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Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 6, 2003 Decided June 20, 2003

No. 02-7003

LESLIE ATKINS, D/B/A LESLIE ATKINS COMMUNICATIONS,

APPELLANT

v.

BENSON J. FISCHER, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 98cv00800)

C. Joel Van Over argued the cause for appellant. With him

on the briefs was David J. Butler. Edward A. Pennington

entered an appearance.

Richard E. Schimel argued the cause for appellee. With

him on the brief was Michael J. Budow. Stanley H. Goldschmidt entered an appearance.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

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Before: EDWARDS, SENTELLE and HENDERSON, Circuit

Judges.

Opinion for the Court filed by Circuit Judge Sentelle.

SENTELLE, Circuit Judge: Appellant Atkins brought this

action against defendant-appellees alleging copyright infringement in the commercial use of six-pack carrier and

bottle designs for a product called ‘‘Redneck Beer,’’ along

with a claim for violation of the Lanham Act. The district

court granted summary judgment in favor of appellees. Because we find that there are substantial issues of material

fact, we vacate the judgments in favor of defendants, and

remand for further proceedings.

I

Appellant Atkins is the sole proprietor of Leslie Atkins

Communications, an advertising, marketing, and public relations firm. Atkins offers services aimed at developing brand

identities for products in various businesses. Appellee Fischer is President of the Fischer Organization, Inc., a real estate

firm. In 1990 or 1991, he originated the concept of a product

called ‘‘Redneck Beer.’’ Fischer contacted several brewing

companies in an effort to find a means of producing and

marketing his proposed product. He was unsuccessful at

first.

Fischer then decided that he would attend a beer convention in Las Vegas in hopes of finding a joint venture partner

or a manufacturing partner with whom he could arrange to

produce and market Redneck Beer. Fischer contacted several graphic artists in hopes of obtaining rough preliminary

sketches or drawings of a potential packaging design for

Redneck Beer to use as a sales tool at the convention.

Fischer ultimately entered into an agreement with Atkins

by which Atkins would create designs for Redneck Beer.

The parties executed two formal agreements, a ‘‘Project

Order Agreement’’ and a ‘‘Terms & Conditions Agreement’’

on September 8, 1993. Under the terms of the Project Order

Agreement, Fischer and Atkins agreed to two stages of work:

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stage one involved the production of two color illustrations or

paintings, one of a bottle of Redneck Beer and one of a sixpack carrier, with an artist’s rendering of logo labels; stage

two involved final logo development and production of camera-ready art. The fees for the two stages of work were

$2000 and $4500, respectively. Both parties understood that

neither party was obligated to proceed with the second stage

of the agreement. The Terms and Conditions Agreement

contained the following provision: ‘‘Ownership and possession

of all underlying creative work developed and supplied by

Leslie Atkins Communications shall remain the exclusive

property of Leslie Atkins Communications; creative work

includes, but is not limited to, sketches, copy, photographs,

illustrations, type, and mechanical art boards.’’ Atkins testified at deposition that she believed that this provision allowed

her to retain her rights to her creative work and to set a price

for use of that creative work. Atkins also testified that she

charged Fischer less than she otherwise would have, with the

understanding that she would be able to obtain royalties for

the use of her work.

Following the execution of the agreements, Atkins subcontracted with a graphic artist, Tom Gaadt, to prepare initial

sketches of possible Redneck Beer designs. Under Atkins’

direction, Gaadt produced several preliminary sketches bearing ‘‘hillbilly or country-themed design elements suggestive of

the beer’s Redneck name.’’ Atkins v. Fischer, Civ. No. 98–

0800, slip op. at 4 (D.D.C. Nov. 30, 2001). Atkins showed

these sketches to Fischer, and Fischer selected a design

featuring a red bandana at the bottle’s neck and a body label

of a blue jeans pocket with a red bandana hanging from the

pocket. Gaadt produced new illustrations of the selected

design. On September 28, 1993, shortly before Fischer left

for the Las Vegas convention, Atkins delivered the new

illustrations to Fischer. On the date of delivery, appellant

sent a note to appellees that stated ‘‘I’m glad we’re finally

going to design a look for Red Neck Beer.’’

