Silvertop Assocs., Inc. v. Kangaroo Mfg., Inc.
Silvertop Assocs., Inc. v. Kangaroo Mfg., Inc.
Opinion of the Court
This matter concerns Defendant Kangaroo Manufacturing, Inc. ("Kangaroo")'s alleged copyright infringement of a banana costume made and copyrighted by Plaintiff Silvertop Associates, Inc., doing business as Rasta Imposta ("Rasta Imposta"). Before the Court is Rasta Imposta's Motion for Preliminary Injunction and Kangaroo's Cross-Motion to Dismiss. For the reasons that follow, the Court will grant Rasta Imposta's Motion for Preliminary Injunction, grant Kangaroo's Cross-Motion to Dismiss as to Count III of the Complaint, and deny Kangaroo's Cross-Motion to Dismiss as to Count I and Count II of the Complaint. The Court will require a $100,000 bond be posted by Rasta Imposta to maintain the preliminary injunction.
I.
The Court takes the following facts from Robert Berman's Declaration in support of Rasta Imposta's Motion for Preliminary *760Injunction and from his testimony at a hearing before the Court. Berman is the Chief Executive Officer of Rasta Imposta, a business that designs, manufactures, and sells costumes for adults and children. Among these costumes, Rasta Imposta began to offer a banana design on March 9, 2011 ("the Banana Costume"). While Rasta Imposta has licensed the Banana Costume to third parties, Kangaroo does not have a license for the Banana Costume. On March 23, 2010, Rasta Imposta filed a copyright application to register the Banana Costume. Copyright Registration No. VA 1-707-439 was issued by the United States Copyright Office on March 26, 2010 for the Banana Costume.
In 2012, Rasta Imposta entered into a business relationship with Yagoozon, Inc. ("Yagoozon"), founded by Justin Ligeri. This relationship was formed for Yagoozon to sell Rasta Imposta's Banana Costume. Over the course of the business relationship, Ligeri was informed of Rasta Imposta's copyright registration for the Banana Costume, and Yagoozon purchased thousands of them from Rasta Imposta. The business relationship eventually ended. Ligeri is also the founder of Kangaroo. Around September 25, 2017, Berman discovered Kangaroo was selling a costume that resembled the Banana Costume at issue in this case.
Rasta Imposta filed its Complaint with the Court on October 5, 2017, bringing claims for copyright infringement (Count I), trade dress infringement (Count II), and unfair competition (Count III). On October 19, 2017, the parties entered into a Stipulation of Standstill Period whereby, in anticipation of "discuss[ing] an amicable resolution to this matter prior to December 1, 2017," the parties agreed that Kangaroo would "cease manufacturing, ordering, offering for sale, advertising, marketing, promoting, selling and distributing Plaintiff's Banana Design (and any substantially similar Banana costume) until December 1, 2017." It further stipulated that "if this case is not settled or otherwise resolved prior to December 1, 2017, Plaintiff will file its application for a preliminary injunction on or about December 1, 2017."
Settlement discussions were not successful and on December 1, 2017, Rasta Imposta filed a Motion for Preliminary Injunction. Kangaroo responded with a December 21, 2017 Cross-Motion to Dismiss. This Court held a hearing on the pending motions on January 26, 2018, which was continued on February 13, 2018. Rasta Imposta presented the testimony of Berman, who was cross-examined by Kangaroo, and who testified consistently with his declaration. The parties submitted supplemental briefing following the hearing, which was complete as of March 8, 2018.
II.
This Court has subject matter jurisdiction over this matter pursuant to
III.
The Court turns to the merits of Rasta Imposta's Motion for Preliminary *761Injunction. "A district court must consider four elements in determining whether to grant a preliminary injunction: (1) reasonable probability of success on the merits; (2) irreparable injury to the moving party; (3) harm to the nonmoving party; and (4) the public interest." Goodwin v. Castille,
However, before turning to these elements, the Court must determine whether or not Rasta Imposta is requesting a mandatory injunction. Kangaroo argues Rasta Imposta is seeking "a mandatory injunction seeking the ultimate relief requested should it win the case," which Kangaroo argues would require the Court to apply a heightened burden on Rasta Imposta. Rasta Imposta, however, argues Kangaroo "mistakenly alleged" that it is seeking a mandatory injunction and maintains that it "is only seeking a preliminary injunction at this stage."
