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On June 17, 2014, a federal judge in Illinois granted summary judgment to Stefani Joanne Germanotta against plaintiff, Rebecca Francescatti, in a copyright infringement matter because he found that no reasonable trier of fact could find that Ms. Germanotta’s song, “Judas,” is substantially similar to Ms. Francescatti’s song, “Juda.”  You may wonder, why you should care about these two unknown figures in the music industry, but the truth is, Ms. Germanotta is far from unknown.  In fact, she has been a staple in the pop music industry since she burst onto the scene in 2008 with the release of her album, “The Fame,” which had such hits as “Just Dance” and “Poker Face.”  By now you may have guessed—Ms. Germanotta is none other than Lady Gaga.

In her complaint, Ms. Francescatti alleged that Lady Gaga’s song, “Judas,” from the album “Born This Way,” infringed Francescatti’s copyright in her song, “Juda.”  According to Ms. Francescatti, she worked with co-defendant sound engineer, Brian Joseph Gaynor, to write “Juda” in 1999.  Ms. Francescatti alleged that Mr. Gaynor later collaborated with Lady Gaga in 2010 to create “Judas.”  According to Ms. Francescatti, the two songs have remarkably similar melodies, structure, bass lines, and further similar features.  This allegation was unsupported by expert testimony.

The record established that DJ Paul Blair was introduced to Mr. Gaynor in 2010 for the purpose of creating original material for Gaga’s ”Born This Way”  album, but DJ Paul Blair “denies ever having heard or received a copy of the Francescatti song, and denies giving a copy of the song to Gaga.”  Ms. Francescatti contended that the similarity in the song names evidenced infringement, but Lady Gaga maintained that she chose the title “Judas” because she felt betrayed by an ex-boyfriend and “Judas is the biblical betrayer of all things.”  In spite of this explanation, Ms. Francescatti filed suit in 2011.

In Lady Gaga’s motion for summary judgment, she stated that she never met with Mr. Gaynor and that Ms. Francescatti failed to present evidence that Mr. Gaynor or DJ Paul Blair ever provided Lady Gaga with a copy of “Juda.”  Lady Gaga claimed that Mr. Gaynor and DJ Paul Blair had no part in composing “Judas,” and that she wrote the song with her normal producer, RedOne.  Ms. Francescatti countered that Mr. Gaynor and DJ. Paul Blair are both credited on “Born This Way,” thereby giving rise to an inference that they worked on “Judas.”

The court granted Lady Gaga’s motion for summary judgment, finding that Ms. Francescatti failed to demonstrate actual copying of the protectable elements of “Juda.”  The court held that although a reasonable juror could find that a nexus existed between the parties and that defendants had an opportunity to hear the Francescatti song, the works are not substantially similar.  According to the court, “music…is inherently subjective,” and consideration of expert testimony is warranted because “a court’s lay ear may not be able to adequately assess the similarities between musical works.”  The court further remarked that:

“the concerns raised with the ordinary observer standard as related to music copyright cases can be ameliorated with the use of expert testimony in this case.  Due to the difficulty we face in ascertaining the alleged similarities between the songs, expert testimony is warranted in order to determine whether objective copying has occurred under the first prong of the substantial similarity analysis.  Specifically, because of the different musical genres we are presented with and the fact that the Gaga Song is computer-generated, our lay ears cannot be relied upon to determine whether there has been copying.”

Interestingly, an email from Ms. Francescatti on the day her lawsuit was filed explicitly admits to her family that “the songs don’t sound the same.”

Applying Illinois precedent, the court found that “although…Francescatti has established copying under the extrinsic test, she has failed to meet the requirements of the intrinsic test.”  Specifically, “[N]o reasonable trier of fact could find under the ordinary observer standard that the allegedly infringing elements of Gaga’s song capture the total concept and feel of the Francescatti song.  Even if the songs did share a similar total concept and feel, however, such similarities would arise from unprotectable elements.”

