The opinion of the court was delivered by: COTE
DENISE COTE, District Judge:
Plaintiff M.H. Segan Limited Partnership ("Segan") filed this action on January 26, 1995, alleging copyright infringement, fraudulent inducement, and breach of contract. Segan is a Massachusetts limited partnership in the business of inventing toys and other consumer products. Defendant Hasbro, Inc. ("Hasbro"), is a Rhode Island corporation and a well-known designer of consumer products, including toys. Jurisdiction is based on 28 U.S.C. §§ 1331, 1332 and 1338(a). Hasbro moves for summary judgment to dismiss all of plaintiff's claims. For the reasons set forth below, defendant's motion is denied in part and granted in part.
This action arises out of plaintiff's submission of three toy ideas to Hasbro. The first toy idea, Frankenstuff,
was first shown on December 19, 1986 to George Dunsay, one of Hasbro's employees. It was immediately rejected. Frankenstuff was again shown to Hasbro on April 18, 1991, this time to John Hall, Vice-President of Research and Development for Playskool, a division of Hasbro. According to the "Inventor Review Record," which was completed by Hasbro at the time plaintiff submitted Frankenstuff, Hall decided to "Hold" the drawings apparently for further evaluation. Plaintiff's drawings were rejected and returned to the plaintiff approximately two months later.
The second toy concept, Super Slick Paint Shop, was shown to Playskool on October 2, 1991; according to the Inventor Review Record, it was rejected. It was again shown to Playskool, together with plaintiff's third toy concept, Manicure Shop, on December 4, 1991; this time, Playskool decided to "Hold" on to plaintiff's Super Slick Paint Shop. Manicure Shop was rejected.
Plaintiff signed a "Confidential Disclosure Waiver" form ("Waiver") on June 13, 1990. It states, in relevant part:
Inventor has been advised by Hasbro's representatives that Hasbro is willing to consider [the inventor's] Submissions, but that because of the large number of inventions and ideas, both old and new, which Hasbro has itself developed or had suggested to it by other third parties, the possibility exists that some of such inventions and ideas are similar to those Submissions which Inventor might disclose to Hasbro. Inventor therefore agrees to and accepts, and asks Hasbro to consider all Submissions made by Inventor in accordance with, the following conditions:
1. All Submissions are made by Inventor on a voluntary and unsolicited basis.
2. No confidential relationship is to be established by such Submission or implied from consideration of the submitted material, and the material is not submitted "in confidence." (Confidential relationships have been held to create obligations and liabilities which are beyond those that Hasbro is willing to assume.)
3. No obligation of any kind is assumed by, nor may be implied against Hasbro and/or its subsidiaries unless or until a formal written contract between the parties is signed, and then the obligations will be only as set forth by the terms of such contract.
4. All of Inventor's rights and remedies arising out of Inventor Submission(s) to Hasbro shall be limited to any rights and remedies Inventor is accorded under United States Patent and Copyright Laws. All other claims of whatever nature arising out of Inventor's Submission to Hasbro are hereby waived.
The Submissions made by Inventor and governed hereunder are as described on the "Inventor Review Record," signed and dated by Inventor.
According to the plaintiff, at the 1993 Toy Fair defendant introduced Big Frank, a toy plaintiff alleges was copied from Frankenstuff. Plaintiff also claims that Hasbro's Monster Truck Mold N' Mash, which, according to the plaintiff, was introduced at the 1994 Toy Fair, was copied from plaintiff's Super Slick Paint Shop. Finally, according to the plaintiff, at the 1995 Toy Fair defendant introduced Fantastic Fingernails, a toy that plaintiff alleges was copied from Manicure Shop.
