Sunday, November 06, 2005
Generally, courts have largely followed the 9th Circuit's approach to such cases (since the 9th Circuit has more opinions on the subject than any other court), which holds that a nominative use is fair if: (1) the product or service in question is not readily identifiable without use of the trademark; (2) the defendant uses only so much of the mark as is reasonably necessary to identify the product or service (i.e., no multiple or repeating uses, no use of the other company's distinctive logos, scripts, or trade dress, etc.); and (3) the user must do nothing to suggest sponsorship or endorsement by the trademark holder. Further, the Ninth Circuit and most other circuits view nominative fair use not as an affirmative defense, but as a way to negate likelihood of confusion.
Well, this wasn't good enough for the 3d Circuit. In Century 21 Real Estate Corp. v. Lending Tree, Inc., No. 03-4700 (this .pdf file will take time to load, and you may need to click "refresh" several times before you can upload it), the court held that nominative fair use IS an affirmative defense. It seemed to think this was required by the recent Supreme Court decision in KP Permanent Make-Up. Although by itself this doesn't really matter in my view (given that civil cases are based on a "more likely than not" standard of proof and a defendant is going to put on this evidence no matter who's got the ultimate burden), the problem is that the 3d Circuit went further held that plaintiff's in cases where nominative fair use is an issue can succeed in showing a likelihood of confusion based solely on a showing on a shortened list of confusion factors: price, level of consumer care, actual confusion, and intent.
The dissenting judge (in his own very long opinion) thought that this tinkering with the 9th Circuit's test simply muddied things up. Although I don't have time right now to explain fully why (and you'd all be bored silly if I tried) I think the dissent got it right. KP Permanent Make-Up dealt with a statutory affirmative defense. Nominative fair use isn't in the statute. It's a court-made doctrine, and the courts that made it have always viewed it as a way to negate likelihood of confusion. Making it a defense and simultaneously making it easier for the plaintiff to show likelihood of confusion not only doesn't make sense, but also would tend, I think, to seriously limit a defendant's ability to make the case for nominative fair use.
Anyway, it's a thought-provoking exchange if you've got a couple of hours.
Sunday, October 02, 2005
The 6th Circuit in Gibson Guitar Corp. v. Paul Reed Smith Guitars, L.P., No. 04-5836 (6th Cir. Sept. 12, 2005) pretty much flatly rejected application of "initial interest confusion" in product configuration cases. The plaintiff argued that, at a distance in a music store, customers may initially be attracted to the defendant's guitars because the shape of them is sorta similar to the shape of plaintiff's Les Paul guitars. The court rejected this "at a distance" type of confusion, because it was concerned that so many products look sufficiently at a distance that such a test would almost always be satisfied, making it, really, no test at all. The court was also concerned that the inability of such cases to be tossed on summary judgment, which is similar to Justice Scalia's concern, in Wal-Mart v. Samara Brothers, that applying inherent distinctiveness concepts to product configuration trade dress could lead to anti-competitive strike suits that would unduly hinder competition. While the court said it was limiting its holding to the facts of the case, the reasoning it used is going to be hard to escape in future cases in the 6th Circuit.
The court also rejected "post sale confusion," but on wrong-headed reasoning. Under the heading "Post-Sale Confusion," it addressed, not post-sale confusion, but a "lack of irreparable harm" argument. In essence what the court said was that post-sale confusion isn't applicable here because the defendant's guitars aren't inferior to plaintiff's. Seems to me that's a weak rebuttal to a defendant's argument of, "What's the harm if people are confused? My guitars are good." Of course, the correct response to that argument, when made in opposition to an irreparable harm argument, is that it is the loss of control of one's reputation that is the harm, since the defendant can at any time decide to produce shoddy merchandise. The point is, the plaintiff no longer controls its own goodwill's destiny.
To complicate things, the heading the Court used for the actual post-sale confusion argument was "Gibson's Smoky Bar Theory of Confusion." In this argument, Gibson apparently argued (persuasively I would have thought) that if a consumer saw a performer in a concert or club using defendant's guitar and didn't like the sound of the performance, the consumer might mistakenly attribute the poor sound to plaintiff's guitars. Seems right to me. But the Court rejected it, again on the ill-considered basis that the defendant's guitars were high quality, and that "Gibson is helped, rather than harmed, by any such confusion."
I've always thought that the 6th Circuit was rather hit-or-miss with trademark and trade dress cases, and this one, I think, is a "miss."
Thursday, September 01, 2005
In Kay Berry, Inc. v. Taylor Gifts, Inc., No. 04-3809 (3d Cir. Aug. 30, 2005), the plaintiff created a bunch of different rock/poem sculpture products (these were mass-produced items, not, you know, "museum" art). The plaintiff registered them en masse by sending the Copyright Office a catalog containing photos of its entire line of rock/poems. The Copyright Office issued a single registration for "sculptural works with design and text."