At the end of the day, the granting of Gaga’s motion raises the question of just how much it takes to establish that an individual has infringed another’s musical copyright.  It seems there was sufficient evidence of a connection between the two such that Ms. Francescatti should have been able to defeat the motion for summary judgment.  It appears from the court’s emphasis on expert testimony regarding musical copyright matters that if Francescatti had produced an expert who could testify that the two songs were substantially similar, and that Ms. Francescatti’s song may have been copied, there would have been a triable question of material fact.  The lesson here is that experts are vital in music copyright cases.  Or maybe, the lesson is simply that it is just more difficult to prevail against a superstar when courts are aware that these individuals are often the victims of extortionate lawsuits.

In Lupyan v. Corinthian Colleges, Inc., a FMLA interference lawsuit, the Third Circuit Court of Appeals reversed a summary judgment in favor of the employer when the employee claimed she never received an FMLA designation letter that her employer claims it mailed to her. The Court essentially held that if an employer wishes to prevail on summary judgment, it will need to send the FMLA designation letter via a method that establishes receipt by the employee.

Lisa Lupyan was hired as an instructor at Corinthian Colleges Inc. (“CCI”) in 2004. In December 2007, Lupyan’s supervisor, James Thomas, noticed that she seemed depressed and suggested she take a personal leave of absence. On her Request for Leave Form, Lupyan specified that she was taking “personal leave” from December 4, 2007 through December 31, 2007. However, Thomas suggested that she apply for short-term disability coverage instead.  Accordingly, Lupyan scheduled an appointment with her doctor and received a DOL “Certification of Health Provider.” Based on the Certification, CCI’s human resources department determined that Lupyan was eligible for leave under the FMLA, rather than personal leave so on December 19^th, CCI’s Supervisor of Administration, Hixson, met with Lupyan and instructed her to initial the box marked “Family Medical Leave” on her Request for Leave Form. Hixson also changed Lupyan’s projected date of return to April 1, 2008, based upon the Certification.

Later in the afternoon of December 19^th, CCI allegedly mailed Lupyan a letter advising her that her leave was designated as FMLA leave and explaining her rights under the FMLA (the “Letter”). Lupyan denies ever having received the Letter, and denies having any knowledge that she was on FMLA leave until she attempted to return to work. When Lupyan did not return to work after the exhaustion of her FMLA leave, her employment was terminated.  CCI explained that due to low student enrollment and her failure to timely return from FMLA leave, there was no position available to her. Lupyan claims that the first time she had any knowledge that she was on FMLA leave was at the time of her termination.

Lupyan sued CCI alleging that it interfered with her rights under the FMLA by failing to give notice that her leave fell under that Act, and that she was fired in retaliation for taking FMLA leave. The District Court granted CCI’s initial motion for summary judgment as to both claims. Thereafter, the District Court sua sponte reversed its ruling on Lupyan’s FMLA interference claim. The court recognized that summary judgment was not appropriate because there was a factual dispute regarding whether CCI had informed Lupyan of her FMLA rights. CCI responded with an amended summary judgment motion which included affidavits from CCI employees who testified that the Letter was properly mailed to Lupyan. Based on the affidavits, the District Court relied on the evidentiary presumption that arises under the “mailbox rule” and found that Lupyan had received the Letter. The Court entered summary judgment in favor of CCI, and Lupyan appealed.

The Court of Appeal explained that the FMLA requires employers to provide employees with both general and individual notice about the FMLA. To meet the general notice requirements, an employer must post a notice of FMLA rights on its premises. (29 CFR § 2619(a)). Because employers have some discretion in the way FMLA policies are implemented, employers must also include information regarding the employer’s FMLA policies in a handbook or similar publication. (29 CFR § 825.300).  Lupyan claimed that CCI interfered with her FMLA rights by not informing her that her leave was under the FMLA. According to her, she therefore was unaware of the requirement that she had to return to work within twelve weeks or be subject to termination.*  Given Lupyan’s claim that she did not receive the Letter that CCI claims was properly mailed to her, the Court had to decide whether the District Court properly afforded CCI the benefit of the presumption of receipt of properly mailed letters that arises under the “mailbox rule.”

