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DOLLCRAFT INDUS. v. WELL-MADE TOY MFG. CO.

August 3, 1978

Dollcraft Industries, Ltd.,
v.
Well-Made Toy Manufacturing Company, and Frederick Catapano



The opinion of the court was delivered by: BRAMWELL

(ORAL OPINION OF THE COURT)

THE COURT: The instant matter concerns Dollcraft Industries' motion for an order preliminarily enjoining Well-Made Toy Manufacturing Company from making, distributing, selling or otherwise using any copies of the accused toys at issue herein on the ground that such use constitutes statutory copyright infringement and unfair competition and violates section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). Three small stuffed toy lambs, one medium stuffed toy bunny and one rather large stuffed toy bunny form the foundation upon which this suit is built.

 In light of the fact that time is a factor in disposing of this matter, I have decided to proceed by way of a bench opinion. Thus, the opinion to follow constitutes my findings of fact and conclusions of law in accordance with Rule 52(a) of the Federal Rules of Civil Procedure. Turning first to my findings of fact, they are as follows:

 (1) Dollcraft Industries, the plaintiff in this action, is a New York Corporation having its principal place of business on Lafayette Street in New York City. Its business is that of manufacturing and selling stuffed toys and bean bags. Although it manufactures most of its toys at its Lafayette Street headquarters, some of its products are contracted out for assembly to other manufacturers.

 (2) Plaintiff employs approximately 70 to 100 workers, said work force fluctuating in size according to the demands of the market. Among its employees are Ms. Aubrey Greene and Wenceslar Martinez, Ms. Greene being the daughter of Joseph Weiss, the president of plaintiff corporation.

 (3) Since at least 1970, Ms. Greene and Mr. Martinez have united in a team effort in the creating of new toy designs for the plaintiff. Although they work together, their respective roles are somewhat distinct. The testimony shows that Ms. Greene sports the conceptual role, while Mr. Martinez interprets her ideas and attempts to transpose them into reality. Although not graphically gifted, Ms. Greene will verbally describe her ideational designs to Mr. Martinez at which point Mr. Martinez will interpret her concept, make a pattern, assemble it, and then present the completed work to Ms. Greene for approval. According to Mr. Martinez, at times, the successful implementation of this process does not come as simply or smoothly as do the words to describe it. Sometimes his interpretation will be rejected by Ms. Greene until the completed product apparently embodies her mental impression. Besides having this inspirational role, Ms. Greene is responsible for the work involved in securing copyrights on original toy designs for Dollcraft.

 (4) When attempting to come forward with an original design, it appears that neither Mr. Martinez nor Ms. Greene will have photographs or models of toys before them. In fact, Mr. Martinez testified that he does not look at catalogs. While Ms. Greene testified that she occasionally looks at European toy catalogs, she also testified that prior to creating the toys at issue, she did not do so. She further testified that she never saw the plaintiff's three toy lambs or rabbits in any toy catalogs prior to their creation.

 (5) The defendant Well-Made Toy Manufacturing Company is a New York Corporation which has its principal place of business in Brooklyn, New York. Like the plaintiff, Well-Made's business is that of manufacturing and selling toys. It makes a variety of at least 100 toys. The defendant Fred Catapano is the president of Well-Made. Ms. Josephine Lazzarini-Battiala is a toy designer for Well-Made Toys and has been with the defendant in that capacity since September of 1977. Although Ms. Lazzarini-Battiala described her own creative procedure, she did not testify that she was the creator-designer of any of the defendant's toys at issue herein.

 (6) Among the plaintiff's toys at issue herein are three baby toy lambs, each of which the plaintiff has named Lamie Pie. The evidence shows that these lambs are normally sold as a three piece assortment. Lamie Pie 903 is a standing lamb which was marked as plaintiff's Exhibit 4. Lamie Pie 803 is a sitting, cuddle lamb which was marked as plaintiff's Exhibit 2. Lamie Pie 334 is a slumbering lamb which was marked as plaintiff's Exhibit 3.

 (7) The first of the three lambs to be created and manufactured was the slumbering lamb. Prior to its publication, this lamb was shown to a buyer from W. T. Grant who suggested to Ms. Greene that a group assortment of three lambs would be a better idea. Other than this voluntary suggestion, the buyer had no input into the creative process. Ms. Greene took heed of her advice, and Ms. Greene created and Mr. Martinez designed companions for the slumbering lamb, one sitting and one standing.

