Kid Stuff Marketing, Inc. v. Creative Consumer Concepts, Inc. et al

Filing 135

MEMORANDUM AND ORDER granting in part and denying in part 111 Plaintiff's Motion for Partial Summary Judgment; granting in part and denying in part 114 Defendants' Motion for Summary Judgment; denying 132 Defendants' Motion for Oral Arguement. Signed by District Judge John W. Lungstrum on 12/19/2016. (Attachments: # 1 Exhibit A - Sizzle & Shaker, # 2 Exhibit B - Goldie, # 3 Exhibit C - dieline, # 4 Exhibit D - assembly) (ses)

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF KANSAS

Kid Stuff Marketing, Inc.,
Plaintiff,
v.

Case No. 15-2620-JWL

Creative Consumer Concepts, Inc.
and Steak N Shake Operations, Inc.,
Defendants.

MEMORANDUM & ORDER
In this lawsuit, plaintiff asserts that defendants infringed on its copyrights in certain
illustrated characters, assembly instructions and a die line associated with paperboard cars that
defendant Steak N Shake Operations, Inc. (“SNS”) distributed to consumers in connection with
its kids’ meal program. This matter is presently before the court on the parties’ motions for
summary judgment. The parties have filed cross-motions on the issues of whether SNS enjoys
an irrevocable implied license to use the character copyrights and whether the assembly
instructions and die line copyrights are valid. Plaintiff also moves for summary judgment on the
issue of ownership of the asserted copyrights. As will be explained, both motions are granted in
part and denied in part.1

I.

Standard

Defendants have recently filed a motion for oral argument (doc. 132) on the parties’ motions.
Because the court does not believe that oral argument would be helpful here, the court denies
that request.
1

Summary judgment is appropriate if the moving party demonstrates that there is “no
genuine dispute as to any material fact” and that it is “entitled to a judgment as a matter of law.”
Fed. R. Civ. P. 56(a). In applying this standard, the court views the evidence and make
inferences in the light most favorable to the non-movant. Kerber v. Qwest Group Life Ins. Plan,
647 F.3d 950, 959 (10th Cir. 2011). A dispute is genuine if “the evidence is such that a
reasonable jury could return a verdict for the nonmoving party” on the issue. Id. (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Although the court views the
evidence and draws reasonable inferences therefrom in the light most favorable to the
nonmoving party, “the nonmoving party must present more than a scintilla of evidence in favor
of his position.” Id. (quoting Ford v. Pryor, 552 F.3d 1174, 1177–78 (10th Cir. 2008)).
The legal standard does not change if the parties file cross-motions for summary
judgment. Each party has the burden of establishing the lack of a genuine issue of material fact
and entitlement to judgment as a matter of law. Atlantic Richfield Co. v. Farm Cr. Bank, 226
F.3d 1138, 1148 (10th Cir. 2000).

II.

Statement of Facts
In August 2008, defendant Steak N Shake Operations, Inc. (hereinafter “SNS”) began

exploring ways to revamp its kids’ meal program. Toward that end, Karen Cunningham, SNS’s
senior marketing manager, issued a Request for Proposals to various marketing entities,
including plaintiff Kid Stuff Marketing, Inc. (hereinafter “KSM”). In preparing a presentation
for SNS, KSM’s then-CEO Joseph Tindall inquired as to whether SNS wanted KSM to explore
the use of characters in connection with the kids’ meal program. Ms. Cunningham indicated
2

that SNS would like to see characters as part of the presentation. Mr. Tindall instructed KSM’s
senior creative director Michael Oden to create and develop characters for inclusion in the
presentation to SNS. Ultimately, Mr. Oden reached out to Mike Dammer, a freelance artist, to
illustrate two animated characters patterned after popular food items sold at SNS.

These

characters came to be known as “Sizzle” and “Shaker.” The versions of those characters that
were ultimately copyrighted by KSM are shown in Exhibit A, attached hereto. Mr. Dammer
executed a work-for-hire agreement in April 2016, an agreement that KSM contends
memorialized the terms of the parties’ agreement at the time Mr. Dammer illustrated Sizzle and
Shaker.
In September 2008, Mr. Tindall and other KSM representatives presented their proposal
to SNS’s management team. The presentation included the Sizzle and Shaker characters, as well
as the introduction of paperboard cars. These “Classic Cruiser” cars, intended for distribution to
children purchasing kids’ meals and for easy assembly in the restaurant, were patterned after
real cars manufactured by Ford and General Motors and were produced under license from those
companies. After viewing KSM’s presentation and proposal, SNS selected KSM as the vendor
for its kids’ meal program.
SNS placed its first order with KSM in October 2008. This initial order included Classic
Cruisers as well as placemats and cups that included animated girl and boy characters developed
by KSM. The order did not include any items with Sizzle and Shaker. In the meantime, a senior
designer at KSM, Jay Thompson, created another illustrated character for potential use with the
SNS work—a “female” character patterned after French fries. This character came to be called

3

“Goldie.” The version of Goldie that was ultimately copyrighted by KSM is shown in Exhibit
B, attached hereto.
In February 2009, KSM put together another presentation for SNS, featuring Sizzle,
Shaker and Goldie and SNS placed its first order for products incorporating these characters in
August 2009. That order called for KSM to develop a double-sided placemat featuring the SNS
kids’ meal menu, various activities, and the Sizzle, Shaker and Goldie characters.

SNS then

used another company to manufacture the placemats that were designed by KSM. In October
2009, SNS placed its second order for products incorporating the Sizzle, Shaker and Goldie
characters.

That order called for KSM to develop the artwork for a new paper kids’ cup that

would feature the characters. As with the placemat design, SNS used another company to
manufacture the cups that were designed by KSM.
In the spring of 2010, SNS approached KSM about ways to reduce the cost of the kids’
meal program. In response to that inquiry, KSM proposed reducing the size of the Classic
Cruisers to make them less expensive and creating original car designs that did not require the
payment of license fees to Ford and GM. Toward that end, William Billen, KSM’s director of
product development, together with KSM’s creative team, began creating original, non-licensed
cars used in connection with SNS’s kids’ meal program. In May 2010, SNS placed its first
order for KSM’s original, non-licensed car designs. These cars were known as the Custom NonLicensed Steak ‘n Shake Cruisers.
SNS continued to order original, non-licensed cars from KSM through early 2014. In
2012, KSM developed a new five-panel design for its original, non-licensed cars that permitted
KSM to incorporate additional design features and graphics. These cars featured one or more of
4

the Sizzle, Shaker and Goldie characters and typically focused on a specific theme.

For

example, the first five-panel cars that KSM produced for SNS were known as the Super Hero
Cars, which were produced in April 2012. Later, KSM produced additional five-panel cars for
SNS, including cars known as the Futuristic Cars. Mr. Billen created the “die line” for the
Futuristic Cars and that die line is known as the 9015 Concept Car die line. 2 That die line is
shown in Exhibit C, attached hereto. Mr. Billen also created assembly instructions for the
Futuristic Cars. Those written instructions, which were designed for a child’s understanding, are
known as the 9015 Concept Car Instructions. The 9015 Concept Car Instructions also include
one illustration for each of the eight separate assembly steps. The assembly instructions as they
appeared on the paperboard cars are shown in Exhibit D. The eight illustrations were created by
James Kresge, a freelance artist. Mr. Kresge, like Mr. Dammer, executed a work-for-hire
agreement in April 2016, an agreement that KSM contends memorialized the terms of the
parties’ agreement at the time Mr. Kresge created the assembly illustrations.
In April 2014, SNS notified KSM that it had received a proposal from a competing
vendor to supply paperboard cars at a lower cost. Despite negotiations between SNS and KSM,
SNS moved its kids’ meal marketing business to that competing vendor, defendant Creative
Consumer Concepts, Inc. (hereinafter “C3”). C3 began supplying paperboard cars to SNS in
early 2015. According to KSM, these cars (known as the Spy Series cars) incorporate the
characters designed by KSM as well as the assembly instructions/illustrations created by KSM.
KSM further asserts that the Spy Series cars were created from the die line created by KSM for

2

A die line is a template used in the manufacturing process in which a steel cutting die is created
to form cuts, folds and perforations in specific places dictated by the template.
5

its Futuristic Cars.

