Today’s real estate industry relies heavily on the use of websites displaying photographs of properties for sale to entice buyers.  Many of the photographs on these sites are taken by professional photographers who license the use of their photos and retain the copyrights to them.  In Stevens v. CoreLogic, Inc. (decided June 20, 2018), the Ninth Circuit was faced with the question of whether these photographers can maintain an action for copyright infringement against a company whose software apparently “scrubbed” metadata identifying the copyright holders of photographs on various real estate websites.

The plaintiffs in the CoreLogic case were photographers who were hired by various real estate agents to take digital photos of homes for sale.  These photos would then be shown on the real estate agent’s websites and other sites to attract potential buyers for these properties.  The digital photographs would contain metadata, which although invisible to the average user, contained information that could help identify the author of the photograph as well as potential copyright ownership information.  Copyright law, specifically 17 U.S.C. § 1202(b) ,restricts “the removal or alteration of copyright management information (“CMI”) – information,” such as the title, the author, the copyright owner and other identifying information, from a copyrighted work.

CoreLogic develops and provides software to the real estate industry, primarily multiple listing services also known as MLSs.  Because digital photos can entail large file sizes, CoreLogic’s software programs would “downsize” photos, which would include removing metadata from particular images.  In May 2014, the Plaintiffs sued CoreLogic claiming that its software, by removing this metadata, constituted copyright infringement.  (It appears that shortly after the lawsuit was filed, CoreLogic modified its software to allow at least one form of metadata to remain attached to images displayed on the MLS websites.)

After discovery was nearly complete, CoreLogic moved for summary judgment arguing that there was no evidence that it intended to allow infringement of Plaintiffs’ copyrights.  The trial court agreed with CoreLogic and granted judgment in its favor, which judgment the photographers appealed to the Ninth Circuit.  (This article does not address other issues raised on appeal by the Plaintiff photographers.)

In essence, the Ninth Circuit considered whether Plaintiffs could state prevail on a claim against CoreLogic that its software unlawfully removed CMI metadata in violation of 17 USC §  1202(b)(1) and that CoreLogic violated 17 U.S.C. § 1202(b)(3) by distributing images knowing that CMI had been removed.  After reviewing the text of both of these statutes, the Ninth Circuit recognized that “[b]oth provisions … require the defendant to possess the mental state of knowing, or having a reasonable basis to know, that his actions `will induce, enable, facilitate or conceal’ infringement.”  The Ninth Circuit agreed with the trial court that the Plaintiff- Photographers had not produced admissible evidence to satisfy this required mental state.

The Plaintiff-Photographers’ main argument was that by removing metadata, CoreLogic was impairing the ability of copyright owners to detect whether someone might be using their photographs in violation of their copyrights.  The Ninth Circuit reasoned that this argument was not based on any affirmative evidence, but rather, “it simply identifies a general possibility that exists whenever CMI is removed.”  The Ninth Circuit held that this “general possibility” was not sufficient to establish copyright infringement.

First, in reviewing the statutory language, the Ninth Circuit found it important to “give effect, if possible, to every clause and word of a statute.”  Thus, in order not to make sure that the mental state requirement set forth in these provisions was not a “superfluity,” there must be a more specific application “than the universal possibility of encouraging infringement.”  While the Plaintiff-Photographers were not required to show that any specific infringement had already occurred, the Ninth Circuit held that a plaintiff “must make an affirmative showing, such as by demonstrating a past `pattern of conduct’ or `modus operandi,’ that the defendant was aware of the probable future impact of its actions.”  The Ninth Circuit continued by recognizing that the statutory intent is further evidenced by the fact that it was enacted in response to similar concerns addressed in the WIPO Copyright Treaty and the WIPO Performance and Phonograms Treaty. In sum, the Ninth Circuit concluded that in order to satisfy the knowledge requirement of section 1202(b), “a plaintiff … must offer more than a bare assertion that `when CMI metadata is removed, copyright infringement plaintiffs … lose an important method of identifying a photo as infringing.’”

The Ninth Circuit then concluded that the Plaintiff-Photographers had failed to offer any specific evidence that the removal of the CMI metadata impaired their ability of policing possible infringement.  First, the Plaintiff-Photographers had not produced any evidence that they ever relied on the use of CMI metadata to prevent or detect copyright infringement of their works.  In fact, at least one of the plaintiffs apparently testified that he had never looked at metadata information on any MLS system.  Furthermore, on two occasions when one of the plaintiffs became aware that his photographs were being infringement upon, this discovery came through a notice provided by the real estate agent who had commissioned the photos later discovering them on another website.

