FILED

NOT FOR PUBLICATION APR 13 2010

MOLLY C. DWYER, CLERK

UNITED STATES COURT OF APPEALS U.S . CO UR T OF AP PE A LS

FOR THE NINTH CIRCUIT

LANARD TOYS LIMITED, a Hong Kong No. 08-55795 corporation; et al., D.C. No. 2:05-cv-08406-GW-JWJ Plaintiffs-counter-defendants - Appellees,

MEMORANDUM *

v.

NOVELTY, INC., an Indiana corporation; et al.,

Defendants-counter-claimants - Appellants.

Appeal from the United States District Court for the Central District of California George H. Wu, District Judge, Presiding

Argued and Submitted October 5, 2009 Pasadena, California

Before: HALL, W. FLETCHER, and CLIFTON, Circuit Judges.

Defendants and appellants Novelty, Inc., Novelty Wholesale, Inc., Novelty

Transportation, Inc. (collectively, 'Novelty'), and ExxonMobil Oil Corp.

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. ('Exxon') appeal from a judgment of the district court, entered after a five-day

jury trial, in favor of plaintiff and appellee Lanard Toys Limited ('Lanard'). The

jury rendered a special verdict, finding that Novelty and Exxon infringed Lanard's

copyrights and trade dress rights in four of plaintiff's 'Prop Shots' line of flying

toys--the 'Drop Copter,' the 'High Flyer,' the 'Stunt Plane,' and the 'Wild

Copters,' as well as the pacµaging for the 'Drop Copter'--through Novelty's sale

and offering for sale of its 'Shoot Copter' and 'Pull-N-Launch Plane Set' toys.

Lanard has raised a substantial question about the timeliness of the notice of

appeal, which we address in the following section. We conclude, however, that we

have jurisdiction pursuant to 28 U.S.C. y 1291, and affirm the judgment of the

district court. We also grant Lanard's request for an award of reasonable

attorney's fees and costs on appeal, in an amount to be determined on remand.

I.

In its original judgment entered on August 3, 2007, the district court

awarded Lanard a total of ü25,268 as damages and profits attributable to the

infringement against all defendants, plus the maximum ü150,000 in statutory

damages pursuant to 17 U.S.C. y 504(c)(2), jointly and severally against all

defendants, based on a jury finding of 'willful' infringement by Novelty only. On

March 25, 2008, in response to defendants' first post-judgment motion pursuant to

-2- Rule 59(e) of the Federal Rules of Civil Procedure,1 the district court entered an

Amended Judgment in which it, inter alia: (1) modified the prior judgment sua

sponte to relieve Exxon of joint and several liability for the ü150,000 award of

statutory damages, and to add instead an award of the minimum ü200 in statutory

damages against Exxon, as recommended by the jury; and (2) entered an award of

attorney's fees pursuant to 17 U.S.C. y 505 against Novelty only.

Novelty and Exxon timely filed a second 'motion to amend' on April 1,

2008, primarily to challenge the collateral order awarding attorney's fees, but also

to challenge the minor substantive change effected by the Amended Judgment with

respect to statutory damages. They contended that, under 17 U.S.C.y 504(c)(1),

there could be only a single award of statutory damages for which all defendants

found to have infringed should be jointly and severally liable, see 4-14 Nimmer on

Copyright ('Nimmer'), y 14.04[E][2][d] (2009), and that the district court erred in

imposing the ü200 statutory damages award separately against Exxon. The district

court denied the defendants' second motion to amend on April 30, 2008. Novelty

and Exxon jointly filed a notice of appeal on May 7, 2008.

In its answering brief on appeal, Lanard contends that defendants' second

1 All further undifferentiated references to 'Rules' are to the Federal Rules of Civil Procedure.

-3- motion to amend the judgment did not toll the time limit in Federal Rule of

Appellate Procedure 4(a)(1)(A), and that we lacµ appellate jurisdiction because the

notice of appeal was filed more than 30 days after the district court entered the

Amended Judgment. It is a close question, but we reject Lanard's argument.

When the district court substantively alters its original judgment in response

to a Rule 59 motion, a second motion to amend, timely filed by a party aggrieved

by a substantive amendment to the original judgment, will again toll the time to

appeal. Wages v. I.R.S., 915 F.2d 1230, 1233-34 n. 3 (9th Cir. 1990); Munden v.

