Intellectual Property Archives - Page 47 of 53

Internet Search Adwords: Are Your Trademarks Protected?

Published: July 9, 2008

Search engine websites sell keywords as a component of their advertising programs. By purchasing an advertising keyword, a business’s advertisement will appear next to the search results whenever a person enters the advertising keyword as a search term. Trademark questions arise whenever a competitor purchases an advertisement keyword that is confusingly similar to the protected mark of another competitor, thereby causing its advertisement to pop up next to the search results.

The Northern District Court recently addressed this issue in Storus Corp. v. Aroa Marketing (2008) WL 449835 (N.D. Cal.). Storus sells a money clip under the mark “Smart Money Clip.” Defendant Aroa also sells money clips in addition to other luxury personal items. Aroa purchased the advertisement keyword “smart money clip” offered by Google as part of its internet advertising program known as “AdWords.” By typing “smart money clip” in Google’s search engine, Aroa’s advertisement would appear to the right of all other search results. Aroa’s advertisement appeared as:

“Smart money clip

www.steinhouseonline.com Elegant Steinhouse accessories. Perfect to add to any collection.

Storus sued, claiming that Aroa had used a mark that was confusingly similar to Storus’s valid, protectable trademark. Storus claimed that Aroa’s use of its mark created “initial interest confusion.”

“Initial interest confusion occurs when the defendant uses the plaintiff’s trademark in a manner calculated to capture initial customer attention, even though no actual sale was finally completed as a result of the confusion.” (Intrastellar Starship Services Ltd. v. Epix, Inc., 304 F.3d 936, 941 (9th Cir. 2002).) Initial interest confusion does not mean that a customer purchases one product, believing that they are actually purchasing the product of another. This is known as “source confusion.” Rather, initial interest confusion occurs when a defendant uses a plaintiff’s mark to divert people looking for the plaintiff’s product to the defendant’s website, thereby inappropriately benefiting from the goodwill plaintiff had established in its mark. (See Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1058 (9th Cir. 1999).)

In Storus, the Northern District Court found, without discussion, that Aroa had “used” plaintiff’s mark and focused its analysis on whether there was a likelihood of confusion by utilizing the eight Sleekcraft factors. (See AMF, Inc. v. Sleekcraft, 599 F.2d 341, 348-49 (9th Cir. 1979).) However, in the context of infringing use on the internet, the Court first evaluates what has been termed the “internet trinity”: (1) similarity of the marks; (2) relatedness of the goods or services; and (3) the parties’ simultaneous use of the Web as a marketing channel. If the “internet trinity” analysis suggests confusion, the burden shifts to the defendant to prove that the remaining Sleekcraft factors “weigh strongly against the likelihood of confusion.” (See Perfumebay.com v. eBay, Inc., 506 F.3d 1165, 1174-75 (Fed. Cir. 2007).)

The Storus court found a likelihood of confusion after evaluating the internet trinity. The Court also found that defendant had failed to present any evidence concerning a lack of actual initial interest confusion and failed to present any evidence weighing against the likelihood of confusion.

However, the Court came to a different conclusion with respect to the second defendant sued by Storus – SkyMall. Storus contended that SkyMall’s web page infringed its trademark because when a customer typed in the phrase “smart money clip,” the customer was directed to a page showing the Aroa money clip. However, the Court found a lack of factual evidence that SkyMall actually “used” the mark “smart money clip.” The evidence presented to the Court established that the reason the customer was directed to the Aroa money clip was because the search mark phrase “smart money clip” also included the phrase “money clip.” To prevail at trial, Storus will have to prove that SkyMall’s search engine directs a customer searching for “smart money clip” to a page in SkyMall’s electronic catalog that contains the entire phrase “smart money clip.” The evidence presented was insufficient to draw that conclusion at summary judgment.

The findings in Storus are consistent with prior Ninth Circuit opinions prohibiting a defendant from using a plaintiff’s mark in “metatags” by causing initial customer confusion. Although a customer immediately notices upon entering the website that it is not the website of the trademark holder and, therefore, there is no actual source confusion, the misdirection of the user as a result of the embedded metatags violates the initial confusion doctrine.

However, at least one other circuit court comes to a different conclusion. The Second Circuit Court of Appeals that the use of protected marks in metatags does not infringe another’s trademark. The Second Circuit, rather than focusing on the element of confusion, instead focuses on whether a defendant “uses” a mark in commerce by employing hidden metatags. Courts in the Second Circuit have consistently held that there is no trademark “use” if the mark is not placed on any product, good, or service or where the mark is not used in a way that would indicate source or origin. (See 1-800 Contracts, 14 F.3d 400 and FragranceNet.com, Inc. v. FragranceX.com, Inc., 493 F.2d 545, 550 (E.D.N.Y. 2007).) The Second Circuit Court has criticized the Ninth Circuit, accusing it of jumping to the “likelihood of confusion” prong without first properly analyzing whether the mark is “used in commerce.”

Defendants who find themselves appearing in courts in the Ninth Circuit need to focus on the “use” element of trademark infringement and encourage the court to heed the viewpoints set forth by Circuit Judge Berzone in his concurring opinion in Playboy Enterprises, Inc. v. Netscape Communications, 354 F.3d 1020, 1034 (C.A. 9 2004). Judge Berzon argues that the “initial interest confusion” doctrine should not be expanded into situations where a party is never confused. For example, Judge Berzon felt that a different result would occur if an internet advertisement, such as in Storus, clearly stated that the ad is not for the trademark owner’s product. Judge Berzon analogized the situation to a department store carrying multiple brands of jeans. If a customer asked the store clerk where she can locate Levi’s jeans, no trademark violation occurs when the clerk directs the customer to the area of the store containing Levi’s jeans as well as Calvin Klein jeans. Judge Berzon cautioned that the initial interest confusion doctrine should not expand to internet advertisements where a potential customer is simply advised of alternative competitive products through advertisements that clearly do not identify themselves with the mark of another.

Court Couldn’t Give A Quack About Generic Mark

Published: June 24, 2008

by Scott M. Hervey
The IP Law Blog

The First Circuit recently decided a case that exemplifies the downfall of building a brand around merely generic terms. No matter how long the mark owner may use a mark in commerce, it is going to be next to impossible to prevent competitors from using those generic components, even where the use is part of the competitor’s trademark.

