Fourth Circuit Strengthens Copyright Protection For Furniture

On August 20, 2010, the Fourth Circuit Court of Appeals affirmed the Middle District of North Carolina's rulings on liability and damages against Collezione Europa. The decision brings to a close litigation originally filed in 2004.

The case is primarily a copyright case with an interesting twist that brings trademark and unfair and deceptive trade practices law into play. Universal sold two collections, the Grand Inheritance Collection and the English Manor Collection. Although Universal's designer admitted to consulting public domain sources, and combining elements from the public domain, Universal filed copyright applications claiming the "decorative sculptural designs on furniture; adaptation of preexisting decorative designs on furniture; compilation of decorative designs on suites of furniture." The Copyright Office issued registrations to Universal on the same day it received the applications.

At the request of a customer, Collezione agreed to design furniture collections that mimicked Universals' collections. Collezione believed that the Universal designs were not entitled to copyright protection. At the High Point Market, Collezione displayed Universal furniture with its labels removed in its showroom when it introduced its collections.

The district court awarded Universal a permanent injunction prohibit Collezione from producing or displaying derivative works of Universal's copyrighted collections and from selling the infringing products. The district court awarded Universal $11 million, representing Collezione's gross revenues on the infringing items. Collezione failed to produce an accurate accounting of its expenses. Collezione appealed the liability and damages decisions.

On appeal, the Fourth Circuit affirmed. The appellate court found that Universal owned valid copyrights that protected sufficiently original and conceptually separable elements in Universal's collections. The court noted the copyright applications only claim decorative sculptural designs and compilations of decorative designs and that such designs meet the threshold for originality even if they consist of a compilation of public domain design elements. The designer still selected and arranged them in an original manner. The court also found that the sculptural elements on Universal's collection were conceptually separable from the utilitarian features.

As in interesting side note, the district court originally denied Universal's motion for a preliminary injunction and the Fourth Circuit affirmed that denial. The district court originally found the claimed designs were not conceptually separable from the furniture's utilitarian function, rendering them unprotectable. In its opinion, the Fourth Circuit noted this tension in the record and commented that the earlier decision was based on a "sparse record" and that it was not the court's intention to "categorically exclude Universal's and other comparable design compilations from copyright protection."

A copy of the decision may be found here.

Custom Furniture: Innovative Plan or Illegal Imitation?

Today's Wall Street Journal, San Francisco Bay Area edition, includes a very interesting article on start up furniture companies whose business model includes reproducing popular furniture designs on a custom basis. The article describes two businesses: Sphere Design and Furniture Envy, both based in San Francisco. The companies custom build furniture based on designs from Pottery Barn, Crate & Barrel, Room & Board, and others. Customers bring the designs to the companies who recreate the design or something similar.

While the companies claim to deliver product that is as good or better than the name-brand versions, the business practice raises the issue of whether such reproductions are an innovative way to boost domestic furniture production, provide U.S. jobs, and deliver quality product or possibly infringe upon the intellectual property rights of the companies whose furniture is being copied. Without concrete examples of an original and a reproduction, it is impossible to answer that question. In addition, such model arguably takes royalties away from the original independent designers who stand to profit from the sell of the branded furniture, even if there is no intellectual property protection of the furniture.

Furniture designs can be protected by design patents, copyright, and trade dress rights. An "oldie but goodie" primer on furniture law may be found here. These start ups would be well advised to study up on how furniture can be protected and conduct a reasonable investigation into pieces before recreating them. In addition, the customers who bring these designs to the companies could potentially be liable for inducing infringement. A similar scenario plays out when a customer brings copyright-protected blueprints and drawings to an architect or builder who slavishly reproduces them. This lands the architect or builder and the homeowner in legal hot water, i.e., a copyright infringement action. It will be interesting to see if the business model of these new custom furniture companies makes it and if they can avoid tangling with the companies whose designs they are recreating.

