Annalee v . Townsend CV-03-327-JD 12/09/03 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Annalee Mobilitee Dolls, Inc., Charles E . Thorndike
v. Civil N o . 03-327-JD Opinion N o . 2003 DNH 215P Townsend Design Studios, Inc., Townsend D. Thorndike
REPORT AND RECOMMENDATION
The Plaintiffs have moved for a preliminary injunction
seeking to enjoin the Defendants from alleged copyright and trade
dress infringement, and from alleged false advertising,
pertaining to a soft sculpture Santa Doll that defendants intend
to produce and sell (document n o . 3 ) . Defendants have filed an
objection.
After considering the evidence presented during the
hearing, and the relevant authorities, I recommend that the court
deny Plaintiffs’ request for a preliminary injunction on their
copyright and trade dress infringement claims, and grant the
Plaintiffs’ request for a preliminary injunction on their false
advertising claim, except with regard to Defendants’ use of the photographs discussed herein.1
Background
A. The Parties
Annalee Mobilitee Dolls, Inc. (“AMD”) is a New Hampshire
corporation with a principal place of business in Meredith, New
Hampshire. AMD was incorporated in 1962 to design, produce and
distribute collectible handcrafted and soft sculptured dolls.
Barbara Annalee Davis (“Annalee”), at one time Annalee Thorndike,
had previously made such dolls, initially as a hobby, and
distributed several hundred through craft outlets. At one time
AMD employed more than 330 people in the Meredith production and
sales facility, but it now has all of its products made in China.
Plaintiff Charles E . Thorndike and defendant Townsend D.
Thorndike (“Townsend”) are sons of AMD founders Annalee and Chip
Thorndike. Charles Thorndike is the older of the two brothers,
and is Chairman of the Board of Directors of AMD.
Townsend was President of AMD until 1995 when he was
1 At the evidentiary hearing, Defendants stipulated to the entry of a preliminary injunction against them with regard to the use of a Sun emblem and the “Annalee Mobilitee Dolls” federally registered trademark, and requiring the Defendants to include a disclaimer on its commercial advertising. I recommend that those stipulations, discussed in more detail at the conclusion of this report, be made orders of the court.
2 replaced by Charles Thorndike. Townsend continues to own
approximately one-third of all AMD common stock, but only 12
percent of the voting stock. Townsend is a former director of
AMD, and participated in the design process of some of AMD’s
products.
Townsend Design Studios, Inc. (“Studios”) is owned and run
by Townsend. It is a New Hampshire corporation with a principal
place of business in Meredith, New Hampshire. Studios was
incorporated in May 2002 to design, produce and distribute
collectible soft sculpture dolls and artifacts. Studios operates
its doll-making business near the location where AMD formerly
made dolls while they were still made in Meredith. As of the
date of the injunction hearing, Studios had made seventy-five
Santa dolls.
Annalee, cofounder and inspiration for the AMD enterprise,
died in 2002. The bitter discord that exists within the
Thorndike family is at the heart of this case. Simply stated,
the issues in dispute are:
1. Should the Defendants be enjoined from offering for sale three versions of Santa dolls because they infringe upon AMD’s copyrights or trade dress?;2 and
2 A fourth doll, “Mrs. Santa,” was not included in the complaint, and is therefore not at issue in this suit.
3 2. Should Defendants be enjoined from implying in its advertising that AMD or Annalee endorsed or participated in the creation of Defendants’ products, and from displaying photographs of Annalee in any marketing capacity?
B. Facts
AMD and Studios are in the same business, the manufacture
and sale of collectible soft sculptured objects, including
poseable Santa Claus dolls. The headquarters of these two
corporations are located within one hundred and fifty yards of
each other.
AMD’s dolls are marketed with a stitched-in label
identifying the dolls as an AMD doll and identifying that the
doll was made in China. Studios manufactures, among other
things, a “Holly Santa” doll. Studios’ Santa doll also bears a
stitched-in label identifying the dolls as Studio’s dolls. In
addition, the Studios’ doll is packaged with a tag that
identifies the manufacturer as “Townsend Design Studios.” In
response to complaints from AMD, that tag contains the following
disclaimer: “Townsend Design Studios, Inc. designs and products
are not associated with Annalee Mobilitee Dolls, Inc.” Studios
manufactures and sells three versions of Santa dolls that AMD
4 alleges violates its copyrights and trade dress.3
1. AMD’s Copyrighted Santas
AMD copyrighted a number of its Santa dolls and Santa faces
over a period of years. AMD has identified seven copyrights with
respect to which plaintiffs seek preliminary injunctive relief.
See P l . Ex. 2-8.
AMD’s 1 8 " M r . Santa (copyright Registration N o . VA-116-215,
renewal registration RE-726-217) appears to be approximately 1 8 "
tall. See P l . Ex. 2 . The doll is wearing a red coat trimmed in
white fur, red pants, green mittens, and black boots. Id. The
coat and hat are trimmed in white fur. Id. The doll has a white
beard, and white mustache. Id. The face of the 1 8 " M r . Santa
has a ruddy complexion with rosy cheeks, a bulbous nose with
horizontal lines on the bridge, wide-open blue eyes, a face
etched with lines and wrinkles, raised eyebrows, and a mouth open
in an “oh” shape. Id. The 1 8 " M r . Santa appears to have a wire
frame with a rounded base at the bottom. Id.
AMD’s 1 8 " Santa with 1 8 " Reindeer (copyright Registration
N o . VA-124-440) is similar in appearance to AMD’s 1 8 " M r . Santa,
3 The Plaintiffs do not have any patents that cover the soft sculpture dolls at issue in this case, nor do they claim that Defendants have misappropriated any trade secrets.
5 but has both arms clasped around the neck of a standing reindeer.
See P l . Ex. 3 . The Santa’s eyes appear to be closed, but the
mouth is open and the eyebrows are raised. Id.
AMD’s 1 8 " Santa Hugging Reindeer (copyright Registration N o .
VA-841-335) appears different from the 1 8 " Santa w/18" Reindeer
in that the Santa is depicted looking at the camera over the back
of the reindeer with its head nestled against the back of the
reindeer’s neck. See P l . Ex. 4 . The Santa’s eyes and mouth are
wide open and the eyes appear to be looking slightly to its
right. Id. 1 8 " Santa Hugging Reindeer, like the other AMD
“outdoor” Santas, is wearing a red suit (although no white fur
trim is visible) and a red hat trimmed in white fur. Id.