Boston Duck Tours operated a sightseeing tour operation of the Boston area since 1994 and used renovated WWII amphibious vehicles commonly referred to as “ducks.” In 2001, Super Duck Tours began operation of a sightseeing land and water tour. Super Duck Tours originally operated its business solely in Portland, Maine. In 2007, Super Duck Tours expanded its operation and began to offer tours in certain parts of Boston not serviced by Boston Duck Tours.

In July 2008, Boston Duck Tours sued Super Duck Tours for trademark infringement. The district court granted Boston Duck’s motion for a preliminary injunction, finding that the term “duck tours” was non-generic for amphibious sightseeing tours in the Boston area and capable of protection. Super Duck Tours promptly appealed the district court’s decision, arguing that the phrase “duck tours” is generic for amphibious sightseeing tour services. The First Circuit Court of Appeals agreed with Super Duck Tours that the district court places a great an emphasis on the generic “Duck Tours” language.

In reviewing basic trademark principles, the Court of Appeals noted that a mark is entitled to trademark protection if it is capable of functioning as a source identifier of goods or services. Trademark law categorizes proposed marks along a spectrum of distinctiveness, with the most distinctive marks being those that are arbitrary or fanciful and the least being those that are generic or merely descriptive. The court noted that if a brand fails to achieve distinctiveness, either inherently or through the acquisition of secondary meaning, it does not have the legal status of a trademark or service mark.

Descriptive marks are those that convey an immediate idea of the ingredients, qualities or characteristics of the goods to which they are attached. Because descriptive marks are not inherently capable of serving as source-identifiers, such marks may only be registered on the Principal Register after the owner has provided sufficient evidence to establish that the public associates the mark not only with a specific feature or quality, but also with a single commercial source.

A generic term is one that does not have capacity as a source-identifier because it does not distinguish the goods of one from those of another. Instead, it is a term that, either by definition or through common use, has come to be understood as designating a particular class of goods. Because they serve primarily to describe products rather than identify their sources, generic terms are incapable of becoming trademarks, at least in connection with the products that they designate.

The lower court found that the term “duck tours” was not generic in connection with the services being offered. In reaching this decision, the lower court relied exclusively on a dictionary definition of “duck,” and did not take into account other references. The Court of Appeals noted that a dictionary definition is only one of several factors that should be taken into account when determining whether a brand is generic. Two other types of evidence generally considered in determining whether a designation is generic are uses by the media and other third parties, and uses within the industry generally.

The Court of Appeals considered the above type of evidence submitted by Super Duck Tours in coming to its conclusion that the term “duck tours” is generic for amphibious sightseeing tours. The Court noted the media and third parties in general refer to amphibious sightseeing tours as “duck tours.” The Court also noted the widespread uses of “duck” and “duck tours” by other companies around the country that provide the same amphibious sight-seeing services. The Court found that this evidence indicates that when consumers hear the term “duck tours” they associate it primarily with a product – amphibious sightseeing tours – rather than a source.

What’s the effect of having a generic designation incorporated into a mark? While the presence of a generic term or phrase in a full mark will not render the entire mark invalid, its presence does affect the analysis of whether a competitor’s mark containing the same component is likely to create confusion. Here, the Court of Appeals noted that Boston Duck Tours was a mark comprised of the generic “duck tours” phrase entitled to no trademark protection at all, coupled with “Boston,” a term that is generally entitled to little protection because it is geographically descriptive. (Because of the long running use of the Boston Duck Tours mark, the court noted that the mark as a whole acquired secondary meaning and is reasonably strong overall as an identifier of its services. Nonetheless, the Court made it clear that the generic part of the mark – the phrase “duck tour” – is entitled to no trademark protection at all.)

The Court of Appeals found that in granting the injunction, the lower court placed undue emphasis on the shared use of “duck tours” in the two marks. In determining whether the marks conflict, the lower court should have focused its inquiry on the non-generic words which comprise the remainder of the marks, which in this case are “Boston” and “Super.”

The lesson in this case for mark owners is, if you want a strong brand, resist incorporating terms that are generic into a brand. (I would even caution against incorporating terms that are extremely descriptive as the line between being extremely descriptive and generic can be a very thin one.) No mater how long you use it and no matter how much advertising money you put behind it, you will never be able to prevent a competitor from using it.

Lack of Enablement – A Stronger Tool for Invalidity

Published: June 4, 2008

by Audrey A. Millemann
The IP Law Blog

One of the requirements of a valid patent is enablement. As set forth in 35 U.S.C. section 112, paragraph 1, a patent’s specification must contain “a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same.” The Court of Appeals for the Federal Circuit has explained that the enablement requirement is met “when one skilled in the art, after reading the specification, could practice the claimed invention without undue experimentation.” AK Steel Corp. v. Sollac, 344 F.3d. 1234, 1244 (Fed. Cir. 2003). Although anticipation or obviousness based on the prior art is a more frequently asserted basis for invalidating a patent in patent infringement litigation, the Federal Circuit’s decision in Sitrick v. Dreamworks, LLC, 516 F.3d. 993 (Feb. 1, 2008) suggests that lack of enablement may be becoming a far more powerful tool.

In Sitrick, the plaintiff owned two patents that covered technology that allows integration of a user’s audio signals or visual image into a preexisting video game or movie. The specifications of the two patents described the invention as it was used in video games, but the claims covered both video games and movies. Dreamworks produced DVDs that included a product that permitted users to add their own voice to movies. Sitrick sued Dreamworks for infringement of both patents.

During claim construction, Dreamworks argued that the claims should be narrowed to cover only video games. The plaintiff opposed that construction, and the court construed the claims as plaintiff requested, to cover both video games and movies.

Dreamworks moved for summary judgment, including for invalidity for lack of enablement. The District Court for the Central District of California granted the motion, finding all of the challenged claims invalid for lack of enablement with respect to movies.

The Court of Appeals affirmed. The court explained that in order to satisfy the enablement requirement, “the full scope of the claimed invention must be enabled.” Sitrick, supra, at 999. The court explained its rationale:

“Enabling the full scope of each claim is ‘part of the quid pro quo of the patent bargain.’ AK Steel, supra, 344 F.3d. at 1244. A patentee who chooses broad claim language must make sure the broad claims are fully enabled. ‘The scope of the claims must be less than or equal to the scope of the enablement’ to ‘ensure that the public knowledge is enriched by the specification to a degree at least commensurate with the scope of the claims.’[citation omitted].”

The court found that because the district court had construed the claims to cover both video games and movies (as the plaintiff had argued), the patents had to enable both embodiments. The specifications described the detailed steps required for integrating a visual image into a video game, but these steps were not usable for the same process in movies and the patents did not describe how to integrate an image into a movie.

