For years, health crisis centers for pregnant women have fought against rogue elements providing false information about abortion services. Using the Internet and phonebook advertising, anti-abortion groups pose as counseling centers and pretend to offer counseling and information services about abortion to pregnant women. In actuality, these groups direct viewers to fake sites that provide false information about abortion options, and provide counseling designed to persuade women to keep their unwanted babies, even when keeping the baby represents a significant risk to the mother’s health.

This month, women’s health centers are asking women to contact their congressperson about a bill recently introduced to “direct the Federal Trade Commission to prescribe rules to prevent deceptive advertising of abortion services.” The ”Stop Deceptive Advertising for Women’s Services Act” would provide special guidelines specifically related to how crisis centers would be able to advertise what they offer.

Practice Note: The bill seeks to tie the act to the already existing powers held by the FTC under Section 5 of The FTC Act, which regulates false and deceptive advertising. Even if the bill does not pass, under the current power, the FTC could independently go after these agencies for their deceptive ads.

The National Advertising Division of the Better Business Bureau has found that Wal-Mart’s claim that it saves Wal-Mart shoppers $2500.00 a year is misleading, and the self-regulatory organization has requested Wal-Mart discontinue the advertising campaign.

The Wal-Mart ad campaign claim is not based on the actual savings of Wal-Mart shoppers, but rather on a calculated number derived from a study it commissioned in 2005. The study in 2005 found that Wal-Mart’s advertising focus on low prices, had resulted in an actual overall price drop in consumer products of 3%. A 3% drop is roughly equal to $287 Billion, which means roughly $2500.00 per household. The statistic, therefore, represents the cost savings to every household, whether the consumer shops at Wal-Mart.

Practice Note: In any advertisement where a measurable statistic is used, the ad sponsor should be able to point to evidence supporting that statistic. Even when a statistic is numerically accurate, as it is here, if the implication is false, then the ad may be deemed false, too. The test for misleading advertising is not merely what is said, but what is implied by the statement.

Engadget came out swinging when it received a trademark infringement demand letter from Deutsche Telekom (which owns T-Mobile). The demand letter suggests that Engadget’s use of the magenta color for its “imobile” section is a violation of Deutsche Telekom’s trademark rights in the color magenta for T-mobile and requests the company stop using the color.

Engadget regularly receives mail from disgruntled companies, primarily pertaining to Engadget’s reviews of certain electronic products, but this letter made Engadget see, uh, magenta, and it responded by posting the letter on the website, and inviting its readers to comment. Moreover, the letter appears to have enraged the company sufficiently that now it is using its trademark in a way that actually could be confusing.

Practice Note: Posting of demand letters by their recipients is nothing new; indeed, this blog has made several references to the practice in the past. Nevertheless, it is a reminder to attorneys to advise clients that demands can be made public. The mere fact that a demand letter might be posted should not deter a client with strong rights, but it may color the tone of the communication. In addition, attorneys want to guide their clients through the legal elements of the claims asserted in a demand, as well as the ramifications of those claims in the court of public opinion. In some cases, if the rights held are thin and the potential backlash is significant, perhaps a well-placed phone call is warranted.

A district court in Georgia has found that a political activist’s use of the term “WAL-OCAUST” coupled with Wal-Mart’s familiar smiley face and recognizable letter and typeface style is fair use.

Defendant sells t-shirts, buttons and other merchandise containing the WAL-OCAST trademark to protest what he believes to be Wal-Mart’s massive contribution to unemployment and U.S. destabilization by shipping jobs overseas where labor is cheaper. The campaign also used terms like WAL-QAEDA. Wal-Mart alleged trademark infringement and dilution by tarnishment. Defendant claimed fair use.

Wal-Mart submitted survey evidence of actual confusion to bolster its position that the activist’s use of the mark confused consumers. The court rejected Wal-Mart’s survey evidence of actual confusion as unpersuasive and of “dubious value” because, among other things, the sample size was not significant, and the conditions that were used to get the results did not reflect actual marketplace conditions. The court found that while Wal-Mart did have recognizable trademark rights in WAL-MART, and the blue stylized lettering, it has failed to show consumers would be confused as to the origin of the products.

