Mary Siceloff

By: Labor and Employment Group

On September 15, 2014 Governor Brown signed AB 2536, which implements changes to California Labor Code section 230.3.  Prior to the passage of this bill, California law prohibited employers from discharging or discriminating against employees for taking time off to perform emergency duty as a volunteer firefighter, reserve peace officer, or emergency rescue personnel. “Emergency rescue personnel” was defined to include an officer, employee, or member of a political subdivision of the state, or of a sheriff’s department, police department, or a private fire department. This new law expands the definition of “Emergency rescue personnel” to include an officer, employee, or member of a disaster medical response entity sponsored or requested by the state.  The changes to section 230.3 now also require an employee who is a health care provider to notify his or her employer at the time the employee becomes designated as emergency rescue personnel and at any time the employee learns that he or she will be deployed as a result of that designation.

In this author’s opinion, I believe that most consumers see wine, beer and mineral water as unrelated products and would not believe that beer, wine or mineral water that share similar trademark elements (e.g., similar words or similar design) are related or emanate from the same source.  However, the TTAB has found otherwise.

Beginning with its 1992 decision in In re Sailerbrau Franz Sailer, the TTAB has been receptive to arguments that wine and beer are related.  In In re Sailerbrau, the TTAB found the mark CHRISTOPHER COLUMBUS for beer confusingly similar to the mark CRISTOBAL COLON and Design for sweet wine.  The TTAB found persuasive the third party registrations introduced by the trademark examiner showing that a number of companies have registered their marks for both beer and wine.

Following that case, the TTAB adjudicated a number of non-precedential cases in which the TTAB found beer and wine related.  For example, in In re Stonestreet, LLC, the TTAB found the mark BUCKEYE for wine confusingly similar to the mark BUCKEYE SPARKLING DRY (stylized) for beer.  Similar to In re Sailerbrau, the TTAB found persuasive third party registrations covering both beer and wine.  The applicant in In re Stonestreet argued that the Federal Circuit case of G.H. Mumm & Cie v. Desnoes & Geddes Ltd., required a finding that beer and wine are not related.  However, the TTAB was not persuaded.  The record in G.H. Mumm demonstrated the MUMM brand champagne to be a premium sparkling wine marketed by one of France’s top quality champagne producers.  The record in Stonestreet lacked any such distinction.

Then, in 2011 the TTAB issued a precedential opinion on the continuing conflict of beer and wine.  In re Kysela Pere et Fils, Ltd. involved a refusal to register the mark HB for wine based on the likelihood of confusion with the mark HB and Design for beer.  The TTAB found persuasive both the third party registrations submitted by the trademark examiner covering both beer and wine as well as third-party web pages for companies that make and sell both beer and wine.  The court stated:

The third-party registration evidence and the website evidence together amply demonstrate the relatedness of beer and wine, and show that consumers, if they encountered both goods sold under confusingly similar marks, are likely to believe that they emanate from the same source.

And now, it seems like the TTAB may be expanding the scope of goods related to wine (and likely beer) to include water.  In the recent case of Joel Gott Wines, LLC v. Rehoboth Von Gott, Inc., the TTAB addressed Gott Wine’s opposition to Von Gott’s application for GOTT LIGHT (stylized) for flat and carbonated drinking water, coconut water and flavored mineral water on the grounds that applicant’s mark is confusingly similar to Joel Gott’s mark, GOTT, for wine.

Addressing whether there is a likelihood of confusion between Von Gott’s mark and Joel Gott’s mark, having found the marks similar, the court focused on the relatedness of the covered goods, the trade channels and classes of purchasers.  First the court noted that the goods need only be sufficiently related that consumers would be likely to assume, upon encountering the goods under similar marks, that the goods originate from, are sponsored or authorized by, or are otherwise connected to the same source.  As such, the court found compelling the use-based, third-party registrations covering both water and wine submitted by Joel Gott.  The court noted that the use-based, third-party registrations have probative value in that they suggest that the goods listed therein are of a kind which may emanate from a single source.  Joel Gott also introduced  marketplace evidence demonstrating that wine and water are related goods. Joel Gott introduced testimony from a witness who purchased several different brands of water from different winery tasting rooms, each bearing the name of the winery at which wines under the same brands are sold.  The court found that this evidence “strongly favors a finding of likelihood of confusion with respect to the du Pont factor regarding the relatedness of the goods.”