AMD’s 1 8 " Musical Santa (copyright Registration N o . VA-880-
950) appears to be wearing a red suit trimmed in white fur,
although the shape of the fur trim differs from that on the 1 8 "
Mr. Santa. See P l . Ex. 5 . The 1 8 " Musical Santa has wide-open
blue eyes looking to the left and with raised eyebrows. The
Musical Santa is holding an open “book” of Christmas carols in
both hands, which appear to have green mittens. Id.
AMD’s 1 8 " Gift List Santa (copyright Registration N o . VA-
878-666) is wearing a red suit trimmed in white fur, similar to
6 that on the 1 8 " Musical Santa. See P l . Ex. 6. The 1 8 " Gift List
Santa has black mittens and black boots and is holding a “list”
in its right hand and a pencil in its left. Id. The face of
this Santa features wide-open blue eyes looking to the right, a
bulbous nose, white mustache, one raised and one invisible
eyebrow, and a pair of glasses perched low on its nose. Id. The
18" Gift List Santa also has a green plaid scarf draped across
its shoulders and hanging down to just above its right boot. Id.
AMD’s 3 0 " Deck the Halls Santa (copyright Registration N o .
VA-880-242) differs from all of the previously described AMD
copyrighted Santas in that Deck the Halls Santa has a black belt
around its middle and instead of a red coat and pants, wears an
ankle-length red coat trimmed in white fur at the bottom. See
P l . Ex. 7 . In addition, the Santa appears to have a short cape,
also trimmed in white fur, over its shoulders. Id. The Santa
has a solid plastic or wood base and a red hat with a long sleeve
and a white fur pompom on the end. Id. 3 0 " Deck the Halls Santa
leans a little to his right, as if beginning to walk in that
direction, and in its right hand appears to hold a green sack
containing white-glazed pine cones, a candy cane, and red
ribbons. Id. The eyebrows are raised and the eyes are wide
7 open, but the colored part of the eye is proportionately smaller
and does not appear to be blue. Id. The head is slightly tilted
toward the right and the eyes are focused off to the right as
well. Id. The mouth is wide open in the “oh” shape and it
appears that the tongue is visible. Id.
AMD’s M r . Santa Head (copyright Registration N o . VA-1-011-
440) depicts expressions on six different M r . Santa doll faces.
See P l . Ex. 8 . These drawings appear in black and white with
only the eyebrows, eyes, nose, mustache and mouth of the M r .
Santa face apparently claimed. Id. The expression on the face
on the top left of the page has wide-open eyes, an open mouth and
visible tongue. Id. The expression on the face in the top
center of the page has wide-open eyes that look to the right and
a slightly open mouth. Id. The expression on the face in the
top right of the page has wide-open eyes that look to the left
and a slightly open mouth. Id. The expression on the face in
the bottom left has wide-open eyes, a wide-open mouth, and a
visible tongue. The expression on the face appears to depict
laughter. The expression on the face in the bottom center has
wide-open eyes, a wide-open mouth with the bottom lower lip open
slightly more on the right side, and with a visible tongue. The
8 expression of the face in the bottom right corner has wide-open
eyes, an open mouth, but no visible tongue.
2. AMD’s Trade Dress
Plaintiffs’ definition of AMD’s claimed trade dress appears
at various places in the record, and are not entirely consistent.
The definition that appears in Plaintiffs’ most recent memorandum
of law, and which the Court finds to be supported by the evidence
presented during the hearing, is as follows:
a pear-shaped, felt face; with screen-printed features made to resemble hand-made brushstrokes; line art on the face that features spike eyebrows, a serrated moustache flowing to upturned points that do not connect with the beard, white highlights on the cheeks, lips, eyes, and nose; a w-shaped beard; heightened rosiness on the cheeks with an airbrushed [look], intense in the center and fading toward the edges; poseability; a posed look upon sale; and furrier stitching.
Plaintiffs’ Reply Memorandum In Support Of Their Motion For A
Preliminary Injunction at 4 . This definition has been narrowed
from claims made in Plaintiffs’ earlier filings.4 The AMD trade
4 The definition of AMD’s claimed dress cited above should be compared with paragraph 44 of Plaintiffs’ Request for Findings of Fact and Conclusions of Law, which claims, among other things, a “red outfit, consisting of a jacket and pants, and trimmed with white fur; red hat trimmed with white fur, with a white ball on the end; green or black mittens sewn with a furrier stitch; and black boots sewn with a furrier stitch.” See also, Ver. Compl., ¶ 16 (claiming green or black mittens and black boots).
9 dress was purported to be exemplified in a doll that was marked
as an exhibit at AMD’s Rule 30(b)(6) deposition, and which was
introduced into evidence during the hearing as Plaintiffs’
Exhibit 17 (see 1 8 " Musical Santa discussed above).
3. Studios’ Santa
Studios’ Santa design includes a 9" tall stuffed Santa
figure covered in felt over a thin metal rod from shoulder to toe
inside the doll that extends out from the foot of the doll.
Studio’s Santa has a circular base, with the doll positioned in
an upright position, and the doll may be posed in different
positions.
Studios’ Santa is clad in a red coat and hat, each trimmed
with white faux fur, and has a black belt, black boots, and black
mittens. Studios’ Santa is “standing” beside a (proportionally)
large green felt sack, which is cinched near the top. Protruding
from the top of the sack is a miniature toy bear, French horn,
and foil-wrapped box. Studios’ Santa is “holding” the toy sack
with its right hand.
Studio’s Santa is made of felt and has a painted face. The
painted face of Studios’ Santa includes, rosy cheeks, a long
slender nose with a bright red “cherry” appearance at the end of
10 the nose, white eyebrows and a white beard. The Santa’s eyes are
dark colored, narrow, and look to the left and slightly upward.
The painted mustache is white with black highlights. The mouth
is flat and nearly closed.
4. Comparison of AMD and Studios Santas
During the injunction hearing, the witnesses compared two
different versions of the AMD M r . Santa, P l . Ex. 17 and 2 0 , and a
Studios’ Santa, P l . Ex. 1 5 .
a. Similarities Between the Parties’ Dolls
AMD’s and Studios’ dolls both use National Nonwovens’
“flesh” colored felt, intended to resemble the appearance of
Caucasian flesh, for the doll faces. See P l . Ex. 81. 5 AMD’s and
Studios’ dolls both have pear-shaped or teardrop-shaped faces.
