In Russell G. Ryan’s recent thoughtful article in the Wall Street Journal entitled “Get the SEC Out Of The PR Business,” he raised several issues that resonate well beyond the practices of the SEC and into the world of advertising law, direct marketing and FTC enforcement actions. See http://www.wsj.com/articles/russell-g-ryan-get-the-sec-out-of-the-pr-business-1417386821.
The gist of Ryan’s article is that the SEC’s pre-trial press releases and Public Relations “announcements” have the effect of unfairly trying its targets in the court of public opinion. He specifically makes the point that many of the press releases — which are typically made at the very outset of a prosecution — violate the so-called “Cinderella Schools” doctrine. That doctrine, originating from a case involving the Cinderella Career and Finishing Schools, was litigated in the 1970s, and resulted in certain FTC orders being nullified because of due process violations stemming from pre-trial pronouncements by the head of the agency that demonstrated pre-judgment. Supposedly, safeguards were put in place to protect against such violations. However, courts in the meantime, have upheld the right of governmental enforcers to make certain public pronouncements — and the agency enforcers have more than run with it.
As a result, the new crop of press releases are often derogatory, shaming and, in this writer’s view, straightforward violations of due process and the bedrock concept of “innocent until proven guilty.” See, e.g., http://www.ftc.gov/news-events/press-releases/2009/07/ftc-cracks-down-scammers-trying-take-advantage-economic-downturn.
In the web-citation, above, for example, which is from a case I was involved two years ago, the government corralled a number of disparate defendants, and, without so much as preliminary hearing, branded all of them “scammers” — and worse. The fact that the government ultimately prevailed against certain of the targets cannot color the issue, because in other cases, it does not. Continue Reading
It’s not exactly a decision in the intellectual property sphere, but a recent ruling by a judge in Oklahoma City, Oklahoma related to a botched call in a high school football game deserves to be called-out for praise.
That case involved a quarterfinal footballgame of a high school league tournament in Oklahoma City. Frederick A. Douglass High School scored on a 58-yard touchdown pass at the last minute to take the lead over its rival, Locust Grove High School.
For some reason, one of the Douglas coaches made physical contact (whether purposely or inadvertently is not known) with a referee on the sideline. That contact resulted in a penalty flag. The rules for this infraction calls for a 5-yard penalty on the extra point attempt or the next kick off. Instead of applying this relatively minor penalty, the officials “went nuclear” and nullified the touchdown. As a result, Locust Grove was declared the winner of the game.
Maybe it was a bad call, maybe it wasn’t. I am certainly not an expert in the niceties of high school football. Although Frederick Douglass High School protested the call, the local association in charge of such things said that its rules did not permit such protest. In light of that, the Association neither permitted Douglass’ request to resume the game with a 1:04 on the game clock or restore the negated touchdown (giving the win to Frederick Douglass). Continue Reading
The last time I checked (which was a couple of years ago), I found 979 U.S. patents in the U.S. Patent and Trademark Office’s database that had the word “Christmas” in the title. Every year at this time, I look at a few of the most interesting ones.
My favorite one this year is U.S. patent no. 5,523,741 entitled “Santa Claus Detector.” This patent covers a Christmas stocking that contains a light bulb or LED, a battery to power the light, and a hidden switch that turns on the light. The switch is connected to a pull cord. When the stocking is hung on the fireplace, the pull cord is positioned across the opening of the fireplace, forming a barrier across the fireplace opening. After the child has gone to sleep on Christmas Eve, Santa Claus comes down the chimney with his bag of toys and triggers the cord, which turns on the light. The next morning, the child will see the light on and know that Santa was there! (Or, as the patent describes, the parent can secretly pull the cord and turn on the light.) The purpose of this invention, according to the inventors, is to reassure children that their good behavior was rewarded by Santa.
Another fun Christmas patent is the “Santa Claus Visit Kit,” U.S. patent no. 7,258,592. This kit is used by parents to prove to a child that Santa Claus has visited. The kit includes a stencil to leave boot prints on the floor, a letter from Santa, and a snack item for Santa. The kit is intended to alleviate a child’s fear that Santa Claus might not leave presents.