The defendant knocked off one of the rock/poems and, when sued, argued that the registration was invalid as a "group registration" under section 408(c)(1) because they weren't "related" enough. The 3d Circuit agreed that the registration wasn't valid under the group registration rules promulgated by the Copyright Office at 37 CFR §§ 202.3(b)(4) -(9), because those rules are the only authority for registration of a "group" of related products, and they don't explicitly extend to a group of sculptural works.
The court, however, said that the registration was valid as a single work registration under 37 CFR § 202.3(b)(3), which permits a single registration of a "published work" of a single claimant such that "all copyrightable elements that are otherwise recognizable as self-contained works . . . are included in a single unit of publication." The court rejected the argument that, for a single work registration under this rule, the works had to be "related."
In a long footnote, the court directed the district court, on remand, to determine the scope of such a copyright. In particular, the court intimated the possibility that a published work containing both new and pre-existing materials may be limited in some way, perhaps to only the expressive material added by the claimant.
The trial court instructed the jury that reverse confusion occurs when the "consumers doing business with the [small] senior user mistakenly believe that they are dealing with the larger junior user" (emphasis mine). The plaintiff argued that "dealing with" is too narrow; that reverse confusion also occurs if the consumers believe there is an affiliation, connection, or association between the parties. But the court said that the instruction was correct.
It seems to me that this is an unjustified narrowing of the scope of a reverse confusion claim. I think most courts agree that forward confusion (i.e, the issue in plain vanilla infringement cases) encompasses more than simply erroneous beliefs that one company is the other; it covers confusion as to association, sponsorship, affiliation, etc. Why treat reverse confusion cases any differently? I can't think of a good reason to make reverse confusion a narrower type of claim. Am I missing something?
In any event, if you're representing a defendant accused of creating reverse confusion, keep this case in mind.
Wednesday, August 31, 2005
In Lamparello v. Falwell, No. 04-2011 (4th Cir. Aug. 24, 2005), the court addressed claims under both the Lanham Act for TM infringement and the Anti-Cybersquatting Act. The parties stipulated that Lamparello never sold any goods or services on his website, but that at one point he had a link to Amazon.com's page offering a book that contained views consistent with Lamparello's and contrary to Falwell's on certain issues.
As to the Lanham Act claim, the Court declined to decide whether, as Lamparello argued, the Lanham Act applies only to "commercial speech" as that term is understood under 1st Amendment law, deciding instead that there was no likelihood of confusion based on the appearance of the Lamparello's web site.
The Court then analyzed Falwell's "initial interest confusion" argument separate from the regular likelihood of confusion analysis. The court sort of pooh-poohed the argument initially, calling it a "relatively new and sporadically applied doctrine" -- sporadically applied? I thought at least half the circuits explicitly accepted it -- noting that the 4th Circuit had never applied it. But then the Court sidestepped an "up or down vote" (to use a buzzword used a lot in certain political contexts these days) on the doctrine, holding that, whether it's a valid legal theory under the Lanham Act or not, it would apply only where the defendant competes with the plaintiff for sales. While I'm usually not a big fan of the 4th Circuit's trademark jurisprudence, this distinction seems to make some sense to me.
Finally, in a long but pretty uninteresting discussion, the 4th Circuit decided that Lamparello didn't meet the "bad faith" standard in the Cybersquatting Act.
Wednesday, August 17, 2005
It involves the Court's rejection of the plaintiff's reverse passing off claim. The plaintiff alleged that the defendant, which was trying to but hadn't yet been able to produce a knock-off computer table, nevertheless cobbled together a sample table based mostly on its own components, but including the important V-shaped legs feature removed from one of the plaintiff's tables. The plaintiff then used the sample as part of its successful pitch to get the Dallas school system to place a sizeable order for tables.
Judge Easterbrook looked at the Supreme Court's decision in Dastar Corp. v. 20th Century Fox Film Corp., and read it really broadly. Remember, Dastar turned on the meaning of the word "source" in the Lanham Act, and in the specific context of a derivative video work based on an pre-existing work whose copyright had expired -- i.e., a "communicative" product, and one that was presumptively in the public domain. Ignoring these facts, Judge Easterbrook said that Dastar asks only whether the consumer knows who has produced the finished product, regardless of whose components go into it. He rhetorically asked, essentially, whether it's reverse passing off if the table seller doesn't disclose that it got its wood from Oregon Clear Cut Lumberyard, its nuts and bolts from Smith Screw Company, and vinyl molding from Jones Vinyl Corp. Of course the answer is no. Duh.