The heads of AMD’s and Studios’ dolls are spherical and made from
two pieces of felt. The dolls have slightly projected foreheads,
cheeks and chins. The dolls contain string stuffing for the
heads to make the forehead, cheek, and chin projections.
AMD’s and Studios’ dolls both contain a wire skeleton, which
enables the dolls to be moved into different poses. The bodies
5 This color was developed by request for AMD. Plaintiffs’ refer to this color felt as “Annalee Flesh” Felt.
11 of the dolls are stuffed with similar materials.
The stitching of the Studios’ dolls on the heads, mittens,
and boots use a “furrier” stitch, which is also employed by AMD.
The evidence showed that this particular stitch gives the dolls a
hand-crafted look.
Each doll has a holly sprig on the upper right of the dolls
face, although some of the materials used for the sprig differ.
Each doll has a beard of wispy, white hair, that has been
attached in a “W” shape.
Both parties’ dolls have screen-printed faces with
airbrushed cheeks. Each face has spike white eyebrows. Both
parties’ dolls have white highlights near the outside of the eyes
and a white highlight inside the dolls’ pupils. The nose of each
doll is outlined with brown paint and has a red tip with white
highlights. Each doll has ruddy cheeks, with red color
airbrushed, rather than hand-painted. The airbrushed cheeks have
intense color toward the center of each cheek and face toward the
edges.
The moustache of each doll is white and has upturned points
that do not connect with the dolls’ beard. In addition, the
underside of each dolls’ moustache has sharp edges resembling a
12 serrated edge. Both dolls have red lips with white highlights.
b. Dissimilarities Between the Parties’ Dolls
A visual inspection of AMD’s Santa, P l . Ex. 1 7 , and Studios’
Santa, P l . Ex. 1 5 , shows that several features of parties’ dolls
are different. The AMD Santa is at least twice the size of the
Studios’ Santa. The face of the AMD Santa is etched with lines
and the nose is bulbous rather than slender and, unlike the
Studios’ Santa, lacks the bright red “cherry” appearance at the
end of the nose. The head of the AMD Santa appears more rounded
and the eyes are open wide and are blue. The mouth of the AMD
Santa is wide open in an “oh” shape as if singing. Studios’
Santa is not depicted as singing and its mouth appears nearly
closed. The AMD Santa does not have a bag of toys and its
mittens are green instead of black.
5. Defendants’ Advertising
Plaintiffs introduced evidence that Defendants have
displayed an image of Annalee on the Studios’ website in close
proximity to the statement: “Symbolizing the return and
continuation of a great family heritage in soft sculpture,
Townsend Design Studios proudly presents the new generation of
design evolution for many years to come.” P l . Ex. 5 3 .
13 Defendants have made the same statement in other advertisements.
See P l . Ex. 4 1 , 5 5 , and 5 6 .
Studios’ website has displayed a picture of Studios’ Santa
to the left of the following statement: “Over many years Annalee
Mobilitee Dolls gained an international reputation for quality
and sensitivity to the buying public. Townsend Design Studios is
honoring a long standing tradition.” P l . Ex. 5 3 . Defendants made
the same or similar statements in other advertisements. P l . Ex.
5 6 , 5 7 , and 6 0 .
The evidence shows that Studios’ website contained a
statement that: “It is fitting that the Santa should be the first
release to symbolize the return and continuation of a great
family heritage in soft sculpture.” P l . Ex. 5 3 . Defendants
make the same statements in another advertisement. P l . Ex. 5 6 .
On their invitation to a June 2 2 , 2003 open house,
Defendants stated the event was “commemorating over 50 years of
the design and manufacture of handcrafted soft sculpture art form
in Meredith[,] New Hampshire.” P l . Ex. 7 7 . After the open
house, Defendants similarly stated in a July 1 5 , 2003
advertisement that the June 2 2 , 2003 event “celebrated more than
50 years of design and manufacturing of soft sculpture and art in
14 Meredith.” P l . Ex. 5 9 .
Defendants’ invitation to its June 2003 event depicts a
small sign that states: “Through this door pass the most skilled
and creative dollmakers and craftsmen in the U.S.A.,” and
describes Studios’ facilities as the “Factory at the Farm.” Pl.
Ex. 7 7 . Plaintiffs’ assert that the “through this door”
statement is a verbatim reproduction of a well-known inscription
found on AMD’s factory, and that it has long used the moniker
“Factory in the Woods” to describe its Meredith facility.
The evidence further shows that Defendants have published a
photograph in Studios’ advertising in which Annalee and Townsend
are presented an award as “1991 New England Entrepreneur of the
year.” See D f . Ex. A . Defendants have also published as part of
Studios’ advertising a 1954 photograph of Annalee with Townsend
as a child, apparently holding dolls. See D f . Ex. D.
Discussion
A. Preliminary Injunction Standard
“The purpose of a preliminary injunction is to preserve the
status quo, freezing an existing situation so as to permit the
trial court, upon full adjudication of the case’s merits, more
effectively to remedy discerned wrongs.” CMM Cable Rep., Inc. v .
15 Ocean Coast Prop., Inc., 48 F.3d 6 1 8 , 620 (1st Cir. 1995) (citing
Chalk v . U.S. Dist. C t . Cent. Dist. of Cal., 840 F.2d 7 0 1 , 704
(9th Cir. 1988); Am. Hosp. Ass’n v . Harris, 625 F.2d 1328, 1330
(7th Cir. 1980)). Thus, if the court ultimately finds for the
movant, a preliminary injunction provides the court with a method
for preventing or minimizing any current or future wrongs caused
by the defendant. CMM Cable Rep., 48 F.3d at 620.
A district court may grant a movant’s request for a
preliminary injunction if the movant satisfies a four-part test,
often stated as follows: (1) a likelihood of success on the
merits; (2) a risk of irreparable harm to the movant if the
injunction is not granted; (3) a favorable balance of the
equities; and (4) the injunction would not adversely affect the
public interest. See Langlois v . Abington Hous. Auth., 207 F.3d
4 3 , 47 (1st Cir. 2000). In the First Circuit, the “sine qua non”
of the preliminary injunction analysis is whether the movant can
demonstrate a likelihood of success on the merits. Weaver v .
