Mag Jewelry Co., Inc v. Cherokee, Inc., (1st Cir. 2007)

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United States Court of Appeals

For the First Circuit

Nos. 06-1556; 06-2127

 

MAG JEWELRY CO., INC.

Plaintiff - Appellant/Cross-Appellee,

v.

CHEROKEE, INC.; TARGET CORPORATION, d/b/a Target Stores; STYLE

ACCESSORIES, INC.,

Defendants - Appellees/Cross-Appellants,

ROBERT MARGOLIS,

Defendant/Cross-Appellant.

         APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. Ernest C. Torres, U.S. District Judge]

Before

 Toruella, Circuit Judge,

Gibson,

[1]

Senior Circuit Judge,

and Lipez, Circuit Judge.

    Robert W. Clarida, with whom Thomas A. Tarro, III, Kris

Macaruso Marotti, Cowan, Liebowitz & Latman, P.C., and The Law Firm

of Thomas A. Tarro, III, were on brief, for appellant/cross-appellee.

    Thomas R. Noel, with whom John R. Harrington and Noel & Gyorgy

LLP, were on brief, for appellee/cross-appellant Style Accessories,

Inc.

    Craig M. Scott, with whom Christine K. Bush and Duffy Sweeney

& Scott, Ltd., were on brief for appellees/cross-appellants

Cherokee, Inc., Target Corporation and Robert Margolis.

 

 

August 8, 2007

 

         LIPEZ, Circuit Judge. In December 2001, plaintiff Mag

Jewelry Company ("Mag") purchased some costume jewelry at a Target

store in Rhode Island. The necklaces, whose pendants were

comprised of four crystal stones in the shape of an angel, were of

interest to Mag because it holds a copyright on that "crystal

angel" design, and Target was not one of Mag's customers. Mag

subsequently filed this copyright infringement action against

Target Corporation and its supplier, Style Accessories, Inc.

("Style").

[2]

The defendants denied copying Mag's angel, claiming

that their jewelry was based on an identical design independently

created by someone else. Following presentation of Mag's case to

a jury, the district court granted defendants' motion for judgment

as a matter of law. Mag appeals that ruling, and, in a cross-appeal, defendants challenge the district court's refusal to award

attorney's fees.

[3]

After careful review of the record, we affirm

the judgment for defendants on the merits but reverse the fees

ruling.

 

I.

         The angel design at the center of this controversy is a

fairly simple figure. A round crystal stone serves as its head and

a teardrop stone as its body, two oblong ("navette") stones create

the wings, and a metal "jump" ring – a piece typically used to link

a charm to a chain – is attached at the top as a halo. The crystal

stones are commercially sold in standard sizes, and the stones are

neither cut nor otherwise altered to create the angel shape at

issue here. The design has been used for necklaces, earrings and

pins.

         The facts underlying the dispute – other than the

ultimate question whether copying occurred – are largely

undisputed. Mag's president, Daniel Magnanimi, applied for

copyright registration for the angel in November 1995, listing 1995

as the year of its creation and June 1, 1995 as the date of first

publication. The United States Copyright Office issued the

registration and, in the following months, Mag sent letters through

counsel to dozens of individuals and businesses demanding that they

stop selling similar crystal angels.

         One such letter was sent to Alan Gregerman, a Rhode

Island jewelry designer and manufacturer,

[4]

who was selling a

crystal angel virtually identical to Mag's. Gregerman hired an

attorney, who in February 1996 sent a response to Mag stating that

Gregerman had created the same angel design earlier than 1995 and

that he also had "first manufactured, marketed, and sold products

incorporating the angel design" before that year. Gregerman later

testified that he created his crystal angel in the summer of 1994,

that he began selling and shipping copies by September 1994, and

that his angel was included in a 1995 gift catalog. His attorney's

letter reciprocally accused Mag of copyright infringement and

demanded that Mag "cease and desist" using the angel in any

products.

         There were further communications between Mag's and

Gregerman's attorneys, followed by two significant events. First,

in June 1996, Mag filed a supplement to its original copyright

registration, changing its crystal angel's date of creation to

March 1992 – more than two years earlier than Gregerman claimed to

have created his angel. Second, Gregerman and Magnanimi agreed

that they both would sell crystal angels without interference or

threat of suit from the other, and Gregerman also gave Mag

permission to make and sell two other angel jewelry designs that he

had created. Magnanimi sent Gregerman a letter reflecting that

arrangement in September 1996, stating that "we have both agreed

that you can make the crystal angel as copyrighted by Mag Jewelry

Co." At trial, Gregerman testified that he rejected his attorney's

advice to pursue litigation at that time because he could continue

to use the four-stone angel design, and litigation would have upset

his mother, who was elderly and ill.

         Mag and Gregerman continued to make and sell crystal

angels, co-existing without incident until Mag discovered the

crystal angel necklaces sold by Target Corporation in late 2001.

After purchasing some at the Target store in Warwick, Rhode Island

in December 2001 and more at a Target store in New York the next

month, Mag filed this copyright infringement action against the

retailer.

[5]

Target later identified Style as its supplier, and Mag

amended its complaint to add Style as a defendant, alleging that

Style had sold crystal angel items that were copied from Mag's

angel.

         Style, however, was a customer of Gregerman. In its

answers to Mag's interrogatories, the company denied that it had

copied "any piece sold or created by Mag jewelry" and reported that

it had "adapted a piece purchased from Alan Gregerman Co." to

create the Target necklace. Style had purchased crystal angels

from Gregerman between May 1997 and August 1998 and subsequently

had similar pieces produced, at a lower cost, by two other

companies. Style did not obtain Gregerman's permission to bring

the design to other manufacturers.

