7.15.2016

Recent Copyright and Trademark Cases and Decisions


Excerpts from: Intellectual Property Law - July 2016
  • The Tale of a Recent Northern District IP Case
  • Report: Trademark Litigation Steady as Firms Protect Brands
  • In Brief—Updates and Interesting Items of Note

The Tale of a Recent Northern District IP Case

Why it matters: The Northern District of California has recently overseen a high-profile, closely watched IP case. On May 26, 2016, the jury in Oracle America, Inc. v. Google, Inc. rejected Oracle's copyright infringement claims against Google (for which it sought $9 billion in damages) and found that Google's use of basic elements of Oracle's Java programming language to build its Android mobile operating system constituted fair use under federal copyright law. The Oracle judge affirmed the jury's verdict in a lengthy order issued on June 8, 2016. Oracle has indicated its intention to appeal. Read on for a recap.
Detailed discussion: Here, we review a recent high-profile IP case from the Northern District of California, which is almost certainly headed to the Federal Circuit on appeal.
Oracle America Corp. v. Google, Inc.
First, a brief recap of the relevant facts in this long-running litigation: In 2010, Oracle America, Inc. (Oracle) filed a $9 billion lawsuit against Google, Inc. (Google) in the Northern District of California alleging that Google's Android mobile operating system infringed Oracle's patents and copyrights related to 37 of its JAVA applied programming interfaces (JAVA Packages). At the conclusion of the first trial in 2012, with District Court Judge William Alsup presiding, a federal jury found that Google did not infringe Oracle's patents but did infringe Oracle's copyrights in the 37 JAVA packages. In addition, the jury deadlocked on Google's fair use defense (as to which Judge Alsup denied Oracle's motion for judgment as a matter of law). Shortly after the trial, Judge Alsup ruled that the replicated elements of the 37 JAVA packages—including the declaring code and the structure, sequence, and organization elements—were not subject to copyright protection. He thus vacated the jury's finding of copyright infringement with respect to the JAVA Packages and entered judgment in favor of Google.
Oracle appealed to the Federal Circuit, which reversed on May 9, 2014, reinstating the jury's finding of infringement with respect to the JAVA Packages and remanding the issue of Google's fair use defense to the district court for resolution in light of the Federal Circuit's opinion. The Supreme Court denied Google's petition for certiorari in 2015.
On May 26, 2016, after the conclusion of the second trial on remand, the federal jury returned a verdict that Google's use of basic elements of Oracle's Java programming language to build its Android mobile operating system constituted fair use under federal copyright law. On June 8, 2016, Judge Alsup issued a 20-page order again denying Oracle's motion for judgment as a matter of law on the issue of fair use and entered judgment in favor of Google.
In his order, the judge said that he believed it necessary to set the stage and "leave a few important observations" about the "charging" instructions on the law of fair use (including the four-factor test therefor) that the parties ultimately agreed could be presented to the jury and that Oracle was now challenging. Judge Alsup then addressed Oracle's "main" challenges to the jury's verdict by looking at the evidence presented at trial in light of the four-factor fair use test. While conceding that the jury could have gone either way on the issue, the judge concluded that the jury's verdict was reasonable in light of the evidentiary record in the case and denied Oracle's motion.

