Eighth Circuit Opts for Clear Error Review of Substantial Similarity Finding in Greeting Card Copyright Dispute

In a case decided last Friday, Taylor Corp. v. Four Seasons Greetings, LLC, (04/11/05 - No. 04-1088), the Eighth Circuit rejected the Second Circuit's reasoning for applying de novo review to a trial court's finding of substantial similarity. Instead, the court adopted the clear error standard used by a "majority of circuit courts," including the Ninth Circuit.

The trial court had determined that six of defendant's greeting cards infringed copyrights owned by plaintiff Taylor corporation. Taylor had acquired the rights by purchasing the assets of the previous owner in bankruptcy. The opinion held that the bankruptcy court's order approving the sale constituted a valid transfer of copyrights "by operation of law" under Section 204(a) of the Copyright Act.

Finding support in the record for the district court's finding of substantial similarity, the Eighth Circuit upheld the permanent injunction prohibiting defendant from future use of the infringing greeting cards. The court rejected defendant's argument that injunctive relief was not warranted because plaintiff could have accepted uncontested damages. Furthermore, as plaintiff sought only injunctive relief, defendant did not have a Seventh Amendment right to a jury trial.