Source: http://openjurist.org/262/f3d/101
Timestamp: 2013-05-19 13:29:21
Document Index: 286580209

Matched Legal Cases: ['§ 504', '§ 504', '§ 101', '§ 103', '§ 102', '§ 504', '§ 504', '§ 1127', '§ 1', '§ 1051', '§ 32', '§ 1114', '§ 7', '§ 1057', '§ 16', '§ 5', '§ 1125']

262 F3d 101 Yurman Design Inc v. Paj Inc | OpenJurist
262 F. 3d 101 - Yurman Design Inc v. Paj Inc	Home262 f3d 101 yurman design inc v. paj inc
262 F3d 101 Yurman Design Inc v. Paj Inc 262 F.3d 101 (2nd Cir. 2001)
YURMAN DESIGN, INC. PLAINTIFF-APPELLEE-CROSS-APPELLANT,v.PAJ, INC., DOING BUSINESS AS PRIME ART & JEWEL, DEFENDANT-APPELLANT-CROSS-APPELLEE.
Docket Nos. 00-7765(L), 00-7805(XAP)August Term: 2000
On November 1, 1999, following a seven day trial, the jury returned a special verdict largely favorable to Yurman. On the copyright claims, the panel concluded that four PAJ products infringed four Yurman copyrighted designs. As to copyright damages, the Copyright Act affords a plaintiff the option of seeking either actual damages suffered plus profits earned by the infringer or "statutory damages." 17 U.S.C. § 504. Yurman elected to seek statutory damages, which at the time allowed an award of up to $100,000 per work infringed if the violation was willful, or up to $20,000 per work if it was not. See 17 U.S.C.A. §§ 504(c)(1)-(2) (West 1996 & Supp. 1999).1 The jury found that PAJ had infringed each of Yurman's four copyrights willfully, and awarded a total $275,000. By way of injunctive relief for those copyright violations, Judge Sweet prohibited PAJ from manufacturing or selling its four infringing products, and ordered the company to destroy all infringing pieces within its control. See Yurman Design v. PAJ, Inc., 93 F. Supp. 2d 449, 466 (S.D.N.Y. 2000).
Copyright law may protect a combination of elements that are unoriginal in themselves. With respect to compilations of facts, for example, protection extends to choices of "selection and arrangement, so long as they are made independently by the compiler and entail a minimal degree of creativity." Feist Publications, 499 U.S. at 348. The same principles apply to "derivative work[s]," which are "based upon one or more pre-existing works." 17 U.S.C. § 101. Jewelry designs have been viewed as fitting within this latter category. See Diamond Direct, LLC v. Star Diamond Group, 116 F. Supp. 2d 525, 529 (S.D.N.Y. 2000) (Kaplan, J.) (considering the originality of diamond ring designs). In either case, however, the copyright "extends only to the material contributed by the author of such work, as distinguished from the pre-existing material employed in the work, and does not imply any exclusive right in the pre-existing material." 17 U.S.C. § 103(b); see Feist Publications, 499 U.S. at 348 ("[C]opyright protection [in a factual compilation] extend[s] only to those components of a work that are original to the author.").
While PAJ admits that it did not independently create its designs, it contends nevertheless that the similarities between its products and Yurman's are not sufficiently "substantial" to trigger liability. PAJ's "substantial similarity" argument raises a threshold issue as to our standard of review. PAJ cites a line of our cases to support the proposition that review of "substantial similarity" under copyright law is de novo. In each such case, however, we were reviewing judgments entered after a bench trial, and we departed from the "clearly erroneous" standard normally applicable to a trial judge's factual findings, Fed. R. Civ. Pro. 52(a), "because what is required is only a visual comparison of the works, rather than credibility, which we are in as good a position to decide as was the district court." Folio Impressions, Inc. v. Byer California, 937 F.2d 759, 766 (2d Cir. 1991); see Hamil America, 193 F.3d at 97 (same). Cf. Concord Fabrics, Inc. v. Marcus Bros. Textile Corp., 409 F.2d 1315, 1317 (2d Cir. 1969) (per curiam) ("[A]s no part of the decision below turned on credibility, we are in as good a position to determine the question as is the district court."). However, we have never decided the standard of review applicable to jury findings of substantial similarity where credibility is not at issue. See Segrets, Inc. v. Gillman Knitwear Co., 207 F.3d 56, 63 (1st Cir. 2000) ("We have found no Second Circuit cases applying [its judge-made de novo] standard to a finding of substantial similarity by a jury.").