In the pretrial order, KSM contends that C3 has produced additional

infringing cars for SNS.
Additional facts will be provided as they relate to the specific arguments raised by the
parties in their submissions.

III.

Discussion
In the pretrial order, KSM alleges that SNS and C3 infringed KSM’s copyrights in the

Sizzle, Shaker and Goldie characters; in the paperboard car assembly instructions (the 9015
Concept Car Instructions); and in the paperboard car die line (the 9015 Concept Car die line) by
preparing, selling and distributing paperboard cars that were manufactured using KSM’s
Concept Car die line and featured the Sizzle, Shaker and Goldie characters as well as the
Concept Car assembly instructions. KSM further alleges a contributory copyright infringement
claim against SNS on the grounds that SNS made the artwork for the characters available to C3
and distributed works featuring the assembly instructions and die line to its franchise locations.
To establish copyright infringement, KSM must establish “(1) ownership of a valid
copyright, and (2) copying of constituent elements of the work that are original.” Savant
Homes, Inc. v. Collins, 809 F.3d 1133, 1138 (10th Cir. 2016). Contributory copyright
infringement is derivative of direct copyright infringement. Id. at 1146. It occurs “when the
defendant causes or materially contributes to another’s infringing activities and knows of the
infringement.” Id. (quoting Diversey v. Schmidly, 738 F.3d 1196, 1204 (10th Cir. 2013)). Thus,
there can be no contributory infringement without a direct infringement. Id. (citations and
quotations omitted).
6

A.

Character Copyrights
The parties’ submissions with respect to the character copyrights implicate only the first

element of an infringement claim—whether KSM owned the character copyrights.3 KSM asks
the court to find as a matter of law that KSM was the sole owner of the character copyrights.
SNS and C3, on the other hand, contend that factual issues exist as to the nature and extent of
KSM’s ownership of those copyrights. According to defendants, SNS is a joint owner of the
characters based on its contributions in the creative process and KSM did not own the Sizzle and
Shaker copyrights in any event until April 2016. For purposes of their motions for summary
judgment, the parties do not dispute the “copying” element of KSM’s infringement claims.
Nonetheless, SNS and C3 contend that their copying of the characters was authorized by SNS’s
irrevocable, implied license to use the characters. SNS and C3 move for summary judgment in
their favor on the grounds that the license is irrevocable. KSM asks the court to find as a matter
of law that the license was revocable and was, in fact, revoked.
As will be explained law, the court concludes that KSM owns the Sizzle, Shaker and
Goldie characters (and owned those characters from the time that they were created), but
whether SNS is a joint owner of those characters must be resolved at trial.

The court further

concludes that, to the extent SNS is not a joint owner of the characters, KSM granted SNS an
unlimited, nonexclusive license to retain, use and modify the characters. Finally, because the
undisputed facts do not permit an inference that the implied license was supported by

3

Defendants do not challenge the validity of the character copyrights.
7

consideration, the court concludes that the license was revocable and was revoked, at the latest,
upon the filing of this lawsuit.

1.

Ownership
KSM seeks a ruling that it is the sole owner of the Sizzle, Shaker and Goldie characters.

SNS asserts that summary judgment on this issue is inappropriate because facts exist from
which a jury could conclude that SNS sufficiently contributed to the creation of the characters
such that it is a joint owner of those characters. See 17 U.S.C. § 201(a) (authors of a joint work
are co-owners of copyright in the work). The Copyright Act defines a joint work as “a work
prepared by two or more authors with the intention that their contributions be merged into
inseparable or interdependent parts of a unitary whole.” 17 U.S.C. § 101. In the absence of a
written agreement establishing joint authorship, the party claiming joint authorship bears the
burden of showing that each of the putative joint authors “(1) made independently copyrightable
contributions to the work; and (2) fully intended to be co-authors.” See 16 Casa Duse, LLC v.
Merkin, 791 F.3d 247, 255 (2nd Cir. 2015); Janky v. Lake County Convention & Visitors
Bureau, 576 F.3d 356, 362 (7th Cir. 2009).4
In support of its argument, SNS contends that it made significant contributions to the
creation of the characters and that the parties intended to be co-authors of the characters. SNS
directs the court to evidence demonstrating that SNS employees directed KSM’s illustrators to
incorporate certain elements into the characters. SNS, for example, advised KSM to place the
4

Although the Tenth Circuit has not set forth the elements pertinent to a showing of joint
authorship, the parties agree that the court should apply the elements outlined by the Second and
Seventh Circuits.
8

hamburger patty on top of the lettuce and tomato in the Sizzle character; specified the type of
glass to use for the milkshake in the Shaker character; and proposed the idea of creating a
female French fry character, which led to the Goldie character. SNS has come forward with
additional evidence of its contributions as well. Specifically, SNS has provided evidence that it
instructed a third-party illustrator to modify the characters in several respects.

These

modifications, made at SNS’s direction, included such things as adding shoes to Shaker’s and
Goldie’s feet; changing the shape of Shaker’s eyes; reducing the visibility of Shaker’s top teeth;
returning Sizzle’s tongue to the interior of its mouth rather than protruding externally; adding
white gloves to Sizzle’s and Goldie’s hands; repositioning Goldie’s eyebrows; enhancing
Goldie’s eyelashes; and reshaping Goldie’s left shoulder. On the intent issue, SNS contends that
KSM never attempted to restrict or limit any modifications made by SNS and never objected to
any changes made by SNS.
KSM contends in reply—in almost summary fashion—that SNS’s evidence is insufficient
to preclude the entry of summary judgment in its favor on the ownership issue. KSM asserts
that SNS cannot be deemed a joint author because it admittedly contributed only “ideas” that, as
a matter of law, are not independently copyrightable. And KSM contends that any contributions
made by the third-party illustrator on SNS’s behalf are sufficient, at most, to confer joint
authorship on that illustrator but not on SNS in the absence of a work-for-hire agreement.
KSM’s arguments are not persuasive.5

While it is certainly true that “ideas” are not

The court summarily rejects KSM’s suggestion at this juncture that the work of the third-party
illustrator might be sufficient to confer joint authorship on that illustrator but not on SNS in the
absence of a work-for-hire agreement. To qualify for joint authorship, the contribution must be
one of authorship rather than mere physical labor. In other words, the creator of a work at
5

9

copyrightable, the “independently copyrightable” element is not read so restrictively.

