First, a shout out to Prof Tushnet, of 43(b)log, whose article is cited with approval in this case.
Lexmark manufactures toner cartridges. Cartridges can be re-filled by ‘re-manufacturers’, so Lexmark inserted a microchip that prevented re-use (unless the consumer returned the cartridge to Lexmark). A ‘shrink-wrap’ license prohibited the consumer from submitting the cartridge to re-manufacturers. Static manufactured a chip that allowed re-manufacture of Lexmark cartridges despite the presence of Lexmark’s chip. Lexmark brought various claims against Static. Static brought counterclaims under the false advertising prong of 43(a), alleging that Lexmark made two false statements that injured Static’s business:
1. That consumers were legally obligated to return the cartridges solely to Lexmark; and
2. That Static’s chips were illegal.
Static claimed that it sold fewer chips because as a result of those false statements, consumers purchased fewer re-manufactured cartridges.
Lexmark argued that because Static was not a direct competitor of Lexmark, Static did not have standing under 43(a).
Held: The ‘direct-competitor’ test is rejected. Static properly pled the elements of a Lanham Act false advertising claim. It properly alleged that its injuries were in the zone of interests that 43(a) seeks to protect. It further properly alleged that its injuries were proximately caused by a violation of the statute – namely that the deception of the re-manufacturers caused them to withhold trade from Static (which it will have to establish at trial).
This SDNY decision is chock full of useful legal tidbits.
Monster Energy allegedly disseminated a video that included four (or was it five?) songs in which the Beastie Boys owned 50% of the copyright (or did they?). The Beastie Boys sue on copyright and trademark. All sorts of pre-trial motions get brought. From the top:
1. Plaintiffs want to offer at trial other videos that contain Beastie Boy music. These videos were created and posted by fans and hosted on Monster’s site, as some sort of user-generated content promotion. Held: the videos are out – the allegedly probativity (that these third-party videos somehow shed light on Monster’s sate of mind) is outweighed by among other things, the dreaded ‘trial in a trial.’
2. Plaintiff is allowed to amend its complaint to add a fifth song. The Case Management Plan had set December 16, 2012 as the deadline for amending the complaint. Plaintiff moves to amend on February 14, 2014. Plaintiff has to show good cause. They discovered the infringement in July 2013, during expert discovery. They notified defendant fairly promptly. They waited out summary judgment. Then they moved to amend. And defendant is not prejudiced by the addition of the fifth song.
3. Even though Plaintiff didn’t own the copyright to the fifth copyright at the time the action started and obtained it by assignment later, the ability to sue for copyright can be retroactively assigned.
4. Defendant’s expert’s testimony relating to any ‘likelihood of association’ arising from the sue of the Beastie Boys’ music in a Monster Energy video, will be inadmissible as to the likelihood of confusion, as to the term may cause confusion with the jury as to the proper standard.
5. Experts may not base their opinion as to perceptions of a brand from asking co-workers in the expert’s office. This expert actually had testimony thrown out in a previous case for the same reason. Seriously?
6. The Court does a very thorough analysis of the requirement for monetary damages under the Lanham Act, laying out the disagreement among the Judges of the SDNY as to whether or not plaintiffs are required to show either (1) actual confusion or (2) bad faith, in order to obtain monetary relief. The Court concludes that they do.
I’m not sure what my favorite Beastie Boys song is.
Plaintiff, owner of a federal registration for COUNTRY KITCHEN for a nationwide chain, operates a COUNTRY KITCHEN in Patchogue. Defendant operates the NORWICH COUNTRY KITCHEN, in East Norwich, which is about 35 minutes away.
Advocacy organization MoveOn.org placed billboards in Louisiana criticizing the governor’s Medicaid policies. The billboard refers to Louisiana’s trademarked phrase ‘Pick Your Passion.’
