Case: 1:18-cv-02354 Document #: 212 Filed: 09/21/22 Page 1 of 7 PageID #:1975
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`Plaintiff,
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`No. 18-cv-02354
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`Judge Martha M. Pacold
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`TY INC.,
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`TARGET CORPORATION and,
`MGS GROUP, LTD.
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`Defendants.
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`MEMORANDUM OPINION AND ORDER
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`Ty Inc. filed suit against Target Corporation and MGS Group, Ltd. alleging
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`copyright infringement of Ty’s plush toy poodle, Rainbow. Target moved under 17
`U.S.C. § 411(b)(2) for the court to issue a request to the Copyright Office to advise
`whether the Copyright Office would have refused registration if it knew that certain
`information included in the registration was inaccurate. [86]. For the reasons
`explained below, the court denies the motion.
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`BACKGROUND
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`Ty is the owner and manufacturer of a line of plush toys sold under the
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`trademark BEANIE BOOS. [97] ¶ 1.1 In 2010, Ty registered a plush toy poodle
`with the United States Copyright Office, “C9962 Pink Poodle Boo” and sold the toy
`poodle under the name Princess. [99-1] at 5, 15.
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`In 2016, Ty registered another plush toy poodle with the Copyright Office, “Beanie
`Boos Patsy 37203,” and sold the toy poodle under the name Patsy. Id. at 17. Ty
`asserts that Patsy’s design featured a different type and color of material than
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`1 Bracketed numbers refer to docket entries and are followed by page and / or paragraph
`number citations. Page numbers refer to the CM/ECF page number.
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`Case: 1:18-cv-02354 Document #: 212 Filed: 09/21/22 Page 2 of 7 PageID #:1976
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`Princess, and “used a slightly different pattern, which permitted the dog more
`stability to sit upright.” [99] at 2.
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`Later in 2016, Ty registered a third plush toy poodle with the United States
`Copyright Office, “37223 Beanie Boos Rainbow,” and sold the toy poodle under the
`name Rainbow. [99-1] at 44. Rainbow resembles Patsy and Princess, but Ty
`asserts that Rainbow’s design features a “different type and color of materials.” [99]
`at 3.
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`On March 30, 2018, Ty filed an application for supplementary registration for
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`the Patsy registration, clarifying that Patsy was a derivative work based on the
`Princess toy. [99-1] at 56. Ty identified “sculpture” under “Material excluded from
`this claim[,]” and “VAu1044341, 2010” (the registration number for Princess) under
`“Previous registration and year.” Id. at 5, 56. Ty also identified “sculpture” as
`“New material included in the claim.” Id. at 56. The Copyright Office issued a
`certificate of registration for Patsy. Id. at 59–62.
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`On March 30, 2018, Ty filed an application for supplementary registration for
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`Rainbow, clarifying that Rainbow was a derivative work based on Patsy and
`Princess. Id. at 65. Ty identified “sculpture” under “Material excluded from this
`claim” and “VAu1044341, 2010” (Princess’s registration number) and
`“VA0002018886, 2016” (Patsy’s registration number) under “Previous registration
`and year.” Id. at 5, 17, 65. Ty also listed “sculpture” under “New material included
`in the claim.” Id. at 65. The Copyright Office issued a Certificate of Registration
`for Rainbow. Id. at 68.
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`2
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`Case: 1:18-cv-02354 Document #: 212 Filed: 09/21/22 Page 3 of 7 PageID #:1977
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`DISCUSSION
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`Target’s motion argues that Ty made a series of knowingly false
`representations to the Copyright Office in order to obtain copyright registration for
`Rainbow. [94]. Target alleges that Rainbow is nothing more than a color variation
`on prior works and that variations in coloring are not copyrightable. Had the
`Copyright Office been aware of the true facts regarding Rainbow, Target argues, it
`would have refused to register Rainbow. Pursuant to 17 U.S.C. § 411(b)(2), Target
`asks that the court request the Register of Copyrights advise the court whether the
`inaccurate information, if known, would have caused the Register of Copyrights to
`refuse registration.2
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`After Target’s motion was fully briefed, the parties filed supplemental briefs
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`addressing a December 4, 2019 Copyright Office decision [153-1] (“Robbins”). [153];
`[154].
