Value Group, Inc. v. Mendham Lake Estates, LP, Civ. A. No. 92-2758(WGB).

• Decision Date: 04 September 1992
• Docket Number: Civ. A. No. 92-2758(WGB).
• Citation: 800 F. Supp. 1228
• Parties: The VALUE GROUP, INC., a corporation organized in accordance with the laws of New Jersey, and Stern-Ring Associates, a partnership, Plaintiffs, v. MENDHAM LAKE ESTATES, L.P., A New Jersey Limited Partnership, Michael Miller, John Doe (a fictitious name) and Mary Roe (a fictitious name), as partners, agents and individuals in active concert with the other defendants, and Gerald Novak, Defendants.
• Court: U.S. District Court — District of New Jersey

800 F. Supp. 1228

The VALUE GROUP, INC., a corporation organized in accordance with the laws of New Jersey, and Stern-Ring Associates, a partnership, Plaintiffs, v. MENDHAM LAKE ESTATES, L.P., A New Jersey Limited Partnership, Michael Miller, John Doe (a fictitious name) and Mary Roe (a fictitious name), as partners, agents and individuals in active concert with the other defendants, and Gerald Novak, Defendants.

Civ. A. No. 92-2758(WGB).

United States District Court, D. New Jersey.

September 4, 1992.

Klein Chapman by Christopher J. McHattie, Clifton, N.J., for Value Group, Inc. and Stern-Ring Associates.

Mandelbaum, Salsburg, Gold, Lazris, Discenza & Steinberg, P.C. by Michael J. Melillo, West Orange, N.J., for Mendham Lake Estates.

BASSLER, District Judge:

A copyright owner of architectural plans seeks to enjoin the completion of a single family residence being built according to plans that infringe the copyright. For the following reasons, the plaintiff's application for a temporary restraining order is granted.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

I. BACKGROUND

This is an application for a temporary restraining order brought by The Value Group, Inc. and its architect, Stern-Ring Associates (collectively referred to as "Value Group" or "plaintiffs") against a competitor, Mendham Lake Estates ("Mendham Lake"). The plaintiffs seek relief under The Copyright Act of 1946 ("the Act") (17 U.S.C., § 101 et seq.); as amended by, inter alia, the Berne Convention Implementation Act of 1988 ("the 1988 Act") and the Copyright Infringement Act of 1990 ("the 1990 Act").¹

Value Group is in the real estate development business, primarily building single family housing in Morris County, New Jersey. Stern-Ring is in the architectural services business, providing architectural plans to Value Group. Value Group and Mendham Lake both specialize in luxury homes in the $450,000 to $600,000 range. Value Group identifies Mendham Lake as its sole competitor in the geographical area and seeks to enjoin Mendham Lake from using a housing design Value Group claims Mendham Lake copied from a design created by Stern-Ring for Value Group.

From approximately September 1990 through January 1991, Value Group designed certain architectural plans for single family residences, designated Estate House I and Estate House II ("the Architectural Plans"). These architectural plans and the related sales brochures created to market the homes were copyrighted under Title 17 of the United States Code on June 17, 1992. See exhibit A-E of the Abramson Certification ("Copyright Certificate").

In January 1992, construction of a first house to be built based upon the Architectural Plans was begun in a development known as Rickland Estates, located in Randolph, New Jersey. That house was completed in May or June 1992 and is the subject matter of the Copyright Certificate.

In early May 1992, Mr. Stern, of Stern-Ring Associates, was contacted by Mr. Gerald Novak ("Novak"), a representative of Mendham Lake. Novak indicated he was interested in obtaining a copy of the Architectural Plans for his use in connection with a Mendham Lake's project in Randolph, New Jersey. Novak did not mention that his interest in the design was for his new clients, Mr. & Mrs. Charles Lane. Value Group had previously rejected the Lanes' request to build a house based on the Estate Plan I Plans in Rickland Estate because a similar house would impair the integrity of the development and violate the municipal "look alike" ordinance.

Stern told Novak that the Architectural Plans were not available for Mendham Lake's use in Randolph because they would compete with, and adversely impact on, Value Group's Randolph project. Stern told Novak that he would prepare alternative plans, not related to the plans he prepared for Value Group. Stern advised Andrew Abramson, the President of Value Group, of the conversation he had with Novak.

Abramson and Stern, on May 8 and 12, wrote to Mendham Lake, reiterating that Value Group owned the Architectural Plans. Mendham Lake responded that it intended to proceed with the house for the Lanes, contending it had derived a new design through modification and a total redrawing of the Architectural Plans.²

The plaintiffs learned that in late May the defendants had filed a building permit on behalf of the Lanes, together with supporting architectural plans and drawings, which the plaintiffs found were virtually identical to their Architectural Plans. Consequently, the plaintiffs filed a complaint alleging copyright infringement, conversion, unjust enrichment, unfair competition and tortious interference. In response to plaintiffs' simultaneous application for a temporary restraining order, defendants denied any copyright infringement and challenged the court's authority to issue an injunction precluding the further construction of a single family house.

