Opinion
No. 1:00-CV-514
August 4, 2000.
OPINION AND ORDER GRANTING PRELIMINARY INJUNCTION
Plaintiff Bird Brain, Inc. ("Bird Brain") filed its complaint in this action on July 12, 2000, asserting claims of copyright infringement against defendant Menard, Inc. ("Menard"). Bird Brain alleges that Menard violated the Copyright Act by copying certain designs for ornamental copper lawn sprinklers, designs to which Bird Brain owns the rights.
With its complaint, Bird Brain filed a Motion for Preliminary Injunction, seeking to enjoin Menard from all alleged acts of infringement pending final disposition of this action. Bird Brain requested expedited consideration of its motion, on the basis that because this is its busiest sales season, irreparable harm is likely to occur if this motion is not considered as expeditiously as possible.
The court heard oral arguments by the parties on August 1, 2000. In its Show Cause Order setting this matter for hearing, the court previously indicated that it would still allow Menard the 28-day written response time provided by W.D. Mich. Local Rule 7.2(a). However, persuaded that Bird Brain had shown a strong likelihood of success, at the time of the hearing the court notified the parties that it would rule on Bird Brain's motion by not later than August 4, 2000. At the hearing, Menard submitted two declarations in opposition to the motion, and on August 2, 2000 Menard also filed a written brief in opposition accompanied by a third declaration. The court concludes that the notice requirement contained in Fed.R.Civ.P. 65(a) has been satisfied, and motion is now ready for decision.
Fed.R.Civ.P. 52(a) provides that "in granting or refusing interlocutory injunctions the court shall . . . set forth the findings of fact and conclusions of law which constitute the grounds of its action." The following constitutes this court's findings of fact and conclusions of law for purposes of this rule.
FACTS
Bird Brain is a Michigan corporation which has its principal place of business in Michigan. Bird Brain is in the business of designing and selling what it deems to be unique and original lawn and garden products, including sprinklers and weathervanes embodying original works of sculpture. Its products are sold to a number of regional and national retailers such as Target, Cosco, SAKS, QVC, Tru-Serv, Ace Hardware, Do It Best, and Lowe's. Bird Brain's copper sprinklers, several of which are the subject of this action, represent approximately one-half of the company's total sales.
In 1999, Bird Brain began selling five new copper sprinklers, and a copper weathervane, each embodying sculptural works. Bird Brain markets these particular works in question under the following names: "CHA CHA," "RHUMBA." "JITTERBUG," "MACARENA," "FOXTROT." and "PISCES." These works were designed expressly for Bird Brain, which owns all rights to them. Three of the six works — "CHA CHA," "RHUMBA," and "JITTERBUG" — are the subject of copyright registrations held by Bird Brain. The three remaining works at issue — "MACARENA," "FOXTROT," and "PISCES" — are not registered works; instead, Bird Brain has merely filed applications for their registration, on the following respective dates: July 7, 2000; May 8, 2000; and July 11, 2000.
Menard is a Wisconsin corporation which owns and operates some 145 home improvement retail stores in Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, North Dakota, South Dakota, and Wisconsin. The company is the nation's third largest home improvement retailer. In 1999, Menard was ranked as No. 27 in the Forbes The 500 Top Private Companies listing, which reported that the company generated revenues of $4 billion.
In July, 1999, Menard purchased approximately 400 copper sprinklers from Bird Brain, for test marketing at some of the Menard retail stores. The copper sprinklers which are the subject of the present action were not included in this test marketing sale. However, according to Bird Brain's president, Courtney King, following the July, 1999 test-marketing purchase, Menard expressed enthusiasm concerning Bird Brain's copper sprinklers. Specifically, according to King, Menard's buyer of lawn and garden products, Edward August, expressed a desire to view additional Bird Brain sprinkler designs. In August or September, 1999, King sent Ed August a number of color photographs depicting additional Bird Brain sprinklers embodying various designs. Among these photographs were pictures of products embodying the works at issue in this action.
After receiving these photographs. Ed August expressed to King Menard's continued interest in purchasing some 24,000 copper sprinklers from Bird Brain-including sprinklers embodying the designs at issue. Subsequently, in October, 1999, King traveled to Menard's headquarters in Eau Claire, Wisconsin, to personally meet with August regarding the prospective purchase. During his meeting with August, King provided him with one of Bird Brain's product catalogs, which depicted each of the subject works. Displayed on alternate pages of the catalog was the following statement. appearing in bold-face type: " ALL DESIGNS COPYRIGHT 1999 BIRD BRAIN, INC." During the meeting, August specifically identified, to King, certain of the subject works as being products in which Menard was interested.
