Annalee v. Townsend

3 . The Court applies this standard in

reviewing AMD’s request for injunctive relief.

B. Copyright Claims

To establish copyright infringement, a plaintiff must

demonstrate (1) ownership of a valid copyright and (2) illicit

copying. See Yankee Candle C o . v . Bridgewater Candle Co., LLC,

259 F.3d 2

5 , 33 (1st Cir. 2001). Defendants do not dispute that

the copyrights that AMD has put in issue are valid for purposes

of consideration of the instant motion.

To prove that illicit copying has occurred, the plaintiff

must first demonstrate, by direct or indirect evidence, that the

defendant copied the plaintiff’s copyrighted work.

at 3 3 .

If there is no evidence of actual copying, copying may be

17 inferred if the plaintiff can show that the defendant had access

to the copyrighted work and that the works are substantially

similar.

Once a plaintiff has proven that the defendant has copied

the plaintiff’s work, the plaintiff has the burden of proving

“that the alleged infringing work is ‘substantially similar’ to

the protected expression” in the copyrighted work.

at 33

n.4, quoting Matthews v . Freedman,

157 F.3d 2

5 , 27 (1st Cir.

1998).

Plaintiffs have sufficiently demonstrated that the

Defendants have copied AMD’s Santa dolls. The evidence

demonstrated that Townsend instructed one his employees, Shirley

Ballou, to obtain “Annalee Flesh” felt. In order to obtain

access to the felt, a Studio’s employee cut a portion of the felt

on an AMD doll and submitted it to National Nonwovens. Studios

then began using the same National Nonwovens’ felt to make its

Santa dolls.

The evidence further demonstrated that Townsend instructed

M s . Ballou to obtain the same type of fabric labels that AMD used

on its dolls. M s . Ballou testified Townsend instructed her that

these labels should be the same size that AMD used.

18 Bernadette Haines testified that she observed Townsend

taking digital pictures of AMD doll faces, and observed him

transferring those images to his computer. M s . Haines testified

that she was instructed by Townsend to similarly take digital

pictures of AMD doll faces and then transfer them to Townsend’s

computer. M s . Haines testified that she observed Townsend edit

the AMD doll faces on his computer. M s . Haines testified that

the doll faces in Plaintiffs’ Exhibit 82 appear to be the images

that she saw on Townsend’s computer.

There was also evidence that Townsend had significant access

to AMD’s dolls and doll faces, that he participated in the design

of some AMD dolls and that he has retained control over a

structure that houses original AMD screen art. This evidence

provides indirect support for Plaintiffs’ allegation of copying.

Moreover, there are numerous similarities between Studios’

and AMD’s Santa dolls. Testifying as an expert, Len Cirelli, a

principal of the manufacturer of AMD’s dolls, stated that his

comparison of Studio’s Santa doll with AMD’s Santa doll revealed

that Studios replicated every process, material, and method used

by AMD in the manufacturing of its Santa doll. While some of

Cirelli’s testimony focused on elements that are arguably

19 functional, including the string stuffing used in the head and

the use of the furrier stitch, he extensively discussed the

similarity in the method of applying the paint to the doll face

to give a hand-painted look, and the style of the line art used

on the doll faces.

Although the Plaintiffs’ evidence of copying is substantial,

after doing a copyright-by-copyright comparison of each of AMD’s

copyrights at issue with the Studios’ Santa, the Court does not

find that Studio’s Santa is substantially similar to the

protected expression in the copyrights. See Yankee Candle,

259 F.3d at 33-34

(finding that only the protected expression is

relevant to an evaluation of substantial similarity).

Apart from the difference in size of Studios’ Santa in

comparison to the various AMD Santas in the copyrights at issue,

the appearance of Studios’ Santa may be distinguished from the

appearance of each of the AMD copyrighted Santas in numerous

ways. Studios’ Santa has a markedly different outfit design than

AMD’s 1 8 " M r . Santa, P l . Ex. 2 , and Studios’ Santa also differs

because it is holding a toy sack. Studios’ Santa differs from

AMD’s 1 8 " Santa with 1 8 " Reindeer, P l . Ex. 3 , and 1 8 " Santa

Hugging Reindeer, P l . Ex. 4 , in that Studios’ Santa is not

20 depicted with a reindeer. Studios’ Santa differs from AMD’s 1 8 "

Musical Santa, P l . Ex. 5 , in that it is not holding a book of

carols, and differs from AMD’s 1 8 " Gift List Santa, P l . Ex. 6, in

that it is not depicted wearing glasses, or holding a list and

pencil. Studios’ Santa differs from AMD’s 3 0 " Deck the Halls

Santa, P l . Ex. 7 , in that Studios’ Santa does not wear an ankle-

length red coat, a short cape, or stand on a solid plastic or

wood base. And the expression of the face of Studios’ Santa does

not appear to be a copy of any of the M r . Santa doll faces

depicted on AMD’s 7" M r . Santa Head, P l . Ex. 8 .

