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U.S. Intellectual Property and New Media Law Update NORMAN, CLIFF, OR AT LEAST THEIR FLESH AND BLOOD PORTRAYERS, RIDING George Wendt et al. v. Host International, Inc. et al. (Ninth Cir. - December 28, 1999) WHO WAS UNJUSTLY ENRICHED? Tooltrend, Inc. v. CMT Utensili, Srl. et al. (Eleventh Cir. - December 17, 1999) THE POOR PREVAILING PARTY Mitek Holdings Inc. et al. v. Arce Engineering Company, Inc et al. (Eleventh Cir. - December 20, 1999) THE BIGGEST TOOL OF THEM ALL Leatherman Tool Group, Inc. v. Cooper Industries, Inc. (Ninth Circuit - Decided: December 17, 1999) NORMAN, CLIFF, OR AT LEAST THEIR FLESH AND BLOOD PORTRAYERS, RIDING George Wendt et al. v. Host International, Inc. et al. (Ninth Cir. - December 28, 1999) As you may remember from our October 27, 1997 Issue of the Newsletter, this case involves the characters Cliff and Norm from "Cheers." The Plaintiffs, are their human portrayers, George Wendt and John Ratzenberger. Norm was the fat, endearing, unemployed accountant, permanently parked at the corner of the bar where he was joined by Cliff, a dubious mailman and know-it-all windbag. Defendant Host International decided to "tap into this keg of goodwill." After securing a license from the copyright owners of the "Cheers" television series, the Defendant opened a line of "Cheers" airport bars that included two robotic figures corresponding to some extent to Norm and Cliff. The actors who portrayed Norm and Cliff sued for invasion of their right of privacy and on appeal the Ninth Circuit found that the right of privacy extended beyond merely likenesses and names to include anything that evokes their identity. Wendt and Ratzenberger were happy, Norm most likely wanted a free beer and Cliff to mis-characterize it. Defendant Host, the bar owner, and Paramount Pictures, the copyright owner, petitioned for rehearing which was rejected. Here, Justice Kozinski, in his inevitable style, dissents on behalf of three members of the panel, from the order rejecting the suggestion of a rehearing en banc. With a great deal of style, Judge Kozinski points out the expansion of the right of publicity, beyond name, voice, likeness and the signature of a person to anything that evokes the person, is conflict both with the copyright law and the Constitution. The conflict with the copyright law arises from Defendant Paramount's ownership of the copyright of the show and, thus, the two characters in question. As copyright owners, they have the right to make derivative works from them. The actors who portray them do not. The robots of the "Cheers" bars are a derivative work, just like a TV clip, promotion, photograph, poster, sequel or dramatic rendering of an episode. Thus, the Defendants have an unconditional right to present robots who resemble Norm and Cliff. Justice Kozinski (I believe rightfully) believes that the extension beyond the celebrity's name, voice, face or signature deprives the copyright owner of its rights in the work. Kozinski goes on to ridicule the end result of the position taken by the Ninth Circuit, with specific and entertaining examples. He also points out how it makes the Ninth Circuit in conflict with about every other circuit which has looked at these issues. The position taken here is similar to the position that this judge took in another case, White v. Samsung Electronics American Inc., 971 F.2d 1395, 1399 with regard to a robot which imitated Vanna White. No presumption should be raised that the good judge has any special feeling about robots, or for that matter Vanna White. The decision can be reviewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=9th&navby=case&no=9655243o WHO WAS UNJUSTLY ENRICHED? Tooltrend, Inc. v. CMT Utensili, Srl. et al. (Eleventh Cir. - December 17, 1999) An interesting case, which, while it goes off on Florida law, has broader applicability. Plaintiff is a Florida based company which sold cutting tools for the woodworking industry. It contracted with an Italian company to sell the Italian company's tools and used a new trademark, CMT TOOLS. This arrangement continued in the period from 1964 to 1991 when the Plaintiff terminated the agreement. Upon termination both Plaintiff and the Defendant tool manufacturer began selling competitive tools in the United States under the trademark CMT. Suit and cross-claim followed hinging on ownership of the CMT mark. Eventually, Defendant, the Italian manufacturer prevailed and received a jury verdict that it owned the CMT mark. However, Plaintiff, the distributor was awarded substantial damages in unjust enrichment claims arising from the money it put in to advertising the product during the period of the license. The theory of the award was that since the Italian company ended up with the trademark, the manufacturer received a benefit from the advertising which gave rise to an implied contract that it would repay such costs. The Eleventh Circuit noted that under Florida law, the claims for unjust enrichment and quantum meruit are different beasts. The claim for unjust enrichment is an equitable claim, based on a legal fiction created by the courts to