Regarding Wal-Mart’s tarnishment claim, the court found that if there was tarnishment, it was the result of satire. A tarnishment claim based upon satire is not actionable under the anti-dilution statute because the speech is protected under the 1st Amendment.

Practice Note: The court early on recognized the campaign as parody, but correctly noted that parody is not an absolute defense to trademark infringement; in a defense against trademark infringement where parody is an element, a party must still prove no likelihood of confusion.

A U.S. District Court in Nevada granted Plaintiff Paradise Canyon’s motion for preliminary injunction against Defendant Integra Investments for Integra’s advertising of its resort properties. The court found Defendant attempted to lure consumers into buying homes by creating a false impression of association with Plaintiff’s famous Wolf Creek Golf Club.

Paradise Canyon owns and operates the famous Wolf Creek Resort and Golf Club in Mesquite, Nevada. The club is renown for its golfing and has been featured as one of the “50 Toughest Courses” in the world. Plaintiff holds four trademark registrations in various classes that include the words WOLF CREEK. Defendant owns a 33 acre parcel of land adjacent to the golf club, which it had earlier attempted to name “Wolf Creek Estates,” but was enjoined from doing so by a court order. Defendant now calls its community Hidden Wolf, and has created advertising to entice buyers to the new development. One such advertisement begins, “WORLD CLASS GOLFING” and goes on to suggest that residents of Hidden Wolf can “play this amazing [Wolf Creek] course every day – just by stepping outside your door.” Various other ads reference the Wolf Creek Golf course by name and then suggest that Hidden Wolf provides access privileges to the famous club.

The court found that while the statements in the ads were not literally false (Defendant never stated it was part of Wolf Creek), the ads had a tendency to deceive potential buyers into thinking a Hidden Wolf home purchase came with golf privileges.

Practice Note: Clients should look critically at their use of third party trademarks in advertising. There are many ways in which defendant might have fairly used the WOLF CREEK. For instance, making an association with the town of Mesquite, which is home to the Wolf Creek Resort, and noting Hidden Wolf’s proximity to the resort, would likely have achieved the same marketing effect without raising the ire of Plaintiff.

Reuters is reporting that the well-known rock band Smashing Pumpkins has filed suit against Virgin Records, claiming that the record company sullied its image by associating it with a Pepsi/Amazon promotion.

According to the law suit, filed in Los Angeles Superior Court on Monday, March 24, 2008, the band claims Virgin used the band’s name, music and images in its “Pepsi Stuff” Promotion, which allows Pepsi drinkers to purchase selected merchandise. In the law suit, the Smashing Pumpkins claim that by using the Band’s image and music as part of the promotion, Virgin has falsely given consumers the impression that Smashing Pumpkins endorsed and was affiliated with the Pepsi Stuff campaign.

Practice Note: Promotions Sponsors must not advertise their promotion in such a way that they create a false sense of Sponsorship with a third party. For instance, while a Sponsor may list the brand name of the prize to be awarded, it may not be able to display a third party trademark or call special attention to that brand in its advertising.

Mallery v. NBC Universal, No. 07 Civ. 2250, 2007 U.S. Dist. LEXIS 88960 (S.D.N.Y., December 3, 2007)

Another “absurd” (the court’s words) claim that a Hollywood studio stole plaintiffs’ ideas for a hit show. And another reminder that not all copying amounts to actionable copyright infringement. That two works of fiction have similar plot, scenes or characters does not necessarily mean there is infringement.

Plaintiffs claimed that the TV show “Heroes” was “strikingly similar” to a novel, short film and painting series they created. “Heroes” is a show that borrows from comic book lore and tells the intersecting stories of a diverse group of individuals who discover they have superhuman powers. In the first season, the characters try to prevent an explosion that is set to destroy New York City, as predicted in paintings created by a character who can draw the future (like the one shown below).

Plaintiffs claimed that “Heroes” was similar to their works in a number of ways. They claimed that it contained characters who were “minorities” and had the ability to paint the future. They also claimed that the stories both featured paintings depicting New York buildings destroyed and predictions that were validated in a newspaper. Other alleged similarities included close up eye images, twin characters, and characters trying to stop tragic events.