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`The Copyright Act, subject to a few exceptions, requires a copyright holder to
`register its copyright in a work with the United States Copyright Office before
`bringing an infringement suit. 17 U.S.C. § 411(a); Reed Elsevier, Inc. v. Muchnick,
`559 U.S. 154, 157 (2010). 17 U.S.C. § 408(d) permits the Register of Copyrights to
`establish formal procedures “for the filing of an application for supplementary
`registration, to correct an error in a copyright registration or to amplify the
`information given in a registration.” “The information contained in a
`supplementary registration augments but does not supersede that contained in the
`earlier registration.” Id.
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`17 U.S.C. § 409 requires that applications for copyright registration “be made
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`on a form prescribed by the Register of Copyrights and shall include . . . (9) in the
`case of a compilation or derivative work, an identification of any preexisting work or
`works that it is based on or incorporates, and a brief, general statement of the
`additional material covered by the copyright claim being registered.” The
`Compendium of U.S. Copyright Practices provides the following guidance for adding
`additional material covered by a copyright claim:
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`When completing an online application, the applicant should identify
`the new authorship that the applicant intends to register on the
`Limitation of Claim screen by checking one or more of the boxes in the
`New Material Included field that accurately describe the new
`authorship that is owned by the copyright claimant. The options for
`each type of work are listed below . . . Works of the Visual Arts [:] 2-D
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`2 Target also initially sought a stay pending the Copyright Office’s response but dropped
`this request. See [104] at 3 (observing that there is not “any remaining need for a stay of
`the prior summary judgment deadline”).
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`3
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`Case: 1:18-cv-02354 Document #: 212 Filed: 09/21/22 Page 4 of 7 PageID #:1978
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`artwork[,] Photograph[,] Jewelry design[,] Architectural work[,]
`Sculpture[,] Technical drawing [and] Map . . . .
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`U.S. Copyright Office, Compendium of U.S. Copyright Practices § 621.8(C)(1) (3d.
`ed. 2017). The Compendium clarifies that “[a]s a general rule, the U.S. Copyright
`Office will accept any of the terms listed above or any combination of these terms,
`provided that they accurately describe the copyrightable authorship being claimed.”
`Id. The Compendium defines “sculpture” or “3-dimensional sculpture” as
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`used to describe the authorship in a work of fine art. Likewise, they may
`be used to describe the authorship in toys, dolls, scale models, and other
`three-dimensional sculptural works. They also may be used to describe
`three-dimensional artwork that has been incorporated into a useful
`article, provided that the sculpture can be separated from the useful
`article.
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`Id. at § 618.4(C).
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`17 U.S.C. § 411(b) provides in relevant part:
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`(1) A certificate of registration satisfies the requirements of this section
`and section 412, regardless of whether the certificate contains any
`inaccurate information, unless-- (A) the inaccurate information was
`included on the application for copyright registration with knowledge
`that it was inaccurate; and (B) the inaccuracy of the information, if
`known, would have caused the Register of Copyrights to refuse
`registration.
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`(2) In any case in which inaccurate information described under
`paragraph (1) is alleged, the court shall request the Register of
`Copyrights to advise the court whether the inaccurate information, if
`known, would have caused the Register of Copyrights to refuse
`registration.
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`Courts have interpreted § 411(b)(2) as a mandatory—not permissive—
`provision. See DeliverMed Holdings, LLC v. Schaltenbrand, 734 F.3d 616, 623 (7th
`Cir. 2013) (“[T]he statute obligates courts to obtain an opinion from the Register
`. . . .”); Palmer/Kane LLC v. Rosen Book Works LLC, 188 F. Supp. 3d 347, 348
`(S.D.N.Y. 2016) (“[C]ourts are in agreement that the provision is mandatory in
`nature . . . .”). But, although § 411(b)(2) is a mandatory condition to determining
`the materiality of a particular misrepresentation, courts have required litigants
`bringing § 411(b)(2) motions to meet certain preconditions before they refer a
`matter to the Register. The Seventh Circuit has held that “courts can demand that
`the party seeking invalidation first establish that the other preconditions to
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`4
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`Case: 1:18-cv-02354 Document #: 212 Filed: 09/21/22 Page 5 of 7 PageID #:1979
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`invalidity are satisfied before obtaining the Register’s advice on materiality.”