Under the “mailbox rule,” if a letter “properly directed is proved to have been either put into the post-office or delivered to the postman, it is presumed . . . that it reached its destination at the regular time, and was received by the person to whom it was addressed.”  However, the presumption is a rebuttable presumption that can be rebutted by opposing evidence that the letter was never received.  The Court explained that in the absence of actual proof of delivery, receipt can be proven circumstantially by introducing evidence of business practices or office customs pertaining to mail. This evidence may be in the form of a sworn statement.  In this case, CCI submitted the affidavits of its Mailroom Supervisor and its HR Coordinator, both of whom had personal knowledge of CCI’s customary mailing practices when the Letter was allegedly mailed to Lupyan.  Moreover, the HR Coordinator swore that she personally prepared the Letter and placed it in the outgoing mail bin.

However, CCI provided no corroborating evidence that Lupyan received the Letter. The Letter was not sent by registered or certified mail, nor did CCI request a return receipt or use any of the now common ways of assigning a tracking number to the Letter. Therefore, the Court held that there is no direct evidence of either receipt or non-receipt.  Consequently, for purposes of a summary judgment motion, Lupyan’s contention that she had no notice that her leave was subject to the limitations of the FMLA because she never received CCI’s Letter, sufficiently burst the mailbox rule’s presumption, and requires that a jury determine the credibility of her testimony, as well as that of CCI’s witnesses.

Takeaway for Employers:

Employers should send all FMLA notices to employees via a method that tracks delivery and receipt by the employee (e.g. Federal Express or other overnight mail, certified mail/return receipt requested, or hand-delivery with a signed acknowledgment of receipt).  Be careful of sending the notices via email as, similar to this case, the employee could claim that he/she did not receive the email and the burden is on the employer to prove the employee did in fact open and read his or her email.

*Caveat:  Employers should never automatically terminate employees who do not return from FMLA (or CFRA) leave at the expiration of the 12 week period.  Instead they should engage in the interactive process to determine if the employee is eligible for a reasonable accommodation (including possibly more leave) under the ADA and FEHA.

By The Labor and Employment Group

In an attempt to gain leverage in settlement negotiations, the NLRB Office of the General Counsel issued a directive that has rocked the franchise world. Days ago, the NLRB Office of the General Counsel determined that McDonald’s USA, LLC, the franchisor, could potentially be held liable for the employment actions of its franchisees under a “joint employer” theory. The General Counsel’s decision has authorized numerous unfair labor practice complaints based on alleged violations of the National Labor Relations Act (NLRA) to proceed against both the franchisor and franchisee entities. While this shift by the NLRB is in its early stages, it is startlingly significant and tees up years of legal battles over the issue.
This decision follows an earlier amicus brief filed approximately one month ago on behalf of the NLRB General Counsel in Browning-Ferris Industries of California, Inc. The amicus brief argued that the Board “should abandon its existing joint employer standard.” The existing standard only finds joint employer liability when an employer exercises direct or indirect control over significant terms and conditions of employment of another entity’s employees. The amicus brief advocated for a new, more liberal standard “that takes account of the totality of the circumstances, including how the putative joint employers structured their commercial dealings with each other.”
The NLRB’s proclamation sent shockwaves through the franchise world. If the NLRB General Counsel follows through on its threats and Court’s later ignore precedent and adopt this radical viewpoint, the essence of the franchise business model would be significantly affected. Typically, franchisors do not exert the level of control over the franchisees’ terms and conditions of employment to be deemed a joint employer. This has stuck the appropriate balance between franchisor and franchisee liability. Under the existing standard, those franchisors that do exhibit control open themselves up to being held joint employers. Those that don’t, don’t. The proposed “totality of the circumstances” standard blurs the line that franchisors rely on in setting up their business model and managing their liability.
The new standard becomes a catch-22 for franchisors. Franchisors would have to consider whether they need to exercise more control over the terms and conditions of the franchisees’ employees’ employment. Franchisors may then feel compelled to weigh in on wages, payroll organization, hiring decisions, terminations, and disciplinary issues typically solely left to franchisees. When they do so, they will fall into the NLRB’s General Counsel’s trap and perpetuate the argument that they are joint employers.
We will have to wait and see whether the NLRB begins actively pursuing “joint employer” cases against other Franchisors or parent companies that would otherwise not have been included in the earlier definition of “employer” under the NLRA. However, this change in course by the NLRB may also send a signal that other departments within the administration, i.e. the Department of Labor, Equal Employment Opportunity Commission.
The NLRB is still in its investigation phase with McDonald’s franchisees. McDonald’s has responded to the NRLB stating, “We believe there is no legal or factual basis for such a finding, and we will vigorously argue our case at the administrative trials and subsequent appeal processes which are likely to follow from the issuance of the complaints.” If the complaints are issued against McDonald’s as a franchisor, the next step will be for McDonald’s to address any complaints filed against it before an administrative law judge. Depending on the outcome, the issue could then go to the full Board or the Courts. Depending on what type of administration we get in the coming years or changes at the NLRB, we may see this issue flip flop between standards for a while. Certainly this issue is one that could eventually be decided by the U.S. Supreme Court. McDonald’s deserves our support during this fight. So super-size your order because this fight is going to cost a lot more than their dollar menu can support.