After their meeting, however, August informed King that Menard was not interested in purchasing any products from Bird Brain. According to King, August indicated that although Bird Brain's were the "best" copper sprinklers he had seen, they were "too expensive." Consequently, August informed King, Menard was going to use another supplier of copper sprinklers.
Ultimately. some time later Menard began selling copper sprinklers manufactured by Watex International ("Watex"). According to King, he spoke with Ed August again in April, 2000, and was informed that Menard had recently begun selling copper sprinklers at its stores. After this conversation, King obtained samples of Menard's copper sprinklers from its retail store in Portland, Michigan (located within this judicial district). On July 2, 2000, Menard ran an advertisement offering for sale "Decorative Copper Sprinklers" (depicted in the advertisement) at a price of $39.99 each. The ad also stated. "Choose from seven unique styles!" The seven "unique" styles depicted in the ad were named as follows: "RAINBOW," "CARNIVAL," "ARC de JARDIN," "WATERLILLY." "TRILOGY," "CATCH OF THE DAY," and "ORBIT." Bird Brain filed this action 10 days later, accusing Menard of infringing its copyrights by utilizing these seven designs.
Unfortunately, an examination of Menard's sprinkler designs in comparison to the designs owned by Bird Brain suggests that Menard's designs might be far from "unique." Specifically:
1. Bird Brain's design for "CHA CHA" consists of copper tubing, in the shape of a circle, placed atop a copper shaft. A copper "vine" is wound around the shaft. Within the circular copper tubing atop the shaft are mounted a copper orb, copper "cups," and a "gazing ball," the latter which appears to be made of colored glass.
Menard's "ORBIT" sprinkler likewise consists of copper tubing, in the shape of a circle, mounted atop a copper shaft. A copper vine is wound around the shaft. Within the circular copper tubing atop the shaft an orb, copper cups, and glass gazing ball are mounted on a coil or spring. Slightly below the circle is a convex arc, on the ends of which appear small ornamental spheres.
2. Bird Brain's design for "RHUMBA" consists of two intersecting convex and concave arcs of copper tubing, placed atop a copper shaft. The intersection of the arcs forms a shape reminiscent of a human eye, at the center of which is a colored glass gazing ball. Slightly below the eye shape is a convex arc, at the ends of which are mounted solid copper arrowheads. A copper vine is wound around the shaft which supports the eye shape.
Menard's "ARC de JARDIN" sprinkler likewise consists of an eye shape mounted atop a shaft encircled by a vine. At the center of the eye shape, rather than a glass gazing ball, is a wire ball or globe shape, mounted atop a coil or spring. Slightly below the eye shape is a convex arc, on the ends of which appear small ornamental spheres.
3. Bird Brain's design for "JITTERBUG" consists of a copper shaft, encircled by a copper vine. Atop the shaft are mounted two equilateral triangles. Inside the lower triangle, the copper vine appears to be wound more tightly around the shaft, which extends through the triangle. Inside the upper triangle is a colored glass gazing ball.
Menard's "WATERLILLY" sprinkler likewise consists of a copper shaft encircled by a copper vine. Atop the shaft is mounted one equilateral triangle, inside of which is a glass gazing ball atop a coil or spring. Slightly below the triangle are two symmetrical projections angling up and away from the shaft. At the ends of each projection a single "leaf" shape has been added.
Menard's "TRILOGY" also consists of a copper shaft encircled by a copper vine, atop which a glass gazing ball is set inside an equilateral triangle Slightly below the triangle, near the top of the shaft, appears a "line" of copper, at the ends of which are two small spheres.
4. Bird Brain's "MACARENA" consists of copper tubing, in the shape of a circle, placed atop a copper shaft encircled by a copper vine. Within the circle are three copper "cups" mounted on a "wheel" shape. Slightly below the circle, near the top of the shaft, is an arc. A copper arrowhead appears on one end of the arc: an arrow end appears at the other end of the arc.
Menard's "CARNIVAL" likewise consists of copper tubing, in the shape of a circle, placed atop a copper shaft encircled by a copper vine. Within the circle are copper cups mounted on a wheel shape. Slightly below the circle, near the top of the shaft, is a convex arc, on the ends of which appear small spheres.
