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U.S. Intellectual Property and New Media Law Update THE TIMES, SHE IS A CHANGING Belejack, et al. v. The New York Times Company, Inc., et al. (Second Cir. - September 24, 1999) FUNERAL BASKETS FILL THEIR NICHE Syndicated Sales Venture v. Hampshire Paper Corp. (Seventh Cir. - September 13, 1999) A TALE OF TWO MANAGEMENT COMPANIES Lane Capital Management, Inc. v. Lane Capital Management, Inc. (Second Cir. - September 22, 1999) HOT WAX NOT HOT ENOUGH Hot Wax, Inc. v. Turtle Wax, Inc. (Seventh Cir. - September 15, 1999) LOVE THAT JURY Trovan Ltd. v. Pfizer, Inc. (S.D. Cal. - October 12, 1999) THE TIMES, SHE IS A CHANGING Belejack, et al. v. The New York Times Company, Inc., et al. (Second Cir. - September 24, 1999) This is an appeal to the Second Circuit by six free-lance writers who had their complaint dismissed against a number of well-known newspaper and magazine companies. The complaint alleged that these newspapers and magazines had infringed the free-lancers' copyrights by putting individual articles previously published in the periodicals on electronic databases available to the public. The lower Court had found on Summary Judgment that the re-publication in electronic databases was protected by the privilege afforded to publishers of "collective works" under Section 201(c) of the Copyright Act of 1976, i.e., the right to publish as part of the particular collective work, any revision of the collective work, and any later collected work in the same series. The Second Circuit took the unusual step of not only reversing, but instructing the Court to enter judgment for the free-lance writers. The Appeals Court noted that none of the articles were written when its authors were employed by the particular periodicals, nor were any such articles written pursuant to work-for-hire contracts. Authors, the Plaintiffs, all registered copyrights in each of their respective articles. The newspapers and magazines in which they appeared are collective works containing articles by free-lance authors as well as works created for hire or by employees. Each of the prior articles, in turn, is supplied to the electronic database, such as Nexis, by the individual periodicals. The articles may be retrieved individually or, for example, together with others on like topics. Such retrieval makes the articles available without any material from the rest of the periodical in which it appeared. Clearly, the electronic databases are neither the original collective work nor a collective work of the same series. The only possible grounds for allowing the periodicals to so republish is that it is a revision. Thus, the crux of the dispute is whether one or more of the pertinent electronic databases may be considered a "revision" of the individual periodical issues from which the article was taken and, thus, would come under the general right of publishers of collective works to revise. The Court found this was clearly not a revision, since the electronic database contains hundreds of thousands of articles from hundreds of periodicals. To view the contents of the databases as a revision would eliminate any need for the privilege for "a later collective work in the same series." Such an exception would swallow the rule. The same holds true if even they are scanned images of portions of the periodicals, since they also form part of thousands of other articles in the database. The decision can be reviewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=2nd&navby=case&no=979181 FUNERAL BASKETS FILL THEIR NICHE Syndicated Sales Venture v. Hampshire Paper Corp. (Seventh Cir. - September 13, 1999) Plaintiff produces plastic baskets used for floral bouquets for funerals. It offers Model Nos. 92 and 95, particularly well known to the men in black. We will not go into the sordid details of their construction, but merely indicate that they are suitably funeral. Defendant started produced a series of plastic funeral baskets quite similar in shape and, not surprisingly, called Nos. 9200 and 9500. Plaintiff sued both for trade dress infringement and federal dilution for the trade dress. The District Court on summary judgment found no likelihood of confusion since the goods were packaged differently and clearly had the names of the sources on the packaging. It also found no dilution because, to the extent these baskets may have been famous, they were famous in a niche market and, thus, would not support a federal dilution count. Here, the Seventh Circuit upheld the finding of no trade dress infringement indicating that the difference in packaging and notice would, in this particular context, be sufficient. However, the Seventh Circuit went on to indicate that the dilution claim could, in fact, lie. It noted that some cases had not allowed claims under the Dilution Act where the mark was only famous in a niche market, and other cases found that fame even only in the niche market was sufficient to support dilution. Where dilution was not found, the respective goods were sold in different markets, while dilution was normally found when the goods in question were in the same market. It went on to note that the statute itself takes into account this factor. The Seventh Circuit remanded for a determination as to whether the mark was sufficiently famous. The Court also found that a case for interference with business relations was proper. The dilution claim could act as the