The opinion of the court was delivered by: EUGENE H. NICKERSON
NICKERSON, District Judge:
Plaintiff, Christina Ladas, a freelance artist, brought this action under the Copyright Act, 17 U.S.C. § 101 et seq., and the Lanham Act, 15 U.S.C. § 1051 et seq., against Potpourri Press, Inc. (Potpourri), a North Carolina corporation. The amended complaint states claims for copyright infringement, trademark infringement, and false advertisement. It seeks a variety of relief both legal and equitable.
Jurisdiction is alleged pursuant to 28 U.S.C. § 1338(a), providing for jurisdiction over copyright and trademark actions, and 15 U.S.C. § 1121, providing for jurisdiction over Lanham Trademark Act actions.
Plaintiff has moved for a preliminary injunction preventing Potpourri from (1) claiming a copyright in her "Fancy Tulips" and "Della Robbia" designs; (2) selling or advertising products based on those designs; and (3) selling or advertising products containing plaintiff's full name or the name "Christina," as in the "Christina Collection."
A. The parties' relationship
Plaintiff began working with Potpourri some time in the middle of 1985. From 1985 through 1988 she provided artwork to Potpourri on a freelance basis. Potpourri paid her for her designs an average of $ 39,664 per year from 1986 through 1988. Potpourri introduced those designs as collections from 1986 through 1988 and sold the collections from 1987 through 1992.
In the fall of 1988 plaintiff and Potpourri agreed to a three-year contract, memorialized in a letter dated November 21, 1988 and signed by David Grimes, the Chairman of Potpourri's board, and by plaintiff. According to that letter, Potpourri would pay plaintiff $ 100,000 per year and pay premiums for her on a $ 500,000 life insurance policy. Plaintiff, in turn, would provide artwork "each year for approximately 60 items in our line." According to the January 25, 1994 affidavit of Janet Pantuso, Potpourri's Vice President of New Product Development, those sixty items predominantly would be elements in 10 collections. Plaintiff assigned the copyright to Potpourri in a number of the designs she created during that period.
The parties fulfilled their contractual obligations through 1991, but they could not agree to a new long-term written contract. By letter dated January 22, 1992 Vice President Pantuso confirmed a one-year oral contract between plaintiff and Potpourri. Potpourri would again pay plaintiff $ 100,000 for the year, and plaintiff would provide artwork for two collections of approximately 15 pieces of art each, one "mini-collection" of five pieces of art, and six pieces of art for use on mugs. Plaintiff did not dispute what was contained in the letter, although it asked her to let Potpourri know if her "understanding of the arrangement" was "different." On the contrary plaintiff proceeded to create artwork for two collections during 1992, namely those entitled "Fancy Tulips" and "Della Robbia."
The parties could not agree to new terms for the creation of artwork in 1993. Plaintiff apparently refused to accept Potpourri's offer of another year at $ 100,000, and Potpourri would not grant either a royalties-based contract or a raise to $ 250,000 per year. Plaintiff ceased providing artwork to Potpourri and currently provides new artwork to another producer of giftware.
On May 18, 1993 plaintiff registered her name, "Christina Ladas," as a trademark. On November 4, 1993 plaintiff registered her copyright in the "Fancy Tulips" and "Della Robbia" collections. The parties agree that she has a valid copyright in these collections.
According to plaintiff's memorandum of law in support of a temporary restraining order, at some unspecified time she refused to sign an assignment of the copyright in "Fancy Tulips" to Potpourri. There is nothing in the record showing that Potpourri sought an assignment of that copyright or the copyright to "Della Robbia," although Potpourri claims that the standard course of dealing between the parties was that plaintiff would assign copyrights to it. The only copyright assignments in the record are for collections created prior to 1989.
B. Potpourri's marketing of the disputed collections
Potpourri has marketed the "Christina Collection" since December 1991, when it appeared on the front cover of Potpourri's "Everyday 1992" catalog and was featured in a six-page spread. In "Everyday 1993" "Christina" received four pages, and in "Everyday 1994" Potpourri displayed "Christina" on two pages. "Christina" uses a pink rose and lilac motif placed in different manners on the various items in the collection. On certain of the items plaintiff's first name appears, and her signature can be seen in each of the catalogs.
Plaintiff brought this action on January 21, 1993 by a complaint and an order to show cause seeking a temporary restraining order and a preliminary injunction. After oral argument the court denied the request for a temporary restraining order. Potpourri continues to market the "Fancy Tulips," "Della Robbia," and "Christina" collections. Potpourri has had items for the "Fancy Tulips" and "Della Robbia" ...