MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT         1. Karen Dudnikov, a/k/a Tabberone, and Michael Meadors ("Plaintiffs") seek summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, or in the alternative, declaratory judgment pursuant to Rule 57 of the Federal Rules of Civil Procedure on all claims alleged in their Complaint dated April 3, 2003. As set forth in detail below, summary judgment is warranted on the grounds that (a) as a matter of law, the Plaintiffs have not infringed on any trademarks held by Major League Baseball Properties ("MLBP" and/or "Defendant"), (b) the Plaintiffs have not infringed on any copyrights held by MLBP, (c) MLBP deliberately misrepresented liability under trademark and copyright laws, and (d) MLBP deliberately made false and misleading statements with the intent to cause harm. As a result, the Plaintiffs have suffered financial loss and damage to their business reputation and will continue to suffer these losses absent relief from this court. Introduction and Overview         2. The Plaintiffs brought this action on behalf of themselves because of actions by MLBP interfering with their home-based sewing business.         3. The Internet has expanded access to large numbers of persons not only for informational purposes but also for the purposes of buying and selling to a wide market throughout the world. Early problems of security have been mostly resolved and there is an abundance of marketplaces as well as potential buyers. eBayŽ, an internet on-line auction venue, is one of the larger and better known of these marketplaces. eBayŽ dominates the on-line auctions with over an estimated 80% of the marketplace.         4. The Internet has introduced a number of sticky problems for the legitimate owners of copyrights and trademarks. Congress has attempted to afford some protections to those legitimate owners of copyrights and trademarks through recent legislation.         5. Some owners of copyrights and trademarks have opted to aggressively police these marketplaces. These policing activities include, but are not limited to, cease and desist letters and emails and the closing down of web sites and on-line auctions using the provisions of the Digital Millennium Copyright Act ("DMCA").         6. While many owners of copyrights and trademarks are engaged in legitimately protecting those copyrights and trademarks, some owners allege infringements when in fact there are none. They harass merchants by deliberately misstating the provisions of the Lanham Act and falsely claiming derivatives.         7. The Plaintiffs lawfully acquired, at retail stores, fabrics that contained copyrighted and trademarked images belonging to MLBP. The Plaintiffs then made the fabric into tissue box covers and offered them for sale on eBayŽ. (see attachment #9 to Plaintiffs' Complaint). MLBP ordered these auctions terminated. ARGUMENTS I. The Summary Judgment Standard         8. Summary Judgment is appropriate when "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law". Fed. R. Civ. P. 56(c). There are no genuine issues of material fact in this case. MLBP asserted four primary claims as a basis for the actions taken: (1) MLBP trademarks were being used by the Plaintiffs without authorization; (2) such use created a likelihood of consumer confusion; (3) such use created derivative works and were therefore a violation of copyright law; (4) such use suggested sponsorship or endorsement. (see attachments #2 & #4 to Plaintiffs' Complaint). These claims are refuted by federal law, case histories, and accepted reputable experts. II. Jurisdiction and Venue         9. This Court has jurisdiction over the federal claims in this action under the Trademark Laws of the United States, Lanham Act Sections 32, 39, 43 (a), and 43 (c)(1), 15 U.S.C. §§ 1114, 1121 and 1125 (a)(c)(1), the Copyright Act 17, U.S.C. § 101 et seq. and the Judicial Code of the United States, 28 U.S.C. §§ 1331, 1338 (a) and (b). This Court has supplemental jurisdiction over any common law and state statutory claims under 28 U.S.C. § 1367.         10. Venue is proper in this district pursuant to 28 U.S.C. § 1391 (b)(2), in that a substantial part of the events giving rise to the claims occurred in this judicial district and plaintiffs are doing business within this judicial district. III. TRADEMARKS A. Use of trademarks Without Authorization         11. "The Tissue Box Covers you were selling on ebay use protected Major League Baseball-related trademarks without authorization. " (see attachment #2 to Plaintiffs' Complaint)         12. Section 1114 of The Lanham Act states:         (1) "Any person who shall, without the consent of the registrant -         (a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or         (b) reproduce, counterfeit, copy, or colorably imitate a registered mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive,"         13. Section 1115(b)(4) of the Lanham Act defines "Fair Use" as:         " a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin ."         14. Section 1114(1)(a) of the Lanham Act does not apply because the Plaintiffs were using lawfully acquired, copyrighted fabric, upon which appeared trademarks of MLBP that were there with the knowledge and consent of MLBP. MLBP has made no claim that the Plaintiffs were using "any reproduction, counterfeit, copy, or colorable imitation" nor has MLBP asserted the fabric was unlawfully acquired.         15. Court after court refers to "counterfeiting" and "knockoffs" when applying the Lanham Act. The use of lawfully acquired copyrighted fabric does not fall under the Lanham Act's restrictions.         16. The Court of Appeals for the Second District said in 1992:         "Where a second-comer acts in bad faith and intentionally copies a trademark or trade dress, a presumption arises that the copier has succeeded in causing confusion. See Warner Bros. Inc. v. American Broadcasting Cos., 720 F.2d 231, 246-47 (2d Cir. 1983)(trademark); Perfect Fit, 618 F.2d at 954 (trade dress); see also Bristol-Myers Squibb, 973 F.2d at 1044-45; Charles of the Ritz, 832 F.2d at 1322 (intentional copying "bolsters a finding of consumer confusion"). In determining a defendant's intent, "actual or constructive knowledge" of the prior user's mark or dress may indicate bad faith. Mobil Oil Corp. v. Pegasus Petroleum Corp., 818 F.2d 254, 259 (2d Cir. 1987). Where such prior knowledge is accompanied by similarities so strong that it seems plain that deliberate copying has occurred, we have upheld findings of bad faith. See id. at 258-59; Charles of the Ritz, 832 F.2d at 1318-20, 1322."         