Court Opinion

ID: 1020326
Source: CourtListenerOpinion
Date Created: 2013-07-04 22:49:24.613502+00
Date Added: 2024-06-11T09:18:09.516724
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 06-1144

UNIVERSAL     FURNITURE        INTERNATIONAL,
INCORPORATED,

                                              Plaintiff - Appellant,

           versus

COLLEZIONE EUROPA USA, INCORPORATED,

                                               Defendant - Appellee.

Appeal from the United States District Court for the Middle
District of North Carolina, at Durham. Frank W. Bullock, Jr.,
District Judge. (1:04-cv-00977-FWB)

Argued:   May 26, 2006                     Decided:   August 29, 2006

Before MICHAEL and KING, Circuit Judges, and Joseph F. ANDERSON,
Jr., Chief United States District Judge for the District of South
Carolina, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Adam Howard Charnes, KILPATRICK STOCKTON, L.L.P., Winston-
Salem, North Carolina, for Appellant.    Nicholas Mesiti, HESLIN,
ROTHENBERG, FARLEY & MESITI, P.C., Albany, New York, for Appellee.
ON BRIEF: George L. Little, Jr., William M. Bryner, KILPATRICK
STOCKTON, L.L.P., Winston-Salem, North Carolina; W. Swain Wood,
WOOD & CO., L.L.P., Raleigh, North Carolina, for Appellant. Brett
M. Hutton, HESLIN, ROTHENBERG, FARLEY & MESITI, P.C., Albany, New
York, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).

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PER CURIAM:

       This matter comes before the court on a limited review of the

district court’s denial of plaintiff’s motion for preliminary

injunction.     On the facts presented on appeal, we find no error by

the district court, and therefore, we affirm.

       In this copyright infringement action, plaintiff Universal

Furniture International, Inc. (“Universal”) sought a preliminary

injunction      barring     defendant         Collezione        Europa     USA,      Inc.

(“Collezione”) from promoting or selling two furniture lines that

Universal contends violate its copyrights in its Grand Inheritance

and English Manor collections.            The district court, adopting the

Report    and   Recommendation      of        the     magistrate    judge,         denied

Universal’s motion for a preliminary injunction after concluding

that Universal failed to show a probability of success on the

merits.

                                         I.

       Universal and Collezione are competing furniture manufacturers

with   divergent   business     models:             Universal    develops        high-end

original furniture designs, whereas Collezione markets lower-cost

models of existing designs. Universal’s designer derived nearly all

of the design elements of the Grand Inheritance and English Manor

furniture     collections    from   the        public     domain,        using    mainly

eighteenth and nineteenth century designs.                      In 2003, Universal

                                         3
obtained Certificates of Registration from the U.S. Copyright Office

for these collections, which covered “decorative sculptural designs

on    furniture;    adaptation     of   preexisting        decorative       designs;

compilation of decorative designs on suites of furniture.”

      In October 2004, Universal discovered that Collezione’s 20200

collection     displayed      pieces    from       Universal’s      English      Manor

collection.      Collezione also showcased a 20000 collection that

Universal claims was strikingly similar to its Grand Inheritance

collection.        Collezione    concedes      it    intended     to    sell   pieces

substantially similar to Universal’s two collections before becoming

aware that the collections were copyrighted.                To avoid a copyright

infringement suit, Collezione agreed with Universal in late October

2004 not to develop or market its 20000 and 20200 collections.

Thereafter, Collezione redesigned its 20000 and 20200 collections.

      Settlement talks between the parties continued until March

2005, when Collezione began marketing its redesigned collections.

Although Collezione’s designer changed various sculptural features

and   design   elements,      Universal      contends      that   the     redesigned

collections are still substantially similar to its copyrighted

English Manor and Grand Inheritance collections.                       According to

Universal’s    expert,     Collezione       made    only   modest      changes    that

retained   the     “overall     aesthetic     impression     of     the   Universal

collections’ ornamentation.”

                                        4
       Universal filed suit and moved for a preliminary injunction

barring Collezione’s promotion and sale of the 20000 and 20200

collections.    Collezione answered and opposed the motion.