The court granted defendant’s motion for summary judgment and held that any similarities between the works related to unprotectable ideas. Storylines such as a minority artist painting the future or heroes trying to stop a catastrophe are scenes à faire, that is to say elements that necessarily follow from the choice of storyline or situation and are not protected by copyright. The court also rejected plaintiff’s argument that the works had similar “total concept and feel.” It noted that any similarities were too abstract for a jury to find substantial similarities and that the two stories “differed in nearly every relevant way.”

This opinion follows a long-line of cases holding that similar stories and characters do not necessarily amount to copyright infringement; for example cases finding that a children’s book about a dinosaur zoo was not substantially similar to the film Jurassic Park, or that the character of Superman was not substantially similar to the TV show “Greatest American Hero.”

Dalton-Ross Homes, Inc. v. Williams, No. CV-06-1301-PCT-FJM, 2007 U.S.Dist. LEXIS 64135 (D. Ar. August 29, 2007).

This case highlights the crucial importance of registering works that copyright owners want to protect and enforce.

Plaintiff, a construction company, owned and registered the copyright in architectural floor Plan 1. A draftsman working for plaintiff prepared Plan 2, based on Plan 1, and Plan 3, based on Plan 2 (and, possibly, Plan 1). Defendants hired the same draftsman, who used plaintiff’s Plan 3 to prepare Plan 4 for defendants. Plaintiffs alleged that defendant’s Plan 4 infringed on plaintiff’s Plan 3, which was derivative of registered Plan 1. Plaintiff never registered its copyrights in Plans 2 or 3.

Dalton-Ross Homes’ Villa Del Mesa model
(“Plan 1″)

The court granted defendant’s motion for summary judgment, stating that copyright registration is a prerequisite to bringing an action in federal court for copyright infringement (17 U.S.C. § 411). A separate registration was required for Plan 3, the derivative work that was the subject of the action. Registration of the underlying original work was not sufficient to create jurisdiction in a lawsuit for infringement of the unregistered derivative work.

The court noted that copying an unregistered derivative work might give rise to liability based on infringement of the registered underlying work, if plaintiff can establish that defendant copied protectable elements of the original work. In this case, plaintiff merely argued that Plan 4 was derivative of Plan 3, which in turn was derivative of Plan 2, which in turn was derivative of Plan 1. Plaintiff never directly argued infringement of Plan 1. If it had done so, the result of the case may have been different.

Jacobsen v. Katzer, No. C06-01905 JSW, 2007 U.S. Dist. LEXIS 63568 (N.D. Ca. August 17, 2007)

This little case about model railroad software addresses a debated issue in the open source community: on what basis can open source creators sue people who misuse their work. This case seems to suggest breach of contract is an available remedy, but not copyright infringement. The case also deals with copyright law preemption.

Plaintiff developed model train software made available on this online community. Plaintiff’s work was subject to a standard open source software license permitting members of the public to make copies, distribute and make derivative works, providing they gave credit to the creators. Plaintiff alleged that defendants used plaintiff’s software to develop and fraudulently patent their own software for model train enthusiasts. Plaintiff sued on a number of counts and moved for a preliminary injunction to enjoin defendants from willfully infringing plaintiff’s copyrighted materials.

The court first held that plaintiff’s claims of unfair competition and unjust enrichment were preempted by federal copyright law, as both counts dealt “exclusively” with the misappropriation of plaintiff’s copyrighted files, a subject matter within the Copyright Act. To survive preemption the state claims must protect different rights than copyright rights. The state claims here did not add the required “extra element” to change the nature of the action or the rights secured under copyright law.

The court then denied plaintiff’s injunction, stating that plaintiff’s claims sounded in contract, not copyright. The court held that, implicit in a non-exclusive license like this one was a promise not to sue for copyright infringement. That is not to say that a licensor may never sue for copyright infringement, but they may only do so when the licensee exceeds the scope of the license. In this case, the license, like all open source licenses, was intentionally broad, closing the door to a copyright claim.

