independently without copying. See Wildlife Express, 18 F.3d at 508. In further support of its motion for preliminary injunction, Art Line argues that Brown independently created Art Line's Animals.
Art Line authorized Brown in the spring of 1995 to design the filled Animals at issue. (Brown Aff. at 5.) Brown states that he has been "designing lawn and garden ornaments for over 30 years." (Brown Aff. at 3.) Brown describes his design process in great detail.
First, Brown went through his file of "reference materials, which include catalogs, postcards, greeting cards, magazines, and other printed materials, and [also looked] over items [he] previously designed." (Brown Aff. at 5.) Then, Brown went to the Wilmette Public Library for additional reference materials. Id.
Next, Brown admits that he referred to some giftware he purchased from a variety of manufacturers and that he visited garden centers, gift shops, and other retail outlets for ideas, as "no designer can develop designs for new products in a vacuum." (Brown Aff. at 3-4.) However, Brown states that he "did not refer to any Universal catalogs, promotional materials, or products when [he] designed any of the designs at issue in this lawsuit." (Brown Aff. at 5.)
Relying on various reference materials, Brown sketched designs of the animals, showing dimensions and details. (Brown Aff. at 4.) Thereafter, Brown sent completed drawings, along with reference materials when specific features could not be clearly shown in a two-dimensional line drawing, to a model making company. Id.
Universal does not offer any evidence to refute Art Line's evidence of independent creation. Universal merely states that Art Line's Animals are substantially similar to Universal's statuary animals. However, as discussed above, the court finds that Art Line has sufficiently shown that its Animals are not substantially similar to Universal's.
Further, Brown has sufficiently evidenced that he has independently created and designed Art Line's Animals. Attached to Brown's affidavit were his drawings of the Animals, and several reference materials which depicted live animals. Unlike in Ty, Inc. v. GMA Accessories, Inc., 959 F. Supp. 936, (N.D. Ill. 1997), Art Line's Animals do appear live, as it is its objective.
In Ty, GMA's designer, allegedly drew inspiration from various books and photographs, as well as the Academy-Award-nominated talking animal movie Babe, which she watched several times. Id. at 940-41. All of those sources depicted live pigs. Id. However, because the pigs and cows at issue did not appear live at all, the court found that GMA failed to show that its pig and cow designs were independently created. Id.
In the instant case, Art Line's Animals do resemble Brown's drawings and do appear live. Thus, the court is convinced that Art Line has more than a negligible chance of showing that Brown independently created and designed Art Line's Animals and, therefore, that there was no infringement. See Wildlife Express, 18 F.3d at 508.
2. Unfair Competition
In further support of its motion for injunctive relief, Art Line argues that it has more than a negligible chance of success on its claims for trade libel, unfair competition in violation of the Lanham Act and common law, and violation of the Illinois Consumer Fraud Act and Deceptive Trade Practices Act. In arguing the likelihood of Art Line's success on these claims, Art Line and Universal focus the court's attention to the following issue: whether Universal's notice of infringement letters contain false or misleading statements, or whether Universal sent such letters in bad faith.
It has long been the law in this circuit that an intellectual property right "holder has the right to defend himself against infringement and to warn purchasers from the alleged infringer that they, too, might be liable to him" through the sending of infringement letters. Spangler Candy Co. v. Crystal Pure Candy Co., 235 F. Supp. 18, 32 (N.D. Ill. 1964); see also Chromium Indus., Inc. v. Mirror Polishing & Plating Co. Inc., 448 F. Supp. 544, 558 (N.D. Ill 1978) (dealing with infringement letters in patent case); Airtex Corp. v. Shelley Radiant Ceiling Co., 400 F. Supp. 170, 177 (N.D. Ill. 1975) (dealing with infringement letters in patent case). However, the right to send infringement letters is limited. A copyright owner may not send infringement letters which (a) contain false statements or (b) are issued in bad faith. 235 F. Supp. at 32.
a. False Statements
Relying on Abbott Lab, Art Line argues that Universal's letters contain false statements in that, contrary to the letters, Art Line is not infringing on Universal's copyrights. In Abbott Lab, the court concluded that Mead's description of its Ricelyte product was literally false. 971 F.2d at 13. Mead described Ricelyte as a "rice-based oral electrolyte solution" and asserted that it contained "rice carbohydrate molecules" even though Ricelyte did not contain any rice at all. Id.
In the instant case, the only alleged false statement is Universal's allegation of infringement. Universal's allegation represents Universal's conclusion and belief, rather than a factual statement. Art Line has not cited to any relevant authority in support of its argument that it, by establishing that it did not infringe Universal's copyright, can prove that Universal's letters contained false statements. As such, the court is not convinced that Universal's letters contained false statements.
