Source: http://www.tabberone.com/Trademarks/PreciousMoments/PreciousMomentsDecision.shtml
Timestamp: 2019-06-25 07:13:50
Document Index: 594585822

Matched Legal Cases: ['§ 106', '§ 109', '§ 106', '§ 101', '§ 3', '§ 5']

Plaintiff Precious Moments, Inc., is a company engaged in the business of licensing the "Precious Moments" trademark and artwork to licensees who manufacture and distribute numerous products, including such items as greeting cards, figurines, stationery, jewelry, dolls, and, most significantly for purposes of the instant case, fabrics, baby	bedding, and baby accessories. Defendant La Infantil, Inc., is a retail store that sells baby products, including furniture, bedding, clothes, and accessories. Some of the bedding it sells is manufactured by Teresita Martin Sewing Service from authentic, lawfully-acquired Precious Moments fabrics. Defendant Muebleria Andalucia, Inc., is a furniture store that relatively recently began selling baby bedding purchased from La Infantil. Precious Moments brought this action alleging copyright and trademark infringement, unfair competition, and dilution under federal and Puerto Rico law. Currently before the Court is Precious Moments' request for a preliminary injunction.
(2) the potential for irreparable harm if the injunction is denied;
(3) the balance of relevant impositions, i.e., the hardship to the nonmovant if enjoined as contrasted with the hardship to the movant if no injunction issues; and
(4) the effect (if any) on the public interest.
Matters in this case have boiled down to a single issue 1 -- whether La Infantil may, consistently with the copyright, trademark, and competition laws, use authentic, lawfully acquired Precious Moments fabric to have baby bedding manufactured which it then sells to the public at the La Infantil store.
The owner of a copyright enjoys the exclusive right, among others, "(1) to reproduce the copyrighted work in copies or phonorecords; (2) to prepare derivative works based upon the copyrighted work; [and] (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending." 17 U.S.C. § 106. The copyright owner's right to distribute the work is limited by the "first sale" doctrine, which permits the owner of a legally acquired, lawfully made copy of a work to sell that particular copy without the consent of the copyright holder. 17 U.S.C. § 109(a). 2 The first sale doctrine, however, limits only the distribution rights of the copyright owner; it does not limit the other exclusive rights enumerated in § 106, including the right to prepare derivative works. Red Baron--Franklin Park, Inc. v. Taito Corp., 883 F.2d 275, 280 (4th Cir.1989); Mirage Editions, Inc. v. Albuquerque A.R.T. Co., 856 F.2d 1341, 1344 (9th Cir.1988). The question presented, then, is whether the items manufactured by Teresita Martin Sewing Service from Precious Moments fabric are "derivative works" infringing on Precious Moments' copyright.
While these cases tend to support Precious Moments' position, they have not been well received. A third ceramic-tile case also involving A.R.T. and the same notecard process at issue in Munoz reached the opposite result, flatly rejecting Mirage and Munoz. See Lee v. Deck the Walls, Inc., 925 F.Supp. 576 (N.D.Ill.1996). The Lee court held that for a work to be a "derivative work," it must contain creativity and originality that would make it independently copyrightable. Id. at 580-81. Mounting on tile was indistinguishable from mere framing, the court reasoned, 3 and the process was a "mundane act [that] falls into the narrow category of works in which no creative spark exists." Id. at 580, 581.
In so holding, the Lee court disagreed with the Ninth Circuit's double standard regarding derivative works. The Ninth Circuit requires one seeking a copyright in a derivative work to meet all the requirements of copyrightability but does not require a work to be independently copyrightable in order for it to be considered a derivative work infringing on the underlying work. Lewis Galoob Toys, Inc. v. Nintendo of Am., Inc., 964 F.2d 965, 967-69 (9th Cir.1992) (fixation in a tangible medium of expression unnecessary for derivative work to infringe). The Lee court found that this double standard "(1) 'risks that courts will naively apply this broad definition to find activities infringing that are more properly viewed as altogether beyond the scope of copyright,' and (2) ignores the definition of a 'derivative work' found in § 101, in which Congress specifically included an originality requirement." Lee, 925 F.Supp. at 580 (quoting Edward G. Black and Michael H. Page, Add-On Infringements: When Computer Add-Ons and Peripherals Should (and Should Not) be Considered Infringing Derivative Works Under Lewis Galoob Toys, Inc. v. Nintendo of America, Inc. and Other Recent Decisions, 15 Hastings Comm. & Ent. L.J. 615, 628-29 (1993)). 4
Mirage and its progeny have been criticized by others as well. See 1 Nimmer on Copyrights, § 3.03 (quoted in Lee, 925 F.Supp. at 579 n. 2); 2 Paul Goldstein, Copyright § 5.3 at 5:81 (2d ed.1996) (described as "condemning Mirage as an unwarranted extension of the Copyright Act" in Mark A. Lemley, The Economics of Improvement in Intellectual Property Law, 75 Tex. L.Rev. 989, 1084 n. 144 (April 1997)); Black and Page, Add-On Infringements, at 629 (describing Mirage as "often criticized"); David Goldberg and Robert J. Bernstein, "What is a Derivative Work? ... Continued," 9/20/96 N.Y.L.J. 3 (col.1) ("[T]he Ninth Circuit approach applied in Greenwich Workshop is unsupported by the statutory text.").
This Court agrees with the Lee court that Mirage and the subsequent cases read the originality requirement out of the definition of "derivative work" and open the door for the most trivial of modifications to generate an infringing derivative work. Applying the proper standard to the case at bar, the Court finds that the necessary element of originality is absent from the items manufactured for La Infantil from the Precious Moments fabric. They therefore do not constitute "derivative works" infringing on Precious Moments' copyright. Precious Moments thus does not carry its burden of showing a likelihood of success on the merits on its copyright claim, and the Court need not consider the remaining requirements for a preliminary injunction.