Report: Trademark Litigation Steady as Firms Protect Brands

Why it matters: Last month, a legal analytics firm released a report that tracks and analyzes statistics, metrics and trends across all trademark litigation filed in the U.S. District Courts from January 2009 through March 2016. The upshot: Trademark litigation continues to be an essential enforcement tool for companies to protect their brands.
Detailed discussion: In May 2016, legal analytics firm Lex Machina released its Trademark Litigation Report for 2016 (Report). The Report compiles statistics and "examines several important metrics (and their interactions) for trademark litigation in aggregate" across cases filed in the U.S. District Courts from January 2009 through the end of the first quarter of 2016. The charts included in the Report provide detailed coded statistics with respect to, among other things, case status (e.g., initial filings, updates and terminations), remedies, findings and judgments, and damages. The Report demonstrated that, over the relevant period, companies continued to rely heavily on trademark litigation as an effective enforcement tool to protect their—in many cases "luxury"—brands.
First, some key definitions: As used in the Report, a "Trademark Case" is defined as a case with one or more claims involving violations of the Lanham Act (the federal trademark statute) including for trademark infringement, trademark dilution, unfair competition or cybersquatting. This definition excludes cases with only state claims of infringement or unfair competition, trademark ownership disputes, and appeals from TTAB or USPTO decisions. The Report breaks out statistics for two primary subcategories of Trademark Cases, (1) Cybersquatting Cases, defined as "Trademark Cases involving claims of cyberpiracy prohibited under 15 U.S.C. § 1125 (d) of the Lanham Act"; and (2) False Advertising Cases, defined as "Trademark Cases involving claims of false advertising prohibited under 15 U.S.C. § 1125 (a)(1)(B) of the Lanham Act."
Here are some of the Report's highlights:*
District Court filing statistics:
  • Highest districts in overall Trademark Case filings: Central District of California (4,164), followed by Southern District of New York (2,142) and Southern District of Florida (1,659).
  • Top three districts for Cybersquatting Case filings: Southern District of Florida (486), Northern District of Illinois (429), and Central District of California (361).
  • Top three districts for False Advertising Case filings: Central District of California (785), Southern District of New York (389), and Northern District of Illinois (274).
Parties—top plaintiffs and defendants:
  • Top plaintiffs (by cases filed): Coach (730), Chanel (330), and Microsoft (203).
    • Last 5 quarters (1/1/15–3/31/16): Sream, Inc. (RooR water pipes) (55), Phoenix Entertainment Partners, LLC (karaoke licensor) (54), Chanel (47) and Coach (20).
  • Top defendants: National Football League and affiliates (548—majority related to dispute over use of former players' likenesses); Syngenta Seeds (184), Big Bad Limo Service (109), Amazon (66), and Walmart (59).
    • Last 5 quarters (1/1/15–3/31/16): Syngenta Seeds and its affiliates comprised the top 6 defendants sued (140).
Litigation breakdown:
  • Injunctions and other remedies: For Trademark Cases generally, approximate median time to obtain a (a) temporary restraining order—6 days, (b) preliminary injunction—1 month, and (c) permanent injunction—6 months. Research showed that Cybersquatting Cases tended to reach preliminary injunction at a slightly faster rate but False Advertising Cases tended to take longer to reach both preliminary and permanent injunction. Chanel, Tiffany, Louis Vuitton, Gucci, and Coach were among the most common parties to relinquishment of domain name actions.
  • Findings and judgments: Default judgments were entered at a high rate and accounted for 68.0% of all findings of Lanham Act violations. Equitable and fair use issues tended to be decided on summary judgment.
  • Damages: A vast majority of the damages awarded in Trademark Cases arose out of default judgments, with the remainder mostly arising from consent judgments. For decisions on the merits, juries awarded damages more frequently than judges.
    • Top three cumulative damage awards from all Trademark Cases: Chanel ($1 billion), Burberry ($523 million), and Gucci ($208 million).
    • Top three cumulative damage awards excluding damages from default or consent judgments: Coach ($66 million), PODS Enterprises ($60 million), and Neurovision Medical Products ($60 million).
*Information for period 1/1/093/31/16 unless otherwise indicated.
Overall, the Report provides useful insight into the current state of U.S. trademark litigation and the trends that are shaping it.
See here to read Lex Machina's "Trademark Litigation Report 2016."

