United States District Court, D. Connecticut
RULING ON PLAINTIFFS' MOTION FOR PARTIAL SUMMARY
JUDGMENT AND DEFENDANTS' MOTION FOR PARTIAL SUMMARY
JUDGMENT
CHARLES S. HAIGHT, JR. SENIOR UNITED STATES 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.
BACKGROUND[1]
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
patent[3] 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(a); see also Glatt v. Fox Searchlight Pictures,
Inc., 811 F.3d 528, 533 (2d Cir. 2016). "[A] fact
is material if it 'might affect the outcome of the suit
under the governing law,' and a dispute is genuine if
'the evidence is such that a reasonable jury could return
a verdict for the nonmoving party.'" Baldwin v.
EMI Feist Catalog, Inc., 805 F.3d 18, 25 (2d Cir. 2015)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986)). Put differently, the court must determine
whether the evidence can reasonably support a verdict in the
moving party's favor. See James v. New York Racing
Ass'n, 233 F.3d 149, 157 (2d Cir. 2000). In
assessing a motion for summary judgment, a court must resolve
all ambiguities and draw all permissible inferences in favor
of the non-moving party. Rogoz v. City of Hartford,
796 F.3d 236, 245-46 (2d Cir. 2015). However, "[m]ere
conclusory allegations, speculation or conjecture will not
avail a party resisting summary judgment." Cifarelli
v. Vill. of Babylon, 93 F.3d 47, 51 (2d Cir. 1996)
(citing Western World Ins. Co. v. Stack Oil, Inc.,
922 F.2d 118, 121 (2d Cir. 1990)).
The
moving party bears the initial burden of demonstrating that
no genuine issue exists as to any material fact. See
Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986);
CILP Assocs., L.P. v. PriceWaterhouse Coopers LLP,
735 F.3d 114, 123 (2d Cir. 2013). "Where a plaintiff
uses a summary judgment motion, in part, to challenge the
legal sufficiency of an affirmative defense - on which the
defendant bears the burden of proof at trial - a plaintiff
'may satisfy its Rule 56 burden by showing that there is
an absence of evidence to support [an essential element of]
the [non-moving party's] case.'" Fed.
Deposit Ins. Corp. v. Giammettei, 34 F.3d 51, 54-5 (2d
Cir. 1994) (quoting DiCola v. SwissRe Holding
(North America), Inc., 996 F.2d 30, 32 (2d
Cir. 1993). If the movant is able to satisfy its burden,
"the opposing party must come forward with specific
evidence demonstrating the existence of a genuine dispute of
material fact." Brown v. Eli Lilly & Co.,
654 F.3d 347, 358 (2d Cir. 2011). The nonmoving party
"may not rely solely on 'the allegations of the
pleadings, or on conclusory statements, or on mere assertions
that affidavits supporting the motion for summary judgment
are not credible.'" Robertson v. Wells Fargo
Bank, N.A., No. 3:14-cv-01861, 2017 WL 326317,
at *7 (D. Conn. Jan. 23, 2017) (quoting Gottlieb v. Cnty.
of Orange, 84 F.3d 511, 518 (2d Cir. 1996)). Rather, it
must present significant probative evidence from the record
to establish the absence of a genuine dispute. Marczeski
v. Gavitt, 354 F.Supp.2d 190, 193 (D. Conn. 2005)
(citing Celotex Corp., 477 U.S. at
327).[7]
III.
DISCUSSION
Pending
before the Court are cross-motions for summary judgment. Lego
seeks judgment as to liability on Count I of its Second
Amended Complaint for copyright infringement. See
Doc. 131 ("Lego MSJ Br.") at 4-12. Lego claims that
it holds certain valid copyrights that cover the sculpture of
its minifigures; that Best-Lock has copied the protectable
elements of the minifigures; and that such copying is
illegal, in that there is a substantial similarity between
Best-Lock's figures and the protectable elements of
Lego's minifigures. See Id. at 11-18. Lego also
asserts that it is entitled to summary judgment dismissing
Best-Lock's affirmative defenses of invalidity, laches,
and equitable estoppel, as well as summary judgment on
several of Best-Lock's related counterclaims, which
assert the invalidity of the copyrights, non-infringement of
the copyrights, and fraud. See Id. at 12-35.
