Copyright Opinions
Unauthorized Copying Not an Element of Prima Facie
Infringement Case: Ali v. Final Call,
Inc., No 15-2963 (7th Cir. Aug. 10, 2016)
Wood, J. In a suit alleging copyright
infringement through the distribution of lithographs of
plaintiff's portrait of Louis Farrakhan, the Seventh Circuit
held that the district court erroneously required plaintiff to
prove that defendant's (admitted) copying was unauthorized. The
court attributed the error in part to the district court's
reliance on Hobbs v. John, 722 F.3d 1089, 1094 (7th Cir.
2013), in which the Seventh Circuit misquoted its own precedent as
requiring "unauthorized copying," rather than mere
"copying," as an element of the prima facie case
for infringement. Because the true prima facie elements were
satisfied (ownership of valid copyright and copying), and defendant
had failed to present any affirmative defense, the Seventh Circuit
reversed and remanded the case for determination of damages.
Ninth Circuit Finds Triable Issue on Willfulness, Limits
Statutory Damages to Named Defendants:
Friedman v. Live Nation Merchandise,
Inc., No. 14-55302 (9th Cir. Aug. 18,
2016)
Berzon, J. In a dispute over defendant's
concededly infringing use of plaintiff's copyrighted
photographs of rap group RunDMC on merchandise, the Ninth Circuit
reversed the district court's summary judgment for defendant on
the issues of willful infringement and knowing removal of copyright
management information (CMI), explaining that issues involving a
state-of-mind determination are generally inappropriate for
resolution by summary judgment. With respect to the willfulness
claim, the court found that the jury could reasonably conclude that
Live Nation's reliance on artists who were the subject of
photographs to clear photographic rights (rather than on the
photographers who took the photos) amounted to recklessness or
willful blindness with respect to plaintiff's intellectual
property rights. With respect to the alleged CMI violation, the
Ninth Circuit clarified that plaintiff could prevail upon showing
that defendant distributed his works knowing that CMI had been
removed, even if defendant did not remove it, and that there was a
triable issue of fact with respect to this knowledge. However, the
Ninth Circuit affirmed the district court in rejecting
plaintiff's claim to 104 separate statutory damages
awards—based on the number of retailers to which defendant
had sold the infringing merchandise—holding that plaintiff
was entitled to only one award for each infringed work because he
had not joined the downstream retailers as defendants.
Third Circuit Affirms $1.6M Award, Including Multipliers
for Rarity and Market Impact: Leonard v.
Stemtech International Inc., Nos. 15-3198,
15-3247 (3d Cir. Aug. 24, 2016)
Shwartz, J. In a case involving unauthorized use
of plaintiff's stem cell photographs by defendant and its
distributors, the Third Circuit found sufficient evidence to uphold
the jury's $1.6 million verdict of infringement, as well as its
contributory infringement and vicarious infringement verdicts. With
respect to contributory infringement, the court held that by
creating the materials containing the infringing images, providing
the materials to its distributors and requiring its distributors to
use the materials, defendant took "'steps that we[re]
substantially certain to result in such direct
infringement.'" With respect to vicarious liability, the
court found that plaintiff's contractual right to impose
disciplinary sanctions on distributors and its practical ability to
withhold compensation and support provided sufficient evidence for
the jury to conclude that plaintiff had satisfied the right and
ability to supervise or control element. As for the damages award,
the court held that the jury could reasonably have relied upon
expert testimony applying multipliers—accounting for the
rarity of stem cell images and the impact of defendant's
widespread use on the market for plaintiff's work—to a
"benchmark" fair market value estimate of approximately
$216,000, so as to arrive at the $1.6 million figure. The Third
Circuit further held that the district court had abused its
discretion by denying prejudgment interest to plaintiff based on a
view that the jury verdict "sufficiently compensated"
plaintiff. However, the court upheld the district court's
summary judgment for defendant on plaintiff's request for
infringer's profits, as plaintiff provided insufficient
evidence linking the infringement to defendant's profits.