After returning from the convention, Fischer requested

that Atkins make some modifications to the design, including

the addition of some colors and a ‘‘tab label’’ on the blue jean

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pocket with ‘‘Fischer’’ printed on it. Atkins had these modifications made and delivered the revised illustrations to Fischer on October 3, 1993. Fischer paid Atkins in full for the first

phase of the contract.

The second phase of the contract was never reached because Fischer declared that he was unhappy with Atkins’

designs. In January of 1995, appellee Fischer Brewing Company was incorporated in Washington, DC. By March of

1995, appellees had engaged a number of different advertising

firms to work on designs for the Redneck Beer bottle label

and six-pack carrier. On March 31, 1995, appellees entered

into a manufacturing services agreement with the Stroh

Brewing Company. A provision in the agreement with Stroh

required Fischer Brewing to warrant that it was the exclusive

owner or licensee of all trademarks and copyrights which it

would use and authorize Stroh to use in manufacturing and

marketing the product. On advice from counsel, Fischer

sought execution of a work-for-hire agreement by Atkins.

Atkins refused to sign the agreement. On April 3, 1995,

Atkins filed a copyright registration for her designs.

By August of 1995, Fischer and Fischer Brewing Company

had registered the name ‘‘Redneck’’ with the U.S. Patent and

Trademark Office and had begun selling and distributing

Redneck Beer. They marketed Redneck Beer with labels

and containers bearing designs by Art Advertising, Inc. that

were marked by a label and placed in six-pack carriers

featuring a design of a blue jeans pocket and a red bandana.

In March of 1998, Atkins filed a complaint against appellees, alleging copyright infringement and false designation of

origin under section 43(a) of the Lanham Act, 15 U.S.C.

§ 1125(a). Appellees filed an answer that included several

affirmative defenses. Over two years later and after the

close of discovery, in December of 2000, appellees moved to

amend their answer and assert an additional defense—implied license. The district court granted the motion and

reopened discovery. Atkins thereafter filed a motion for

summary judgment.

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On November 30, 2001, the district court denied Atkins’

motion for summary judgment and sua sponte granted summary judgment for appellees. The court concluded that

appellees had an implied nonexclusive license to use Atkins’

work in the commercial production of Redneck Beer. The

court also held that the six-pack carrier design appellees

actually used was not substantially similar to Atkins’ designs.

In addition, the court, without explanation, dismissed Atkins’

Lanham Act claim. Atkins appealed, arguing, among other

things, that the district court erred in holding that appellees

had an implied license to use Atkins’ work in the commercial

production of Redneck Beer; that the district court erred in

concluding that the six-pack carrier design used by appellees

was substantially similar to Atkins’ six-pack carrier design;

and that the district court erred in dismissing the Lanham

Act claim.

II

A. Implied License

Section 204 of the Copyright Act invalidates attempted

transfers of copyright ownership made without a writing. 17

U.S.C. § 204(a) (2000). However, section 101 of the Act

excludes nonexclusive licenses from the definition of ‘‘transfer

of copyright ownership.’’ 17 U.S.C. § 101. A nonexclusive

license may be granted orally or arise from the conduct of the

parties. Nelson–Salabes, Inc. v. Morningside Development,

LLC, 284 F.3d 505, 514 (4th Cir. 2002); Johnson v. Jones, 149

F.3d 494, 500 (6th Cir. 1998); Lulirama Ltd., Inc. v. Axcess

Broad. Serv., 128 F.3d 872, 879 (5th Cir. 1997); IAE, Inc. v.

