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

United States District Court, D. Connecticut

July 25, 2019

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.

          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. ...


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