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U.S. Intellectual Property and New Media Law Update BUNNY BITES PLAYBOY (SHADES OF CARTER) Playboy Enterprises, Inc. v. Welles (Ninth Cir. February 1, 2002) TOO MUCH BULL IN THE TORO CLAIM The Toro Company v ToroHead, Inc. (TTAB, December 12, 2001) MUTATING X-MEN Twentieth Century Fox Film Corp. v. Marvel Enterprises, Inc. et al. (Second Circuit, January 14, 2002) IN RE MORTON-NORWICH SURVIVES TRAFFIX Valu Engineering, Inc. v. Rexnord Corp. (Fed. Circuit, January 23, 2002) BUNNY BITES PLAYBOY (SHADES OF CARTER) Playboy Enterprises, Inc. v. Welles (Ninth Cir. February 1, 2002) Terri Welles, was Playmate of the Year for 1981 and Playboy defendant of 2001. She had a website offering information about and free photos of herself, advertised photos for sale, advertised membership in her photo club, and promoted her services as a spokesperson. While she specifically disclaimed any association with Playboy Enterprises, Playboy objected to the use of the trademarks "Playboy" and "Playmate" in the metatags of the website, use of the phrase "Playboy Playmate of the Year 1981" on the masthead and "Playmate of the Year 1981" on various banner ads and the repeated use of the abbreviation "PMOY '81" as the watermark on the pages of the website. Playboy Enterprise believes that these uses constituted trademark infringement, dilution, false designation of origin, and unfair competition. Playboy sued Welles and she then included in the website discussion of the suit and criticism of Playboy Enterprises. The Ninth Circuit found that except for the use of PMOY '81 in the wallpaper of Welles website, Welles use of Playboy's trademarks are permissible nominative use. They do not imply a current sponsorship or endorsement. The Court concluded that Welles used the marks only when no descriptive substitute exists, used no more of the mark than was necessary and that the use does nothing to suggest sponsorship or endorsement by the mark holder. The decision can be viewed at: http://caselaw.lp.findlaw.com/data2/circs/9th/0055009p.pdf TOO MUCH BULL IN THE TORO CLAIM The Toro Company v ToroHead, Inc. (TTAB, December 12, 2001) ToroHead, Inc. filed an application for the mark "ToroMR" and bull's head design for "very low reluctance, thin film magnetic reading and writing heads for sale to OEM manufacturers of high performance computer disk drives, in International Class 9." This application was opposed by The Toro Company for the mark TORO for a variety of goods and services, of a far less high tech nature such as power mowers. Originally, the complaint was brought based purely on likelihood of confusion but was amended to claim that the ToroMR and bull's head design was likely to dilute the distinctive quality of opposer's famous Toro mark. The TTAB viewed the Du Pont factors and found a lack of confusion due to their difference in goods and services channels of trade, etc., leaving only the dilution claim and the opportunity for the TTAB to supply its understanding of its new mandate to review dilution in the context of opposition proceedings. The TTAB first noted that a finding of dilution is an extraordinary remedy. It also held that an application based on intent to use the mark can be opposed for its dilutive effect. However, this raises the question in such situations as to what date must the owner of an allegedly famous mark prove that its mark has become famous. There are two potential answers, the filing date of the intent to use application or at the time of trial. The TTAB found that the owner of allegedly famous mark must establish that the mark had become famous prior to the filing date of the trademark application opposed based on the constructive use provisions of the Trademark Act. It also found that distinctive and famous are separate concepts. For a mark to be diluted it must not only be famous, but also so distinctive, i.e., the public must associate the term with the owner of the famous mark even when it encounters the term apart from the owners goods or services, i.e., devoid of its trademark context. The Board also noted that in oppositions, evidence of duration and extent of use and advertising are the type of evidence that would help establish that the mark is a strong mark for likelihood of confusion purposes but it is much less persuasive to establish the mark is truly famous and distinctive for the broad scope of protection provided by the FTDA (Federal Trademark Dilution Act). In this case, the Board found that Opposer did not submit sufficient evidence in support of the fame and distinctiveness of its Toro marks for the purpose of the FTDA. In addition the Board found that even if the Toro mark was famous, there is insufficient evidence to support a finding that Applicants' mark would dilute Opposer's mark. The decision can be viewed at: http://www.uspto.gov/web/offices/com/sol/foia/ttab/other/2001/114061.pdf