PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNIVERSAL FURNITURE 

INTERNATIONAL, INCORPORATED,

Plaintiff-Appellee,

v.  No. 07-2180

COLLEZIONE EUROPA USA,

INCORPORATED,

Defendant-Appellant. 

UNIVERSAL FURNITURE 

INTERNATIONAL, INCORPORATED,

Plaintiff-Appellee,

v.  No. 09-1437

COLLEZIONE EUROPAUSA,

INCORPORATED,

Defendant-Appellant. 

Appeals from the United States District Court

for the Middle District of North Carolina, at Durham.

William L. Osteen, Jr., District Judge.

(1:04-cv-00977-WO-PTS)

Argued: December 2, 2009

Decided: August 20, 2010

Before MICHAEL, MOTZ, and KING, Circuit Judges.
Affirmed by published per curiam opinion.

COUNSEL

ARGUED: Nicholas Mesiti, HESLIN, ROTHENBERG,

FARLEY & MESITI, PC, Albany, New York, for Appellant.

William M. Bryner, KILPATRICK & STOCKTON, LLP,

Winston-Salem, North Carolina, for Appellee. ON BRIEF:

Brett M. Hutton, HESLIN, ROTHENBERG, FARLEY &

MESITI, PC, Albany, New York, for Appellant. George L.

Little, Jr., Laura C. Miller, KILPATRICK & STOCKTON,

LLP, Winston-Salem, North Carolina; W. Swain Wood,

WOOD JACKSON, PLLC, Raleigh, North Carolina, for

Appellee.

OPINION

PER CURIAM:

Appellant Collezione Europa USA, Incorporated

("Collezione"), and its adversary in this proceeding, appellee

Universal Furniture International, Incorporated ("Universal"),

are competing furniture companies. In 2004, Universal sued

Collezione in the Middle District of North Carolina, alleging

infringement under the Copyright Act with respect to two of

Universal’s furniture collections, as well as violations of the

Lanham Act and the North Carolina Unfair and Deceptive

Trade Practices Act (the "UDTPA"). In opposing the copyright claim, Collezione argued that the furniture at issue is not

copyrightable. The district court disagreed, however, concluding that Universal possessed valid copyrights in its furniture

designs and that Collezione had infringed those copyrights.

See Universal Furniture Int’l, Inc. v. Collezione Europa USA,

Inc., No. 1:04-cv-00977 (M.D.N.C. Sept. 14, 2007) (the "Lia2 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
bility Opinion").1

 The court also concluded in its Liability

Opinion that Collezione had misrepresented Universal’s furniture lines as its own, in contravention of both the Lanham Act

and the UDTPA. After conducting a thorough hearing on the

damages issues, the court awarded more than $11 million to

Universal. See Universal Furniture Int’l, Inc. v. Collezione

Europa USA, Inc., No. 1:04-cv-00977 (M.D.N.C. Feb. 12,

2009) (the "Damages Opinion").2

Collezione has appealed from the rulings made in the Liability Opinion, in favor of Universal, under the Copyright Act,

the Lanham Act, and the UDTPA. Furthermore, Collezione

contends that the court erred in the Damages Opinion in

excluding its proof of deductible expenses. As explained

below, we affirm. 

I.

A.

Universal and Collezione have been embroiled in litigation

since 2004 over Collezione’s alleged copying of two of Universal’s furniture collections. Collezione has a reputation as

being a knock-off furniture company: that is, one that imitates

the designs of its competitors for a lower cost. Indeed, Collezione’s president acknowledged that his company routinely

imitated other companies’ furniture designs. 

Universal is a North Carolina-based business that designs,

imports, and distributes furniture that is manufactured outside

this country. In 1994, Universal’s predecessor, Universal Furniture Industries, Incorporated ("UFI"), entered into a designservice agreement with the Norman Hekler design firm (the

1The Liability Opinion is found at J.A. 2765-804. (Citations herein to

"J.A. ___" refer to the contents of the Joint Appendix filed by the parties

in this appeal.) 

2The Damages Opinion is found at J.A. 3050-85. 

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 3
"1994 service agreement"). Through a subsequent merger in

1998 (the "1998 merger"), UFI became Universal Furniture

Limited ("UFL"). In 2001, Universal entered into an assetpurchase agreement with UFL (the "2001 asset agreement").

Among the assets purchased by Universal were all of UFL’s

intellectual property rights, including the 1994 service agreement.

Steven Russell was the Hekler designer who created the

two Universal collections that are the subject of this dispute:

the Grand Inheritance Collection (the "GIC") and the English

Manor Collection (the "EMC"). Russell designed the GIC in

2001 and the EMC in 2002, and both collections were manufactured for Universal by a Chinese corporation called Lacquercraft. The GIC line became available to the public in

April 2001 and the EMC line became available in April 2003.

Russell began his design process for the GIC and EMC

lines by consulting public domain sources such as furniture

books and antiques magazines. Russell then did "conceptual

doodles" by hand until he came up with designs that were

pleasing to his eye. J.A. 651-52. Russell asserted that he did

not simply replicate research references in his designs. Rather,

he used the references as inspiration and combined elements

from the public domain to "create a different look than has

been seen before." Id. at 805. Russell’s objective was to blend

looks from historical periods (rather than reproduce a particular period) and to "bring something new to the party on an

historical theme." Id. at 673. Although he was influenced by

functional concerns in designing the furniture, Russell was

also motivated by aesthetic goals (such as making the furniture attractive to consumers). 

In May and November 2003, Universal filed registration

forms with the Copyright Office seeking copyright protection

for the GIC and EMC lines. A supplementary registration

form filed in July 2003 for the GIC line described the subject

of the registration as the "decorative sculptural designs on fur4 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
niture; adaptation of preexisting decorative designs; compilation of decorative designs on suites of furniture." J.A. 1233.

Similarly, the EMC registration form noted that, although the

collection contained "public domain elemental designs," Universal sought copyright protection in the "[o]riginal decorative designs appearing on suites of furniture including original

adaptations of public domain designs and original compilations of decorative designs." Id. at 1234B. The Copyright

Office issued registrations to Universal for the GIC and EMC

lines on the same day it received the applications. 

In 2004, Rhodes Furniture — a major purchaser of the

EMC and GIC lines — approached Collezione seeking a

cheaper alternative to Universal’s furniture. As a result, Collezione agreed to design furniture that would mimic the EMC

and GIC lines. Collezione’s Chief Financial Officer Paul

Frankel admitted that Collezione intended to sell furniture

similar to the GIC and EMC lines. Unaware that Universal

had obtained its copyrights, Frankel nevertheless believed that

the GIC and EMC designs were not entitled to copyright protection and that Collezione had the right to mimic them. 