`DeliverMed Holdings, 734 F.3d at 625. The Seventh Circuit set forth a two-part test
`for § 411(b)(2) motions. The movant should “demonstrate that (1) the registration
`application included inaccurate information; and (2) the registrant knowingly
`included the inaccuracy in his submission to the Copyright Office.” Id. The
`Seventh Circuit explained that “[g]iven its obvious potential for abuse, we must
`strongly caution both courts and litigants to be wary of using this device in the
`future.” Id. The court noted the “risk that parties would use this provision as a
`delay tactic” and advised courts to “tread carefully and employ this mechanism only
`when necessary.” Id.
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`Target alleges Rainbow’s registration included three types of inaccuracies.
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`First, Target claims Ty failed to disclose that Rainbow was a derivative work of
`Patsy and Princess. [94] at 4–5. Second, Target alleges that Ty failed to disclose
`that Rainbow’s new material was previously used in a Ty plush toy owl. Id. at 6–7.
`Third, Target argues that Rainbow’s registration inaccurately stated that it
`featured new “sculptural” material when Rainbow was “nothing more than a
`variation in coloring of” preexisting works. Id. The court addresses each argument
`in turn.
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`Target’s first argument that Ty’s application was inaccurate because it did
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`not disclose that Rainbow was derivative of Patsy and Princess is unpersuasive.
`In 2016, when Ty registered the Rainbow poodle, it did not identify Rainbow as a
`derivative work. [99-1] at 45. But Ty’s 2018 supplementary registration clarified
`that Rainbow was a derivative work based on Patsy and Princess. Id. at 65; see also
`id. at 5, 17. Ty followed an accepted procedure under 17 U.S.C. § 408(d), “to correct
`an error in a copyright registration” and did so before filing its infringement action
`in this case. See also [99-1] at 79; Compendium § 1802.6(J) (“A supplementary
`registration may be used to correct or amplify the claim that has been asserted in
`the basic registration. Specifically, it may be used to correct or amend the
`information that appears on the certification of registration in the fields/spaces
`marked Author Created, Limitation of Copyright Claim, Nature of Authorship,
`and/or Material Added to This Work.”).3 Taking into account the totality of Ty’s
`representations to the Copyright Office, Ty’s representations regarding Rainbow’s
`relationship to Patsy and Princess are accurate.
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`Next, relying on the deposition testimony of Ty Warner, the CEO of Ty, Inc.,
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`Target contends that Rainbow’s registration omitted reference to a Ty plush toy owl,
`which used the same colors and/or fabric. Target’s opening brief states that Ty
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`3 The “Limitation of Copyright Claim” includes space for the applicant to list the prior
`works, including “Material excluded from this claim” and the “Previous registration and
`year” for that material. See [99-1] at 65 (listing registration and years for Ty’s Princess and
`Patsy products in its supplemental registration for Rainbow).
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`adopted the toy owl’s colors, [94] at 6, but its reply brief indicates that Rainbow
`adopted its fabric, [104] at 1. Some of Warner’s deposition testimony appears to
`suggest that Rainbow used the toy owl’s colors. [94-1] at 40. But the court lacks
`any other evidence suggesting that Ty “based” Rainbow on the toy owl or
`“incorporated” the toy owl into its design. Further, Target has not demonstrated
`that, whatever the relationship between Rainbow and the toy owl, Ty was obligated
`to disclose it to the Copyright Office and Ty’s failure to do so rendered its
`application inaccurate. Thus, the court cannot conclude that Ty’s omission of the
`toy owl from Rainbow’s registration makes the registration inaccurate.
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`Target’s final argument also does not establish that Ty’s application was
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`inaccurate. Target alleges that Ty’s supplemental registration is inaccurate
`because it claims that Rainbow contains new material, despite differing from
`preexisting works in color alone. Target points to Ty Warner’s deposition testimony
`that he instructed Star Ace, Ty’s manufacturer, to “use the colors” from a previous
`copyrighted toy owl and “apply that to Patsy.” [94-1] at 40. But Ty cites to other
`deposition testimony that suggests that Ty used different colors and different types
`of fabric material. Warner testified that he “gave [Rainbow] different fabric. . . .
