Lego A/S v. Best-Lock Constr. Toys, Inc.

• Decision Date: 25 July 2019
• Docket Number: 3:11-cv-01586 (CSH)
• Parties: LEGO A/S and Lego Systems, Inc., Plaintiffs, v. BEST-LOCK CONSTRUCTION TOYS, INC., and Best-Lock Limited, Hong-Kong, Defendants. Best-Lock Construction Toys, Inc., Best-Lock Limited, Hong-Kong, and Best-Lock Group Limited, Counterclaim Plaintiffs, v. LEGO A/S and Lego Systems, Inc., Counterclaim Defendants.
• Court: U.S. District Court — District of Connecticut

404 F.Supp.3d 583

LEGO A/S and Lego Systems, Inc., Plaintiffs,

v.BEST-LOCK CONSTRUCTION TOYS, INC., and Best-Lock Limited, Hong-Kong, Defendants.

Best-Lock Construction Toys, Inc., Best-Lock Limited, Hong-Kong, and Best-Lock Group Limited, Counterclaim Plaintiffs,

v.LEGO A/S and Lego Systems, Inc., Counterclaim Defendants.

3:11-cv-01586 (CSH)

United States District Court, D. Connecticut.

Signed July 25, 2019

Catherine Dugan O'Connor, Day Pitney LLP, Stamford, CT, Elizabeth Ann Alquist, Elizabeth P. Retersdorf, Sunita Paknikar, Woo Sin Sean Park, Eric J. TeVelde, Day Pitney LLP, Hartford, CT, for Plaintiffs and Counterclaim Defendants.

Dena M. Castricone, North Haven, CT, Michael J. Donnelly, Melissa A. Federico, Murtha Cullina LLP, Hartford, CT, Robert C. Faber, Ostrolenk Faber LLP, New York, NY, Andy I. Corea, Murtha Cullina, New Haven, CT, for Defendants and Counterclaim Plaintiffs.

RULING ON PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT AND DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT

HAIGHT, Senior District Judge:

Plaintiffs LEGO A/S and Lego Systems, Inc. (collectively, "Lego" or "Plaintiffs") brought this action against Defendants Best-Lock Construction Toys, Inc. and Best-Lock Limited, Hong Kong (collectively, "Best-Lock" or "Defendants"), principally alleging that Best-Lock is producing and selling figurines that infringe on Lego's copyrighted minifigure design. Before the Court are cross-motions for summary judgment: Plaintiffs' motion for summary judgment on their claim for copyright infringement as well as several of Defendants' affirmative defenses and counterclaims, and Defendants' cross-motion for summary judgment on Plaintiffs' claim of copyright infringement.

For the reasons discussed below, Plaintiffs' motion for summary judgment is granted in part but denied as to Defendants' affirmative defense of equitable estoppel. Defendants' motion for summary judgment is denied.

I. BACKGROUND¹

Lego has manufactured "minifigure" figurines – small, three-dimensional toys depicting people – since 1978 ("Lego minifigures"). Doc. 43-1 ¶ 4. Lego minifigures are designed so that a user can disassemble them and attach them to other figurines or studded blocks produced by Lego. Each Lego minifigure may vary in its two-dimensional representation of clothing and facial features, but has the same basic shape, including " ‘(1) cylindrical shape of head, (2) curvature at the top and bottom of head, (3) cylindrical neck, which is slightly narrower than the head, (4) trapezoidal shape or [sic] torso, (5) torso which is wider at the bottom and narrower at the top, (6) square, block-like set of shoulders, (7) arms extending from upper side of trunk, slightly below where shoulder starts, (8) arms slightly bent at the elbows, and (9) square feet.’ " Doc. 164-2 ("BL MSJ SOF") ¶ 13 (quoting Doc. 131 at 11).

As Lego became increasingly successful, a number of companies began manufacturing similar looking toys capable of attachment to Lego's minifigures and studded blocks. Doc. 37-2 ("Geller Decl. I") ¶ 13.² Many of these competitors are still operational and have expanded to international, multimillion dollar businesses, including Mega Bloks, Cobi S.A., Kre-O, and the Defendants in the present litigation, Best-Lock. Id. ¶ 11. Best-Lock was founded in 1997, and has been selling its own minifigures (the "Best-Lock minifigures") in the United States since 1998. Geller Decl. I ¶ 3. These minifigures are also designed to be disassembled and attached to other figurines and studded blocks – including minifigures and studded blocks produced by Lego. Id. ¶¶ 4, 5, 13. Best-Lock has advertised the "well known interchangeability of Best-Lock figures and their body parts with Lego's." Doc. 132 ("Lego MSJ SOF") ¶ 5. Best-Lock's minifigures are the same size as Lego's, and also have cylindrical heads, cylindrical necks, trapezoidal torsos, bent arms, hooked hands, and square, block-like feet. The Best-Lock minifigures, however, may differ in their surface adornments, including color, facial features, hairstyles, or clothing, from Lego minifigures. Doc. 52-1 ("Geller Decl. II") ¶ 3. For example, unlike Lego's minifigures, Best-Lock's minifigures have molded noses, molded mouths, and molded eyes. Geller Decl. I ¶ 7. As of February 2012, Best-Lock estimated that it had sold product sets containing more than 18 million Best-Lock minifigures in the United States. Geller Decl. I ¶ 12. These product sales have generated over $50 million in revenues from more than 50,000 stores throughout the country, including major retailers such as Wal-Mart, Sears, Target, FAO Schwartz, Amazon, Walgreens, Family Dollar, and K-Mart. Id. ¶¶ 8, 12. Lego minifigures are sold in many of the same stores. Id. Best-Lock and Lego have also appeared in many of the same trade publications and trade shows. Geller Decl. I ¶ 14.

