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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 6, 2003 Decided June 20, 2003
No. 02-7003
LESLIE ATKINS, D/B/A LESLIE ATKINS COMMUNICATIONS,
APPELLANT
v.
BENSON J. FISCHER, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 98cv00800)
C. Joel Van Over argued the cause for appellant. With him
on the briefs was David J. Butler. Edward A. Pennington
entered an appearance.
Richard E. Schimel argued the cause for appellee. With
him on the brief was Michael J. Budow. Stanley H. Gold-
schmidt entered an appearance.
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
Before: EDWARDS, SENTELLE and HENDERSON, Circuit
Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
SENTELLE, Circuit Judge: Appellant Atkins brought this
action against defendant-appellees alleging copyright in-
fringement in the commercial use of six-pack carrier and
bottle designs for a product called ‘‘Redneck Beer,’’ along
with a claim for violation of the Lanham Act. The district
court granted summary judgment in favor of appellees. Be-
cause we find that there are substantial issues of material
fact, we vacate the judgments in favor of defendants, and
remand for further proceedings.
I
Appellant Atkins is the sole proprietor of Leslie Atkins
Communications, an advertising, marketing, and public rela-
tions firm. Atkins offers services aimed at developing brand
identities for products in various businesses. Appellee Fisch-
er is President of the Fischer Organization, Inc., a real estate
firm. In 1990 or 1991, he originated the concept of a product
called ‘‘Redneck Beer.’’ Fischer contacted several brewing
companies in an effort to find a means of producing and
marketing his proposed product. He was unsuccessful at
first.
Fischer then decided that he would attend a beer conven-
tion in Las Vegas in hopes of finding a joint venture partner
or a manufacturing partner with whom he could arrange to
produce and market Redneck Beer. Fischer contacted sever-
al graphic artists in hopes of obtaining rough preliminary
sketches or drawings of a potential packaging design for
Redneck Beer to use as a sales tool at the convention.
Fischer ultimately entered into an agreement with Atkins
by which Atkins would create designs for Redneck Beer.
The parties executed two formal agreements, a ‘‘Project
Order Agreement’’ and a ‘‘Terms & Conditions Agreement’’
on September 8, 1993. Under the terms of the Project Order
Agreement, Fischer and Atkins agreed to two stages of work:
3
stage one involved the production of two color illustrations or
paintings, one of a bottle of Redneck Beer and one of a six-
pack carrier, with an artist’s rendering of logo labels; stage
two involved final logo development and production of cam-
era-ready art. The fees for the two stages of work were
$2000 and $4500, respectively. Both parties understood that
neither party was obligated to proceed with the second stage
of the agreement. The Terms and Conditions Agreement
contained the following provision: ‘‘Ownership and possession
of all underlying creative work developed and supplied by
Leslie Atkins Communications shall remain the exclusive
property of Leslie Atkins Communications; creative work
includes, but is not limited to, sketches, copy, photographs,
illustrations, type, and mechanical art boards.’’ Atkins testi-
fied at deposition that she believed that this provision allowed
her to retain her rights to her creative work and to set a price
for use of that creative work. Atkins also testified that she
charged Fischer less than she otherwise would have, with the
understanding that she would be able to obtain royalties for
the use of her work.
Following the execution of the agreements, Atkins subcon-
tracted with a graphic artist, Tom Gaadt, to prepare initial
sketches of possible Redneck Beer designs. Under Atkins’
direction, Gaadt produced several preliminary sketches bear-
ing ‘‘hillbilly or country-themed design elements suggestive of
the beer’s Redneck name.’’ Atkins v. Fischer, Civ. No. 98–
0800, slip op. at 4 (D.D.C. Nov. 30, 2001). Atkins showed
these sketches to Fischer, and Fischer selected a design
featuring a red bandana at the bottle’s neck and a body label
of a blue jeans pocket with a red bandana hanging from the
pocket. Gaadt produced new illustrations of the selected
design. On September 28, 1993, shortly before Fischer left
for the Las Vegas convention, Atkins delivered the new
illustrations to Fischer. On the date of delivery, appellant
sent a note to appellees that stated ‘‘I’m glad we’re finally
going to design a look for Red Neck Beer.’’
