Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-56331/USCOURTS-ca9-12-56331-1/pdf.json

Parties Involved:
Wael Salim Elhalawani
Appellee
Inhale, Inc.
Appellant
Starbuzz Tobacco, Inc.
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

INHALE, INC., a California

Corporation,

Plaintiff-Appellant,

v.

STARBUZZ TOBACCO, INC., a

California Corporation; WAEL

SALIM ELHALAWANI, an individual

residing in California,

Defendants-Appellees.

No. 12-56331

D.C. No.

2:11-cv-03838-

ODW-FFM

ORDER AND

AMENDED

OPINION

Appeal from the United States District Court

for the Central District of California

Otis D. Wright, II, District Judge, Presiding

Argued and Submitted

November 4, 2013—Pasadena, California

Filed January 9, 2014

Amended June 3, 2014

Before: Diarmuid F. O’Scannlain, Susan P. Graber,

and Carlos T. Bea, Circuit Judges.

Order;

Opinion by Judge O’Scannlain;

Concurrence by Judge Bea

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2 INHALE, INC. V. STARBUZZ TOBACCO, INC.

SUMMARY*

Copyright

The panel filed (1) an order amending its opinion,

denying petitions for rehearing and rehearing en banc, and

granting a request for an award of attorneys’ fees; and (2) an

amended opinion affirming the district court’s summary

judgment and award of attorneys’ fees in favor of the

defendant in an action under the Copyright Act.

The panel held that the shape of a hookah water container

was not entitled to copyright protection. The panel held that

the container, a useful article, was not copyrightable because

it did not incorporate sculptural features that could be

identified separately from, and were capable of existing

independently of, the container’s utilitarian aspects. 

Adopting the reasoning of the Copyright Office, the panel

held that whether an item’s shape is distinctive does not

affect conceptual separability. The panel also held that the

district court did not abuse its discretion in awarding

attorneys’ fees to the defendant under 17 U.S.C. § 505. The

panel awarded attorneys’ fees for the appeal in an amount to

be determined by the district court.

Concurring in part, Judge Bea wrote that he concurred

with the majority’s opinion, except for the part of Part II.C

that discusses the level of deference owed to the Copyright

Office’s interpretations of the Copyright Office. Judge Bea

wrote that because the statute was not ambiguous, it was

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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INHALE, INC. V. STARBUZZ TOBACCO, INC. 3

unnecessary to look to the Copyright Office for further

guidance.

COUNSEL

Louis F. Teran, SLC Law Group, Pasadena, California,

argued the cause and filed the briefs for Plaintiff-Appellant.

Natu J. Patel, The Patel Law Firm, P.C., Irvine, California,

argued the cause and filed the brief for Defendants-Appellees.

ORDER

The opinion filed January 9, 2014, and published at

739 F.3d 446, is amended as follows:

On slip opinion page 8, after <is not copyrightable.3> and

before the beginning of Part III, add the following as a new

paragraph:

<In summary, we hold that any part of a container that

merely accomplishes the containing is not copyrightable. We

do not mean to suggest that, in some other case, no elements

of a container “can be identified separately from, and are

capable of existing independently of,” the container. 

17 U.S.C. § 101. Here, though, Inhale does not argue in its

opening brief that the exterior shape of the drooping ring is

conceptually separable because the interior shape of the

hookah does not protrude into the ring. Instead, its theory is

that the hookah’s “outer skin,” from top to bottom, can be

peeled away and analyzed separately. Therefore, its

argument in the petition for rehearing, that the exterior shape

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4 INHALE, INC. V. STARBUZZ TOBACCO, INC.

of the drooping ring is uniquely separable, is waived. See

Greenwood v. Fed. Aviation Admin., 28 F.3d 971, 977 (9th

Cir. 1994). In addition, we emphasize that Inhale does not

argue that the imagery on the container is copyrightable. Our

opinion should not be understood to affect the

copyrightability of “[p]ictorial, graphic, and sculptural

works,” 17 U.S.C. § 101, that may be affixed to or made part

of a container.>.

An amended opinion is filed concurrently with this order.

