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1 Work + 2 Infringers = 1 Statutory Damages Award

PSBN Trademark Law Group — Thu, 23 May 2013 19:35:52 +0000

Photographer Morel was rebuffed in his attempt to collect a statutory damages award against each of two infringers. The District Court for the Southern District of New York held that a plaintiff seeking statutory damages for copyright infringement may not multiply the number of per-work awards by pursuing separate theories of individual liability against otherwise jointly liable defendants. Agence France Presse v. Morel, May 21, 2013.

AFP infringed photos that Morel had posted on Twitter; Google obtained the images from AFP. After being notified by Morel, AFP issued a “kill” notice that the images could no longer be used, but Google continue to use them. Morel sought statutory damages against AFP and Google for each photograph infringed. The Court held that, as a matter of law, there could only be a single award per work, stating that § 504(c) of the copyright statute contemplates a single per-work award for all infringements in an action and is unconcerned with causal or temporal breaks in infringement. The court also stressed, however, that even a single statutory award can account for multiple infringers (up to the statutory maximum).

Warner Brothers sued over fictional software in The Dark Knight Rises

PSBN Trademark Law Group — Tue, 21 May 2013 16:51:07 +0000

Warner Brothers is in the news once again over a Batman movie, but fans of the Caped Crusader will be disappointed to know that it is not for the development of a new movie. Instead, Warner Brothers was sued by a company called Fortres Grand over their use of the term “Clean Slate” on a piece of software in their last entry in the series, The Dark Knight Rises. In the film, the character Selina Kyle seeks the Clean Slate software because it supposedly possesses the ability to wipe her criminal history from all of the world’s records. In reality, Fortres Grand has sold software called Clean Slate since 2000, giving users the ability to restore their computers to their original state and erase all traces of activity that may have been recorded. Since 2001, Fortres Grand has had a federal trademark registration for the term.

In September 2012, not long after the release of The Dark Knight Rises, Fortres Grand sued Warner Brothers for trademark infringement. The hallmark of a trademark infringement suit is whether customers will be confused over the source of a product. This requires not only that potential customers are confused, but also that there is some bearing on purchasing decisions, rather than simply a vague sense of uncertainty.

In the classic case, the public can be confused when a new user attempts to free ride on the famous trademark of a large company. Hypothetically, a new company could create a new spreadsheet computer program using Microsoft’s mark Excel. This case, however, highlights “reverse confusion,” where the large party is, in fact, later to the party, becoming the “junior user.”

While a claim for reverse confusion is just as valid as one in the classic case, Chief Judge Simon ruled in this case that Fortres Grand suffered from a fatal flaw: the product that it offered was in no way similar to that offered by Warner Brothers! Because the Clean Slate software in the movie exists only in the fictional world of Gotham, the relevant comparison is between Fortres Grand’s software and the film itself. The lack of confusion between these products is obvious: nobody would purport that Fortres Grand is responsible for The Dark Knight Rises, and likewise nobody would believe that Warner Brothers is responsible for the sale of software bearing the Clean Slate mark because anyone who seeks out software as depicted in the film would quickly discover that no such software exists under this name.

Not content to dispose of the issue under just one theory, Chief Judge Simon further ruled that Warner Brothers acted within its rights based on the First Amendment’s grant of freedom of speech. The thin, blurry line where free speech meets regulation of trademarks in artistic works is based upon whether the use is artistically relevant to the work and whether it is explicitly misleading as to the source of the work. While the Clean Slate software was relevant to the plot surrounding the Selena Kyle character, there was no suggestion that Fortres Grand had anything to do with The Dark Knight Rises.

As a result, Fortres Grand’s case was dismissed. While Chief Judge Simon allowed Fortres Grand an opportunity to amend its complaint to state a valid claim for trademark infringement, it seems unlikely that it will be able to do so

Hasbro and Warner Bros. Battle Over Film Rights to 'Dungeons & Dragons'

PSBN Trademark Law Group — Mon, 20 May 2013 13:39:13 +0000

Enthusiasts of the legendary board game “Dungeons & Dragons” will be excited to learn that a new movie based on the game is in development. But, a new lawsuit filed by Hasbro earlier this week in California federal court against the production company, Sweetpea Entertainment, may keep the film in the dark. Hasbro asserts that Sweetpea Entertainment does not own the rights to make a new film based on Hasbro’s “Dungeons & Dragons” brand.

