Thursday, May 27, 2010

9th Circuit: Receipt of application, not issuance of registration certificate, prerequisite to copyright suit

17 U.S.C. § 411(a) provides that "no civil action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made in accordance with this title." In Cosmetic Ideas, Inc. v. IAC/InteractiveCorp., No. 08-56079 (9th Cir. May 25, 2010), the 9th Circuit held that § 411(a) is satisfied when the Copyright Office receives a completed application, not when it actually issues a certificate of registration. This issue has split the circuits, with the 9th Circuit joining the 5th and 7th against the 10th and 11th.

Thursday, May 20, 2010

6th Circuit Gives Victoria's Secret a Dilution Win Against Victor's Little Secret in Round 2

In a fractured decision, the Sixth Circuit yesterday revisited the trademark dilution dispute between Victoria’s Secret and the Kentucky “adult” store, Victor’s Little Secret. V Secret Catalogue, Inc. v. Victor’s Secret Stores, Inc.¸, No. 08-5793 (6th Cir. May 19, 2010). The case had previously risen all the way up to the Supreme Court, which in 2003 held that Victoria’s Secret had failed to prove actual dilution under the old dilution law and remanded the case. In response, Congress quickly expanded the dilution law to cover “likelihood of dilution.”

In essence, the Sixth Circuit interpreted the revised law to create a rule that puts a finger on the scales of justice in favor of a mark owner when the junior user uses a mark that (1) creates an association with the senior user’s mark and (2) is used in connection with sex-related products. One judge in the majority called it a “rebuttable presumption” or a “res ipsa loquitur-like effect.” (Opinion of Merritt, J.) The other judge in the majority called it an “inference.” (Opinion of Gibbons, J.) The dissenting judge (Moore, J.) called it “wrong.”

The dissent noted that the only evidence in the record was that one army officer at a nearby base was offended by the junior user’s mark. The dissent explained that evidence that one person is offended by the junior user’s mark or commercial sex-related activities is not the same thing as evidence that the senior user’s reputation has been tainted. The dissenter noted that this paucity of likely reputational harm is especially significant where the evidence showed that the senior user (Victoria’s Secret) uses its mark in ways that relate to sex as well.

I am inclined to agree with the dissent—based on the facts sets forth in the opinion—on the failure of the plaintiff’s evidentiary showing here. I agree Congress intended to liberalize the dilution law by expanding it to be triggered by likely dilution. But I don’t think Congress intended that expansion to mean that there should be a presumption or inference in the absence of any evidence of likely harm.

Monday, May 10, 2010

Ninth Circuit enjoins unauthorized sale of “VW” badges on a marquee license plate

This is a decision I think is best categorized as right decision, wrong reasoning. The declaratory judgment plaintiff in Au-Tomotive Gold Inc. v. Volkswagen of America, Inc., No. 08-16005 (9th Cir. May 6, 2010) sold several auto accessories displaying the VW design, including a “marquee” license plate with a VW design badge mounted on it. It purchased the badge from authorized VW dealers, altered them so they could be stuck on a marquee license plate, then stuck them on the plate and sold them. At the point of sale, Au-Tomotive Gold used a disclaimer stating that the plates were not VW plates.

In a previous decision, the 9th Circuit held that these products would likely create post-sale confusion among non-purchasers who see the license plate—which did not themselves in any way identify Au-Tomotive Gold as the manufacturer. But the 9th Circuit remanded for consideration of the “first sale” defense.

This time around, a different panel of the 9th Circuit affirmed the district court’s rejection of the defense. It held that the first sale defense did not apply because post-sale, nonpurchasers viewing the license plate were likely to think it was a VW product. The Court seemed to distinguish—but did not explain why—cases where the re-seller simply repackaged the trademark owners goods and placed a label on the repackaged goods disclosing that they had been repackaged. The Court also cited, but stated it was not relying on, cases where a purchaser bought a trademarked good, altered it, and re-sold it without disclosing the alteration.

The Court also seemed quite concerned with Au-Tomotive Gold “free-riding” on the demand for VW emblems on marquee license plates.

To me, this is a puzzling and unsatisfying decision. If the first appeal turned on likelihood of confusion, and the remanded issue (first sale) also turned on the same finding, then why the remand? I think the court would have done better to rely on the cases it said it wasn’t relying on: those that hold that folks who materially alter trademarked goods can’t re-sell them under the original trademark. I guess the second panel was in a pickle because the first panel remanded on the wrong issue.

(Hat tip to Locke Lord associate Kathryn Barrett for alerting me to this decision)