       The district court, in adopting the recommendation of the

magistrate judge, denied Universal’s motion for a preliminary

injunction.    The court determined that the balance of hardships

stood in equipoise and that Universal, therefore, had to demonstrate

a stronger probability of success than if the balance had tipped in

its favor.    Based on the sparse record available at the preliminary

stage of litigation, the court concluded that the validity of

Universal’s copyrights was questionable, at least insofar as the

copyrights concerned Universal’s compilations of adapted public-

domain designs.      The court based its conclusion on the “conceptual

separability” test, expressing doubt that the design compilations

were   conceptually     separable   from   the   furniture’s     utilitarian

functions.    The court found this doubt, combined with the sparsity

of the record, counseled against granting the preliminary injunction

and potentially enlarging the law of copyright protection beyond its

intended borders.      Universal then filed this interlocutory appeal

challenging    the   district   court’s    denial   of   its   motion   for   a

preliminary injunction.

                                     5
                                    II.

         We review the district court’s denial of Universal’s motion for

a preliminary injunction for abuse of discretion. See Quince Orchard

Valley Citizens Ass’n, Inc. v. Hodel, 872 F.2d 75, 78 (4th Cir.

1989).      A district court abuses its discretion “‘by applying an

incorrect preliminary injunction standard, by resting its decision

on   a    clearly   erroneous   finding   of   a   material   fact,   or   by

misapprehending the law with respect to [the] underlying issues in

litigation.’” Id. (quoting Goldie’s Bookstore, Inc. v. Superior Ct.

of California, 739 F.2d 466, 470 (9th Cir. 1984)).

         Section 502(a) of the Copyright Act, 17 U.S.C. § 502(a),

authorizes a federal court to “grant temporary and final injunctions

on such terms as it may deem reasonable to prevent or restrain

infringement of a copyright.”       In this circuit, a district court

deciding a motion for preliminary injunction should consider four

factors: (1) the plaintiff’s likelihood of success on the merits of

the underlying dispute; (2) the possibility of irreparable harm to

the plaintiff if preliminary relief is denied; (3) the harm to the

defendant if an injunction is issued; and (4) the public interest.

See Blackwelder Furniture Co. v. Seilig Mfg. Co., 550 F.2d 189, 196

(4th Cir. 1977).      The factors are weighed on a sliding scale, with

the two more important factors being those of irreparable injury to

the plaintiff without a decree and of likely harm to the defendant

with a decree.        If the balance of harm is not shown to be in

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plaintiff’s     favor,    the    importance    of    plaintiff’s      showing    a

likelihood of success on the merits increases.              Id. at 195.

       Applying the Blackwelder standard, the district court found

that   the   balance     of    hardships   stood    in   equipoise,    and   that

therefore, Universal had failed to show that the balance of harm

tipped in its favor.          Consequently, the district court found that

Universal had to demonstrate a probability of success by showing a

clear and strong case.          Ultimately, the district court found that

Universal could not meet this standard.

       Registration of a copyright constitutes prima facie evidence

of the validity of a copyright in any judicial proceeding brought

within five years of the copyright’s first publication.                17 U.S.C.

§ 410(c).    Universal contends that it was entitled to a presumption

of irreparable harm based on its prima facie claim of copyright

infringement.     See Serv. & Training, Inc. v. Data Gen. Corp., 963

F.2d 680, 690 (4th Cir. 1992).         To negate this prima facie claim,

and its attendant presumption of irreparable harm, Collezione need

only present some evidence that “casts doubt on the question” of

copyright validity. Diamond Star Bldg. Corp. v. Freed, 30 F.3d 503,

505 n.1 (4th Cir. 1994); see also Lamps Plus, Inc. v. Seattle

Lighting Fixture Co., 345 F.3d 1140, 1144 (9th Cir. 2003).                      The

relative ease of this rebuttal is premised, in part, on the lack of

attention that the Copyright Office generally gives applications for

registration. See, e.g., Carol Barnhart, Inc. v. Econ. Cover Corp.,

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594 F. Supp. 364, 367 (E.D.N.Y. 1984) (“The Copyright Office’s

scrutiny of an article for registration is not like the intense and

prolonged scrutiny required for patent and trademark registration.