The Court finds that the question of whether Rasta Imposta is asking for a mandatory injunction or not depends not on the wording of the motion and the moving papers, but on the substance of the relief being requested. Accordingly, the language Rasta Imposta chose in framing its request does not resolve this issue.
"An injunction is mandatory if the injunction will either (1) 'alter the status quo by commanding some positive act' or (2) provide the moving party with 'substantially all the relief sought and that relief cannot be undone even if the defendant prevails at a trial on the merits.' " Coast to Coast Entm't, LLC v. Coastal Amusements, Inc., No. 05-3977,
The Court finds Rasta Imposta is not requesting a mandatory injunction, and the Court will accordingly not apply a heightened burden in determining whether a preliminary injunction is warranted in this case.
First, Rasta Imposta requests relief other than the enjoinment of Kangaroo's alleged copyright infringement. Rasta Imposta's Complaint pleads it "is entitled pursuant to
A. Reasonable Probability of Success on the Merits
The Court begins by considering the reasonable probability of success on the merits of Rasta Imposta's copyright infringement claim. "To establish infringement, two elements must be proven: (1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original." Feist Publ'ns, Inc. v. Rural Tel. Serv. Co.,
1. Ownership of a Valid Copyright
"A plaintiff in a copyright infringement action must prove ... that the copyright upon which it rests its claim is valid." Don Post Studios, Inc. v. Cinema Secrets, Inc.,
The Certificate of Registration Rasta Imposta presents to the Court lists an "effective date of registration" of March 26, 2010. However, it lists the date of first publication as March 9, 2001-well over five years before the registration date. The Court thus finds there is no presumption of validity in this case due to the registration of the Banana Costume over nine years after its first publication. Nonetheless, the Court considers the existence of this registration in its analysis of the validity of the copyright.
The Court begins by considering whether the Banana Costume is a useful article. The Court finds the Banana Costume is a useful article under the definition provided in
The Supreme Court in Star Athletica, L.L.C. v. Varsity Brands, Inc., --- U.S. ----,
*763The Copyright Act ... establishes a special rule for copyrighting a pictorial, graphic, or sculptural work incorporated into a "useful article," which is defined as "an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information." The statute does not protect useful articles as such. Rather, "the design of a useful article" is "considered a pictorial, graphical, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article."
For the first requirement of separate identification, "[t]he decisionmaker need only be able to look at the useful article and spot some two- or three-dimensional element that appears to have pictorial, graphic, or sculptural qualities."
In other words, the feature must be able to exist as its own pictorial, graphic, or sculptural work as defined in § 101 once it is imagined apart from the useful article. If the feature is not capable of existing as a pictorial, graphic, or sculptural work once separated from the useful article, then it was not a pictorial, graphic, or sculptural feature of that article, but rather one of its utilitarian aspects.
Rasta Imposta claims the following as the unique features of the banana design: the overall shape and cutout holes of the costume, the black ends of the banana, and the vertical lines running down the middle of the banana. Rasta Imposta argues the elements could be removed and displayed elsewhere, such as "to a two-dimensional painter's canvas" or "made into a three-dimensional item like a piñata, a clay sculpture or a paperweight."
The Court addresses the cutout holes first. Kangaroo argues the cutout holes "are [a] utilitarian aspect of a useful article," and as such "cannot be protected through copyright." Kangaroo argues the cutout holes serve no "design or aesthetic purpose" and exist solely "to enable the costume to be worn by an individual, no different than the arm or neck cutouts on a shirt or the leg cutouts on a pair of *764shorts." A close reading of Star Athletica compels the Court to find that the cutout holes are not, per se, a feature eligible for copyright.
Star Athletica concerned a claim of copyright infringement for five designs of cheerleading uniforms.
The Court finds the same must be said for the Banana Costume's cutout holes. The cutout holes perform a solely utilitarian function. They do not contribute to the Banana Costume's aesthetic except to produce it in a wearable form, i.e., to give it its utilitarian function. However, the Court finds the other features of the Banana Costume can be identified separately from and are capable of existing independently of the utilitarian aspects.
As for the colors, lines, shape, and other features, Kangaroo argues that color is generally not protected by copyright and that "depicting basic features of a naturally occurring banana ... [is] not original and not eligible for copyright protection." Kangaroo argues "there is nothing original about making a banana yellow or the ends of a banana black, as this is exactly how a ripe banana appears in nature."