Because plaintiff's claim for copyright infringement applies solely to Frankenstuff, the Court will describe plaintiff's Frankenstuff and defendant's Big Frank in some detail. Frankenstuff is depicted as a "plush", "soft" doll approximately 22 inches tall with two sets of zippers so that a child's small play things can be stored in the head or chest. It has green skin; a lavender (or purple), loose-fitting robe; large hands with red-painted fingernails and either four or five fingers; short legs; large, brown shoes (or large, white tennis shoes) with thick soles; a zipper across its forehead and another zipper across its chest; a large, red heart with two gears (one green and the smaller one yellow) resembling the mechanism of a clock inside the chest cavity; and various objects that might be stored in the head or chest compartments, such as a wrench, a gear, a telephone, a garbage can and animals (spider, frog, worm, mouse, bats), among other things. The doll's head is large (in proportion to the rest of its body) and rectangular in shape; it is flat at the top and has dark hair that is unevenly cut. Its facial features are baby-like -- a small, flat and round nose, round cheeks, small ears, small eyes that are dark and somewhat far apart. It has a large, smiling mouth with closed lips that, in some pictures, tend to curve slightly upward on one side. The doll has a very short, thick neck with bolts on each side. Plaintiff holds Certificates of Registration for the Frankenstuff design.
Big Frank is approximately sixteen inches tall and constructed out of hard (or semi-hard) plastic. It has green skin, black hair, and a large upper body, with wide shoulders; by contrast, its legs are short. Its arms and legs are stocky, and the hands and feet are disproportionately large. There are silver-colored chains around its wrists, and one silver-colored bolt on each upper arm. It wears a bright orange suit with seams that look stitched together and a patch stitched over the right knee. Underneath the coat, there is what appears to be a purple T-Shirt. It has large, black boots with thick soles and a number of screws.
Big Frank's face is essentially that of a young boy, except that certain features are exaggerated and reminiscent of the monster Frankenstein. For example, it has a flat head, a large forehead, and a prominent brow. The eyes are green with red LED (Light Emitting Diode) lights instead of pupils. The cheeks are chubby, and the nose is flat, small and round. Its smile appears to curve up slightly to one side, but this effect is created by the fact that Big Frank's lower lip is bigger on one side of the mouth. The ears are small and stick out. It has no neck.
Big Frank's head and chest open; the top of the head opens toward the back, lifting the hair and leaving Big Frank's forehead in place. Inside the head there is a space to hold three tools. The chest has hinged doors, fastened with a bolt, that swing open to reveal a panel inside with gears and other objects that a child can manipulate to, among other things, create sounds. There are two gears, the larger one is blue and above the smaller one, which is yellow. By turning the gears, the child can change the picture in an adjacent window. The picture can be a broken bone or gear, which means that Big Frank needs fixing, or a whole bone or gear, which indicates that Big Frank is fixed. The other mechanisms in its chest make Big Frank talk. What it says depends on whether he needs fixing. If the bone or gear in the window is broken, then, when an "electrical" switch is pressed against the button underneath, it says, "Uh, fix me." If the gear or bone is whole, the same switch makes it say "Thank you." Similarly, there is a fuel gauge window with a button underneath that, when pressed, makes it say "Uh, Fix me" when the bone or gear is broken. If the bone or gear is not broken, Big Frank makes other sounds and says "Mmm, good." Finally, the red heart makes a pumping sound when pressed and it says "I'm alive!" if the bone or gear is not broken. If the bone or gear is broken, pressing the heart makes it say "Uh, Fix me." When fixed, the eyes flash red in synchrony with the voice.
To succeed in its copyright infringement claim, plaintiff must demonstrate: (1) ownership of a valid copyright; (2) that the defendant has actually copied the plaintiff's work; and (3) the copying is illegal because a substantial similarity exists between the defendant's work and the protectible elements of plaintiff's. See Knitwaves, Inc. v. Lollytogs Ltd. (Inc.), 71 F.3d 996, 1002 (2d Cir. 1995); see also Fisher-Price, Inc. v. Well-Made Toy Mfg. Corp., 25 F.3d 119, 122-23 (2d Cir. 1994).
1. Ownership of Valid Copyright
A certificate of copyright registration made before or within five years after first publication of plaintiff's work is prima facie proof of plaintiff's ownership and validity of its copyright. 17 U.S.C. § 410(c) (1988);
see Carol Barnhart Inc. v. Economy Cover Corp., 773 F.2d 411, 414 (2d Cir. 1985). A timely issued certificate, however, creates only a rebuttable presumption of copyright validity, and defendant may offer evidentiary proof casting doubt on the copyright's validity. See Durham Indus., Inc. v. Tomy Corp., 630 F.2d 905, 908 (2d Cir. 1980).