Shaver, 74 F.3d 768, 775 (7th Cir. 1996); Effects Assocs., Inc.

v. Cohen, 908 F.2d 555, 558 (9th Cir. 1990). Such an implied

license will arise where ‘‘(1) a person (the licensee) requests

the creation of a work, (2) the creator (the licensor) makes

the particular work and delivers it to the licensee who requested it, and (3) the licensor intends that the licenseerequestor copy and distribute his work.’’ Lulirama, 128 F.3d

at 879 (quoting IAE, 74 F.3d at 776). Because the existence

of an implied license is an affirmative defense to infringeUSCA Case #02-7003 Document #755644 Filed: 06/20/2003 Page 5 of 11
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ment, the alleged infringers have the burden of establishing

an implied license. IAE, 74 F.3d at 775.

The only disputed issue in this phase of the case is whether

Atkins intended Fischer to copy and distribute her work.

Atkins acknowledges that she delivered her designs to Fischer before the Las Vegas beer convention with the intent that

Fischer would use her designs as a sales tool at the convention, but she argues that Fischer’s actions in marketing the

product thereafter exceed the scope of his license to use the

designs. MacLean Assoc. v. Wm. M. Mercer–Meidinger–

Hansen, Inc., 952 F.2d 769, 779 (3d Cir. 1991) (‘‘[T]he licensor

can still bring suit for copyright infringement if the licensee’s

use goes beyond the scope of the nonexclusive license.’’).

Atkins argues that she did not intend for Fischer to use her

designs as anything more than a sales tool at the convention

and that, at a minimum, a genuine issue of material fact exists

with regard to the intent of the parties. Appellees argue that

they hold an implied license to use the artwork from the first

stage of the agreement in completing the second stage because the designs from the first stage were indisputably

intended to be used in the second stage. Appellees further

argue that the note from Atkins to Fischer on the date of

delivery of the first-stage designs supports their theory that

the parties intended the first-stage designs to be used by

Fischer in the commercial production of Redneck Beer.

We review these grants of summary judgment ‘‘de novo,

affirming only if there is no genuine issue as to any material

fact and the moving party is entitled to judgment as a matter

of law.’’ Republican National Committee v. Taylor, 299 F.3d

887, 890 (D.C. Cir. 2002). The record before us presents a

genuine issue of fact on the material issue of the intent of the

parties. As the district court recognized, the two-stage written agreement between the parties sheds little light on

whether completion of the first stage of the agreement implied a grant of a nonexclusive license to use Atkins’ copyrighted designs for commercial production or merely as a

sales tool at the convention. Atkins v. Fischer, Civ. No. 98–

0800, slip op. at 22 (D.D.C. Nov. 30, 2001) (noting that the

agreement between the parties ‘‘does not eliminate the possiUSCA Case #02-7003 Document #755644 Filed: 06/20/2003 Page 6 of 11
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bility of an oral or implied grant of a nonexclusive license’’).

The existence of the second stage of the agreement suggests

that the parties contemplated that the designs, created during

the first stage, would be used in the second stage to create

camera-ready art suitable for commercial production. Nevertheless, there is a genuine issue as to whether the agreement

implies the grant of a nonexclusive license to Fischer to use

the bottle and six-pack carrier designs from the first-stage for

subsequent commercial production without Atkins’ cooperation and further compensation. This is especially so considering the relatively small price Fischer paid for completion of

the first stage of the agreement. Arguably, Atkins’ acceptance of the relatively small payment of $2000 for the use of

her copyright designs supports a finding that the intent of the

parties was that only a limited license be conveyed. This

factor distinguishes the present case from Effects, 908 F.2d

555, upon which the district court relied in concluding that

Atkins had granted Fischer an implied license to use her

designs for commercial production. In Effects, the Ninth

Circuit placed significant weight on the fact that the licensee

paid almost $56,000 for seven shots of special effects footage

for a movie, explaining that holding that the licensor did not

convey to the licensee a license to use the footage in the

movie ‘‘can’t be squared with the TTT almost $56,000 [paid] for

this footage.’’ Id. at 559. The $2,000 in the present case,

nothing else appearing, will not support the same sort of

reasoning.

The parties’ conduct similarly fails to illuminate this issue.