17. Section 1114(1)(b) of the Lanham Act does not apply for two reasons: (a) the Plaintiffs did not "reproduce, counterfeit, copy, or colorably imitate a registered mark" as stated in Paragraph 14, and (b) the use of the trademarked names and use of pictures of the product are protected under Section 1115(b)(4) of the Lanham Act as "fair use".         18. Additionally, there is no presumption of infringement in the Lanham Act. The wording is specific in that the use has to create a likelihood of confusion.         19. The claim of trademark protection does not apply to a copyright. The fabric was copyrighted by the licensee, Fabric Traditions, Inc. The actual images themselves are not copyrighted. It is the pattern of the images that is copyrighted. The fact that the images happen to be trademarks does move the copyright issue into trademark protection as claimed by MLBP. B. Fair Use         20. In New Kids on the Block v. News Am. Publ'g, Inc., 971 F.2d 302, 308 (9th Cir. 1992), Judge Kozinski stated:         "one might refer to "the two-time world champions" or "the professional basketball team from Chicago," but it's far simpler (and more likely to be understood) to refer to the Chicago Bulls. In such cases, use of the trademark does not imply sponsorship or endorsement of the product because the mark is used only to describe the thing, rather than to identify its source."         21. Judge Kozinski further stated:         "Indeed, we may generalize a class of cases where the use of the trademark does not attempt to capitalize on consumer confusion or to appropriate the cachet of one product for a different one. Such nominative use of a mark--where the only word reasonably available to describe a particular thing is pressed into service--lies outside the strictures of trademark law: Because it does not implicate the source- identification function that is the purpose of trademark, it does not constitute unfair competition; such use is fair because it does not imply sponsorship or endorsement by the trademark holder. "When the mark is used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth." Prestonettes, Inc. v. Coty, 264 U.S. 359, 368, 44 S.Ct. 350, 351, 68 L.Ed. 731 (1924) (Holmes, J.)."         22. New Kids on the Block held that a commercial user is entitled to a nominative fair use defense provided the following three requirements are met: first, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.         23. The baseball teams in question, The Atlanta Braves, The New York Yankees, and the Arizona Diamondbacks, would not be readily identifiable without using their names. The team names were used only as reasonably necessary. Nothing was done that would suggest sponsorship or endorsement by the trademark holder. (see attachment #9 to Plaintiffs' Complaint)         As Justice Holmes clarified,         "A trade mark[sic] only gives the right to prohibit the use of it so far as to protect the owner's good will against the sale of another's product as his. . . . When the mark is used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth. It is not taboo."         24. What matters is whether the defendant is using the protected word or image descriptively, and not as a mark. See Mattel, Inc. v. Azrak-Hamway Int'l, Inc., 724 F.2d 357, 361 (2d Cir. 1983) (defense of fair use "allows a competitor to use another's registered trademark to describe aspects of one's own goods").         25. Regardless whether the protected mark is descriptive, suggestive, arbitrary, or fanciful as used in connection with the product or service covered by the mark, the public's right to use descriptive words or images in good faith in their ordinary descriptive sense must prevail over the exclusivity claims of the trademark owner. See Dowbrands, L.P. v. Helene Curtis, Inc., 863 F. Supp. 963, 966-69 (D. Minn. 1994) (fair use defense is not limited to descriptive marks); Restatement (Third) of Unfair Competition § 28 cmt. A ("Trademark rights . . . extend only to the source significance that has been acquired by such terms, not to their original descriptive meanings."). C. Likelihood Of Confusion         26. "Therefore, they create a likelihood of consumer confusion and suggest some type of sponsorship or endorsement by Major League Baseball Properties in violation of trademark law." " (see attachment #2 to Plaintiffs' Complaint)         27. There is no presumption of confusion in the Lanham Act and there is no presumption of sponsorship or endorsement. Those are predicated upon the use of the mark is such a way as to cause them. As stated above, the alleged "unauthorized use" plainly falls into the "fair use doctrine".         28. The Plaintiffs made every attempt to avoid any possible confusion. Immediately following the description of the item was a very noticeable disclaimer that read:         "This is not a licensed Major League Baseball product. It is however crafted from licensed MLB fabric. Tabberone is not affiliated with Major League Baseball or the Atlanta Braves. " (see attachment #9 to Plaintiffs' Complaint)         29. To be considered effective, a disclaimer must be conspicuous, easy to read, and easy to understand.         30. The listing title included the wording "Atlanta Braves Fabric Tissue Box Cover" as opposed to simply saying "Atlanta Braves Tissue Box Cover". The former sends an immediate word message to the browsing public the item is not a licensed product.         31. Again, further in the listing, is a disclaimer that states:         "Tabberone™ is not affiliated with the manufacturer of this fabric or any other fabrics used unless otherwise stated."         