In 2004, Collezione introduced one collection (the

"20000") to imitate the GIC line and another collection (the

"20200") to imitate the EMC line. Collezione displayed the

20200 collection at the High Point, North Carolina furniture

market in October 2004. Upon learning that Collezione was

displaying furniture that was nearly identical to the EMC line,

Universal’s Senior Vice President Stephen Giles visited the

High Point market. Giles was shocked by the similarity

between Collezione’s 20200 collection and the EMC line, and

also concluded that Collezione was displaying furniture actually manufactured by Universal. Indeed, Giles believed that

Collezione had simply removed Universal stickers from some

pieces. In some instances, he noticed stickers (which he had

designed) bearing the name of Universal’s manufacturer, Lacquercraft. Giles took photographs of what he observed and

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 5
provided the evidence to Universal’s Vice President Victor

Hsu. 

Claiming a violation of its copyrights, Universal promptly

sent Collezione a cease and desist letter. Universal also filed

suit against Collezione in October 2004 in the Middle District

of North Carolina, alleging violations of the Copyright and

Lanham Acts as well as state law violations of the UDTPA.

Although Collezione believed that Universal’s GIC and EMC

lines were not entitled to copyright protection, it agreed to

redesign its 20000 and 20200 collections to distinguish them

from the GIC and EMC lines. Collezione also agreed to submit the redesigns to Universal before marketing them, but it

later displayed the redesigns at a San Francisco furniture market and in the magazine Furniture Today without first submitting them to Universal. When the redesigns were finally

submitted to Universal, they were still substantially similar to

the GIC and EMC designs. 

B.

In May 2005, Universal sought a preliminary injunction in

the district court barring Collezione’s promotion and sale of

its 20000 and 20200 collections. The court denied the motion,

however, observing that the design compilations on Universal’s furniture likely were not conceptually separable from the

furniture’s utilitarian function, rendering them unprotectable.

We affirmed the district court’s ruling on the preliminary

injunction. See Universal Furniture Int’l, Inc. v. Collezione

Europa USA, Inc., 196 F. App’x 166 (4th Cir. 2006). In so

doing, however, we emphasized the sparse record and stated

that our intention was not to "categorically exclude Universal’s and other comparable design compilations from copyright protection." Id. at 171.

In May 2007, Universal’s lawsuit against Collezione proceeded to a five-day bench trial in Greensboro on the liability

issues. The district court thereafter ruled, in its Liability Opin6 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
ion, that Universal owned its copyrights and that the GIC and

EMC designs were copyrightable. More specifically, the court

found that the designs — but not the furniture itself — satisfied two elements necessary for copyright protection: originality and conceptual separability. Although the decorative

elements of Universal’s designs were derived mostly from the

public domain, the court concluded that the designer’s compilation of the elements was sufficiently unique to meet the test

of originality. The court also found the decorative elements

conceptually separable from the furniture’s utilitarian function, because the designer’s functional considerations ended

after he had sketched the basic shapes of the pieces and

because the designer selectively placed elements on the furniture to achieve a "new look." See Liability Opinion 16.

After comparing Collezione’s redesigned 20000 and 20200

collections to the GIC and EMC lines, the district court determined that nearly all of Collezione’s furniture in these collections infringed Universal’s copyrights because they were

substantially similar to the GIC and EMC designs on extrinsic

and intrinsic levels.3 The court also assessed the extrinsic similarity by comparing the companies’ furniture collections as a

whole. It evaluated the issue of intrinsic similarity by making

individual comparisons among the relevant furniture pieces.

Finally, the court concluded that Collezione had violated the

Lanham Act and the UDTPA by "reverse passing off" Universal’s furniture as its own. See Liability Opinion 38. The court

reserved the issue of damages for later determination. 

3

In particular, comparing the GIC line to Collezione’s 20000 collection,

the district court found infringement in the following items: Collezione’s

china cabinets, sideboards, headboards and footboards, dressers, chests of

drawers, nightstands, armoires, and mirrors. It did not find similarity

between the GIC line and the 20000 collection’s chairs and rectangular

tables. See Liability Opinion 22-28. The court found that Collezione’s

entire 20200 collection infringed Universal’s copyright in the EMC

designs. Id. at 28-29. 

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 7
C.

In November 2007, the district court awarded Universal a

permanent injunction prohibiting Collezione from producing

or displaying derivative works of Universal’s GIC and EMC

lines. See Universal Furniture Int’l, Inc. v. Collezione Europa

USA, Inc., No. 1:04-cv-00977 (M.D.N.C. Nov. 30, 2007) (the

"Injunction").4 The Injunction also barred Collezione from

marketing or selling any furniture in its 20000 collection

(except for noninfringing chairs and rectangular tables) or its

20200 collection. On January 3, 2008, we denied Collezione’s

motion to stay the Injunction pending appeal. 

After Collezione filed for bankruptcy in February 2008,

Universal requested relief from the automatic stay to allow

the district court to resolve the damages issues. The bankruptcy court agreed and lifted the stay, and a damages hearing

was conducted in the district court in June 2008. 

For Collezione’s violation of the Copyright Act, the court

awarded Universal more than $11 million, representing the

gross revenues that Collezione had garnered from selling the

infringing items. See Damages Opinion 29. Although copyright infringers are entitled to seek a reduction in damages by

proving deductible expenses and profits unrelated to the

infringement activities, the court rejected Collezione’s proof

in that regard. The court so ruled after giving Collezione

repeated opportunities to present an accurate picture of its

deductible expenses. The court declined, however, to award

damages to Universal on either the Lanham Act or UDTPA

claims, reasoning that any such damages would be duplicative

of those awarded under the Copyright Act. 

Collezione has filed a timely notice of appeal, and we possess jurisdiction pursuant to 28 U.S.C. § 1291.

4The Injunction is found at J.A. 2817-19. 

8 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
II.

We review a judgment resulting from a bench trial "under

a mixed standard of review — factual findings may be

reversed only if clearly erroneous, while conclusions of law

. . . are examined de novo." Roanoke Cement Co., LLC v. Falk

Corp., 413 F.3d 431, 433 (4th Cir. 2005). A court’s calculation of damages "is a finding of fact and therefore is reviewable only for clear error, but to the extent those calculations

were influenced by legal error, review is de novo." United

States ex rel. Maddux Supply Co. v. St. Paul Fire & Marine

Ins. Co., 86 F.3d 332, 334 (4th Cir. 1996).

III.

In disposing of this appeal, we assess the issues in the same

order as did the district court. We begin by examining

whether Universal owned valid copyrights in the GIC and

EMC furniture designs and, if so, whether Collezione

infringed those copyrights. We then assess whether Collezione contravened the Lanham Act and the UDTPA by displaying Universal’s furniture as its own at the High Point

furniture market in 2004. Finally, we review Collezione’s

contention that the court erroneously excluded its evidence of

deductible expenses in making the damages award. 

A.

Collezione first challenges the district court’s conclusion

that Universal possessed valid copyrights in the GIC and

EMC furniture designs and that Collezione infringed those

copyrights. In this regard, Collezione presents four appellate

contentions. First, Collezione maintains that the court erred in

ruling that Universal owned the copyrights. Second, Collezione insists that Universal’s designs on the GIC and EMC

lines are not sufficiently original for copyright protection.

Third, Collezione contends that the GIC and EMC designs are

not conceptually separable from the furniture’s utilitarian

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 9
aspects, and thus not entitled to copyright protection. And

fourth, Collezione maintains that, even if the GIC and EMC

designs are copyrightable, it did nothing that infringed those

copyrights. We address these contentions in turn.

