Case Comments
| Publication year | 2017 |
| Author | LOWELL ANDERSON |
LOWELL ANDERSON
Stetina Brunda Garred & Brucker
"Our holding is that Florida's doctrine of equitable estoppel permits a non-signatory to an agreement to avail herself of an arbitration clause only when the claims asserted against her fall within the scope of the clause that the signatories had agreed upon." Thus, defendant Kim Kardashian cannot compel a company (plaintiff) to arbitrate a trademark infringement claim based on an agreement to which Kardashian is not a party, on a claim not covered by the settlement agreement and its arbitration clause. An order denying arbitration was affirmed. Kroma Makeup, EU v. Boldface Licensing + Branding, 845 F.3d 1351, 121 U.S.P.Q.2d 1312 (11th Cir. 2017).
After a 35% reduction in fees for block billing, the court reduced the remaining fee amount by 92.5% because plaintiff's damage award represented an average of 7.5% of the highest and lowest amount Plaintiff sought. Awarding fees in strict proportion to the results obtained at trial was an abuse of discretion. Florida law provides that claims arise out of contract if they are inextricably intertwined with the contract, so it was error to exclude fees incurred on copyright claims in enforcing a photo licensing agreement. The contract authorized awarding non-taxable costs which circumvented normal limits on costs, and full costs are normally awarded even if plaintiff prevails on a fraction of the claims advanced, so it was an abuse of discretion to discount such costs. Yellow Pages Photos, Inc. v. Ziplocal, LP, 846 F.3d 1159, 121 U.S.P.Q.2d 1465 (11th Cir. 2017).
A patent infringement settlement agreement did not preclude defendant from alleging invalidity but did require defendant to "not do anything to unfairly interfere with the right of another party to receive the benefits of the contract." When defendant raised patent invalidity as a defense and counterclaim to infringement, plaintiff alleged breach of the implied covenant of good faith and fair dealing. As the invalidity defense and invalidity counterclaim did not expressly breach the settlement agreement they were privileged under Cal.Civ.Code § s47, as was the claim for breach of the "implied" covenant. Because the implied covenant is based on both contract and tort and tort claims are privileged under § 47, there was an added reason to deny a motion to dismiss the invalidity defenses and counterclaims. Alexsam, Inc. v. Green Dot. Corp., 121 U.S.P.Q.2d 1341 (C.D. Cal. 2016).
Materials sold as part of a compilation, such as songs on an album, ordinarily are not deemed separate works for determining statutory damages. But when a copyright holder or publisher issues material on an independent basis, the law permits a statutory damages award for each individual work. The court thus properly awarded separate statutory damage awards for songs that the plaintiffs issued as singles, even if those songs were also made available on albums as of the date of infringement. The statutory damage award appears to be based on the number of infringed songs, not the number of copyright registrations. EMI Christian Music Grp., Inc. v. MP3tunes, LLC, 844 F.3d 79, 121 U.S.P.Q.2d 1373 (2d Cir. 2017).
Statutory damages of $5 million on a default judgment for infringement of 435 copyrighted works was granted rather than the $30,000 per work award (totaling over $13 million) that was requested for willful infringement. The lower award was adequate for compensation and deterrence. Cengage Learning, Inc. v. Shi, 122 U.S.P.Q.2d 1046 (S.D.N.Y. 2017).
Motions to exclude a damage expert's testimony on sales trends and 1.27 lost sales for each infringing article were denied. While the motions identified numerous grounds for impeachment, the court was not tasked with determining whether the opinions are right or wrong, but whether the "opinions are 'unreliable nonsense' such that it would not be 'helpful' to the jury's assessment of the facts of this case." Brighton Collectibles, LLC v. Believe Prod., Inc., 121 U.S.P.Q.2d 1556 (C.D. Cal. 2017).
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Defendants distribution of pre-2007 songs in MP3 format knowing that major music labels did not release songs in that format and had not authorized distribution of the song on the internet, gave red flag knowledge making infringement obvious. A JMOL reversing a jury verdict of ref-flag knowledge and willful blindness was reversed and the jury verdict reinstated. The award of one statutory damage award for both the musical composition its corresponding sound recording was affirmed. EMI Christian Music Grp., Inc. v. MP3tunes, LLC, 844 F.3d 79, 121 U.S.P.Q.2d 1373 (2d Cir. 2017).