Trademark Opinions
District Court Lacks Jurisdiction to Cancel Fraudulent
Registration Where Plaintiff Not Entitled to Damages or
Injunction: East Iowa Plastics, Inc. v. PI,
Inc., No. 15-2757 (8th Cir. Aug. 11,
2016)
Kelly, J. In an appeal involving fraudulent
procurement of trademark registrations, the Eighth Circuit vacated
the district court's cancellation of defendant's trademark
registrations and reversed an award of attorneys' fees, finding
that plaintiff lacked standing because there was no evidence of
either damages or nonmonetary injury to plaintiff. The court
further held that plaintiff was not a "prevailing party"
by virtue of successfully defending against infringement and unfair
competition counterclaims, because "[e]ach party brought
virtually identical claims with respect to the same trademark, and
neither was successful." However, the Eighth Circuit directed
the district court on remand to determine whether attorneys'
fees are available based on plaintiff's claim for declaratory
judgment of trademark ownership, and noted that plaintiff may be
able to seek cancellation of defendant's registrations by
filing a petition with the PTO.
Seventh Circuit Rejects Post-Trial Argument Regarding
Lack of Continuous Use: S.C. Johnson &
Son, Inc. v. Nutraceutical Corp., No.
15-33337 (7th Cir. Aug. 25, 2016)
Wood, CJ. In a dispute involving two companies
using the mark BUG OFF over a 20-year period, where defendant
Nutraceutical adopted the mark over 35 years ago but never
registered it and plaintiff S.C. Johnson acquired the rights of a
third party who registered the mark in 1998, the district court
rejected the prior use defense based on a failure by defendant to
demonstrate continuous use and found trademark infringement. The
Seventh Circuit reversed, finding that plaintiff was estopped from
raising the continuous use defense for the first time at the
post-trial stage, and that even if the continuous argument was
considered, defendant had established continuous use.
Ninth Circuit Holds Sufficient Nexus Between Sales in
Canada and American Commerce to Warrant Extraterritorial
Application of the Lanham Act: Trader
Joe's Co. v. Hallatt, No. 14-35035 (9th
Cir. Aug. 26, 2016)
Christen, J. In a case involving a purchaser of
Trader Joe's products in Washington state who distributed the
goods in Canada under the business name Pirate Joe's, the Ninth
Circuit reversed the district court's dismissal of Trader
Joe's Lanham Act claims for lack of subject matter
jurisdiction, concluding that: (1) extraterritorial reach of the
Lanham Act is a non-jurisdictional merits question, and the
statute's "use in commerce" element gives it
extraterritorial reach; and (2) there was a sufficient nexus
between defendant's activities and Trader Joe's American
commerce due to the reputational harm defendant's activities
could cause to Trader Joe's trademarks, which would diminish
the value of the marks. Alternatively, the court also found that
the defendant operated in American commerce when he purchased goods
in Washington and hired locals to assist him. Finally, the court
found that there was not sufficient "interference with other
nations' sovereign authority" to prevent application of
the Lanham Act.
Tenth Circuit Holds That Color in Product Packaging Can
Be Inherently Distinctive Only When Specific Colors Are Used With a
Shape, Pattern or Design: Forney Industries,
Inc. v. Daco of Missouri, Inc., No. 15-1226
(10th Cir. Aug. 29, 2016)
Hartz, J. In a case involving packaging for
metalworking parts and accessories, the Tenth Circuit affirmed the
district court's summary judgment dismissing trade dress
claims, holding that color in product packaging can be inherently
distinctive only when specific colors are used in association with
shapes, patterns or designs, and that plaintiff's red, yellow,
white and black color scheme was insufficient because it was used
inconsistently. The court also affirmed the district court's
finding that there was not sufficient evidence to show that the
trade dress had acquired secondary meaning based on its
determination that the CEO's affidavit regarding advertising,
sales data and exclusive use over a 20-year period was lacking.
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