Q2 2016 Quick Links, Part 1 (Intellectual Property)

Copyright

* Skidmore v. Led Zeppelin, No. CV 15-03462-RGK (AGRx) (C.D. Cal. June 23, 2016): Led Zeppelin’s Stairway to Heaven isn’t substantially similar to Spirit’s Taurus. The plaintiff’s lawyer explains why it was a loss for both sides. My Q: why are we litigating a copyright case over a song released 45 years ago? We need an effective statute of limitations for copyright law.

* Photo Attorney: “As reported in the recent White Paper on Remixes, First Sale, and Statutory Damages issued by the Department of Commerce Internet Policy Task Force (Jan. 2016), only two courts in four decades have reduced the statutory damages to $200 for innocent infringement (see pp. 83-84 and footnote 504).” We need to rethink how we formulate the range for statutory damages; clearly the low end isn’t working very well as an outlet for “not so bad” infringement.

* Techdirt: A Dozen Bad Ideas That Were Raised At The Copyright Office’s DMCA Roundtables. This doesn’t even include the noxious proposal from the Copyright Office to require agent designation renewals or forfeit the safe harbor.

* ABS Entertainment v. CBS Corp. (C.D. Cal. May 30, 2016): “Plaintiffs’ pre-1972 Sound Recordings have undergone sufficient changes during the remastering process to qualify for federal copyright protection.” This one has to be reversed or else it’s a seismic ruling that will unleash countless new plaintiffs.

* “Google Books is legal. Full stop.” Super retrospective of 10 years of Google Books litigation by James Grimmelmann.

* Techdirt: John McCain, Forgetting His Own Support Of Fair Use On YouTube, Tries To Use Copyright To Take Down His Own Ad

* OpenMedia: What the heck is ancillary copyright and why do we call it the Link Tax?

* The Music Industry Buried More Than 150 Startups. Now They Are Left To Dance With The Giants.

* ABA Journal: Two reluctant entrepreneurs tackle challenge of copyright duration

Trademarks

* Zerorez Franchising System, Inc. v. Distinctive Cleaning, Inc., 2016 WL 2637801 (D. Minn. May 6, 2016):

Plaintiffs claim that between June 1, 2012 through June 30, 2014, they spent $82,062.34 on internet-based corrective advertising through Google AdWords. The online advertisement Plaintiffs claim was corrective states “Official ZEROREZ® Website” with the description “Patented Empowered Water™” and “For Clean You Can Trust.”

Plaintiffs are not entitled to recover the full $82,062.34. The only mildly corrective element of the advertisement is the phrase “Official ZEROREZ® Website.” The Court finds that Plaintiffs are entitled to recover ten percent of their requested amount, or $8,206, for online corrective advertising. Ten percent is fair given the limited advertising space available in this medium; a larger message that explicitly referenced Distinctive’s infringement would likely be unwieldly. Moreover, the record includes a screenshot showing the Zerorez advertisement positioned directly above a Distinctive advertisement that states “Zero Rez Carpet Cleaning.” In this context, claiming to be “official” is marginally corrective and serves to remedy potential customer confusion. For these reasons, Plaintiffs are entitled to a limited portion of its internet advertising expenditures.

In a footnote, the court added:

Defendants claim that because other carpet cleaning companies used Google AdWords campaigns with the Plaintiffs’ trademark, the causal connection for recovering corrective advertising is further eroded. This argument misses the mark. As explained in the May 5th Order, Defendants’ infringement is founded on Distinctive’s use of Plaintiffs’ trademark in the text of its advertisements, which is viewable to potential customers. The words and phrases used in Google AdWords campaigns are not viewable to potential customers and merely act to display specific advertisements when that word or phrase is used as a search term. Because of the low likelihood of confusion resulting from merely employing trademarked phrases in a non-customer facing environment, such behavior does not constitute trademark infringement. See, e.g., 1-800 Contacts, Inc. v. Lens.com, Inc., 722 F.3d 1229 (10th Cir. 2013).