The

Second Circuit has explained that the “independently copyrightable” element was intended to
mean only that the co-author’s contribution be “the product of authorship, i.e., expression” and
not that the coauthor must be able to obtain a copyright on his or her separate contribution. See
16 Casa Duse, LLC v. Merkin, 791 F.3d 247, 255 n.3 (2d Cir. 2015). Similarly, Nimmer rejects
an interpretation requiring that a contribution itself be “separately” copyrightable. 1 Melville B.
Nimmer & David Nimmer, Nimmer on Copyright § 6.07[A] [3] at 6-21 (2013). And the Circuit
Courts of Appeal clearly recognize that, under appropriate circumstances, a contributor of ideas
may qualify as a joint author.6
In Janky v. Lake County Convention & Visitors Bureau, 576 F.3d 356 (7th Cir. 2009), the
Seventh Circuit considered whether a song was a joint work. The plaintiff, Janky, wrote the
music and lyrics for a song that was commissioned by the defendant to promote tourism in Lake
County, Indiana. Id. at 359. Janky then showed the song to Farag, a member of her doo-wop
group. Farag “recommended revising the lyrics to better suit the Bureau’s vision.” Id. Janky
adopted Farag’s recommendations and testified that those recommendations “accounted for 10
another’s direction, without contributing intellectual modification, is not an author.” 1 Melville
B. Nimmer & David Nimmer, Nimmer on Copyright § 6.07[A] [2] at 6-20.1 (2013) (and cases
cited therein). The record is not sufficiently developed to permit the court to conclude as a
matter of law that SNS cannot be deemed an author of the contributions that were implemented
by the third-party illustrator.
6
The sole case cited by KSM in support of its argument that an “idea contributor” cannot qualify
as a joint author is Fred Riley Home Building Corp. v. Cosgrove, 864 F. Supp. 1034 (D. Kan.
1994). That case arose in the context of a builder presenting ideas and concepts to an architect.
There the court recognized that the builder’s ideas were insufficient to confer joint authorship in
the plans. As explained by Nimmer, courts considering the “idea contributor” in the
architectural context have “soundly rejected” the proposition that a client or builder who
contributed ideas to be used in plans qualifies as a joint author. See Nimmer, supra, §
6.07[A][3][b].
10

percent of the lyrical content.” Id. at 360. The Circuit ultimately concluded that Farag was a
joint author of the song because Farag’s contributions went “beyond general ideas, refinements,
and suggestions”:
They were concrete expressions and thus pass the test of copyrightability where
mere ideas fail. In addition, while Farag’s changes may have accounted for only
10 percent of the lyrics, they were significant. They were important not only to
the final sound, but also to its commercial viability. Before Farag became
involved, the song celebrated the charm of Indiana as a state; Farag shifted the
focus to Lake County. Without Farag’s input, it is unlikely that the Bureau would
have embraced the song the way it did.
Id. at 363. (citation omitted). Similarly, the evidence here suggests that SNS contributed more
than general ideas, but that SNS gave expression to those ideas through numerous, specific,
concrete recommendations that were implemented in the final character illustrations.

See

Gaiman v. McFarlane, 360 F.3d 644, 658-69 (7th Cir. 2004) (plaintiff, who provided verbal
ideas for characters that were drawn by defendant, was entitled to joint authorship because his
contribution, while perhaps not copyrightable by itself, had expressive content).

KSM, then,

has not shown on this record that the nature and extent of SNS’s contributions to the characters
are insufficient to confer joint authorship on it. See Enterprise Management Ltd. v. Warrick,
717 F.3d 1112, 1119 & n.7 (copyrightability is a mixed question of law and fact).
The court turns, then, to whether SNS and KSM “fully intended” to be co-authors. KSM
omits any discussion of this element from its reply. Regardless, it is clear that factual issues
exist that must be resolved at trial.

In analyzing whether SNS and KSM intended to be co-

authors, it matters not whether the parties intended to recognize each other as co-authors for
purposes of copyright law; “the focus is on the parties’ intent to work together in the creation of
a single product, not on the legal consequences of that collaboration.” Janky, 576 F.3d at 362.
11

There is certainly evidence from which a jury could conclude that the parties intended to work
together to create a joint work.

The record suggests that SNS made more than minor

suggestions that KSM felt free to disregard, but that SNS demanded numerous specific changes
during the process and wielded “considerable control” over what the characters looked like at
the end of the process. See id.
Finally, SNS contends in response to KSM’s motion that KSM does not own the Sizzle
and Shaker copyrights in any respect and that SNS is, in fact, a joint owner of those copyrights
with the illustrator of them. The court rejects this argument. The evidence demonstrates that
KSM commissioned Michael Dammer, a freelance artist, to illustrate the Sizzle and Shaker
characters in 2008. KSM asserts in its motion that it owns the copyright to the illustrations
created by Mr. Dammer because those illustrations were “made for hire.” The Copyright Act
provides that copyright ownership “vests initially in the author or authors of the work.” 17
U.S.C. § 201(a). However, if the work is made “for hire,” the “person for whom the work was
prepared is considered the author . . . and, unless the parties have expressly agreed otherwise in
a written instrument signed by them, owns all of the rights comprised in the copyright.” 17
U.S.C. § 201(b). Section 101 of the Copyright Act defines a “work made for hire” as “a work
specially ordered or commissioned . . . if the parties expressly agree in a written instrument
signed by them that the work shall be considered a work made for hire.” 17 U.S.C. § 101(2).
Mr. Dammer signed a work-for-hire agreement with KSM in April 2016—long after the creation
and completion of the work. According to KSM, that agreement memorialized the terms under
which Mr. Dammer had previously agreed to perform the work. Mr. Woodward testified that
Mr. Dammer executed a written agreement prior to the creation of the illustrations, but that
12

KSM was unable to locate that agreement (as well as other Work for Hire agreements) after
KSM relocated to its new facility. While Mr. Dammer could not specifically recall signing a
written agreement prior to April 2016, he confirmed in his deposition that the April 2016 written
agreement memorialized what the parties had agreed to previously.
The Circuit Courts of Appeal are split as to whether the statute requires the writing before
the creation (or at least the completion) of the work or whether a written agreement can postdate the creation of the work so long as it is memorializing an earlier oral agreement. In Schiller
& Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410 (7th Cir. 1992), the Seventh Circuit adopted a
bright-line rule requiring that the parties must sign the work-for-hire agreement before the work
is created in order for the agreement to be valid. As explained by the Seventh Circuit:
The requirement of a written statement regarding the copyright on a specially
commissioned work is not merely a statute of frauds, although that is the purpose
emphasized by the cases. That is, it is not only designed to protect people against
false claims of oral agreements. If it were, then it might not matter when the
statement had been made or signed, although there is authority that it must be
signed before suit is brought. This is an esoteric question, since ordinarily the
absence of the requisite statement will lead to the dismissal of the suit before it can
be tendered. We need not try to resolve the question here. For the signedstatement requirement in section 101(2) has a second purpose—to make the
ownership of property rights in intellectual property clear and definite, so that such
property will be readily marketable. The creator of the property is the owner,
unless he is an employee creating the property within the scope of his employment
or the parties have agreed in a writing signed by both that the person who
commissioned the creation of the property is the owner. The writing must precede
the creation of the property in order to serve its purpose of identifying the
(noncreator) owner unequivocally. It did not precede it here.
Id. at 412-13 (citations omitted). The Second Circuit, in Playboy Enterprises, Inc. v. Dumas,
agreed with the Seventh Circuit to the extent that parties may not enter into work-for-hire
agreements years after a work is created. 53 F.3d 549, 559 (2nd Cir. 1995). But the Second
13

