Opinion ID: 558968
Heading Depth: 2
Heading Rank: 3

Heading: The Summit Plastic Bag Infringement

Text: 94 Ford made another allegation of copyright and trademark infringement against Altran, this one concerning Altran's dealings with Summit Motor Products. It was Ford's position during the trial that over a period of many years, Altran sold to Summit plastic bags with trade dress closely resembling the Ghosted GT trade dress used by Ford, and that Summit subsequently sold parts in those bags. According to Ford, a plastic bag sealing machine facilitated those efforts by printing Ford parts numbers on the bags and then sealing them. 95 Several witnesses testified on Ford's behalf. Sanford Landa, the president of Summit, guessed that he had purchased plastic bags from Altran with the Ghosted GT trade dress through 1984, stated that Summit put a minor number of parts in those bags, and believed that the parts were sold in those bags until 1984. However, the district court apparently considered Landa less than convincing, since it characterized his testimony as all full of inconsistencies. Another witness, Michael Morales, a Summit employee, stated that he ordered bags from Altran on several occasions during the course of his employment, and that parts were sold in those bags. But his testimony was somewhat vague. For example, he could not recall the last time he placed an order for the Altran bags. Ford's private detective, Charles Baley, testified that during a raid on Summit he seized parts packaged in the counterfeit bags allegedly supplied by Altran, that there was a sealing machine and printing press on Summit premises, and that he found at least two rolls of the counterfeit bags. Baley's testimony was somewhat weakened by two admissions: first, he threw out the bags which contained parts; and second, he could not determine the origin of the bags. Moreover, it is unclear from Baley's testimony just how many seized parts were found in plastic bags. Baley itemized twenty-two separate items, but apparently a number of them were packaged in envelopes and boxes. 96 Ford also produced photos of the sealing machine and the distribution area, and two spools of bags supplied by Altran to Summit, one dated 1975, the other 1979. Additionally, Ford presented Summit invoices indicating purchases from Altran. These invoices, however, did not reflect what items were actually purchased. Ford did not present any witness who actually saw the sealing machine in operation. Nor could Ford produce any direct evidence that Summit parts were sold in Altran counterfeit bags. It did, however, demonstrate that some parts dealers returned counterfeit Ghosted GT plastic bags containing non-Ford parts to Ford in order to receive credit. These bags were virtually identical to those given to Summit by Altran. 97 Altran disputes Ford's interpretation of the evidence. Altran's president, Alfred Schlanger, testified that in the late 1970s, he bought packaging material from his former employer, who was bankrupt. Found among the materials were a few rolls of plastic bags having trade dress resembling Ford's Ghosted GT packaging. At first, Schlanger intended to throw the bags out, but when Summit's Landa mentioned in a conversation that Summit had obtained a sealing machine and needed plastic bags to test it, Schlanger gave the plastic bags to Summit at no charge. Schlanger stated that he did not believe the bags would be used to package parts destined for sale. 98 Whether or not Schlanger's version of the incident is true is a matter of witness credibility. Apparently, the jury embraced Schlanger's story. We cannot find fault with this decision. But even accepting Schlanger's testimony as true, the overwhelming weight of the evidence nevertheless leads to a finding of infringement. 99 (1) The Copyright Claim 100 We begin with the copyright claim. Aside from the differing circumstances, the evidence in the Summit infringement is substantially the same as the evidence presented in the Transgo infringement. Therefore, we find that Ford established its ownership of the Ghosted GT copyright and Altran's access to the copyright. Moreover, both the extrinsic and intrinsic tests of substantial similarity have been met. Regarding the extrinsic test, a visual examination of the Altran bags reveals printed red and black speeding cars practically identical to the Ghosted GT. Altran's argument that the copyright passed into the public domain by virtue of publication without notice must be disregarded because it was not considered by the jury. The copyright infringement claim, then, boils down to a question of whether a right guaranteed by section 106 of the Copyright Act was abridged. 17 U.S.C. Sec. 106. 101 Only one of the enumerated rights in section 106 could conceivably apply in this instance, namely, the right under section 106(3) to distribute copies ... of the copyrighted work to the public by sale or other transfer of ownership. Altran contends that a one-time gift to another person does not implicate section 106(3). We disagree. That the bags were a gift is of no import. The term other transfer of ownership is broad enough to encompass gifts. In fact, the House Report on the 1976 Amendment to the Copyright Act states during the course of a discussion on section 106(3) that the copyright owner has the right to control public distribution, whether by sale, gift, loan, or some rental or lease arrangement. H.R.REP. NO. 94-1476, 94th Cong., 2d Sess. 62, reprinted in 1976 U.S.Code Cong. & Admin.News 5659, 5675-76 and 17 U.S.C.A. Sec. 106 (West 1977) (Historical Note) (emphasis added). This report clearly indicates legislative intent to include gifts within the scope of section 106(3). 