This dispute arose after Sweetpea Entertainment, which produced a film version of “Dungeons & Dragons” in 2000, recently began working with Warner Bros. to develop a “Dungeons & Dragons” sequel, tentatively named “Chainmail.” Hasbro objected, because it already licensed the rights for a “Dungeons & Dragons” sequel motion picture to Universal Studios. Hasbro’s copyright infringement lawsuit against Sweetpea Entertainment claims Hasbro owns all rights to the “Dungeons & Dragons” brand and seeks an injunction to prevent production and release of “Chainmail.”

According to Hasbro’s complaint, Sweetpea Entertainment acquired rights to the “Dungeons & Dragons” property from Hasbro by an agreement executed in 1994. Under the terms of the agreement, Sweetpea Entertainment obtained the right to produce a sequel or prequel. Sweetpea Entertainment contends that this provision provides it with the right to produce the “Chainmail” sequel. However, Hasbro rejects Sweetpea Entertainment’s ownership claim and argues that the sequel rights have reverted back to Hasbro under the terms of an amendment to the 1994 agreement. In the complaint, Hasbro notes that the amendment states that sequel rights would “revert on a rolling basis … on the earlier of (i) five (5) years from of the initial U.S. release or (ii) seven (7) years from final director’s cut of the immediately prior picture.” Hasbro claims that Sweetpea Entertainment’s earlier production of “Dungeons & Dragons” occurred well beyond the permissible windows of time, whereby Sweetpea Entertainment’s sequel rights expired long ago.

Unfortunately for “Dungeons & Dragons” fans, it looks like the only battles being fought for the time being will be in a courtroom. Stay tuned for further updates.

Copyright Troll Loses Footing: the End of Righthaven

PSBN Trademark Law Group — Fri, 17 May 2013 14:04:05 +0000

Illustrating the dangers posed by pro forma copyright assignments, the 9th Circuit Court of Appeals dealt the final blow to Righthaven LLC, renowned copyright troll. Righthaven LLC v. Hoehn, Civil Action No. 11-16751 (May 9, 2013). Righthaven’s business model was to obtain copyright assignments from the owners of newspaper articles and then aggressively pursue perceived infringers. Many of the company’s targets were bloggers or other news outlets. Despite the existence of copyright assignments to Righthaven (which included the right to sue for past infringement), side agreements with the assignor provided the assignor with some control over potential lawsuits, as well as a reversionary right. The 9th Circuit held that the existence of a copyright assignment was not conclusive, and that it was necessary to examine the overall substance of the transaction. Examining the relationship between the parties, the court concluded that Righthaven lacked the exclusive rights necessary for it to file suit.

The court, in an amusing anecdote, made the point that the mere existence of a contract assigning all rights is, by itself, insufficient to establish that the assignee actually possesses the exclusive rights contemplated by the Copyright Act: “Abraham Lincoln told a story about a lawyer who tried to establish that a calf had five legs by calling its tail a leg. But the calf had only four legs, Lincoln observed, because calling a tail a leg does not make it so.” An effective assignment requires more than a piece of paper.

New Bill May Have Profound Effect on Copyright Law, Fair Use, and Unlocking Cell Phones

PSBN Trademark Law Group — Tue, 14 May 2013 16:09:44 +0000

On May 8, 2013, Rep. Zoe Lofgren (D-Calif.) introduced a bill into Congress which may have profound implications on copyright law. Dubbed the “Unlocking Technology Act of 2013,” the bill’s primary target is the restriction found within the Digital Millennium Copyright Act (“DMCA”) that prohibits anyone from circumventing copyright prevention mechanisms, regardless of one’s intentions. While the DMCA’s provision is intended to reduce or eliminate piracy of digital files, its broad language prevents consumers from unlocking devices for benign purposes such as backing up their DVDs, installing text-to-speech software to enable the blind to read e-books, and repairing parts of cars and trucks which are tied to the innumerable sensors auto manufactures now install.

The Unlocking Technology Act of 2013 is the latest in a series of bills that have been introduced over the past few months in response to the Copyright Office’s failure to renew the exemption granted to users’ ability to unlock their cell phones. Since it was first introduced in 2005, this exemption has been periodically renewed to grant users the ability to modify their phones in order to install software that has not been approved by the manufacturer of the phone. Primarily, users can use this ability to connect a phone previously intended for use on one network, e.g. Verizon, to a different network, e.g. AT&T. This ability is particularly useful for users who purchase or are given a used phone but who have reason to use the phone on a different network, such as an international traveler or military serviceman who wishes to avoid extensive roaming charges while overseas. The exemption expired at the end of 2012 and was not renewed by the Copyright Office.

