Monthly Archives: November 2011

Music Row Companies Spend Big Money On Lobbying to Promote Legislation that Protects Intellectual Property Rights

According to the Tennessean, Music Row business have spent close to $4 million dollars in the last three months lobbying Tennessee politicians like Bob Corker, Marsha Blackburn, and Jim Cooper for help on industry-friendly IP initiatives such as the Performance Rights Act (which would expand the royalties available for radio play), the Songwriters Tax Simplification Reauthorization Act (a bill for songwriters which simplifies their taxes), and the controversial  Stop Online Piracy Act or (“SOPA”)(the Senate version is called Protect IP). The entertainment industry originally tried to fight piracy by filing lawsuits against illegal down-loaders, but this ended up as a public relations debacle and did little to curb infringement. Consequently, the industry is now targeting its money and its efforts towards promoting legislation like SOPA, which the industry views as a reasonable and necessary weapon to protect IP rights. This route has its own challenges–much of the technology sector and Internet titans like Google and Facebook hate the bill and the fight will undoubtedly get bloody. It remains to be seen what we will end up with in the ever-shifting landscape that is modern copyright law.

Tennessee Court of Appeals makes it easier for Fisk to Sell the Georgia O’Keefe Art Collection

After a decision by the Tennessee Court of Appeals handed down on Tuesday, Nashville’s Fisk University is one step closer to being able to sell the gorgeous art collection bequeathed to it by artist Georgia O’Keefe. A little background is in order to understand this controversy. In 1949, O’Keefe donated 97 pieces to Fisk from the estate of her late husband, the photographer Alfred Stieglitz. The collection contains works by Picasso, Renoir, Cezanne, Marsden Hartley, Alfred Maurer and Charles Demuth, among others. O’Keeffe, who died in 1986, also gave the school four of her own paintings as part of the gift, which was made to Fisk because the school educated blacks at a time when the South was segregated. The gift carried the stipulation that it could not be sold or broken up. But Fisk has long maintained that it cannot even afford the yearly costs of displaying the collection and that it needs to monetize the artwork to keep its doors open. In 2005, Fisk announced plans to sell O’Keeffe’s “Radiator Building” and Hartley’s “Painting No. 3.” The state attorney general opposed the sale because that office oversees charitable giving for the State. The parties have been litigating about the collection ever since.

Fisk wants to enter into a joint venture with the Crystal Bridges Museum of Benton, Arkansas, wherein Fisk would sell a 50% stake in the collection in exchange for $30 million dollars. The Fisk O’Keefe collection would then move between Fisk and the Crystal Bridges Museum every two years. Crystal Bridges also houses a collection amassed by Walmart heiress Alice Walton and features pieces like Asher Durand’s landscape painting “Kindred Spirits” and Norman Rockwell’s “Rosie the Riveter.”

The trial court had placed a condition on the transaction that Fisk had to reserve two thirds of the proceeds, or $20 million dollars, to ensure future upkeep of the collection amid the university’s shaky financial circumstances. The Court of Appeals held that the trial judge did not have the authority to impose this reserve and that the proposed sale could go forward without the reserve requirement. Judge Frank Clement dissented, arguing that the record indicated that it was never Georgia O’Keefe’s intention to give Fisk the collection in order “to pay its general operating expenses.”

While the Court of Appeals ruled out the reserve requirement, it did not preclude the court from approving one or another “dedicated source of support” for the collection. It also requires Fisk to outline how it will use a $1 million pledge from Walton to upgrade the display space and describe plans to spend the $30 million proceeds from the transaction.

The state attorney general’s office has not yet indicated whether to seek an appeal to the state Supreme Court and it has thirty days to make that decision.

The decision is In re Fisk University, No. M2010-02615-COA-R3-CV, decision dated November 29, 2011.

Judge Richard Dinkins, delivered the opinion of the court, in which Judge David Farmer joined. Judge Frank Clement filed a separate opinion concurring in part and dissenting in part.

John P. Branham, Stacey A. Garrett, C. David Briley, and C. Michael Norton, Nashville, Tennessee, for the Appellant, Fisk University.

Robert E. Cooper, Jr., Attorney General and Reporter, Joseph F. Whalen, Associate Solicitor General, Janet M. Kleinfelter, Deputy Attorney General, and William N. Helou, Nashville,Tennessee, for the Appellee, State of Tennessee.