Henderson, 984 F.2d 1 1 , 12 (1st Cir. 1993). To warrant
preliminary injunctive relief, the movant’s showing on the
likelihood of success must be substantial. See I.P. Lund Trading
ApS v . Kohler Co., 163 F.3d 2 7 , 33 (1st Cir. 1998) (stating the
16 preliminary injunction test as requiring a showing that the
moving party is “substantially likely to succeed on the merits of
its claim”); TEC Eng’g Corp. v . Budget Molders Supply, Inc., 82
F.3d 5 4 2 , 544 (1st Cir. 1996) (same). When considering claims
based on copyright, trademark or trade dress infringement,
irreparable harm may be presumed even in the absence of
demonstration of actual injury, if a likelihood of success on the
merits has been sufficiently demonstrated. See e.g, I.P. Lund
Trading, 163 F.3d at 3 3 . The Court applies this standard in
reviewing AMD’s request for injunctive relief.
B. Copyright Claims
To establish copyright infringement, a plaintiff must
demonstrate (1) ownership of a valid copyright and (2) illicit
copying. See Yankee Candle C o . v . Bridgewater Candle Co., LLC,
259 F.3d 2 5 , 33 (1st Cir. 2001). Defendants do not dispute that
the copyrights that AMD has put in issue are valid for purposes
of consideration of the instant motion.
To prove that illicit copying has occurred, the plaintiff
must first demonstrate, by direct or indirect evidence, that the
defendant copied the plaintiff’s copyrighted work. Id. at 3 3 .
If there is no evidence of actual copying, copying may be
17 inferred if the plaintiff can show that the defendant had access
to the copyrighted work and that the works are substantially
similar. Id.
Once a plaintiff has proven that the defendant has copied
the plaintiff’s work, the plaintiff has the burden of proving
“that the alleged infringing work is ‘substantially similar’ to
the protected expression” in the copyrighted work. Id. at 33
n.4, quoting Matthews v . Freedman, 157 F.3d 2 5 , 27 (1st Cir.
1998).
Plaintiffs have sufficiently demonstrated that the
Defendants have copied AMD’s Santa dolls. The evidence
demonstrated that Townsend instructed one his employees, Shirley
Ballou, to obtain “Annalee Flesh” felt. In order to obtain
access to the felt, a Studio’s employee cut a portion of the felt
on an AMD doll and submitted it to National Nonwovens. Studios
then began using the same National Nonwovens’ felt to make its
The evidence further demonstrated that Townsend instructed
M s . Ballou to obtain the same type of fabric labels that AMD used
on its dolls. M s . Ballou testified Townsend instructed her that
these labels should be the same size that AMD used.
18 Bernadette Haines testified that she observed Townsend
taking digital pictures of AMD doll faces, and observed him
transferring those images to his computer. M s . Haines testified
that she was instructed by Townsend to similarly take digital
pictures of AMD doll faces and then transfer them to Townsend’s
computer. M s . Haines testified that she observed Townsend edit
the AMD doll faces on his computer. M s . Haines testified that
the doll faces in Plaintiffs’ Exhibit 82 appear to be the images
that she saw on Townsend’s computer.
There was also evidence that Townsend had significant access
to AMD’s dolls and doll faces, that he participated in the design
of some AMD dolls and that he has retained control over a
structure that houses original AMD screen art. This evidence
provides indirect support for Plaintiffs’ allegation of copying.
Moreover, there are numerous similarities between Studios’
and AMD’s Santa dolls. Testifying as an expert, Len Cirelli, a
principal of the manufacturer of AMD’s dolls, stated that his
comparison of Studio’s Santa doll with AMD’s Santa doll revealed
that Studios replicated every process, material, and method used
by AMD in the manufacturing of its Santa doll. While some of
Cirelli’s testimony focused on elements that are arguably
19 functional, including the string stuffing used in the head and
the use of the furrier stitch, he extensively discussed the
similarity in the method of applying the paint to the doll face
to give a hand-painted look, and the style of the line art used
on the doll faces.
Although the Plaintiffs’ evidence of copying is substantial,
after doing a copyright-by-copyright comparison of each of AMD’s
copyrights at issue with the Studios’ Santa, the Court does not
find that Studio’s Santa is substantially similar to the
protected expression in the copyrights. See Yankee Candle, 259
F.3d at 33-34 (finding that only the protected expression is
relevant to an evaluation of substantial similarity).
Apart from the difference in size of Studios’ Santa in
comparison to the various AMD Santas in the copyrights at issue,
the appearance of Studios’ Santa may be distinguished from the
appearance of each of the AMD copyrighted Santas in numerous
ways. Studios’ Santa has a markedly different outfit design than
AMD’s 1 8 " M r . Santa, P l . Ex. 2 , and Studios’ Santa also differs
because it is holding a toy sack. Studios’ Santa differs from
AMD’s 1 8 " Santa with 1 8 " Reindeer, P l . Ex. 3 , and 1 8 " Santa
Hugging Reindeer, P l . Ex. 4 , in that Studios’ Santa is not
20 depicted with a reindeer. Studios’ Santa differs from AMD’s 1 8 "
Musical Santa, P l . Ex. 5 , in that it is not holding a book of
carols, and differs from AMD’s 1 8 " Gift List Santa, P l . Ex. 6, in
that it is not depicted wearing glasses, or holding a list and
pencil. Studios’ Santa differs from AMD’s 3 0 " Deck the Halls
Santa, P l . Ex. 7 , in that Studios’ Santa does not wear an ankle-
length red coat, a short cape, or stand on a solid plastic or
wood base. And the expression of the face of Studios’ Santa does
not appear to be a copy of any of the M r . Santa doll faces
depicted on AMD’s 7" M r . Santa Head, P l . Ex. 8 .
Plaintiffs allege for the first time in their supplemental
memorandum, filed after the conclusion of the injunction hearing,
that Plaintiffs Exhibits 20 and 35 are entitled to independent
protection as “derivative works,” and that Studios’ Santa
infringes these derivative works. The Court finds that
plaintiffs have not demonstrated a likelihood of success on the
merits with respect to this claim for three of reasons.
