Beginning in 1993, Ty, Inc., the Beanie Babies manufacturer, sold stuffed animal pig “Squealer” and cow “Daisy.” GMA released stuffed animals “Louie the Cow” and “Preston the Pig” three years later. Ty, Inc. brought a copyright infringement suit and the district court granted a preliminary injunction enjoining GMA from selling Louie and Preston. GMA appealed the preliminary injunction only as to Preston. The Seventh Circuit affirmed. 

The appellate court found a “striking similarity” between Squealer and Preston because the stuffed pigs are the same length and have “virtually identical snout[s].” The appellate court acknowledged that the GMA-supplied photograph of the two stuffed pigs downplayed the similarities. GMA photographed a defective Preston with a different length snout at an angle that misrepresents the stuffed animals’ respective lengths and added a ribbon around Preston’s neck that is not on the retail Preston.

The Seventh Circuit found that the “nearly identical” similarity between the pigs indicates copyright infringement but only if GMA actually copied Squealer and did not independently create Preston. The appellate court reasoned that actual copying consists of (1) access and (2) such access being used to copy. The Seventh Circuit noted that access can be demonstrated when the works at issue share  “a similarity that is so close as to be highly unlikely to have been an accident of independent creation . . .” Preston was sufficiently similar to Squealer,  and not to other pigs within the public domain (including real pigs or other fictional pigs), to support an inference of copying.

The Seventh Circuit did not find GMA’s assertion that its stuffed animal designer had independently created Preston persuasive because her design drawing was significantly different from the manufactured Preston (such as a shorter snout and ribbon) which suggests that GMA changed Preston’s design to look more like Squealer later on in the production process. Furthermore, the appellate court noted the strong likelihood that GMA accessed Squealer given their shared industry and Beanie Babies’ significant popularity. Additionally, the Seventh Circuit found that the almost “complete” similarity between  Louie and Daisy independently supported an inference of copying Squealer because if GMA had access to Louie, GMA also likely had access to Squealer. 

The Seventh Circuit affirmed the district court's grant of a preliminary injunction because Ty, Inc. demonstrated a likely meritorious copyright infringement case and a likelihood of irreparable harm if the injunction was not granted. The Seventh Circuit held the harm was irreparable because GMA had interfered with Ty, Inc.’s income and “scheme of distribution.” Furthermore, the appellate court noted that this harm is compounded because Ty, Inc.’s goodwill could be damaged if customers purchase a GMA stuffed animal thinking it is a Beanie Baby.   

Therefore, the Seventh Circuit affirmed the district court’s granting of a preliminary injunction.  The parties later settled and the settlement terms were not disclosed.

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