Netflix, the web based DVD rental service, launched as contest in 2006 offering a 1 million dollar prize to team that develops a recommendation algorithm that is shown to be 10% better that Netflix’s current recommendation engine. To those in the programming community, the challenge has been compared to scaling Mount Everest. Has the summit been reached?

It seems the two contest front runners, Team Pragmatic Theory and Team Bellkor in BigChaos, have joined forces and submitted an algorithm that was 10.05 percent better than the one Netflix uses to recommend movies to its subscribers. The result was published on the Netflix Prize leader board on June 26, 2009.

From a promotion law point of view, the contest winner must grant to Netflix, an irrevocable, royalty free, worldwide non-exclusive license under the contest entrant’s copyrights, patents or other intellectual property rights in the winning algorithm. In addition, a description of the algorithm, but not the source code, will be published on the Netflix site. I.e., the winners will “describe to the world how [they] did it and why it works.” Like all well conceived contests, the official rules provide a mechanism for determining the contest entrants actually created the entry submitted. It appears however, that the winners are not prohibited patenting their entry and winners are not prohibited from charging others for the use the algorithm.

This contest, where competitive incentives are offered as an alternative to in-house research and development, looks like a new, workable model to foster innovation.

In a long and hard fought battle, the Second Circuit Court of Appeals has given renowned fashion designer, Joseph Abboud, a chance to reclaim his name.

Issuing a sweeping injunction in June 2008, a Southern District of New York court enjoined Abboud from using his name to sell, market or promote his own business, goods and/or services, finding Abboud’s intended use constituted a breach of contract and would constitute trademark infringement. The Second Circuit, in J.A. Apparel Corp. v. Abboud, et al No. 08-3181-cv (Second Cir.) found here reversed and remanded.

J.A. Apparel Corporation (“JA”), a former joint venture of Joseph Abboud, sued the designer in federal court alleging breach of contract, trademark infringement, and related claims over Abboud’s plans to use his name in the marketing and advertising of his then new JAZZ line, which he intended to promote using with such phrases as “a new composition by designer Joseph Abboud.”

Underlying the dispute, in 2000 JA entered into a sales agreement with Abboud, paying Abboud 65 million dollars for the exclusive rights to the ABBOUD label and related JOSEPH ABBOUD trademarks. While Abboud claimed the agreement only transferred rights in the ABBOUD trademarks but not the rights in his name, JA asserted the contract sold both the trademarks and the exclusive rights to use the Joseph Abboud name for commercial purposes. The district court ruled Abboud had unambiguously conveyed to J.A. all of Abboud’s rights to use his personal name, trademarks, and trade names for commercial purposes and also found Abboud’s planned use of his name would constitute trademark infringement, as it was likely to cause consumer confusion.

Vacating the injunction, the Second Circuit remanded the case, ruling the district court: 1) erred in ruling the sales agreement unambiguously conveyed all of Abboud’s rights to use his name commercially; and 2) erred in rejecting Abboud’s fair use claim as a defense to trademark infringement. The appellate court specifically found that given the conflicting interpretations of the sales agreement, the district court should have considered the parties’ extrinsic evidence to more fully understand the parties’ intent and that the district court should have examined Abboud’s actual or proposed use to resolve his fair use defense.

COMMENTARY: This case highlights the risks inherent in licensing or selling a brand name which also happens to be an individual’s name. Because the parties failed to clearly and precisely define the scope of their agreement, Joseph Abboud stands to lose the right to his very valuable name. Granted, he was paid 65 million dollars, which may seem like more than adequate compensation….but how much is your name worth, and what would it take for you to sell it? As some might say, “priceless.” Take the time to get it right.

St. Louis Cardinals manager Tony La Russa has sued Twitter, the popular micro-blogging service in San Francisco Superior Court alleging: Trademark Infringement, False Designation of Origin, Trademark Dilution, Cybersquatting, Misappropriation of Name, and Misappropriation of Likeness. In the Complaint, Mr. La Russa states the defendant owns the domain name twitter.com, and pursuant thereto, twitter.com/TonyLaRussa. Mr. La Russa contends an unknown user, pretending to be La Russa, began posting updates as Mr. La Russa. One line of the “profile” suggested it was all a fake: “Bio Parodies are fun for everyone.”