As to the channels of trade, Von Gott contended that although both wine and water are sold in supermarkets, they are sold in different sections of the store; Von Gott argued that because goods can both be sold in a large store such as a supermarket would not alone be sufficient to show that consumers would be likely to encounter both in a shopping trip, or assume a common source merely because both types of goods can be found in such a store.   However, the court found compelling evidence submitted by Joel Gott which showed that wine and water are often sold in the same area of a store, as well as copies of online beverage menus from restaurant websites, showing that restaurants offer both water and wine for sale in the same menu section.  Based on the evidence submitted by Joel Gott, the court found that wine and water are sold through the same trade channels to the same classes of customers.

With the TTAB finding wine and water related goods that are sold through the same class of goods to the same classes of customers, one must ask what is next.  Soft drinks and energy drinks are also sold in the same area of a supermarket as water; spirits are usually sold on the next isle over.  The slow creep of product relatedness in the beverage category will make it increasingly difficult for brand owners in the space to select and clear trademarks.

One of the primary purposes of the Communications Decency Act (“CDA”) is to limit liability for certain internet content providers specifically protecting websites from liability for material posting on their website by a third party. In Jane Doe No. 14 v. Internet Brands, Inc., the operator of a networking site in the modeling industry sought to use the CDA as a defense to a negligence claim based on a failure to warn.  The facts of the case are horrific.

Jane Doe was an aspiring actress who posted her information on the networking site Modelmayhem.com.  In February 2011, she was contacted by two men Lavont Flanders and Emerson Callum, about a modeling audition in Florida.  Jane Doe traveled to Florida to meet with the two men and was given a drug that caused her to pass out after which she was raped and the assault made into a pornographic film.   (Flanders and Mr. Callum were convicted of numerous crimes by a federal jury in Florida and sentenced to life in prison for this and other similar assaults.)

Jane Doe claimed that the owner of the Modelmayhem.com website, Internet Brands, Inc. knew of the two men’s unlawful conduct but took no steps to warn her or other users of the threat.  Prior to the 2011 assault, Internet Brand, which had purchased the Modelmayhem site in 2008, had apparently sued the seller of the site in 2010 for failing to disclose the potential civil liability arising from the criminal deeds of Callum and Flanders.  She brought a claim against Internet Brands, Inc. for negligence under California law which recognizes a cause of action for failure to warn. Internet Brands moved to dismiss the claim asserting that the CDA immunized it from liability as to Jane Doe’s claims.  The trial court agreed and dismissed the complaint.  Jane Doe appealed to the Ninth Circuit which reversed the trial court’s decision in an opinion dated September 17, 2014.

The Ninth Circuit framed the issue as “whether the CDA bars Jane Doe’s negligent failure to warn claim under California law” and began by looking at the text of the CDA, specifically sections 230(c)(1) and (2).  The Court found that section 230(c)(1) of the CDA “precludes liability that treats a website as the publisher or speaker of information users provide on the website.  In general, this section protects websites from liability for material posted on the website by someone else.”

The Ninth Circuit reasoned that this protection from liability applies “even though the website proprietor has not acted to remove offensive content posted by others.”  However, the Court concluded that Jane Doe’s claim was different from the general claim that would otherwise be barred by the CDA.  Specifically, the Court found that she did not seek “to hold Internet Brands liable as a `publisher or speaker’ of content someone posted on the Modelmayhem website” or that it failed to remove such content.  Neither Flanders nor Callum were alleged to have posted any materials themselves.  (They apparently contacted Jane Doe about the alleged audition through the Modelmayhem website using a fake identity.)  Jane Doe’s complaint sought to hold Internet Brands liable because it has failed to warn her that these individuals had used the website to target other potential victims.

Internet Brands claimed that requiring it to post or email a warning would be deemed an act of publishing information and would otherwise fall within the protections of the CDA.  The Ninth Circuit rejected this argument.  It held that such a posting or email by Internet Brands “would involve only content that Internet Brands itself produced” and that therefore a tort based on a duty that would require such a self-produced warning therefore falls outside of section 230(c)(1).”  Essentially, the Court found that plaintiff was not seeking to hold Internet Brands liable for publishing information provided by another information content provider.

