United States District Court, S.D. New York
January 28, 2004.
MARILYN CARANO a/k/a LYNN CARANO d/b/a LYNN CARANO GRAPHICS, Plaintiff, -against- VINA CONCHA Y TORO, S.A., BANFI VINTNERS, BARBARA LONG d/b/a LEAPFROG BRAND STRATEGIES, and MARIE GREENER d/b/a GREENER GROUP, Defendants
The opinion of the court was delivered by: CHARLES BRIEANT, District Judge
Memorandum and Order
There are before the Court for resolution the following motions, all
of which were heard and fully submitted for decision on December 13,
2001. The motions are listed in their order of filing:
Document 53 by Barbara Long, Marie Greener, etc,
for Summary Judgment dismissing Plaintiff's
complaint and for Summary Judgment on their
counterclaim, filed November 27, 2002.
Document 55 by Banfi Vintners and Vina Concha Y
Tora for Summary Judgment dismissing the
complaint, filed September 27, 2002.
Document 63 by Marilyn Carano for partial Summary
Judgment in favor of Plaintiff on the issue of
infringement as to Defendants Vina Concha Y Toro
and Banfi Vintners, filed October 28, 2002.
Document 67 by Barbara Long and Marie Greener for
Summary Judgment dismissing the cross claims of
Defendants Vina Concha Y Toro, S.A. and Banfi
Vintners, filed November 12, 2002.
This is an action for copyright infringement brought by Marilyn Carano
a/k/a Lynn Carano doing business as Carano Graphics, on June 27, 2001.
The Court has subject matter jurisdiction
under 28 U.S.C. § 1338. Vina Concha Y Toro is a corporation existing
in, and under the laws of Chile, which makes and exports wine under the
brand name Concha Y Toro, loosely translated as "shell and bull".
Defendant Banfi Vintners, Inc. is the importer and distributor of Concha
Y Toro and of other wines made by other wine makers. For convenience, we
refer to Vina Concha Y Tora, and Banfi Vintners simply as Banfi, unless
the context indicates otherwise. Defendant Barbara Long does business as
Leapfrog Brand Strategies ("Leapfrog"). The co-defendant Marie Greener
does business as Greener Group, Inc. Leapfrog describes itself as "a
consumer research and brand strategy consulting business". Marie Greener
apparently is in the same or similar business as Leapfrog and the two
organizations have collaborated to perform services for various
manufacturers and wholesalers of packaged products.
The standards for granting Summary Judgment are so well known as not to
require repetition. There are no disputed issues of material fact in this
case, although the legal consequences flowing from the facts are hotly
contested. The relevant facts are as follows.
Banfi also is the American distributor for another group of wines sold
under the name of Riunite, and, in 1999, Banfi retained Leapfrog to
analyze consumer perceptions of the Riunite Brand and to propose improved
merchandising techniques, including improved packaging. A specialty of
Leapfrog is the use of so-called "focus groups" which involves obtaining
a panel of persons, a cross-section of the community, to evaluate the
products, their names and packaging and express their reactions to
existing packaging and merchandising as well as to possible changes and
improvements. The project concerned research to understand the public
perception of the
Riunite Brand and the identification of future opportunities for
enhanced sales. These marketing services were performed without a written
contract, and eventuated to the satisfaction of the account executive at
Banfi, although written contracts are the customary means by which Banfi
accomplishes similar work. Leapfrog associated Greener with this project
and Ms. Long and Ms. Greener worked directly with Banfi representatives.
Long and Greener describe their work output as a "Deliverable".
In connection with the Riunite project, neither Long nor Greener
informed Banfi that they worked with a third party to create visual
imagery for their consumer exploratory work with the focus groups. In
fact, they did so and they had, in connection with the Riunite project,
retained Plaintiff, a graphic artist who works independently, as an
independent contractor to develop depictions of the Riunite name in
various styles, typefaces and colors which were exhibited to the focus
groups by Long and Greener in connection with their work for Banfi.
