The opinion of the court was delivered by: Sweet, District Judge.
Plaintiffs Dirk Laureyssens ("Laureyssens"), I Love Love
Company, N.V. ("ILLC"), Creative City Limited ("CCL) and Extar
Corp. ("Extar") have moved for a preliminary injunction
restraining defendant Idea Group, Inc. ("IGI") from
distributing certain toys which the Plaintiffs assert infringe
Laureyssens' copyrights and trade dress. For the following
reasons, the motion is granted in part and denied in part.
Laureyssens is a designer of various puzzles and toys
including the puzzles which give rise to this dispute (the
"Laureyssens Puzzles"). In the United States, the Laureyssens
Puzzles have been sold under several names, most recently
under the name "HAPPY CUBE."
ILLC is a Belgian corporation with its principal place of
business in Belgium. ILLC manufactures the Laureyssens Puzzles
in Europe and distributes them to certain European countries.
ILLC has exported Laureyssens Puzzles for sale in the United
CCL is Laureyssens' worldwide representative for licensing
the copyrights for the Laureyssens Puzzles.
Extar is a California corporation headquartered in Los
Angeles. Extar's Chief Executive Officer is Raphael Berkien
("Berkien"). Extar is the "exclusive United States
distributor" of the Laureyssens Puzzles.
IGI is a California corporation with principal offices in
Palm Desert, California. IGI was formed to develop and market
consumer products including the puzzles at issue in this
lawsuit (the "SNAFOOZ Puzzles"), and has been investigating
the possibility of marketing various other products.
The Plaintiffs' motion was filed on June 5, 1991. Testimony
was heard on July 1 and 2, and the matter was argued and fully
submitted on July 10.
At issue in this lawsuit are a series of foam rubber
puzzles. The puzzles produced by both parties are described as
"flat to cube" puzzles, meaning that their six pieces can be
assembled in a flat form in a rectangular frame, and can also
be assembled into a three-dimensional hollow cube. The cube is
formed by joining the six pieces, the cube faces, with each
piece being connected to its four neighbors at right angles.
The pieces are joined together by means of "notches" cut
into the edges and "fingers," the parts of the edge left when
the notches are cut out. The fingers fit into the notches and
the friction between the two holds the pieces together in the
The notches and fingers are all cut at right angles to the
piece edge and perpendicular to the face of the piece, so that
the fingers can interlock with notches in both a planar
arrangement, with both pieces lying flat on one surface, and
in the perpendicular arrangement necessary to form a
cube.*fn1 For ease of reference, this system of connecting
pieces in flat and cube form through the use of right-angled
notches and fingers in the piece edges will be referred to as
Obviously, in order to connect two pieces in either the flat
or cube form, the notches on the edge of the first piece must
match up with fingers on the adjoining edge of the second
piece. The fundamental challenge of the puzzle is to select
the proper pieces to join together and to join them in the
correct orientation. While this may appear to be a simple or
trivial task, in fact the puzzles, particularly the
multi-puzzle combinations described in more detail below, are
The complexity of the puzzles is to a certain extent
dictated by the number of notches and fingers on each edge. In
order to join two pieces smoothly in the perpendicular
alignment, the depth of the notches — and, correspondingly,
the length of the fingers — must be equal to the thickness of
the material of which the puzzle is made. Assuming that a
single notch or finger is square,*fn2 as is the case in both
parties' puzzles, the length of each edge of the cube can be
measured in "notch-widths" or "units," one unit being equal to
the thickness of the puzzle material. The Laureyssens Puzzles
are all based on a cube which has five units per edge, while
IGI's puzzles form cubes which are six units in length.*fn3
Laureyssens first began working with cube puzzles in 1985,
when he attempted to design a cube which could be assembled
from six identically shaped pieces. After some
experimentation, he realized that this was not possible, but
he did produce a cube formed from five identical pieces and
one piece which was only slightly different.
In fact, he designed a series of such puzzles, six of which
are the source of this lawsuit (the "Laureyssens Puzzles").