Best-Lock subsequently filed its own motion for partial
summary judgment on Lego's claim for copyright
infringement. See Doc. 164.
A
copyright provides for the exclusive right "to
distribute copies . . . of the copyrighted work to the public
by sale or other transfer of ownership, or by rental, lease,
or lending." 17 U.S.C. § 106(3). Anyone who
violates any of those exclusive rights is an infringer of the
copyright of the author, and the legal or beneficial owner of
the exclusive right is entitled to sue for infringement under
17 U.S.C. § 501(a)-(b). To establish copyright
infringement, a plaintiff must show: "(1) ownership of a
valid copyright, and (2) copying of constituent elements of
the work that are original." Feist Publ'ns, Inc.
v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991);
see also Kwan v. Schlein, 634 F.3d 224, 229 (2d Cir.
2011).
For the
following reasons, the Court concludes that on the
evidentiary record, there is no genuine dispute that
Plaintiffs satisfy both elements of the Feist test.
That is to say: Lego is entitled to summary judgment that it
owned valid copyrights in the Lego minifigures, and Best-Lock
copied the original constituent elements of the copyrighted
minifigures. However, genuine issues of material fact
preclude summary judgment in Lego's favor on
Best-Lock's affirmative defense of equitable estoppel,
which, if sustained, would bar Lego's claim for
infringement.
I
consider these several issues in order.
A.
Lego's Ownership of a Valid Copyright
The
first part of the Feist test asks whether Lego owns
a valid copyright in the Minifigures. The gravamen of
Defendants' argument is that the Asserted Copyrights are
invalid for four reasons: (1) they cover the same subject
matter as previously issued patents, in contravention of a
then-existing statute; (2) the elements in question are
functional; (3) the underlying applications for the Asserted
Copyrights fraudulently failed to disclose that the material
seeking copyright protection was functional and that patents
covered the same subject matter; and (4) the registration of
the '104 Copyright asserts copyrights in a collection,
but the work does not qualify as a published collection
pursuant to Copyright Office regulations. Defendants also
argue that Lego has failed to prove ownership of the Asserted
Copyrights.
None of
these claims has merit. Plaintiffs are therefore entitled to
summary judgment dismissing Defendants' fifth affirmative
defense (invalidity of copyright), sixth affirmative defense
(invalidity due to fraud), first counterclaim (invalidity due
to functionality), third counterclaim (fraud), and the denial
of Defendants' cross-motion for summary judgment. The
Court also grants summary judgment for the Plaintiffs on the
issue of ownership of a valid copyright.
1.
Presumption of Validity
As a
threshold matter, the parties dispute whether Lego is
entitled to a presumption of validity based on the
certificates of registration assigned to the Asserted
Copyright.
The
Copyright Act provides that a certificate of a registration
"shall constitute prima facie evidence of the validity
of the copyright and of the facts stated in the
certificate." 17 U.S.C. § 410(c). This presumption
"orders the burdens of proof," relieving a
purported copyright owner of any duty "'in the first
instance to prove all of the multitude of facts that
underline the validity of the copyright unless the [alleged
infringer], by effectively challenging them, shifts the
burden of doing so to the [purported owner].'"
Carol Barnhart Inc. v. Econ. Cover Corp., 773 F.2d
411, 414 (2d Cir. 1985) (quoting H. Rep. No. 1476, 94th
Cong., 2d Sess. 157).[8] The provision also establishes a time
limit for entitlement to the statutory presumption of
validity: the certificate of registration must have been made
"before or within five years after first publication of
the [registered] work." 17 U.S.C. § 410(c); see
also Telerate Sys., Inc. v. Caro, 689 F.Supp. 221, 227
(S.D.N.Y. 1988) ("The 1976 Act added the five-year
requirement because 'the longer the lapse of time between
publication and registration the less likely to be reliable
are the facts stated in the certificate.'" (citation
omitted)).