5. Bird Brain's "FOXTROT" consists of copper tubing, in the shape of a circle, mounted atop a copper shaft encircled by a copper vine. Within the circle, mounted atop a coil, is a colored glass gazing ball.
Menard's "RAINBOW" likewise consists of copper tubing, in the shape of a circle, mounted atop a copper shaft encircled by a copper vine. Within the circle, mounted atop a coil, is a circular clear glass disc, on which appears the "face" of a sun. Slightly below the copper circle, near the top of the shaft, is a convex arc, on the ends of which appear small spheres.
6. Bird Brain's "PISCES" consists of a copper shaft encircled by a copper vine, atop which is mounted an arc in the abstract shape of a fish. The "head" of the fish is formed of copper tubing, while the "tail" appears to be formed from solid copper. The "eye" of the fish is a solid copper triangle. Mounted at the top center of the fish are a "crescent moon" and circle, apparently formed from solid copper. Mounted at the bottom center or "belly" of the fish is copper tubing in the shape of a crescent moon.
Menard's "CATCH OF THE DAY" likewise consists of a copper shaft, encircled by a copper vine, atop which is mounted an arc in the abstract shape of a fish. The head of the fish is formed of copper tubing; so is the tail. The eye of the fish is a small glass gazing ball. Mounted at the bottom or "belly" of the fish is a slight arc, at the ends of which are small spheres.
ANALYSIS
Bird Brain has requested that the court issue a preliminary injunction against Menard as follows:
1. Enjoining Menard, and all persons acting in concert or participation with Menard, including but not limited to its officers, directors, stockholders. partners, owners, agents, representatives, employees. attorneys, successors, and assigns, from making and distributing by sale or other transfer the sprinklers accused of infringing Bird Brain's copyrights:
2. Ordering that any inventory or other stock of the sprinklers in question should be accounted for and secured against distribution by sale or otherwise: and
3. Ordering that Menard submit to the court a written oath of compliance, including an accounting of sprinklers in its inventory or stock.
The court must balance four factors in deciding whether to issue a preliminary injunction: (1) whether the plaintiff has shown a strong or substantial likelihood of success on the merits; (2) whether the plaintiff has shown that it will suffer irreparable harm unless a preliminary injunction issues; (3) whether an injunction would cause substantial harm to others, including the defendant: and (4) whether an injunction would serve the public interest. E.g., Moltan Co. v. Eagle-Picher Ind. Inc., 55 F.3d 1171, 1175 (6th Cir. 1995); Mason County Medical Assn v. Knebel, 563 F.2d 256, 261, 264 (6th Cir. 1977). Because an injunction is considered to be an "extraordinary remedy," the court should not invoke its injunctive powers unless the plaintiff clearly meets its burden of persuasion as to the listed factors. Meyer Jewelry Co. v. Meyer Holdings. Inc., 906 F. Supp. 428, 432 (E.D.Mich. 1995).
I
At the outset. the court must address an argument which Menard has raised regarding Bird Brain's three unregistered works. Specifically, Menard argues that because the works "FOXTROT," "PISCES," and "MACARENA" are merely the subject of pending copyright applications for which no copyright certificate has yet issued, the court lacks jurisdiction to consider the claims relating to these works.
As Menard has correctly observed, this court has previously interpreted Section 411(a) of the Copyright Act as requiring "registration [as] a jurisdictional prerequisite to the initiation of an infringement action in federal court." Marshall Swift v. BSA Software, 871 F. Supp. 952, 958 (W.D.Mich. 1994) (citingM.G.B. Homes. Inc. v. Ameron Homes. Inc., 903 F.2d 1486, 1488 (11th Cir. 1990); Dodd v. Fort Smith Special School Dist. No. 100, 666 F. Supp. 1278, 1282 (W.D.Ark. 1987); International Trade Management, Inc. v. United States, 553 F. Supp. 402, 403 (Cl.Ct. 1982)). Although in some instances an application for copyright protection tiled after initiating a lawsuit does not preclude action, see Seeburg Corp. v. AMR Publishing, 80 F. Supp.2d 723, 726 (W.D.Mich. 1999) (Bell, J.), without a certificate of registration, the plaintiff lacks "prima facie evidence" of the validity of the copyright, for which § 410(c) provides.
