Judge Susan Illston, from the Northern District of California, recently issued an opinion in a case involving alleged infringement of drag queen dolls, Montwillo v. Tull, 2008 WL 2264574 (N.D. Cal. June 2, 2008)(Docket No. No. C 07-3947 SI.). The parties cross-moved for summary judgment; both motions were denied, so this is not the last we have heard of the matter.
Judge Illston gives the following background, which I have severely edited to include only the most relevant information:
This case arises out of a failed business venture between plaintiff Paul Montwillo and defendant William Tull to create and distribute dolls designed by Montwillo. As background, several years prior to the business venture, Montwillo made several “drag queen” and “Trailer Trash Barbie” dolls by dressing Barbie dolls in wigs, applying make-up, and changing their outfits. In 1996, Montwillo began selling his dolls at a store owned by Tull in San Francisco, In-Jean-ious Active. Soon thereafter, Mattel, Inc., the producer of Barbie Doll, sued Montwillo and In-Jean-ious Active for trademark and copyright infringement. Montwillo and In-Jean-ious Active settled the lawsuit with Mattel, Inc. by agreeing, inter alia, to refrain from selling any dolls based on Mattel's Barbie line; imitating or copying or using the Barbie line packaging; imitating or copying the body shape or facial features of “Barbie” and “Ken.”
In July 1997, Tull and Montwillo entered into a partnership to create and distribute dolls that did not violate the terms of the Mattel settlement. … The Partnership Agreement, signed July 16, 1997, states that Tull “will be primarily responsible for the financial investment of startup costs, and upkeep until the business shows a profit. Mr. Tull is also responsible for bookkeeping, sales, and distribution.” With respect to Montwillo, the Partnership Agreement provides that he “will be primarily responsible for Art Direction, Design, and Advertising of the product line. This would include such things as: corporate identification, product design, package design, web site design and maintenance, and print advertising.”
In the fall of 1998, Tull and Montwillo converted the partnership into a limited liability company, and registered it with the State of California as Arsenic & Apple Pie, L.L.C. (“AAP”).
During the years of the Arsenic and Apple Pie Partnership and later during the Arsenic and Apple Pie LLC,FN2 Montwillo designed, developed and helped market the first three Trailer Trash Doll models: “Trailer Trash Doll,” “Blonde Drag Queen,” and “Redhead Drag Queen.” FN3 Montwillo also developed a pre-production prototype of the “Talking Pregnant Trailer Trash Doll.” It is undisputed that all dolls were manufactured, developed, financed and distributed by Arsenic. It is also undisputed that Montwillo was actively involved in the design and artwork of the cardboard package in which each doll was sold; on the back of each box, there was a copyright notice on behalf of Arsenic & Apple Pie …AAP was not profitable; from its inception in 1999 until its dissolution in 2004, AAP lost money every year except in 2000, when it showed a profit of $6,140.
Montwillo filed suit against Tull, Gibby, and Gibby Novelties LLC on August 1, 2007, alleging a claim of copyright infringement. Tull counterclaimed for conversion, breach of contract, and breach of covenant of good faith and fair dealing.