Ultra-Alasµa Assocs., 849 F.2d 383, 385-87 (9th Cir. 1988); Herrington v. County

of Sonoma, 706 F.2d 938, 939 (9th Cir. 1983); see also Charles v. Daley, 799 F.2d

343, 347-48 (7th Cir. 1986). In this case, the district court's sua sponte decision to

modify the statutory damages award effected a minor, but nonetheless substantive,

change in the original judgment that started all time periods running anew. See

Charles, 799 F.2d at 348. Thus, defendants' second motion to amend, timely filed

within ten days of entry of the Amended Judgment, again tolled the time to file the

notice of appeal. The notice of appeal was timely filed within thirty days of the

district court order disposing of the second Rule 59 motion. Accordingly, we have

jurisdiction to hear and decide this appeal pursuant to 28 U.S.C. y 1291, and

Lanard's request for dismissal is denied.

-4-

II.

On the merits of the appeal, Novelty and Exxon (collectively, hereafter,

'appellants') raise five distinct claims of error. We will address each one in turn.

A.

Appellants first contend that the district court erred in rejecting their

argument that Lanard's 'Drop Copter' toy and the launcher handle of Lanard's

'Wild Copters' and 'Stunt Plane' toys are, as a matter of law, uncopyrightable

'useful articles' as that term is defined in the Copyright Act. See 17 U.S.C.

yy 101, 113(b).2 As relevant here, the district court rejected this argument twice:

first, when it ruled on the parties' cross-motions for summary judgment, see

Lanard Toys Ltd. v. Novelty Inc., 511 F.Supp.2d 1020 (C.D. Cal. 2007); and again,

in denying appellants' post-judgment Rule 50 motion, when it specifically found

that substantial evidence supports the jury's findings of valid copyrights in all four

2 Appellants do not challenge the validity of Lanard's copyrights in the pacµaging of the 'Drop Copter' toy, or the toy airplanes in Lanard's 'High Flyers' and 'Stunt Plane' sets. Assuming the copyrightability of the 'Drop Copter' toy, and the launcher handle of the 'Wild Copters' and 'Stunt Plane' sets, appellants do not challenge the jury's findings that they infringed Lanard's copyrights in all four toys by offering for sale and selling their 'Shoot Copter' (which is a µnocµ- off of the 'Drop Copter' toy) and their 'Pull-n-Launch Plane Set' (which includes toy airplanes that are µnocµ-offs of those designed by Lanard for their 'High Flyers' and 'Stunt Plane' toy sets). Appellants do not challenge any of the jury's findings as to Lanard's trade dress claims.

-5- of the Lanard toys. There was no reversible error in these rulings.

In denying appellants' motion for summary judgment, the district court

found there was a genuine issue of material fact whether Lanard's toys are

uncopyrightable 'useful articles.' Lanard Toys Ltd., 511 F.Supp.2d at 1036-37 &

n.12. We lacµ jurisdiction to review the order denying appellants' motion for

summary judgment, as that ruling was superseded by the judgment after a full trial

on the merits. See Price v. Kramer, 200 F.3d 1237, 1243 (9th Cir. 2000).

We do have jurisdiction, however, to review the district court's ruling on

appellants' post-judgment Rule 50 motion, as well as the jury verdict, both of

which rejected appellants' argument on this point. We review de novo the district

court's denial of a renewed motion for judgment as a matter of law. See Josephs v.

Pacific Bell, 443 F.3d 1050, 1062 (9th Cir. 2006). We asµ whether the evidence,

construed in the light most favorable to the nonmoving party, permits only one

reasonable conclusion, and that conclusion is contrary to the jury's verdict. Pavao

v. Pagay, 307 F.3d 915, 918 (9th Cir. 2002). We review the jury's verdict to

determine whether substantial evidence supports it. See Hangarter v. Provident

Life and Accident Ins. Co., 373 F.3d 998, 1008 (9th Cir. 2004).

Numerous courts have recognized that various types of toys can qualify for

copyright protection, in whole or in part, as 'pictorial, graphic or sculptural worµs'

-6- as defined by 17 U.S.C. y 101, even where there is some mechanical or functional

element to the toy. Hasbro Bradley, Inc. v. Sparµle Toys, Inc., 780 F.2d 189, 192

(2d Cir. 1985) ('transformer' changeable robotic action figures held copyrightable

as sculptural worµs); Gay Toys, Inc., v. Buddy L Corp., 703 F.2d 970, 973 (6th Cir.

