Ronaldo Designer Jewelry, Inc. v. Cox, 1:17-cv-00002

Background

Ronaldo Designer Jewelry, Inc. sued the Coxes for copyright infringement over two wire-bracelet designs: the Power of Prayer (created 1995) and the Angelina (2000).
Gold Craft Associates, Inc. originally owned the designs; in 2009 Gold Craft assigned its intellectual property to Ronaldo Inc. via sale and assignment documents.
Ronaldo Inc. obtained copyright registrations listing itself as author/claimant in 2012 (Power of Prayer) and 2013 (Angelina); in 2015 it filed supplements correcting the author to Gold Craft and stating Ronaldo claimed by assignment; the Copyright Office reissued the certificates.
The Coxes moved under 17 U.S.C. § 411(b)(2) asking the court to request the Register of Copyrights to advise whether alleged inaccuracies in the applications would have caused refusal of registration.
The Coxes alleged Ronaldo’s applications were inaccurate because Ronaldo Inc. was not the owner/claimant at filing, was not the author, and failed to disclose preexisting material (i.e., that the bracelets were derivative of earlier designs).
The district court evaluated whether the Coxes made good-faith, nonfrivolous allegations under Rule 11 that: (1) the applications contained inaccurate information, (2) the inaccuracies were made knowingly, and (3) the inaccuracies would have caused the Copyright Office to refuse registration.

Issues

Issue	Plaintiff's Argument (Ronaldo)	Defendant's Argument (Coxes)	Held
Ownership/claimant at time of application	Ronaldo: Gold Craft validly assigned rights to Ronaldo Inc.; Ronaldo was claimant when it applied	Coxes: Transfer was voidable/fraudulent because Ronnie Needham failed to disclose assignment/ownership in his 2009 bankruptcy, so Ronaldo Inc. was not owner when it applied	Court: Coxes failed to plead facts showing fraudulent transfer or trustee action; no good-faith allegation that Ronaldo Inc. lacked ownership — denial
Authorship/assignment disclosure on application	Ronaldo: Errors were corrected by supplemental registration and the Copyright Office accepted corrections; Register would have inquired and allowed amendment	Coxes: Initial applications incorrectly listed Ronaldo as author and failed to state claim was by transfer; these were knowing misstatements	Court: Because the Office accepted the supplemental registrations and would likely have permitted correction upon inquiry, Coxes did not show the Register would have refused for incorrect author info — denial
Failure to disclose preexisting works (derivative work) — Power of Prayer	Ronaldo: Power of Prayer is original; Coxes point only to elements, not identifiable preexisting works	Coxes: Power of Prayer incorporates substantial elements from prior designers (Reuther, Incahoots) and omission was knowing	Court: Coxes failed to identify specific preexisting works or show Ronnie saw them; allegations not in good faith — denial
Failure to disclose preexisting works (derivative work) — Angelina	Ronaldo: Angelina is original; errors corrected; no basis to show Register would refuse	Coxes: Angelina is derivative of a Reuther bar bracelet (similar pattern bar, vertical wraps, clasp); Ronnie had access to Reuther’s work; omission was knowing and material	Court: Coxes made good-faith allegations that Angelina is derivative of Reuther’s bar bracelet, that omission was knowing, and that the Register may have refused registration — referral granted (limited)

Key Cases Cited

Gwaltney of Smithfield v. Chesapeake Bay Found., 484 U.S. 49 (1987) (Supreme Court’s discussion of when a “good-faith allegation” suffices to invoke statutory procedures and reliance on Rule 11 in that context)
Lennar Homes of Tex. Sales & Mktg., Ltd. v. Perry Homes, LLC, 117 F. Supp. 3d 913 (S.D. Tex.) (2015) (discusses protectable arrangements of unprotectable elements and factors for derivative-work analysis)
In re Roberts, 556 B.R. 266 (Bankr. S.D. Miss. 2016) (bankruptcy authority noting undisclosed assets remain estate property)