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U.S. Intellectual Property and New Media Law Update IS NOTHING IN LIFE PERMANENT? KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc.; MCN International Inc. (9th Cir., May, 2005) LAW GRANTING COPYRIGHT PROTECTION TO WORKS ALREADY IN PUBLIC DOMAIN UPHELD Luck’s Music Library, Inc., et al v. Alberto Gonzales, et al. (D.C. Cir. 2005) IF YOU SAMPLE - YOU MUST LICENSE Bridgeport Music, Inc. et al v. Dimension Films, et al. (6th Cir. 2005) STAY TUNED FOR MORE PBS PLEDGE DRIVES… Program Suppliers v. Librarian of Congress, et al. (D.C. Cir. May, 2005) IS NOTHING IN LIFE PERMANENT? KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc.; MCN International Inc. (9th Cir., May, 2005) KP Permanent Make-Up and Lasting Impression are both cosmetic companies that used some form of trademark MICRO COLOR on or in connection with permanent make-up. In 1999, Lasting demanded that KP cease from using its trademark MICROCOLOR. In response, KP filed a declaratory judgment. Lasting counterclaimed for trademark infringement, among other claims, and the District Court dismissed the case on summary judgment, finding that KP used MICROCOLOR descriptively and not as a trademark. On appeal the Ninth Circuit reversed, finding that the District Court erred in addressing the fair use defense without discussing the issue of likelihood of confusion. The Supreme Court granted certiorari to resolve the dispute and again reversed and remanded, holding the burden of proving a likelihood of confusion rests with the party claiming trademark infringement not with the party asserting a fair use defense. In its analysis, the Court observed a degree of confusion by the party asserting the fair use defense is tolerable, provided the mark is used descriptively. However, the Court did not completely foreclose the possibility of an infringement finding, even when a fair use defense is asserted, if there is a significant showing of likelihood of confusion. On remand, the Court of Appeals held that KP had failed to overcome the presumption of validity afforded to Lasting's incontestable trademark registration of MICRO COLORS and Design. Accordingly, the most salient feature of the mark, namely MICRO COLORS, could not be found to be generic on summary judgment. Moreover, the court held that KP's motion for summary judgment could not be upheld on the grounds that MICRO COLORS was merely descriptive and had not acquired secondary meaning, as Lasting's trademark registration was conclusive evidence that MICRO COLORS was non-descriptive or had acquired secondary meaning. After determining that MICRO COLORS was a protectable trademark, the court concluded that there were still genuine issues of material fact remaining with regard to the issues of a likelihood of confusion and whether the defense of fair use had been established. In so holding, the Appeals Court for the Ninth Circuit again reversed the district court's grant of summary judgment in K.P.'s favor and remanded the case for further proceedings. The decision can be viewed at: http://caselaw.lp.findlaw.com/data2/circs/9th/0156055pv2.pdf LAW GRANTING COPYRIGHT PROTECTION TO WORKS ALREADY IN PUBLIC DOMAIN UPHELD Luck’s Music Library, Inc., et al v. Alberto Gonzales, et al. (D.C. Cir. 2005) The plaintiff-appellants rented and sold, among other things, sheet music, classical music scores, vintage movies and old film footage. Plaintiffs challenged the constitutionality of §514 of the Uruguay Round Agreements Act ("URAA")(implementing Article 18 of the Berne Convention for the Protection of Literary and Artistic Works). The provision at issue established copyright in various kinds of works that had, for various reasons, fallen into the public domain in the U.S. despite the fact that the foreign holders were protected under the law where the works were initially published. The section at issue had the effect of removing from the public domain some of the works which plaintiffs were renting and selling. Plaintiffs relied on the Copyright and Patent Clause of the U.S. Constitution, which provides that Congress shall have the power "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries". Plaintiffs argued that since the Constitution's wording required that copyright laws provide an 'incentive' to authors to "promote the progress of science and useful arts", there could be no such incentive where copyright laws operate to remove works from the public domain, as in the case of the URAA. In effect, the rewarding of prior works could not provide any significant incentive to create new works. The Court of Appeals rejected plaintiff's claim, affirming the District Court's ruling. Citing Eldred v. Ashcroft 537 U.S. 186 (2003), a similar case which concerned an unsuccessful challenge to the extension of the copyright term for works already in existence, the court reasoned that the knowledge that Congress may pass laws like the URAA in the future does affect the returns from investing time and effort in producing works. Therefore, "the expected benefits of creating new works are greater if Congress can remedy the loss of copyright protection for works that have fallen accidentally into the public domain". Although, as the court acknowledged, such expected benefit may seem like a meager incentive, it was deemed sufficient to pass Constitutional muster. A second argument advanced by plaintiffs, that there existed no historical legal precedent for the removal of works from the public