This new opinion from the Ninth Circuit Court of Appeals on a quirky topic offers some insights on copyright law generally. Inhale, a seller of hookah water containers, sued a competitor, Starbuzz Tobacco, for selling similar-looking containers. Inhale, Inc. v. Starbuzz Tobacco, Inc., 739 F.3d 446 (9th Cir. 2014). For those unfamiliar with hookahs, the Ninth Circuit provided a helpful footnote: "A 'hookah' is a device for smoking tobacco. It contains coals that cause the tobacco to smoke. A user's inhalation through a tube causes the smoke to travel through water, which cools and filters the smoke, before it reaches the user. The water is held in a container at the base of the hookah." Two points from this decision stand out.
First, the district court had granted summary judgment to the defendant on the basis that the hookah water container was not copyrightable under the "useful article" doctrine. As the product at issue was a water container, Inhale conceded it was a useful article. Protection for "the design of a useful article" is available "only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article." 17 U.S.C. §101. Inhale argued that its design was "conceptually separable" and attempted to distinguish prior authority by arguing that its container shape was "distinctive." Both the district court and the Ninth Circuit reviewing de novo rejected these arguments.
In particular, the Ninth Circuit considered the Copyright
Office's opinion on the topic. Administrative deference, in
which the court will not disturb an agency's interpretation
"if the statute is silent or ambiguous" and "the
agency's answer is based on a permissible construction of the
statute" (See Chevron, U.S.A., Inc. v. Natural
Res. Def. Council, Inc., 467 U.S. 837 (1984)), did not apply
because the materials were an internal manual and opinion letter.
Instead, the proper level of deference was "only to the extent
that those interpretations have the 'power to
persuade,'" quoting Christensen v. Harris Cnty.,
529 U.S. 576 (2000). The Copyright Office's determination that
"whether an item's shape is distinctive does not affect
separability" was "persuasive" because "[t]he
shape of the alleged 'artistic features' and of the useful
article are one and the same," citing a letter from Nanette
Petruzzelli, Assoc. Register, U.S. Copyright Office, to Jeffrey H.
Brown, attorney for MSRF, Inc., Re: Fanciful Ornamental Bottle
Designs 1–9, Control No. 61-309-9525(S), April 9, 2008;
Compendium of Copyright Office Practices II
§ 505.03.
Judge Bea wrote separately to state that while he joined in the result, he did not think the Court needed to look to agency materials because "[t]he text of 17 U.S.C. § 101 does not suggest that 'distinctiveness' is an element of separability." Nevertheless, this opinion serves as a reminder that the Copyright Office's opinion letters and manual can be valuable resources in decision-making for both businesses and judges.
Second, the Ninth Circuit affirmed the district court's award of $111,993 in attorneys' fees to the defendant, and further tacked on fees for defending the appeal. In awarding fees, the district court noted "Starbuzz's 'total success on the merits' and the need for deterrence of 'similarly frivolous claims against innocent Defendants.'" The Ninth Circuit approved of this analysis as "wellfounded in the record and...in keeping with the purposes of the Copyright Act." Future successful defendants are sure to point to this opinion in arguing for fees, especially to quote the court's conclusion that "[a] successful defense furthers the purposes of the Copyright Act just as much as a successful infringement suit does."
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