The current version of 17 U.S.C. § 411 (a) provides in pertinent part as follows:
. . . no action for infringement of the copyright in any United States work shall be instituted until registration of the copyright claim has been made in accordance with this title. In any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute an action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights. The Register may, at his or her option, become a party to the action with respect to the issue of registrability of the copyright claim by entering an appearance within sixty days after such service, but the Register's failure to become a party shall not deprive the court of jurisdiction to determine that issue.
Title 17 U.S.C. § 410(c) provides as follows:
In any judicial proceedings the certificate of a registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate. The evidentiary weight to be accorded the certificate of a registration made thereafter shall be within the discretion of the court.
Here, the complaint asserts infringement with respect to three registered works. Whatever impact the lack of a certificate has on Bird Brain's claims with respect to "FOXTROT," "PISCES," and "MACARENA," it does not deprive the court of jurisdiction over this action.
The court acknowledges Menard's "Motion to Dismiss Plaintiff's Copyright Infringement Claims Pursuant to Fed.R.Civ.P. 12(b)(1)," filed concurrently with its brief in opposition to the motion for preliminary injunction. In the former motion Menard, seeking expedited consideration, seemingly argues that the court should dismiss the entire action for lack of subject matter jurisdiction, in view of the presence of the three unregistered works as subjects of the complaint. Menard observes that Bird Brain's complaint lumps all six claims of copyright infringement into one "Count," thus suggesting that if the allegations regarding one or more designs are deficient, then the entire complaint is deficient. However, the court is not, of course, bound by the labels attached to pleadings.
II
To establish a claim of copyright infringement, the plaintiff must prove two elements: (1) ownership of a valid copyright, and (2) copying of constituent elements of the work which are original.Feist Publications. Inc. v. Rural Telephone Service Co. Inc., 499 U.S. 340, 361 (1991); Wickham v. Knoxville Int'l Energy Exposition. Inc., 739 F.2d 1094, 1097 (6th Cir. 1984)."A certification of registration `made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certification.'" Sem-Torq. Inc. v. K Mart, 936 F.2d 851, 854 (6th Cir. 1991) (quoting 17 U.S.C. § 410(c)). Bird Brain has presented certificates of registration for three of the works in question: "CHA CHA," "RHUMBA," and "JITTERBUG." Under the circumstances, the copyrights to these works are prima facie valid.
Menard argues, however, that Bird Brain's copyrights are not valid, for a number of reasons. First, Menard argues that because the designs are "simple" and encompass utilitarian aspects, they may not be copyrighted. Second. Menard argues that Bird Brain made what Menard deems "material misrepresentations and omissions" with respect to these works in communications with the Copyright Office. Third, Menard argues that the existence of substantial numbers of copper tubing lawn sprinklers which are and have been available on the market raises questions concerning the originality of Bird Brain's designs.
Menard is correct in observing that a certificate of registration does not create an irrebuttable presumption of validity. Durham Ind., Inc. v. Tomy Corp., 630 F.2d 905, 908 (2d Cir. 1980). "Where other evidence in the record casts doubt on the question, validity will not be assumed." Id. Here, however, the court is not convinced that Menard will be able to rebut the presumption of validity of the "CHA CHA," "RHUMBA," and "JITTERBUG" copyrights.
With respect to the utilitarian aspects of the works — their ability to function as sprinklers — the court has not perceived that Bird Brain is even remotely claiming copyright protection based on the functional nature of the works. Instead, it is Bird Brain which focuses on the utilitarian aspects, by arguing that operational concerns dictate the representational elements of the works. This argument, however, cuts both ways. Undoubtedly, some ornamental sprinklers may, based on design, function better than others. However, for others, artistic considerations, rather than functional ones, may predominate. Moreover, even Menard has not denied that any aesthetic value in the works exists even while the sprinklers themselves are unconnected to a water source, such as they might be during winter months in a Michigan climate. In sum, the court concludes that the utilitarian nature of the works does not rebut the prima facie validity of the copyrights. Nor, in the court's view, does the simplicity of the designs rebut the prima facie validity of the copyrights in the "CHA CHA," "RHUMBA," and "JITTERBUG." Menard cites to 37 C.F.R. § 202.1, which provides that "familiar symbols or designs" are not subject to copyright. 37 C.F.R. § 202.1(a). Menard further argues that because Bird Brain's works contain familiar shapes, such as spheres or triangles, they contain "unprotectible elements" and the court must therefore attempt to filter out the protectible from the unprotectible elements in considering the validity of Bird Brain's claims. Menard goes so far as to argue that Bird Brain has not identified any elements of its works which are protectible. However, Bird Brain's complaint does identify the protectible elements of its works: it is their designs. Paragraph 16 of the complaint alleges as follows:
The Copyright Act focuses on artistic innovation, refusing to offer protection to utilitarian qualities. Country Kids `N City Slicks, Inc. v. Sheen, 77 F.3d 1280, 1287 (10th Cir. 1996). Consistent with this focus, the Act defines protectible pictorial, graphic, and sculptural works to "include works of artistic craftsmanship insofar as their form but not their mechanical or utilitarian aspects are concerned." Id. (quoting 17 U.S.C. § 101).
