VISA claimed that "eVisa" for "multilingual education and information" services on the Internet diluted its famous mark by blurring. In Visa Int'l Serv. Ass'n v. JSL Corp., No. 08-15206 (9th Cir. June 28, 2010), the 9th Circuit agreed.
Judge Kozinski's opinion focused on issues that can arise when the plaintiff's mark is a real word in the dictionary (e.g., "VISA," as opposed to a coined term like XEROX). Two ways this circumstance can affect a dilution-by-blurring claim are whether the plaintiff's mark is distinctive enough to be protected under the dilution statute and whether the defendant can claim a fair descriptive use.
The court held that even a word appearing in the dictionary can be distinctive enough to qualify for dilution protection (under 15 USC § 1125(c)(1)), so long as the plaintiff isn't using it descriptively. Judge Kozinski mentioned TIDE and CAMEL, among other examples sprinkled throughout the court's opinion.
The court also rejected what appeared to be the defendant's "fair descriptive use" defense (15 USC § 1125(c)(3)(A)), saying using eVisa for multilingual education did not evoke the dictionary definition of "visa."
Tuesday, June 29, 2010
Friday, June 25, 2010
Fed. Cir. Overturns Yet Another E.D. Tex. “No Transfer” Order
The Federal Circuit yesterday rejected a plaintiff’s attorney’s attempt to “game the system” by arranging to have its client open up what appeared to be a sham office in the E.D. Tex. before filing a patent suit there against an Indiana company.
In In re Zimmer Holdings, Inc., No. 2010-M938 (Fed. Cir. June 24, 2010), the evidence showed that the plaintiff's Longview, Texas, office was shared with another of plaintiff’s counsel’s clients. The plaintiff was not registered to do business in Texas, had no employees in Texas, and actually has deeper ties to Michigan, where it conducts its R&D, where its two officers reside, and where its patent prosecution is done. But the district court denied a section 1404(a) transfer.
The Federal Circuit granted the defendant's petition for mandamus. It chastised the district court for admittedly refusing to “scrutinize litigants’ business decisions to determine whether opening an office in a particular location has a legitimate business purpose or is merely a tactic to manipulate venue.” Citing Hertz Corp. v. Friend, 130 S. Ct. 1181, 1195 (2010), the Federal Circuit urged district courts to do just that. Calling the Longview office "a legal fiction" (slip op. at 8), the court held that manipulation is precisely what transpired in this case: “This is a classic case where the plaintiff is attempting to game the system by artificially seeking to establish venue by sharing office space with another of the trial counsel’s clients.” (Id. at 6.)
In In re Zimmer Holdings, Inc., No. 2010-M938 (Fed. Cir. June 24, 2010), the evidence showed that the plaintiff's Longview, Texas, office was shared with another of plaintiff’s counsel’s clients. The plaintiff was not registered to do business in Texas, had no employees in Texas, and actually has deeper ties to Michigan, where it conducts its R&D, where its two officers reside, and where its patent prosecution is done. But the district court denied a section 1404(a) transfer.
The Federal Circuit granted the defendant's petition for mandamus. It chastised the district court for admittedly refusing to “scrutinize litigants’ business decisions to determine whether opening an office in a particular location has a legitimate business purpose or is merely a tactic to manipulate venue.” Citing Hertz Corp. v. Friend, 130 S. Ct. 1181, 1195 (2010), the Federal Circuit urged district courts to do just that. Calling the Longview office "a legal fiction" (slip op. at 8), the court held that manipulation is precisely what transpired in this case: “This is a classic case where the plaintiff is attempting to game the system by artificially seeking to establish venue by sharing office space with another of the trial counsel’s clients.” (Id. at 6.)
Thursday, June 03, 2010
5th Circuit lays out analytical framework for assessing distinctiveness of registered design mark
The Fifth Circuit yesterday issued an opinion discussing how to analyze the distinctiveness of a registered design mark. In Amazing Spaces, Inc. v. Metro Mini Storage, No. 09-20702 (5th Cir. June 2, 2010), the court first held that the presumption of validity flowing from registration was not itself enough to stave off summary judgment of nondistinctiveness (at least in this case).
Moving on to an assessment of inherent distinctiveness, the court held that this registered design mark:
could not be analyzed under the seminal distinctiveness (generic, descriptive, suggestive, arbitrary/fanciful) test set forth in Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4 (2d Cir. 1976) (Friendly, J.) (generic, descriptive, suggestive, arbitrary/fanciful) because it was a "futile endeavor" to try to apply any of those labels to the mark. (The court resisted saying that Abercrombie could never be applied to a non-word mark, however.)
Instead, the court applied the distinctiveness test from Seabrook Foods, Inc. v. Bar-Well Foods Ltd., 568 F.2d 1342 (CCPA 1978), which is geared more toward design marks. The Seabrook test looks at whether the design is a common shape or form of ornamentation (as opposed to being unusual in its field), or is capable of being perceived as an indicator of source apart from any words it is used with. Applying Seabrook, the court held that so many others use designs similar to this one that it was not inherently distinctive.
