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Internet and Intellectual Property Alert Top Stories...

Google Wins!!! Jury Finds Use of Java Code Fair Use

Oracle sued Google in 2010 for using Java’s software code for its Android operating system. Oracle owns copyrights in pre-written packages of source code called application programming interfaces (APIs), code that provides step-by-step instructions that allow websites and other apps to talk to each other. Oracle had sought $8.8 billion in damages for alleged copyright infringement. A trial was held in 2012 in which a jury found that Google had copied portions of the Java APIs but the district court overturned the verdict on the ground that APIs are functional and not entitled to copyright protection. In 2014 the Federal Circuit reversed, holding that while functional in certain ways, APIs are still entitled to copyright protection. It remanded the case for trial on the fair use defense and damages claims.

After a three week trial in May, a jury unanimously held that Google’s use of 37 Java package names and 11,000 lines of declaring code in its Android operating system constituted permissible fair use. In denying Oracle’s motion for judgment as a matter of law, the Court just issued a lengthy opinion explaining why the jury’s finding of fair use was reasonable. It ruled that the jury could reasonably have concluded that Google’s use of Java was in good faith and that its decision to make Android available open source and free for all to use had non-commercial purposes, such as the interest in sharing software innovation. Oracle will appeal. The verdict is a huge win for the Java programming community and software developers who rely on open and free programming languages.

Oracle America, Inc. v. Google Inc., (N.D. Cal. May, 2016).
 

Jury Finds Little Trees' Trade Dress Infringed

The maker of Little Trees air freshener that has been around since we were kids sued a competitor for trade dress infringement. Although defendant’s freshener is shaped like a palm tree, the maker of Little Trees contended that when it changed its header card to include a green tree logo, upward/slanting text and a yellow background it infringed its trade dress. A jury agreed, finding that the trade dress had acquired secondary meaning in the minds of the public and that the infringement was willful.

Car Freshner Corp. v. Exotica Air Fresheners Co., (S.D.N.Y. March, 2016).

 

Starbucks’ Frappuccino Campaign Not a Rip Off

Plaintiff, a well-known visual artist who is often commissioned to paint murals, was approached by Starbucks’ ad agency to create artwork for its Frappuccino campaign. Although she declined the offer, she claimed that Starbucks created artwork that is substantially similar to her works and sued for copyright infringement. Plaintiff Hayuk’s works are known for their use of bold colors, geometric shapes, such as rays, lines, stripes and circles and layering of hues and texture produced by dripping paint. She claimed that the Starbucks’ campaign infringed five of her works. The artwork from the Frappuccino campaign consists of one or more cups with a green straw coming out of a lid and colored lines radiating out from the straw that cross at irregular angles within a triangular shape whose base faces upward and uses a multitude of colors.

Hayuk admitted that none of the Frappuccino art are exact copies but claimed that they misappropriated the "total concept and feel," characterizing this as the "core" of her works. In finding no infringement, the Court first noted that the Hayuk works use standard geometric forms, colors and textures but that these basic elements of artistic creation are not protectable. It then applied the "more discerning observer" test to determine whether the protectable elements standing alone are substantially similar to the allegedly infringing work. It concluded that none of the Frappuccino art is substantially similar to the total concept and feel of protectable elements of the Hayuk works. Although they share overlapping colored rays, these elements fall into the unprotectable category of raw materials or ideas in the public domain.

Hayuk v. Starbucks Corp., et al., 2016 WL 154121 (S.D.N.Y. Jan. 2016).

 

Guess What Scents Are Trademarked

While the Trademark Office rarely grants trademarks for fragrances/scents, see if you can guess which of the following have been trademarked. See answers at bottom of the page.