Lego's
Asserted Copyrights were not registered within five years of
first publication of the underlying
minifigures.[9] Defendants are therefore correct that Lego
is not entitled to a statutory presumption of validity. But
the Court's analysis does not end there. For
registrations made more than five years after first
publication of the work, the "evidentiary weight to be
accorded the certificate . . . shall be within the discretion
of the court." 17 U.S.C. § 410(c). "Most
courts conclude that untimely certificates [of registration]
constitute prima facie evidence." Brighton
Collectibles, Inc. v. RK Tex. Leather Mfg., No.
10-CV-419-GPC (WVG), 2012 WL 6553403, at *3 (S.D. Cal. Dec.
13, 2012); see also Graphic Design Mktg., Inc. v. Xtreme
Enters., Inc., 772 F.Supp.2d 1029, 1033 (E.D. Wis. 2011)
("While [plaintiff] obtained Certificate of Registration
VA 1-750-576 more than five years after first publication,
courts typically extend the presumption to later obtained
registrations."), adhered to, 2011 WL 534337
(E.D. Wis. Feb. 8, 2011).
Best-Lock
has not offered any evidence tending to show that the
certificates of registration provided by Lego are invalid or
otherwise unreliable, nor does it proffer evidence
challenging Lego's ownership of the copyrights in the
minifigures covered by those registrations. The Court
therefore, in its discretion, holds that these registrations
give rise to a rebuttable presumption that Lego owns valid
copyrights in the Lego minifigures. That presumption of
validity is grounded in the clear weight of authority.
See, e.g., Stern v. Lavender, 319 F.Supp.3d
650, 671 (S.D.N.Y. 2018) (treating as prima facie evidence of
copyright validity a registration made twenty-one years after
first publication); CJ Prods. LLC v. Snuggly Plushez
LLC, 809 F.Supp.2d 127, 143 (E.D.N.Y. 2011) (treating
registration certificates issued more than five years after
first publication as prima facie evidence of copyright
validity "[i]n light of the totality of admissible
evidence presented on this motion for preliminary
injunction" (internal quotation marks and citation
omitted)); Yurman Design, Inc. v. Golden Treasure Imps.,
Inc., 275 F.Supp.2d 506, 515-16 (S.D.N.Y. 2003)
(certificates of registration issued more than five years
after works were first published were prima facie evidence of
valid copyrights, because defendants did not come forward
with any evidence that "would raise any question as to
the validity of the copyrights covered by the registration
certificates"); Michael Grecco Photography, Inc. v.
Everett Collection, Inc., 589 F.Supp.2d 375, 382
(S.D.N.Y. 2008) (certificates of registration issued more
than five years after publication constituted prima facie
evidence of valid copyrights because defendants did not offer
"any evidence tending to show that the certificates of
registration" were invalid or that plaintiff did not in
fact own the copyrights); Telerate Sys., 689 F.Supp.
at 227 n.7 ("Even if the certificate were . . . issued
more than five years after the actual date of first
publication, the court would be inclined to give the
certificate the weight of prima facie evidence, as permitted
under Section 410(c)."); Brighton Collectibles,
2012 WL 6553403, at *3 (treating as prima facie evidence of
copyright validity a registration made more than thirteen
years after first publication); Graphic Design, 772
F.Supp.2d at 1033 (treating as prima facie evidence of
copyright validity a registration made ten years after first
publication).
2.
Invalidity Due to Patents on the Same Subject Matter
The
Court must next determine whether Best-Lock has come forward
with sufficient evidence to rebut the presumption (adopted
for the foregoing reasons) that Lego owned valid copyrights
in the minifigures.
In its
motion for summary judgment, Best-Lock argues that the
Asserted Copyrights are rendered invalid by Lego's
patents on the same minifigures. See Doc. 164-1
("BL MSJ Br."). The existence of those patents,
Best-Lock asserts, means that the registrations for the
Asserted Copyrights should not have issued in the first
instance, and Lego should not have been permitted to file
suit for infringement.
