Craft Smith, LLC v. EC Design, LLC

969 F.3d 1092

CRAFT SMITH, LLC, a California limited liability company, Plaintiff Counterclaim Defendant - Appellee,

v. EC DESIGN, LLC, a California limited liability company, Defendant Counterclaimant - Appellant,andMichaels Stores, Inc., a Delaware corporation, Counterclaim Defendant - Appellee.

No. 19-4087

United States Court of Appeals, Tenth Circuit.

FILED August 11, 2020

Juliette P. White (Kristine M. Johnson and Alan S. Mouritsen with her on the briefs), of Parsons Behle & Latimer, Salt Lake City, Utah, for Defendant Counterclaimant-Appellant.

R. Parrish Freeman (Charles J. Veverka and Daniel R. Barber with him on the brief), of Maschoff Brennan P.L.L.C., Park City, Utah, for Plaintiff Counterclaim Defendants-Appellees.

Before HARTZ, PHILLIPS, and MORITZ, Circuit Judges.

PHILLIPS, Circuit Judge.

Since 2007, EC Design, LLC, has been selling its popular personal organizer, the LifePlanner. In 2015, Craft Smith, Inc., wanting to enter the personal-organizer market, reached out to EC Design about a possible collaboration. Failing to join forces with EC Design, Craft Smith, with input from Michaels Stores, Inc., designed and developed a personal organizer to sell in Michaels stores, leading to this action in Utah federal district court. EC Design has asserted that the Craft Smith and Michaels product infringes on the LifePlanner's registered compilation copyright and unregistered trade dress. The district court disagreed, granting summary judgment in favor of Craft Smith and Michaels (collectively, the Appellees) on both issues. On the copyright issue, the district court concluded that EC Design does not own a valid copyright in its asserted LifePlanner compilation. Though we disagree with how the court framed this issue, we affirm because no reasonable juror could conclude that the allegedly infringing aspects of Appellees’ organizer are substantially similar to the protected expression in the LifePlanner compilation. On trade dress, the district court held that EC Design had failed to create a genuine issue of material fact over whether the LifePlanner's trade dress had acquired secondary meaning. We agree.

Accordingly, exercising jurisdiction under 28 U.S.C. § 1291, we affirm the district court's grant of summary judgment in favor of Appellees on both claims.

BACKGROUND

I. EC Design's LifePlanner

Erin Condren, EC Design's founder, designed the LifePlanner personal organizer to help users better plan their lives. To do so, the LifePlanner provides users with weekly and monthly calendars, which are color-coded and laid out helpfully. In addition to the calendars, the LifePlanner has colorful artwork, spaces for the user to write notes, inspirational quotations, and various other textual elements, all of which are interspersed throughout the entire planner. All these features are bound together by a single metal coil and enclosed between plastic-laminated front and back covers. And every year, users can select a LifePlanner to their liking from one of EC Design's many color/art options.

The LifePlanner contains three labeled sections—introductory, monthly, and notes.¹ The introductory section comprises a notes page, an ownership page, and a two-page spread of monthly thumbnail calendars. After the thumbnail calendars comes another two-page spread containing "an inspirational statement spanning the top of both pages" and six different-colored boxes on each page. App. vol. 18 at 4784. The introductory section ends with a lined page for notes. The monthly section follows. It contains color-coordinated tabs for each month, inspirational quotations to start each month, monthly calendars spread over two pages (with space on one side for notes), weekly calendars (horizontal or vertical layout), and a notes page. The LifePlanner concludes with the notes section, which is signaled by a different color from the previous months and is labeled "NOTES." Id. at 4792–93. Several lined, graphical, and blank pages follow, along with a two-page spread of the next year's calendar, with rectangular boxes at the bottom for notes. The notes section concludes with several pages of stickers, a cutaway folder, and a pocket to place things.

Though this overall layout has stayed relatively constant, each passing year brings a variety of changes, distinguishing each year's LifePlanner from previous versions. Some changes occur every year—new text/artwork and updated calendars. Additional changes are made occasionally to the organizer's fundamental layout and look. These new offerings often reflect customer surveys, for instance, 2015's horizontal weekly calendar layout and hardbound-cover version.