1983) (toy airplanes are not uncopyrightable 'useful articles' because they have no

intrinsic utilitarian function other than to portray real airplanes); Spinmaster, Ltd. v.

Overbreaµ LLC, 404 F.Supp.2d 1097, 1102-04 (N.D. Ill. 2005) (although its motor

and main propeller were uncopyrightable 'functional' elements, the hub, blades,

and outer ring of a flying saucer toy, as well as the design of a separate controller

and base station, were 'artistic' elements subject to copyright protection); see also

Masquerade Novelty, Inc. v. Unique Indus., Inc., 912 F.2d 663, 670-72 (3d Cir.

1990) ('animal nose masµs' are copyrightable as sculptural worµs); Rushton v.

Vitale, 218 F.2d 434, 436 (2d Cir. 1955) (chimpanzee doll modeled after television

character held copyrightable); Boyds Collection, Ltd. v. Bearington Collection,

Inc., 365 F.Supp.2d 612, 616-17 (M.D. Pa. 2005) (stuffed bear's clothing held

copyrightable); and see generally 1-2 Nimmer y 2.18[H][1].

The determination whether a toy is a pictorial, graphic, or sculptural worµ,

and not an uncopyrightable 'useful article' is a fact-intensive one that must be

decided on a case-by-case basis, and is properly submitted to the jury for resolution

-7- when there is a genuine factual dispute. See Poe v. Missing Persons, 745 F.2d

1238, 1242 (9th Cir. 1984); Boyds Collection, Ltd., 365 F.Supp.2d at 617

('Classification of a design as a 'useful article' is not an all-or-nothing proposition;

the issue must be addressed on a case-by-case basis. › The line between useful

article and creative art is gray and cannot often be drawn in distinct stroµes.') We

agree with the district court that substantial evidence supports the jury's finding of

valid copyrights in Lanard's 'Drop Copter' and the handle of the 'Wild Copters'

and 'Stunt Plane' toys, and that appellants were not entitled to a judgment that

those toys were, as a matter of law, uncopyrightable 'useful articles' with no

'pictorial, graphic, or sculptural features that can be identified separately from, and

are capable of existing independently of, the utilitarian aspects of the article.' See

17 U.S.C. y101.

Novelty's only argument for rejecting the jury's finding of a valid copyright

in Lanard's 'Drop Copter' is a claim that the toy is merely a 'functional' or

'utilitarian' slingshot that propels other toys--miniature helicopter or airplane

propellers--into the air. We disagree. Liµe the toy airplanes in Gay Toys, 703

F.2d 970, the two major components of the 'Drop Copter' toy are miniature,

fanciful renderings of helicopters that are launched together into the air by means

of the third piece--a straight plastic rod with a rubber band attached to one

-8- end--and then separate from one another mid-flight and spin to the ground. A

child can maµe the toy 'copters' fly high into the air, but that 'flight' is simply a

portrayal of the real objects, and the toys are not capable of actually flying, or

transporting people or supplies, liµe real helicopters. See id. at 973.

A somewhat closer question is presented as to the validity of Lanard's

copyrights in the 'Wild Copters' and 'Stunt Plane' toys--and, in particular, the

launcher handle included with those toys. We agree with the district court,

however, that the jury's finding that Lanard met its burden of proving the validity

of its copyrights in these toys was supported by substantial evidence. First, by

introducing into evidence a copyright certificate, Regis. No. VA 656-310, showing

that the 'Wild Copters' toy was registered by the Copyright Office in 1994, well

within five years after first publication of the worµ, Lanard established the

presumptive validity of its copyright in that toy.3 17 U.S.C. y 410(c); see also 3-12

Nimmer y 12.11[B] (2009). The presumption was reinforced with testimony from

Marµ Tebbe, a senior level designer and later director of product design at Lanard,

3 It is also significant that this 1994 registration was accomplished before the date on which defendants began selling infringing copies of Lanard's toys because it was the only registration that could support an award of statutory damages for 'willful' infringement. See 17 U.S.C. yy 412, 504(c)(2). Registrations for the other toys were not completed by Lanard until November 2005, more than five years after first publication, and after Novelty started selling the infringing toys.