"X-frame" Chair Design Not Protected Trade Dress

The United States Court of Appeals for the Seventh Circuit ruled August 11, 2010 that Greenwich Industries, LP's "x-frame" folding chair design was functional and thus ineligible for protection even as a common law trademark.

The case began in the United States District Court for the Northern District of Illinois. The district court invalidated Greenwich's registered trade dress rights upon the request of competitor Specialized Seating, Inc in a declaratory judgment action filed in 2005. The Seventh Circuit affirmed the district court's holding that the x-frame construction was designed to optimize the chair's strength-to-weight ratio, rather than create a distinctive appearance that would help consumers distinguish it from similar brands. The appellate court held that "[i]t looks the way it does in order to be a better chair, not in order to be a better way of identifying who made it." In addition to its functionality argument, Specialized argued that Greenwich withheld as many as four expired patents covering the x-frame design from the U.S. Patent and Trademark Office thereby misrepresenting that its design was not functional.

The case is Specialized Seating, Inc. v. Greenwich Industries LP, case number 07-1435, U.S. Court of Appeals for the Seventh Circuit. The Seventh Circuit's decision may found by clicking here.

Greenwich's registered trade dress (now invalid):

Award Winning Logo

Thomas & Gray's new logo was recently named one of the top 10 logos of the year by 2010 How Magazine Logo Design Awards. The mark, shown below, emphasizes that furniture companies need to establish brand recognition on the brand level and then extend that to collections and even pieces. This can be coupled with celebrity licensing (e.g., Thomasville's Hemingway collection) to further protect the name and brand identity of the furniture company and its collections.

Home Meridian Sues Baby's Dream Furniture

On August 13, 2010, Home Meridian International, Inc. ("HMI") filed suit in the Middle District of North Carolina against Baby's Dream Furniture, Inc. ("Baby's Dream") (Civil Action NO. 1:10-CV-625 (M.D.N.C.). The suit accuses Baby's Dream of secretly obtaining one or more pieces of HMI's distinctive Summer's Evening collection of baby furniture, copying the furniture, and thereafter selling an unlicensed "knockoff." HMI's suit alleges trade dress infringement and unfair competition.

Baby's Dream collection:

HMI's Summer's Evening collection:

Collection Against Collezione

Two items of interest in the on-going saga of intellectual property enforcement against bankrupt Collezione Europa and its principals, Paul and Leonard Frankel.

AICO/Amini recently settled with the Frankels at the end of July after first bringing copyright and design patent infringement claims against Collezione Europa in federal court in New Jersey. The terms of that settlement are confidential but AICO's approach represents an aggressive strategy. When Collezione filed for bankruptcy in 2008, AICO went after the personal assets of the Frankels for their involvement in Collezione's infringing activities. The strategy paid off to some degree, although it sounds like AICO was not terribly thrilled with the dollar amount they got at the end of the day.

In another matter, Universal Furniture is continuing to pursue the individual assets of the Frankels in federal court in North Carolina, again after Collezione filed for bankruptcy. In the North Carolina case, Paul Frankel challenged the court's personal jurisdiction but his motion was denied. Leonard Frankel did not respond to the complaint and default has been entered against him. From the docket, it looks like the case is in the discovery phase now. The case is Civil Action No. 1:08-cv-395 (MDNC).

Although the strength of an infringement claim is of paramount importance in any patent, copyright, or trademark case, one should not forget that a judgment may be worth little if the defendant is judgment-proof.

Two Men And A Lawsuit

Well, actually, it's one guy and a lawsuit.


Popular franchisor Two Men and a Truck/International, Inc. recently filed suit against an individual in Raleigh, NC doing business as "Furniture Cab" over the use of the "Two Men and Truck" name in his Internet advertising (shown below). The suit was filed in the Eastern District of North Carolina. The suit is a useful reminder that trademark law covers services as well as goods. In some circumstances, a company will want a registration covering goods that it offers, and a registration on the same mark for services that it offers.