Circuit disagreed with the Seventh Circuit’s conclusion that the actual writing memorializing the
agreement must be executed before the creation of the work. Id. Looking to the Nimmers’
treatise on copyrights, the Second Circuit emphasized that such a requirement could itself create
uncertainty:
[O]ne can . . . imagine claims involving parties each of whom knew of the
unanimous intent among all concerned that the work for hire doctrine would
apply, notwithstanding that some of the paperwork remained not fully executed
until after creation of the subject work. In that circumstance, the bright line rule
could frustrate the intent of the parties, and cloud rather than serve the goal of
certainty.
Id. (quoting 1 Nimmer § 5.03[B][2][b] (1994)). Ultimately, the Second Circuit held that the
writing requirement could be met by a writing executed after the work is created, if the writing
confirms a prior agreement, either explicit or implicit, made before the creation of the work. Id.
The Tenth Circuit has not addressed this issue. Not surprisingly, defendants urge the
court to adopt the Seventh Circuit’s holding in Schiller, while KSM urges the court to adopt the
approach followed by the Second Circuit in Dumas. The two federal district courts that have
squarely addressed the question have followed the Second Circuit’s approach on the grounds
that the Second Circuit is the “de facto Copyright Court of the United States.” Looney Ricks
Kiss Architects, Inc. v. Bryan, 2010 WL 4068885, at *5-6 (W.D. La. Oct. 14, 2010) (accepting
the Fifth Circuit’s admonition that the Second Circuit is “the de facto Copyright Court of the
United States” and adopting the Second Circuit’s approach in Dumas); Compaq Computer Corp.
v. Ergonome Inc., 210 F.Supp.2d 839, 842–844 (S.D. Tex. 2001) (same). The court here does
the same. To begin, the Seventh Circuit’s Schiller opinion cites no authority in support of its
conclusion that the writing “must” precede the creation of the property. The statute itself is
14

silent as to when the parties’ written instrument must be executed. Moreover, the Second
Circuit’s approach allows for a flexible, case-by-case inquiry into the existence of a work-forhire agreement—an approach that the Tenth Circuit has adopted in other contexts when
examining writing requirements under the Copyright Act. See SCO Group, Inc. v. Novell, Inc.,
578 F. 3d 1201, 1212-13 (10th Cir. 2009) (evaluating whether written instrument sufficient to
transfer copyright ownership under § 204(a) and, citing Nimmer with approval, observing that
“strict requirements” will not always aid predictability and certainty of copyright ownership; in
the absence of support in statutory text, unwilling to read into writing requirement an “onerous”
restraint on ability to transfer ownership). The court, then, believes that this rule is the approach
that the Circuit would adopt and applies it here. In doing so, the court examines (1) whether the
language of the agreement was sufficient to meet the writing requirement of § 101(2); (2) if so,
whether KSM and Mr. Dammer understood at the time the illustrations for the assembly
instructions were created that the works were made for hire; and (3) whether the agreement was
signed by both parties. See Dumas, 53 F.3d at 559 (finding these three questions relevant to
whether valid work-for-hire agreement existed).
The answers to these questions demonstrate as a matter of law that KSM owned the
illustrations made by Mr. Dammer. The agreement, which is signed by Mr. Dammer and Mr.
Woodward of KSM, expressly indicates that Mr. Kresge’s prior and future “illustration services”
commissioned by KSM constitute “work for hire” such that KSM is the “sole and exclusive
owner” of those illustrations. The plain language of the agreement further demonstrates that it
memorializes the parties’ understanding at the time the illustrations were created. In that regard,
the agreement confirms in writing that for “prior work completed,” KSM is, “as agreed at the
15

time,” the sole owner of the works. Mr. Woodward’s deposition testimony confirms that the
written agreement memorialized the terms under which Mr. Dammer, prior to creating the
works, had agreed to create the works, including the term that the works were made for hire.
Similarly, Mr. Dammer confirmed in his deposition that the written agreement memorialized
what the parties had agreed to long ago. While defendants suggest that they doubt the veracity
of whether an oral work-for-hire agreement existed at the time Mr. Dammer created the Sizzle
and Shaker illustrations (or whether a prior written agreement truly existed), they have come
forward with no evidence contradicting KSM’s evidence on this point. For the foregoing
reasons, the court finds as a matter of law that KSM owns the Sizzle and Shaker characters.7
Whether SNS is a joint owner of those characters must be resolved at trial.

2.

Implied License
If the jury concludes that SNS is a joint owner of the character copyrights, then SNS may

use or license that work freely. See Janky v. Lake County Convention & Visitors Bureau, 576
F.3d 356, 361 (7th Cir. 2009). To the extent, however, that the jury concludes that SNS is not a
joint owner of the character copyrights, then SNS contends that its use was authorized in any
event because KSM granted SNS an implied license to use the characters. “The existence of a
license authorizing the use of copyrighted material is an affirmative defense to an allegation of
infringement.” Baisden v. I'm Ready Prods., Inc., 693 F.3d 491, 499 (5th Cir.2012) (internal
quotation marks omitted). Although the Tenth Circuit has not yet had the occasion to address
7

Because the court finds as a matter of law that KSM owned the Sizzle and Shaker illustrations
at all times, the court need not address defendants’ argument that the work-for-hire agreement
fails to assign to KSM past causes of action for infringement.
16

implied licenses in the context of copyright use, several Circuit Courts of Appeals have done so
and the parties here do not dispute the elements required to establish an implied license. To
establish an implied license, a party must show that “(1) a person (the licensee) requests the
creation of a work, (2) the creator (the licensor) makes that particular work and delivers it to the
licensee who requested it, and (3) the licensor intends that the licensee-requestor copy and
distribute his work. I.A.E., Inc. v. Shaver, 74 F.3d 768, 776 (7th Cir. 1996) (citing Effects
Assocs., Inc. v. Cohen, 908 F.2d 555, 558 (9th Cir. 1990)); accord Baisden v. I’m Ready
Productions, Inc., 693 F.3d 491 (5th Cir. 2012) (approving same elements but further stating
that an implied license might arise in other circumstances, including circumstances where
licensee had not asked copyright owner to produce copyrighted material).

An implied

nonexclusive license does not transfer ownership of the copyright to the licensee, but simply
permits the use of a copyrighted work in a particular manner. Shaver, 74 F.3d at 775.
There is little, if any, dispute in this case about whether SNS had an implied license to
use the characters created by KSM.8 The real dispute concerns whether there was any limit on

KSM’s brief lacks clarity on this issue. On the one hand, KSM expressly states that it is
“undisputed” that SNS enjoyed an implied license to use the characters, so long as that use was
not “unfettered.” On the other hand, KSM contends that no license existed at all because SNS
cannot satisfy the first element of the test. Specifically, KSM contends that SNS did not request
the characters from KSM, but that SNS simply agreed to KSM’s initial idea to conduct a
“character exploratory” to its presentation. That fact, standing alone, does not preclude the
finding of an implied license. Falcon Enterprises, Inc. v. Publishers Serv., Inc., 438 Fed. Appx.
579, 581 (9th Cir. 2011) (finding an implied license based on the parties’ conduct despite the
fact that licensor did not produce content at licensee’s specific request); accord 3 Melville B.
Nimmer & David Nimmer, Nimmer on Copyright § 10.03[A] [7] at 10-55 (2013) (it is
“questionable” for courts to apply the three-factor rigidly and to hold that no implied license
exists when one factor is absent). In light of the conduct of the parties in this case as described
above, the court concludes as a matter of law that SNS had an implied license to use the
characters created by KSM.
8

17

the scope of the license. KSM, in essence, contends that SNS was entitled to use the characters
only during the course of its relationship with KSM, while SNS contends that it was free to use
the characters in connection with its kids’ meal program and restaurant activities regardless of
the existence of a continuing business relationship with KSM. In resolving this issue, the court
determines whether KSM intended to grant a license by considering the following factors:
1) whether the parties were engaged in a short-term discrete transaction as
opposed to an ongoing relationship; (2) whether the creator utilized written
contracts . . . providing that copyrighted materials could only be used with the
creator’s future involvement or express permission; and (3) whether the creator’s
conduct during the creation or delivery of the copyrighted material indicated that
use of the material without the creator’s involvement or consent was permissible.
Asset Marketing Sys., Inc. v. Gagnon, 542 F.3d 748, 756 (9th Cir. 2008) (adopting factors
utilized by First and Fourth Circuits).
Viewed in the light most favorable to KSM, the evidence does not permit an inference
that KSM intended to limit the scope of the license to the duration of SNS’s relationship with
KSM or, stated another way, that KSM intended to condition the license on a continuing
relationship with SNS.

