Breaking News: The Supreme Court didn’t deliver Bilski today but they did unanimously decide that American Needle’s important IP and anti-trust lawsuit against the NFL can proceed (see decision here).
In brief, a 2001 agreement made between Reebok International and the National Football League (NFL) granted Reebok an exclusive licence for the rights to use the NFL’s (i.e., all 32 NFL teams) IP (team trade marks, logos, etc) for baseball caps and other apparel. It therefore followed that American Needle and other merchandise manufacturer’s licences with the NFL were not renewed. Consumer prices for NFL team’s merchandise in turn increased. American Needle et al filed a complaint in 2004 alleging that this agreement was in violation of sections 1 and 2 of the Sherman Antitrust Act.The NFL (the biggest of the big sports businesses) asked the court to shield them from anti-trust laws which could have allowed the potential anti-competitive licensing of their intellectual property to continue affecting manufacturers like American Needle and consumers of NFL products (for further details see previous post here). The NFL’s argument was that the NFL was one single entity, not a plurality of 32 individual teams, and so thus fell outside the Sherman Act’s plurality requirement.
The Supreme Court held that the NFL’s “alleged conduct related to licensing of IP constitutes concerted action that is not categorically beyond section 1′s [of the Sherman Act's] coverage” and that the NFL does not constitute a single entity for the purposes of the Sherman Act. This decision overturned the lower court’s decision which threw out American Needle’s lawsuit at the summary judgment stage. Justice Stevens, giving the majority opinion, wrote:
“Although NFL teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests in licensing team trademarks are not necessarily aligned.”
The Supreme Court have remanded the case back to the lower court for re-consideration of its section 1 analysis.
This Kat will be back with a detailed update once she has time to digest all of the 20 pages of the decision. In the meantime see these articles in the Financial Times and the Wall Street Journal.
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Tags: Copyright · Design rights · Trade marks
Viacom v YouTube gets ******** ugly : The AmeriKat has previously reported on the amazingly brutal mudfight between Viacom and YouTube here, but the documents that were disclosed last Friday have been the cherry on the litigation disclosure cake. Favorite quotes include those “Google bastards” and, referring to companies who wanted their content removed from YouTube as “copyright cop a**holes”. According to Ars Technica, the most interesting disclosure was a YouTube training manual that stated that “user generated content should never be monitored.” All makes for entertaining reading, but one hopes that few swear words and hilarious catchphrases should not detract the court from the key questions in this case. For Google’s news on this recent disclosure click here, for Viacom’s version click here.
Superman litigation heats up, up, and away: Last Friday,
Warner Bros. company, DC Comics, filed a copyright and interference with contract claim against Los Angeles attorney Marc Toberoff in LA federal court. Toberoff was representing the heirs of the Superman creators- Jerry Siegal and Joe Shuster -in their battle with Warner Bros. The complaint alleges that the creators of Superman never terminated DC Comic’s copyright to Superman and that their heirs agreed to royalty agreements for the duration of the copyright. The suit argues that Toberoff induced the families to repudiate the agreements and terminate DC’s Superman copyright in an attempt to reclaim the copyright in the superhero. The complaint also alleges that Toberoff sought a financial interest in Superman by securing the families’ claims by orchestrating
“a web of collusive agreements concerning the Superman copyrights with the heirs to the co-creators of Superman…By these agreements, Toberoff purported to secure a majority and controlling financial stake in copyright interests in Superman…and preclude the heirs from freely entering into new agreements with DC Comics for the continued exploitation of Superman.”
Toberoff replied to the complaint:
“Having lost repeatedly on the merits over the last five and a half years in ‘Superman’ litigation. Warner Bros. and their new attorney Dan Petrocelli have now launched a libelous personal attack against me and my clients.”
Warner Bros. stated:
“DC has spent decades working constructively with our talent and creators and we look forward to a speedy resolution of these matters so we can continue to share Superman with all his many fans for generations to come.”
Warner Bros. have hired Daniel Petrocelli (O’Melveny & Myers) to fight the contractual terminations between DC Comics and the heirs. Petrocelli was the attorney who aided Disney’s win in the merchandising right battle against the heirs to Winnie the Pooh.