The Ninth Circuit continued by recognizing that the purpose of CDA supported this conclusion.  One of the purposes of the CDA was to allow the operator of a website “to self-regulate offensive third party content without fear of liability.”  The Court concluded that this policy was not implicated by allowing plaintiff’s failure to warn claim to proceed.  It concluded that the claim was based on the theory “that Internet Brands should be held liable based on its knowledge of the rape scheme and its “special relationship” with users like Jane Doe for failing to generate its own warning.  Liability would not discourage “Good Samaritan filtering of third party content.”

The Court then turned its attention as to the other policy of the CDA which was to “avoid the chilling effect upon internet free speech that would be occasioned by the imposition of tort liability upon companies that do not create potentially harmful messages but are simply intermediaries for their delivery.”  The Court acknowledged that Internet Brands was an “intermediary” between Jane Doe and the rapists but that there was no allegation that modelmayhem itself transmitted any potentially harmful messages.  For instance, there was “no allegation that Flanders or Callum posted their own profiles on the website.”   The Court said that although it could be argued that imposing liability on Internet Brands in this matter could be said to have a “chilling effect” on the internet, it reasoned that “the CDA does not declare `a general immunity from liability deriving from third party content’.”  Specifically, the Court found that “Congress has not provided an all-purpose-get-out-of-jail-free card for businesses that publish user content on the internet, though any claims might have a marginal chilling effect on internet publishing businesses.”

The Court concluded that although the case presented a “novel issue,” it found that the CDA did not bar a state law based failure to warn claim.  The Court emphasized that it was expressing “no opinion on the viability of the failure to warn allegations” but only that “the CDA is not a valid basis to dismiss Jane Doe’s complaint.”

Although it remains to be seen as Jane Doe’s case progresses whether she will be able to establish liability on the part of Internet Brands, the Ninth Circuit’s ruling is a reminder to content providers on the internet that there are some limits to the scope of immunity protection provided by the CDA.

You don’t have to be a Disney enthusiast like myself to be familiar with its latest blockbuster franchise, Frozen.  To date, the film has grossed over 1.2 billion dollars in worldwide box office revenue, making it the highest-grossing animated film of all time, and the fifth highest-grossing film overall.  The fact is, Frozen has taken the world by storm since its November 27, 2013 release, and it does not appear to be letting up as Disney is planning on opening a Frozen themed ride at Walt Disney World and a Frozen musical on Broadway.  Nonetheless, one New Jersey woman is seeking to put an immediate halt on Disney’s cash cow with the filing of her complaint for copyright infringement in the United States District Court for the District of New Jersey.

On September 22, 2014, Isabella Tanikumi—also known as L. Amy Gonzalez, filed a complaint against the Walt Disney Company (“Disney”) alleging copyright infringement because Disney purportedly stole at least eighteen (18) elements of Frozen from her 2010 autobiography, Living My Truth.  Specifically, Ms. Tanikumi has cited the following similarities: (1) both stories involve villages at the base of snow covered mountains; (2) both stories involve two sisters with different colored hair; (3) both stories involve one of the two sisters injuring the other; (4) both stories have two male characters who act as the romantic interest of one of the sisters; and (5) open doors/gates are involved in the endings of both respective tales.  This list is merely illustrative, but for those of you who wish to see the entire list, feel free to read the complaint and its attachment by clicking Isabelle Tanikumi AKA L. Amy Gonzalez v. The Walt Disney Company.  In the interest of providing full disclosure, the remaining similarities do not get much more mind blowing than those stated above.  Regardless, Ms. Tanikumi obviously believes that she has been wronged by Disney, but whether she can prevail on these farfetched claims remains to be seen.

Based on the foregoing allegations, Ms. Tanikumi seeks $250 million dollars and an order that Disney “cease and desist from any and all sales, distribution, and marketing of Frozen in any media format.”  In more formal legal terms, Ms. Tanikumi is not only seeking monetary damages, but also an injunction to stop all future Frozen related commerce.  Although it is unclear whether there is any evidentiary support for Ms. Tanikumi’s allegations, what is clear is that her complaint is going to need substantial revision if it is going to survive a Rule 12(b) Motion to Dismiss under the Federal Rules of Civil Procedure due to the unpolished and conclusory manner in which it is currently drafted.  In any event, stay tuned for future developments.

The patent laws require that the claims of a patent (which define the boundaries of what the patent owner can protect) “particularly point out and distinctly claim the subject matter … of the invention.”  35 U.S.C. §112, ¶2.  This requirement is referred to as “definiteness.”  A patent that fails to satisfy this requirement may be found to be invalid for indefiniteness.