In Brief—Updates and Interesting Items of Note

First lawsuits filed under the Defend Trade Secrets Act of 2016 (DTSA): Patentlyo.com reported that the first (of many more to come) lawsuits were filed under the newly enacted DTSA in the Southern District of Florida (two cases filed on May 16, 2016), the Northern District of Texas (one case filed on May 19, 2016), and the Northern District of California (one case filed on May 24, 2016). We covered the DTSA in our June 6, 2016 Newsletter under "Defend Trade Secrets Act of 2016: An Overview."
Other recent high-profile music copyright infringement lawsuits:
  • On June 8, 2016, a complaint for copyright infringement seeking $20 million in damages was filed against Ed Sheeren in the Central District of California by prominent songwriters who claimed that Sheeren's song "Photograph" copied a song they wrote that was recorded and released by an "X Factor" winner.
  • On May 26, 2016, a complaint for copyright infringement seeking unspecified damages was filed against Justin Bieber in the Middle District of Tennessee by a singer-songwriter who claimed that Bieber copied the "core" of his hit song "Sorry" from one of her songs. Also named in the complaint were the artist Skrillex and other collaborators and several Universal Music Group units.
New IP-related cert petition filed with Supreme Court—Commonwealth Scientific and Industrial Research Organization (CSIRO) v. Cisco Systems, Inc.: On May 25, 2016, CSIRO filed a petition for writ of certiorari asking the Court to review the question presented of "[i]s the Federal Circuit's promulgation of rigid legal rules to control the weight to be given by the trier of fact to evidence of patent infringement damages proper under 35 U.S.C. § 284?" Cert pending.
Copyright Opinions
Samples in Madonna's “Vogue” Too Trivial to Be Infringing: VMG Salsoul, LLC v. Ciccone, Nos. 13-57104, 14-55837 (9th Cir. June 2, 2016)
Graber, J. In a suit claiming infringement of both composition and sound-recording copyrights based on alleged sampling—in Madonna's song “Vogue”—of a 0.23-second “horn hit” from plaintiff's recording, a divided Ninth Circuit panel affirmed the district court's summary judgment of noninfringement under the de minimis exception to copyright, notwithstanding the fact that plaintiff had offered evidence of actual copying. With respect to the composition, the Ninth Circuit relied on its precedent in Newton v. Diamond (9th Cir. 2004), which held that copying of a musical composition is de minimis—and therefore noninfringing—when “the average audience would not recognize the appropriation.” With respect to the sound recording, the panel majority rejected the Sixth Circuit's bright-line rule of Bridgeport Music, Inc. v. Dimension Films (6th Cir. 2005), under which any unauthorized copying of a sound recording constitutes infringement. In the first federal appellate decision to address the issue since Bridgeport, the majority extended Newton's “average audience” test to sound recordings, finding “unpersuasive” the Sixth Circuit's reasoning that Congress intended to eliminate the de minimis exception for sound recordings under the Copyright Act. However, the Ninth Circuit held that the district court abused its discretion in granting attorneys' fees to defendants, holding that “[a] claim premised on a legal theory adopted by the only circuit court to have addressed the issue is, as a matter of law, objectively reasonable."
Burning of Burning Man Ship Not a Violation of VARA: Cheffins v. Stewart, No. 12-16913 (9th Cir. June 8, 2016)
O'Scannlain, J. In a suit alleging violation of the Visual Artists Rights Act (“VARA”), 17 U.S.C. § 106A, based on the burning of a replica of a Spanish galleon, the Ninth Circuit affirmed the district court's summary judgment ruling that the replica was “applied art” and accordingly not protected under VARA, which applies only to “works of visual art.” The panel majority held that “an object constitutes a piece of 'applied 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.” Where the galleon—which was built around a functioning school bus—was used for transportation, hosting of events, and other purposes during the annual Burning Man Festival, the Ninth Circuit held that the replica was ineligible for VARA protection under this standard.
Copyright Act's Fee-Shifting Provision Applies to Litigation of Fee Petitions: Bell v. Lantz, No. 15-2341 (7th Cir. June 17, 2016)
Rovner, J. In an appeal concerning the attorneys' fees awarded to defendant after plaintiff voluntarily dismissed his copyright infringement suit, the Seventh Circuit held that the Copyright Act permits an award of legal fees to the prevailing party for time spent defending the fee petition. The Seventh Circuit concluded that the Act's fee-shifting provision, 17 U.S.C. § 505, displaces the traditional American Rule even in the context of litigation over the entitlement to and amount of attorneys' fees. The court also rejected plaintiff's argument that defendant had run up fees by failing to timely notify him that he had sued the wrong party because defendant's denial of the infringement allegations in his answer was sufficient to put plaintiff on notice. However, because the district court did not address certain evidence pertaining to defense counsel's hourly rate, the Seventh Circuit remanded the case for redetermination of the fee award. Coming the day after the U.S. Supreme Court's ruling in Kirtsaeng v. John Wiley & Sons, Inc., the Seventh Circuit references the ruling, but does not substantively apply the Supreme Court standard.