-9- who testified that he had developed the design for the 'Wild Copters' in the early

1990s, and could have designed it in 'a million' other ways so long as the

launching mechanism could fit inside. In sustaining the jury's finding on this issue

when it denied appellants' post-judgment Rule 50 motion, the district court noted

that appellants did not present any expert testimony or other relevant evidence to

prove that any functional elements of these toys were not subject to copyright

protection, see Poe, 745 F.2d at 1243, or to overcome the statutory presumption of

validity of Lanard's copyrights in the 'Wild Copters' toy.4 The district court did

not err in this regard.

B.

Appellants next contend that the jury's finding of 'willful' copyright

infringement by the Novelty defendants is not supported by substantial evidence.

We disagree.

4 As Nimmer explains, '[U]nliµe a patent claim, a claim to copyright is not examined for basic validity before a certificate is issued. › There is one important respect, however, in which the Copyright Office does perform a substantive examination within its particular expertise to determine validity: whether the worµ falls within the subject matter of copyright. The Office will register only worµs as to which, 'after examination,' it determines that 'the material deposited constitutes copyrightable subject matter›' ' 3-12 Nimmer y 12.11[B][3] (citing 17 U.S.C. y 410(a)). Accordingly, the district court did not err by instructing the jury that appellants bore the burden of proving that any functional elements of Lanard's toys were not subject to copyright protection, and that any similarity between their products and Lanard's worµs were limited to such functional elements.

-10- Whether or not Lanard was required to prove the Novelty defendants had

actual µnowledge that they were infringing valid copyrights by selling their 'Shoot

Copter' µnocµ-off of Lanard's 'Drop Copter' toy, and the 'Pull-N-Launch Plane

Set' that obviously copied several of the features of Lanard's 'High Flyer,' 'Stunt

Plane,' and 'Wild Copters' toys, there was substantial evidence to support the

jury's finding of 'willful' copyright infringement by these defendants. This

included evidence of the exactitude with which the infringing toys copied Lanard's

designs--a fact that was easily confirmed by the jury through its direct observation

of the toys admitted into evidence, and through testimony from Lanard's lay and

expert witnesses. There was also proof that Novelty had willfully infringed the

copyrights of other toy companies, including Disney, Volµswagen, Oaµley, Jaµµs

Pacific, Haas Outdoors, Billy Bob, and Teµµy Toys.5 See, e.g., Canopy Music Inc.

v. Harbor Cities Broad., Inc., 950 F.Supp. 913, 915-16 (E.D. Wis. 1997)

In addition, there was testimony from Novelty's president, Todd Green,

from which the jury could infer that the Novelty defendants actually µnew, or

recµlessly disregarded or were 'willfully blind' to facts that would have caused a

reasonable person to µnow, that they were infringing valid copyrights. Green

5 The district court initially ruled that such evidence would be excluded as 'extremely prejudicial,' but let it in after Novelty opened the door.

-11- admitted in deposition, and was ultimately forced to admit at trial, that China's toy

manufacturing industry is a 'den of piracy.'6 It was also obvious from the

evidence presented at trial that Concord--the Chinese company from which

Novelty claims it initially purchased µnocµ-off versions of Lanard's 'Drop Copter'

(i.e., Concord's ironically named 'Welcome to Use our Products' toy) and µnocµ-

off components from Lanard's 'Wild Copters,' 'High Flyers,' and 'Stunt Plane'

sets (combined in Concord's 'Super Plane' set)--had boldly copied Lanard's

products. Yet Green effectively admitted that his company actively participated in

Concord's infringement by 'Americanizing' the Concord products in such a way

that the jury could reasonably infer that Novelty was attempting to conceal the

particulars of Concord's blatant copying of Lanard's products.

Green also admitted that Novelty does not normally maµe copyright checµs

for goods purchased in China, and specifically did not do so in this case. Had

Novelty or its counsel made even the most modest effort to do so before it began

selling the 'Pull-N-Launch Plane Set,' however, it might well have discovered

Lanard's 1994 registration of the 'Wild Copters' toy, Regis. No. VA 656-

310--which included the distinctively-shaped launcher handle that was copied

6 After initially denying that he was aware of rampant piracy in the toy industry in China, Green was impeached on this point with his own deposition testimony.

-12- exactly in both the 'Pull-N-Launch Plane Set' and the earlier Concord version of

that toy, the 'Super Plane' set. The jury could also infer willfulness from

Novelty's admitted practice of sending samples of 'hot products' found in U.S.

retail establishments to its Chinese vendors to copy and pacµage as Novelty toys,

without asµing permission from the sellers or creators of the toys.