By The Labor and Employment Group

On June 12, 2014, U.S. Secretary of Labor Thomas E. Perez announced a proposed rule raising the minimum wage to $10.10 per hour starting on January 1, 2015, for workers on federal service and construction contracts. The proposed rule implements Executive Order 13658, “Establishing a Minimum Wage for Contractors,” which President Barack Obama signed on February 12.31

By The Labor and Employment Group

A recent California Court of Appeal upheld the trial court’s order granting defendant’s pre-certification motion for summary judgment against off-the-clock class claims made by the named plaintiff in a putative class action.  The case is named Jong v. Kaiser Foundation Health Plan, Inc., Case No. A138725, ___ Cal. App. 4th __,  (Cal. App. 1st Dist. 5/20/2014) (Jong).  Jong is welcome news for California employers.

In 2012, the named plaintiff brought a class action with two other former employees, claiming they regularly worked off-the-clock.  This is a fairly prevalent claim here in California.    The trial court granted summary judgment prior to class certification and dismissed the claims.  Plaintiff appealed.

The appellate court, as they should, placed great weight on the plaintiff’s own admissions during his deposition.  There, he admitted that (1) he was aware of the employer’s policy to pay for all hours worked; (2) he knew how to use the employer’s timekeeping system; (3) he was aware that the employer paid for all overtime hours recorded, even if not approved by supervisors; (4) he kept no record of the alleged off-the-clock hours worked; (5) he did not know whether any manager was aware of his alleged off-the-clock work; and (6) he never made a request to work or be paid for the alleged off-the-clock work.

Faced with these admissions, the Plaintiff went to the common argument that his employment position was such that he was pressured to stay within labor budget.  He said this caused the “unenviable dilemma” of choosing to “maintain his accountability and avoid the imposition of discipline” or report all his hours worked.  Despite his admissions, he said he chose the later.

The Jong court applied the off-the-clock standard set forth in Forrester v. Roth’s I.G.A. Foodliner, Inc., 646 F.2d 413 (9th Cir. 1981) (Forrester).  The Court specifically noted that the Forrester standard applied to state law claims.   White v. Starbucks Corp., 497 F. Supp. 2d 1080, 1083 (N.D.Cal. 2007) (White).  Forrester is “where an employer has no knowledge that an employee is engaging in overtime work and that employee fails to notify the employer or deliberately prevents the employer from acquiring knowledge of the overtime work, the employer’s failure to pay for the overtime hours is not a violation [of the FLSA].”  Forrester, 646 F.2d at 414.  Thus, “where the acts of an employee prevent an employer from acquiring knowledge, here of alleged uncompensated overtime hours, the employer cannot be said to have suffered or permitted the employee to work in violation of [the FLSA].”  Id. at 414-15.  Insert California Labor Code wherever you see “FLSA” and you can see the Court’s rationale.

