A Champion Spark plug re-conditioned goods case involving ROLEX watch parts. From the Fifth Circuit decision:

This is a trademark infringement dispute involving allegations of counterfeit and infringing use of Rolex’s marks by BeckerTime. Rolex is a luxury watch seller with a legally protectable interest in numerous trademarks. BeckerTime sells primarily decades-old preowned watches containing Rolex branded parts. The at-issue watches in this case are watches sold by BeckerTime that are identified as “Genuine Rolex,” but contain both Rolex and non-Rolex parts. The watches specifically considered by the district court contained additional diamonds, which were added “as hour markers to the refinished dials by drilling holes in the dials and placing aftermarket diamonds or other stones and settings in the holes.” To refinish dials, BeckerTime “strips the dial down to bare metal, then, after the refurbishing process is complete, reapplies Rolex’s trademarks.” These “modifications” are not performed or authorized by Rolex. BeckerTime lists the retail prices of their modified watches with comparison prices to new Rolex watches, but for the watches considered, the district court found that “Rolex has never sold a watch matching the description” provided by BeckerTime.The at-issue watches contain “at least one Rolex trademark” and “aftermarket bezels (not made or endorsed by Rolex) . . . including bezels with added diamonds.” BeckerTime further applies “aftermarket bands or straps (not made or endorsed by Rolex)” that “sometimes include a genuine Rolex clasp or buckle displaying Rolex’s trademarks.” The parts BeckerTime adds to the at-issue watches “do not bear any markings indicating BeckerTime is the source.” Further, the district court found that the parts replaced, such as the bezel, dials, and bracelets, “are integral and necessary to the at-issue watches.”

Text of decision in Rolex v BeckerTime, 5th Circuit, Jan 26 2024

SDNY: For purposes of a MtD, Defendant’s affirmative defenses (e.g. fair use) must be evident from the face of the complaint. Here, while defendant’s own mark prominently appeared alongside plaintiff’s mark on its packaging, whether this was fair use could not be determined at the 12b6 stage.

text of decision in Global Brand v Rae Dunn Design, 23-CV-1644 (DEH) January 9, 2024



This could be an important story for brand professionals. County star Luke Combs won a $250K copyright judgment against an ailing fan. Now, the fan says she didn’t know about the suit (sic), and he says he didn’t know about the suit (sic)

If you’ve been following U.S. TM and copyright litigation trends, then you guessed correctly that this was a SAD (for Schedule A Defendant) lawsuit – called that because so many defendants are lumped together (often over a hundred), that they are not individually identified in the caption, but are instead listed in a schedule attached to the complaint (and the suit is referred to as, for example, Luke Comb vs. Schedule A Defendants).

The significance of SAD suits are severalfold. First, they’re efficient and cost-effective for plaintiffs, allowing them to knock out numerous bad guys in a single suit (sometimes seizing significant amounts of illegal proceeds in the process).

However, speaking generally, these suits take some procedural short cuts. If plaintiff establishes that the bad guys will flee the jurisdiction (or more accurately, will likely withdraw funds from its U.S. accounts), then the plaintiff may be allowed to freeze the defendants’ U.S. assets on an ex parte basis. I

If the plaintiff can establish that normal service of process is not possible (because, for example, defendant operates under a fake persona) the plaintiff may be allowed to serve process via email.

Also, joinder requirements seem to be, uh, relaxed. The plaintiff alleges that all the defendants are related, and that seems to be that.

Taken as a whole, these short-cuts add up to a boon for plaintiffs, but also poses enough due process questions that it seems very few courts allow them. An overwhelming majority are brought in only two federal judicial districts – those in Chicago and Miami. For more info on SAD suits, see Professor Goldman’s paper “A SAD Scheme.”

Which brings us to Luke Combs. He is “heart sick” that he sued an ailing fan who sold $380 worth of alleged infringing merchandise. He says he didn’t know about the suit (brought in his name). His management company takes care of these things. Defendant says that the service email went to her spam folder. He says he will raise funds for her. The judgment, however, has already been “rendered.” (raised eyebrow emoji).

SAD suits have been going on for ten years or so but their existence has percolated into main-steam awareness slowly. To the extent that there have been any due process corners cut – the victims tend to be non-U.S. infringers (who don’t tend to have good U.S. PR help).