Viewed in its entirety, the evidence presented at trial was sufficient to

support both the jury's finding of willful copyright infringement by Novelty, and

the district court's decision to deny appellants' post-judgment motion for judgment

as a matter of law on this issue.

C.

Appellants further contend that Lanard made a final and binding election of

statutory damages on November 1, 2006, and that the district court abused its

discretion by allowing Lanard to present evidence of actual damages at trial on

certain of its claims for copyright and trade dress infringement. Again, we disagree.

In denying appellants' motion in limine to exclude evidence of actual

damages, the district court specifically found that Lanard clarified that it was

seeµing statutory damages as to only some of its copyright claims by timely filing

an amended notice of election on November 20, 2006, and that the defendants

thereafter did not object to the amended notice or seeµ additional discovery on the

-13- issue of actual damages for the remaining claims--even though discovery was still

ongoing. Appellants' claim that they were prejudiced by Lanard's amendment of

its election, or that they detrimentally relied on the initial notice, was properly

rejected. Trial did not commence until May 25, 2007, more than six months after

Lanard filed its amended notice, and appellants could have sought leave to conduct

further discovery or to have their motion to compel heard. In these circumstances,

the district court did not abuse its discretion by allowing Lanard to present

evidence of actual damages at trial.

D.

Appellants next contend that the jury's findings of liability for copyright

infringement as to Novelty Wholesale, Inc., and Novelty Transportation, Inc., are

not supported by substantial evidence. We reject this argument.

The transportation and distribution of infringing copies of copyrighted

worµs from one location to myriad sales points materially contributes to the

improper conduct of the direct infringer, and there was substantial evidence from

which the jury could infer that in performing such services for Novelty, Inc., both

Novelty Transportation and Novelty Wholesale acted with µnowledge of the

infringing activity, or could fairly have such µnowledge imputed to them. See

Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701, 727 (9th Cir. 2007) (citing

-14- Gershwin Publ'g Corp. v. Columbia Artists Mgmt, Inc., 443 F.2d 1159, 1162 (2nd

Cir. 1971)). This included evidence that Novelty, Inc., was their sole customer;

Green owned and was an officer of all three corporations, and was actively

involved in their operations; and the three companies jointly realized revenue from

the infringing activities. See Perfect 10, 487 F.3d at 727. The district court did not

err in denying appellants' post-judgment motion on this issue.

E.

Finally, appellants contend that the district court abused its discretion by

allowing Lanard's expert, Howard Marylander, to testify at trial, because his full

expert report was not disclosed by September 15, 2006, the deadline set by the

court for expert disclosures. Lanard does not dispute that it technically violated

Rule 26(a)(2)(B) by not serving Marylander's full expert report by that date.

Lanard argues, however, that the district court acted within its discretion in

allowing Marylander to testify at trial.

Appellants correctly note that Rule 37(c)(1), as implemented through the

1993 amendments, was intended to foster stricter adherence to discovery

requirements and to broaden the power of the district courts to sanction violations

of Rule 26. Yeti by Molly, Ltd. v. Decµers Outdoor Corp., 259 F.3d 1101, 1106

(9th Cir. 2001). Rule 37(c)(1) did not, however, strip the district courts of

-15- discretion to allow expert testimony in appropriate circumstances; to the contrary,

it contains an express exception under which a failure timely to serve an expert

report may be excused if the failure was substantially justified or is harmless. Yeti

by Molly, 259 F.3d at 1106-07. Among the factors that may properly guide a

district court in determining whether a violation of a discovery deadline is justified

or harmless are: (1) prejudice or surprise to the party against whom the evidence is

offered; (2) the ability of that party to cure the prejudice; (3) the liµelihood of

disruption of the trial; and (4) bad faith or willfulness involved in not timely

disclosing the evidence. See David v. Caterpillar, Inc., 324 F.3d 851, 857 (7th Cir.

2003). The burden is on the party facing exclusion of its expert's testimony to

prove the delay was justified or harmless. Yeti by Molly, 259 F.3d at 1107.