domain, was roundly rejected by the court. In fact, the Copyright Act of 1790 granted copyright protection to works already in print in the U.S. Other Acts of Congress have authorized the President to give authors publishing works abroad during WWI and WWII time to comply with filing requirements in the U.S., despite the fact that such works may already have entered the public domain. The decision can be viewed at: http://caselaw.lp.findlaw.com/data2/circs/dc/045240a.pdf IF YOU SAMPLE - YOU MUST LICENSE Bridgeport Music, Inc. et al v. Dimension Films, et al. (6th Cir. 2005) Plaintiff record companies appealed several district court rulings with respect to copyright infringement claims brought against a movie company (among others) for use of samples from compositions and sound recordings. The original complaint alleged nearly 500 counts of copyright infringement and related state claims against approximately 800 defendants. The case was severed into 476 separate actions. In this action, the four plaintiffs, all in the business of music publishing and exploiting musical composition copyrights, seek compensation for use of a sample from the sound recording "Get Off Your Ass and Jam" by George Clinton Jr. and the Funkadelics. There is no dispute that the defendants in the action did in fact sample this song in connection with the release of a movie entitled "I Got the Hook Up". It is alleged that the sound track of "Hook Up" contains the first three notes from "Get Off Your Ass and Jam" that last four seconds in five places in the sound track song. The district court found that a jury could reasonably find the riff to be original and creative enough to warrant copyright protection. This determination is also not disputed. Instead, Defendants claim that the use of the three note riff was de minimis copying. In holding that a sound recording owner has the right to "sample" his own recording, the Court of Appeals, in a lengthy discussion attempting to justify its decision, returned the case to the District Court to apply a new standard for sampling, i.e., if you use a sample of a sound recording, no matter how small, you need a license to do so. The Appeals Court believed that due to the popularity of rap music which commonly incorporates the samples of third party recordings, it was time a bright line rule was established to govern use of sound recording samples. It is likely that this decision will come under heavy fire. Only time will tell if other jurisdictions follow. The decision can be viewed at: http://caselaw.lp.findlaw.com/data2/circs/6th/026521pv2.pdf STAY TUNED FOR MORE PBS PLEDGE DRIVES… Program Suppliers v. Librarian of Congress, et al. (D.C. Cir. May, 2005) Cable television operators (CSOs) sell their subscribers, inter alia, retransmissions of distant broadcast signals, including those of both private and public television stations (PTVs). Their retransmission is permitted under provisions of the Copyright Act, provided that the CSOs pay royalty fees into one or more of three related funds maintained by the Librarian of Congress. These funds compensate copyright owners for the distant retransmission of non-network programming, i.e., retransmission that reaches viewers beyond the range of the signal broadcast. The Librarian of Congress is to allocate these royalty funds among a class of claimants, which includes Public Television (PTV) stations, and others. If the claimants do not agree with the Librarian's allocation, they may objects. Upon such objection, the Librarian forms an ad hoc Copyright Arbitration Royalty Panel ("CARP"). The CARP then receives evidence as to the valuations proposed by the various parties, and makes a recommendation to the Librarian, who is to accept the recommendation unless it is arbitrary or contrary to applicable statutory proceedings. If it is, the Librarian makes the royalty allocation himself, and any aggrieved party may appeal the Librarian's actions to the Court of Appeals for the D.C. Circuit. In the case at hand, Royalty claimants did not agree with the Librarian allocation, and so the Librarian appointed a CARP. The CARP received evidence in the form of the well-known Nielsen TV viewership data and the so-called "Bortz survey", which had been commissioned by providers of sports programming. The CARP relied heavily on this ad-hoc "Bortz report" to justify a decision leaving the royalties paid to PTV stations unchanged since some seven years prior - despite evidence that PTV viewership had quadrupled over this period, and the fact that the Bortz survey questions querying CSOs on programming value did not even list PTV as a type of programming. The Librarian allocated the royalties per recommendation of the CARP. The Program suppliers objected that the CARP didn't rely on Nielsen data, but only on the "Bortz survey". PBS (PTVs) objected, saying that CARP should have found that changed circumstances (e.g. a quadrupling in public TV viewership) justified a higher percentage of royalties going to PTV. However, the appellate court essentially noted that the CARP had the statutorily conferred authority to choose and use the evidence as it had done, and noted that "Because the [Librarian's] order [allocating royalties] survives our exceptionally deferential standard of review, we affirm [that order, and deny appeals of Program suppliers and PBS.].". The decision can be viewed at: http://caselaw.lp.findlaw.com/data2/circs/dc/041070a.pdf |
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