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U.S. Intellectual Property and New Media Law Update COPYRIGHTS NEVER DIE Eldred, et al. v. Ashcroft, 123 S. Ct. 769, 154 L. Ed. 2d 683, (Jan 15, 2003) WHEN TOYS "R" THEM Toys "R" Us v. Step Two, S.A., 2003 U.S. App. LEXIS 1355 (3rd Cir., January 27, 2003) BEACH BOYS CLASH Brothers Records, Inc. v. Jardine, 2003 U.S. App. LEXIS 1335 (9th Cir. January 28, 2003) PEOPLE STILL CARE ABOUT BEANIE BABIES Ty Inc. v. Perryman, 306 F. 3d 509 (7th Cir. 2002) A NEW DESIGN RIGHT IN THE E.U. Regulation (EC) No. 6/2002 COPYRIGHTS NEVER DIE Eldred, et al. v. Ashcroft, 123 S. Ct. 769, 154 L. Ed. 2d 683, (Jan 15, 2003) In an opinion almost as long as the 20 year extension granted copyrights by Congress, the Supreme Court upheld Congress' right to extend existing copyrights. They thereby saved Mickey Mouse from over exposure. The petitioners were individuals and businesses whose products or services are built on the use of copyrighted works that enter the public domain. They wanted access to Mickey and all his aging friends. They argued that the extension for existing works failed constitutional review under both the Copyright Clause "limited times" prescription and the first amendment free speech guarantee. The Supreme Court looked at prior extensions and found this one no different. It is clear from the majority opinion they thought Congress may not have been wise, but within its rights. Interesting dissent by Justices Stevens and Breyer. Stevens argued that if Congress can not expand the scope of an existing patent monopoly beyond its expiration date, it also may not extend the life of an existing copyright. Breyer looked to the economic effect of the 20 year extension, and that the extension made copyrights virtually perpetual. He felt that the extension inhibited the progress of science. The decision can be viewed at: http://laws.findlaw.com/us/000/01-618.html WHEN TOYS "R" THEM Toys "R" Us v. Step Two, S.A., 2003 U.S. App. LEXIS 1355 (3rd Cir., January 27, 2003) Toys "R" Us brought an action against Defendant Step Two, a Spanish corporation, because it alleged that the Defendant's website was in violation of the Lanham Act and New Jersey State Law. The District Court entered Step Two's motion to dismiss for lack of personal jurisdiction. Here the Third Circuit held that the District Court should not have denied Plaintiff's request for jurisdictional discovery before granting such motion. Plaintiff currently owns 37 free standing IMAGINARIUM stores in the United States. Defendant has registered the same mark in a number of countries outside the United States and has approximately 164 IMAGINARIUM stores outside the United States. The stores have the same unique appearance as Plaintiff's; use the same logo as Plaintiff and sells the same type of merchandise that Plaintiff sells in its stores. However, Defendant does not operate any stores, maintain any offices, or bank accounts or have any employees anywhere in the United States. Defendant maintained that it has not directed any advertising or marketing efforts towards the United States. Some of the merchandise sold at Defendant's stores are purchased from vendors in the United States and its President attends the New York Toy Fair each year. Both Plaintiff and Defendant had websites at the time that this lawsuit was filed. Defendant's site was interactive, allowing users to purchase merchandise online. Goods ordered on Defendant's site are paid for in Euros and can only be shipped within Spain. The site is entirely in Spanish. The Third Circuit applied the minimum contact requirements of the Fifth Amendment. The precise question raised by the case is whether the operation of a commercially interactive website accessible in the foreign state is sufficient for personal jurisdiction or whether there must be additional evidence that Defendant has purposely availed itself of conducting activity in the state. A number of District Court decisions made this an explicit requirement to justify the exercise of the specific personal jurisdiction. Other Appeals Courts have also adopted this standard, including the Fourth and Ninth Circuit. In deciding whether there was purposeful availment the Court also looks into non-Internet contact such as location of the suppliers, attendance at trade shows and advertisements and publications that have been circulated in the United States. Essentially, the Court sent the case back to the District Court to allow discovery to see the extent to which such contacts existed. The decision can be viewed at: http://caselaw.findlaw.com/data2/circs/3rd/013390p.pdf BEACH BOYS CLASH Brothers Records, Inc. v. Jardine, 2003 U.S. App. LEXIS 1335 (9th Cir. January 28, 2003) In 1961, Al Jardine, Mike Love, Brian Wilson, Carl Wilson and Dennis Wilson formed The Beach Boys. Thereafter, they achieved more than a little success. In 1967, the members of the Beach Boys incorporated Brother Records, Inc. to hold the intellectual property rights for the Beach Boys. Currently this company is equally owned by four shareholders who are also ex-directors, Al Jardine, Mike Love, Brian Wilson, and the estate of Carl Wilson. Brother Records is the registered owner of "The Beach Boys" trademark. As usual with bands, personal differences arose between some of the members and some of the members decided not to tour full-time or at all. In 1993, the directors of Brother Records agreed to devote a certain percentage of the touring income to the corporation for use of the trademark and designated a larger percentage of the income to those members who actually toured. By 1998, Carl Wilson had died, Love and Jardine no longer wanted to tour together, and Brian Wilson did not want to tour at all. Love negotiated with Brother Records a license to use "The Beach Boys" trademark in connection with his own band. Brother Records issued a non-exclusive license upon agreement of the Board including a yea vote by Jardine. The Love license contained a clause designed to protect the value of the trademark requiring the licensee to preserve The Beach Boys style and to choose from a list of approved booking agencies and managers. In 1998, Jardine began touring with his own band using a booking agent and manager that were not included in the list approved by the Love license. Jardine performed as "Beach Boys Family and Friends." Jardine proposed