Between
1956 and 1995, United States Copyright Office Rule 37 C.F.R.
§ 202.10 directed, in relevant part, that:
The potential availability of protection under the design
patent law will not affect the registrability of a work of
art, but a copyright claim in a patented design or in the
drawings or photographs in a patent application will not be
registered after the patent has been issued.
37 C.F.R. § 202.10(b) (1956) (emphasis
added).[10]
The
Rule was revised effective April 24, 1995, however, and now
explicitly provides that the existence of a patent on a work
does not affect its eligibility for copyright
protection. See 37 C.F.R. § 202.10(a), as
amended by 60 Fed. Reg. 15605, 15606 (Mar. 24, 1995)
("The availability of protection or grant of protection
under the law for a utility or design patent will not affect
the registrability of a claim in an original work of
pictorial, graphic, or sculptural authorship.").
It is
undisputed that when the minifigure copyright applications
were filed on January 21, 1994, the previous version of 37
C.F.R. § 202.10 was in effect. It is also undisputed
that the minifigure copyrights covered the same subject
matter as the minifigure patents. See Doc. 171 at
9-10. But those facts alone do not compel the conclusion that
Lego's Asserted Copyright registrations are invalid.
Copyright
registration is generally a prerequisite to bringing a civil
copyright infringement action. The subject is governed by the
Copyright Act, which provides in 17 U.S.C. § 411(a)
that, with some exceptions not relevant here, "no civil
action for infringement of the copyright in any United States
work shall be instituted until preregistration or
registration of the copyright claim has been made in
accordance with this title." Registration is a
straightforward process. It requires delivery of only three
items to the Copyright Office: a brief, two-page application,
deposit copies of the work, and a filing fee. See 17
U.S.C. § 408(a). The Copyright Office then
"typically registers about 99 percent of the claims
submitted to it." 2 Nimmer on Copyright § 7.16
(citing Brief for the United States as Amicus Curiae
Supporting Vacatur & Remand, Reed Elsevier, Inc. v.
Muchnick, 559 U.S. 154, 2009 WL 1601031, at *4 n.2
(2010)).
Consistent
with that permissive approach to registration, the
Prioritizing Resources and Organization for Intellectual
Property Act of 2008 (the "PRO IP Act"), which
amended the Copyright Act, provides in 17 U.S.C.
§411(b)(1):
A certificate of registration satisfies the requirements of
[section 411] and section 412, regardless of whether the
certificate contains any inaccurate information, unless
-
(A) the inaccurate information was included on the
application for copyright registration with knowledge that it
was inaccurate; and
(B) the inaccuracy of the information, if known, would have
caused the Register of Copyrights to refuse registration.
17 U.S.C. §411(b)(1) (emphasis added). § 411(b)(2)
further instructs that:
In any case in which inaccurate information described under
paragraph (1) is alleged, the court shall request the
Register of Copyrights to advise the court whether the
inaccurate information, if known, would have caused the
Register of Copyrights to refuse registration.
17 U.S.C. §411(b)(2).
The PRO
IP Act codified an approach that was already well-established
within the Second Circuit. In Eckes v. Card Prices
Update, 736 F.2d 859, 861-62 (2d Cir. 1984), the Second
Circuit foreshadowed the language of the PRO IP Act in
holding that "[o]nly the 'knowing failure to advise
the Copyright Office of facts which might have occasioned a
rejection of the application constitute[s] reason for holding
the registration invalid, and thus incapable of supporting an
infringement action....'" (citing and quoting
Russ Berrie & Co., Inc. v. Jerry Elsner Co.,
Inc., 482 F.Supp. 980, 988 (S.D.N.Y. 1980)). Subsequent
decisions in this Circuit have consistently followed the same
approach. See Klauber Bros. v. Target Corp., No. 14
CIV. 2125, 2015 WL 4393091, at *2 (S.D.N.Y. July 16, 2015)
("[W]here a plaintiff fails to disclose facts to the
Copyright Office, a copyright may not be invalidated unless
(1) the failure was knowing and willful, and (2) the omitted
information might have caused the Copyright Office to reject
the registration."); Dynamic Sols., Inc. v. Planning
& Control, Inc., 646 F.Supp. 1329, 1341 (S.D.N.Y.
