K&M International, Inc v. Rhode Island Novelty, Inc

Filing 54

MEMORANDUM AND ORDER granting in part and denying in part 28 Motion for Partial Summary Judgment. So Ordered by Chief Judge William E. Smith on 3/20/2017. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
)
)
Plaintiff,
)
)
v.
)
)
RHODE ISLAND NOVELTY, INC.,
)
)
Defendant.
)
___________________________________)
K&M INTERNATIONAL, INC.,

C.A. No. 14-428 S

MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
Before

the

Court

is

Plaintiff

K&M

International,

Inc.’s

(“K&M”) Motion for Partial Summary Judgment seeking judgment as
a matter of law on two of the seven counts alleged in its First
Amended Complaint against Defendant Rhode Island Novelty, Inc.
(“RINCO”). (Pl.’s Mot. for Partial Summ. J. 1, ECF No. 28.)

For

the reasons that follow, K&M’s motion is GRANTED IN PART and
DENIED IN PART.
I. Background
K&M and RINCO are both designers and distributors of toys
that

are

sold

throughout

the

country

in

gift

shops

and

concession stands located on the premises of zoos, museums, and
aquariums. (Pl.’s Statement of Undisputed Facts (“SUF”) ¶¶ 1, 2,
ECF No. 30; Nowak Aff. ¶ 8, ECF No. 42-2.)

The toys include

plush

animals

and

(SUF ¶¶ 1, 2.)

polyvinyl

chloride

(“PVC”)

animal

figures.

The instant litigation is not the first time

these parties have tangled over Plaintiff’s copyrights for its
plush toys.

In 2006, K&M sued RINCO for trademark and copyright

infringement,
REPUBLIC”
connection

alleging

trademark
with

its

that

when
toy

RINCO
RINCO

had
used

products.

Compl. ¶¶ 2-3, ECF No. 19.)

(See

infringed
“WILD
CA

K&M’s

“WILD

ADVENTURES”
No.

06-159ML

in
Am.

The parties ultimately settled this

litigation and signed a confidential settlement agreement. (CA
No. 14-428S Am. Compl. ¶ 3, ECF No. 18.)
Since the first round of litigation, K&M and RINCO have
continued to develop their product lines, including new plush
toy animals and PVC toys.

K&M has registered copyrights for its

designs of at least four new plush toys (a pink hippopotamus, a
penguin

chick,

a

river

otter,

and

a

harbor

seal)

and

has

continued to use its “WILD REPUBLIC” trademark. (Pl.’s SUF ¶¶ 3,
5, 25.)

RINCO has acquired designs for at least four of the

same animals and has been marketing and selling these new plush
toys. (Labsan Aff. ¶¶ 25-30, ECF No. 42-3.) In addition, RINCO
has produced several sets of toys using “ADVENTURE PLANET” as a
trademark and brand name, and has also used the terms “wild” and
“wildlife” on the packaging and in the marketing of some of
these toys. (Id. ¶¶ 7, 9, 11.)

2

In

2014,

K&M

initiated

the

present

litigation

against

RINCO, alleging that RINCO has: (1) breached the 2007 settlement
agreement by using the word “wild” in marketing and selling its
toy products; (2) infringed K&M’s trademarks and copyrights; (3)
engaged in common law unfair competition; and (4) benefitted
from unjust enrichment as a result. (Am. Compl., ECF No. 18.)
K&M is moving for summary judgment on two of the seven counts
brought against RINCO: copyright infringement with respect to
K&M’s registered copyrights for the pink hippopotamus, penguin
chick, river otter, and harbor seal (count I) and breach of
contract (count VI). (Mem. in Supp. of Pl.’s Mot. for Partial
Summ. J. (“Pl.’s Mem.”) 1, ECF No. 29.)
II. Standard of Review
“Summary

judgment

is

proper

only

if

the

record,

read

favorably to the non-moving party, reflects no genuine issues of
material fact and the undisputed facts indicate that the movant
is entitled to judgment as a matter of law.” T-Peg, Inc. v.
Vermont Timber Works, Inc., 459 F.3d 97, 111 (1st Cir. 2006)
(quoting Hadfield v. McDonough, 407 F.3d 11, 15 (1st Cir. 2005)
(citing Fed. R. Civ. P. 56(c))).