Furthermore, the Plaintiff-Photographers had not offered any evidence that CoreLogic’s distribution of real estate photographs to other sites had ever resulted in an infringing use of photographs by third parties.  Importantly, the Ninth Circuit recognized that if a third party was intent on infringing the copyrights of one of the photographers, that party could always remove any CMI metadata, which would also preclude the detection of infringement through the search of metadata.  The Ninth Circuit concluded that “because the photographers have not put forward any evidence that CoreLogic knew its software carried even a substantial risk of inducing, enabling, facilitating or concealing infringement, let alone a pattern or probability of such a connection to an infringement, CoreLogic is not liable for violating 17 U.S.C. §  1202(b).”

The CoreLogic decision is a reminder to copyright infringement plaintiffs that in order to prevail on a copyright infringement claim, they must come forward with admissible evidence to meet each of their burdens of proof to establish their claim.  The Ninth Circuit has made clear that relying on a “general possibility” of infringement theory will not suffice to meet this burden and risk dismissal of such claims.

James Kachmar is a shareholder in Weintraub Tobin Chediak Coleman Grodin’s litigation section.  He represents corporate and individual clients in both state and federal courts in various business litigation matters, including trade secret misappropriation, unfair business competition, stockholder disputes, and intellectual property disputes.  For additional articles on intellectual property issues, please visit Weintraub’s law blog at www.theiplawblog.com. 

Does anyone think that a monkey has standing to bring a copyright infringement lawsuit? In Naruto v. Slater, 888 F.3d 418 (9th Cir. 2018), the Ninth Circuit Court of Appeals said no, but not without carefully considering the issue.

Animals have many legal rights based on federal and state laws. Most of those rights are enforceable by humans or legal entities suing under the statutes on behalf of the animals. However, should animals have the right to sue under their own names in court?

The Ninth Circuit Court of Appeals has addressed this question in The Cetacean Community v. George W. Bush and Donald H. Rumsfeld, 386 F.3d 1169 (9th Cir. 2004). In that case, the court had to decide whether cetaceans (whales, porpoises, and dolphins) had standing to sue in their own names under several federal statues, including the Endangered Species Act and the Marine Mammal Protection Act. The world’s cetaceans, identified as The Cetacean Community, represented by an attorney in Hawaii, sued the United States Government to stop the Navy’s use of a type of sonar that causes injury to cetaceans. This sonar emits low frequency pings that are heard underwater over hundreds of miles.  The pings cause the cetaceans tissue damage and hearing loss, and disrupt their feeding and mating behavior by masking the sounds of other cetaceans and the environment. The damage caused by this type of sonar was undisputed. The use of the sonar during peacetime had been successfully challenged in a separate case filed by the Natural Resource Defense Council. In this case, the cetaceans sued to cause the President and the Secretary of Defense to conduct a regulatory review and to prepare an environmental impact report on the use of this sonar during threat situations and wartime.

The district court for Hawaii granted the defendants’ motion to dismiss the case on the grounds that the cetaceans did not have standing under the federal statutes to bring suit.

The Ninth Circuit affirmed. The court explained that standing to sue under federal statues requires both Article III standing and specific standing under the statute. Article III standing exists if there is a “case or controversy,” meaning that the plaintiff must have suffered an injury traceable to the defendant for which a court can provide a remedy.

According to the court, nothing in Article III prohibits animals from having a “case or controversy.” Cetacean Community, 386 F.3d 1175. Congress can grant animals the right to sue in their own names by statute, just as Congress has enacted statutes that provide for suits in the names of entities such as corporations or trusts, cities, ships, and incompetent persons such as infants or mentally incapacitated individuals. Id. at 1176.

The court then analyzed whether The Environmental Protection Act, The Marine Mammal Protection Act, and the other statutes under which the cetaceans sued provided standing to the cetaceans. The court held that these statutes did not provide standing to any animals, but rather provided standing to persons or entities to sue to protect the animals. Id. at 1179.

In Naruto v. Slater, supra, 888 F.3d 418, the Ninth Circuit was faced with a copyright infringement claim brought by an animal. The animal was a Crested Macaque, a type of monkey, named Naruto. Naruto lived in a wildlife reserve in Indonesia. In 2011, Naruto found a camera that had been left in the reserve by a photographer, defendant David Slater. Naruto took photos of himself. In 2014, presumably after finding the camera with Naruto’s selfies, Slater and the other defendants published a book containing the selfies. The defendants listed themselves as the copyright owner of the selfies, although they admitted that Naruto had taken the pictures.