After returning from the convention, Fischer requested
that Atkins make some modifications to the design, including
the addition of some colors and a ‘‘tab label’’ on the blue jean
4
pocket with ‘‘Fischer’’ printed on it. Atkins had these modifi-
cations made and delivered the revised illustrations to Fisch-
er on October 3, 1993. Fischer paid Atkins in full for the first
phase of the contract.
The second phase of the contract was never reached be-
cause Fischer declared that he was unhappy with Atkins’
designs. In January of 1995, appellee Fischer Brewing Com-
pany was incorporated in Washington, DC. By March of
1995, appellees had engaged a number of different advertising
firms to work on designs for the Redneck Beer bottle label
and six-pack carrier. On March 31, 1995, appellees entered
into a manufacturing services agreement with the Stroh
Brewing Company. A provision in the agreement with Stroh
required Fischer Brewing to warrant that it was the exclusive
owner or licensee of all trademarks and copyrights which it
would use and authorize Stroh to use in manufacturing and
marketing the product. On advice from counsel, Fischer
sought execution of a work-for-hire agreement by Atkins.
Atkins refused to sign the agreement. On April 3, 1995,
Atkins filed a copyright registration for her designs.
By August of 1995, Fischer and Fischer Brewing Company
had registered the name ‘‘Redneck’’ with the U.S. Patent and
Trademark Office and had begun selling and distributing
Redneck Beer. They marketed Redneck Beer with labels
and containers bearing designs by Art Advertising, Inc. that
were marked by a label and placed in six-pack carriers
featuring a design of a blue jeans pocket and a red bandana.
In March of 1998, Atkins filed a complaint against appel-
lees, alleging copyright infringement and false designation of
origin under section 43(a) of the Lanham Act, 15 U.S.C.
§ 1125(a). Appellees filed an answer that included several
affirmative defenses. Over two years later and after the
close of discovery, in December of 2000, appellees moved to
amend their answer and assert an additional defense—im-
plied license. The district court granted the motion and
reopened discovery. Atkins thereafter filed a motion for
summary judgment.
5
On November 30, 2001, the district court denied Atkins’
motion for summary judgment and sua sponte granted sum-
mary judgment for appellees. The court concluded that
appellees had an implied nonexclusive license to use Atkins’
work in the commercial production of Redneck Beer. The
court also held that the six-pack carrier design appellees
actually used was not substantially similar to Atkins’ designs.
In addition, the court, without explanation, dismissed Atkins’
Lanham Act claim. Atkins appealed, arguing, among other
things, that the district court erred in holding that appellees
had an implied license to use Atkins’ work in the commercial
production of Redneck Beer; that the district court erred in
concluding that the six-pack carrier design used by appellees
was substantially similar to Atkins’ six-pack carrier design;
and that the district court erred in dismissing the Lanham
Act claim.
II
A. Implied License
Section 204 of the Copyright Act invalidates attempted
transfers of copyright ownership made without a writing. 17
U.S.C. § 204(a) (2000). However, section 101 of the Act
excludes nonexclusive licenses from the definition of ‘‘transfer
of copyright ownership.’’ 17 U.S.C. § 101. A nonexclusive
license may be granted orally or arise from the conduct of the
parties. Nelson–Salabes, Inc. v. Morningside Development,
LLC, 284 F.3d 505, 514 (4th Cir. 2002); Johnson v. Jones, 149
F.3d 494, 500 (6th Cir. 1998); Lulirama Ltd., Inc. v. Axcess
Broad. Serv., 128 F.3d 872, 879 (5th Cir. 1997); IAE, Inc. v.
