Property, intangible

a blog about ownership of intellectual property rights and its licensing

  • Use Inuring to the Licensor

    While I write about all the intellectual property disciplines, I have a soft spot for trademark ownership disputes. And I was, frankly, surprised by today’s case—it was not the outcome I expected when I first started reading.

    Tammy Goldthorpe filed an application for the mark SLIPPERY WIZARD for asphalt release agent. The application was opposed by her former employer, Brody Chemical Company Inc.* So you see what this looks like at first, an attempted rights grab by a former employee. Only, turns out, it was Ms. Goldthorpe’s former employer who was making the grab.

    You get the gist pretty early in the case with this:

    The pertinent portions of Mr. Liddiard’s testimony, Opposer’s primary witness, are directly contradicted by the testimony of Applicant’s five witnesses, including Opposer’s own witness, Mr. Butler. The level of contradiction, culminating in a forged date on a material piece of evidence renders Mr. Liddiard’s testimony utterly unreliable.

    Yes, so when your own employees contradict the company’s position, and agree with the former employee’s version of events, it’s not going well for you.

    Goldthorpe claimed that she had created the asphalt release and sold it through another company under another name before working for Brody Chemical. When Brody Chemical became interested in selling it, they asked for a new name and she suggested SLIPPERY WIZARD. When Goldthorpe ultimately went to work for Brody Chemical, she claimed to have an oral agreement that she would be paid a dollar per gallon sold by others in the company.

    There is so much false testimony by Mr. Liddiard it’s hard to find the best example to give you the flavor of it. But here’s some (sorry for the length, but it’s pretty damning):

    Mr. Liddiard testifies regarding the genesis of the name as follows:

    Once we decided to add a new product other than our current Asphalt release, we were going to come up with a new name. Well, Asphalt Release, that’s the generic name for it, so we had to come up with something different. And so in a manager’s meeting, as I recall, there was myself, Buzz Butler, and I think that’s it. Just the two of us were in a management meeting, and we were trying to think of a name. And I think it was Buzz that came up with the name. He just said Slippery Wizard, and we went, “okay. That will work as a secondary name for a second product for Asphalt Release.” … She – I didn’t even have a conversation with Tammy about the name for the product. We just decided to add a secondary product. It needed a name to go on the price list, and so we came up with – I came up with a formula, we costed it. I needed a name to put it on the formula – on the price list, so Buzz and I thought of a name by – I still look back, and I think it was Buzz that said Slippery Wizard. And I went, “Yeah, that sounds okay. Let’s go with that.” And we did it.

    He further testifies that Ms. Goldthorpe had no involvement in the selection of the SLIPPERY WIZARD name and mark.

    This testimony is breathtaking in its “inaccuracy.” As noted above, Mr. Butler testifies that at that time (2004) he was the regional manager in Montana and was not involved in management in the main office. More specifically, he testifies that he did not come up with the name SLIPPERY WIZARD and was in no way involved in the creation or adoption of the name, and that Applicant was the one who came up with the name and that she brought the formula to opposer. He does not remember hiring Applicant. He testifies that employees and customers associated Applicant as the source of the SLIPPERY WIZARD product.

    Mr. Liddiard testifies that he “came up with the formula” for the product and Applicant did not give it to him. He testifies that a Mr. Steve Madsen had suggested using cooking grease for an asphalt release agent and Mr. Liddiard, or his company, developed the product. However, Ms. Goldthorpe submitted the assignment agreement she entered into with Mr. Madsen recognizing her invention and ownership of the formula for the asphalt release product. This is corroborated by Mr. Forsgren’s testimony that Steve Madsen and Ms. Goldthorpe “manufactured, sold, delivered asphalt release” in 2003 and that it was Ms. Goldthorpe’s product.

    (Internal citations omitted.)

    Without any evidence in Brody Chemical’s favor, there isn’t a lot of legal analysis required. Although there was no written agreement until 2011, licenses can be oral. The trademark owner doesn’t have to use the mark itself, the use can be solely by a licensee, with the use inuring to the licensor’s benefit. Even if the Brody Chemical name was on the packaging, a trademark owner is not required to apply its name to the goods. The mark was not designed by the employee in the scope of her employment, but rather she rebranded her product in anticipation of, and actually, receiving royalties for its sale. “The preponderance of the evidence supports Applicant’s position that Applicant owns the mark and Opposer was simply the licensee while Applicant was affiliated with Opposer.” The opposition was dismissed.