In 2005, People for the Ethical Treatment of Animals (PETA) and a scientist who had studied Naruto sued the defendants for copyright infringement, as “Next Friends” on behalf of Naruto. The defendants moved to dismiss. The district court for the Northern District of California granted the motion on the grounds that the Copyright Act did not provide statutory standing to animals.

The Ninth Circuit affirmed. The court held that it was bound by the holding of Cetacean Community, supra, that animals could show Article III standing. Naruto, supra, 888 F.3d at 421. The court found that PETA was not a proper Next Friend to sue on behalf of Naruto, but held that this was not determinative because a Next Friend was not necessary to establish Article III standing. The court held that because the “case or controversy” requirement was met, Naruto had Article III standing. Id. at 424. However, the court held that the Copyright Act did not provide statutory standing to animals other than humans.

So, at least for now, animals who take pictures don’t own the copyrights to those pictures. You can leave your camera somewhere and claim ownership of any photos taken by an animal without the risk of liability for copyright infringement! In the future, however, it’s possible that the animals just might win.

On April 24, 2018, the Supreme Court issued its ruling in SAS Institute, Inc. v. Iancu, which held that the Patent Trial and Appeal Board (“PTAB”) arm of the United States Patent and Trademark Office (“USPTO”) must issue a final written decision addressing each and every patent claim challenged in an Inter Partes Review (“IPR”) petition if review is granted.  In other words, if the PTAB is going to institute a review, it must address all the claims that are being challenged by the petition.  In the six weeks or so since the SAS Institute decision, the ruling has had repercussions not only for the PTAB, but also for federal courts.

For example, in Wi-LAN, Inc. et al v. LG Electronics, Inc. et al, the Southern District of California recently decided to issue a stay in a patent infringement case brought by WiLan, Inc. against LG Electronics, Inc. pending a decision on whether to institute an IPR proceeding against the at-issue patents.  While not dispositive, the Court did consider the SAS Insitute ruling in making its decision, reasoning “[w]hile review is not guaranteed … in light of the Supreme Court’s mandate to review all contested claims upon grant of [an IPR] and the complexity of this case, the court finds [the simplification of issues] weighs in favor of a limited stay of proceedings until the [PTAB] issues its decisions on whether to institute IPR.”

Next, in DermaFocus LLC v. Ulthera, Inc., the District of Delaware had to decide whether to lift an already issued stay when some but not all challenged claims had already been ruled on by the PTAB.  The Delaware District Court decided not to lift the stay because the circumstances warranting the entry of a stay in the first instance still persisted in light of SAS Institute.  Specifically, the Court reasoned that the “parties stipulated to stay the litigation ‘pending resolution by the PTAB of the patentability of all challenged claims in the pending IPR.’”  Although the PTAB denied institution of IPR proceedings with respect to some claims, and issued a final written decision on all remaining claims, the Supreme Court recently ruled that the PTAB must issue a final written decision “with respect to the patentability of any patent claim challenged,” and “in this context, as in so many others, ‘any’ means ‘every.’”  For this reason, the Federal Circuit remanded Ulthera’s appeal to the PTAB for issuance of a final decision regarding the patentability of all claims.  Consequently, the PTAB has yet to resolve the patentability of all challenged claims in the pending IPR proceeding, and the terms of the parties’ stipulation have not been satisfied.

Finally, in PGS Geophysical AS v. Iancu, the Federal Circuit held that it has jurisdiction to address appeals without first requiring the PTAB address the claims and grounds included in petitions for review but not previously included in final written decisions, i.e. the “non-instituted” claims and grounds.  In other words, the Federal Circuit held “that the existence of non-instituted claims and grounds does not deprive [it] of jurisdiction to decide appeals from final written decisions.”  The Federal Circuit reasoned that while the PTAB having only partially instituted review is now improper under SAS Institute, the PTAB’s final decisions on the validity of individual claims are nonetheless still final because the PTAB made a patentability determination.

Although there are still numerous issues and questions the PTAB and federal courts need to decide in implementing the SAS Institute ruling, the answers to some of these issues and questions are slowly taking shape.  However, there are many more that will require resolution in both the short and long term.

