Court Again Partially Grants Summary Judgment in Warhammer 40K Dispute; Copyright Fair Use Defense Survives
Games Workshop, an England-based company, sells various science-fiction/fantasy products relating to a "dystopian fictional universe" called Warhammer 40,000, which was first created in 1987 with the release of the book Rogue Trader.
Most relevant to this case, Games Workshop created a tabletop miniature game based on Warhammer 40,000 lore in which players compete with miniature figurines. Games Workshop sells its figurines online and at hobby stores in the United States. The figurines are sold unpainted and often require assembly.
Chapterhouse Studios, begun by a Warhammer 40,000 fan at his home in Texas, began selling Warhammer 40,000 accessories, or "bit" parts, conforming to the scale used by Games Workshop for its figurines. The "bit" parts largely included shoulder pads, shields, weapons, and miniature heads to use with Warhammer 40,000 and other figurines. Chapterhouse sells its products online both at its website and on third-party websites like eBay.
In 2010, Games Workshop sued Chapterhouse for copyright infringement, trademark infringement, and related state and federal claims.
Both parties moved for summary judgment, which the district court granted in part and denied in part in November 2012. At the time of the court's opinion, Games Workshop claimed that 95 of Chapterhouse's products infringed its copyrighted works and 110 products infringed its trademarks.
In the November 2012 summary judgment decision, the district court addressed a number of issues including: (1) Games Workshop's ownership of the copyrights at issue under English law (concluding it had largely established ownership); (2) the protectability of Games Workshop's figurines under U.S. copyright law (concluding that most of the figurines were protectable); (3) substantial similarity of the parties' respective works (concluding that the issue could not be resolved on summary judgment); (4) likelihood of confusion on Games Workshop's trademark claims (concluding that question could not be resolved on summary judgment); (5) Chapterhouse's alleged nominative fair use of Games Workshop's trademarks (again concluding that could not be resolved on summary judgment); and (6) trademark dilution (granting summary judgment to Chapterhouse on Games Workshop's dilution claim). The November 2012 summary judgment decision can be found here.
After the district court granted Games Workshop leave to amend its complaint to add claims, the parties again moved for summary judgment and Chapterhouse additionally sought reconsideration of part of the court's earlier summary judgment ruling.
The district court denied Chapterhouse's request for reconsideration (which largely related to the protectability of an element of Games Workshop's figurines) although it did award Chapterhouse its costs relating to previously undisclosed correspondence it had obtained between Games Workshop and the Copyright Office. The court similarly summarily denied Chapterhouse's motion for summary judgment, concluding that the court had already addressed the arguments in its earlier summary judgment decision and in discussing Chapterhouse's motion for reconsideration of that decision.
The district court then turned to Games Workshop's summary judgment motion which raised three issues: (1) Games Workshop's ownership of the copyrights at issue; (2) Games Workshop's prior use of 87 of its alleged trademarks, which it claimed Chapterhouse had admitted; and (3) Games Workshop's request to strike certain of Chapterhouse's affirmative defenses.
Following fairly brief discussion, the district court resolved the first two issues largely, though not completely, in favor of Games Workshop.
More interesting is the district court's discussion of Games Workshop's request that certain of Chapterhouse's affirmative defenses be stricken, and more specifically, the copyright fair use and implied license defenses.
With respect to the fair use defense, the district court ultimately concluded that genuine issues of material fact precluded summary judgment with respect to virtually every fair use factor.
With respect to the first factor--the purpose and character of Chapterhouse's use--the district court concluded that Chapterhouse had presented evidence from which a reasonable jury could conclude that its products were transformative in that they added something new with a different character.
As to the second factor--the nature of the copyrighted work--although the district court concluded that Games Workshop's products were sufficiently original to warrant copyright protection and that they related to a fictional universe, it was still unclear to what degree this factor favored it:
[T]he characters that [Games Workshop] has created undoubtedly share many of their traits with other fictional characters in science-fiction and fantasy genres, and the Space Marines include traits and armor similar to those worn by real soldiers throughout history. Thus although Warhammer 40K is undeniably fictional, many components of [Games Workshop's] products bear substantial similar[ity] to items found throughout history.
Factor three--the amount and substantiality of the portion used in relation to the copyrighted work as a whole--was also a jury question, the district court concluded, referring to its earlier discussion and its first summary judgment decision as to the extent that Chapterhouse's products copied Games Workshop's products.
Finally, only the fourth factor--the effect of the use upon the potential market for or value of the copyrighted work--more clearly favored Games Workshop, the district court concluded, because the evidence suggested that Chapterhouse's core business model was to attract Games Workshop's customers and sell them alternative figurine parts at a lower cost.
Thus, in light of these largely disputed issues, the district court concluded that summary judgment was inappropriate as to Chapterhouse's fair use defense.
Chapterhouse was not so fortunate, however, with respect to its implied license defense. Although the discussion is brief, according to the district court, Chapterhouse contended that a page on Games Workshop's website entitled "What you can and can't do with Games Workshop's intellectual property," impliedly licensed use of its IP (the court's opinion didn't specify any specific language from that page to further explain Chapterhouse's contention).
Citing the policy statement on the website, which forbid "informal licensees" from using its IP "in relation to any commercial activity" and "creat[ing] a production run of conversions for sale" and "cast[ing] any materials that are based on Games Workshop material," the district court concluded that no reasonable jury could find in Chapterhouse's favor on the issue. It therefore granted Games Workshop's summary judgment motion on Chapterhouse's implied license defense.
The case cite is Games Workshop Ltd. v. Chapterhouse Studios, LLC, Case No. 10 C 8103 (N.D. Ill. Apr. 1, 2013).