Defendant argues that plaintiff's copyright is invalid because Frankenstuff is a derivative work without a license from MCA/Universal Merchandising, Inc. ("MCA"), which owns the copyright to the visual image of Frankenstein from its movie by the same name. MCA has filed an affidavit in support of defendant's motion which indicates that it considers Frankenstuff to be a derivative work and that it has not given any permission to Segan to make such a derivative work. That plaintiff lacks authorization from MCA is not disputed.
Section 101 of the Copyright Act defines a derivative work as:
a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a "derivative work".
17 U.S.C. § 101 (emphasis supplied). Not just any work that is based on a pre-existing work, however, is a "derivative" work entitled to copyright protection. A derivative work must "borrow substantially from existing works." Eden Toys, Inc. v. Florelee Undergarment Co., Inc., 697 F.2d 27, 34 (2d Cir. 1982). Thus,
1 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 3.01, at 3-3 (1995) ("Nimmer on Copyright") (first emphasis in original). See also, Eden Toys, 697 F.2d at 34 (citing United States v. Taxe, 540 F.2d 961, 965 n.2 (9th Cir. 1976), cert. denied, 429 U.S. 1040, 50 L. Ed. 2d 751, 97 S. Ct. 737 (1977) (quoting Nimmer on Copyright)). Accord Litchfield v. Spielberg, 736 F.2d 1352, 1357 (9th Cir. 1984), cert. denied, 470 U.S. 1052, 84 L. Ed. 2d 817, 105 S. Ct. 1753 (1985) (work must infringe underlying work to be derivative); Peter Pan Fabrics, Inc. v. Rosstex Fabrics, Inc., 733 F. Supp. 174, 177 (S.D.N.Y. 1990) (quoting Nimmer on Copyright). A copyright owner has the exclusive right to prepare derivative works. See 17 U.S.C. § 106(2).
The Court must, therefore, decide whether Frankenstuff is a derivative work.
Because Segan does not have MCA's authorization, and Frankenstein is not in the public domain, Segan's copyright in Frankenstuff would be invalid if it were a derivative work based on MCA's Frankenstein. See 17 U.S.C. § 501(a) ("Anyone who violates any of the exclusive rights of the copyright owner . . . is an infringer of the copyright or right of the author."). In order to decide whether Frankenstuff is a derivative work, the Court must decide whether Frankenstuff infringes MCA's copyright in Frankenstein.
The standard for copyright infringement is whether the defendant's work is "substantially similar" to the underlying copyrighted work. See generally 1 Nimmer on Copyright § 3.06, at 3-34.5 & n.2 (derivative work's unauthorized incorporation of preexisting copyrighted work must satisfy substantial similarity test to amount to infringement). In determining whether plaintiff's Frankenstuff infringes MCA's copyright, the Court must apply the "ordinary observer" test. Under this test, the Court must determine
whether "the ordinary observer, unless he set out to detect the disparities, would be disposed to overlook them, and regard their aesthetic appeal as the same."
Laureyssens v. Idea Group, Inc., 964 F.2d 131, 141 (2d Cir. 1992) (quoting Peter Pan Fabrics, Inc. v. Martin Weiner Corp., 274 F.2d 487, 489 (2d Cir. 1960)). Accord Fisher-Price, 25 F.3d at 123. In making this judgment, what is at stake is the similarity of expression and not the extent of protection to an idea. See Durham, 630 F.2d at 912-13 (applying substantial similarity test to toys). In conducting this fact-intensive inquiry, the Court must compare the works' "'total concept and feel.'" Knitwaves, 71 F.3d at 1003. Although in some ways the aesthetic appeal between Frankenstuff and Frankenstein is quite different -- one is playful and friendly, the other is forbidding and scary -- Frankenstuff shares many of Frankenstein's most memorable or prominent features. Indeed, its very purpose is to evoke Frankenstein. Segan aptly described Frankenstuff to Hasbro in 1986 "as a somewhat friendly looking juvenile Frankenstein's monster whose chest and head can be zipped open to reveal all kinds of interesting and fun toys and goodies." However,
Warner Bros. v. American Broadcasting Cos., 720 F.2d 231, 242 (2d Cir. 1983).
Therefore, I find there is an issue of fact with ...