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U.S. Intellectual Property and New Media Law Update 9-1/2 WEEKS YES, 19 WEEKS YES, 28-1/2 WEEKS, NO Jonesfilm v. Lion Gate Int’l et al., 299 F.3d 134 (2d. Cir. 2002) HARRODS IS FOREVER BRITISH Harrods Ltd. v. Sixty Internet Domain Names: HARRODSARGENTINA.COM; et al., 302, F.3d 214 (4th Cir. 2002) VIRTUAL CONFLICT Virtual Countries, Inc. v. Republic of South Africa, 300 F.3d 230 (2nd Cir. 2002) LANHAM ACT IS NO PRECEDENT United States of America v. Hanafy, et al., 302 F.3d 485 (5th Cir. 2002) 9-1/2 WEEKS YES, 19 WEEKS YES, 28-1/2 WEEKS, NO Jonesfilm v. Lion Gate Int’l et al., 299 F.3d 134 (2d. Cir. 2002) In 1986, Mickey Rourke and Kim Basinger gave the world a very hot film, "9 ½ Weeks." After the world's temperature lowered a bit, the company owning the film rights (Jonesfilms) licensed NTTS Productions Ltd. to make a sequel called "Another 9 ½ Weeks." In doing so, they also gave an option to negotiate further pictures including "9 ½ Weeks" in the title. NTTS sold its option to the Defendant in this present action who then made "The First 9 ½ Weeks," a prequel. "The First 9 ½ Weeks" was made without informing the Plaintiff about the prequel. While I was exhausted after the first "9 ½ Weeks" and I am sure a smaller, but more intense, audience was exhausted after "Another 9 ½ Weeks", Jonesfilms was activated upon learning of the prequel. Jonesfilms sued and initially was kicked out of court by Judge Preska based on the lack of an indispensable party. Judge Preska reasoned that since NTTS had on option to make the prequel, the Defendant's right to make the film rose or fell under NTTS' right to exercise that option and therefore NTTS was an indispensable party, whose rights would be adjudged by this action. Since NTTS was not subject to the Court's jurisdiction, the suit had to be dismissed. The Second Circuit disagreed. Before NTTS could be an indispensable party, its right had to be colorable. Since the option required a new negotiation and that negotiation was never entered into, there was never a colorable right to NTTS and therefore the suit could proceed directly against the Defendant and its prequel. The decision can be viewed at: http://laws.findlaw.com/2nd/019437.htm HARRODS IS FOREVER BRITISH Harrods Ltd. v. Sixty Internet Domain Names: HARRODSARGENTINA.COM; et al., 302, F.3d 214 (4th Cir. 2002) This case is an internet domain name dispute under the Anti-Cybersquatting Consumer Protection Act between two companies both having the right to name Harrods in different parts of the world. The Plaintiff, Harrods Limited, is the owner of the well known Harrods of London department store. Defendants are a group of domain names which are owned by Harrods BA, once affiliated with Harrods UK. Harrods started in 1849 in London. In 1912 Harrods UK created a wholly owned subsidiary in Latin America, which opened department stores in Buenos Aires in a building designed to look like Harrods UK historic London building. This company, Harrods BA, registered Harrods as a trademark in Argentina, Brazil, Paraguay, Venezuela, and a number of other South American countries. The two companies drifted apart and by the 1920s were operating largely independently and by 1963 they had severed all legal ties. Sometime around 1998, Harrods BA ended its department store operation entirely and the building now sits vacant. Its only income is about $300,000 annually from the continued operation of the building's parking garage. At about the time that Harrods UK began its Internet online store, Harrods BA registered some 300 Harrods related domain names. It was planned that the Harrods BA website was to be set-up much like the former store but would simply act on commission for vendors that sponsored it. It treated the Harrods name as a primary asset which Harrods BA would offer vendors to induce them to join the Harrods portal site and pay commissions. No party expressed interest in this plan and alternate plans were in development. At this point, Harrods UK sued under the provisions of the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d)(2). On summary judgment, the District Court found those names that clearly identified Harrods Buenos Aires or Harrods Argentina not to be in bad faith. After trial, the District Court found bad faith with respect to the remaining 54 domain names and ordered the domain names to be transferred to Harrods UK. The Court of Appeals found that the District Court was correct with regard to the 54 domain names being in bad faith, but that the District Court erred in granting summary judgment with regard to the six Argentinian names before Harrods UK had an adequate opportunity for discovery. The Court set the standard for finding bad faith as the "preponderance of the evidence" rather than Defendant's requested "clear and convincing evidence." Of particular interest are the jurisdictional questions discussed by the Fourth Circuit rather