The court stated that it was irrelevant if the patents were enabled for video games – the enablement requirement was not met unless the patents were enabled for both embodiments of the invention, video games and movies. Sitrick, supra, at 1000.

The court held that Dreamworks’ evidence, consisting of the specifications of the two patents and expert testimony, was clear and convincing evidence of lack of enablement. The patents did not teach how to use, in movies, the technology described for using the invention in video games. In addition, defendants’ experts testified that a person skilled in the art could not use the specifications to utilize the invention in movies because video games and movies differed in many respects.

In an earlier case, Automotive Technologies International, Inc. v. BMW of North America, Inc. 501 F.3d. 1274 (Fed. Cir. 2007), the court reached the same conclusion. In that case, the plaintiff’s patent covered side impact sensors used in airbags. The patent’s specification described mechanical sensors in detail, but also mentioned electronic sensors, and the claims covered both types of sensors. The district court granted a defendant’s motion for summary judgment on invalidity on the grounds that the full scope of the claims covered electronic sensors as well as mechanical sensors, but the specification did not teach a person skilled in the art how to make and use the invention with an electronic sensor.

On appeal, the plaintiff argued that because one embodiment, mechanical sensors, was enabled, the claims were enabled. The Court of Appeals held to the contrary, at 1285:

“…[T]he claim construction of the relevant claim limitation resulted in the scope of the claims including both mechanical and electronic side impact sensors. Disclosure of only mechanical side impact sensors does not permit one skilled in the art to make and use the invention as broadly as it was claimed, which includes electronic side impact sensors. Electronic side impact sensors are not just another known species of a genus consisting of sensors, but are a distinctly different sensor compared with the well-enabled mechanical side impact sensor that is fully discussed in the specification. Thus, in order to fulfill the enablement requirement, the specification must enable the full scope of the claims that includes both electronic and mechanical side impact sensors, which the specification fails to do.”

The plaintiff also argued that a person skilled in the art would be able to figure out how to use an electronic sensor in the invention. The court disagreed. “‘It is the specification, not the knowledge of one skilled in the art, that must supply the novel aspects of an invention in order to constitute adequate enablement.’ Although the knowledge of one skilled in the art is indeed relevant, the novel aspect of an invention must be enabled in the patent.” Id. at 1283. The court explained that “when there is no disclosure of any specific starting material or of any of the conditions under which a process can be carried out, undue experimentation is required.” Id. at 1284.

Thus in both Strick and Automotive Technologies, the plaintiffs had sought and obtained a broad claim construction, but had lost the case on summary judgment due to their failure to show that the scope of the claims was enabled.

Some commentators have questioned whether the Federal Circuit is setting the enablement standard too high. That remains to be seen. At this point, however, it is clear that patent litigation plaintiffs should carefully consider the specification in seeking a broad claim construction, and defendants should scrutinize the broad claims to see if invalidity based on lack of enablement can be asserted.

Intentional Interference Claims and Preemption by the California Uniform Trade Secrets Act

Published: May 22, 2008

by James Kachmar
The IP Law Blog

On March 5, 2008, the United States District Court for the Northern District of California (“District Court”) in First Advantage Background Services Corp. v. PrivateEyes, Inc., (“First Advantage”) found, inter alia, that the California Uniform Trade Secrets Act, California Civil Code section 3426, et seq. (“CUTSA”) preempts common law claims for intentional interference that are based on wrongful acts amounting to misappropriation of trade secrets. The First Advantage opinion holds that claims for intentional interference that are based on wrongful acts amounting to misappropriation of trade secrets may be preempted by CUTSA.

PrivateEyes, a California corporation who conducts background checks for employers, entered into an agreement with First Advantage’s predecessor, whose duties First Advantage assumed. First Advantage agreed not to use confidential information received from PrivateEyes to solicit business from vendors with whom PrivateEyes was in contract. First Advantage solicited business despite the agreement not to, and also disclosed PrivateEyes’ confidential and proprietary information to the same vendor. After First Advantage sued PrivateEyes alleging a number of claims related to their agreement, PrivateEyes filed a counterclaim asserting various causes of action. First Advantage filed a motion to dismiss some causes of action found in PrivateEyes’ counterclaim. The District Court granted First Advantage’s motion in part, allowing PrivateEyes leave to amend some of the claims, which PrivateEyes did when it filed its First Amended Counterclaim. Thereafter, the District Court entertained First Advantage’s motion to dismiss.

The District Court began its discussion by addressing First Advantage’s motion to dismiss PrivateEyes’ fifth cause of action: intentional interference with prospective economic advantage. Citing Korea Supply Co. v. Lockheed Martin Corp., the District Court noted that PrivateEyes would need to satisfy the following elements in order to prevail: “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.”

In dismissing PrivateEyes’ intentional interference claim in PrivateEyes’ initial counterclaim, the District Court found that the intentional interference claim failed to “allege an independently wrongful act outside a simple breach of contract,” a necessary requirement to satisfy the intentional interference claim’s third element. To survive a motion to dismiss, PrivateEyes would have to “plead and prove that the defendant’s acts are wrongful apart from the interference itself.” An independently wrongful act is one that “is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” PrivateEyes’ amended counterclaim alleged three specific independently wrongful acts in an attempt to satisfy the third element of the intentional interference claim: misappropriation of trade secrets, breach of confidence, and trade libel.

PrivateEyes alleged that First Advantage misappropriated trade secrets in violation of CUTSA because it improperly disclosed PrivateEyes’ confidential information, including PrivateEyes’ profit margins. First Advantage argued, however, that CUTSA preempted PrivateEyes’ intentional interference claim because CUTSA preempts any common law claim based on conduct which could support a trade secret claim. Relying on Reeves v. Hanlon, a California Supreme Court case, PrivateEyes argued that trade secrets misappropriation can form the basis of an intentional interference claim.

In Reeves, the court found the defendants “violated CUTSA for stealing a confidential client list, and found to have committed intentional interference based on wrongful acts including destruction of the plaintiffs’ computer files, misappropriation of confidential information, and improper solicitation of plaintiffs’ clients.” The District Court disagreed with PrivateEyes’ reading of Reeves. Specifically, the District Court stated that although Reeves discussed misappropriation in its analysis of the intentional interference claim, that discussion in and of itself did not “foreclose preemption” for a number of reasons. First, the District Court noted that the defendant in Reeves had not raised the issue of preemption. This was important because in San Jose Constr., Inc. v. S.B.C.C., Inc., the appellate court refused to rule on CUTSA preemption because the issue of preemption had not been raised below. Second, Reeves is distinguishable as it was specifically limited to whether an employer could bring an intentional interference claim against a competitor that hired the employer’s former at-will employees. Lastly, because there was no dispute as to the wrongful acts beyond misappropriation, the preemption analysis would have had no impact on the court’s decision. The District Court recognized that in Cadence Design Sys., Inc. v. Avant! Corp., the only other California Supreme Court decision on point, the court suggested that CUTSA preempted all common law claims based on trade secret misappropriation.