* Nespresso USA, Inc. v. Africa America Coffee Trading Co. LLC, 2016 WL 3162118 (SDNY June 2, 2016). In a default judgment ruling:

in its briefing Nespresso cites the theory of “initial interest confusion,” as articulated by the Ninth Circuit, in support of its claim that Libretto’s use of the Nespresso mark in its metatags is likely to create confusion. See Brookfield Commc’ns, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036 (9th Cir. 1999). In Brookfield, the Ninth Circuit held that the use of metatags in source code could constitute a violation of the Lanham Act where such use might lead consumers from the trademark holder’s website to the website of a competitor. See generally id. This initial confusion, in turn, might cause the consumer to remain on the competitor’s website and utilize the competitor’s goods or services instead of returning to the initially-sought mark holder’s website. The Second Circuit has acknowledged and adopted the initial interest confusion doctrine, requiring a demonstration of a defendant’s intent to confuse to prove liability. Savin Corp. 391 F.3d at 462 n.13 (noting that consumers diverted on the internet can more easily go back, which minimizes harm). Based on the entirety of the circumstances before it, which include both Libretto’s prominent use of the Nespresso mark on its packaging and website, as well as in its metatags, the Court can infer that Libretto intended to create consumer confusion with respect to Nespresso’s sponsorship or endorsement of its goods. Nespresso has therefore also demonstrated false designation of origin on a theory of initial interest confusion liability based on Libretto’s use of the Nespresso mark in its website metatags.

Initial interest confusion sucks.

* CFE Racing Products, Inc. v. BMF Wheels, Inc., 2016 WL 1637560 (E.D. Mich. April 26, 2016)

The plaintiff contends that, at least since November 16, 2015, the defendants have run ads appearing in Google searches for “BMF Wheels” that state “BMF Wheels is Now SOTA — sotaoffroad.com.” Remarkably, the defendants admit that they have published the Google ads, but maintain that this is not “trademark use,” and merely constitutes publication of a “statement of fact” advising customers that the company has changed to a new brand….In this case, the defendant’s use of “BMF Wheels” in their Google ads clearly is intended to identify SOTA Offroad as the source of goods formerly sold under the prohibited brand. In all events, whether this constitutes “use” of the mark or not, the continued — and apparently new and renewed — publication of advertising including the mark “BMF Wheels” plainly defies the injunctive command to “forthwith… withdraw all advertising in all media that bears the infringing marks or logos.”

* Hart v. Amazon.com, Inc., 2016 WL 3360639 (N.D. Ill. June 13, 2016). The plaintiff alleged Amazon’s vendors resold counterfeit versions of his books. The court rejects the trademark claims, saying that Amazon qualifies for the First Sale defense because the plaintiff didn’t make enough showing that the books were counterfeit. (Cf. the Tre Milano v. Amazon case). The court also rejected a false endorsement claim, saying “a shopper at a bookstore does not automatically believe that just because a used book is appearing at the store, the author is expressly endorsing that store. The same is true for a book that is resold on Amazon.”

Patents

* William Hubbard, Razing the Patent Bar. Why do we require technical expertise to sit for the Patent bar exam and become licensed to prosecute patents before the USPTO? This article questions the logic:

It does not appear that the USPTO has ever articulated a detailed economic justification for the technical education requirement….

market failures regarding technical qualifications played no role in the legal origins of the Patent Bar…

[In 1934:] Lawyers, however, were automatically eligible to take the exam. As a result, for many years lawyers without technical degrees joined the Patent Bar, and by 1960, 22% of the members of the Patent Bar were lawyers without technical degrees….

the correlation between patent practitioner quality and the technical education requirement is relatively weak…once a person becomes a patent agent or attorney, she is not limited to working on matters related to the technical credentials that allowed her to join…many members of the Patent Bar ultimately work on matters that are minimally related to the members’ technical backgrounds.

One consequence of the PTO’s unnecessary requirement is that we’re going to face a shortage of patent prosecutors, which will impede the prosecution of new patents and increase prosecution costs:

2014 saw the smallest number of new admissions to the Patent Bar in a decade, with less than 1,200 people taking and passing the Patent Bar exam. In contrast to the slow growth in the Patent Bar, the number of patent applications filed each year has steadily increased, so that today the USPTO receives 47% more applications than it did a decade ago

* Vice Motherboard: The Small Town Judge Who Sees a Quarter of the Nation’s Patent Cases

Trade Secrets and Employee Mobility

* During the debates about the Defend Trade Secrets Act, the theft of Kevlar by South Korean actors was the ONLY example that supporters could marshal to show why we needed an ex parte seizure provision. But this article by the American Lawyer demonstrates that Kevlar would never have qualified for the ex parte seizure provisions.

* White House report: Non-Compete Agreements: Analysis of the Usage, Potential Issues, and State Responses. Related post.

Publicity Rights

* AP: ‘El Chapo’ Wants Payment From U.S. TV Networks