Although the Deliverable for Riunite included visual depictions of the
Riunite name in various styles and colors, none of them were actually
used by Banfi.
Pleased with the work done by Leapfrog and Greener for Riunite, Banfi
retained Leapfrog to do similar work in connection with its line of
Concha Y Toro wines (the Concha Y Toro Project). This retainer was also
oral, but it was the expectation of Banfi that Leapfrog would be
associated with Ms. Greener in preparing the Deliverable and that the
scope of the work would be similar to that actually done for Banfi by the
same Defendants in connection with Riunite. Banfi anticipated that the
same graphic artist who had worked on the Riunite project, or somebody
similarly situated would be employed by the Leapfrog-Greener joint
venture to produce visual art as part of the Deliverable, just as had
been done with the Riunite project.
The July 13th, 1999 presentation, made to Banfi by
Leapfrog, outlines the Concha Y Toro Project in the peculiar argot known
to those engaged in marketing research. Leapfrog undertook to "define and
dimensionalize brand equities among (Banfi's) current consumers and
understand the role of the sub-brands (sub-brand names omitted)" and to
"identify leverageable company values, heritage and lore." Leapfrog
undertook to "define and map the competitive landscape and to identify
opportunities for the brand tomorrow." Included also was an undertaking
to "identify untapped life style values and desires that can be linked to
the brand opportunity"; "explore the opportunity to own the best of Chile
imagery linked to wine" and "develop a range of potential brand
positionings". Leapfrog described its efforts as including a four stage
process: Discovery; Hypothesis Development; Consumer Exploratory; and
Strategic Vision. It promised that "from this approach, we will clearly
define an ownable brand positioning and vision with directional tactics
to build momentum, engage and sustain customers over time." Familiarity
of the reader with the initial presentation of Leapfrog to Banfi in
connection with the Concha Y Toro Project is assumed. There was no
undertaking therein to design a logo for the brand, and no discussion
whatever concerning ownership of the intellectual property rights flowing
out of the work.
With the approval of Banfi and without a written contract, Long and
Greener went to work and retained Plaintiff to help them as a graphic
artist. Ultimately, Leapfrog was paid $95,927.26, which it shared with
Greener, by Banfi for the Deliverable dated October 25, 1999 found as
Exhibit 9 attached to Document 58 on the Motion. Of this sum, they
paid $3,289.11 to Plaintiff Marilyn Carano for her part in the effort.
To earn her fee, Ms. Carano, at the direction of Long and Greener,
drew, and revised, a picture of a shell similar to that of a snail, and
took from "clip art" in the public domain, the head of a Bull, to express
the concept of "shell and bull". It is the alleged copying of this
rendition (upon which Ms. Carano later obtained a copyright registration
without designating it as a derivative work from the clip art) that is
the basis of this lawsuit.
Leapfrog showed:he drawing, along with some other labels and graphics,
which are not in dispute, to its focus groups and, in its Deliverable of
October 25, 1999, included a copy of the graphic prepared for Leapfrog
and Greener by Ms. Carano, along with a recommendation that Banfi "own an
invocative shell and bull icon that visually distinguishes the brand,"
and "develop powerful iconography for the brand."
Greener testified, and this fact is apparently confirmed by all other
participants, that Leapfrog did not recommend or expect that Banfi would
simply take and use the shell and bull design set forth in the
Deliverable, but rather would treat it as a sample rendering of a
strategic area to be developed by others (Greener deposition at 219).