First, the Plaintiffs did not allege that Studios infringed
any derivative works in their complaint. Therefore, this claim
is not properly before the court. Second, the Plaintiffs did not
present any evidence at the injunction hearing to establish that
21 the M r . Santa dolls that are now claimed to be derivatives, are
in fact derivatives of the copyrights at issue. And third, the
Plaintiffs’ alleged derivative works have not been registered.
As the Plaintiffs’ acknowledge, there is split of authority
regarding whether the owner of an unregistered derivative work
may sue a copier of the derivative work. The First Circuit has
not decided this issue. The Court is unpersuaded by the
Plaintiffs’ argument that the First Circuit’s ruling Gamma Audio
& Video, Inc. v . Ean-Chea, 11 F.3d 1106 (1st Cir. 1993), supports
their position. That case is distinguishable in that the
plaintiff in Gamma Audio claimed that the defendant infringed its
exclusive right to distribute registered and copyrighted images
contained within an unregistered derivative work. The First
Circuit did not suggest in Gamma Audio that the plaintiff would
be entitled to relief for protection of an unregistered
derivative work standing alone.
The Court finds that the Plaintiffs have not shown a
substantial likelihood of success on the merits of AMD’s
copyright infringement claims. Accordingly, the Court recommends
that Plaintiffs’ request for a preliminary injunction with regard
to the copyright claims be denied.
22 C. Trade Dress Claims
Section 43(a) of the Lanham Act gives a producer a cause of
action for the use by any person of “any word, term, name,
symbol, or device, or any combination thereof . . . which . . .
is likely to cause confusion . . . as to the origin, sponsorship,
or approval of his or her goods . . . .” 15 U.S.C. § 1125(a).
This section has been held to apply to a manufacturer’s “trade
dress,” “a category that originally included only the packaging,
or ‘dressing,’ of a product, but in recent years has been
expanded by many courts of appeals to encompass the design of a
product.” Wal-Mart Stores, Inc. v . Samara Bros., Inc., 529 U.S.
205, 209 (2000). “Trade dress includes ‘the design and
appearance of [a] product together with the elements making up
the overall image that serves to identify the product presented
to the consumer.” I.P. Lund Trading, 163 F.3d at 3 5 , quoting,
Chrysler Corp. v . Silva, 118 F.3d 5 6 , 58 (1st Cir. 1997)
(additional citations omitted).
To establish a trade dress infringement claim, a plaintiff
must demonstrate that (1) the trade dress has been used in
commerce, (2) the trade dress is nonfunctional, (3) the trade
dress is inherently distinctive or has acquired distinctiveness
23 through secondary meaning, and (4) that prospective purchasers of
the products in question are likely to be confused as to the
source of the products. See Yankee Candle, 259 F.3d at 3 8 ; I.P.
Lund Trading, 163 F.3d at 3 6 , 4 3 . There is no dispute that the
Plaintiffs’ dolls have been used in commerce. Therefore, I do
not discuss the first requirement for protection against
infringement further.
1. Functionality
A party seeking to exclude new entrants based on a claim of
trade dress infringement of a product design has the burden of
showing the non-functionality of the design feature. Wal-Mart,
529 U.S. at 214; I.P. Lund Trading, 163 F.3d at 36-37. A
“functional” product feature is one that “is essential to the use
or purpose of the article or [that] . . . affects the cost or
quality of the article.” I.P. Lund Trading, 163 F.3d at 3 7 ,
quoting Inwood Labs., Inc. v . Ives Labs., Inc., 456 U.S. 8 4 4 , 850
n . 10 (1982) (brackets in original); see also, I.P. Lund Trading,
163 F.3d at 37 n.5 (“A design i s , inter alia, nonfunctional if it
is not ‘essential to the use or purpose of the article’ and does
not ‘affect[] the cost or quality of the article.”) (citations
omitted). However, “a particular arbitrary combination of
24 functional features, the combination of which is not itself
functional, properly enjoys protection.” Id. at 3 7 , quoting Taco
Cabana Int’l v . Two Pesos, Inc., 932 F.2d 1113, 1119 (5th Cir.
1991), aff’d, 505 U.S. 763 (1992). The court need determine the
effect of granting protection on the opportunity of other to
compete. I.P. Lund Trading, 163 F.3d at 3 7 .
Defendants argue that a number of elements that AMD claims
as part of its trade dress are functional, and therefore not
entitled to protection under the Lanham Act. To begin with,
certain elements contained within the AMD and Studios’ Santas,
such as a red suit trimmed with white fur, are common to numerous
depictions of Santa Claus in the marketplace, and the Court does
not consider those elements as part of the Plaintiffs’ claimed
trade dress. See Kurt S . Adler, Inc. v . World Bazaars, 897 F.
Supp. 9 2 , 95 (S.D.N.Y. 1995) (finding that the stereotypical
elements of Santa Claus such as a “jolly, rotund, elder
gentleman, wearing a red suit and floppy cap with white trim, and
a black belt and boots,” may not be protected).
Defendants have argued that the internal wire frame and head
and body stuffing used on AMD’s and Studios’ Santa dolls are
functional elements that are necessary to the design of a
25 poseable, soft sculpture doll, for which Plaintiffs admit they
have no design patent. Defendants also produced a witness at the
hearing, Pat Rogers, who testified that the use of a “furrier”
stitch made the dolls cheaper to produce by hand than other
methods and could be employed easily and cost effectively by
Studios. Therefore, Defendants argue, the use of the “furrier
stitch” on the Studios’ Santa is an element that “affects the
cost” of the article and is therefore functional. I.P. Lund
Trading, 163 F.3d at 3 7 . In the Court’s view, Defendants have
raised close questions regarding AMD’s attempt to prevent a
competitor from manufacturing a Santa doll with an internal wire
frame, string stuffing, and a furrier stitching. For the
purposes of Plaintiffs’ motion for a preliminary injunction, the
Court does not consider those elements as part of AMD’s
protectable trade dress because the Plaintiffs have not
demonstrated a substantial likelihood of success on the element
of non-functionality.