USPTO Announce Workshop: Two weeks ago, the USPTO announced that on 26 May 2010 they will hold a joint public workshop on “the intersection of patent policy and competition policy and its implications for promoting innovation.” That is not an overly broad topic at all, says the AmeriKat. Kappos and Friends will be in attendance, including Assistant Attorney General for the Antitrust Division Christine Varney and FTC Commissioner Edith Ramirez. Kappos had this to say about the workshop:
“Since innovation is the only sustainable source of America’s competitive advantage, the relationship between intellectual property, which captures the value of innovation, and competition policy, which maintains a dynamic
marketplace for innovation, is of paramount importance. This conference is designed to explore the relationship between competition policy and intellectual property policy and how it fosters innovation.”
The morning panel will consider the challenges posed by the patent backlog and its affect on competitive strategies of applicants, as well as considering the impact of the Supreme Courts 2006 opinion in eBay Inc v MercExchange. The afternoon panel will consider the role of patents impact on industry standards and competition.
Heroes gets sued: Graphic novel author, Jason Barnes (aka Jazan Wild) has filed a copyright infringement lawsuit against NBC Universal alleging that season 4 of the popular TV show Heroes copies plot details from his novels Carnival of Souls. The suit states that the first two episodes “introduce a traveling carnival virtually identical to that in [Barnes']s original, copyrighted works” including the replication of Jamaican Vodoo witchdoctors. NBC Universal told Entertainment Weekly that they believed the lawsuit to be “meritless”. For a side-to-side comparison of the two click here.
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Tags: Copyright · Design rights · Trade marks
Last week the AmeriKat was hanging on tenterhooks constantly refreshing the US Supreme Court page hoping that the decision in Bilski had finally been issued. Low and behold, a watched Supreme Court webpage doesn’t deliver opinions. Time was not completely wasted, however. (picture, left – the AmeriKat takes a nap while awaiting Bilksi) The AmeriKat has learned that waiting for someone or something to occur is generally a wasted activity and so she spent the interim time prowling the web for other IP news, going to the gym, tackling her two page To-Do list and various other ignored activities. After all of this, the Supreme Court still had not delivered a decision but that was no skin off the AmeriKat’s nose leather. She had been extremely productive in the interim period. So productive, it seems, that the bulk of US news stories that she was to write about in her weekly Letter she already posted during the week. So this week, she delivers a some bits of bobs from the US IP.
Catcher in the Rye Back to Batts: Last Friday, the US Second Circuit Court of Appeals held that Judge Batts had erred in her reasoning by not applying all of the equitable principles required for the evaluation of a preliminary injunction when she granted the injunction to prohibit the sale of Fredrick Colting’s sequel to Catcher in the Rye,60 Years Later: Coming Through the Rye. In June last year, JD Salinger, the now deceased author of The Catcher in the Rye, filed a lawsuit in the US District Court in New York claiming that 60YL infringed “both his novel and the character of Holden Caulfield” and aiming to prohibit the publication of the sequel in the US (for further background on the case see the AmeriKat’s previous reports here). In overturning the injunction, the Court of Appeals found that Judge Batts had considered only the likelihood of success of Salinger’s copyright infringement claim and not also, for example, whether Salinger would suffer irreparable harm if the injunction was not granted. Judge Guido Calabresi stated:
“Because Salinger had established a prima facie case of copyright infringement, and in light of how the district court, understandably, viewed this court’s precedents, the district court presumed irreparable harm without discussion.”
Judge Calabresi continued by saying that the lower court’s decision was understandable given that the US Supreme Court’s standard for granting injunctions in eBay Inc v MercExchange (2006), a patent case, was inconsistent with the 2nd Circuit’s standard for preliminary injunctions in copyright cases. The Court of Appeals vacated Batts’ decision but allowed the injunction to remain for 10 days so that Salinger’s estate could apply for a temporary restraining order pending the rehearing. It is important to note that although the Court of Appeals vacated the injunction, the issues regarding Salinger’s likelihood of success for the substantive issues remained in his favor.
Patent’s inequitable conduct to get a rehearing: Last week the US Court of Appeals for the Federal Circuit granted an en banc rehearing of the appeal of a Californian district court decision in Therasense, Inc v Becton Dickinson & Co that held a patent to be unenforceable due to inequitable conduct. (picture, left – an example of inequitable conduct) The panel opinion delivered this past January affirmed the lower court’s finding that the applicant’s failure to disclose statements made to the EPO about their patent’s European counterpart amounted to inequitable conduct. This opinion was also vacated by last week’s order. Under Rule 56, patent applicants must disclose to the USTPO all information that is material to the patentability of the invention. Withholding any material information or making false representations along with the intent to deceive the USTPO is held to be inequitable conduct. Inequitable conduct is generally pleaded by defendants as an affirmative defence and allows a federal judge to void patents on a finding that a company deceived the USPTO in order to obtain a patent. The Federal Circuit’s January decision was heralded by some as meaning that applicants had to submit all information relating to their patent application including documents submitted to foreign patent offices – a massive burden you can imagine for some international pharmaceutical and biotech companies! The en banc court will prove to be important in that setting out guidelines as to what documents and from where a patent applicant must disclose to the USPTO to avoid a finding of inequitable conduct. The Federal Circuit has asked the parties to submit arguments addressing these questions prior to the hearing. Also last week, a majority panel in last week’s case of Avid v Crystal Import Corporation found there had been inequitable conduct on the part of the applicants.
