HQ 0453234 - Suspected infringement of Russ Berrie's Troll doll copyright (U.S. Copyright Office Registration Nos. VA 462-387, VA 462-390; Customs Recordation Issuance Nos. Cop 91-00300, Cop 91-00301) - United States International Trade Commision Rulings

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HQ 453234

August 18, 1992

TRA CO:I:IT:I 453234 TPT

CATEGORY: COPYRIGHT

District Director of Customs
U.S. Customs
909 First Avenue
Room 2039
Seattle, WA 98174

RE: Suspected infringement of Russ Berrie's Troll doll copyright (U.S. Copyright Office Registration Nos. VA 462-387, VA 462-390; Customs Recordation Issuance Nos. Cop 91-00300, Cop 91-00301)

Dear Sir:

This is in response to your memorandum dated March 12, 1992, wherein you requested that this office provide a legal opinion as to whether certain detained troll dolls infringe the copyrights referenced above.

FACTS:

The Entry Summary (Customs Form 7501) indicates that the subject troll dolls were imported on November 5, 1991, and that the entry date was November 11, 1991. Customs notified the importer by a letter dated December 5, 1991, that the troll dolls were suspected of infringing copyright registration VA 462-387. Because the merchandise had been released, Customs requested that it be given constructive custody of the merchandise.

In a letter dated January 3, 1992, the importer denied the allegation of infringement and informed Customs that the merchandise was not available for re-delivery or detention.

In accordance with section 133.43 of the Customs Regulations (19 C.F.R. 133.43), Customs notified the copyright owner regarding this shipment by letter dated January 8, 1992. The copyright owner, through counsel, responded and requested that Customs deny entry to the shipment and deposited a bond in the amount of $2,500 by a letter dated February 3, 1992.

ISSUE:

Whether the imported troll doll is substantially similar to the copyrighted troll dolls referenced above?

Whether the evidence, arguments, and law provide sufficient grounds to disregard the claims to derivative work copyrights in 2
the trolls referenced above?

LAW AND ANALYSIS:

The role of Customs in issuing substantive decisions of copyright infringement as to imported merchandise was addressed recently in The Miss America Organization v. Mattel, Inc., 945 F.2d 536 (2nd Cir. 1991). Citing section 603 of the Copyright Law (17 U.S.C. 603) the court recognized Customs authority to enforce the provisions of the law prohibiting importations of infringing goods. Mattel, 945 F.2d at 538. Also, the court acknowledged that as a result of its duties, Customs has developed expertise in determining whether merchandise does or does not infringe. Id. at 539. Further, the court stated that since sections 602 and 603 (17 U.S.C. 602, 603) direct the Secretary of Treasury to enact regulations to aid in combatting copyright infringement, it is implicit in these directions that the agency (Customs) would be involved in making infringement determinations. Id. at 541. Therefore, because the Treasury Department has been assigned the duty to enforce the copyright laws in cases where there is a reason to believe infringement exists as to an imported item, it follows that it is within Customs jurisdiction to take any action to fulfill this duty. Id. at 542.

Customs has some independence and autonomy in making infringement determinations regarding imported merchandise. Id. at 544. The court stated that there is no reason to enjoin Customs from performing its statutory duties so long as the agency proceeds in conformity with the statutory scheme. Id.

A party claiming infringement of its copyright must prove that it owns the copyright, that the alleged infringer had access to the copyrighted work, and that there is substantial similarity between the copyrighted work and the alleged infringing work. Aliotti v. R. Dakin & Co., 831 F.2d 898, 900 (9th Cir. 1987). A party makes a prima facie case as to copyright ownership by submitting the copyright registration which carries with it a presumption of validity and ownership. 17 U.S.C. 410(c); Folio Impressions, Inc. v. Byer California, 752 F. Supp. 583, 585 (S.D.N.Y. 1990), aff'd, 937 F.2d 759 (2nd Cir. 1991); Quaker Oats Co. v. Mel Appel Enterprises, Inc., 703 F. Supp. 1054, 1058 (S.D.N.Y. 1989). Upon presentation of a registration certificate the burden of proof shifts to the defendant to introduce evidence of invalidity. Original Appalachian Artworks, Inc. v. The Toy Loft, Inc., 684 F.2d 821 (11th Cir. 1982).