Trademark Counterfeiting: Chanel Obtains Order Seizing Hundreds of Domain Names

After a number of ex parte hearings (where the other side is not present), luxury goods maker Chanel has won recent court orders against hundreds of websites distributing and selling counterfeit merchandise. A federal judge in Nevada issued an order that allows Chanel to seize the domain names in question and transfer them all to GoDaddy.com. After the seizure, when the alleged counterfeiter’s url is entered, it forwards to a page that contains notice of the seizure and nothing more. The judge also ordered “all Internet search engines” and “all social media websites”—specifically naming Facebook, Twitter, Google+, Bing, Yahoo, and Google—to “de-index” the domain names and to remove them from any search results. In effect, he’s allowing Chanel to waive a magic wand and remove the counterfeiters from cyberspace.

Like many other owners of famous marks that are prime candidates for counterfeiting, Chanel filed a lawsuit naming “Does 1-1000,” individuals, entities, and websites it believes to be illegally knocking off its merchandise. Whenever it finds a new site that it believes is counterfeiting, it adds that site to the lawsuit. Once it identifies a defendant, it then moves quickly for ex parte relief to obtain an injunction prohibiting the counterfeiting and, in this case, obtaining the offending domain names, and removing them from the search results of all the major search engines.

The power given to the mark holder in this situation is quite extraordinary. I’ve been involved in matters where the mark holder obtains the ex parte injunction, with all the papers under seal, and walks unannounced into the alleged counterfeiter’s place of business with the US Marshall and confiscates computers, documents, merchandise, and files, all without the counterfeiter being able to tell its side of the story till long after the dust has settled. I have never been involved in a matter where the alleged counterfeiters weren’t actually counterfeiting so it really wasn’t a problem. However, one can easily imagine the situation where mistakes could be made, especially on the facts described in the Wired article. The moral of this story is do not sell knockoff Chanel merchandise, or even merchandise that could perceived to be Chanel merchandise, unless you aren’t particularly attached to your domain name.

 

 

Bits and Bytes

The story of how the FBI was working feverishly to save the country’s youth from the subversive and obscene content of the song “Louie Louie.”

Protect Yourself Against Identify Theft, via The Tennessean.

Celebs tell their side of the story in UK phone hacking scandel.

Some stuff you can do with Google+ even if your friends don’t use it.

I’m a sucker for how-to’s and do-it-yourself guides so I loved this article on how to build a projector for your smart phone for about $1.

Forget the royalties…just give your book away, via Michael Hyatt’s excellent blog.

I found this article’s illustrations to be rather reassuring. New software can tell whether the picture has been photoshopped.

How to get more pages out of your printer when that stupid toner light starts blinking.

Righthaven, the so-called “copyright troll” is on the ropes.

My elementary school teacher was wrong. Chewing gum makes you smarter.

Nashville-based Lifeway is giving away mobile apps to 1,000 churches.

Does Mattel’s use of “Motown Metal” on Hot Wheels dilute Universal Music Group’s “Motown” music Trademark?

Because Mattel evidently hasn’t yet had its fill of litigation, it filed suit yesterday seeking to overturn the United States Patent and Trademark Office’s (USPTO) ruling that it could not trademark “Motown Metal” for its Hot Wheels toy cars because that would dilute Universal Music Group Recordings Inc.’s “Motown” mark.

Mattel’s pleadings alleged that it submitted a trademark application to the USPTO in November of 2005 for “Motown Metal,” the name of the new line of Hot Wheels cars that were to be an homage to the cars produced in Detroit during the 1960s and 1970s. The line included toys modeled after the 1970 Chevrolet, the 1965 Mustang, and the 1969 Pontiac GTO. Universal opposed the application on the basis that it would dilute the distinctiveness of the Universal “Motown” mark, which has been in use since 1959 on music-related goods and performances. The Trademark Trial and Appeals Board (“TTAB”) agreed with Universal and denied the application on September 30, 2011. In its decision, the TTAB found that Mattel’s “Motown Metal” and Universal’s “Motown” were “sufficiently similar that an association between them [was] established.”

While in the past the TTAB has relied upon surveys showing that at least 73 percent of the general public recognized the senior mark, here the TTAB made the dilution finding based only upon Universal’s advertising and sales revenue numbers. The board found this evidence sufficient to prove that the “Motown” mark was famous and well-known by the public.