But this case was different. Oregon Clear Cut and Smith and Jones don't sell tables. They sell components used to make a variety of things, including tables. When a competitor in the table business, however, sees its product being sold under another's mark, that's reverse passing off. And when what is taken is less than the complete product, then most circuits take the position that the question is whether the defendant's product is substantially different from the product the plaintiff sells -- a grey area that will change with each case. In my view it's way too simplistic and wrong, as well as based on an overbroad reading of Dastar, to say that there's no reverse passing off in any case when the customer knows who assembled the product.
Let's take Judge Easterbrook's position to an extreme to see if it holds. Let's say Pepsi decides to change its business model. It decides to buy COKE brand soft drink (good TM usage!) from Sam's Club, pour it into a big vat, add one grain of Domino brand sugar per each 12 ounces, and rebottle under the PEPSI brand. Under Judge Easterbrook's analysis, this is not reverse passing off because Pepsi made the finished product and the consumer is told that. C'mon. No way.
In any event, however, I don't think that Judge Easterbrook needed to address this tricky issue (or to make such a sweeping pronouncement of the death of reverse passing off) -- although he clearly wanted to -- because it seems to me that there was a standing issue "standing" in the way. In a nutshell, there was no mention of any showing that the defendant's use of the plaintiff's component caused it to lose the Dallas sale (so much for the damage claim), and since the Dallas pitch was a one-time, non-repeated thing, there was no standing to ask for an injunction.
Whether I'm right or not on the goofy standing issue, it's clear that the 7th Circuit is now a risky place to bring a reverse passing off claim.
Sunday, August 14, 2005
In Bretford Manufacturing, Inc. v. Smith System Manufacturing Corp., No. 03-3932 (7th Cir. Aug. 8, 2005) (Easterbrook, J.), the plaintiff asserted trade dress protection for the V-shaped table legs of its computer table. Following Wal-Mart v. Samara Brothers, the district court required the plaintiff to prove secondary meaning in the asserted product configuration trade dress, as opposed to claiming it was inherently distinctive.
So the plaintiff pointed to the fact that for 7 years, it was the only manufacturer of computer table with V-shaped legs, and during that time it spent over $4 million to promote the tables, and was successful in selling 200,000 tables. Not bad, eh?
Not good enough, said Judge Easterbrook. He reasoned that:
"In the end, all Bretford has to go on is the fact that it was the only maker of such tables for eight years and spent more than $4 million to promote sales. If that were enough to permit judgment in its favor, new entry would be curtailed unduly by the risk and expense of trademark litigation, for every introducer of a new design could make the same sort of claim." (Slip op. at 5.)
The rest of the panel, in awe of this Jedi master of law and economics, nodded in unanimous agreement.
I think this answers the wrong question. The question shouldn't be whether the plaintiff's assertion of trade dress rights in product configuration curtails new entry in that exact market. Of course it does. And the risk increases the longer the plaintiff is out there alone. But the Supreme Court didn't categorically reject product configuration cases because of this risk. It simply said that in such cases a plaintiff needs to prove secondary meaning. An accepted (if risky) way to prove up secondary meaning is to show a long period of exclusivity in the market, with substantial sales success, along with substantial promotional activity. In this case, those numbers were pretty impressive, and the Court didn't mention any countervailing evidence.
But if these numbers didn't cut it, then, at least in the 7th Circuit, it's going to be virtually impossible for anyone to prove secondary meaning in a product's design with sales & advertising figures alone. And I doubt that the Court that slapped down this evidence is going to be swayed by affidavits of selected consumers ("merely anecdotal," no doubt), no matter how many you can drum up. Plaintiffs are going to have to strongly consider ponying up for a real survey.
(Judge Easterbrook also addressed, in his inimitable style, a weak reverse passing off claim in the case.)
As always, it's fun to read a Judge Easterbrook opinion, but I think this one is wrong.
Tuesday, August 09, 2005
The court performed its genericism analysis by literally asking itself and answering itself the questions "who are you; what are you?" I'm not sure I've ever seen genericism analyzed in a way that sounds like a game kids play at preschool, but, hey, whatever works.
Monday, August 08, 2005
Well, no dice, said the 5th Circuit. The Court not only examined the documents in detail, but it also examined several other other cases involving disputes about whether a sufficient writing existed. So this case is one to keep in mind if you're facing this sort of question.
There's some other interesting stuff in the opinion about what happens to preliminary injunction bonds when the winner of the case keeps changing. (The copyright owner won a preliminary injunction, posted a bond, lost at trial, lost the bond, then won on appeal and wanted the money back.)
