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U.S. Intellectual Property and New Media Law Update UNAUTHORIZED GODZILLA Toho Co., Ltd. v. William Morrow and Co., Inc. (C. D. Cal. -Decided- April 6, 1998) A SIGH OF RELIEF FOR PATENT ATTORNEYS AND OF FEAR FROM THEIR CLIENTS Igen, Inc. v. White, et al. (Appellate Division, First Dept., New York County -Decided- May 19, 1998) ROY ROGERS RIDES HIGH Pappan Enterprises, Inc. v. Hardee’s Food Systems, Inc., et al. (Third Cir. -Decided- May 13, 1998) A GORDIAN’S KNOT Micro Data Base Systems, Inc. v Dharma Systems, Inc. (Seventh Cir. -Decided- May 29, 1998) UNAUTHORIZED GODZILLA Toho Co., Ltd. v. William Morrow and Co., Inc. (C. D. Cal. -Decided- April 6, 1998) Toho, the Plaintiff, is the Japanese company who brought the world Godzilla, a prehistoric monster out of its time, in a series of motion pictures including such classics as "Godzilla," "Godzilla versus Mothra" and "Son of Godzilla." Plaintiff obtained trademark registrations and licensed Tri Star's new movie of that name and authorized Random House to publish a compendium book of Godzilla's films entitled, "The Official Godzilla Compendium." Defendant Morrow had started advertising and publishing a 227 page Godzilla compendium book entitled, "Godzilla." It features an illustration of Toho's copyrighted Godzilla character and the title is written in the distinctive lettering style used by Plaintiff and its licensees in their merchandising activities. Plaintiff sued for violations under the Lanham Act, statutory trademark infringement, common law trademark infringement, the Federal Anti-dilution law, California's Anti-dilution law, common law unfair competition, unjust enrichment, and copyright infringement. They came on like Godzilla and succeeded in a motion for preliminary injunction in the Central District of California. Along the way, a number of interesting defenses were raised by the Defendant and shot down by the Court. First, Defendant claimed that its use of the title "Godzilla" was nominative fair use of the trademark GODZILLA. While the Court found it was necessary to use the name GODZILLA to describe Plaintiff's character since "a giant-sized prehistoric dragon-like monster" just simply doesn't roll off the tongue, it also found that Defendant took more than was necessary for this purpose since it also incorporated the style of lettering, etc., used by the Plaintiff, i.e., it exceeded its legitimate referential purpose and because it was clear that the usage implied a relationship with Plaintiff. Defendant contended there is a significant First Amendment interest associated with choosing an appropriate title for a book or other work. The Court found that the public interest in sparing consumers confusion outweighs the slight public interest in permitting authors to use such titles. It also found that the use of the word "unauthorized" and specific disclaimers were insufficient to protect against confusion. Defendant came up with an interesting argument against the copyright claims. It argued that the Godzilla character is not delineated enough to merit copyright protection since it varied over the years and in the different films. However, the Court found that Godzilla has developed a constant set of traits that distinguish him/her/it from other fictional characters. While Godzilla may have shifted from evil to good, there remains an underlying set of attributes which remain in every film. Godzilla is always a prehistoric, fire-breathing gigantic dinosaur alive and well in the modern world. The decision can be viewed at: http://www.courttv.com/legaldocs/misc/godzilla.html A SIGH OF RELIEF FOR PATENT ATTORNEYS AND OF FEAR FROM THEIR CLIENTS Igen, Inc. v. White, et al. (Appellate Division, First Dept., New York County -Decided- May 19, 1998) An interesting case brought in the New York State Court system. Plaintiff was the inventor of a technique for producing monoclonal antibodies. The action is for malpractice since Plaintiff maintained that their attorney, John P. White of Cooper and Dunham, failed to file a patent application in the EEC patent system before the deadline of August 29, 1985 and failed to explain the consequences of not filing the application to the client. The complaint noted that the patent was likely to be extremely valuable in the future and sought $150,000,000 worth of damages. Defendants moved to dismiss the complaint arguing that the Plaintiff had not incurred any damages by virtue of the purported malpractice of Defendants and that actual damages from a lawyer's malpractice is an essential element of a legal malpractice claim. The lower court denied the motion and here, the Appellate Division, reversed, finding that the value of the patent on the lost profits on the date its malpractice action was commenced is the standard. No injury is sustained unless there has been an infringement against which its patent would have afforded a right of recovery. The affidavit of plaintiff's experts was held to be nothing more than idle speculation. A copy of the decision can be viewed at: http://www.lcp.com/products/NY/slipops/pay/ad1/A0478980.htm ROY ROGERS RIDES HIGH Pappan Enterprises, Inc. v. Hardee’s Food Systems, Inc., et al. (Third Cir. -Decided- May 13, 1998) Hardee's owns the ROY ROGERS trademarks which it franchises to individual owners throughout the country. Plaintiff, Pappan, was a franchisee who stopped paying. Pappan then sued the franchiser alleging breach of contract, breach of covenant and good faith and unfair dealing, negligence, and tortuous interference with business relations. Basically, Pappan contended that Hardee's had mis- managed the ROGERS system and, as a result, had lost significant value. The District Court dismissed the claims for negligence and tortuous interference. Hardee's filed their answer denying the two remaining claims and adding a counterclaim for breach of contract for failure to pay royalty. It then terminated the Defendant and amended the complaint adding claims arising out of the termination of Pappan's franchise agreement including claims of breach of post-termination contractual obligations, unjust enrichment and trademark infringement. Hardee's then moved for a preliminary injunction. The District Court found there would be a likelihood of success on the merits but denied Hardee's motion finding the irreparable harm to Pappan from the entry of a preliminary injunction outweighed the irreparable harm to Hardee's from the denial of the preliminary injunction. The present case is an appeal from the denial. The Court of Appeals for the Third Circuit found that the District Court made clear error since any difficulties Pappan now faces was brought on by its own conduct. Given this construction, the case was remanded to District Court with instructions to grant Hardee's motion for a preliminary injunction. A GORDIAN’S KNOT Micro Data Base Systems, Inc. v Dharma Systems, Inc. (Seventh Cir. -Decided- May 29, 1998) This case is the original Gordian Knot and Judge Posner, in his usual style, welded the sword. This suit is a diversity suit which blends issues of contract law, trade secret law and conflicts of law. The complex fact situation of a contractual relationship between Plaintiff and Defendant is set forth in the opinion. Basically, software was developed by Plaintiff for Defendant for resale to others. Defendant resold, without authorization of the developer of the software. The Circuit Court located the epicenter of these various complex disputes, and found for the developer of the software. The Circuit Court found it was appropriate to award damages based on future lost sales arising from the trade secret count. This decision can be viewed at: http://www.kentlaw.edu/7circuit/1998/may/97-2989.html |
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