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The U.S. Court of Appeals for the Fourth Circuit recently affirmed a judgment in excess of $11 million entered against a furniture manufacturer found liable for copyright infringement. Universal Furniture International, Inc. v. Collezione Europa USA, Inc., 618 F.3d 417 (4th Cir. 2010). Following a bench trial in 2007, Collezione Europa USA, Inc. (“Collezione”) was found liable for, among other things, infringing the copyrighted furniture designs of Universal Furniture International, Inc. (“Universal”). See Universal Furniture Int'l, Inc. v. Collezione Europa USA, Inc., 2007 WL 2712926 (M.D.N.C. 2007). Subsequently, Collezione was ordered to pay Universal its entire gross revenues from sales of the infringing furniture ' a remedy provided for by the Copyright Act. See Universal Furniture Int'l, Inc. v. Collezione Europa USA, Inc., 2009 WL 367538 (M.D.N.C. 2009). Although the Fourth Circuit's judgment has not yet become final, unless it is reversed or overruled this opinion establishes, for the first time in that Circuit, certain significant principles of copyright law, as discussed below.
History of the Litigation
The story of this dispute begins at the Fall 2004 International Home Furnishings Market in High Point, NC. During that market, Universal learned that Collezione was displaying in Collezione's showroom certain furniture collections that were strikingly similar to two of Universal's leading collections, called “Grand Inheritance” and “English Manor” (collectively the “Collections”). Upon investigation, Universal's representatives became convinced that Collezione was displaying actual pieces from Universal's English Manor Collection in Collezione's showroom. Universal brought suit against Collezione under the Copyright Act for infringing Universal's copyrighted designs in the Collections, and under the Lanham Act and the North Carolina Unfair and Deceptive Trade Practices Act (the “UDTPA”) for reverse passing off. In 2005, the U.S. District Court for the Middle District of North Carolina denied Universal's request for a preliminary injunction barring Collezione's promotion and sale of Collezione's competing collections. Noting the relative sparsity of the preliminary injunction record, the Fourth Circuit affirmed the district court's denial of the preliminary injunction, agreeing with the determination that the designs compilations “likely were not conceptually separable from the furniture's utilitarian function.” Universal Furniture, 618 F.3d at 426.
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