Access to a copyrighted work may be established by direct proof of copying or by circumstantial evidence that an alleged infringer had access to the copyrighted work. Gund, Inc. v. Russ Berrie and Co., Inc., 701 F. Supp. 1013, 1018 (S.D.N.Y. 1988). Whether a work is substantially similar to another is determined 3
by the "ordinary observer" test which is whether the ordinary observer would be disposed to overlook the disparities of the works and regard their aesthetic appeal as the same. Id. at 1018. A determination that copying has taken place does not require a finding that every detail is the same, the key being the similarities rather than the differences. Id. at 1018.

Imported articles which infringe a copyright are prohibited importations under section 602(b) of the Copyright Act and such articles are subject to seizure and forfeiture under section 603(c) of the Copyright Act. These articles are seized and forfeited in the same manner as goods imported in violation of the Customs revenue laws. 17 U.S.C. 603. Alternatively, infringing articles may be returned to the country of export whenever it is shown to the satisfaction of the Secretary of the Treasury (Customs) that the importer had no reasonable grounds for believing that its acts constituted a violation of law. 19 C.F.R. 133.47. The party claiming that an imported article is infringing shall bear the burden of proof. 19 C.F.R.

The copyright which is at issue here is VA 462-387 which covers the three and a half inch troll doll. Russ Berrie contends that the more appropriate registration is VA 462-390 which covers the four inch troll. The detained troll is two and a half inches.

Russ Berrie asserts that all the trolls recorded with Customs are covered by U.S. Copyright Office registrations which constitute prima facie presumption of validity. Masquerade Novelty, Inc. v. Unique Industries, Inc., 912 F.2d 663 (3rd Cir. 1990). It further argues that the copyrighted troll figure is derived from two dimensional photographs of an earlier version of a Russ troll doll and, thus, the current three dimensional works are derivative works subject to copyright protection under section 103 of the Copyright Law (17 U.S.C. 103).

Russ Berrie states that it made full disclosure to the Copyright Office in applying for its copyright registration. It asserts that full disclosure was made of the two dimensional troll from which its three dimensional troll was derived. In Scandia House Enterprises, Inc. v. Dam Things, Est., 243 F. Supp. 450 (D.D.C. 1965) the court found troll dolls to be in the public domain. Russ Berrie concedes that the underlying two dimensional trolls might be identical to or substantially similar to the public domain troll doll. Russ Berrie Memorandum at P.4. Based upon the information provided, the Copyright Office granted the registration in August, 1991.

Russ Berrie asserts that in making these new troll dolls many features were changed. It states that the eyelids were 4
rounded, the eyes were made closer together, the chin was sculptured to come after the smile line, the space between the nose and mouth was shortened, the eye color was changed, the hairline width was made longer, the head was made larger in proportion to the body, the ears were rounded, the nose was made more puggish, and rouge was removed from the cheeks. Also, in addition to these changes to the head, the copyright owner contends that other parts of the body were changed. It states that the entire back of the sculpture is original and changes were made to the legs, chest, bottom, toes, hands.

The copyright owner relies upon Feist Publications, Inc. v. Rural Telephone Service Company, Inc., U.S. , 111 S. Ct. 1282 (1991), for the standard for originality. The Court stated that "original" means work that is independently created and possesses at least some minimal degree of creativity, the level of which is extremely low and that the vast majority of works have the requisite creativity no matter how crude, humble, or obvious. Id. at 1287. Russ Berrie argues that even if its original troll dolls are in the public domain because they were made from the molds used to make the dolls ruled upon in 1965, the changes made to create the current three dimensional dolls are protectable as derivative works.