Here is the ‘argument.’ The Lieutenant Governor’s office, which we are told is a ‘separate’ office from that of the Governor, instructs the Tourism Department. The Tourism Department is the title owner of the PICK YOUR PASSION trademark, which covers ‘Promoting culture, recreation, tourism and business in Louisiana.’ MoveOn’s billboard uses the trademark to criticize the Governor, not the Lieutenant Governor. Under the ‘Cat is Not in the Hat’ line of reasoning (ignoring the conflation of tm and copyright theories), defendant may only appropriate plaintiff’s protectable expression to comment on plaintiff, not on a third party. The Billboard uses the Lieutenant Governor’s trademark to comment on the Governor.
Seems like transparent sophistry to me. Perhaps MoveOn should consider a 42 USC Sec 1983 claim against the State of Louisiana.
LovelySkin.com owns registrations for LOVELYSKIN and LOVELYSKIN.COM, which it obtained through a showing of acquired distinctiveness under Section 2(f) of the Lanham Act. It sued LivelySkin.com for infringement (both were ‘cosmeceutical’ retailers). Defendant counterclaims, moving to cancel plaintiff’s registrations. The District Court found no confusion and cancelled the regs. This 8th Circuit decision does a good job walking through the proper analysis for presumptions. Defendant raised questions whether plaintiff had acquired distinctiveness, but not enough to upend the presumption. However, defendant won the war, as the Court affirmed the finding of no confusion. Bonus discussion of whether misaddressed emails are in fact evidence of actual confusion (in this case, no).
Kevin Mernone ran Gluco Perfect, a successful medical supply company. According to the complaint: He was an alcoholic and going through a divorce. Defendant Francine Freiman worked at the company. While he struggled with his disease, she ‘covertly’ plied him with liquor. She and her co-conspirators, looted the company. They forged checks, embezzled, etc. The established a ‘mirror image’ company, Perfect Gluco, to divert funds. In the last days of his life, while he lay in a coma, she and others stole personal effects of his (they allegedly carried out a safe!). The widow (the divorce was never finalized) and the company now sue to reclaim what was stolen.
OK – sounds like there is indeed a colorable trademark cause but the forged checks and embezzled funds sound criminal as well. I can’t find any references on the Internet to any criminal proceeding.
National Grange organization sues former chapter. History of plaintiff here.
Judge Judy Sheindlin of TV, who is not related to Judge Shira Sheindlin of the SDNY, sues a Connecticut PI lawyer for running excerpts from her show in his commercials. Judge Judy alleges that, according to a survey, she is one of America’s 100 most trusted people. Maybe he’s a great PI lawyer but you may want to consider other options in seeking counsel for right of publicity claims.
Plaintiff operates a successful bar named DUTCH KILLS in the Long Island City section of Queens. Defendant has opened DUTCH KILLS CENTRAAL six blocks away. There is a neighborhood named Dutch Kills in Long Island City. Plaintiff alleges that neither bar is located in it.
Plaintiffs are the administrators of the Estate of their brother, the late artist Jean-Michel Basquiat. The Estate owns the trademark ‘BASQUIAT” and the copyrights in his works. It serves as an Authentication Committee to opine on the authenticity of works attributed to him. Christie’s is the famous auction house. A collector put 50 of his alleged Basquiat works up for sale through Christies. He had previously shown 7 such works to the Authentication Committee, which authenticated 6 of them. Christie’s listed the 50 works on its catalog and ran a notice in it:
All artwork by Jean-Michel Basquiat: (c) 2014 the Estate of Jean-Michel Basquiat/ADAGP, Paris/ARS, New York.
The complaint doesn’t specifically say that the 43 unauthenticated items are not authentic. Para. 10 of the complaint says specifically what they say about the authenticity. Para. 11 indicates that the copyright notice is false, because the Estate won’t claim copyright in all of the works because it won’t claim ownership in works that are of ‘questionable authenticity.’ Accordingly, Christie’s claim that the Estate is claiming copyright, is a false statement that deceptively implies that the works are authentic and that the Estate sanctioned the sale.
Christie’s has reportedly suspended the sale.
A sample Basquiat work from Wikipedia here (not intended to suggest that it is part of the suit).