There are several patents for fire extinguishers incorporated into Christmas decorations. One patent covers a fire extinguisher hidden inside the trunk of a synthetic Christmas tree that is activated by a heat sensor. Another patent is for a Christmas tree ornament that contains a fire-retardant powder. The ornament pops open when the temperature reaches a certain point, releasing the fire retardant powder and, hopefully, putting out the fire. Continue Reading
On September 11, 2014, the Ninth Circuit heard oral argument on the appeal in Davis v. Electronic Arts (Case No. 12-15737), a class action lawsuit brought by three former NFL Players against Electronic Arts (“EA”), the publisher of the renowned Madden NFL Games. Michael Davis, Vince Ferragamo, and Billy Joe Dupree claimed that EA violated their right of publicity by using their likeness and the likeness of six thousand other similarly situated former NFL players without permission. The Ninth Circuit has yet to issue its ruling on the appeal, but most legal scholars agree that EA has almost no chance of prevailing on the issue in light of the Ninth Circuit’s holding in Keller v. Electronic Arts (Case No. 10-15387) where the Ninth Circuit found that EA unlawfully utilized the images of collegiate athletes in its NCAA Football game series.
Interestingly, EA put forth the same argument in Davis as it did in Keller. Specifically, EA argued that its portrayal of the class members is protected by the First Amendment under the doctrine of transformative use, which analyzes whether the challenged work or product contains significant transformative elements (or value that) does not derive primarily from the celebrity’s fame.
At the oral argument, counsel for EA cited to a footnote in the Keller decision wherein the court reserved the “question of whether the First Amendment furnishes a defense other than those the parties raise.” EA argued that the footnote provided the court with the wiggle room it needed to come to a different conclusion than it did in Keller. EA urged that the court prescribe a second standard for the use of likeness in books, films, and video games. Specifically, EA argued that the extensive labor and detail involved in making a video game should almost guarantee that the product is entitled to First Amendment protection as an expressive work. Judge Marsha S. Berzon was not very receptive to this argument and remarked that the creation of a video game sounded more like a compilation of data than an expressive work. EA responded that a great deal of creative expression is embodied in that compilation. Whether the Court accepts EA’s position remains to be seen. Continue Reading
If you use Facebook, you probably already have noticed that many users are posting statements claiming that Facebook somehow acquires ownership of users’ intellectual property that has been posted to that site. Reacting to this entirely erroneous proposition, many Facebook users have posted very scary and onerous status updates aggressively asserting their intellectual property rights in the materials they have uploaded onto Facebook. One user posted that they “hereby declare that my copyright is attached to all of my personal details, illustrations, comics, paintings, crafts, professional photos and videos, etc. . . . for commercial use of the above my written consent is needed at all times!” (Undoubtedly her use of an exclamation point will add significant legal weight when this status update is considered by a court in the forthcoming case of Everyone v. Facebook.) That same user warns us that violation of her privacy is punished by law, UCC 1 1-308-308 1-103 and the Rome Statute. Undoubtedly, Facebook is horrified by the prospect of violating either of these statutes. Or not.
Recently the 11th Circuit addressed on appeal the question of whether fair use insulates from copyright liability a University which offers to its students a digital repository of reading material culled from third party publications without the benefit of a license. Three academic publishers filed suit against Georgia State University claiming that the University infringed their copyrights by maintaining a policy which allows GSU professors to make digital copies of excerpts of their books available to students without paying them a royalty. Prior copyright cases known as the “course pack cases” – cases in which commercial copy shops were found to have infringed copyrights by printing course packs containing excerpts from third party publications without permission from the publishers – seemed to dictate a finding of infringement. However, of the 74 instances of infringement alleged, the lower court found that the Plaintiffs failed to establish a prima facie case of infringement for 26 works and that fair use applied to all but 5 instances.
The fair use of a copyrighted work is not an infringement of copyright. The four factors a court must consider in determining whether fair use applies are: (1) the purpose of the allegedly infringing use, (2) the nature of the original work, (3) the size and significance of the portion of the original work that was copied, and (4) the effect of the allegedly infringing use on the potential market for or value of the original. Continue Reading
In March 2014, this column analyzed a decision by a Ninth Circuit panel in Garcia v. Google, Inc., in which the Court held that an actress, who believed she was appearing in a minor role in an Arabian adventure movie, could maintain a copyright infringement claim against the producers when they used the footage instead in an anti-Islamic film that resulted in her receiving death threats. As the prior column surmised, it appeared that “bad” (although entirely sympathetic) facts were making “bad” law.
This week, the Ninth Circuit ruled that it would rehear the matter en banc and ordered that its previous decision “not be cited as precedent by or to any court of the Ninth Circuit.” It remains to be seen whether the entire Ninth Circuit will take a different position this time (and hold that the lower court properly denied the injunctive relief) or take the opportunity to emphasize just how limited the scope of its prior ruling was intended to reach.
Below is the original column analyzing the Ninth Ciruit’s original ruling in this case.