The District Court also discussed California Civil Code section 3426.7(b), which identified the three categories of cases not preempted by CUTSA. Specifically, in addition to cases based on breach of contract and criminal remedies, any claims not based on trade secret misappropriation are not preempted by CUTSA. As a result, courts have interpreted this statute to mean that all claims which are based on trade secret misappropriation are preempted by CUTSA.

Applying this rule to PrivateEyes’ allegations in their First Amended Counterclaim, the District Court recognized that PrivateEyes had specifically alleged a CUTSA violation. Because the intentional interference claim was a common law claim based on trade secret misappropriation, the District Court held that CUTSA preempted the claim.

The District Court also addressed PrivateEyes’ additional support of its intentional interference claim. Specifically, PrivateEyes alleged that First Advantage had engaged in a common law breach of confidence because it had improperly disclosed PrivateEyes’ “confidential and proprietary information to CCE in violation of its agreement to maintain the confidential nature of this information.” However, the District Court was critical of PrivateEyes’ breach of confidence claim because the language and facts used “in support of its allegation of breach of confidence are identical to those [PrivateEyes] offered in support of its misappropriation claim.” Further, the District Court noted that the only other difference between the two claims was the existence of a contract, which by itself is inadequate to avoid preemption. Thus, the District Court held that CUTSA preempted the intentional interference claim based on breach of confidence because this was “still a common law claim based on facts which would amount to the misappropriation of trade secrets.”

The District Court’s decision in the First Advantage case suggests that CUTSA will preempt any claims for intentional interference that are based on wrongful acts amounting to misappropriation of trade secrets. Although the plaintiff in First Advantage attempted to avoid preemption by CUTSA by basing its intentional interference claim on misappropriation of trade secrets and breach of confidence, the District Court followed an increasing body of authority holding that any common law claims based on trade secret misappropriation are preempted by CUTSA.

Google Loses Initial Cybersquatting Battle

Published: May 7, 2008

by Jeffrey Pietsch
The IP Law Blog

Google may soon be facing an expensive and damaging class action lawsuit. A federal court ruled last month that Google can be sued for its role in serving ads on websites that use domain names that violate trademark and cybersquatting laws. This case is significant because Google is not the owner or user of the infringing domain names. Google is simply providing advertising services to these domain names. Google, seeking dismissal of the case, argued along these lines. The court, however, held that Google may be liable for cybersquatting.

This case was brought against Google by Vulcan Golf, a golf club manufacturer. Vulcan Golf claims that Google is encouraging and profiting from owners and users of domain names that violate cybersquatting laws. Vulcan Golf has sued Google on the basis that Google is benefitting from and encouraging cybersquatters by capitalizing on valid trademarks, such as Vulcan Golf.

The Anticybersquatting Consumer Protection Act (ACPA), established in 1999, provides trademark holders protection from cybersquatters. Cybersquatting is registering and using a domain name in bad faith with the intent of profiting from the goodwill created by another’s trademark. Cybersquatters often seek to sell the domain name to the trademark holder at an inflated price. In the early days of the internet, who ever registered a domain first had rights to that domain name. Many individuals bought names hoping to later sell them for exorbitant sums of money. For example, the generic domain name business.com sold for 7.5 million dollars in 1999. Concerned about this environment as it relates to federally registered trademarks, Congress passed the ACPA. The ACPA gives trademark owners legal remedies against defendants who cybersquat.

In this case, Vulcan Golf is not concerned with cybersquatters who seek to sell domain names, but, rather, they are concerned with cybersquatters who are providing empty sites that feature advertisements from Google’s AdSense program. For example, a cybersquatter may own a web address that is similar to the trademark but slightly misspelled. When a user mistakenly types in the wrong web address, an empty page appears featuring ads from Google. These ads will be targeted to the audience that typed in the incorrect domain name. If the user clicks on the ads, the domain name owner and Google earn money. Vulcan Golf claims since Google is benefiting from the illegal domain names, they are violating the ACPA.

In order to show a violation of the ACPA, the plaintiff must show that the defendant:

1. has a bad faith intent to profit from the registered trademark; and

2. registers, traffics in, or uses a domain name that is identical, confusingly similar, or, in cases of famous marks, dilutive of a mark that is distinctive or famous at the time the domain name was registered.

Google requested that the case be dismissed because the plaintiffs failed to show these two elements. Google’s main defense was that they can’t be found liable for violations under the ACPA because Google did not register, own or use the infringing domain names. Google argued that their role was merely providing advertising through their AdSense programs.

Despite these arguments, the court ruled that Google may be liable under the ACPA even if they do not own, register or use the infringing domain names. The court found it is plausible that Google participated in the “trafficking in” of an infringing domain name. The Court stated, “Google pays registrants for its use of the purportedly deceptive domain names, provides domain performance reporting, participates in the testing of domain names, uses semantics technology to analyze the meaning of domain names and select revenue maximizing advertisements and controls and maintains that advertising.”

It is this broad interpretation of “trafficking in” that may lead to a flood of lawsuits under the ACPA. Before this ruling, only owners and users of domain names were held liable under the ACPA. If Google, with its deep pockets, is now liable under the ACPA, expect to see many more lawsuits filed against them under the ACPA.

Superman and a Super Copyright Battle

Published: April 2, 2008

by Scott M. Hervey
The IP Law Blog

On March 26, 2008, the District Court for the Central District of California issued an order closing one chapter to a long running battle between the heirs of one of the original creators of the iconic comic book superhero, Superman, and DC Comics. The court’s order addressed the heirs’ attempt to exercise their rights under the termination provision contained in the Copyright Act of 1976; a formalistic and complex statutory scheme which allows authors and their heirs to terminate a prior grant of copyright in a creation.

At issue in the case was a 1938 grant (and other purported grants) by Jerome Siegel and his creative partner Joseph Shuster, of the copyright in the first edition of Superman published by DC Comics. The court’s order is a detailed 72 page ruling which devotes great consideration to the story behind the creation of Superman. As the court notes, “any discussion about the termination of the initial grant to the copyright in a work begins with the story of the creation of the work itself.”

