Walt Disney Productions v. Basmajian
226 U.S.P.Q. (BNA) 268, 600 F. Supp. 439 (1984)
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Rule of Law:
A preliminary injunction will not be granted when the alleged harm is purely monetary, as this does not constitute irreparable injury. Furthermore, under the first sale doctrine, a copyright owner cannot prevent the resale of a specific copy of a work if title to that copy was lawfully transferred, such as by gift.
Facts:
- John Basmajian, Sr. worked in Walt Disney Productions' animation department from 1943 to 1946.
- During his employment, Basmajian claims he received permission from his superiors, John Bond and Ben Mosley, to take home original animation cels and sketches that were being discarded by the studio.
- Disney estimated that 20 million pieces of artwork were created during that period, but its own archives currently hold only about 50 pieces from that time.
- For decades, Basmajian kept the artwork openly in his home, displaying some pieces and showing the collection to visitors.
- In 1970, Disney's archivist, David Smith, wrote to Basmajian inquiring about his possession of Disney artwork after being informed about the collection by his own father, a colleague of Basmajian's son.
- In December 1983, Basmajian contracted with Christie's auction house to sell his collection of Disney artwork.
- In August 1984, a Christie's representative fully disclosed the origin of the Basmajian collection to Disney's legal counsel and informed them of the planned auction.
Procedural Posture:
- Walt Disney Productions ('Disney') filed a lawsuit against Christie, Manson & Woods International, Inc. ('Christie's') in the U.S. District Court for the Southern District of New York, a federal trial court.
- Disney filed a motion for a preliminary injunction to prevent Christie's from proceeding with a scheduled auction of original Disney artwork.
- The district court held a hearing on the motion for a preliminary injunction on December 6 and 7, 1984.
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Issue:
Is a copyright holder entitled to a preliminary injunction to stop the sale of its original artwork when the alleged harm is purely monetary and the current possessor provides credible evidence of having lawfully acquired the artwork as a gift?
Opinions:
Majority - Carter, District Judge
No. A preliminary injunction is not warranted because Disney failed to demonstrate it would suffer irreparable injury and was unlikely to succeed on the merits of its copyright claim. The court reasoned that Disney's claimed injury—the loss of potential revenue from selling the artwork itself—is a purely monetary harm that can be compensated with damages, thus failing the irreparable injury requirement for an injunction. Furthermore, the court found Basmajian's account of receiving the artwork as a gift from employees authorized to dispose of studio waste to be more plausible than Disney's claim of theft. This plausible claim of a gift constitutes a lawful transfer of title, triggering the first sale doctrine under 17 U.S.C. § 109(a), which allows the lawful owner of a copy of a copyrighted work to sell that particular copy without the copyright holder's permission.
Analysis:
This case serves as a crucial example of the high threshold for obtaining a preliminary injunction, particularly the strict interpretation of irreparable harm. It establishes that even for unique and culturally significant property like original artwork, if the plaintiff's primary alleged injury is loss of commercial value or revenue, the harm is considered monetary and thus not irreparable. The decision also provides a practical application of the first sale doctrine, showing that a credible, unrebutted claim of acquisition by gift can be sufficient to defeat a copyright owner's attempt to control downstream sales. Finally, the court's reference to laches suggests that a copyright holder's long delay in asserting its rights after having notice can weaken its claim for equitable relief.
