Author of Work Created While in Federal Prison Cannot Sue United States for Copyright Infringement
Walton v. United States, 89 U.S.P.Q.2d 1317 (Fed. Cir. 2009). While an inmate at a federal prison, Walton was assigned to work for a government-owned corporation and he developed and produced desk-blotter calendars. Walton subsequently sued the United States for copyright infringement based on the government's use of calendars he created. The government moved to dismiss the case, and the court, in affirming the lower court's dismissal of Walton's case, explained that a copyright infringement suit cannot be maintained against the United States, if the work was prepared while the author of the work was in the "employment or service" of the United States. The court held that Walton's work was done "in the service of the United States" since (1) he developed and made the calendars at the direction of and with computers provided by the United States, (2) he was supervised by United States employees in that work, (3) he performed the work at a government facility, and (4) the government paid him modest compensation for his efforts.
No Confusion Where Mark Not Used on Goods or Services
St. Louis Univ. v. Meyer, 2008 U.S. Dist. LEXIS 104032 (E.D. Mo. Dec. 24, 2008). St. Louis University registered its name as a trademark and also claimed protection for the name and caption of the student newspaper as unregistered marks. To reserve the name of the student newspaper for the students' use in case the university discontinued on-campus publication, the faculty advisor filed articles of incorporation with the Missouri Secretary of State for a non-profit entity using the newspaper's name and caption. After a new charter for the newspaper was accepted, the advisor filed articles of dissolution. The university sued for trademark infringement, and on the faculty advisor's motion for partial summary judgment, the court held that an internal utilization of a trademark in a way that does not communicate it to the public does not violate the Lanham Act, which is concerned with the use of trademarks in connection with the sale of goods or services in a manner likely to lead to consumer confusion as to the source of such goods or services. The court explained that the advisor's actions amounted to no more than internal, non-public, utilization of the university's marks and did not constitute infringement.
Disposal of Seized Goods Improper Absent Court Determination That They Are Counterfeit
National Association for Stock Car Auto Racing, Inc. v. Doe , 08 CV 00044 (W.D.N.C. Nov. 6, 2008). In each of the past four years, NASCAR filed lawsuits against unidentified defendants, alleging that those defendants are selling counterfeit goods. NASCAR was then been able to obtain court orders permitting it to seize the allegedly counterfeit goods-because the cases involve counterfeiting, the courts can issue such orders without hearing from the defendants. Based on the order it obtained, NASCAR then seized allegedly counterfeit goods being sold near its races; however, each year, NASCAR dismissed the case before the court could determine whether the goods are actually counterfeit and destroys or donates the items that it seizes. NASCAR did the same thing in 2008, but the court would not go along. After speaking with NASCAR's attorneys, the court issued an order in which it expressed doubt that the NASCAR would ever conclude its case, pointing out that that NASCAR had filed similar suits in the previous four years and had dismissed each case before any finding of a violation of the Trademark Act. The court explained that this was significant because counterfeiting cases usually conclude with the entry of a permanent injunction and the destruction of the infringing goods. To arrive at this conclusion, however, a violation of the Trademark Act must be established. In the absence of any finding, the court asserted that NASCAR had no authority to destroy or dispose of any of the goods they seized. The court further explained that if NASCAR voluntarily dismissed this case, it would have to return the goods it seized to the parties from whom they had been seized. In view of the court's order, parties taking advantage of seizure orders must be sure that the court finds that a violation of the Trademark Act before disposing of seized goods.
Copyright Owners Should Consider Fair Use Doctrine When Issuing DMCA "Takedown" Notices
Lenz v. Universal Music Corp., 572 F. Supp. 2d 1150 (N.D. Cal. 2008). Universal sent a takedown notice to YouTube, requesting that a video posted by Ms. Lenz showing her young son dancing to the song "Let's Go Crazy" be removed. YouTube took the Video down and Ms. Lenz sued Universal alleging that their take down notice contained misrepresentations, arguing that Universal should have considered whether she had made a fair use of the song. After considering Universal's motion to dismiss, the court agreed. The courts explained that when sending a takedown notice, a copyright owner is required to consider whether the objectionable use constitutes a fair use. As Ms. Lenz had alleged that Universal had not engaged in such an analysis, her claim against Universal was allowed to proceed.
Imposition of Civil Penalty Appropriate Where Goods Seized by Customs Not Identical to Goods Identified in Trademark Registration
Untied States v. Able Time Inc., 06-56033 (9th Cir. Sept. 25, 2008). Able imported a shipment of watches to the United States that bore the mark "TOMMY", a registered trademark owned by Tommy Hilfiger. The Bureau of Customs and Border Protection (Customs) seized the watches. Tommy Hilfiger did not make or sell watches at the time of the seizure. Customs imposed a civil penalty upon Able, but Able objected and filed suit alleging that Tommy Hilfiger did not make or sell watches. The district court ruled that because Tommy Hilfiger did not make watches at the time of the seizure the watches were not counterfeit, and therefore the civil penalty imposed was unlawful. On appeal the Ninth Circuit found that the civil penalty remedy was still available because there is no requirement that the imported goods be identical to the goods or services identified in a trademark registration. Consequently, Customs could impose a civil penalty upon the importer of merchandise that bore the counterfeit mark, because the offending watches caused confusion even though the trademark owner did not manufacture or sell the same type of merchandise.
Reference Book for Book Series Infringes Copyright Rights in Author's Own Reference Books
Warner Bros. Entertainment Inc. v. RDR Books, 575 F.Supp.2d 513 (S.D.N.Y. 2008). Plaintiffs, Warner Bros. Entertainment and J.K. Rowling, brought a copyright infringement action against RDR Books, the publisher of "The Lexicon," an unauthorized encyclopedia-type reference book intended to be used in conjunction with Rowling's Harry Potter series. In addition to the Harry Potter novels, Rowling published two short companion books, one of which was encyclopedia-like. The court compared The Lexicon with the Harry Potter novels and companion books, and determined that The Lexicon included material that both quantitatively and qualitatively copied from the novels and the companion books--indeed the court noted that the copying from the companion books was significant. With copyright infringement established, the court evaluated whether the affirmative defense of fair use would nonetheless allow the use of Rowling's copyrighted work. In considering this question, the court observed that in taking material from the companion books, defendants had not created a new work, but instead created a work that was supplanting works of a similar type (the companion books) created by Rowling. The court also concluded that the publication of The Lexicon would harm the market for the companion books. In view of the foregoing, the court found that The Lexicon was not a fair use and permanently enjoined publication of The Lexicon.
