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U.S. Intellectual Property and New Media Law Update IN REM REALITIES Heathmount Corp. A.E. v. Technodome.com. (U.S. District Court, Eastern District of Virginia, Alexandria Division, Case No. CA-00-00714-A of July 24, 2000) ONE BOOGIE TOO MANY ABKO Music, Inc. v. Lavere, et al. (Ninth Cir. - June 26, 2000) LEFT HOLDING THE BAG Hermes International, et al, v. Lederer de Paris Fifth Avenue, Inc. et al. (Second Cir. - July 10, 2000) .CUSTODY OF THAT BLUE DOG Rodrigue v. Rodrigue (Fifth Cir. - July 2, 2000) IN REM REALITIES Heathmount Corp. A.E. v. Technodome.com. (U.S. District Court, Eastern District of Virginia, Alexandria Division, Case No. CA-00-00714-A of July 24, 2000) This case is a dual pleasure to report. First it is always nice to report on one of your own cases, and secondly, it is always nice to report on a case which truly clarifies the law. Our client Heathmount is developing two major recreational/educational facilities, one in Montreal and the other in New York under the mark TECHNODOME and DESTINATION: TECHNODOME. A Canadian citizen obtained the domain names technodome.com and destinationtechnodome.com. He has held the domain names without using them in commerce. In correspondence and elsewhere, he has maintained that he has no contact with the United States. The Anti Cybersquatting Consumer Protection Act added a new weapon to the anti domain name piracy arsenal. It provided that where the defendant was not subject to jurisdiction in a United States court, an In Rem proceeding against the domain name itself may be brought in the district where the domain registry has its offices. Given that until recently, NSI was the only source for domain names and is still the source for .com domain names, its location in its Eastern District of Virginia has ensured that all In Rem proceedings have been brought in that district since enactment of the Act on November 29, 1999. While there have been a small number of In Rem proceedings prior to this case, they primarily arose in existing litigation where questions of jurisdiction were already in issue. The decision exhaustively examines In Rem jurisdiction and makes it clear that some real effort must have been made to determine whether the owner of the infringing domain name would be subject to the jurisdiction of any U.S. court. It also specifically reviewed the question of whether the mere act of registering a domain name would be sufficient to establish jurisdiction both under Virginia Law and the U.S. Constitution. The decision may be viewed on our site at: http://www.ipcounselors.com/heathm.htm ONE BOOGIE TOO MANY ABKO Music, Inc. v. Lavere, et al. (Ninth Cir. - June 26, 2000) This is one of those delightfully complex cases arising under the interaction of various copyright statues and concepts of law created in 1830 which clash with later developed technology. This action was a declaratory judgment action in which Delta et al threatened ABKO with a suit over two Rolling Stone numbers. ABKO sued for declaratory judgment of non-infringement. Delta claimed that the two Rolling Stone songs were based on two by Robert Johnson, a blues artist who was murdered in 1938. Johnson's songs were recorded and distributed in the late 1930s. In the late 1960s and 1970s, Johnson's albums were re-released including his songs "Love in Vain" and "Stop Breaking Down". Delta Haze claimed that "The album Exile on Main Street was based in part on these live songs. Now the history lesson begins. In 1831, when Congress first extended copyright protection to original music compositions, there was no technology for mechanical reproduction of music and congress merely protected the copying of sheet music. Then came the piano roll and life got interesting. In 1908 the Supreme Court found that early forms of mechanical reproduction of specific music and performances did not constitute a copy of the copyrighted musical composition because it was not written or printed in a tangible form. In other words, piano rolls were performance, rather than the publication of a musical composition. Aside from a small handful of cases, this was considered the law under the 1909 act by most courts which considered the issue. In 1995 the Ninth Circuit found that a record was a publication which would vest, or in this case divest, rights in the underlying musical composition. Under this theory, Delta Haze would have lost its rights to the music by publication with release of the records in the late 1930s. If so, the Rolling Stones could just keep rolling. However, in November 1997, while the present dispute was in the courts, the copyright act was amended to provide that the distribution before January 1, 1978 of a "photorecord shall not for any purposes constitute a publication of the musical work embodied therein". Since the suit was already commenced at the time of the amendment, the question became whether following the amendment to the Copyright Act would be retro-active application of law and thus impermissible. The court after a careful review of the cases, found that the amendment to the Copyright Act was meant to be a clarification of existing law rather than new law and as such its application would not be retroactive. If the sale of records in the 1930s had been considered a publication, the copyright would have long run out. The amendment to the Copyright Act clarified that sale of this was not publication and therefore the works were not in the public domain. The decision can be viewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=9th&navby=case&no=9856145 LEFT HOLDING THE BAG Hermes International, et al, v. Lederer de Paris Fifth Avenue, Inc. et al. (Second Cir. - July 10, 2000) Plaintiff Hermes is a famous French manufacturer of very expensive leather goods including high quality handbags. Hermes