The Court must view the Banana Costume as a whole, as opposed to inspecting the individual components that come together to create the Banana Costume. Indeed, it is "the combination of texture, color, size and shape" and the particular details of an item that are relevant. See Kay Berry, Inc. v. Taylor Gifts, Inc.,
It means nothing that these elements may not be individually entitled to protection; "all creative works draw on the common wellspring that is the public domain. In this pool are not only elemental 'raw materials,' like colors, letters, descriptive facts, and the catalogue of standard geometric forms, but also earlier works of art that, due to the passage of time or for other reasons, are no longer copyright protected."
The Court finds there is a reasonable probability of success that Rasta Imposta will prove ownership of a valid copyright. First, the existence of the Certificate of Registration, even if registered over nine years after the date of first publication, is persuasive evidence to this Court. Further, the Court finds a likelihood that Rasta Imposta can prove that the banana design can both be identified separately from and can exist independently from the utilitarian aspect of the article. The Court can easily identify the features of the Banana Costume having a pictorial, graphic, or sculptural quality.
These features include: a) the overall length of the costume, b) the overall shape of the design in terms of curvature, c) the length of the shape both above and below the torso of the wearer, d) the shape, size, *765and jet black color of both ends, e) the location of the head and arm cutouts which dictate how the costume drapes on and protrudes from a wearer (as opposed to the mere existence of the cutout holes), f) the soft, smooth, almost shiny look and feel of the chosen synthetic fabric, g) the parallel lines which mimic the ridges on a banana in three-dimensional form, and h) the bright shade of a golden yellow and uniform color that appears distinct from the more muted and inconsistent tones of a natural banana.
The Court finds that, if these features were separated from the costume itself and applied on a painter's canvas, it would qualify as a two-dimensional work of art in a way that would not replicate the costume itself. The Court thus finds, although it uses elements that might in and of themselves not be protectable standing alone, that the design when considered as a whole is separable and eligible for copyright protection.
2. Copying of Constituent Elements of the Work that are Original
Copying "may be demonstrated by showing that the defendant had access *766to the copyrighted work and that the original and allegedly infringing works share substantial similarities."
" 'Substantial similarity,' in turn, is further broken down into two considerations: '(1) whether the defendant copied from the plaintiff's work and (2) whether the copying, if proven, went so far as to constitute an improper appropriation.' "
"A finding of substantial similarity is an ad hoc determination." Educ. Testing Servs. v. Katzman,
For the second prong, "[t]he focus is ... [on] 'whether the substantial similarities relate to protectable material.' "
*767A plaintiff "will have a more difficult time proving infringement if his work contains only a minimal amount of original expression." Id."[A] copyright on a work which bears practically a photographic likeness to the natural article ... is likely to prove a relatively weak copyright."
"In some instances, there may come a point when an author's expression becomes indistinguishable from the idea he seeks to convey, such that the two merge."
"In general, the merger doctrine is most applicable where the idea and the expression are of items found in nature, or are found commonly in everyday life." Yankee Candle Co. v. Bridgewater Candle Co.,
Kangaroo argues the unique features claimed by Rasta Imposta "are necessary to manifest the idea of [a] wearable body suit which resembles a ripe, unpeeled banana, for which there are few, if any, other means of expression." The Court understands there are admittedly few features to a banana but it does not necessarily *768follow that there are consequently only a few unique ways of designing a banana costume. In fact, the contrary appears to be true.
Rasta Imposta provides this Court with twenty-one banana costumes available in the marketplace that are easily distinguished from Rasta Imposta's design, which suggests that the limited number of options requirement necessary for merger to apply is absent. (Arena Decl. Ex. A). The Court has reviewed this submission and notes several unique ways of designing a banana costume.
In contrast, it appears to the Court that almost every feature of Kangaroo's design resembles Rasta Imposta's. Rasta Imposta argues "[a] side-by-side comparison of the costumes at issue is sufficient circumstantial evidence from which to infer copying." The Court agrees and finds Rasta Imposta has shown a reasonable likelihood of proving "near identity" of the costumes and that the copyright relates to protectable material.
The Court notes that the two deluxe costumes are both yellow in color and almost identically so, with Kangaroo's costume having a slightly more golden hue. However, both have black tips at both ends appearing to be roughly the same size and exactly the same color. Both have a near identical curvature with lines of the same yellow shade running vertically in roughly the same locations. The material and texture also appear substantially similar.