Plaintiffs allege for the first time in their supplemental

memorandum, filed after the conclusion of the injunction hearing,

that Plaintiffs Exhibits 20 and 35 are entitled to independent

protection as “derivative works,” and that Studios’ Santa

infringes these derivative works. The Court finds that

plaintiffs have not demonstrated a likelihood of success on the

merits with respect to this claim for three of reasons.

First, the Plaintiffs did not allege that Studios infringed

any derivative works in their complaint. Therefore, this claim

is not properly before the court. Second, the Plaintiffs did not

present any evidence at the injunction hearing to establish that

21 the M r . Santa dolls that are now claimed to be derivatives, are

in fact derivatives of the copyrights at issue. And third, the

Plaintiffs’ alleged derivative works have not been registered.

As the Plaintiffs’ acknowledge, there is split of authority

regarding whether the owner of an unregistered derivative work

may sue a copier of the derivative work. The First Circuit has

not decided this issue. The Court is unpersuaded by the

Plaintiffs’ argument that the First Circuit’s ruling Gamma Audio

& Video, Inc. v . Ean-Chea,

11 F.3d 1106

(1st Cir. 1993), supports

their position. That case is distinguishable in that the

plaintiff in Gamma Audio claimed that the defendant infringed its

exclusive right to distribute registered and copyrighted images

contained within an unregistered derivative work. The First

Circuit did not suggest in Gamma Audio that the plaintiff would

be entitled to relief for protection of an unregistered

derivative work standing alone.

The Court finds that the Plaintiffs have not shown a

substantial likelihood of success on the merits of AMD’s

that Plaintiffs’ request for a preliminary injunction with regard

to the copyright claims be denied.

22 C. Trade Dress Claims

Section 43(a) of the Lanham Act gives a producer a cause of

action for the use by any person of “any word, term, name,

symbol, or device, or any combination thereof . . . which . . .

is likely to cause confusion . . . as to the origin, sponsorship,

or approval of his or her goods . . . .”

15 U.S.C. § 1125

(a).

This section has been held to apply to a manufacturer’s “trade

dress,” “a category that originally included only the packaging,

or ‘dressing,’ of a product, but in recent years has been

expanded by many courts of appeals to encompass the design of a

product.” Wal-Mart Stores, Inc. v . Samara Bros., Inc.,

529 U.S. 205, 209

(2000). “Trade dress includes ‘the design and

appearance of [a] product together with the elements making up

the overall image that serves to identify the product presented

to the consumer.” I.P. Lund Trading,

5 , quoting,

Chrysler Corp. v . Silva,

118 F.3d 5

6 , 58 (1st Cir. 1997)

(additional citations omitted).

To establish a trade dress infringement claim, a plaintiff

must demonstrate that (1) the trade dress has been used in

commerce, (2) the trade dress is nonfunctional, (3) the trade

dress is inherently distinctive or has acquired distinctiveness

23 through secondary meaning, and (4) that prospective purchasers of

the products in question are likely to be confused as to the

source of the products. See Yankee Candle,

259 F.3d at 3

8 ; I.P.

Lund Trading,

6 , 4 3 . There is no dispute that the

Plaintiffs’ dolls have been used in commerce. Therefore, I do

not discuss the first requirement for protection against

infringement further.

1. Functionality

A party seeking to exclude new entrants based on a claim of

trade dress infringement of a product design has the burden of

showing the non-functionality of the design feature. Wal-Mart,

529 U.S. at 214

; I.P. Lund Trading,

163 F.3d at 36-37

. A

“functional” product feature is one that “is essential to the use

or purpose of the article or [that] . . . affects the cost or

quality of the article.” I.P. Lund Trading,

7 ,

quoting Inwood Labs., Inc. v . Ives Labs., Inc.,

456 U.S. 8

4 4 , 850

n . 10 (1982) (brackets in original); see also, I.P. Lund Trading,

163 F.3d at 37

n.5 (“A design i s , inter alia, nonfunctional if it

is not ‘essential to the use or purpose of the article’ and does

not ‘affect[] the cost or quality of the article.”) (citations

omitted). However, “a particular arbitrary combination of

24 functional features, the combination of which is not itself

functional, properly enjoys protection.”

at 3 7 , quoting Taco

Cabana Int’l v . Two Pesos, Inc.,

932 F.2d 1113, 1119

(5th Cir.