The mark owner tried to establish secondary meaning by offering evidence of long usage, substantial sales revenue, and substantial advertising expenditures. But the 5th Circuit affirmed summary judgment of no secondary meaning because the evidence showed that the mark owner primarily used the mark as a form of ornamentation, along with word marks that were more clearly the main product identifiers. In other words, these other facts severed the inferential link the mark owner tried to make between this circumstantial evidence and the conclusion that the star design itself thereby acquired secondary meaning.
Tom
Moving on to an assessment of inherent distinctiveness, the court held that this registered design mark:
could not be analyzed under the seminal distinctiveness (generic, descriptive, suggestive, arbitrary/fanciful) test set forth in Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4 (2d Cir. 1976) (Friendly, J.) (generic, descriptive, suggestive, arbitrary/fanciful) because it was a "futile endeavor" to try to apply any of those labels to the mark. (The court resisted saying that Abercrombie could never be applied to a non-word mark, however.)
Instead, the court applied the distinctiveness test from Seabrook Foods, Inc. v. Bar-Well Foods Ltd., 568 F.2d 1342 (CCPA 1978), which is geared more toward design marks. The Seabrook test looks at whether the design is a common shape or form of ornamentation (as opposed to being unusual in its field), or is capable of being perceived as an indicator of source apart from any words it is used with. Applying Seabrook, the court held that so many others use designs similar to this one that it was not inherently distinctive.
The mark owner tried to establish secondary meaning by offering evidence of long usage, substantial sales revenue, and substantial advertising expenditures. But the 5th Circuit affirmed summary judgment of no secondary meaning because the evidence showed that the mark owner primarily used the mark as a form of ornamentation, along with word marks that were more clearly the main product identifiers. In other words, these other facts severed the inferential link the mark owner tried to make between this circumstantial evidence and the conclusion that the star design itself thereby acquired secondary meaning.
Tom
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.
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)
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)
Friday, April 30, 2010
Second Circuit gets rid of presumption of irreparable harm in copyright injunction cases
The Second Circuit yesterday overruled prior precedent that provided for a presumption of irreparable harm in the preliminary injunction context in copyright cases. In Salinger v. Colting, No. 09-2878 (2d Cir. Apr. 29, 2010), the Second Circuit held that the Supreme Court’s decision in eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (2006)--in which the Supreme Court, in a patent case, rejected general or categorical rules favoring or disfavoring injunctions--was not limited to patent cases.
The new test for a preliminary injunction (in copyright cases in the Second Circuit) is now:
1. (a) likelihood of success on the merits; or
(b) sufficiently serious merits questions and the balance of hardships tipping decidedly in the movant’s favor;
2. a demonstration of likely irreparable harm;
3. consideration of the balance of hardships; and
4. confirmation that the public interest would not be disserved.
As to factor (2), the Court softened the blow to copyright holders, however, by hinting that courts could consider “historical tendencies” in past copyright cases in assessing the showing of irreparable harm. It will be interesting to see whether such “historical tendencies” will actually put litigants pretty close to where they were under the “presumption of irreparable” standard.
While the Court was careful to limit its holding to copyright cases, nothing I could find in the opinion suggested that the Second Circuit would not also extend eBay to trademark cases once the issue is squarely presented to it. However, in what might have been an instance of purposeful judicial foreshadowing, the Court noted that historically courts have tended to find “possible marketplace confusion” as an example of irreparable harm. Hmmm.
The new test for a preliminary injunction (in copyright cases in the Second Circuit) is now:
1. (a) likelihood of success on the merits; or
(b) sufficiently serious merits questions and the balance of hardships tipping decidedly in the movant’s favor;
2. a demonstration of likely irreparable harm;
3. consideration of the balance of hardships; and
4. confirmation that the public interest would not be disserved.
As to factor (2), the Court softened the blow to copyright holders, however, by hinting that courts could consider “historical tendencies” in past copyright cases in assessing the showing of irreparable harm. It will be interesting to see whether such “historical tendencies” will actually put litigants pretty close to where they were under the “presumption of irreparable” standard.
While the Court was careful to limit its holding to copyright cases, nothing I could find in the opinion suggested that the Second Circuit would not also extend eBay to trademark cases once the issue is squarely presented to it. However, in what might have been an instance of purposeful judicial foreshadowing, the Court noted that historically courts have tended to find “possible marketplace confusion” as an example of irreparable harm. Hmmm.
Tuesday, April 27, 2010
Ninth Circuit Decision on the line between descriptiveness and suggestiveness
In Zobmondo Entertainment, LLC v. Falls Media, LLC, No. 08-56831 (9th Cir. Apr. 26, 2010), the 9th Circuit reversed the district court’s ruling, on summary judgment, that the registered mark “WOULD YOU RATHER . . . ?” for books and games was merely descriptive and that its registration should be canceled.
