Ty has not allowed Company X to manufacture and sell actual Beanie Babies as though they belong to Company X. In particular, Ty has not licensed its pig or its cow to Company X at all. Ty has not placed a price on the heads of Beanie Babies, exchanging its right to exclusivity for money. As such, the court finds that the licensing agreement does not rebut the presumption of irreparable harm.
D. Balancing of Harms
1. Harm to Defendants
Regarding the GMA Cow, Defendants have already stated that they are not currently manufacturing, marketing, or selling the allegedly infringing cow. As such, Defendants will suffer no harm if the court preliminarily enjoins them from selling the cow.
Moreover, Defendants will not likely be harmed, where Ty has shown that it is likely to succeed in demonstrating that Defendants are misappropriating Ty's copyrights. Loss of profits from infringing products warrant little consideration in the balancing of harms analysis. Atari, 672 F.2d at 620.
However, if the GMA Pig and the GMA Cow are found not to infringe on Ty's copyrights, GMA may suffer some lost sales of those two Floppy Friend products. Unlike Ty, GMA does not contend that it will suffer damage to its reputation or lost future business. GMA's lost sales could reasonably be calculated and deducted from a bond posted by Ty. In balancing that potential harm against the potential harm to Ty, discussed supra, the court finds that the balance tips in favor of the injunction.
2. Public Interest
In addition to the foregoing analysis, when determining whether equitable relief is appropriate, the court must also give high regard to the public interest. August Storck, 59 F.3d at 619. The general public is a great beneficiary of competition. Id.
However, the court also considers that the public should not be deceived into participating in "competition" by purchasing one product, thinking it is a different product. Confusion in the marketplace and of consumers inevitably results from copyright infringement. E.g., Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 18 (7th Cir. 1992); Jackson v. MPI Home Video, 694 F. Supp. 483, 488 (N.D. Ill. 1988). Given the substantial similarity of the products at issue, the court finds that the public would likely be confused by the two cow and pig products. The court finds that the public interest weighs in favor of a preliminary injunction.
For the foregoing reasons, the court grants the Motion for Preliminary Injunction and Expedited Discovery. Ty has demonstrated (1) a likelihood of success on the merits, (2) the inadequacy of legal remedies, and (3) that it will suffer irreparable harm absent the preliminary injunction.
Accordingly, Ty has met its burden of demonstrating that a preliminary injunction is appropriate. Defendants shall not import, manufacture, distribute, market, or sell its Preston the Pig or Louie the Cow. Defendants shall produce all copies or reproductions of the GMA Pig and the GMA Cow, all patterns and other means of producing such copies, and all advertisements and promotional literature therefor to the court for impoundment.
GMA shall make a recommendation to the court regarding an appropriate dollar amount for a preliminary injunction bond to be posted by Ty on or before May 1, 1997. The parties shall appear for status on May 2, 1997, at 9:30 a.m. Defendants are preliminarily enjoined from sending either "Preston the Pig" or "Louie the Cow" to market.
IT IS SO ORDERED.
CHARLES RONALD NORGLE, SR., Judge United States District Court