For example. Menard argues that the rotating elements must be arranged symmetrically about a central axis, lest the sprinkler wobble when in operation, and that the spraying element must have a convex or divergent shape in order to direct the spray of water outward rather than merely upward.
16. Subsequent to having seen the subject works, [Menard] engaged in the design of, sold, and is now selling . . . sprinklers embodying designs as shown in the attached Exhibits . . . (emphasis supplied).
The "sine qua non of copyright is originality." Feist, 499 U.S. at 345. Moreover,
Original, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity. . . . To be sure, the requisite level of creativity is extremely low; even a slight amount will suffice. The vast majority of works make the grade quite easily, as they possess some creative spark `no matter how crude, humble or obvious' it might be.Id. (citations omitted). In the court's view, Bird Brain's designs for the "CHA CHA," "RHUMBA." and "JITTERBUG" display the "minimal creative spark" required for copyright protection. Feist, 499 U.S. at 363.
As for Menard's argument that Bird Brain materially "misled" the Copyright Office, the court finds the evidence substantiating this argument to be lacking. Menard contends that evidence consisting of a partial letter from the Copyright Office to Bird Brain's counsel indicates that Bird Brain represented that its works were "sold purely for decorative or ornamental purposes." However, in this same letter the Copyright Office also concluded that the three works in question "contain a sufficient amount of original sculptural authorship that may be regarded as copyrightable." Bird Brain did not hide from the Copyright Office the fact that the designs are embodied in sprinklers. Indeed, the certificates of registration for the "CHA CHA" "RHUMBA," and "JITTERBUG" each identify the nature of the work as a "Sculpture Embodied in Sprinkler Design."
Finally, with respect to Menard's argument that substantial third-party use of copper tubing to make lawn sprinklers raises questions about the originality of Bird Brain's designs, the evidence presented by Menard regarding these third-party products (namely, pictures of these other sprinklers. included in exhibits provided with the Declaration of Joel Leviton) actually supports Bird Brain's position. This evidence suggests that while the universe of decorative copper sprinklers may be large, and may include some designs which are arguably lacking in any creativity or originality, Bird Brain and others in the field have indeed managed to convey more than a minimal degree of individualized expression.
The presumption of validity, however, only applies here to the "CHA CHA," "RHUMBA." and "JITTERBUG" designs. As Menard has observed. Bird Brain does not possess certificates of registration for the remaining three works, "FOXTROT," "PISCES," and "MACARENA." Bird Brain argues that these three works are of the same caliber as those already registered: it has thus far been content to invite the court to visually compare the works to those registered. However, the court finds that Bird Brain has not, at the present time, presented sufficient evidence demonstrating a valid copyright to these works. Under the circumstances, the court will deny preliminary injunctive relief with respect to these three designs.
Of all of the works at issue, it is the "FOXTROT" and "PISCES" which, in the court's view, appear to involve the least creativity. As for the "MACARENA," which appears to be the product of more substantial creativity, Bird Brain's claim of registration for this work could conceivably be granted by the Copyright Office. Given this possibility, Menard would be well advised to cease its potentially infringing activities with respect to this design.
As noted above, Bird Brain must also demonstrate copying of constituent elements of the works which are original. Feist, 499 U.S. at 361. The court has addressed the originality of the "CHA CHA," "RHUMBA," and "JITTERBUG" designs above: the court concludes that they do embody original designs. Having passed this hurdle, Bird Brain easily satisfies the copying component of its infringement claims with respect to these three designs.