A few years ago, before the 76ers returned to playoff glory, the NBA’s Philadelphia 76ers’ ownership and front office began utilizing the phrase “Trust the Process” to represent their journey back to the top. Finally, after years of absolutely horrendous basketball, which enabled the 76ers to draft stars such as Joel Embiid and Ben Simmons, the 76ers finished third in their conference and returned to the playoffs for the first time in years. Evidently, the Process paid off.

Now, switching sports, after a season that ended with the Buffalo Bills being eliminated in the first round of the NFL playoffs and trading their once–prized quarterback Tyrod Taylor to the Cleveland Browns, the Bills have drafted rookie quarterback Josh Allen from the University of Wyoming. For some reason, despite making the playoffs and presumably being a trade or two away from going further into the playoffs, the Bills have opted to rebuild. In furtherance of that process, the Buffalo Bills recently filed a trademark application with the United States Patent and Trademark Office, seeking to register “Respect the Process.” The Bills intend to use the mark on cellphone cases, magnets, flags, towels, water bottles, door mats, and other similar goods. They do not, however, plan to print t-shirts reflecting the mark, as a company known as Made Me Tees registered that mark in early 2017 with respect to such clothing. In any event, it seems the Bills may have a larger problem looming.

Although the 76ers never registered “Trust the Process” or “The Process,” superstar Joel Embiid did. In 2016, Embiid, whose Twitter wallpaper features “The Process” in all caps, filed an application to register the mark, which is still, no pun intended, going through the trademark registration process, but seemingly on track for registration. So, this raises an issue: Can Embiid block the Buffalo Bills’ attempt to register “Respect the Process”? And better yet, if he can, will he?

The answer to the first question will depend greatly upon whether the USPTO’s examining attorney believes the marks are confusingly similar. Frankly, I’m not sure I think consumers are likely to confuse the two marks, but I haven’t researched similar cases and even if I had, the examining attorney could view the comparison differently than I do. As for the second question, it remains to be seen if Embiid would oppose the mark. He may not care in light of the different sports, or he may not find the marks all that similar. We won’t know until he acts, or fails to do so. In any event, given the parties involved, we will keep an eye on the situation and report subsequent developments.

adidas and Skechers are athletic shoe and apparel manufacturers who have a long history of litigation between them arising out of claims that Skechers has repeatedly infringed upon adidas’ trademarks.  In Adidas America, Inc. v. Skechers USA, Inc. (decided May 10, 2018), the Ninth Circuit once again had to weigh in on Skechers’ alleged infringement of adidas’ trademarks.

 

adidas is well known for its “three-stripe” mark, which it has featured on its shoes and clothes for decades as part of its branding strategy and for which it owns a federal trademark.  adidas claims that the mark is worth millions of dollars in sales and that it invests heavily to advertise the three-stripe mark in various media.  In past lawsuits with Skechers, Skechers has had to admit that adidas is “the exclusive owner” of the three-stripe mark and has agreed not to use it or any other protected mark, which may be “confusingly similar thereto.” 

 

In September 2015, adidas sued Skechers once again for trademark infringement, among other claims, arising out of the adidas Stan Smith shoe and the competing Skechers Onyx shoe (which this article will not discuss) as well as Skechers Relaxed Fit Cross Court TR shoe, which utilized a three-stripe mark similar to adidas trademark.  adidas successfully moved for a preliminary injunction in the trial court barring Skechers from manufacturing, distributing, advertising, selling or offering for sale the Cross Court shoe.  Skechers appealed that decision to the Ninth Circuit.

 

The Ninth Circuit began by recognizing that it reviews the issuance of a preliminary injunction for abuse of discretion which means that the Court’s “decision is based on either an erroneous legal standard or clearly erroneous factual findings ….”  To obtain an injunction, a plaintiff usually has to establish: (1) the likelihood of success on the merits of its claim(s); and (2) that it is likely to suffer irreparable harm in the absence of an injunction.

 

The Ninth Circuit, in reviewing the lower court’s issuance of the injunction as to Skechers’ Cross Court shoe, found that the trial court had properly determined that adidas had established a  likelihood of success on the merits of its claims.  To meet its burden of establishing trademark infringement, adidas had to show “among other things, ownership of its trademark and a likelihood of confusion between its and the defendant’s [Skechers] marks.”  Given that Skechers had essentially conceded adidas ownership of the three strip mark, the only issue was whether adidas had met its confusion element.