         Based on the uncontroverted evidence that Style's crystal

angel was modeled on a design it obtained from Gregerman,

[6]

the

defendants moved for summary judgment in July 2005. In support of

their motion, they cited a June 2000 affidavit from Gregerman

stating that he had independently created his crystal angel.

[7]

In

opposition, Mag offered a new affidavit from Gregerman, taken on

September 1, 2005, that included the following assertions:

5.Based on an agreement with Daniel

Magnanimi, Alan Gregerman Company can make and

sell the subject "Crystal Angel" jewelry

piece.

 

6.I inform any potential customer

interested in purchasing the subject "Crystal

Angel" piece that it has been copyrighted by

Mag Jewelry Co., Inc. and that Alan Gregerman

Company has an agreement with Mag and can make

and sell the piece to its customers.

 

. . .

 

8.To the best of my recollection, I

informed Chad Mollica of Style Accessories,

Inc. of the fact that the subject "Crystal

Angel" piece was copyrighted by Mag Jewelry

Co.

Relying on the new affidavit, Mag argued during a hearing on the

summary judgment motion that factual disputes remained,

particularly "whether Mr. Gregerman independently created that

piece" and, even if he did create a crystal angel, whether the

angel Gregerman sold to Style was his own or the Mag design. Mag's

counsel suggested that Gregerman was a licensee of Mag, and he told

the court that, if the new affidavit is read "precisely[,] what it

says is that he sold to Style the Mag angel. Assuming that there

even is an angel that he still maintains that he independently

created, that's not what he sold to Style."

         At the end of the hearing, the district court denied the

summary judgment motions, observing that "there are just too many

factual links that have to be established here . . . for the Court

to say as a matter of law that this is not an infringing product."

The case thus proceeded to trial before a jury.

         In preparation for trial and in response to Gregerman's

second affidavit, defendants sought further discovery and obtained

permission to depose him. At his February 2006 deposition,

Gregerman testified that he originally refused to sign a new

affidavit proposed to him by Mag's counsel because it stated that

Alan Gregerman Company had a license from Mag – "and that was not

the case." Gregerman agreed to the affidavit ultimately submitted

to the court after it was revised to eliminate the license

reference. At the deposition, the following exchange took place

between Gregerman and defense counsel:

Q. You didn't understand that you had a

license, correct?

A. I did not have – as far as I was

concerned, based upon my definition or my

understanding of a license, I did not have a

license from Danny.

Q. You were selling your Crystal Angel in

the Summer of 2005, correct?

A. Correct.

Q. And that was your creation that you were

selling, correct?

A. Correct.

         At trial, Magnanimi testified about his creation of the

crystal angel in 1992 and stated that the piece, which was first

created as a pin, had been displayed at jewelry shows in

Providence, Rhode Island between 1992 and 1994. The earliest

evidence that Mag's crystal angel was distributed to others was an

invoice showing that a sample piece was mailed to a company,

Merlite Industries, in September 1994. Magnanimi testified that

the first documented sale of a crystal angel item occurred in March

1995 and that more than 14,000 pins with that design were sold in

the first half of 1995. At one point during cross-examination,

when asked about his company's effort to secure an assignment from

Gregerman of the copyright in his angel, Magnanimi stated that

there was never a dispute as to whose crystal

angel it was. Alan Gregerman claims that he

independently designed it, and I claim that I

independently designed it.

Whose crystal angel it was from 1995

and 1996 until this day me and Alan Gregerman

never discussed, didn't care whose crystal

angel it was.

         Gregerman, also called as a witness by Mag, described his

own creation of a four-stone crystal angel in 1994 at a customer's

request. On cross-examination, in response to a question by

defense counsel, he agreed that he had "always considered that [he]

independently created that angel," and further agreed that it was

his own angel that he sold to Style. However, he also acknowledged

that he told customers who purchased the crystal angel, including

Style's president, Chad Mollica, that Mag Jewelry had a copyright

on the design and that he and Magnanimi had "an understanding or

agreement" that he could manufacture and sell the four-stone angel

"without any legal repercussions." Upon questioning by Mag's

counsel, Gregerman testified that the crystal angel design sold to

Style was "the same crystal angel design" as Mag's and that,

"[t]echnically," Gregerman had been selling "the crystal angel

design that was copyrighted by Mag Jewelry."

         At the close of Mag's presentation of its case-in-chief,

the defendants moved for judgment as a matter of law pursuant to

Federal Rule of Civil Procedure 50, arguing, inter alia, that Mag

had failed to prove that Style copied the Mag crystal angel. In

its oral ruling, the district court stated that the only reasonable

conclusion that could be drawn from the evidence was that

defendants had copied the angel they had obtained from Gregerman.

The court explained:

I don't see how there could be any contention

here that the defendants copied Mag's crystal

angel as opposed to Gregerman's, because they

had ready access to Gregerman's, and there

would be no reason for them having Gregerman's

crystal angel and having a history of selling

it why they would possibly go to take Mag's

crystal angel.

         The court then went on to consider the "fundamental

question" – "whether Gregerman's crystal angel infringed on Mag's

copyright." To establish copyright infringement, a plaintiff must

prove two elements: (1) ownership of a valid copyright and (2)

copying of the protected work by the alleged infringer. Feist

Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991);

Johnson v. Gordon, 409 F.3d 12, 17 (1st Cir. 2005). The plaintiff

bears the burden of proof on both elements. Johnson, 409 F.3d at

17. Mag's ownership of a valid copyright has not been contested;

the focus in this case has been on the element of copying. Direct

evidence of copying is rare, id. at 18; Grubb v. KMS Patriots,

L.P., 88 F.3d 1, 3 (1st Cir. 1996), but an inference of copying may

be drawn from evidence that an alleged copier had access to the

copyright holder's previously created design and that there is a

high degree of similarity between the works, Johnson, 409 F.3d at

18; Grubb, 88 F.3d at 3.