DVR Does not Infringe Copyright Rights in TV Programming
Cartoon Network v. CSC Holdings, 536 F.3d 121 (2d Cir. 2008). Plaintiffs sued Cablevision for copyright infringement based on Cablevision's announcement of its "Remote Storage DVR System" (RS-DVR), which allowed its customers to record a single copy of a program for play back at a later time. Plaintiffs claimed that this system would violate their copyright in any recorded program. The District Court granted summary judgment in favor of plaintiffs, and Cablevision appealed. On appeal, the court noted that the question at issue was whether the RS-DVR system made copies that would give rise to a claim that Cablevision had violated plaintiffs' copyright rights. The court of appeals found that it did not. The court explained that Cablevision temporarily stored all programming in a temporary "buffer" in order to accommodate any requests it might have from customers; this temporary storage did not result in the making of a copy because the program was stored in the buffer for approximately one second and therefore was not fixed with any kind of the permanence required by the Copyright Act. Further, the court explained that, as with a VCR, the user, not Cablevision, made the copy of the program because the user programmed the system to record in turn making the copy. Finally, the court held that the playback of a program recorded on a RS-DVR was not an infringing "public performance" because the playback was transmitted only to the customer who instructed the RS-DVR to record that program.
eBay Not Liable for Sale of Allegedly Counterfeit Goods
Tiffany Inc. v. eBay Inc., No. 04-cv-04607-RJS (S.D.N.Y. July 14, 2008). Plaintiff, Tiffany Inc., brought an action for trademark infringement against eBay based on the sale of goods that Tiffany believed were counterfeit through eBay by third parties. Even though eBay removed from sale items that Tiffany believed were counterfeit, Tiffany took the position that eBay (and not eBay sellers) should be held responsible for the sale of counterfeit Tiffany goods through eBay's website. The court found that eBay itself did not infringe Tiffany's mark; the court explained that to the extent that eBay used Tiffany's mark on its website, this was permissible to inform potential buyers about the goods available for sale on the eBay website. The court also found that eBay was not liable for infringing uses of the TIFFANY mark by eBay sellers because Tiffany could not establish eBay had specific knowledge that eBay sellers were engaging in infringement by selling counterfeits. In reaching this conclusion, the court emphasized that eBay took steps to control its marketplace by removing listings to which Tiffany objected, a fact that Tiffany agreed with.
Authorized Unrestricted Sale of Any Object Embodying Methods Exhaust Patent Rights
Quanta Computer Inc. v. LG Electronics, Inc. No. 06-937 (June 9, 2008). LG Electronics (LGE) owned patents for certain systems used for coordinating read and write requests and managing data traffic in microprocessors. LGE licensed the patents to Intel for use in their chipsets, and the license agreement required Intel to give written notice to its customers that the license did not extend to products combining the Intel chipset with non-Intel parts. Quanta, a manufacturer, purchased Intel chipsets to combine with non-Intel parts. LGE claimed that Quanta infringed its patents because the license did not extend to such a sale, while Quanta claimed that no such restriction could apply as LGE's patent rights had been exhausted by the sale from Intel to Quanta. The appellate court found that the patent exhaustion doctrine, which provides that the initial authorized sale of a patented item terminates all patent rights to that item, did not apply to method patents (which it concluded described the patents at issue), and, in the alternative, that the doctrine did not apply because LGE did not license Intel to sell the products to Quanta to combine with non-Intel products. The Supreme Court unanimously reversed, holding that the patent exhaustion doctrine does apply to method patents and that because LGE's agreement with Intel authorized the sale of components substantially embodying the patents, the patent exhaustion doctrine prevented LGE from further asserting its rights beyond its sale to Intel. The Court found that nothing in the agreement prohibited Intel's sale, and thus, the sale was authorized.
Dooney & Bourke Handbags Do Not Infringe Louis Vuitton's Trademark Rights
Louis Vuitton Malletier v. Dooney & Bourke, Inc., No. 04 Civ. 2990 (SAS) (S.D.N.Y. May 30, 2008). Louis Vuitton and Dooney & Bourke manufacture and sell handbags. Louis Vuitton sells handbags featuring a pattern of "LV" monograms in different colors. After Louis Vuitton began selling those handbags, Dooney & Burke began selling handbags with a pattern of "DB" monograms in different colors, and Louis Vuitton subsequently sued Dooney & Bourke for trademark infringement and related claims. Dooney & Bourke moved for summary judgment on Louis Vuitton's claims of infringement and dilution. The district court found that there was no infringement because Louis Vuitton failed to establish that consumers were likely to be confused as to the source, authorization, or affiliation of Dooney & Bourke bags. The court explained that there were sufficient differences in the bags to distinguish them, that there was no evidence that any consumers had actually been confused or that Dooney & Bourke had been acting in bad faith, that the bags were of similar quality, and that consumers were highly sophisticated about brand identity. The court also ruled that there was no dilution, explaining that Louis Vuitton had failed to produce evidence of actual trademark dilution even though both brands had enjoyed tremendous sales for over four years. Instead, the court observed that there was evidence that the existence of the "D&B" mark may have strengthened the "LV" mark as Louis Vuitton's reputation and recognition had only increased since the introduction of the Dooney & Bourke bag.
Purchase of Competitor's Trademark as Search Term May Be "Use in Commerce" Under Lanham Act
T.D.I. International, Inc. and XGD Systems, LLC, v. Golf Preservations, Inc. and Samson Bailey , No. 07-cv-00313-DCR (E.D. Ky. Jan. 31, 2008). TDI and XGD, both in the business of laying drainage systems for golf courses, sued Samson Bailey, who formerly worked for TDI and XGD and founded Golf Preservations, a competing company, for Bailey�€™s purchasing "XGD" as a keyword. The Court denied defendants�€™ motion to dismiss for failure to state a claim. Defendants argued, based on case law from the Second Circuit, that use of another's trademark on the internet is not infringing if the mark is not visible to the end user. Defendants supported their argument with Sixth Circuit authority that using a competitor's trademark in the post-domain path of a URL is not an impermissible "use in commerce." The court, however, was persuaded that the plaintiffs had pleaded sufficient facts to state a claim to relief that was at least "plausible" on its face, and that the Lanham Act issue should go to trial. According to the court, the cases from the Second Circuit dealt with the situation where a computer program uses an internal registry of trademarks which the end user never sees and the Sixth Circuit case did not deal with the use of internet search terms. The court bolstered its conclusion by citing cases from other circuits that have held that certain uses of a competitor's trademark in a search term are a use in commerce.