Prior bills have failed to satisfy critics of the DMCA. Bills such as the Wireless Independence Act of 2013, the Wireless Consumer Choice Act, and the Unlocking Consumer Choice and Wireless Competition Act are all considered “band-aid” attempts that do not go far enough to fix the root of the problem. Rather than create a limited exemption strictly tied to switching cell phones from network to network, as is the case in many of the earlier bills, the Unlocking Technology Act of 2013 aims to modify the DMCA itself to hopefully solve the problem once and for all. It proposes three changes: 1) amending the DMCA to prohibit circumventing copyright protection mechanisms only if the user’s intent is to infringe copyright, 2) amending the DMCA to prohibit the development of tools which aid in the circumvention of copyright protection only if the purpose of the tool is to enable copyright infringement, and 3) specifically making legal the act of modifying the software on a cell phone or tablet if the purpose is to enable the user to connect to a different carrier.

These changes not only solve the cell phone unlocking issue, but also have the much broader implication of restoring a fair use exception to copyright law in the wake of the DMCA. This exception would allow users to unlock any device or product they own, so long as their intent is not to infringe a copyright. Car owners would have a greater ability to repair their cars, blind readers would have a greater ability to listen to e-books, and everyone would enjoy the ability the back up the data they have stored on DVDs, which are notoriously susceptible to scratching and breaking. However, non-legitimate unlocking of devices, such as pirating movies after cracking their copyright protection, would still be forbidden.

A solution has been sought for some time. While the bill is still in its earliest stages and will likely be subject to extensive modifications as it wends its way through Congress, its proponents are hopeful that its changes to the DMCA will enable users to use their devices in any way they see fit, while also enabling users to reverse engineer their devices and create new advancements in the technology. Only time will tell whether this ends up being the ultimate outcome.

Trademarks and Open Source Software

PSBN Trademark Law Group — Thu, 09 May 2013 18:22:07 +0000

Open Source Software (“OSS”) is a time-saving godsend for many developers. Unlike the traditional software development model, where a large team of programmers is paid to write code for a particular project, OSS is written in a bit by bit fashion for free, generally by members of the public who have an interest in seeing the software be developed and utilized. But, while copyright concerns may be suspended with OSS, trademark concerns are not.

Freedom is a guiding principle of OSS. All of the generally accepted licensing schemes require the developer to allow users to run the program, study it, modify it, and redistribute copies of both the original and the modified versions. This system is, in essence, a waiver of copyright protection. The initial collaborative approach to development leads to a continued collaboration with the public in the future. This “open” approach, however, should not be confused with a waiver of trademark protection.

Many companies have been successful in selling their versions of OSS, called “distributions.” Perhaps the most well-known of these are distributions of the open source Linux operating system, such as Novell Open Enterprise Server, Red Hat Enterprise Linux, and SUSE Linux Enterprise. “Open” does not necessarily mean free for these branded distributions: software companies build on OSS, develop their own interpretations, hire professionals to test the software, and provide continuous tech support. The customer pays for these enhancements.

Professionally developed OSS products generally have their source code open for public inspection and use. This is where things begin to get tricky. While developers often encourage users to modifying the code for their own needs or to further the collaborative efforts of the group, how does one identify the new software? If, for example, I download the source code of Red Hat Enterprise Linux and make extensive modifications to it, can I then make it available to the public under the same name? Based on the core tenet of freedom in OSS, it would be easy to come to the conclusion that this is permissible. It isn’t.

A reseller can only use the original provider’s trademark to identify substantially unchanged goods. In my example, the new product is materially different, so the reseller (or redistributor, in the case where the product is given away for free) is barred from using the original trademark. At most, the reseller could use the mark in a descriptive sense, such as marketing the new software as “adapted from Red Hat Enterprise Linux.”

OSS vendors who attach a trademark to their distribution have an unusual situation to monitor. On the one hand they allow and even encourage their software to be modified and redistributed; on the other, they must ensure that subsequent users are not infringing their trademarks, since trademarks can be lost if their use is not monitored and controlled by the mark owner. Controlled licensing of the trademark reinforces the value of the developer’s brand and ensures that the public continues to understand the type and quality of products associated with the mark, which, at the end of the day, is exactly why it is essential to establish and register trademarks.