[8]

         Consistent with that framework, the district court noted

that, for Mag to prevail, it would have to make two showings.

First, Mag needed to demonstrate "a sufficient degree of

similarity" between its crystal angel and Gregerman's "to give rise

to an inference of actual copying." Johnson, 409 F.3d at 18. The

court found that Mag's evidence supported such a finding. Second,

Mag had to prove that the similarity in the designs was

attributable to Gregerman's having had access to Mag's crystal

angel rather than to Gregerman's independent creation of the same

design. The district court concluded that Mag's evidence on this

prong fell short, explaining that Mag's failure to elicit probative

evidence of access precluded a jury from finding that the items

sold and manufactured by the defendants were copied from Mag's

angel.

[9]

The defendants were therefore entitled to judgment as a

matter of law.

         On appeal, Mag contends that the district court applied

the wrong legal standard to the issue of access and further erred

by failing to consider Style's access to the Mag design along with

Gregerman's. Mag also claims that the court improperly neglected

a dispositive independent basis on which Mag could have prevailed

before the jury – that Gregerman sold Mag's "crystal angel" design

to Style, and not his own independent creation.

         In a cross-appeal, defendants claim that the district

court abused its discretion in rejecting their request for

attorney's fees.

II.

         The parties' contentions in this case are sufficiently

unusual that we think it helpful to pause briefly for the purpose

of clarifying the relationships among the central characters. As

noted above, it is undisputed that Gregerman was the original

source of the crystal angel jewelry that Style distributed to

Target. Although Style directly purchased crystal angels from

Gregerman for a little more than a year, it later hired other

companies to make similar items, but at a lower cost and without

Gregerman's authorization. The necklaces that Mag found at Target

were produced by one or more of these other companies.

         When Mag sued Target and Style for copyright

infringement, Style defended in part by claiming that – if the

crystal angel could be copyrighted

[10]

– Mag was not the copyright

holder whose design had been infringed. Style asserted that the

crystal angel necklace sold at Target was based on Gregerman's

independently created design and impliedly claimed that, if any

infringement occurred, it was of Gregerman's design, not Mag's.

         Mag ultimately responded in two ways. First, it

maintained that Gregerman was not, in fact, an independent creator,

and so "Gregerman's design" was in reality Mag's design. Second,

Mag argued that even assuming that Gregerman independently created

an identical crystal angel, the angel design that Gregerman sold to

Style was Mag's, and not his own.

[11]

Under either theory, Mag would

have a viable copyright claim against Style.

         Gregerman is not a defendant in this case because he and

Magnanimi agreed that both of their companies could make the angel

– whether or not Gregerman was an independent creator – and

Gregerman also was free to sell the design to Style and his other

customers. Thus, in selling the crystal angel to Style, Gregerman

did no more than was authorized by the September 1996 letter

agreement. Mag's claim is that Style committed copyright

infringement when – without permission from either Mag or Gregerman

– it took the design it had obtained from Gregerman to other

companies for production of crystal angel jewelry.

         Mag argues that we should reject out of hand what it

characterizes as Style's unprecedented independent creation

defense, i.e., that Style is protected by Gregerman's independent

creation notwithstanding the fact it did not have Gregerman's

permission to make the allegedly infringing items. While we can

appreciate Mag's dismay, principles of copyright law on which Mag

itself relies appear to permit just such a defense by Style. Mag

acknowledges in its brief that it is "axiomatic" that separate

copyrights exist in independently created designs, even if the

works are identical. See Boisson v. Banian, Ltd., 273 F.3d 262,

270-71 (2d Cir. 2001); see also Melville B. Nimmer & David Nimmer,

1 Nimmer on Copyright § 2.01[A] (2007) ("[A] work is original and

may command copyright protection, even if it is completely

identical with a prior work, provided it was not copied from such

prior work but is rather a product of the independent efforts of

its author."). Presumably, then, if Gregerman independently

created his design, and if Style copied the crystal angel from

Gregerman, only Gregerman's rights would be implicated. It would

be up to Gregerman to pursue, or not, his rights in his design.

[12]

         The pivotal issues before us, therefore, are whether Mag

provided sufficient evidence of copying by Gregerman to allow a

jury to reject the claim of independent creation, and whether, even

if Gregerman did independently conceive a crystal angel, the

particular design taken without permission by Style was Mag's.

        With this background in mind, we turn to our review of

the district court's judgments.

          III.

         We review de novo the grant of a motion for judgment as

a matter of law under Rule 50, viewing "'the evidence, and

inferences to be drawn therefrom, in the light most favorable to

the non-movant.'" Cardona-Martínez v. Rodríguez-Quiñones, 444 F.3d

25, 28 (1st Cir. 2006) (quoting Mangla v. Brown Univ., 135 F.3d 80,

82 (1st Cir. 1998)). Judgment as a matter of law is appropriate if

the presentation of the party's case reveals no "legally sufficient

evidentiary basis" for a reasonable jury to find for that party.

Fed. R. Civ. P. 50(a)(1); see also id. at 28.

         The district court concluded that defendants were

entitled to judgment because, in its view, there was insufficient

evidence to permit a jury to conclude that Style's crystal angel

originated with Mag's copyrighted design. Specifically, the court

ruled that there was no evidentiary basis for a finding that

Gregerman had access to Mag's crystal angel before he made his own

– and thus no basis for concluding that he copied the Mag angel.

         Mag argues that the court erred in evaluating "access."