There are no written contracts or documents providing that the

characters could only be used with KSM’s involvement or consent. Moreover, it is undisputed
that KSM never warned SNS against using or modifying the characters in any way and never
advised SNS that it could only use the characters so long as SNS was purchasing products from
KSM. In fact, KSM never communicated any limitations whatsoever on SNS’s use of the
characters. KSM did not object when SNS trademarked the characters in April 2012 and
complied with SNS’s request to include trademark registration markings on future projects.
According to plaintiff’s allegations in the pretrial order, SNS’s trademarks remain in force for
18

10 years. KSM did not object when SNS used the characters in its dealings with third-party
vendors, including projects involving t-shirts, bus signs, cups, placemats, costumes and plush
replicas that were not produced by KSM.9 In fact, the first time that KSM raised any concerns
about SNS’s use of the characters was in May 2014 when SNS notified KSM that it had decided
to move its kids’ program marketing business (and, more specifically, its paperboard car
business) to defendant Creative Consumer Concepts, Inc.
KSM contends that the license was limited in scope because KSM, on all but one
occasion, included a copyright notice on the artwork and products it created incorporating the
characters. But simply including a copyright notice does not negate SNS’s license to use the
products. KSM’s use of the copyright notice simply speaks to KSM’s intent to retain copyright
ownership over the characters—an intent that is not inconsistent with its right, as the copyright
owner, to grant a license to SNS. See Asset Marketing Sys., Inc. v. Gagnon, 542 F.3d 748, 757
(9th Cir. 2008) (use of copyright notice has no bearing on existence or scope of implied license).
KSM also complains that SNS never sought permission from KSM to modify the characters on
products created by other parties. But nothing in the parties’ course of conduct suggests that
KSM’s consent was required in connection with SNS’s use of the characters or that SNS was
precluded from modifying the characters. See id. (unless licensor expresses an intent to retain
control over work and limit the license, assumption is that an unlimited license to retain, use and
modify work exists).

9

While some of these transactions involved KSM directly providing the artwork to the thirdparty vendors (which might indicate an intent to maintain control over the work), several
transactions occurred between SNS and third-party vendors without KSM’s involvement. In
those instances, KSM never objected to SNS’s use of the characters.
19

In sum, KSM never expressed any intent to retain control over the characters or to limit
SNS’s use of the characters to the duration of the parties’ relationship.

KSM’s belated

contention, made for the first time after SNS’s decision to move its work to a competitor, that
the characters could not be used if SNS terminated its relationship with KSM, is not sufficient to
negate all other objective manifestations of intent to grant SNS an unlimited license. See id.
For the foregoing reasons, then, the court concludes that KSM granted SNS an unlimited,
nonexclusive right to retain, use and modify the characters.
One final issue remains with respect to SNS’s implied license. SNS contends that it is
entitled to summary judgment on KSM’s claims concerning the character copyrights because the
implied license was supported by consideration and, accordingly, was irrevocable such that any
and all use by SNS is authorized. KSM, on the other hand, contends that the license was
revocable and, in fact, was revoked upon the filing of this lawsuit such that any use by SNS after
the filing of the lawsuit was and is unauthorized. As explained below, the undisputed facts do
not permit an inference that the implied license was supported by consideration. The court
concludes, then, that the license was revocable and was revoked, at the latest, upon the filing of
this lawsuit.
Implied licenses are revocable absent consideration and, thus, are irrevocable if supported
by consideration. Asset Mktg. Sys., Inc. v. Gagnon, 542 F.3d 748, 757 (9th Cir. 2008); Carson
v. Dynergy, Inc., 344 F.3d 446, 451-52 (5th Cir. 2003); 3 Melville B. Nimmer & David Nimmer,
Nimmer on Copyright § 10.02[B] [5] at 10-28.6 (2013). The parties vigorously dispute whether
KSM received consideration for the implied license given to SNS. In support of its motion,

20

SNS directs the court to the following evidence which, according to defendants, demonstrates
that SNS paid for the license to the characters:
•
In October 2009, SNS paid KSM $5200 for “creative services” rendered in
connection with a placemat that KSM designed for use in SNS’s restaurants. The
double-sided placemat included a menu of available kids’ meals, drinks and milk
shakes as well as activities and illustrations of the characters and food items.
•
In November 2009, SNS paid KSM $1040 for “creative services” rendered
in connection with a kids’ paper cup that KSM designed for use in SNS’s
restaurants. The artwork on the cup included Sizzle, Shaker and Goldie as well as
additional branding elements from SNS, including a restaurant building, a signpost
with the SNS logo and a checkerboard design associated with the SNS brand.
•
KSM included the characters on paperboard cars and other products it
designed and supplied for SNS, and the “cost of the mascots” was “baked in” to
the price of the products sold to SNS.10
With respect to the SNS’s payments in October and November 2009, there are no facts from
which a jury could reasonably conclude that SNS was paying for anything other than the
specific services (creating artwork for placemats and cups) described in the job orders for those
products. The invoice for the placemat work reflects that SNS paid KSM for 80 hours of work
associated with the placemat artwork at a rate of $65.00 per hour. The “creative services”
provided by KSM are expressly limited to “SNS—Nov-Dec Kids Menu Placemat.”

This

evidence, then, reflects only that SNS, in paying the $5200 invoice, was paying for the hours
that KSM spent on the placemat artwork—integrating the characters, creating other illustrations
and incorporating additional branding elements into the artwork for the placemat. Similarly, the
invoice for the cup work reflects that SNS paid KSM for 16 hours of work associated only with

Although the court refers to the Sizzle, Shaker and Goldie illustrations as “characters,” the
parties have generally referred to those characters as “mascots.”
10

21

the cup artwork at a rate of $65.00 per hour. The “creative services” provided by KSM are
expressly limited to “SNS Kids Cup Artwork.”
The record is devoid of any evidence that these payments were made, in whole or in part,
for the creation of the characters themselves (which, in fact, were created long before the
placemat and cup orders) or for a license to use the characters beyond the placemats and cups
specifically described in the job orders. Moreover, SNS’s argument is inherently flawed—if in
fact SNS’s payment in October 2009 constituted consideration for an “irrevocable” license, then
any November 2009 payment for the license was obviously unnecessary. Defendants, then,
have come forward with no evidence from which a jury could determine that the October 2009
or November 2009 payments could reasonably be construed as payment for an unlimited,
implied license.
That leaves only defendants’ argument that the “cost of the mascots” was “part of the
baked-in price” that SNS paid for the paperboard cars and other products it purchased featuring
the characters.11

This argument essentially mirrors defendants’ other arguments—that when

SNS paid for the artwork on specific products, it was paying for an unlimited license to use
those characters. But nothing in the evidence cited by SNS reflects that any payment made by
SNS for artwork or creative services associated with specific products constituted consideration
for the specific licensing right to use the characters in any and all other contexts. SNS’s
evidence reflects only that KSM considered the “costs” associated with creating the characters
when determining KSM’s budget for the paperboard cars and that KSM routinely offers pricing