According to the San Francisco Chronicle, La Russa’s attorney tried to contact Twitter before filing the lawsuit, but got no response. Hours after the lawsuit was filed, Twitter removed the fake La Russa page and its postings. It is being reported that the case has already settled. “La Russa said Friday [6/5/09] that Twitter has agreed to pay legal fees and make a donation to his Animal Rescue Foundation. The organization is likely to take control of the name www.twitter.com/TonyLaRussa. However, the Wall Street Journal is reporting the opposite.

The truth is out there.

Trademark Note: Using a trademark and then simply claiming “parody” is not a “get outta jail free card.” In trademark cases, when a parody defense is raised, the defendant justifies his use on the grounds of humorous social comment. Funny or not, a defendant’s use may still be enjoined if it is likely to cause confusion with plaintiff’s trademark. Courts must balance the public interest in poking fun at trademarks and the institutions they represent, with the trademark owner’s investment and good will. Courts must also protect consumers from likely confusion.

As of last Saturday, Facebook users have been able to register personalized URLs of their choice for their Facebook home page (e.g., facebook.com/myusername). Approximately 5.75 million users signed up for their own URL over the weekend (also called “Vanity URLs”).

These new usernames could potentially be anything, including someone else’s trademark. To help trademark owners prevent hijacking of their marks, Facebook put in place a temporary procedure for trademark owners to “reserve” their registered trademarks with Facebook in advance and prevent the creation of URLs associated with those marks. Facebook has now closed this reservation period.

So what can trademark owners do who did not register their trademarks with Facebook and discover unauthorized URLs? They can request removal by contacting Facebook via this notice form. The procedure is fairly straightforward. You do not need to be registered on Facebook to use it.

So go to Facebook, check possible URLs containing your marks and, if you discover unauthorized uses, take action sooner rather than later.

Copyright infringement claims can often be reduced to a formula. In instances where the copyright infringement is less obvious and direct, a copyright owner asserts both a valid copyright registration and a theory of how access occurred and then conjectures that because of the substantial similarity between the two works, it may be concluded that defendant’s work infringes. Such a formula is the basis of a copyright complaint filed this week in the Eastern District of New York by a fine art book designer against Urban Outfitters and its subsidiary, Anthropologie. The copyright registration upon which the case relies was effective February 13, 2009, well after the date of alleged infringement. That’s a problem because the Copyright Statute explicitly prohibits the plaintiff from recovering attorney’s fees or statutory damages when the copyright registration is obtained after infringement.

Here are the facts: Purgatory Pie Press attended the fall 2008 Artists Book Fair in New York. Visiting their booth, an Urban Outfitter representative signed the guest book with effusive praise. According to the complaint, the Urban Outfitter representative was “observed surreptitiously taking pictures using small digital cameras and mobile telephone cameras.” But there is no clarity as to whether the surreptitiously taken pictures were of the disputed work.

The complaint includes a blend of claims, not just copyright. Other claims include unfair competition as well as trademark dilution, which is particularly interesting as there is no assertion that the work at issue rises to the level of a trademark.

The prayer for relief includes a demand for attorney’s fees and damages in the amount of $150,000 (the upper statutory damage limit.) This will be hard for the Plaintiff to obtain given that their post-infringement registration bars both attorney’s fees and statutory damages.

This is a complaint by an angry artist who obviously feels ripped off and is seeking orderly revenge. Unfortunately, there is little likelihood of getting more than an injunction and perhaps some modest, actual monetary damages given the late filing of the copyright application and the absence of the image at issue having been used as a trademark. It is a complaint that expresses the emotion, but fails to have many teeth.

Practice tip: Register those copyrights early and often. Having a registration in hand before an infringement occurs empowers the complaint, making it more fierce. The Copyright Statute favors the proactive.

A new website has launched whose purpose is to connect potential buyers and sellers of trademarks. Trademarks are words, signs or symbols used by businesses as a source identifier of goods and and services. Trademarks are valuable not only for the consumer goodwill they engender (see, MCDONALD’S, GOOGLE, BMW, HBO), but also as a barrier to market entry of similar products (or services) with confusingly similar trademarks.