1986) ("Errors on the registration application do not
affect plaintiff's right to sue for infringement unless
they are knowing and might have caused the Copyright Office
to reject the application.").
Best-Lock
attempts to circumvent the PRO IP Act and Eckes by
relying heavily on a single case from the Southern District
of New York, Family Dollar Stores, Inc. v. United Fabrics
Int'l, Inc., 896 F.Supp.2d 223 (S.D.N.Y. 2012). In
Family Dollar, plaintiff registered a collection of
fabric designs as unpublished that, in fact, included 13
previously-published designs. Id. at 225. In holding
the copyright registration invalid, the court concluded that
a "showing of fraud" is required to invalidate a
copyright registration "only where a party seeks to
invalidate a copyright based on simple technical errors in a
registration application." Id. at 231.
"The fraud requirement does not come into play when
material omissions or errors were made in the registration
application." Id. The court also stated that
the PRO IP Act, 17 U.S.C. § 411(b)(1), did not apply at
all because the inaccuracy was material. Id. at 233
(the PRO IP Act "solely concerns technical and minor
errors with copyright registrations").
Three
subsequent decisions in this Circuit have explicitly rejected
the holding in Family Dollar. See Sohm v.
Scholastic Inc., No. 16-CV-7098 (JPO), 2018 WL 1605214,
at *7 (S.D.N.Y. Mar. 29, 2018); Archie MD, Inc. v.
Elsevier, Inc., 261 F.Supp.3d 512, 518-20 (S.D.N.Y.
2017); Palmer/Kane LLC v. Gareth Stevens Publ'g
("Palmer II"), No. 1:15-CV-7404-GHW, 2017
WL 3973957, at *14 (S.D.N.Y. Sept. 7, 2017). These cases have
reasoned that "the Family Dollar approach,
which turns on a purported distinction between
'material' and 'technical' errors, is
'inconsistent with the clear language of the
statute.'" Sohm, 2018 WL 1605214, at *7
(citing Palmer II, 2017 WL 3973957, at
*14). As Judge Rakoff explained in Archie MD:
Family Dollar's conclusion, that the PRO IP Act
did not apply because the error in question would have caused
the Copyright Office to refuse registration, is hard to
square with § 411(b)(1). Family Dollar finds that the
condition in clause (B), i.e., the materiality of
the inaccuracy, is satisfied, but then takes that conclusion
to entail that the condition in clause (A), i.e.,
the knowledge of the inaccuracy, is irrelevant. But Section
411(b) (1) presents a conjunctive test: both conditions must
be satisfied in order for an inaccuracy in a registration to
defeat a claim.
261 F.Supp.3d at 518-19. Judge Rakoff concluded that "in
order to comply with the clear directive in § 411(b)(1),
a copyright infringement claim should not be dismissed on
account of inaccurate information that was inadvertently
included in the copyright registration, whether or not the
inaccurate information is material." Id.
Palmer/Kane
LLC v. Gareth Stevens Publ'g ("Palmer
I"), No. 1:15-CV-7404-GHW, 2016 WL 6238612, at *4
n.2 (S.D.N.Y. Oct. 24, 2016)) is to the same effect. The
district judge explicitly declined to follow Family Dollar
because its "proposition that a showing of fraud is
required only when the error is technical rather than
material appears to be irreconcilable with the §
411(b)(2) requirement that the Register of Copyrights be
consulted regarding whether the inaccuracy is material";
the Family Dollar court's reading of §
411(b) "seems to be inconsistent with the statute's
requirement that the Register of Copyrights weigh in on the
issue of materiality in all cases." 2016 WL
6238612, at *4 n. 2 (emphasis added).
The
criticisms of Family Dollar's holding by the
cited cases are persuasive, and bolstered by the plain
language of the PRO IP Act and other case law within this
Circuit. I therefore decline to follow Family
Dollar.[11]
i.