Saturday, August 06, 2005
In a long and scholarly opinion in McBee v. Delicia Co., No. 04-2733 (1st Cir. Aug. 2, 2005) (click on link, click "opinions", type in the case number "04-2733", and click "submit search"), the 1st Circuit decided that the Vanity Fair factors needed to be "disaggregated." It thought that the first Vanity Fair factor (whether the defendant is a US citizen), should be the preliminary inquiry. The 1st Circuit suggested that the answer to that question would have an impact upon how much of an effect the defendant's foreign activities would be required to have on US commerce (US citizen, less; foreigner, more). (The court also briefly noted that US activities of foreign defendants are automatically within the subject matter jurisdiction of US courts over Lanham Act claims).
Because the defendant in the case was foreign company, and the activities at issue (with a minor exception I won't tell you about) were purely foreign activities, the 1st Circuit then went on to put a finer point on how much of an effect on US commerce is required for subject matter jurisdiction over such foreign activities of foreign defendants. Looking for guidance more from recent Supreme Court antitrust decisions than from the Supreme Court's much older Bulova Watch Lanham Act decision, the 1st Circuit decided that there has to be "a substantial effect on United States commerce" -- which, of course is the second Vanity Fair factor. The court said this test needs to be applied with an eye toward the dual goals of the Lanham Act: protecting US consumers from being confused, and protecting the goodwill of trademark owners in their marks.
The 1st Circuit then "disaggregated" the third Vanity Fair factor (comity with foreign law), saying that issue wasn't a question of subject matter jurisdiction, but rather was a question of whether that jurisdiction, if it exists, ought to be exercised.
Applying the new test, the 1st Circuit said there wasn't subject matter jurisdiction over the plaintiff's claim concerning the defendant's Japanese language website because few Americans can read Japanese and there wasn't any evidence of Americans going to the website and being confused. Nor was there jurisdiction over the plaintiff's claim concerning the Japanese company's sales in Japan because there was virtually no evidence that Americans either were exposed to and confused by the defendant's mark in Japan or that the defendant's goods sold in Japan were making their way back into the US in substantial amounts.
Saturday, July 30, 2005
Counterfeiting. In a case I initially missed because it was a criminal case -- not a civil suit -- the 10th Circuit held in United States v. Foote, No. 03-3263 (July 6, 2005), that the criminal counterfeiting definition, 18 USC § 2320(e)(1), which, like its civil counterpart, 15 USC § 1114(1)(b), requires a likelihood of confusion, covers post-sale confusion. The case concerned a defendant who sold "replicas" of prestigious branded items to customers who, it was assumed, knew full well that the items were fakes.
8th Circuit Gives Cold Shoulder to Weak Ice Cream Mark. "Frosty Treats" is a company that operates a fleet of vans that cruise residential neighborhoods and sell frozen goodies. Problem is, the FROSTY TREATS brand doesn't appear prominently on the trucks. It appears on a sign no larger than the myriad of other stickers festooning the truck displaying the "frosty treats" within. Oh, that reminds me, the mark is also highly descriptive. So when the mark appeared on an evil ice cream truck in a Sony video game, Frosty Treats was ill-prepared to defend its rights. The 8th Circuit held, in Frosty Treats, Inc. v. Sony Computer Entertainment America, Inc., No. 04-2502 (July 25, 2005), that the FROSTY TREATS mark was descriptive and that the plaintiff failed to prove up secondary meaning. Oh yeah, and there was no likelihood of confusion, either. In so doing, the 8th Circuit also trashed the plaintiff's shoddy survey. NOTE: To access the decision after linking, click on Opinions by Month/Year, select July 2005, and scroll until you come to it.
10th Circuit Requires Copyright Office to Issue Registration Before Suit Can Be Filed. In La Resolana Architects, PA v. Clay Realtors Angel Fire, No. 04-2127, (July 26, 2005), the Tenth Circuit, in a detailed opinion, held that "[t]he Copyright Office must approve or reject the application before registration occurs or a copyright infringement action can be brought." In taking this approach, the 10th Circuit broke with the 5th Circuit's rule, which is that it is enough to have filed the application, together submitting the proper specimen and fee. Although the 10th thought it was the second circuit to have taken the "registration required" approach, I believe that it's actually the third circuit to have done so explicitly, since the 10th Circuit overlooked at least the 9th Circuit cases requiring registration. See, e.g., S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081 (9th Cir. 1989); Kodadek v. MTV Networks, Inc., 152 F.3d 1209 (9th Cir. 1998). (There may be other circuits too, but I've researched the 9th Circuit's approach before and know of those 2 cases.)
11th Circuit Sinks Vessel Hull Infringement Complaint. In a straightforward (but rare) suit under the Vessel Hull Design Protection Act, 17 USC § 1301 et seq., the 11th Circuit held in Maverick Boat Company, Inc. v. American Marine Holdings. Inc., No. 04-11259 (July 27, 2005), that the Act means what it says when it provides that only a "substantial" change to an existing design can qualify for protection under the Act.
