Opinion ID: 789734
Heading Depth: 3
Heading Rank: 2

Heading: Eden Toys, Inc. v. Florelee Undergarment Co., Inc.

Text: 172 By contrast, the Second Circuit's decision in Eden Toys, Inc. v. Florelee Undergarment Co., Inc., 697 F.2d 27 (2d Cir.1982) involves a different factual situation and thus is entitled to little weight here. 173 In Eden Toys, Paddington Bear & Company, Ltd. (Paddington Bear) held the copyright to children's books which featured the fictional character Paddington Bear. Id. at 29. In 1975, Paddington Bear entered into an agreement with Eden Toys, Inc. (Eden Toys), an American corporation, whereby Eden Toys was granted an exclusive license to use licensor Paddington Bear's copyright and characters in North America. Id. In 1980, that agreement was amended to grant Eden Toys exclusive North American rights to all Paddington products except books, tapes, records, stage plays, motion pictures, radio and television productions. Id. at 30. Under the agreement, Paddington Bear retained the right to sue for copyright infringement on Eden Toys' license. Id. In particular, the agreement allowed Paddington Bear to sue, or choose not to, but let Eden Toys bring suits on Paddington's behalf. 22 Id. at 30 n. 2. 174 Eden Toys brought suit against Florelee Undergarment Co. (Florelee), alleging copyright infringement, and seeking to enjoin Florelee's use of the Paddington Bear image. Id. at 31. Florelee moved to dismiss the complaint on the ground that Eden Toys lacked standing to sue under 17 U.S.C. § 501(b) (1976). Id. The Second Circuit affirmed the district court's dismissal of the claim, holding that [the court] do[es] not believe that the [1976] Copyright Act permits holders of rights under copyrights to choose third parties to bring suits on their behalf. Id. at 32 n. 3. 175 The Majority contends that the court in Eden Toys made plain the basic principle, which we also have derived from § 501(b) and its context and history, that only the owner of an exclusive right under the copyright is entitled to sue for infringement. Op. at 889. 176 I respectfully disagree. In my view, the holding of Eden Toys is far more narrow. The court in Eden Toys held that a copyright holder who maintains ownership of the exclusive right to reproduce cannot assign to a third party the bare right to sue should the copyright holder choose not to do so. It does not hold that a copyright holder may not assign the accrued cause of action, on which a new owner can sue. 177 Indeed, the specific contractual agreement between Eden Toys and Paddington Bear did not (as it does here) assign all rights to any claims, but merely assigned the right to sue where Eden Toys or its licensees was exposed to competition, direct or indirect, from infringers of the copyright or trademark rights which are licensed hereunder. Id. at 30 n. 2. There was no assignment to Eden Toys of pre-existing accrued causes of action. Accordingly, there was no real assignment of any accrued cause of action. Rather, the Eden-Paddington Bear agreement was interpreted as an agreement merely designating Eden as the agent for purposes of suit. Thus, Eden Toys merely holds that the proper party plaintiff, the real party in interest, is the owner of the cause of action for infringement, not some hand-picked stand-in. 178