32. Besides the original disclaimer, Paragraph 26, it is stated three times that the item being offered for sale is hand-crafted, which means home-made.         33. One of the persons who bid on the items offered at auction responded in part:         "I REMEMBER YOUR AD YOU WENT OUT OF YOUR WAY TO SAYYOU (sic) ARE NOT AFFILIATED WITH THEM!" (original was all capitals). (see attachment #10 to Plaintiffs' Complaint)         34. Subsequent Confusion is unavoidable if it occurs, even with licensed products. Hand-crafted items of this nature have little, if any, secondary value in the used market and even less to the collector. The absence of a label denoting manufacturer is a warning sign to a collector who would only acquire it as a novelty. Besides, there is no restriction upon removing a label or markings from licensed products and some people do so. The removal of these tags and markings from licensed products cannot be prevented and do not create "subsequent confusion" and therefore do not prohibit the resale of the licensed products without markings in the used marketplace at a future date.         35. By releasing crafting materials, such as the fabrics, MLBP has created their own subsequent confusion problem with the finished products. They had to reasonably expect these "home items" would and could find their way, either intentionally or unintentionally, into the secondary market. They cannot complain about a problem of their own making. D. False Designation of Origin         36. In paragraph 25 of Defendant's counterclaims, MLBP admits the tissue box covers did not have any labels or tags affixed to them. Yet MLBP tries to assert a counterclaim of false designation.         37. In order to show likelihood of success on their claim, MLBP must show that Tabberone affixed a false designation of origin to the items, that Tabberone used the false designation in commerce, that the false designation is likely to cause consumer confusion, and that MLBP is likely to be damaged by the false designation.         38. The first question is whether the acts constitute a false designation of origin under section 43(a) of the Lanham Act. The section has been interpreted as prohibiting misrepresentations as to the source of a product in primarily two types of activities: (1) false advertising and (2) "passing off" (also called "palming off").         39. A cursory examination of the listings show at no time was there any "false advertising" or "passing off". IV. Copyrights         40. In the Counterclaims, MLPB pointedly avoids making any claims of copyright infringement, instead attempting to focus upon trademark law. MLBP does not deny the original assertions of "derivatives" made by MLBP. As stated in Paragraph 19, the trademark claims are not valid. A. Derivatives         41. "Furthermore, the Tissue Box Covers are derivative works based upon a preexisting Major League Baseball-related copyright-protected work in violation of copyright law. " (see attachment #2 to Plaintiffs' Complaint)         42. The First Sale Doctrine allows that the owner of a lawfully acquired copy of a product may dispose of that copy without interference from the owner of the copyright unless the copyrighted work is transformed into a derivative.         43. One test of a derivative is whether the copyrighted copy was used as intended by the copyright owner. Fabric is intended to be made into fabric items.         44. Disclaimers included in the copyright statement on the selvage of the fabric are not legal and they are not binding upon the purchaser. The copyright statute does not empower copyright holders to override the fair use right by overbroad copyright notices or other unilaterally imposed provisions.         45. Copyright notices that assert rights of the copyright holder beyond those granted by the copyright statute are extra-legal and inefficacious. The statute provides that a copyright notice shall consist of the word "Copyright" or the letter "C" in a circle, the name of the copyright owner, and the date. Therefore, one may disregard extraneous matter in copyright notices and rely on the copyright statute for determining what may be considered fair use.         46. The Supreme Court has said copyright "protection has never accorded the copyright owner complete control over all possible uses of his work. See Fogerty v. Fantasy, Inc., 510 U.S. 517, 526 (1994).         47. The fabric itself is not copyrighted, only the pattern of the images on it are. These images are not "recast, transformed, or adapted" in any manner. The fabric is modified into an end product consistent with the intended use, the images are not. Likewise, since fabric is intended to be cut, and shaped, and sewn, no "material difference" exists from the original product. Indeed, the fabric images would have to be altered before the First Sale Doctrine could be refuted under 15 U.S.C. Section 1114. One does not buy a yard of fabric, toss it over their shoulder, and walk down the street showing it off. The fabric must be cut and shaped and sewn to complete the use for which it was intended.         48. Another test of a derivative is whether the "new" item would be copyrightable in it's own right. A fabric item made from copyrighted fabric, cut using a universally obtainable sewing pattern, then sewn together, would not qualify for copyright as there is nothing new.         49. Section 101 of the Copyright Act defines a derivative work as:         "a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a "derivative work."         50. A final test of a derivative is the mandated requirement that it be "recast, transformed, or adapted" having "modifications" that "represent an original work". There is no originality in fabric items. In Precious Moments vs La Infantil, 1997, (D.P.R.) 971 F.Supp. 66, the First Circuit Court specifically rejected the copyright claim where La Infantil was being accused with unauthorized use of copyrighted fabric, saying that "bedding items manufactured with lawfully acquired, authentic fabric with copyrighted design were not infringing derivative works." (see attachment #7 to Plaintiffs' Complaint)         51. The First Circuit Court argued that previous decisions had omitted the qualification that a derivative work must show originality. It held that merely using a pattern to sew fabric into a design was not "original" and it does not make the item a derivative work. The Court rejected the reasoning in Mirage properly concluding Mirage had not placed enough emphasis on "originality". Many law scholars also disagree with Mirage (Mirage Editions, Inc. v. Albuquerque A.R.T. Co., 856 F. 2d 1341).         