The importer argues that Russ Berrie has offered no evidence to support validity of its VA 462-387 copyright. Additionally, it argues that for Customs to fail to address the issue of validity denies due process where exclusion of merchandise may take place without consideration of the issue.

The importer contends that once the prima facie evidence validity exists based upon the presentation of a registration certificate, the importer may submit evidence to rebut the presumption by showing that the copyrighted work merely copied or presented trivial variations of a public domain work. Russ Berrie & Co. v. Jerry Elsner Co., 482 F. Supp. 980 (S.D.N.Y. 1980). In arguing that the copyright at issue here is invalid, the importer asserts that troll dolls have been considered to be in the public domain as a result of the decision in Scandia House It argues that public domain works may be freely copied. Russ Berrie & Co. 482 F. Supp. at 985. Conceding that the copyright law extends protection to that material which an author contributes to a pre-existing work, the importer contends that the copyrighted trolls fail to have the requisite requirements for a valid copyright of a derivative work,

The importer argues that in order to obtain a copyright in a derivative work, the material which is added to the pre-existing work must be substantial, not merely trivial. Sherry Manufacturing Company, Inc. v. Towel King of Florida, Inc., 753 F.2d 1565 (11th Cir. 1985). The importer asserts that the 5
copyright owner may prevail only if the copyrighted troll doll differs substantially from the public domain troll doll. L. Batlin & Son, Inc. v. Snyder, 536 F.2d 486 (2nd Cir. 1976), cert. denied, 429 U.S. 857 (1976). The importer contends that there are fewer differences between the Russ Berrie troll doll and the public domain troll doll than what was found in L. Batlin where the court invalidated a copyright for a derivative work.

In support of its position that the Russ Berrie troll doll is substantially similar to the public domain troll, the importer provides Mr. Russ Berrie's testimony in EFS Marketing, Inc. v. Russ Berrie & Company, Inc., 21 U.S.P.Q. 2d 1993 (S.D.N.Y. 1991) (decision denying preliminary injunction sought by plaintiff and denying summary judgement sought by defendants). The importer offers Mr. Berrie's statement that he made minor changes to the public domain doll by rounding the ears, changing the jawline, and derouging or dereddening the face. The importer argues that these are merely trivial changes and that copyright protection does not extend to these minor variations.

CUSTOMS DETERMINATION

As a general rule Customs has not addressed the issue of validity of a copyright except to state that the existence of a registration certificate constitutes prima facie evidence of validity pursuant to section 410 of the Copyright Law. Customs has been careful not to appear to encroach on the courts' functions of passing on a certificate's validity since the registrant vouches for the independence and originality of a copyright when it is signed. 20 Cust. B. & Dec. 646 (C.S.D. 86- 23, 1986) (hereinafter C.S.D. 86-23). However, because both parties in the instant matter present and argue the issue, we are compelled to discuss it.

Although the facts in C.S.D. 86-23 are very different than the instant case, it does provide some background. In C.S.D. 86- 23 Customs was faced with imported merchandise which became the subject of a copyright registration after the importation occurred. The merchandise was suspected of infringing another copyright registration which covered the same merchandise. In this ruling Customs stated that

Although a copyright registration certificate acquired prior to importation is arguably somewhat more persuasive of originality than one obtained only after Customs has seized or detained imported goods, it is similarly subject to question and may be disregarded when other evidence indicates piratical copying.
Id. at 648.
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Further, Customs held in that case that if evidence clearly indicates piratical copying or reason to suspect such copying of a copyrighted work recorded with Customs and the imported article is covered by a copyright certificate (whether obtained before or after importation), Customs officers shall institute the procedures set forth in section 133.43. Therefore, Customs does not now venture into resolving the issue of a questionable copyright registration certificate without having contemplated this possibility in the past albeit under a different factual setting.

In an effort to resolve this issue, we look to the copyright laws and judicial opinions available to reach a reasoned conclusion. First, section 103 of the Copyright Law (17 U.S.C. 103) explicitly provides for protection of derivative works. We look to judicial opinions which have dealt with the question of whether a derivative work has sufficient original authorship to warrant copyright protection.