The “baked-in price” language comes from a deposition question posited by defense counsel
during the deposition of Mr. Tindall.
11

22

to clients that includes the costs of creative services. So while KSM might have “baked in” to
the contract price the costs incurred by KSM in terms of time spent creating the characters or the
artwork for specific products, that fact does not support an inference that those “costs” somehow
included payment for an unlimited license to use the characters. Contrary to defendants’
characterization of KSM’s argument, the court is not requiring as evidence an invoice that
includes a separate line item for the license, but neither can the court permit a jury to infer an
irrevocable license based solely on the fact that SNS paid for the time and money it cost KSM to
develop the products ordered by SNS. SNS, then, has failed to raise any disputed factual issues
concerning whether the license granted by KSM was supported by consideration. The court
concludes, then, that the license enjoyed by SNS was revocable and was revoked, at the latest,
upon the filing of this lawsuit. See Cynthia Hunt Productions, Ltd. v. Evolution of Fitness
Houston Inc., 2007 WL 2363148, at *6 (S.D. Tex. Aug. 16, 2007) (nonexclusive license
revoked by filing copyright infringement lawsuit); Keane Dealer Servs., Inc. v. Harts, 968 F.
Supp. 944, 947 (S.D.N.Y. 1997) (institution of infringement lawsuit constitutes revocation of
implied license).12

B.

Assembly Instructions Copyright
The parties’ submissions with respect to the assembly instructions copyright similarly

implicate only the first element of an infringement claim—KSM’s “ownership” of a “valid”
12

In their reply in support of their motion for summary judgment, defendants assert for the first
time that the license was supported by consideration by virtue of SNS’s hiring of KSM for
services and products. The court will not consider this argument. Lynch v. Barrett, 703 F.3d
1153, 1160 n.2 (10th Cir. 2013) (court does not consider arguments raised for the first time in
reply brief).
23

copyright. KSM asks the court to find as a matter of law that KSM was the sole owner of the
assembly instructions copyright. SNS and C3, on the other hand, contend that factual issues
exist as to the nature and extent of KSM’s ownership of that copyright.

According to

defendants, KSM did not own the assembly instructions copyright until the third-party artist
who illustrated each of the instructional steps executed a work-for-hire agreement in April 2016.
Moreover, both parties have moved for summary judgment on the issue of whether the assembly
instructions copyright is valid. KSM contends that the copyright is valid as a “pictorial or
graphic” work under 17 U.S.C. § 102(a)(5). Defendants assert that the assembly instructions are
not entitled to copyright protection because those instructions (including the illustrations) are
strictly functional. Finally, defendants move for summary judgment on the grounds that KSM
is not seeking damages or any other remedy based on defendants’ infringement of the assembly
instructions copyright.
As explained in more detail below, the court concludes as a matter of law that KSM is the
sole owner of the assembly instructions copyright and that it owned that copyright at all times.
The court further concludes that defendants have not rebutted the presumption of validity with
respect to the illustrations contained in the assembly instructions copyright, but that defendants
have established that the copyright in the written instructions is not valid.

Finally, the court

rejects defendants’ argument that KSM is not seeking damages or any other remedy based on
defendants’ infringement of the assembly instructions copyright.

1.

Ownership of the Copyright

24

The assembly instructions for the paperboard cars were developed by two individuals.
Mr. Billen of KSM authored the verbiage for each of the eight separate assembly steps. Each of
those eight assembly steps were illustrated by James Kresge, a freelance artist. KSM asserts in
its motion that it owns the copyright to the illustrations created by Mr. Kresge because those
illustrations were “made for hire.” But, similar to the situation discussed above with respect to
Mr. Dammer, Mr. Kresge did not sign a work-for-hire agreement with KSM until April 2016,
after the creation and completion of the work. According to KSM, that agreement memorialized
the terms under which Mr. Kresge had previously agreed to perform the work. Mr. Woodward
testified that Mr. Kresge executed a written agreement prior to the creation of the illustrations,
but that KSM was unable to locate that agreement either after KSM relocated to its new facility.
For the reasons explained above in connection with the agreement executed by Mr.
Dammer, the court applies the rule adopted by the Second Circuit in Dumas—that is, that §
101(2)’s writing requirement may be met by a writing executed after the work is created, if the
writing confirms a prior agreement, either explicit or implicit, made before the creation of the
work.

Applying that rule, the court concludes as a matter of law that KSM owned the

illustrations made by Mr. Kresge. The agreement, which is signed by Mr. Kresge and Mr.
Woodward of KSM, expressly indicates that Mr. Kresge’s prior and future “illustration services”
commissioned by KSM constitute “work for hire” such that KSM is the “sole and exclusive
owner” of those illustrations. The plain language of the agreement further demonstrates that it
memorializes the parties’ understanding at the time the illustrations were created. In that regard,
the agreement confirms in writing that “for prior work completed,” KSM is, “as agreed at the
time,” the sole owner of the works.

Mr. Woodward’s affidavit confirms that the written
25

agreement memorialized the terms under which Mr. Kresge, prior to creating the works, had
agreed to create the works, including the term that the works were made for hire. While
defendants, as they did above in connection with Mr. Dammer’s agreement, suggest that they
doubt the veracity of whether an oral work-for-hire agreement existed at the time Mr. Kresge
created the illustrations for the assembly instructions (or whether a prior written agreement truly
existed), they have come forward with no evidence contradicting KSM’s evidence on this point.
For the foregoing reasons, the court finds as a matter of law that KSM is the sole owner of the
assembly instructions copyright.13

2.

Validity
As noted above, the assembly instructions for the paperboard cars are comprised of two

parts—textual instructions set forth in eight steps and eight drawings or graphics that illustrate
those eight assembly steps. It is undisputed that KSM, in February 2015, obtained a certificate
of registration with respect to the assembly instructions. The Copyright Act expressly provides
that a certificate of registration issued before or within five years of the first publication of the
work constitutes prima facie evidence of the validity of the copyright. See 17 U.S.C. § 410(c).
When evaluating an application for a certificate, the Copyright Office performs a “substantive
examination within its particular expertise to determine validity: whether the work falls within
the subject matter of copyright”:

13

Because the court finds as a matter of law that KSM owned the illustrations at all times, the
court need not address defendants’ argument that the work-for-hire agreement fails to assign to
KSM past causes of action for infringement.
26

The Office will register only works as to which, “after examination,” it determines
that the material deposited constitutes copyrightable subject matter. The Office
will decline to register materials that it deems outside the scope of copyright
protection.
3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 12.11[B][3] at 12-207 (2013)
(citing 17 U.S.C. § 410(a)). Thus, the section 410(c) presumption of validity is in place and the
burden is on defendants to rebut that presumption. See Palladium Music, Inc. v. EatSleepMusic,
Inc., 398 F.3d 1193, 1196 (10th Cir. 2005). To rebut the presumption, defendants “must simply
offer some evidence or proof to dispute or deny the plaintiff’s prima facie case” of validity.
Id.14
In its submissions, KSM concedes that the textual instructions are not entitled to
copyright protection as those instructions, as written, are purely functional. See, e.g., TomaydoTomahhdo, LLC v. Vozary, 629 Fed. Appx. 658, 661 (6th Cir. 2015) (functional directions are
statutorily excluded from copyright protection); National Nonwovens, Inc. v. Consumer
Products Enterprises, Inc., 397 F. Supp. 2d 245, 256 (D. Mass. 2005) (written instructions on
how to boil wool were not entitled to copyright protection in the absence of any stylistic
flourishes or other forms of creative expression that somehow transcend the functional core of
the directions); 17 U.S.C. § 102(b). The parties dispute whether the illustrations accompanying
the textual instructions are subject to copyright protection. Defendants urge that the illustrations
are unprotectable “scènes à faire” that are driven exclusively by and flow naturally from
considerations related to the car’s design rather than the author’s creativity. See 4 Melville B.
Nimmer & David Nimmer, Nimmer on Copyright § 13.03[B][4] at 13-88.6 (2013) (scènes à
KSM does not suggest that the Copyright Office’s decision to issue the certificate is entitled to
any particular deference.
14

27

faire—scenes which “must be done”—refer to incidents, characters or settings which are
indispensable, or at least standard, in the treatment of a given topic).