Much of the advice in the Deliverable was very basic. For example,
Banfi was told by Long and Greener that "Sunrise name (a sub-brand of
Concha Y Toro) clearly says morning, and
is a disconnect with wine; more suited to orange juice, breakfast
food." There are numerous other examples in the Deliverable, some of
which show that people retain consultants to tell them that which they
ought to know without being told. The Deliverable told Banfi that Concha
evokes an archetype of "the feminine watery principle; the universal
magic; birth, regeneration, life; love; marriage; fertility; the
life-giving female `yin'; a good life, a journey across the sea; the two
halves being closely held together in passion", while Toro evokes the
archetype of "masculine principle in nature; the solar generative force
sacred to all sky gods; male procreative strength; royalty; a king; the
roaring bull symbolizes thunder, rain and fertility" (Exhibit 9 at
B001631). On the following page of the Deliverable, the consultants
presented Ms. Carano's rendering of the bull and the shell, with the bull
on the left side of the shell, as an "integrated brand icon
telegraphic and timeless". The consultants wrote "the mystery and magic
of the name come to life with an evocative, suggestive icon that
integrates the dual principles of the shell and the bull" (Page B001632).
Familiarity of the reader with the balance of the Deliverable is
assumed. Clearly, it is an invitation to the client to adopt, as an icon,
a simple replication of a shell and a bull, and although the word logo
appears nowhere in the Deliverable, the Concha Y Toro drawing is
reproduced again at B0001648 under a heading "Universal Appeal" and
described as "distinct and evocative, defines the name, evokes a
compelling brand mood and spirit, a powerful highly appealing icon that
fits the name of a distinct Chilean wine". Beginning at Page B0001649,
other possible icons were presented and described as "supportive but not
ownable". These include the name superimposed over a bunch of grapes, the
name using the Y in the middle of the name to evoke
two peaks of the Andes, as well as two modern drawings, one of a
wine glass on Page B01650 regarded as "relevant but lacked stature".
Other labels are included for all of the different Concha Y Toro wines,
with different forms of typeface, including some which were marked
Nowhere in the Deliverable is a symbol attached to the Plaintiff's
drawing indicating it is copyrighted, and the Deliverable itself is not
copyrighted and bears no sign of such. The parties clearly regarded the
various icons suggested, including the shell and the bull, as preliminary
and mere suggestions. The Defendant consultants were recommending that
Banfi develop powerful iconography, and that the idea of the shell and
the bull be used to do so, but neither they nor Banfi regarded
Plaintiff's work as a final design. Rather it was submitted to the client
as a sample rendering of the "strategic area to be developed" (Greener
deposition at 219).
Banfi thereafter retained Muts&Joy, an unrelated package design
firm to develop a Concha Y Toro master brand signature and to portray the
meaning of the Concha Y Toro name (Shell and Bull). It is conceded that
Muts&Joy attended the presentation of the Deliverable, and that a
copy which contained the Plaintiff's work was turned over the
Thereafter, Banfi paid Muts&Joy approximately $150,000.00 to create
the logo of the shell
and the bull actually used on the wine bottles of Concha Y Toro.
See Exhibit 8 to Document 75, Declaration of Kristin M. Walden. The
appearance of the logo as ultimately created by Muts&Joy is somewhat
different. The shell is superimposed over the bull and is on the left of
the bull from the purchaser's viewpoint, rather than on the right as
originally submitted by Leapfrog. It is rendered in black and brown with
a white frame, while the Deliverable was submitted in black and white
without a frame. The proportions of height to width are also different.
Concha Y Toro filed the shell and the bull as developed by Muts&Joy,
as a trademark first used on April 20, 2000.
Common sense suggests that if, for no other reason, the Complaint must
fail because Banfi paid a substantial fee for which it received an
implied non-exclusive license to develop the icon through its consultant,
Muts&Joy. The procedures followed in this case by Leapfrog and
Greener are customary in marketing research. All parties, including
Plaintiff, knew the scope of Leapfrog's retainer by Banfi and they knew
that the intellectual property comprised within the Deliverable would be
passed on to Banfi at the conclusion of the Project and after payment of
the fee, with the intention that others would be retained as, in fact,
happened with Muts&Joy, to adapt and use the ideas for which Leapfrog
was well paid by Banfi. Ms. Carano knew at all times for what the work
was being used. She did not seek copyright registration until long after
the event (August 8, 2000), and nothing on the drawing submitted to Banfi
as part of the Deliverable indicates any intention to copyright the work.
