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U.S. Intellectual Property and New Media Law Update COPYRIGHTING Pebble Beach Co. et al. v. Tour 18 I Limited (Fifth Cir. - September 14, 1998) ACCOUNTING AND ACTUAL DAMAGES Bishop v. Equinox International Corp. (Tenth Cir -September 4, 1998) THE CYBER-JUDGE STRIKES AGAIN Micro Star v. FormGen Inc. et al. (Ninth Cir.-September 11, 1998) THE TRADEMARK SEARCH DATABASE U.S. Patent & Trademark Office COPYRIGHTING Pebble Beach Co. et al. v. Tour 18 I Limited (Fifth Cir. - September 14, 1998) Defendant owns and operates two golf courses where each of the holes is copied from a famous golf course. Three of the copied holes are from courses owned by Plaintiff, Pebble Beach Co., Resort of Pinehurst and Sea Pines Co. who have collectively sued the Defendant for its copying. In advertising its golf course clones, Defendant indicates the origins of each hole copied by using the trademark of the original course and the golf holes by their common nicknames like "The Lighthouse Hole," "The Blue Monster," and "The Amen Corner." These designations are printed on the scorecards along with various other symbols of the Plaintiffs, such as the image of the lighthouse. Defendant does disclaim any relationship to the various golf courses. The Plaintiffs' suit was under the Lanham Act, for various claims of service mark and trade dress infringement, unfair competition and false advertising. After a bench trial, the District Court found for Plaintiffs. The District Court, however, denied Plaintiffs' request for damages or profits and attorney's fees and ordered that the Defendant cease using the Pebble Beach and Pinehurst marks, except to inform the public that the golf holes were copies, cease using Sea Pines mark and the image of the lighthouse, without any exception, remove the replica of Sea Pines lighthouse from both of its courses, and make no claims for use of original blue prints, maps, or other data in the construction of the course without a disclaimer. Everyone appealed. Defendants, as to the findings of infringement and the broadness of the injunction, and Plaintiffs, as to the narrowness of the injunction and failure to award an accounting. The Fifth Circuit first noted that the Plaintiffs' marks PEBBLE BEACH, PINEHURST and HARBOR TOWN and the image of a lighthouse are protectable trademarks, and the configuration of a golf hole is non-functional. However, only Sea Pines lighthouse hole was either inherently distinctive, or had acquired secondary meaning, and, thus, only that hole design was protectable under a trademark or unfair competition theory. Defendant's argument that their business was copying famous golf holes and, thus, the design of a golf course required, as a functional aspect, the designs in question were summarily dismissed by the Circuit Court, since functionality cannot be defined in terms of commercial success or marketing effectiveness. Arguments that each hole design effects how the game is played were equally dismissed since designs are not essential to playing the game of golf. The Fifth Circuit confirmed the District Court's finding that Pebble Beach and the Pinehurst golf hole designs were not inherently distinctive because they were variations on common place themes in the design of golf holes. However, with Sea Pines, the lighthouse adds an arbitrary source identifying feature. Also, there was a showing of secondary meaning that which was absent from Pebble Beach and Pinehurst's evidence. The Court slightly modified the injunction and upheld the judge's decision not to award damages on an accounting as not an abuse of discretion. The decision can be viewed at: http://www.ca5.uscourts.gov/opinions/pub/96/96-21102-CV0.HTM ACCOUNTING AND ACTUAL DAMAGES Bishop v. Equinox International Corp. (Tenth Cir -September 4, 1998) The requirements for an award of an accounting of the Defendant's profits varies from circuit to circuit. In this case, the Tenth Circuit considered the question of whether an accounting of profits under the Lanham Act (i.e.,trademark infringement) pursuant to 15 U.S.C. Sec. 1117(a) requires proof of actual damages. Following a bench trial, the District Court in Oklahoma concluded that a likelihood of confusion existed and enjoined Equinox from the use of Bishop's "Essence of Life" trademark, finding the case exceptional and awarding attorney's fees to the Plaintiff. The Plaintiff and Defendant cross-appealed. The Plaintiff contended it was also entitled to an accounting of profits and, the Defendant, inter alia, that the attorney's fee award was an abuse of discretion. The District Court had not awarded Defendant's profits since it noted that Plaintiff had not established entitlement to any actual damages. The Tenth Circuit indicated this an erroneous statement of law noting that an award of profits is not automatically granted but is determined by equitable considerations. Other considerations which might prompt an award of profits is preventing unjust enrichment and deterring willful infringement. The Circuit Court remanded to the District Court for a determination of whether an award of profits is appropriate taking into account all of the equitable considerations. They also did not find the award of attorney's fees to be an abuse of discretion. This decision can be seen at: http://lawlib.wuacc.edu/ca10/cases/1998/09/97-5161.htm THE CYBER-JUDGE STRIKES AGAIN Micro Star v. FormGen Inc. et al. (Ninth Cir.