Debunking the myth that a group of attorneys can never agree on anything, 30 attorneys general recently sent a letter to the administrator of the federal Alcohol and Tobacco Tax and Trade Bureau, requesting that the organization investigate the aggressive marketing campaigns that surround the promotion of new energy drinks that mix caffeine and alcohol (a trend started by want-to-have-it-all professionals whose drink of choice is a Vodka and Red Bull cocktail).

The recent boom in energy-alcohol drinks, coupled with the super-sweet alcohol “soft drinks” is sparking a trend by consumers of drinking alcohol beverages designed to feel alcohol-free. If nothing else, the proliferation of drinks like Anheuser Busch’s Bud Extra, Miller Brewing Company’s Sparks, and other alco-energy drinks like Charge and Liquid Core, make clear that such drinks are speeding up the cash conveyor for large companies.

AGs nationwide are concerned that the aggressive position marketers are taking with these drinks, coupled with the “outlandish” health-claims related to the consumption of these energy-pops are misleading. Moreover, many AGs believe that the target market is underage drinkers. Slogans like “You can sleep when you’re 30” and references to “pulling an all-nighter,” appear, at least in the minds of the attorneys general, to be focusing on the under 21 crowd.

Practice Pointer: Even when a marketing campaign is legally sound, and regardless of the product, when companies engage in advertising that is directed at a younger crowd, they run the risk of having parents and watchdog groups complain if the message, however understated, suggests a behavior that is either illegal, or promotes unhealthy habits. Attorneys should advise their clients to be prepared for fallout when launching aggressive marketing campaigns.

Tiseo Architects, Inc. v. B &B Pools Serv. and Supply Co., No. 06-1819, 2007 U.S. App. LEXIS 17894 (6th Cir., July 20, 2007)

This case illustrates the long-standing, but sometimes forgotten, copyright principle: that one must first analyze whether the similarities between defendant’s and plaintiff’s works pertain to original elements of plaintiff’s work. If they do not, then there is no infringement.

First, the facts: B&B Pools hired Tiseo Architects to prepare design drawings for its store remodel; then later hired a new architect, Olson, to prepare the construction plans. Tiseo sued for copyright infringement.

The Sixth Circuit affirmed the lower court’s finding of no infringement. Even when works are very similar and access to plaintiff’s work is obvious, defendant’s work must be substantially similar to protectable elements of plaintiff’s work. Filtering out the unoriginal, unprotectable elements of Plaintiff’s plans (such as elements dictated by the client or zoning regulations), the court reached the logical conclusion: there are not a lot of ways for an architect to draw plans for an existing office.

Practice Tip: Practitioners should take care to fully analyze the elements of their infringement cases. The result in this case might have been different if Plaintiff had briefed the similarities between the protectable elements of the drawings, which, according to the Sixth Circuit Court, it did not do.

The latest trend in customer loyalty and brand value is the creation of the Limited Edition gift card. Currently, consumers can purchase the gift card for the value of the card. When the value is depleted, the gift card is theirs to keep. The retention by the consumer of the commemorative card is associated with a positive perspective on the client.

Recently, the Texaco Company has begun selling what it calls commemorative gift cards, featuring the image of Juan Pablo Montoya on the cards and touting it as a limited edition card. Currently, the special edition card costs no extra.

Some state laws forbid the charging of a sizeable premium for a gift card. This new twist, however, paves the way for companies to recoup any losses they may rack up in the creation of the cards themselves. So long as the card is legally a “limited edition,” and there is some real value associated with collecting the card, companies may start trying to push the envelope with regard to charging a premium for gift cards. It appears that the “free drinking glass with fill-up” days are long over.

Last Wednesday, Johnson & Johnson filed suit against the Red Cross, alleging trademark infringement of J&J’s RED CROSS design by the Red Cross for products licensed by the Red Cross and sold to the public.

J&J doesn’t appear to dispute the Red Cross’ use of the mark for disaster preparedness, but claims that its use cannot extend to commercially available products, such as first aid kits, something J&J has been selling since at least as early as 1903 (and possibly 1887). J&J claims that the 1900 Charter by Congress did not give the Red Cross the right to sell commercial products. The Red Cross, on the other hand, points to language in the Charter that allowed it to register its emblem (red cross on a white background) in every class at the U.S. Patent and Trademark Office, as well as language in the Charter that allows it to carry out other activities consistent with its Charter purposes. Supplying the public with various products related to safety, the Red Cross contends, is completely within the course and scope of its mandate and the Charter. Such a position is making J&J see red.

