Top Intellectual Property Cases of 2008-part Ii
| Publication year | 2009 |
| Pages | 45 |
| Citation | Vol. 38 No. 4 Pg. 45 |
2009, April, Pg. 45. Top Intellectual Property Cases of 2008-Part II
April 2009
Vol. 38, No. 4 [Page 45]
Intellectual Property and Technology articles are sponsored by the CBA Intellectual Property and Technology Law and Policy Sections. They provide information of interest to intellectual property and technology attorneys who advise clients on protecting and exploiting various forms of intellectual property in the marketplace.
Article Editors
Steven J. Merker, Denver, of Dorsey and Whitney LLP-(303) 629-3400, merker.steve@dorsey.com; William F. Vobach, Denver, of Townsend and Townsend and Crew LLP-(303) 571-4000, wfvobach@townsend.com
About the Author
Daniel J. Sherwinter is an associate at Townsend and Townsend and Crew LLP. His practice focuses on strategic patent portfolio development, with an emphasis on patent prosecution in the electronics, software, and mechanical arts-(303) 571-4000, djsherwinter@townsend.com.
This article provides summaries of the most notable intellectual property cases of 2008. Several cases concerning each of IP's main disciplines-trademark, copyright, and patent law-were summarized in Part I. The remaining cases are summarized here.
Throughout 2008, a number of important cases were decided across the various disciplines of intellectual property law. This article provides a summary of the top cases in trademark, copyright, and patent law. Part I, which was published in the March 2009 issue of The Colorado Lawyer,(fn1) covered the first half of these cases; Part II covers the remaining half. The facts of each case are consolidated as much as possible to highlight significant legal developments and implications.
The Coveted Blue Box: Who Has the Burden to Police for Fakes on eBay?Tiffany (NJ) Inc. v. eBay, Inc., 576 F.Supp.2d 463 (S.D.N.Y. 2008).
In 2004, Tiffany, Inc., a retailer of jewelry and other luxury items, sued eBay, Inc., an online auction company, for direct trademark infringement, contributory trademark infringement, and unfair competition. Tiffany alleged that hundreds of thousands of counterfeit items were offered for sale on eBay's website under the Tiffany mark. Tiffany argued that eBay has an obligation to investigate and control counterfeiting on its site. In a sixty-six-page opinion after a Bench trial, the court found in favor of eBay on all claims.
In addressing direct infringement issues, the court spent little time analyzing likelihood-of-confusion factors, relying instead on a determination of nominative use. Nominative use essentially is a trademark fair use defense that allows the use of trademarks in legitimate after-market commercial contexts. For example, eBay sellers, like other merchants, must be allowed to use the Tiffany trademark in the sale of legitimate Tiffany goods. The court found that, because at least some of the Tiffany goods for sale on eBay are legitimate, eBay cannot be summarily prevented from using the Tiffany mark.(fn2)
The court similarly applied the nominative use analysis to support a determination that eBay did not engage in false advertising (some of its sellers may have, but eBay's use of the mark was to indicate the availability of legitimate Tiffany merchandise on the site), and that eBay's automated generation of Google AdSense ad copy from various terms (including trademarks such as "Tiffany") was noninfringing. Specifically, the ads and ad copy are protected commercial speech when applied to the legitimate goods.
Regarding secondary liability, the court's opinion addressed an area with little case law. Particularly, the opinion suggests that a website's liability for trademark infringement by its users should be evaluated more like a notice-and-takedown regime, where the mark holder bears at least some of the burden in policing for infringement and notifying the website. Indeed, even in the copyright realm, courts have struggled at least since 1995 to define the contours of the law in the area of online secondary infringement liability.(fn3)
Even so, it appears that generalized knowledge of future infringements may be insufficient to establish liability, and failure to be proactive in finding infringement may be insufficient to show willfulness. In the context of trademark dilution, the court determined that eBay cannot be liable for tarnishment within an active notice-and-takedown regime. The court also rejected any claims of blurring on the ground that junior users do not blur trademarks by simply and legitimately referring to the senior trademark owner.