While largely fact-specific, the 9th Circuit opinion is notable in a least a couple of respects. First, it discusses three different tests that could be employed to determine whether a challenged mark is suggestive or descriptive: the “imagination” test, which focuses on how much thought consumers need, when confronted with the mark, to make conclusions about the nature of the product; the “competitors’ needs” test, which focuses on the extent to which, if any, competitors need to use the mark to describe their competing products; and the “extent of use” test, which looks at the frequency with which competitors actually use the mark on similar merchandise. (To me, there looks to be little difference between the “competitors’ needs” test and the “extent of use” test.)
Second, the court gave substantial weight to the fact that the PTO registered the mark without requiring proof of secondary meaning.
Finally, the court highlighted the challenger’s citation of statements by people associated with the registrant that seemed to indicate that they thought “WOULD YOU RATHER . . . ?” was a good mark for the precise reason that it described the subject of the book and the game. Good evidence to look for in discovery.
While largely fact-specific, the 9th Circuit opinion is notable in a least a couple of respects. First, it discusses three different tests that could be employed to determine whether a challenged mark is suggestive or descriptive: the “imagination” test, which focuses on how much thought consumers need, when confronted with the mark, to make conclusions about the nature of the product; the “competitors’ needs” test, which focuses on the extent to which, if any, competitors need to use the mark to describe their competing products; and the “extent of use” test, which looks at the frequency with which competitors actually use the mark on similar merchandise. (To me, there looks to be little difference between the “competitors’ needs” test and the “extent of use” test.)
Second, the court gave substantial weight to the fact that the PTO registered the mark without requiring proof of secondary meaning.
Finally, the court highlighted the challenger’s citation of statements by people associated with the registrant that seemed to indicate that they thought “WOULD YOU RATHER . . . ?” was a good mark for the precise reason that it described the subject of the book and the game. Good evidence to look for in discovery.
Thursday, April 08, 2010
Three recent decisions re: architectural copyrights; a stolen domain name; and copyright/trade secret ownership in the employment context
While interesting, the following three recent decision don’t seem to warrant extended analysis, so here are the TV Guide summaries:
2d Circuit Throws Out Architectural Copyright Claim on 12(b)(6) Motion Based on Designs Appended to Complaint
Don’t plead yourself out of court. That may be the lesson of Peter F. Gaito Architecture, LLC v. Simone Dev. Corp., No. 09-2613-cv (Apr. 7, 2010). The plaintiff copyright owner alleged that a developer infringed his copyrighted plans, and attached depictions of the designs to its complaint. Assuming for purposes of argument that copying occurred, the Second Circuit compared the two designs for substantial similarity. Concluding that the depictions demonstrated that only general ideas and concepts—not protectable expression—was misappropriated, the court affirmed dismissal of the case. Of course, not attaching the depictions of the designs to the complaint would likely have only postponed the dismissal to the summary judgment stage, but it may have increased leverage for some kind of monetary settlement in the meantime.
9th Circuit Grapples with Conflict of Laws Issue in Domain Name Conversion Case
In an intensely-fact specific case involving a claim that the defendants converted the plaintiff’s domain name registration (replete with a bad guy in the PRC, an innocent purchaser for value defense, and a cameo appearance by Ralph Lauren), the 9th Circuit in CRS Recovery, Inc. v. Laxton, No. 08-17306 (Apr. 6, 2010), engaged in a lengthy discussion of the policies underlying the respective laws of Virginia and California to determine a tricky and potentially outcome-determinative choice-of-law issue.
9th Circuit Analyzes Employee/Independent Contractor Issue to Decide Who Owns Copyrights and Trade Secrets in Computer Software Source Code
In JustMed, Inc. v. Byce, No. 07-35861 (Apr. 5, 2010), the Ninth Circuit went through a lengthy, fact-intensive analysis of the often-litigated issue of whether the author of copyrightable material or creator of a trade secret was an employee or independent contractor of a company claiming that it owned the individual’s work. The case is interesting in that it seems to somewhat alter the traditional weighing of the factors relevant to that determination to fit the context of small, non-traditional, techie start up companies.
2d Circuit Throws Out Architectural Copyright Claim on 12(b)(6) Motion Based on Designs Appended to Complaint
Don’t plead yourself out of court. That may be the lesson of Peter F. Gaito Architecture, LLC v. Simone Dev. Corp., No. 09-2613-cv (Apr. 7, 2010). The plaintiff copyright owner alleged that a developer infringed his copyrighted plans, and attached depictions of the designs to its complaint. Assuming for purposes of argument that copying occurred, the Second Circuit compared the two designs for substantial similarity. Concluding that the depictions demonstrated that only general ideas and concepts—not protectable expression—was misappropriated, the court affirmed dismissal of the case. Of course, not attaching the depictions of the designs to the complaint would likely have only postponed the dismissal to the summary judgment stage, but it may have increased leverage for some kind of monetary settlement in the meantime.