Plaintiff created media files for defendant and authorized derivative works of those files, in return for referrals, and continued to do so after the written agreement lapsed. "The implied license is intended to prevent a work creator from providing a work for use and then waiting until the recipient cannot feasibly complete its business without the work." While implied licenses may be terminated, no evidence of a revocable term was presented. Plaintiff's emails to others showed an intent to lure defendant into conduct that would enable plaintiff to later hold 'defendant up for ransom.' Summary judgment dismissal of the copyright claim was granted. Claims for breach of oral contract and unjust enrichment were also dismissed on summary judgment. LimeCoral, Ltd. v. CareerBuilder, LLC, 121 U.S.P.Q.2d 1923 (N.D. Ill. 2017).
"We are persuaded by the unanimous line of cases from our sister circuits and now hold that when the gravamen of a copyright suit is a question of copyright ownership, the claim accrues when the ownership dispute becomes explicit - that is, when the claimant has notice that his claim of ownership is repudiated or contested." The claim accrues only once. Consumer Health Info. Corp. v. Amylin Pharms., Inc., 819 F.3d 992, 118 U.S.P.Q.2d 1361 (7th Cir. 2016).
Personal jurisdiction over an officer was affirmed based on extensive control over a company found to infringe in prior litigation and in the present lawsuit, by distributing unauthorized songs over the internet. Vicarious liability may arise from the right and ability to supervise that coalesces with a direct financial interest in the exploitation of copyrighted materials, and the direct financial interest may be established where the infringing material acts as a draw to attract subscribers to the officer's business. A jury verdict imposing damages on the officer was affirmed. EMI Christian Music Grp., Inc. v. MP3tunes, LLC, 844 F.3d 79, 121 U.S.P.Q.2d 1373 (2d Cir. 2017).
While claims for reverse palming off (selling Plaintiff's authentic jewelry under Defendant's name) would be preempted, Plaintiff alleged that using photos of plaintiff's jewelry to sell defendant's allegedly infringing and lower quality jewelry gave an unfair advantage and constituted unfair competition. This behavior stated a claim for implied palming off that was not preempted by the Copyright Act. 17 U.S.C. § 301(a). Brighton Collectibles, LLC v. Believe Prod., Inc., 121 U.S.P.Q.2d 1556 (C.D. Cal. 2017).
Claims for unfair competition based on use of a copyrighted drawing to make a product were preempted. "Although the Copyright Act provides the owner of such a drawing the exclusive right to reproduce the drawing itself, it does no grant the exclusive right to use the drawing to make the useful article depicted." 17 U.S.C. § 301. But copyright rights include derivative works and protection was withheld from useful, derivative works - thus indicating copyright protection could have been granted. Thus, unfair competition claims were preempted. Ultraflo Corp. v. Pelican Tank Parts, Inc., 845 F.3d 652, 121 U.S.P.Q.2d 1307 (5th Cir. 2017).
Courts may consider inadmissible evidence in deciding a preliminary injunction motion because of the need for a prompt decision, so evidentiary objections affect weight rather than admissibility. "The purchase of a DVD only conveys the authority to view the DVD, not to decrypt it." Intermediate, fragmentary copies of DVD's are viewable by software and thus proscribed. "Multiple courts have declined to adopt an exemption for space-shifting." Thus, a user viewing a streaming DVD does not own the DVD and does not have a license to decrypt the DVD. A preliminary injunction enjoining DVD streaming was issued, requiring a $25,000 bond. Disney Enters., Inc. v. VidAngel, Inc., 121 U.S.P.Q.2d 1212 (C.D. Cal. 2017).
By response to a certified question, "New York common law does not recognize a right of public performance for creators of pre-1972 sound recordings. Flo & Eddie, Inc. v. Sirus XM Radio, Inc. 2016 WL 7349 183 [121 U.S.P.Q.2d 115] (N.Y. Dec. 20, 2016)." The certified question disposed of all claims so the action for copyright infringement was remanded with instructions to dismiss. Flo & Eddie, Inc. v. Sirus XM Radio, Inc., 849 F.3d 14, 121 U.S.P.Q.2d 1577 (2d Cir. 2017).
Federal agencies may incorporate voluntary consensus standards and service manuals into federal regulations by reference. 5 U.S.C.§ 552. Registered copyrights in ASTM standards do not prevent anyone from using or applying the procedures in the standards and only prevent copying the written descriptions in the standards so 17 U.S.C. § 102(b) does not prevent copyrighting the standards. Section 105 prevents copyright in works of the U.S. government but that is limited to government employees creating works as part of their official duties. The presumption of validity in the registered standards was un-rebutted and enforced in a summary judgment. Am. Soc'y for Testing & Materials...
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