According to its press release:

USTrademarkExchange.com was launched earlier this month as a dedicated trademark sales portal . . . Owners can list and promote their registered trademarks, while potential buyers including investors can easily search through a variety of available trademarks in one location.”

Sounds like a great idea, right? Hmmm, not so fast. There are a few basic, but important concepts worth noting. When a trademark is assigned (ownership transferred) from one party to another, the purchasor generally succeeds to all of the previous owner’s rights (e.g., dates of first use, etc.). However, a maxim of trademark law states a valid trademark assignment must include the goodwill of the business. What is goodwill?

A trademark stands for a certain standard of quality. The mark symbolized that level of quality that the public has come to associate with the products bearing the mark. That said, an assignee (or purchasor) of a trademark must be sure she has the implements necessary to maintain this quality. If she does not, the trademark becomes separated from its goodwill. When goodwill does not accompany the mark, the assignment may be called an assignment in gross or a naked assignment. Generally speaking, an assignment without goodwill is invalid.

It is too soon to tell how USTrademarkExchange.com intends to handle its trademark assignments and how potential buyers and sellers will see the benefits of their respective bargains. Like many things in life, “an ounce of prevention is worth a pound of cure.” When it comes to assigning or purchasing trademarks, conferring with competent trademark counsel is always a good bet.

In a huge victory for U.S. copyright owners (including Warner Bros, Sony Music Entertainment, EMI, and Columbia Pictures) in their longstanding battle against The Pirate Bay, the largest BitTorrent file-sharing web site, a court in Stockholm, on Friday, convicted the four site owners to one year in prison and a fine of about $3.5 million for copyright violations. The Court found that the defendants knew that the content being shared was protected by copyright.

With over 20 million reported users and millions of files exchanged every day, The Pirate Bay is one of the most high-profile facilitators of P2P file-sharing on the internet. The Pirate Bay, based in Sweden, was set up in 2003 by the anti-copyright group Piratbyran (“The Piracy Bureau”). The site does not technically host copyrighted content on its servers, but indexes and links to BitTorrent files (music, movies, TV shows, etc.) on its users’ computers. The site is known for its militant (and sometimes humorous) opposition to copyright laws and the Hollywood industry, and has been involved in many lawsuits. Some countries, like Denmark, have banned access to the site altogether. The site was also blocked by Facebook a few weeks ago after The Pirate Bay tried to create a “Share on Facebook” application.

The U.S. film industry, led by the Motion Picture Association of America (MPAA), has worked tirelessly with Swedish authorities to shut down the site since its creation and filed a criminal complaint against The Pirate Bay’s owners in 2004. In 2006, the Swedish police raided The Pirate Bay offices for copyright violations, ceased their servers and shut down the site for a few days. Last year, the four Pirate Bay owners were charged by a Swedish court with “promoting other people’s infringements of copyright laws.”

The defendants have maintained that the site is not illegal under Swedish laws because they do not store copyrighted material on their servers but instead act as a directory for users who wish to exchange files. The defendants say they plan to appeal; in the meantime, the sentences are suspended. Their response to the sentencing is available here (for now!).

On March 19, 2009, The Hershey Company, et al. filed suit in the Northern District of West Virginia against Reese’s Nursery and Landscaping, alleging federal trademark infringement, false designation of origin, federal trademark dilution, and unfair competition. At issue is the Defendant’s alleged use of the REESE’s trade dress, i.e., “the REESE’S brand name in distinct yellow script letters outlined in brown.”

In its Complaint, Hershey alleges it has used its distinctive trade dress in commerce for “nearly 100 years in connection with REESE’S brand candy.” At the rich, creamy center of this controversy is Hershey’s allegation that Defendant has adopted a business logo that is nearly identical to the Reese’s trade dress.

What really sticks to the roof of Hershey’s mouth is its belief that Defendant adopted its logo in “a deliberate attempt to trade on the valuable trademark rights and substantial goodwill established by Hershey.” Moreover, Hershey contends Defendant has “traded on and profited from the enormous goodwill an d reputation established by Hershey.” Where “the rubber hits the road” in this Complaint, or more aptly, where “the peanut butter meets chocolate,” is the following allegation: Defendant has “continued to use REESE’S trade dress despite previously representing to The Hershey Company that [it] would cease use of the REESE’S trade dress.”

