Original Appalachian Artworks, Inc. v. Toy Loft, Inc.

Majority - Kravitch, Circuit Judge

Yes, OAA's dolls possessed the minimal degree of originality necessary for copyright protection. The trial court found OAA’s dolls to be "substantially different" from the earlier Martha Nelson dolls, detailing several design differences such as facial expression, nose shape, hand anatomy, and the presence of a center seam on the buttocks, which were more anatomically correct and proportioned like an infant. These variations, though derived from the idea of a soft-sculpture doll, constituted the original work of Roberts and Morehead, providing more than a "merely trivial" variation and thus meeting the low threshold for originality (citing Alfred Bell & Co. v. Catalda Fine Arts, Inc.). No, OAA's copyright was not invalid due to inadequate notice or alleged fraud. The court found that the 1978 dolls were "new works" distinct from the experimental 1977 dolls, making the 1976 Copyright Act applicable. Under § 405(a)(1) of the 1976 Act, a copyright is not invalidated if notice has been omitted from only a "relatively small number" of copies; here, approximately 1% of OAA's total doll sales at the time of trial lacked the sewn-in copyright notice, which the court deemed sufficient. Regarding fraud or unclean hands, the court found no "scienter" (intentional concealment). Roberts' omission of Morehead as co-author was due to her leaving the operation, and the omission on a pre-existing works item on the application was based on advice from copyright office personnel, not an intent to mislead (citing Mitchell Brothers Film Group v. Cinema Adult Theater). Yes, Lawson infringed OAA’s copyright. Lawson did not dispute having access to OAA’s dolls. The trial court’s finding that Lawson’s dolls were "substantially similar" to OAA’s was not clearly erroneous, satisfying the second element of the indirect copying test (citing Miller v. Universal City Studios, Inc.). Substantial similarity exists where "an average lay observer would recognize the alleged copy as having been appropriated from the copyrighted work." Lawson's claim of independent creation was implicitly rejected by the trial court and warranted given Lawson's documented interest in OAA's production techniques. Even considering OAA's dolls as derivative works of Nelson's, Lawson's dolls infringed the distinguishable variations OAA added, as they contained most, if not all, of the features enumerated by the trial court as differences between OAA and Nelson dolls. Yes, Lawson infringed OAA’s distinctive "trade dress." The court concluded that OAA's unique combination of marketing techniques—including the adoption procedures, birth certificates, naming, and signing of dolls—constituted protectible "trade dress" under Section 43(a) of the Lanham Act. These techniques functioned as a sales method designed to make OAA's product distinctive in the marketplace. The trial court's finding of a "likelihood of confusion" by consumers was not clearly erroneous, considering factors such as the identical nature of the products, similar retail outlets and clientele, and evidence of actual confusion by a potential customer (citing Chevron Chemical, supra and Sun-Fun, supra). Lawson's efforts to differentiate his dolls were insufficient to negate this likelihood. No, the award of $10,000 in attorneys’ fees was not an abuse of discretion. Section 505 of the 1976 Copyright Act permits a trial court, in its discretion, to award reasonable attorneys' fees to the prevailing party. A showing of willful infringement or frivolity is not a prerequisite for granting fees, only that the party receiving the fee is the "prevailing party" and the fee is reasonable. OAA was the prevailing party, and the reasonableness of the fee was not challenged.