“[A] party seeking summary

judgment [must] make a preliminary showing that no genuine issue
of material fact exists.
the

nonmovant

specific

facts

must

Once the movant has made this showing,

contradict

3

showing

by

that

demonstrating

the

there

is,

pointing

to

indeed,

a

trialworthy issue.” Nat’l Amusements, Inc. v. Town of Dedham, 43
F.3d 731, 735 (1st Cir. 1995) (citing Celotex Corp. v. Catrett,
477

U.S.

317,

324

trialworthiness,

(1986)).

and

“To

thereby

satisfy

forestall

the

criterion

of

summary

judgment,

an

issue must be ‘genuine,’ that is, the evidence relevant to the
issue, viewed in the light most flattering to the party opposing
the motion . . . must be sufficiently open-ended to permit a
rational

factfinder

to

resolve

the

issue

in

favor

of

either

side.” Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S.
242,

250

Circuit

(1986))

has

(other

stated,

citations

“[t]he

omitted).

evidence

As

illustrating

the
the

First

factual

controversy cannot be conjectural or problematic; it must have
substance in the sense that it limns differing versions of the
truth which a factfinder must resolve . . . .” Id. (quoting Mack
v.

Great

1989)).

Atl.

&

Pac.

Tea

Co.,

871

F.2d

179,

181

(1st

Cir.

A material fact is one that “has the capacity to sway

the outcome of the litigation under the applicable law.” Id.
(citing

Liberty

Lobby,

477

U.S.

at

248)

(other

citations

omitted).
III. Discussion
A. Breach of Contract Claim
As part of the 2007 Settlement Agreement, RINCO agreed that
it would “not use as a trademark or brand name the terms “WILD”
and “REPUBLIC,” either as a word or syllable, alone or as part
4

of

a

composite

connection

mark,

with

word,

the

symbol

marketing,

or

design

element,

promotion,

in

manufacture,

distribution and/or sale of toy products anywhere in the world.”
(Pl.’s Mem. 10; 2007 Settlement Agreement ¶ 3(h), Malbin Decl.
Ex. 14, ECF No. 33-4 (filed under seal).)
K&M

argues

that

RINCO

breached

the

2007

Settlement

Agreement by using the term “wild” in two separate ways: first,
by

marketing

and

distributing

toy

products

with

logos

“prominently” reflecting the term “wild” on the packaging, and
second, by marketing toy lines “identified by names containing
the term ‘wild.’” (Pl.’s Mem. 10.)

K&M contends that both of

these uses constitute use as a brand name because each logo or
name

on

toy

packaging

products. (Id. at 12.)

is

a

symbol

that

identifies

RINCO’s

K&M also argues that these uses of the

term “wild” constitute use as a trademark within the definition
applied by the Lanham Act, 15 U.S.C. § 1127. (Id. at 13, 15.)
For its part, RINCO argues that it has not used the term
“wild” as either a brand name or trademark, but instead as a
generic,

descriptive

term

of

its

products

and

alongside

its

Adventure Planet trademark and brand name. (Def.’s Mem. in Supp.
of Obj. (“Def.’s Mem.”) 1, 5, 15, ECF No. 42-1.)
RINCO,

paragraph

3(h)

of

the

2007

According to

Settlement

Agreement

specifically prohibited the use of the term as a brand name or
trademark but not from using the terms “wild” and “republic” as
5

descriptive terms. (Id. at 13-14.)
plain

meaning

of

terms

“wild”

and

trademark,

but

paragraph

3(h)

“republic”

not

RINCO also asserts that the
prohibits

together

separately,

and

as

that

it
a
it

from
brand
could

using
name
not

the
or
have

breached the 2007 Settlement Agreement because it has not used
these terms together. (Id. at 1, 5, 9.)