It claims that copyright law requires only that a defendant had a

"reasonable opportunity" to view the plaintiff's work and that the

court erroneously utilized a more demanding standard. According to

Mag, the court required it to prove that Gregerman actually took

advantage of viewing opportunities and saw the work.

         We find this argument unpersuasive. Mag is correct that

"reasonable opportunity" is the applicable standard for evaluating

access; a copyright owner need not demonstrate an alleged

infringer's actual access to a protected work. See Grubb v. KMS

Patriots, L.P., 88 F.3d 1, 3 (1st Cir. 1996). However, "[e]vidence

that only creates a 'bare possibility' that the defendant had

access is not sufficient." Id.; see also, e.g., Gaste v.

Kaiserman, 863 F.2d 1061, 1066 (2d Cir. 1988) (requiring evidence

of "a reasonable possibility of access," which is "more than a bare

possibility and may not be inferred through speculation or

conjecture"); 4 Melville B. Nimmer & David Nimmer, Nimmer on

Copyright § 13.02[A] (2007) ("Of course, reasonable opportunity

. . . does not encompass any bare possibility in the sense that

anything is possible. Access may not be inferred through mere

speculation or conjecture. There must be a reasonable possibility

of viewing plaintiff's work – not a bare possibility.") (footnotes

omitted).

         Here, as the district court noted, there was no evidence

that the Mag angel was widely distributed before Gregerman first

produced large quantities of his crystal angel in late 1994.

[13]

A

sample was provided to a customer, Merlite, in September 1994, but

Mag recorded no sales until early the following year. Mag did not

create its first catalog until December 1996. Although there was

evidence that the crystal angel was displayed at jewelry shows

between 1992 and 1994 – two each year in Rhode Island, where

Gregerman lived

[14]

– the district court observed that "[t]he problem

is that there is no evidence that Mr. Gregerman attended any of

those shows, let alone that he went to Mag's display."

         Mag complains that this statement of "[t]he problem"

reflected the incorrect view that Mag had to show that Gregerman

actually viewed the design at the shows, while the standard

requires only an opportunity for viewing. However, the gap in

evidence is larger than Mag admits. While evidence that Gregerman

attended the Rhode Island jewelry shows – or, even more generally,

that he sometimes attended similar shows – may have permitted an

inference that he had a reasonable opportunity to view Mag's

design, Mag failed to identify any such evidence. Notably,

Gregerman was called as Mag's witness at trial, but was not asked

about his attendance at trade shows.

[15]

         Mag asserts that a reasonable opportunity to view the

copyrighted work can be shown through a "chain of events" or a

"link" by which access might have occurred. It cites Flag Fables,

Inc. v. Jean Ann's Country Flags & Crafts, Inc., 730 F. Supp. 1165

(D. Mass. 1989), to support its contention that the annual display

of Mag crystal angels at trade shows in Rhode Island, "in Mr.

Gregerman's own locality," was sufficient to establish such a

chain. Access was not disputed in Flag Fables, id. at 1171, 1178,

but the judge briefly noted that the defendant could not credibly

argue lack of access in part because plaintiff's decorative banners

had been displayed at the same craft fairs where the defendant

later sold her flags for more than a year before defendant began

producing her own versions. In addition, the court relied on

evidence that plaintiff's banners had achieved "rapid and

widespread popularity," id. at 1171, and were the subject of a

local newspaper article. No equivalent "chain of events" was shown

here. No evidence placed either Gregerman or Style at the jewelry

trade shows, and, as noted earlier, there is no evidence of

widespread awareness of Mag's crystal angel before Gregerman began

selling his jewelry.

         Mag seeks to mitigate the absence of "'affirmative and

probative evidence'" of access, Jorgensen v. Epic/Sony Records, 351

F.3d 46, 51 (2d Cir. 2003) (quoting Scott v. Paramount Pictures

Corp., 449 F. Supp. 518, 520 (D.D.C. 1978), aff'd, 607 F.2d 494

(D.C. Cir. 1979) (table)), by pointing to the "striking similarity"

between the Mag and Gregerman crystal angel pieces. Mag argues

that numerous courts have held that such equivalence between works

is itself independent evidence of access, see Bucklew v. Hawkins,

Ash, Baptie & Co., 329 F.3d 923, 926 (7th Cir. 2003) (citing

cases), and it suggests that other facts in the record also tend to

rebut Gregerman's claim of independent creation. Mag notes

Gregerman's failure to register the copyright in his four-stone

angel, despite his registration of other contemporaneous designs;

his failure to enforce his claimed rights in the crystal angel

design against infringers, despite enforcing his copyright in other

contemporaneous works; and his issuance of a license to Mag to sell

other of his designs, suggesting a quid pro quo for Mag's allowing

him to sell its crystal angel.

[16]

         While the designs' similarity and these additional facts

would have assisted Mag before the jury had it offered some

probative evidence of access, any finding of copying by the jury

based on Gregerman's failure to register copyrights in other

designs or to enforce his rights in the crystal angel beyond his

agreement with Magnanimi would be "mere speculation or

conjecture."

[17]

In addition, as the district court noted, the

striking similarity between the designs "is a little less

compelling in this case . . . because we're dealing with basically

an arrangement of geometric shapes and we're dealing with a final

creation that is sort of fixed in concept. . . . [T]here are only

so many ways one can depict an angel." In a case such as this,

where the simplicity of the design makes independent creation

highly plausible, similarity alone could not establish access and,

in turn, copying.

