Georgia Lee Miller Roulo, Cross-Appellant v. Russ Berrie & Co., Inc., Cross-Appellee

Trade dress protects a product’s total image, including its size, color combinations, graphics, packaging, and related visual features. Although individual components such as stripes, handwriting, and dots may be common in greeting cards, a distinctive combination of otherwise ordinary features can receive protection.

Roulo offered evidence that no comparable card in a major Hallmark collection used the same combination of design features. She also showed that Berrie regarded the line as unusually valuable and distinctive, as reflected in its unusually high royalty arrangement and its testimony comparing Roulo to prominent greeting-card designers.

Because the jury could find the FS trade dress inherently distinctive, Roulo did not have to prove secondary meaning through consumer surveys or proof that consumers identified the design specifically with her name. The relevant question was whether consumers associated the design with a single source, not whether they knew that source’s identity.

The card lines had strikingly similar overall appearances: identically sized and priced single-face cards, cream or beige textured paper, brown cursive messages using ellipses, colored stripes flanking the message, and similar four-sided racks displaying 32 cards in coordinated color schemes.

The cards were inexpensive impulse purchases, sold through the same retail channels. Those conditions reduced the likelihood that consumers would carefully inspect small differences, such as TY’s butterfly, lack of foil stripes, brass-toned rack, or Berrie identification on the header.

Evidence also supported an inference of intentional imitation. After learning that Roulo would not renew the contract, Berrie set out to develop a replacement line that would fit the former FS display and use verses “a la Feeling Sensitive.” Deliberate copying, combined with the strength and visual uniqueness of the FS presentation, supported the jury’s confusion finding even without evidence of actual confusion.

Under the Lanham Act, two consecutive years of nonuse create prima facie evidence of abandonment. But abandonment requires discontinued use with an intent not to resume use, and the court read that phrase to require evidence of an intent not to resume—not an affirmative requirement that the owner prove a concrete plan to resume within a particular time.

The presumption shifts only the burden of producing rebuttal evidence to the trademark or trade-dress owner; the alleged infringer retains the ultimate burden of persuasion. The district court therefore correctly rejected Berrie’s proposed instruction that would have placed the burden of proof on Roulo.

Roulo testified that she would have resumed marketing FS cards had Berrie not introduced TY cards, and her activity at the 1980 Chicago Gift Show supported her claimed interest in continued greeting-card marketing. Although the evidence on both sides was limited, the jury was entitled to credit Roulo’s account and find no abandonment.

Copyright does not protect isolated ideas or commonplace design elements, such as beige paper, cursive handwriting, brown ink, ellipses, stripes, card size, or the single-face card format. But it can protect an original selection, coordination, and arrangement of those elements.

The court applied the ordinary-observer approach, focusing on the works’ total concept and feel while still recognizing that only protected expression may be appropriated. The district court properly instructed the jury that the individual common features were not copyrightable but that their original arrangement or layout could be protected.

Berrie did more than use general greeting-card conventions. It selected a composition closely resembling the FS cards: similar paper, similar handwriting and ink, striped borders on both sides of the verse, and nearly identical overall layout. Coupled with evidence that Berrie had patterned TY after FS, that similarity supported the jury’s verdict.

Berrie’s proposed expert, a copyright lawyer, would have advanced the legal view that only the card verses, rather than the visual design as a whole, were protected. But the scope of copyright protection and the proper legal instructions were questions for the court, not matters requiring expert testimony.

The district court correctly instructed the jury on the distinction between unprotected individual components and a potentially protected original arrangement. Because greeting cards may be protected as literary and pictorial compositions, the expert’s proposed testimony was unnecessary.

Although copyright and trade dress are distinct legal theories and the jury rendered separate liability findings, the protected material substantially overlapped here: the distinctive overall visual arrangement of the FS cards. The court therefore found no reversible error in the district judge’s observation that, on these facts, the protected copyright material and trade dress were the same thing.

Both the Copyright Act and the Lanham Act permit recovery measured by the infringer’s profits. Under either statute, Roulo had to establish Berrie’s gross revenues, and Berrie bore the burden of proving deductible expenses and any appropriate allocation of profits to noninfringing factors. A separate damages verdict for each theory would risk duplicative recovery rather than provide a necessary additional remedy.

The Lanham Act authorizes an award of an infringer’s profits subject to equitable principles. It does not expressly require proof of actual damages, direct competition, actual confusion, or willfulness before profits may be awarded.

Profit awards can serve several purposes, including preventing unjust enrichment, deterring infringement, and compensating the trademark owner. The Seventh Circuit emphasized that a central function of Lanham Act remedies is to make infringement unprofitable.

The evidence of purposeful imitation and substantial similarity made a profits remedy equitable even if Roulo’s own actual losses were smaller than Berrie’s gains. The district court therefore did not abuse its discretion by allowing the jury to consider Berrie’s profits.

Roulo presented evidence of approximately $5.9 million in TY sales receipts and direct production costs of about $945,000. Berrie claimed lower incremental profits and argued that only a small portion of profits was attributable to infringement, but it bore the burden of substantiating deductions and apportionment.

The jury could discount Berrie’s proof because key expense documentation had been lost, some claimed administrative expenses were not shown to be variable costs, and fixed costs generally may not be deducted in calculating profits. The jury was not required to accept unsupported accounting assumptions.

An infringer is entitled to apportionment only when the evidence provides a fair basis for dividing profits between infringing and noninfringing sources. Because Berrie copied the cards’ total concept and feel rather than a narrow isolated feature, the jury could decline Berrie’s minimal allocation. Its $4.3 million award, less than Roulo’s proposed maximum, also suggested that it made some deductions or allocation.

Laches requires the defendant to prove the plaintiff’s knowledge of the infringement, an inexcusable and unreasonable delay, and prejudice caused by detrimental reliance on that delay. A delay of roughly two years after learning of infringement is rarely sufficient by itself.

Roulo explained that she delayed while investigating the facts and assessing the merits of her claim. Berrie did not identify reliance-based prejudice beyond its continued marketing of TY cards.

Berrie had begun promoting TY before it could have relied on Roulo’s silence or supposed acquiescence. The jury could therefore conclude that Berrie did not prove the necessary detrimental reliance and prejudice.

Under the Lanham Act, fees are available only in exceptional cases, which the Seventh Circuit had interpreted to require willful infringement. The district court reasonably concluded that Berrie tried to make TY different from FS, even though those differences ultimately did not avoid infringement.

The Copyright Act permits discretionary fee awards and does not invariably require willfulness. But the district court could consider Berrie’s lack of flagrant conduct, the large profits award, and the fact that additional fees were unnecessary either to compensate Roulo or to deter Berrie.

Roulo already received a substantial award that exceeded what she might have earned through a renewed agreement or independent sale of FS cards. On these facts, an additional fee award could reasonably be viewed as an unwarranted windfall rather than a necessary remedial measure.