Original Appalachian Artworks v. Topps Chewing Gum

• Decision Date: 29 August 1986
• Docket Number: Civ. A. No. C86-483A.
• Citation: 642 F. Supp. 1031
• Parties: ORIGINAL APPALACHIAN ARTWORKS, INC., a Georgia corporation v. TOPPS CHEWING GUM, INC., a New York corporation.
• Court: U.S. District Court — Northern District of Georgia

642 F. Supp. 1031

ORIGINAL APPALACHIAN ARTWORKS, INC., a Georgia corporation v. TOPPS CHEWING GUM, INC., a New York corporation.

Civ. A. No. C86-483A.

United States District Court, N.D. Georgia, Atlanta Division.

August 29, 1986.

William H. Needle, Stanley F. Birch, Jr., Vaughan, Roach, Davis, Birch & Murphy, Atlanta, Ga., for plaintiff.

Robert Pennington, Troutman, Sanders, Lockerman & Ashmore, Atlanta, Ga., Daniel Carroll, Shea & Gould, New York City, Rodgers Lunsford, Atlanta, Ga., for defendant.

ORDER

G. ERNEST TIDWELL, District Judge.

The above-styled action is one for copyright infringement, trademark infringement, and unfair competition, brought pursuant to the Federal Copyright Act, 17 U.S.C. § 101 et seq., the Federal Trademark Act, 15 U.S.C. § 1051 et seq., the Lanham Act, 15 U.S.C. § 1125, and state laws governing unfair competition. The plaintiff Original Appalachian Artworks, Inc. (OAA) was incorporated in 1978 and manufactures and markets soft-sculptured dolls created by Xavier Roberts. On June 1, 1979, copyright registration No. VA 35-804 was issued for plaintiff's dolls "The Little People." Since July 1982, plaintiff has marketed these dolls under the trademark "Cabbage Patch Kids." Over forty million Cabbage Patch Kids Dolls have been sold to date.

Defendant Topps Chewing Gum, Inc. (Topps) was founded in 1938. Over the last fifty years it has produced various entertainment products and novelties designed for children, perhaps most notably Bazooka Bubble Gum and baseball trading cards. In November 1984, Topps filed for the registration of the trademark "Garbage Pail Kids." In May 1985, defendant began distributing the first series of Garbage Pail Kids stickers/cards. The Garbage Pail Kids' stickers derisively depict dolls with features similar to Cabbage Patch Kids dolls in rude, violent and frequently noxious settings. The cards became very popular in early 1986 and Topps has recently begun licensing Garbage Pail Kids products such as T-shirts, school notebooks, balloons, etc. More than 800 million stickers have been sold.

The matter is presently before the court on the plaintiff's motion for a preliminary injunction on the grounds that "unless defendant is so enjoined, it will continue its unfair and infringing acts and that such acts will result in irreparable injury and damage to plaintiff for which there is no adequate remedy at law." Plaintiff's Motion for Preliminary Injunction (filed May 23, 1986).

The Copyright and Trademark acts as well as various Georgia statutes specifically authorize a federal court to grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement. See 17 U.S.C. § 502(a) (injunctions in copyright cases); 15 U.S.C. § 1116 (injunctions in federal trademark and false designation of origin cases); O.C.G.A. §§ 10-1-373(a), 10-1-399(a) (injunctions under Georgia Deceptive Trade Practices Act and Fair Business Practices Act); O.C.G.A. § 10-1-451(b) (injunction under Georgia anti-dilution statute). Nevertheless, in copyright, trademark, and unfair competition cases, as in most others, a plaintiff seeking preliminary injunctive relief must demonstrate:

(1) a substantial likelihood of success on the merits at trial;

(2) an immediate and real threat of irreparable injury;

(3) that the harm to the plaintiff without such injunction outweighs the harm to the defendant emanating from the granting of such injunction; and

(4) that the granting of the injunction is consistent with the interests of the public.

Dallas Cowboys Cheerleaders v. Scoreboard Posters, 600 F.2d 1184, 1187 (5th Cir.1979); Scientific Applications, Inc. v. Energy Conservation Corp. of America, 436 F.Supp. 354, 357 (N.D.Ga.1977). The court turns to the issue of whether the plaintiff can satisfy these requirements.

I. Likelihood of Success

A. Copyright Claim:

In order to prove a prima facie claim of copyright infringement a plaintiff must demonstrate (1) that he owns a valid copyright in the work and (2) copying by the defendant. Original Appalachian Artworks, Inc. v. Toy Loft, Inc., 684 F.2d 821, 824 (11th Cir.1982). The defendant does not seriously contest, and the court finds, that the plaintiff owns valid existing copyrights in the underlying and derivative Cabbage Patch Kids products. Id. See, e.g., copyright registration nos. VA 35-804, 141-801, 150-(809-812). This automatically establishes that plaintiff has the exclusive right to prepare derivative items based on the copyrighted work. 17 U.S.C. § 106(2).