A Bit Part, A Fatwa and Copyright Infringement
Most law students learn early in law school the old maxim: “Bad facts make bad law.” A recent Ninth Circuit case, Garcia v. Google, Inc., seems certain to test this proposition with its incredibly sympathetic facts. Continue Reading
One of the more important intellectual property cases decided in 2014 is the U.S. Supreme Court’s decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc. (2014) 134 S.Ct. 1749. In that case, the Supreme Court announced a new test for awarding attorneys’ fees in patent infringement cases, holding that the existing test used by the Federal Circuit Court of Appeals was “overly rigid.”
The plaintiff, Octane Fitness, and the defendant, ICON Health, both made elliptical exercise machines. ICON owned a U.S. patent for its machine. ICON sued Octane for patent infringement. The district court granted summary judgment of noninfringement in favor of Octane. Octane filed a motion to seeking its attorneys’ fees under 35 U.S.C. section 285. The district court denied the motion. On appeal, the Federal Circuit Court of Appeals affirmed.
The Supreme Court reversed, stating that “the framework established by the Federal Circuit in Brooks Furniture Mfg. v. Dutailier International (Fed. Cir. 2005) 393 F.3d 1378 is unduly rigid, and it impermissibly encumbers the statutory grant of discretion to district courts.” Id. at 1755. The Court held that the Federal Circuit’s test in Brooks Furniture was “overly rigid.” Id. at 1756. Under that test, a case was exceptional if there was either: (1) litigation-related misconduct, or (2) subjective bad faith and objective baselessness. According to the Federal Circuit, the first alternative, litigation misconduct, would be found it there was willful infringement, vexatious litigation, a Rule 11 violation, or fraud or inequitable conduct in obtaining the patent. Under the second alternative, subjective bad faith was met only if the plaintiff actually knew that its suit was objectively baseless, and objective baselessness was met if no reasonable litigant could believe they would prevail. In addition, the Brooks court held that a defendant had to prove an exceptional case by clear and convincing evidence. Continue Reading
On May 31, 2014, members of the band Led Zeppelin and its publishers were sued for copyright infringement by Randy California, the former guitarist and front man of the band Spirit. The lawsuit, filed in the state of Pennsylvania, alleges that a significant portion of Led Zeppelin’s “Stairway to Heaven” was stolen from “Taurus,” a song written by Mr. California when he was with Spirit.
Claiming that a Pennsylvania court lacks jurisdiction over the band’s three British citizens, Led Zeppelin challenged jurisdiction and, in the alternative, argued that the lawsuit should be Going to California, Over the Hills and Far Away, where venue would be more appropriate. (Put another way, they sang the Immigrant Song.) The court denied Led Zeppelin’s motion, leaving the band Dazed and Confused. Accordingly, The Song Remains the Same.
While the decision has undoubtedly been a Heartbreaker for the band, failure to have the case dismissed or transferred is really only a minor setback. It’s not yet time to lead Stairway to Heaven to the Gallows Pole. The case will simply go forward in Pennsylvania, Wearing and Tearing its way to trial.
Led Zeppelin’s predicament is not a new one for musicians. In 1971, music publishing company Bright Tunes alleged that George Harrison’s “My Sweet Lord” was a copy of the Chiffons’ hit “He’s So Fine.” During the litigation, George Harrison testified that he had not noticed any similarities between the two songs until other people started pointing them out, but he also admitted that he had been aware of the Chiffon’s hit before he wrote “My Sweet Lord.” Ultimately, the court ruled that, although Harrison did not intentionally plagiarize the song, Mr. Harrison had “subconsciously” copied substantial portions and incorporated them into “My Sweet Lord.” The court then ordered Harrison to pay to Bright Tunes three quarters of the royalties he had received from sales of his song.
Bright Tunes should be ringing in Led Zeppelin’s ears. “Taurus” was released on Spirit’s debut album in 1968. Led Zeppelin opened for Spirit on their 1969 tour, and later released Stairway to Heaven in 1971. (It is fair to question why Spirit did not raise a claim for copyright infringement within the last 43 years. Perhaps they were occupied with Somethin’ Else.) As the opening act for Spirit on the 1968 tour, it appears likely that Led Zeppelin probably had heard “Taurus” prior to writing “Stairway.” The band therefore might face a fate similar to George Harrison’s – a finding of “subliminal” infringement similar to the outcome in Bright Tunes. Based on the royalty award in Bright Tunes, it no doubt will be Celebration Day for Spirit if they successfully prove a case for copyright infringement.
Rock and Roll. That’s the Way. But I don’t want to Ramble On.