52. Mirage, a remarkably brief but controversial opinion, has been criticized by other courts and by commentators. One of the problems with Mirage is there was no analysis of whether there was sufficient originality in the tiles to constitute a derivative work. Even if Mirage were to be considered, the cases are not similar in that in Mirage, the defendant cut pictures from a book and mounted them on tiles, a use not intended by the holder of the copyright.         53. In C.M. Paula Co. v. Logan, 355 S.Supp. 189 (N.D.Tex.1973), the court found that the defendant had not infringed copyright in the plaintiff's greeting cards by removing the ink from the cards through a somewhat ill-explained process and re-applying the ink to ceramic plaques; such activity, said the Paula court, was protected by the first sale doctrine (enshrined in 17 U.S.C. §109) because the image was merely resold, albeit after transfer to a different medium.         54. Originality was addressed in Lee v. Deck the Walls Inc., 925 F.Supp. 576 (N.D.Ill. 1996). Plaintiff Annie Lee, an artist, sued defendants for gluing her notecards to ceramic tiles and covering the images on the tiles with clear epoxy resin. The court in Lee rejected the holding of Mirage Editions and Munoz, observing that to be an infringing derivative work an object must be original enough that, if lawful, it would qualify for protection as a derivative work. The Lee court cited Woods v. Bourne Co., 60 F.3d 978 (2nd Cir. 1995), for the rule that to be a derivative work a thing must be "independently copyrightable." The court found no "creative spark" in the "mundane act of placing notecards onto a ceramic tile." The court also cited in support of its finding the case of Paramount Pictures v. Video Broadcasting System, 724 F.Supp. 808 (D. Kan. 1989), in which the addition of commercials at the beginning of videocassette movies was not found to create infringing derivative works.         55. In Lee v. Deck the Walls Inc, The court noted that its conclusion hinged on whether the alleged new "work" contains sufficient originality, as required by the Constitution and 1976 Copyright Act, for it merit "derivative work" status. (Id. at 580-81, 40 U.S.P.Q.2d at 1116-17) To this end, the court was persuaded that the Copyright Office refused the defendant's copyright application for the ceramic tile mounted note card because the "work does not contain any original artistic expression ."( Id. at 581, 40 U.S.P.Q.2d at 1117 (quoting the Copyright Office's rejection of defendant's copyright application)) B. First Sale Doctrine         56. The common-law roots of the first sale doctrine allows the owner of a particular copy of a work to dispose of that copy. This judicial doctrine was grounded in the common-law principle that restraints on the alienation of tangible property are to be avoided in the absence of clear congressional intent to abrogate this principle. This doctrine appears in section 109 of the Copyright Act of 1976. Section 109(a) specifies that this notwithstanding a copyright owner's exclusive distribution right under section 106 the owner of a particular copy or phonorecord that was lawfully made under title 17 is entitled to sell or further dispose of the possession of that copy or phonorecord.         57. The Plaintiffs lawfully purchased the copyrighted fabric from retail outlet sources. MLBP does not assert any claims the fabric was unlawfully acquired. Since the plaintiffs use of the copyrighted fabric was consistent with the intended purpose of the sale of the fabric, the subsequent sales of the fabric items falls wholly under the First Sale Doctrine.         58. In Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984), the Supreme Court stated that copyright protection "subsists . . . in original works of authorship fixed in any tangible medium of expression." 17 U. S. C. § 102(a) (1982 ed.). This protection has never accorded the copyright owner complete control over all possible uses of his work. (White-Smith Music Publishing Co. v. Apollo Co., 209 U.S., at 19).         59. In Quality King Distributors, Inc. v. L'Anzaresearch Int'l, Inc (98 F.3d 1109, reversed), Justice Stevens noted for a unanimous court:         "The whole point of the first sale doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution." V. CLAIMS OF WRONGDOING BY MLBP A. PERJURY         60. To establish Perjury under 17 USC 512, it must be shown that MLBP knew, or reasonably should have known, the statements made in the affidavit sent to eBayŽ were false.         61. Under the NYSBA Lawyer's Code of Responsibility (EC-6-1): "The lawyer should strive to become and remain proficient in his or her practice and should accept employment only in matters in which he or she is or intends to become competent to handle."         62. It is fair to assume, given their education, training, and background, that Ethan Orlinsky and Bryan Day are competent in Trademark and Copyright Law.         63. The flagrant and deliberate distortions of federal trademark and copyright laws in emails and "cease and desist" letters was done with the intention to mislead and intimidate the recipients.         "The Tissue Box Covers you were selling on ebay use protected Major League Baseball-related trademarks without authorization." (see attachment #2 to Plaintiffs' Complaint)         64. MLBP does not assert that the fabric used by the Plaintiffs to make the tissue box covers was unlawfully acquired by the plaintiffs. MLBP does not dispute the fact the fabric used was licensed by MLBP.         65. MLBP does not claim at any time that the Plaintiffs used "in commerce any reproduction, counterfeit, copy, or colorable imitation" of their trademarks. Therefore, Section 1114(1)a of the Lanham Act does not apply.         66. MLBP does not claim at any time that the Plaintiffs attempted to "reproduce, counterfeit, copy, or colorably imitate a registered mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements". Therefore, of Section 1114(1)b of the Lanham Act does not apply.         67. Fair use allows the trademarked names to be used to sell the fabric items and fair use allows the use of pictures for the same.         68. MLBP's counterclaim of unfair competition is not supported by the facts of the case.         69. Since Sections 1114 & 1125 are the only sections of the Lanham Act that that defines offenses under which a mark holder may claim relief, the Plaintiffs have not committed trademark infringement as defined by the Lanham Act.         "Therefore, they create a likelihood of consumer confusion and suggest some type of sponsorship or endorsement by Major League Baseball Properties in violation of trademark law." (see attachment #2 to Plaintiffs' Complaint)         70. There is no "assumption" in trademark law that the use of a trademark automatically constitutes a likelihood of consumer confusion. The "unauthorized use" of the mark must be done in such a way as to "create" that likelihood.         71. The auction listings stated in the titles that the tissue box covers were from baseball related fabrics, i.e., "Atlanta Braves Fabric Tissue Box Cover" , "New York Yankees Fabric Tissue Box Cover", etc.         72. The auction listings repeated the title as the header and only once in the listing referred to the teams, i.e., "A really nifty tissue box cover for the Atlanta Braves fan in the family", "A really nifty tissue box cover for the New York Yankees fan in the family", etc.         73. Immediately below the description was a disclaimer that stated         "This is not a licensed Major League Baseball product. It is however crafted from licensed MLB fabric. Tabberone is not affiliated with Major League Baseball or the New York Yankees." (one example)         74. Section 1115 (b)(4) of the Lanham Act allows such use of a mark as "fair use" provided the use "is descriptive of and used fairly and in good faith only to describe the goods or services of such party".         75. Judge Kozinski in New Kids On The Block defined "fair use" in such a way that the case is cited in every jurisdiction.         "A related problem arises when a trademark also describes a person, a place or an attribute of a product. If the trademark holder were allowed exclusive rights in such use, the language would be depleted in much the same way as if generic words were protectable. Thus trademark law recognizes a defense where the mark is used only "to describe the goods or services of [a] party, or their geographic origin." 15 U.S.C. s 1115(b)(4). "The 'fair- use' defense, in essence, forbids a trademark registrant to appropriate a descriptive term for his exclusive use and so prevent others from accurately describing a characteristic of their goods." Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir.1980)."         "A good example of this is Volkswagenwerk Aktiengesellschaft v. Church, 411 F.2d 350 (9th Cir.1969), where we held that Volkswagen could not prevent an automobile repair shop from using its mark. We recognized that in "advertising [the repair of Volkswagens, it] would be difficult, if not impossible, for [Church] to avoid altogether the use of the word 'Volkswagen' or its abbreviation 'VW,' which are the normal terms which, to the public at large, signify appellant's cars." Id. at 352. Church did not suggest to customers that he was part of the Volkswagen organization or that his repair shop was sponsored or authorized by VW; he merely used the words "Volkswagen" and "VW" to convey information about the types of cars he repaired. Therefore, his use of the Volkswagen trademark was not an infringing use."         "But sometimes there is no descriptive substitute, and a problem closely related to genericity and descriptiveness is presented when many goods and services are effectively identifiable only by their trademarks. For example, one might refer to "the two-time world champions" or "the professional basketball team from Chicago," but it's far simpler (and more likely to be understood) to refer to the Chicago Bulls. In such cases, use of the trademark does not imply sponsorship or endorsement of the product because the mark is used only to describe the thing, rather than to identify its source."         New Kids on the Block v. News America Publishing, Inc., 971 F.2d 302 (9th Cir. 1992).         "Furthermore, the Tissue Box Covers are derivative works based upon a preexisting Major League Baseball-related copyright-protected work in violation of copyright law." (see attachment #2 to Plaintiffs' Complaint)         76. The Copyright Act, 17 U.S.C. § 101 defines a derivative work as follows:         "...a work based upon one or more preexisting works such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship is a "derivative work"."         77. This protection has never accorded the copyright owner complete control over all possible uses of his work. (White-Smith Music Publishing Co. v. Apollo Co., 209 U.S., at 19).         78. A derivative work is copyrightable if it is sufficiently original. 4 1 Nimmer on Copyright § 3.03. The law requires more than a modicum of originality. This has been interpreted to require a distinguishable variation that is more than merely trivial. L. Batlin & Son, Inc. v. Snyder, 536 F.2d 486 (2d Cir.) (en banc) (requiring some substantial, not just a trivial, variation), cert. denied, 429 U.S. 857, 490-92 (1976). As stated in Batlin:         "Originality is . . . distinguished from novelty; there must be independent creation, but it need not be invention in the sense of striking uniqueness, ingeniousness, or novelty, since the Constitution differentiates "authors" and their "writings" from "inventors" and their "discoveries." Originality means that the work owes its creation to the author and this in turn means that the work must not consist of actual copying. "         Id. at 490 (citations omitted).         79. No one would claim there is any originality in placing a piece of fabric on an easily obtainable pattern and cutting it. No one would claim there is any originality in sewing that piece of fabric into common fabric item.         80. What is a "material difference"? The courts generally have interpreted it to mean "one that consumers consider relevant to a decision about whether to purchase a product." Nestle S.A. v. Casa Helvetia Inc., 982 F .2d 633 (1st Cir. 1992). In Nestle, the court concluded that Italian chocolates trumped Venezuelan chocolates, although both contained a genuine trademark from Perugina. Differences in composition, packaging, price and the conditions under which the chocolates were transported and stored were held to be material differences.         