Pattishall IP Blog

June 19, 2017

50 Years After Lanham Act’s Enactment, The Supreme Court’s Slants Decision Unanimously Holds Its Clause Barring Disparaging Marks Unconstitutional Under First Amendment; Far-Reaching Impact Will Cover The Washington Redskins and Likely Far Beyond

Filed under: Constitution, Litigation, TM Registration, Trademark (General) — Tags: , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 4:23 pm

By Belinda J. Scrimenti

As its 2016-17 term concluded, the U.S. Supreme Court held unanimously in Matal v. Tam[1] that the disparagement clause of the Lanham Act, Section 2(a), is unconstitutional in violation of the First Amendment’s Free Speech Clause.  The clause at issue—a provision unchanged from the original 1946 enactment of the Lanham Act—prohibits registration of marks which “may disparage . . .  persons, living or dead, institutions, beliefs or national symbols, or bring them into contempt or disrepute.” [2]  The Opinion of the Court, written by Justice Alito – joined in various parts by all of the Justices – reflected the sacred nature of the First Amendment protections at stake when applicants seek to register trademarks deemed offensive.  A concurring opinion by Justice Kennedy, joined by Justices Ginsburg, Sotomayor and Kagan, further highlighted the fundamental simplicity of the First Amendment protection that must be accorded trademark registration to prevent the slippery slope of governmental censorship.

The decision was issued in the case involving an Asian rock band seeking to trademark its name the “Slants,” which band founder Simon Tam asserts he selected in order “‘reclaim’  the term and drain its denigrating force as a derogatory term for Asian persons.”  But the decision’s repercussions will be much broader – most directly to the efforts by the Washington Redskins ownership to defend against longstanding efforts by Native American activists to cancel its trademark registrations under the same provision of the Lanham Act.

The Court’s opinion began with a primer on trademark law, outlining its history and origins, and purposes. Among the authorities cited were two articles by this Firm’s name partner, Beverly Pattishall, a highly recognized trademark expert of his generation.[3]  The Court also noted the now more than 2 million active marks on the federal register.  The Court next quickly dispensed with the argument put forth by Tam (which may have distinguished the case from that of the Redskins’ case, as cancellation actions brought by individual Native American persons) that the clause did not apply to Tam’s band name because the definition of “persons” included only “natural and juristic” persons, not “non-juristic” entities such as racial and ethnic groups.  Although Tam had not raised the argument in the Federal Circuit or on the writ of certiorari, the Court nevertheless expressed the necessity of rejecting this claim.[4]  The Court concluded that the disparagement clause did prohibit registration of terms that “disparage persons who share a common race or ethnicity.”[5]

The Court then turned to the fundamental issue of whether the clause violates the Free Speech Clause of the First Amendment.  The Court first rejected the Government’s arguments that the registration of trademarks constitutes government speech, not private speech.  The Court pointed out that if “private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints.”[6]  The Court concluded that “it is far-fetched to suggest that the content of a registered mark is government speech,” noting that if the federal registration makes a mark government speech, “the Federal Government is babbling prodigiously and incoherently.”[7]  Significantly, the Court noted the “most worrisome implication” of the Government’s argument concerned the copyright registration system, in that such a ruling could eliminate similar protections for books and writings based on the expressive content.[8]

In the next section of the Opinion, Justice Alito (joined by an unusual mix of Justices – Roberts, Thomas and Breyer) rejected the Government’s assertion that the clause should be upheld because it is “subsidized speech.” The Court handily rejected the argument, noting that the situation was readily distinguished from cases involving government cash or equivalent subsidies, because, in contrast, the trademark applicant must pay fees.[9]  The Court concluded that the clause also could not be protected as analogous to cases in which a unit of government creates a limited public forum for private speech where some content and speaker-based provisions may be allowed, noting that even in such situations “viewpoint discrimination” is forbidden.[10]

Having concluded that trademark registration is not government speech, Justice Alito’s Opinion next turned to the question of whether trademarks are commercial speech and therefore subject to relaxed scrutiny. Quickly dismissing the competing claims of the Government and Tam as to whether trademarks are all commercial speech or have an expressive component, he found that the disparagement clause failed even the relaxed test of a commercial speech restriction that must serve “a substantial interest” and be “narrowly drawn.”[11]  Justice Alito rejected as “substantial interests, the Government’s interest in preventing offensive speech as “that idea strikes at the heart of the First Amendment.”  Finally, he rejected the asserted interest in protecting the “orderly flow of commerce” as “far too broad.”