1.

We begin with the issue of whether Universal owned the

copyrights. The Copyright Act affords protection to "original

works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be

perceived, reproduced, or otherwise communicated." 17

U.S.C. 102(a). A plaintiff claiming copyright infringement

must establish "ownership of the copyright by the plaintiff

and copying by the defendant." Keeler Brass Co. v. Cont’l

Brass Co., 862 F.2d 1063, 1065 (4th Cir. 1988). A certificate

of registration issued by the Copyright Office is "prima facie

evidence of the validity of the copyright and of the facts

stated in the certificate," such as ownership. 17 U.S.C.

§ 410(c). When such a certificate exists, the burden shifts to

the defendant to prove that the claimed copyrights are invalid.

M. Kramer Mfg. Co. v. Andrews, 783 F.2d 421, 434 (4th Cir.

1986). However, the Copyright Office’s practice of summarily issuing registrations (perhaps even the day of filing the

application, as in this case) counsels against placing too much

weight on registrations as proof of a valid copyright. Universal Furniture, 196 Fed. Appx. at 170. Accordingly, a reviewing court should assess other relevant indicia of ownership,

such as the parties’ intent and the terms of transfer agreements

and other documents establishing a chain of title. See, e.g.,

SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1209 (10th

Cir. 2009); Accusoft Corp. v. Palo, 237 F.3d 31, 58 (1st Cir.

2001). 

Collezione maintains that Universal failed to establish a

chain of title linking Universal to the 1994 service agreement

between the Norman Hekler design firm and Universal’s predecessor company, UFI. More specifically, Collezione con10 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
tends that Universal did not prove ownership of the

copyrights to the EMC and GIC designs that Steven Russell

of the Hekler firm designed after the 1994 service agreement

was made.

The registrations issued by the Copyright Office for the

GIC and EMC lines identify Universal as the claimant. These

registrations were presumptive proof of Universal’s ownership of the asserted copyrights, and the other evidence also

suggests that result. The 2001 asset agreement between UFL

and Universal conveys "all right, title, and interest . . . to the

Intellectual Property including, but not limited to, the Intellectual Property listed on Schedule 2.1(e)." J.A. 3098. Schedule

2.1(e), in turn, lists the 1994 service agreement between Hekler and UFI. The 1994 service agreement is also specified as

among the "contracts" explicitly transferred to Universal. See

id. at 3098, 3155. Although Russell designed the EMC in

2002, after the 2001 asset agreement, such agreement clearly

transferred the intellectual property rights specified in the

1994 service agreement. The terms of the 1994 service agreement are not time-limited, and the 2001 asset agreement could

therefore include future designs made by Hekler employees.

Indeed, the 1994 service agreement provides that Hekler

"shall apply its skill, knowledge, and expertise to the design

of each item of furniture as [UFI] may, from time to time,

request in writing." Id. at 1266. 

In making its chain-of-title argument, Collezione misunderstands that it bears the burden of rebutting the presumption of

ownership established by the copyright registrations. M.

Kramer Mfg., 783 F.2d at 434. Universal’s documentation of

the 1998 merger and the 2001 asset agreement links Universal

to the Hekler contract and to Russell’s design of the GIC and

EMC under the 1994 service agreement. Collezione argues

that Universal failed to prove that the 1994 service agreement

was included in the 1998 merger between UFI and UFL. Nevertheless, the 2001 asset agreement between UFL and Universal explicitly includes the 1994 service agreement with

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 11
Hekler, which indicates that UFI remained a party to the 1994

service agreement and thus had the right to transfer that agreement to UFL in the 1998 merger. Although Universal did not

present evidence of the specific assets that UFL acquired in

the 1998 merger, this was not Universal’s burden. Finally,

although the Copyright Act generally requires a writing to

transfer copyright ownership, it makes exceptions for transfers that occur "by operation of law." 17 U.S.C. § 204(a). And

certain of our sister circuits have ruled that mergers transfer

copyrights "by operation of law" and obviate the writing

requirement. See Taylor Corp. v. Four Seasons Greetings,

LLC, 403 F.3d 958, 963 (8th Cir. 2005); Lone Ranger Television, Inc. v. Program Radio Corp., 740 F.2d 718, 721 (9th

Cir. 1984). As a result, the district court did not err in concluding that Universal established its ownership of the

asserted copyrights.5

2.

Next, we assess whether Universal’s designs on the GIC

and EMC lines are sufficiently original for copyright protection. To claim a valid copyright, Universal was obliged to

show that the GIC and EMC designs are (1) original and (2)

conceptually separable from the utilitarian aspects of the furniture. Superior Form Builders v. Dan Chase Taxidermy Supply Co., 74 F.3d 488, 492-93 (4th Cir. 1996). Each of these

elements requires fleshing out the term "designs" because the

"industrial design" of even "aesthetically pleasing" furniture

5Collezione correctly points out, however, that the district court inaccurately described the chain of title. The court mistakenly specified the year

of the 2001 asset agreement as 1997, not 2001. The court also mistakenly

believed that the 2001 asset agreement was between UFI and UFL rather

than between UFL and Universal. And, given that Steven Russell designed

the GIC in 2001 and the EMC in 2002, the court erred when it noted that

Universal contracted with Russell to design these collections in 2003. Notwithstanding the court’s misdescriptions, Universal’s evidence sufficiently

establishes its ownership of the asserted copyrights in the GIC and EMC

designs. 

12 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
is not entitled to copyright protection. Id. at 493. Recognizing

this distinction, the district court properly looked to the copyright registrations that Universal filed, which describe the

subjects of the sought-after protection as the "decorative

sculptural designs on furniture, the adaptation of preexisting

decorative designs, and the compilation of decorative designs

on suites of furniture." See Liability Opinion 3. 

Establishing originality implicates only a light burden.

"Original, as the term is used in copyright, means only that

the work was independently created by the author (as opposed

to copied from other works), and that it possesses at least

some minimal degree of creativity." Feist Publ’ns, Inc. v.

Rural Tel. Serv. Co., 499 U.S. 340, 345 (1991). "[T]he requisite level of creativity is extremely low; even a slight amount

will suffice. The vast majority of works make the grade quite

easily, as they possess some creative spark." Id.

Even when the work at issue is a compilation of preexisting

design elements, the originality threshold remains low:

"Copyright protection may extend to such a compilation, even

if the material of which it is composed is not copyrightable

itself . . . ; it is sufficient if original skill and labor is expended

in creating the work." M. Kramer Mfg., 783 F.2d at 438

(internal citations and quotation marks omitted). "The mere

fact that component parts of a collective work are neither

original to the plaintiff nor copyrightable by the plaintiff does

not preclude a determination that the combination of such

component parts as a separate entity is both original and copyrightable." Id. (internal citation and quotation marks omitted).

For compilations of preexisting elements, "the principal focus

should be on whether the selection, coordination, and arrangement are sufficiently original to merit protection." Feist, 499

U.S. at 358. 