The Court applied the above standard to the Plaintiff’s admissions and reasoned that the Plaintiff had no disputed facts that could demonstrate liability of the employer for the alleged off-the-clock work.  The Court rejected 18 of the plaintiff’s fellow employees, finding they were largely irrelevant because they did not show that the employer was on notice that he was performing off-the-clock work, contrary to the employer’s policy, practice and expectation.

This decision is extremely helpful in clarifying that, in order to obtain summary judgment against an off-the-clock claim, employers need not affirmatively prove that no off-the-clock work was performed.   Jong leads the way in showing that in order to be successful in defeating off-the-clock claims the employer should be able to show that it has a policy authorizing all hours worked to be reported, did not have a practice that was different from the stated policy, the employer paid for all hours recorded, and supervisors were not aware of off-the-clock work.  In those instances, Jong gives employers a strong framework for summary judgment motions being granted in their favor against off-the-clock claims.

The case is Jong v. Kaiser Foundation Health Plan, Inc., Case No. A138725, ___ Cal. App. 4th __,  (Cal. App. 1st Dist. 5/20/2014).  Read it here.  http://www.courts.ca.gov/opinions/documents/A138725.PDF

By The Labor and Employment Group

In a recent 3-1 decision in Macy’s Inc., the NLRB used its controversial Specialty Healthcare decision in upholding as appropriate a micro bargaining unit of only 41 employees in the cosmetics and fragrances department of a Boston-area Macy’s store.  The Micro-Unit excludes all other sales employees at the store, despite there being almost 80 other salespersons employed there.  This case is the first NLRB matter that applied the Specialty Healthcare standard to a retail employer.   Applying the standards established in Specialty Healthcare, the NLRB found that the petitioned-for unit was appropriate because the 41 cosmetics and fragrances employees are a “readily identifiable group who share a community of interest.”  The NLRB further held that Macy’s had not met its burden of showing an “overwhelming” community of interest between those employees and the other sales employees in the store’s 10 other departments.

This is terrible news for all employers, especially those in the retail industry.  The Specialty Healthcare and Macy’s Inc. decisions help unions’ efforts to organize small groups of employees into “micro-units”, in order to gain a foothold within a targeting company.

Employers must therefore be mindful of this issue in preparing for and responding to union organizing campaigns, as unions are increasingly seeking to organize the smallest subset of employees which they believe they can secure a majority of supporters.

By: Real Estate

The California Office of Environmental Health Hazard Assessment’s  (OEHHA)  2014  proposed regulations to revise  Proposition 65 warnings has been widely panned by industry critics.  The overhaul was requested by Governor Brown last year when a related effort to gain a consensus on proposed rules was unsuccessful.  The proposed rules contain requirements for identification of specific chemicals in the warnings, warnings for food products, pharmaceutical and medical devices as well as creating a global web site for information.

Industry believes that the specific labeling will create additional litigation opportunities for plaintiffs, and create conflicts with FDA labeling for drugs and medical devices.  Further the specific language for “Environmental Exposures” includes language that admits exposure (“will expose” as opposed to the current  ”may contain” ) and will perhaps trigger personal injury type liability that was previously not an issue.  Another sector of  industry that has voiced concerns is the automotive industry as the new regulations requiring specific warnings would eliminate the ability to provide a single warning for a “complex durable good” like a car that is made up of  a series of individual products.  Finally the proposed use of pictograms in the warnings will,  according to industry,  create confusion for consumers as the pictograms have already done in other contexts.

Despite the expansive opposition it is not clear whether OEHHA will have additional workshops as the regulations progress.