In addition to an order overturning the board’s decision, Mattel is also wants a court order that it is entitled to register “Motown Metal” for toys. Alternatively, Mattel wants a court order preventing Universal from registering the senior “Motown” mark on toys.

The case is Mattel Inc. v. UMG Recordings Inc., case number 2:11-cv-09813, in the U.S. District Court for the Central District of California.

Chinese Company that Allegedly Stole Trade Secrets Seeks Rehearing of Decision that Allows ITC to Ban the Importation of Its Goods

Last week, I discussed the fact that the Federal Circuit had affirmed an International Trade Commission (ITC) ruling which expanded Section 337 of the Tariff Act of 1930 to permit a US company to enjoin the importation of goods made in China by a Chinese company using trade secrets stolen from the US company.  Not surprisingly, the Chinese manufacturer, TianRui Group Co. Ltd. and its affiliates, and probably many others, were not happy with this decision. TianRui and group filed a petition for a rehearing of the case en banc, arguing that the Federal Circuit’s ruling improperly broadened the authority of U.S. trade laws.

In the decision at issue, a three-judge panel ruled this past October that the ITC did not err in finding that the Chinese wheel maker violated Section 337 of the Tariff Act by importing cast-steel railway wheels produced in China using Chicago-based Amsted Industries Inc.’s trade secrets. The appeals court held that the Tariff Act, which applies to “unfair acts in the importation of articles … into the U.S.,” allowed the ITC to ban the importation of products even where the infringing or illegal conduct occurred in a foreign country, outside the boundaries of the United States.

TianRui seeks a rehearing of this decision, arguing that the appeals court dramatically expanded the authority of the ITC, because, without express Congressional authority, the ITC can’t reach as far as the decision allows. The petition alleges “[t]he majority here, by stepping in where Congress chose not to tread, has unlawfully broadened the scope of Section 337.”

The suit originated when Amsted filed its complaint against TianRui and its affiliates in August of 2008, claiming they stole trade secrets and used them to make the wheels at issue. TianRui had tried to get a license earlier from Amsted for use of the secret information, but Amsted refused because it had already had two other Chinese licensees for the trade secrets.  Administrative Law Judge Carl C. Charneski found in October of 2009 that TianRui had impermissibly taken Amsted’s trade secrets after they were shared with it by former employees of Amsted’s predecessors who had gone to work for TianRui. The ALJ recommended that the ITC issue exclusion and cease-and-desist orders stopping the goods from coming into the country. TianRui filed a petition for review in November of 2009, but the ITC refused to review the ALJ’s initial determination in December of 2009.

As a result, in February of 2010, the ITC issued a 10-year ban on the importation and sale of TianRui’s railway wheels made using Amsted trade secrets. TianRui appealed this ruling in June of 2010, asserting that the ITC did not have the authority to apply federal trade secret laws to conduct that occurred in China without express statutory authority from Congress. On Oct. 11th, 2011, the Federal Circuit issued a decision finding that the ITC had correctly applied Section 337 in this case. Although TianRui claimed the trade secrets theft took place exclusively in a foreign country, the company imported the railway wheels produced using the stolen information, which allowed the ITC to address the conduct under a §337 investigation, the appeals court said. In the petition for rehearing, TianRui argues that the Federal Circuit’s decision unlawfully allows the ITC to apply U.S. trade law to any unfair act that takes place outside the borders of the United States.

I think that the ITC and the Federal Circuit got it right. While the ITC can’t lawfully punish conduct that occurs in China and stays in China, if the offending manufacturer wants to bring those goods into this country, the ITC does and should have the authority to regulate that and has done so here. Congress should, however, clear up any ambiguities in the statute and make it clear that foreign manufacturers who steal the IP of US companies cannot lawfully bring those goods to market in the United States.

The case is TianRui Group Co. v. ITC, case number 2010-1395, in the U.S. Court of Appeals for the Federal Circuit.