The submission of a valid certificate of copyright registration creates a presumption of originality for five years from

the date of the registration. Swirsky v. Carey, 376 F.3d 841,

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 13
851 (9th Cir. 2004). However, as we have explained, this presumption is fairly easy to rebut because the Copyright Office

tends toward cursory issuance of registrations. Universal Furniture Int’l, Inc. v. Collezione Europa USA, Inc., 196 Fed.

Appx. 166, 170 (4th Cir. 2006). "[T]he presumption of validity may be rebutted where other evidence in the record casts

doubt on the question," such as "evidence that the work had

been copied from the public domain or by evidence that the

work was a non-copyrightable utilitarian article." Fonar Corp.

v. Domenick, 105 F.3d 99, 104 (2d Cir. 1997) (internal citation and quotation marks omitted).

The supporting evidence in this record demonstrates that

the GIC and EMC designs are original. Russell’s design process satisfied the low burden for originality in that it demonstrated "some creative spark" and did not involve wholesale

copying. Feist, 499 U.S. at 345. Under the evidence, Russell

expended "original skill and labor" in selecting and adapting

the decorative elements, and he created an original "separate

entity" by blending elements from different historical periods.

M. Kramer Mfg., 783 F.2d at 438. His consultation of public

domain sources does not render the EMC and GIC designs

non-original for copyright purposes. He did not set out to

create an "authentic period reproduction" in designing the

EMC and GIC furniture. J.A. 646. Although the ornamental

elements placed on the GIC and EMC furniture were culled

from a variety of public domain sources, Russell did more

than simply copy those sources. He consulted various reference books and magazines and then sketched until he arrived

at a design that he deemed to be aesthetically pleasing. Russell explained that he modified — rather than replicated —

these sources. His objective was to "bring something new to

the party on a historical theme." Id. at 673. He described his

skill as "offer[ing] modernized interpretations of historical

pieces of furniture," which he accomplished by blending elements to "create a different look than has been seen before."

Id. at 805. Universal’s expert witness, furniture designer

Thomas Moser, testified that "the act of collecting and sorting

14 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
through, synthesizing from other sizes, in some cases making

an artistic leap by joining two vastly different periods together

. . . requires a good deal of training and experience and artistry." Id. at 927. Although Moser agreed that the GIC and

EMC ornamental designs originated in the public domain, he

opined that the selection, coordination, and arrangement of

these elements reflected Russell’s creative judgment. Moser

explained that these elements are not simply compiled; they

"pass through . . . the filter of the creator," who "takes them

and adapts them to serve his purposes." Id. at 967.

In arguing against originality, Collezione relies on a single

Second Circuit decision involving a design process that is

readily distinguishable from Universal’s. In L. Batlin & Son,

Inc. v. Snyder, 536 F.2d 486, 488 (2d Cir. 1976), the appellant

took the famous metal Uncle Sam mechanical bank design

and recreated it in plastic. The court of appeals held that the

plastic recreation was not sufficiently original for copyright

purposes because it was a "mere copy" of the metal version,

and the "mere reproduction of a work of art in a different

medium should not constitute the required originality." Id. at

491 (quoting 1 M. Nimmer, The Law of Copyright, § 20.2, at

93 (1975)). The court, however, did not further address the

issue of originality in connection with compilations. In this

situation, Russell did more than simply take two-dimensional

decorative designs from the public domain and copy them

wholesale on three-dimensional furniture. He modified and

arranged the decorative elements in unique ways, which is

more than sufficient to satisfy the low threshold for originality.

3.

We turn now to a more vexing question in this case:

whether Universal’s GIC and EMC designs are conceptually

separable from the utilitarian aspects of such furniture. We

must approach this inquiry mindful of the nebulous standard

with which the court was obliged to grapple. See Masquerade

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 15
Novelty, Inc. v. Unique Indus., Inc., 912 F.2d 663, 670 (3d

Cir. 1990) ("Courts have twisted themselves in 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.");

Bonazoli v. R.S.V.P. Int’l, Inc., 353 F. Supp. 2d 218, 224

(D.R.I. 2005) ("[T]he [conceptual separability] analysis often

sounds more like metaphysics than law . . . ."); 1-2 Nimmer

on Copyright, § 2.08 (describing conceptual separability as an

"ethereal realm"). When we affirmed the denial of the preliminary injunction sought by Universal, we expressed concern

that finding the GIC and EMC designs copyrightable would

"potentially enlarge the law of copyright beyond its intended

borders by extending copyright protection to two entire furniture collections based on their ‘ornate, opulent’ look alone."

Universal Furniture, 196 Fed. Appx. at 172. With the benefit

of a full record, however, we are confident that the district

court correctly applied the conceptual separability test and did

not expand the law to protect any useful article that might be

deemed "aesthetically pleasing." Superior Form, 74 F.3d at

493.

Copyright protection extends to three-dimensional "sculptural works," including some useful articles. 17 U.S.C.

§ 102(a)(5).6 "[T]he design of a useful article . . . shall be considered . . . a sculptural work only if, and only to the extent

that, such design incorporates pictorial, graphic, or sculptural

features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the

article." Id. § 101. Under this conceptual separability test, useful articles may qualify for copyright protection. Galiano v.

Harrah’s Operating Co., 416 F.3d 411, 417 (5th Cir. 2005).

6A "useful article" is "an article having an intrinsic utilitarian function

that is not merely to portray the appearance of the article or to convey

information." 17 U.S.C. § 101. Universal’s furniture satisfies this definition. See Universal Furniture, 196 Fed. Appx. at 170. 

16 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
Congress enacted the current phrasing of the conceptual

separability test in order to codify the Supreme Court’s holding in Mazer v. Stein, 347 U.S. 201 (1954). H.R. Rep. No. 94-

1476, at 55 (1976), reprinted in 1976 U.S.C.C.A.N. 5659,

5667. In Mazer, the Court held that china statuettes of dancing

figures that appeared on the bases of table lamps merited

copyright protection. 347 U.S. at 214. Although the term

"conceptual separability" does not appear in the Mazer decision, the idea is embedded in the Court’s recognition that the

statuettes were the "original . . . tangible expression of [the

creator’s] ideas," even though they appeared on an otherwise

mundane utilitarian object. Id. 

In a decision rendered soon after the amended language

appeared in the 1976 Copyright Act, the Court of Appeals for

the District of Columbia explained the underlying policy concern with which reviewing courts struggle: "If one manufacturer were given the copyright to the design of . . . [a useful]

article, it could completely prevent others from producing the

same article." Esquire, Inc. v. Ringer, 591 F.2d 796, 801 n.15

(D.C. Cir. 1978). Further, "consumer preference sometimes

demands uniformity of shape for certain utilitarian articles"

and thus "it would be unfair to grant a monopoly on the use

of any particular such shape, no matter how aesthetically well

it was integrated into a utilitarian article." Id. Professor Nimmer, however, posits that "it is not entirely clear that the result

is undesirable" because "[i]f copyright is to be accorded only

to the nonfunctional form of a work, this would not inhibit

competitors from making available to the public the utilitarian

essence of an industrial product." 1-2 Nimmer on Copyright

§ 2.08 (emphasis added).

