Design Ideas, Ltd. v. Meijer, Inc.

DESIGN IDEAS, LTD., an Illinois Corporation, Plaintiff, v. MEIJER, INC., a Michigan corporation;WHITMOR, INC., a Delaware corporation;and THE TJX COMPANIES, INC., a Delaware corporation, Defendants.

No. 15-cv-03093

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF ILLINOIS SPRINGFIELD DIVISION

August 25, 2016

OPINION

SUE E. MYERSCOUGH, U.S. District Judge.

The parties have filed partial motions for summary judgment. Because the undisputed facts show that Defendants infringed on Plaintiff's valid copyright, Plaintiff's Motion for Partial Summary Judgment (d/e 96) is GRANTED. Defendants' Motion for Partial Summary Judgment on Plaintiff's Copyright Claims (d/e 68) and Motion for Summary Judgment (d/e 71) are DENIED.

I. INTRODUCTION

Plaintiff is an Illinois corporation engaged in the business of creating, manufacturing, and distributing a range of decorative housewares. Plaintiff originally filed suit in May 2015. On November 10, 2015, Plaintiff filed a First Amended Complaint against Defendants Meijer, Inc. (Meijer), Whitmor, Inc. (Whitmor), and the TJX Companies, Inc. (TJX). Meijer is a Michigan corporation with its principal place of business in Grand Rapids, Michigan. Meijer's website describes the company as a privately-held company that has manufacturing facilities, distribution centers, and 200 stores.

Whitmor is a Delaware corporation with its principal place of business in Southaven, Mississippi. Whitmor's website indicates that Whitmore is a family-owned business and privately held company that has been "bringing organization home" to consumers around the world. Whitmore makes products that are sold at numerous stores, such as Amazon, Target, and Wal-Mart. TJX is a Delaware corporation with its principal place of business in Framingham, Massachusetts. TJX does business under the names Marshalls, T.J. Maxx, and HomeGoods.

Plaintiff alleges numerous causes of action against Defendants, including copyright infringement under the Copyright Act of 1976, federal unfair competition under the U.S. Trademark Act, violations of the Digital Millennium Copyright Act, common law unfair competition, the Illinois Consumer Fraud and Deceptive Practices Act, and breach of contract. See First Am. Compl. ¶ 1 (d/e 42). As is relevant to the pending motions for summary judgment, Plaintiff alleges that Defendants have infringed on Plaintiff's copyrighted product, Sparrow Clips. A Sparrow Clip is a clothespin with a silhouetted bird design on top. See Appendix 1 (image of Sparrow Clips). Plaintiff seeks partial summary judgment on Count I (copyright infringement) that (1) Plaintiff "owns a valid copyright to its SPARROWCLIPS work" and (2) Defendants "infringed that copyright by producing and selling exact copies of [Plaintiff's] protected expression." Pl. Mot. at 68 (d/e 96).

Defendants seek partial summary judgment on Count I (copyright infringement) and Count IV (violation of the Digital Millennium Copyright Act). Defendants argue that both Counts I and IV require a valid copyright as a necessary element of thoseclaims. According to Defendants, Plaintiff cannot prove the existence of a valid copyright because Sparrow Clips are not sufficiently creative to be copyrightable, and the Sparrow Clips are useful articles not subject to copyright protection.

II. BACKGROUND

The parties dispute the materiality and/or accuracy of many of the facts in this case. Taking into account those disputes, the Court sets forth the following factual background.

1. Pititas Waiwiriya created the bird clothespin design and sold the copyright to Plaintiff.

In 2007, Pititas Waiwiriya of Thailand created the bird-clothespin design that is the basis for the Sparrow Clips. He took inspiration from his memories of playing in his family's garden with birds and from a visit to his mother's house in the country where Mr. Waiwiriya saw birds landing, perching, and taking off from a clothesline. Mr. Waiwiriya was also influenced by the Danish architect, Arne Jacobsen, and he sought to make a bird-clothespin sculpture that presented a sleek, modern design.

Mr. Waiwiriya used computer-aided design software to create his bird design, first by drawing linear geometric shapes, which hethen rounded and merged into the bird silhouette shape. He did not copy the two-dimensional outline or three-dimensional shape of his bird design from any source. Mr. Waiwiriya's intention in creating the bird-clothespin sculpture was to create an art piece and not a product for sale.

Mr. Waiwiriya first displayed the bird-clothespin design at the Living Design Center Ozone exhibition during the 2007 Tokyo Design Week. The initial design featured a clipping mechanism that was not strong enough to hold anything or stand up straight. That is, Mr. Waiwiriya intended that the clipping mechanism be used to attach the bird to objects as decoration but not for objects of weight to hang from the clip. A visitor to the art fair suggested that Mr. Waiwiriya improve the clip so that he could use the design to hang items from the clip and sell it to others for that purpose. Mr. Waiwiriya subsequently improved the clip's spring so that the "bird pin design" could hold items. Declaration ¶ 17 (d/e 113).