RINCO contends that any

determination regarding the placement, use, and context of its
use of the term “wild” is too fact-specific to undertake at this
summary judgment stage of the litigation. (Id. at 11.)
“To

succeed

on

a

breach

of

contract

claim

under

Rhode

Island law, a plaintiff must prove that (1) an agreement existed
between the parties, (2) the defendant breached the agreement,
and (3) the breach caused (4) damages to the plaintiff.” Barkan
v. Dunkin’ Donuts, Inc., 627 F.3d 34, 39 (1st Cir. 2010) (citing
Petrarca v. Fid. & Cas. Ins. Co., 884 A.2d 406, 410 (R.I. 2005)
(additional citations omitted)). There is no dispute that the
2007

Settlement

Agreement

exists

as

a

contract

between

the

parties and that this agreement is governed by Rhode Island law.
(Pl.’s Mem. 10; Def.’s Mem. 10.)
When the Rhode Island Supreme Court reviews the terms of a
settlement agreement, it applies its general rules of contract
construction. Furtado v. Goncalves, 63 A.3d 533, 537 (R.I. 2013)
(citing Rivera v. Gagnon, 847 A.2d 280, 282, 284 (R.I. 2004)).
“[T]he existence of ambiguity vel non in a contract is an issue
6

of law to be determined by the [C]ourt.” Id. (quoting Derderian
v. Essex Insurance Co., 44 A.3d 122, 127 (R.I. 2012) (additional
quotations omitted)).

It is well settled that “[a]n ambiguity

in a contract cannot be resolved on summary judgment.” Garden
City Treatment Ctr., Inc. v. Coordinated Health Partners, Inc.,
852 A.2d 535, 541 (R.I. 2004) (quoting Rubery v. Downing Corp.,
760

A.2d

945,

947

(R.I.

2000)

(per

curiam)

(additional

quotations omitted)).
“In

assessing

whether

contract

language

is

ambiguous,

[Rhode Island] give[s] words their plain, ordinary, and usual
meaning. . . .

The subjective intent of the parties may not

properly be considered . . , [instead the Court] consider[s] the
intent expressed by the language of the contract.” Furtado, 63
A.3d

at

537

(quoting

Derderian,

quotations omitted)).
is

reasonably

and

44

A.3d

at

128

(additional

“[A] contract is ambiguous only when it
clearly

susceptible

of

more

than

one

interpretation.” Garden City Treatment Ctr., 852 A.2d at 541-42
(quoting

Rubery,

omitted)).
ambiguous,

760

A.2d

at

947

(additional

quotations

When assessing whether language in a contract is
the

Court

is

to

“refrain

from

engaging

in

mental

gymnastics or from stretching the imagination to read ambiguity
. . . where none is present.’” Young v. Warwick Rollermagic
Skating

Ctr.,

Inc.,

973

A.2d

553,

559

(R.I.

2009)

(quoting

Mallane v. Holyoke Mut. Ins. Co. in Salem, 658 A.2d 18, 20 (R.I.
7

1995) (additional citations omitted)).

In addition, “the mere

fact that parties differ as to the meaning of an agreement does
not necessarily mean that the agreement is in fact ambiguous.”
Id. at 560.
The Court finds that the sentence at issue in K&M’s breach
of contract claim is not reasonably susceptible to more than one
interpretation and is therefore not ambiguous.

RINCO agreed not

to use the terms “WILD” and “REPUBLIC” as a trademark or brand
name, “either as a word or syllable, alone or as part of a
composite mark, word, symbol or design element, in connection
with the marketing, promotion, manufacture, distribution and/or
sale of toy products anywhere in the world.” (Pl.’s Mem. 10;
2007

Settlement

conjunction

Agreement

“and”

instead

¶

3(h).)

of

Despite

“or,”

the

the

plain

use
and

of

the

ordinary

meaning of the sentence indicates that RINCO agreed not to use
either term as a trademark or brand name.