Thursday, July 21, 2005
Unfortunately for the applicant, the Federal Circuit did uphold the Board's decision that the mark was merely descriptive and, over a dissent, that it lacked secondary meaning. Curiously, the majority didn't even mention much of the evidence in the record that Judge Linn's dissent thought required a vacatur of the Board's finding of no secondary meaning. It's frustrating when a dissent mentions evidence in a record that it thinks requires a contrary result, yet the majority doesn't even deign to say why that evidence didn't require a different result from the one it reached. That situation makes it hard to figure out how to use the decision as precedent in future disputes.
Wednesday, July 20, 2005
Wednesday, July 13, 2005
The case involved uniforms for casino employees. The plaintiff, an independent clothing designer, designed them for Harrah's, and Harrah's began ordering the plaintiff-designed uniforms from third-party clothing suppliers, since the plaintiff didn't have the capacity to manufacture the uniforms. After the contract between the plaintiff and Harrah's ended, Harrah's kept ordering plaintiff-designed uniforms from the suppliers. The designer somehow felt aggrieved by this--the opinion doesn't explain exactly why--and so she sued, "weaving" her law "suit" out of the "fabric" of copyright law.
All agreed that the uniform designs were very creative, but the district court nevertheless found the copyright claim "torn": it held that the designs were not entitled to copyright protection because the uniforms' artistic elements weren't conceptually separable from their utilitarian aspects. "Dressing up" the issue in this fashion, the district court held that the definition of "pictorial, graphic, or sculptural works" (17 USC § 101) didn't "fit". Under this definition, copyright protection "vests" in useful articles only if the design of them "incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article."
There are many variants of the "conceptual separability test" out there, including the 7th Circuit's recent and lengthy decision in Pivot Point International, Inc. v. Charlene Products, Inc., 372 F.3d 913 (7th Cir. 2004), but the 5th Circuit said none of these "one-size-fits-all" tests really "suited" the case, and so "skirted" around the question of whether to adopt a general test. Instead, it decided to "fashion" a rule specifically for, and explicitly limited to, garment design cases only: the likelihood-of-marketability test.
Under the new likelihood of marketability test, a garment design is entitled to copyright protection upon a showing that it has "actual or potential market value as a stand-alone piece of artwork," (Slip Op. at 10), i.e., "the capacity of the item to moonlight as a piece of marketable artwork." (Id.) Because the plaintiff had made no showing under this newly-adopted test--but who knows what was in her "briefs"--the case against her was all but "sewn up": the 5th Circuit affirmed summary judgment in Harrah's favor.
Thursday, July 07, 2005
WhenU sells pop-up advertising. The pop-ups appear on computer screens of Internet users who have installed the WhenU program on their computers. The ads vary in size, shape, and placement, but they all are framed by a border displaying the words "A WhenU Offer--click?" The advertisers are usually competitors of, or in a business related to, the company whose website the computer user is on or the search result screen on which the company appears. Advertisers can't sign up to always have their ads appear when a user is on a competitor's site, but they sign up to be included in group of several advertisers whose pop-ups are randomly chosen for display when the triggering event happens.
The pop-ups are triggered by a database of web addresses, search terms, and key word algorithms kept by WhenU in an unseen directory maintained by When U.
One of the triggering web addresses in the WhenU directory was www.1800contacts.com, the web address of a company that used 1-800CONTACTS as a service mark for selling contact lenses.
The 2d Circuit reversed the district court's entry of a preliminary injunction against WhenU's "use" of the www.1800contacts.com web address as a trigger for competitors' pop-up ads. The 2d Circuit believed that WhenU did not "use" the plaintiff's mark by either maintaining the web address in WhenU's hidden directory or by causing the corresponding pop-up ad to appear.
As to the secret directory, the court said that (a) the inclusion of the plaintiff's web address was not the same thing as inclusion of the plaintiff's mark (even though they're similar), and (b) in any event, the fact that it was secret was not a "use" in connection with the sale of goods, in that the use was hidden from the purchasing public. I think the first reason is pretty flimsy, but the second reason goes to the heart of the matter, and I think gets it right.
As to the pop-ups themselves, the court again found no "use" as required by the Lanham Act. It again rested its decision in part on the flimsy distinction between the triggering address and mark itself. In another unconvincing section, the 2d Circuit pointed out that there was no "use" because other search terms (like "eye care") triggered 1-800CONTACTS' competitor's pop-up ads. More solidly, I think, however, the court also pointed out that the pop-up ads themselves don't actually use the plaintiff's mark or anything like it. And, of course, as a result, the pop-ups themselves are clearly marked as something other than the web page on which they are superimposed, and they're not themselves confusing. My own view is that the Court therefore should have rested its analysis of the pop-up ads themselves on the ground that they were unlikely to cause confusion, rather than lack of "use."