By statute, copyrights protect the particular means of expressing ideas, not the ideas themselves. See 17 U.S.C. § 102(b). So if there is just one way to express an idea, the idea and expression are said to merge, and the expression is not protectable. See Hart v. Dan Chase Taxidermy Supply Co., 86 F.3d 320, 322 (2d Cir. 1996) ("[T]he merger inquiry asks whether all realistic fish mannequins, no matter how artistic they might be, will necessarily be `substantially similar.' And only if this is so, is there no unique expression to protect under the copyright laws."); CCC Info. Servs., Inc. v. Maclean Hunter Mkt. Reports, Inc., 44 F.3d 61, 68 (2d Cir. 1994). The test is whether "protection of expression would inevitably accord protection to an idea." CCC Info. Servs., 44 F.3d at 72 n.26.
As explained above, the Copyright Act allows plaintiffs to sue for "statutory damages" in lieu of "actual damages and profits." 17 U.S.C. § 504(c). Yurman elected statutory damages, which ranged (at the time) between $500 and $20,000 per work infringed, and up to $100,000 per work if the infringement was willful. See 17 U.S.C.A. §§ 504(c)(1)-(2) (West 1996 & Supp. 1999).4 The jury found that each of PAJ's four infringements was willful, and awarded a total of $275,000. PAJ argues that the willfulness finding is unsustainable, and in the alternative that it is excessive. We consider these two arguments in order.
Willfulness in this context means that the defendant "recklessly disregarded" the possibility that "its conduct represented infringement." Hamil America, 193 F.3d at 97; see Knitwaves, 71 F.3d at 1010 ("Reckless disregard of the copyright holder's rights... suffices to warrant award of the enhanced damages."). A plaintiff is not required to show that the defendant "had knowledge that its actions constitute[d] an infringement." Knitwaves, 71 F.3d at 1010 (internal quotation marks omitted).
Section 45 of the Lanham Act defines "trademark" as "any word, name, symbol, or device, or any combination thereof [used or intended to be used] to identify and distinguish [a producer's] goods... from those manufactured or sold by others and to indicate the source of the goods...." 15 U.S.C. § 1127. The owner of a trademark may apply to register it by filing inter alia "a drawing of the mark" in the United States Patent and Trademark Office. Lanham Act § 1(a)(1)(B), 15 U.S.C. § 1051(a)(1)(B). Among other privileges, registration of a mark "enables the owner to sue an infringer under § 32, 15 U.S.C. § 1114," and "entitles the owner to a presumption that its mark is valid, see § 7(b), 15 U.S.C. § 1057(b)." Wal-mart Stores v. Samara Bros., 529 U.S. 205, 209 (2000).
We exercise "particular `caution,' when extending protection to product designs." Landscape Forms, Inc. v. Columbia Cascade Co., 113 F.3d 373, 380 (2d Cir. 1997) (quoting Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc., 58 F.3d 27, 32 (2d Cir. 1995)). Although the Lanham Act protects marks that "consumers are likely to rely upon in distinguishing goods," Landscape Forms, 113 F.3d at 380, "almost invariably, even the most unusual of product designs--such as a cocktail shaker shaped like a penguin--is intended not to identify the source" of the product, "but to render the product itself more useful or more appealing," Samara Bros., 529 U.S. at 213. See Restatement (Third) of Unfair Competition § 16 cmt.b at 159 (1995) ("Product designs are more likely to be seen merely as utilitarian or ornamental aspects of the goods."). And trade dress claims raise a potent risk that relief will impermissibly afford a level of "protection that would hamper efforts to market competitive goods." Landscape Forms, 113 F.3d at 380; see id. at 379 ("[T]he Lanham Act must be construed in the light of a strong federal policy in favor of vigorously competitive markets."); Jeffrey Milstein, 58 F.3d at 33. While most trademarks only create a monopoly in a word, a phrase, or a symbol, "granting trade dress protection to an ordinary product design would create a monopoly in the goods themselves." Landscape Forms, 113 F.3d at 380.
Moreover, even a showing of secondary meaning is insufficient to protect product designs that are overbroad or "generic"--"those that `refe[r] to the genus of which the particular product is a species'." Jeffrey Milstein, 58 F.3d at 32, 33 (quoting Two Pesos, 505 U.S. at 768). This check on monopoly rights limits all marks, but for two reasons it is particularly important in cases of product design. "[F]irst, `overextension of trade dress protection can undermine restrictions in copyright and patent law that are designed to avoid monopolization of products and ideas.'" Landscape Forms, 113 F.3d at 380 (quoting Jeffrey Milstein, 58 F.3d at 32). Patent and copyright law bestow limited periods of protection, but trademark rights can be forever. See Stormy Clime Ltd. v. ProGroup, Inc., 809 F.2d 971, 977-78 (2d Cir. 1987). "`[S]econd, just as copyright law does not protect ideas but only their concrete expression, neither does trade dress law protect an idea, a concept, or a generalized type of appearance.'" Landscape Forms, 113 F.3d at 380 (quoting Jeffrey Milstein, 58 F.3d at 32; cf. Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 349-50 (1991) (noting that the distinction between ideas and expression in copyright law "assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work"). Product design is driven primarily by the usefulness or aesthetic appeal of the object; trade dress protection for product design therefore entails a greater risk of impinging on ideas as compared with protection of packaging or labeling.