1991), aff’d,

505 U.S. 763

(1992). The court need determine the

effect of granting protection on the opportunity of other to

compete. I.P. Lund Trading,

7 .

Defendants argue that a number of elements that AMD claims

as part of its trade dress are functional, and therefore not

entitled to protection under the Lanham Act. To begin with,

certain elements contained within the AMD and Studios’ Santas,

such as a red suit trimmed with white fur, are common to numerous

depictions of Santa Claus in the marketplace, and the Court does

not consider those elements as part of the Plaintiffs’ claimed

trade dress. See Kurt S . Adler, Inc. v . World Bazaars,

897 F. Supp. 9

2 , 95 (S.D.N.Y. 1995) (finding that the stereotypical

elements of Santa Claus such as a “jolly, rotund, elder

gentleman, wearing a red suit and floppy cap with white trim, and

a black belt and boots,” may not be protected).

Defendants have argued that the internal wire frame and head

and body stuffing used on AMD’s and Studios’ Santa dolls are

functional elements that are necessary to the design of a

25 poseable, soft sculpture doll, for which Plaintiffs admit they

have no design patent. Defendants also produced a witness at the

hearing, Pat Rogers, who testified that the use of a “furrier”

stitch made the dolls cheaper to produce by hand than other

methods and could be employed easily and cost effectively by

Studios. Therefore, Defendants argue, the use of the “furrier

stitch” on the Studios’ Santa is an element that “affects the

cost” of the article and is therefore functional. I.P. Lund

Trading,

7 . In the Court’s view, Defendants have

raised close questions regarding AMD’s attempt to prevent a

competitor from manufacturing a Santa doll with an internal wire

frame, string stuffing, and a furrier stitching. For the

purposes of Plaintiffs’ motion for a preliminary injunction, the

Court does not consider those elements as part of AMD’s

protectable trade dress because the Plaintiffs have not

demonstrated a substantial likelihood of success on the element

of non-functionality.

Even without the excluded elements discussed above, there

are numerous other elements that AMD claimed constitute its trade

dress that appear to the Court to be non-functional. Plaintiffs

have argued, and introduced expert testimony to support, that the

26 following elements are non-functional: a pear-shaped, felt face;

with screen-printed features made to resemble hand-made brush

strokes; line art on the face that features spike eyebrows, a

serrated moustache flowing to upturned points that do not connect

with the beard, white highlights on the cheeks, lips, eyes, and

nose; a beard attached in a “W” shape; heightened rosiness on the

cheeks with an airbrushed look, intense in the center and fading

toward the edges; and a posed look upon sale.6 See Kurt S .

Adler,

897 F. Supp. at 95

(listing the protectable expression of

Santa Claus at issue as including a “pear shaped head, a red

underlip emphasized, an upcurving mustache, a skin tone bubble

nose, [and] rounded boots”). Plaintiffs introduced evidence that

competitors routinely market collectible Santa dolls without the

features in AMD’s claimed trade dress. See P l . Ex. 23-24. The

evidence further demonstrates that the AMD’s combination of

features are not found in other dolls sold in the industry or in

other depictions of Santa Claus. P l . Ex. 23-24; D f . Ex. B . The

Court finds the Plaintiffs’ evidence sufficient to demonstrate

6 This district court has previously described AMD’s style of doll as having the distinguishing characteristics of “pear shaped faces, furrier stitched chins, heightened rosiness of cheeks, stitched in Annalee label and simple plastic wrapping.” Annalee Mobilitee Dolls, Inc. v . Caldor Corp., Civ. N o . 95-175-M,

1995 U.S. Dist. LEXIS 8512

at *6 (D.N.H. Apr. 1 4 , 1995).

27 that the remaining elements of AMD’s claimed trade dress are non-

functional.

2. Secondary Meaning

In order for a plaintiff to succeed on the merits of a

product-design trade dress infringement claim, the plaintiff must

prove that AMD’s trade dress has acquired secondary meaning.

Wal-Mart,

529 U.S. at 212

. This is so because product design may

not be considered inherently distinctive.

Id.