In 1932 Jerome Siegel and Joseph Shuster were teenagers at Glenville High School in Cleveland, Ohio. Siegel was an aspiring writer and Shuster an aspiring artist. The two men met while working on their high school newspaper and discovered a shared passion for science fiction and comics.

In January, 1933, Siegel and Shuster first introduced the Superman character in a short story, The Reign of the Superman. The story told of a mad scientist’s experiment with a “deprived man from the bread lines,” and the creation of a villain with superhuman powers. A short time later, inspired to introduce a literary character which would bring hope amidst the general despair felt by most as a result of the Depression, Siegel revised the Superman character from a villain to a hero.

Siegel and Shuster made numerous attempts to get their current version of Superman published. The comic book publisher Detective Dan was the first potential publisher. However, Detective Dan later rescinded its offer. Undaunted rejections, Siegel and Shuster continued to work on Superman. They enhanced his powers and modified the format from comic book to newspaper comic strip.

By 1934, Siegel and Shuster had transformed the Superman character to its present day incarnation. Dressed in its now well known cape and outfit, complete with the “S” crest on its chest, Superman possessed superhuman strength, had the ability to jump an eight of a mile and leap a twenty story building; the character could run faster than an express train and was impervious to gunfire. Siegel and Shuster had also developed the concept of Superman’s secret identity and humanized this character by giving it an “ordinary person” alter ego in the form of Clark Kent.

The two shopped Superman for a number of years to numerous publishers but were unsuccessful. During that time, Siegel and Shuster wrote other comic strips that were sold to Nickelson Publishing Company. When Nickelson closed up in 1937, Detective Comics acquired some of the comic properties that Siegel and Shuster had written. On December 4, 1937, Siegel and Shuster entered into an agreement with Detective Comics and agreed to continue to furnish these comics for the next two years. The agreement also gave Detective Comics a sixty day option to publish any new material created by Siegel and Shuster.

Soon thereafter, Detective Comics decided to issue a new comic book magazine entitled Action Comic and became interested in Siegel and Shuster’s Superman material. With Detective Comics intending to publish Superman in an expanded thirteen page format, Siegel and Shuster began work on revising and expanding the existing Superman newspaper material into a format suitable for a comic book. In February, 1938 Siegel and Shuster resubmitted their Superman material to Detective Comics. On March 1, 1938, prior to the printing of the first issue of Action Comics, Detective Comics sent Siegel a check for $130.00 (representing the per page rate for the thirteen page Superman comic book) and a written agreement for Siegel and Shuster’s signature. The agreement assigned to Detective Comics “[all] the goodwill attached…and exclusive right[s]” to Superman “to have and hold forever.” Siegel and Shuster signed and returned the written assignment to Detective Comics.

Siegel and Shuster’s grant of worldwide ownership rights in Superman was later confirmed in a September 22, 1938 employment agreement in which Siegel and Shuster acknowledged that Detective Comics was “the exclusive owner of Superman.” This agreement also provided for Siegel and Shuster to continue to supply the artwork and storyline for Superman at a per page rate for the next five years.

Superman was published by Detective Comics on April 19, 1938 in Volume One of Action Comics. The comic was highly successful. However, while Superman continued to grow in popularity, a rift developed between the two creators, and Detective Comics. The parties engaged in legal bouts and disputes beginning in 1947, when Siegel and Shuster brought an action against Detective Comics seeking, among other things, to rescind their previous agreements with Detective Comics based lack of mutuality and consideration. The parties litigated again in 1969 as a result of the expiration of the initial copyright term for Superman. Siegel and Shuster brought suit seeking a declaration that they, not Detective Comics, were the owners of the renewal rights to the Superman copyrights. The results were not fruitful, and in 1970 the Federal District Court in New York ruled that the March 1, 1938 grant to Detective Comics (which was reconfirmed in a 1948 stipulation) had transferred and assigned to Detective Comics not only the initial copyright term, but the renewal term in the Superman copyrights as well.

In 1976, Congress made substantial changes to the Copyright Act, and these changes would have a great and profound affect on Siegel and Shuster and their grant of rights to Detective Comics. The 1976 Act expanded the duration of the renewal term for works like Volume One of Action Comics that were already in their renewal term at the time of the Act’s passage. Additionally, the Act gave artists and their heirs the ability to terminate any prior grant of rights to their creation where the grants were executed before January 1, 1978. The purpose was to protect authors, given their lack of bargaining power. Specifically, Section 304(c) of the Act provided that any copyright subsisting in either its first or renewal term on January 1, 1978, other than a copyright in a work for hire, the exclusive or non-exclusive transfer or license executed before January 1, 1978 is subject to termination notwithstanding any agreement to the contrary. It was this right of termination that spurred ten years of negotiation and litigation between the heirs of Jerome Siegel and Detective Comics, its parent company Time Warner, and their affiliated entities.

While the 1976 Act created a new right allowing authors and their heirs to terminate a prior grant of copyright, the Act also set forth specific steps concerning the timing and contents of the termination notice that must be served in order to effectuate termination. The termination of a grant may be effective “at any time during a period of five years beginning of the end of 56 years from the date the copyright was originally secured” and the notice of termination must by served “not less than two or more than ten years” before its effective date. These statutory requirements, along with regulations promulgated by the Register of Copyright made the termination process difficult, complex and extremely technical. However, through assistance of able counsel, the Siegel heirs were able to serve seven separate notices of termination on April 3, 1997, purporting to terminate several of Siegel’s grants in the Superman copyright. The parties negotiated until February, 2002 but were unable to come to terms. Litigation commenced in 2004.

Detective Comics attacked the enforceability of the termination notices and claimed that certain portions of the Superman comic in Volume one of Action Comics were in the nature of a work for hire and not subject to termination. Detective Comics raised other technical challenges to the claims made by Siegel’s heirs. Although highly technical and intricate, the court essentially ruled in favor of Siegel’s heirs and returned to them the copyright in the Superman material that was published in Volume one of Action Comics. Left undecided was how to apportion the profits from the exploitation of new derivative works on a going forward basis. (A termination of rights does not affect the post termination utilization and exploitation of derivative work prepared before termination.) The Court noted that section 304(c)(6)(E) would appear to exclude the Siegel heirs from sharing in profits derived from the foreign exploitation of the Superman material. Additionally, the Court noted that profits derived form the use of the Superman trademarks need not be shared with the Siegel heirs. Also left open is the issue of an accounting for profits resulting from the exploitations of the works by Detective Comics’ corporate siblings, Warner Brothers Entertainment and its corporate parent Time Warner Inc. The genesis of this claim stems from certain inter-corporate transactions concerning the Superman copyright. In noting that summary judgment was inappropriate (and surely ensuring another ten years of litigation), the court noted that “whether the license fees paid represents the fair market value…or whether the license for the works was a sweetheart deal…” are questions of fact that are not answered on summary judgments.