Art Line has not met its burden of showing that it has more than a negligible chance of showing that Universal's letters contain false or misleading statements. Thus, the court will address whether Universal's letters were issued in bad faith.
b. Bad Faith
Art Line argues that Universal's letters were issued in bad faith, evidenced by Universal's timing. According to Art Line, Universal saw Art Line's Animals on August 11-14, 1996, when Art Line debuted its entire new line at the National Hardware Show. Art Line further asserts that Universal knew that Art Line was actively marketing all of the items displayed at the trade show. Nevertheless, Art Line argues that Universal did not assert any copyright infringements until Hechinger, a major account, decided in January 1997 to carry Art Line's Animals rather than Universal's statuary animals.
In addition, Art Line argues that the court can infer Universal's bad faith from Universal's failure to promptly follow their letters with an infringement lawsuit. See Airtex Corp., 536 F.2d at 155-56. Art Line argues that it sent a letter to Universal, advised Universal that its allegations of infringement were without merit, and demanded Universal to retract its allegation. Because Art Line's letter was met with "deafening silence," Art Line filed the instant action on February 18, 1997. Art Line argues that Universal did not promptly follow its letters with a lawsuit as it waited until March 31, 1997, to file a counterclaim against Art Line.
Universal did not refute the time-line Art Line presented. For the purpose of this motion, the court does infer bad faith from the order of events as Art Line has described. As such, the court is convinced that Art Line has met its low burden of showing that it has more than a negligible chance of proving that Universal issued its notice of infringement letters in bad faith.
Based on all of the aforementioned reasons, the court is convinced that Art Line has met its low burden of showing that it has more than a negligible chance of succeeding on the merits. Thus, the court will examine the remaining factors to determine whether a preliminary injunction is warranted.
B. No Adequate Remedy at Law
Art Line argues that if Universal is not enjoined from sending infringement letters to Art Line's customers or anyone else in the indoor and outdoor statuary industry, it is likely that Art Line will lose a considerable amount of business, not only as to the statuary animals at issue, but other products as well. More importantly, Art Line argues that Art Line's reputation will be damaged. Thus, Art Line argues that "if Universal is allowed to keep disparaging Art Line until Art Line wins at trial, Art Line will have won the battle but lost the war." (Art Line Reply Br. at 2.)
The court is convinced that the damage Art Line is likely to suffer, if Universal is not enjoined, is not easily measurable in monetary terms. Thus, Art Line has met its burden of showing that no adequate remedy at law exists.
C. Irreparable Harm
A presumption of irreparable harm may arise upon a showing of likelihood of success on the merits and a prima facie case. See Jackson v. MPI Home Video, 694 F. Supp. 483, 488 (N.D. Ill. 1988). Even without the presumption, Art Line has met its burden of showing the irreparable harm it will suffer if Universal is not enjoined.
Art Line argues that the 1998 selling season for statuary begins in June with the Colorado Springs trade show, and ends in August with the National Hardware Show. As such, if Universal is not enjoined, Art Line argues that "Universal will not only divert Art Line sales to its own benefit, but it will besmirch Art Line's reputation." (Art Line Reply Br. at 2.) The court agrees; thus, the court must balance the hardships the parties are likely to suffer.
D. Balance of Hardships
Art Line argues that the balance of hardships weighs in favor of Art Line as its reputation may be permanently damaged if Universal is not enjoined. Universal argues that "each time an infringing product is sold in place of Universal's product, Universal loses both its hard-earned profit and its reputation." (Universal Resp. Br. at 10.)
The court is mindful, as is Art Line, that Universal's letters may prevent loss of profits. However, Universal will have an adequate opportunity to recover its calculable loss of profits if it prevails at trial.
The incalculable damage to each party's reputation is of greater importance in the instant analysis. Once one's reputation is damaged, it cannot be easily remedied. Universal is alleging that Art Line has infringed Universal's copyrights. Such an allegation could harm Art Line's business reputation, from which Art Line may not recover. In addition, Art Line's design consultant's reputation is at issue, since he was responsible for designing the Animals.
Although Universal states that its reputation will be harmed each time Art Line's Animals are purchased over its statuary animals, Universal does not articulate how, or to what degree, its reputation will be harmed. Thus, the court finds that the harm Art Line is likely to suffer, as it is alleged to be a copyright infringer, outweighs this amorphous harm Universal alleges. Using a "sliding scale" approach to this balancing, the court is convinced that the balance weighs in favor of enjoining Universal from sending notice of infringement letters to Art Line's current or potential customers, or anyone else in the indoor and outdoor statuary industry.
Art Line has shown that it has more than a negligible chance of success on the merits, that it has no adequate remedy at law, and that it would suffer greater irreparable harm if Universal is not enjoined from sending notice of infringement letters to Art Line's current or prospective customers, or anyone else in the indoor and outdoor statuary industry. Consequently, Art Line has met its burden of showing that an injunctive relief is warranted in this case. Universal shall not send notice of infringement letters until the case is resolved on the merits.
Because injunctive relief has been granted, the court will set a prompt trial date. The parties shall appear for status with an agreed discovery schedule on July 14, 1997, at 9:30 a.m.
IT IS SO ORDERED.
CHARLES RONALD NORGLE, SR., Judge
United States District Court