[18]

Cf. Bucklew, 329 F.3d at 926 ("[W]hen the

similarities concern details of such an arbitrary character that

the probability that the infringer had duplicated them

independently is remote, an inference of copying may be drawn

without any additional evidence."); Gaste, 863 F.2d at 1068

("Though striking similarity alone can raise an inference of

copying, that inference must be reasonable in light of all the

evidence."); Selle v. Gibb, 741 F.2d 896, 901 (7th Cir. 1984)

("[A]n inference of access may [] be established circumstantially

by proof of similarity which is so striking that the possibilities

of independent creation, coincidence and prior common source are,

as a practical matter, precluded. . . . [However], striking

similarity is just one piece of circumstantial evidence tending to

show access and must not be considered in isolation . . . .").

         On this record, we agree with the district court that no

reasonable finder of fact could conclude that Gregerman had a

reasonable opportunity to view Mag's work before Gregerman produced

his crystal angel. Consequently, the court properly found as a

matter of law that Mag could not establish that Style copied its

crystal angel design by copying Gregerman's design.

[19]

                              IV.

         Mag alternatively asserts that, even assuming that

Gregerman independently conceived his crystal angel, Mag was

entitled to prove to a jury that the angel Gregerman sold to Style

was not his own creation, but Mag's design – meaning that when

Style copied the design, it was copying from Mag, not Gregerman.

Mag claims the district court erred in failing to consider this

basis for the infringement claim.

         We view this argument to be so implausible as to verge on

frivolity. The record as a whole unequivocally refutes the theory

that Gregerman sold his customers crystal angels that he considered

to be based on Mag's copyrighted design, rather than on his own

essentially identical concept. Gregerman consistently testified

that he sold his own crystal angel design to his customers,

specifically including Style.

         Mag's attempt to create a factual dispute by

characterizing Magnanimi's letter to Gregerman in September 1996

as a license agreement is, at best, disingenuous. The letter,

stating that "we have both agreed that you can make the crystal

angel as copyrighted by Mag Jewelry Co.," provides no basis for an

inference that from that time forward Gregerman was selling Mag's

angel pursuant to a license rather than his own creation. Indeed,

such a suggestion defies reason. Gregerman and Magnanimi both

testified that the two angels were essentially the same.

[20]

Given

the assumption of independent creation – and that is the starting

point for this alternative argument – whether the angel Gregerman

sold to Style was his own design or Mag's depended entirely on

Gregerman's representation. In either case, the jewelry would look

the same. Thus, if Gregerman said he was selling his own angel –

and he did so testify – a jury could find otherwise only if

Gregerman's statements or behavior at the time of the sales

contradicted that assertion.

[21]

         In attempting to show such inconsistency, Mag relies in

part on the September 1996 letter. The letter contains only the

single sentence concerning Gregerman's use of the Mag design: "Per

our telephone conversation we have both agreed that you can make

the crystal angel as copyrighted by Mag Jewelry Co." As we already

have pointed out, this says nothing about which angel Gregerman

actually would make and sell. As Magnanimi testified, neither he

nor Gregerman was concerned about that question because both

designs were, essentially, "the same angel." In other words, both

men agreed that "the crystal angel as copyrighted by Mag Jewelry

Co." was identical to the crystal angel that Gregerman claimed to

have created.

         Mag also highlights Gregerman's disclosure to his

customers that Mag possessed a registered copyright on the crystal

angel, as well as Gregerman's assurance that there would be no

litigation over his customers' use of the crystal angel design –

suggesting that these actions demonstrate that Gregerman was

selling Mag's angel. Mag reads too much into these messages.

Gregerman's decision to inform his customers that there was no risk

of legal action stemming from their purchase of his angels, despite

Mag's formal copyright protection, does not contradict his

testimony that he sold Style his own angels.

         Nor does the new Gregerman affidavit that was offered by

Mag in its effort to stave off summary judgment fill the gap.

Without doubt, the affidavit could be read out of context as

stating that, in Gregerman's view, he was selling Mag's copyrighted

angel. In it, Gregerman refers to the Mag design as "the subject

'Crystal Angel' jewelry piece" and states that the "Alan Gregerman

Company sold the subject 'Crystal Angel' jewelry piece to Style

Accessories, Inc." Once again, however, the fact that all parties

saw Gregerman's angel as indistinguishable from Mag's provides

necessary context. Gregerman's testimony unmistakably shows that

it was the uniformity between the pieces that caused him to view

any sale of the former as "[t]echnically" also a sale of the

latter.

[22]

         Mag asserts that sufficient ambiguity exists surrounding

these various factors – the agreement, the verbal assurances to

customers, the averments in the new affidavit – that it was

entitled to a jury judgment on the credibility of Gregerman's

assertion that he sold his own angel design to Style. We disagree.

To the extent any of these indicators is equivocal in isolation,

the uncertainty is dispelled when the record is considered as a

whole. On this record, a jury could find for Mag only by engaging

in conjecture or speculation, and defendants' Rule 50 motion may

not be denied on such a basis. See Peguero-Moronta v. Santiago,

464 F.3d 29, 45 (1st Cir. 2006) ("Even though we draw all rational

inferences from the facts in favor of the non-moving party, that

party 'is not entitled to inferences based on speculation and

conjecture.'") (quoting Ferrer v. Zayas, 914 F.2d 309, 311 (1st

Cir. 1990)); Russo v. Baxter Healthcare Corp., 140 F.3d 6, 8 (1st

Cir. 1998) (stating that non-moving party may not rely on

conjecture or speculation to justify submitting an issue to the

jury).

         In sum, we conclude that a reasonable jury could not have

found that Gregerman sold Mag's angel rather than his own to Style.

We therefore affirm the district court's grant of defendants'

motion for judgment under Rule 50.

V.

         Under section 505 of the Copyright Act, the district

court "in its discretion" may award a "reasonable attorney's fee"

to the prevailing party. 17 U.S.C. 505. Such fees are to be

awarded to defendants on an "evenhanded" basis with plaintiffs.

Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994); see also

InvesSys, Inc. v. McGraw-Hill Cos., 369 F.3d 16, 19 (1st Cir.

2004). Among the factors that may be considered are

"'frivolousness, motivation, objective unreasonableness (both in

the factual and in the legal components of the case) and the need

in particular circumstances to advance considerations of

compensation and deterrence.'" Fogerty, 510 U.S. at 534 n.19

(quoting Lieb v. Topstone Indus., 788 F.2d 151, 156 (3d Cir.

1986)). The goal of such awards is to "vindicat[e] the overriding

purpose of the Copyright Act: to encourage the production of

original literary, artistic, and musical expression for the public

good." Lotus Dev. Corp. v. Borland Int'l, Inc., 140 F.3d 70, 73

(1st Cir. 1998); see also Fogerty, 510 U.S. at 524.

         Defendants challenge the district court's refusal to make

a fee award in this case, arguing that the court overemphasized

Mag's subjective good faith and improperly failed to take into

account both the weak factual basis for Mag's position and Mag's

misleading representations at the summary judgment hearing

concerning whether Gregerman sold Style his own, or Mag's, crystal

angel design. Although we may not disturb the trial court's

judgment simply because we would have approached the matter

differently, the court's misapprehension of either the law or the

facts may justify vacating its ruling as an abuse of discretion.

See InvesSys, 369 F.3d at 19; Lotus Dev. Corp., 140 F.3d at 75;

Edwards v. Red Farm Studio Co., 109 F.3d 80, 82-83 (1st Cir. 1997).

         Having closely reviewed the record, we agree with

defendants that in rejecting a fee award, the district court relied

on a mistaken notion of the factual reasonableness of Mag's

infringement claim. During the hearing on defendants' fees motion,

the court noted that it was undisputed that Style had copied an

angel obtained from Gregerman and that the issue thus became

"whether Gregerman was producing this crystal angel simply as a

licensee of Mag pursuant to Mag's copyright." The court observed

that, despite its finding that Mag presented insufficient evidence

of access to warrant an inference of copying, that evidentiary

failure did not necessarily lead to an award of attorney's fees.

The court thought it significant that "the issue of Mr. Gregerman's

access to Mag's crystal angel didn't really surface[,] . . . didn't

become a big issue until the time of trial." The court stated:

It might have been a different matter

if this were an issue that was fully explored

prior to trial, but that wasn't the case.

This issue, although [it] may have been

touched on somewhat collaterally, didn't

really emerge as the focal point in the case

until the time of trial. At least that was my

recollection.

         The court went on to identify as the other "significant"

point the "agreement, whether you call it a licensing agreement or

however one characterizes it, there was an agreement between Mag

and Gregerman under which they agreed to sell each other's crystal

angel." The court found "very troubling" the alleged

misrepresentations by Mag concerning the Gregerman affidavit at the

summary judgment hearing,

[23]

but said that "I certainly can't

conclude based on what's been presented to me that . . . there was

any attempt to mislead the Court as to what Gregerman's position

was in this."

         We think the court misunderstood the extent and

significance of Mag's shift in its theory of the case to avoid

summary judgment and, indeed, the comments quoted above indicate

that the court may have decided differently had it fully

appreciated Mag's strategy. At the outset of the litigation, Mag

was pursuing Style as an infringer of its crystal angel. Once it

discovered that Style's angel originated with Gregerman, the

infringement claim as originally conceived was no longer viable.

At that point, Mag could show copyright infringement only if it

could prove either that Gregerman's "independent" design had in

fact been copied from Mag's, or that Gregerman had sold Mag's

angel, rather than his own, to Style.

         Our analyses in the preceding sections explain why

neither of those positions was vindicated at trial, and we think it

apparent that the inadequacies in Mag's showings are traceable to

facts of which the company had full knowledge at the time of

summary judgment: that Gregerman had consistently maintained that

(1) he independently created his crystal angel, and (2) the angel

he sold to Style was his own (though identical to Mag's). Mag

offered no meaningful contrary evidence at trial.

         At both the summary judgment and fees hearings, Mag's

counsel muddied the district court's understanding of the facts by

describing the September 1996 letter from Magnanimi to Gregerman as

a licensing agreement and asserting that Gregerman had agreed to

sell Mag's angel. There is no evidence that Gregerman agreed to

sell Mag's angel rather than his own, and counsel's assertion at

the fees hearing that Gregerman "testified that he sold the Mag

piece" to Style is – as we have explained – based on statements

taken out of context. Mag's counsel skillfully prepared the 2005

Gregerman affidavit to create that same ambiguity about Gregerman's

sales to Style, despite the company's awareness that Gregerman at

all times insisted that he sold only his own design.

         Mag may well have revealed its hand in this litigation

when its counsel noted, at the outset of his argument in opposition

to the fee request, that "[t]he Court should not reward the

Defendants for their admitted actions of copying a copyrighted

piece." Counsel continued: "Maybe it was Mr. Gregerman['s] as they

contend or Mr. Magnanimi's [as] we contend, but they copied a

copyrighted work without authorization, and they should at the very

least not be rewarded for that with an award of attorneys' fees."

Beyond the equities, Mag argued that an award of fees would be

inappropriate because the issues were novel and complex, involving

the odd circumstance of a defendant without authorization from

either of two claimed copyright holders defending against an

infringement claim by asserting that its work originated from the

second holder, not the plaintiff. See, e.g., Lotus Dev. Corp., 140

F.3d at 72 (affirming denial of fees where case involved "a novel

and unsettled question of copyright law"); id. at 75 ("When close

infringement cases are litigated, copyright law benefits from the

resulting clarification of the doctrine's boundaries.").