Notably, the court lauded eBay's investments in proactive policing over the years. In the formative years of the Internet, many cases suggested that any active policing of content on a site might pose a no-win situation for providers of online services; companies either were liable for not doing enough to prevent certain content or were liable for doing too much and squelching free speech. Whereas many online service providers were being strategically "passive," eBay was spending tens of millions of dollars on anti-counterfeiting and other policing measures, including developing its Verified Rights Owners (VeRO) fraud engine. This clearly impressed the court, which noted that "[n]otwithstanding the significance of the online counterfeiting problem, it is clear that Tiffany invested relatively modest resources to combat the problem,"(fn4) and found baseless Tiffany's proposed demand(fn5) for eBay to do more.(fn6)
Will the Real "Naked Cowboy" Please (Not) Stand Up. Burck v. Mars, Inc., 571 F.Supp.2d 446 (S.D.N.Y. 2008).
Plaintiff is Robert Burck, a guitar-playing street performer known in New York for posing with tourists dressed only in a cowboy hat, cowboy boots, and white briefs. Burck has been developing his "naked" persona for more than ten years as a tourist attraction in Times Square, registering trademarks in the Naked Cowboy name and likeness, appearing in television shows and movies, and occasionally licensing his trademarks for use in advertisements. In 2007, defendant Mars, Inc. began running ads on a big screen in Times Square for M&M candies, in which a blue M&M was dressed like the Naked Cowboy. Burck sued, alleging violation of his right of publicity and trademark infringement due to a false appearance of endorsement.
In November, Burck dismissed the case with prejudice (and no cited reason), preventing him from later re-filing the complaint. Previously in June, however, the U.S. District Judge had made preliminary rulings, including dismissing Burck's right-of-publicity claim (finding that the New York statute giving rise to the claim protects only portraits or pictures of living persons, not fictitious characters created by a person), but allowing his false-endorsement claim. The judge found that even if the M&M character was considered a parody, the parody might be too weak to outweigh the potential for consumer confusion arising from a mistaken belief that Burke endorsed the use of his trademarked likeness.
Pony Up-Ralph Lauren's Trademarks Do Not Cover the Entire World of Polo. PRL USA Holdings, Inc. v. U.S. Polo Ass'n, Inc., 520 F.3d 109 (2d Cir. 2008).
In this case of Polo versus polo, plaintiff PRL USA Holdings, Inc. (PRL), the holder of Ralph Lauren trademarks for clothing, sheets, perfumes, and other goods, sued the U.S. Polo Association (USPA) and its licensee, Jordache Ltd., for trademark infringement. Defendant's four logos at issue all include "double horsemen," as opposed to the well-known "single-horseman" mark used by PRL since 1972. In this appeal, the Second Circuit affirmed noninfringement of three of the marks as posing no likelihood of confusion, as previously determined by a jury in 2005.
In 1984, a district court enjoined the USPA from using certain marks as infringing PRL's marks, but left the USPA open to use other equestrian and polo-related marks if distinctive. After continued battles between the parties over various marks, settlement discussions ensued in 1996, during which PRL allegedly told the USPA it would not object to use of a double horsemen mark. The USPA subsequently spent $41 million to develop and license the double horsemen marks for use on clothing by Jordache. PRL contended that they never consented to use of the mark.
Typically, statements made during confidential settlement negotiations are not admissible as evidence. However, citing an exception to F.R.E. 408,(fn7) the Circuit allowed statements from the settlement negotiations to be admitted as evidence of estoppel.
True Colors-School Colors and Indicia Are Protectable Marks. Bd. of Supervisors for Louisiana State Univ. and Agricultural and Mechanical College v. Smack Apparel Co., 2008 WL 4981326 (5th Cir. Nov. 25, 2008).
Plaintiffs, including a number of colleges and the Collegiate Licensing Company, sued defendant Smack Apparel Company over sales of t-shirts having unlicensed references to plaintiffs' school colors and other sports team indicia. The Fifth Circuit determined that Smack Apparel intended to mislead fans into thinking that the apparel was made or licensed by the schools through the use of color schemes and other indicia that had developed a strong consumer association with a particular school.(fn8) Further, the Circuit rejected Smack Apparel's arguments that school colors were not protectable as trademarks, concluding instead that "the colors, content, and context of the offending t-shirts are likely to cause confusion as to their source, sponsorship, or affiliation."(fn9)
Survey Says: High Likelihood of Confusion Indicates No Parody Defense. Anheuser-Busch, Inc. v. VIP Products, LLC, No. 4:08CV0358 TCM, 2008 WL 4619702 (E.D.Mo...
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