Through the years, EC Design has registered trademarks in "LifePlanner," "Erin Condren," and the asterisk symbols adorning all its products. For the LifePlanner specifically, EC Design has registered three copyrights in the 2016/2017 version.² Only one of those registrations relates to this appeal: U.S. Registration No. VA 2-072-725 (‘725 Registration), which ties to the "2016/2017 Vertical LifePlanner Compilation."³ App. vol. 16 at 4214. This registration covers "2-D artwork, compilation of introductory and section phrases, graphics" and excludes "[c]alendar arrangement and calendar text." Id.

II. Craft Smith Enters the Personal-Organizer Market

In October 2015, Craft Smith took steps towards entering the personal-planner market.⁴ At that time, Craft Smith reached out to Michaels—Craft Smith's biggest customer—about creating a new spiral-bound organizer that would be "like ... the current Erin Condren Life Planner."⁵ App. vol. 32 at 8448, 8512. As this comment reflects, Craft Smith sought to emulate the LifePlanner with its own product. For example, it used a LifePlanner sample to obtain pricing estimates from the manufacturer. As a result, the manufacturer's quote to Craft Smith was based on the LifePlanner's "size," "quality of spiral," and "laminated type cover."⁶ Id. at 8508, 8512 (noting that the manufacturer's quote was "based on everything you see in the EC planner"). Further, Craft Smith designed its organizer with the same "pagination and sheet counts" as the LifePlanner. Id. at 8508.

By April 2016, Michaels agreed to sell Craft Smith's new organizer in its stores—called the Recollections Planner. Soon thereafter, Michaels asked Craft Smith to compare the Recollections Planner with the LifePlanner to ensure that they were "not too similar." App. vol. 32 at 8600. In particular, Michaels sought assurance from Craft Smith that the organizers had different artwork and quotations. Craft Smith satisfied itself and Michaels that the artwork and quotations sufficiently differed from EC Design's, so, according to EC Design, the review led to no changes. And in October 2016, the Recollections Planner went on sale at Michaels.

III. Procedural Background

On November 29, 2016, soon after the Recollections Planner went on sale, EC Design notified Craft Smith and Michaels that the Recollections Planner infringed the LifePlanner's copyright and trade dress. In response, Craft Smith sought a declaratory judgment in Utah federal district court that it had infringed neither.

EC Design counterclaimed, joining Michaels to the suit and asserting copyright and trade-dress infringement claims, along with related state-law claims.⁷ After discovery, both sides filed motions for summary judgment on the copyright and trade-dress claims. The district court granted Appellees’ motion on the copyright and trade-dress claims, denied EC Design's motion, and declined to exercise supplemental jurisdiction over EC Design's state-law claims after disposing of the federal claims. EC Design timely appealed, challenging the district court's grant of summary judgment against its copyright and trade-dress claims.

DISCUSSION

We review de novo a district court's grant of summary judgment, using "the same standard applied by the district court." Sally Beauty Co. v. Beautyco, Inc. , 304 F.3d 964, 971 (10th Cir. 2002) (citation omitted). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "We view all facts and evidence in the light most favorable to the party opposing summary judgment." Blehm v. Jacobs , 702 F.3d 1193, 1199 (10th Cir. 2012) (alteration omitted) (internal quotation marks and citation omitted).

I. Copyright Infringement

Copyright infringement requires that the plaintiff prove two elements: "(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original." Id. (quoting Feist Publ'ns Inc. v. Rural Tel. Serv. Co. , 499 U.S. 340, 361, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991) ) (internal quotation marks omitted); see also Enter. Mgmt. Ltd., Inc. v. Warrick , 717 F.3d 1112, 1117 (10th Cir. 2013) ("There are two elements to a copyright infringement claim; a plaintiff must show both ownership of a valid copyright, and copying of protectable constituent elements of the work." (citations omitted)). This appeal concerns both elements.

We hold that though EC Design owns a valid copyright in the LifePlanner compilation (element one), EC Design has failed to raise a genuine issue of material fact concerning the required substantial similarity between the LifePlanner compilation's protected expression and Appellees’ allegedly infringing organizer (element two). Thus, we affirm the district court's grant of summary judgment.

A. Element One: Valid Copyright

To meet the first element of a copyright-infringement claim, a plaintiff must demonstrate ownership of a valid copyright in the allegedly infringed work. See Blehm , 702 F.3d at 1199 ; 4 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 13.01[A] (2020) [hereinafter Nimmer on Copyright ]. Often, a party accomplishes this by producing a certificate of registration from the Copyright Office. Jacobsen v. Deseret Book Co. , 287 F.3d 936, 942 (10th Cir. 2002) (f...