than the question of bad faith. The initial question was whether the mere registration of the domain names gave it jurisdiction under the due process clause, i.e., was of sufficient minimum contact with the forum for due process. The Court found such minimum contact since the property itself was the subject matter of the dispute. With regard to the question of whether domain name is property, as the Court referred the parties to the decision in Porsche Cars North Am., Inc. v. Porsche.net, ___ F.3d _____ (4th Cir. Aug. 23, 2002) (Holding that "congress plainly treated domain names as property in the ACPA...") Most interestingly, Harrods UK argued successfully that Section 1125(d)(2) provides for an in rem jurisdiction against domain names for trademark infringement and dilution claims. Looking at language such as "any violation of any right of the owner," the Court found in rem jurisdiction over a domain name that infringes either a registered mark or one protected under 1125(a). Thus in rem proceedings are not merely limited solely to bad faith claims under Section (d)(1). The decision can bhttp://laws.findlaw.com/4th/002414p.html VIRTUAL CONFLICT Virtual Countries, Inc. v. Republic of South Africa, 300 F.3d 230 (2nd Cir. 2002) Virtual Countries is an American company which owns internet domain names such as algeria.com, bangladesh.com,etc. It has owned southafrica.com since at least May 13, 1995, and used it since October 1996 to provide access, news, weather, tourist information, and online shopping opportunities in South Africa. The Republic of South Africa also operates a national tourist agency web site called southafrica.net. South Africa issued a press release indicating that it intended to put political pressure on ICANN and other international bodies to reserve country name domain names to the respective countries and intended to file a UDRP proceeding for the right to its own country name as a domain name in the generic top-level domain name .com. In response, Virtual Countries filed a complaint in the United States District Court for the Southern District of New York seeking declaratory judgment relief that the Republic of South Africa had no rights to the domain name "www.southafrica.com." On April 30th the Defendant moved to dismiss the action for lack of subject matter jurisdiction. They submitted a declaration of the director of the South African Department of Communication explaining that in issuing a press release, the Republic of South Africa has been engaged in international multi-state, state to state, and regional international diplomacy regarding the appropriate position that the relevant international bodies should follow regarding domain name registration for the name of states. He further indicated that the Republic of South Africa had decided not to commence an arbitration under the UDRP Procedures. The District Court granted the Defendant's motion to dismiss because of sovereign immunity for the non-commercial acts of government negotiation. Here, the Second Circuit found that this court correctly found that the Republic of South Africa's press release has no direct effect on commerce and that the District Court had committed no procedural error. In confirming, the Second Circuit expressly indicated that it did not reach the question of whether the District Court correctly concluded that the Republic of South Africa's issuance of the press release was not commercial activity. The decision can bhttp://laws.findlaw.com/7th/013304.html LANHAM ACT IS NO PRECEDENT United States of America v. Hanafy, et al., 302 F.3d 485 (5th Cir. 2002) The Appellees in this case all owned businesses which purchased individual cans of infant formula and then repackaged the cans into trays for resale to wholesalers. The cans at issue in the case were all either bought, obtained through welfare programs, or stolen by various third parties who were not associated with the Appellees. The cans of formula where then resold by these various third parties to a number of different convenience stores throughout Texas. The question simply became whether the repackaging in trays with the manufacturers' trademarks appearing on the new trays constitute criminal trademark counterfeiting. Because the goods were genuine goods, the Fifth Circuit found that the use of new trays with the manufacturers trademarks did not constitute counterfeiting, although under the Lanham Act they may constitute trademark violation under certain circumstances. Although the definitions under the Lanham Act and under the Criminal Statute 18 U.S.C. § 2320 are identical the Fifth Circuit followed the Tenth Circuit in rejecting the use of Lanham Act cases to interpret the criminal statute. Since the statute is criminal, it must be construed narrowly rather than the broad approach allowed civil legislation. The decision can be viewed at: http://laws.findlaw.com/5th/0110068cr0.html |
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