Trademark Infringement: Factors Considered in Consumer Confusion

Published: March 26, 2008

by Jeffrey Pietsch
The IP Law Blog

Trademark infringement occurs when a third party uses a mark in a way that infringes upon a trademark owner’s exclusive right and use of a trademark. Often, the third party will use a similar mark in a way that confuses consumers as to the source of the goods and services. For example, a fast food restaurant named “Wendi’s” would likely cause confusion with “Wendy’s.” Trademark infringement can occur only when it is likely that consumers will be confused as to the source of the goods. The purpose of this article is to examine the test and factors that courts use to determine if such infringement exists.

Many courts have developed a balancing test to determine if a mark infringes on another. This balancing test has largely grown from the seminal case Polaroid Corp. v. Polarad Elect. Corp., 287 F.2d 492 (2nd Cir. 1961). In that case, the court identified several variables to consider when assessing if a mark is infringing on another mark. This balancing test seeks to determine if consumers would likely be confused as to the source of the marks. If the test favors that confusion would likely result, then the court will likely rule that infringement exists. On the other hand, if confusion is unlikely or minimal, the court will likely rule against infringement.

The following are factors used by courts to assess the possibility of trademark infringement by looking at the likelihood of consumer confusion. Not one of these factors is dispositive to the issue of consumer confusion, and each factor must be examined in the context of the ultimate likelihood of confusion.

The first factor the court will look at is the strength of the marks in question. The strength of the marks is determined by distinctiveness of the mark. The more unique and distinct the mark, the more likely the mark will be protected against junior users. On the hand, the more descriptive and generic the mark, the less protection courts will provide to these marks. For example, the mark KODAK will receive more protection than a similar product that uses the mark FAST PHOTO.

Another factor examined is the similarity between the marks. Similarity of marks is tested based on sight, sound and meaning. The marks will be considered in their entirety to determine any similarities. A mark that looks different from another but gives off a similar commercial impression might be considered similar and thus weigh in favor of confusion. For example, a trademark that consisted of the word MONEY might be confused with the mark $$$ because the marks have similar commercial impressions.

The courts will also look at the proximity of the goods in the marketplace. This test relates to the channels of trade used by the goods. The more related the goods the greater the likelihood that they would exist together in the marketplace. Similar marks that are also are related would likely cause confusion as to the source of those goods. Highly related goods are more likely to cause confusion compared to unrelated goods.

The above three factors weigh heavily in determining likelihood of confusion. A mark will not be found confusingly similar with another mark if the two are not found similar in one of these areas, and the complaining mark is considered a weak mark.

After reviewing these, the courts will examine the likelihood that the prior owner will “bridge the gap” in the marketplace. This factor addresses the possibility that a mark will expand into other product lines. The more likely expansion will occur, the more likely consumer confusion will exist.

Next the courts examine evidence of actual confusion. When a case is brought to trial, the evidence is usually in the form of consumer surveys done by the parties. Survey evidence of this nature is often critical in determining likelihood of confusion in infringement cases.

The courts will also look to the sophistication of the buyers of the goods or services to determine likelihood of confusion. Courts have found that sophisticated buyers, such as those who have expertise in a specific area, are less likely to be confused by similarities in marks. In addition, courts have held that consumers of goods and services that are expensive exercise a higher degree of care in making these expensive purchasers. For example, a consumer would exercise a higher degree of care when purchasing a car compared to when that consumer purchases a piece of candy.

The last factor courts examine in a trademark infringement case is the intent of the defendant. If the defendant copies an existing trademark in bad faith to capitalize on that trademark’s goodwill, the courts will lean in favor of finding infringement. The likelihood of confusion, however, is the main consideration in determining infringement regardless of intent. If an individual copies a mark that does not lead to consumer confusion, the courts will likely not find infringement.

The above are not a rigid set of factors used by the courts. Most jurisdictions use some form of the above factors to determine if a likelihood of confusion exists. Regardless of the different variations, courts ultimately are seeking to discover if marks, as they are used in commerce, cause consumer confusion and lead to trademark infringement.

The Ninth Circuit Just Doesn’t Like Karaoke

Published: March 19, 2008

The IP Law Blog

The Ninth Circuit just doesn’t like karaoke. At least, that’s what plaintiffs, manufacturers of karaoke machines, in two recent opinions involving copyright law would likely say. In both decisions, the Ninth Circuit affirmed the district courts’ dismissal of the complaints without leave to amend. Both of these decisions discussed the various copyrights that are implicated in a karaoke device, including the copyright of the performance of the song itself, the song lyrics, and the synchronization of the two. Both decisions also involved the licenses required by karaoke device manufacturers.

In the first, Leadsinger, Inc. v. BMG Music Publishing, 512 F3d 522 (9th Cir. 2008), the court addressed a matter of first impression in the Circuit: How does the Copyright Act apply to karaoke devices? Plaintiff Leadsinger is a karaoke device manufacturer. The device it manufactures is “an all-in-one microphone player” that connects directly to a television and has recorded songs imbedded in a microchip in the microphone. While playing, the Leadsinger device, like most karaoke devices, plays music and projects the song lyrics visually on the screen synchronized with the music.

Copyright law grants the copyright owner the exclusive rights reproduce and distribute the copyrighted work in “phonorecords.” However, as the Leadsinger court noted these exclusive rights are subject to a compulsory license under section 115, which “subjects phonorecords to a compulsory licensing scheme that authorizes any person who complies with its provisions to obtain a license to make and distribute phonorecords of a nondramatic musical work.” If, as Leadsinger argued, its karaoke device was a “phonorecord,” then the compulsory license under section 115 would allow the use of the songs and lyrics.

The gravamen of the dispute involved license fees that BMG demanded of Leadsinger. As the court explained, “in addition to the mechanical fee required under to secure a compulsory license, BMG has demanded that Leadsinger and other karaoke companies pay a ‘lyric reprint’ fee and a ‘synchronization fee.’ Leadsinger has refused to pay these additional fees and filed for declaratory judgment to resolve whether it has the right to visually display song lyrics in real time with song recordings….” In essence, Leadsinger believes that the compulsory mechanical license under 17 U.S.C. § 115 should cover everything, and it should not be required to pay a separate fee to show the lyrics or to synchronize the lyrics with the music.