Each was designed by Laureyssens to have a different level of
difficulty, and he chose the pieces for the six puzzles so
that not only could each individual puzzle be assembled in
flat and cube form, but pieces from different puzzles could be
assembled to create new cubes and other three-dimensional
figures, including a "beam" of two or three cubes joined in a
line, a double sized cube, with each side comprised of four
pieces, a "cross" of five cubes, and a "star" of six cubes. In
selecting the pieces for his puzzles, Laureyssens testified
that he was trying not only to satisfy all of the foregoing
criteria, but also to select pieces which had "balance," or
were aesthetically pleasing to his senses. In fact, he
testified that he rejected a number of pieces because he did
not like their appearance.
The first commercial puzzles which Laureyssens produced
consisted of a set of three of what would eventually be his
six puzzles. All three were initially manufactured in white
foam. Subsequently these puzzles were colored yellow, green,
and blue, corresponding to the puzzles presently marketed in
those colors. Laureyssens later added orange, red and purple
puzzles to his line.
Of the thirty-six puzzles pieces which make up the series of
six Laureyssens Puzzles, there are thirty-four distinct piece
shapes: two shapes are repeated, one in the red and blue
puzzles, and one in the orange and purple.
The six Laureyssens Puzzles are also identified by the names
of various cities: the yellow is called "Tokio", the orange is
"Amsterdam," green "New York," blue "Milano," purple
"Brussels" and red "Paris." Since he first began marketing
these puzzles, Laureyssens has sold them under the names
I-QUBE, COCOCRASH, CUBE-IT and HAPPY CUBE.
3. Laureyssens' Attempts to Protect His Puzzles
In the first phase of designing his puzzles, Laureyssens
created about forty distinct puzzle pieces. He initially
sought intellectual property protection for his designs by
registering them in 1986 with the World Intellectual Property
Organization ("WIPO"), an international organization
headquartered in Geneva, Switzerland. Although there were more
than one hundred pieces depicted in this registration, there
are at least some pieces in the Laureyssens Puzzles which were
Laureyssens first sought United States copyright protection
in 1987, when he personally visited the Copyright Office in
Washington and prepared his own certificate of copyright
registration, Certificate Number TXU 271 722 (the "722
Certificate"). This certificate contained the following entry:
Nature of Authorship Briefly describe nature of the
material created by this author in which copyright
SCULPTURE, TEXT, ARTWORK, PHOTOGRAPHES
[sic] AND SAMPLE.
The material which accompanied this registration certificate
has not been produced by the Plaintiffs, although Laureyssens
testified that he submitted as part of the application a white
foam rubber version of the puzzle which is now the yellow
b. The 1988 Registrations
Under the category of "DERIVATIVE WORK OR COMPILATION," the
524 Certificate contained the following entry:
6.b. Material Added To This Work. Give a brief
general statement of the material that has been
added to this work and in which copyright is
NEW TEXTS FOR ARENA; NEW DRAWINGS IQUBE, TATO,
AUTOSAFARI; TEERLING AND PHOTOGRAPHES
Attached to the 524 Certificate are twenty-four pages of
written material which include diagrams describing how to
assemble 120 different cubes as well as twenty-eight more
complex puzzles, and several diagrams showing how some of the
120 cube puzzles could also be assembled in flat form. Among
this latter category are all six of the Laureyssens Puzzles:
the yellow puzzle is identified in the registration
certificate as Number 4, the blue as Number 19, the green as
Number 22, orange as Number 51, red as Number 55, and purple
as Number 58. See 524 Certificate App. at 25. The material
attached to the 524 Certificate also includes three photographs
of empty frames and assembled and partially assembled cubes.
On the 525 Certificate, Laureyssens listed the following as
"Material Added To This Work:"
TEXT EDUCATIONAL REPORT, NEW MODELS, NEW TEXT,
COPY OF INTERNATIONAL MODEL DEPOSIT 1986.
There are twenty-one pages of written material attached to
the 525 Certificate. Most of the text of this material is in
a foreign language (which appears to be Dutch). Included are
sketches and drawings of over one hundred puzzle piece shapes,
many of which are not pieces in any of the Laureyssens
Puzzles. Also, as with the WIPO registration above, there are
at least some pieces from the Laureyssens puzzles which are
not depicted in the 525 Certificate, again including the red
puzzle piece from the HAPPY CUBE package. On one page there is
a diagram indicating that the idea of the puzzles is to
convert it from the flat arrangement to a cube. Interestingly,
while the pieces displayed are those of the yellow Laureyssens
Puzzle, the flat arrangement shown is not the one used for
that puzzle. See 525 Certificate App. at 4. A later page
includes a diagram of the pieces from the yellow puzzle
assembled in yet a third distinct flat arrangement. Id. at 9.