The merger doctrine does not change this Court's conclusion. Admittedly, Rasta Imposta's Banana Costume, which so closely resembles a ripe banana, is not a broad copyright. Rather, the Court is inclined to find it is a relatively weak copyright. Nonetheless, the Court finds at this time sufficient evidence that Kangaroo's design is nearly identical to Rasta Imposta's such that it fits within the limited scope of Rasta Imposta's copyright.
*769B. Remaining Elements for a Preliminary Injunction
Finding a reasonable likelihood of success on the merits, the Court addresses the remaining elements for a preliminary injunction.
1. Irreparable Injury
As to irreparable injury to Rasta Imposta, "[i]rreparable harm 'must be of a peculiar nature, so that compensation in money alone cannot atone for it.' " Opticians Ass'n of Am. v. Indep. Opticians of Am.,
The Court finds sufficient evidence of irreparable injury here based on likely confusion. As the Court discussed above, the parties' banana costumes are nearly identical, creating a high likelihood of consumer confusion. Further, the Court notes that "[a] copyright plaintiff who makes out a prima facie case of infringement is entitled to a preliminary injunction without a detailed showing of irreparable harm." Apple Comput.,
2. Balance of Hardships
As to balancing the hardships to the parties, this prong is designed "to ensure that the issuance of an injunction would not harm the infringer more than a denial would harm the mark's owner." Opticians Ass'n of Am.,
3. Public Interest
As to the public interest, "[p]reliminary injunctions are a common judicial response to the ... infringement of an apparently valid copyright." CMM Cable, Inc. v. Keymarket Commc'ns, Inc.,
Accordingly, the Court will grant Rasta Imposta's Motion for Preliminary Injunction.
IV.
The Court next addresses Kangaroo's arguments that Rasta Imposta's Complaint fails to state a claim for trade dress infringement or unfair competition.
A. Standard of Review
When considering a motion to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6), a court must accept all well-pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. Evancho v. Fisher,
*771"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do ...." Bell Atl. Corp. v. Twombly,
To determine the sufficiency of a complaint, a court must take three steps. First, the court must "tak[e] note of the elements a plaintiff must plead to state a claim." Second, the court should identify allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Third, "whe[n] there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief."
Malleus v. George,
A district court, in weighing a motion to dismiss, asks "not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claim." Twombly,
B. Trade Dress Infringement
Count II of Rasta Imposta's Complaint asserts a claim for trade dress infringement. "To establish trade dress infringement under the Lanham Act, a plaintiff must prove that (1) the allegedly infringing design is non-functional; (2) the design is inherently distinctive or has acquired secondary meaning; and (3) consumers are likely to confuse the source of the plaintiff's product with that of the defendant's product." McNeil Nutritionals, LLC v. Heartland Sweeteners, LLC,
In light of the findings above and the Court's decision to grant a preliminary injunction on the copyright count, the Court finds this count adequately pled and will allow it to proceed. As noted above, certain elements of the Banana Costume represent unique non-functional and distinctive pictorial, graphic, and sculptural features. As for customer confusion, the Court has noted the products are almost identical in look and feel. The danger of confusion in the marketplace is clear.
C. Unfair Competition
Count III of Rasta Imposta's Complaint brings claims for common law and federal unfair competition.
Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any *772word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact which-
(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or
(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities
Shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
The Court finds this claim cannot proceed at this time. Rasta Imposta's Complaint has not pleaded the use of a "word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact" that would allow for relief under
V.
The Court last addresses Kangaroo's request that this Court require Rasta Imposta to post a bond in the amount of $300,000. Federal Rule of Civil Procedure 65(c) provides: "The court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained." The bond requirement is subject to "an extremely narrow exception" for "when complying with the preliminary injunction 'raises no risk of monetary loss to the defendant.' " Zambelli Fireworks Mfg. Co. v. Wood,
"[T]he amount of the bond is left to the discretion of the court ...." Id."[T]he injunction bond 'provides a fund to use to compensate incorrectly enjoined defendants.' " Sprint Commc'ns Co. L.P. v. CAT Commc'ns Int'l, Inc.,
*773Kangaroo asks for a bond in the amount of $300,000. Kangaroo appears to base this amount on the allegation that "defendant did $102,000 of sales of the banana costume in 2017 and would risk the loss of sales for the 2018 and 2019 seasons if the preliminary injunction were wrongfully issued." Based on this allegation, it appears to the Court that lost sales for 2018 and 2019 would be projected to be around $204,000. Kangaroo does not explain to the Court why almost $100,000 more than that figure should be posted by Rasta Imposta and why that amount should not be discounted to account for the difference between gross sales and lost profits. Kangaroo's loss of gross sales would not be the true measure of harm if the injunction is dissolved. Given this lack of explanation, the Court will require a bond in the amount of $100,000 to be posted by Rasta Imposta.