Menard readily admits that it was aware of Bird Brain's sprinkler designs when it decided to purchase and distribute Watex's sprinklers for the 2000 season. In addition, the evidence presented by Bird Brain indicating that it provided Menard with its catalog containing pictures of the designs has not been rebutted. Indeed, Mr. August's statement that he "wanted to modify the Watex designs so that they were substantially different from the Bird Brain designs" strongly suggests that he was working from more than mere memory in directing Watex's production. In this regard, the court also notes that Menard has presented no colorable evidence that Watex independently created the designs. Instead, the evidence, which includes the characteristics of the Menard sprinklers and Bird Brain designs, indicates that Menard may have failed miserably in its attempt to avoid infringement by directing Watex to vary, ever so slightly, the registered Bird Brain designs.
According to Ed August, Watex's agent, CB Marketing ("CB), presented Menard with "conceptional drawings" of 12 to 15 of Watex's copper sprinklers in the fall of 1999. However, Mr. August also implies that there had been prior communication between Menard and CB regarding Bird Brain's designs. for he states that CB's representative, Don Corning, "was familiar with the price at which we sold the Bird Brain designs[.]"
Because the evidence of access is particularly strong, this case does not turn on the issue of "substantial similarity." As Menard has observed, the Sixth Circuit "has not adopted a specific test for determining substantial similarity in copyright infringement cases[.]" Ellis v. Diffie, 177 F.3d 503, 506 n. 2 (6th Cir. 1999). The "ordinary observer" test, which is the traditional standard of copyright infringement. "requires the trier of fact to gauge the similarities of the two works solely on the basis of his `net impression' and without relying on expert analysis or dissection."Id. at 506 n. 2. Here, because the designs are embodied in sculptures, the court concludes that the "ordinary observer" test suffices. Applying this test, the court finds that Menard's "ORBIT," "ARC de JARDIN," "WATERLILLY," and "TRILOGY" are substantially similar to Bird Brain's "CHA CHA," "RHUMBA," and "JITTERBUG" designs, respectively.
"Because rarely is there direct evidence of unauthorized duplication, the copyright holder frequently proves copying by showing that the defendant or the person who composed the defendant's work had access to the copyrighted material and that the defendant's work is substantially similar to the protected work." Robert R. Jones Associates, Inc. v. Nino Homes, 858 F.2d 274, 276-77 (6th Cir. 1988).
"In the words of Judge Learned Hand, two works are substantially similar if `the ordinary observer, unless he set out to detect the disparities, would be disposed to overlook them, and regard their aesthetic appeal as the same.'" Concrete Machinery Co., Inc. v. Classic Lawn Ornaments. Inc., 843 F.2d 600, 607 (1st Cir. 1988) (quoting Peter Pan Fabrics, Inc. v. Martin Weiner Corp,. 274 F.2d 487, 489 (2d Cir. 1960)).
Having concluded that Bird Brain has shown a strong likelihood of success on the merits with respect to these three designs, the court must also balance the remaining three factors: irreparable harm, harm to others, and the public interest. Moltan, 55 F.3d at 1175.
The "prevailing view" in cases of copyright infringement is "that a showing of likelihood of success on the merits raises a presumption of irreparable harm." Country Kids `N City Slicks Inc. v. Sheen. 77 F.3d 1280, 1288 (10th Cir. 1996). The Sixth Circuit appears to have adopted this view. See Forrv, Inc. v. Neundorfer. Inc., 837 F.2d 259, 267 (6th Cir. 1988). Although the presumption of irreparable harm is rebuttable, see id., Menard has not succeeded in rebutting it in this instance. Bird Brain did not unreasonably delay in bringing suit. The company's copper sprinklers represent one-half of its total sales, and Menard is clearly a large retailer, capable of saturating the market with its sprinkler models. In addition, according to Menard's estimate, large numbers of the offending products still remain in its inventory. The court concludes that irreparable harm is established.
Bird Brain's president, Courtney King, has stated that summer is the strongest season for retail sales of lawn and garden products, including sprinklers. Menard has conceded that its sprinklers are currently "in the prime selling season."
The question of whether an injunction would cause substantial harm to others, including Menard, is of questionable relevance here, where it appears particularly likely that Menard is an infringer.see Concrete Machinery, 843 F.2d at 612 ("More important to our decision here is the sometimes questionable relevance of the `balance of hardships' factor to the determination of whether a likely infringer should be preliminarily enjoined"). However, to the extent that this factor must be weighed in the equation, the court observes (1) that the evidence of deliberate copying is strong, providing the court with little justification for protecting Menard's investment; (2) Menard has not denied that its business consists of much more than the infringing products, and it could well survive a prohibition on their sale; and (3) the infringing products, sold by Menard for $39.99 each, constitute but a minute portion of Menard's $4 billion in sales.