  • Pina Colada scent for ukuleles
  • Orange scent for fracking chemicals
  • Cherry scent for lubricants for high performance racing
  • Minty scent for pain relief patches
  • Strawberry scent for toothbrushes
  • Flowery musk scent used at Verizon Wireless destination stores
     

Vogue Sampling Not Infringement

Plaintiff sued singer Madonna and producers of her mega-hit dance song Vogue, accusing them of sampling "horn hits" from the song Love Break owned by plaintiff. Defendant and producer Pettibone recorded Love Break and copied a .23 second segment of horns from it and used it in Vogue. Plaintiff submitted evidence of actual copying so the Court addressed whether the use was so minor that it did not infringe plaintiff’s copyrights. Although the district court granted summary judgment in favor of defendants, the Ninth Circuit analyzed the sampling in detail in affirming the decision. Sampling is the actual physical copying of sounds from an existing recording for use in a new recording, even with slight modifications such as changes to pitch or tempo. While it found that Vogue used both the single and double horn hits contained in Love Break, it ultimately concluded that the use was de minimis and not infringing because the average audience would not recognize the appropriation.

VMG Salsoul, LLC v. Madonna Louise Ciccone, et al., 2016 WL 3090790 (9th Cir.).

  

Cirque de Soleil Accuses Timberlake and Timbaland of Sampling

Cirque de Soleil owns the copyright in the Steel Dream sound recording included in its highly successful QUIDAM album. It has sued artists Justin Timberlake, Timbaland, J-Roc and Fauntleroy, accusing them of copyright infringement by using a digital sample of Steel Dream in the song Don’t Hold the Wall, part of Timberlake’s The 20/20 Experience album, which went double platinum, meaning it sold more than 2 million copies.

Cirque de Soleil Canada Inc. v. Timberlake, Mosley, Timbaland, et al. (S.D.N.Y. March, 2016).

 

Burning Man Bus Not Visual Art Under VARA

Plaintiffs transformed a simple school bus into a replica of a 16th-century Spanish Galleon for use at the Burning Man Festival by adding a hull, decking, masts and a hand-crafted figurehead. The La Contessa first appeared at the Festival in 2002 and a number of years thereafter. It was stored on land owned by defendant, who intentionally burned the wooden structure so that a scrap metal dealer could remove it from his property. The artists filed suit for violation of the Visual Artists Rights Act (VARA). VARA, enacted in 1990, protects the "moral rights" of artists, giving the author of a work of visual art the right to prevent any intentional distortion, mutilation or destruction of the work. While VARA does not define "works of visual art," it is part of the Copyright Act, which states that paintings, sculptures, photographs and other materials qualify.

The district court granted summary judgment in favor of defendant on the ground that La Contessa is "applied art," and thus not covered by VARA’s protections. While VARA does not define the term "applied art," the Ninth Circuit crafted a definition in affirming the judgment. It explained that an object constitutes a piece of "applied art" – as opposed to "a work of visual art" – where the object initially served a utilitarian function and continues to serve such a function after the artist made embellishments or alterations to it. While a school bus was transformed into the La Contessa by adding elaborate decorative elements, it retained its practical function of transportation. At Burning Man, the La Contessa provided rides to festival-goers and served as a stage for poetry and acrobatics shows.

Cheffins and Jones v. Stewart, 2016 WL 3190914 (9th Cir. June, 2016).

J.C. Penney Caves in Burberry Suit

Luxury apparel brand Burberry sued J.C. Penney for infringing its famous BURBERRY CHECK trademark, which it contends is a symbol of modern luxury and high quality merchandise. Burberry has used the mark in its original red, camel, black and white colors, as well as other combinations. It sued for trademark infringement, counterfeiting and dilution for use of the mark on a "Scarf Coat," as well as a quilted jacket. It sought treble damages or alternatively, statutory damages of up to $2 million for each mark. As part of the settlement, Penney removed all of the allegedly infringing goods from its website and stores.

Burberry Ltd. v. J.C. Penney Corp., Inc., et al., (S.D.N.Y. Feb., 2016).

 
Maker of NBA Videogame Sued Over Players’ Tattoos

2K Games, the maker of the popular NBA 2K16 videogame, has been sued for copyright infringement by a company which owns the rights to tattoos inked on certain NBA players. These players’ tattoos are prominently featured in the game, including multiple tattoos on LeBron James, a Crown with Butterflies on Kobe Bryant, a Wizard on Kenyon Martin and a Script with Scroll on DeAndre Jordan. Plaintiff Solid Oak Sketches has copyright license agreements with the tattoo artists and offered to license the eight tattoos to the game maker for $1.1 million. The Complaint contends that 2K promoted its improved tattoo customization as a major feature of the game. Although 2K obtained copyright registrations for the tattoos, the issue of whether a tattoo is entitled to copyright protection has yet to be decided by a court.

