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GEMMY INDUSTRIES CORP. v. CHRISHA CREATIONS LTD.

June 23, 2004.

GEMMY INDUSTRIES CORPORATION, Plaintiff,
v.
CHRISHA CREATIONS LIMITED, QUAY RICHERSON and ALSTO, Defendants.



The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge

OPINION

Defendants Chrisha Creations Limited ("Chrisha") and Quay Richerson ("Richerson") have moved to dismiss the complaint of plaintiff Gemmy Industries Corporation ("Gemmy") pursuant to Fed. R. Civ. P. 12(b)(6), and for summary judgment dismissing the Gemmy complaint pursuant to Fed.R.Civ.P. 56. For the reasons set forth below, the motion is granted.

Prior Proceedings

  Gemmy commenced this action in the United States District Court for the District of Kansas on October 21, 2003, by filing its complaint followed by the First Amended Complaint on November 17, 2003, alleging nine causes of action: copyright infringement, unfair competition, violation of the Uniform Trade Secrets Act, violation of fiduciary duty, breach of implied contract, patent infringement, injunction and attorneys' fees, arising out of the defendants' sale of self-inflating outdoor decorations (the "Kansas action"). Chrisha filed its complaint seeking injunctive relief against Gemmy in this Court on November 12, 2003 (the "New York action"). On January 28, 2004, the Honorable John W. Lungstrum, Chief Judge, transferred the Kansas action to this Court and on March 5, 2004, the New York action and the Kansas action were consolidated under the caption of the Kansas action (the "consolidated action"). Gemmy in the Kansas action moved for a preliminary injunction and Chrisha and Richerson moved to dismiss and for transfer and for summary judgment. Motion practice and discovery ensued. Gemmy discontinued its action against Alsto.

  On February 11, 2004, a hearing was held on Chrisha's motion. Additional materials were submitted on February 27, 2004, March 15, 2004, and April 9, 2004.

  The Facts

  The following facts are established by the Chrisha Statement of Undisputed Material Facts, the affidavits and depositions submitted, and are undisputed except as noted below.

  Gemmy is a Texas corporation with its principal place of business in Irving, Texas, and sells self-inflating outdoor decorations among other products for 20 years. Chrisha is a Rhode Island corporation with its principal place of business in Greenville, Rhode Island, and has been selling toys, holiday and seasonal accessories, decorations and costumes for 17 years. Richerson is a resident of Sisters, Oregon and president of LSA of Oregon, Inc. and has been an independent sales representative for Chrisha since 1988, and acted in a similar capacity for Gemmy in 1999 until the fall of 2003. Gemmy and Chrisha sell their products to retailers or distributors who in turn sell the products to the consumer.

  In August 2000, Gemmy began developing a prototype for a new product, a line of inflatable outdoor decorations. The initial prototype was inflated by a hair dryer through a long tube. In October 2000, Gemmy showed the prototype at a meeting for approximately thirty representatives of retailers. Some of those representatives requested and were provided with quote sheets. The quote sheet provided specifications on the prototype, including an estimated price for the produce, measurements, and sometimes weights. No sales orders for the prototype were taken or provided at that time.

  In January 2001, the prototype was altered in that the hair dryer was replaced with a box fan that inflated the prototype through a long tube.

  The first airblown inflatable figures were shipped in May 2001. Each airblown inflatable is made up of a base containing a fan unit, an inflatable body attached to the base, and a string of enclosed lights extending through the inflatable body.

  Gemmy obtained Copyright Registration No. VA 1-151-537 for the airblown stationary Santa with Ho Ho Ho on November 12, 2002, Copyright Registration No. VA 1-103-387 for the airblown stationary Snowman on May 2, 2001, and Copyright Registration No. VA 1-103-392 for the Airblown Stationary Pumpkin-Vertical on May 2, 2001, and Copyright Registration No. VA 1-199-889 for the Airblown Polar Bear on March 13, 2003.