Contrary to RINCO’s

proposed interpretation, paragraph 3(h) did not only prohibit it
from using the words “wild republic” together, but from using
either word pursuant to the other limitations articulated in the
remainder of paragraph 3(h).
The

more

difficult

material

fact

exists

issue

with

is

respect

whether
to

a

K&M’s

genuine
claim

issue

that

of

RINCO

breached paragraph 3(h) of the 2007 Settlement Agreement when it
used the term “wild” on its packaging and as part of the name in
8

some of its product lines, and that these uses constitute use as
a trademark or brand name.
K&M provided screenshots from RINCO’s website to support
its arguments that RINCO breached the 2007 Settlement Agreement
by using “wild” as a brand name and trademark on the packaging
of toys as well as by marketing toys with the term “wild” in the
product’s name.

(Malbin Decl. Ex. 12, ECF No. 32-12.)

screenshots

show

that

a

variety

packaging

in

the
of

word
toy

“wild”
names;

is
for

used

on

The

RINCO’s

example,

Wildlife

Discovery Expedition, Wild Animals Pail Set, Wildbios Northern
Trek pack, Wild West Ranger, and Wild-Action playset.
“Adventure

Planet”

logo

also

appears

on

each

of

RINCO’s
the

toys

depicted in the screenshots, and always at the top left hand
corner of the product.
In response, and in support of RINCO’s argument that the
term “wild” was used as a generic, descriptive term and not as a
brand name or trademark, RINCO provided an affidavit from Jeremy
Labsan, an Imports Manager for RINCO.

Labsan asserts that the

“Wildlife Discovery Expedition” toy is simply one variety of a
more

expansive

“Discovery

(Labsan Aff. ¶ 9.)
content

of

Expedition”

each
line

Expedition”

line

of

toy

products.

Labsan also asserts that, depending on the
toy

of

package,

toys

will

the
be

name

preceded

of
by

the

“Discovery

either

“wild,”

“aquatic,” “journey,” “jungle,” or “northern trek,” and RINCO
9

provides excerpts from its 2015 product catalog to support this
assertion. 1 (See Labsan Aff. Ex. A, ECF Nos. 42-5, 42-6.)
RINCO’s 2015 product catalog excerpts demonstrate that a
genuine issue of material fact exists as to whether its use of
the word “wild” was, as it contends, simply part of the name of
a

toy

within

a

product

line

under

the

“ADVENTURE

PLANET”

trademark, or its use of the word “wild” was as a trademark or
brand

name

Agreement.
breached

and

therefore

a

breach

of

the

2007

Settlement

As a result, the Court concludes that whether RINCO
the

2007

Settlement

Agreement

is

a

factual

determination to be made by the trier of fact, and DENIES K&M’s
Motion for Summary Judgment on count I.
B. Copyright Infringement Claim
K&M argues that it is entitled to summary judgment on its
copyright

infringement

claim

regarding

its

pink

hippopotamus,

penguin chick, river otter, and harbor seal because: (1) it owns
valid copyrights of its original designs for these four plush
toys

and

has

the

certificates

of

registration;

(2)

it

has

evidence that RINCO copied K&M’s designs; and (3) the degree of
similarity

of

RINCO’s

plush

toys’

1

design

elements

to

K&M’s

Labsan also asserts that the term “wild” was similarly
substituted in other product lines such as the “adventure pod”
line of toys products. (Labsan Aff. ¶ 8.) The excerpts from the
2015 product catalog support this assertion.
10

copyrighted toys’ design elements. (Pl.’s Mem. 18, 19-24, Pl.’s
Mem. Exs. 1, 4, ECF No. 32.)
RINCO counterargues that K&M has not provided any “direct”
or “competent” evidence to support its claim that RINCO copied
the design of the four plush toys at issue, and that attendance
at the same trade shows is insufficient evidence to establish
that RINCO copied the designs. (Def.’s Mem. 20.)