The Defendant has not yet filed a responsive pleading, but a quick review of its website, reveals a new black and white logo.

Practice Note: Although early in the litigation process, there is much to learn from Hershey’s Complaint. First, it appears as though Hershey previously reached out to the Nursery, seeking a modification of its logo. When Defendant’s (likely multiple) assurances that it would modify its logo went unfulfilled, Hershey filed its suit. The lawsuit appears to have gotten the attention of Defendant, as it has now removed color elements from its logo. Time will tell whether this change will satisfy Hershey’s.

Hershey’s Complaint does a nice job of laying out facts necessary to establish that its trade dress is “famous” under the Lanham Act. Finally, the case may negatively impact Hershey’s public image. For example, what was once a legal filing in West Virginia, is now a blogosphere entry, and may be written about by others in less than glowing terms. Some may view this lawsuit as a “big guy v. little guy” case and not feel as fondly for Hershey as they once may have. Moreover, one has to ask how much damage Hershey has really suffered here? To this eye, the Nursery logo reminds me of the Reese’s logo, but I’m not confused as whether the nursery is a business venture of the chocolatier. In fact, it makes me want to walk to my reception desk and pluck a REESE’s peanut butter cup out of our candy dish!

Have you ever had one of those really good soft oatmeal cookies that comes in the pretty red package that looks like this:

Well, the company, Archway Bakeries, LLC, invested a lot of time and money in creating and marketing its trade dress (i.e. the look and feel of it packaging) and was piping hot when it discovered that a competitor, Voortman Cookies Limited, began packaging its cookies like this shortly after Archway filed for bankruptcy:

Prior to Archway’s bankruptcy filing, Voortman’s packaging creating a completely distinct commercial impression and looked like this:

Pulling the plug on Voortman’s activities, Archway and Lance Manufacturing, the company that purchased Archway’s assets (including all intellectual property rights) during the bankruptcy proceeding (collectively “Archway”), filed suit against Voortman for trademark infringement and related claims in Lance Mfg., LLC v. Voortman Cookies (WD NC 3/24/09).

In a bittersweet ruling against Voortman, the North Carolina district court issued a preliminary injunction prohibiting Voortman from advertising, distributing, selling, or offering to sell its cookies in the Voortman packaging. Carefully measuring the arguments, the court found that Archway’s trade unregistered trade dress was: 1) non-functional – i.e. not essential to the use or purpose of the product; and 2) created an overall distinctive impression.

Voortman attempted to stir things up by arguing that the case was moot because it had already ceased using the packaging and had begun production of a modified packaging following a cease and desist letter it received from Lance; however, the court wouldn’t bite. It noted that the allegedly infringing packaging still remained on the shelves and and that Voortman could, at any time, re-release the packaging.

The court also found that Archway was likely to succeed in proving the Voortman packaging was likely to cause confusion with Archway’s packaging. The packages were virtually identical in many respects. Moreover, Archway presented evidence that the Voortman packaging was an intentional copy and nearly identical to its trade dress. In light of the overall evidence, the court found that Archway had made an adequate showing of a likelihood of confusion.

In its narrowly tailored injunction, the court did offer Voortman a nice-sized crumb by refusing to require Voortman to remove, destroy and/or recall the existing packaging from the marketplace. Citing the financial hardship to Voortman and relatively short shelf life of the existing cookies inventory, the court ruled that Voortman could sell-off its remaining inventory in the existing packaging. Voortman fans better get them while they’re hot!

This article from the Daily Princetonian reports that the University “grossed roughly $266,000 [in] 2008… for the commercial use of Princeton trademarks and logos.” The University reportedly has over 100 licensing agreements with third parties, which grant limited rights to produce, use and/or sell products under the University’s marks (anything from baseball caps to mugs), in exchange for quality control and a royalty. As it should, the University owns and maintains a number of trademark registrations at the U.S. Patent and Trademark Office.

Practice Note: As Lezlie pointed out in her excellent post last week, a company’s IP is often it’s most valuable asset, especially in these tough economic times. This story is an example of a trademark owner (Princeton in this case) “doing it right.”