81. The fabric itself is not copyrighted, only the pattern of the images on it are. These images are not "recast, transformed, or adapted" in any manner. The fabric is modified into an end product consistent with the intended use of fabric. Permission to use the fabric to make fabric items is implied with the retail sale of the fabric. Indeed, it was the intent of copyright holder the fabric be made into some sort of usable object. D. The Defendant cannot claim trademark protection for a copyright.         82. The Second Circuit Court of Appeals has stated in EMI Catalogue Partnership v. Hill, Holliday, Connors, Cosmopulos, 228 F.3d 56 (2d Cir. 2000):         "The Supreme Court has stressed that there are "fundamental differences between copyright law and trademark law." Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 439 n.19 (1984). Copyright law has its roots in the Constitution. U.S. Const. art. I, sect. 8 (8). It protects "fruits of intellectual labor," such as literary or dramatic works, musical compositions, motion pictures, sound recordings, architectural works, and other similar original works of authorship. Trade-Mark Cases, 100 U.S. 82, 94 (1879); see 17 U.S.C. §102. A trademark, by way of contrast, grows out of the adoption and use of a distinctive symbol by the party using it. Its function "is simply to designate the goods as the product of a particular trader and to protect his good will against the sale of another's product as his." United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97 (1918).         Applying these principles to a musical composition, a trademark must be derivative of the original work, used to identify that work or its source. The creation and expression of an original work is protected by copyright law, and once an original work has been produced trademark law is not the proper means of protecting the rights in this originality. See Duraco Prods., Inc. v. Joy Plastic Enters., Ltd., 40 F.3d 1431, 1446 (3d Cir. 1994) ("[I]t is not the purpose of unfair competition law, under the guise of either consumer protection or the protection of business good will, to implement a policy of encouraging innovative designs by protecting them once designed.... Those issues are the province of copyright and patent laws."). The work itself is protected from misappropriation by the copyright laws. The different, source-identifying function of trademarks requires that a trademark in a musical composition not be coextensive with the music itself. Rather, the trademark serves to identify the copyrighted music.         We hold therefore that a musical composition cannot be protected as its own trademark under the Lanham Act. A contrary conclusion would allow any copyright claim for infringement of rights in a musical composition to be converted automatically into a Lanham Act cause of action. While there are many cases in which both claims are appropriate, cases involving trademark infringement should be those alleging the appropriation of symbols or devices that identify the composition or its source, not the appropriation or copying or imitation of the composition itself. Concluding that a song can serve as an identifying mark of the song itself would stretch the definition of trademark ­- and the protection afforded under § 43(a) ­- too far and give trademark law a role in protecting the very essence of the song, an unwarranted extension into an area already protected by copyright law." (emphasis added)         83. The Plaintiffs feel copyrighted fabric containing trademarked images fall into the same category. A copyrighted product was sold at retail. After the original owner disagrees with the use of the product, the owner tries to claim the use is a trademark infringement attempting to garner additional legal basis for their actions. E. The cases cited are not new interpretations of the law.         84. Before taking action to terminate auctions of fabric items, MLBP should have made a careful determination of the facts. A detailed analysis of case histories would have provided the following conclusions:         (a) There was no trademark infringement under Section 1114 1(a) or under Section 1114 1(b) or under Section 1125 of the Lanham Act.         (b) The use of the names of the Major League Baseball Teams to describe the fabric items easily falls within the definition of "fair use" as defined in Section 1115 b(4) and relevant court cases.         (c) The items were not derivatives.         (d) Trademark protection is not available for copyrights.         85. If in doubt, the first responsibility is to do no harm. That isn't the case here. MLBP aggressively attacked even though the facts did not support such action. MLBP chose to ignore legal precedent deciding intimidation would provide more satisfying results. A "good faith belief" is not an adequate defense under these circumstances. Counsel for MLBP had the knowledge, education, and background that should have guided counsel to a better decision. As with the medical profession, a lawyer should first seek to do no harm.         86. Under the NYSBA Lawyer's Code of Responsibility (EC-7-4):         "The lawyer's conduct is within the bounds of the law, and therefore permissible, if the position taken is supported by the law or is supportable by a good faith argument for an extension, modification, or reversal of the law."         87. The actions by MLBP do not qualify as a good faith argument for an extension, modification, or reversal of the law but more of a distortion of law and precedent to fulfill the needs of their threats.         88. The statements by MLBP to eBayŽ were false and MLBP knew they would be accepted as fact. B. TORTIOUS BUSINESS INTERFERENCE 89. To establish Tortious Business Interference under Colorado Law, it must be shown that Plaintiffs had a contract in effect, that MLBP knew there was a contract, that MLBP interfered with that contract, that MLBP's actions were unjustifed, and that the interference caused harm.         90. Listing an item on the internet auction site eBayŽ is an offer to sell. A bid on the listing is an offer to buy. An offer to sell accompanied by an offer to buy is a contract.         