The 2d Circuit also pointed out that WhenU's program isn't different from vendors who pay retail stores to place their competing, but not confusingly similar, brands, right next to a well-known competing brand. Of course, this begs the question whether THAT practice is legal, but even so, it's a decent analogy.
Overall, I think this is probably the right result, but the analysis leaves something to be desired.
Friday, May 20, 2005
In this round, the 9th Circuit re-analyzed the district court's summary judgment in favor of accused infringer KP. While the 9th Circuit had no trouble identifying lots of fact issues that required trial, the most important aspect of the 9th Circuit's decision is how it assessed the scope of enforceable rights that the plaintiff owned through its incontestable MICRO COLORS & design registration (which it called a "logo mark"). The 9th Circuit stated several times that the mark owner's rights from such a registration cover not only the whole design (including the words), but also the words "MICRO COLORS" alone, which the court said was appropriate because the words were, in its view, "most salient feature of the logo mark." Accordingly, the 9th Circuit wouldn't let the accused infringer challenge the words MICRO COLORS alone as merely descriptive and lacking secondary meaning.
This broad view that the incontestability of a design mark extends to the words alone if they are the most salient feature of the design mark is, in my view, more controversial than the 9th Circuit lets on. But this is certainly a weapon to remember in future cases.
Saturday, May 07, 2005
Nevertheless, this precedent may come in handy when representing accused infringers.
Thursday, May 05, 2005
Despite satisfying his initial burden, however, the plaintiff couldn't recover because the defendant had presented adequate evidence that the rent money was the result of factors other than the copyrighted design elements. Id. at 7.
Wednesday, April 13, 2005
- What parts of the graphic and user interface of a video golf game are protectible under trade dress and copyright law? None, that's what, sez the 7th Circuit in Incredible Technologies, Inc. v. Virtual Technologies, Inc., No. 03-3785 (March 15, 2005).
- How about part numbers and part drawings in a transmission parts catalog? Protectible under copyright law? Nope, quoth the 6th Circuit in ATC Distribution Group, Inc. v. Whatever It Takes Transmissions & Parts, Inc., No. 03-6505 (March 30, 2005).
- OK, what about a last name registered as a trademark under German law? Out of luck in Murica, says the Federal Circuit in In re Rath, No. 04-1419, -1420 (March 24, 2005).
- I don't own the copyright, but I have an assignment of all causes of action from the copyright owner, so I can sue, right? Wrong, according to the en banc 9th Circuit in Silvers v. Sony Pictures Entertainment, Inc., No. 01-56069 (March 25, 2005).
- I've got a jury finding of intentional trademark infringement. Pretty exceptional, huh? I get fees, don't I? Well, don't I?? Nope. Intentional doesn't mean the same thing as willful, says a panel of the 9th Circuit, apparently deciding the case without their Roget's Thesaurus. Watec Co. v. Liu, No. 03-55823, -56079 (March 30, 2005).
- Hey! There's a guy using my trademark for the domain name of a web site where he says rotten things about me. Doesn't trademark law prohibit that? Not if he's just griping. That's not "use in connection with the sale of goods," as required under the Lanham Act, but you might have a beef under the Anticybersquatting Act. Bosley Medical Inst., Inc. v. Kremer, No. 04-55962 (9th Cir. April 4, 2005).
- Finally, the 8th Circuit held that (a) a bankruptcy court order approving the sale of assets, including "all intellectual property," was a valid transfer of ownership in copyrights, (b) an appellate court should review a district court's finding of "substantial similarity" under the clearly erroneous standard, not de novo (a bad sign for the appellant in the case), and (c) no jury trial for plaintiffs who drop their damage claims prior to trial. Taylor Corp. v. Four Seasons Greetings, LLC, No. 04-1088 (April 11, 2005). (Hard to do anything flip with that decision -- sorry.)
Wednesday, March 02, 2005
Friday, February 25, 2005
- 1 man (Louis Kemp) who has sold the rights to use his name as a trademark on seafood
- 1 company to buy the mark
- 1 contract memorializing the deal
- millions of $$ spent by the company making the man's name famous
- 1 ton of second thoughts by the man upon seeing how famous the company made his name
Take the LOUIS KEMP mark, mix in the millions of advertising $$, and allow it to rise. In a separate pan, allow Louis Kemp the man to stew in his own juices with the second thoughts and the contract. Add in a plan to use his name for DIFFERENT food items than the ones specifically listed in the contract wherein he sold his rights. Stir and heat in a federal district court at 400 degrees until the dispute comes to a boil and begins smoking. Garnish the trial court's decision with parsley. Serves 3 appellate judges.