    HT to John Welch of the inimitable TTABlog for the case.

    Brody Chemical Co. v. Goldthorpe, Opp. No. 92104070 (June 5, 2014).

    *Seriously Brody Chemical? A paper application in 2011?

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  • Only One Recovery

    Just a brief decision on the damages award for infringement of a work that is the embodiment of more than one copyright—you only get one recovery. Here, the case was about “pirated” music and music has two copyrights, the copyright in the composition and the copyright in the sound performance. In a short but thorough review of the law, the court explained why there was only one award. The recent decision in the Beastie Boys case was to the contrary, but the Capitol Records court begged to disagree.

    Capitol Records, Inc. v. MP3Tunes, LLC, No. 07 Civ. 9931(WHP)* (S.D.N.Y. April 7, 2014).

    *The cases are on a privately-hosted cloud using ownCloud. Let me know if you have any problems getting them.

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  • Zombie Brand Rising From the Dead?

    I just watched the most recent episode of Mad Men, “The Strategy.” The “strategy” is for an advertising campaign for the Burger Chef chain of fast food restaurants. Here’s the closing shot of the episode, with Pete, Peggy and Don sitting in a Burger Chef:

    Anyone eaten at a Burger Chef lately—anyone? According to Wikipedia, there aren’t any remaining stand-alone Burger Chef restaurants. The Hardee’s chain ultimately ended up with ownership of the brand, but its ownership was challenged by zombie reviver River West Brands (prior blog post here). In 2006 River West Brands filed its own application for BURGER CHEF and then petitioned to cancel two Hardee’s trademark registrations on the basis of abandonment.

    Perhaps not coincidentally, a 2007 press release says that the Burger Chef branding was being revived for a “Big Shef” burger. River West Brands ultimately abandoned both its cancellation action and application, apparently capitulating to Hardee’s. In 2013 and 2014 Hardee’s renewed two of the original Burger Chef registrations with these specimens of use:

    Specimen on USPTO website

    From file wrapper at USPTO website

    Hardee’s has also filed a new application for a BURGER CHEF mark.

    So what do we make of the Burger Chef reference on Mad Men? I don’t think these things happen by coincidence; when Interstate Bakeries was in bankruptcy it used product placement in the movie Talladega Nights as free advertising for Wonder Bread. Are we seeing Burger Chef return from the dead?

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  • It Just Seems Wrong

    I don’t know whether this case is an unintended consequence or an ill-considered strategy. In any case, I think the outcome is wrong.

    We have four different parties using somewhat different trademarks for strip clubs.* Their relative order of priority, and the marks, is this:

    Owner Marks Priority date
    Spencer (defendant) CRAZY HORSE CLEVELAND
    CRAZY HORSE MEN’S CLUB
    PLATINUM HORSE BOOK PARK    		 1978
    Carl Reid (non-party) CRAZY HORSE
    PURE GOLD’S CRAZY HORSE    		 2001
    2004
    Crazy Horse Too A Gentlemen’s Club (non-party) CRAZY HORSE TOO GENTLEMEN’S CLUB 2001
    Russell Road (plaintiff)  CRAZY HORSE III 2009

    Although Spencer was the first (of these parties at least) to use a CRAZY HORSE variant, Reid was the first to file, followed by Crazy Horse Too A Gentlemen’s Club (“CHTAGC”). Spencer then filed his application for CRAZY HORSE in 2008. It was refused registration because of a likelihood of confusion with the Reid registrations, and there was a warning that it might be refused if the then-pending application filed by CHTAGC registered. In 2009 the trademark application filed by CHTAGC was also refused registration because of the Reid registrations, so CHTAGC filed petitions to cancel the two Reid registrations. Reid and CHTAGC entered into a consent agreement and the cancellations were dismissed.

    The consent agreement provided that CHTAGC could use and register CRAZY HORSE TOO GENTLEMEN’S CLUB and any mark that included the phrase CRAZY HORSE, provided that the mark did not contain the phrase PURE GOLD’S. The Agreement was binding on the parties’ successors.