RINCO outlines

the history of the designs of its versions of the plush animals
at issue to demonstrate that the designs were acquired through
overseas vendors. (Id. at 21-22; Labsan Aff. ¶¶ 26-30.)

RINCO

also argues that, despite K&M’s attempt to demonstrate the ways
in which the design elements of RINCO’s version of the plush
toys are substantially similar to K&M’s plush toys, “an ordinary
observer would not confuse these products when viewed side-byside.” (Id. at 23.) Moreover, RINCO distinguishes the design
elements of each of its plush toys from K&M’s designs. (Id. at
23-30.)
“To prevail on a copyright infringement claim, a party must
prove both control of a valid copyright and copying of original
elements of the work by the putative infringer.” Coquico, Inc.
v. Rodriguez-Miranda, 562 F.3d 62, 66 (1st Cir. 2009) (citing
Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361
(1991)).
copyrights

Here,
for

there

the

is

design

no
of

dispute
the

11

four

that

K&M

has

valid

plush

toys

at

issue.

(Pl.’s Mem. 18; Def.’s Mem. 19.)

The issue before the Court on

this claim, therefore, is whether K&M is entitled to judgment as
a matter of law that RINCO copied the original design elements
of the four plush toys at issue.
To

prove

that

a

valid

See Coquico, 562 F.3d at 66.

copyright

has

been

infringed,

a

plaintiff must prove two elements that are highly fact-specific:
first, that “the putative infringer copied the protected work,”
id. (citing Segrets, Inc. v. Gillman Knitwear Co., 207 F.3d 56,
60

(1st

Cir.

2000)),

and

second,

“that

the

copying

was

so

egregious as to render the allegedly infringing and infringed
works substantially similar.” Id. (citing Lotus Dev. Corp. v.
Borland Int’l, Inc., 49 F.3d 807, 813 (1st Cir. 1995)) (emphasis
added).

“A party may demonstrate actual copying through either

direct or circumstantial evidence.” Id. (citing Yankee Candle
Co. v. Bridgewater Candle Co., 259 F.3d 25, 33 (1st Cir. 2001)).
“Proving

actual

copying

by

direct

evidence

is

generally

a

difficult task, as it is the rare case in which the specific act
of copying was witnessed, observed, or recorded.”

Society of

Holy Transfiguration Monastery, Inc. v. Gregory, 689 F.3d 29, 49
(1st Cir. 2012) (citing Johnson v. Gordon, 409 F.3d 12, 18 (1st
Cir.

2005)

proof

of

reason,

(“Plagiarists

actual
parties

copying
typically

rarely
is

work

seldom

rely

on

in

the

open

and

direct

available.”)).

“For

this

circumstantial

evidence

to

prove that the defendant had access to the protected work and
12

that

the

original,

resulting
was

product,

sufficiently

when

similar

fairly
that

compared

actual

to

the

copying

may

properly be inferred.” Id. (citing Concrete Mach. Co. v. Classic
Lawn

Ornaments,

Inc.,

843

F.2d

600,

606

(1st

Cir.

1988)

(additional citations omitted)).
“To gauge substantial similarity in cases involving nontechnological
‘ordinary
infringing
allegedly

consumer

observer’
work

products,

test.

will

be

infringed

Under
deemed

work

if

an

courts
that

often

metric,

substantially
ordinary

employ

the

allegedly

similar

observer

an

to

would

the
be

disposed to overlook any disparities in the works.” Coquico, 562
F.3d

at

67

(citing

Concrete

Mach.,

843

F.2d

at

607).

“[S]ubstantial similarity does not mean absolute identicality.”
Id. at 70.