believes its bags incorporate a number of distinctive design characteristics, constitutes a famous mark and trade dress. Defendants sell replicas of various Hermes products, although you can hardly say that the knock offs are inexpensive, having an average selling price of over $ 5,000, with some models selling for over $ 30,000. Hermes knew that Defendant Lederer had been selling copies of its Kelly bags since at least 1979 and artbags since 1989. It claimed, however, that it had not become fully aware of the scope of the alleged infringement until 1996 when it learned that Lederer and Artbag were selling entire lines of knock offs of Hermes products. At the conclusion of its investigation, Hermes sued under every section of the Lanham Act it could think of and under New York statutory and common law. Defendants moved for summary judgement against Hermes on the grounds that it had abandoned its trademarks and trade dress or in the alternative that Hermes was estopped from obtaining relief under the doctrine of laches. The District Court found that the defense had not met their burden of showing abandonment of the trademarks or trade dress, but found unreasonable delay in bringing an infringement action. Accordingly, it used the doctrine of laches to bar both monetary and injunctive relief. The Court of Appeals noted that laches is not a defense against injunctive relief when the defendant intended the infringement and thus, the appellees intentional infringement is a dispositive threshold injury that bars further consideration of the laches defense. Defendants' acts were intentional, they sought to sell knock offs of Hermes originals. The Defendants should not have been entitled to invoke the doctrine of laches against Hermes claim for injunctive relief. With regard to laches against monetary relief, defendant only offered proof the Plaintiff was aware of one style that was infringed. The Second Circuit therefore limited the summary judgment for laches against monetary relief on one bag and left the of laches on the remaining bags to be the subject of a trial as to Plaintiff's knowledge. Thhttp://caselaw.findlaw.com/cgi-bin/getcase.pl?court=2nd&navby=case&no=999283 .CUSTODY OF THAT BLUE DOG Rodrigue v. Rodrigue (Fifth Cir. - July 2, 2000) In this case, the Fifth Circuit has attempted to sort out and reconcile the obligations of authors under the Federal Copyright Law and their spouses under Louisiana Community Property Law. Plaintiff and Defendant were married in Louisiana in 1967 and were divorced there in 1993. Under Louisiana law, their property was community property. As a general proposition, the Louisiana Civil Code provides that on termination of the marriage, each spouse owns an undivided one half interest in the property of their community and its fruits and products until petitioned by the court. In the course of their marriage, the husband became a widely acclaimed, highly successful and very prolific painter. He made numerous paintings during the existence of the marriage featuring a stylized and easily recognizable blue dog. In the period of the marriage, the husband obtained copyright registrations for some, but not all of his paintings. After termination, he continued to paint that poor blue dog. After dissolution of the marriage, the husband and his former business associate filed this action in the Federal Court, seeking a declaration that he was the sole owner of the intellectual property in all the paintings. He also sought to enjoin the former wife from seeking a declaration of her co-ownership of these works making image transfers and suing for copyright infringement. Not surprisingly, the wife counter-claimed for a finding that she owned an undivided half interest in all intellectual property rights including but not limited to the blue dog generated during the existence of the marriage and all post marriage artwork that was derivative of that intellectual property, i.e. all the later blue dog paintings. The District Court granted the husband's and denied the wife's motion for summary judgment, finding that the Federal Copyright Law pre-empted state community property law. The court certified the preemption issue for immediate appeal and stayed any remaining issues in the action. The opinion was based on conflict preemption. Subjecting copyright on works of the author's spouse to a Louisiana community property law would damage the federal interest in national uniformity and efficient exchange of copyright. Here, the Fifth Circuit adopted much of the reasoning but reversed the decision. The Fifth Circuit found that the preemption was more limited in scope. The author's spouse retained the control of the copyright but that the economic benefit of the copyright work belonged to the community of the marriage while it exists and to the former spouses in division thereafter. Essentially, it used the Louisiana civil code division between the right to use or possess the property, the right to abuse or alienate the property and the right to obtain fruits of the property. The author spouse alone holds the elements of use and alienation. However, the right to receive and enjoy the economic benefits produced by or derived from the copyright is part of the community. With regard to derivative works, the court found that the wife did have an economic right with respect to derivative works, but left it to the district court to determine on remand which works are derivative, if any. The court also noted that it was up to the state court to determine both the proper method of establishing the value of the wife's share of those net economic benefits and the proper procedure for delivery of that share to her. The decision can be viewed at: http://caselaw.findlaw.com/cgi-bin/getcase.pl?court=5th&navby=case&no=9930334CV0 |
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