    In 2010 Spencer opposed the CHTAGC application and CHTAGC abandoned it, so the CHTAGC mark ultimately was never registered. Spencer’s wholly-owned company Crazy Horse Consulting then acquired the Reid CRAZY HORSE registration (but not the PURE GOLD’S CRAZY HORSE registration) by assignment and Spencer admitted he was aware of the consent agreement. Thereafter the refusal of the Spencer application was withdrawn.**

    Which brings us to the suit. In 2010 Plaintiff Spencer and Defendant Russell Road Food and Beverage, a company entirely unrelated to CHTAGC, engaged in licensing negotiations, but they broke down. In 2012 CHTAGC assigned the consent agreement, but not any underlying trademark rights or business, to Russell Road. The next day Russell Road filed a declaratory judgment action of non-infringement against Spencer.

    Russell Road filed a motion for summary judgment on the basis that the consent agreement permitted its use of the CRAZY HORSE mark, and it worked. The court held

     The Consent Agreement … was a contract whereby Reid consented to a defined usage of the CRAZY HORSE mark. Defendants do not dispute that Russell Road’s use of the CRAZY HORSE III design mark is permitted by the terms of the Consent Agreement….

    Defendants dispute that CHTAGC’s assignment of the Consent Agreement to Russell Road was a valid and enforceable assignment. Specifically, Defendants assert that CHTAGC’s trademark assignment [sic-no trademark was assigned, just a consent agreement] to Russell Road is unenforceable because CHTAGC did not transfer any good will. Again, Defendants’ arguments are premised on the misplaced notion that CHTAGC sought to assign ownership rights in the CRAZY HORSE trademark to Russell Road. However, because CHTAGC did not acquire any ownership rights in the CRAZY HORSE mark, its assignment of the Consent Agreement could not have purported to either. Instead, CHTACG assigned its contractual right under the Consent Agreement to use the CRAZY HORSE mark in a defined manner to Russell Road.

    Defendants do not otherwise dispute that the Assignment Agreement is a valid assignment of CHTACG’s contractual rights under the Consent Agreement. Moreover, there is no indication that the Assignment Agreement was otherwise prohibited by law. Here, the Consent Agreement does not contain any language prohibiting assignment. In fact, it actually contemplates that the agreement would bind assigns. Nor is there any indication that the Assignment Agreement materially changed the terms of the Consent Agreement. Accordingly, the Court finds that CHTACG’s assignment of its rights under the Consent Agreement to Russell Road is valid and enforceable.

    So let’s review what happened here. Spencer was the most senior user of the mark; no one seemed to dispute that. But, he was late to the registration game and there were a couple of registrations and applications that he had to get out of the way. With respect to the Reid registrations he was pragmatic; he took an assignment of the CRAZY HORSE registration but left Reid with PURE GOLD’S CRAZY HORSE, which apparently was an arrangement to everyone’s satisfaction. He didn’t take an assignment of the consent agreement, but, as the court rightly found, he took the Reid registration subject to the continuing right of CHTAGC to use CRAZY HORSE TOO GENTLEMEN’S CLUB.

    But the mischief began when CHTAGC assigned a bare consent agreement, without any underlying trademark rights, to another party. There were some unusual aspects to this consent agreement that allowed this to happen. First, as the court notes, the agreement was assignable. Typically, because of the personal services nature of trademarks, one wouldn’t allow an assignment of a trademark-related agreement without approval from the other contracting party, or at least permit an assignment only with a transfer of the entire business too. Second, the agreement didn’t have any termination provision. It looks like Crazy Horse Too shut down in 2005 and wasn’t reopening until 2013—had there been a termination provision based on cessation of use of the mark, there wouldn’t have been any agreement to assign. Third, we have an agreement that was perhaps written more broadly than it needed to be; the parties were really thinking about CRAZY HORSE TOO A GENTLEMEN’S CLUB and PURE GOLD’S CRAZY HORSE as their respective marks, yet the agreement covered any use of CRAZY HORSE by CHTAGC.

    But even given that, it doesn’t seem right in principle that one can assign a trademark consent agreement without also obtaining any of the rights to which it pertains, like an assignment of any underlying trademark rights, or succeeding to the business of the original party to the contract. From a brief review of McCarthy’s, it looks like, in the cases involving successor companies (Waukesha Hygeia Mineral Springs Co. v. Hygeia Sparkling Distilled Water Co., 63 F. 438 (7th Cir. 1894) and T & T Mfg. Co. v. A. T. Cross Co., 587 F.2d 533, 537, 201 U.S.P.Q. 561 (1st Cir. 1978)), the successor companies had acquired the business and were selling goods identical to those sold by the original party to the agreement. But that wasn’t the case here, and instead we have a case where an co-existence agreement is free-floating, apparently indefinitely, for the use of anyone who can get their hands on it.

