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U.S. Intellectual Property and New Media Law Update THE VELVET ELVIS Elvis Presley Enterprises, Inc. v. Barry Capece, et al. (Fifth Cir. -Decided- May 7, 1998) SELENA AND TEXAS TELEVISION Quintanilla, Jr,. et al. v. Texas Television Inc., et al. (Fifth Cir. -Decided- April 17, 1998) SAME ELEVENTH AMENDMENT - ANOTHER UNIVERSITY Chavez v. Arte Publico Press, et al. (Fifth Cir. -Decided- April 20, 1998) DECLARATORY JUDGMENT AND THE INFRINGEMENT INDUCER Fina Research S.A. v. Baroid Limited and Henkel KGAA (Fed. Cir. -Decided- April 17, 1998) THE VELVET ELVIS Elvis Presley Enterprises, Inc. v. Barry Capece, et al. (Fifth Cir. -Decided- May 7, 1998) In case you didn't know, Elvis Presley is a famous deceased rock and roller. The estate has at least 17 federal trademark and service mark registrations, as well as common law trademarks, for ELVIS PRESLEY, ELVIS and for his likeness. There, however, are no registrations for restaurant and tavern services. Defendants' own and operated a bar and restaurant called "The Velvet Elvis Night Club." Its decor includes paintings on velvet of celebrities and female nudes, including, for example, one of Elvis and one of a bare chested Mona Lisa. There are lava lamps, cheap ceramic sculptures, beaded curtains and vinyl furniture. Playboy centerfolds cover the men's room walls. The menu includes, "Love Me Blenders," peanut butter and banana sandwiches (Elvis's favorite), and "Your Football Hound Dog" hotdog. Numerous magazine photographs of Elvis, a statue of Elvis playing the guitar, and a bust of Elvis completes the decor. Defendants' advertisements emphasize the "Elvis" over the "Velvet" to the point that the word velvet almost disappeared. The advertisements included words such as "The King Lives," "Viva la Elvis" and "Hunka-Hunka Happy Hour." Not surprisingly, the estate sued. Defendants claimed they were not selling restaurant services associated with the King, per se, but selling the idea of a tacky bar with Elvis as one of the symbols of tackiness. In other words, they tried to raise a parody defense. For unknown reasons, the judge bought it, finding that the overall decor of the bar was not limited to Elvis and the public would not be confused. The Fifth Circuit, in this opinion, strongly disagrees. First the Fifth Circuit points out that the judge of the lower court separated the advertisements from the trademark. The Court found that, in reality, the advertisements pointed dramatically to the relationship and, thus, helped generate the confusion. As to the parody defense, the Fifth Circuit noted that in the world of trademarks, there was no such beast. Parody comes into effect only to the extent the use has an obvious parody nature, and, thus, does not create likelihood of confusion in the relevant public. The Court found that here the parody was not so strong that it would clearly eliminate possible confusion as to sponsorship. It went on to find that almost every decision the District Court judge made on the various factors for confusion in the Fifth Circuit was wrong. The decision can be viewed at: http://www.ca5.uscourts.gov/opinions/pub/97/97-20096-CV0.HTM SELENA AND TEXAS TELEVISION Quintanilla, Jr,. et al. v. Texas Television Inc., et al. (Fifth Cir. -Decided- April 17, 1998) Now to a more recent vocal star's interaction with intellectual property law. The estate of the popular singer, Selena, has sued a television station for infringement of rights in a videotape of a concert which was made by the station. Selena's father was directly involved in her concerts and gave consent to Texas Television to videotape the concert. Prior to the concert, Defendant sent Plaintiff a note stating "thank you for allowing us to videotape the concert tomorrow . . . as per our agreement, we will use the video on the Domingo Show and other news shows. In turn, we will provide you with a master copy on 3/4 to use for promotional purposes." Plaintiff obtained a copyright registration for the videotape. After Selena's death, Defendants aired a portion of the videotape in a Selena special on the anniversary of her death. The District Court and the Fifth Circuit found that the estate did not own the rights in the videotape and, therefore, the copyright was invalid. They did not find that any of the documents including the note quoted above indicated that there had been an assignment of copyrights in the videotape production. Thus, Selena's estate could only be the owner of the copyright under the work-for-hire doctrine. To come under the work-for-hire doctrine one either has to be an employee or has to have authored the work specially ordered or commissioned for use as part of a audio-visual work pursuant to an express written agreement. The taping was done by employees of the station. There was no written instrument, so the question simply became were the station and its employees, in actuality, the employees of the Plaintiff. Normal