imply a contract as a matter of law. Although the parties may never, by word or deed, have indicated in any way that there was any agreement between them, the law will in essence create an agreement in situations where it seemed unjust for one party to have received a benefit without having to pay compensation for it. In other words, it is a quasi contract. Quantum meruit, on the other hand, is a contract implied, in fact, from the situation. That is, the parties, in fact, enter into an agreement of sufficient clarity so that the fact finder must examine and interpret the parties' conduct to give a definition to their unspoken agreement. Here, all parties agreed that the question was one of quasi contract, not quantum meruit. Ultimately, the Eleventh Circuit confirmed the district court's decision that there was no cognizable claim for unjust enrichment because the advertising costs incurred by the Plaintiff distributor were in furtherance of its own sales during the period the license agreement was in effect. In other words, Plaintiff reaped the benefits of its efforts in the promotional work. Any benefit that the Defendant received was incidental and far from unjust. The decision can be viewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=11th&navby=case&no=983183OPN THE POOR PREVAILING PARTY Mitek Holdings Inc. et al. v. Arce Engineering Company, Inc et al. (Eleventh Cir. - December 20, 1999) The Plaintiff brought a copyright action for protection of non-literal elements of computer programs. The Defendant prevailed. Based on a recommendation of a magistrate, the District Court ordered attorneys' fees to the Defendant. The basis for the attorneys' fees was simply that the Defendant was a small party and the Plaintiff was a large party and, accordingly, the Plaintiff could afford the suit much more readily than the Defendant. A basic deeper-pockets theory. The Plaintiff, of course, appealed to the Eleventh Circuit. The Eleventh Circuit found that the purpose of attorneys' fees under Section 505 is whether its imposition will further the interest of the Copyright Act, i.e., by encouraging the raising of objectively reasonable claims and defenses. Here, the complaint was a reasonable one in an area of the law which was yet to be clarified, and the only reason presented by the District Court was the shallowness of the Defendants' pockets. The Eleventh Circuit acknowledged that while the financial strength of the parties may be a factor in determining the award of attorneys' fees, it should not be the only factor arguing for the award of such fees. It overturned the award of attorneys' fees since the District Court did not assess whether and how the imposition of the attorneys' fees would further the goals of the Copyright Act and remanded the case for re-evaluation of the attorneys' fee request. The decision can be viewed at: http://laws.findlaw.com/11th/985257OPN.html THE BIGGEST TOOL OF THEM ALL Leatherman Tool Group, Inc. v. Cooper Industries, Inc. (Ninth Circuit - Decided: December 17, 1999) The Plaintiff was the first to market a multi-functional tool which includes pliers and other features. Plaintiff sells its tool as the pocket survival tool. Defendant came up with a "Toolzall" multi-purpose tool that only differed from the Plaintiff's in three ways: its name; the fasteners which held the tool together; and the inclusion of a serrated blade. Plaintiff sued claiming a protectable trade dress in the overall appearance of its tool and obtained a preliminary injunction. Thereafter the Defendant moved for summary judgment on the trade dress claim, claiming that the Plaintiff failed to prove that its tool design was non-functional. The motion contained an acknowledgment that the Defendant had intentionally copied Plaintiff's tool. The District Court denied the motion. When the jury got hold of the issue they found the overall appearance of the tool was protectable trade dress and that the Defendant's "Toolzall" infringed it. The District Court entered a permanent injunction prohibiting the marketing of the tool in question. The Ninth Circuit found that there was no evidence to support the jury's conclusion that the overall appearance of the Plaintiff's tool was protectable trade dress. The Court of Appeals first noted that in its own opinion deliberate intent to copy alone does not support findings of a likelihood of confusion in product configuration cases unless a product's labeling and marketing are also affirmatively misleading (other Circuits face handle this issue differently). The fact that there are other multi-functional tools with a variety of appearances did not preclude the Defendant from copying Plaintiff's functional tool since the evidence was unequivocal that none of the alternatives offered the same functionality as the Plaintiff's tool. The Court noted that to uphold a finding of infringement here, however, would suggest that the general appearance of almost any unpatented product rarely if ever could be copied faithfully. This is not the law. The decision can be reviewed at: http://laws.findlaw.com/9th/9835147.html |
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