illegal act required for interference. Nothing in Indiana law required that the improper act leading to the interference with business relations be criminal in nature. The decision can be reviewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=7th&navby=case&no=984217 A TALE OF TWO MANAGEMENT COMPANIES Lane Capital Management, Inc. v. Lane Capital Management, Inc. (Second Cir. - September 22, 1999) Here, two companies chose the same name approximately seven months apart, Lane Capital Management, Inc. Plaintiff chose its name because "Lane" implied a straight and narrow path. Defendant chose its name because the firm's principal was Douglas C. Lane. Before suit commenced, the Plaintiff had applied for a federal registration which issued during the litigation. Upon issuance of the federal registration the Plaintiff moved for summary judgment and it was granted. After the Defendant lost the motion for summary judgment, it made a motion for re-argument and simultaneously asked to be permitted to amend its answer to plead an affirmative defense of unlawful use, which was denied. Thus, the two issues on appeal were whether the Judge properly granted summary judgment and whether he properly prohibited Appellant from amending the complaint to add the unlawful use defense. The Court found that while Lane was a recognized family name, insufficient evidence to raise a question of fact was introduced by Defedant as to what the public would perceive Lane Capital Management as incorporating a family name or would have some other meaning and, accordingly, upheld the summary judgment on that issue. Equally, it found the request to amend at this late stage was properly within the Judge's discretion. Since the defense was an affirmative defense, the defense was gone without such amendment. Possibly the most interesting aspect of the case was that the Court of Appeals pointed out all sorts of rather interesting questions that the Defendant's counsel failed to raise at the summary judgment or appeal stage which issues might have changed the result. The Defendant failed to assert at the summary judgment stage that its mark had acquired secondary meaning. Although it was only registered during the pendency of the action, the claim of infringement was treated as under 15 U.S.C. 1114(1) rather than under 1125(a). Appellant did not challenge the Judge's treatment of the mark as a registered one. Finally, the Defendant failed to raise the question of whether this was, in reality, a case about trade names rather than service mark and, thus, not under the Lanham Act. The decision can be reviewed at: https://www.tourolaw.edu/2ndCircuit/September99/98-91730.html HOT WAX NOT HOT ENOUGH Hot Wax, Inc. v. Turtle Wax, Inc. (Seventh Cir. - September 15, 1999) This is one of the more unusual cases of the season. Aside from the assertion by a number of comedians that there is no hot wax, just a flashing red light, there is hot wax and it involves real hot wax sprayed on the car. Plaintiff invented the system and started selling it in 1975. A great system, but expensive. Turtle Wax began in 1976 selling a competing, cheaper product under the Turtle Wax name. In the opinion of the Plaintiff and his experts, this "wax" did not contain either natural or synthetic wax. The Plaintiff first started a letter writing campaign and eventually a complaint to the Wisconsin Department of Agriculture, Trade and Consumer Protection. After this twenty year campaign failed to produce results, Plaintiff finally sued for false advertising under the Lanham Act in 1997. There were cross summary judgment motions on the fundamental issue of whether the statement was correct or incorrect. The District Court found sufficient conflicting evidence to say that this a question of fact to be decided at trial. However, the Court went on to find latches. The Seventh Circuit affirmed finding both a long history of failure to commence the suit and a resulting injury to the Defendant in so far as its continued investment in the Turtle Wax product. Plaintiff lost the right to sue. The decision can be reviewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=7th&navby=case&no=983981 LOVE THAT JURY Trovan Ltd. v. Pfizer, Inc. (S.D. Cal. - October 12, 1999) I don't have many facts, no case to link with, but I thought all our readers would be interested to know that recently a jury had made the biggest award in a trademark suit ever. They awarded $145,000,000 to Britain's Trovan Ltd. Trovan Ltd. won based on Pfizer's adaptation of the name TROVAN for an antibiotic. Beyond the question of normal infringement damages, injury was sustained when the infringingly named drug in question was linked to several cases of deadly liver failure. The jury found Pfizer was liable for willful infringement and on October 12 awarded the $145 million. The damages already awarded brake down to $8 million for actual damages and $135 million in punitive damages or 1% of Pfizer's 1998 annual sales. $5 million of the award was set aside to fund an advertising campaign to clear up confusion between the two products. The power of a Jury to warm the heart of a Plaintiff's attorney is again affirmed by this case. However, the end may not be in sight. The District Court Judge has yet to decide whether Trovan is entitled to an additional $60 million for the profits Pfizer earned from the sales of its TROVAN antibiotic. |
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