The opinion of the court was delivered by: Kevin Thomas Duffy, District Judge:
Plaintiff Lida, Inc. ("Lida") commenced this action alleging
copyright infringement, unfair competition, and deceptive and
unfair acts and practices against defendants Texollini, Inc.
("Texollini"), B.B. Blu, Inc. ("B.B. Blu"), and John Does 2-40.
Lida has moved, by Order to Show Cause, for preliminary
injunctions against Texollini, B.B. Blu, and John Does 2-40. A
hearing was conducted before me on May 24, 1991. The following
constitute my findings of fact and conclusions of law.
Lida is in the business of dying and imprinting unbleached,
undyed fabric (greige goods) with a design and selling the
finished bolts of fabric to companies that use it to manufacture
garments. Second Amended Complaint (2nd Compl.) ¶ 2. Texollini
also converts greige goods into printed fabric and is one of
Lida's competitors. 2nd Compl. ¶ 3. B.B. Blu manufactures and
sells garments made with the printed designs. 2nd Compl. ¶ 4.
On June 18, 1990, Lida purchased the first design in question
from Wendy Booth, a textile and graphic designer who also acts as
an agent for other designers. 2nd Compl. ¶ 6. Booth sold the
artwork of creator Judith Found.*fn1 Booth Depo. at 31-34. Prior
to sale, the artwork was not shown to anyone except on a
confidential basis for the purpose of sale. Booth Depo. at 47-52.
An invoice, stating that "The Seller Warrants This Artwork To Be
Original And Copyrightable Designs" accompanied the sale.
Richards Aff., Exh. B.
Subsequently, the artwork served as a basis for Lida's textile
design entitled "Crayola Garden." This design was put into
repeat.*fn2 On August 10, 1990, Lida received, from the Register
of Copyrights, a certificate of registration No. VA 418-097. 2nd
Compl. ¶ 8. In addition, the fabric itself was embossed with an
encircled "c," indicating a notice of copyright. 2nd Compl. ¶ 12.
Lida's application states that the fabric design was an original
work of the author, i.e. Lida, made for hire. 2nd Compl., Exh. B.
In January 1991, B.B. Blu ordered 700 yards of material
containing the Crayola Garden design. 2nd Compl. ¶ 13.
Subsequently, garments made with imprinted fabric, similar in
design to Lida's Crayola Garden design, were manufactured by
Texollini, and appeared in stores under B.B. Blu's label. The
Texollini design, which was produced into B.B. Blu's line of
garments, has been offered to other manufacturers with the claim
that it is an original design. Texollini's fabric is offered at a
price substantially lower than offered by Lida. 2nd Compl. ¶ 21.
In November 1990, Lida's internal art department created a
wholly different design, entitled the "Michelangelo design." 2nd
Compl. ¶ 27. Certificate of registration No. VA 427-245 was
awarded Lida for that design on December 17, 1990.
By January and March of 1991, B.B. Blu had ordered from Lida
approximately 700 yards of material containing the Michelangelo
design. 2nd Compl. ¶ 34. Subsequently, garments made with a
design almost identical to the Michelangelo design and
manufactured by Texollini, appeared in stores under B.B. Blu's
label. Texollini's rendition sold in the marketplace at a price
substantially lower than that charged for Lida's Michelangelo.
2nd Compl. ¶ 42.
The standard for granting a preliminary injunction requires a
showing of irreparable harm and either: (1) likelihood of success
on the merits or (2) sufficiently serious questions going to the
merits to make them a fair ground for litigation. Hasbro
Bradley, Inc. v. Sparkle Toys, Inc., 780 F.2d 189, 192 (2d Cir.
1985); Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc.,
596 F.2d 70, 72 (2d Cir. 1979). In addition, a balancing of the hardships
must tip decidedly toward the party requesting the preliminary
B.B. Blu and Texollini oppose injunctive relief only as to the
Crayola design.*fn3 Production of a certificate of registration
to a design presumptively constitutes a showing of copyright
ownership. Durham Indus., Inc. v. Tomy Corp., 630 F.2d 905, 908
(2d Cir. 1980). Lida has produced such a certificate.
However, Texollini maintains that Lida, in its application for
a copyright, misrepresented certain material facts regarding the
design's origins and thus the copyright is a nullity.
Specifically, Lida stated on its application to the registry that
it was the design's author when in fact the design was brokered
to Lida from an independent party and the design's creator was
not employed directly by the corporation. In response to question
six on Lida's application for a copyright, namely, "identify any
pre-existing work or works that this work is based on or
incorporates," Lida wrote "N/A," apparently indicating the design
was not a derivative work. 2nd Compl., Exh. B.
Because there are false statements on the certificate,
Texollini claims that Lida's evidence of ownership of a valid
copyright is null and void. I disagree. "Only the `knowing
failure to advise the Copyright Office of facts which might have
occasioned a rejection of the application constitute[s] reason
for holding the registration invalid, and thus incapable of
supporting an infringement action . . . or denying enforcement on
the grounds of unclean hands . . .'" Eckes v. Card Prices
Update, 736 F.2d 859, 861-62 (2d Cir. 1984) (quoting Russ
Berrie & Co., Inc. v. Jerry Elsner Co., Inc., 482 F. Supp. 980,
988 (S.D.N.Y. 1980)). Texollini has adduced no evidence that Lida
was engaged in fraudulent conduct by these errors in its
application. An innocent or inadvertent omission will not
invalidate a copyright registration. Eckes, 736 F.2d at 862. It
is certainly not outlandish to think that Lida considered itself
the originator of the copyright design since it purchased ...