With this amendment, the panel has voted unanimously

to deny the petition for rehearing and the petition for

rehearing en banc. The full court has been advised of the

petition for rehearing en banc, and no judge has requested a

vote on whether to rehear the matter. Fed. R. App. P. 35.

The petition for rehearing and the petition for rehearing

en banc are DENIED. No further petitions for panel

rehearing or for rehearing en banc will be entertained. 

Starbuzz’s request for an award of attorneys’ fees under

17 U.S.C. § 505 is GRANTED. We award attorneys’ fees

incurred in responding to the petition for rehearing and

rehearing en banc to Starbuzz in an amount to be determined

by the district court on remand.

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INHALE, INC. V. STARBUZZ TOBACCO, INC. 5

OPINION

O’SCANNLAIN, Circuit Judge:

We must decide whether the shape of a hookah water

container1is entitled to copyright protection.

I

Inhale, Inc. claims copyright protection in the shape of a

hookah water container that it first published on August 29,

2008 and registered with the United States Copyright Office

on April 21, 2011. At both the time of publication and the

time of registration, the container included skull-andcrossbones images on the outside.

Less than a month after registration, Inhale sued Starbuzz

Tobacco, Inc. and Wael Salim Elhalawani (collectively,

“Starbuzz”) for copyright infringement. Inhale claimed that

Starbuzz sold hookah water containers that were identical in

shape to Inhale’s container. The allegedly infringing

containers did not contain skull-and-crossbones images. 

After determining that the shape of the water container is not

copyrightable, the district court granted summary judgment

in favor of Starbuzz.

1 A “hookah” is a device for smoking tobacco. It contains coals that

cause the tobacco to smoke. A user’s inhalation through a tube causes the

smoke to travel through water, which cools and filters the smoke, before

it reaches the user. The water is held in a container at the base of the

hookah.

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6 INHALE, INC. V. STARBUZZ TOBACCO, INC.

II

Because “ownership of a valid copyright” is an element

of copyright infringement, Feist Publ’ns, Inc. v. Rural Tel.

Serv. Co., 499 U.S. 340, 361 (1991), summary judgment was

appropriate if the shape of Inhale’s hookah water container is

not copyrightable.

A

The parties agree that Inhale’s hookah water container is

a “useful article.” As “the design of a useful article,” the

shape of the container is copyrightable “only if, and only to

the extent that, [it] incorporates . . . sculptural features that

can be identified separately from, and are capable of existing

independently of, the utilitarian aspects of the” container. 

17 U.S.C. § 101 (defining “[p]ictorial, graphic, and

sculptural works”); id. § 102(a)(5) (granting copyright

protection to “pictorial, graphic, and sculptural works”).

This statutory standard is satisfied by either physical or

conceptual separability. See 1 Melville B. Nimmer & David

Nimmer, Nimmer on Copyright § 2.08[B][3], at 2-99–2-100

(2011). Inhale does not argue that the container’s shape

satisfies the requirements of physical separability. Thus, we

consider only conceptual separability.

B

Relying on Poe v. Missing Persons, 745 F.2d 1238 (9th

Cir. 1984), Inhale argues that conceptual separability is a

question of fact. Inhale’s reliance on Poe is misplaced. Poe

decided that whether an item is a useful article is a factual

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INHALE, INC. V. STARBUZZ TOBACCO, INC. 7

question. Id. at 1241–42. But usefulness is distinct from

separability.

In Ets-Hokin v. Skyy Spirits, Inc., 225 F.3d 1068 (9th Cir.

2000), we ruled that the shape of a vodka bottle was not

separable from its utilitarian features. Rather than treat

separability as a question for the jury, we conducted our own

analysis. See id at 1080. (“[T]he district court did not identify

any artistic features of the bottle that are separable from its

utilitarian ones. We also find none.”). In Fabrica Inc. v. El

Dorado Corp., 697 F.2d 890 (9th Cir. 1983), we affirmed a

district court’s directed verdict in favor of a copyright

defendant on the ground that the allegedly infringed work

was not copyrightable. We assessed separability ourselves. 

See id. at 893 (“There is no element of the folders that can be

separated out and exist independently of their utilitarian

aspects.”).