         We cannot agree with Mag's view that an award of fees in

this case would be improper on the ground that defendants violated

Gregerman's copyright, even if not Mag's. As the district court

recognized, Gregerman's possible case against the defendants is not

relevant, and we have no occasion to speculate on the propriety of

Style's conduct vis-à-vis Gregerman. Nor does this case implicate

a novel or complex issue of copyright law. Although the facts

underlying Style's defense may be unusual, the legal principle at

the core of their argument is, as noted earlier, well established:

separate copyrights exist in each of two identical works that are

independently created.

         Mag must have known early on that its infringement claim

was tenuous, yet it managed to prolong the litigation by obscuring

the clarity of the underlying facts – a strategy that undoubtedly

accounts for the district court's imperfect recollection of the

case. Even if Mag was motivated by a good faith belief that Style

was an infringer, its pursuit of these defendants became

indefensible once it learned that Style obtained the design from

Gregerman. In these circumstances, we think the district court's

refusal to award fees may fairly be deemed an abuse of discretion.

See InvesSys, 369 F.3d at 20 ("[I]n section 505 Congress aimed to

provide a potential incentive to the winner who asserts a

successful copyright claim or defends against an unworthy one.");

Matthews v. Freedman, 157 F.3d 25, 29 (1st Cir. 1998) ("A

plaintiff's decision to bring a weak, if nonfrivolous, case and to

argue for an unreasonable extension of copyright protection are

relevant concerns."); Edwards, 109 F.3d at 82-83 (reversing

district court's denial of fees where plaintiff's action was

"highly unreasonable, if not frivolous" because she relied on

ambiguities she created); cf. Fogerty, 510 U.S. at 527

("[D]efendants who seek to advance a variety of meritorious

copyright defenses should be encouraged to litigate them to the

same extent that plaintiffs are encouraged to litigate meritorious

claims of infringement.").

[24]

We leave to the district court's

discretion on remand the appropriate amount of the fee.

         In Appeal No. 06-1556, the judgment of the district court

is affirmed. In Appeal No. 06-2127, the judgment of the district

court is reversed, and the case is remanded for further proceedings

consistent with this opinion.

Footnotes

[1] 'Of the Eighth Circuit, sitting by designation.

[2] ' Also named as defendants were Cherokee, Inc., a company

whose principal business is to license trademarks to companies, and

Cherokee's chief executive officer, Robert Margolis. The crystal

angels that Mag purchased at Target were branded with the

"Cherokee" trademark. Mag dismissed all claims against Margolis in

June 2005. Cherokee remains a defendant-appellant, but its

relationship to the case is derivative of Target's and we therefore

do not separately address its liability.

[3] ' Mag's appeal is designated as No. 06-1556; the cross-appeal

was filed several months later and is separately designated as No.

06-2127.

[4] ' Gregerman's jewelry business is called Alan Gregerman

Company.

[5] ' The lawsuit originally was filed in the Southern District of

New York, but was transferred to Rhode Island in response to

Target's motion.

              

[6] ' Mag does not concede that it was Gregerman's own design, but

has not contested that Style gained access to the crystal angel

through its dealings with Gregerman.

[7] ' That affidavit stated, in part:

                   Mag's principal, Daniel Magnanimi, . . . proposed an

agreement whereby Mag would not interfere with my

production and sale of my crystal angel if I permitted

Mag to make and sell two other angel jewelry designs I

had created and was then selling. Mr. Magnanimi sent me

a letter in September, 1996 reflecting this arrangement.

I continued selling my crystal angel and still sell that

product to this day.

[8] ' A copyright infringement claim may involve two different

assessments of "similarity" – one to determine whether copying in

fact occurred and the other to evaluate whether it amounted to

infringement – and we have observed that confusion has arisen from

the "dual use of the term 'substantially similar'" to refer to both

issues, Yankee Candle Co. v. Bridgewater Candle Co., 259 F.3d 25,

33 n.4 (1st Cir. 2001); see also Johnson, 409 F.3d at 18; Matthews

v. Freedman, 157 F.3d 25, 27 n.1 (1st Cir. 1998) (noting the two

uses of "[t]he substantial similarity rubric"). In Johnson, we

used distinct language for each, stating that the fact of copying

may be proven inferentially if there is "probative similarity"

between the works at issue (accompanied by proof of access), i.e.,

"the two works are 'so similar that the court may infer that there

was factual copying.'" 409 F.3d at 18 (quoting Lotus Dev. Corp. v.

Borland Int'l, 49 F.3d 807, 813 (1st Cir. 1995)). Copying as a

factual matter is insufficient to prove infringement, however,

giving rise to the second similarity question: whether the copying

was sufficiently extensive to render the two works "substantially

similar," and therefore actionable. Segrets, Inc. v. Gillman

Knitwear Co., 207 F.3d 56, 60 (1st Cir. 2000). "Th[is] substantial

similarity requirement focuses holistically on the works in

question and entails proof that the copying was so extensive that

it rendered the works so similar that the later work represented a

wrongful appropriation of expression." Johnson, 409 F.3d at 18.

Here, where the copyrighted work and the allegedly infringing item

are essentially the same, the latter inquiry is unnecessary.

[9] ' We note that, even if a plaintiff is able to show both

access and substantial similarity, "the trier of fact may

nonetheless find no copying if the defendant shows independent

creation." Grubb, 88 F.3d at 3; see also Concrete Mach. Co. v.

Classic Lawn Ornaments, Inc., 843 F.2d 600, 606 n.6 (1st Cir.

1988).

[10] ' In its Answer, Style included as an affirmative defense that

Mag's crystal angel "was not original, nor was it an independent

creation."

[11] ' This latter argument is based on Mag's contention that, even

if Gregerman conceived of the crystal angel independently, he

intended to be selling Mag's angel to his customers.