 

The Ninth Circuit found that the district court had properly applied the Sleekcraft factors to find that they favored adidas in finding a likelihood of trademark infringement. The Court found the following significant in reaching this determination: (1) both the cross court and adidas designs have three-stripes; (2) although there may have been slight differences in the three-stripes marks, they were attached to closely related products and the court could overlook any minor differences between them; (3) there was significant strength in adidas three-stripe mark given that it was “more likely … to be remembered and associated in the public mind with the marks’ owners”; and (4) Skechers having previously admitted the three-stripe mark belonged to adidas, could be construed as having adapted the mark similar to adidas’ to deceive the public.  Taken together, these factors weighed heavily in adidas favor and the Ninth Circuit found that the trial court had properly concluded that adidas had established the likelihood of success on the merits as to its trademark infringement claim.

 

Next, the Ninth Circuit turned to adidas’ trademark dilution claim.  Trademark dilution is “the lessening of the capacity of a famous mark to identify and distinguish goods or services regardless of the presence of or absence of: (1) competition between the owner of the famous mark and other parties; or (2) likelihood of confusion, mistake or deception.”  In order to establish dilution, a plaintiff must show several factors which are similar to the Sleekcraft factors.  In opposing adidas’ trademark dilution claim, Skechers relied on many of the same objections regarding the trademark infringement claim which the Ninth Circuit concluded had properly been overruled.  Skechers further argued that adidas failed to produce evidence of the degree of recognition of the three-stripe market, but the Court rejected this finding and concluded that there was significant evidence that “the three-stripe mark enjoyed a high degree of recognition.”  Like the trademark infringement claim, the Ninth Circuit affirmed the trial court’s finding as to adidas’ trademark dilution claim in support of the granting of the motion for preliminary injunction.

 

However, the Court found that the trial court had erred in finding that there was a likelihood of irreparable harm.  adidas had argued that Skechers, by selling the Cross Court shoe, had “harmed adidas’ ability to control its brand image because consumers who see others wearing Cross Court shoes, would associate the allegedly lesser quality Cross Courts with adidas and its three-stripes mark.”   The Ninth Circuit concluded that there was no evidence in the record to support this loss of control theory.

 

First, the Ninth Circuit recognized that this claim relied on the assumption that adidas is viewed by consumers as a premium brand while Skechers is viewed as a lower quality discount brand.  However, the only evidence offered by adidas in support of this position were statements made by adidas personnel.  The Ninth Circuit concluded that “Skechers’ reputation among the ranks of adidas employees does not indicate how the general consumer views it.”

 

Second, the Ninth Circuit rejected this loss of control theory on the ground that this theory of harm was contradictory to adidas’ theory of consumer confusion to establish its likelihood of success on the merits.  Essentially, adidas was arguing not that a Cross Court purchaser would believe that he or she was buying an adidas product, but that someone else seeing the wearer of a Cross Court shoe would somehow mistake it for an adidas.  The Court found it inconsistent as to how a supposed consumer viewing the Cross Court shoe from afar would somehow (1) mistake it for an Adidas; and (2) somehow be able to determine that it was in fact a lower quality shoe.  Drilling down a bit further, the Ninth Circuit said that if an observer was not close enough to be able to see the Skechers logos on the shoes that would distinguish from an adidas shoe, how could that observer reasonably assess the quality of the shoes?  Further, how could that observer determine that the shoe was a “discount” brand without knowing the price of the shoe or being able to determine it  was a Skecher shoe to begin with.  The Court found that this failure of proof on the part of adidas meant that the trial court should have denied the motion for preliminary injunction as to the cross Court shoe.

 

Circuit Judge Clifton dissented from the opinion and found that the Court should have upheld the preliminary injunction in its entirety.  Judge Clifton found that the Ninth Circuit should have been more deferential to the trial court’s factual findings and believed that there had been sufficient evidence under prior case law to establish irreparable injury.

 

Litigants in trademark infringement/dilution cases seeking injunctive relief need to remember that they bear the burden of establishing with admissible evidence both the likelihood of success on the merits and the danger of irreparable injury.  Merely relying on internal employee statements may not be sufficient to meet this burden.

 

James Kachmar is a shareholder in Weintraub Tobin Chediak Coleman Grodin’s litigation section.  He represents corporate and individual clients in both state and federal courts in various business litigation matters, including trade secret misappropriation, unfair business competition, stockholder disputes, and intellectual property disputes.  For additional articles on intellectual property issues, please visit Weintraub’s law blog at www.theiplawblog.com.