None of the other five Laureyssens Puzzles are depicted in the
c. The 1991 Registrations
In March 1991, Laureyssens filed six new certificates of
registration, one for each of his puzzles (the "1991
Certificates"). Each certificate indicates that the "Nature of
Authorship" is "Shape of pieces (Sculpture)."*fn5 Although
none of the certificates originally referred to any of
Laureyssens' prior registrations, Laureyssens corrected this
omission by six amendments filed in June 1991.
Laureyssens has always marketed his puzzles with a proper
notice of copyright attached.
4. The Plaintiffs' Marketing Efforts
Laureyssens first presented the Laureyssens Puzzle for sale
in the United States at the 1988 International Toy Fair held
in New York City. Shortly thereafter, he entered an agreement
with Sentinel International Packaging ("Sentinel") to market
the puzzles in the United States. This arrangement collapsed
when Sentinel encountered financial difficulties, and
Laureyssens decided to market the puzzles himself.
a. Laureyssens' Packaging
When the name was changed to HAPPY CUBE, because of a
trademark conflict, the only aspect of the packaging which
changed was the name. In the HAPPY CUBE packaging, each letter
in the word "HAPPY" is a different color, and the word "CUBE"
is entirely in the sixth color.
The packages are displayed for marketing in a six-tiered
cardboard "step display," which features the multi-colored
HAPPY CUBE logo on a black background. The display also
features drawings of several multi-puzzle assemblies and a
single picture of a one-color cube.
b. Laureyssens' Marketing Efforts
Since the introduction of the Laureyssens Puzzles into the
marketplace, Plaintiffs have sold approximately 103,000
Laureyssens Puzzles in the United States and have orders for
nearly an additional 250,000. Approximately 90,000 of these
puzzles were marketed in the HAPPY CUBE/CUBE-IT packaging
having rainbow-colored lettering against a black background.
In addition to marketing the Laureyssens Puzzles under the
HAPPY CUBE line as games of skill, the Plaintiffs have made
efforts to sell the puzzles as novelty items, to be imprinted
with corporate logos or promotional messages. In these
marketing efforts, the Plaintiffs have produced puzzles in
colors and designs other than the six colors used in the HAPPY
Extar has organized a nationwide sales force which presently
consists of forty sales representatives, each of whom is,
according to Extar's CEO Berkien, "committed to selling at
least 100,000 Laureyssens puzzles per month," June 4, 1991
Berkien Declaration at ¶ 5, but the nature of this commitment
has not been explained. Berkien also stated that since 1988,
Extar has sold more than $50,000 worth of Laureyssens Puzzles
in the United States, id., although during his June 11
deposition, taken one week after his declaration was signed,
Berkien was unable to confirm this statement or to elaborate on
Extar's sales. Berkien Deposition at 65.
Plaintiffs have advertised the Laureyssens Puzzles in trade
magazines such as the New York Toy Fair Directory and the
Since Laureyssens' original attempt to market his puzzles at
the 1988 New York Toy Fair, Plaintiffs have exhibited the
Laureyssens Puzzles at toy and novelty shows including the
Dallas Toy Fair in 1989 and 1990, the New York International
Toy Fair in 1990 and 1991, the Chicago Premium Show in 1990,
and the New York Premium and Incentive Show in 1989. They
intend to exhibit their product at the Dallas Toy Fair, the
Chicago Premium Show, the Denver Toy Fair, and the Los Angeles
Toy Fair in 1991. During the 1990 Dallas Toy Fair, the
Laureyssens Puzzles were filmed and broadcast on a nationwide
newscast by NBC Television, although there was no evidence
concerning the type or extent of this coverage.
Laureyssens testified that ILLC had spent approximately
$80,000 in connection with the United States marketing of the
puzzles at issue. Plaintiffs altogether claim to have expended
approximately $180,000.00 in connection with the advertising
and promotion of their Laureyssens Puzzles.