9th Circuit Grapples with Conflict of Laws Issue in Domain Name Conversion Case
In an intensely-fact specific case involving a claim that the defendants converted the plaintiff’s domain name registration (replete with a bad guy in the PRC, an innocent purchaser for value defense, and a cameo appearance by Ralph Lauren), the 9th Circuit in CRS Recovery, Inc. v. Laxton, No. 08-17306 (Apr. 6, 2010), engaged in a lengthy discussion of the policies underlying the respective laws of Virginia and California to determine a tricky and potentially outcome-determinative choice-of-law issue.
9th Circuit Analyzes Employee/Independent Contractor Issue to Decide Who Owns Copyrights and Trade Secrets in Computer Software Source Code
In JustMed, Inc. v. Byce, No. 07-35861 (Apr. 5, 2010), the Ninth Circuit went through a lengthy, fact-intensive analysis of the often-litigated issue of whether the author of copyrightable material or creator of a trade secret was an employee or independent contractor of a company claiming that it owned the individual’s work. The case is interesting in that it seems to somewhat alter the traditional weighing of the factors relevant to that determination to fit the context of small, non-traditional, techie start up companies.
Thursday, April 01, 2010
2d Cir. decision rejecting Tiffany's allegations that eBay liable for sale of counterfeit goods
The Second Circuit today affirmed judgment in favor of eBay and against Tiffany in Tiffany’s much-publicized case against eBay for permitting the sale of counterfeit Tiffany products in its on-line auctions. The case involved significant rulings in the area of (1) buying “sponsor links” on Internet search engines using others’ trademarks, and also (2) as to the liability of an on-line auction site for hosting sales of counterfeit goods.
In Tiffany (NJ) Inc. v. eBay Inc., No. 08-3947 (2d Cir. Apr. 1, 2010), the Second Circuit first rejected Tiffany’s claim of direct trademark infringement. Although eBay bought Yahoo! sponsor ads/links using Tiffany’s trademark, the court found that this was a nominative fair use of the Tiffany mark, because Tiffany goods were in fact available on eBay.
The Second Circuit next rejected Tiffany’s claim that eBay contributorily infringed the Tiffany marks by facilitating the sale of counterfeit goods at auction. Citing the Supreme Court’s familiar standard from Inwood v. Ives, 456 U.S. 844 (1982), and decisions from other circuits concerning flea markets, the Second Circuit first ruled that eBay exerted substantial enough control over the auctions on its site to potentially be subject to contributory liability. But because eBay effectively stopped known instances of counterfeiting pursuant to its various programs designed to stop sale of counterfeit and infringing goods, the Second Circuit ruled that eBay did not run afoul of the Inwood v. Ives prohibition against continuing to permit sales of known counterfeit items or permit known counterfeiters to continue to list on eBay.
Tiffany pointed to evidence that nearly three-quarters of its goods sold on eBay are counterfeit. The Second Circuit, however, rejected the notion that generalized knowledge that many counterfeit items are being sold can trigger contributory liability under Inwood v. Ives, particularly in view of the substantial anti-counterfeiting steps that eBay has implemented. In so doing, the Second Circuit admitted that it was adopting a somewhat narrow reading of the Inwood v. Ives standard of continued support in the face of a “reason to know” of infringing activity. The court also noted that such generalized knowledge does not rise to the culpable level of “willful blindness.”
The court also quickly dispatched Tiffany’s trademark dilution claim (because eBay did not itself use the Tiffany marks).
Finally, the court remanded Tiffany’s claim of false advertising for the district court to determine whether any of eBay’s ads were implicitly misleading as to the nature of the Tiffany goods that were listed on eBay.
In Tiffany (NJ) Inc. v. eBay Inc., No. 08-3947 (2d Cir. Apr. 1, 2010), the Second Circuit first rejected Tiffany’s claim of direct trademark infringement. Although eBay bought Yahoo! sponsor ads/links using Tiffany’s trademark, the court found that this was a nominative fair use of the Tiffany mark, because Tiffany goods were in fact available on eBay.
The Second Circuit next rejected Tiffany’s claim that eBay contributorily infringed the Tiffany marks by facilitating the sale of counterfeit goods at auction. Citing the Supreme Court’s familiar standard from Inwood v. Ives, 456 U.S. 844 (1982), and decisions from other circuits concerning flea markets, the Second Circuit first ruled that eBay exerted substantial enough control over the auctions on its site to potentially be subject to contributory liability. But because eBay effectively stopped known instances of counterfeiting pursuant to its various programs designed to stop sale of counterfeit and infringing goods, the Second Circuit ruled that eBay did not run afoul of the Inwood v. Ives prohibition against continuing to permit sales of known counterfeit items or permit known counterfeiters to continue to list on eBay.
Tiffany pointed to evidence that nearly three-quarters of its goods sold on eBay are counterfeit. The Second Circuit, however, rejected the notion that generalized knowledge that many counterfeit items are being sold can trigger contributory liability under Inwood v. Ives, particularly in view of the substantial anti-counterfeiting steps that eBay has implemented. In so doing, the Second Circuit admitted that it was adopting a somewhat narrow reading of the Inwood v. Ives standard of continued support in the face of a “reason to know” of infringing activity. The court also noted that such generalized knowledge does not rise to the culpable level of “willful blindness.”