    The Waukesa case had a similar fact pattern, i.e., the assignee acquired a trademark subject to consent agreement and then tried to escape the legal effect. But, unlike here, in Waukesha the party against whom enforcement of the agreement was sought had no preexisting rights independent from those which it acquired. Here, Spencer hadn’t needed the underlying trademark rights for the registration it acquired because he had independent, senior rights. I therefore find it a surprising outcome that Spencer could have conceded all his far senior rights by gaining a trademark registration he didn’t even really need. If one steps completely into the shoes of your predecessor company and all rights accrue from the acquired trademark that might make sense, but Spencer didn’t do that.

    Spencer, as the senior user, likely didn’t need to get an assignment of the Reid trademark registration—he could have instead simply asked Reid to voluntarily surrender it. By acquiring the registration, though, Spencer could avail himself of the legal advantage of an earlier registration date than the one he would have with his own, later-filed application. Without the benefit of hindsight it seems a reasonable decision about how to manage his own trademark prosecution, although it looks like a bad decision now.

    Had the court used the consent agreement as guidance to decide when the various uses of CRAZY HORSE were confusing (because we see there are many, many strip clubs named CRAZY HORSE), I would be fine with it. Spencer also had previously failed in his attempt to get a preliminary injunction because he was not in the Las Vegas territory, which I also don’t disagree with. But to say that one can just buy the bare right not to be sued for trademark infringement is, in my opinion, crazy.

    Russell Road Food and Beverage, LLC v. Spencer, No. 2:12-CV-01514-LRH-GWF (D. Nev. May 6, 2014).

    *Excellent footnote alert: “Courts have alternatively referred to these businesses as ‘nude dancing establishments,’ ‘gentlemen’s clubs,’ and ‘exotic entertainment’ establishments. See, e.g., City of Erie v. Pap’s A.M., 529 U.S. 277, 283 (2000). The Court here follows the conventions of Circuit authority in adopting the term ‘strip club.’ See, e.g., E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc., 547 F.3d 1095, 1097 (9th Cir.2008).”

    **As of this writing, the Spencer application was published, then opposed by the Crazy Horse Memorial Foundation, an opposition which the Crazy Horse Memorial Foundation then lost.

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  • Why There Are Nonprecedential Decisions

    When we last visited Taylor v. Taylor Made Plastics, Inc., the trial court held that the spouse of the inventor acquired a legal ownership interest in the inventor’s patent in the divorce. I was a bit surprised; the language in the divorce was this:

    The Court finds that the proceeds from the production of the patents shall be split 60% to the Wife and 40% to the Husband ….

    I thought the language “proceeds from the production of the patents” was pretty clearly an income interest, not legal ownership. But the district court dismissed the husband’s patent infringement suit for lack of standing because the wife was not a co-plaintiff.

    Taylor appealed and we have a nonprecedential per curiam opinion from the Federal Circuit that’s pretty much a “huh?” Here’s the entire Discussion portion of the opinion (citations omitted):

    The long-established rule is that a suit for patent infringement must join all co-owners of the patent as plaintiffs. If any co-owner should refuse to join as a co-plaintiff, the suit must be dismissed for lack of standing. But a party is not co-owner of a patent for standing purposes merely because he or she holds an equitable interest in the patent. Rather, a co-owner must hold legal title to the patent. Legal title vests initially in the inventor, and passes to others only through assignment or other effective legal transfer.

    Before the district court, James T. argued that Mary T. was not the owner of legal title to the ’566 patent, but he does not press that argument on appeal. Instead, James T. argues in his brief that the district court erred in dismissing the complaint because Mary T. either (1) joined the suit as a co-plaintiff by participating in mediation or (2) waived participation in the suit by entering an agreement with James T. These arguments need not be discussed in detail, as they are stated only in a cursory fashion without any supporting facts. It is enough to note that James T. has the burden of establishing standing, and that he has failed to carry that burden.

    Presumably Taylor had a good reason to give up on his argument that his wife had what was indeed, as the Federal Circuit appears to suggest, only an equitable interest in the patent. Whatever.