Finally, to the extent that the court must consider whether an injunction would serve the public interest, this interest "can only be served by upholding copyright protections and, correspondingly, preventing misappropriation of the skills, creative energies, and resources which are invested in the protected work." Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1255 (3d Cir. 1983). Therefore, the court concludes that the public interest would be better served by granting Bird Brain's notion.
Balancing all of the four factors, the court concludes that the preliminary injunction sought by Bird Brain should issue. Bird Brain has demonstrated a strong likelihood of success on the merits with regard to the copying of its original designs "CHA CHA," "RHUMBA," and "JITTERBUG." The strength of this factor, combined with the corresponding strong showing on the remaining factors, convinces the court that injunctive relief is warranted to preserve the status quo during the pendency of this litigation.
III
Fed.R.Civ.P. 65(c) declares that "[n]o restraining order or preliminary injunction shall issue except upon the giving of security by the applicant. in such sum as the court deems proper, for the payment of such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained. . . ." Moltan, 55 F.3d at 1176. Although the language of this rule appears to be mandatory, the rule in the Sixth Circuit "has long been that the district court possesses discretion over whether to require the posting of security." Id. (citations omitted).
Bird Brain argues that only a "nominal" bond — or, better yet, none at all — is necessary to support the preliminary injunction which it has sought, because "to require copyright owners to post significant bonds, especially in cases such as this one where the infringement is so transparent, would necessarily discourage efforts to vindicate these significant rights, and so undermine the strong public interest in promoting creativity and originality." Menard, for its part, argues that if the court is inclined to grant Bird Brain's motion, a bond of at least $400,000 is appropriate. According to Menard, this amount represents the approximate retail value of the more than 11,000 units currently in stock.
The court finds neither party's position persuasive on the issue of security. Bird Brain has not asked that Menard be required to destroy or divest itself of its remaining inventory in the offending products; instead, Bird Brain merely asks the court to order Menard to stop making and selling them. Moreover, not all of the products will be subject to the injunction; of the 11,050 units which Menard estimates it retains in its inventory, 3,838 units will not be enjoined. Under the circumstances, the $400,000 in security proposed by Menard seems vastly excessive. By the same token, however, it cannot be said that no bond at all is in order. particularly when it appears that Menard has recently advertised all of these products for sale to potential customers.
Assuming Menard's estimate of its inventory to be correct, the court will not assume that Menard would be likely to have sold all of its inventory for this season.
Although the evidence on this issue is less than ideal, Rule 65 does not require mathematical precision, but merely the establishment of an amount which will provide security for "such costs and damages as may be incurred or suffered by any party who is found to have been wrongfully enjoined." In this instance, the court concludes that Bird Brain should be required to post a bond.
The court finds that a bond in the amount of $44,000, which represents approximately 10 percent of what Menard estimates to be the value of all of its remaining inventory in all of the sprinklers (those subject to the injunction and those not subject to it), is adequate security.
ORDER FOR PRELIMINARY INJUNCTION
Based on the foregoing, IT IS THEREFORE ORDERED that1. Bird Brain is awarded a preliminary injunction against Menard;
2. Menard, and all persons acting in concert or participation with Menard, including but not limited to its officers, directors, stockholders, partners, owners, agents, representatives, employees, attorneys, successors, and assigns, who receive notice of the injunction by personal service or otherwise, shall be and are enjoined from making and/or distributing by sale or other transfer the sprinklers which have been described by Menard as "ORBIT," "ARC de JARDIN," "WATERLILLY," and "TRILOGY";
3. Menard shall account for and secure against distribution by sale or otherwise, any inventory or other stock of the sprinklers referenced in paragraph (2) above; and
4. Menard shall file with the court and serve on Bird Brain, within 30 days after the date below written. a written report, under oath, detailing its compliance with this injunction. including a particularized accounting of the referenced sprinklers in its inventory or stock and an account of the manner in which Menard has notified any makers of the referenced sprinklers, including Watex International and/or its agents, of the terms of this injunction.
5. Bird Brain shall post security in the amount of $44,000.