Solid Oak Sketches, LLC v. Visual Concepts, LLC, and 2K Games, Inc., (S.D.N.Y. Feb. 2016).

 
Defend Trade Secrets Act Signed Into Law

On May 11, 2016, President Obama signed the Defend Trade Secrets Act (DTSA), creating the first federal civil cause of action for trade secret misappropriation. The Act does not preempt state trade secret acts but provides additional remedies, including reasonable royalties for ongoing infringement, exemplary damages up to twice the amount of monetary damages awarded if the misappropriation was willful and attorneys’ fees in the event of bad faith by either party or willful and malicious misappropriation. In extraordinary circumstances, the court may issue an ex parte order authorizing law enforcement to seize property necessary to prevent dissemination of the trade secret. The DTSA rejects the "inevitable disclosure doctrine," which allows employers in some states to enjoin former employees from working for competitors on the assumption that he or she has knowledge that will inevitably be passed on to the new employer.

Effective May 12, 2016, all employers should provide a written whistleblower immunity notification advising employees, contractors or consultants of their right to immunity for disclosing trade secret information in confidence to a government authority in order to report a violation of law. The DTSA does not mandate that all agreements contain this provision but if an employer fails to comply with the notice requirement and later sues for trade secret misappropriation it will not be entitled to enhanced damages and attorneys’ fees.

 

Hendrix Estate Sues to Stop Purple Haze Liqueur

Plaintiffs own all copyright, trademark and licensing rights related to the late Jimi Hendrix, including music compositions and sound recordings. Hendrix was one of the most creative musicians of the 20th century and pioneered the explosive possibilities of the electric guitar. His classic tracks include Purple Haze, Voodoo Child and Are You Experienced. Because drugs and alcohol have been connected to his death, plaintiffs do not license his marks or music in connection with alcohol or drug related products.

Plaintiffs sued defendants for trademark and copyright infringement and trademark dilution by tarnishment as result of their use of the Purple Haze mark, Hendrix’s signature, his "headshot" logo and album titles to promote and sell alcohol products, including Purple Haze Liqueur. The complaint notes that while defendants applied for federal trademark registrations for PURPLE HAZE LIQUEUR and related marks, the PTO refused them because they included matter which may falsely suggest a connection with Jimi Hendrix.

Experience Hendrix, LLC v. Tiger Paw Distributors, LLC (M.D. Ga. April, 2016)

 
Can Generic Drug Maker Sell Purple Pills?

Late last year the maker of Prilosec and Nexium for treating severe heartburn and acid reflux obtained a preliminary injunction against Dr. Reddy’s sale of a generic version of Nexium in a purple color. Plaintiffs own federal trademark registrations covering the color purple for GI products and the phrase THE PURPLE PILL. Last Fall, Dr. Reddy’s launched its generic equivalent to Nexium in capsule form using two shades of purple. In granting the injunction, the Court held that plaintiffs are likely to succeed
on the trademark infringement and dilution claims. The evidence is undisputed that the public associates the color purple with Prilosec and Nexium. While Nexium is a branded product and Dr. Reddy’s is generic, they are still competing in the same market to the same consumers and there was sufficient evidence to show that plaintiffs’ trademarks are famous. The Court explained that a registration for a color covers all shades of that color. The litigation is moving forward.

AstraZeneca AB, et al. v. Dr. Reddy’s Laboratories, Inc., 2015 WL 6870038 (D. Del.).

 

Louis Vuitton Cannot Take a Joke

Louis Vuitton sued a seller of canvas tote bags bearing caricatures of iconic
handbags such as Vuitton, Chanel and Kate Spade on one side and
the text My Other Bag on the other. The name My Other Bag (MOB) was inspired by novelty bumper stickers which can be seen on inexpensive cars claiming that the driver’s "other car" is a Mercedes or some other luxury car. They are a riff on wealth, luxury brands and the social expectations of who would be driving these cars. Vuitton sued for trademark infringement, dilution and copyright infringement.