Warhol Foundation Files Suit Over Allegedly Stolen Banana

PSBN Trademark Law Group — Tue, 02 Oct 2012 19:55:34 +0000

In January 2012, the legendary rock band The Velvet Underground sued The Andy Warhol Foundation For the Visual Arts in a dispute over use of the iconic banana logo featured on the cover of the band’s debut album, The Velvet Underground & Nico. Credited as the 13^th best album in history by Rolling Stone magazine, the album is also notable because its cover art was created by one of the most well-known artists of the era, Andy Warhol. In fact, the art was such a hit with the band that it was later incorporated into future Velvet Underground album covers and merchandise.

In 2011, the Andy Warhol Foundation began licensing a number of Warhol’s works to Incase, which makes protective cases for iPhones. One of the first images used in this agreement was the banana from the album cover. As Warhol not only created the artwork, but was also the band’s manager at the time and was listed as the producer of the album, the Foundation believes it has a copyright in the image. As alleged in the suit, The Velvet Underground disagrees.

The first count The Velvet Underground charged the Foundation with relates to this copyright issue. The band asked the Court to declare that the Foundation has no such copyright to the banana image. After learning of the suit, the Foundation irrevocably agreed not to sue The Velvet Underground on any grounds relating to copyright of the image. On September 7, the Court agreed with the Foundation’s contention that the copyright claim should be dismissed because no controversy exists under the copyright in light of the Foundation’s inability to sue. Federal courts are Constitutionally prohibited from issuing opinions in cases where no real controversy exists.

Much more interesting are The Velvet Underground’s three pending claims related to the use of the banana as a trademark. Because of the longstanding use of the image with the band’s products, The Velvet Underground argues that the banana has gained a secondary meaning in the minds of consumers as an identifier of the band’s music and merchandise, especially in light of there being no apparent connection between bananas and musicians. The band asserts that if the Foundation is permitted to license the image, consumers will be confused as to the source of the products, charging the Foundation with False Designation of Origin under federal law and Unfair Competition and Misappropriation under New York law.

Predictably, the Foundation has denied the band’s allegation and has counterclaimed that it, not The Velvet Underground, owns trademark rights in the image. It also alleges that the stylized Andy Warhol signature that appears on the album cover and is reproduced on merchandise violates a trademark owned by the Foundation.

Unfortunately for us, it is likely that none of these issues will be ruled upon for several more months. In the mean time, the music lovers behind this blog will be watching and waiting.

Posted by Keith Jones

Marilyn Monroe Heats Up California Court Over Right of Publicity

PSBN Trademark Law Group — Wed, 12 Sep 2012 18:25:38 +0000

While this blog normally focuses on trademarks, a recent court ruling in California highlights an interesting case in the similar field of the right of publicity. In a nutshell, the right of publicity is the right of a well-known individual to control the commercial use of his or her name, image, and likeness. Unlike trademarks, for which there is a comprehensive federal right in addition to any additional rights that may be provided by the states, this right exists solely in the domain of state laws.

On August 30, the Court of Appeals for the Ninth Circuit ruled that the estate of Marilyn Monroe is not owed royalties for sales of images and photographs of the actress by The Milton Greene Archives. The ruling highlights the differences in the right provided by the different states. At the time of her death in 1962, Monroe owned a home in Los Angeles and an apartment in New York. In order to avoid paying California’s severe inheritance taxes, her estate then claimed New York as her legal state of residence, a decision which the Ninth Circuit found to be legitimate.

In recent years, however, Monroe’s estate has changed its tune, wishing to assert a California law granting the posthumous right of publicity to the famous. The law treats the publicity rights of a famous person essentially as a piece of property, much like a trademark, which survives one’s death and can be transferred to one’s heirs either specifically or, as here, through the residuary clause in her will. New York’s version of this law stalled in the state legislature and has not been passed. Unfortunately for Monroe’s estate, claiming New York residency half a century ago prohibited them from claiming California residency now.

While the issue in this case is relatively unique to celebrities, it does provide a useful lesson in related fields. Monroe’s estate was foiled by the uneven laws of differing states because no comprehensive federal law exists. Such a federal law does, however, exist in trademark law. Those who wish to protect their brands via trademarks as Monroe’s estate wished to protect her likeness via the right of publicity should strongly consider the merits of federal trademark registration so that, at the very least, they gain certainty in their marks being equal in force no matter which state they happen to be in.