Clearly there is no love lost between John Wayne Enterprises, LLC (“JWE”), the entity owned by John Wayne’s heirs which controls the intellectual property related to John Wayne, and Duke University.   Both have have been locked in battle over various trademarks incorporating the word DUKE.  The most recent skirmish involves a trademark application filed by John Wayne Enterprises, LLC (“JWE”)  for the following design mark for alcoholic beverages, excluding beer:

Duke University requested and was granted  an extension of time to potentially opposition to the registration of this mark.    Previously, Duke University opposed JWE’s’ application to register DUKE for restaurant services, claiming that the mark is likely to cause confusion with Duke University’s other DUKE trademarks and/or dilute Duke University’s famous trademarks. Specifically, Duke University alleged that:  “[JWE] seeks to register a mark that is substantially similar to [the University’s] famous mark DUKE, and that moreover is likely to be abbreviated simply as DUKE and expressed orally simply  as DUKE, for goods that are closely related to goods and services with which [the University’s] DUKE Marks are used…”

It appears that this time, JWE took John Wayne’s quote  “You tangle with me, I’ll have your hide.” literally and didn’t wait and see whether the University actually filed an opposition.  JEW filed a complaint for declaratory relief in the United States District Court for the Central District of California, requesting the court to declare that the above mark does not infringe or dilute any of the DUKE trademarks owned by Duke University.  In its complaint it alleges that “Duke University believes that products bearing John Wayne’s world renowned image and signature…will somehow be confused with being associated with Duke University.” Further, JWE alleges that “in light of the multiple Oppositions and Cancellation proceedings Duke University has filed against JWE and the claims made therein, JEW believes Duke University contends that JEW’s [registration and use of its marks] or any other mark that includes the term DUKE are likely to cause confusion with [the marks owned by Duke University] and intends to sue JWE for trademark infringement, notwithstanding that JWE’s use is directly associated with and expressly linked to John Wayne.”

Trademark Infringement

In determining whether JWE’s mark infringes any of the University’s marks, the court will follow the multifactor test established by AMF Inc. v. Sleekcraft Boats.  In applying this test the court will engage in the following analysis:

1. Strength or Weakness of the Plaintiff’s Mark. The more the consuming public recognizes the plaintiff’s trademark as an indication of origin of the plaintiff’s goods, the more likely it is that consumers would be confused about the source of the defendant’s goods if the defendant uses a similar mark.  The court will consider whether the University’s mark are strong marks.  If so, this would weigh in favor of a finding of confusion.  The court is likely to find that the University’s marks are strong.

2. Defendant’s Use of the Mark. If the defendant and plaintiff use their trademarks on the same, related, or complementary kinds of goods there may be a greater likelihood of confusion about the source of the goods than otherwise.  The court will consider the types of goods and services covered by the University’s marks.  The records of the trademark office do not reveal a DUKE mark owned by Duke University for any type of alcoholic beverages.  While there are various marks covering beverage glasses and containers and food and beverage services, unless Duke University is able to establish common law rights covering alcoholic beverages, its likely the court would not find these services similar enough to support a finding of confusion.

3. Similarity of Plaintiff’s and Defendant’s Marks. If the overall impression created by the plaintiff’s trademark in the marketplace is similar to that created by the defendant’s trademark in appearance, sound or meaning, there is a greater chance of likelihood of confusion.   Here, the court would consider whether, taken in their entirety, the marks are similar in appearance, sound and meaning.  JWE’s mark features a distinct and unmistakable design element of a cowboy (likely stylized after one of the numerous cowboy characters played by John Wayne).  Its likely that the court will determine that, not only does this cause the marks to be different in appearance, but it also causes JWE’s mark to give off a commercial impression that is different than any of the Duke University marks; that the bourbon is associated with John Wayne.  The court will likely find that these facts support a finding of no likelihood of confusion.

4. Actual Confusion. Evidence of actual confusion  strongly suggests a likelihood of confusion.  The court will consider any evidence of actual confusion.  If none, this will be a neutral factor.

5. Defendant’s Intent. Knowing use by defendant of the plaintiff’s trademark to identify similar goods may strongly show an intent to derive benefit from the reputation of the plaintiff’s mark, suggesting an intent to cause a likelihood of confusion.  The court will consider whether JWE’s intent in using DUKE was to refer to John Wayne or to refer to the University.  Its likely that JWE will present strong evidence that its use of DUKE was as a reference to John Wayne.  After all, one of John Wayne’s better known quotes is “I never trust a man who doesn’t drink.”