Because the evolving iterations of the conceptual separability test are cogently charted in several cases, we need not

retread the path here. See, e.g., Galiano, 416 F.3d at 417-19;

Pivot Point Int’l, Inc. v. Charlene Prods., 372 F.3d 913, 920-

30 (7th Cir. 2004). After an extensive analysis of the varying

approaches, the Seventh Circuit concluded that courts had

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 17
moved toward a "process-oriented" approach, distilling the

conceptual separability test as follows:

Conceptual separability exists . . . when the artistic

aspects of an article can be conceptualized as existing independently of their utilitarian function. This

independence is necessarily informed by whether the

design elements can be identified as reflecting the

designer’s artistic judgment exercised independently

of functional influences. If the elements do reflect

the independent, artistic judgment of the designer,

conceptual separability exists. Conversely, when the

design of a useful article is as much the result of utilitarian pressures as aesthetic choices, the useful and

aesthetic elements are not conceptually separable.

Pivot Point, 372 F.3d at 931 (internal quotations and citations

omitted).

Our circuit has not elaborated extensively upon conceptual

separability. In Superior Form Builders, we considered

whether animal mannequins used to mount animal skins were

copyrightable. 74 F.3d at 491. We held that the mannequins

were not "useful articles" under the Copyright Act and therefore did not need to meet the test of conceptual separability.

Id. at 494. However, because we went on to address conceptual separability "[t]o the extent that an argument can be made

that the mannequins . . . perform a utilitarian function," the

decision provides some guidance here. Id. We observed, for

example, that "the industrial design of a unique, aesthetically

pleasing chair cannot be separated from the chair’s utilitarian

function, and therefore, is not subject to copyright protection."

Id. at 493 (emphasis added). The industrial design of a chair

is unlike the design of statuettes adorning lamp bases because

the objective of the chair’s design is to "create a utilitarian

object, albeit an aesthetically pleasing one," whereas "the

objective in creating a statue of a dancer is to express the idea

of a dancer." Id.

18 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
Superior Form’s example of the industrial design of a chair

fails to directly address the category of designs at issue here:

compilations of decorative elements adorning utilitarian furniture. In other words, Universal does not seek copyright protection for the purely "industrial" designs of its furniture, and

the district court correctly recognized as much by explaining

that the "shape of the furniture cannot be the subject of a

copyright, no matter how aesthetically pleasing it may be,"

but the "decorative elements that are separable from the furniture can be." Liability Opinion 17 (emphases added). Conceptual separability directs a reviewing court to answer whether

protection extends to the "nonfunctional form of a work." 1-2

Nimmer on Copyright § 2.08.

In Carol Barnhart Inc. v. Economy Cover Corp., 773 F.2d

411, 414 (2d Cir. 1985), the Second Circuit held that lifesized mannequins of human torsos used to display clothing

had no "artistic or aesthetic features" that were "physically or

conceptually separable from their utilitarian dimension." The

court thus rejected the designer’s argument that the mannequins were akin to sculptures and could serve a decorative

function apart from the utilitarian purpose of serving as a

vehicle for clothing and accessories. Id. at 418. That the mannequins may have been "aesthetically satisfying" was not

enough for copyright protection. Id. The Second Circuit distinguished that case from an earlier decision finding copyright

protection in "belt buckles bearing sculptured designs cast in

precious metals and principally used for decoration." Id. (citing Kieselstein-Cord v. Accessories by Pearl, Inc., 632 F.2d

989 (2d Cir. 1980)). The "highly ornamental" designs on the

belt buckles were totally unlike the bare model of a human

torso; the "unique artistic design" of the buckles "was wholly

unnecessary to performance of the utilitarian function" of the

belts. Id. at 419. In contrast, the sculpted anatomical elements

on the torso mannequins, while perhaps aesthetically pleasing,

were "inextricably intertwined with the utilitarian feature, the

display of clothes." Id.

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 19
Synthesizing these principles, we are compelled to reach

the same conclusion as the district court: the decorative elements on Universal’s GIC and EMC are conceptually separable from the furniture’s utilitarian aspects. The GIC and EMC

designs are highly ornate collections of furniture adorned with

three-dimensional shells, acanthus leaves, columns, finials,

rosettes, and other carvings. Steven Russell described the collections as "an ornamentation explosion," and Universal’s

expert Thomas Moser similarly described the EMC and GIC

as "essentially vehicles for expressing ornament." J.A. 645,

926. These decorative compilations are not "industrial

designs" of furniture. They are not like a bare human torso

mannequin for which adornment is the very utilitarian purpose of the object. Like statuettes on a lamp base, the GIC and

EMC design compilations are superfluous nonfunctional

adornments for which the shape of the furniture (which is not

copyrightable) serves as the vehicle. The designs can therefore be "identified separately from" the utilitarian aspects of

the furniture. 17 U.S.C. § 101. Indeed, the designs are

"wholly unnecessary" to the furniture’s utilitarian function.

Carol Barnhart, 773 F.2d at 419. A carved scroll of leaves on

a nightstand post, for example, does nothing to improve the

utilitarian aspect thereof. 

As in Pivot Point, Mr. Russell’s process reflects an "artistic

judgment exercised independently of functional influences."

372 F.3d at 931. To be sure, Russell was influenced by function in designing these decorative elements. After all, he

explained, furniture "has got to function." J.A. 817. But his

objective in compiling these decorative elements onto the

basic shapes of the furniture was not to improve the furniture’s utility but to "give [the pieces] a pretty face." Id. at 816.

He developed the shape of the furniture before turning to

ornamentation. For many of the decorative elements on the

furniture, such as carved shells and leaves, Russell’s purpose

was entirely aesthetic. Moser similarly testified to the "exuberant" ornamentation on the GIC and EMC furniture and

opined that "the ornamentation . . . has little or nothing to do

20 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
with the function of these lines." Id. at 853-54. In sum, Russell’s design and placement of these decorative elements was

not "as much the result of utilitarian pressures as aesthetic

choices." Pivot Point, 372 F.3d at 931. Aesthetic choices were

the dominant force at work in Russell’s design process.

However, the conceptual separability test is a conjunctive

one: the decorative elements adorning the GIC and EMC lines

must be capable of separate identification from the utilitarian

aspects of the furniture, and they must be capable of "existing

independently of, the utilitarian aspects of the [furniture.]" 17

U.S.C. § 101. This poses somewhat of a metaphysical quandary for decorative elements on furniture. The elements serve

no purpose divorced from the furniture — they become

designs in space. But the test is conceptual separability, not

physical separability. 1-2 Nimmer on Copyright, § 2.08. The

House Committee that drafted the 1976 Copyright Act contemplated that the conceptual separability test could be satisfied in this very context:

[O]nly elements . . . which can be identified separately from the useful article as such are copyrightable. And, even if the three-dimensional design

contains some such element (for example, a carving

on the back of a chair or a floral relief design on silver flatware), copyright protection would extend

only to that element, and would not cover the overall configuration of the utilitarian article as such.