The court also quickly dispatched Tiffany’s trademark dilution claim (because eBay did not itself use the Tiffany marks).
Finally, the court remanded Tiffany’s claim of false advertising for the district court to determine whether any of eBay’s ads were implicitly misleading as to the nature of the Tiffany goods that were listed on eBay.
Friday, February 26, 2010
9th Cir. decision re enforcement of judgment by levying on and auctioning off domain names
In Office Depot, Inc. v. Zuccarini, No. 07-16788 (9th Cir. Feb. 26, 2010), the Ninth Circuit held Office Depot’s money judgment against notorious cybersquatter could be enforced by levying upon and selling off his domain names.
VeriSign, the registry for all “.com” and .net” domain names, is located in the N.D. Cal. The 9th Circuit permitted an enforcement procedure comprising: (1) registering the judgment in the N.D. Cal.; and (2) moving for the appointment of a receiver, who would then (3) obtain the domain names from the VeriSign registry and sell them off at auction. In approving this procedure, the court held that domain names are “property” that can be levied upon under California law. The court further held that, for purposes of the quasi in rem jurisdiction that applied to such attachment proceedings, domain names are located wherever the registry or registrar is located.
VeriSign, the registry for all “.com” and .net” domain names, is located in the N.D. Cal. The 9th Circuit permitted an enforcement procedure comprising: (1) registering the judgment in the N.D. Cal.; and (2) moving for the appointment of a receiver, who would then (3) obtain the domain names from the VeriSign registry and sell them off at auction. In approving this procedure, the court held that domain names are “property” that can be levied upon under California law. The court further held that, for purposes of the quasi in rem jurisdiction that applied to such attachment proceedings, domain names are located wherever the registry or registrar is located.
Fed. Cir. holds government liable for copyright infringing stamp depicting Korean War Veterans Memorial
In a fascinating and factually unique case that I won’t try to fully summarize, a 2-1 panel majority of the Federal Circuit held that the U.S. government is liable to the sculptor of the soldier figures in the government’s Korean War Veterans Memorial for copyright infringement based on a commemorative U.S. postage stamp bearing a photograph of the soldier figures. Gaylord v. United States, No. 2009-5044 (Fed. Cir. Feb. 25, 2010).
The sculptor was a subcontractor. The prime contractor for the Memorial had a contract with the government providing that government would own the copyrights in the end product and that the project was a work made for hire. The government paid the subcontractor/sculptor $775,000 to create the figures. The sculptor later registered copyrights in the figures.
The majority ignored the government contract because the parties (curiously) didn’t brief it, and ruled that: (1) the sculptor owned valid copyrights; (2) the stamp was not a fair use; and (3) the government was not a joint author because the only contributions made by the government’s designees were suggestions (i.e., uncopyrightable ideas). The majority remanded for a determination of damages—which will probably be substantial in light of the fact that the government sold $17 million worth of stamps.
In dissent, Judge Newman lambasted the majority for ignoring the contract and for ignoring a statute that provides that there is no right of action against the government for infringement of copyrights inuring in works created in service to the government (28 U.S.C. § 1498).
The sculptor was a subcontractor. The prime contractor for the Memorial had a contract with the government providing that government would own the copyrights in the end product and that the project was a work made for hire. The government paid the subcontractor/sculptor $775,000 to create the figures. The sculptor later registered copyrights in the figures.
The majority ignored the government contract because the parties (curiously) didn’t brief it, and ruled that: (1) the sculptor owned valid copyrights; (2) the stamp was not a fair use; and (3) the government was not a joint author because the only contributions made by the government’s designees were suggestions (i.e., uncopyrightable ideas). The majority remanded for a determination of damages—which will probably be substantial in light of the fact that the government sold $17 million worth of stamps.
In dissent, Judge Newman lambasted the majority for ignoring the contract and for ignoring a statute that provides that there is no right of action against the government for infringement of copyrights inuring in works created in service to the government (28 U.S.C. § 1498).
Thursday, February 25, 2010
5th Circuit decision on "innocent infringer" damages reduction defense in copyright case
The 5th Circuit recently whacked a defendant found liable for copyright infringement by downloading, and possibly sharing, 37 of the plaintiff’s copyrighted songs through a peer-to-peer file-sharing network. Maverick Recording Co. v. Harper, No. 08-51194 (5th Cir. Feb. 25, 2010).
The district court had entered summary judgment of infringement. The plaintiff requested minimum statutory damages of $750 per song under 17 USC § 504(c)(1), but the defendant argued that she was an innocent infringer and therefore should be liable only for the 17 USC § 504(c)(2) reduced amount of $200 per song. The district court found that the defendant’s testimony—that she was too young to understand that such free downloading and sharing constituted copyright infringement—created a trial issue.
