a dispute over the ownership of the copyrights in two puppet characters named Wilkins and Wontkins created and performed by or at the direction of Jim Henson for certain commercials for the John H. Wilkins Company as more fully described below.¹

Facts Concerning the Hensons

2. Jim Henson was a world renowned puppeteer who, through his talents as a performer designer and writer, and his innovative use of television and previously the motion picture medium, created "the Muppets", a now-famous family of original puppets including Kermit the Frog, Miss Piggy, and Big Bird. Mr. Henson (and his company, Jim Henson Productions, Inc.) have won numerous awards including Emmy and Grammy awards for excellence in the art of puppetry. (Pl.Exs.4, 16-22, 86-87). Mr. Henson passed away suddenly in 1990 at the age of 53.

3. Jane Nebel Henson is a talented puppeteer who was involved in much of Mr. Henson's early work and routinely attended business meetings and discussed with Mr. Henson the business aspects of their work. (Deposition of Jane Henson ("Jane Henson") sworn to on Jan. 27, and June 7, 1993, 6-14, 17, 21, 23-24, 201-03; see, e.g., Pl.Ex. 45 (¶ 11); Pl.Ex. 12).

4. An essential aspect of Mr. Henson's art form was his personal performance of his puppets. He was an entertainer who performed his own puppets and was not engaged in building or creating puppets for others. As early as 1965, Mr. Henson was quoted as saying "when you do puppets, you can create the whole show yourself, write it, perform it, direct it, everything. It's a whole thing, a mood. It's a way of saying something." (Pl. Exs. 13 (H02060), 33(c), 34, 38, 86-87; Jane Henson 61-62; Deposition of Jerry Juhl sworn to on Apr. 26, 1993 ("Juhl") 30; Trial Tr.² 37-38, 40-41, 54-55, Schube).

5. From the outset of his career, all performances of Muppet puppets have been by Mr. Henson or other Muppet puppeteers trained by Mr. Henson and/or Jim Henson Productions, Inc. Mr. Henson did not permit others to perform his puppets, and Jim Henson Productions, Inc. has consistently enforced that policy. (Id.) ("[W]e wouldn't consider divorcing the puppet from the performance. They're too closely connected.")).

6. From as early as 1954, Mr. Henson had a practice of retaining the copyrights in all Muppet puppets, and to date all such copyrights have been retained by him and/or his company, Jim Henson Productions, Inc. (Deposition of Irwin Russell sworn to on May 24, 1995 ("Russell") 23-26, 43-44, Pretrial Ord. § E ¶ 22; Trial Tr. 45, Schube ("[A]ny muppets that are in those movies or even created for those movies will be and will always be owned by us. That's been our practice throughout the history of the Company and it remains our practice today")).

7. Notwithstanding Mr. Henson's practice of retaining copyright ownership in the Muppet puppets, in the 1950s and 1960s he did not routinely register these copyrights in the Copyright Office. Although a small number of Muppet puppets created in the 1950s and 1960s were registered with the Copyright Office, many Muppets created as early as the mid-50s, including puppets appearing on his Sam and Friends television series, were not registered. (Jane Henson 23-24, Pretrial Ord. § E ¶ 22, Pl.Exs. 4, 12, 89).

Facts Surrounding Recognition of the Hensons' Work Prior to Their Relationship with the John H. Wilkins Co.

8. While students at the University of Maryland in the 1950s, Jim and Jane Henson began work on what would later become a puppet-based entertainment empire. (Pl.Ex. 13 (H02044-45, H02048, etc.); Pl.Ex. 45 (¶¶ 3, 11); JHP, Inc., 867 F.Supp. at 177).

9. Commencing sometime about 1954, they adopted the term "Muppet" and "Muppets" as a service mark and as a trademark to identify the puppet characters they created and performed. (Pl.Ex. 45 (¶¶ 4, 5, 49); JHP, Inc., 867 F.Supp. at 177). Today, "Muppets" is a famous mark that continues to identify plaintiffs' particular brand of puppetry — the soft, expressive puppet performed and created by plaintiffs. (Trial Tr. 38, Schube; Pl.Exs. 4, 87-88).

10. The Hensons started gaining notoriety in connection with their performances of Muppet puppets on television in or around the early-to-mid 1950s. (Pl.Ex. 13 (H02044-45, H02048-49, H02052-56, H02060(a)-61, H02068-71), 85).