Product Photos are Derivative Works
Shrock v. Learning Curve International, Inc., No. 04 C 6927 (N.D. Ill. Jan. 29, 2008). Shrock, a professional photographer, brought an action for copyright infringement against various corporate defendants based on their use of photographs he had taken of their products. Shrock was hired to take product photographs for which he registered the copyrights and granted defendants a license to use the photographs for two years. The defendants continued using the photos after the two years ended and Shrock sued. In deciding whether to grant summary judgment, the Court had to determine whether promotional product photographs are derivative works when the product that is the subject of the photograph is itself copyrighted. To decide the issue, the Court had to interpret the Copyright Act's definition of a derivative work as one that "recast[s], transform[s], or adapt[s]" the original work. The Court held that the photographs were derivative works, explaining that In so holding, the Court ruled that the photographs depicted three dimensional copyrighted works in two dimensions, and that such depiction was a "recasting, transforming, or adapting" of the original work. In so ruling, the Court disagreed with the Second Circuit, which had held that product photographs do not "recast, transform, or adapt" their subjects and therefore are not be derivative works. As a result of the Court's holding, Shrock's copyright registrations were found to be invalid because he did not register the copyrights with the consent of the products' owners.
Forum Selection Clause in Registration Agreement Bars Non-Signatory from Removal
Compana LLC v. Mondial Assistance SAS, No. 3:07-CV-1293 (January 23, 2008 N.D. TX.) In 2004, Compana, a domain name registrar, registered the domain name (in doing so, Compana somewhat paradoxically entered into a domain name Registration Agreement with itself). In April 2007, Mondial, a French corporation, initiated a proceeding under the Uniform Domain Name Dispute Resolution Policy ("UDRP"), which was incorporated by referenced into the Compana's Registration Agreement, by filing a complaint against Compana with the World Intellectual Property Organization ("WIPO"). Mondial's UDRP complaint alleged abusive registration of the domain name and sought to have Compana's registration either cancelled or transferred to Mondial. While the UDRP proceeding was pending, Compana filed suit in Texas State Court, seeking a declaratory judgment that its use of the domain name did not violate Mondial's trademark rights, and requesting a permanent injunction prohibiting the transfer of to Mondial. Mondial removed the action to federal court, and Compana filed a motion to remand the case back to the Texas State Court. Compana argued that a forum selection clause contained in the Registration Agreement made and entered between Compana as registrar and Compana as registrant prohibited removal of any action from a Texas court. Even though Mondial was not a signatory to the Registration Agreement, the court explained that since Mondial had invoked the Registration Agreement to establish the WIPO's jurisdiction under the UDRP, Mondial was bound by the terms of the Registration Agreement, including the forum selection clause. Accordingly, the District Court granted Compana's motion and remanded the case to Texas State Court.
Use of Competitor's Trademark as Keyword is a "Use in Commerce"
Boston Duck Tours, LP v. Super Duck Tours, LLC, Discover Boston Multi-Lingual Tours, Inc., No. 07-cv-11222-NMG (D. Mass. Dec. 5, 2007). Boston Duck Tours and Super Duck Tours offer competing tours of Boston in amphibious vehicles. Boston Duck Tours was granted a preliminary injunction to prevent Super Duck Tours from using the phrase "duck tour" as a trademark. Super Duck Tours in turn petitioned the court to determine whether its use of advertisements whose appearance was triggered by searches containing the term "duck tours" violated the injunction, requiring the court to decide whether the use of a trademark as a keyword "use in commerce" under the Lanham Act. The Court held that "internal use" (use not visible to the end user) of a competitor's trademark in purchasing sponsored links is a "use in commerce" under the Lanham Act. The court reasoned that "any use 'in the advertising of services' is deemed to be 'use' for purposes of determining liability," and rejected the reasoning of courts in the Second Circuit that distinguish internal uses of a competitor's trademark which are not visible to the end user as "analogous to an individual's private thoughts about a trademark."
Copyright Registration is a Jurisdictional Requirement
In Re: Literary Works in Electronic Databases Copyright Litigation , Nos. 05-5947-cv(L), 06-0223-cv(CON) (2d Cir. Nov. 29, 2007). Plaintiffs, freelance writers sought damages for infringement based on defendant publishers' unauthorized use of their works in electronic databases. The District Court certified a settlement class, but the Court of Appeals reversed, throwing a wrench into the contemplated settlement. According the Court of Appeals, the lower courts never had subject matter jurisdiction because the copyrights in the vast majority of the plaintiffs' allegedly infringed works had not been registered with the Copyright Office. The Court of Appeals explained that copyright registration is a jurisdictional requirement under the Copyright Act rather than one's "ticket to court," and that each infringement claim in a certified class must satisfy the registration requirement.
Use of Trademarks on Subcomponents Not Likely to be Visible to the Consumers is Not Infringement
Custom Manufacturing and Engineering, Inc. v. Midway Services, Inc., (11th Cir., Nov. 21, 2007). Midway contracted with Custom to design and manufacture an electronic system to remotely monitor water usage in multiple-unit residential complexes. The relationship eventually soured, causing Midway to terminate its contract with Custom and enter into a new contract with another manufacturer. The new manufacturer incorporated revised versions of circuit board designs created by Custom for its prototype system. After discovering that components installed by Midway contained the modified circuit boards that still bore a printed legend containing Custom's trade name, Custom sued for trademark infringement. The District Court granted summary judgment in favor of Midway, and the Court of Appeals affirmed that decision. In affirming the decision, the Court of Appeals noted that the District Court had not conducted the usual likelihood of confusion analysis, but explained that such an analysis is only a guide to determining whether confusion is likely. According to the Court of Appeals, the question was whether Custom's or Midway's potential customers, apartment complex owners and managers, were likely to be confused as to the origin of the circuit boards. The court determined that there was no likelihood of confusion since the circuit boards bearing Custom's name were within the opaque plastic housing of the installed product and thus not readily visible. Furthermore, the Court of Appeals explained that it was unlikely that anyone would remove the opaque covers to reveal the trade name-bearing circuit boards within, particularly in the absence of any evidence from Custom that technicians opening the transmitters for service would be confused by the name.