    Dennis Crouch at Patently-O with some more of the back story here.

    Taylor v. Taylor Made Plastics, Inc., No. 2014-1212 (Fed. Cir. May 9, 2014).

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  • A Post-Lexmark Clarification for Patents

    Here’s a little soupçon of a decision, a teaching moment from the Federal Circuit. It’s an easy fact pattern: a patent is in an inter partes reexamination, after the case has been fully briefed the patent owner assigns the patent, the Patent Trial and Appeal Board rejects the claims, and the former owner appeals the rejection.

    This is the opening paragraph of the opinion, which is all you need:

    The only cause of action (right to sue) in this court that Vaillancourt invokes is 35 U.S.C. § 141, but the unambiguous language of that provision limits it to the patent owner. Though the parties in this case have argued about “standing,” the Supreme Court recently clarified that some issues often discussed in “standing” terms are better viewed as interpretations of a statutory cause of action. See Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1386-88 (2014). Because the issue here focuses on § 141, this opinion directly addresses the scope of that cause of action. As Vaillancourt is not the owner of the ‘221 patent, he cannot bring this appeal before the court, for lack of a cause of action.

    Ok, got it. Vaillancourt’s missing ownership doesn’t go to “standing,” but it is the “lack of a cause of action.” So now I just have to figure out why the court thought it needed clarification.

    For those of you not up-to-the-minute on your Supreme Court false advertising jurisprudence, the Lexmark case says this:

    In sum, the question this case presents is whether Static Control falls within the class of plaintiffs whom Congress has authorized to sue under § 1125(a). In other words, we ask whether Static Control has a cause of action under the statute. That question requires us to determine the meaning of the congressionally enacted provision creating a cause of action. In doing so, we apply traditional principles of statutory interpretation. We do not ask whether in our judgment Congress should have authorized Static Control’s suit, but whether Congress in fact did so. Just as a court cannot apply its independent policy judgment to recognize a cause of action that Congress has denied, it cannot limit a cause of action that Congress has created merely because “prudence” dictates.

    The Vaillancourt appeal was fully briefed before the Lexmark decision, so I suppose the clarification was for the benefit of the parties, to explain why the opinion went a different direction than what either party had briefed. And now we all know.

    Vaillancourt v. Becton Dickinson & Co., No. 2013-1408 (Fed. Cir. April 24, 2014).

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  • Making an Inaccurate Claim Because It’s Cheaper

    Yesterday, May 1, 2014, the Copyright Office raised most of its fees. There was one fee that didn’t go up for a subset of claimants, though, those that are for registration of “single author, same claimant, one work, not for hire.”

    So it’s the “not for hire” part that gives me pause. The Copyright Office’s motives are pure:

    The Office is also proposing to offer a reduced fee to a single author who is also the claimant for the online filing of a claim in a single work that is not a work made for hire, for the policy reasons discussed below and after considering the comments received from the public in response to the January 24, 2012 Notice of Inquiry. The Copyright Office is committed to maintaining an affordable copyright registration system. No author or copyright owner should be deterred from registering a copyright because the cost of registration is too high, and the Office is mindful that there is not endless elasticity in pricing; pricing is a factor in whether one chooses to register. Many of the works that come from independent creators are critical to the Nation’s economy and the Library of Congress’ mint record and collection of American creativity. The copyright law itself is designed to promote and protect authorship and this includes facilitating registration for the establishment of a public record of copyright claims and to enable the copyright owner to seek all the remedies available in the Copyright Act. Similarly, users of copyrighted works rely on the Copyright Office registration records to identify copyright owners when they require licenses. If individual authors do not register and are therefore not part of the public database, they more than any other group of copyright owners may be difficult to find.

    Commenters to the Notice of Inquiry support a separate and lower fee for single authors. They note, as did the Office, that such applications are easier to process; that registration provides important remedies for the author; and that registration benefits the public by creating a more robust public record. The Office therefore sees a clear benefit to offering a lower fee to these claimants as an incentive to register their works.

    Indeed laudable. Here’s how it looks during the electronic registration process:

    First selection screen
    (click to enlarge)

    If you can’t read the text, it has three criteria, all of which must be selected as “Yes” to get the reduced fee:

    I am registering one work (one song, one poem, one photograph, etc.)
    The work being registered was created by one person.
    Copyright in the work is solely owned by the person who created it.