 (8) The lamb assortment was not and, to date, is not manufactured by Dollcraft. Instead, this job was contracted out to Terry Industries. The manufacturing of the slumber lamb commenced several months before its sitting and standing comrades were manufactured. Mr. Leo Marchisello of Terry Industries was uncertain whether he began manufacturing the lambs in 1973 or 1974. However, according to Dollcraft's records as testified to by Ms. Greene, the three lambs were published as an assortment and first sold in November of 1974.

 (9) Each lamb of this assortment has been admitted into evidence, and an examination of each one reveals that a copyright notice label has been sewn to each body.

 (10) In March of 1978, a copyright registration for each lamb in this assortment was issued. Each certificate sets forth November 12, 1974 as the first publication date for each lamb. Said publication date was founded upon Dollcraft's records. Ms. Greene prepared and signed each registration.

 (11) The concept embodied within the confines of plaintiff's large crouching rabbit which is Exhibit 6, was born from Ms. Greene's personal response to a certain jaunt to the Central Park Zoo. Upon seeing a rabbit with a black eye patch in a crouching position, Ms. Greene requested her colleague, Jane, to sketch the rabbit. Thereafter, said sketch was adapted and transposed into a toy form bearing the name Honey Bunny. Originally it was made in black and white. Later, the colors were changed. According to Dollcraft's records as testified to by Ms. Greene, this Honey Bunny croucher was first sold in January of 1973. Sewn on to the plaintiff's Exhibit 6 is a copyright notice label.

 (12) A certificate of copyright registration on this large crouching Honey Bunny was sought by and subsequently issued to Dollcraft on March 13, 1978. Ms. Greene prepared and signed the registration form for said toy.

 (13) The last of plaintiff's toys that the defendant has allegedly copied is Exhibit 5, a sitting cuddle bunny with stuffed ears. This toy evolved from a change in Federal regulations which prohibited the further use of wire in the ear of a toy. As a consequence of this directive, Ms. Greene and Mr. Martinez combined their energies to develop a rabbit with stuffed ears. Initially, they placed stuffed ears on their previous wire-eared bunny. Their previous wire-eared bunny's photograph is Exhibit 11. Unhappy with the result, they proceeded to work on this project for several months. Finally, they designed and developed a toy rabbit similar to yet distinct from the previous wire-eared bunny. Specifically, the entire head structure was changed to naturally and aesthetically accommodate unsupported, separated stuffed ears. This sitting bunny was also entitled Honey Bunny.

 (14) A certificate of registration was issued to plaintiff on this bunny on March 13, 1978. According to said certificate, this sitting Honey Bunny was first published on December 5, 1973.

 (15) Each copyright registration issued on plaintiff's toys designates the author of each respective work as Dollcraft. Said statement is substantiated by the testimony of Ms. Greene and Mr. Martinez as well as the facts surrounding the origin of each toy.

 (16) Dollcraft makes a substantial effort to insure that each of the plaintiff's toys at issue are manufactured and subsequently distributed with the proper copyright notice attached to each toy.

 (17) As to those toys that are subcontracted out for manufacture, Dollcraft supplies its contractors with the proper copyright notice labels and directs them to attach said labels to the toy reproductions. One of the plaintiff's contractors, Leo Marchisello of Terry Industries, testified that he always received an adequate supply of copyright notice labels from Dollcraft for every toy he manufactured for them and that he used his best efforts to be sure said labels were affixed to each toy. A contractor's finished products are sent to Dollcraft, not Dollcraft's customers. Dollcraft conducts spot checks of the toys contracted out by requesting random samples of the same. In the course of this spot check, the toys are examined to be certain that the copyright notice labels have been properly affixed to the toys. Of the five toys at issue herein, plaintiff wholly contracts out the manufacture of the lamb assortment and partially contracts out the manufacture of the medium size sitting Honey Bunny, Exhibit 5.