The law the 8th Circuit discussed was pretty straightforward, primarily involving an assessment of the likelihood of confusion factors.
To access the decision, go to the 8th Circuit's opinion search page, click on Opinions by Month/Year, select February 2005, and scroll until you come to it.
3d Circuit holds "willfulness" no longer prerequisite for accounting of trademark infringer's profits
Tuesday, February 15, 2005
The settlement had a strange wrinkle, however. If Bean were to win the appeal (no personal jurisdiction over Bean), then Gator.com would pay it an additional 10K. If Gator.com were to win (p.j. over Bean in Cal.), then Bean got nothing.
Although it isn't clear to me why the parties wanted to continue to have the appeal heard with such a paltry stake riding on it (precedent?), they nevertheless pressed forward. But the en banc 9th Circuit pressed back, and held that the parties' settlement mooted the case. The court reasoned that the 10K personal jurisdiction was a "side bet" only: the REAL dispute as to whether Gator.com's business practices were legal was fully resolved by the settlement. The court distinguished prior cases where a settlement payment was contingent on the outcome of an appeal by noting that, in such cases, the contingent payment was in essence a liquidated amount for damages claimed in the original dispute. In this dispute, by contrast, said the court, there is no damage claim (because Bean moved to dismiss and won before it answered and counterclaimed?), and the personal jurisdiction argument has nothing to do with the substance of the controversy between the parties.
Friday, February 11, 2005
The 3d Circuit held that the district court should have dismissed the Lanham Act claim as barred by laches. It agreed with the district court's choice of the UTPCPL statute of limitations as the proper guidepost for the false advertising claim (take heed -- this may not be the proper source from which to borrow for a Lanham Act trademark infringement claim). It also agreed that a presumption of laches arose because of the plaintiff's seven-year wait. But it disagreed that a plaintiff facing a presumption of laches need overcome only one of the two elements of laches. The plaintiff needs to show BOTH that its delay was excusable AND that the defendant wasn't prejudiced by the delay. (Slip op. at 29.) The 3d Circuit discussed the issue in some detail despite several of its prior opinions expressly so holding, probably because the plaintiff had cited a district court decision written by Senior Third Circuit Judge Becker (when he was a district judge) that adopted the "either/or" rule for overcoming the presumption of laches.
Friday, February 04, 2005
11th Circuit Certifies "Advertising Injury" Insurance Issue in Lanham Act Case to Florida Supreme Court
And if you've defended such cases in situations where there may be insurance coverage for "advertising injury," you might have heard the insurer squawk about how the allegation of intentional or willful infringement triggered a common exclusion in such policies for intentional acts.
The issue of whether an insurance policy covers the particular claims is an issue of state law, and federal courts usually put on their Erie hats and decide them. In Vector Products, Inc. v. Hartford Fire Insurance Co., No. 04-10975 (Jan. 26, 2005), however, the allegation of willful conduct complicated things. One of Vector's competitors claimed that Vector was engaged in false advertising, and brought a Lanham Act claim against it. Probably to try to qualify for additional remedies, the competitor claimed that Vector's acts were intentional. The insurer then refused to defend because of that allegation. Realizing that allegations of willfulness might trigger the exclusion against the insurer's duty to defend, yet wasn't required for Lanham Act liability, the 11th Circuit thought the issue of coverage was sufficiently subtle and unsettled under Florida law to require a punt to the Florida Supreme Court.
Insurers and trademark litigators will be watching the runback on this one.
Friday, January 28, 2005
Of interest in the 8th Circuit's opinion is its discussion of a whole bunch of circumstantial evidence--there was no direct evidence of theft--that supported the district court's finding that the defendant misappropriated the secret process (pp. 5-6.) The court found it particularly significant that no one had, for decades, been able to replicate the Wyeth process, and the court believed that this fact gave rise to an inference that the defendant must have gotten it illegally.
But in the statute of limitations discussion, that fact proved a one way street headed exactly where the plaintiff wanted to go. A process may be so hard to replicate that when someone replicates it, it must be stealing, right? But when the trade secret owner sees that the defendant has replicated it, he isn't charged with notice that the defendant stole it. (pp. 6-9.) Huh?
Anyway, on to remedy. The district court forever barred the defendant from all activity related to the development of natural conjugated estrogens. The defendant thought that the injunction ought to be limited to whatever "head start" the misappropriation gave it. . . but forever? Sheesh!
