Prolix 9th decision on copyright “first sale” defense

Whatever happened to the kind of pithy opinions that old-timey jurists like the Hand cousins used to write?

It recently took the Ninth Circuit 26 pages to decide whether a software transaction was a sale or a license for purposes of “first sale” defense to a claim of copyright infringement. The written agreement (1) recited that the copyright owner retained title; (2) stated that the transaction conveyed a nonexclusive, nontransferable license; (3) imposed substantial restrictions against transfer; (4) imposed substantial use restrictions; and (5) provided for license termination if the licensee doesn’t comply with certain provisions. Walks, quacks, and looks like a license to me. Vernor v. Autodesk, Inc., No. 09-35969 (9th Cir. Sept. 10, 2010).

Significant precedential TTAB decision concerning fraudulent intent and "advice of counsel"

I don’t usually report on TTAB decisions, but this one looks significant. It concerns “advice of counsel” and proof of fraudulent intent in the wake of In re Bose Corp., 580 F.3d 1240 (Fed. Cir. 2009).

In M.C.I. Foods, Inc. v. Bunte, Cancellation No. 92046056 (TTAB Sept. 13, 2010), Bunte cross-petitioned to cancel MCI’s registration for fraud. MCI’s registration listed many types of Mexican foods (including tortilla chips), but MCI never used it for tortilla chips. MCI’s president testified that he made a list of goods he wanted to have on the application (including items he knew MCI hadn't used the mark on, like tortilla chips), but testified that the list “was discussed with counsel.” Bunte’s attorney asked no further questions about the discussions with counsel.

Based on the evidence that MCI provided the list to counsel and discussed it with counsel, the TTAB found that MCI did not intend to deceive the PTO. The TTAB qualified its ruling by noting that it was not holding that merely asserting “advice of counsel” creates a per se defense to fraudulent intent. Rather, it faulted Bunte for not following up and obtaining testimony concerning what counsel’s actual advice, if any, was. So, evidence that counsel’s advice was sought can be exonerating if there is no further evidence that counsel’s advice (or lack thereof) undercut this evidence of good faith. In other words, evidence that the accused party sought the “advice of counsel” creates a presumption of good faith, and the presumption stands unless outweighed by contrary evidence.

NB: The TTAB did not discuss the necessarily-implicated issue of whether an accused party waives the attorney-client privilege merely by invoking or referring to the obtaining of counsel’s advice.

Absent fraud, the TTAB denied cancellation, instead restricting MCI’s registration to the items that it actually used the mark on.

Three recent trademark and copyright decisions of note

In the past week or so there have been a few appellate trademark and copyright decisions that, while not earth shattering, probably merit a brief note.

In Seller Agency Council, Inc. v. Kennedy Center for Real Estate Educ., Inc., No. 08-56791 (9th Cir. Sept. 3, 2010), the Ninth Circuit officially defined the equitable defense of acquiescence in a trademark case with the three-part test other circuits have used: (1)the senior user actively represented it would not assert a claim; (2) the delay between the representation and the assertion of the claim was not excusable; and (3) the delay prejudiced the defendant.

In the ongoing saga of the copyright-infringing Baltimore Ravens football logo design, the 4th Circuit held that the fair use defense insulated the Ravens—who discontinued the infringing logo several years ago—from liability for displaying the infringing logo in a pictorial collage of the organization’s history in its corporate office, but not for selling highlight films from the years when the players wore the infringing design on their helmets. Bouchat v. Baltimore Ravens L.P., No. 08-2381 (4th Cir. Sept. 2, 2010).

In a patent/trademark case in which the district court made some seemingly bizarre trademark rulings, the Federal Circuit held that a trademark invalidity declaratory judgment cannot be dismissed for lack of an Article III case or controversy where the mark owner has actually sued the party seeking the D.J. for infringement. (One would have thought that this is not a concept that needs to be rectified at the appeals level.) In another part of the opinion, the Federal Circuit also used imprecise nomenclature when it repeatedly referred to a demand for a disgorgement of profits as a “damage” claim—an imprecision that could cause confusion down the line since the principles applying to each remedy are quite different. Green Edge Enters., LLC v. Rubber Mulch Etc., LLC, No 2009-1455 (Fed. Cir. Sept. 7, 2010).

7th Circuit decision re product design trade dress turns on construction of French contract

In a recent decision, the Seventh Circuit ruled that a trade dress dispute involving nearly identical-looking French press coffee makers turned on the construction, under French law, of a French contract between the parties. In Bodum USA, Inc. v. La Cafetiere, Inc., No. 09-1892 (7th Cir. Sept. 2, 2010), the Court ruled that the plaintiff had signed a contract that permitted the defendant to sell the accused design in all countries but France. Since the issue was use in the U.S., the defendant won.

While the court technically sidestepped the issue of whether the design was protectable under the Lanham Act (all but saying that it wasn't), there were three separate opinions totaling 36 pages (the majority by Judge Easterbrook, with concurrences by Judges Posner and Wood) concerning how foreign law should be proved under Fed. R. Civ. P. 44.1. In short, Judges Easterbrook and Posner think not only that Rule 44.1 does not require expert testimony, but that expert testimony is a lousy way to determine foreign law. They think judges should simply research it, like they do any federal or state law. Judge Wood agreed that rule 44.1 doesn't require expert testimony, but she thinks it's a good idea, mostly because in the translated research materials that judges would typically obtain, nuances can sometimes be missed.