However, if there are more sad SAD stories like this one, involving U.S. defendants (and U.S. plaintiffs who have been “victimized” by their cold and unfeeling brand protection counsel) then we may see heightened scrutiny of these suits.

https://lnkd.in/eJQs6xDc (-tumblers-1235836617/

NASHVILLE, TENNESSEE - JUNE 08: Luke Combs performs on stage during day one of CMA Fest 2023 at Nissan Stadium on June 08, 2023 in Nashville, Tennessee. (Photo by Jason Kempin/Getty Images)

Luke Combs ‘Sick to My Stomach’ to Learn He Won $250K Judgment Against Convalescing Fan Who Made Tumblers; Says He Will Raise Funds for Her

variety.com • 4 min read

From the decision:

The main issues in this appeal are governed by the United States Supreme Court’s recent decision in Jack Daniel’s Properties, Inc. v. VIP Products LLC, 599 U.S. 140 (2023). Applying Jack Daniel’s, we conclude that Vans is likely to prevail in arguing that MSCHF’s Wavy Baby shoes used Vans’ marks and trade dress as source identifiers, and thus no special First Amendment protections apply to protect MSCHF against Vans’ trademark infringement claim. As such, the district court did not err in concluding that Vans is likely to prevail on the merits of its trademark infringement claim in light of the likelihood of confusion as to the source of the Wavy Baby shoes. We further conclude that the district court did not err in requiring MSCHF to escrow its revenues from Wavy Baby sales, and that the district court was not required to make a bond.

Text of Decision in Van v MSCHF, 2d Cir Dec 5 2023

Question presented:

Whether a seller whose products ship nationwide is
subject to personal jurisdiction in every forum into which
even one of its products is shipped
.

Factual background from petition:

Respondent is a Delaware corporation with its principal
place of business in Arizona and is in the business of
selling health and wellness products. Alleging that
Petitioners unlawfully sold Respondent’s products through
online storefronts on Amazon.com, Respondent brought
suit against Petitioners for trademark infringement and
related claims. citations omitted.

TEXT OF CERT PETITION IN PHOTOPLAZA v HERBAL BRANDS

TEXT OF NINTH CIRCUIT DECISION IN PHOTOPLAZA v HERBAL BRANDS

Link to Reuters article on cert petition: Amazon resellers ask Supreme Court to clarify where online businesses can be sued

Text of in rem complaint Latham & Watkins vs LW-IUF.COM et. al., 1:23-cv-01486-CMH-LRV (EDVA October 31, 2023).

From the complaint:

An unknown scammer has maliciously used the Abusive Domain Names in violation of Latham’s trademark rights to unlawfully, and in bad faith, derive a profit by defrauding members of the public. In the emails that Latham is aware of, the scammer has used the Abusive Domain Names to email members of the public and Latham’s clients purporting to be a Latham partner in Latham’s Paris office. It is possible that the scammer has impersonated different Latham attorneys or staff in other instances of which Latham is presently unaware. In the emails, the scammer attempts to collect payment for a purportedly pending invoice. By registering and using the Abusive Domain Names and impersonating Latham personnel, the scammer has not only attempted to defraud Latham’s clients and other members of the public, the scammer has violated and harmed Latham’s longstanding trademark rights and damaged Latham’s outstanding reputation and goodwill. This conduct constitutes cyberpiracy in violation of the ACPA, and Latham accordingly seeks an order transferring the Abusive Domain Names to Latham to halt this scam.

The Anti-cybersquatting consumer protection act (section 43(d) of the Lanham Act) allows for in rem jurisdiction over a domain name if, despite diligent efforts, the plaintiff cannot identify the person who registered or used the abusive domain name. In rem jurisdiction is appropriate in the forum of the registrar or registry. Verisign, administrator of the .com gTLD registry, resides in Virginia, and thus this suit has been filed in the EDVA.

Reuters coverage here.

Our Powerpoint “Sorting the Real From the Fake” – Mel Gardner and Marty Schwimmer

Slides from our presentation “Sorting the Real from the Fake” – Conners Inn CLE

Google Research Explains Test-to-Image Technology

Matt Sag article on Copyright Safety for Generative AI

Recent cases:

·Silverman et al v. OpenAI, Inc.