Even without the excluded elements discussed above, there
are numerous other elements that AMD claimed constitute its trade
dress that appear to the Court to be non-functional. Plaintiffs
have argued, and introduced expert testimony to support, that the
26 following elements are non-functional: a pear-shaped, felt face;
with screen-printed features made to resemble hand-made brush
strokes; line art on the face that features spike eyebrows, a
serrated moustache flowing to upturned points that do not connect
with the beard, white highlights on the cheeks, lips, eyes, and
nose; a beard attached in a “W” shape; heightened rosiness on the
cheeks with an airbrushed look, intense in the center and fading
toward the edges; and a posed look upon sale.6 See Kurt S .
Adler, 897 F. Supp. at 95 (listing the protectable expression of
Santa Claus at issue as including a “pear shaped head, a red
underlip emphasized, an upcurving mustache, a skin tone bubble
nose, [and] rounded boots”). Plaintiffs introduced evidence that
competitors routinely market collectible Santa dolls without the
features in AMD’s claimed trade dress. See P l . Ex. 23-24. The
evidence further demonstrates that the AMD’s combination of
features are not found in other dolls sold in the industry or in
other depictions of Santa Claus. P l . Ex. 23-24; D f . Ex. B . The
Court finds the Plaintiffs’ evidence sufficient to demonstrate
6 This district court has previously described AMD’s style of doll as having the distinguishing characteristics of “pear shaped faces, furrier stitched chins, heightened rosiness of cheeks, stitched in Annalee label and simple plastic wrapping.” Annalee Mobilitee Dolls, Inc. v . Caldor Corp., Civ. N o . 95-175-M, 1995 U.S. Dist. LEXIS 8512 at *6 (D.N.H. Apr. 1 4 , 1995).
27 that the remaining elements of AMD’s claimed trade dress are non-
functional.
2. Secondary Meaning
In order for a plaintiff to succeed on the merits of a
product-design trade dress infringement claim, the plaintiff must
prove that AMD’s trade dress has acquired secondary meaning.
Wal-Mart, 529 U.S. at 212. This is so because product design may
not be considered inherently distinctive. Id.
“As to secondary meaning said to stem from the design of the
product itself, . . . the plaintiff must show that the primary
significance of the design is to signify its source.” I.P. Lund
Trading, 163 F.3d at 3 3 . “Proof of secondary meaning entails
vigorous evidentiary requirements.” Boston Beer C o . Ltd. P’ship
v . Slesar Bros. Brewing Co., 9 F.3d 175, 181 (1st Cir. 1993)
(quoting Perini Corp. v . Perini Constr., Inc., 915 F.2d 1 2 1 , 125
(4th Cir. 1990)). A plaintiff faces an even higher threshold of
proof in a product design/configuration case. Yankee Candle, 259
F.3d at 43 n . 1 2 . In the instant case, a lack of sufficient
evidence of secondary meaning is the Plaintiffs’ Achilles’ heel
for purposes of their request for preliminary injunctive relief.
The First Circuit has found that “[t]he only direct evidence
28 probative of secondary meaning is consumer surveys and testimony
by individual consumers.” Yankee Candle, 259 F.3d at 4 3 .
Plaintiffs did not introduce any survey evidence during the
hearing, nor did they introduce any testimony from individual
consumers. The testimony given by AMD’s officers and employees,
and by Len Cirelli, that they have observed consumers who
immediately recognize an AMD Santa doll as coming from AMD is not
probative evidence. See id., at 43 n . 14 (finding that the
opinions of retailers and distributors active in the field and
extremely familiar with the plaintiff’s products is hardly
evidence of whether the “consuming public” forms the same
association).
Absent probative direct evidence, AMD could still
demonstrate that its Santa dolls have acquired secondary meaning
through the introduction of circumstantial evidence. Id. at 4 3 .
The types of circumstantial evidence that a court may consider in
determining whether a plaintiff has established that a trade
dress has acquired secondary meaning include: “the nature and
extent of advertising and promotion of the trade dress, and the
efforts made to promote a conscious connection by the public
between the trade dress and the product’s source.” Id. at 4 3 ,
29 citing, Boston Beer, 9 F.3d at 182. The court may also consider
the product’s “established place in the market” and proof of
intentional copying. Yankee Candle, 259 F.3d at 4 4 , citing, I.P.
Lund Trading, 163 F.3d at 4 2 .
Plaintiffs have introduced evidence that AMD has advertised
its Santa dolls in catalogues since at least the early 1970s.
See P l . Ex. 27-40. Similarly, Plaintiffs introduced evidence
that AMD expends significant resources on advertising
attributable to AMD Santa dolls, P l . Ex. 2 6 , and that sales of
AMD’s Santa dolls have been successful, P l . Ex. 2 5 . However,
this evidence does not sufficiently demonstrate, by itself, that
the public makes a conscious connection between the claimed trade
dress and the source. See Yankee Candle, 259 F.3d at 44 (“To be
probative of secondary meaning, the [plaintiff’s] advertising
must direct the consumer to those features claimed as trade
dress.”).
Plaintiffs argue that AMD’s advertising is probative of
secondary meaning because it has directed consumers to “look for”
the unique faces on AMD dolls. Advertising that specifically
directs a consumer’s attention to those features claimed as trade
dress may support a finding of secondary meaning. Yankee Candle,
30 259 F.3d 4 4 . A review of the evidence in the record shows that
the most commonly emphasized features in AMD’s advertising are
“the famous whimsical expressions” of AMD dolls, see P l . Ex. 27-
3 0 , 3 8 , and that the dolls are handcrafted, see P l . Ex. 28-30. 7
AMD’s advertising does not emphasize the particular aspects that
Plaintiffs claim constitutes AMD’s trade dress, namely screen-
printed features made to resemble hand-made brush strokes; line
art on the face that features spike eyebrows, a serrated
moustache flowing to upturned points that do not connect with the
beard, white highlights on the cheeks, lips, eyes, and nose; and
heightened rosiness on the cheeks with an airbrushed look,
intense in the center and fading toward the edges. “Merely
‘featuring’ the relevant aspect of the product in advertising is
no more probative of secondary meaning than are strong sales.”