6. Marketing/Advertising Channels. If the plaintiff’s and defendant’s goods or services are likely to be sold in the same or similar stores or outlets, or advertised in similar media, this may increase the likelihood of confusion.  If Duke University does not use any of its DUKE marks in connection with alcoholic beverages, the court may find that there is not a significant overlap in the marketing channels.

7. Consumer’s Degree of Care. The more sophisticated the potential buyers of the goods or the more costly the goods, the more careful and discriminating the reasonably prudent purchaser exercising ordinary caution may be. Ordinarily, where a heightened degree of care is exercised by purchasers, this factor tends to favor a finding of no confusion.  However, since buyers of alcoholic beverages are generally not considered sophisticated purchasers, the court would consider the degree of care exercised by an ordinary consumer.

8. Product Line Expansion. If there is a strong possibility of Duke University expanding into the alcoholic beverage market, there is a greater likelihood of confusion. If Duke University is not able to show that it has made any overtures to use or allow use of its mark in connection with alcoholic beverages, this factor will not support a finding of likelihood of confusion.

Trademark Dilution

In a claim for trademark dilution, the owner of a famous mark can bring a claim due to either blurring or tarnishment.  Blurring occurs when a defendant uses or modifies the plaintiff’s trademark to identify the defendant’s goods and services, raising the possibility that the plaintiff’s mark will lose its ability to serve as a unique identifier of the plaintiff’s product. In considering whether JEW’s mark causes dilution of Duke University’s mark by blurring, the court will consider the following:

(i)  The degree of similarity between JWE’s mark and the Duke University’s mark. The court will likely find the marks not similar;

(ii) The degree of inherent distinctiveness in the University’s marks that have allegedly been infringed.  The court will likely find the University’s marks to be distinctive;

(iii) The extent to which Duke University is engaged in substantially exclusive use of DUKE as a trademark.  This will require some investigation by the court.  USPTO records show only one DUKE mark registered by JWE – DUKE’S PLACE for restaurant services.  This use is likely pursuant to a settlement agreement between JWE and the University.  Additionally,  records of the Trademark Trial and Appeals Board show that  the University has opposed the registration of almost every third party trademark application which includes DUKE. These facts could support a finding of dilution by blurring;

(iv) The degree of recognition of the Duke University marks.  The court will likely find them to be highly recognizable;

(v) Whether JWE intended to create an association with one or more of Duke’s mark.  As mentioned above, its likely that JWE will present strong evidence that its use of DUKE was intended to create an association with John Wayne and not the University; and

(vi) Any actual association between JWE’s mark and Duke University’s marks.

Dilution by tarnishment occurs when the reputation of a famous mark is harmed through association with another similar mark or trade name.  Here the court would consider whether there is any actual association between JWE’s mark and Duke University’s marks and if the University’s reputation is harmed by such association.  Even if the court found an association between the two marks, such association does not likely harm the University’s reputation.

Predictions:  A well known quote of John Wayne is “Out here, due process is a bullet.”  While the resolution of the present dispute will not be as quick, based on the facts as they are presently known, it seems that JWE will prevail.  It seems clear that JWE’s mark does not infringe any Duke University marks.   And while the outcome JWE’s request for judicial determination that its mark does not dilute any of the University’s marks is not as easy to predict, its likely that a court will be persuaded by the lack of similarity between the marks and find that a substantial influence in a finding of no dilution.

A California businessman, Walter Liew, was recently sentenced to 15 years in federal prison after being found guilty by a jury on charges of trade secret theft, economic espionage, witness tampering and making false statements.  Mr. Liew, who had contracts with a Chinese company Pangang Group, was charged with stealing trade secrets from DuPont that included plans and information regarding a manufacturing plant.  The prosecutors allege that Mr. Liew helped the Pangang Group obtain these trade secrets to develop a manufacturing plant in China that would produce titanium dioxide, a white pigment.

Mr. Liew’s prosecution is another example of ongoing efforts by U.S. prosecutors to deter China from engaging in economic espionage and trade secret theft.  For more details about this case, please see http://www.bloomberg.com/news/2014-07-10/man-gets-15-years-prison-for-stealing-dupont-secrets.html.