Silverman et al v. OpenAI, Inc. et al 4:23-cv-03416-KAW | Lex Machina

·Kadrey et al v. Meta Platforms, Inc

Kadrey et al v. Meta Platforms, Inc. 3:23-cv-03417-SK | Lex Machina

·Tremblay et al v. OpenAI, Inc.

Tremblay et al v. OPENAI, INC. et al 3:23-cv-03223-AMO | Lex Machina

·Description: “OpenAI’s ChatGPT software product allegedly used copyrighted books in its training dataset without the authors’ consent.” 

·Andersen et al v. Stability AI Ltd

Link: Andersen et al v. Stability AI Ltd. et al 3:23-cv-00201-WHO | Lex Machina

Andersen et al. v. Stability et al. January 2023 (N.D. California): Artists sued in a class action AI entity for acquiring billions of images for training of its AI systems to then create works. 

·Getty Images (US), Inc. v. Stability AI

Link: Getty Images (US), Inc. v. Stability AI, Inc. 1:23-cv-00135-GBW | Lex Machina

Authors Guild v Open AI 23-cv-08292 SDNY

Text of complaint in Authors Guild v Open AI Answer due December 4, 2023

FAIR USE ARTICLES

Copyright Safety by Professor Matthew Sag

Verification Tools

NY Times Visual Investigations

NY Times Favorite Tools

Washington Post Visual Forensics

BellingCat

We had a successful result for a defendant in a pretty interesting case.

Can a take-down notice sent to an ecommerce site such as eBay or Amazon expose the IP rights-owner to a defamation suit? Yes (or No), says a New York federal judge (in two different cases). The two decisions (Unlimited Cellular v. Red Point Software and CDC Newburgh v. STM Bags) taken together suggest how to fine-tune takedown notices.

In both disputes, agents of trademark owners submitted takedown notices (to eBay in Unlimited Cellular and to Amazon in CC Newburgh), asserting that an unauthorized seller’s goods were counterfeit.

Rather than respond to the ecommerce site’s takedown procedure, the sellers filed lawsuits against the agents (and the trademark owner as well in CDC Newburgh), alleging that the takedown notices were defamatory because, according to the complaints, the goods were not counterfeit.  The plaintiffs also alleged various business torts such as tortious interference). The plaintiffs in the two suits were represented by the same counsel (and the defendants alleged that the plaintiffs were related entities).

Defendants moved to dismiss in both actions. In Unlimited Cellular, Judge Roman of the SDNY allowed the defamation action to proceed. However in CDC Newburgh, Judge Roman dismissed the defamation action (and granted defendant’s motion to dismiss in its entirety).

The reason is the difference between a declarative statement upon which the speaker intends the recipient to rely, and an opinion where the speaker discloses the basis for the opinion. A false statement of fact is potentially actionable if defamatory. An opinion can be wrong, but its not actionable.

Judge Roman, applying New York state law, held that the statement to eBay consisted of little else than the assertion that the goods were counterfeit. The takedown notice to Amazon allowed for comments in which the defendant noted that the seller was not an authorized re-seller, nor did the trademark owner have records that it had sold anything to this seller, and “therefore we can safely assume” (or “therefore we conclude”) that the goods are counterfeit (the defendant used both of those phrases in its takedown notices. Accordingly, the Court held that the alleged statements were in the form of “a proferred hypothesis that is offered after a full recitation of the facts on which it is based . . .readily understood by the audience as conjecture.”

Takedown notices, as a class of communication, may be subject to various qualified privileges. For example, New York recognizes the common interest privilege, covering statements made between parties pursuing a common interest (such as a trademark owner and an ecommerce site policing the site for infringements). However qualified privileges ordinarily require some fact-finding, and a court is reluctant to dismiss a defamation cause at the early motion-to-dismiss phase – in contrast to absolute defenses, such as the opinion privilege, which can be evaluated on the face of the pleading.

Not speaking to the other issues raised by these decisions (including a discussion of whether a federal court can enforce New Yorks Anti-Slapp statute (short answer – no), where do these decisions leave the trademark owner? When sending a takedown notice (or other forms of demand letters sent to third parties), take care that the notice contains more than conclusory claims, but contain a “full recitation of the facts on which the [claim] is based.”

Leason Ellis represented co-defendant in CDC Newburgh v STM Bags.

TEXT OF UNICELLULAR v REDPOINT DECISION

TEXT OF CDC NEWBURGH v STM BAGS