Yankee Candle, 259 F.3d at 4 4 . The Court finds that the evidence
of AMD’s advertising is not sufficiently probative of secondary
meaning of AMD’s claimed trade dress.8
7 While Plaintiffs’ Exhibit 28 indicates that the AMD doll head is “flesh felt with soft white whiskers,” that is the only reference to “flesh felt” that the Court has located in the advertising in the record. 8 The Plaintiffs have requested a finding of fact that Defendant Townsend and Pat Rogers admitted that “the consuming public recognizes an [AMD] Santa doll when they see i t , and that
31 Plaintiffs argue that a finding in their favor on secondary
meaning is supported by the evidence of the Defendants’
intentional copying. While intentional copying has been
identified as a factor that courts may consider on the element of
secondary meaning, the defendant’s intent “plays a particularly
minor role in product design/configuration cases.” Yankee
Candle, 259 F.3d at 4 5 . A copier may simply be attempting to
exploit a particularly desirable feature as opposed to attempting
to confuse customers as to the product’s source. Id., citing,
Duraco Prods. Inc. v . Joy Plastic Enters., Ltd., 40 F.3d 1431,
1453 (3d Cir. 1994). The Court finds that the evidence of
copying that the Plaintiffs have offered, while substantial,
cannot carry the day. See Yankee Candle, 259 F.3d at 44 (“Proof
of secondary meaning requires at least some evidence that
consumers associate the trade dress with the source.”) (emphasis
in original).
the dolls’ artwork makes it distinctive in the minds of consumers.” P l . Req. for Findings of Fact and Conclusions of Law, ¶¶ 53-54. The Court does not make such a finding. The Plaintiffs did not examine Townsend and Pat Rogers on those issues during the evidentiary hearing, and even if they had, those statements would not prove the truth of the matter asserted.
32 While the Plaintiffs may be able to demonstrate at trial
that AMD’s dolls have acquired secondary meaning, the Court finds
that the evidence presented during the injunction hearing does
not demonstrate that the Plaintiffs have a substantial likelihood
of proving secondary meaning, which is a necessary element of
Plaintiffs’ trade dress infringement claims. Because the Court
finds that the Plaintiffs have not met their burden on the
element of secondary meaning, the Court does not address the
element of likelihood of confusion as to source.
D. False Advertising Claims
1. Elements of a False Advertising Claim
To establish a false advertising claim under the Lanham Act,
a plaintiff must demonstrate that (1) the defendant made a false
or misleading description of fact in a commercial advertisement
about his own or another’s product, (2) the misrepresentation is
material, i.e., likely to influence the purchasing decision, (3)
the misrepresentation actually deceives or has the tendency to
deceive a substantial segment of its audience; (4) the defendant
placed the false or misleading statement in interstate commerce;
and (5) the plaintiff has been or is likely to be injured by the
misrepresentation. See Cashmere & Camel Hair Mfrs. Inst. v . Saks
33 Fifth Ave., 284 F.3d 3 0 2 , 310-11 (1st Cir. 2002), citing Clorox
C o . P.R. v . Proctor & Gamble Commercial Co., 228 F.3d 2 4 , 33 n.6
(1st Cir. 2000).
2. False or Misleading Description of Material Fact
“A plaintiff can succeed on a false advertising claim by
proving either that the defendant’s advertisement is literally
false or implicitly false–-that i s , the advertisement is true or
ambiguous yet misleading.” Cashmere, 284 F.3d at 311. If the
defendant’s advertising is literally false, the plaintiff may
demonstrate a violation without evidence of consumer deception.
Id. However, if the defendant’s advertising is implicitly false,
the plaintiff has the burden to show that the advertising is
likely to cause confusion or to deceive customers to warrant
injunctive relief. Id. The evidence shows that the Defendants
have made the following statements in commercial advertising:
1. Symbolizing the return and continuation of a great family heritage in soft sculpture, Townsend Design Studios proudly presents the new generation of design evolution for many years to come.
2. Over many years Annalee Mobilitee Dolls gained an international reputation for quality and sensitivity to the buying public. Townsend Design Studios is honoring a long standing tradition.
3. It is fitting that the Santa should be the first release to symbolize the return and continuation of a great family
34 heritage in soft sculpture.
4. commemorating over 50 years of the design and manufacture of handcrafted soft sculpture art form in Meredith, New Hampshire.
5. Through this door pass the most skilled and creative dollmakers and craftsmen in the U.S.A.
6. Studios’ facilities is the “Factory at the Farm.”
Plaintiffs argue that Defendants’ advertising is literally
false in that Studios is not the same entity as AMD, nor is it a
continuation of AMD. In the alternative, Plaintiffs argue that
Defendants’ advertising is implicitly false and likely to cause
confusion in that it suggests an affiliation between Studios and
AMD. Plaintiffs also argue that Defendants’ advertising is
likely to cause confusion in that it suggests that Annalee
sponsors Studios’ products. Plaintiffs argue that Defendants’
representations are material because AMD’s or Annalee’s
involvement in the design of a doll is likely to influence a
consumer’s buying decision.
In response, Defendants counter that Plaintiffs’ false
advertising claims must fail because Defendants’ advertising is
not false or misleading. Defendants assert that it is truthful
to state that Townsend is Annalee’s son, that Townsend has years
of experience in the doll-making industry, and that Townsend
35 comes from a doll-making heritage. Defendants also assert that
Studios employs doll-makers who formerly worked for AMD. Were
Defendants advertisements limited to these basic assertions, the
Court would be inclined agree. Defendants’ statements are not so
limited.
The Court finds that each of the statements alleged to be
false or misleading by Plaintiffs, even if vague enough to not be
deemed literally false, is likely to cause confusion among
consumers. The Court makes the following findings:
Studios’ use of the statement: “Symbolizing the return and
Townsend Design Studios proudly presents the new generation of
design evolution for many years to come,” is misleading in that
it implies that the Studios’ business is a continuation of AMD,
or that Studios is an entity related to AMD.
Studios’ use of the statement: “Over many years Annalee
Mobilitee Dolls gained an international reputation for quality
and sensitivity to the buying public. Townsend Design Studios is
honoring a long standing tradition” is misleading in that it
clearly implies a present affiliation between AMD and the
Studios’ business, or that Studios is an entity related to AMD.
36 Studios’ use of the statement: “It is fitting that the Santa
should be the first release to symbolize the return and
continuation of a great family heritage in soft sculpture” is
misleading in that it implies that the Studios’ business, not
Townsend individually, was a part o f , or affiliated with AMD.
Studios’ use of the statement: “commemorating over 50 years
of the design and manufacture of handcrafted soft sculpture art
form in Meredith, New Hampshire” is misleading in that it clearly
evokes the long-running business of AMD, and implies that Studios
is affiliated with, or sponsored by AMD.