“As to secondary meaning said to stem from the design of the

product itself, . . . the plaintiff must show that the primary

significance of the design is to signify its source.” I.P. Lund

Trading,

3 . “Proof of secondary meaning entails

vigorous evidentiary requirements.” Boston Beer C o . Ltd. P’ship

v . Slesar Bros. Brewing Co.,

9 F.3d 175, 181

(1st Cir. 1993)

(quoting Perini Corp. v . Perini Constr., Inc.,

915 F.2d 1

2 1 , 125

(4th Cir. 1990)). A plaintiff faces an even higher threshold of

proof in a product design/configuration case. Yankee Candle,

259 F.3d at 43

n . 1 2 . In the instant case, a lack of sufficient

evidence of secondary meaning is the Plaintiffs’ Achilles’ heel

for purposes of their request for preliminary injunctive relief.

The First Circuit has found that “[t]he only direct evidence

28 probative of secondary meaning is consumer surveys and testimony

by individual consumers.” Yankee Candle,

3 .

Plaintiffs did not introduce any survey evidence during the

hearing, nor did they introduce any testimony from individual

consumers. The testimony given by AMD’s officers and employees,

and by Len Cirelli, that they have observed consumers who

immediately recognize an AMD Santa doll as coming from AMD is not

probative evidence. See

id.,

at 43 n . 14 (finding that the

opinions of retailers and distributors active in the field and

extremely familiar with the plaintiff’s products is hardly

evidence of whether the “consuming public” forms the same

association).

Absent probative direct evidence, AMD could still

demonstrate that its Santa dolls have acquired secondary meaning

through the introduction of circumstantial evidence.

at 4 3 .

The types of circumstantial evidence that a court may consider in

determining whether a plaintiff has established that a trade

dress has acquired secondary meaning include: “the nature and

extent of advertising and promotion of the trade dress, and the

efforts made to promote a conscious connection by the public

between the trade dress and the product’s source.”

at 4 3 ,

29 citing, Boston Beer,

9 F.3d at 182

. The court may also consider

the product’s “established place in the market” and proof of

intentional copying. Yankee Candle,

4 , citing, I.P.

Lund Trading,

163 F.3d at 4

2 .

Plaintiffs have introduced evidence that AMD has advertised

its Santa dolls in catalogues since at least the early 1970s.

See P l . Ex. 27-40. Similarly, Plaintiffs introduced evidence

that AMD expends significant resources on advertising

attributable to AMD Santa dolls, P l . Ex. 2 6 , and that sales of

AMD’s Santa dolls have been successful, P l . Ex. 2 5 . However,

this evidence does not sufficiently demonstrate, by itself, that

the public makes a conscious connection between the claimed trade

dress and the source. See Yankee Candle,

259 F.3d at 44

(“To be

probative of secondary meaning, the [plaintiff’s] advertising

must direct the consumer to those features claimed as trade

dress.”).

Plaintiffs argue that AMD’s advertising is probative of

secondary meaning because it has directed consumers to “look for”

the unique faces on AMD dolls. Advertising that specifically

directs a consumer’s attention to those features claimed as trade

dress may support a finding of secondary meaning. Yankee Candle,

259 F.3d 4

4 . A review of the evidence in the record shows that

the most commonly emphasized features in AMD’s advertising are

“the famous whimsical expressions” of AMD dolls, see P l . Ex. 27-

3 0 , 3 8 , and that the dolls are handcrafted, see P l . Ex. 28-30. 7

AMD’s advertising does not emphasize the particular aspects that

Plaintiffs claim constitutes AMD’s trade dress, namely screen-

printed features made to resemble hand-made brush strokes; line

art on the face that features spike eyebrows, a serrated

moustache flowing to upturned points that do not connect with the

beard, white highlights on the cheeks, lips, eyes, and nose; and

heightened rosiness on the cheeks with an airbrushed look,

intense in the center and fading toward the edges. “Merely

‘featuring’ the relevant aspect of the product in advertising is

no more probative of secondary meaning than are strong sales.”

Yankee Candle,

4 . The Court finds that the evidence

of AMD’s advertising is not sufficiently probative of secondary

meaning of AMD’s claimed trade dress.8

7 While Plaintiffs’ Exhibit 28 indicates that the AMD doll head is “flesh felt with soft white whiskers,” that is the only reference to “flesh felt” that the Court has located in the advertising in the record. 8 The Plaintiffs have requested a finding of fact that Defendant Townsend and Pat Rogers admitted that “the consuming public recognizes an [AMD] Santa doll when they see i t , and that

31 Plaintiffs argue that a finding in their favor on secondary

meaning is supported by the evidence of the Defendants’

intentional copying. While intentional copying has been

identified as a factor that courts may consider on the element of

secondary meaning, the defendant’s intent “plays a particularly

minor role in product design/configuration cases.” Yankee

Candle,