-September 11, 1998) Only Judge Kozinski of the Ninth Circuit can start a case with a sentence such steeped in game lore/law: "Duke Nukem routinely vanquishes Octabrain and the Protozoid Slimer. But what about the dreaded Micro Star?" Defendant FormGen makes, distributes and owns the rights to Duke Nukem 3D, acknowledged by Judge Kozinski, as a "very cool" computer game. It is a game played in the first person, you are Duke Nukem. In a multimedia world of this game you would see and hear what Duke would see and hear as you explore a futuristic city infested with evil aliens and other hazards. Zap or be zapped in a mad search for a hidden passage to the next level. The game comes with 29 levels, each its own world. Bundled with the game is the build editor, a utility that enables players to create their own levels. FormGen encourages players to post their levels on the Internet for downloading by other players. Plaintiff Micro Star downloaded 300 such user-created levels and compiled them into a CD- ROM and sold them as Nuke It. After some initial skirmishes Plaintiff filed a suit in the District Court seeking a declaratory judgment that Nuke It did not infringe any of FormGen's copyrights. In response FormGen counterclaimed seeking a preliminary injunction barring further production and distribution of Nuke It. At the District Court level, the Court held that Nuke It was not a derivative work and therefore did not infringe FormGen's copyrights. It did grant a preliminary injunction as to various screen shots shown on the packaging, since they showed Duke Nukem characters without a license. Everyone appealed. The Ninth Circuit explored the question as to whether Micro Star's unauthorized commercial exploitation of user-created game levels infringed FormGen's underlying copyright in the game itself as a derivative work. Then the question becomes, does the audio-visual display generated when its game is run in conjunction with the files generated by the players in creating new levels, infringe this exclusivity. Micro Star argued that its CD is not a derivative work because the audio-visual displays generated when run with Defendant's software are not incorporated in any concrete or permanent form and that the files he displays do not copy any of Duke Nukem's protected expression. The Ninth Circuit found them wrong in both contentions. Micro Star also makes much of the fact that its CD does not incorporate any of the protected expression, but merely calls up the images from art files in Defendants' program. The Court said what's infringed was the story itself. The Court distinguished from Lewis Galoob Toys, Inc. v. Nintendo of Am., Inc., 964 F.2d 965 (9th Cir. 1992) where copyright was denied in a modification of a game, where the modifications had to be entered individually each time a player wished to arrive at those conditions and, here, where there was permanent recording of each level. As normal with a Kozinski opinion, just like the Star report but for different reasons, the footnotes are worth a read The decision can be seen at: http://www.ljx.com/topdecision/de091598.html THE TRADEMARK SEARCH DATABASE U.S. Patent & Trademark Office The PTO has initiated a service on the Internet which allows searching of the full biographic text of pending and registered trademarks. The search can be a combined mark search for the word mark, pseudo mark and translation, a number search for a particular registration or serial number, a boolean search and a manual search. Essentially, the search is of the material available on its CD-ROM discs of "trademark registered and trademark pending marks." Thus, the information will only be updated on a two month cycle and could be as much as four months out of sequence with the PTO's internal trademark database. Its web database does not include information on inactive applications and registrations, i.e., abandoned applications or canceled or expired registrations. Aside from the limitations of the database, the searching abilities are rather restricted and kluncky. Images won't be supplied until November. After using it for a while, its primary use should be in situations where you have a registration or serial number and wish to review the history. The decision can be seen at: http://www.uspto.gov/tmdb/index.html |
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