The copyright owner accepted the $200 per song judgment, but reserved the right to appeal the innocent infringer issue if the infringer appealed. The infringer appealed.
Bad idea.
The Fifth Circuit affirmed the infringement finding and threw out the infringer’s weak due process argument (to paraphrase the defense: “$200 per song is unconstitutional given that I was young and naive”). The Fifth Circuit then found that the infringer’s "young and ignorant of the law" argument immaterial to the “innocent infringement” defense as well because the copyright owner put copyright notices on its “phonorecords” (e.g., CDs). Even though there was no evidence that the file-downloading infringer ever saw a CD, 17 USC § 402(d) prohibits the “innocent infringement” reduction where the infringer had “access” to the “phonorecord,” a point that the infringer failed to contest. Having stripped away the innocent infringer reduction, the Fifth Circuit remanded for entry of judgment for the amount the copyright owner originally requested: $750 per song.
The district court had entered summary judgment of infringement. The plaintiff requested minimum statutory damages of $750 per song under 17 USC § 504(c)(1), but the defendant argued that she was an innocent infringer and therefore should be liable only for the 17 USC § 504(c)(2) reduced amount of $200 per song. The district court found that the defendant’s testimony—that she was too young to understand that such free downloading and sharing constituted copyright infringement—created a trial issue.
The copyright owner accepted the $200 per song judgment, but reserved the right to appeal the innocent infringer issue if the infringer appealed. The infringer appealed.
Bad idea.
The Fifth Circuit affirmed the infringement finding and threw out the infringer’s weak due process argument (to paraphrase the defense: “$200 per song is unconstitutional given that I was young and naive”). The Fifth Circuit then found that the infringer’s "young and ignorant of the law" argument immaterial to the “innocent infringement” defense as well because the copyright owner put copyright notices on its “phonorecords” (e.g., CDs). Even though there was no evidence that the file-downloading infringer ever saw a CD, 17 USC § 402(d) prohibits the “innocent infringement” reduction where the infringer had “access” to the “phonorecord,” a point that the infringer failed to contest. Having stripped away the innocent infringer reduction, the Fifth Circuit remanded for entry of judgment for the amount the copyright owner originally requested: $750 per song.
Sunday, February 21, 2010
11th Cir. decision on copyrightability of blank forms
In Utopia Provider Sys., Inc. v. Plummer, No. 09-11160 (Feb. 19, 2010), the 11th Circuit addressed the test for determining the copyrightability of blank forms. At issue was a series of print and electronic forms developed for hospital emergency room treatment. The forms contained a detailed series of headings with blank spaces for a treating physician to input a patient's medical history, present symptoms, physical exam results, diagnosis and treatment decisions, and instructions. The more specific aspects of the forms were different for different problems.
The court first noted that blank forms are not copyrightable unless they convey information or original pictorial expression. Examples of non-copyrightable forms include baseball scorecards and check stubs. In contrast, diaries for "baby's first year" might be an example of a form that could be copyrightable. Because, in the court's view, the headings of the medical forms at issue did not convey any information, but simply called for the recordation of the information that any responsible physician would ask or note in such emergency room visits, the court held that the forms were not copyrightable.
The court first noted that blank forms are not copyrightable unless they convey information or original pictorial expression. Examples of non-copyrightable forms include baseball scorecards and check stubs. In contrast, diaries for "baby's first year" might be an example of a form that could be copyrightable. Because, in the court's view, the headings of the medical forms at issue did not convey any information, but simply called for the recordation of the information that any responsible physician would ask or note in such emergency room visits, the court held that the forms were not copyrightable.
Wednesday, December 30, 2009
Federal Circuit ruling on website-based trademark specimens
In a mundane but useful decision, the Federal Circuit recently overturned the PTO’s “bright-line rule that a trademark specimen of use taken from a website must contain a picture.”
In In re Sones, No. 2009-1140 (Fed. Cir. Dec. 23, 2009), the specimen consisted of two webpage print-outs. One was a page from a website advertising a “charity bracelet” under the asserted mark "ONE NATION UNDER GOD™." There was no picture of the bracelet on the webpage, only a placeholder icon stating “Photo not available.” This webpage appeared to allow the user to click on an “Add to Cart” icon, indicating that the item could be ordered right off the website. The applicant also provided a sample webpage order form with the bracelet in the "cart."
The test that the Federal Circuit articulated in lieu of the website-picture requirement is that the website specimen “must in some way evince that the mark is ‘associated’ with the goods and serves as an indicator of source.” The court noted that while a picture is “an important consideration,” all relevant factors should be assessed, including whether the webpage specimen has a “point of sale nature,” whether the actual or inherent features of the product are recognizable from the textual description, and the use of the “™” symbol.
While the Court rejected the PTO’s “website-picture” requirement, the Court did not approve the specimen at issue, but instead remanded for a determination whether the specimen met the newly-articulated test.