Knowing Inaccuracies
Having
determined that 17 U.S.C. § 411(b)(1) and Eckes
provide the relevant legal framework on this aspect of the
case, the Court turns to the remaining relevant issues: (1)
whether Lego included inaccurate or misleading information in
its copyright registration, and (2) whether, if the
registration included inaccurate or misleading information,
Lego included the information "with knowledge that it
was inaccurate," 17 U.S.C. § 411(b)(1)(A). Only if
I hold for Best-Lock on both questions must I turn to the
final question: whether the knowledge was material, which is
to say, whether knowledge of that information would have
caused the Register of Copyrights to refuse registration.
As to
the first question, Best-Lock presents no evidence that Lego
withheld or misstated information about its patents on the
minifigures. To the contrary, the Asserted Copyright
applications appear thorough, complete, and consistent with
the undisputed facts on record. The brief, two-page copyright
application did not ask whether Lego had sought or obtained
patents or other intellectual property. Nor did it provide
any catchall space in which to disclose other relevant
information. Consequently, Lego had no obligation to disclose
its existing patents on the application, and its failure to
do so was neither "misleading" nor an
"omission." Best-Lock contends that the Lego
minifigures are derivative of the drawings from the '711
and '402 patents, and therefore should have been
disclosed in Section 6(a) of the application, instructing
applicants for registration of a "derivative work"
to "[i]dentify any preexisting work or works that this
work is based on or incorporates." BL Ex. B at
2.[12] This argument is dismissed for a
fundamental reason: the Lego minifigure covered by the
Registration was created in 1977-the year before
either Lego patent was filed. Id. at 1. As Lego
observes, "[i]f anything, the drawing submitted in the
patent applications was derivative of the sculptural
work." Lego MSJ Br. at 10 n.5.
But
even if the minifigure sculpture had been created after the
patent drawings, Best-Lock's argument fails for two
reasons. First, the sculptural form of the minifigures does
not constitute a copyrightable derivative work, independent
of the minifigure drawings. By Best-Lock's own
(undisputed) account, the subject matter of the patents and
the copyrights are the same - i.e., apart from the
medium in which they are conveyed, there are no material
differences between the Lego minifigure sculptures and the
patent drawings. The Second Circuit has squarely held that
mere translation of a work to a different medium does not
demonstrate sufficient originality to warrant copyright
protection. L. Batlin & Son, Inc. v. Snyder, 536
F.2d 486, 491 (2d Cir. 1976) (because "translation [of a
work of art] to a different medium" is "merely a
trivial variation," creating a plastic version of a cast
iron "Uncle Sam" toy coin bank in the public domain
lacked the originality to support a copyright); see also
Earth Flag, Ltd. v. Alamo Flag Co., 153 F.Supp.2d 349,
354 (S.D.N.Y. 2001) (transfer of a public domain photograph
from paper to a fabric article of clothing was not entitled
to copyright protection because "a copyright
claimant's production of a work of art in a different
medium cannot by itself constitute the originality required
for copyright protection[.]"). A "derivative
work," similarly, "must incorporate some or all of
a 'preexisting work' and add new original
copyrightable authorship to that work." United
States Copyright Office, Copyright In Derivative Works and
Compilations (2013),
https://www.copyright.gov/circs/circ14.pdf (emphasis added).
The shift from patent drawing to sculpture does not have the
requisite originality to constitute a derivative work.