The purpose of the definiteness requirement is to provide the public with notice of what the patent owner owns, and what would be an infringement of the patent.  Thus, the definiteness requirement serves to encourage innovation by providing certainty as to what the patent protects.

This year, the United States Supreme Court vacated a Federal Circuit Court of Appeals decision on the grounds that the Federal Circuit’s test for indefiniteness was not precise enough and would result in confusion in the district courts.  The case is Nautilus, Inc. v. Biosig Instruments, Inc., 189 L.Ed. 2d 37 (June 2, 2014).

In 2004, the patent owner, Biosig, sued Nautilus for infringement of a patent covering a heart-rate monitor used in exercise.  Biosig’s heart monitor was different from existing heart monitors in that it was more accurate because it did not measure both electrical signals from the user’s heart and from the muscles.  The Biosig heart monitor used two pairs of electrodes, one pair for each hand of the user.  Biosig alleged that Nautilus, who owned the StairMaster brand of exercise machine, used the patented heart monitor in StairMaster machines.

In its claim construction decision, the district court for the Southern District of New York construed the phrase “spaced relationship” between the electrodes.  The district court held that this phrase means “a defined relationship,” but did not include any reference to the distance between the two pairs of electrodes.

Nautilus moved for summary judgment on the grounds that the “spaced relationship” was indefinite and rendered the patent invalid.  The district court granted the motion on the grounds that the phrase did not specify the distance between the pairs of electrodes or state how that distance should be calculated.

On appeal, the Federal Circuit reversed and remanded the case.  The court held that the test for indefiniteness is met “‘only when [the claim] is not amenable to construction or insolubly ambiguous.’”  Nautilus, supra, at 46, quoting the Federal Circuit’s decision, 715 F.3d 891, 898 (2013).  The Federal Circuit found that Biosig’s patent claims were not indefinite under this test.

On appeal to the Supreme Court, Biosig argued that a claim is definite enough to satisfy section 112 as long as it “provides reasonable notice of the scope of the claimed invention.”  Id. at 47.  Nautilus contented that a claim is indefinite if it is “ambiguous, such that readers could reasonably interpret the claim’s scope differently.”  Id.

In analyzing the issue, the Court explained that section 112 requires a balance.  There will always be some uncertainty, as “the price of ensuring the appropriate incentives for innovation.”  Id. at 47.  However, a claim must also:

“… be precise enough to afford clear notice of what is claimed, thereby ‘appris[ing] the public of what is still open to them.’  [Citations omitted.]  Otherwise there would be ‘[a] zone of uncertainty which enterprise and experimentation may enter only at the risk of infringement claims.’”

Id. at 48.

According to the Court, at 48, section 112 requires that:

“… a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty.”

The Court noted that patent applicants have an incentive to be as vague as possible in drafting claims.  Therefore, the Court found that the incentive must be reversed, and the burden should be on the applicant to draft clear and unambiguous claims.  Id. at 48.

The Court held that the Federal Circuit’s test of “amenable to construction” and “insolubly ambiguous” was too imprecise, and would cause confusion in the lower courts.  The Court stated, at 49:

“It cannot be sufficient that a court can ascribe some meaning to a patent’s claims; the definiteness inquiry trains on the understanding of a skilled artisan at the time of the patent application, not that of a court viewing matters post hoc.  To tolerate imprecision just short of that rendering a claim ‘insolubly ambiguous’ would diminish the definiteness requirement’s public-notice function and foster the innovation-discouraging ‘zone of uncertainty,’ against which this Court has warned.”

The Court did not address whether Biosig’s patent satisfied section 112’s definiteness requirement or was indefinite and therefore invalid, remanding the case to the Federal Circuit for that determination.

Gov. Jerry Brown has resurrected an expired law, Cal. Code of Civil Procedure section 128.5. This is a positive development for ethical lawyers and their clients, who find themselves dealing with bad-faith litigation tactics coming from another other party or attorney, but without a meaningful way to combat it. This law restores trial courts’ authority to award sanctions, including attorney’s fees, to a party if the other side engages in bad-faith tactics in litigation.

