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New York-based Tiffany & Co. won a major court victory Friday when a federal jury rejected a $45 million copyright infringement suit brought by a Philadelphia jewelry designer who said Tiffany had stolen his designs for a line of rings, pendants and bracelets with flush-set diamonds. After a two-week trial before federal Judge Harvey Bartle III of the Eastern District of Pennsylvania, the jury deliberated most of Thursday and one more hour on Friday before deciding that Paul Morelli’s designs were not even entitled to copyright protection. The verdict is a victory for Tiffany’s defense team — attorneys J. Scott Kramer, Dana J. Ash and Anthony L. Gallia of Duane Morris, along with Douglas C. Fairhurst of Dorsey & Whitney in New York. And the potential damages verdict wasn’t the only measure of the magnitude of the victory since any finding of copyright infringement would have resulted in a mandatory injunction barring Tiffany from continuing to sell its popular “Etoile” line of jewelry, which accounts for more than $30 million in annual sales worldwide. If the eight-member jury had found infringement, it would have gone on in a second phase of the trial to consider whether the infringement was “willful” and whether punitive damages should be awarded. Morelli, who was represented by attorney Stephen E. Raynes of Raynes, McCarty, Binder, Ross & Mundy along with Manny D. Pokotilow and Salvatore Guerriero of Caesar, Revise, Bernstein, Cohen & Pokotilow, faced an uphill battle in the trial because the U.S. Copyright Office had refused to register his designs. A denial of registration isn’t necessarily fatal to a copyright infringement claim because the law allows a jury to effectively overrule the Copyright Office by finding that a work incorporates enough creativity to warrant protection. But Morelli’s uphill battle was made even steeper when the U.S. Department of Justice intervened in his case and sent a lawyer to the trial to argue that the Copyright Office got it right when it rejected Morelli’s attempts to register his designs. Justice Department attorney John Fargo told the jury in a brief closing argument that each of the designs was too simple to warrant a copyright. “The problem with minimalist work sometimes is it doesn’t leave a lot in the way of expression that remains. … Common shapes — a heart, the square shape of a pillow earring, a circular shape of a ring or a bracelet — those are not copyrightable by themselves. They’re free. They’re geometric shapes. They’re free for all to use,” Fargo said. Likewise, Fargo said, the zigzag pattern of the inlaid diamonds on Morelli’s jewelry was not enough to constitute a creative expression. At trial, Morelli’s lawyers called a series of expert witnesses who testified that the designs were, in fact, creative and innovative. After the verdict was returned, Raynes said he believed the evidence was overwhelming that Tiffany’s Etoile line was “substantially similar” to Morelli’s designs predating Tiffany’s collection by several years. But Raynes said the plaintiff’s experts were limited in the conclusions they were allowed to testify to because Bartle precluded them from opining on the “ultimate issue” of whether they deserved copyright protection. As a result, Raynes said, the only conclusion the jurors heard was the rejection by the Copyright Office and Fargo’s argument that the jury should respect that decision. Morelli had also set out to prove that Tiffany had access to his “Sprinkled Diamond” jewelry designs and had copied them. In his closing argument, Raynes outlined for the jury how Morelli had conceived of his line of designs, beginning in 1987 with a heart-shaped pendant that was set with diamonds inlaid so that they would be flush to the surface. During the next few years, Raynes said, Morelli added bracelets and rings to the line. In the late 1980s, he said, Morelli began showing the designs at jewelry trade shows. At one trade show, he said, officials from Tiffany took an interest and asked for slides. And in 1992, Morelli was chosen one of five jewelry designers to have work featured in Bergdorf Goodman’s store on Fifth Avenue in New York — right across the street from Tiffany’s flagship store. Raynes told the jury that the woman who was responsible for choosing Morelli wares for Bergdorf later took a job with Tiffany and introduced Morelli to Tiffany’s new product development group. Soon after, Raynes said, Tiffany debuted its Etoile line, but claims its ideas had nothing to do with seeing Morelli’s line. “They not only took his original design, but they took the whole collection,” Raynes told the jury. But Kramer told the jury that Tiffany had proved that “the Etoile collection was created independently and without reference to anyone’s jewelry.” Kramer also urged the jury to find that Morelli’s designs were not entitled to copyright protection. “The jewelry at issue — simple, basic shapes using geometric patterns — is not protectable under the copyright laws because it lacks … originality and creativity,” Kramer said. When Morelli first met with Tiffany’s product development team, Kramer said, Tiffany was already selling one of the rings that Morelli now claims is a design stolen from him. Kramer also said Tiffany’s designs were different from Morelli’s in several ways, especially in the finish. While Morelli always used a textured finish, Tiffany’s line has a polished finish, he said. After the verdict was returned, Kramer said the jury’s decision was legally significant because it rejected an attempt to copyright “generic” jewelry designs. And although the jury never reached the question whether Tiffany had infringed on Morelli’s copyrights — since it rejected Morelli’s claim on the threshold question whether the designs were deserving of copyright protection — Kramer said the jury nonetheless cleared Tiffany of the charge by exonerating it on Morelli’s separate claim of unfair competition. “This case came down to the credibility of Tiffany & Co.’s witnesses,” Kramer said. By rejecting the unfair competition claim, Kramer said, the jury showed that it was convinced that Tiffany’s work on the Etoile line was “done independently.”

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