In 1990, Extar entered into an agreement with Strottman
International, Inc. ("Strottman"), a supplier of premium and
novelty products to packagers such as fast-food and breakfast
cereal companies. The agreement granted Strottman exclusive
promotional rights to the Laureyssens Puzzle in the premium
a. The Proumen/Miner Puzzles
In April 1989, Frohman, in his then-capacity as package
designer and salesperson for South Coast Packaging Associates,
Inc., was approached by Richard Proumen ("Proumen") and Gary
Miner ("Miner") to quote price estimates for display packaging
for a series of flat foam rubber puzzles which they were
marketing (the "PM Puzzles"). As it later developed, the PM
puzzles were copies of the Laureyssens Puzzles.
Frohman provided Proumen and Miner with price quotes for
basic packaging of the PM puzzles, but advised them that the
product would be more marketable if they used a different
presentation with more elaborate packaging and graphics. After
considering Frohman's advice, Proumen and Miner advised him
that they could not follow it due to a lack of financing.
Frohman, believing that the PM Puzzles could be a success,
expressed an interest in licensing the puzzles from them.
In or about August 1989, IGI was incorporated, primarily for
the purpose of marketing the PM Puzzles. Since its
incorporation, IGI has not marketed any product other than the
SNAFOOZ puzzles at issue in this litigation, although it is
presently investigating several new products.
Negotiations between Proumen, Miner and Frohman resulted in
a license agreement dated December 5, 1989 between The Arista
Group and IGI, under which IGI was to have the exclusive
United States marketing rights to the PM Puzzles in exchange
for a royalty on sales and an agreement to sell a certain
minimum number of the puzzles per year. IGI planned to market
the puzzles in six different colors: red, yellow, blue,
orange, green and purple — the same colors used by
According to Frohman, in the fall of 1989 he shopped around
to determine whether or not there were any products on the
market which would compete with the PM Puzzles. Although he
did come across a number of items that assembled into a cube
in some fashion, he believed that none of them were
competitive with the PM Puzzles. He did not learn of the
IGI has marketed its SNAFOOZ Puzzles in several different
packaging styles. All of its packages feature the SNAFOOZ logo
in rainbow-colored lettering on a black background. The logo
is displayed prominently across the top of the package in type
which is quite distinct from that used by the Plaintiffs for
their logo. The simplest packaging style consists of a puzzle
assembled in its flat form wrapped in clear plastic
"shrinkwrap" with a cardboard wraparound insert. As opposed to
the Laureyssens packaging, the SNAFOOZ insert displays a
picture of an assembled cube, and the back of the package
includes directions and pictures of the different multi-puzzle
combinations which can be formed from the SNAFOOZ Puzzle
IGI's current packaging for its SNAFOOZ Puzzles is identical
to that which it designed for the PM Puzzles.
IGI had two or three dozen prototype PM Puzzles
manufactured, as well as prototype packaging, for use at IGI's
display booth at the 1990 New York International Toy Fair. IGI
also created and printed a promotional brochure for the fair.
During the toy fair, IGI took several hundred dollars worth of
orders for the PM Puzzles.
During the 1990 Toy Fair, Laureyssens became aware that IGI
was manufacturing and marketing puzzles which were similar to
his. Upon investigating, he discovered that the puzzles
offered by IGI were in fact identical to his own. Laureyssens
objected to the IGI personnel at the booth, claiming that the
PM Puzzles infringed the copyrights on his puzzles.
On February 18, 1990, a cease and desist letter from ILLC
was delivered by hand to the IGI booth at the New York Toy
Fair. Also, on February 21, the last day of the fair,
Plaintiffs forwarded a cease and desist letter directly to
IGI, demanding that it immediately discontinue the manufacture
and sale of the infringing SNAFOOZ puzzles.
On March 19, 1990, IGI admitted to the Plaintiffs' that "We
acknowledge that our puzzles apparently were copied from a
sample obtained through your French distributor or licensee
and, in its [sic] present form, cannot be marketed in the
United States without your permission."
d. Negotiations Between IGI and Laureyssens
Upon discovering that the PM Puzzles were, in fact, the
Laureyssens Puzzles and that Proumen and Miner were not
authorized to distribute and license the puzzles, Frohman
attempted to negotiate a license with Laureyssens for United
States distribution rights.
After negotiations between IGI and Laureyssens failed,
Frohman assured Laureyssens and the other Plaintiffs that IGI
would cease marketing the infringing puzzles.