  Gemmy's airblown inflatables are sold in distinctive boxes. The shape and die cut of Gemmy's distinctive boxes is accurately depicted in Exhibits G and H. Exhibit G depicts the inside of Gemmy's box and Exhibit H depicts the outside of Gemmy's box.

  An employee of Gemmy took pictures of Chrisha's box. Exhibit I depicts the inside of Chrisha's box and Exhibit J depicts the outside of Chrisha's box. These photographs are true and accurate representations of the actual box in which Chrisha's inflatable figures are sold.

  Tsai Chin-Cheng filed for a patent on January 9, 2002 and obtained United States Patent 6,644,843 entitled Inflatable Figure Assembly (the "'843 Patent"). The `843 Patent issued on November 11, 2003 and is directed generally to the products described herein as Gemmy's airblown products. Exhibit K is a true and correct copy of the '843 Patent. The '843 Patent was assigned to Gemmy on January 21, 2003. Tsai Chin-Cheng is the true and correct inventor of the invention claimed in the '843 Patent.

  In the spring of 2000, Richerson began representing Gemmy by making sales primarily to Fred Meyer and Kroger retailers and had access to Gemmy's airblown inflatable product line.

  Daniel G. Flaherty, the president of Gemmy ("Flaherty") has claimed that the information obtained by Richerson was confidential. Richerson has denied any confidentiality, and no document setting forth any confidentiality agreement has been submitted.

  Chrisha did not at any time copy the construction of any Gemmy product. William Machala, the president of Chrisha ("Machala") initiated the construction and design of Chrisha's inflatable products in 2001 and commissioned what became the first construction of a Chrisha prototype inflatable product. He instructed Shirley Lin, vice general manager at Shanghai Toy Art requesting that Toy Art create a snowman design for Chrisha's inflatable snowman product based on the design of a plush toy snowman that Chrisha has been selling since 2000.

  Chrisha's Santa, Snowman and Pumpkin inflatable designs were independently created by and for Chrisha by Great Success Toys and Shanghai Toy Art located in China ("Toy Art"). Chrisha has been selling these inflatable products that were independently created for Chrisha since approximately 2002.

  Gemmy's copyright registrations pertaining to its Snowman, Pumpkin and Santa Clause inflatable body designs are annexed to its complaints. The copyright certificates do not indicate that Gemmy's works are derivative works or the specific aspects or elements of expressions contained within the "three dimensional sculptures" for which copyright is sought.

  Chrisha's Snowman Inflatable Design

  Chrisha's design for its inflatable Snowman placed at issue in this action by Gemmy was independently created for Chrisha by Toy Art pursuant to Machala's instructions.

  The Gemmy and Chrisha Snowmen possess certain stereotypical attributes: black eyes, smiling faces, rosy cheeks. Chrisha's Snowman has a three dimensional face with a long pointed carrot nose, and eyes like coal. The Gemmy Snowman face is printed onto the fabric and is not three dimensional. The Chrisha Snowman is wearing a tall black top hat with a red ribbon. The Gemmy Snowman is wearing a short-cropped hat that looks like a derby, and is carrying a rather large inflatable candy cane. The Chrisha Snowman wears a long red and white striped scarf, while the Gemmy Snowman wears a shorter green and red striped scarf.

  The Chrisha Snowman's mouth is three dimensional in the form of an open lipped smile with lips open approximately one inch. The Gemmy Snowman has a single line as a smile depicting a closed mouth and its body design is the three round snow balls, each becoming smaller approaching the head. The Chrisha Snowman's body has no clear delineation or reference to three snow balls. Both Snowmen are wearing gloves, but the Chrisha Snowman's gloves are green with cuffs, and Gemmy's Snowman's gloves are blue with no cuffs.

  No evidence has been presented to establish that Chrisha had access to the Gemmy Snowman.

  Machala prepared a sketch for Toy Art to create the Chrisha three stack pumpkin inflatable product indicating that each pumpkin face in the three stack pumpkin inflatable product should look different, that a stem should be placed on the top ...


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