In a related vein,

defendants contend that the merger doctrine precludes copyright protection for the illustrations.
KSM urges that neither scènes à faire nor the merger doctrine apply to the illustrations, which
reflect a myriad of stylistic choices concerning whether and how to depict each of the eight
assembly steps. KSM, then, contends that the illustrations are protected from infringement.

1.

Scènes à Faire
Defendants contend that the illustrations are excluded from copyright protections under

the scènes à faire doctrine. Under the scènes à faire doctrine, expressive elements of a work of
authorship are not entitled to protection against infringement “if they are standard, stock, or
common to a topic, or if they necessarily follow from a common theme or setting.” Mitel, Inc.
v. Iqtel, Inc., 124 F.3d 1366, 1374 (10th Cir. 1997) (citation omitted). By way of example,
“[f]oot chases and the morale problems of policemen, not to mention the familiar figure of the
Irish cop, are venerable and often-recurring themes of police fiction,” and are unprotectable
scènes à faire. Id. at 1374-75 (citation and quotation omitted). The Tenth Circuit has extended
the scènes à faire doctrine in the context of computer programs to exclude from protection those
elements of a work that necessarily result from external factors inherent in the subject matter of
the work. Id. at 1375.15

15

As explained by Nimmer, the doctrine of scènes à faire applies particularly to computer
programs because “in many instances, it is virtually impossible to write a program to perform
particular functions in a specific computing environment without employing standard
techniques.” See Nimmer, supra, § 13.03[F][3] at 13-127.
28

Defendants assert that the assembly illustrations are unprotectable scènes à faire because
the images and arrows flow naturally from the steps necessary to assemble the paperboard
cars—that the car must necessarily be assembled a certain way due to the car’s design. In
support of this argument, defendants rely primarily (if not exclusively) on Gennie Shifter, LLC
v. Lokar, Inc., 2010 WL 126181 (D. Colo. Jan. 12, 2010). While Gennie Shifter might support
the conclusion that the written assembly instructions are not protectable, it does not support the
conclusion that the illustrations are not protectable. In that case, both parties manufactured
transmission shifters and transmission shifter accessories.

Id. at *2.

The plaintiff began

manufacturing its “Lo-Dapt Shifter Knob Adapter” which was similar to a Shifter Knob Adapter
manufactured by the defendant. Id. The defendant did not hold a design patent for its Shifter
Knob Adapter, but sent the plaintiff a cease and desist letter alleging that the plaintiff had
violated, among other things, copyrights held by the defendant for the contents of the installation
instruction sheet accompanying the Shift Knob Adapter. Id. Ultimately, the plaintiff filed suit
seeking a declaratory judgment that it had not infringed the defendant’s copyrights. See id.
On the parties’ cross-motion for summary judgment, the district court held that the
installation instructions were not protectable under the scènes à faire doctrine. Id. at *5. In
doing so, the court explained that the instructions were “merely the recitation of the mechanical
steps and parts dictated by the installation process” without sufficient creative expression. See
id. at *6. The court did not discuss—and the parties’ arguments apparently did not address—
any illustrations accompanying the written instructions. Contrary to defendants’ suggestion,
then, Gennie Shifter does not have “highly analogous” facts to those set forth here. While the

29

seven-step instructions quoted by the district court direct the reader to certain figures, 16 it is not
clear from the court’s opinion that those figures were included the instruction sheet before the
court (as opposed to a separate sheet) or that the defendant even claimed a copyright in the
illustrations. See id. at *5-6. There is simply no discussion with respect to any illustrations
whatsoever and it cannot reasonably be inferred from the opinion, as defendants argue, that the
court denied protection to “graphical” installation instructions.
Defendants, then, have not established that the scènes à faire doctrine precludes
protection of the assembly illustrations.

While the paperboard car necessarily must be

assembled in a certain fashion in light of the car’s specific design, the specific illustrations that
support that assembly (as opposed to the written instructions outlining the assembly) do not
necessarily follow from that assembly rather than from the author’s creativity. The illustrations
reflect a creative decision to depict a white, unadorned car against a black background with red
arrows indicating specific folds and insertion points. The illustrations depict the car as a threedimensional object from a specific vantage point. These creative decisions were made from
numerous choices about whether and how to illustrate the specific assembly steps. Moreover,
while the illustrations are certainly helpful to assembling the paperboard car, it cannot be said
that the illustrations are required for assembly, particularly in light of the written instructions. In
short, there is nothing “standard” about the illustrations. There is no basis, then, to conclude that
the illustrations constitute scènes à faire. See Nimmer, supra, § 13.03[B][4] (scènes à faire refers
to the notion that less copyright protection is afforded to incidents, characters or settings which

For example, Step 2 of the instructions states: “Install the jam-nut from the kit onto the shifter
lever; run down to bottom of threads on shifter lever. Fig. 2. “
16

30

are as practical matter “indispensable, or at least standard, in the treatment of a given topic.”);
Tetris Holding, LLC v. Xio Interactive, Inc., 863 F. Supp. 2d 394, 405-06 (D.N.J. 2012)
(diagrams, charts and graphical works associated with games are unprotectable only when the
game is “useless” without the accompanying diagram, chart or illustration; scènes à faire
doctrine has “little weight” in context of games that have “no grounding in the real world”
because “there are no expressive elements ‘standard, stock, or common’ to a unique puzzle
game that is divorced from any real world representation”); Compaq Computer Corp. v.
Ergonome, Inc., 137 F. Supp. 2d 768,776- 77 (S.D. Tex. 2001) (rejecting application of scènes à
faire doctrine for illustrations accompanying written directives concerning correct and incorrect
hand positions relating to a computer keyboard; the specific, detailed illustrations displayed
enough originality to separate it from mere generic expression and ideas could be expressed in
various ways).17

2.

Merger Doctrine
While “pictorial, graphic, and sculptural works” are generally copyrightable, the

protection does not “extend to any idea, procedure, process, system, method of operation,
concept, principle, or discovery” regardless of the form in which it is described, explained,
illustrated, or embodied in such work. Enterprise Management Ltd. v. Warrick, 717 F.3d 1112,
1117 (10th Cir. 2013) (quoting 17 U.S.C. § 102(a)(5) & (b)). “In short, the copyright law is not

17

Even if the illustrations are treated as scènes à faire, they would nonetheless receive protection
from identical copying. See Incredible Techs., Inc. v. Virtual Techs., Inc., 400 F.3d 1007, 1015
(7th Cir. 2005).
31

a patent law: it protects the expression of ideas rather than the underlying ideas themselves.”
Id. (citing Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 344–45 (1991) (“The most
fundamental axiom of copyright law is that no author may copyright his ideas or the facts he
narrates.”)). When a “work expresses an idea in the only way it can be expressed, courts deny
those expressions protection under the ‘merger doctrine’ to avoid giving the author a monopoly
over the underlying idea. Id. (citing Gates Rubber Co. v. Bando Chem. Indus., 9 F.3d 823, 838
(10th Cir. 1993)).