Trademarks can be a valuable income-generating asset, if properly maintained and managed. With reasonable policies and proper oversight procedures in place, licensing and co-branding deals represent great opportunities for generating regular revenue, as well as strengthening your client’s brand.

As a starting point, clients may want to keep in mind these basic guidelines to maximize these licensing opportunities:
- Register your marks domestically, as well as in the countries where you intend to do business. Being pro-active about trademark protection saves money and headaches in the long run. Also think about keeping your trademark counsel in the loop of new marketing and branding strategies, to make sure you’re covered;
- Maintain your marks and use them properly and consistently; be practical but don’t be lazy or you may lose rights (and licensing opportunities) over time. Your trademark counsel is there to assist you in this process, for example by talking with your marketing staff about proper trademark use and ways to create strong brands;
- Police your marks consistently, which may include having an enforcement plan in place and following it. If you don’t enforce your trademarks, you may lose rights. A pro-active policy is also a good way to establish your rights without having to send a demand letter every time.
- Explore licensing and royalty-generating opportunities and have those agreements vetted by your intellectual property counsel. Contracts that don’t include certain “magic (legal) words” (for example, quality control provisions) may weaken your rights significantly.

The new logo (shown above next to the old one) is representative of the phone company’s radically new “so very Verizon” campaign.

Further images of the clever campaign are available here.

No word yet on whether the old CAN YOU HEAR ME NOW? tagline will be replaced by the VERY awesome: IS IT HOT IN HERE?

Practice Notes: Rebranding efforts can be effective for companies to update their image and gain new consumers (although they can sometimes backfire, as Tropicana learned recently). Clients should involve their trademark counsel in the rebranding and marketing efforts, so as to assess potential risks (such as likelihood of confusion with existing marks, say, in this case, the SKYPE logo) and protect the new marks, including new trade dress, if applicable.

Tsan’s Comment: Naturally, rebranding efforts that take place on April Fool’s Day and are gone the next day should be suspect (unless you’re introducing New Coke).

It’s no secret: U.S. and international markets are in deep turmoil. Massive layoffs, historic stock market declines, and institutional failures remind us this no ordinary time. Even while companies look for ways to cut back and streamline institutional costs, now may be the best time to strengthen your intellectual property (IP) portfolio.

Although frequently overlooked, a company’s IP, including its trademarks, copyrights, and patents, is often its most valuable asset. There are several reasons why strengthening an IP portfolio now, even during the recession, not only makes good business sense but may be the key to a company’s future economic growth and recovery:

1. IP Assets May Be A Significant Source Of Revenue During (And After) The Recession.

Licensing or selling of IP assets has always been a way for companies to generate additional revenue. For example, during 2006 Neo-Magic recorded a $3.5 million gain on the sale of its unused patents, representing over 37% of the company’s total yearly revenue. A recent article in the Chicago Tribune reports “amid the recession, a growing number [of companies] are looking to generate cash by selling or licensing their dormant trademarks and patents.” If protected and maintained properly, your IP assets can offer significant revenue now and into the future. In fact, many lending organizations look to a company’s trademark portfolio as a means for determining the foundational strength of the organization.

2. IP Assets Are The Building Blocks To A Flexible Business.

The recession has brought significant restructuring and reorganizing of businesses. Mergers, acquisition, spin-offs, and new business units are a sign of the times, and strong IP portfolios are the building blocks for new business opportunities as companies transform their products and market positions. Perhaps this is why, historically, certain IP filings and litigation tends to increase during times of recessions (click here and here for historical figures). As a business continue to change, adapt and grow, so too must its IP assets.

3. IP Assets Will Set Companies Apart From The Competition.

Brand recognition by consumers not only increases product and service sales, but creates a significant barrier to entry for new competitors. Thus, the strengthening of a brand position in a downturn (through both IP filings and consumer marketing), provides an opportunity for companies to stand out when there is a smaller competitive market. Strong IP assets, such as trademarks, will help ensure brand recognition and differentiate companies from their competition.

4. IP Assets Have A Lifetime That Will Extend Well Beyond The Recession.

Perhaps the only thing we know about this recession is that it will end. Innovation, creation and entrepreneurism will continue to drive our economy forward, and as we emerge into the next profitable market cycle, IP assets will remain one of most valuable company assets. Failure to protect them now may have severe consequences for the future.