VI.
As the Court finds a reasonable likelihood of success on the merits of the copyright infringement claim and the other three elements for a preliminary injunction to be satisfied, the Court will grant Rasta Imposta's Motion for Preliminary Injunction. The Court will grant Kangaroo's Cross-Motion to Dismiss Count III of the Complaint but will deny the Cross-Motion to Dismiss as to Count I and Count II of the Complaint. The Court will further require Rasta Imposta to deposit security in the amount of $100,000 to maintain the preliminary injunction issued in this case.
An appropriate Order will be entered.
This Court finds that even if Rasta Imposta could be said to be seeking a mandatory injunction it has met its burden of showing a clear and substantial likelihood of success on the merits.
The Court further questions whether Rasta Imposta's Motion for Preliminary Injunction could be considered to command "some positive act."
Rasta Imposta appears to concede the Banana Costume is a useful article. See Pl. Br. 12 ("Although banana costumes are worn on the body and therefore may qualify as 'useful articles,' they also can have distinctive sculptural features.").
As of the writing of this Opinion, this Court is the first in the Third Circuit to address the implications of Star Athletica.
See Star Athletica,
Although the Court applies Star Athletica, as it must, as relevant and binding precedent, the Court also notes that Star Athletica is factually distinguishable from the instant matter in a meaningful way. At issue in Star Athletica was the iconic outfit of an American cheerleader. From the film American Graffiti to high school football games on Friday nights to March Madness and similar Americana, these ubiquitious costumes are part of our collective culture. It would distort the purpose and intent of copyright law to grant to one person or entity the right to control the bundle of rights associated with copyright for the lengthy term of copyright protection for an item so imbedded in the public consciousness. To that end, the Court in Star Athletica separated the fanciful designs applied to cheerleading costumes from the utilitarian and ordinary costumes themselves as the relevant statute,
The Court notes that Kangaroo's argument that Rasta Imposta's copyright is invalid because it merely created what we would all recognize as a banana would deny Andy Warhol copyright protection for his famous image of a ripe banana. The Court views such a result as highly unlikely. See Velvet Underground v. Andy Warhol Found. for the Visual Arts, Inc.,
Rasta Imposta's evidence also included testimony and photographs showing that Kangaroo displayed Rasta Imposta's product alongside its own at Kangaroo's booth at the industry's largest trade show in Las Vegas. The Court does not suggest that this evidence proves access to the original design before the competing design was created, only that this case involves competitors whose designs are well known to each other. This is not a case in which a defendant claims the allegedly infringing image was created independently, unknowingly, and innocently.
The Court also notes that a banana itself can be expressed in a number of ways other than in the form of a costume.
The tag of both costumes identifies they are both 100% polyester.
Kangaroo also argues the scenes a faire doctrine applies here. This doctrine "applies to expression that is so associated with a particular genre, motif, or idea that one is compelled to use such expression." Tetris Holding, LLC v. Xio Interactive, Inc.,
"One of the goals of the preliminary injunction analysis is to maintain the status quo, defined as 'the last, peaceable, noncontested status of the parties.' " Opticians Ass'n of Am.,
For the same reasons the Court finds a preliminary injunction appropriate, the Court will not dismiss Count I of the Complaint under Federal Rule of Civil Procedure 12(b)(6). The Court finds the allegations in the Complaint contain sufficient evidence of the existence of a valid copyright and the copying of constituent elements to survive Kangaroo's Cross-Motion to Dismiss. Rasta Imposta's Complaint pleads that it owns a copyright registration, which this Court finds persuasive evidence of a valid copyright. The Complaint further pleads separability in including a picture of the Banana Costume, which allows the Court to determine that a pictorial, graphic, or sculptural feature can be identified separately from and can exist independently of the utilitarian aspects.
The Complaint further pleads the relationship between Ligeri, Yagoozon, and Kangaroo, which goes to Kangaroo's access to the copyrighted work. Further, in including a picture of both Rasta Imposta's and Kangaroo's costumes, the Court is able to discern substantial similarities.
Reference
- Full Case Name
- SILVERTOP ASSOCIATES, INC. d/b/a Rasta Imposta v. KANGAROO MANUFACTURING, INC.
- Cited By
- 11 cases
- Status
- Published