Use of Another's Trademark in Blog May Qualify for the News Reporting or News Commentary Exception Under the Lanham Act
BidZirk, LLC v. Smith, (D.S.C. Oct. 22, 2007). Smith authored and published an article on his blog detailing his experience dealing with BidZerk. The article also depicted BidZerk's trademark. BidZerk subsequently sued Smith for trademark infringement and related claims arising from Smith's publication of his article. Smith moved for summary judgment, and the court granted the motion. With respect to the claim for trademark infringement, the court reasoned that Smith's actions, even if found to be an infringement of BidZerk's marks, were excused under the statutory defense for "forms of news reporting and news commentary." Noting that no published cases had decided the question of whether a blogger is a journalist, and that not all bloggers are journalists, the court conducted a functional analysis and examined the content of Smith's article. The court explained that Smith's article described his experience with BidZerk in great detail, pointing to what were, in his opinion, positive and negative aspects of his experience, and provided advice to others based on this experience. Accordingly, the court concluded that Smith used the BidZerk mark to convey information to the public and thus qualified under the news reporting and news commentary defense. The fact that Smith's article reported negatively did not change the court's opinion because there was no evidence that his sole purpose was to denigrate BidZerk.
Patents Unenforceable Due to Inequitable Conduct
Nilssen and Geo Foundation, LTD. v. Osram Sylvania, Inc. and Osram Sylvania Products, Inc., No. 2006-1550 (Fed. Cir. Oct. 10, 2007). The court of appeals affirmed a lower court decision finding 15 of Nilssen�€™s patents unenforceable due to inequitable conduct during the prosecution of the patent applications in the Patent Office. The court explained that this finding resulted from Nilssen�€™s failure to: pay the appropriate fees for certain patents, disclose prior litigation on similar patents and disclose prior art. Nilssen, who prosecuted the patents on his own, argued that these were good faith mistakes, but the court of appeals agreed that his testimony before the lower court was not credible. The court pointed out that while Nilssen�€™s claim of good faith errors might be credible when each error was viewed in isolation, when viewed as a whole they suggested a pattern of deliberate misconduct.
Purchase of Another Company's Trademark as a Keyword is Not Trademark Infringement
S&L Vitamins, Inc. v. Australian Gold, Inc., 05 CV 1217 (Sept. 30, 2007 E.D.N.Y.). To promote and sell Australian Gold tanning products, S&L Vitamins, an internet retailer selling tanning products, purchased "Australian Gold" as a keyword on various search engines. After receiving a notice letter from Australian Gold, the manufacturer of tanning lotions and related products, S&L Vitamins sued Australian Gold for a declaration that its actions in promoting and selling did not violate Australian Gold's trademark and other rights. The parties subsequently moved for summary judgment, and the court found that S&L Vitamins' purchase of "Australian Gold" as a keyword did not constitute trademark infringement. The court explaining that by purchasing "Australian Gold" as a keyword, S&L Vitamins did not place the mark on a product, good or service and did not use the mark in a way that would indicate source or origin. In other words, S&L Vitamins had not used the "Australian Gold" as a trademark. Only a use of "Australian Gold" as a trademark would have given rise to a claim for a trademark infringement; however, since S&L Vitamins did not use the phrase as a trademark, the court concluded that the purchase of "Australian Gold" as a keyword did not give rise to a claim for trademark infringement.
Sale of Kits Facilitating Installation New Car Body Similar to that of Another Vehicle Does Not Infringe Trade Dress in Other Vehicle
General Motors Corporation v. Urban Gorilla LLC, No. 06-4128 (10th Cir. Sept. 12, 2007). Urban Gorilla produces "body kits" that allow customers to install a new body on top of an existing truck chassis to make a truck look like other vehicles. Among the kits offered by Urban Gorilla was one that would make a truck look like a Hummer. GM, the manufacturer of the Hummer as well as the owner of the trade dress in the Hummer and trademark registrations for the shape of the Hummer and the nose and grill area of the Hummer, filed an action for trade dress infringement and related claims. GM moved for a preliminary injunction and the district court denied the motion, finding that GM had not presented sufficient evidence to establish that the use of Urban Gorilla's car kits was likely to cause confusion. GM appealed arguing that the district court only considered whether confusion would occur at the point of sale of the car kits and failed to consider whether there would be post-sale confusion if other drivers on the road saw an inferior product that looked like a Hummer. The court of appeals affirmed, explaining that the district court had properly analyzed whether there was any likelihood of confusion, particularly since Urban Gorilla was selling body kits requiring assembly and GM was selling finished vehicles.
Use of Another's Trademarks as Metatags and Keywords for "Sponsored Links" Does Not Constitute Trademark Infringement or Unfair Competition
FragranceNet.com, Inc. v. FrangranceX.com, Inc., 06 CV 2225
(E.D.N.Y. June 12, 2007). Plaintiff sought leave to amend its Complaint to add counts for trademark infringement, and related claims based on Defendant's use of Plaintiff's trademark as a keyword in search engine "sponsored links" and as a website metatag. Defendant argued that the amendment would be futile since the use of trademarks as keywords and metatags does not constitute "use in commerce" under the Lanham Act and as such, could not rise to the level of trademark infringement. Relying on other decisions reaching the same conclusion, the court held that the use of a trademark as a keyword or metatag is not a "use in commerce". In view of the court's holding, Defendant's use of Plaintiff's trademark as a keyword or metatag could not, as a matter of law, be trademark infringement. On that basis, the court denied Plaintiff's motion to amend as futile.