We agree with Lanard that its violation of Rule 26(a)(2)(B) did not cause

prejudice to appellants or any unfairness in the trial. Although Lanard did not

strictly comply with the requirements of that Rule by the disclosure deadline, it did

timely serve a 'preliminary' expert declaration containing detailed information

about Marylander's bacµground and expertise, a copy of his curriculum vitae, a list

of representative cases in which he had testified, a listing of the materials reviewed

in support of his declaration, and a statement of his scope of worµ for this case.

Lanard then served a 'supplemental' expert declaration that fully satisfied Rule

-16- 26(a)(2)(B) on October 23, 2006--more than three weeµs before the cut-off date

for expert discovery, and more than seven months before the date set for trial.

Appellants, for their part, made no effort whatsoever to depose Marylander,

even though they continued to use the ongoing discovery process to compel

production of other evidence with which they would attempt to impeach him at

trial. Not only was Marylander's anticipated testimony not a 'surprise' to

appellants, they were obviously able to taµe steps they thought necessary to

contend with his testimony at trial. In these circumstances, we conclude the

district court did not abuse its discretion or otherwise err by allowing Marylander

to testify at trial.

III.

Because we affirm the jury's finding of willful infringement of Lanard's

copyright and trade dress rights by Novelty, an award of reasonable attorney's fees

incurred by Lanard in this appeal is appropriate only as against those appellants.

15 U.S.C. y 1117; Volµswagenwerµ Aµtiengesellschaft v. Wheeler, 814 F.2d 812,

821 (1st Cir. 1987) (award of reasonable attorney's fees is appropriate where

justified by equitable considerations, including where the acts of infringement were

'willful'). An award of reasonable attorney's fees on appeal is also appropriate in

this case pursuant to 17 U.S.C. y 505, to further the purposes of the Copyright

-17- Act--i.e., to protect copyrights and deter infringement.

IV.

For the foregoing reasons, Lanard's request for dismissal of the appeal is

DENIED, and the judgment of the district court is AFFIRMED. Lanard shall

recover its reasonable attorney's fees and costs incurred on appeal, in an amount to

be determined by the district court on remand.

-18-

FILED

Lanard Toys Ltd. v. Novelty, Inc., No. 08-55795 APR 13 2010

MOLLY C. DWYER, CLERK

CLIFTON, Circuit Judge, dissenting: U.S . CO UR T OF AP PE A LS

I respectfully dissent. I conclude that Lanard's Drop Copter toy and the

launcher handles of its Wild Copters and Stunt Plane toys are uncopyrightable

'useful articles' under 17 U.S.C. y 101. The evidence, even when construed in the

light most favorable to Lanard, reasonably permits only this conclusion, which is

contrary to the jury's verdict. See Pavao v. Pagay, 307 F.3d 915, 918 (stating this

standard of review for a denial of a renewed Rule 50 motion for judgment as a

matter of law). I believe, therefore, that we should reverse the district court's

denial of Novelty's Rule 50 motion as to the copyrightability of these toys.1 The

jury liµely perceived Novelty as a willful vendor of flagrant µnocµ-offs coming

from China, described at trial, as the majority notes, at 11, as a 'den of piracy.'

Even so, Lanard has no right to copyright remedies if the toys Novelty imitated are

not among the worµs that the Copyright Act protects. They are not, and the jury

1 The uncopyrightability of the Wild Copters launcher handle--the only worµ registered before Novelty began selling its toys, and thus the only basis for statutory damages under 17 U.S.C. y 412--requires that we reverse the judgment on this infringement claim (along with the others related to uncopyrightable toys) and vacate Lanard's statutory damages award. Novelty argues that we must also vacate the finding that Lanard was a prevailing party and order the payment of costs, including attorney's fees, incurred by Novelty since its Rule 68 Offer of Judgment. I would remand the case to the district court to resolve these subsidiary issues in the first instance. misapplied the law in concluding otherwise.

The majority deems the Drop Copter and launcher handles copyrightable as

'sculptural worµs.' The portion of 17 U.S.C. y 101 that extends copyright to this

category of worµs reads:

'Pictorial, graphic, and sculptural worµs' include two-dimensional and three-dimensional worµs of fine, graphic, and applied art, photographs, prints and art reproductions, maps, globes, charts, diagrams, models, and technical drawings, including architectural plans. Such worµs shall include worµs of artistic craftsmanship insofar as their form but not their mechanical or utilitarian aspects are concerned; the design of a useful article, as defined in this section, shall be considered a pictorial, graphic, or sculptural worµ only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.

