Silvertop Assocs. Inc. v. Kangaroo Mfg. Inc.

931 F.3d 215

SILVERTOP ASSOCIATES INC., dba Rasta Imposta

v.KANGAROO MANUFACTURING INC., Appellant

No. 18-2266

United States Court of Appeals, Third Circuit.

Argued April 3, 2019

Filed: August 1, 2019

Alexis Arena [Argued], Flaster Greenberg, 1835 Market Street, Suite 1050, Philadelphia, PA 19103, Eric R. Clendening, Flaster Greenberg, 1810 Chapel Avenue West, Cherry Hill, NJ 08002, Attorneys for Appellee

David A. Schrader [Argued], Paykin Krieg & Adams, 750 Third Avenue, 9th Floor, New York, NY 10017, Attorney for Appellant

Before: CHAGARES, HARDIMAN, Circuit Judges, and GOLDBERG, District Judge.^*

OPINION OF THE COURT

HARDIMAN, Circuit Judge.

This interlocutory appeal involves the validity of a copyright in a full-body banana costume. Appellant Kangaroo Manufacturing Inc. concedes that the banana costume it manufactures and sells is substantially similar to the banana costume created and sold by Appellee Rasta Imposta. See infra Appendix A. Yet Kangaroo claims that Rasta cannot hold a valid copyright in such a costume’s "pictorial, graphic, or sculptural features." 17 U.S.C. § 101. This dispute presents a matter of first impression for our Court and requires us to apply the Supreme Court’s recent decision in Star Athletica, L.L.C. v. Varsity Brands, Inc. , ––– U.S. ––––, 137 S. Ct. 1002, 197 L.Ed.2d 354 (2017). We hold that, in combination, the Rasta costume’s non-utilitarian, sculptural features are copyrightable, so we will affirm the District Court’s preliminary injunction.

I

This dispute stems from a business relationship that went bad. In 2010, Rasta obtained Copyright Registration No. VA 1-707-439 for its full-body banana costume. Two years later, Rasta began working with a company called Yagoozon, Inc., which purchased and resold thousands of Rasta’s banana costumes. Yagoozon’s founder, Justin Ligeri, also founded Kangaroo and at all relevant times was aware of Rasta’s copyright registration in the banana costume. After the business relationship between Rasta and Yagoozon ended, Rasta’s CEO, Robert Berman, discovered Kangaroo selling a costume that resembled his company’s without a license.

Rasta sued Kangaroo for copyright infringement, trade dress infringement, and unfair competition. After settlement discussions were unsuccessful, Rasta moved for a preliminary injunction and Kangaroo responded by moving to dismiss. The District Court granted the motion for a preliminary injunction and explained its reasons for doing so in a thorough opinion. See Silvertop Assocs., Inc. v. Kangaroo Mfg., Inc. , 319 F. Supp. 3d 754 (D.N.J. 2018). It also dismissed the unfair competition count. Kangaroo appealed, but because the District Court had not entered an order detailing the injunction’s terms, we granted the parties’ motion to remand for the limited purpose of entering a corrected order. The District Court amended its order, and the injunction is now ripe for review on appeal.

II

The District Court had jurisdiction under 28 U.S.C. §§ 1331 and 1338(a). We have jurisdiction under 28 U.S.C. § 1292(a)(1). We review the District Court’s conclusions of law de novo and its ultimate decision to grant the preliminary injunction for abuse of discretion. Child Evangelism Fellowship of N.J. Inc. v. Stafford Twp. Sch. Dist. , 386 F.3d 514, 524 (3d Cir. 2004).¹

III

Kangaroo claims the injunction should not have issued because Rasta is not likely to succeed on the merits of its copyright infringement claim.² According to Kangaroo, Rasta does not hold a valid copyright in its banana costume. Whether Rasta’s copyright is valid is a question of law, which makes our review plenary. See Masquerade Novelty, Inc. v. Unique Indus. , 912 F.2d 663, 667 (3d Cir. 1990).³ And we must remain "cognizant of the Supreme Court’s teaching that copyrights protect only expressions of ideas and not ideas themselves." Id. at 671 (citing Mazer v. Stein , 347 U.S. 201, 217, 74 S.Ct. 460, 98 L.Ed. 630 (1954) ).

We begin by analyzing whether non-utilitarian, sculptural features of the costume are copyrightable by determining whether those features can be identified separately from its utilitarian features and are capable of existing independently from its utilitarian features. See 17 U.S.C. § 101 ; Star Athletica , 137 S. Ct. at 1008. We then consider whether the merger and scenes a faire doctrines render the costume ineligible for copyright protection. We conclude that the District Court did not err when it held that Rasta is reasonably likely to prove ownership of a valid copyright.