Purchase of Another Company's Trademark as a Keyword Does Not Constitute Use of a Trademark in Commerce Under the Trademark Act
Site Pro-1, Inc. v. Better Metal, LLC, 06 CV 6508 (E.D.N.Y., May 9, 2007). SitePro1 is a manufacturer of cable wire, cable mounts, clamps, supports, antenna supports, and metal connectors utilized in the construction of wireless telecommunications towers. Better Metal, a competitor of SitePro1, purchased "1", "pro" and "site" as keywords so that its website would be included among the search listings when a Yahoo! user searched for some combination of those keywords. SitePro1 sued Better Metal for trademark infringement and related claims. Better Metal moved to dismiss the action, and the court granted the motion, finding that since Better Metal purchase of keywords was not a use of SitePro1's SITE PRO 1 mark in the trademark sense, Better Metal could not be liable for trademark infringement. The court analogized the purchase of keywords to the marketing strategy of use of placing generic products next to brand name products on a store shelf. The court further explained that there was no use of the trademark in commerce it did not appear on any goods, containers, displays, or advertisements, and the keywords were not visible to the public.
Unsettled State of Law on Whether Purchase of Trademark as Keyword Gives Rise to Cause of Action Under Lanham Act Bars Modification of Permanent Injunction
Rhino Sports, Inc. v. Sport Court, Inc., 06 CV 3066 (D. Ariz., May 2, 2007). To resolve a prior litigation, Rhino Sport agreed to a permanent injunction that permanently enjoined Rhino Sport from using Sport Court's SPORT COURT mark in connection with the Internet. Thereafter, to promote its recreational flooring business, Rhino Sports purchased "sport courts" as a keyword from Google. Rhino Sports then moved for a modification of the injunction to allow it to purchase "SPORT COURT" as a keyword for a Google search. The court denied the motion, explaining that the law is unclear as to whether keyword use of a trademark gives rise to a claim for trademark infringement. Since the law on this point is unsettled, the court found that Rhino Sports had not met its burden of establishing a significant change in the law or facts warranting a modification of the permanent injunction.
Supreme Court Reevaluates Obviousness Standard with Respect to Patents
KSR Int'l Co. v. Teleflex Inc., No. 04-1350 (April 30, 2007). Teleflex, a competitor of KSR in the design and manufacture of adjustable pedals, sued KSR for patent infringement, charging it with violating its patent on connecting an adjustable vehicle control pedal to an electronic throttle control. KSR modified its design for an adjustable pedal system for vehicles with cable-actuated throttles by adding a modular sensor to make the system compatible with vehicles using computer-controlled throttles. KSR argued that since Teleflex's patent was merely a combination of a pre-existing adjustable pedal assembly combined with a pre-existing electronic control, the combination of the two elements was "obvious" and therefore invalid. The district court agreed with KSR, but the appellate court reversed that decision. On appeal, the Supreme Court unanimously reversed the decision, explaining that the court of appeals should have considered "whether a pedal designer of ordinary skill, facing the wide range of needs created by developments in the field of endeavor, would have seen a benefit to upgrading [a prior art patent] with a sensor." The Court went on to state that "mounting an available sensor on a fixed pivot point of the [pedal] was a design step well within the grasp of a person of ordinary skill in the relevant art, and the benefit of doing so was obvious." After considering the evidence, the Court found that the claim was the result of ordinary skill and common sense rather than innovation; therefore, the patent was invalid as "obvious".
Patent Act Applies to Activities outside of the U.S. when "Components" from U.S. are Exported from the U.S. for Combination Abroad
Microsoft Corp. v. AT&T Corp., No. 05-1056 (April 30, 2007). Alleging that certain features of the Windows operating system, when installed on a computer, infringed its patent, AT&T sued Microsoft and sought to hold Microsoft liable for alleged infringement arising out of Microsoft's making and selling the Windows operating system outside of the United States. According to AT&T, Microsoft infringed AT&T's patent because Microsoft supplied a master disk containing Windows to computer makers outside of the U.S. who copied Windows from the master disk and installed Windows on their computers, which were then sold to the public. The District Court found for AT&T, and the court of appeals affirmed. The Supreme Court, however, reversed. The Court explained that the Patent Act can cover infringement occurring outside of the U.S. where one supplies, from the U.S., for combination abroad, the components of a patented invention. According to the Court, software is not a combinable component and Microsoft does not export copies of Windows created in the U.S. Thus, the court concluded that the Patent Act does not cover Microsoft's activities. As the Court pointed out, AT&T might have been able to halt Microsoft's activities if it had foreign patents, demonstrating the importance of securing foreign patents.
Downloading of Digital Music Files Does Not Constitute a Public Performance
United States of America, AOL, Realnetworks, Yahoo v. American Society of Composers, 41 CV 1395 (S.D.N.Y. April 25, 2007). Applicants America Online Inc (AOL), RealNetworks, and Yahoo! Inc, and Defendant American Society of Composers (ASCAP) were unable to agree on an appropriate license fee for applicants' public performance, by means of their respective internet services, of the musical works controlled by ASCAP. Accordingly, the parties filed summary judgment motions asking the court to determine whether the downloading of a digital music file, in and of itself, constitutes a public performance subject to ASCAP's licensing scheme. The court concluded that it does not and denied ASCAP's summary judgment motion, and granted the Applicants' motion for partial summary judgment. The court explained that streaming music is not the same as downloading music and that it could conceive of "no construction [of the Copyright Act] that extends [performance] to the copying of a digital file from one computer to another in the absence of any perceptible rendition." The court called downloading a method of "reproducing" the file, rather than performing it. In other words, the court found that while downloading a song creates a copy of the song on the downloader's computer, it does not involve a performance of the song. In so ruling, the court highlighted the different rights protected by copyright.
No Award of Attorney's Fees in Where Defendant had Colorable Defense to Plaintiff's Claims
Green v. Fornario, No. 06-2649 (3d Cir., April 23, 2007). Tyler Green, a retired pitcher for the Philadelphia Phillies, sued Greg Fornario, a bartender who started a sports betting consulting business using Tyler Green's name, for trademark infringement. Fornario claimed that he chose the name by combining "green" for the color of money and "Tyler" from Stephen Tyler of the rock band Aerosmith and that he had never heard of Tyler Green. Green's attorney sent Fornario an especially combative notice letter, and when Foriano declined to comply with the demands in the letter, Green sued for unfair competition and related claims. Foriano eventually agreed to stop using the name "Tyler Green", so the case continued solely on the issues of damages, costs and attorney's fees. The District Court awarded Green costs but not attorney's fees, and Green appealed. The Court of Appeal affirmed the denial of an award of attorney's fees. The Court of Appeals explained that attorney's fees were not available here because Green did not engage in culpable conduct because there was no evidence that Green was so famous that Foriano must have known his name, and because Green was not obligated to comply with the demands in the notice letter since he had plausible, good faith defenses. Indeed, the Court of Appeals noted that Foriano's decision to stop using the name "Tyler Green" was likely due to his desire to avoid costly litigation and the fact that the name was of minimal importance to him.