MUTATING X-MEN Twentieth Century Fox Film Corp. v. Marvel Enterprises, Inc. et al. (Second Circuit, January 14, 2002) For those who were never a fourteen year old male, Marvel publishes comic books. It's X-Men series featured a group of young super-powered mutants led by Professor X, an older, super intelligent leader who sought to train his students and to protect them from a hostile society. In an October 19, 1993 agreement, Marvel licensed Fox for all rights in the X-Men to use, distribute, exploit, advertise, promote and publicize theatrical motion pictures based on the X-Men comic book series, including the X-Men characters and the X-Universe. Marvel reserved all television rights subject to a proviso critical to Fox's contract claim, that Marvel would not "produce, distribute or exploit or authorize the production, distribution or exploitation of any live-action motion picture" without Fox's consent. In 1999 Fox began shooting a motion picture entitled X-Men, which was released theatrically nationwide in 2000. The 14 year olds loved it and much money was drained from the Nation's piggy banks. In November 1998 Marvel began publishing a comic book series called "Mutant X" which pictured, among other things, the brother of one of the original X-Men characters. In the summer of 2000 Marvel developed a live action television series called Mutant X involving characters that were the product of genetic splicing experiments gone awry. Fox sued for breach of contract and for misleading the public to believe that the Mutant X TV series was associated with the Fox film. To IP attorneys, the claims of interest were for false designations of origin under Section 43(a) of the Lanham Act, copyright infringement and common law unfair competition. The present appeal deals with a number of issues, including a contract action. We will confine our discussion to those of interest to the IP attorney. Thus with regard to the contract term we will only note that each side presented markedly different views of the effects of the TV series. Fox indicated that it would unfavorable impact the market for potential sequels to the X-Men movie while Marvel claimed that the TV series would widen the audience for X-Men characters and increased the values of Fox's Film. The Second Circuit confirmed the District Court's finding that any damage could be fully compensated for by money judgement and that is the equities way against halting a TV series not being aired because of alleged injury to a film's sequel that is, at best, in the planning stage. The Second Circuit found that Fox, as Marvel's licensee, had no goodwill of its own in the X-Men property. Absent goodwill, the Lanham Act claim would not have a basis. Fox also complained about any attempt to link the Mutant X TV series to the X-Men movies, to indicate that Fox might have produced the TV series, i.e., the Mutant X series is a spinoff of the X-Men movies. However, since the advertising campaign complained of has been completed there was no need for the preliminary injunction. The decision can be viewed at: http://bluecanary.com/cases.asp?s=2nd;case;017983 IN RE MORTON-NORWICH SURVIVES TRAFFIX Valu Engineering, Inc. v. Rexnord Corp. (Fed. Circuit, January 23, 2002) This is the first Federal Circuit which has reviewed the Morton-Norwich factors used by the TTAB determining functionality in view of the recent decision by the Supreme Court in TrafFix Devices, Inc. v. Marketing Displays Inc., 532 U.S. 23, 121, S. Ct. 1255. In that case, the Court found that a patent was highly determinative of the issue of functionality and once a product is found to be functional, there is no need to proceed further to consider if there is competitive necessity for the feature and thus there is no need to engage in speculation about other design possibilities. The Morton-Norwich test on the other hand does allow the board to assess the effect on competition, i.e., to focus on the availability of other alternatives. The Federal Circuit maintains that alternative designs are still proper to consider in determining whether the design is functional. That is, alternative designs can act as a legitimate source of evidence to determine whether a feature is functional in the first place. Once it is found functional, no further inquiry with regard to alternatives is proper. One can only wonder if this is another blow in the on again off again guerilla war between these two courts. The next question was whether the board improperly focused on the functionality of design in a particular environment in which only one of the recited goods was used. The Federal Circuit read the functionality provisions broadly to find that even if the mark was functional for only one of the significant recited goods, the mark as a whole was functional. The decision can be viewed at: http://bluecanary.com/cases.asp?s=Fed;case;001565 |
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