## Facts

- JCW Investments, Inc., doing business as Tekky Toys, designed and sold a novelty plush doll called “Pull My Finger Fred,” a seated, overweight, middle-aged man whose extended finger triggered fart sounds and crude spoken jokes when squeezed.
- Tekky held a 2001 copyright registration for the doll as a “plush toy with sound.”
- Novelty, Inc., a competitor, sold a similar plush doll called “Fartman” with closely matching visual features, the same finger-activated fart function, and overlapping jokes (including some identical lines).
- Novelty also sold a “Pull-My-Finger Santa” farting doll.
- Tekky sued for (1) copyright infringement, (2) trademark infringement under the Lanham Act based on “Pull My Finger Fred” and related source-identifying features, and (3) Illinois unfair competition, seeking punitive damages.
- A jury found for Tekky on all claims and awarded lost profits for copyright and trademark infringement and punitive damages for Illinois unfair competition.
- The district court also awarded Tekky $575,099.82 in attorneys’ fees.
- Novelty appealed, challenging copyright protectability and infringement, arguing punitive damages were preempted by federal copyright law, and contending attorneys’ fees should be capped by Tekky’s contingent-fee arrangement.

## Issues

1. Whether the plush “Pull My Finger Fred” doll embodied protectable copyrightable expression rather than an unprotectable idea or stock character.
2. Whether the evidence supported a finding that Novelty’s dolls were substantially similar to and copied Tekky’s protected expression.
3. Whether Illinois unfair competition punitive damages were preempted by the Copyright Act.
4. Whether statutory fee awards under the Copyright Act and Lanham Act must be limited by the prevailing party’s contingent-fee agreement.

## Decision

- The Seventh Circuit affirmed the judgment in full.
- The court upheld the jury’s copyright verdict, concluding the doll’s original, particular combination of visual and aural features was protectable and the evidence supported copying and substantial similarity.
- The court upheld the jury’s Lanham Act and unfair competition verdicts as supported by evidence of likely confusion and trading on goodwill.
- The court held Illinois unfair competition punitive damages were not preempted because the claim required elements beyond rights equivalent to copyright.
- The court affirmed the attorneys’ fee award, holding the district court did not abuse its discretion and fees were not capped by Tekky’s contingent-fee contract.

## Legal Principles

- Copyright protection may extend to a toy character when originality is shown through a particular selection and arrangement of expressive elements; copying that specific expression is actionable even if the general concept is commonplace.
- A valid copyright registration constitutes prima facie evidence of copyright validity.
- Substantial similarity and copying may be found where a defendant appropriates a plaintiff’s detailed character presentation (visual traits, mechanism, and expressive content), not merely the general idea.
- Copyright Act preemption does not apply to a state unfair competition claim that contains an “extra element” (such as passing off, likelihood of confusion, or exploitation of goodwill) making it qualitatively different from a claim equivalent to exclusive rights under 17 U.S.C. § 106.
- Under fee-shifting statutes (including 17 U.S.C. § 505 and 15 U.S.C. § 1117(a)), a reasonable fee is generally determined by lodestar principles; a contingent-fee agreement may be considered but does not impose a ceiling on a statutory fee award.

## Conclusion

The court affirmed a jury verdict and remedies against a competitor that closely copied a registered plush character with sound effects and similar source-identifying features, upheld punitive damages for Illinois unfair competition as not preempted by federal copyright law, and approved a lodestar-based attorneys’ fee award that exceeded the plaintiff’s contingent-fee arrangement.


JCW Invs., Inc. v. Novelty, Inc., 482 F.3d 910 (7th Cir. 2007)