Nashville’s Hammock, Inc. Reinvents Itself as Content Developer/Provider for the Health Care Industry

The Tennessean had an interesting profile of Hammock, Inc’s CEO, Rex Hammock, in the Technology section of today’s paper. For most of its twenty years,  Hammock, Inc. was a successful custom magazine printing business. Mr. Hammock found himself reinventing the company after weathering the loss of one of its largest clients–a client that comprised about 40% of its business. Since re-imaging the business as a health-care content provider, Hammock, Inc. has several major clients in the health care business, including some of Nashville’s biggest health care companies, like HealthStream and HealthTrust. Hammock, Inc. now creates on-line content and apps for this sector, producing videos and launching technology-based platforms for corporate clients that include a few non-healthcare based companies. Rather than simply printing magazines, Hammock now uses technology and the content it develops to helps its customers develop deeper relationships with their customers after the sale is made. Rex Hammock describes a wiki Hammock is developing for Healthstream that allows it to connect all the different kinds of information that it has compiled with the people within its hospitals that actually need that information. The HealthStream Competency Statement Wiktionary should be up and running early next year.

But Rex Hammock has other interests as well. He is widely regarded as technology pioneer, jumping into Twitter early enough to have the Twitter handle, “R,” and having the foresight to acquire the domain name “smallbusiness.com,” an on-line wiki he runs that has generated more than 26 million page views since he launched it five years ago. He uses smallbusiness.com as a laboratory to work on other types of businesses and to learn how customers want to see and access information. His thoughts on using social networking to develop relationships with his customers and other CEOs are well worth the read.  And while you’re at it, check out Hammock.com’s website. To celebrate its 20th birthday, it is giving away a free 2012 Content and Marketing Budgeting Guide that you might find useful.

Gallery

Buying Your Competitor’s Trademarks as Google Ad Words – Is it Trademark Infringement?

This gallery contains 1 photos.

I get a lot of questions on the ad word issue: is it trademark infringement if your competitor buys your marks as Google ad words? The Ninth Circuit is leaning more towards answering that question with a “no.” See Network … Continue reading

Groupon has Another Big Win In Trademark Dispute

Groupon had another really good day in court yesterday. A federal district judge in California ruled for Groupon in a pending trademark suit, holding that Groupion, LLC (a customer software development company) and Groupon (the on-line couponing company) are not confusingly similar. Groupion had moved for summary judgment and an injunction to prevent Groupon from using its name. “Despite the similarity in the spelling of the two words, the court finds that the marks, when viewed in their entirety and as they appear in the marketplace, are dissimilar,” wrote Judge Jeffrey S. White.

While both parties began using their respective names in late 2008, according to Plaintiff Groupion, there was no problem until Groupon began developing and marketing its own customer relations management software in 2009 and 2010 in order to do more business with merchants. Plaintiff Groupion complained that consumers were confused by the use of the names and that even Google’s search engine confuses the two, asking the user if he or she meant to search on “Groupon,” when the plaintiff’s mark is entered.

However, the plaintiff could not carry the day and provide proof strong enough to convince Judge White that there was a likelihood of confusion with the consumers at issue. This seems reasonable to me, given that the consumers for product development software are quite different from the ones that are looking for a good deal on a haircut and highlights at their local salon. I wonder if Groupon is able to get a deal on all its legal fees, because some lawyers have successfully used it (but that is a topic for another day).

Groupon Gets Big Win in Florida Patent Case

The folks at Groupon must have had a good Thanksgiving. Last Wednesday a Florida federal judge ruled that Groupon, Inc.’s deal website does not infringe rival eWinWin Inc.’s three technology patents. U.S. District Judge Susan C. Bucklew granted summary judgment of noninfringement to Groupon, holding that Groupon had not violated any of eWinWin’s patents.

EWinWin sued Groupon in December of 2010, accusing the popular coupon site of patent infringement. According to Judge Bucklew, eWinWin’s patents document a system that decreases the price for a good or service as more and more users sign up for the deal. Groupon, in contrast, uses its website to sell coupons to local businesses, but the coupons only become available if a predetermined number of buyers take the business up on the deal. Judge Bucklew found that all three of eWinWin’s patents require that the product price drops as more people take advantage of it. Because Groupon does not sell its coupons for more than one price, Judge Bucklew held that Groupon’s service did not violate the patents. Although Judge Bucklew dismissed Groupon’s counterclaims of invalidity as moot, Groupon’s counterclaims of infringement against eWinWin remain in the case. eWinWin might be regretting bringing this suit right about now.

eWinWin Inc. v. Groupon, Inc., Docket No. 8:10-cv-02678, U.S. District Court for the Middle District of Florida.