Historically, Lego's minifigures were protected by a design patent³ and a utility patent,⁴ which were issued in 1979 and 1980, respectively. BL MSJ SOF ¶¶ 1-2. In January 1994, approximately one month after the design patent expired and three years before the utility patent was set to expire, Lego's predecessor, Interlego A/G ("Interlego") filed two applications with the United States Copyright Office (the "Copyright Office") to protect its minifigures: Registration No. VA0000655104 (the "'104 Copyright"), titled "Basic Minifigures," and Registration No. VA0000655230 (the "'230 Copyright"), titled "Figure With Brown Hair" (collectively, the "Asserted Copyrights"). See Doc. 164-4 ("BL MSJ Ex. B"); Doc. 164-5 ("BL MSJ Ex. C"). Both were registered by the Copyright Office, effective as of January 21, 1994. See BL MSJ Exs. B & C. The '104 Copyright registration stated that the work was first published in 1978, and did not represent that the work was a "derivative work." See BL MSJ Ex. B. The '230 Copyright registration stated that the work was first published in 1979, and represented that it was a "derivative work" incorporating preexisting "leg, face, and torso design," with newly added "hair decoration." See BL MSJ Ex. C. The Asserted Copyrights were subsequently assigned to Lego from Interlego in 2007. Doc. 132-2 ("Hecht Decl.") ¶ 4, Ex. 1.⁵

Lego representatives and Best-Lock representatives have interacted frequently at various toy shows.⁶ Prior to filing this suit, no Lego representative had contacted any principal of Best-Lock to express copyright-related concerns or otherwise voice an objection concerning the design or configuration of Best-Lock products in the United States. Lego MSJ SOF ¶¶ 9-10. Nor had Lego ever threatened or initiated litigation against Best-Lock in the United States prior to this lawsuit. Geller Decl. II ¶ 12. Outside of the United States, though, the relationship between the parties prior to 2011 was considerably more fraught. Geller stated that "since 1998, outside the United States, I do not recall there being a single year when Best-Lock and Lego's lawyers have not been involved in litigation or threats of litigation concerning Best-Lock's products." Id. ¶ 11 (emphasis in original). Indeed, Lego has commenced or threatened litigation concerning the "designs of some of the elements of Best-Lock's product sets" in the UK, Belgium, Canada, Austria, and Germany. Id. ¶ 13; Doc. 180 ("Geller Decl. IV") ¶ 5; Geller Decl. IV, Ex. A. However, Lego had never previously claimed that its minifigures were infringed by Best-Lock. Geller Decl. II ¶ 13; Geller Decl. I ¶ 21.

On or about July 14, 2011, U.S. Customs and Border Protection (CBP) carried out the first of a series of seizures of shipments from abroad of Best-Lock's toy blocks and minifigures. Id. ¶ 16. CBP sent Best-Lock's counsel a letter dated August 17, 2011, in which it asserted that it was carrying out the seizures because the minifigures infringed the '104 Copyright. Hecht Decl., Ex. L. Lego had not previously attempted to stop Best-Lock's sale of its blocks and figures in the United States, and had not issued any warning or given Best-Lock any notice that it believed Best-Lock's minifigures infringed any Lego copyrights. Geller Decl. I ¶ 21. Best-Lock petitioned CBP to cease the seizures, and requested that Lego assist in doing so, to no avail. See Geller Decl. II ¶¶ 18, 20; Doc. 37-25.

Three months later, on October 14, 2011, Lego filed the present action alleging, inter alia , that Best-Lock infringed the Asserted Copyrights in violation of 17 U.S.C. § 101, et seq. , by producing and selling the Best-Lock minifigures. See Doc. 84 (Second Amended Complaint). Lego also asserted claims against Best-Lock for defamation and violation of the Connecticut Unfair Trade Practices Act ("CUPTA"), Conn. Gen. Stat. § 42-110a, et seq. See id. Lego seeks to enjoin and restrain Best-Lock from manufacturing or selling its minifigures, and asserts claims for actual damages sustained due to the alleged infringement. See id. at 10-11.

In response, Best-Lock asserted affirmative defenses and counterclaims, claiming, inter alia , that: (1) the Asserted Copyrights are invalid and unenforceable; (2) Best-Lock is entitled to a declaratory judgment that the sale of Best-Lock's minifigures does not infringe on the Asserted Copyrights; and (3) Best-Lock is entitled to an injunction requiring Lego to consent to the importation and delivery of Best-Lock's goods in the United States. See Doc. 86 ("Am. Answer").

The case is now before the Court on cross-motions for partial summary judgment. Lego moves for summary judgment on its copyright infringement claim, as well as summary judgment on many of Best-Lock's affirmative defenses and counterclaims. See Doc. 131. Best-Lock resists those motions, and cross-moves for summary judgment on Lego's claim for copyright infringement. See Doc. 164.

II. STANDARD OF REVIEW FOR SUMMARY JUDGMENT

Summary judgment is appropriate only where "there is no genuine dispute as to any material fact" and "the movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56...