In In re Sones, No. 2009-1140 (Fed. Cir. Dec. 23, 2009), the specimen consisted of two webpage print-outs. One was a page from a website advertising a “charity bracelet” under the asserted mark "ONE NATION UNDER GOD™." There was no picture of the bracelet on the webpage, only a placeholder icon stating “Photo not available.” This webpage appeared to allow the user to click on an “Add to Cart” icon, indicating that the item could be ordered right off the website. The applicant also provided a sample webpage order form with the bracelet in the "cart."
The test that the Federal Circuit articulated in lieu of the website-picture requirement is that the website specimen “must in some way evince that the mark is ‘associated’ with the goods and serves as an indicator of source.” The court noted that while a picture is “an important consideration,” all relevant factors should be assessed, including whether the webpage specimen has a “point of sale nature,” whether the actual or inherent features of the product are recognizable from the textual description, and the use of the “™” symbol.
While the Court rejected the PTO’s “website-picture” requirement, the Court did not approve the specimen at issue, but instead remanded for a determination whether the specimen met the newly-articulated test.
Thursday, December 03, 2009
2d Circuit Federal Trademark Dilution Act decision in Starbucks v. Charbucks dispute
The Second Circuit today revived Starbucks' Federal Trademark Dilution Act (FTDA) claim against the mark CHARBUCKS, but affirmed a judgment, entered after a bench trial, dismissing Starbucks' federal infringement and New York state dilution claims.
In Starbucks Corp. v. Wolfe's Borough Coffee, Inc., No. 08-3331-cv (Dec. 3, 2009), the Second Circuit found that the district court erred in ruling against Starbucks on the FTDA claim when it held that the "similarity" factor in the FTDA claim requires that the accused mark be "substantially similar." Rather, the latest version of the FTDA (which was amended in 2005 to address the Supreme Court's interpretation of the FTDA in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003)), contains no such requirement, providing only that the courts assess only "the degree of similarity."
The Second Circuit's opinion contained a few more interesting statements, including:
In Starbucks Corp. v. Wolfe's Borough Coffee, Inc., No. 08-3331-cv (Dec. 3, 2009), the Second Circuit found that the district court erred in ruling against Starbucks on the FTDA claim when it held that the "similarity" factor in the FTDA claim requires that the accused mark be "substantially similar." Rather, the latest version of the FTDA (which was amended in 2005 to address the Supreme Court's interpretation of the FTDA in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003)), contains no such requirement, providing only that the courts assess only "the degree of similarity."
The Second Circuit's opinion contained a few more interesting statements, including:
- "intent to capitalize on [the senior user's] reputation" is irrelevant to a federal infringement claim; only "intent to deceive" or "mislead" the public is relevant;
- intent to create an association is the relevant type of intent for FTDA claims;
- even if a product name sounds pejorative, that isn't necessarily a "tarnishing" use if the mark isn't marketed as a pejorative and the product is of high quality;
- Unlike the current FTDA, New York dilution law does require "substantial similarity"; and
- "Charbucks" was not a protected parody but an (unprotected) "subtle satire."
Tuesday, November 17, 2009
Unduly long 9th Circuit opinion on boundary between descriptive and suggestive marks
In what struck me as an unusually long opinion, the 9th Circuit took on the difference between descriptive and suggestive marks. Lahoti v. VeriCheck, Inc., No. 08-35001 (9th Cir. Nov. 16, 2009) concerned a DJ brought by a previously-adjudicated cybersquatter concerning his registration of the domain name "vericheck.com." The district court found for the defendant, ruling on summary judgment that the mark VERICHECK was inherently distinctive and that the plaintiff acted in bad faith.
The 9th Circuit affirmed the finding of bad faith, but vacated the finding of inherent distinctiveness because the district court, in its view, relied in part on erroneous legal reasoning. In its long discussion, the 9th Circuit noted that it is proper for a court to weigh in favor of a finding of inherent distinctiveness that the PTO has allowed others to register the mark at issue for similar products without requiring a showing of secondary meaning.
The 9th Circuit affirmed the finding of bad faith, but vacated the finding of inherent distinctiveness because the district court, in its view, relied in part on erroneous legal reasoning. In its long discussion, the 9th Circuit noted that it is proper for a court to weigh in favor of a finding of inherent distinctiveness that the PTO has allowed others to register the mark at issue for similar products without requiring a showing of secondary meaning.
Monday, November 09, 2009
7th Circuit decision on who gets to "copyright" derivative works
Here's a good lesson in how to bite the hand that previously fed you.
In Schrock v. Learning Curve Int'l, Inc., No. 08-1296 (7th Cir. Nov. 5, 2009), the owner of copyrights in toy characters licensed a company to make the toys. The toy maker then licensed a photographer to take photos of the toys for marketing purposes. When the toymaker stopped using the photographer, the photographer registered the photos and sued the character owner and the toymaker for copyright infringement for continuing to use the photos. The district court dismissed the photographer's case, saying that the photographer needed permission to "copyright" the photos.