If the Red Cross’ public information is correct and it has for 100-plus years been selling first aid kits for over 100 years openly, and with the knowledge of J&J, this writer thinks a laches defense might well carry the day. If J&J leaps that hurdle, then perhaps a showing of lack of confusion for the past 100 years is sufficient to quiet the company. Nabisco, Inc. v. PF Brands, Inc. 191 F. 3d 208 (2d Cir. 1999)Surely, the proliferation of third party “cross” marks, coupled with both entities’ longstanding histories has over time educated consumers to the distinction between the two marks’ use. Sun Banks of Fla., Inc. v. Sun Fedl. Sav. & Loan Ass’n. 651 F.2d 311 (5th Cir. 1981); Local Trademarks, Inc. v. Handy Boys, Inc., 16 U.S.P.Q.2d 1156 (TTAB 1990).

Despite the fact that the marks are identical, it’s not difficult to tell the difference when we are presented with each; much like pornography, we know which is which when we see it. What is likely making J&J see red is the potential loss of market share rather than any real concern of confusion. And here we thought trademarks were for consumer protection.

WB Music Corp v. RTV Communications Group, Inc. 445 F.3d 538 (2d Cir. 2006)

In 7 separate CD products, RTV copied and distributed unauthorized copies of WB Music’s copyrights in 13 musical works. The trial court held that the infringement was willful and granted statutory damages for 7 infringments.

On appeal, the Second Circuit reversed and awarded 13 infringements. The damage calculation was properly the works taken not the works produced.

Roberts v. Keith 79 USPQ 2d 1368 (SDNY 2006)

This is a case of disclosure; biding one’s time; and that biding being seen as a fraud that tolled the three year statute of limitations.

Roberts wrote songs in 1976 and 1977 and showed them to Keith who stated that he had no interest in those works.

In 1980, Keith released the songs; and between 1997 – 2001, Keith’s song was re-released repeatedly in compilations.

Roberts sued Keith in 2003 for copyright infringement; and, Keith defended that the statute of limitations barred all infringements prior to 1999.

Court held that the Statute of Limitations was tolled by the fraud of Keith. Motion of dismiss on statute of limitations denied; case going forward.

Gilpin v. Siebert 419 F. Supp 2d 1288 (D. Or. 2006)

Bernadine Gilpin was an employee of the Portland Community College as a counselor. With another college employee, Al Gilpin, she co-authored a book, “College Survival and Success”.

In a copyright infringement action between the two authors, summary judgement was denied because there was insufficient evidence on whether the Work Made For Hire doctrine applied. The court noted that the record was insufficient to determine the following:
-whether the writing was incidental to job duties;
-whether work was created inside or outside the authorized work hours;
-whether the the writing was within her job description;
-whether the writing was written with the intent to benefit the college; and,
-whether the writing was inspired by or derivative to her work experience.

A veritable paint-by-numbers for a professor to own a copyright, it is.

Pritchett v. Pound No. 05-41445 December 18, 2006 (5th Cir)

Pound was an employee of Pritchett; and his employment agreement/ job description included that he would be“completing regular written
assignments and the development of new products and procedures;” and that “[s]hould the Employee produce any written materials in the course of
his work with the Employer, then such shall be done for and on behalf of the Employer and all work produced shall be the exclusive property of the Employer.”

While still employed in 1988 and 1989, Pound co-authored two books which Pritchett both filed for copyright applications at the United States Copyright Office, and published and sold successfully.

When completing the copyright application, Pritchett erroneously checked “NO” in response to the question, “Is this a Work Made For Hire?”; and went on to identify Pound as an “author” on that form. The copyright applications resulted in registrations; and an effort to correct that error at the Copyright Office was blundered in 1990.

In 1995, Pound died. Pritchett was generous in accomodating the widow including paying the entire one million dollar bonus that year even though Pound had only worked one quarter of that year.

In 2002, Pound’s widow sued Pritchett as a joint author demanding an accounting and damages.

