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Just as children outgrow their toys, toys can outgrow their copyrights. That was the message the U.S. Court of Appeals for the Second Circuit sent in December � ruling that a big doll did not infringe on a smaller doll’s copyright, even though the big doll was derived from the smaller doll’s enlarged version. The controversy centered on a 4-foot-tall rag doll made by toy manufacturer Goffa International Corporation. The plaintiff, Well-Made Toy Manufacturing Corporation, produces rag dolls in two sizes: a small doll and a grown-up version, which is the same size as Goffa’s doll. Well-Made only copyrighted the smaller version, but in its suit it argued Goffa’s doll infringed because it was a derivative of a derivative, or “transitively derivative” of the plaintiff’s smaller doll, regardless of any lack of substantial similarity between the two. The court disagreed, ruling that even if Goffa’s doll is a derivative of the bigger doll, “it does not follow that Goffa violated Well-Made’s right to control the preparation of works” derived from the smaller one. Writing for a unanimous panel, Judge Robert Sack wrote that the proper comparison was between Goffa’s doll and Well-Made’s little doll. Comparing the two, the court found they had “little in common.” William Alper of Cohen, Pontani, Liberman & Pavane, who argued the case for the defendant, said the decision made sense because a derivative is not a copy, since it incorporates parts of the original but makes changes to it as well. “The further away you get from the original, the less like the original it will be,” he said. But Gerard Dunne, who represented the plaintiff, said that the court overlooked an important point. “They missed the fact that actual copying was proved [and] that’s an infringement,” he said. In a first for the circuit, the appellate court also found that it lacked jurisdiction over an infringement action for the plaintiff’s uncopyrighted bigger doll, since the features it shared with the smaller doll had not been registered under the latter’s copyright. The lesson here is “spend the 30 bucks to register your copyright,” Alper said. Dunne, however, argued that no copyright was needed for the bigger doll, since it was “so clearly a derivative work.” Well-Made introduced “Sweetie Mine,” a 20-inch rag doll, in 1995 and registered it with the copyright office the following year. In 1998, Well-Made developed a 48-inch version by photocopying drawings of its smaller toy and adjusting the proportions. This was done to preserve the doll’s appeal, since, as the designer testified, simply enlarging the smaller one would have resulted in a “fat, very klutzy looking doll.” The product of Well-Made’s efforts was instead “an attractive, perky-looking 4-foot companion for a preteen child,” versus the “sweet and cuddlesome” 20-incher appropriate for a toddler. The 4-footer caught the eye of Goffa president Douglas Song, who learned that it was selling well in the United States. He decided to introduce a competitor and sent his Shanghai factory the larger Sweetie Mine and a Chinese knockoff as examples of “how nice other people make it.” Based on the samples and some of Goffa’s own dolls, the factory designed and began manufacturing the “Huggable Lovable.” Late in 1998, Well-Made warned Goffa that it believed the Huggable Lovable infringed on its copyrights, and in early 1999 Goffa redesigned its doll and ceased production of the allegedly infringing version. Well-Made sued its rival in U.S. district court in Brooklyn for damages it had suffered in the interim. The dispute landed before Judge Jack Weinstein, who issued the opinion affirmed by the Second Circuit in December. The case went to a bench trial, during which the judge sat the two bigger dolls in the jury box, and counsel jokingly called them jurors. (Presumably the infant Sweetie Mine was excused on the grounds of extreme youth.) Weinstein ruled that “where the preexisting work is registered, but the derivative work is not, a suit for infringement may be maintained as to [a] protected element contained in the registered preexisting work but not as to any element original to the unregistered derivative work.” The court found that Well-Made owned a valid copyright to the little Sweetie Mine doll and that Goffa directly copied “large parts” of the larger Sweetie Mine. But Well-Made’s infringement claim fell short because it was unable to establish a “substantial similarity” between the protectable elements of its doll and the Goffa doll, Weinstein found. The judge found that the smaller Sweetie Mine “has a considerably younger, [more] winsome look” than the Huggable Lovable, due to differences in size, proportions, facial features, and clothing. “Size matters,” he wrote. “It is obvious yet important to take note of the fact that things smaller than ourselves are seen differently than things larger.” Furthermore, the defendant’s doll, with its adultlike proportions, is not just an enlarged replica of the smaller Sweetie Mine, with its infant proportions, “but more like its older sister or first cousin,” the judge wrote. The doll’s faces were also dissimilar “in obvious and important respects,” Weinstein found. While the Sweetie Mine had a “sugary” face with an “expression of pleasant satisfaction,” the Huggable Lovable had a “less sophisticated look” featuring an openmouthed “expression of joy.” All in all, the lower court found, compared with the two Sweetie Mines, the Huggable Lovable “looks like a slightly less alert and attractive relative” of the bigger version, “but definitely not like a twin of either.” A version of this story originally appeared in New York Law Journal, a sibling publication of Corporate Counsel and a part of American Lawyer Media.

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