The 7th Circuit reinstated the photographer's claim. Assuming that the photos were derivative works, the 7th Circuit held a couple of things. First, it held that derivative works are subject to the same minimal originality requirements as any other type of work and the photos of the toys were original enough for copyright protection as derivative works.
Second, it noted that, to sue for infringement, the person creating the derivative work must have both (a) the permission of the owner of the copyright in the underlying work to create the derivative work (not a problem in this case) and (b) the right to "copyright" the derivative work. As to (b), however, the 7th Circuit disagreed with the district court, noting that copyright law normally vests the copyright in the derivative work in the creator of the derivative work unless the owner of the underlying copyright contractually alters this ownership arrangement.
Since the record was inconclusive on whether the arrangement was contractually altered, the court remanded the case.
In Schrock v. Learning Curve Int'l, Inc., No. 08-1296 (7th Cir. Nov. 5, 2009), the owner of copyrights in toy characters licensed a company to make the toys. The toy maker then licensed a photographer to take photos of the toys for marketing purposes. When the toymaker stopped using the photographer, the photographer registered the photos and sued the character owner and the toymaker for copyright infringement for continuing to use the photos. The district court dismissed the photographer's case, saying that the photographer needed permission to "copyright" the photos.
The 7th Circuit reinstated the photographer's claim. Assuming that the photos were derivative works, the 7th Circuit held a couple of things. First, it held that derivative works are subject to the same minimal originality requirements as any other type of work and the photos of the toys were original enough for copyright protection as derivative works.
Second, it noted that, to sue for infringement, the person creating the derivative work must have both (a) the permission of the owner of the copyright in the underlying work to create the derivative work (not a problem in this case) and (b) the right to "copyright" the derivative work. As to (b), however, the 7th Circuit disagreed with the district court, noting that copyright law normally vests the copyright in the derivative work in the creator of the derivative work unless the owner of the underlying copyright contractually alters this ownership arrangement.
Since the record was inconclusive on whether the arrangement was contractually altered, the court remanded the case.
Friday, October 16, 2009
2d Circuit decision allowing consumer class action alleging Walker Process antitrust claim to go forward
Today the Second Circuit reversed the dismissal of a Walker Process antitrust claim brought against prescription drug sellers whose patent on the drug was previously held unenforceable.
It's a long (but interesting) decision, so I'll take my shot at a TV Guide®-type summary. First, the Court held that the consumer class has antitrust standing. In part the Court based this on the fact that type of damage the consumers sustained -- overcharging -- would go unremedied if only competitors could bring this type of action. Second, the Court held that the class's complaint satisfies both rule 9(b) and Iqbal. Both discussions are informative.
The case is In re: DDAVP Direct Purchaser Antitrust Litigation, No. 06-5525 (2d Cir. Oct. 16, 2009).
It's a long (but interesting) decision, so I'll take my shot at a TV Guide®-type summary. First, the Court held that the consumer class has antitrust standing. In part the Court based this on the fact that type of damage the consumers sustained -- overcharging -- would go unremedied if only competitors could bring this type of action. Second, the Court held that the class's complaint satisfies both rule 9(b) and Iqbal. Both discussions are informative.
The case is In re: DDAVP Direct Purchaser Antitrust Litigation, No. 06-5525 (2d Cir. Oct. 16, 2009).
Wednesday, September 30, 2009
5th Circuit (in Unpublished Opinion) Says Strength of Junior User’s Mark May be Relevant in Reverse Confusion Analysis
Seemingly approving of other circuits’ holdings that, in a reverse confusion case, the strength of the junior user’s mark is relevant, the 5th Circuit vacated summary judgment in the reverse confusion case of The Great Amer. Rest. Co. v. Domino’s Pizza LLC, No. 08-40654 (5th Cir. Sept. 30, 2009). The court designated its short, four-page opinion as “unpublished,” however. While unpublished opinions can be cited pursuant to Fed. R. App. P. 32.1, the 5th Circuit’s local rule 47.5.4 states that its unpublished opinions “are not precedent.” So it’s questionable how much weight any court might give it.
I believe this is the first time that the 5th Circuit has mentioned the “reverse strength” concept applying in a reverse confusion case. Off the top of my head I know that the 3d and 9th Circuits also take this view (the 5th Circuit cited only the 3d Circuit’s decision in A&H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198 (3d Cir. 2000)). The court did not address, however, whether the strength of the senior user’s mark remains relevant (or how) in the likelihood of reverse confusion calculus.
I believe this is the first time that the 5th Circuit has mentioned the “reverse strength” concept applying in a reverse confusion case. Off the top of my head I know that the 3d and 9th Circuits also take this view (the 5th Circuit cited only the 3d Circuit’s decision in A&H Sportswear, Inc. v. Victoria’s Secret Stores, Inc., 237 F.3d 198 (3d Cir. 2000)). The court did not address, however, whether the strength of the senior user’s mark remains relevant (or how) in the likelihood of reverse confusion calculus.
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