At some point in March, 1990 IGI also began to consider
designing and marketing its own flat-to-cube puzzles, similar
but not identical to those of Laureyssens. When it first
consulted its attorney about the ramifications of designing
puzzles which were based on six units per edge instead of the
five units used by Laureyssens, the attorney cautioned IGI
that "if five of your six segments match Laureyssens' five
segments it may constitute substantial similarity."*fn6
Frohman testified that in early April of 1990 shortly before
the negotiations between IGI and Laureyssens broke off,
Laureyssens' counsel indicated to IGI that if IGI produced its
own flat-to-cube puzzles in which none of the individual
pieces were copies of any of Laureyssens' pieces then
Laureyssens would have no grounds for a claim of copyright
e. IGI's Design of the SNAFOOZ Puzzles
After the breakdown of negotiations with Laureyssens, IGI
proceeded with its plans to design and develop its own
flat-to-cube puzzle, using six units per side to ensure that
none of its puzzle pieces matched any of those used by
Laureyssens. IGI clearly intended to copy the idea underlying
the Laureyssens Puzzles, while at the same time making its
puzzles different enough to avoid infringing Laureyssens'
Thereafter, Stevens, through a friend, contacted Eric Brewer
("Brewer"), a graduate student in computer science at
Massachusetts Institute of Technology, about creating a series
of puzzles for IGI. On or about July 17, 1990, Stevens called
Brewer and described to him the nature of the puzzle that IGI
wished to develop, i.e., a flat-to-cube structure with six
units per side, rectilinear interconnections and multi-puzzle
interconnectability. In response to this description of IGI's
requirement, Brewer, prior to seeing any puzzle samples or
prototypes, believed that he knew how to approach the problem,
and told Stevens that he could write a program to generate the
puzzles without much difficulty.
On July 28, 1990, Stevens met with Brewer. He brought to the
meeting two of the PM Puzzles (which IGI had admitted were
copies of the Laureyssens Puzzles) which had been taken off
the market after the New York Toy Fair. Brewer took these
puzzles with him when he left the meeting. IGI and Brewer
subsequently entered into an agreement effective August 4,
1990, the addendum to which set forth the parameters for the
required six single puzzle designs and the additional criteria
for more complex multiple puzzle structures.
Other than understanding the general concept of the PM
Puzzles and measuring the difficulty level of those puzzles by
assembling and disassembling them, Brewer asserts that he made
no use of the PM Puzzles in creating the SNAFOOZ Puzzles.
On August 25, 1990, Brewer sent to IGI a letter describing
six six-unit-per-side puzzle designs (the "SNAFOOZ Puzzles")
and including diagrams showing how the pieces could be
assembled into cubes and other more complex structures, along
with a computer disc containing all of his programming,
including the source code.
IGI thereafter arranged to have the new puzzles
manufactured. From September 1, 1990 to February 1, 1991, IGI
ordered and received approximately 300,000 SNAFOOZ Puzzles
from its manufacturer in Korea. Associated packaging and
display materials were manufactured locally. Although the
Plaintiffs have suggested that the foam material of the
SNAFOOZ Puzzles may contain toxic substances which would make
it unsafe for children, there has been no evidence to support
Late in 1990, while IGI was in the process of preparing to
launch the SNAFOOZ Puzzles at the 1991 New York Toy Fair,
IGI's counsel received a letter from Plaintiffs' counsel dated
November 13, 1990 requesting assurances from IGI that it had
no intention of infringing the alleged copyrights in the
Laureyssens Puzzles. By letter dated February 7, 1991, IGI's
counsel confirmed that IGI would no longer market the PM
Immediately prior to the 1991 New York Toy Fair at which the
SNAFOOZ Puzzles were exhibited for the first time, IGI
conducted a direct mail campaign and placed advertisements in
the 1991 New York Toy Fair Directory and in various trade
publications for the SNAFOOZ Puzzles.
Apart from a visit by Laureyssens to IGI's showroom at the
1991 New York Toy Fair, Laureyssens made no effort to stop IGI
from selling the SNAFOOZ Puzzles at the fair.
At the end of the week of the Toy Fair, Laureyssens
requested a meeting with IGI and himself. At the meeting,
neither Laureyssens nor his counsel asked IGI to stop selling
the SNAFOOZ Puzzles nor ...