labels, which are rare and increase value. The author also rates
some as Highly Recommended, as is Floppity (the lilac rabbit).
Gobbles (the turkey) is not highly recommended. According to
defendants, prices range from the $5-7 category, into which many
fall, all the way to the rarefied upper values of Bongo (the
monkey) (tan-tailed Nana only) at $4000, Peanut (the elephant)
(royal blue only) $5000, and Punchers (not Pinchers) (the
lobster) at $4750.
Ty holds copyrights to the original soft sculptures marketed as
part of its line of toys, and it has trademark registrations for
the marks associated with the product and its heart-shaped hang
tags. It has common-law trademarks too. It wants me to enjoin
defendants from publishing and selling its books: For the Love
of Beanie Babies and Beanie Babies Collector's Guide. The
books' covers do contain the legend: This publication is not
authorized or licensed by Ty, Inc. Publications International,
Ltd. is not affiliated with Ty, Inc.
Ty obviously is not displeased, in principle, with books or
magazines for collectors of the toys — this is precisely what the
creator of collectibles wants to occur. The company has licensed
three such publications and is willing to license others. Indeed,
Ty has licensed a corporation to form the BEANIE BABIES OFFICIAL
CLUB. The club gives out information about the toys and sells
related products. At least one licensee has complained to Ty
about competing with defendants' unlicensed product. But, says
Ty, the defendants here do not have licenses, and their books
display unauthorized photographs of the copyrighted Babies and
the trademarks. Ty wants the defendants stopped, as they have had
others stopped in this Court. See Ty Inc. v. West Highland Pub.
Inc., 98 C 4091, 1998 WL 698922 (N.D.Ill. 1998) (Norgle, J.).
Defendants begin by saying that no injunction may issue against
publication of its books because the First Amendment prohibits
such injunctions. They rely heavily upon Time, Inc. v. Hill,
385 U.S. 374, 87 S.Ct. 534, 17 L.Ed.2d 456 (1967), which held
that the First Amendment protected a magazine from an invasion of
privacy suit (absent knowing or reckless falsity) by a family, an
incident from whose life was falsely portrayed by Life
magazine. The case is memorable for its divisions: two Justices
joined the majority opinion only "in order for the Court to be
able to agree on an opinion in this important case." 385 U.S. at
398, 87 S.Ct. 534 (Black and Douglas, JJ.). It is memorable for
its alignments: Brennan, Stewart, White (with Black and Douglas)
vs. Harlan vs. Fortas, Clark and Warren. It is memorable for the
fact that Richard M. Nixon argued for Hill. It is memorable that
false portrayals did not cast the plaintiffs in a bad light. It
is not memorable for any discussion of the relationship of
copyright and trademark protection to the ambit of First
The Supreme Court did address that relationship in Zacchini v.
Scripps-Howard Broadcasting Co., 433 U.S. 562, 97 S.Ct. 2849, 53
L.Ed.2d 965 (1977), a case in which a human cannonball sued a
television station for videotaping his entire 15-second act and
then broadcasting it. Zacchini thought that the free broadcast
might reduce the number of persons willing to pay to see it. Over
objection that Time, Inc. v. Hill precluded a lawsuit over the
broadcast, the Court wrote:
The Constitution no more prevents a State from
requiring respondent to compensate petitioner for
broadcasting his act on television than it would
privilege respondent to film and broadcast a
copyrighted dramatic work without liability to the
copyright owner. 433 U.S. at 575, 97 S.Ct. 2849.
In Cohen v. Cowles Media Co.,
These cases do not destroy defendants' argument, because, they
concede, at least at this stage, that they might be liable for
damages. It is the prior restraint, the injunction against
further distribution, which, they say, is a violation of the
First Amendment. Taken literally, the words of the Supreme Court
authorize injunction, because "obeying copyright laws" usually
includes obeying orders to stop violating the copyright. But the
Supreme Court has not explicitly said that copyright injunctions
are permissible against the press, although there is a hint that
such injunctions are legal in San Francisco Arts & Athletics v.