“[T]he determination of substantial similarity is

ordinarily assigned to the factfinder,” although when “[f]aced
with a motion for summary judgment . . . a court [considers]
whether

a

reasonable

jury

could

conclude

that

‘an

ordinary

observer’ examining the two [products] would see the defendant’s
version as a wrongful appropriation of the plaintiff’s protected
expression.” Harney v. Sony Pictures Television, Inc., 704 F.3d
173, 179-80 (1st Cir. 2013).
Beginning

with

the

inquiry

into

whether

RINCO

actually

copied K&M’s designs for the pink hippopotamus, penguin chick,
river otter, and/or harbor seal, K&M has provided circumstantial
13

evidence that RINCO had access to its products in the following
ways:

(1)

K&M’s

wide

dissemination

of

these

four

plush

toys

through catalog marketing, display at trade shows, and sales
around the country; (2) RINCO’s attendance at seven of the same
trade shows as K&M in the years after K&M distributed its plush
toys but before RINCO started marketing its versions; and (3)
RINCO’s purchase of the design for its pink hippopotamus from
the Chinese company that manufactured K&M’s original design for
its own pink hippopotamus. (Pl.’s SUF ¶¶ 49-53, 61-62; Chandran
Decl.

¶¶

¶ 26.)

3-5,

ECF

No.

48-1

(filed

under

seal);

Labsan

Aff.

RINCO did not provide any evidence to dispute or counter

K&M’s circumstantial evidence.
The evidence submitted by both parties to support their
respective positions regarding the degree of similarity of the
design

elements

of

the

plush

toys

makes

it

clear

that

the

determination of whether RINCO’s versions of the four plush toys
at issue are substantially similar to K&M’s original designs is
not easy.

K&M provided photos of each of the four toys at

issue, as well as photos of RINCO’s versions, and persuasively
argued the ways in which the design elements are substantially
similar. (See Pl.’s Mem. 7-8; Malbin Decl. Exs. 2-11, ECF No.
32.)

K&M asserts that each of RINCO’s toys is substantially

similar to K&M’s design elements and that the design elements
are original to K&M’s toys because they are so different from
14

the natural characteristics of these animals in the wild (for
example,

hippos

in

the

wild

Malbin Decl. Exs. 20-23.)

are

not

pink).

(Pl.’s

Mem.

24,

K&M also asserts that these animals

can be designed and depicted in many different ways that are
different from nature and also from its original designs, as
demonstrated by numerous products sold by other companies, yet
RINCO’s products track closely to K&M’s product characteristics.
(Pl.’s Mem. 24, Malbin Decl. Exs. 17-19.)
RINCO provided a side-by-side comparison of the toys at
issue in its effort to distinguish the design elements of its
plush toys from K&M’s plush toys. (See Labsan Aff. Exs. C, E, G,
I.)

In addition, RINCO provided a comparison of each of the

four toys at issue to other companies’ plush toys, organized by
individual design elements that K&M claims are original to its
designs. (See Labsan Aff. Exs. D, F, H, J.)
The exhibits submitted by both parties demonstrate that the
determination of whether RINCO’s plush toys are substantially
similar

to

question.

K&M’s
This

copyrighted
inquiry

plush

is

toys

therefore

is
not

a

fact-intensive

appropriate

for

resolution on summary judgment.

This Court finds that genuine

issues

as

of

material

fact

exist

to

whether

“an

ordinary

observer would be disposed to overlook any disparities in the
works,” Coquico, 562 F.3d at 67, and that K&M is not entitled to
summary judgment on its copyright infringement claim.
15

IV. Conclusion
For

the

reasons

stated

herein,

Plaintiff’s

Motion

for

Partial Summary Judgment (ECF No. 28.) is GRANTED IN PART and
DENIED IN PART.

K&M is not entitled to judgment as a matter of

law either on its copyright infringement claim (count I) or on
its

breach

of

contract

claim

(count

VI).

The

Court

does

conclude that, as a matter of law, paragraph 3(h) of the 2007
Settlement Agreement unambiguously prohibited RINCO from using
“wild” or “republic” as either a trademark or brand name or
pursuant to the other limitations imposed by this paragraph of
the contract.
IT IS SO ORDERED.

William E. Smith
Chief Judge
Date: March 20, 2017

16