Notices of Infringing Activity from Third Parties May Prevent Service Providers from Taking Advantage of Limitations on Liability for Online Copyright Infringement
Perfect 10 v. CCBill LLC, NetPass Systems, 04-57143, 04-57207 (9th Cir. March 29, 2007). Plaintiff Perfect 10, an adult entertainment website, sued CWIE, a web hosting company, and CCBill, an ecommerce entity, alleging that both entities violated Perfect 10's copyrights by providing support services (such as web hosting and billing) to websites that posted images taken from Perfect 10's website and magazine. CWIE and CCBill claimed that they were not liable for copyright infringement because they complied with the "safe harbor" provisions of the Digital Millennium Copyright Act (DMCA), and the District Court agreed. The Court of Appeals, however, was not so sure. To determine if CWIE and CCBill qualified for the limitations on liability set out in the DMCA, the Court looked to see if CWIE and CCBill reasonably implemented a policy to terminate repeat infringers from using their services. The Court explained that since Perfect 10 sent CWIE and CCBill a number of deficient notices of infringement, those notices did not give CWIE and CCBill notice of infringing activity by their customers. The Court remanded the case, though, instructing the District Court to determine if third party infringement notices put CWIE and CCBill on notice or raised "red flags" alerting CWIE and CCBill to infringing activity. This determination will be critical for CWIE, since the Court held that if the District Court found that CWIE reasonably implemented a repeat infringer policy, it will be entitled to a limitation on liability under the DMCA because it did not post the infringing materials itself. As can be seen, to qualify for a limitation on liability for copyright infringement under the DMCA it is crucial that a website have a meaningful policy for dealing with repeat infringers.
Transfer of Domain Name 7 days after Filing Complaint does not Undermine Plaintiff's Standing to Seek Declaratory Relief
Mann v. AFN Investments, Ltd., 07 CV 0083(S.D. Cal. Feb. 27, 2007). AFN Investments, Ltd. ("AFN") brought a proceeding against Michael Mann ("Mann") under the Uniform Domain Name Dispute Resolution Proceeding ("UDRP") regarding his registration of the domain name . The panel in the UDRP proceeding ordered the transfer of the domain name to AFN. To prevent the transfer of the domain name, Mann filed a lawsuit in federal court seeking a declaratory judgment that his use of the domain name was not unlawful. Seven days later, Mann transferred the domain name into the registry of the court. AFN challenged Mann's standing to bring the lawsuit because the domain name was transferred to the court's registry after the complaint was filed, and, according to AFN, the applicable statute permitted the filing of a lawsuit to establish lawful use of a domain name only when a domain name has been "suspended, disabled or transferred." Relying on the decisions of appellate courts that addressed the issue of standing in such cases, the court found that a domain name registrant may seek a declaratory judgment that they lawfully registered the domain name "so long as the domain name has been ordered to be transferred or deactivated pursuant to UDRP even if the actual transfer or deactivation has not yet occurred." Accordingly, the court allowed Mann's lawsuit to proceed.
National Law Firm's Unregistered Trademark Not Protectable Absent Evidence of Secondary Meaning
Milbank Tweed Hadley & McCloy LLP v. Milbank Holding Corp, d/b/a Milbank Real Estate Services, 06 CV 187 (C.D. Cal. Feb. 23, 2007). Plaintiff Milbank Tweed (MT), a national general practice law firm brought suit against Milbank Real Estate Services (MRE), a California real estate service firm, alleging federal trademark infringement, unfair competition, cyberpiracy, as well as related California state law claims in the mark "Milbank." In analyzing MT's claims, the court noted that MT did not have a registered trademark, and found that MT had not proven that the public associated the "Milbank" mark with MT. As a result, the Court found that MT lacked a protectable interest in the "Milbank" mark. In view of that finding, the Court dismissed MT's claims and by doing so, demonstrated just how important a trademark registration can be to protecting one's rights.
Granting Licensee Responsibility to Sue Infringers, Patent Licensing Agreement Failed to Grant Licensee Sufficient Ownership Interest to Have Standing to Bring Suit
Propat Intern. Corp. v. RPost, Inc., 81 U.S.P.Q.2d 1350 (Fed. Cir. 2007). In May of 2002, Authenticational Technologies ("Authentix") transferred rights in its patent, U.S. Patent No. 6,182,219 ("the '219 patent") to Propat International Corp. ("Propat"). The agreement granted Propat the responsibility to license the patent to the third parties, to enforce the licensing agreements, and to sue infringers. Royalties acquired under Propat's licensing were to be divided between the two parties. Propat also agreed "to consult with and obtain prior approval" from Authentix for the selection of licensees, though approval could not be unreasonably withheld. Importantly, the agreement did not grant Propat the right to practice the invention, and specifically prohibited Propat from assigning its rights under the agreement without Authentixs' consent, which could be arbitrarily withheld. After observing what it felt to be infringement of '219 patent, Propat brought suit against RPost US, Inc.; RPost International Limited; and three individuals (collectively, "RPost"). RPost moved to dismiss the case alleging that Propat lacked a sufficient ownership interest in the patent to have standing to sue. The District Court for the Central District of California agreed, and the Court of Appeals for the Federal Circuit affirmed, finding that Authentix retained so much control that it had in fact retained ownership of the patent.
Federal Court Overrules Ruling in Proceeding Under Uniform Domain Name Dispute Resolution Policy
General Media Communications, Inc. v. Crazy Troll, LLC, 06 Civ. 4051, (S.D.N.Y. January 16, 2007).
Defendants acquired the domain name "penthouseboutique.com" after plaintiff's bankruptcy trustee permitted the registration to lapse. Defendants used the domain name to redirect all traffic to another website which offered the domain name for sale. Plaintiff initiated a Uniform Domain Name Dispute ("UDRP") proceeding with the National Arbitration Forum ("NAF") to retrieve its "penhouseboutique.com" domain name. The NAF panel declined to transfer the domain name back to the Plaintiff and further found that Plaintiff had engaged in reverse domain name hijacking. Plaintiff then brought an action in federal court seeking a declaration that it did not engage in reverse domain name hijacking. The federal court found that the defendant Crazy Troll LLC failed to demonstrate its entitlement to the domain name by proving it had an intent to use the website to sell goods; that it was commonly known by the domain name; or that its use of the domain name was without intent to mislead consumers. In so finding, the federal court effectively reversed the decision of the UDRP and transferred the domain name back to the plaintiffs.