H.R. Rep. No. 94-1476, at 55 (1976), reprinted in 1976

U.S.C.C.A.N. 5659, 5668 (emphasis added). Like sculpted

designs on belt buckles, the decorative elements adorning the

GIC and EMC lines are "conceptually separable sculptural

elements." Kieselstein-Cord, 632 F.2d at 993. Their form is

not "inextricably intertwined" with the function of furniture.

Carol Barnhart, 773 F.2d at 419. They are "artistic and aesthetic features" that can "be conceived of as having been

added to, or superimposed upon, an otherwise utilitarian artiUNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 21
cle," and they are therefore capable of existing independently

of the furniture. Id.

Because the GIC and EMC designs are original and conceptually separable from the utilitarian aspects of the furniture, we agree with the district court that the compilation of

design elements on the EMC and GIC lines are entitled to

copyright protection.7

4.

We next assess whether Collezione infringed Universal’s

copyrights. Assuming that the district court correctly applied

the legal standard, its factual findings regarding the similarity

between Universal’s GIC and EMC lines and Collezione’s

20200 and 20000 collections are entitled to considerable deference. Roanoke Cement, 413 F.3d at 433; see also Taylor

Corp., 403 F.3d at 965 (observing that most circuits apply a

clearly erroneous standard of review to factual finding of substantial similarity even though credibility is not implicated).

Collezione argues that the court incorrectly applied the legal

standard for copyright infringement by comparing Universal

and Collezione’s furniture as a whole, rather than comparing

the compilations of design elements. 

A successful claim of copyright infringement requires the

plaintiff to prove that the "defendant copied the original elements of that copyright." Lyons P’ship v. Morris Costumes,

7Collezione incorrectly asserts that the district court found Universal’s

"furniture, as a whole, to be copyrightable, rather than the compilations of

public domain designs on the furniture." Br. of Appellant 42. The court

was explicit that "[w]hile the shape of the furniture cannot be the subject

of a copyright, no matter how aesthetically pleasing it may be, the decorative elements that are separable from the furniture can be." Liability Opinion 17 (emphasis added). The court likewise concluded that Collezione

"violated the Copyright Act by producing pieces of furniture displaying

substantially similar types and arrangements of decorative elements as

used in [Universal’s] furniture." Id. at 39 (emphasis added). 

22 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
Inc., 243 F.3d 789, 801 (4th Cir. 2001). "When the plaintiff

possesses no direct evidence that the defendant copied its protected work, it may create a presumption of copying by indirect evidence establishing that the defendant had access to the

copyrighted work and that the defendant’s work is ‘substantially similar’ to the protected material." Id. (internal citation

omitted). Substantial similarity is a two-pronged test. The

plaintiff must show that the two works are (1) "extrinsically

similar because they contain substantially similar ideas that

are subject to copyright protection" and (2) "intrinsically similar in the sense that they express those ideas in a substantially

similar manner from the perspective of the intended audience

of the work." Id. (internal citations and quotation marks omitted). 

The extrinsic inquiry is an objective one on which expert

testimony may be relevant. Dawson v. Hinshaw Music, Inc.,

905 F.2d 731, 733 (4th Cir. 1990). The extrinsic analysis

looks to "external criteria" of "substantial similarities in both

ideas and expression." Apple Computer Co. v. Microsoft

Corp., 35 F.3d 1435, 1442 (9th Cir. 1994). The intrinsic

inquiry, in contrast, implicates the perspective of the object’s

intended observer. Dawson, 905 F.3d at 733. In assessing

intrinsic similarity, the factfinder looks to the "total concept

and feel of the works, but only as seen through the eyes of the

. . . intended audience of the plaintiff’s work." Lyons, 243

F.3d at 801. (internal citations and quotation marks omitted)

(emphasis in original). Judge Learned Hand phrased the

intrinsic test as whether "the ordinary observer, unless he set

out to detect the disparities, would be disposed to overlook

them, and regard their aesthetic appeal as the same." Peter

Pan Fabrics, Inc. v. Martin Weiner Corp., 274 F.2d 487, 489

(2d Cir. 1960). 

Collezione maintains that the district court incorrectly

applied the substantial similarity test by comparing the noncopyrightable elements of the parties’ furniture collections.

On the extrinsic prong, Collezione argues that the court’s

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 23
comparison of the two furniture collections as a whole

improperly factored in noncopyrightable features such as the

furniture’s shape and color. On the intrinsic prong, Collezione

argues that the court’s comparison of individual pieces of furniture within each collection also encompassed these noncopyrightable features.

In the furniture context, the external criteria of similar ideas

and expressions will presumably be the collections’ historical

themes and ornamentation. Cf. Taylor, 403 F.3d at 966 (concluding that district court correctly applied extrinsic test to

holiday greeting card designs by considering the cards’ "similar holiday themes, paper stock and printing techniques").

"Idea" and "expression" are broad concepts, and the district

court properly compared the ideas and expressions of Universal and Collezione’s collections by considering the furniture

as a whole. 

Still, substantial similarity asks whether a defendant copied

the "original elements" of a copyright. Lyons, 243 F.3d at 801

(emphasis added). The district court’s extrinsic analysis

briefly mentioned the furniture’s noncopyrightable features

such as similarity of shape and color. And the court would

have erred had it found similarity only in the collection’s noncopyrightable features. See Herzog v. Castle Rock Entm’t, 193

F.3d 1241, 1257 (11th Cir. 1999) ("A court may grant summary judgment for defendant as a matter of law if the similarity between the two works concerns only noncopyrightable

elements of the plaintiff’s work."). But the court’s extrinsic

analysis largely focused on the copyrightable aspects of Universal’s GIC and EMC: the ornamentation. The court determined that the collections shared a "highly decorative

appearance with a traditional feel" and "very ornamental

designs combined with basic styles that resemble furniture

pieces from England in the 18th or 19th centuries." Liability

Opinion 21-22. In so finding, the court relied on Universal’s

expert testimony, which is helpful to the extrinsic prong.

Dawson, 905 F.2d at 733. In Thomas Moser’s view, Univer24 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
sal’s and Collezione’s collections shared a "great collection of

ornamental detail, principally in the form of relief carvings"

and were "similar in terms of placement, selection, arrangement, and most certainly execution." J.A. 860. Moser

explained that Universal’s GIC had a "consistency in the

application of the ornament, neither too much or too little,"

and that Collezione’s 20000 collection shared this aesthetic

"harmony." Id. at 893. He described the ornamentation on

these collections as taking up the same amount of space on

the furniture. In sum, the district court correctly applied the

extrinsic prong by considering whether the protected aspects

of Universal’s GIC and EMC lines were substantially similar

in idea and expression to Collezione’s 20000 and 20200 collections. We thus find no clear error in the court’s determination of extrinsic similarity. 

Collezione’s argument with respect to the intrinsic prong of

substantial similarity is also unavailing because, as other circuits have observed, "analytic dissection" of protected and

unprotected elements is inappropriate under the intrinsic

prong, given that the ordinary observer does not make this

distinction. Taylor, 403 F.3d at 966; Knitwaves, Inc. v. Lollytogs, Ltd., 71 F.3d 996, 1003 (2d Cir. 1995). Rather, the ordinary observer encounters the furniture as one object. 