Undisputed deposition testimony confirms that the idea of the
shell and bull, which is not in itself protected by copyright, was
conceived by Long and/or Greener to be recommended for development as an
icon for Concha Y Toro wines. The bull, as noted earlier, was clip art in
the public domain and the shell was drawn and re-drawn by Plaintiff under
the direction of Long and Greener. It is highly likely under these
circumstances that, were the case to be tried, any rational jury would
have to conclude that Long and Greener were co-authors of the work, but
whether or not this is so is of no concern. Ms. Carano did the work at
the request of Long and Greener knowing that it was to be submitted as
part of the Deliverable, and used by Banfi and she was paid for what she
did. She did not assert any copyright claim in the matter, nor did she
mark the work as copyrighted. The totality of her actions, and those of
Long and Greener are sufficient to grant Banfi a non-exclusive implied
The commercial practices followed in this case are, as noted earlier,
quite common, and therefore it is of note that the issue presented does
not seemed to have arisen in many cases. It is clear that Banfi requested
the creation of the Deliverable, which was reasonably expected to include
one or more recommended icons. Ms. Carano knew this, and delivered the
work to Long and Greener as intermediaries for Banfi, and is presumed to
have intended, on the totality of the circumstances, that the
licensee-requestor (Banfi) would copy and distribute the work, LA.E.
Incorporated v. Schaver, 74 F.3d 768, 776 (7th Cir. 1976),
Effects Associates, Inc. v. Cohen, 908 F.2d 555, 558-59 (9th
Cir. 1990), Holtzbrinck Publishing Holdings, LP. v. Vyne
Communications, Inc. (S.D.N.Y. 97 Civ. 1082 not officially
In I.A.E. Incorporated, supra, a factual context very similar
to this case was presented. An architect, Shaver, copyrighted design
drawings he had prepared for a joint venture which, in turn, had
contracted to design and construct an air cargo/hangar building for a
Regional Airport Authority. The joint venture hired the architect as an
independent contractor for a sum certain to prepare the drawings. Unlike
Ms. Carano, Mr. Shaver submitted his drawings with a notice of copyright
attached. The Court noted that, as in this case, the copyright holder
"created a work at Defendant's request and handed it over intending that
Defendant copy and distribute it (Id. at 772) and was paid a fee
for doing so, resulting in an implied non-exclusive license to the
Defendant to use its work. The Court of Appeals quoted with approval the
conclusion of the District Court:
As a matter of law only one conclusion can be
drawn from these undisputed facts: `shaver [the
copyright holder] granted the airport a
non-exclusive license to use his drawings as the
basis for preparing working drawings and
completing the project. Shaver's argument that the
Airport can use the drawings only as pieces of
paper (wall hangings?, placemats?) is untenable'
(quoted from 74 F.3d 768 at 772).
Distinguishing between an exclusive license which by statute must be in
writing, the Court held that a non-exclusive license may be implied from
conduct, and, against a factual background very similar to the instant
case, held that it was. Indeed, the instant case is in a way stronger
than I.A.E. Incorporated because the disputed drawing in this
case contains no copyright notice; Shaver had clearly marked his design
drawings as copyrighted.
Holtzbrinck, supra involves the creation of the Scientific
American website for a substantial payment pursuant to an oral agreement.
Assuming that parties failed to satisfy the requirements of the Copyright
Act to support a finding of express license, the Court held that,
having paid for the development of the work, Holtzbrinck
was entitled to an irrevocable nonexclusive license to use the programs
and files comprising the website. Relying on Graham v. James,
144 F.3d 229, 235 (2d Cir. 1998), the Court, in Holtzbrinck held
that an implied nonexclusive license is granted when a person, the
licensee, requests the creation of a work, the creator, the licensor,
makes that particular work and delivers it to the licensee with the
understanding that the licensee will copy and distribute the work.
Accordingly, this Court concludes as a matter of law that Banfi and
Concha Y Toro at the very least, possess a permanent implied
non-exclusive license to use the work.