United States Olympic Committee, 483 U.S. 522, 107 S.Ct. 2971,
97 L.Ed.2d 427 (1987) (upholding injunction against use of the
term "Olympics" to describe an athletic competition where
Congress had granted exclusive use of word to the United States
The hint must be fairly strong because there are not many
reported cases in which challenges to copyright or trademark
injunctions are made upon First Amendment grounds. Those
challenges that are made have been summarily rejected. A parodist
once wrote a poem about the O.J. Simpson murder trial entitled
The Cat NOT in the Hat! A Parody by Dr. Juice, which was
found to be an infringement of The Cat in the Hat, by Dr.
Seuss. On appeal, the panel of the Ninth Circuit said in a
footnote that it "reject[s] outright [the] claim that the
injunction in this case constitutes a prior restraint in
violation of free speech guaranteed by the United States
Constitution." Dr. Seuss Enterprises L.P. v. Penguin Books,
109 F.3d 1394, 1403 n. 11 (9th Cir. 1997). The short shrift given to
the claim is typical of all the cases cited by the Ninth Circuit.
I too reject the bald claim that the injunctive relief sought
violates the First Amendment absent extraordinary circumstances.
I deny the motion to strike the request for injunctive relief.
The fair use doctrine, which I address in a moment, is adequate
protection of the defendants' constitutional right to comment
upon and criticize the Beanie Babies, individually or as a whole.
The standards for preliminary injunction are well known. I am
to consider likelihood of success (more than negligible is the
minimum), inadequacy of money damages or irreparable harm, the
balance of harms to the parties from the wrongful granting or
denial of injunctive relief and the consequences of the ruling to
the public. These factors are somewhat interdependent, because an
overwhelmingly good case on the merits might justify an
injunction even if the harm of denying the injunction is not very
great. Storck U.S.A., L.P. v. Farley Candy Co., 14 F.3d 311,
314 (7th Cir. 1994); Abbott Lab. v. Mead Johnson & Co.,
971 F.2d 6, 11-12 (7th Cir. 1992).
The photographs of the Beanie Babies in defendants' books are
reproductions of the copyrighted works of the plaintiff, and I do
not find that this is disputed. See, e.g., Sheldon v.
Metro-Goldwyn Pictures Corp., 81 F.2d 49 (2d Cir. 1936) (motion
picture copied from a play); Ringgold v. BET, 126 F.3d 70 (2d
Cir. 1997) (artwork converted into set decoration for television
show). At the least, the books are derivative works as Judge
Norgle similarly concluded in Ty, Inc. v. West Highland
Publishing Inc., 98 C 4091, 1998 WL 698922 (N.D.Ill. Oct.5,
1998). The defendants do not deny that they, along with the rest
of America, had access to the Ty works.
The use of trademarks is also quite clear. Beanie Babies and
the Ty Heart Logo are used on the cover of the books and
throughout them. And there is little dispute that these and other
marks are Ty's and are both strong and protectable. See
International Kennel Club v. Mighty Star, Inc., 846 F.2d 1079
(7th Cir. 1988) (general outline of trademark protection
Leaving aside the effect of the disclaimer on the cover of the
defendants' books, there is a substantial likelihood of
confusion. One could easily believe the books
are Ty products. The books look like and serve the same purpose
as Ty's licensed products, and they are marketed to the same
audience. Even in the absence of Ty's licensed products, it is
likely that defendants' books fall under the doctrine that
protects against use of the mark in related product and services
markets. Tally-Ho v. Coast Community College Dist.,
889 F.2d 1018,1027 (11th Cir. 1989). And there is not much incentive for
the consumer to examine the items carefully since they cost less
than ten dollars. See AHP Subsidiary Holding Co. v. Stuart Hale
Co., 1 F.3d 611, 616 (7th Cir. 1993). I leave aside the
disclaimer because defendants do not rely upon it to save
themselves from claims of likelihood of confusion.
Once likelihood of success on the merits is shown, irreparable
harm is presumed to exist when copyright or trademark is
infringed. I have said so. Jackson v. MPI Home Video,
694 F. Supp. 483, 488 (N.D.Ill. 1988). Much more importantly, our
Court of Appeals (along with every other Court of Appeals) has
said so. Atari, Inc. v. North American Philips Consumer Elec.