The Court entered summary judgment in favor of MOB, finding that its bags are protected as fair use and constitute permissible parody. It explained that a successful parody communicates to a consumer that an entity distinct from the trademark owner is poking fun at a trademark or the policies of its owner.

That joke – combined with the stylized, almost cartoonish renderings of Louis Vuitton’s bags depicted on the totes - builds significant distance between MOB’s inexpensive workhorse totes and the expensive handbags they are meant to evoke, and invites an amusing comparison between MOB and the luxury status of Louis Vuitton. Further, the image of exclusivity and refinery that Louis Vuitton has so carefully cultivated is, at least in part, the brunt of the joke: Whereas a Louis Vuitton handbag is something wealthy women may handle with reverent care and display to communicate a certain status, MOB’s canvas totes are utilitarian bags "intended to be stuffed with produce at the supermarket, sweaty clothes at the gym or towels at the beach."
The Court concluded with advice to Vuitton that sometimes it is better to accept the implied compliment and to smile or laugh rather than sue.

Louis Vuitton Malletier v. My Other Bag, Inc., 2016 WL 70026 (S.D.N.Y.).

 
Can Italian Fashion House Stop Former Quarterback From Using His Name

Italian luxury goods company Salvatore Ferragamo has sued former NFL quarterback Vince Ferragamo, accusing his Ferragamo Winery of infringing its trademarks, as well as cybersquatting and false designation of origin. Plaintiff claims it made Ferragamo branded wine in the 1980s and then later re-introduced the wine in the United States. It filed an intent to use trademark application in 2012 and received a registration for FERRAGAMO in connection with wines.

Vince Ferragamo, now 62, started his winery in California in 2010 and its wine has won medals in the Los Angeles Wine Competition. The lawsuit complains that defendants’ website is festooned with images of Tuscany, Italy and the Italian countryside, suggesting a connection to Italy and Italian culture.

Salvatore Ferragamo S.P.A. v. Ferragamo Winery and Vincent Ferragamo, (S.D.N.Y. May, 2016).

 

Coke/Dr. Pepper Fight Over “Zero” Is a Draw

For over a decade Coke has tried to obtain a federal trademark registration for the term "zero" for its zero calorie soft drinks, such as Coke Zero, Sprite Zero and Powerade Zero. Dr. Pepper Snapple, which markets Diet Rite Pure Zero, challenged the applications, arguing that "zero" is a generic term used frequently by beverage firms for drinks which contain no calories. It also argued that allowing Coke to register the term would give it a monopoly to use a common English word.

In a split decision, the Trademark Trial and Appeal Board ruled that the term "zero" is descriptive, not generic, of Coke’s beverages and that it has acquired distinctiveness in the term "zero" when used as a part of a mark for soft drinks. As a result, Coke can register Coke Zero for soft drinks but does not have the exclusive right to use the term. It also ruled that Dr. Pepper could register Diet Rite Pure Zero because use of the word "zero" in this fashion would not cause consumer confusion in the marketplace.

Royal Crown Company and Dr. Pepper/Seven Up Inc. v. The Coca-Cola Company, Opp. No. 91184434 (TTAB May 23, 2016).

 
IP Cases Supreme Court Will Address

The following are a few of the Intellectual Property cases the Supreme Court will decide this year.

How to Determine When Feature of Useful Article Is Protected by Copyright

In our September 2015 Update we reported on Varsity Brands, Inc. v. Star Athletica, LLC, in which the Sixth Circuit held that designs on cheerleading uniforms are protectable under the Copyright Act. The Court’s decision will provide guidance on how to determine whether a component of a useful article is entitled to copyright protection and may have broader implications not only for the apparel industry but for new technologies, such as 3D printing.

 
Whether Lanham Act Provision Prohibiting Registration of Scandalous, Immoral or Disparaging Trademarks Is Constitutional?