91. All eBayŽ users agree to abide by the eBayŽ User Agreement. Paragraph 4 of the Agreement states: 4. Bidding and Buying. As a buyer, you are obligated to complete the transaction with the seller:     a. if you purchase an item through one of our fixed price formats; or     b.if you are the highest bidder at the end of an auction (meeting the applicable minimum bid or reserve requirements) and your bid is accepted by the seller, unless the item is listed in a category under the Non-Binding Bid Policy or the transaction is prohibited by law or by this Agreement. By bidding on an item you agree to be bound by the conditions of sale included in the item's description so long as those conditions of sale are not in violation of this Agreement or unlawful. Bids are not retractable except in exceptional circumstances, such as: when the seller materially changes the item's description after you bid; a clear typographical error is made; you cannot authenticate the seller's identity; or when the seller does not confirm your purchase in the Half.com area of our services. If you choose to bid on mature audience items or items that are restricted to adult use, you are certifying that you have the legal right to purchase such items.         92. Paragraph 5 states: 5.2 Binding Bids. Except for items listed in a category under the Non-binding Bid Policy, if you receive at least one bid at or above your stated minimum price (or in the case of reserve auctions, at or above the reserve price), you are obligated as the seller to complete the transaction with the highest bidder upon the auction's completion, unless there is an exceptional circumstance, such as: (a) the buyer fails to meet the terms of your listing (such as payment method), or (b) you cannot authenticate the buyer's identity.         93. When a person submits a bid for an item on auction, just below the box for the bid the the following warning from eBayŽ: Your bid is a contract - Place a bid only if you're serious about buying the item. If you are the winning bidder, you will enter into a legally binding contract to purchase the item from the seller.         94. MLBP is a member of eBay's Verified Rights Owner ("VeRO") Program, and as such, is a registered member of eBayŽ, agreeing to abide by the User's Agreement. Therefore MLBP knew a contract existed as there were bids on the three auctions.         95. As stated above, MLBP knew, or reasonably should have known, the allegations made in the affidavit were false. When MLBP submitted the affidavit to eBayŽ, MLBP knew eBayŽ would take action based upon the affidavit.         96. As a result of the affidavit, eBayŽ was compelled to terminate the auctions to avoid liability under federal statutes, and thus 3 contracts were terminated.         97. As a result of the auction terminations, the Plaintiffs lost money based upon the existing bids, and in all probability, future bids that would have resulted in higher closing amounts.         98. The terminated auctions also interfered with the possibility of prospective future business from those individuals.         99. The terminated auctions also caused harm to the Plaintiffs' business reputation. When an auction is terminated in this manner, eBayŽ sends an email to the bidders informing them that the auction(s) was terminated giving the reason as the seller committed a listing violation. This creates a negative impression in the minds of the bidders making them reluctant to again bid on items offered by that seller. C. NEGLIGENT REPRESENTATION         100. To establish negligent representation under Colorado law, it must be shown that MLBP made representations, the representations were false, and that MLBP failed to exercise reasonable care and competence in communicating said information, MLBP knew eBayŽ would act on the representations, and that the representations caused harm.         101. When eBayŽ terminated the auctions, eBayŽ sent an email to the Plaintiffs that stated: Dear Karen Dudnikov (tabberone@hotmail.com), We regret to inform you that your listing: 2720120801 Arizona Diamondbacks Fabric Tissue Box Cover 2720120847 Atlanta Braves Fabric Tissue Box Cover 2720121609 New York Yankees Fabric Tissue Box Cover because a member of our Verified Rights Owner (VeRO) Program notified us, under penalty of perjury, that your item infringes their copyright, trademark, or other rights.         102. Further in that email was: If you believe your listing was ended in error, or have questions regarding the removal of this listing, please contact the VeRO Member directly at: Major League Baseball Properties bryan.day@mlb.com         103. Bryan Day is listed as counsel for Major League Baseball Properties.         104. It is fair to assume, given his education, training, and background, that Bryan Day is competent in Trademark and Copyright Law.         105. Based upon the arguments stated above, MLBP knew, or reasonably should have known, the representations were false.         106. Knowing the representations were false, MLBP should not have submitted the sworn affidavit to eBayŽ.         107. Having previously terminated other auctions for similar reasons, MLBP knew eBayŽ would take action based upon the representations.         108. As stated above, these representations resulted in harm to the Plaintiffs in lost revenue, lost potential future revenue, and harm to the reputation of their business. D. FRAUDULENT REPRESENTATION         109. To establish fraudulent representation under Colorado law, it must be shown that MLBP made representations, the representations were false and that MLBP knew they were false, and that MLBP failed to exercise reasonable care and competence in communicating said information, MLBP knew eBayŽ would act on the representations, and that the representations caused harm.         110. As stated above, eBayŽ terminated the auctions, because of representations from MLBP.         111. It is fair to assume, given his education, training, and background, that Bryan Day is competent in Trademark and Copyright Law.         112. Based upon the arguments stated above, MLBP knew, or reasonably should have known, the representations were false, and did not care.         113. Knowing the representations were false, MLBP should not have submitted the sworn affidavit to eBayŽ.         114. Having previously terminated other auctions for similar reasons, MLBP knew eBayŽ would take action based upon the representations.         