TTAB Finds Philly Cheesesteak Trademark Claim a Tough Sell

PSBN Trademark Law Group — Fri, 07 Sep 2012 11:52:09 +0000

The Trademark Trial and Appeal Board (“TTAB”) recently affirmed the USPTO’s refusal to register the mark PHILADELPHIA’S CHEESESTEAK as applied for by Philly favorite Campo’s Deli. The rejection comes under Section 2(d) of the Trademark Act for being confusingly similar to several other marks and under Section 2(e)(2) of the Act for being geographically descriptive.

In its rejection under Section 2(d), the TTAB cited the registered marks PHILADELPHIA CHEESESTEAK CO. and THE ORIGINAL PHILADELPHIA CHEESESTEAK CO., both of which were registered by The Original Philadelphia Cheesesteak Co. under the class of “prepared foods, namely, meat.” While Campo’s filed its application under the class of “sandwiches; sandwiches, namely, cheesesteaks,” the Board found that these types of goods same channels of trade to the same classes of consumers and that sandwiches and meat are so closely related that one may contain the other. Because the types of goods are so similar and because the marks are so similar in apearance, the Board upheld the Examiner’s refusal to register the mark.

Continuing its analysis, the Board also rejected the application under Section 2(e)(2) of the Act as being geographically descriptive based on the fact that Campo’s is located in Philadelphia. Campo’s argued that the mark actually designates a style of cheesesteak popular in Philadelphia as opposed to designating that a particular sandwich physically originates from the city. While the TTAB is likely less troubled by this implicit assertion that Campo’s is the preeminent cheesesteak producer of Philadelphia than the numerous other delis in the city who make similar claims, it does not overcome the Board’s initial presumption of the association of the goods and the place.

Thus, the PHILADELPHIA’S CHEESESTEAK mark was both too similar to other marks already registered and was also too descriptive of the applicant’s location to be granted. Applicants should take note and create more unique marks that at most suggest, not describe, a location.

To view the TTAB’s opinion in full, please visit: http://ttabvue.uspto.gov/ttabvue/ttabvue-77768687-EXA-19.pdf.

Apple Finally Obtains Rights to IPAD Trademark in China

PSBN Trademark Law Group — Thu, 26 Jul 2012 16:55:27 +0000

Earlier this month, Apple reached a $60 million agreement with China-based Proview International Holdings to acquire the rights to the trademark for the iPad in China. The deal ends several years of litigation in Chinese courts between the two parties. While far short of the $2 billion Proview initially asked for, and even further short of the $110 billion in cash Apple had on hand earlier this year, the sum still demonstrates both the value of a trademark and the importance of acquiring the rights to the mark before it becomes so valuable.

Proview initially registered the mark in China in 2001 for an “Internet Personal Access Device.” In 2009, at a time when it maintained very little presence in China and before it launched the wildly successful tablet, Apple set up a subsidiary named IP Application Development to procure rights to the IPAD mark around the world. Conveniently, IP Application Development abbreviates to IPAD and could not be easily linked to Apple. At this point, the iPad device had not yet been announced and the mark was therefore not associated with any valuable brand. Apple, through IP Application Development, struck a deal worth roughly $55,000 with what it thought was Proview for the rights to the mark in a number of countries, including China.

A year later, after the iPad device debuted to immediate success, Proview initiated a law suit in Chinese court claiming rights to the mark. Its argument was that the deal struck with Apple was actually signed by Proview’s Taiwanese subsidiary, which did not own the mark. The Chinese court ultimately found this argument persuasive and Apple, faced with the prospect of protracted litigation, decided settlement was in its best interest. Industry speculators believe the acquisition of the mark was the last hurdle Apple needed to clear before releasing the latest version of the device in China.

Ultimately, Apple’s trademark struggle in China highlights the importance of registering marks as soon as possible in China as both an offensive and defensive measure for building and protecting brands. It is important to note that unlike the U.S., China is a first-to-file country, whereby a party can claim rights to a mark by simply beating competitors to the filing process. Under this type of system, a party can potentially claim rights to a priceless mark like IPAD by obtaining a registration first, and can then effectively hold other parties that might have a claim to the mark, like Apple, hostage. Thus, Apple’s costly battle to obtain the IPAD mark in China represents a key reminder that a party should always consider registering a mark in China as soon as possible to ensure that they reserve their rights to use and enforce that mark in China.

For more information about this settlement, please see: http://www.bbc.co.uk/news/business-18669394