In the not so distant past, E & J Gallo Winery (“Gallo”) decided that it was not satisfied with only being a player in the wine business. It decided to expand his horizons and venture into the tequila business, which is currently filled with such players as Patron, Don Julio, Jose Cuervo, and perhaps most importantly, 1800 Tequila (“1800”). After placing a significant amount of time and effort into the release of its new tequila, Camarena, Gallo was informed that its supplier, Tequila Supremo, had received a cease and desist letter from Agavera Camichines S.A. de C.V. (“Agavera”), the holder of trademark and trade dress rights for the “1800 Tequila” brand. Accordingly, Gallo brought suit for declaratory relief in the United States District Court in the Eastern District of California.
Agavera and co-defendant, Proximo Spirits Inc. (“Proximo”), counterclaimed that Gallo’s Camarena bottle design infringes Proximo’s registered trade dress and also constitutes false designation of origin under the Lanham Act and unfair competition under common law. Gallo sought and prevailed on its motion for summary judgment before the Honorable Judge Lawrence J. O’Neill of the Eastern District of California. Judge O’Neill found that Proximo failed to raise a genuine issue as to whether its trade dress was distinctive. Furthermore, it was found that there was no likelihood of confusion between 1800 Tequila and Camarena. Proximo moved for reconsideration on grounds that its trademark registration and related description of the 1800 Tequila bottle and stopper should have constituted sufficient evidence for a trier-of-fact to rely on in deeming the bottle distinctive. Nonetheless, Judge O’Neill denied the request. The court also denied Proximo’s motion to dismiss the declaratory judgment action on grounds that the court lacked subject matter jurisdiction. As a result, Proximo appealed the decision to the Ninth Circuit to challenge the court’s ruling on the motion to dismiss and its grant of summary judgment on the counterclaims. Continue Reading
Victims of trade secret theft often can seek a variety of civil and criminal remedies against those who have absconded with proprietary information. The Ninth Circuit however recently rejected criminal charges in a situation where the claims could be addressed as a civil matter under California’s trade secret laws.
In United States v. Nosal, David Nosal was sued by his former employer, the Korn/Ferry executive search and placement firm. After leaving Korn/Ferry, Mr. Nosal contacted several former colleagues who were still working with the company and asked them for assistance with his efforts to set up a competing business. Mr. Nosal’s former co-workers had access to a significant amount of proprietary information on the Korn/Ferry computer system, and assisted Mr. Nosal by using this access in order to provide names, contact information, and other confidential data from Korn/Ferry’s proprietary database to Mr. Nosal. Although their access to the database was authorized, the employees provided information to Mr. Nosal in violation of a trade secret and nondisclosure agreement with their employer. Continue Reading
In a sensible decision, the Ninth Circuit Court of Appeals recently ruled that Amazon.com Inc. is not vicariously liable for copyright infringement based upon the conduct of its Associates who use copyrighted photos without permission on their linked websites.
This decision is particularly important because there are an increasing number of “copyright trolls” patrolling various Internet websites. These trolls, sometimes using computerized software to locate allegedly protected images, engage in “hit and run” litigation whereby they identify an alleged act of infringement and then seek a nominal — but still significant — sum (usually less than $5,000) to instantly settle the case. They even go so far as putting in credit card payment information in their “dunning letters.” Intent is not a factor. The trolls well know that establishing a fair use defense is probably more costly than simply settling the case. An entire industry is now being built on these kinds of spurious lawsuits, where a few years ago a polite takedown notice would have been all that was required. Continue Reading
The answer may surprise you.
This dispute over ownership of Facebook ‘likes’ pits the creator of a fan Facebook page for a TV show against the television network that owns the show. The facts of the dispute are as follows: From 2008, the CW Network broadcasted the television series “The Game”, a dramatic comedy about the lives of professional football players and their wives and girlfriends. BET acquired the syndication rights to the series in 2010 and then in 2011 began producing original episodes.
In 2008, when the series was on the CW Network, Stacey Mattocks created a Facebook fan page for the series. Mattocks did not post any CW or BET owned content and she did not hold the Facebook page out to the public as the “official” series page. Around October 2010, BET hired Mattocks to perform part-time work managing the series’ Facebook page. BET then regularly instructed Mattocks to post, or not to post, certain information on the page and provided her with exclusive photos and video clips. Mattocks posted most of the content on the FB Page, but BET employees also occasionally posted material. Apparently Mattocks did a good job managing the series’ Facebook page as the number of ‘likes’ grew from around two million to over six million.
In February 2011, BET and Mattocks entered into a written agreement regarding each parties’ rights and privileges regarding the Facebook page. Mattocks granted BET full administrative access to the page, and BET agreed not to exclude Mattocks from the page by changing her administrative rights. However, it appears that this agreement was silent on which party owned the Facebook page. Continue Reading
Recently, Wikimedia (the entity behind Wikipedia) has refused repeated requests from professional photographer David Slater to remove from one of his most famous photos from its royalty free photo collection website. The photo at issue is a “monkey selfie.” Slater claims he owns the copyright to the photo and Wikimedia is using it without his permission. Bananas! claimed Wikimedia; a recent report reveals that Wikimedia editors decided that Mr Slater has no claim on the image as the monkey itself took the picture.