As an alternative ground, the Court concludes that the conceded facts
suggest that Long and Greener were co-authors of the work. By delivering
the work to Banfi in return for a substantial payment and without any
warning that a copyright would be claimed adversely to Banfi after Banfi
used what it paid for, Long and Greener should be found as a matter of
law to have consented to an implied non-exclusive license of the work in
favor of Banfi. Their consent as co-authors binds the Plaintiff.
We leave the issue of implied license and turn to a closer question
presented, and that is: Does the logo as finally used by Concha Y Toro
infringe the work of Plaintiff submitted as part of the Deliverable?
Ordinarily, Courts confronted with infringement begin with the issue of
finding access, infer from the infringing work and the copyrighted
work set down side-by-side, that there must have been copying because of
the similarities of the respective works. Here, in this case, there is no
question about access, because, as noted earlier, Muts&Joy attended
the presentation of the Deliverable to Banfi with the express purpose, as
recommended by Long and Greener, of reworking the idea of the icon
recommended by Leapfrog to Banfi, so that it would be commercially usable
as a trademark.
It was the conceded purpose of Muts&Joy to present something "close
to the research". (See Exhibit C to Document 75). There are
just so many ways to present the concept of a bull and the initial
presentation was done with clip art in the public domain. The bull, as
presented in the Deliverable, is a mere outline, intentionally foggy,
showing large horns characteristic of a Texas Longhorn with a wider head
of the sort attributable to a Holstein-Friesian. As finally presented by
Muts&Joy, the bull's head is somewhat darker and the horns somewhat
flattened. In the Plaintiff's work, the shell appears to the right of the
bull and is not clearly delineated from the bull's face. In the
Muts&Joy logo, the shell appears on the observer's left and the bull
appears on the right. This is consistent with the order in which the
shell and bull appear in the name. The shell is distinctly rendered, so
as to appear on a different visual plane than the bull's head and extends
slightly over the edge of the border. We are told that some of the
members of the focus group found the bull originally depicted as
aggressive and threatening. This is not the Court's impression but a
reasonable person might think so. In the Muts&Joy rendition, the bull
probably appears less ominous and the bull's head is level rather than
tilted. Joy Greene, a principal of Muts&Joy, testified that the
balance between the bull and shell elements was materially different,
and that the total impression between the two works is entirely
different. This Court agrees.
A conclusion of non-infringement follows when an ordinary observer
would determine that the total concept and feel of the two works is
different. Such differences may result from lighting, shading and color.
See, e.g. Kaplan v. Stock Market Photo Agency, 133 F. Supp.2d 317,
321-28 (S.D.N.Y. 2001) (photographs of a man standing on the ledge
of a tall building held not to be infringing because of different moods
being perceived by the observer as a result of differences in lighting,
shading and color). See also Kerr v. New Yorker Magazine, Inc.,
63 F. Supp.2d 320 (S.D.N.Y. 1999) (two drawings of a man with a Mohawk
haircut with a Manhattan skyline superimposed did not infringe because of
a difference in the contours and a different positioning of the man's
head). The Court concludes that the Muts&Joy logo is sufficiently
different from Plaintiff's work, by which it was clearly inspired, as to
be non-infringing because it conveys a different impression.
The Court agrees with Defendants that the State law claims pleaded
against Concha Y Toro and Banfi must be dismissed because they are
preempted by the Copyright Act. Finding no infringement, this Court need
not reach the issue of whether the copyright registration is invalid
because it fails to disclose the use of the clip art, and Defendants lack
standing to assert invalidity, absent infringement.
The motions by Defendants for Summary Judgment dismissing the Complaint
both are granted. The Motion of Plaintiff for partial Summary Judgment on
the issue of infringement is
denied. So much of the Motion by Defendants Long and Greener, which
seeks Summary Judgment on the counterclaim, is denied. The cross claims
are dismissed without prejudice.
The Clerk shall file a final judgment.