Our precedent suggests that whether a useful article has

conceptually separable features is a mixed question of law

and fact. See Pullman-Standard v. Swint, 456 U.S. 273, 289

n.19 (1982) (describing mixed questions of law and fact as

those “in which the historical facts are admitted or

established, the rule of law is undisputed, and the issue is

whether the facts satisfy the statutory standard”). Because

both parties agree that the hookah water container is a useful

article that holds water within its shape, all that is left is the

application of the legal standard to those facts. Thus, whether

the shape of the container is conceptually separable is a

conclusion that we review de novo. See Mathews v. Chevron

Corp., 362 F.3d 1172, 1180 (9th Cir. 2004) (“Mixed

questions of law and fact are reviewed de novo; however, the

underlying factual findings are reviewed for clear error.”).

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8 INHALE, INC. V. STARBUZZ TOBACCO, INC.

C

Relying in part on Ets-Hokin, the district court ruled that

the container’s shape is not conceptually separable from its

utilitarian features. In Ets-Hokin, we held that the shape of a

vodka “bottle without a distinctive shape” was not

conceptually separable. See 225 F.3d at 1080. Attempting to

distinguish this case from our precedent, however, Inhale

emphasizes the distinctive shape of its hookah water

container. Therefore, we must determine whether

distinctiveness of shape affects separability.

When interpreting the Copyright Act, we defer to the

Copyright Office’s interpretations in the appropriate

circumstances.2See Richlin v. Metro-Goldwyn-Mayer

Pictures, Inc., 531 F.3d 962, 972–73 (9th Cir. 2008); Batjac

Prods. Inc. v. GoodTimes Home Video Corp., 160 F.3d 1223,

1230–31 (9th Cir. 1998) (deferring to the Register’s

interpretation in an internal manual, Compendium of

Copyright Office Practices). Because Chevron deference

does not apply to internal agency manuals or opinion letters,

we defer to the Copyright Office’s views expressed in such

2

“Courts have twisted themselves into knots trying to create a test to

effectively ascertain whether the artistic aspects of a useful article can be

identified separately from and exist independently of the article’s

utilitarian function.” Masquerade Novelty, Inc. v. Unique Indus., 912 F.2d

663, 670 (3d Cir. 1990). Under some interpretations of 17 U.S.C. § 101,

distinctiveness of shape would be relevant. See, e.g., Brandir Int’l, Inc.

v. Cascade Pac. Lumber Co., 834 F.2d 1142, 1145 (2d Cir. 1987) (asking

whether “design elements can be identified as reflecting the designer’s

artistic judgment exercised independently of functional influences”). We

think § 101 is sufficiently ambiguous to justify deference to administrative

interpretations. See High Sierra Hikers Ass’n v. Blackwell, 390 F.3d 630,

638–39 (9th Cir. 2004).

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INHALE, INC. V. STARBUZZ TOBACCO, INC. 9

materials “only to the extent that those interpretations have

the ‘power to persuade.’” See Christensen v. Harris Cnty.,

529 U.S. 576, 587 (2000).

In an opinion letter and an internal manual, the Copyright

Office has determined that whether an item’s shape is

distinctive does not affect separability. See Letter from

Nanette Petruzzelli, Assoc. Register, U.S. Copyright Office,

to Jeffrey H. Brown, attorney for MSRF, Inc., Re: Fanciful

OrnamentalBottle Designs 1–9, Control No. 61-309-9525(S),

April 9, 2008. That determination was based on the principle

that “analogizing the general shape of a useful article to

works of modern sculpture” is insufficient for conceptual

separability. Compendium of Copyright Office Practices II

(Compendium II) § 505.03. Although Inhale’s water

container, like a piece of modern sculpture, has a distinctive

shape, “[t]he shape of the alleged ‘artistic features’ and of the

useful article are one and the same.” Id.

Because the Copyright Office’s reasoning is persuasive,

we adopt it for this case. The shape of a container is not

independent of the container’s utilitarian function—to hold

the contents within its shape—because the shape

accomplishes the function. The district court correctly

concluded that the shape of Inhale’s hookah water container

is not copyrightable.3

3 That the Copyright Office issued a certificate of registration to Inhale

does not contradict this conclusion. Because Inhale’s application included

skull-and-crossbones images on the container, the certificate of

registration does not show that the Copyright Office considers the shape

of the container copyrightable.