115. As stated above, these representations resulted in harm to the Plaintiffs in lost revenue, lost potential future revenue, and harm to the reputation of their business. D. OUTRAGEOUS CONDUCT         116. The Court of Appeals for the Second District has held that the first element, "one who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for emotional distress," Fischer v. Maloney, 43 N.Y.2d 553, 557, 373 N.E.2d 1215, 1217, 402 N.Y.S.2d 991, 993 (1978). Extreme and outrageous conduct as discussed in this rule means that when a person acts in a manner that causes a person to suffer extreme emotional distress, the courts will find that a cause of action exists. IIED, unlike other intentional torts, is not premised on, "prescribed specific conduct." The court has said that in defining extreme and outrageous conduct that, "It is as limitless as the human capacity for cruelty." In each case it is up to the courts to impose the liability based on the facts In regard to the actor's behavior and then decide if it was extreme and outrageous. Howell v. New York Post Co., 81 N.Y.2d 115, 122, 612 N.E.2d 699, 702, 596 N.Y.S.2d 350 354 (1993). Courts have found in the past, that extreme and outrageous conduct exists even when there was a legitimate motive for the defendant's actions Long v. Beneficial Finance Co., 39 A.D.2d 11, 15, 330 NYS2d 664, 668-669 (4th Dep't 1972).         117. The tort of intentional infliction of emotional distress requires no proof of physical injury or actual pecuniary loss. It is established by showing that the actor (1) by extreme and outrageous conduct, (2) acted intentionally or recklessly to cause the plaintiff severe emotional distress, (3) which conduct in fact caused the plaintiff's distress, and (4) the plaintiff suffered an extreme, disabling emotional response to the actor's conduct. Kjerstad v. Ravellette Publications, Inc., 517 NW2d 419, 428 (SD 1994). This cause of action is described in the Restatement (Second) of Torts § 46 (1965), which states in part:         § 46. Outrageous Conduct Causing Severe Emotional Distress         (1) One who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm.         118. The conduct necessary to form intentional infliction of emotional distress must be "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and be regarded as atrocious, and utterly intolerable in a civilized community."         119. For a lawyer to deliberately distort case histories and deliberately misapply the wording of statutes to cause harm and emotional stress is intolerable and indecent. A civilized society has to trust it's legal profession to uphold and protect the law at all times. Behavior of this type cannot be tolerated. VI. COUNTERCLAIMS BY MLBP A. Colorado Trademark Law         120. Since Colorado trademark law is similar to the federal statues, the arguments will show there is no infringement. B. Arizona Trademark Law         121. Since Arizona trademark law is similar to the federal statues, the arguments will show there is no infringement. C. Colorado Consumer Protection Act         122. As there is no trademark infringement, there are no violations of this act. D. Michael Meadors as Plaintiff         123. The counterclaim that Michael Meadors is not a real party in interest and lacks standing is mistaken.         124. Karen Dudnikov buys the fabrics and sews them into the fabric products sold on eBayŽ and on the web site, www.tabberone.com.         125. Michael Meadors takes the pictures of the items, does the coding and listings for eBayŽ and the web site, helps maintain records, and does the packing and shipping of the sold items.         126. All income from the web site sales and eBayŽ sales are reported through the company known as Meadnikov Collectibles. Meadnikov Collectibles files as a sole proprietorship for the purposes of taxes under Michael Meadors' social security number. E. Ebay         127. Paragraph 29 of the Defendant's Counterclaims is misleading through omission. Persons seeking to purchase item on eBayŽ do in fact enter "keywords" to search or items on auction. They are presented with a one-line listing (sometimes with picture) which matches the keywords. This listing can be one up to thousands of lines, one line for each matching auction.         128. The paragraph neglects to state that to view the item, or to purchase the item, a browser must click on the line listing for a fuller, more detailed description of the item being offered. It is here that the items are fully described. The browser is not purchasing blind. VIII. CONCLUSION         Based upon the above arguments, the plaintiffs firmly believe that the actions of MLBP are calculated, improper, unethical and illegal and will continue unless stopped. MLBP has also used the threat of legal action to extort monies from persons involved in perfectly legal activities. MLBP, like many other companies, is using the threat of federal court action to interfere with small home businesses conducting business legally and within the applications of federal law. The actions of MLBP has caused harm, present and future, to the plaintiffs.         Therefore the plaintiffs request the court issue a declaratory judgment affirming:         1. Selling copyrighted fabric items is allowed reasonable "fair use" of images and descriptions that pertain to the items being offered without interference and threats from the copyright and trademark holder.         2. Selling fabric items made from lawfully acquired copyrighted fabric are protected by the "First Sale Doctrine" because the fabric items do not qualify as derivatives as defined in Copyright Law.         3. Selling fabric items made from lawfully acquired copyrighted fabric do not need "authorization" to make and subsequently offer for sale these fabric items.         4. "Cease and Desist" letters (or emails) that reference the above items (1 & 2 & 3) are illegal and a violation of professional ethics.         5. Auctions terminated for reasons stated in 1, 2 and 3 constitute tortious interference with business.         6. Auctions terminated for reasons stated in 1, 2 and 3 constitute perjury under 17 U.S.C Section 512.         7. Plaintiffs request the court grant legal costs and any other reimbursements deemed to be appropriate. Dated June 26, 2003

Respectively submitted, _________________________________ KAREN DUDNIKOV ____________________________ MICHAEL MEADORS P.O. Box 87 3463 Maskoke Trail Hartsel, CO 80449 303-913-6075 pro se Plaintiffs