In what must be the wildest of luck, Slater was visiting a North Sulawesi national park in Indonesia when a black macaque grabbed an errant camera and took an amazing array of self-portraits. These amazing pictures ran in an July 5 article about the incident in the UK’s Daily Mail. Two of the four pictures featured in the article included a copyright notice indicating Caters News Agency (Slater’s photo agency) as the owner.
Can Canters News Agency or Mr. Slater own the copyright in the photos taken by this highly intelligent and obviously photogenic? In order for this to be the case, the monkey would have to be an author under the Copyright Act. And if a monkey can be considered an author, he or she would have to assign or transfer the copyright in the photos to Caters News Agency. Continue Reading
In a June decision, the U.S. Supreme Court resolved a key issue in patent law: whether a party can be liable for patent infringement when there is no underlying act of direct infringement. Specifically, the court addressed whether a party who instructs multiple parties to perform different steps of a method patent can be liable for inducing infringement. The Court’s answer: no. The case is Limelight Networks, Inc. v. Akamai Technologies, Inc. (U.S. Supreme Court June 2, 2014) 2014 U.S. LEXIS 3817.
Patent infringement is either direct or indirect. Direct infringement exists when a defendant makes, uses, sells, offers to sell, or imports into the United States a patented product or performs all of the steps of a patented method. Indirect infringement exists when the defendant does not itself commit direct infringement, but causes another party to do so. There are two types of indirect infringement: inducing and contributory. A defendant has induced infringement when it instructs or causes another party to infringe a patent. For a method patent, a defendant induces infringement if it instructs another party to perform all of the steps of the method. The party who performs all of the steps is liable as a direct infringer, while the inducer is liable as an indirect infringer. Contributory infringement, which is not relevant here, exists when a defendant sells or offers to sell a component that can only be used in infringing a patented invention. Continue Reading
On June 17, 2014, a federal judge in Illinois granted summary judgment to Stefani Joanne Germanotta against plaintiff, Rebecca Francescatti, in a copyright infringement matter because he found that no reasonable trier of fact could find that Ms. Germanotta’s song, “Judas,” is substantially similar to Ms. Francescatti’s song, “Juda.” You may wonder, why you should care about these two unknown figures in the music industry, but the truth is, Ms. Germanotta is far from unknown. In fact, she has been a staple in the pop music industry since she burst onto the scene in 2008 with the release of her album, “The Fame,” which had such hits as “Just Dance” and “Poker Face.” By now you may have guessed—Ms. Germanotta is none other than Lady Gaga.
In her complaint, Ms. Francescatti alleged that Lady Gaga’s song, “Judas,” from the album “Born This Way,” infringed Francescatti’s copyright in her song, “Juda.” According to Ms. Francescatti, she worked with co-defendant sound engineer, Brian Joseph Gaynor, to write “Juda” in 1999. Ms. Francescatti alleged that Mr. Gaynor later collaborated with Lady Gaga in 2010 to create “Judas.” According to Ms. Francescatti, the two songs have remarkably similar melodies, structure, bass lines, and further similar features. This allegation was unsupported by expert testimony. Continue Reading
Among the unstated powers of the federal (and sometimes state) government that few litigation targets think about is the power of the press release. Prosecutors, whether at the agency level or above (for example, at the state Attorney General’s office or at the Federal Department of Justice), have a hidden tool in their arsenal. It is so simple that many persons and corporations often fail to take it into account in their defense strategy.
Federal regulatory agencies such as the SEC, FCC and FTC, as well as state agencies, have engaged in large-scale public relations campaigns that often seem to undermine the innocent until proven guilty ethos under which they as governmental actors, in particular, labor.
For example, in a recent action by the FTC, the agency conducted a sweep of various infomercial producers which it deemed to be producing false or misleading advertisements. Before even the first court hearing and, in fact, on the same day the complaint was issued, the FTC conducted a carefully-orchestrated press conference to tout their latest “pro consumer” lawsuit. The regulatory agencies usually come up with a fancy “handle” by which they identify their work. These lawsuits often have military-style monikers such as “Operation Clean Sweep,” or “Operation Restore Trust.”