`[and] different colors.” [94-1] at 28. Ty’s Vice President of Management and
`Information Systems, Christopher Johnson, testified at his deposition that “the
`coloring is the—is the major difference, the material and the coloring.” [94-1] at 69.
`Johnson also testified that Rainbow’s “supplementary application introduces the
`new material and any of the changes” and that Ty filed the supplementary
`registration to identify Rainbow’s “different material.” Id. at 57–58. Given the
`Compendium’s capacious definition of “sculpture,” the court cannot conclude on the
`present record and briefing that Ty inaccurately described Rainbow’s fabric and
`coloring changes as “sculpture” in its application. See Compendium § 618.4(C).
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`The Copyright Board’s decision in Robbins does not suggest otherwise.
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`In Robbins, the Copyright Office considered an applicant’s second request for the
`registration of five three-dimensional sculptural works. [153-1]. The Copyright
`Office granted registration for three works, but denied registration for the other
`two. For “Bear Rug Claraloo Variation 16,” the Board was “unconvinced that the
`change in faux fur color and texture is enough to render the Work a copyrightable
`derivative work.” [153-1] at 9.
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`Although Robbins involves somewhat similar facts, it does not by itself
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`dictate whether Rainbow’s registration contains inaccuracies. First, Robbins and
`this case involve distinct questions. Robbins concerned whether a toy merited
`separate copyright registration. The relevant question here is the accuracy of Ty’s
`representations in its application to register Rainbow. Undoubtedly these questions
`are related. But this case, unlike Robbins, involves § 411(b)(2), and the appropriate
`balance of “the Copyright Office’s statutory right to weigh in on the materiality of a
`knowing misrepresentation in an application for copyright registration, on the one
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`Case: 1:18-cv-02354 Document #: 212 Filed: 09/21/22 Page 7 of 7 PageID #:1981
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`hand, against the district court’s ‘inherent power to control its own docket and to
`prevent abuse in its proceedings,’ on the other.” Palmer/Kane, 188 F. Supp. 3d at
`349. Mindful of the Seventh Circuit’s instruction to “be wary of” § 411(b)(2) and to
`permit its use only “when necessary,” the court concludes that Target has not shown
`that Ty’s Rainbow registration was inaccurate. DeliverMed, 734 F.3d at 625.
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`Second, decisions like Robbins do not have precedential effect. “A decision
`issued by the Review Board has no precedential value, nor is any decision binding
`upon the Board in any other appeal.” Compendium § 1704.2.
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`Finally, based on the present record, Robbins is factually distinguishable
`because Bear Rug Claraloo Variation 16 contained less substantial changes than
`Rainbow. The Copyright Office noted that Bear Rug Claraloo Variation 16’s “single
`change” was its use of “grey ‘plush minky fur’” instead of “white ‘long exaggerated
`faux fur.’” [153-1] at 9. The Copyright Office also noted that “changing one color is
`not a copyrightable alternation.” Id. (citing 37 C.F.R. § 202.1(a); Compendium of
`U.S. Copyright Practices § 906.3). Here, however, the record indicates that
`Rainbow utilized a variety of different colors and a fabric change. [99] at 2–3
`(depicting “different type and color of materials” between Princess, Patsy, and
`Rainbow)). And as Warner described the evolution from Princess to Patsy to
`Rainbow during his deposition: “I gave it different fabric. All right. I gave it
`different colors . . . . Poodles aren’t this color in real life. . . . Well, poodle[s] aren’t -
`- you don’t see poodles in rainbow colors. You see poodles, you know, black and
`white, you know, your standard dog, brown, apricot, right? But to see a rainbow
`colored poodle is something that only fantasy could dream up.” [94-1] at 28. Ty
`characterizes Rainbow’s design as an “idiosyncratic combination of uncommon
`colors on the ear tips, top of the head, upper body, tip of the tail, and feet, combined
`with shorter, light pink fabric on the remaining parts of the toy.” [153] at 5.
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`Accordingly, Target has not shown that Ty’s application contained any
`inaccuracies. The court therefore need not address whether Target demonstrated
`that Ty had knowledge of any inaccuracies.
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`CONCLUSION
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`For these reasons, Target’s motion is denied.
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`Date: September 21, 2022
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`/s/ Martha M. Pacold
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`7
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