    If you say “yes” to all of there, there is another warning before you can continue:

    Not eligible for reduced fee filing
    (click to enlarge)

    This says:

    IMPORTANT NOTICE:

    WARNING: Using the application to file a claim that does not meet all of the criteria below may result in processing delays, additional fees, and later effective date of registration.

    Examples of works that are NOT eligible for this application include:

    * Unpublished collections (multiple poems, photographs, illustrations, songs, sound recordings, paintings, sculptures, jewelry, etc.)
    * CD containing multiple tracks
    * Book of poems
    * Collective works
    * Databases
    * Websites
    * Units of publication (e.g. multimedia kits)
    * Works made for hire (e.g. a company, organization or corporation is listed as author)
    * Joint works
    * Works with a deceased claimant
    * Works by more than one author
    * Works with more than one owner
    * Works where there has been a transfer of ownership

    If your claim is NOT eligible for this application, click “Cancel” below to revise your answers on the preceding page.

    If you claim satisfies all of the criteria listed above, click “OK” below.

    Now, the registration process for all applications requires that the claimant state whether or not the work is a work made for hire, so you could say that the only difference is that the decision point for this judgment call is simply made earlier in the registration process. And I’ll even say that the added questions are more likely to lead to a correct answer on whether the work is a work made for hire than the simple “yes/no” check boxes on the main form. But the answer has a different consequence than before; now saying “no” means that the fee is reduced.

    Time after time we see litigation about who the copyright owner is. It matters because only the owner of an exclusive legal or beneficial right has standing for a copyright infringement claim. So ownership is a frequent point of challenge; if you can show that the registration was in the wrong name then the whole lawsuit gets dismissed.

    Now lets take the example of an individual creator who has a business entity, say an LLC. This is a notoriously difficult situation in which to sort out ownership. In the 9th Circuit case Jules Jordan Video, Inc. v. 144942 Canada Inc., No. 08-55075, 08-55126 (9th Cir. Aug. 16, 2010) (blogged here), the sole shareholder of the corporation, Ashley Gasper, was the producer, director and star of porno films. The district court decided that Gasper’s work on the films was as a work made for hire but the 9th Circuit reversed.

    So with the new fees you will get sole shareholders or members who may not have a clear understanding of the legal dividing lines between acts of the owner and acts of the employee, or who are motivated to list themselves individually as owner because it’s less expensive. The ownership then gets challenged in litigation—okay, but that was already happening anyway, so what?

    The difference is the reduced fee. Under 17 U.S.C. § 411(b), an error in a registration certificate does not invalidate a registration unless the applicant knew that the information was inaccurate and “the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse the registration.” Certainly it’s arguable that the Copyright Office would have refused registration because the proper fee wasn’t paid.

    Hopefully the Register of Copyrights will help out the erring registrants, though. 17 U.S.C. § 411(b) also says that courts have to ask the Copyright Office to opine on whether the error would have refused registration, so maybe the Copyright Office will find a clever solution.

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  • You Don’t Have to Parody the Owner of the Mark

    The Office of the Lieutenant Governor for Louisiana owns a state trademark registration for LOUISIANA PICK YOUR PASSION:

    Louisiana trademark

    The Louisiana Department of Culture, Recreation and Tourism, which is under the Office of the Lieutenant Governor, also registered the word mark PICK YOUR PASSION with the United States Patent and Trademark Office.

    MoveOn.org used the trademark* on a billboard critical of the Governor of Louisiana:

    MoveOn billboard

    If you can’t read it, the billboard says “Pick your passion! But hope you don’t love your health. Gov. Jindal’s denying Medicaid to 242,000 people.”

    Because politicians do not appear to be able to take criticism gracefully, the Lieutenant Governor** sued MoveOn.org for trademark infringement. One argument was that since the Lieutenant Governor was the owner of the mark, it was not a lawful parody because the Governor, not the Lieutenant Governor, was the target of the message.

    So that’s an interesting concept—is it true that the “parody”*** use of a trademark has to be about the owner of the mark?