“Conversely, when an idea is capable of many different ‘modes of

expression,’ the expression of the idea is eligible for copyright protection.” Id. (quoting Apple
Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1253 (3d Cir. 1983)).
Defendants argue that the merger doctrine precludes protection of the assembly
illustrations. According to defendants, if the illustrations are protected, then plaintiff will enjoy
a monopoly on the idea of a paperboard car because one cannot make a paperboard car without
the illustrations. The court rejects this argument. In producing and selling their paperboard
cars, defendants could have described, through pictures or images, the assembly process in
numerous ways. Defendants could have utilized photographs of the actual paperboard cars at
the various stages of assembly. To the extent defendants wanted to use illustrations, they could
have incorporated various colors and details into those illustrations, instead of the unadorned,
white car utilized by KSM. They could have depicted only a portion of the car as opposed to the
whole car that KSM decided to depict. They could have depicted the car from a different
vantage point. Because there are numerous ways to illustrate the proper assembly of the car,
KSM’s expression in this respect does not “merge” with the idea of the car itself.

In other

words, because KSM’s creative choices with respect to illustrating the assembly instructions do
32

not foreclose other ways of explaining those instructions, there is no merger. See id. at 1117-18
(no merger where plaintiff’s diagram expressed an idea but defendant could express the same
idea in his own fashion).
For the foregoing reasons, defendants have not effectively rebutted the presumption of
validity of KSM’s copyright in the assembly illustrations.

KSM’s motion for summary

judgment on the validity of the illustrations is granted and defendants’ motion on that same issue
is denied. With respect to the written instructions, however, defendants’ motion for summary
judgment is granted.

3.

Remedy
Defendants also move for summary judgment on KSM’s infringement claim relating to

the assembly instructions copyright on the grounds that KSM, in the pretrial order, has sought
no remedy for the alleged infringement. The court rejects this argument. In the pretrial order,
KSM seeks damages measured by its lost profits on sales of “five-panel paperboard cars
featuring the Sizzle, Shaker and/or Goldie characters.” Contrary to defendants’ argument, the
court does not read this sentence as limiting KSM’s damages to those arising from infringement
of the character copyrights. The pretrial order clearly states that the infringement claim is based,
in part, on the Spy Series cars which include KSM’s assembly instructions and were
manufactured using KSM’s Concept Car die line. While the “Damages” portion of the pretrial
order does not specifically reference the assembly instructions or die line copyrights by name or
registration number, that omission, in light of the overall context of the pretrial order and the

33

nature of KSM’s claims, simply does not suggest that KSM is not seeking a remedy with respect
to those copyrights.

C.

Die Line Copyright
KSM undisputedly created the die line for its Futuristic Cars series of paperboard cars. A

die line is a template used in the manufacturing process in which a steel cutting die is created to
form cuts, folds and perforations in specific places dictated by the template. The parties’
submissions with respect to the die line copyright focus on the validity of the copyright. 18 It is
undisputed that KSM, in August 2014, obtained a certificate of registration with respect to the
die line. As noted earlier, then, a presumption of validity is in place and the burden is on
defendants to rebut that presumption by offering some evidence or proof to dispute or deny
KSM’s prima facie case of validity. See Palladium Music, Inc. v. EatSleepMusic, Inc., 398 F.3d
1193, 1196 (10th Cir. 2005).
KSM contends that the die line template is eligible for copyright protection as a “pictorial
or graphic” work under 17 U.S.C. § 102(a)(5). Defendants assert that the paperboard car is a
“useful article” that is excluded from copyright eligibility; that the die line is, in fact, the
paperboard car in flattened, unassembled form; and, accordingly, that the die line is itself a
useful article. A “useful article” is defined in the Copyright Act as “an article having an

18

KSM moves for summary judgment on the issue of its sole ownership of the die line
copyright, which is undisputed by defendants. That aspect of KSM’s motion, then, is granted.
Defendants move for summary judgment on the grounds that KSM is not seeking damages or
any other remedy based on defendants’ infringement of the die line copyright. For the reasons
discussed above in connection with the assembly instructions copyright, this argument is
rejected.
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intrinsic utilitarian function that is not merely to portray the appearance of the article or to
convey information.” See 17 U.S.C. § 101. The court rejects this argument for two reasons.
First, defendants’ argument is premised on the conclusion that the paperboard car is a
useful article. The court rejected that argument at the motion to dismiss stage and defendants
have failed to demonstrate why the court should reconsider that decision.

See Kid Stuff

Marketing, Inc. v. Creative Consumer Concepts, Inc., 2015 WL 3485759, at *4 (D. Kan. June 2,
2015) (plaintiff’s paperboard car, which was intended merely to portray a real car and has no
intrinsic utilitarian function, is not a useful article and would be copyrightable); accord 1
Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 2A.14[A] at 2A-197 (2013)
(because toys do not have an intrinsic function other than the portrayal of the real item, they do
not qualify as useful articles).19
Second, defendants’ argument assumes that the die line is indistinct from the paperboard
car itself. According to defendant, the die line “is the sheet of semi-rigid material” that is folded
into the car. The record does not support this conclusion. Rather, the record reflects that the
function of the die line is merely to convey information to the manufacturer for purposes of the
die-cutting process. The die line is simply an image or graphic that tells the manufacturer where
and how to cut the car from the sheet of paperboard and where additional, internal cuts or

19

According to defendants, the record reflects that that the paperboard car may be used as a
“carton for food” such that it has a function apart from portraying a real car. But courts have
held that toys can qualify for copyright protection even where there is some mechanical or
functional element to the toy. See Lanard Toys Ltd. v. Novelty, Inc., 375 Fed. Appx. 705, 709
(9th Cir. 2010) (citing cases). Even assuming, however, that the court were inclined to find a
factual issue on whether the paperboard car is a “useful article,” defendants’ argument
nonetheless fails for the independent reason that the die line is entirely distinct from the car
itself.
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perforations should be made and where fold lines should be formed. The unassembled, flattened
form of the car that is ultimately presented to the consumer is not created until the completion of
the die-cutting process.
Defendants, then, have not demonstrated that KSM’s die line is ineligible for copyright
protection. Summary judgment on this issue is granted in favor of KSM. Compare Ellison
Educational Equipment, Inc. v. Chen, 2004 WL 3154592, at *6-8 (C.D. Cal. Dec. 21, 2004)
(concluding that plaintiff’s die designs were eligible for copyright protection and that defendant
infringed by copying certain, specific designs); and Ellison Educational Equipment, Inc. v.
Tekservices, Inc., 903 F. Supp. 1350, 1359-60 (D. Neb. 1995) (issuing injunction where
competitor’s die designs were substantially similar to plaintiff’s designs); with Ellison
Educational Equipment, Inc. v. Accu-Cut Systems, Inc., 769 F. Supp. 1090, 1101-02 (D. Neb.
1991) (copyright protection did not extend to die designs that were silhouettes of “ordinary,
common items” such as a dog bone, an apple and a sun because where were an extremely finite
number of ways to alter those shapes such that copyright protection would grant the plaintiff a
monopoly).

IT IS THEREFORE ORDERED BY THE COURT THAT plaintiff’s motion for
partial summary judgment (doc. 111) is granted in part and denied in part; defendants’ motion
for summary judgment (doc. 114) is granted in part and denied in part; and defendants’ motion
for oral argument (doc. 132) is denied.

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IT IS SO ORDERED.

Dated this 19th day of December, 2016, at Kansas City, Kansas.

s/ John W. Lungstrum
John W. Lungstrum
United States District Judge

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