Awaiting Judge Lee’s Decision in Rosetta Stone - Last week, the AmeriKat and IPKat wrote about the breaking news of Judge Lee’s granting of summary judgment in favor of Google in the Adwords case brought by Rosetta Stone. The AmeriKat has been prowling the Internet for the past hour and has determined that Judge Lee has yet to issue his formal decision. As soon as he does the AmeriKat will be on it!
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Tags: Copyright · Design rights · Trade marks
Hot off the press this morning is a seminal judgment of Mr Justice Kitchin, of the Chancery Division of the High Court for England and Wales, in Twentieth Century Fox Film Corporation and others v Newzbin Ltd [2010] EWHC 608 (Ch).
Fox and other film makers and distributors sued Newzbin, which ran an internet discussion system called Usenet, for copyright infringement, alleging that Newzbin is focused on piracy in that it locates and categorises unlawful copies of films and then (i) displays the titles of these copies in its indices, (ii) provides a facility for its users to search for particular unlawful copies, (iii) displays their search results and (iv) provides a simple one-click mechanism for users to acquire the unlawful copies of their choice. The defendant company, which owned and ran Newzbin, says its website is simply a search engine like Google — but that it was directed to Usenet rather than to the worldwide web. It also said it is “content agnostic”, being designed to index the entire content of Usenet. Where possible, it provided hyperlinks so that any supply of unlawful material is an act occurring exclusively between the hyperlink user and the relevant Usenet server operators — but that it played no part in any such activity.
In a long and carefully-expressed judgment in which he explains how Usenet and Newzbin work and what Newzbin actually does, Kitchin J concluded from the evidence that Newzbin clearly knew that its facility was used mainly by its members for the unauthorised downloading of infringing copies of the claimants’ films. He then turned to Fox’s action, which was based on the following:
(i) authorising acts of infringement by Newzbin’s members;
(ii) procuring, encouraging and entering into a common design with its members to infringe;
(iii) communicating the claimants’ copyright works to the public, namely the defendant’s members;
(iv) categorisation of Newzbin as a service provider with actual knowledge of other persons using its service to infringe copyright, in respect of which the claimants seek an injunction under section 97A of the Copyright, Designs and Patents Act 1988.
As to “authorisation”, Kitchin J reviewed and analysed the law relating to that word as it affected copyright infringement, with particular regard to the narrow, literal interpretation placed upon it by the House of Lords in C.B.S. Songs Ltd and others v Amstrad Consumer Electronics Plc [1988] 1 A.C. 1013, when the sale of tape-to-tape recording machines was not regarded as “authorising” infringement of the music copied by them since the company that made and sold the machines had not acted as though it had an entitlement to permit infringing acts by those machines’ users. At paragraph 90 he summarises the position:
“… “authorise” means the grant or purported grant of the right to do the act complained of. It does not extend to mere enablement, assistance or even encouragement. The grant or purported grant to do the relevant act may be express or implied from all the relevant circumstances. In a case which involves an allegation of authorisation by supply, these circumstances may include the nature of the relationship between the alleged authoriser and the primary infringer, whether the equipment or other material supplied constitutes the means used to infringe, whether it is inevitable it will be used to infringe, the degree of control which the supplier retains and whether he has taken any steps to prevent infringement. These are matters to be taken into account and may or may not be determinative depending upon all the other circumstances”.
Applying this to the facts, he held Newzbin liable:
” … I am entirely satisfied that a reasonable member would deduce from the defendant’s activities that it purports to possess the authority to grant any required permission to copy any film that a member may choose from the Movies category on Newzbin and that the defendant has sanctioned, approved and countenanced the copying of the claimants’ films …”.
As for “procuring, encouraging and entering into a common design” to infringe, the judge drew again on C.B.S. v Amstrad and the stiff test which had to be satisfied if liability were to be found:
“… mere (or even knowing) assistance or facilitation of the primary infringement is not enough. The joint tortfeasor must have so involved himself in the tort as to make it his own. This will be the case if he has induced, incited or persuaded the primary infringer to engage in the infringing act or if there is a common design or concerted action or agreement on a common action to secure the doing of the infringing act” (para.108).