    According to the court, no:

    First, viewers would have to know that the service mark in question is a creation of and sponsored by the Lieutenant Governor’s Office. There is no evidence of this. Furthermore, neither the Lieutenant Governor himself, nor the Office of the Lieutenant Governor as an agency of the State, is the owner of the mark. The owner of the mark is the State, and more specifically its citizens.[****] Hence, the Court is being asked to find that viewers of the billboard are likely to believe that the State, as the owner of the service mark, is being critical of the Governor. The State argues that MoveOn.org’s billboard does not criticize the owner of the mark, the State of Louisiana, but rather it criticizes Governor Bobby Jindal. Essentially, the State argues that the target of MoveOn.org’s parody (Governor Jindal) is not the holder or owner of the mark (the State). The question is whether the disconnect between the owner of the mark and the target of the parody creates viewer confusion. In other words, is a motorist viewing the billboard likely to conclude that the State of Louisiana is criticizing Governor Jindal. The Court thinks not.

    It doesn’t matter who the owner is because the question is whether anyone is confused and clearly, here, no one would be. But you can see what an aggravating problem it could be for an otherwise-uninvolved trademark owner. What if the billboard had said “Can You Hear Me Now? Vote Gov. Jindal out of office for denying Medicaid to 242,000 people.” I suspect the likelihood is low that anyone would think that Verizon was related to an ad critical of the Governor of Louisiana, but Verizon would nonetheless be unhappy about it.

    And as you would expect here, the court held the MoveOn.org billboard was protected speech under the First Amendment.

    Dardenne v. MoveOn.org, No. 14-00150-DDD-SCR (M.D. La. April 7, 2014).*****

    *And did kind of a lousy job copying “Louisiana.” The state registration specifically claims that both letters “I” in “Louisiana” are replaced with exclamation marks, but MoveOn.org only replaced one. Lousy replication of the font, too, but good enough to make the point.

    **I’m not sure why the Louisiana Department of Culture, Recreation and Tourism, owner of the federal registration, wasn’t also named as a plaintiff, although, as will be discussed, the court sorts out that problem.

    ***I say “parody” because that’s what the parties argued. I don’t see how this is a parody. There’s nothing “comic” whatsoever about the billboard, but, hey, it’s how the parties and court talked about it so we’ll go with it.

    ****Thus, the Department of Culture, Recreation and Tourism probably didn’t need to be named as a plaintiff. Although I wonder what the PTO would think about the validity of the registration if the State is actually the owner.

    *****Any guesses why the State filed in federal court instead of state court?

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  • Four Agreements, No Standing

    Today’s post is another of the many currently-pending lawsuits by photographers against textbook publishers (recursive link) for under-reporting the number of copies of books that were published. In this case, the defendant publisher Pearson Education challenged the standing of plaintiff Viesti Associates, Inc., a stock photo agency.

    Viesti had four different agreements with photographers, two of them signed before the lawsuit was filed and two signed afterwards trying to cure the standing problem. The first agreement was an assignment so that Viesti could bring an earlier suit against Houghton Mifflin Harcourt Publishing Company; the court held for various reasons the document didn’t assign the copyright of the photographs for this lawsuit.

    Next up, Viesti and the photographers also had Agency Agreements. Viesti claimed these agreements assigned the copyright. Here is the paragraph in the agreement that matters:

    Viesti declaration clip

    If you can’t read it, it says:

    1. I, the undersigned certify and warrant that I am the sole and exclusive owner of all negatives, prints, positives, original color transparencies, duplicates, stories, motion picture films, text information, and other photographic materials delivered to you, now and in the future. I appoint you as a nonexclusive Agent and representative in respect of the leasing and sale of said materials throughout the world. All negotiations shall be at your discretion without prior consultation with me, except when outright purchase of originals is to be negotiated.

    The court found that this language was not an assignment of copyright; instead

    the plain meaning of the agreements does not purport to convey to Viesti any ownership interest in the copyright. Rather, the agreements’ first paragraph contains the only reference to ownership and clearly states that the sole and exclusive ownership in the images is vested in the photographer.

    There were other theories, based on this part of the agreement:

    Viesti declaration clip

    Viesti’s theory that it was a beneficial owner of the copyright because it earned money from the licensing didn’t work either. A beneficial owner is one who assigns legal ownership of a copyright in exchange for an economic interest in its exploitation.

    Because Viesti’s economic interests are derived solely from its own use of the copyright and not from the use of the copyright by its legal owners, the photographers, Viesti is not a beneficial owner pursuant to § 501(b). Viesti does not reconcile its position with the well-settled rule that nonexclusive licensees lack standing to bring an action ….