Shaver, 74 F.3d 768, 775 (7th Cir. 1996); Effects Assocs., Inc.
v. Cohen, 908 F.2d 555, 558 (9th Cir. 1990). Such an implied
license will arise where ‘‘(1) a person (the licensee) requests
the creation of a work, (2) the creator (the licensor) makes
the particular work and delivers it to the licensee who re-
quested it, and (3) the licensor intends that the licensee-
requestor copy and distribute his work.’’ Lulirama, 128 F.3d
at 879 (quoting IAE, 74 F.3d at 776). Because the existence
of an implied license is an affirmative defense to infringe-
6
ment, the alleged infringers have the burden of establishing
an implied license. IAE, 74 F.3d at 775.
The only disputed issue in this phase of the case is whether
Atkins intended Fischer to copy and distribute her work.
Atkins acknowledges that she delivered her designs to Fisch-
er before the Las Vegas beer convention with the intent that
Fischer would use her designs as a sales tool at the conven-
tion, but she argues that Fischer’s actions in marketing the
product thereafter exceed the scope of his license to use the
designs. MacLean Assoc. v. Wm. M. Mercer–Meidinger–
Hansen, Inc., 952 F.2d 769, 779 (3d Cir. 1991) (‘‘[T]he licensor
can still bring suit for copyright infringement if the licensee’s
use goes beyond the scope of the nonexclusive license.’’).
Atkins argues that she did not intend for Fischer to use her
designs as anything more than a sales tool at the convention
and that, at a minimum, a genuine issue of material fact exists
with regard to the intent of the parties. Appellees argue that
they hold an implied license to use the artwork from the first
stage of the agreement in completing the second stage be-
cause the designs from the first stage were indisputably
intended to be used in the second stage. Appellees further
argue that the note from Atkins to Fischer on the date of
delivery of the first-stage designs supports their theory that
the parties intended the first-stage designs to be used by
Fischer in the commercial production of Redneck Beer.
We review these grants of summary judgment ‘‘de novo,
affirming only if there is no genuine issue as to any material
fact and the moving party is entitled to judgment as a matter
of law.’’ Republican National Committee v. Taylor, 299 F.3d
887, 890 (D.C. Cir. 2002). The record before us presents a
genuine issue of fact on the material issue of the intent of the
parties. As the district court recognized, the two-stage writ-
ten agreement between the parties sheds little light on
whether completion of the first stage of the agreement im-
plied a grant of a nonexclusive license to use Atkins’ copy-
righted designs for commercial production or merely as a
sales tool at the convention. Atkins v. Fischer, Civ. No. 98–
0800, slip op. at 22 (D.D.C. Nov. 30, 2001) (noting that the
agreement between the parties ‘‘does not eliminate the possi-
7
bility of an oral or implied grant of a nonexclusive license’’).
The existence of the second stage of the agreement suggests
that the parties contemplated that the designs, created during
the first stage, would be used in the second stage to create
camera-ready art suitable for commercial production. Never-
theless, there is a genuine issue as to whether the agreement
implies the grant of a nonexclusive license to Fischer to use
the bottle and six-pack carrier designs from the first-stage for
subsequent commercial production without Atkins’ coopera-
tion and further compensation. This is especially so consider-
ing the relatively small price Fischer paid for completion of
the first stage of the agreement. Arguably, Atkins’ accep-
tance of the relatively small payment of $2000 for the use of
her copyright designs supports a finding that the intent of the
parties was that only a limited license be conveyed. This
factor distinguishes the present case from Effects, 908 F.2d
555, upon which the district court relied in concluding that
Atkins had granted Fischer an implied license to use her
designs for commercial production. In Effects, the Ninth
Circuit placed significant weight on the fact that the licensee
paid almost $56,000 for seven shots of special effects footage
for a movie, explaining that holding that the licensor did not
convey to the licensee a license to use the footage in the
movie ‘‘can’t be squared with the TTT almost $56,000 [paid] for
this footage.’’ Id. at 559. The $2,000 in the present case,
nothing else appearing, will not support the same sort of
reasoning.
The parties’ conduct similarly fails to illuminate this issue.