II. DISCUSSION

A. The Standard for Preliminary Injunctions

It is fundamental that "the purpose of an interlocutory injunction is to preserve the status quo to protect the respective rights of the parties pending determination on the merits." Cordis Corp. v. Medtronic, Inc., 780 F.2d 991, 994 (Fed.Cir.1985), cert. denied, 476 U.S. 1115, 106 S.Ct. 1971, 90 L.Ed.2d 655 (1986); see also, Smith International, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1578 (Fed.Cir.), cert. denied, 464 U.S. 996, 104 S.Ct. 493, 78 L.Ed.2d 687 (1983). Four factors are weighed: (1) the likelihood of success on the merits after a full hearing; (2) whether the movant will be irreparably injured without the restraint; (3) whether the party to be enjoined will be irreparably injured if the preliminary relief is granted; and (4) whether the public interest will be served by the preliminary relief. Opticians Ass'n of America v. Independent Opticians of America, 920 F.2d 187, 191-192 (3d Cir. 1990). The court must balance these factors in deciding whether to issue a preliminary injunction. Kershner v. Mazurkiewicz, 670 F.2d 440, 443 (3d Cir.1982) (in banc). As explained below, all of these factors favor the plaintiff's application to enjoin further infringement of their copyrights.

B. Subject Matter

Architectural works and pictorial, graphic and sculptural works are all protected by copyright. 17 U.S.C. § 102(a)(5) and (8). Plaintiff's architectural plans and drawings, and the architectural work based on those plans and drawings, are expressly included in the definitions in 17 U.S.C. § 101, which provides, inter alia:

An "architectural work" is the design of a building as embodied in any tangible medium of expression, including a building, architectural plans, or drawings. The work includes the overall form as well as the arrangement and composition of spaces and elements in the design, but does not include individual standard features.

A pictorial, graphic and sculptural work³ includes two-dimensional and three-dimensional works of fine, graphic and applied art ... diagrams ... and technical drawings, including architectural plans.

Works falling within these definitions are expressly protected by 17 U.S.C. § 102(a):

Copyright protection subsists in, in accordance with this title, original work of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories:

(5) pictorial, graphic, and sculptural works,;

(8) architectural works.⁴

A copyright owner is granted exclusive rights in the copyrighted work pursuant to 17 U.S.C. § 106. 17 U.S.C. §§ 107-120 provide that the owner of the copyright has the exclusive right to authorize the reproduction of the copyrighted work, the preparation of derivative works based on the copyrighted work, and the displaying of the copyrighted work publicly.

17 U.S.C. § 501 provides that anyone who violates any of the exclusive rights of the copyright owner is an infringer. 17 U.S.C. § 502 provides that any court having jurisdiction of a civil action arising under this title may grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.

C. Likelihood of Success on the Merits

Value Group is likely to succeed on the merits of the copyright infringement count. To succeed on a claim of copyright infringement, a plaintiff must show: (1) ownership of a valid copyright and (2) copying by a defendant. Midway Mfg. Co. v. Bandai-America, Inc., et al., 546 F.Supp. 125, 138 (D.N.J.1982), aff'd, 775 F.2d 70 (3d Cir.1985), cert. denied, 475 U.S. 1047, 106 S.Ct. 1265, 89 L.Ed.2d 574 (1986) (citing Franklin Mint Corp. v. National Wildlife Art Exch., Inc., 575 F.2d 62, 64 (3d Cir.), cert. denied, 439 U.S. 880, 99 S.Ct. 217, 58 L.Ed.2d 193 (1978)). The movant must show a "reasonable probability of eventual success in the litigation." In re Arthur Treacher's Franchise Litigation, 689 F.2d 1137, 1147 (3d Cir.1982). See also Constructors Ass'ns of W. Pa. v. Kreps, 573 F.2d 811 (3d Cir.1978).

1. Ownership of a Valid Copyright

There is no reason to believe that the Copyright Certificates provided by the plaintiff are invalid. These certificates constitute prima facie evidence of copyright validity and ownership. Midway Mfg., 546 F.Supp. at 139.⁵

Even when valid certificates exist, however, an architectural work must exhibit some modicum of creativity before it is eligible for copyright protection. This requirement for creativity is delineated by the Supreme Court in Feist Publications, Inc. v. Rural Telephone Service Co., ___ U.S. ___, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991). The Court stated that "original," as the term is used in copyright, "means only that the work was independently created by the author ... and that it possesses a minimal degree of creativity." Id. at ___, 111 S.Ct. at 1287. The requisite level of creativity is...