A final doctrinal hurdle is the congressionally-imposed requirement that a plaintiff prove that an unregistered trade dress is "not functional." See Trademark Amendments Act of 1999 § 5, Pub. L. 106-43 (August 5, 1999), codified at 15 U.S.C.A. § 1125(a)(3) (West Supp. 2001). (Prior to the congressional directive, this element was an affirmative defense in this circuit. See, e.g., Jeffrey Milstein, 58 F.3d at 31.) "`[A] product feature is functional, and cannot serve as a trademark, if it is essential to the use or purpose of the article or if it affects the cost or quality of the article.'" TrafFix Devices, Inc. v. Marketing Displays, Inc., 121 S. Ct. 1255, 1261 (2001) (quoting Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165 (1995)) (other internal quotation marks omitted). And in cases involving an aesthetic feature, the dress is also functional if the right to use it exclusively "`would put competitors at a significant non-reputation-related disadvantage.'" TrafFix Devices, 121 U.S. at 1261 (quoting Qualitex Co., 514 U.S. at 165). Thus, the nonfunctionality requirement "protects competition even at the cost of potential consumer confusion."5 Landscape Forms, 113 F.3d at 379-380.
A plaintiff such as Yurman may seek trade dress protection for an entire product line, by establishing that the "overall look" in each separate product is "consistent." Walt Disney Co. v. GoodTimes Home Video Corp., 830 F. Supp. 762, 766 (S.D.N.Y. 1993). But for obvious reasons, concern for protecting competition is in that context particularly "acute." Landscape Forms, 113 F.3d at 380; see id. ("[A] claim of trade dress covering an array of items is likely to be broader than one for an individual product's design.").
Second, no juror can evaluate secondary meaning, overbreadth, or nonfunctionality without knowing precisely what the plaintiff is trying to protect: "[w]ithout such a precise expression of the character and scope of the claimed trade dress,... courts will be unable to evaluate how unique and unexpected the design elements are in the relevant market." Landscape Forms, 113 F.3d at 381.
Fourth, "[c]courts will... be unable to shape narrowly-tailored relief if they do not know what distinctive combination of ingredients deserves protection." Landscape Forms, 113 F.3d at 381. This case is itself a good example. See Yurman Design, 93 F. Supp. 2d at 466 (Yurman's "inability to articulate the trade dress... poses significant problems for the Court in issuing an injunction"). And if a court is unable to identify what types of designs will infringe a trade dress, how is a competitor in the jewelry business to know what new designs would be subject to challenge by Yurman? See Samara Bros., 529 U.S. at 214 (noting that "[c]ompetition is deterred... not merely by successful suit but by the plausible threat of a successful suit").
We need not decide whether Yurman could formulate a description of design elements to support a trade dress claim sufficient to protect a line of Yurman jewelry, because Yurman has not even offered one for our consideration. The trade dress of works that are decorative or artistic may be harder to capture in words, and may need descriptions more broadly framed, or may need drawings; but the party seeking protection must nonetheless be able to point to the elements and features that distinguish its trade dress. Pressed by PAJ on appeal to provide some description of its trade dress, Yurman produced the following: "the artistic combination of cable [jewelry] with other elements." Appellee's Brief 33. But the word "artistic" simply begs a question; and unless Yurman seeks protection for cable itself, the jewelry must be supposed to combine cable "with other elements." This articulation is altogether too broad to be a protectable, source-identifying expression. Cf. Jeffrey Milstein, 58 F.3d at 33 (concluding that "a trade dress described as consisting solely of die-cut photographs would simply "`refe[r] to the genus of which the particular product is a species.'" (quoting Two Pesos, 505 U.S. at 768)). Yurman's inability to articulate its trade dress at a lower level of generality is not altogether surprising, given (1) that there are 18 different Yurman pieces in the product line it seeks to protect (eight rings, seven bracelets, and three pairs of earrings), four of which the jury found to be separately copyrightable; and (2) Yurman's concession that the pieces are composed exclusively of elements commonly used in the jewelry industry. Appellee's Brief at 17-19. A unique combination of elements may make a dress distinctive, but "the fact that a trade dress is composed entirely of commonly used or functional elements might suggest that the dress should be regarded as unprotectible or `generic,' to avoid tying up a product or marketing idea." Jeffrey Milstein, 58 F.3d at 32.
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