Certainly, Atkins’ delivery of her designs to Fischer just
before the Las Vegas beer convention is consistent with an
intent that Fischer would use them as a sales tool at the
convention, but does not conclusively establish whether At-
kins intended for appellees to use them further in the com-
mercial production of Redneck Beer without additional com-
pensation. Likewise, the statement in Atkins’ note delivered
to Fischer on the date of the delivery of the first-stage
designs (‘‘I’m glad we’re finally going to design a look for Red
Neck Beer’’) leaves the issue open to argument. That the
parties were ‘‘finally going to design a look for Red Neck
8
Beer’’ does not indicate one way or another whether this
‘‘look’’ would be used simply as a sales tool or in commercial
production. Moreover, the statement suggests that the
‘‘look’’ to which Atkins refers is not the product of the first
stage of the agreement because the statement indicates that
the ‘‘look’’ to which she refers is something that the parties
are ‘‘going to design’’ in the future. Thus, a genuine issue of
material fact exists as to the question of intent, rendering
summary judgment inappropriate.
In addition, Atkins testified that Fischer told her several
times that ‘‘[t]here would be plenty of money later on’’ and
that Fischer talked her into reducing her prices for her work
because of his assurances that she would ‘‘make a lot of
money on this.’’ Such statements are appropriate evidence in
determining whether an implied nonexclusive license arises
from the conduct of the parties, Foad Consulting Grp. v.
Azzalino, 270 F.3d 821, 833–34 (9th Cir. 2001) (Kozinski, J.,
concurring), and further expose the genuine issue of material
fact that requires jury deliberation. Therefore, summary
judgment was inappropriate and the implied license issue
should have been submitted to trial.
B. Substantial Similarity
The Copyright Act defines derivative works as those
‘‘based upon’’ the copyrighted work. 17 U.S.C. § 101.
Courts interpret the Act to mandate that derivative work that
is ‘‘substantially similar’’ to the original work upon which it is
based is an infringement. E.g., Sturdza v. United Arab
Emirates, 281 F.3d 1287 (D.C. Cir. 2002). Because substan-
tial similarity is an extremely close question of fact, summary
judgment has traditionally been frowned upon. Id. at 1296.
The question is whether ‘‘an average lay observer would
recognize the alleged copy as having been appropriated from
the copyrighted work.’’ Hamil America, Inc. v. GFI, 193
F.3d 92, 100 (2d Cir. 1999). Judge Learned Hand previously
described the test as whether the ordinary observer, ‘‘unless
he set out to detect the disparities, would be disposed to over
look them, and regard their aesthetic appeal as the same.’’
9
Id. (quotation omitted). When determining similarity, courts
are to look at the ‘‘total concept and feel’’ of the designs. Id.
at 102. When comparing the designs, it is not sufficient to
dissect separate components and dissimilarities. The original
way that the author ‘‘selected, coordinated, and arranged the
elements’’ of her work is the focus of the court. Id. at 103.
Although all derivative works have differences from the origi-
nal, it is the similarities, rather than the differences, that
inform whether the ‘‘total concept and feel’’ of the works and
their ‘‘aesthetic appeal’’ is the same. Knitwaves, Inc. v.
Lollytogs Ltd., 71 F.3d 996, 1004 (2d Cir. 1995).
In ruling against Atkins, the court found that Atkins’ six-
pack carrier design and the challenged six-pack carrier design
‘‘merely reflect a similar idea or concept and are not suffi-
ciently substantial to raise a genuine issue of material fact
with regard to copying.’’ Atkins v. Fischer, Civ. No. 98–0800,
slip op. at 31 (D.D.C. Nov. 30, 2001). While we cannot say
that the district court was wrong in its conclusion, it is not
apparent that the record before the court was sufficient to
have decided as a matter of law rather than submitting to a
trier of fact the determination of substantial similarity of the
total concept necessary to the resolution of this issue.