The district court properly assessed whether the ordinary

observer of individual pieces of furniture within the disputed

collections would "see each piece the same, discounting any

trivial differences." Liability Opinion 22; see Taylor, 403 F.3d

at 966 ("[A] finding of substantial similarity is not precluded

where differences in detail do little to lessen a viewer’s overwhelming impression that the defendant’s products are appropriations." (internal citation and quotation marks omitted)).

The court made detailed comparisons of the ornamental

designs on the individual pieces within the competing collections. Collezione resorts to selective references to the Liability Opinion to suggest that the intrinsic similarity analysis

focused on noncopyrightable elements. Br. of Appellant 45.

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 25
Although the court again mentioned noncopyrightable features such as the furniture’s shape and color, it appropriately

focused on whether the ordinary, reasonable observer would

find the furniture lines, as a whole, to be substantially similar.

Taylor, 403 F.3d at 966. Additionally, the court’s analysis

clearly concentrated on the compilation of designs on the furniture. For example, it found that Collezione’s 20000 sideboards were "nearly identical" to Universal’s GIC sideboards

because both had "decorative elements in the same places

with carvings such as the rosette atop the pilasters and molding around the top railings," as well as "matching inlays in the

side doors bordered by matching carved moldings." Liability

Opinion 24. The court made similar detailed comparisons of

the ornamentation on the other pieces in Collezione’s 20000

collection. Although the court’s comparison of Collezione’s

20200 collection to Universal’s EMC was less detailed, the

court did not clearly err by finding that the entire 20200 collection was substantially similar to the EMC. The court determined that Collezione "undertook significantly less effort

with respect to redesigning the 20200 collection than it did

with its 20000 collection" and that Collezione essentially copied the EMC. Id. at 28-29. The photographs in evidence show

near exact similarity between these collections, as well as

between most of Universal’s GIC and Collezione’s 20000 collections. Accordingly, the court did not err in determining that

most of Collezione’s 20000 redesigns infringed Universal’s

GIC copyright8 and that all of Collezione’s 20200 redesigns

infringed Universal’s EMC copyright.

B.

Collezione next challenges the district court’s determination that it violated the Lanham Act by marketing actual

8We agree with the district court that Collezione’s 20000 chairs and rectangular tables are not intrinsically similar to Universal’s GIC chairs and

rectangular tables. These pieces therefore do not infringe Universal’s

copyrights. 

26 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
pieces from Universal’s EMC line as its own furniture at the

High Point furniture market in October 2004. The Lanham

Act prohibits a "false designation of origin" that is "likely to

cause confusion, or to cause mistake, or to deceive as to the

affiliation, connection, or association . . . or as to the origin"

of "goods, services, or commercial activities." 15 U.S.C.

§ 1125(a)(1)(A). The type of false designation of origin at

issue here is a "reverse passing off," which occurs when a

"producer misrepresents someone else’s goods or services as

his own." Dastar Corp. v. Twentieth Century Fox Film Corp.,

539 U.S. 23, 28 n.1 (2003). A reverse passing off claim

requires the plaintiff to prove four elements: "(1) that the

work at issue originated with the plaintiff; (2) that origin of

the work was falsely designated by the defendant; (3) that the

false designation of origin was likely to cause consumer confusion; and (4) that the plaintiff was harmed by the defendant’s false designation of origin." Syngenta Seeds, Inc. v.

Delta Cotton Coop, Inc., 457 F.3d 1269, 1277 (Fed. Cir.

2006). 

On the first element, Universal is the "origin" of the EMC

even though it does not manufacture the furniture. Although

"the most natural understanding of the ‘origin’ of ‘goods’ —

the source of wares — is the producer of the tangible product," origin may also encompass "the trademark owner who

commissioned or assumed responsibility for (‘stood behind’)

production of the physical product." Dastar, 539 U.S. at 31-

32. Universal is the company that markets and "stands

behind" its furniture collections. Universal labels the furniture

with its name, distributes the furniture, and owns the copyrights in the designs. 

With respect to the second element — that the origin of the

work was falsely designated — the district court found this

element satisfied by Collezione’s display of actual pieces

from Universal’s EMC line at the 2004 High Point furniture

market. The court’s credibility determinations and factual

findings in that respect are entitled to our deference, and we

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 27
are unable to identify clear error. The court examined and

assessed photographs of the showroom furniture and heard

testimony from Universal Vice-President Stephen Giles, who

took the photographs after learning that Collezione was selling furniture strikingly similar to the EMC line. Giles confirmed that Collezione’s display samples bore lot control

stickers that he had designed for Universal. The court compared photographs of Universal’s EMC pieces to the photographs taken by Giles and concluded that Collezione was

marketing Universal’s furniture at the showroom. The photographs in evidence amply support the court’s finding. Compare J.A. 2531, id. at 2539-40, and id. at 2497, with id. at

1272, id. at 1274, and id. at 1278. Because Collezione displayed actual pieces from Universal’s EMC line and marketed

them as belonging to its 20200 collection, Collezione falsely

designated the origin of such furniture.

The third element of the reverse passing off claim, consumer confusion, requires a showing that a "substantial number . . . of consumers are likely to be misled." Scotts Co. v.

United Indus. Corp., 315 F.3d 264, 280 (4th Cir. 2002).

"While there is no bright line test to determine the existence

of a likelihood of consumer confusion, recovery under the

Lanham Act requires, at a minimum, that confusion, mistake,

or deception be likely, not merely possible." Custom Mfg. &

Eng’g, Inc. v. Midway Servs., Inc., 508 F.3d 641, 651 (11th

Cir. 2007) (internal citation and quotation marks omitted). As

the Sixth Circuit has observed, when a "defendant has taken

the plaintiff’s product and has represented it to be his own

work," it is "difficult to imagine how a designation of origin

of a product could be more false, or could be more likely to

cause confusion or mistake as to the actual origin of the product." Johnson v. Jones, 149 F.3d 494, 503 (6th Cir. 1998).

Collezione’s display of Universal’s furniture at a lower price

was likely to mislead a substantial number of consumers. As

the district court recognized, "[i]t would be difficult to fathom

a situation where a customer would not be confused by seeing

two different companies marketing the same furniture under

28 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
different names." Liability Opinion 37. Indeed, consumer

confusion is what prompted Giles to visit the showroom for

inspection; he learned of Collezione’s display from a confused dealer. 