[12] ' At the hearing on defendants' motion for attorney's fees,

the district court observed that "[o]ne of the many missing sets of

facts here is why Mr. Gregerman hasn't sued the Defendants, but

that's neither here nor there." Mag reported in its reply brief

that shortly after judgment was granted for defendants in this case

Gregerman did file his own action against Style. That litigation

is obviously outside the scope of this case, and we take no view of

its merits.

[13] ' The record included a receipt showing Gregerman's sale of

thirty-six pairs of crystal angel earrings to Treasure Chest, Inc.,

in September 1994 and an additional twenty-four pairs to the same

company in December 1994.

[14] ' Magnanimi's testimony indicates that items displayed in the

shows, which took place on two weekends each year, remained in a

permanent showroom that was open every Wednesday.

[15] ' Mag suggests in its briefs that the district court

improperly relied on Gregerman's "uncorroborated denial of copying"

in finding insufficient evidence of access, and asserts that

Gregerman "never denied that he knew of the [Rhode Island jewelry

show], or that he was for any reason unable to attend." However,

Mag bore the burden to show copying, and the court reasonably could

take into account its failure to establish Gregerman's history of

attending the show – or any other affirmative evidence of access.

[16] ' At oral argument, Mag emphasized this alleged quid pro quo

and Gregerman's failure to register his four-stone angel as

evidence that Gregerman did not in fact consider the crystal angel

design to be his own. Whatever weight may be attached to these

facts is offset, however, by the evidence that Mag in 1997 asked

Gregerman for an assignment of his copyright in the angel –

suggesting that Mag believed Gregerman had a valid claim of

independent creation. Gregerman testified that he did not sign the

document and has "[n]ever" wished to assign any rights in the

crystal angel.

[17] ' Gregerman testified that he had submitted registrations for

seven or eight copyrights out of the hundreds, possibly thousands,

of designs that he created over twenty-five years, noting that he

had begun registering more frequently than he had in the past.

[18] ' Indeed, we previously have held that, even where two designs

are very similar, proof of access remains necessary. See Grubb v.

KMS Patriots, L.P., 88 F.3d 1, 5-6 (1st Cir. 1996). We explained

that "[t]he reason for both requirements is simple: copyright

protection precludes only copying; if two people arrive at the same

result independently, copyright law will not protect the first."

Id. at 6.

[19] ' On the issue of access, Mag alternatively offers a cursory

argument that Style's liability should be premised on its own

access to Mag's crystal angel jewelry. Mag has never argued or

presented evidence that Style was exposed to the crystal angel

outside of its dealings with Gregerman; rather, it argues that

Style gained access to Mag's design through those dealings.

However, as we explain in Section IV, in light of Mag's failure to

offer sufficient evidence of copying by Gregerman, a jury could not

reasonably find that Gregerman provided Mag's design – rather than

his own – to Style. Consequently, there is no basis for a finding

that Style had access to Mag's design through Gregerman.

[20] ' At trial, Mag's counsel asked Gregerman if he had been

selling "the crystal angel design that was copyrighted by Mag

Jewelry." He replied, "Technically." Defense counsel immediately

followed up, asking Gregerman if his crystal angel looked the same

as the Mag crystal angel. He responded that "[i]t is the exact

same expression."

              Magnanimi testified similarly:

              Defense Counsel:   So as of June of 1997, you knew that Mr.

Gregerman had the rights to his crystal

angel, didn't you?

              Magnanimi:         His crystal angel or my crystal angel?

              Defense Counsel:   His crystal angel.

              Magnanimi:         . . . [T]here was never a dispute as to

whose crystal angel it was. Alan

Gregerman claims that he independently

designed it, and I claim that I

independently designed it.

                                       Whose crystal angel it was from 1995

and 1996 until this day me and Alan

Gregerman never discussed, didn't care

whose crystal angel it was.

              Defense Counsel:   Because it's the same angel,

essentially, isn't it?

              Magnanimi:         Absolutely.

[21] ' We acknowledge that this discussion is somewhat elusive in

that we are attempting to ascertain the source of a piece of

jewelry that would look the same regardless of its origin.

However, given the uniformity in the designs, the critical fact in

these circumstances is whom Gregerman identifies as the designer of

the crystal angel jewelry he sold to Style.

[22] ' Mag attempts to discredit as self-interested – and thus not

credible – Gregerman's testimony that he sold Style his own angel

design because such testimony protects Gregerman's ability to

pursue his own infringement suit against Style. However, if that

were Gregerman's motivation, he would have responded negatively

when asked whether he sold Mag's design to Style. His answer –

"technically" – was unnecessarily precise, confirming that the only

reasonable interpretation of his statements and behavior is that,

in his view, he was selling Style his own creation and not Mag's.

[23] ' At that hearing, the court pressed Mag's counsel on whether

Gregerman's two affidavits "really clash with one another" so as to

create a factual dispute requiring trial. Counsel told the court

that the disputed question was whether Gregerman had independently

created the crystal angel; he reported that, in the second

affidavit, Gregerman was moving away from his earlier independent

creation position and "is saying . . . that there is a Mag piece

that is covered by the Mag copyright, and that is what he sold to

Style." Counsel further suggested that Gregerman asserted that his

sales of the Mag angel were pursuant to a licensing agreement.

However, Gregerman's testimony at trial was that he refused to sign

the affidavit until the language referring to a license was

removed.

[24] ' Our conclusion that fees are warranted based on the case

litigated against Style and Target makes it unnecessary to consider

the separate arguments raised on behalf of Cherokee, Inc., and

Robert Margolis. We note, however, that the claims against

Cherokee and Margolis appear to be even more patently unreasonable.

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