The court also finds that the plaintiff has satisfied the second requirement, copying by the defendant. Defendant's brief correctly states that "copying must be shown by either: (a) proof of direct copying; or (b) proof of access to the copyrighted work and a substantial similarity between the copyrighted work and the defendant's work." Defendant's Brief in Opposition to Motion for a Preliminary Injunction 26 (filed June 18, 1986). See Toy Loft, 684 F.2d at 829; Central Tel. Co. of Va. v. Johnson Publishing Co., Inc., 526 F.Supp. 838, 843 (D.Colo.1981). See generally 3 M. Nimmer, Nimmer on Copyright §§ 12.11D, 13.01B, at 12-82 to 12-84.1, 13-6 to 13-8 (1963 & Supp. 1985). "Since there is seldom direct evidence of `copying,' the plaintiff generally proves this element by showing that the person who composed the defendant's work had access to the copyrighted work and that defendant's work is substantially similar to the plaintiff's." Ferguson v. National Broadcasting Co., Inc., 584 F.2d 111, 113 (5th Cir.1978). However, in this case there is substantial evidence of direct intentional copying sufficient to carry plaintiff's burden. The defendant's contentions that the Garbage Pail Kids were not based upon Cabbage Patch Kids but were modeled after cute dolls such as Strawberry Shortcake, Rainbow Brite, Barbie and Garfield are not credible. The court finds that John Pound, the artist who designed a majority of the Garbage Pail Kid stickers, purposefully copied substantial amounts of Cabbage Patch Kid features for the defendant's stickers, as he had been instructed to do by Leonard Brown, creative director for Topps. Mr. Brown either directed or suggested that Pound make the "Adam Bomb" character, depicted on the wrapper of all of the Garbage Pail Kids stickers packages, look like the Cabbage Patch dolls.

The defendant next argues that the Garbage Pail Kids are a parody or satire of the Cabbage Patch Kids and are therefore protected by the "fair use" defense to copyright infringement. 17 U.S.C. § 107. The plaintiff denies that the defendant has a valid fair use defense. On a motion for preliminary injunction, plaintiff must demonstrate a likelihood of success on the merits at trial as to asserted affirmative defenses, as well as to the elements of plaintiff's prima facie case. Metro-Goldwyn-Mayer, Inc. (MGM) v. Showcase Atlanta Cooperative Productions, Inc., 479 F.Supp. 351, 355 (N.D.Ga.1979).

Section 107 of the Copyright Act of 1976 states that even if a party has copied another's work, the "fair use of a copyrighted work.... for purposes such as criticism, comment, news reporting, teaching ..., scholarship, or research, is not an infringement of copyright." Although the fair use provision does not mention parody of satire, courts have recognized that parody may be protected under § 107. See Warner Bros., Inc. v. American Broadcasting Cos., Inc., 720 F.2d 231 (2d Cir.1983); Scoreboard Posters, supra; Walt Disney Productions v. Air Pirates, 581 F.2d 751 (9th Cir.1978), cert. denied, 439 U.S. 1132, 99 S.Ct. 1054, 59 L.Ed.2d 94 (1979).

It is a fine line, however, between parody and piracy, and in assessing whether defendant has crossed that boundary the courts examine several factors:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

17 U.S.C. § 107. While these factors are not exhaustive, they do provide a framework for the court's analysis of the defendant's affirmative defense. See 3 M. Nimmer, supra, § 13.05A, at 13-65 to 13-66.

The first factor to be considered in determining the applicability of fair use is the purpose and character of that use and "specifically whether the use is of a commercial nature or is for a nonprofit educational purpose." Marcus v. Rowley, 695 F.2d 1171, 1175 (9th Cir.1983). The Supreme Court has stated that "commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright." Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 104 S.Ct. 774, 793, 78 L.Ed.2d 574 (1984). See also Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 105 S.Ct. 2218, 2231, 85 L.Ed.2d 588 (1985).

Here the primary purpose behind defendant's parody is not an effort to make a social comment but is an attempt to make money. Cf. MGM, 479 F.Supp. at 357 (to be fair use parody must make critical comment). The Garbage Pail Kid stickers is one of the more profitable ventures of Topps' business history. Neither are the Garbage Pail Kid stickers merely one of a series of spoofs of various different products, as defendant has produced in the past, nor a single cartoon or editorial in a broader satirical product such as Mad Magazine. The basic concept behind the defendant's stickers is aimed at capitalizing on the Cabbage Patch craze. As was the case in D.C. Comics, Inc. v. Unlimited Monkey Business, Inc., 598 F.Supp. 110 (N.D.Ga.1984), where the court held that defendant was not entitled to rely upon the fair use defense for their characters Super Stud and Wonder Wench paroding Superman and Wonder Woman, "Defendan...