Even so, there was ample evidence from which to conclude that Newzbin had so involved itself.
On the question of whether Newzbin had communicated the claimants’ Films to the public, Kitchin J found guidance in a European Court of Justice ruling in rather a different context,
Case C-306/05 Sociedad General de Autores v Editores de España (SGAE) v Rafael Hoteles SA. In that preliminary ruling on a reference from Spain, the Court had said:
“46 While the mere provision of physical facilities, usually involving, besides the hotel, companies specialising in the sale or hire of television sets, does not constitute, as such, a communication within the meaning of Directive 2001/29, the installation of such facilities may nevertheless make public access to broadcast works technically possible. Therefore, if, by means of television sets thus installed, the hotel distributes the signal to customers staying in its rooms, then communication to the public takes place, irrespective of the technique used to transmit the signal”.
On this basis, since Newzbin’s premium members indeed downloaded the claimants’ films from a place and at a time individually chosen by them, and since its members consider Newzbin to be making the films available to them, liability was established. An enquiry into damages, including additional damages for flagrant infringement was ordered. Injunctive relief would however be less dramatic:
“In my judgment the scope of any injunction under section 97A(2) should extend no further than that to which I have already concluded the claimants are entitled, namely an injunction to restrain the defendant from infringing the claimants’ copyrights in relation to their repertoire of films” (para. 135).
The IPKat thinks that this is a good example of a copyright owner taking its time, getting its evidence together, marshalling its legal arguments in order to get maximum benefit from the litigation process.
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Tags: Copyright · Design rights · Trade marks
Abuse of process is all the rage these days. Only a few short hours ago the IPKat was reflecting as to whether an appeal by a successful party in trade mark opposition proceedings against a decision in which he was actually victorious might constitute an abuse of process and now, in Ashley Wilde Group Ltd v Kocak and others, a decision in the Chancery Division (England and Wales) from John Baldwin QC, sitting as a Deputy High Court judge, abuse issues are raised in copyright infringement proceedings (note: this decision is not available on BAILII, but was conveniently summarised by Lawtel, to which subscribers may turn if they wish to order the full text).
In these proceedings the second and third defendants applied (i) to set aside an order which struck out their earlier application to challenge the court’s jurisdiction to hear a claim against them and (ii) to set aside an order that they be liable for costs incurred in separate proceedings.
The background to this is that the claimant, whom Lawtel designate as “W”, had obtained judgment, injunctive relief and an award of damages against a Turkish company for infringing the copyright in the design of a cushion. Having failed to execute judgment against the Turkish company, W went after the second and third defendants on the basis that, as the Turkish company’s chairman and vice-chairman respectively, they were sufficiently involved in the infringement of copyright to be made personally liable. After W succeeded against them, gaining an order that they pay the Turkish company’s costs in the first action since they had caused the first action to be carried on in the way that it was, the defendants applied to have the orders struck out (the application to set aside the costs order being made after a time-lag of five months from the application relating to liability). The defendants maintained that they should not have been proceeded against since the action against them was barred by res judicata or as an abuse of process; after all, the issue of infringement of copyright had already been the subject of a decision against the Turkish company and it was inappropriate to litigate it a second time. They also argued that the factual basis for the costs order was incorrect, not least because they had not caused the Turkish company to dispose of its assets in order to avoid W’s judgment.
John Baldwin QC dismissed the applications. In his view
* Res judicata was no defence where neither party was relying on a decision on the merits in the original action. The defendants might just have got some help from res judicata if W had lost in the first action, but that was not the case.
* There was nothing to support the contention that this was vexatious litigation.
* The requirement that a claimant bring all its claims arising out of the same incident against a defendant at once did not mean that a claimant could not sue other parties who might have been involved in the same tort but who were not parties to the earlier litigation.
* There were insufficient details from which it could be shown that the defendants had a real prospect of successfully defending the costs order and the court was not satisfied that things would have turned out any differently if the defendants had been parties to the first action.
The IPKat, admittedly without sight of the full text of the decision, thinks that this must be the correct approach. Merpel adds, at times when substantive copyright law seems to be creaking at the joints and it can be difficult for an injured party to obtain relief, the courts generally seem to take a more flexible and pro-rights-owner position when considering procedural issues.
Make your own Turkish Delight
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Tags: Copyright · Design rights · Trade marks