Domain Names Used in Connection with Disparaging Websites Violate Anti-Cybersquatting Consumer Protection Act
HER, Inc. v. RE/MAX First Choice, LLC, No. 2:06-cv-00492 (S.D. Ohio Jan. 5, 2007).
Plaintiffs (HER, Harley Rouda Sr., Harley Rouda Jr. and Kaira Sturdivant-Rouda) had continuously used the website www.realliving.com in connection with their Ohio real estate business. Plaintiffs owned registered trademarks for HER, REAL LIVING, RELAX WITH REAL LIVING, and IT'S GOOD TO BE REAL. Defendants' registered the domain names "insiderealliving.com," "harleyroudajr.com," "harleyrouda.com," "harleyroudasr.com", "kairarouda.com" and "kairasturdivantrouda.com." When an end user visited one of the defendants' websites, he or she would be diverted to the website of Defendant RE/MAX First Choice. Further, nearly seven hundred HER real estate agents received an email from "herbie@INSIDEREALLIVING.COM" providing disparaging remarks towards HER from an alleged HER insider. Plaintiffs sued alleging that the defendants' registration of the various domain names violated the Anti-Cybersquatting Consumer Protection Act. The court, finding that Defendant had acted in bad faith, discounted the defendants' First Amendment defense and granted a preliminary injunction requiring the defendants to remove the misleading websites.
Use of Mark as Keyword and Metatags Constitutes Use in Commerce under Lanham Act, but Does Not Foster Initial Interest Confusion
J.G. Wentworth, S.S.C. Ltd. v. Settlement Fund LLC d/b/a Peachtree Settlement Funding, No. 06-0597 (Ea. Dist. Pa. Jan. 4, 2007). Plaintiff brought suit for trademark infringement and dilution on account of Defendant's use of its trademarks as metatags on its websites and through the Google "Adwords" program. Defendant moved to dismiss the action, claiming there was no likelihood of confusion and it had not used Plaintiff's marks "in commerce," as required by the Lanham Act. Although the court ultimately granted Defendant's motion, it found that contrary to Defendant's arguments, the purchase of Plaintiff's mark as a keyword as part of Google's program was a use in commerce that attempted to trade on the value of Plaintiff's mark. In addition, the court found that placing metatags on Defendant's websites, which are not used merely for descriptive purposes, but rather for search engine recognition, was also a use in commerce. In so ruling, the court noted that in both instances Defendant used Plaintiff's mark in order to advertise its own goods and services. Nevertheless, the court granted Defendant's motion to dismiss because it did not find any likelihood of confusion. According to the court, consumers can ignore sponsored links, or any of the other search results, particularly when they appear as "independent and distinct links on the search result pages."
Providing Link to Infringing Webcast Constitutes
Live Nation Motor Sports, Inc. v. Davis, No. 06-276
(N.D.Tx. Dec. 12, 2006). Defendant Robert Davis streamed live, real time
webcasts of motorcycle racing events produced and promoted by plaintiff Live
Nation Motor Sports, Inc. Plaintiff sued for copyright and trademark
infringement and moved for a preliminary injunction to prevent Davis from
continuing his unauthorized web streams. The court granted the motion and, in
doing so, found that links on Davis’ website to the webcasts were likely
to infringe Live Nation’s copyright rights because they displayed or performed
works protected by Live Nation’s copyright rights. By so ruling, the court
effectively ruled that providing a link to a website containing infringing
material constitutes copyright infringement; however, the court did not offer
any reasoning to support its conclusion. Nevertheless, the court’s decision
reinforces the importance of screening all links on your website.
Design "Theme" of Decorative Tiles is Not Protectable Trade Dress
Walker & Zanger Inc. v. Paragon Industries Inc., No. C-04-1946 (December 1, 2006 N.D. CA.) Walker produces high quality decorative tiles and tile collections that it markets nationally in lines exemplifying a particular artistic concept. Walker brought suit against Paragon, a competitor, alleging that Paragon was selling tiles that copied the trade dress of tiles from Walker's best selling Avignon and Newport lines, and that Paragon displayed and promoted its copies using trade dress similar to that used by Walker to promote its tiles. Paragon moved for summary judgment, claiming that Walker's trade dress was generic and therefore not entitled to protection. The court agreed, explaining that Walker's trade dress was generic because Walker's description of the trade dress constituted because the basic form of tile design, and because Walker's claimed trade dress was common in the industry. Additionally, the court found that consumers did not view Walker's claimed trade dress as indicating the source of Walker's tiles; Walker's trade dress was not entitled to protection for that reason, as well. Consequently, the court granted Paragon summary judgment on Walker's trade dress claims.
Finding that Domain Name was Registered in Bad Faith
Supports Award of Attorney’s Fees Under Lanham Act
Audi AG v. D’Amato, No. 05-2359 (6th Cir.
Nov. 27, 2006). Audi AG (“Audi”) sued defendant Bob D’Amato (“D’Amato”) for
trademark infringement, trademark dilution, violation of the Anti-Cybersquatting
Consumer Protection Act and related claims arising out of D’Amato’s sale of
various goods featuring the AUDI mark and/or logo though the website at the
domain name <audisport.com>, which he had registered. The District Court
granted Audi’s motion for summary judgment, denied D’Amato’s request for
additional discovery, entered an injunction against D’Amato and awarded Audi its
attorney’s fees. As the Court of Appeals explained, D’Amato, his arguments to
the contrary notwithstanding, never had permission to use the AUDI mark and
logos, and he had no reasonable basis for believing that he did. The Court of
Appeals further explained that since the District Court found that Amato had registered the domain name in bad faith, an
award of Audi’s attorney’s fees was justified. Accordingly, the Court of
Appeals affirmed the grant of summary judgment.