An Asian-American rock band called The Slants sought to register this mark to "reclaim" and "take ownership" of Asian stereotypes. The PTO rejected the mark as disparaging and the Federal Circuit affirmed. However, it subsequently vacated its decision and determined that the disparagement provision of the Lanham Act is unconstitutional because it in effect acts as a penalty or censorship of free speech. In re Simon Shiao Tam, 808 F.3d 1321 (Fed. Cir. 2015). The Court will decide whether the disparagement provision is invalid under the Free Speech Clause of the First Amendment.

 
Whether Defense of Laches May Bar a Patent Infringement Claim Brought Within the Patent Act・fs Six Year Statutory Limitations?

Two years ago the Supreme Court in Petrella v. Metro-Goldwyn-Mayer held that laches was not a defense to claims for legal remedies for copyright infringement that are brought within the Copyright Act’s three year statute of limitations. It limited the application of laches to claims of an equitable nature.

In SCA Hygiene Products v. First Quality Baby Products, LLC, 807 F.3d 1311 (Fed. Cir. 2013), the Federal Circuit, in a divided decision, held that despite Petrella, laches remains available to bar claims for legal relief that are timely barred under the Patent Act because Congress codified the laches defense for patent actions. The outcome could be significant since a party that prevails on a laches defense can bar all pre-suit damages.

 
Awarding Attorneys' Fees in Copyright Cases

The Court heard oral arguments in Kirtsaeng v. John Wiley & Sons, Inc. in April 2016. Kirtsaeng bought Wiley’s textbooks overseas and re-sold them in the U.S. Wiley sued for copyright infringement and the lower courts granted judgment in its favor. In 2013 the Supreme Court reversed, holding that Kirtsaeng’s actions were permitted by the "first sale" provision of the Copyright Act. Kirtsaeng then sought his attorneys’ fees. The district court held that Wiley’s claim was not objectively unreasonable and represented a legitimate attempt to protect the rights of a copyright holder and that considerations of compensation and deterrence did not weight in favor of a fee award. The Second Circuit affirmed.

 
Supreme Court Rules That Test for Enhanced Damages in Patent Cases Is Too Rigid

This ruling came down as this update is going to press. The appeal involved two patent infringement cases, Stryker Corp. and Halo Electronics. In both cases, defendants were found to infringe plaintiffs’ patents but the Federal Circuit held that enhanced damages were not available. The Court just ruled that the test applied by the Federal Circuit is too rigid. It held that a patent infringer’s subjective willfulness, whether intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless. It noted that under the current test, a district court may not even consider enhanced damages for malicious pirates who intentionally infringe a patent unless their infringement was "objectively" reckless. Such a test insulates some of the worst patent infringers from liability for enhanced damages. It emphasized that enhanced damages should generally be reserved for egregious cases typified by willful misconduct.

Halo Electronics, Inc. v. Pulse Electronics, Inc., et al., (S.Ct. June 13, 2016).

 
How to Measure Damages for Infringement of Design Patents

A juror awarded Apple over $1 billion in damages in its patent infringement case against Samsung for infringement of Apple’s utility and design patents. Samsung argued that it should not have to pay 100% of its profits for the phones that used these components since they made up only a small part of the phone’s features. In December 2015, Samsung paid Apple $548 million as part of a joint agreement but preserved its right to appeal. The question presented is: Where a design patent is applied to only a component of a product, should an award of an infringer’s profits be limited to those profits attributable to the component.

 
Proper Claims Construction of Patents

There has been a great deal of confusion and inconsistency between the standard of review used by the Patent Office and that of the federal courts. The Patent Office construes claims according to their broadest reasonable interpretation rather than their plan and ordinary meaning, as applied by federal courts during litigation. The Court heard oral arguments in April 2016 in Cuozzo Speed Technologies, LLC v. Lee. Cuozzo owned a patent for an invention that alerts drivers when they are speeding. Garmin filed a challenge with the Patent Office, which invalidated the Cuozzo patent on the grounds that its claims were not truly innovative.

Answers: All of the above have been registered except the fracking chemical, which abandoned its application.