Elements of copyrightability are viewed as largely legal questions

and therefore equally within the expertise of the courts.”).

       Under the Copyright Act (“Act”), “useful articles” as a whole,

such as furniture, are not eligible for copyright protection, but

individual design elements may be eligible only if, and only to the

extent that they “can be identified separately from, and are capable

of    existing    independently      of,    the      utilitarian     aspects    of    the

article.”      17 U.S.C. § 101.       This test is known as the conceptual

separability test.

       Applying     these    standards,        the   district   court    found       that

Collezione       presented    sufficient         rebuttal     evidence    to    defeat

Universal’s prima facie claim of infringement, questioning both the

originality and the conceptual separability of the registered works.

The    court     found   Universal    was       therefore     not    entitled    to     a

presumption of irreparable harm.                We agree.

                                           A.

       Universal originally argued that its compilations of adapted

public domain designs meet the conceptual separability test.                     Under

this    analysis,    Universal    argues        that    a   design   compilation       is

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copyrightable so long as it is original, regardless of whether its

constituent designs meet the conceptual separability test.

        We find that the definition of compilation in 17 U.S.C. § 101

does not constitute a separate category eligible for copyright

protection independently of Sections 102 and 103.                            A reading of

sections 101 through 103 of the Act clarifies that “copyright

protection      subsists    ...     in   original       works       of    authorship    ...

[including] pictorial, graphic, and sculptural works,” including

compilations that meet the definition of “works of authorship.”

Therefore, a compilation of design elements on furniture is not

copyrightable if it is not an original work conceptually separable

from the useful article’s functionality.

        The court in Lamps Plus faced an analogous situation.                     In that

case, the court held that plaintiff’s “mechanical combination of

four preexisting ceiling-lamp elements with a preexisting table-lamp

base did not result in the expression of an original work.”                           Lamps

Plus,    345    F.3d   at   1147.        In       declaring    the       lamp-compilation

unprotectable, the court discussed both its lack of originality and

its   lack     of   conceptual    separability.               The    court    found    that

plaintiff’s assembling of preexisting components did not create “an

original work of authorship as required by § 101.                            [It] did not

create any of the ‘design . . . features that can be identified

separately from, and are capable of existing independently of, the

utilitarian aspects’ of any of the lamp’s component parts.”                             Id.

                                              9
(quoting 17 U.S.C. § 101).          The court thereby incorporated the

conceptual    separability   test    into      the   originality     test   when

assessing    the   copyrightability       of   the   lamp   as   a   sculptural

compilation.

     The cases cited by Universal to the contrary (e.g., Feist

Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (1991) and

Harper House, Inc. v. Thomas Nelson, Inc., 889 F.2d 197 (9th Cir.

1989)) are inapposite because they involve compilations of literary

works and data, not compilations of sculptural designs.

                                     B.

     Applying the conceptual separability test in the instant case,

the magistrate judge expressed doubt that Universal’s compilations

are conceptually separable from the furniture they adorn.              For this

reason, the magistrate judge concluded, and the district court held,

that Universal failed to demonstrate the requisite likelihood of

success on the merits, foreclosing a preliminary injunction at that

early stage of litigation.          We agree with the lower court’s

conclusion.

     As we explained in Superior Form Builders, Inc. v. Dan Chase

Taxidermy Supply Co., Inc., 74 F.3d 488 (4th Cir. 1996), the Act

makes a critical distinction between a utilitarian object and a

decorative sculptural object:

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          [T]he 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.     But the design of a statue
     portraying a dancer, created merely for its expressive
     form, continues to be copyrightable even when it has been
     included as the base of a lamp which is utilitarian. The
     objective in designing a chair is to create a utilitarian
     object, albeit an aesthetically pleasing one; the
     objective in creating a statue of a dancer is to express
     the idea of a dancer.

Id. at 493 (citation omitted).           Applying this analysis on the

limited facts presented, we cannot say that the district court

abused its discretion in finding Universal’s design compilations not

conceptually    separable   from   the    functional   elements   of   the

furniture.     We agree with the district court that the furniture

would almost certainly not be marketable to any significant segment

of the community if it had no utilitarian use and only aesthetic

qualities.   See 1 Melville B. Nimmer and David Nimmer on Copyright

§ 2.08[B] (2006).