Pritchett defended that Pound was not an author, and that the Work Made For Hire doctrine trumped the errors in the copyright application.

The Fifth Circuit agrees with Pritchett stating that a more clear agreement of the parties was needed to change the status of Work Made For Hire. The error in the copyright application was not substantive or effective in changing ownership.

Faessler v. United States Playing Card Co 1:05-cv-00581; U.S. District Court for the Southern District of Ohio

Michael Faessler was a cadet at the United States Military Academy when he composed a playing card set modeled on the military ranking system (lowest rank correlates to lowest card and so on). Faeseller registered his set with the United States Copyright Office; offered to sell the cards through the military commissaries but was declined that opportunity.

Upon learning that his identical card sets were being manufactured, and distributed by the military commissary, Faessler sued.

Two of the defenses raised were that there is no copyright in the set; and that the location of copyright notice solely on the joker card and not on any of the other cards caused any copyright to be forfeit and the work in the public domain.

The trial court held that the copyright in the set is valid and enforceable; and that the notice on the joker card alone is sufficient.

Roger Miller Music, Inc. v. Sony/ATV Publishing 2007 WL 443048
In what is becoming a normative complicated and attenuated set of facts for a renewal case, this case involves whether the renewal of Roger Miller’s 1958 – 1964 music was timely.

Mary Miller, the widow of Roger, sued Sony for copyright infringement asserting that the Roger Miller estate and not Sony owned the renewal rights. Key to the complicated set of facts is that Sony filed the renewal documents on behalf of Miller personally in the twenty eighth year, before Miller died later in that same twenty eighth year.

This tee-ed up the question simply as: can a copyright renewal term vest before the renewal term begins?

The issue is further complicated because these pre-1978 musical works are now governed by the 1998 Bono Copyright Extension Act which states:

Section 304(c)(2)(A) At the expiration of the original term of copyright in a work specified in paragraph (1)(B) of this subsection, the copyright shall endure for a renewed and extended further term of 67 years, which —

(i) if an application to register a claim to such further term has been made to the Copyright Office within 1 year before the expiration of the original term of copyright, and the claim is registered, shall vest, upon the beginning of such further term, in the proprietor of the copyright who is entitled to claim the renewal of copyright at the time the application is made; or

(ii) if no such application is made or the claim pursuant to such application is not registered, shall vest, upon the beginning of such further term, in the person or entity that was the proprietor of the copyright as of the last day of the original term of copyright.

The trial court ruled that because Roger Miller was alive at the time that Sony filed the renewal, the renewal rights went to Sony.

The renewal rights of the pre-1978 works are proving to be valuable; and the courts are giving us more guidance on when and how the timing of the renewal dance works. More proof that copyrights are economically vibrant, still.

Tenn. Walking Horse v. Nat’l. Walking Horse 2007 WL 325774 (M.D. Tenn. Jan. 31, 2007)

Out of Tennessee, we learn that facts about horses that are selected, arranged and organized in a registry are copyrightable.

Here are the facts: The Tennessee Walking Horses Breeders Association of America (TW) has been keeping a registry since 1935 which keeps the details of just under half a million horses’ pedigree and related information such as identifying details, unusual markings and legacy data.

In part precipitated by the controversy over ’soring’ the Tennessee Walking Horse, a separate association, The National Walking Horse Association, (NWHA) was formed in 1998 to promote the breeding of that specific horse breed without the training technique called ’soring’ that makes the horse lift their feet in the archetypal manner of that breed. In July of 2004, the NWHA rolled out a registry that was to be analogous, but separate from the TW registry.

TW obtained a copyright registration for its registry; and, filed a copyright infringement action against the NWHA alledging that the NWHA registry infringes the TW registry compilation copyright. TW’s summary judgment motion details that their registry comprises facts that are specifically selected, organized and arranged, including unique colors and combinations, markings, identifiers and abbreviations. (“blaze lower lip, sock left hind leg,
fetlock right hind leg”).

Judge Todd Campbell, of the Tennessee federal trial court ruled, in January of 2007, that the copyright registration is valid and that NWHA’s copying constituted copyright infringement. The court discarded the NWHA’s defense that that the small facts of that were used were ‘de minimis’.