The 8th Circuit affirmed the permanent timeout, however, primarily because the defendant acted very sneakily during the litigation, destroying evidence, lying, hiding things, whistling some nameless tune while looking around innocently, etc. So sneaky, in fact, that the district court felt that the defendant couldn't be trusted to comply with any order that gave it any wiggle room. The 8th Circuit affirmed on this point. (pp. 9-10.) And I would be missing a marketing opportunity if I were to fail to mention that this holding seems to be in line with my scintillating article, Permanent Injunctions in Trade Secret Actions: Is a Proper Understanding of the Role of the Inadequate Remedy at Law/Irreparable Harm Requirement the Key to Consistent Decisions?, 28 AIPLA Q. J. 124 (Spring 2000). Alas, the court didn't cite to it. Bummer.
To access the decision, go to the 8th Circuit's opinion search page, click on Opinions by Month/Year, select January 2005, and scroll 'til you come to it.
Thursday, January 13, 2005
In Tumblebus, Inc. v. Cranmer, the plaintiff uses the TUMBLEBUS mark both for sales of reoutfitted school buses and for the operation of several buses in the Louisville area. The buses the plaintiff sold to 3rd parties not only looked like the plaintiff's buses, but she also (1) allowed the buyers to use the TUMBLEBUS mark, (2) gave them training lessons in how to pitch the services, and (3) further entered into informal oral agreements about where these buyers could operate. In other words, the plaintiff's business looked a lot like a haphazard and informal form of franchising . . . but without the oversight and quality control.
This informality resulted in a legal dispute when one of the plaintiff's purchasers began operating in the Louisville area, which the plaintiff considered HER territory. The purchaser later sold to someone else, who continued to operate in Louisville.
Suing the purchaser of the used bus, the plaintiff was still able to win a preliminary injunction and get it affirmed by the 6th Circuit. The courts found that the defendant had failed to create a factual record sufficient to find the mark was, or had become, generic. The court also rejected the argument that the mark was descriptive because it found "preschool gym on wheels" more appropriate as a description and thought that TUMBLEBUS required a bit of imagination.
Finally, the courts also rejected an abandonment-through-naked-licensing argument because the one geographic are where that argument really didn't apply was Louisville -- where the plaintiff herself was the exclusive operator.
The lesson here . . . . well, maybe there is no lesson here, since the plaintiff seems to have gotten away with some pretty loosey-goosey business practices. Next time, however, TUMBLEBUS may not be so lucky.
Tuesday, January 11, 2005
Where it applies, complete preemption doctrine permits the recharacterization of state law claims as federal claims, thus permitting removal of such a case from state to federal court. The reason Kid Rock wanted to recharacterize the promoter's claims as copyright claims was that he'd thought the claims had got rusty, thought they'd got dusty -- the Copyright Act has a 3 year statute of limitations.
Fat and ugly, broke, black and blue, the promoter came back to the Sixth for round two. The Sixth Circuit, however, used the opportunity to fall in line with the Second and Fourth Circuit's adoption of complete preemption doctrine. The promoter was told, don't test the boss, 'cause he's got this sewn like Betsy Ross. According to the court:
You take the copyright claim
And you give it the state law name
You know that trick is lame
You're in the federal domain
Sorry, I just couldn't resist.
Monday, January 10, 2005
Friday, January 07, 2005
But I digress. In Team Tires Plus, Ltd. v. Tires Plus, Inc. (January 6, 2005), the 10th Circuit burned a little rubber on the district court. The plaintiff used TIRES PLUS for franchising services to tire stores. The defendant TIRES PLUS was an unrelated tire store. The district court ruled that since franchising and tire-selling are not the same thing, the plaintiff's infringement case had no traction.
The 10th Circuit held that the district court's simplistic analysis hydroplaned right over the key issue of likelihood of confusion. The court noted that while in the days of solid rubber tires such a binary view may have held sway, it has long gone the way of the Model T.
Having jacked up and replaced the district court's threadbare reasoning, the 10th Circuit rolled the case back to the trial court for proper inflation of the multi-factor likelihood of confusion test.
Tuesday, January 04, 2005
After summarizing Knievel's career of daring exploits in a manner worthy of the best publicists, the court held that Knievel's lawsuit had hit a slippery patch of 12(b)(6) grade motor oil and crashed. Blame it on kids today. Given the other "satirical, risque, and sophomoric slang" used by ESPN and others in describing the "youthful" event, two judges held that the word pimp wasn't really an accusation that Knievel was, in fact, unlawfully engaged as a business manager of prostitutes. Holding that Knievel should get over it (the majority actually wasn't quite that blunt), the court affirmed the dismissal of Knievel's complaint.
A dissenting judge wasn't so sure. He quoted Shakespeare (presumably, in the context of this case, to exemplify just how far pop culture has fallen) and lamented that the jury ought to have decided whether Knievel was defamed or not. Here's the link.