Finally, turning to the fourth element, we must reject Collezione’s contention that, because it did not actually sell the

EMC furniture and recalled its sales photos of the furniture,

Universal suffered no harm from the false designation. Even

if the EMC furniture never left the High Point showroom, the

district court properly found that Universal suffered harm

simply from the display of its furniture by Collezione. A significant harm of reverse passing off is that the "originator of

the misidentified product is involuntarily deprived of the

advertising value of its name and of the goodwill that otherwise would stem from public knowledge of the true source of

the satisfactory product." Smith v. Montoro, 648 F.2d 602,

607 (9th Cir. 1981). As the Supreme Court explained in

Dastar, the Lanham Act "assure[s] a producer that it (and not

an imitating competitor) will reap the financial, reputationrelated rewards associated with a desirable product." 539 U.S.

at 34 (internal citation and quotation marks omitted). We thus

agree with the district court that Collezione’s display of the

EMC furniture deprived Universal of "the opportunity to earn

sales and profits." Liability Opinion 37. By displaying Universal’s furniture as its own for a lower price, Collezione

appears to have retained customers that would have otherwise

purchased from Universal, even if it did not actually sell the

EMC pieces in question. Universal introduced evidence that

Collezione sold pieces in its 20200 collection to customers

who placed their orders during the period in which Collezione

displayed corresponding pieces of Universal’s EMC line. We

therefore affirm the court’s ruling that Collezione violated the

Lanham Act.

C.

Collezione also challenges the district court’s determination

that it violated North Carolina’s UDTPA by displaying UniUNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 29
versal’s furniture during the 2004 High Point furniture market. The UDTPA makes unlawful "unfair methods of

competition in or affecting commerce" and "unfair or deceptive acts or practices in or affecting commerce." N.C. Gen.

Stat. § 75-1.1. As used in the UDTPA, the words "unfair

methods of competition" encompass "any conduct that a court

of equity would consider unfair." Polo Fashions, Inc. v.

Craftex, Inc., 816 F.2d 145, 148 (4th Cir. 1987). More specifically, a "practice is unfair if it is unethical or unscrupulous,

and it is deceptive if it has a tendency to deceive." Id.

In these circumstances, we are unable to conclude that Collezione’s conduct — displaying a rival company’s products as

though they were its own — was neither unfair nor deceptive.

The district court found that Collezione not only displayed

Universal’s EMC line as its own, but also actively attempted

to deceive potential customers by removing any indicia

(including certain stickers) that Universal had actually produced the furniture. Because such conduct is unethical and

has a strong tendency to deceive, we must affirm the court’s

conclusion that Collezione contravened the UDTPA. See Harrington Mfg. Co. v. Powell Mfg. Co., 248 S.E.2d 739, 746

(N.C. Ct. App. 1978) (concluding that UDTPA is violated

where defendant used plaintiff’s "actual product in demonstrations to potential customers, [and] at the same time falsely

represent[ed] . . . that the product had been manufactured by"

the defendant). 

D.

Finally, Collezione challenges the district court’s award of

damages, maintaining that the court erred when it rejected

proof of deductible expenses and instead awarded damages to

Universal in an amount equal to Collezione’s gross revenue

from sales of the 20000 and 20200 collections. 

A "copyright owner is entitled to recover the actual damages suffered by him or her as a result of the infringement,

30 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
and any profits of the infringer that are attributable to the

infringement and are not taken into account in computing the

actual damages." 17 U.S.C. § 504(b). "In establishing the

infringer’s profits, the copyright owner is required to present

proof only of the infringer’s gross revenue, and the infringer

is required to prove his or her deductible expenses and the

elements of profit attributable to factors other than the copyrighted work." Id. In other words, "[o]nce the copyright owner

has established the amount of the infringer’s gross revenues,

the burden shifts to the infringer to prove either that part or

all of those revenues are ‘deductible expenses’ (i.e., are not

profits), or that they are ‘attributable to factors other than the

copyrighted work.’" Bouchat v. Balt. Ravens Football Club,

Inc., 346 F.3d 514, 520 (4th Cir. 2003) (internal citation omitted).

Following its three-day damages inquiry in June 2008, the

district court issued its Damages Opinion, determining that

Collezione received gross revenues of $4,633,621.26 from its

infringing 20200 collection and $6,695,155.92 from its

infringing 20000 collection. The court also found that Collezione’s infringement was willful. During discovery, Collezione

was asked to produce a Rule 30(b)(6) deponent who could

testify to the company’s gross profits and deductible expenses

and to the methodology for calculating deductible expenses.

Collezione designated its chief financial officer, Paul Frankel,

who was unable to provide these calculations. Frankel

asserted that there were no documents in existence from

which gross profits on the 20000 or 20200 could be calculated. Further, he stated that no one in the company had calculated net profits on the collections as of that date. Shortly

before trial, Collezione managed to produce a summary of its

profit calculations, which Frankel characterized as

"[r]easonably accurate," though he was not "sure." J.A. 1139,

1155. After the damages inquiry, the court ordered Collezione

to submit revised calculations, which the court later found

noncompliant because the summary was unreliable and inconsistent with Frankel’s testimony. Importantly, the court found

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 31
that "Collezione’s submissions demonstrate its calculation of

total sales increased between summary judgment and trial, but

its net profit calculation inexplicably decreased." Damages

Opinion 19. The court thus concluded that Collezione had

failed to meet its burden of proving deductible expenses

because it "presented methods of calculating costs which are

confusing, unreliable, and internally inconsistent." Id. at 12.

Further, Collezione’s delay in producing the first summary

until shortly before trial hampered Universal’s ability to

investigate its accuracy. 

The district court applied the correct legal standard when it

required Universal to establish Collezione’s gross profits from

the infringement and then shifted the burden to Collezione to

prove its deductible expenses. Moreover, we discern no clear

error in the court’s conclusion that Collezione failed to meet

this burden. The court’s comprehensive findings were based

on its extensive examination of the parties’ presentations and

on the credibility of witnesses, particularly the equivocal testimony of Frankel. These factual findings are entitled to our

deference. 

Nor did the district court abuse its discretion by rejecting

Collezione’s proffered calculations as unreliable. Collezione

was given several opportunities to offer reliable proof of

deductible expenses, yet repeatedly failed to do so. Its appellate contention that the "[d]istrict court, as the finder of fact

. . . should have reviewed the documents and calculated gross

and net profits for each of the infringing pieces of furniture,"

Br. of Appellant 65, demonstrates a gross misunderstanding

— it is the infringer’s burden to prove deductible expenses.

17 U.S.C. § 504(b). Finally, the court did not err by finding

that Collezione’s infringement was willful, particularly given

Collezione’s admission that it initially set out to imitate Universal’s GIC and EMC lines and its display of Universal’s

furniture at the October 2004 High Point market. 

32 UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA
IV.

For these reasons, we affirm the district court’s judgment

on liability and damages.9

AFFIRMED

9Collezione claims that the Injunction is overbroad because it applies to

furniture within the 20000 and 20200 collections that the district court did

not find to infringe Universal’s GIC and EMC copyrights. In particular,

Collezione maintains that it sells entertainment centers (other than the

infringing 20000 armoires) and desks within these collections, and that

Universal does not sell desks or entertainment centers as part of the EMC

or GIC. Br. of Appellant 70. Universal did not respond to this argument.

We assume that there can be no infringement of nonexistent pieces of Universal’s furniture. Consequently, we affirm the permanent injunction only

for the furniture within Collezione’s 20000 and 20200 lines that actually

infringes Universal’s copyrights. 

UNIVERSAL FURNITURE v. COLLEZIONE EUROPA USA 33