Corp., 672 F.2d 607, 620 (7th Cir. 1982); Wesley-Jessen v.
Bausch & Lomb, 698 F.2d 862, 867 (7th Cir. 1983). And, in any
event, Ty has received complaints from its licensees who compete
with defendants, and damage to relationships with licensees is
real, not simply presumed, irreparable injury.
The public interest will not be disserved by issuance or denial
of the injunction. The public may benefit from enforcement of
intellectual property rights of Ty, and the public may benefit
from access to the guidebooks of the defendants.
Balance of harms favors neither party when weighed in the
abstract. Wrongfully granting the injunction against defendants
would entirely exclude their current products from the
marketplace, and, I assume, for purposes of this motion, that a
substantial number (but surely less than all) of those who would
purchase a Beanie Baby collector's guide would not purchase more
than one. The defendants would lose forever the opportunity to
sell their products to some likely purchasers. Indeed, the
collector's guides are perishable goods, the information in them
needs updating, and an injunction might destroy the value of the
entire current edition.
Wrongfully denying the injunction would leave Ty with the
potential loss of its licensees who produce products that compete
with defendants' goods. Ty would not only lose its royalties, it
would have to find new licensees or repair its relationships with
current ones. Even if it waives its fees to keep its licensees
happy, it may suffer losses to its image as a steadfast protector
of its copyrights and trademarks. Finally the wrongful denial of
injunction may well encourage others to do what defendants have
done, thus increasing the injury to Ty and inflicting expense on
Ty to defend its intellectual property interests.
There are real, equally substantial harms to both sides here if
the preliminary ruling does not hold up.
The answer to whether the injunction should issue must be found
in analysis of the two factors of irreparable injury and
likelihood of success; indeed, these are the two points that the
defendants raise in opposition to the motion for preliminary
injunction. They say that Ty delayed for so long before seeking
the injunction that its irreparable injury claims have expired,
and they assert that their use of Ty's copyrights and trademarks
is fair use permitted by the law.
Ty wrote to defendants on 7 August 1998 asking them to cease
publishing their Beanie Baby books. It did not seek an injunction
until 6 October 1999. A fourteen-month delay between learning of
an infringement and seeking injunctive relief would cause some
courts to discredit claims for injunctive relief. See Lanvin,
Inc. v. Colonia, Inc., 739 F. Supp. 182 (S.D.N Y
1990) (seven-month delay). Of course, a plaintiff can offer a
for the delay and still secure injunctive relief. The explanation
usually offered and accepted is that settlement discussions were
ongoing. Ocean Garden, Inc. v. Marktrade Co., 953 F.2d 500, 508
(9th Cir. 1991); Kraft General Foods v. Allied Old English,
831 F. Supp. 123, 136 n. 12 (S.D.N.Y. 1993). Here Ty says, without
contradiction, that settlement discussions went on continuously,
almost reaching fruition in March 1999 before breaking up over
the publication of a new edition in August 1999 after which Ty
filed suit. On 10 September, a final settlement effort was made
and failed when defendants stated they were unwilling to cease
publishing or to pay Ty for the use of Ty's intellectual
property. The delay that counts against Ty is from 10 September
to 6 October, and such a delay does not impinge on the showing of
irreparable injury, nor does it justify the use of laches to bar
Indeed, the principal thrust of the defendants' argument is
that their conduct is protected by the doctrine of fair use,
which permits reasonable use of another's intellectual property
without the consent of its owner. Harper & Row, Publishers v.
Nation Enterprises, 471 U.S. 539, 549, 105 S.Ct. 2218, 85
L.Ed.2d 588 (1985).
Fair use doctrine, a judicial creation, was codified by
Congress. See, e.g., Campbell v. Acuff-Rose Music, Inc.,
510 U.S. 569, 577-78, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994) and
17 U.S.C. § 107. I am required to consider four factors:
1. The purpose and character of the use, including whether it
is commercial in nature or not-for-profit.
The use here is clearly commercial, a point in Ty's favor. See
Campbell, 510 U.S. at 585,