A

"A valid copyright extends only to copyrightable subject matter." Star Athletica , 137 S. Ct. at 1008. Copyrightable subject matter means "original works of authorship fixed in any tangible medium of expression." 17 U.S.C. § 102(a). Originality is a very low bar, requiring "only a minimal amount of creativity." Kay Berry, Inc. v. Taylor Gifts, Inc. , 421 F.3d 199, 207 (3d Cir. 2005). "Works of authorship include ... pictorial, graphic, and sculptural works," 17 U.S.C. § 102(a)(5), which are "two-dimensional and three-dimensional works of fine, graphic, and applied art, [etc.]," id. § 101. "And a work of authorship is ‘fixed in a tangible medium of expression when it is embodied in a’ ‘material object ... from which the work can be perceived, reproduced, or otherwise communicated.’ " Star Athletica , 137 S. Ct. at 1008 (internal quotation marks and alterations omitted) (quoting 17 U.S.C. § 101 ).

A special rule applies to "useful article[s]," i.e. , those which have "an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information." Id. (quoting 17 U.S.C. § 101 ). Without more, they may not receive protection as such. Id. Instead, useful articles that "incorporate[ ] pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article" may be eligible for protection of those features alone. Id. (quoting 17 U.S.C. § 101 ). Thus, separability analysis determines whether a useful article contains copyrightable features.

A useful article’s design feature "is eligible for copyright if, when identified and imagined apart from the useful article, it would qualify as a pictorial, graphic, or sculptural work either on its own or when fixed in some other tangible medium." Id. at 1012 (describing separability analysis). So we ask two questions: (1) can the artistic feature of the useful article’s design "be perceived as a two- or three-dimensional work of art separate from the useful article[?]" and (2) would the feature "qualify as a protectable pictorial, graphic, or sculptural work either on its own or in some other medium if imagined separately from the useful article[?]" Id. at 1016.

The first requirement "is not onerous. The decisionmaker need only be able to look at the useful article and spot some two- or three-dimensional element that appears to have pictorial, graphic, or sculptural qualities." Id. at 1010.

The second requirement, which is "ordinarily more difficult to satisfy," requires "that the separately identified feature has the capacity to exist apart from the utilitarian aspects of the article." Id. ("In other words, the feature must be able to exist as its own pictorial, graphic, or sculptural work as defined in § 101 once it is imagined apart from the useful article."). And that separate feature "cannot itself be a useful article or ‘an article that is normally a part of a useful article’ (which is itself considered a useful article)." Id. (alteration omitted) (quoting 17 U.S.C. § 101 ). We do not focus on "any aspects of the useful article that remain after the imaginary extraction." Id. at 1013. Nor does the work’s marketability or artistic merit bear on our analysis. See id. at 1015. Thus, the two-part inquiry effectively turns on whether the separately imagined features are still intrinsically useful.

We have explained that we do not analyze each feature in isolation; instead, a "specific combination of elements" that gives a sculpture "its unique look" could be eligible for copyright protection. Kay Berry , 421 F.3d at 209 (emphasis added). Those combined features may include "texture, color, size, and shape," among others, and it "means nothing that these elements may not be individually entitled to protection." Id. at 207 ; see also Star Athletica , 137 S. Ct. at 1012 (analyzing the uniform designs’ "arrangement of colors, shapes, stripes, and chevrons" together, not individually).

The Supreme Court in Star Athletica found the two-dimensional design patterns on cheerleader uniforms eligible for copyright protection. Id. The uniform’s utilitarian "shape, cut, and dimensions" were not copyrightable, but "the two-dimensional work of art fixed in the tangible medium of the uniform fabric" was. Id. at 1013. Imagining those designs apart from the uniform did not necessarily replicate the useful article even though the designs still looked like uniforms. See id. at 1012.

The Star Athletica Court also provided helpful examples addressing three-dimensional articles. First, it reaffirmed its decision in Mazer , which held that a statuette depicting a dancer, intended for use as a lamp base, was eligible for copyright protection. Id. at 1011 (citing 347 U.S. at 214, 218–19, 74 S.Ct. 460 ). Second, the Court noted that a replica of a useful article (cardboard model car) could be copyrightable, although the underlying article (the car itself) could not. Id. at 1010. Finally, the Court noted that a shovel, "even if displayed in an art gallery," still has an intrinsic utilitarian function beyond portraying its appearance or conveying information. Id. at 1013 n.2. So it could not be copyrighted, even though a drawing of a shovel or any separately identifiable artistic features could. Id. We too have observed that "just because a sculpture is incorporated into an article that functions as other than a pure sculpture does not mean...