Certainly, Atkins’ delivery of her designs to Fischer just

before the Las Vegas beer convention is consistent with an

intent that Fischer would use them as a sales tool at the

convention, but does not conclusively establish whether Atkins intended for appellees to use them further in the commercial production of Redneck Beer without additional compensation. Likewise, the statement in Atkins’ note delivered

to Fischer on the date of the delivery of the first-stage

designs (‘‘I’m glad we’re finally going to design a look for Red

Neck Beer’’) leaves the issue open to argument. That the

parties were ‘‘finally going to design a look for Red Neck

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Beer’’ does not indicate one way or another whether this

‘‘look’’ would be used simply as a sales tool or in commercial

production. Moreover, the statement suggests that the

‘‘look’’ to which Atkins refers is not the product of the first

stage of the agreement because the statement indicates that

the ‘‘look’’ to which she refers is something that the parties

are ‘‘going to design’’ in the future. Thus, a genuine issue of

material fact exists as to the question of intent, rendering

summary judgment inappropriate.

In addition, Atkins testified that Fischer told her several

times that ‘‘[t]here would be plenty of money later on’’ and

that Fischer talked her into reducing her prices for her work

because of his assurances that she would ‘‘make a lot of

money on this.’’ Such statements are appropriate evidence in

determining whether an implied nonexclusive license arises

from the conduct of the parties, Foad Consulting Grp. v.

Azzalino, 270 F.3d 821, 833–34 (9th Cir. 2001) (Kozinski, J.,

concurring), and further expose the genuine issue of material

fact that requires jury deliberation. Therefore, summary

judgment was inappropriate and the implied license issue

should have been submitted to trial.

B. Substantial Similarity

The Copyright Act defines derivative works as those

‘‘based upon’’ the copyrighted work. 17 U.S.C. § 101.

Courts interpret the Act to mandate that derivative work that

is ‘‘substantially similar’’ to the original work upon which it is

based is an infringement. E.g., Sturdza v. United Arab

Emirates, 281 F.3d 1287 (D.C. Cir. 2002). Because substantial similarity is an extremely close question of fact, summary

judgment has traditionally been frowned upon. Id. at 1296.

The question is whether ‘‘an average lay observer would

recognize the alleged copy as having been appropriated from

the copyrighted work.’’ Hamil America, Inc. v. GFI, 193

F.3d 92, 100 (2d Cir. 1999). Judge Learned Hand previously

described the test as whether the ordinary observer, ‘‘unless

he set out to detect the disparities, would be disposed to over

look them, and regard their aesthetic appeal as the same.’’

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Id. (quotation omitted). When determining similarity, courts

are to look at the ‘‘total concept and feel’’ of the designs. Id.

at 102. When comparing the designs, it is not sufficient to

dissect separate components and dissimilarities. The original

way that the author ‘‘selected, coordinated, and arranged the

elements’’ of her work is the focus of the court. Id. at 103.

Although all derivative works have differences from the original, it is the similarities, rather than the differences, that

inform whether the ‘‘total concept and feel’’ of the works and

their ‘‘aesthetic appeal’’ is the same. Knitwaves, Inc. v.

Lollytogs Ltd., 71 F.3d 996, 1004 (2d Cir. 1995).

In ruling against Atkins, the court found that Atkins’ sixpack carrier design and the challenged six-pack carrier design

‘‘merely reflect a similar idea or concept and are not sufficiently substantial to raise a genuine issue of material fact

with regard to copying.’’ Atkins v. Fischer, Civ. No. 98–0800,

slip op. at 31 (D.D.C. Nov. 30, 2001). While we cannot say

that the district court was wrong in its conclusion, it is not

apparent that the record before the court was sufficient to

have decided as a matter of law rather than submitting to a

trier of fact the determination of substantial similarity of the

total concept necessary to the resolution of this issue.