    The last paragraph, which gives Viesti “full and complete authority to make claims or institute suit, in your name if necessary, without further permission from me,” does not describe one of the exclusive rights set forth in § 106 of the Copyright Act and therefore isn’t a basis for standing.

    Whether a plaintiff has standing is determined by the ownership at the time of suit; therefore the two agreements signed after the suit was filed didn’t cure the standing problem and the case was dismissed.

    Viesti Associates, Inc. v. Pearson Education, Inc., No. 11-cv-01687-PAB-DW (D. Colo. March 19, 2014).

    Creative Commons License
    The text of this work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.

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  • Sometimes Everyone DOESN’T Know What It Means

    I have often wondered about the distinction commonly used in photography contracts for “editorial” use. I never quite knew what it meant, but then I’m not a specialist in that industry. Industries have their own terms of art and I figured that everyone who works in photography knows what kind of use crosses the “editorial” line.

    But apparently not. In Boatman v. US Racquetball Association, Boatman photographed racquetball events and allowed non-party Gamin Enterprises, who ran the events for USA Racquetball, to use the photographs for “editorial” purposes and to let USA Racquetball use them. There were three agreements and only one had anything that could be considered a definition of “editorial,” as seen below:

    USAR License clip

    If you can’t read it, it says “USA Racquetball is restricted to editorial usage only. NO commercial advertisement or for ads of any type….”

    There were six different types of uses by USA Raquetball that Boatman claimed were outside the scope of the license, like this:

    Boatman v. USAR alleged infringement

    Boatman filed a motion for summary judgment on infringement.

    The problem was, the count found there were a number of different meanings for “editorial.” First, as to the agreements themselves:

    None of the agreements of [sic] licenses offers an express definition of the term “editorial use.” At best, the USAR License appears to juxtapose the concept of permissible “editorial use“ with the prohibition on the use of the photos in “commercial advertisement or for ads of any type.”

    The testimony didn’t clear anything up either. Before the lawsuit started, a principal of defendant USA Racquetball had asked Mr. Ganim of Ganim Enterprises “what are editorial rights” and continued “that to me does not imply the right to use the photographs in any way other than the Open.” His tune changed though; he later testified that he understood the term “editorial use” to mean “written information that is not for profit, including a non-profit publication” (which described one of the accused uses) and said that “editorial, to me, means usage of—beyond usage for your own use; giving it to somebody for commercial purposes that will make them money.”

    Garmin offered yet a different definition. Gamin said that “the photographs were licensed to me for the purpose of anything I wanted to do with them with regards to the U.S. Open, so editorial purposes, marketing and promotion of the U.S. Open, dissemination and use of the U.S. Open photos by my U.S. Open sponsors …. that I could use the photographs for, you know, whatever I needed to as long as it related to the U.S. Open.” He also said he “didn’t want the photographs, you know, to be profited from, that we were only interested in promoting racquetball with the photographs.”

    Dictionary definitions didn’t help; “editorial” is defined as “of or relating to an editor or editing,” and the act of “editing” is defined as “to prepare [material] for publication.”

    Thus there could be no summary judgment here:

    There is some evidence to suggest that the parties understood “editorial use” to be the antithesis of “commercial” or “advertising” use – i.e. that USAR was permitted to make use of the photographs in conjunction with articles about the U.S. Open in particular, or even about racquetball in general, but was not entitled to use the photographs to promote the sale of any products.

    But even that interpretation does not clearly resolve the issue: the concept of “commercial” use is itself ambiguous. Mr. Ganim’s recitation of discussions with Mr. Boatman suggest that the parties may have understood that “commercial” use equated with “for profit” use – that is, the photographs could be used to advertise products and services provided by USAR or other non-profit entities seeking to advance the statute of racquetball, but that the photographs could not be used by for-profit entities seeking to advertise their products or services. If, by extension, “editorial” use is the opposite of “for-profit” use, then all of USAR’s uses of the photos might be considered “editorial” in nature because USAR is a non-profit company and there is nothing in the record to suggest that its own use of the products was ever for a profit-generating purpose.

    So I guess I wasn’t crazy when I wondered what an “editorial” use of a photograph is.

    Boatman v. US Racquetball Assn., Civ. No. 12-cv-01590-MSK-CBS (D. Colo. March 31, 2014).

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