Varsity Brands, Inc. v. Star Athletica, LLC, Case No. 14-5237, 2015 WL 4934282 (6th Cir. Aug. 19, 2015).

Addressing a subtle issue of copyright law that has perplexed other district and appeals courts, the U.S. Court of Appeals for the Sixth Circuit recently articulated a multistep analysis to determine whether a two-dimensional graphic design is a separable part of a useful article and therefore eligible for copyright protection.

Background

Varsity Brands, Inc. (Varsity) designs and sells cheerleader uniforms that include a variety of stripes, chevrons, zigzags, curves, stripes, color blocks, and other graphical elements. Varsity sued Star Athletica, LLC (Star) in the U.S. District Court for the Western District of Tennessee, alleging that the defendant’s competing cheerleader attire infringed Varsity’s registered copyrights for the product designs. The district court granted Star’s motion for partial summary judgment that Varsity’s copyright registrations were invalid, because the graphic elements were not physically or conceptually separable from the utilitarian function of the cheerleader uniforms they adorned. Varsity appealed and, in a 2-1 decision, the Sixth Circuit reversed.

I. Copyright Registrations Entitled To Skidmore Deference.

Circuit Judge Karen Nelson Moore wrote the court’s majority opinion. Prior to considering the merits of Varsity’s appeal, the court first considered the degree of deference that a court should give the U.S. Copyright Office’s decision to grant a copyright registration. Under some circumstances, the issuance of a registration creates a presumption of validity. 17 U.S.C. § 410(c). The court concluded, however, that the Copyright Office’s determination of registrability is not akin to an agency’s promulgation of rules having the power of law, which are afforded Chevron deference. Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Instead, the court ruled that the decision to register a copyright is entitled to the less-substantial Skidmore deference. Skidmore v. Swift & Co., 323 U.S. 134 (1944). Under Skidmore, the amount of deference afforded a decision depends on the thoroughness evident in the Copyright Office’s consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking the power to control. Slip op. at *7, quoting United States v. Mead Corp., 533 U.S. 218 (2001). The court ruled that the district court erred in failing to afford sufficient deference to the Copyright Office’s decision to register the copyrights in Varsity’s designs.

II. Sixth Circuit Separability Analysis.

Next, the appeals court considered the appropriate test for determining whether a pictorial or graphic design on an article is copyrightable. Under the Copyright Act, a design involving a useful article is copyrightable as a pictorial, graphic, or sculptural work “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. Thus, where a design is part of or applied to a useful article, a two-step inquiry is required to determine copyrightability: (1) whether the design is a “design of a useful article;” and (2) if so, whether the design of the useful article “incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the [useful] article.” Slip op. at *8, quoting 17 U.S.C. § 101.

The second step of this analysis has been the subject of much controversy. The court identified nine separate tests for separability that have been adopted by various courts or proposed by commentators. After reviewing the leading cases, the court articulated the following analysis to be applied in the Sixth Circuit:

(1)  Is the design a pictorial, graphic, or sculptural work?

(2)  If the design is a pictorial, graphic, or sculptural work, then is it a design of a useful article — “an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information”?

(3)  What are the utilitarian aspects of the useful article?

(4)  Can the viewer of the design identify pictorial, graphic, or sculptural features separately from the utilitarian aspects of the useful article?

(5)  Can the pictorial, graphic, or sculptural features of the design of the useful article exist independently of the utilitarian aspects of the useful article?

Slip op. at *15. As to the last question, the court found the “objectively necessary” approach identified in Carol Barnhart, Inc. v. Economy Cover Corp., 773 F.2d 411 (2d Cir. 1985) to be useful: “If the pictorial, graphic, or sculptural features of the design of the useful article are ‘not required by [the useful article’s] utilitarian functions’ or are ‘wholly unnecessary to performance of the utilitarian function’ of the useful article, then the pictorial, graphic, or sculptural features are not dictated by the function of the useful article, and therefore can exist without the useful article.” Id.

III. Varsity’s Cheerleader Uniform Designs Are Separable, Thus Copyrightable

Applying its analysis to Varsity’s cheerleader uniforms, the majority of the Sixth Circuit panel held that the designs are copyrightable: (1) The combination of graphical elements is a “pictorial, graphic or sculptural” work. (2) The cheerleader garment is a useful article. (3) The utilitarian aspects of the article are to “cover the body, wick away moisture, and withstand the rigors of athletic movements.” (4) A viewer of the design can identify the graphic design elements, including chevrons, stripes, and color blocks, separately from the garment’s utilitarian aspects. This was especially true since the Varsity catalog allowed customers to order garments with different combinations of graphical elements. And, (5) the graphic designs can exist independently of the uniform’s utilitarian aspects. Among other things, the majority noted that “the interchangeability of Varsity’s various designs is evidence that the graphic design on the surface of the uniform does not affect whether the uniform still functions as a cheerleading uniform.” Slip op. at *18. As a result, the majority held that the Varsity graphic designs were separable from the functional aspects of the cheerleader garments, and thus were copyrightable. The majority reversed the partial summary judgment in favor of Star and remanded for further proceedings.

Circuit Judge David W. McKeague dissented in part from the result. Although he agreed with the court’s test for separability, he argued that the Varsity design was not separable because one of the utilitarian aspects of the cheerleader uniform was to identify the wearer as a member of a cheerleading squad. “Varsity’s designs would lose their ability to identify the wearer as a cheerleader without these aesthetic elements. Rather than simply giving the pieces a pretty face, Varsity’s designs enhance the garment’s utility. The claimed artistic choices thus cannot be separated from that function.” Dissent op. at *22 (quotation and citation omitted).