The Second Circuit in Knitwaves, 71 F.3d 996, provides a

working example of the adjudication of this sort of copyright

infringement case. In that case, Knitwaves filed an action

against Lollytogs, alleging infringement of Knitwaves’ copyrighted sweater designs. Despite numerous differences cited

by Lollytogs, the court found that the two sweater designs

had the same ‘‘total concept and feel.’’ For example, Lollytogs had pointed out that its ‘‘leaf’’ sweater used a five-leaf

design of leaf and acorn appliques made of felt with two pairs

of leaves above and one leaf below, whereas Knitwaves used

an eight-leaf design of leaf appliques made of puffy polar

fleece and placed in three rows. In addition, the leaves were

arranged in different patterns. 71 F.3d at 1004. The Second

Circuit explained that despite the differences ‘‘in detail’’

‘‘requiring considerable ink to describe,’’ the differences ‘‘do

little to lessen a viewer’s overwhelming impression that the

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TTT Lollytogs sweaters are appropriations of the Knitwaves

sweaters.’’ Id.

In the present case, Atkins maintains that the court focused

too much on the differences in detail and too little on the

similarity in concept and feel:

In the Atkins Design, the words ‘‘Redneck Beer’’ appear

sprawled across a jean’s pocket and the red bandana

which hangs out of the pocket. In contrast, on the actual

carrier, the words ‘‘Redneck Beer’’ appear in a different

style of writing, are differently colored and are written

directly across the jeans pocket. Further, there is no

bandana hanging out of the jeans pocket depicted on the

label. While the red bandana does appear on the actual

carrier, it appears only on the top of the carrier, with the

white patterned detailing seemingly enlarged in comparison to the bandana on the Atkins carrier. The actual

carrier features different writing, located in different

places from that on the Atkins carrier. Lastly, the

actual carrier does not include any of the ‘‘suds’’ detailing

which appears on the Atkins carrier. In sum, the only

similarity between the two carriers is the fact that they

both feature blue-jeans material, a red bandana, and the

word ‘‘Redneck.’’

Atkins v. Fischer, Civ. No. 98–0800, slip op. at 31 (D.D.C.

Nov. 30, 2001) (internal citations omitted).

Atkins argues that a reasonable jury could find that the

differences in detail between the two designs do not lessen

the total concept and feel of similarity between the designs.

E.g., Sturdza, 281 F.3d at 1297 (reversing finding of noninfringement where court overlooked similar expression of design concepts and the ‘‘overall look and feel’’ of the two

designs); Cavalier v. Random House, Inc., 297 F.3d 815, 827

(9th Cir. 2002) (the presence of some similarities and differences made the question unfit for summary judgment and

better left for the jury). We agree. Upon de novo review of

the record, while we are not prepared to say that the district

court’s conclusion of dissimilarity was incorrect, that is not

the test. This issue of substantial similarity in a copyright

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infringement case ‘‘is customarily an extremely close question

of fact,’’ as to which ‘‘summary judgment has traditionally

been frowned upon.’’ Sturdza, 281 F.3d at 1296 (citations

omitted). Such a grant of summary judgment would be

appropriate only ‘‘if the works are so dissimilar as to protectable elements that no reasonable jury could find for the

plaintiff on the question of substantial similarity.’’ Id. at

1297. In conducting our de novo review under that correct

standard, we conclude that a reasonable jury could have

found for appellant on this issue, and we therefore must order

vacatur of the summary judgment.

C. Lanham Act

The district court did not explain why it dismissed Atkins’

Lanham Act claim. Accordingly, we cannot determine the

effect our reversal of summary judgment on the copyright

infringement claims has upon the Lanham Act claim. We

therefore remand that claim to the district court so it may

reconsider the claim in light of our decisions on the copyright

infringement claims.

III

The presence of material factual issues renders summary

judgment inappropriate for both the implied license issue and

the issue of substantial similarity between the six-pack carriers. Accordingly, we reverse the grant of summary judgment. We also vacate and remand the court’s dismissal of

Atkins’ Lanham Act claim to allow the court an opportunity

to reconsider that claim in light of our decision on the implied

license and substantial similarity issues.

So ordered.

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