This
conclusion is further bolstered by a body of case law holding
that a copyright registrant need not disclose preexisting
works of its own creation. See, e.g., Yurman
Design, Inc. v. Chaindom Enters., No. 99 Civ. 9307
(JFK), 2002 WL 31358991, at *10-11 (S.D.N.Y. Sept. 30, 2002)
(rejecting the "false premise" that "a
copyright applicant must disclose that its work is derived
from another work the applicant has created [on a copyright
application]"); Frank Betz Assocs. v. J.O. Clark
Constr., L.L.C, No. 3:08-cv-159, 2010 WL
2253541, at *11 (M.D. Tenn. May 30, 2010) (where evidence
indicates that plaintiff created derivative designs based on
its own original designs "the concerns that §
409(9) raises are not implicated"); Robert L. Stark
Enters. v. Neptune Design Grp., LLC, No. 1:16
CV 264, 2017 WL 1345195, at *9 (N.D. Ohio Apr. 12, 2017)
("As the copyright would have simply incorporated plans
created by defendant, its failure to identify those plans as
pre-existing materials does not implicate Section 409(9) of
the Copyright Act."). As Judge Rakoff explained in
Peterson v. Kolodin, No. 13 Civ. 793 (JSR), 2013 WL
5226114, at *6 (S.D.N.Y. Sept. 6, 2013), this sensible
approach avoids the "wasteful and impractical"
requirement that a copyright owner "separately register
every draft or version of an evolving work." Thus,
"even where the registered work is an independently
copyrightable derivative work, 'when the same party owns
the derivative . . . work plus the underlying elements
incorporated therein, its registration of the former is
sufficient to permit an infringement action on the underlying
parts, whether they be new or preexisting.'"
Id. (quoting 3-12 Nimmer on Copyright §
7.16(B)(5)(c)). The court in Peterson held that
"even if . . . the intermediate 'rough cut' of
the [plaintiffs'] recordings and/or the final version
somehow qualify as derivative works distinct from the
original unedited takes, plaintiffs' registration of the
final version is still sufficient to support this
infringement action." Id. The same conclusion
applies here. For purposes of copyright law, Lego's
minifigure sculptures are not derivative work and were not
required to be reported as such. Thus, no reasonable trier of
fact could find that the Asserted Copyright applications were
factually inaccurate as to the existence of the minifigure
patents, much less knowingly so.[13]
ii.
Materiality
I need
not address the materiality of the allegedly omitted
information under 17 U.S.C. § 411(b), as failure to
demonstrate knowing misrepresentation by Lego is fatal to
Best-Lock's summary judgment motion. In the interest of
completeness, however, and particularly in light of the
parties' extensive briefing on the issue, the Court notes
that even if Best-Lock had established that Lego knowingly
misrepresented information about its minifigure patents,
based on the current record it could not prevail on summary
judgment as to materiality of the omitted information as a
matter of law.
Before
a court invalidates a copyright registration under 17 U.S.C.
§ 411(b), it must request that "the Register of
Copyrights advise the court whether the inaccurate
information, if known, would have caused the Register of
Copyrights to refuse registration." 17 U.S.C. §
411(b)(2);[14] Palmer/Kane LLC v. Rosen Book Works
LLC, 188 F.Supp.3d 347, 348 (S.D.N.Y. 2016)
("[C]ourts are in agreement that the provision is
mandatory in nature, requiring district courts to
solicit the advice of the Copyright Office when the statutory
conditions are satisfied." (emphasis
added))."[15]
This
requirement applies even if the court's conclusion
appears indisputably sound. In Argento v. Santiago for
Love of Ramon, LLC, for example, the court determined
that the plaintiff had knowingly included inaccurate
information on his copyright registration application -
specifically, the false claim that plaintiff was the author
of an artistic design that had, in fact, been created by
another individual roughly a decade before the creation date
listed on plaintiff's application. No.
16-CV-6172-FPG-MWP, 2019 WL 948186, at *4 (W.D.N.Y. Dec. 18,
2017). Notwithstanding the seemingly obvious answer - one
would naturally conclude the Copyright Office would not issue
a copyright registration to someone falsely claiming
authorship of a deceased individual's work - the court
nonetheless deferred its decision on defendant's motion
for summary judgment on plaintiff's copyright invalidity
until the parties had asked for and received a response from
the Register of Copyrights regarding the materiality of the
misrepresentation. Id.; see also Gold Value
Int'l Textile, Inc. v. Sanctuary Clothing, LLC, No.
LA CV16-00339 JAK (FFMx), 2017 WL 2903180, at *12 (C.D. Cal.