An issue to be resolved in copyright infringement cases is the issue of validity. Masquerade Novelty, 912 F.2d at 667; Durham Industries, Inc. v. Tomy Corporation, 630 F.2d 905, 908 (2nd Cir. 1980); Folio Impressions, Inc. 752 F. Supp. at 585; Russ Berrie & Co., 482 F. Supp. at 984. The court in Mattel stated that when infringement cases arise in the context of imported merchandise, it is within the jurisdiction of Customs to fulfill the duties explicitly tasked to the Department of the Treasury, i.e., to enforce the provisions of the law prohibiting importation of infringing goods. Mattel, 945 F.2d at 538. Although we see implicit in the court's language that Customs may address any issue that is raised in connection with determining whether copyright infringement exists, we do not choose to take the step of invalidating the registration.

Customs's role of enforcement is different from that of the U.S. Copyright Office's role as a registry. Since our decisions may have the effect of depriving one of his/her property, we must engage in the type of legal analysis conducted by the courts. It is instructional for us to review cases wherein works were derived from the public domain or from works subject to copyright registrations, but found to be invalid upon challenge in the courts.

The L. Batlin case involved a copyright recorded with U.S. Customs where a copyrighted plastic bank derived from a cast iron bank in the public domain. The cast iron bank is referred to as an Uncle Sam mechanical bank which was known to exist as early as 1886 and had long since passed into the public domain. The court described the bank as

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Uncle Sam, dressed in his usual stove pipe hat, blue full dress coat, starred trousers, and leaning on his umbrella, stands on a four-or five-inch wide base, on which sits his carpet bag. . . . The base has an embossed American eagle on it with the words "Uncle Sam" on streamers above it, as well as the word "Bank" on each side.

L. Batlin, 536 F.2d at 488.

Defending the copyrighted plastic work, the copyright owner in L. Batlin argued that in addition to the difference in size, that his carpet bag in his plastic bank was smoother than the cast iron bank, that the metal bank had a fatter base, that the eagle in the cast iron was holding arrows while on the plastic bank the eagle was holding leaves, that the shapes of Uncle Sams were different, and the shapes and texture of the hats were different.

Additionally, the copyright owner claimed that the umbrella hung loose on the cast iron bank but not on the plastic bank and that the texture of the clothing, the hairline, shape of the bow ties and of the shirt collar, left arm, and the flag bearing the name on the base of the statue were all different. The court, however, concluded that these differences were not "perceptible to the casual observer." Id. at 489.

The court concluded that the public domain cast iron bank and the plastic bank, the subject of a copyright registration, were extremely similar except for the size and material. Id. The court stated that other than the size the only other differences were the shape of the satchel and the leaves in the eagles talons. Id. The court reviewed those features which were similar. The similar features were summarized by "the appearance and number of stripes on the trousers, buttons on the coat, and stars on the vest and hat, the attire and pose of Uncle Sam, the decor on his base and bag, the overall color scheme." Id.

The court found that there must be independent creation and that there must be some substantial, not trivial originality. Id. at 490. The court, therefore, affirmed the lower court's factual finding that the differences were infinitesimal. Id. at 489.

In Gracen v. Bradford Exchange, 698 F.2d 300 (7th Cir. 1983), a copyright in a derivative work was denied because there was not substantial difference between a still photograph of Judy Garland in the Wizard of Oz and Miss Gracen's painting of Judy Garland. Scenes from the movie were provided to contestants. The contestants were asked to give their interpretations through 8
paintings. The picture of Judy Garland provided by Bradford Exchange and the painting done by Miss Gracen have differences (Reproduced as part of the reported case). Although, we do not enumerate all the differences here, we note that the two pictures reproduced in the reported case do differ in that Miss Gracen's painting has Judy Garland standing on a brick road and a wooden fence on one side of the road, two features absent in the photograph provided by the Bradford Exchange to its contestant. However, despite these two obvious differences and other minute ones, the court rejected Miss Gracen's argument that she possessed a copyright in her work as derivative work because the differences were not substantial enough. Id. at 305.