The Copyright Act defines “phonorecords” as “material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.” 17 U.S.C. § 101. “Audiovisual works” are defined as “works that consist of a series of related images which are intrinsically intended to be shown by the use of machines, or devices such as projectors, viewers, or electronic equipment, together with accompanying sounds, if any….” Id.

The Ninth Circuit found that the use of the lyrics, in projecting them on the screen synchronized with the music, met every element of an “audiovisual work,” and therefore was not a phonorecord. The court found that the “images of successive portions of song lyrics are ‘intrinsically intended to be shown by the use of machine [sic] … together with accompanying sounds.’” As an audiovisual work, it was excluded from the compulsory licensing scheme in § 115.

The end result was that Leadsinger could not rely just on the compulsory license fees it paid to BMG to make and distribute copies of phonorecords, it also had to pay BMG fees for synchronization licenses and reprint licenses to display the song lyrics.

In the second case, Sybersound Records, Inc. v. UAV Corp. et al., — F3d —, 2008 WL 509245 (9th Cir. 2008), the Ninth Circuit continued its apparent disdain for karaoke. In that case, Plaintiff Sybersound Records, another karaoke device manufacturer, sued several of its competitors over the same licenses that were at issue in Leadsinger. In Sybersound, however, the complaint was that the other manufacturer defendants were not paying the license fees, therefore they were able to undercut Sybersound’s prices and compete unfairly. Sybersound claimed it was injured because it did pay all required license fees, and therefore its costs were higher than his competitors.

Sybersound’s problem, however, is that they didn’t own the copyrights on which they claimed the license fees were due. Because it didn’t own the copyrights, Sybersound did not have standing to complain about the actual infringement due to failure to pay the license fees. Apparently recognizing this problem, Sybersound sued instead for violations of California’s unfair competition law, RICO violations, and intentional interference. But all of these claims rested on one alleged wrong – the infringement of the copyrights Sybersound lacked standing to address. The court held that because Sybersound lacked standing to sue for copyright infringement, it also lacked standing to sue for related claims that required the copyright claims to be decided. The court also held that the unfair competition claim was preempted by the federal Copyright Act. Therefore, the court affirmed the dismissal of the complaint without leave to amend.

Thus, for the second time in two months, the Ninth Circuit pulled the plug on karaoke plaintiffs. However, in so doing, it left us with a few reminders of what should probably be obvious points. First, karaoke devices, and the recordings that are played on them, contain more than one copyright. Each of these rights is separate and requires a separate license. Second, a plaintiff can only complain of the infringement of rights it owns. And third, a plaintiff cannot easily plead around this standing requirement by recasting its complaint in terms of other related claims. Or perhaps it’s really as simple as the Ninth Circuit just doesn’t like karaoke.

Federal Circuit Applies Supreme Court’s New Test for Declaratory Judgment Jurisdiction

Published: March 18, 2008

by Audrey A. Millemann
The IP Law Blog

The Federal Circuit Court of Appeals recently reversed a district court’s dismissal of a declaratory judgment action, relying on the Supreme Court’s decision in MedImmune Inc. v. Genentech Inc., 127 S.Ct. 764 (2007). See Micron Technology, Inc. v. MOSAID Technologies, Inc., 2008 WL 540182 (Feb. 29, 2008)

Micron was one of the four largest manufacturers of dynamic random access memory (DRAM) chips. Micron, together with Samsung Electronics Company, Ltd, Hynix Semiconductor, Inc., and Infineon Technologies of North America, controlled seventy-five percent of the worldwide market for these chips.

MOSAID held patents on the circuit technology that was used in the manufacture of DRAM chips. In 2001 and 2002, MOSAID sent a series of four letters to Micron inviting Micron to license MOSAID’s patents.

After sending letters to all four of the manufacturers who declined to enter into licenses with MOSAID, MOSAID began patent infringement litigation against each of the manufacturers. MOSAID first sued Samsung. Infineon then sued MOSAID for declaratory judgment of noninfringement. MOSAID and Samsung settled. MOSAID then sued Hynix, who later settled. MOSAID then settled with Infineon. In each settlement, MOSAID granted the manufacturer a license under its patents. MOSAID made statements in public and in its 2005 annual report that it intended to “aggressively” pursue all other DRAM manufacturers to force them to license MOSAID’s technology, and that it would be “unrelenting” in its litigation strategy. The industry believed that Micron was the next target of MOSAID.

In July 2005, Micron filed a declaratory judgment in the Northern District of California seeking a declaration of noninfringement of 14 patents owned by MOSAID. The following day, MOSAID sued Micron and two other defendants, in the Eastern District of Texas, for infringing seven patents. MOSAID later added one more defendant and three more patents to the Texas action.

MOSAID then moved to dismiss the California action for lack of subject matter jurisdiction. The district court granted MOSAID’s motion on the grounds that Micron had no reasonable apprehension of being sued by MOSAID. The district court found that there was no evidence of threats from MOSAID to Micron for the last four years, no threats from MOSAID to Micron’s customers, and no public statements by MOSAID that it intented to sue Micron.

Micron appealed and the Federal Circuit reversed.

The court first held that the district court in California did have subject matter jurisdiction over the case. The district court had applied the wrong test – the “reasonable apprehension” test is not the proper test, according to the Supreme Court in MedImmune. The correct test, which the appellate court repeatedly stated “is more lenient,” is “whether the facts alleged under all the circumstances show that there is a substantial controversy between parties having adverse legal interests of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Micron, quoting MedImmune, 127 S.Ct. at 771.

In applying this test, a district court must look at the evidence of all of the circumstances. In this case, the evidence included the series of letters from MOSAID to Micron, the previous suits from MOSAID against the other three manufacturers, and MOSAID’s public statements of its intent to aggressively pursue litigation against the remaining manufacturers.

The appellate court explained that this case was just the type of case for which the Declaratory Judgment Act was intended. The court explained the purpose of the Act as follows, quoting from a previous decision in Electronics for Imaging, Inc. v. Coyle, 394 F.3d 1341, 1346 (Fed. Cir. 2005):

“[A] patent owner…attempts extra-judicial patent enforcement with scare-the-customer-and-run tactics that infect the competitive environment of the business community with uncertainty and insecurity…Before the Act, competitors victimized by that tactic were rendered helpless and immobile so long as the patent owner refused to grasp the nettle and sue. After the Act, those competitors were no longer restricted to in terrorem choice between the incurrence of a growing potential liability for patent infringement and abandonment of their enterprises; they could clear the air by suing for a judgment that would settle the conflict of interests.”