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10 INHALE, INC. V. STARBUZZ TOBACCO, INC.

In summary, we hold that any part of a container that

merely accomplishes the containing is not copyrightable. We

do not mean to suggest that, in some other case, no elements

of a container “can be identified separately from, and are

capable of existing independently of,” the container. 

17 U.S.C. § 101. Here, though, Inhale does not argue in its

opening brief that the exterior shape of the drooping ring is

conceptually separable because the interior shape of the

hookah does not protrude into the ring. Instead, its theory is

that the hookah’s “outer skin,” from top to bottom, can be

peeled away and analyzed separately. Therefore, its

argument in the petition for rehearing, that the exterior shape

of the drooping ring is uniquely separable, is waived. See

Greenwood v. Fed. Aviation Admin., 28 F.3d 971, 977 (9th

Cir. 1994). In addition, we emphasize that Inhale does not

argue that the imagery on the container is copyrightable. Our

opinion should not be understood to affect the

copyrightability of “[p]ictorial, graphic, and sculptural

works,” 17 U.S.C. § 101, that may be affixed to or made part

of a container.

III

A

Exercising its discretion under 17 U.S.C. § 505, the

district court awarded $111,993 in attorneys’ feesto Starbuzz. 

The district court considered the five, non-exclusive factors

listed in Jackson v. Axton: “[1] the degree of success

obtained; [2] frivolousness; [3] motivation; [4] objective

unreasonableness (both in the factual and legal arguments in

the case); and [5] the need in particular circumstances to

advance considerations of compensation and deterrence.” 

25 F.3d 884, 890 (9th Cir. 1994) (citation omitted). In ruling

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INHALE, INC. V. STARBUZZ TOBACCO, INC. 11

that the factors favored an award to Starbuzz, the district

court relied on, among other things, Starbuzz’s “total success

on the merits” and the need for deterrence of “similarly

frivolous claims against innocent Defendants.”

The district court did not abuse its discretion because “the

reasons given by the district court in this case are wellfounded in the record and are in keeping with the purposes of

the Copyright Act,” Fantasy, Inc. v. Fogerty, 94 F.3d 553,

560 (9th Cir. 1996). A successful defense furthers the

purposes of the Copyright Act just as much as a successful

infringement suit does. See Fogerty v. Fantasy, Inc.,

510 U.S. 517, 527 (1994) (“[D]efendants who seek to

advance a varietyof meritorious copyright defenses should be

encouraged to litigate them to the same extent that plaintiffs

are encouraged to litigate meritorious claims of

infringement.”).

B

Starbuzz also requests attorneys’ fees for this appeal

under 17 U.S.C. § 505. Section 505 gives us the same

discretion that it gave to the district court. See Disenos

Artisticos E Industriales, S.A. v. Costco Wholesale Corp.,

97 F.3d 377, 382 (9th Cir. 1996). We award attorneys’ fees

incurred in the defense of this appeal to Starbuzz in an

amount to be determined by the district court. See Fantasy,

94 F.3d at 561 (“[W]e conclude that fees are warranted under

§ 505 inasmuch as it served the purposes of the Copyright

Act for Fogerty to defend an appeal so that the district court’s

fee award would not be taken away from him.”).

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12 INHALE, INC. V. STARBUZZ TOBACCO, INC.

IV

For the foregoing reasons, we affirm the district court’s

grant of summary judgment and award of attorneys’ fees to

Starbuzz. We award attorneys’ fees for this appeal in an

amount to be determined by the district court.

AFFIRMED AND REMANDED.

BEA, Circuit Judge, concurring in part:

I concur with the majority’s opinion, except for the part

of Part II.C which discusses the level of deference owed to

the Copyright Office’s interpretations of the Copyright Act. 

The text of 17 U.S.C. § 101 does not suggest that

“distinctiveness” is an element of separability. Because the

statute is not ambiguous in this respect, it is unnecessary to

look to the Copyright Office for further guidance.

Once we start engrafting administrative interpretation to

our opinions, there is a tendency to look elsewhere than the

text of the enactments of Congress. This misplaces the power

of enactment of laws from the legislative to the administrative

branch and is contrary to my concept of the separation of

powers.

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