agencies rules control who are employees. Here, the persons doing the taping were Defendant's salaried employees, and while the concert was controlled by the Plaintiff, the videotaping was controlled by the station. Thus, the authors were not employees of the Plaintiff. Dismissal confirmed. The decision can be viewed at: http://www.ca5.uscourts.gov/opinions/pub/97/97-40950-CV0.HTM SAME ELEVENTH AMENDMENT - ANOTHER UNIVERSITY Chavez v. Arte Publico Press, et al. (Fifth Cir. -Decided- April 20, 1998) As found by the lower court, Denise Chavez, the Plaintiff, is a "nationally renowned playwright and publicist . . . with a unique and valuable reputation as a commentator on cultural issues regarding women and, in particular, Hispanic women." The Defendant, Arte Publico Press, is part of the University of Houston, which is in turn owned and operated by the State of Texas. In July, 1984, Chavez and the University entered into a contract to publish the book "The Last of the Menu Girls." The copyright in the book was registered in Chavez's name. There were several reissues, in each case, under contract which specified the number of copies to be printed. In late 1991 and early 1992, Chavez refused to let the University print any more copies than agreed to under the existing agreements since the University had failed to correct errors in earlier printings. The University took the position that these contracts, in reality, did not limit the number of copies to print and indicated its intention to let the presses roar. The University claimed immunity under the Eleventh Amendment and moved to dismiss. As noted by the Fifth Circuit, this claim "would appear to be a compelling defense, were it not for the vicissitudes of Supreme Court interpretations of the Amendment. As the Court's decision now stands, the University's claim of sovereign immunity must fail . . .", noting that state immunity under the Eleventh Amendment has had "a turbulent past, an enigmatic present and an uncertain future." The Court reviewed the history of state immunity. The case analysis is not unlike that discussed in connection with the University of California's patent holdings whichhttp://www.ipcounselors.com/19980518.htm. While both the Copyright and the Lanham Act specifically abrogate states' immunity from suit in a Federal court, Texas asserts that these enactments violate recent Supreme Court Eleventh Amendment jurisdiction and are ineffective. After a review of the Supreme Court's decisions in this area, the Fifth Circuit concluded that until the Supreme Court determines otherwise, when the states opt to conduct business for profit in areas where Congress conditions participation upon waiver of immunity, there is waiver of immunity. This decision can be viewed at: http://www.ca5.uscourts.gov/opinions/pub/93/93-02881-CV1.HTM DECLARATORY JUDGMENT AND THE INFRINGEMENT INDUCER Fina Research S.A. v. Baroid Limited and Henkel KGAA (Fed. Cir. -Decided- April 17, 1998) This is an appeal to the Federal Circuit which presents only one issue: whether there may be an actual controversy for purposes of a declaratory judgment action when the Plaintiff's potential liability is only for inducing patent infringement under 35 U.S.C. 271(b). The lower court found that the inducer had no reasonable apprehension of suit and dismissed, without prejudice, for lack of jurisdiction. The Federal Circuit overrules. Here, Plaintiff manufactures a product under the trademark FINAGREEN derived from vegetable oil for use as an ingredient in drilling mud or fluid. It has not, as of yet, been sold to any customers in the United States. With respect to one of the patents in suit, Plaintiff could not be a contributory infringer since the Defendant patentee admited that FINAGREEN is a staple article of commerce. The parties also agreed that Plaintiff has no intention of directly infringing the patent since the product must be mixed with other ingredients to come under the patent claims, leaving only inducement of infringement. Given this situation, the District Court found that there was no reasonable apprehension on the part of Plaintiff of facing a suit for inducing infringement. The Federal Circuit reversed because it felt that Defendant made threats that created a reasonable apprehension on the part of Plaintiff that it will face suit for inducing infringement. In doing so, they point to language in warning letters from the Defendant including language such as, "intends to vigorously protect and enforce its rights in the subject patents, including the filing of suit if necessary," and Plaintiff "is actively inducing the infringement of one or both of the subject patents under 35 U.S.C. 271(b)." This was sufficient for the Federal Circuit to read the letters as manifesting "an ample-enough threat." A copy of the decision can be viewed at: http://www.ll.georgetown.edu/Fed-Ct/Circuit/fed/opinions/97-1429.html |
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