A U.S. District Court in California recently granted summary judgment in favor of Boy Scouts of America (“BSA”) in a trademark infringement suit concerning the mark YOUTHSCOUTS. In Wrenn v. Boy Scouts of America, 2008 U.S. Dist. LEXIS 91913 (N.D. Cal. Oct. 28, 2008), the Court found BSA’s Congressional Charter provides special protection to its exclusive use of “emblems, badges, descriptive or designating marks, and words or phrases.” In addition, the protection afforded by congress provides BSA “need not demonstrate” that the mark YOUTHSCOUTS is likely to cause confusion with BSA’s CUB SCOUTS, EAGLE SCOUT, BOY SCOUTS OF AMERICA, and SEA SCOUTS trademarks. While the Court, “for the sake of completeness,” undertook a traditional trademark infringement analysis under Ninth Circuit precedent, this case was ultimately decided in BSA’s favor through application of the “special protection[s]” afforded by Congress whereby specific trademarks are removed from the general trademark process.

Mr. Wrenn, the plaintiff, is the founder of the National Counsel of Youthscouts, a non-profit founded in 2002 when plaintiff’s daughter was denied the right to become a member of her twin brother’s Cub Scout troop. Mr. Wrenn filed a trademark application for YOUTHSCOUTS with the USPTO. Thereafter, BSA filed a notice of opposition to the YOUTHSCOUTS application with the Trademark Trial and Appeal Board (“TTAB”) (Opp. No. 91157313). In response to the TTAB action, Mr. Wrenn sought to cancel or amend numerous BSA marks on the grounds that the terms “Scouts” and “Scouting” are generic. The TTAB issued a ruling that BSA had valid and incontestable rights to marks CUB SCOUTS, EAGLE SCOUT, and BOY SCOUTS OF AMERICA. Plaintiff also filed a declaratory judgment action in the District Court.

The District Court reviewed the history of BSA and its Congressional Charter. In 1916, Congress passed a charter providing special protections for BSA. The original Congressional Charter provided: “The corporation shall have the sole and exclusive right to use, in carrying out its purposes, all emblems and badges, descriptive or designation marks, and words or phrases now or heretofore used by the Boy Scout of America in carrying out its program.” In 1998, the charter was changed slightly and now provides: “The corporation has the exclusive right to use emblems, badges, descriptive or designating marks, and words or phrases the corporation adopts.”

Ultimately, the District Court granted Defendant BSA’s Motions for Summary Judgment and Judgment on the Pleadings. In doing so, the Court found that “BSA need not demonstrate the likelihood of confusion because it has been granted special protection by Congressional charter,” citing The Last Best Beef, LLC v. Dudas, 506 F. 3d 333, 339 (4th Cir. 2007) and S.F. Arts & Athletics, Inc. v. U.S. Olympic Committee, 483 U.S. 522, 531 (1987).

PRACTICE POINTER: A list of Patriotic and National Organizations recognized by Congress can be found here. If your client is on this list, its Congressional Charter may serve it well in a trademark infringement action.

Washington D.C. is full of original works of art in the form of sculptures. One description of D.C. made by a young friend is that D.C. is a sculpture garden disguised as a town. A score of years ago, the Supreme Court issued a copyright opinion on another sculpture case, The Community for Creative NonViolence (CCNV). This opinion, Gaylord v. U.S., which issued on December 16, 2008, is consistent with CCNV.

The title of the work at issue, “The Column”, refers to a public sculpture depicting 19 Korean War soldiers in a ‘column’ formation. This sculpture forms the core of the larger Korean War Veterans Memorial (KWVM) in Washington, D.C. Frank C. Gaylord, the acknowledged artist who authored “The Column”, objected when the United States Postal Service commissioned a freelance photographer for $1,500.00 and then used that image on a commemorative stamp. The USPS sold 86.8 million 37-cent stamps bearing the image before retiring the stamp in 1998. The photographer pocketed his $1,500. Gaylord got nothing, not even a free stamp.

Gaylord sued; alleged copyright infringement; and demanded as damage 10% of the revenue of the USPS stamp sales.

