New Jersey Federal Court Allows Toy Company To Bring Copyright Claim Against Rival For Infringing On The Design Of Its “ABC Shapes” Educational Playtime Rug

March 2, 2023

By: Carl L. Engel

On February 27, 2023, the U.S. District Court for the District of New Jersey, in the case Kev & Cooper LLC v. Gladwell Education LLC, allowed a toy company to proceed with claims that a rival had infringed on its copyright in the design of an educational and playtime rug for children.  The defendant had argued that the toy company did not have the right to enforce the design copyright, because the work was not created for it on commission or by an employee, but had been created independently by one of the toy company’s owners.  The court found the creator’s consent to the toy company’s enforcement of the copyright was sufficient, and illuminated the contours of the work-for-hire doctrine with its analysis.

Kev & Cooper LLC owns a portfolio of brands which includes a “KC Cubs” line of educational playtime rugs for infants.  In early 2016, Kev & Cooper’s co-owner, Omer Cuper, created an “ABC Shapes Rug,” which the company registered with the U.S. Copyright Office in 2018.  The Office issued a Certificate of Registration to Kev & Cooper, which identifies the company as the author and denotes that the rug design was a work made for hire.

On April 7, 2022, Kev & Cooper filed a lawsuit against Gladwell Education LLC, based on allegations that Gladwell had sold rugs bearing designs strikingly similar to the “ABC Shapes Rug,” thereby infringing on Kev & Cooper’s copyright.  Gladwell moved to dismiss the complaint against it, arguing that the rug design could not have been made by Mr. Cupor for hire by Kev & Cooper, because he was neither an employee nor a contractor of the company, and was instead its co-owner.  In opposition, a Kev & Cooper representative, an illustrator employed by the company, and Mr. Cuper each submitted affidavits stating that the “ABC Rug” had been designed and created with the understanding that it was a work made for hire by Kev & Cooper.

Under the U.S. Copyright Act, a work is “made for hire” when it is either “prepared by an employee within the scope of their employment,” or is “specially ordered or commissioned.”   When the creator makes a work for hire, the copyright transfers to whomever ordered or commissioned the work, rather than the creator.  Therefore, if someone infringes on the copyright of the work, the employer has the right to bring a lawsuit to enforce it, rather than the creator. 

The court sided with Kev & Cooper and Mr. Cupor, finding that, to the extent there was an issue with the transfer of the copyright, it was not for Gladwell to challenge.  In other words, because both Mr. Cupor (the creator) and Kev & Cooper agreed that the company bears the right to enforce the copyright, the court had no reason to disturb their arrangement based on someone else’s protest.

Accordingly, the court is allowing Kev & Cooper to enforce the copyright, rather than requiring Mr. Cupor to substitute himself as plaintiff.  The benefit to Mr. Cupor is that the legal fees are a tax-deductible business expense of his company, Kev & Cooper, and he need not first pay himself taxable income to then pay his attorneys.