The court next addressed the district court’s discretion not to hear a case even if it has subject matter jurisdiction. The court explained that, based on MOSAID’s filing of its patent infringement suit against Micron in Texas one day after Micron filed its declaratory judgment action in California, “the parties in this dispute are really just contesting the location and right to choose the form for their inevitable suit.” Because of the “more lenient” test for declaratory judgment jurisdiction, the court noted that there is an increased likelihood of “a forum-seeking race to the courthouse between accused infringers and patent holders.” As a result, district courts must perform an analysis under 28 U.S.C. §1404(a), considering the factors of convenience. In essence, if there is subject matter jurisdiction in two different forums, the real issue is “the convenience and suitability of competing forums.”

The court stated that under §1404(a), in general, the forum of the first-filed action controls, but that the interests of justice and convenience factors could alter that rule. In particular, courts should consider the convenience of witnesses, the lack of jurisdiction over necessary or desirable parties, and the existence and possible consolidation of related cases.

In this case, the court found that MOSAID is a Canadian company, but that it had operations in the Northern District of California. Both MOSAID and Micron did business in both California and Texas; there were no related cases in Texas; and there was no evidence regarding the convenience or availability of witnesses. Therefore, the first-filed forum, the Northern District of California, was proper.

Lights, Camera, IP Issues…

Published: February 26, 2008

by Scott M. Hervey
The IP Law Blog

Last October I had the good fortune of being invited to attend my friend’s “man shower” in Las Vegas. What made this trip interesting was the fact that this all guy’s version of a baby shower would be the subject of an episode of the VH1 reality TV show “Scott Baio is 46 and Pregnant.” While there are a number of interesting stories that came out of this first and only man style baby shower, the “what happens in Vegas stays in Vegas” rule prohibits me from telling you any. However, the tales fit for this article comes from my observations of the numerous, IP issues that came up during our two days of shooting.

As regular readers of my articles may know, part of my practice includes representing independent motion picture and reality television producers. While I have been production counsel for a number of movies and reality television shows, most of my work occurs before the cameras ever roll. Part of this work involves working with the production staff and preparing them to deal with those issues that may arrive when shooting in an environment you don’t entirely control. However, being on set and having to identify issues on the fly (especially when the person identifying the issues is not a lawyer) is very different from engaging in theoretical and hypothetical discussions.

Shooting on an existing location presents a number of complex and interesting IP issues. Where the location is the floor of the Hard Rock Casino as it was in the VH1 show, this makes it even all the more interesting. The first issue is dealing with the crowd; not from a logistic standpoint, but from a right of publicity standpoint.

Most states provide some type of protection of an individual’s right of publicity. In California, Civil code section 3344 and 3344.1 protect against the use of another’s name, voice, signature, photograph or likeness in connection with a commercial activity without consent. There are a number of ways production companies deal with crowds and securing the right of publicity. First, if the production company is dealing with a controlled location and is able to cast extras to play in the crowd, the extras would sign some type of agreement. In addition to items such as the extra’s fee, this agreement would contain certain language resulting in a grant of the extra’s right of publicity to the production company. This situation is more common for my motion picture production company clients.

My reality television production company clients do not enjoy the benefit of controlling all aspects of their shoot. It’s reality television, which usually means dealing with a live set and a crowd of ordinary people. If the shoot is such that the group of people being photographed is relatively small, the production company will usually get those who appear on camera to sign a standard appearance release. Depending on who drafted the release, it could have a variety of different language. However, most appearance releases grant the producer the right to make use of the subject’s image, likeness appearance, voice or musical performance in the form of one or more photographs, video images, sound recordings, illustrations or other media for any and all programs, advertisements, promotions, product endorsements and any and all other uses relating to promoting, advertising, marketing, selling and/or exploiting the subject television show, and all ancillary products related thereto, including but not limited to “out takes,” and “making of” specials.

Where the production is dealing with a very large crowd, the producer will post a number of large signs stating that filming is in progress and to vacate the area if you do not want to be videotaped, photographed, or recorded. The notice will also usually state that your presence within the filming area constitutes consent to be recorded and portrayed in connection with the television program and that you expressly authorize and permit the use of your name, voice and likeness and all reproductions thereof for any purpose whatsoever throughout the world, in perpetuity, in any and all media, and without limitation and without any compensation whatsoever. I am unaware of any case where a person challenged the validity of such a notice; usually people are thrilled to be on TV.

The “more complex issues” which arise during an on-location shoot usually involve the inclusion of a third party trademark or copyright protected material into the program. When shooting on location, the production company will have the owner sign a location release. In addition to photographing the interior and exterior of the location, location releases usually also include the right to photograph and use the owner’s name, logo, signs, marks or slogans, as depicted in, on, and/or about the location in connection with the production, exhibition, advertising and exploitation of the television program. What’s usually not included in the location release is the right to photograph third party trademarks which may be incorporated into signs or goods on or about the location.

Case in point, the VH1 production crew shooting the Baio show at the Hard Rock casino had to deal with scenes that were shot in a bar on the casino and in a diner. In those shots, they had to deal with Hines® mustard jars, Budwiser® beer bottles and neon signs for all types of beverages. While the production crew had obtained permission to shoot at the Hard Rock, that permission did not, and could not, extend to include third party brands such as these. The serious risk is that the brand owner may object to its mark being used in the television show and threaten to sue for trademark infringement. (15 USC 1125(a) – Any person who, on or in connection with any goods or services… uses in commerce any [mark]…which is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.) So, producers hide product labels or peal them off bottles, move or cover signs, and, if that doesn’t work, blur them out in post production.

Works subject to copyright protection also offer interesting challenges. Paintings, photographs, background music or a television playing in the background all present problems. These works fall under Copyright law, and the owner of the copyright enjoys the following exclusive rights:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly; and

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly. (17 USC 106)

For example, if a producer accidentally includes recognizable background music in a segment and does not secure the necessary rights, this would infringe on the copyright owner’s exclusive rights. This may or may not result in a lawsuit, but it certainly would cost the production company an little more to secure the necessary rights than it otherwise would have cost had the rights been cleared in advance.

There are a multitude of other complex issues that arise in the production of a television show or motion picture, which explains the proliferation of lawyers that practice entertainment law.