Mar. 24, 2017) (deferring decision on defendant's motion
for summary judgment because a "request to the Register
of Copyright . . . must [ ] precede a determination
whether the Copyright Office would have refused registration
of the copyright at issue in this action" (emphasis
added)). Similarly, in DeliverMed - the only
appellate decision to address § 411(b)(2) in depth - the
plaintiff falsely represented in his copyright registration
application that the artist had transferred ownership to him
by written agreement, knowing that the information was
untrue. 734 F.3d at 623. Following a two-week bench trial,
the district court entered a declaratory judgment
invalidating the plaintiff's copyright registration under
17 U.S.C. § 411(b). Id. The Seventh Circuit
reversed and remanded. Id. Although "the
district court's reasoning seem[ed] consistent with the
Register's practice," the Seventh Circuit
nonetheless concluded that "under section 411(b)(2), a
court still must request a response from the Register before
coming to a conclusion as to the materiality of a particular
mis-representation. By granting a declaratory judgment
invalidating DeliverMed's copyright registration without
following the statutorily mandated procedure, the district
court made a legal error." Id. at 623-24.
On this
record, therefore, these challenges by Best-Lock to the
validity of Lego's copyrights fail, and do not militate
against Lego's right to summary judgment.[16]
3.
Invalidity Due to Functionality
Best-Lock's
argument that the Asserted Copyrights are invalid because
certain design elements in question are functional is
similarly unavailing.
As I
have previously held in this case, certain elements of the
Lego minifigures are, indeed, functional. See 874
F.Supp.2d at 95-102. But the mere fact that some elements of
the Lego Minifigures are functional does not render the
entire sculptural work uncopyrightable. See, e.g.,
Kurt S. Adler, Inc. v. World Bazaars, 897 F.Supp.
92, 95-6 (S.D.N.Y. 1995) (finding defendant had infringed
plaintiff's valid copyright in case involving
bubble-blowing Santa Claus ornaments, despite functional
aspects of the protected work such as a pivoting arm holding
a bubble wand). Because Best-Lock concedes, as it must, that
certain elements of the Lego minifigures are purely
sculptural, its argument goes to the scope of the
copyrights (discussed in Section III(B)(2)(I)) - not
underlying validity of the copyrights. Klauber
Bros., 2015 WL 4393091, at *3 (rejecting defendants'
argument that plaintiff's registration of a copyrighted
design was unenforceable because plaintiff failed to disclose
to the Copyright Office, inter alia, that the
scalloped edges of a copyrighted design were a functional
technique; that fact did "not establish that the [ ]
design is unprotectable in its entirety.").
Best-Lock
has also failed to demonstrate that any allegedly inaccurate
information "was included on the application for
copyright registration with knowledge that it was
inaccurate," as it must under the PRO IP Act.
See 17 U.S.C. § 411(b)(1). For that second
independent reason, Best-Lock's claim fails.
3.
Invalidity Due to Fraud
Best-Lock's
related argument, that Lego fraudulently failed to disclose
that the minifigures it was registering were functional and
previously patented, is also meritless. "A party seeking
to establish a fraud on the Copyright Office . . . bears a
heavy burden." Lennon v. Seaman, 84 F.Supp.2d
522, 525 (S.D.N.Y. 2000). The party "must show at a
minimum that the author's application for copyright
registration [was] factually inaccurate, that the
inaccuracies were willful or deliberate, and that the
Copyright Office relied on those misrepresentations."
King-Devick Test Inc. v. NYU Langone
Hosps., No. 17-CV-9307 (JPO), 2019 WL 78986, at *6
(S.D.N.Y. Jan. 2, 2019) (internal quotation marks and
citation omitted).
As
discussed, Best-Lock has presented no evidence of factual
inaccuracies on Lego's copyright applications. And even
if, arguendo, Lego should have disclosed its patents
or functionality of the minifigures on its application,
Best-Lock has not presented any evidence to support a
conclusion that Lego failed to do so with an intent to
deceive the Copyright Office. Indeed, it is far more
plausible that the information was not included because it
was not explicitly requested. ...