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U.S. Intellectual Property and New Media Law Update INHERENTLY DISTINCTIVE, DUPLICATIVE, BUT NOT CONFUSED Children’s Factory, Inc. v. Benee’s Toys, Inc. (Eighth Cir. -November 17, 1998) WING FLINGS ARE CONTEMPTUOUS OF WING DINGS BUT IS NOT IN CONTEMPT Hester Industries, Inc. v. Tyson Foods, Inc. (Second Cir. -November 20, 1998) DREAMSCAPE MAY BE NIGHTMARE FOR NEW YORK ATTORNEY GENERAL Dreamscape Online, LLC, et al. v. Dennis Vacco, Attorney General of the State of New York (N.D.N.Y. -Complaint filed- November 24, 1998) INHERENTLY DISTINCTIVE, DUPLICATIVE, BUT NOT CONFUSED Children’s Factory, Inc. v. Benee’s Toys, Inc. (Eighth Cir. -November 17, 1998) The Plaintiff is a manufacturer of children's toys which it sells through distributors. Defendant is a manufacturer of toys who sells directly to consumers through catalogs and similar devices. Defendant almost exactly copied Plaintiff's line. Plaintiff sued and the District Court reached the conclusion that at least some of the toys copied had inherently distinctive trade dress but that there was no likelihood of confusion. Obviously upset by the decision which seemed to run contrary to case law in other circuits and on its fact, common sense, Plaintiff appealed to the Eighth Circuit. First, the Eighth Circuit noted that while some circuits have chosen to review the likelihood of confusion by de novo, it treated the issue as a question of fact and, thus, reviewed it under a clearly erroneous standard. They first looked at Defendant's intent to pass, while noting exact copying, the use of Plaintiff's catalog to aid in preparing Defendant's catalog, including pictures, they found that the Defendant clearly represented to the ultimately consumer that it manufactured its own products. Similarly, it discounted instances of actual confusion by noting that they occurred only in the first year of the introduction of the copied line. In most circuits, this would be considered evidence of the gradual destruction of the mark. With regard to the cost and condition of purchase, the Court found that the consumer was more concerned with the cost and durability of the product, rather than the source of the product. While the other factors all went in favor of the Plaintiff, the Court found these three facts sufficient to uphold the decision. While I obviously haven't seen the evidence adduced at trial, there is something about this decision that makes me wonder at the sub-text. The decision can be seen at: http://ls.wustl.edu/8th.cir/Opinions/981117/981179.P8 WING FLINGS ARE CONTEMPTUOUS OF WING DINGS BUT IS NOT IN CONTEMPT Hester Industries, Inc. v. Tyson Foods, Inc. (Second Cir. -November 20, 1998) This is one of those interesting cases where Plaintiff's attorneys garnered a substantial award in the District Court but failed to dot all the i's and cross all its procedural t's. The District Court giveth and the Second Circuit taketh away, based on the Federal Rules of Civil Procedure. The underlying suit was a conflict between Defendant Tyson's WING FLINGS and Plaintiff's WING DINGS. Just before trial, the parties entered into a settlement agreement which was attached to a Stipulated Order of Dismissal with prejudice. The dismissal specifically disavowed the entry of any judgment. The agreement required the Defendant to discontinue all use of WING FLINGS. The present action was for contempt and breach of contract of the District Court's dismissal order, and trademark dilution, trademark infringement and unfair competition. After trial, the District Court found that the Defendants had indeed violated its Order and calculated contempt damages at $8,599,272.84 based on the Defendant's profits of $30,831,958. The Second Circuit concentrated on the contents of the Stipulated Order of Dismissal. The dismissal was effectuated by stipulation, it did not require any judicial action. While the agreement was attached to the Order, the Order did not attempt to adopt it by reference. The Court specifically found that the dismissal was not under Rule 41(a)(2) (i.e., by Order of the Court), where the Judge could require "terms and conditions." The Judge's signature on the stipulation did not change the nature of the dismissal. Because the dismissal was effectuated by the stipulation of the parties, the Court lacked the authority to condition dismissal on compliance with the agreement. The end result of the analysis is some attorneys forgot the Federal Rules and gave other attorneys an $8 million present. The decision can be viewed at: http://www.law.pace.edu/lawlib/legal/us-legal/judiciary/second-circuit/test3/97-9606.opn.html DREAMSCAPE MAY BE NIGHTMARE FOR NEW YORK ATTORNEY GENERAL Dreamscape Online, LLC, et al. v. Dennis Vacco, Attorney General of the State of New York (N.D.N.Y. -Complaint filed- November 24, 1998) Dreamscape is an Internet Service Provider (ISP). That is, a company which simply provides entry to the Internet for people who do not have a direct connection to the system. On October 27, 1998, the Attorney General of the State of New York seized the equipment utilized by Dreamscape to provide its subscribers with access to over 30,000 newsgroups available on the Internet. It was Attorney General Vacco's position that some of the newsgroups were pornographic in nature and, accordingly, equipment used in connection with such was available for seizure under New York law. Dreamscape did not provide services to and had no connection with any of the individuals accused by the Attorney General of trafficking in pornographic materials. In fact, Dreamscape alleges that it cooperated with law enforcement officials when such officials bring complaints to its attention. Dreamscape, being a modern company, has sued the Attorney General in order to determine an ISP's obligation to review and censor newsgroups, chat lines, web sites and other messages and images on the Internet under the laws of the State of New York and asked for a declaratory judgment that ISP's are not required to edit, delete or block access to messages or images available on the Internet except by judicial order. It also sought a declaration that passage or temporary storage of electronic messages or images on the Internet, through the ISP's service equipment, does not constitute promotion or possession of any contents, message or image under New York State law. It also seeks to have the Attorney General enjoined from bringing any criminal prosecution against it or seizing any part of Dreamscape's equipment or network. Of course, it tops it off with a request for damages. The complaint can be seen at: http://www.dreamscape.com/press/vaccoact.html |
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