17 U.S.C. y 101. 'Useful article' is defined as 'an article having an intrinsic

utilitarian function that is not merely to portray the appearance of the article or to

convey information.' Id.

As the Sixth Circuit recognized in Gay Toys, Inc. v. Buddy L Corp., 703

F.2d 970 (6th Cir. 1983), the above-quoted language defines the category of

'pictorial, graphic, and sculptural worµs' that are eligible for copyright protection

in a three-step logical process: first, 'copyright protection is extended to 'pictorial,

graphic, and sculptural worµs' generally'; then, 'an exception to this general rule

-2- is carved out by exempting 'useful articles' from copyrightability'; and, finally,

'nevertheless, certain particular features of 'useful articles' [i.e., those 'that can be

identified separately from, and are capable of existing independently of, the

utilitarian aspects of the [useful] article'] may be separately copyrighted.' Gay

Toys, 703 F.2d at 972.

Assuming that they qualify as sculptures generally, the Drop Copter and the

launcher handles are plainly 'useful articles' subject to the statute's exception,

because they have 'intrinsic utilitarian function[s]' that are unrelated to merely

portraying their own appearances. The Drop Copter uses an elastic slingshot to

launch plastic spinners into the air. The Wild Copters and Stunt Plane launcher

handles serve--as their very description as 'launcher handles' suggests--as places

to grasp the mechanisms that launch the toys into the air.

These 'intrinsic utilitarian function[s],' which do not 'merely . . . portray

the appearance of the article[s] or . . . convey information,' differentiate the toys

(and toy components) in this case from the toy airplane in Gay Toys. The Gay

Toys court held that the toy airplane before it was not a 'useful article' because it

was 'merely a model which portrays a real airplane.' Gay Toys, 703 F.2d at 973.

The only 'use' attributed to the model airplane in Gay Toys was to 'permit[] a

child to dream and to let his or her imagination soar.' Id. The Gay Toys court

-3- rightly recognized that inspiring imagination should not maµe an object 'useful.'

Paintings and other pieces of pure art (to which Congress clearly extended

copyright) have similar imagination-stoµing 'uses' that would bring them within

the 'useful article' exception if 'use' were defined so broadly. That approach

'would have the 'useful article' exception swallow the general rule.' Id.

In contrast, however, the toys here do more than serve as models. They

actually launch objects into the air. The portions of the toys that exist to

accomplish this flight have more concrete utilitarian functions than the Gay Toys

plane that properly bring them within the 'useful article' exception.2

2 The majority misunderstands the Drop Copter's relevant utilitarian function. It does not matter that the Drop Copter propellers are 'not capable of actually flying, or transporting people or supplies, liµe real helicopters,' majority memo. at 9, because no one claims that this is their intended or actual function. The Drop Copter's 'intrinsic utilitarian function' is to launch a pair of plastic propellers into the air to entertain children. The majority also misses important distinctions when it analogizes the Drop Copter--a functional object--to the toy airplane in Gay Toys--a mere model. The majority asserts that the Drop Copter's flight 'is simply a portrayal of [a real helicopter],' majority memo. at 9, in the same sense that 'a toy airplane is merely a model which portrays a real airplane.' Gay Toys, 703 F.2d at 973. The analogy fails in two ways: (1) the Gay Toys plane was (as far as the opinion's description of it suggests) a closer approximation of its real-life analogue than the unadorned propeller pieces of the Drop Copter are of a real helicopter, and (2) the model plane's 'portrayal' of a real plane depended exclusively on the form of the sculptural worµ itself; there is no reason to thinµ that the copyright statute's definition of a 'sculptural worµ' encompasses physical movement of a sculpture in the world. '[P]ortrayal of the real objects' through ''flight,'' majority memo. at 9 (discussing how these toys merely portray their real-world equivalents), is a

-4- The question in this case--not reached in Gay Toys, because there the Sixth

Circuit held that the toy airplane was not a useful article3--is whether elements of

the designs of the Drop Copter and launcher handles are separately copyrightable

despite the utilitarian functions of these articles. '[T]he design of a useful article

. . . shall be considered a . . . sculptural worµ only if, and only to the extent that,

such design incorporates . . . sculptural features that can be identified separately

from, and are capable of existing independently of, the utilitarian aspects of the

article.' 17 U.S.C. y 101 (emphasis added); see also, e.g., Chosun Int'l, Inc. v.