Eleventh Circuit Upholds JMOL of Noninfringement for Architectural Plans: Home Design Services, Inc. v. Turner Heritage Homes Inc., No. 15-11912 (11th Cir. June 17, 2016)
Goldberg, J. In a suit alleging copyright infringement of architectural floor plans, the Eleventh Circuit affirmed the district court's grant of defendant's motion for judgment as a matter of law following a jury verdict for plaintiffs. Citing its precedent in Intervest Construction, Inc. v. Canterbury Estate Homes, Inc. (11th Cir. 2008), together with Zalewski v. Cicero Builder Dev., Inc. (2d Cir. 2014), the court held that, if the similarities between the works at issue concern only non-copyrightable elements, such as customary styles or features that are motivated by efficiency- or expectation-driven industry standards, there can be no copyright infringement as a matter of law. Following its holding inIntervest, the court also reaffirmed that because “separat[ing] protectable expression from non-protectable expression is . . . a question of law or, at the very least, a mixed question of law and fact,” judges are often best-situated to perform the substantial similarity analysis in such cases.
Trademark Opinions
Proof of Probable Confusion Not Required for Entire Geographic Scope of Injunction: Guthrie Healthcare System v. ContextMedia, Inc., No. 13-3343-cv(L) (2d Cir. June 13, 2016)
Leval, J. In a trademark dispute involving the logos of plaintiff, a non-profit healthcare services provider, and defendant, a provider of health-related digital content, the Second Circuit affirmed the district court's ruling of infringement and grant of a permanent injunction, but held that the district court had misapplied the law in fashioning a narrowly limited injunction that permitted defendant's use of the mark on the Internet and limited defendant's use only in a prescribed “Guthrie Service Area.” The Second Circuit explained that “[o]nce the senior user has proven entitlement to an injunction, the scope of the injunction should be governed by a variety of equitable factors—the principal concern ordinarily being providing the injured senior user with reasonable protection from the junior user's infringement.” Here, the district court had erroneously required plaintiff to prove a probability of confusion in all geographic areas to be covered by the injunction. Noting that plaintiff engaged in recruitment and fundraising nationwide and that its future geographic expansion could be impeded, the Second Circuit broadened the injunction to cover two additional counties containing plaintiff's facilities and remanded the case to the district court to determine whether an injunction could be tailored to allow defendant some limited use of its marks on the Internet and nationwide.
District Court Action Barred by Collateral Estoppel Based on Prior TTAB Proceeding: Ashe v. PNC Financial Services Group, Inc., No. 15-2566 (4th Cir. June 13, 2016) (non-precedential)
Per Curiam. In an unpublished opinion, the Fourth Circuit affirmed the district court's dismissal of plaintiff's complaint for trademark infringement as barred by collateral estoppel, based on the TTAB's finding in a prior opposition that defendant had established priority of use for the mark in question. The court declined to decide whether—as the district court concluded—the issues of priority in an opposition proceeding before the TTAB and in a federal infringement case are necessarily always identical, or rather—as plaintiff argued—that the Supreme Court's decision in B & B Hardware, Inc. v. Hargis Industries, Inc. (2015) “stands for the proposition that, when considering the issue of priority, courts must determine whether the actual use of a mark is the same as the use stated in a trademark application.” However, because plaintiff alleged no actual use of the mark beyond the uses described in his application, the Fourth Circuit concluded that “in this case, the issue of priority decided by the TTAB was identical to the issue of priority presented to the district court,” such that collateral estoppel applied.
Do you think your copyright or trademark has been infringed? Have you been accused of copyright or trademark infringement? Not sure if your actions could be considered copyright or trademark infringement? Want to avoid making a costly mistake? Then contact me at danny@djimlaw.com or call me at 929.322.3546.
Matter included here or in linked websites may not be current. It is advisable to consult with a competent professional before relying on any written commentary. No attorney client relationship is established by the viewing, use, or communication in any manner through this web site. Nothing on this blog or blog posting is official legal advice; it is just information and opinion. But if you want to, you can visit my professional website at www.djimlaw.com and if you wish to learn more then contact me. 

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