a license that included different terms than those in the Love license including a smaller royalty. Jardine's license was rejected but Jardine continued to perform using names that included "The Beach Boys" trademark. A number of show organizers booked Jardine's band thinking that they were getting The Beach Boys along with special added guests, but subsequently canceled the booking when they discovered that Jardine's band was not what they thought it was. Eventually Brother Records sued. Jardine's answer asserted the defenses of fair use, laches, estoppel and unclean hands, and counterclaimed for breach of his employment agreement, breach of a license agreement, and for a declaratory judgment that Jardine could tour as the "Beach Boys Family and Friends." The District Court issued a preliminary injunction, which allowed Jardine to refer to his past membership in the band in a descriptive fashion. Thereafter, the District Court granted summary judgment and issued a permanent injunction against Jardine's use of the trademark. The Ninth Circuit has maintained two separate doctrines in connection with fair use: the classic fair use doctrine and the nominative fair use doctrine. In the classic fair use case, the defendant has used the plaintiff's mark to describe the defendant's own product. In the nominative fair use doctrine, the defendant has used a trademark to describe the plaintiff's product rather than its own. Jardine argued both that "The Beach Boys" mark describes The Beach Boys product and alternatively that "The Beach Boys" mark described only himself, the founding member of The Beach Boys and did not describe "The Beach Boys" product. Rather than contorting itself to making a decision as to who Jardine meant, the Court simply looked at the doctrines themselves. Classic fair use only applies to marks that possess both the primary meaning and secondary meaning and only when the mark is used in the primary descriptive sense rather than the secondary trademark sense. Here, there was no descriptive use of the mark, so the classic fair use doctrine was not applicable. In other words, Jardine did not use the trademark in any primary descriptive sense. With regard to nominative fair use, the Court noted that the fair use defense is available only if the use of the trademark does not attempt to capitalize on consumer confusion or to appropriate the cachet of one product for a different one. That was clearly not the case here. The decision can be viewed at: http://caselaw.findlaw.com/data2/circs/9th/0157095P.pdf PEOPLE STILL CARE ABOUT BEANIE BABIES Ty Inc. v. Perryman, 306 F. 3d 509 (7th Cir. 2002) This one is an interesting decision by Judge Posner of the Seventh Circuit. Ty Inc., the manufacturer of the Beanie Babies, brought the suit for trademark infringement against Ruth Perryman who sells second hand bean bag stuffed animals [primarily, but not exclusively, Ty's Beanie Babies] over the Internet. Her domain name is "bargainbeanies.com." This suit is based on the Federal Anti-Dilution statute, which protects famous marks. The District Court granted summary judgment in favor of Ty and entered an injunction that forbid Defendant from using "beanie" or "beanies" within any business name, internet domain name, or trademark or in connection with any non-Ty products. Perryman appealed. Her argument is primarily that "beanies" have become a generic term for bean bag stuffed animals and therefore can not be appropriated as a trademark at all. Judge Posner first noted that confusion is not a factor because Perryman is not a competing producer of bean bag stuffed animals and her website clearly disclaims any affiliation with Ty. However, this does not get her off the hook under the dilution laws. The Court found that Ty's trademarks are household words and that Perryman's use of the words were commercial in nature and took place in interstate commerce. The Court went into an extended discussion on the basis of the harm that is done by dilution in a number of alternate circumstances. After a review of the circumstances here, the Court found that none of the rationales for anti-dilution statutes support Ty's position in this case. Perryman is selling the very product to which the trademark is sought to be defended against. The Court noted that you can not sell branded product without using its brand name. The Court surmised that what Ty is seeking in this case is an extension of the anti-dilution law to forbid commercial uses that accelerate the transition of the mark from trademark brand name to a generic name product name and then rejected such extension. Although 80% of Defendant' s sales are Ty's products, 20% are not. With regard to that 20%, she is misdirecting the consumer and is conducting false advertising. Accordingly, an injunction directed to those uses of beanie would be appropriate. The decision can be viewed at: http://caselaw.findlaw.com/data2/circs/7th/021771P.pdf A NEW DESIGN RIGHT IN THE E.U. Regulation (EC) No. 6/2002 Effective April 1, 2003, inventors or assignees may protect designs in the European Union by registering them as a Community Design pursuant to Regulation (EC) No. 6/2002. Registration allows an owner to prevent copying of the design in all member states of the European Union (The EU currently has 15 member state but will be expanding May 1, 2004 to 25 member states). The registrations are valid for 5 years initially and may be renewed 4 times for 5 years on each renewal affording a total of 25 years of registration if desired. The registrations may also claim foreign priority if filed with six months of the priority date of the foreign registration. The applications are not examined nor are they subject to opposition during the registration process. The applications are only reviewed to determine if procedural requirements have been met. Basically, registration is automatic. However, to be valid and protectable, each design registered must not be functional, must be novel and have individual character. A registration may be challenged in the Office of Harmonization in the Internal Markets (OHIM) or during an infringement proceeding by counter claim. Should you desire more information or would like to file for community design protection, you should email our patent department at bdpc@ipcounselors.com or call 1-212-292-5390. |
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