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LIDA, INC. v. TEXOLLINI

July 16, 1991

LIDA, INC., PLAINTIFF,
v.
TEXOLLINI, INC.; B.B. BLU, INC. AND JOHN DOES 2-40, DEFENDANTS.



The opinion of the court was delivered by: Kevin Thomas Duffy, District Judge:

  OPINION

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.

FACTS

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.

DISCUSSION

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 relief. Id.

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 ...


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