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Silvertop Associates Inc. v. Kangaroo Manufacturing Inc.

United States Court of Appeals, Third Circuit

August 1, 2019

SILVERTOP ASSOCIATES INC., DBA Rasta Imposta
v.
KANGAROO MANUFACTURING INC., Appellant

          Argued April 3, 2019

          On Appeal from the United States District Court for the District of New Jersey (D.C. No. 1-17-cv-07919) District Judge: Honorable Noel L. Hillman

          Alexis Arena [Argued] Flaster Greenberg, Eric R. Clendening Flaster Greenberg Attorneys for Appellee

          David A. Schrader [Argued] Paykin Krieg & Adams Attorney for Appellant

          Before: CHAGARES, HARDIMAN, Circuit Judges, and GOLDBERG, District Judge. [*]

          OPINION

          HARDIMAN, CIRCUIT JUDGE.

         This interlocutory appeal involves the validity of a copyright in a full-body banana costume. Appellant Kangaroo Manufacturing Inc. concedes that the banana costume it manufactures and sells is substantially similar to the banana costume created and sold by Appellee Rasta Imposta. See infra Appendix A. Yet Kangaroo claims that Rasta cannot hold a valid copyright in such a costume's "pictorial, graphic, or sculptural features." 17 U.S.C. § 101. This dispute presents a matter of first impression for our Court and requires us to apply the Supreme Court's recent decision in Star Athletica, L.L.C. v. Varsity Brands, Inc., 137 S.Ct. 1002 (2017). We hold that, in combination, the Rasta costume's non-utilitarian, sculptural features are copyrightable, so we will affirm the District Court's preliminary injunction.

         I

         This dispute stems from a business relationship that went bad. In 2010, Rasta obtained Copyright Registration No. VA 1-707-439 for its full-body banana costume. Two years later, Rasta began working with a company called Yagoozon, Inc., which purchased and resold thousands of Rasta's banana costumes. Yagoozon's founder, Justin Ligeri, also founded Kangaroo and at all relevant times was aware of Rasta's copyright registration in the banana costume. After the business relationship between Rasta and Yagoozon ended, Rasta's CEO, Robert Berman, discovered Kangaroo selling a costume that resembled his company's without a license.

         Rasta sued Kangaroo for copyright infringement, trade dress infringement, and unfair competition. After settlement discussions were unsuccessful, Rasta moved for a preliminary injunction and Kangaroo responded by moving to dismiss. The District Court granted the motion for a preliminary injunction and explained its reasons for doing so in a thorough opinion. See Silvertop Assocs., Inc. v. Kangaroo Mfg., Inc., 319 F.Supp.3d 754 (D.N.J. 2018). It also dismissed the unfair competition count. Kangaroo appealed, but because the District Court had not entered an order detailing the injunction's terms, we granted the parties' motion to remand for the limited purpose of entering a corrected order. The District Court amended its order, and the injunction is now ripe for review on appeal.

         II

         The District Court had jurisdiction under 28 U.S.C. §§ 1331 and 1338(a). We have jurisdiction under 28 U.S.C. § 1292(a)(1). We review the District Court's conclusions of law de novo and its ultimate decision to grant the preliminary injunction for abuse of discretion. Child Evangelism Fellowship of N.J. Inc. v. Stafford Twp. Sch. Dist., 386 F.3d 514, 524 (3d Cir. 2004).[1]

         III

         Kangaroo claims the injunction should not have issued because Rasta is not likely to succeed on the merits of its copyright infringement claim.[2] According to Kangaroo, Rasta does not hold a valid copyright in its banana costume. Whether Rasta's copyright is valid is a question of law, which makes our review plenary. See Masquerade Novelty, Inc. v. Unique Indus., 912 F.2d 663, 667 (3d Cir. 1990).[3] And we must remain "cognizant of the Supreme Court's teaching that ...


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