11. In 1955 or 1956, articles in the Washington Post and Times Herald stated that "[b]ig things are ... in the works for Jim Henson and Jane Nebel" and that "NBC producers were impressed with muppets Sam, Kermit, Algernon J. Kumquat, Yorick, Hank and Frank, and Mush Melon." (Pl.Ex. 13; (H02044-45; H02056)). In 1957, reviewers noted that Jim Henson and his Muppets "have been getting considerable attention recently from the networks...." (Pl.Ex. 13 (H02048)).

12. During 1956 and 1957, the Hensons made guest appearances including performances of the Muppet puppets on the Will Rodgers Show, the Steve Allen Show, on Arthur Godfrey Time, and on the Jack Paar Show. (Pl.Ex. 13 (H02050-51, H02055, H02061, H02068-71)).

13. The Hensons subsequently made guest appearances on the Tonight Show and the Jack Paar Show and also appeared on other national television programs, including appearing as guest stars on the Ed Sullivan Show, and as regulars on the Jimmy Dean Show. (See e.g. Pl.Ex. 45 (¶¶ 41 and 42); Pl.Ex. 49 (¶ 20)).

14. Commencing in approximately May, 1955 (before the John H. Wilkins commercials were created) and continuing until approximately December 1961, Jim and Jane Henson, and later their company, Muppets, Inc., regularly performed various Muppet puppets (but not Wilkins and Wontkins) on a local television show entitled "Sam and Friends" which was broadcast in the Washington, D.C. area and which aired twice nightly on WRC-TV, the NBC affiliate in Washington, D.C., once just after the Huntley Brinkley News Hour, and once just prior to the Tonight Show. (See e.g. Pl.Ex. 45 (¶¶ 41 and 42); Pl.Ex. 49 (¶ 20); Pl.Ex. 13; Def.Ex. 46; Jane Henson 10-11, 24, 201-03; Deposition of Regis Cupples sworn to on Apr. 23, 1993 ("Cupples") 13; Juhl 21-22, 30; Deposition of Leslie Asch sworn to on Apr. 30, 1993 ("Asch") 32).

15. Prior to 1957, somewhere between twelve and twenty Muppet puppets had been created. (Jane Henson 23-24).

16. In 1958, "Sam and Friends" was "acclaimed by Washingtonians as the most popular local television attraction" and in February 1958 won an Emmy award for best local entertainment. (Pl .Ex. 13 (H02050-51); Pl. Exs. 45 (¶ 42), 79A and 80A (¶ 1-5)).

17. Mr. Martin Stone, an expert called by defendants, testified to the effect of television appearances on one's reputation, stating that a performer "achieved almost immediately, if not in a few months, a presence and if you stay on long enough, you would be extremely successful." (Trial Tr. 309, Stone).

18. Jim Henson and the "Muppet" puppets were already well known prior to the commencement of their relationship with the John H. Wilkins Company for their "Sam and Friends" show, among other things. (See also (¶¶ 8-17), supra, and J. Henson 23, 201-03).

19. Jim and Jane Henson were earning substantial sums from their performances on Sam and Friends in the mid-to-late 1950s, appearing twice daily, five times a week. (See Pl.Ex. 88 (¶ 2(b)) — ($370 rate for five performances of 15 minutes or less) × 2 (for 10 performances a week) × 2 (Jim and Jane) × 52 (weeks per year) = $76,960 annual income; § 2(c) = $740 (assuming that the two performances per day were identical, the two performances would be compensated at one and three-quarter times the single rate, yielding $67,340 combined annual income)).

20. The Hensons transferred all of their rights in Wilkins and Wontkins to Muppets, Inc. upon its incorporation in Washington D.C. on November 20, 1958. (Jane Henson 73-75, 182; Pl.Ex. 2).

Facts Concerning the John H. Wilkins Co.

21. The John H. Wilkins Company was formed primarily for the purpose of marketing food supplies and related products. (Pl. Ex.23).

22. During the 1950s and 1960s, the John H. Wilkins Company's business consisted primarily of manufacturing and selling its own coffee products. (Hefler 6-7).

23. At all relevant times prior to 1974, the John H. Wilkins...