In 2008, Mr. Waiwiriya exhibited his bird-clothespin design at the Bangkok design fair, where Plaintiff's president, Andy Van Meter, saw the product and expressed his interest in purchasing it.The parties dispute whether Mr. Waiwiriya sold his bird-clothespin design to Plaintiff in July 2008.

According to Plaintiff, Mr. Waiwiriya executed a Royalty Agreement on July 2, 2008 that transferred to Plaintiff "the entire right, title and interest in and to the Products and worldwide Intellectual Property on such Products." See Mr. Waiwiriya Declaration ¶ 23, Ex. M (copy of an unexecuted Royalty Agreement that Mr. Waiwiriya purportedly received in 2008) (d/e 113). The Royalty Agreement provided that the term "Products" meant "all products listed on Exhibit A of this Agreement." Id.

Exhibit A, which specifically indicated that the Exhibit was "part and parcel of the Royalty Agreement," identified the Products as "Sparrow Clip." Exhibit A provided for an advance to Mr. Waiwiriya of $3,100 and payment of a 4% royalty on sales of his bird-clothespin design exceeding $37,000. Mr. Waiwiriya also retained the rights to sell the listed item in Thailand and France and the right to display and sell the item in Design Boom, a digital magazine for architecture and design.

However, Plaintiff has been unable to locate a signed copy of the 2008 Royalty Agreement but has located a copy of Exhibit A tothe 2008 Royalty Agreement signed by Plaintiff and Mr. Waiwiriya. On March 23, 2013, after Plaintiff discovered that it could not locate a copy of the 2008 Royalty Agreement with Mr. Waiwiriya's signature, Mr. Waiwiriya signed a Royalty Agreement that Plaintiff claims ratified the 2008 agreement. Defendants dispute that the 2013 agreement ratified any 2008 agreement. As will be discussed further in the analysis portion of this Opinion, the date Mr. Waiwiriya transferred the copyright to Plaintiff is important because a plaintiff cannot bring an infringement action unless he was the owner of the copyright at the time the infringement occurred or received an assignment of the right to sue for copyright infringement that occurred before the transfer of ownership.

The parties do not dispute that Chris Hardy, Plaintiff's design director, selected the colors for the Sparrow Clips. Mr. Hardy looked through different books of color chips from the Pantone Company, which contains thousands of colors. Mr. Hardy selected the green, blue, orange, and red colors used for the Sparrow Clips. Defendants do not dispute that Hardy did not copy his selection of colors for the Sparrow Clips from any source, although they contend the fact is immaterial. While Plaintiff claims to distributeSparrow Clips in sets of the four colors selected by Mr. Hardy, Defendants dispute this, asserting that the Sparrow Clips are also sold in black. In fact, in July 2013, Plaintiff and Mr. Waiwiriya executed a separate "Exhibit A" for black Sparrow Clips.

Plaintiff began marketing Sparrow Clips in its 2009 catalog and has featured Sparrow Clips in its catalogs ever since. Plaintiff's catalogs feature prominent copyright notices indicating that the product designs contained in the catalogs, and not just the catalogs themselves, are protected by copyright. On April 11, 2013, one week after Plaintiff filed for a copyright on the Sparrow Clips, as discussed in more detail below, Plaintiff filed an amendment with the Copyright Office pertaining to the 2009 catalog. Plaintiff stated that Plaintiff "is not claiming as part of the above-referenced copyright, the 'Sparrow Clips' featured on page 164 of the deposit." Defs. Opp. Ex. V (d/e 107-21). The reference to "deposit" apparently refers to the catalog that was deposited with the Copyright Office. See, e.g., Design Ideas, Ltd. v. Yankee Candle Co., Inc., No. 10-cv-3217, 2011 WL 1827981, at *1 (C.D. Ill. 2011) (noting that the Spring 2006 catalog was deposited with the registration filed with the U.S. Copyright Office).

According to Plaintiff, the packaging for Sparrow Clips contains prominent copyright notices indicating that the product design is protected by copyright. Defendants dispute this, asserting that the packaging contains a single copyright notice on the back side and that there is no indication that the notice applies to the actual Sparrow Clip but instead plainly applies to the text of the packaging. In that text, Plaintiff advertises Sparrow Clips as "fashionable as well as functional."

2. Plaintiff solicited additional designs from Mr. Waiwiriya in 2011.

Defendants claim that the evidence shows that Mr. Waiwiriya did not transfer the copyright to Plaintiff in 2008 and that the bird design is a useful article not subject to copyright.

In February 2011, Plaintiff solicited from Mr. Waiwiriya other designs...