Finally, in Sherry Manufacturing Company, Inc. v. Towel King of Florida, Inc., the work at issue was a design on beach towels. Sherry Manufacturing first marketed its towels with the design in the 1960's. The design was a decorative scene depicting three palm trees growing out of some sand, an ocean view above the sand with a sailboat in the right lower corner, and clouds above the ocean horizon. The design was not copyrighted and was public domain material.

In the mid-seventies, Sherry Manufacturing wanted to obtain copyright protection for its designs. This original design was changed. The redesign involved changes in the dimension of the beach, trees, and water. The new design was submitted for registration and a copyright registration was issued. The copyrighted work was subsequently corrected due to a watermark defect. When it was discovered that Towel King was marketing a towel which copied Sherry's design, the suit followed.

The district court judge found Towel King's design to be virtually identical to the copyrighted design except for the way the word Florida appeared on the towels, a difference in one cloud on the left side of the palm trees, and a reduction of the sand below the palm trees. Towel King's design even included the watermark defect. Id. at 1566. At issue on appeal was whether the new Sherry design was copyrightable.

The court concluded that based upon a side by side comparison, the contributions by Sherry's artist were too trivial and too insubstantial to justify copyright protection. Id. The trial judge listed the differences between Sherry's public domain design and the copyrighted design.
a) The extent of the seawater portion of the scene is painted differently. b) The amount of sand beneath the tree was increased to change the impression from an island to a beach. c) The leaves of the palm tree are sharper 9
and more lifelike. d) The clouds on the new design were painted differently. e) The effect of the wind in the overall impression is diminished. g) The water was lowered approximately three inches. On [Sherry's Original Design] some of the palm leaves touched the water. In
[Sherry's New Design] they are two inches away. h) The leaves of the palm tree are different. The right small palm leaves are totally spread from the center palm tree trunk.

Id. at 1568. (no subsection (f) in the trial court's fact finding.)

Upon reviewing the lower court's findings, the court of appeals concluded that these distinguishing features were so minor that they were virtually unnoticeable upon a cursory comparison. Id. The court continued that those differences which were noticeable were so only because they involved simple changes in spacing and dimensions of non-detailed features. The court stated that copyright protection was intended to apply to works with more recognizable originality, especially in cases such as this where the primary purpose of making changes was to make the work copyrightable, and to make it more aesthetically appealing. Id.

Applying these principles to the instant matter, initially, we disagree with the copyright owner, Russ Berrie, that the Scandia case is irrelevant to this case. We must be cognizant of those characteristics and features of the troll doll which are in the public domain and may be copied by any one. Works substantially derived from pre-existing works, whether copyrighted or in the public domain, are subject to copyright protection so long as the derivative work itself is original as long as the original aspects are nontrivial and do not affect the underlying work. Knickerbocker Toy Co., Inc. v.Winterbrook Corp., 554 F. Supp. 1309, 1317 (D.N.H. 1982).

The copyright owner's reliance upon Feist is misplaced. Feist focused on compilations. In the instant case, the issue presented involves derivative works. Since we find sufficient case law on derivative works, we obtain our guidance from these cases.

Next, we turn to the features of the Russ Berrie trolls, the imported troll, and the public domain troll. Again, we disagree with the copyright owner's contention that Mr. Berrie's testimony 10
in another action is irrelevant in the instant matter. Mr. Berrie's testimony in EFS has been submitted as part of the record before us and shall be considered. While we understand that the EFS case involves a trade dress issue, the significance of the testimony is that Mr. Berrie provides a historical background for his trolls in a copyright context.

