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A federal judge has refused to grant a new trial for a Philadelphia jewelry designer whose $45 million copyright infringement suit against Tiffany & Co. was rejected by a jury. In his 15-page decision in Paul Morelli Design Inc. v. Tiffany & Co., U.S. District Judge Harvey Bartle III of the Eastern District of Pennsylvania rejected arguments by plaintiffs’ lawyers who said he erred when he instructed the jury that the decision of the U.S. Copyright Office in refusing to register copyrights for the Morelli designs was entitled to “some deference.” Attorney Stephen E. Raynes of Philadelphia’s Raynes, McCarty, Binder, Ross & Mundy, along with Manny D. Pokotilow and Salvatore Guerriero of Caesar, Rivise, Bernstein, Cohen & Pokotilow, argued that Bartle should have told the jury that its verdict would be “de novo” — without any consideration for the decision of the Copyright Office. In copyright law, a rejection by the Copyright Office is not fatal to a plaintiff’s case. Instead, the plaintiff can still file suit and ask a jury to effectively overrule the Copyright Office and find that a design is sufficiently original to deserve protection. In Paul Morelli’s case, the Copyright Office intervened and participated in the trial, urging the jury to reject Morelli’s claim that his “sprinkled diamond” jewelry line was entitled to copyright protection. In post-trial motions, the plaintiffs’ lawyers argued that Bartle’s instructions deprived the jury of its proper role. Bartle disagreed, saying, “Although courts have articulated various standards for a court or jury to apply when considering the register’s denial of a registration, we have taken the path followed by our colleague Judge Norma Shapiro.” In Safeguard Business Systems Inc. v. The Reynolds and Reynolds Co., Shapiro, sitting without a jury in a copyright infringement case where the Copyright Office had denied a registration, explained in finding for the defendant that she had given “some deference” to the action of the Copyright Office. Bartle found that several other courts — including the 9th and 11th Circuits — had also concluded that the Copyright Office’s determination in an infringement action is entitled to “some deference.” While other courts have called for a “heightened abuse of discretion” standard, Bartle concluded that the “some deference” standard “strikes the proper balance.” “The statute, after all, gives the Register of Copyrights the right to intervene in this action,” Bartle wrote. “There would be little point in allowing her to do so if the decision of her office were deemed to be meaningless, as the plaintiff contends. On the other hand, since the statute permits a party whose application was denied to sue for copyright infringement, Congress did not intend, in our view, narrowly to constrain a jury or a court from finding a rejected work to be copyrightable and infringed.” By instructing the jury that the Copyright Office was entitled to some deference, Bartle said, “the jury was not bound by that decision and must decide for itself the issue of copyrightability of the jewelry designs involved.” Bartle noted that he had also explained to the jury the reason given by the Copyright Office for refusal of registration and that the examiner never saw the Morelli jewelry itself but only pictures of it. “The charge gave the jury the appropriate latitude to differ from the Copyright Office without totally ignoring its decision refusing registration. De novo review would not be consistent with the statutory scheme,” Bartle wrote. In the suit, Morelli claimed that Tiffany had stolen his designs for a line of rings, pendants and bracelets with flush-set diamonds. After a two-week trial, the jury decided that Morelli’s designs were not even entitled to copyright protection. The verdict was a victory for Tiffany’s defense team — attorneys J. Scott Kramer, Dana J. Ash and Anthony L. Gallia of Duane Morris in Philadelphia, along with Douglas C. Fairhurst of Dorsey & Whitney in New York. 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 that would have barred Tiffany from continuing to sell its popular “Etoile” line of jewelry that currently 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 to award punitive damages.

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