Notes & Comment
Vol. 2003, No. 2
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What happens when you create something, obtain a copyright registration for it, create a derivative work but don't register that , and someone copies the unregistered derivative work?
In Well-Made Toy Mfg. Corp. v. Goffa International Corp., No. 02-7881 (December 2, 2003), the U.S. Court of Appeals for the Second Circuit held that you just might be out of luck. (Opinion available at http://www.ca2.uscourts.gov:81, enter case name or case number in search boxes).
The Well-Made Toy company ("Well-Made") created a 20-inch "Sweetie Mine" rag doll and obtained a copyright registration in 1996. Two years later, Well-Made produced a 48-inch derivative version of "Sweetie Mine" by, among other things, enlarging cloth patterns to adjust for larger proportions, but it didn't register a new copyright for the 48-inch version.
Also in 1998, Goffa International ("Goffa") created the 48-inch "Huggable Lovable" rag doll that the trial court found had substantially copied Well-Made’s 48-inch product. Well-Made sued Goffa and its distributor for copyright infringement, claiming that Goffa’s 48-inch "Huggable Lovable" infringed copyrights for both its 20-inch and 48-inch "Sweetie Mine" dolls.
After a bench trial, the district court entered judgment for Goffa, and the Court of Appeals affirmed.
Well-Made Toy Mfg. Corp. v. Goffa International Corp. makes several useful and relatively simple points about copyright law.
First, one generally must have a federal copyright registration to pursue an infringement case in federal court and seek damages and other remedies. 17 U.S.C. 411(a). Here, the main problem was that Well-Made had not registered a copyright for its 48-inch product.
Second, a derivative work generally requires its own copyright registration before a court will entertain an infringement lawsuit. In other words, a copyright registration obtained for an initial work (here, the 20-inch "Sweetie Mine" doll) does not automatically extend to a subsequent derivative work (the 48-inch "Sweetie Mine" doll). Each work should be registered separately.
However, said the court, this rule does not necessarily apply in the mirror circumstance, as when the derivative work (such as a collection of photographs) cumulatively includes and subsumes the original work (the individual photographs). In that situation, a copyright registration for the later derivative work (the photograph collection) could authorize an infringement lawsuit related to the unregistered original work (the individual photographs).
Third, copying an unregistered derivative work (here, Well-Made’s 48-inch doll) does not, by extension, automatically result in an infringement of the registered original work (the 20-inch version). Well-Made had argued that its registration for the 20-inch product excluded Goffa from making "a derivative of a derivative."
But the court found that since Well-Made did not register the 48-inch doll, it could prevail only if Goffa’s 48-inch doll infringed Well-Made’s 20-inch registered version. The evidence showed that while Goffa’s 48-inch "Huggable Lovable" substantially copied Well-Made’s 48-inch model, it was different enough from Well-Made’s 20-inch product -- had "sufficiently transformed the expression of the [20-inch doll] such that the two works ceased to be substantially similar" -- as to not be a derivative work, nor otherwise infringe that copyright.
Finally, Well-Made had also sued Goffa’s distributor for the same copyright infringement. Goffa was defending the distributor pursuant to an indemnification agreement. Since the underlying claims could did not succeed against Goffa, the manufacturer, they could not succeed against the distributor either.
The case demonstrates the risk that "innocent" channel partners (distributors, resellers, systems integrators, OEMs) assume when distributing another’s products, and the value of proper channel partner agreements that include such provisions as intellectual property representations and warranties and indemnification.
Conclusion
The core issue in this case was access to the federal courts to remedy an alleged infringement. Access generally requires a copyright registration. Oftentimes, the volume and frequency of creative output makes registration of each work impractical and costly.
Nonetheless, Well-Made Toy Mfg. Corp. v. Goffa International Corp. suggests that creators should at least make qualitative, selective decisions about their work, and should register copyrights for works that have strategic value. Registration of an original work, however, doesn't necessarily extend to a subsequent unregistered derivative work. Each work should be registered. But the converse may be true: creators that can't or don't wish to register each original work should, at a minimum, consider registering cumulative derivative works that incorporate unregistered original works.
© Matthew Joseph 2003. Law Offices of Matthew Joseph, San Mateo, California, practices in the areas of intellectual property licensing, commercial real estate leasing, and corporate and business transactions. No legal advice is intended by the information provided herein and recipients should independently consult counsel before taking any action related to this subject matter.