102 In addition, Altran seems to argue that Schlanger did not intend to infringe any copyright law, and only gave the plastic bags to Landa so that Landa could test his machine. But it is settled law that innocent intent is generally not a defense to copyright infringement. Williams Electronics, Inc. v. Artic International, Inc., 685 F.2d at 878. 27 103 Altran also claims that section 106(3) is inapplicable because the gift to Landa was not a distribution to the public. This argument fails because even one person can be the public for the purposes of section 106(3). The term public is not defined in the Copyright Act. Thus, we need to look elsewhere for a definition. Our search commences with the observation that the right protected by section 106(3) is generally referred to as that of publication. See id. (stating that section 106(3) establishes the exclusive right of publication. (emphasis added)). Indeed, the statutory definition of publication is the distribution of copies ... of a work to the public by sale or other transfer of ownership, 17 U.S.C. Sec. 101, a definition which tracks the language of section 106(3). Publication and the exclusive right protected by section 106(3), then, are for all practical purposes, synonymous. Therefore, any clarification of what is meant by publication would also clarify what is meant by section 106(3), and in particular, the term public. 104 Courts have held that when deciding if a common law publication occurred, the number of persons receiving copies is not determinative; a general publication may be found when only one copy of the work reaches a member of the general public.... Brown v. Tabb, 714 F.2d 1088, 1091 (11th Cir.1983). Accord Burke v. National Broadcasting Co., Inc., 598 F.2d 688, 691 (1st Cir.1979) (publication can be found where only one copy of the work passes to a member of the general public). 28 Hence, because publication and the right protected by section 106(3) are the same, and because a publication can occur when only one member of the public receives a copyrighted work, it follows that a violation of section 106(3) can also occur when illicit copies of a copyrighted work are only distributed to one person. Obviously, in such a situation, damages may be limited, or even non-existent, but the liability for infringement remains. 105 Given this construction of section 106(3), there is no doubt that Altran's one-time gift to Summit's Sanford Landa of the plastic bags, however innocent, clearly falls within the scope of that section. As matter of law, therefore, Altran violated section 106(3) by its gift of the infringing bags. Thus, there was no evidence or law to buttress the jury's finding that Altran did not infringe Ford's copyright by supplying the plastic bags to Summit. 106 (2) The Trademark Claim 107 Finally, we address the plastic bag trademark claim. The evidence on secondary meaning is the same in this instance as it was in the claim arising out of the Shift Kit sales, with one exception: Ford proved that counterfeit plastic bags resembling the ones Altran gave to Summit and containing non-Ford parts were returned to Ford for credit. This is strong proof of actual confusion, which points towards a finding of secondary meaning. We therefore remain convinced that the Ghosted GT has secondary meaning. Moreover, as mentioned earlier, Ford has also proven ownership of a common law Ghosted GT trademark. 108 Likelihood of confusion is the only remaining issue in deciding whether a trademark infringement occurred. One factor in our analysis which bolsters Altran's position that there is no likely confusion concerns intent. Taking Schlanger's testimony as true, there was no intent by Altran to infringe Ford's trademark. Conversely, the trade dress on Ford packaging and the Altran-supplied plastic bags is very similar, which strongly indicates a likelihood of confusion. Other important factors in Ford's favor include the strength of the mark, the public expectation that Ford and Altran would compete in the same market, and Ford's evidence of parts returned for credit in bags almost identical to those Altran supplied to Summit. This latter evidence is solid proof of actual confusion. 29 109 Ultimately, though, our decision depends on whether Summit actually packaged parts in those plastic bags. If evidence was presented supporting Altran's contention that Summit did not actually package or sell parts in those plastic bags, then the factors in the Scott Paper test relating to defendant's marketing efforts, channels of trade, targets of sale efforts, and similarity of function would all indicate that confusion was unlikely, since Summit was not marketing or selling goods with the infringing mark. But the only significant evidence presented on the issue was offered by Ford. The testimonies of Landa, Morales, and Baley, while thoroughly impeached, nonetheless reveal that Summit did package at least a handful of parts in the counterfeit bags. For example, at least one or two of the twenty-two items Baley seized were apparently packaged in Altran bags. Even a few minor transgressions, 30 though, are enough to shift the Scott Paper factors regarding marketing and sales in Ford's favor. We can only conclude, then, that there was a likelihood of confusion. Ford has therefore proven to our satisfaction secondary meaning, ownership, and likelihood of confusion. Again, Altran's evidence to the contrary provided an insufficient basis for the jury to find otherwise. As such, a new trial on both the plastic bag trademark claim and the related copyright claim is justified.