     It is immaterial for our purposes that the district court erred

by applying the inapplicable, and arguably more stringent, test of

conceptual separability adapted from an Illinois district court and

later reversed by the Seventh Circuit (i.e., whether the design

compilations, once detached from the furniture, constitute “a work

of art as traditionally conceived”). The record at this preliminary

injunction stage supports a finding that Universal’s compilations

would not satisfy the Superior Form Builders test previously set

forth by this court that the design must reflect the “designer’s

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artistic judgment exercised independently of functional influences.”

Superior Form Builders, 74 F.3d at 494 (quoting Brandir Int’l, Inc.

v. Cascade Pac. Lumber Co., 834 F.2d 1142, 1145 (2d Cir. 1987)).

     By affirming on the basis of Superior Form Builders, we do not

intend to categorically exclude Universal’s and other comparable

design compilations from copyright protection.               Rather, we affirm

on the failure of appellant to demonstrate the district court abused

its discretion in denying a preliminary injunction based on the

uncertainty that these compilations are in fact copyrightable, owing

to the lack of controlling case law and the sparsity of the record.

It is our opinion that granting Universal’s motion 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.

                                       C.

     Universal next argues that the district court erred by not

considering the copyrightability of individual design elements. The

copyright   registrations     for   both    the    English    Manor     and   Grand

Inheritance     collections   encompassed         the    compilations    and    the

individual elements comprising these compilations, whether original

elements or elements adapted from the public domain.

                                       12
      Initially, we note that Universal’s failure to object to the

magistrate judge’s report as to the copyrightability of individual

design elements likely renders its argument waived.             See Wells v.

Shriners Hosp., 109 F.3d 198, 200 (4th Cir. 1997).         Aside from the

waiver, however, we conclude that the district court did not abuse

its discretion by considering only the copyrightability of the

compilations.      Universal   consistently    framed     its    case   as   a

compilations-only case in seeking an injunction covering two entire

furniture collections, not just individual design elements on those

collections.

      Had the district court evaluated the constituent elements, it

would almost certainly have reached the identical decision on the

same basic reasoning.    Universal cannot show on this sparse record

the   requisite   likelihood   of   success   necessary    for    the   broad

preliminary injunction.

                                    D.

      The district court properly declined to consider whether

Collezione substantially copied Universal’s two collections.              The

two elements of copyright infringement are:         (1) ownership of a

valid copyright by the party complaining of infringement, and (2)

unauthorized copying of the protected work by the infringing party.

See Keeler Brass Co. v. Cont’l Brass Co., 862 F.2d 1063, 1065 (4th

                                    13
Cir. 1988).    Based on the record, we cannot say that the district

court abused its discretion in finding that Universal was not able

to demonstrate it had valid copyrights.          Without valid copyrights,

Universal cannot prevail on its infringement claims, no matter how

closely Collezione copied its two collections.

                                    E.

     Universal contends that the district court erred by finding

the balance of hardships “in equipoise,” and on this basis requiring

Universal to show a strong likelihood of success.                We find the

district court did not err in its analysis of the respective harms

that the parties would suffer in the context of a preliminary

injunction motion.

     The district court found that in addition to lost sales,

Universal showed an immediate threat of irreparable injury to its

reputation    and   customer   relations   due    to   impending    sales   of

Collezione’s allegedly similar, but cheaper furniture.             Similarly,

the district court found that if Collezione were enjoined from

selling its 20000 and 20200 collections, it would be required to

cancel or recall all of its outstanding orders, which would injure

its reputation and customer relations and would likely subject it

to claims by its suppliers for noncompleted sales.           In noting the

factual similarity to Magnussen Furniture, Inc.             v.     Collezione

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Europa USA, Inc., 116 F.3d 472 (4th Cir. 1997)(unpublished opinion),

the district court found the balance of hardships between the

parties to be equal.    We cannot say that the district court erred

in its analysis on this issue.

                                  III.

     Based   on   the   record   at    this   preliminary   stage    of   the

litigation, we find the district court did not abuse its discretion

in denying Universal's motion for a preliminary injunction.

                                                                    AFFIRMED

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