The tangled facts surrounding the creation of the sculpture are pivotal in understanding this case. It is a fact pattern that reads like a nested Russian doll. An architectural firm won the contract from the American Battle Monuments Commission (ABMC) to create and install the KWVM; and, that architectural firm subcontracted the sculpture of the soldiers (19 in all) to Frank Gaylord, a self employed and well known artist. In the documentation regarding the creation of the sculpture, Gaylord demanded; was refused; and then succeeded in unimpeded ownership to the copyright in his works. Gaylord obtained numerous copyright registrations covering the sculptures of the poncho wearing foot soldiers both individually as a grouped column.

After the KWVM was installed, an amateur photographer visited the KWVM during a snowstorm and took photographs. The snow frosted images of trudging soldiers in column was licensed to the United States Postal Service for $1,500. The photographer notified the Postal Service that the permission of the artist of the sculpture would also be needed for reproduction of the image. The Postal Service contacted the ABMC who represented that it had the rights to the sculptures. No one contacted Mr. Gaylord; Mr. Gaylord did not consent.

Upon learning of the use of his work, Gaylord tried negotiating a ten percent license on the revenue of the stamp sales, and when that was refused, he sued the United States.

The United States defended stating that the Gaylord sculpture was a joint work. In reviewing the facts and logic, which were reminiscent of those of the Community for Creative Nonviolence (1988), the Court of Federal Claims found no joint authorship and that Gaylord is the sole owner of the sculptures. However, in reviewing the defense of fair use, the Court of Federal Claims found that United States Postal Service stamp was a fair use of Mr. Gaylord’s solely owned sculpture as the stamp is a transformative work, having a new and different character and expression from that of Mr. Gaylord’s sculpture. Gaylord for all his effort and for his tenacity in taking the matter to court; still gets nothing.

Like a quarterback sacked by his own team, a U.S. district court in Alabama granted Auburn University’s motion for a preliminary injunction against alumni, Mike Moody, and his website sixfingeryear.com in the case of Auburn University v. Mike Moody and Sixfingeryear.com (Civil Act. No. 3:08cv796-CSC November 4, 2008). There the court found that the defendants’ six finger foam hand novelty souvenirs bearing the marks AUBURN and WAR EAGLE likely infringed on Auburn’s registered trademarks.

Auburn University owned incontestable federally registered trademarks for the marks AUBURN, WAR EAGLE, AUBURN UNIVERSITY, and AUBURN TIGERS. Moody created and sold, through his website sixfingersyear.com, orange six finger foam hand novelty souvenirs designed to commemorate Auburn’s six game winning streak over the University of Alabama in the Iron Bowl. Each finger represented one of the teams’ victories, and each hand bore the words “Auburn” and “War Eagle” in blue.

Auburn called foul. It filed a motion for preliminary injunction and sued Moody for trademark infringement, unfair competition, dilution, false designation and misrepresentation of origin. Stepping in to referee the dispute, the court entered an order restraining Moody from producing, manufacturing, marketing, distributing, selling or offering to sale, the six finger foam hands bearing the marks AUBURN and/or WAR EAGLE and/or any other foam hand novelty product that contained any of Auburn University’s marks.

Playing zone defense, Woody offered several unsuccessful arguments, including a claim that he was not profiting from the sale of the hands and that he had not intended to use the marks in retail commerce. All he wanted, he claimed, was to have “fun to celebrate and hopefully make enough money to pay for the costs and buy some beer” from his “lemonade stand type project.” As the court signaled from the sideline, it was not necessary that Moody profit but only that he intended to benefit from the use of Auburn’s mark.

Perhaps his greatest fumble, however, was in selling one of his foam hands containing the words AUBURN and WAR EAGLE to an employee of the Auburn’s Trademark Management and Licensing Office after receiving a cease and desist letter from Auburn’s licensing agent.

The court easily found Moody offsides. The relevant likelihood of confusion factors, including strength of the marks, similarity of marks, similarity of goods/services, the channels of trade, defendant’s intent and actual confusion, weighed strongly in favor of Auburn. Finding it likely that Auburn would prevail on its infringement suit, the court granted a preliminary injunction.

Note: And all of this because a guy who sold 14 foam fingers to his friends for make some beer money. Perhaps Mr. Moody should have stuck to his lemonade stand.