An almost identical version of Cal. Code of Civil Procedure section 128.5 had been in effect until December 31, 1994, but expired in 1995, leaving only its companion, Cal. Code of Civil Procedure section 128.7, in effect. That “watered down” statute was narrower, allowing sanctions for filing meritless and frivolous complaints, motions, or other pleadings, but not for other bad faith litigation tactics and conduct. Now, lawyers and parties will once again be subject to sanctions for conduct that is “totally and completely without merit” or done “for the sole purpose of harassing an opposing party.” Cal. Code of Civil Procedure section 128.7 will also remain effective.

“Prior to this bill, courts had tools to sanction lawyers who brought frivolous lawsuits but not sanctions if they behaved badly,” said Kim Stone, president of the Civil Justice Association of California. “Now, if the filing is legit, but the lawyer is behaving like a jerk, the court can smack them with the other side’s legal fees.”

The new law is in effect from January 1, 2015 until January 1, 2018, when the California Research Bureau will determine if the law was a demonstrable deterrent on bad-faith litigation conduct.

In the not so distant past, E & J Gallo Winery (“Gallo”) decided that it was not satisfied with only being a player in the wine business.  It decided to expand his horizons and venture into the tequila business, which is currently filled with such players as Patron, Don Julio, Jose Cuervo, and perhaps most importantly, 1800 Tequila (“1800”).  After placing a significant amount of time and effort into the release of its new tequila, Camarena, Gallo was informed that its supplier, Tequila Supremo, had received a cease and desist letter from Agavera Camichines S.A. de C.V. (“Agavera”), the holder of trademark and trade dress rights for the “1800 Tequila” brand.  Accordingly, Gallo brought suit for declaratory relief in the United States District Court in the Eastern District of California.

Agavera and co-defendant, Proximo Spirits Inc. (“Proximo”), counterclaimed that Gallo’s Camarena bottle design infringes Proximo’s registered trade dress and also constitutes false designation of origin under the Lanham Act and unfair competition under common law.  Gallo sought and prevailed on its motion for summary judgment before the Honorable Judge Lawrence J. O’Neill of the Eastern District of California.  Judge O’Neill found that Proximo failed to raise a genuine issue as to whether its trade dress was distinctive.  Furthermore, it was found that there was no likelihood of confusion between 1800 Tequila and Camarena.  Proximo moved for reconsideration on grounds that its trademark registration and related description of the 1800 Tequila bottle and stopper should have constituted sufficient evidence for a trier-of-fact to rely on in deeming the bottle distinctive.  Nonetheless, Judge O’Neill denied the request.  The court also denied Proximo’s motion to dismiss the declaratory judgment action on grounds that the court lacked subject matter jurisdiction.  As a result, Proximo appealed the decision to the Ninth Circuit to challenge the court’s ruling on the motion to dismiss and its grant of summary judgment on the counterclaims.  

The Ninth Circuit affirmed each point and held that under the Declaratory Judgment Act (“DJA”), an actual controversy exists between the parties.  Discovery revealed that Agavera and Proximo are part of a conglomerate known as “Grupo Cuervo.”  The Ninth Circuit stated that, “[I]n light of its findings, which are undisputed and supported by ample record evidence, the court did not err in holding that an actual controversy exists under the “DJA.”  The Ninth Circuit found that Proximo’s argument that Judge O’Neill deprived himself of jurisdiction to enter final judgment when he granted a motion by Gallo to voluntarily dismiss under Federal Rule of Civil Procedure 41(a)(2) was “almost out of hand.”  The Ninth Circuit stated that “[I]n this instance, the Court had already entered judgment on Appellants’ counterclaims and received Appellants’ statement of no opposition when it granted Gallo’s motion to voluntarily dismiss the declaratory action.  The contention that the granting of that unopposed motion somehow disposed of prior rulings on which judgment had already been entered is without merit.”

With regard to the merits of the counterclaim, the Ninth Circuit acknowledged that the disposition of an infringement claim is generally disfavored on summary judgment, and remained “mindful that likelihood of confusion is typically a question for the jury,” but nonetheless found “no factual dispute worthy of a jury.”  The Ninth Circuit stated that, “[A]fter reviewing the bottles and the record de novo, we conclude that the Camarena and 1800 trade dresses are so dissimilar that no reasonable juror could conclude otherwise.”  Thus, the Ninth Circuit affirmed every decision at issue in the appeal and the matter was concluded with Camarena to be distributed without further intellectual property contestations from Proximo.