The Second Circuit in Knitwaves, 71 F.3d 996, provides a
working example of the adjudication of this sort of copyright
infringement case. In that case, Knitwaves filed an action
against Lollytogs, alleging infringement of Knitwaves’ copy-
righted sweater designs. Despite numerous differences cited
by Lollytogs, the court found that the two sweater designs
had the same ‘‘total concept and feel.’’ For example, Lolly-
togs had pointed out that its ‘‘leaf’’ sweater used a five-leaf
design of leaf and acorn appliques made of felt with two pairs
of leaves above and one leaf below, whereas Knitwaves used
an eight-leaf design of leaf appliques made of puffy polar
fleece and placed in three rows. In addition, the leaves were
arranged in different patterns. 71 F.3d at 1004. The Second
Circuit explained that despite the differences ‘‘in detail’’
‘‘requiring considerable ink to describe,’’ the differences ‘‘do
little to lessen a viewer’s overwhelming impression that the
10
TTT Lollytogs sweaters are appropriations of the Knitwaves
sweaters.’’ Id.
In the present case, Atkins maintains that the court focused
too much on the differences in detail and too little on the
similarity in concept and feel:
In the Atkins Design, the words ‘‘Redneck Beer’’ appear
sprawled across a jean’s pocket and the red bandana
which hangs out of the pocket. In contrast, on the actual
carrier, the words ‘‘Redneck Beer’’ appear in a different
style of writing, are differently colored and are written
directly across the jeans pocket. Further, there is no
bandana hanging out of the jeans pocket depicted on the
label. While the red bandana does appear on the actual
carrier, it appears only on the top of the carrier, with the
white patterned detailing seemingly enlarged in compari-
son to the bandana on the Atkins carrier. The actual
carrier features different writing, located in different
places from that on the Atkins carrier. Lastly, the
actual carrier does not include any of the ‘‘suds’’ detailing
which appears on the Atkins carrier. In sum, the only
similarity between the two carriers is the fact that they
both feature blue-jeans material, a red bandana, and the
word ‘‘Redneck.’’
Atkins v. Fischer, Civ. No. 98–0800, slip op. at 31 (D.D.C.
Nov. 30, 2001) (internal citations omitted).
Atkins argues that a reasonable jury could find that the
differences in detail between the two designs do not lessen
the total concept and feel of similarity between the designs.
E.g., Sturdza, 281 F.3d at 1297 (reversing finding of nonin-
fringement where court overlooked similar expression of de-
sign concepts and the ‘‘overall look and feel’’ of the two
designs); Cavalier v. Random House, Inc., 297 F.3d 815, 827
(9th Cir. 2002) (the presence of some similarities and differ-
ences made the question unfit for summary judgment and
better left for the jury). We agree. Upon de novo review of
the record, while we are not prepared to say that the district
court’s conclusion of dissimilarity was incorrect, that is not
the test. This issue of substantial similarity in a copyright
11
infringement case ‘‘is customarily an extremely close question
of fact,’’ as to which ‘‘summary judgment has traditionally
been frowned upon.’’ Sturdza, 281 F.3d at 1296 (citations
omitted). Such a grant of summary judgment would be
appropriate only ‘‘if the works are so dissimilar as to protect-
able elements that no reasonable jury could find for the
plaintiff on the question of substantial similarity.’’ Id. at
1297. In conducting our de novo review under that correct
standard, we conclude that a reasonable jury could have
found for appellant on this issue, and we therefore must order
vacatur of the summary judgment.
C. Lanham Act
The district court did not explain why it dismissed Atkins’
Lanham Act claim. Accordingly, we cannot determine the
effect our reversal of summary judgment on the copyright
infringement claims has upon the Lanham Act claim. We
therefore remand that claim to the district court so it may
reconsider the claim in light of our decisions on the copyright
infringement claims.
III
The presence of material factual issues renders summary
judgment inappropriate for both the implied license issue and
the issue of substantial similarity between the six-pack carri-
ers. Accordingly, we reverse the grant of summary judg-
ment. We also vacate and remand the court’s dismissal of
Atkins’ Lanham Act claim to allow the court an opportunity
to reconsider that claim in light of our decision on the implied
license and substantial similarity issues.
So ordered.