In many cases, a regulatory agency will sue a number of targets, be they advertisers, hedge funds, banks, etc. all at once in coordinated actions. The trouble with this strategy is that while there may be several bad actors in the group, everyone is tarred with the same devastating brush. This is trial by the court of public opinion. The “sweep” is now invariably accompanied by a high-profile press conference, website release and press releases. To even the casual observer, it should be obvious that this strategy is aimed more at making the reputation of the individual agency enforcer than in actually doing justice. While some private plaintiffs like to use press releases as a litigation strategy (usually a bad one), this issue is far worse when the government is a party-plaintiff. Continue Reading
Clearly there is no love lost between John Wayne Enterprises, LLC (“JWE”), the entity owned by John Wayne’s heirs which controls the intellectual property related to John Wayne, and Duke University. Both have have been locked in battle over various trademarks incorporating the word DUKE. The most recent skirmish involves a trademark application filed by John Wayne Enterprises, LLC (“JWE”) for the following design mark for alcoholic beverages, excluding beer:
Duke University requested and was granted an extension of time to potentially opposition to the registration of this mark. Previously, Duke University opposed JWE’s’ application to register DUKE for restaurant services, claiming that the mark is likely to cause confusion with Duke University’s other DUKE trademarks and/or dilute Duke University’s famous trademarks. Specifically, Duke University alleged that: “[JWE] seeks to register a mark that is substantially similar to [the University’s] famous mark DUKE, and that moreover is likely to be abbreviated simply as DUKE and expressed orally simply as DUKE, for goods that are closely related to goods and services with which [the University’s] DUKE Marks are used…”
It appears that this time, JWE took John Wayne’s quote “You tangle with me, I’ll have your hide.” literally and didn’t wait and see whether the University actually filed an opposition. JEW filed a complaint for declaratory relief in the United States District Court for the Central District of California, requesting the court to declare that the above mark does not infringe or dilute any of the DUKE trademarks owned by Duke University. In its complaint it alleges that “Duke University believes that products bearing John Wayne’s world renowned image and signature…will somehow be confused with being associated with Duke University.” Further, JWE alleges that “in light of the multiple Oppositions and Cancellation proceedings Duke University has filed against JWE and the claims made therein, JEW believes Duke University contends that JEW’s [registration and use of its marks] or any other mark that includes the term DUKE are likely to cause confusion with [the marks owned by Duke University] and intends to sue JWE for trademark infringement, notwithstanding that JWE’s use is directly associated with and expressly linked to John Wayne.” Continue Reading
Litigants know that obtaining a judgment against an adversary is only half the battle. Sometimes the efforts a litigant must expend to collect on that judgment are just as significant, if not more so, than obtaining the judgment. In looking for assets to satisfy a judgment, litigants are reminded that a defendant’s intellectual property, including any copyrights, may be subject to execution to satisfy an unpaid judgment. This issue was recently explored in a Ninth Circuit case titled, Hendricks & Lewis PLLC v. George Clinton (the funk music superstar).
Clinton was a pioneer in funk music starring in bands such as Funkadelic and Parliament. During the last ten years, however, he racked up legal fees with Hendricks & Lewis in excess of $3 million. Hendricks & Lewis obtained an arbitration award in excess of $1.6 million that was later confirmed as a judgment against Clinton.
After receiving only a portion of the outstanding judgment through various collection methods, Hendricks & Lewis asked a U.S. District Court to appoint a receiver who would then attempt to sell Clinton’s copyrights in his various music to help satisfy the judgment. The District Court agreed and appointed a receiver to do so. Clinton then appealed to the Ninth Circuit.
One additional set of facts that is crucial to the outcome of this case was the history of Clinton’s copyrights in his music. In July 1975, Clinton, through his production company, Thang, Inc., entered into a recording contract with Warner Bros. Records in which he agreed to make master recordings of his performances with Funkadelic. The agreement made clear that Warner Bros. was to own in perpetuity all rights in the recordings and that neither Thang nor Clinton would have any rights. This included an acknowledgment that Warner Bros. owned the copyrights in the recordings. Clinton signed a similar agreement again with Warner Bros. in 1979. Later, Clinton and Warner Bros. had various disputes and in 1982 entered into a settlement agreement under which Warner Bros. agreed to relinquish its ownership, including its copyrights, in the recordings to Clinton. In 2005, a U.S. District Court in California recognized that Clinton was the sole owner of the copyrights for the recordings.
On appeal, Clinton argued that: (1) his copyrights were not subject to execution to satisfy a judgment; and (2) even if they were, he was entitled to protection under section 201(e) of the Copyright Act which forbids the “involuntary transfer” of a copyright.
The Ninth Circuit began by recognizing that judgment collection proceedings are governed under state law. Washington law provides that: “All property, real and personal, of the judgment debtor that is not exempted by law is liable to execution.” Although the Ninth Circuit could not find any cases that held that a copyright was subject to execution, the U.S. Supreme Court had long ago held that a judgment debtor’s interest in a patent could be assigned to satisfy a judgment. The Ninth Circuit reasoned “that where copyright case law is lacking, ‘it is appropriate to look for guidance to patent law ‘because of the historic kinship between patent law and copyright right law.’’” The Court also found it relevant that it had previously held in a case arising out of California, in Office Depot, Inc. v. Zuccarini, 596 F.3d 696, that a judgment debtor’s internet domain name could also be subject to execution. Continue Reading