 (18) When the toys are manufactured by Dollcraft itself, as is the case of the large crouching Honey Bunny and which is partially the case of the medium sitting Honey Bunny, it is the responsibility of the foreman of Dollcraft's sewing department to see that every toy has the copyright notice label affixed to it. Ms. Greene also makes checks by occasionally visiting department stores and examining Dollcraft's products on display therein. Ms. Greene testified that she never examined any toy which did not have the proper copyright notice label affixed to it.

 (19) As has been noted, each of the plaintiff's toys that have been introduced into evidence has the proper copyright notice label securely fastened to it. Although Mr. Catapano stated in his affidavit that he had purchased plaintiff's toys without such labels affixed thereto, he did not produce any of these toys or the pieces thereof in support of his statement, nor were any witnesses presented to substantiate this claim. Furthermore, he did not specify either the time or place where he claims to have purchased the unlabeled toys. In fact, he did not specify which toy or toys he purchased without the proper label. In determining the weight to be given the statement in his affidavit, Mr. Catapano's testimony is of significance. During the hearing, Mr. Catapano commented on his beginnings in the toy industry and his association with a Mr. Eidelberg, a person who is now allegedly associated with the plaintiff in an unknown status. Specifically, as evidenced on page 218 of the transcript, Mr. Catapano stated, "When he (meaning Mr. Eidelberg) came into business with me, I knew nothing. I was only a contractor and an honest person. Until he had problems and he left. But there was certain patterns missing which I did see in the Dollcraft line later on. And I decided I better start to understand what they're doing since they know my business." Such a statement possibly evidences a hardened, unscrupulous business attitude and, when considered with the complete lack of evidence on the label issue, casts a significant shadow on the credibility of the affidavit statement which was made by a clearly interested witness. Consequently, I find that Mr. Catapano's affidavit statement is worthy of little or no weight on this issue.

 (20) Dollcraft sells its products in interstate commerce to various retailers, including department stores. In the past ten years, it has not issued a catalog but sells its designs by way of exhibiting its toys to potential buyers.

 (21) The defendant Well-Made also sells its products to retailers and apparently does so through the use of catalogs.

 (22) As a routine part of operating Well-Made, Mr. Catapano shops for toys manufactured by his competitors, especially Dollcraft. He also purchases these items and proceeds to dissect them. Although Mr. Catapano testified that his particular interest in Dollcraft stems from his former association with Mr. Eidelberg, there is not even the slightest scintilla of evidence that Mr. Eidelberg was involved in any way with the underlying concept, creation and design of plaintiff's five toys at issue herein.

 (23) Mr. Catapano admitted that he saw Exhibits 2, 3, 4, 5 and 6 and that he bought and inspected said toys prior to Well-Made's manufacturing of Exhibits 16, 15, 17, 14 and 13 respectively. He further admitted that he "knocked off" the plaintiff's toys. As reflected on page 217 of the transcript, he stated that "This is one of hundreds of toys that I've taken from other competitors and either knocked off or tried to understand how they based their cost and overhead factors. We all do this in a trade. We all do that, even Toycraft (which probably should read Dollcraft) does it, even if they deny it."

 (24) Dollcraft first became aware of the existence of the accused toys on the market just before Easter of 1978 when Ms. Greene observed two of the accused toy rabbits, Exhibits 13 and 14, on display in Alexander's Department Store in White Plains. Subsequently, Ms. Greene discovered that the defendant Well-Made's toy catalog contained the accused lamb assortment. Thereafter, a cease and desist letter was sent by Dollcraft to the defendants on March 14th and 17th, 1978. Said letters and the defendants' response thereto are attached as Exhibits A, B and C, respectively, to the affidavit of Joseph Weiss. To date, the defendants continue to manufacture, sell and distribute the accused toys.

 (25) Upon visual inspection and comparison of plaintiff's three lambs, Exhibits 2, 3 and 4, to the defendant's three lambs, Exhibits 16, 15 and 17 respectively, the overall appearances are substantially similar. There is a subtle likeness between the whole respective articles. Not only is there a community of expression, the basic color, the same fabric, face, posture, mouth, nose and shape of ears duplicate those of the plaintiff's lambs. Given the fact that Mr. Catapano admitted to knocking off the plaintiff's toys, such a conclusion is most logical. Furthermore, such a conclusion of substantial similarity is further buttressed by the record at page 110 where the defendants' attorney stood corrected by the Court when he mistakenly picked up the ...


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