Studios’ use of the phrase, “Through this door pass the most
skilled and creative dollmakers and craftsmen in the U.S.A.,”
alleged to have been in use for years at the AMD facility, is
misleading in that it implies that Studios is a continuation of
AMD’s business, or has an affiliation with AMD.
Studios’ description of its facilities as the “Factory at
the Farm” is misleading in that it is confusingly similar to
AMD’s “Factory in the Woods” moniker, and misleadingly implies an
affiliation between AMD and Studios.
The Court further finds that the Defendants’ statements are
material. “The materiality component of a false advertising
37 claim requires a plaintiff to prove that the defendant’s
deception is ‘likely to influence the purchasing decision.’”
Cashmere, 284 F.3d at 3 1 1 , quoting, Clorox, 228 F.3d at 33 n.6.
The evidence demonstrates that AMD has been in business since at
least 1962. AMD has expended substantial resources on
advertising and developing goodwill in the industry. The Court
finds that it is likely that Studios’ advertisements influence
the consumer’s purchasing decision by exploiting AMD’s good will.
2. The Misrepresentation Deceives or Has the Tendency to Deceive
Plaintiffs argue that there is overwhelming evidence of
actual customer confusion. Christine Hodecker, Director of AMD’s
Wholesale Sales, testified that three different sets of retailers
saw Defendants’ advertisement and believed that it was an
advertisement for an Annalee doll. Charles Thorndike testified
that a Nevada retailer saw one of the Defendants’ advertisements
and assumed that Studios’ was affiliated with AMD. Lisa Ekholm,
manager of AMD’s gift shop, testified that numerous individuals
came into AMD’s gift shop on June 2 2 , 2003, the day of Studios’
open house and barbeque, believing that the event was affiliated
with AMD. M s . Ekholm further testified that a customer came into
AMD’s gift shop and asked her for Studios’ Santa doll after
38 seeing a newspaper advertisement. The Court is satisfied that
Plaintiffs have demonstrated that Defendants’ statements in its
advertising have deceived consumers, or that it has a tendency to
deceive, which is all that is required to warrant injunctive
relief. Cashmere, 284 F.3d at 314 n.12.
3. Use of Annalee’s Image In Defendants’ Advertising
Plaintiffs seek an order preventing the Defendants from
including images of Annalee in Defendants’ advertising.
Plaintiffs argue that Defendants’ advertising is false or
misleading in that it suggests that Annalee endorses Studios’
Messages conveyed in visual images are to be considered in
false advertising claims brought under the Lanham Act. See
Gillette C o . v . Norelco Consumer Prods. Co., 946 F. Supp. 115,
128 (D. Mass. 1996) (citing cases). Disassociated from any
allegedly false or misleading text, the Court does not find that
the photographs that Defendants used are themselves literally or
implicitly false.9 The photographs do not depict Annalee holding
a Studios’ product or amongst Studios’ products. Moreover, the
Plaintiffs do not allege that the photographs at issue are not
9 Studios has not claimed in any advertisement that its products were designed or endorsed by Annalee.
39 genuine, that the Defendants did not have a right to possess
them, or that Plaintiffs have copyright protection for the
photographs. The Court does not find, based on the evidence
presented, that the Plaintiffs’ have demonstrated that they are
likely to succeed on their false advertising claim with regard to
Defendants’ use of the photographs at issue.
4. Other Preliminary Injunction Factors
Having found that the Plaintiffs have demonstrated a
likelihood of success on the merits of their false advertising
claim with respect to the six statements in Studios’ advertising
discussed herein, the Court presumes that AMD is likely to suffer
irreparable harm in the absence of injunctive relief. The Court
further finds that the public interest would be served by
enjoining the Defendants from engaging in the allegedly
misleading advertising, and that the balance of the equities
favors the Plaintiffs. On the facts of this case, there should
be no requirement for the Plaintiffs to post a bond.
Conclusion
For the reasons stated above, I recommend that the court
grant the Plaintiffs’ motion for a preliminary injunction
(document n o . 3 ) with respect to the following stipulated issues:
40 1. Defendants and their officers, agents, servants, employees, and attorneys, and all persons in active concert or participation with them, or any of them, be enjoined and restrained from selling, offering for sale, displaying, making or otherwise using the Sun emblem previously found on Defendants’ website, displayed on certain signs, and featured on t-shirts and totebags.
2. Defendants and their officers, agents, servants, employees, and attorneys, and all persons in active concert or participation with them, or any of them be enjoined and restrained from using the “Annalee Mobilitee Dolls” federally registered trademark.
3. Defendants are ordered to include the following disclaimer on all commercial advertising (including, without limitation, the Internet, mail advertising, newspaper and trade journal advertisement, and trade show presentations), and on all products sold: “Townsend Design Studios, Inc. designs and products are not associated with Annalee Mobilitee Dolls, Inc.”10
I recommend that the court deny Plaintiffs’ request for a
preliminary injunction on their copyright and trade dress
infringement claims, and grant the Plaintiffs’ request for a
preliminary injunction on their false advertising claim, except
with regard to the Defendants’ use of the photographs discussed
herein. I recommend that the court issue an order that
Defendants and their officers, agents, servants, employees, and
10 Defendants seek the right, not agreed upon by the parties, to state in their disclaimer that Studios’ products are “original” and “distinctive.” Plaintiffs object. The Court recommends that the Defendants be ordered to comply with the disclaimer as stated herein.
41 attorneys, and all persons in active concert or participation
with them, or any of them be enjoined and restrained from
publishing the statements found to be misleading in this report
in any commercial advertising (including, without limitation, the
Internet, mail advertising, newspaper and trade journal
advertisement, and trade show presentations).
Any objections to this Report and Recommendation must be
filed within ten (10) days of receipt of this notice. Failure to
file objections within the specified time waives the right to
appeal the district court’s order. See Unauthorized Practice of
Law Comm. v . Gordon, 979 F.2d 1 1 , 13-14 (1st Cir. 1992); United
States v . Valencia-Copete, 792 F.2d 4 , 6 (1st Cir. 1986).
James R. Muirhead United States Magistrate Judge
Date: December 9, 2003
cc: James E . Higgins, Esq. Arnold Rosenblatt, Esq. Daniel J. Bourque, Esq.