Chrisha Creations, Ltd., 413 F.3d 324, 328 (2d Cir. 2005) ('[I]f a useful article

incorporates a design element that is physically or conceptually separable from the

underlying product, the element is eligible for copyright protection.').

Inspection of these toys compels the conclusion that there are no sculptural

features of the Drop Copter toy or the launcher handles that 'can be identified

separately from, and are capable of existing independently of, the utilitarian

aspects of' these articles. The physical forms of the Drop Copter and launcher

different µind of 'portrayal' than strictly form-based imitation, precisely because it integrates the object's function into the so-called portrait. 3 '[B]ecause we conclude that the Air Coupe is not a 'useful article,' we need not consider whether certain aspects of the item are copyrightable individually as separate and independent features.' Gay Toys, 703 F.3d at 974.

-5- handles are about as close to purely functional as possible. Virtually every

physical feature of the Drop Copter toy is directed by its intended use: to launch

the 'copter' from an elastic band and fly through the air. Lanard does not even

attempt to point out specific sculptural features of the Drop Copter that are

separably identifiable and independent of its utilitarian aspects; it would be all but

impossible to do so, because the Drop Copter has no 'design element[s]' that come

remotely close to satisfying this standard.

The sculptural features of the Stunt Plane and Wild Copters launcher handles

are similarly utilitarian. A toy airplane might inspire a child to dream, but I doubt

that any child ever dreams about one of these launcher handles--or even looµs at it

except to use it. The standard handle shape conforms to the natural shape of a

human hand to facilitate grasping. Grooves on the handles improve a user's grip.

It is difficult to identify any sculptural features of the handles beyond their basic

shape and grooves, and Lanard maµes no attempt to do so. That no feature of the

launcher handles is--or even purports to be--expressive or artistic leaves these

handles a far cry from the sort of decorative components of useful articles that

courts have found eligible for copyright protection. See, e.g., Mazer v. Stein, 347

U.S. 201, 202 (1954) (holding that 'statuettes of male and female dancing figures

made of semivitreous china' are copyrightable despite their use as bases for table

-6- lamps); Kieselstein-Cord v. Accessories by Pearl, Inc., 632 F.2d 989, 990 (2d Cir.

1980) (holding that belt bucµles 'cast in precious metals--decorative in nature and

used as jewelry is, principally for ornamentation' and cast from specially

handcrafted molds are copyrightable); see also Fabrica Inc. v. El Dorado Corp.,

697 F.2d 890, 893 (9th Cir. 1983) ('[I]f an article has any intrinsic utilitarian

function, it can be denied copyright protection except to the extent that its artistic

features can be identified separately and are capable of existing independently as a

worµ of art.').

Even with respect to the Wild Copters launcher handle--where the

copyright registration certificate established the presumptive validity of the

copyright in that toy--Novelty carried its burden of establishing that the launcher

handle was an uncopyrightable useful article by introducing the toy itself into

evidence. With the toy and other submitted evidence (such as testimony about the

utilitarian function of the handle's grooves) before it, a jury, applying the copyright

statute's legal standards faithfully, could reasonably only conclude that the handle

was a useful article and that no sculptural feature of it was independently

copyrightable. Novelty was not required, as the majority suggests, at 10, to

introduce any more evidence than it did to maµe this conclusion unavoidable. That

this court in Poe v. Missing Persons, 745 F.2d 1238, 1243 (9th Cir. 1984),

-7- 'identif[ied] [four types of] relevant evidence which may be presented to the trier

of fact' to establish whether an article is functional or a worµ of art did not maµe

the presentation of evidence in those four illustrative categories mandatory.

Novelty, therefore, did not automatically fail to carry its evidentiary burden simply

because it relied on other sufficient evidence (the toys themselves, and testimony

about their sculptural features) instead of any of the four types of proof this court

happened to enumerate in Poe.

Although I favor reversal of the jury's verdict here, I generally agree with

the majority that the classification of useful articles is a fact-intensive, case-by-case

determination that is typically best left to a jury. In closer cases, where the line

between useful articles and art is fuzzy, a jury should maµe the difficult call, and

the call it maµes should be entitled to deference. In this case, however, I see no

reasonable way that the jury could have applied the statutory standards to the toys

at issue and reached the conclusion that it did.

We should reverse the district court's denial of Novelty's motion for

judgment as a matter of law insofar as it held that copyright protects these toys.

-8-