IP Law Daily Dismissal of personal organizer infringement suit affirmed on appeal
Wednesday, August 12, 2020

Dismissal of personal organizer infringement suit affirmed on appeal

By Robert B. Barnett Jr., J.D.

The Tenth Circuit affirmed the lower court’s grant of summary judgment to the alleged infringer on both the copyright infringement and trade dress claims.

In an infringement case in which EC Design alleged that Craft Smith infringed its copyright in personal organizers, and after the Utah federal district court granted summary judgment to Craft Smith on the ground that EC Design lacked a valid copyright, the U.S. Court of Appeals in Denver has affirmed the decision but on different grounds—the copyright was valid but EC Design never proved substantial similarity. In addition, the Tenth Circuit affirmed the lower court’s dismissal of the trade dress claim because EC Design failed to establish that the unregistered product design trade dress had acquired secondary meaning (Craft Smith, LLC v. EC Design, LLC, August 11, 2020, Phillips, G.).

EC Design, LLC, has sold its popular personal organizer, the LifePlanner, since 2007. In 2015, Craft Smith, Inc., wanting to enter the personal organizer market, contacted EC Design but failed to reach an agreement. Instead, Craft Smith designed its own personal organizer and sold it through Michaels Stores, Inc., its biggest customer. EC Design then sued Craft Smith and Michaels in Utah federal court, alleging claims for copyright infringement and unregistered trade dress infringement. The trial court granted summary judgment to Craft Smith, ruling (1) that the copyright infringement claim should be dismissed because EC Design lacked a valid copyright and (2) the trade dress claim should be dismissed because EC Design failed to establish secondary meaning for its trade dress. EC Design appealed the decision to the Tenth Circuit.

Valid copyright. In the trial court, EC Design presented the ‘725 (Vertical LifePlanner Compilation) registration certificate to satisfy the requirement that it had a valid copyright. The trial court, however, rejected that registration, ruling that the copyright infringement claim asserted a much broader protection than the scope outlined in the ‘725 registration. The Tenth Circuit ruled that the lower court erred by misapplying copyright infringement’s first element. This element requires only the existence of a valid copyright in the allegedly infringed copyright work as a whole. A valid copyright exists if the work "as a whole" exhibits a minimal degree of creativity. Because EC Design had a valid compilation copyright in the LifePlanner, it satisfied the first element.

Copying of original elements. Turning to the remaining element, the copying of original elements, the appellate court noted that EC Design was required to demonstrate that the two works were substantially similar in order to survive the motion for summary judgment. Because the copyright was a compilation copyright, the protectible elements were the collection and assembling of preexisting materials or data selected, coordinated, or arranged in some way that the work constituted an original work of authorship. Examining each of those elements, the Tenth Circuit concluded that the LifePlanner constituted an original work. Its two most important features were the texts, such as the daily quotes provided each day, and the graphics or applied art. Thus, the LifePlanner’s protectible elements consisted of the selection and arrangement of the text and the selection and arrangement of the artwork and graphics.

Because, however, the copyright was a compilation copyright, the protectible elements were limited to the selection and arrangement of that content and not to the format and layout itself. The format and layout were not protected because copyright law does not protect ideas. As a result, the protection afforded a compilation copyright is "thin" (TransWestern Pub. Co. v. Multimedia Mtkg. Assocs., 133 F.3d 773, 776 (10th Cir. 1998)).

Substantial similarity. To support substantial similarity, EC Design provided examples of four shared elements: (1) the same month and weekly calendar form, with the same banners and notes sections, arranged in the same order, (2) the same three sections, with same number of pages in each section, (3) the same number of sticker pages arranged in the same locations, and (4) the same tab size and font. Importantly, none of these reasons involved the text or the artwork, the two most important features of the compilation copyright. Instead, they all argued a similar layout and format, which were not protected. As the court said: "Copyright law does not protect how EC Design has laid out its LifePlanner, which is an idea, not an expression." As a result, the Tenth Circuit concluded, no reasonable juror could conclude that the protected elements of the LifePlanner were substantially similar to the allegedly infringing product. Thus, summary judgment on the copyright infringement claim was affirmed, although for a different reason than the one relied on by the trial court.

Trade dress. The trade dress claim rested on allegations that the LifePlanner’s overall image and appearance, such as the size, shape, color, and even sales techniques, were similar enough to justify a finding of infringement. Under the Lanham Act, which permits the unregistered trade dress claim, the trade dress must be inherently distinctive through a secondary meaning. Secondary meaning differs for cases involving product design versus cases involving product packaging.

Secondary meaning. Secondary meaning is acquired when the trade dress has been used so long and so exclusively that the purchasing public associates it with the product. It is a single thing coming from a single source. EC Design pointed to its colorful themes, customizable cover, sticker pages, and a coiled binding as evidence of a secondary meaning for the trade dress. It also pointed to its significant advertising spending, its significant sales, and intentional copying of some elements.

Citing Sally Beauty v. Beauty Co., Inc., 304 F.3d 964 (10 Cir. 2002), EC Design argued that the rule in the Tenth Circuit was that evidence of significant sales and intentional copying automatically created a genuine issue of material fact on secondary meaning. The Tenth Circuit, however, noted that the Sally Beauty case involved product-packaging trade dress, while this case involved product-design trade dress. The Tenth Circuit then refused to extend the Sally Beauty rule to product-design trade dress cases because the same consideration did not apply. A product’s design, for example, goes directly to its function. Thus, when a competitor copies the design, it may have done so for "any number of reasons unrelated to deception." Under these facts, the court concluded, evidence of significant sales and intentional copying failed to create a genuine issue of material fact regarding secondary meaning.

As for the remaining circumstantial evidence, the court admitted that using circumstantial evidence in product-design trade dress cases to prove source identification can be difficult because product design, unlike product packaging, is rarely involved with the identity of the source. EC Design argued that length of use created a genuine issue of fact. But the court noted that the trade dress had existed only since 2015, which meant that an alleged 2017 infringement occurred only a little more than a year after it was created. Furthermore, EC Design constantly altered colors, artwork, covers, and layout. Significant ad expenditures did not qualify either because the expenditures were not for the purpose of establishing a conscious connection in the public’s mind between the trade dress and the product. And, finally, the fact that some third parties commented that the allegedly infringing product was a "knockoff" was not determinative because those comments failed to establish the trade dress as a source identifier. As a result, the Tenth Circuit affirmed summary judgment on the trade dress claim.

The Tenth Circuit, therefore, affirmed the lower court’s ruling on both claims.

This case is No. 19-4087.

Attorneys: Daniel Barber (Maschoff Brennan) for Craft Smith LLC. Alan S. Mouritsen (Parsons Behle & Latimer) for EC Design LLC.

Companies: Craft Smith LLC.; EC Design LLC

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