Use of Mark in Text of Advertisement Supports Claim for Infringement and Issuance of a Temporary Restraining Order
International Profit Associates Inc. v. Paisola, 06-CV-06154
(N. Dist. Ill. Nov. 14, 2006). Plaintiff sought a temporary restraining order to enjoin defendant's unauthorized use of plaintiff's trademarks in the domain name and content of an allegedly infringing website. In support of its motion and claim for trademark infringement, plaintiff offered evidence that defendant used its trademark as part of the text of an advertisement through Google's "Adwords" program, which returns "sponsored links" featuring key words as part of the search results. The court concluded that plaintiff had established a likelihood of success on its Lanham Act claims, because defendant's use of plaintiff's trademark in the sponsored links section was likely to cause confusion among consumers. Therefore, the court ordered defendant to stop using plaintiff's trademarks as keywords for the purposes of advertising its own website through search engines such as Google and Yahoo!.
Use of Metatags in Descriptive Manner can be
Non-Infringing Fair Use
Gregerson v. Vilna Financial, Inc., No. 06-CV-1164
(D. Minn. Nov. 7, 2006). Seeking compensation for the use of a photograph from
his website, plaintiff sued defendants. Defendants counterclaimed, alleging,
among other things, that the metatags on plaintiff’s websites infringed their
trademark rights. Defendants sought a preliminary injunction barring plaintiff
from using their trademarks as metatags for his websites, which were critical of
defendants. At the request of the Court, plaintiff revised the metatags so that
they indicated that plaintiff’s websites were critical of defendants. Based on
plaintiff’s representation that he had made the changes, the court denied the
preliminary injunction motion, explaining that not all uses of someone else’s
trademark in metatags constitutes trademark infringement.
Use of “Chewy Vuiton” on Dog Products is Parody of
Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC,
No 06-CV-321 (E.D. Va. Nov. 3, 2006). Louis Vuitton, the well-known handbag
manufacturer, sued defendants for trademark infringement, trademark dilution and
copyright infringement based on their sale of dog toys and related products
under the name “Chewy Vuiton”. The court granted defendants’ motion for summary
judgment on all of Louis Vuitton’s claims. In so ruling, the court explained
that there was no likelihood of confusion since the “Chewy Vuiton” name was a
parody of the LOUIS VUITTON mark, since there was an absence of actual confusion
and since there was minimal competitive proximity between the party’s products.
Applying the recently amended dilution act, the court found there was no
dilution, again nothing that “Chewy Vuiton” was a parody. The court dismissed
the copyright claim on the same basis.
School Colors are Protectable Indicators of Source
Texas Tech University v. Spiegelberg, No. 05-CV-192
(S.D. Tx. Nov. 2, 2006). Texas Tech University sued defendant, a retailer, for
trademark and trade dress infringement arising out of defendant’s sale of
unlicensed apparel featuring Texas Tech’s marks and the school colors. The
court granted Texas Tech’s motion for summary judgment, explaining that the
school’s colors were entitled to protection because they were not functional; in
other words, the quality of defendant’s products would not be affected if it
could not use Texas Tech’s school colors. Indeed, those colors had become
associated with Texas Tech and identified the goods on which they appeared as
originating with Texas Tech. In so ruling, the court recognized that a
combination of colors can function to indicate source.
Unauthorized Assertion of Control Over Domain Names
Constitutes Bad Faith
The Christensen Firm v. Chameleon Data Corp., No.
C06-337Z (D. Wash. Nov. 1, 2006). A law firm sued its web hosting company for
violating the Anti-Cybersquatting Consumer Protection Act (“ACPA”) after the
hosting company transferred ownership of the law firm’s domain names to the
hosting company in order to gain leverage in a dispute over fees allegedly owed
to the hosting company. The Court refused to grant the hosting company’s motion
for summary judgment, finding instead that the hosting company had a bad faith
intent to profit, an element of a claim under the ACPA, since it transferred
ownership of the domain names to obtain leverage in a fee dispute. The Court
also ruled that the hosting company, by transferring ownership of the domain
names to itself, had registered the domain names, another element of a claim
under the ACPA. In so ruling, the Court made it clear that the ACPA applies
beyond situations where a party registers a domain name corresponding to a
trademark and then tries to sell it to the trademark owner.
Purchase of Competitor’s Mark as Keyword is Use in
Buying for the Home, LLC, v. Humble Abode, LLC, No.
03-CV-2783 (D.N.J. Oct. 20, 2006). Plaintiff, an online furniture retailer,
sued defendant, another online furniture retailer, for trademark infringement,
unfair competition and related claims. Plaintiff based its claims, in part, on
the allegation that defendant purchased plaintiff’s trademark as a keyword to
trigger the appearance of internet advertisements. Defendant sought to dismiss
plaintiff’s claim, arguing that it had not made “use” of plaintiff’s mark. The
court ruled that dismissal was inappropriate, explaining that since the purchase
of the keyword was a transaction that occurred in commerce and the
advertisements triggered by the keyword provided consumers access to defendant’s
website at which they could purchase furniture, defendant had used the mark in
commerce. The Court’s decision is at odds with the decision in Rescuecom
Corp. v. Google, Inc., and demonstrates that the issue of whether the
purchase of a competitor’s mark as a keyword constitutes trademark infringement
is far from settled.
Double Recovery Not Permitted
Aero Products International Inc. v. Intex Recreation
Corp., No. 05-1283 (Fed. Cir. Oct. 2, 2006). Plaintiff, an air mattress
manufacturer, sued defendant for both patent and trademark infringement based
solely on defendant’s sale of air mattresses. After trial, a jury awarded
plaintiff damages for both patent and trademark infringement. The Court of
Appeals reversed the jury’s award as an impermissible double recovery because
the same operative fact, the sale of the air mattresses, was the basis for
both awards even though the awards were based on separate wrongs.
Selling Trademark as Keyword Not Use in Commerce
Rescuecom Corp. v. Google, Inc., No. 04-CV-1055 (N.D.N.Y.
Sept. 28, 2006). Defendant sold plaintiff’s trademark to plaintiff’s
competitors as a keyword that triggered the appearance of advertisements when
users entered plaintiff’s trademark into defendant’s search engine. Plaintiff
brought suit for trademark infringement and related claims, and defendant moved
to dismiss the complaint. The Court granted the motion after finding that
defendant did not use plaintiff’s mark in commerce (e.g., it was not used on
goods). In so ruling, the Court split with other courts that have considered
the same issue, ensuring that the law in this area will remain unsettled until
the courts of appeal rule on the issue.