From the copyright owner's petition, Russ Berrie Petition at 10 n.2, and Mr. Berrie's testimony, it is stated that Mr. Berrie's company bought troll doll molds from a Florida company which made the public domain troll doll for Scandia. Importer's Exhibit C at p. 256, 273 (hereinafter 'Imp. Ex.') Mr. Berrie's company used the same molds to make troll dolls in 1972, Berrie Pet. at 10 n.2, and in 1976. Imp. Ex. C at p. 275. In the late 1980's Mr. Berrie sent the work abroad for manufacturing, still using photographs of earlier troll dolls, but asking that they be enlarged. Id. at p. 279. In a series of questions and answers concerning copyrighting the pencil topper troll, Mr. Berrie testified that the changes involved were as to the ears, jaw line, rounding cheeks, removing rouge color, and adding other elements. Id. at pp. 279-281.

Mr. Berrie's affidavit in the EFS case, Imp. Ex. D, confirms that his troll dolls, old and new, incorporate features of public domain trolls. Id. at p. 13. Specifically, he states that these public domain elements are pointed ears, puggish nose, pot belly, big eyes, wild hair, and outstretched arms. Id. The only changes Mr. Berrie refers to are the changes in the ears, jaw line, rounding cheeks, removing rouge color, and adding other elements (unspecified).

We now turn to the actual comparison of the troll dolls. We agree that the importer's two and a half inch troll doll is substantially similar, if not identical, to the three and a half and four inch copyrighted dolls (which are identical except the size). However, when the copyrighted dolls are compared to a public domain doll, we see that they have pot bellies, outstretched arms, big round eyes, wild hair, and bulbous noses. Also, if changes have been made to the backs of the copyrighted doll, we see no discernable differences other than the minor difference in the angle of bend at the knee. The differences are slight in that the dolls are slightly different shades of flesh color, the ears of the copyrighted work are not as pointed, and there is slightly more of a chin on the copyrighted works. In our side by side comparison we do not notice many of the changes noted by the copyright owner. After reviewing L. Batlin, Gracen, and Sherry Manufacturing Company, we conclude that the similarities between the public domain doll and the protected works are substantial and that the differences, in our judgement,

11
are trivial. We are of the opinion that an ordinary observer would overlook the differences because they are trivial and insubstantial .

Concerning the importer's argument that it is denied due process where Customs does not make a finding on the issue of validity, we believe that the procedural mechanisms available are sufficient. In cases where Customs finds infringement, an importer may challenge the substantive merits during proceedings for judicial forfeiture. See 19 U.S.C. 1608; 19 C.F.R. 162.47. Therefore, we conclude that the procedural mechanisms now available provide the importer with due process to challenge Customs seizures and forfeitures.

This forum has not in the past found a copyright invalid and we choose not to do so here. However, Customs will enforce its regulations as though no copyright certificate exists. See C.S.D. 86-23.

Although the decision above makes any further findings unnecessary, we do address an additional point made by the importer. The documents submitted by the importer demonstrate that the troll doll which was imported is Item No. M2287, two and a half inch troll doll. The importer has provided entry documents related to a 1989 shipment which indicates that this item was imported prior to the creation of the troll doll covered by copyright registration VA 462-387 (work created 1990, first published May 13, 1991).

Although these documents are provided in order to permit Customs to conclude that the item currently detained is the same as the item imported in 1989, we can not reach this conclusion. The 1989 invoice refers to the Item No. M2287 as small trolls. Additionally, the photocopies from the catalogue, when compared to the detained troll appears to be different. Therefore, we can not conclude that the item detained and the items imported in 1989 are identical based upon the questionable quality of the black and white photocopy.

HOLDING:

Customs will enforce its regulations as if there is no valid certificate of registration covering this claim to copyright. C.S.D. 86-23. Therefore, based upon the foregoing, we conclude that there is no infringement by the imported item on the Russ Berrie troll dolls at issue.

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A copy of this decision may be provided to the copyright owner and importer. Finally, in view of the decision that infringement does not exist in this case, the bond deposited by the copyright owner shall be transmitted to the importer pursuant to 19 C.F.R. 133.44(b).

Sincerely,

John F. Atwood, Chief

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