The concluding remarks by Justice Alito are particularly notable in this era of a super-charged political environment:  “The commercial market is well stocked with merchandise that disparages prominent figures and groups, and the line between commercial and non-commercial speech is not always clear, as this case illustrates.  If affixing the commercial label permits the suppression of any speech that may lead to political or social ‘volatility,’ free speech would be endangered.”[12]

The ramifications of the Court’s decision are yet to be seen.  The first, nearly certain result, will be the upholding of the Washington Redskin’s registrations in the face of challenge under Section 2(a).[13]  Less certain is the greater fallout.  Will the ruling open the floodgates for applications seeking registrations of any number of offensive, hateful and otherwise distasteful marks?  While recognizing the source and consumer protection functions of trademarks, Justice Kennedy noted in his concurrence that there remain only “a few categories of speech that the government can regulate or punish—for instance, fraud, defamation, or incitement . . . and a few other narrow exceptions.”[14]  It seems that the next wave of litigation in the trademark arena may now revolve around these narrow First Amendment exceptions, rather than traditional trademark principles.  Will today’s nasty tweet or violent Facebook rant become tomorrow’s trademark?  While the Tam decision decisively answers one question, it may open the door to many more questions of what trademarks are permissible, assuming no traditional trademark grounds for refusal.

_______________________________

[1] Matal, Interim Director, USPTO v. Tam, No. 15-1293 (June 19, 2017) (8-0 decision; Justice  Gorsuch took no part in the decision).  The full opinion can be found at: https://www.supremeCourt.gov/opinions/16pdf/15-1293_1o13.pdf.
[2] 15 U.S.C. § 1052(a).
[3] Slip Op. at 2-5. Citing, treatises and compendiums including 3 J. McCarthy, Trademarks and Unfair Competition §19:8 (4th ed. 2017); Pattishall, The Constitutional Foundations of American Trademark Law, 78 Trademark Rep. 456, 457–458 (1988); Pattishall, Two Hundred Years of American Trademark Law, 68 Trademark Rep. 121, 121–123 (1978), Id. at 2.
[4] All Justices concurred in this portion of the opinion with the exception of Justice Thomas who saw “no reason to address this legal question.”  J. Thomas concurring, Slip. Op. at 1.
[5] Slip. Op., at 11.
[6] Id. at 14.
[7] Id. at 14-15, citing Pro-Football, Inc. (Washington Redskins) Amicus brief and numerous examples of such phrases.
[8] Id. at 18.
[9] Id. at 18-20.
[10] Id. at 22.  But in dicta, the Court noted it left open the question of whether such analysis framework is appropriate for free speech challenges to the provisions of the Lanham Act.
[11] Id. at 23-24, citing Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 447 U.S. 557 (1980), but leaving open the question of whether Central Hudson provides the appropriate test for deciding free speech challenges to provisions of the Lanham Act.
[12] Id. at 26.
[13] Pro Football, Inc. v. Blackhorse, Case No. 15-1874 (4th Circ.).
[14] J. Kennedy concurring, Slip. Op. at 2, citing United States v. Stevens, 559 U. S. 460, 468 (2010).

 

These materials have been prepared by Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP for general informational purposes only.
They are not legal advice. They are not intended to create, and their receipt by you does not create, an attorney-client relationship.

March 25, 2015

Supreme Court holds that issues decided by the TTAB may be preclusive in Federal Court

Filed under: Litigation, TTAB — Tags: , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 9:53 am

Widmaier_Uli_1 F LRBy: Uli Widmaier

A.  The Supreme Court’s Holding

On March 24, 2015, the Supreme Court held for the first time that “a court should give preclusive effect to TTAB decisions if the ordinary elements of issue preclusion are met.” B&B Hardware, Inc. v. Hargis Industries, Inc., No. 13-352, slip op. at 2.

In other words, “[s]o long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially the same as those before the district court, issue preclusion should apply.” Id., slip op. at 22. The Supreme Court remanded the case for a determination whether the conditions for preclusion are met. Id.

B.  The Reach of the Supreme Court’s Opinion

In B&B, the issue to which preclusion may apply was likelihood of confusion. But the principle announced by the Supreme Court is not limited to likelihood of confusion. Given the wording and rationale of the Supreme Court’s opinion, practitioners and trademark owners should expect any TTAB decision to have a preclusive effect if it meets the conditions for preclusion articulated by the Supreme Court. These conditions are discussed below.

That would include TTAB decisions on issues such as secondary meaning, inherent distinctiveness, genericness, abandonment, functionality, dilution, and others. Any TTAB decision on these and other issues will be preclusive if it meets the Supreme Court’s conditions. Therefore, the potential reach of the Supreme Court’s holding is broad and may have substantial implications for trademark owners.

C.  Facts

B&B owns the mark SEALTIGHT for metal fasteners in the aerospace industry; Hargis owns the mark SEALTITE for metal fasteners in the construction trade. Slip op. at 6. B&B opposed Hargis’s application to register SEALTITE and prevailed in the TTAB, which found a likelihood of confusion between the two marks. Id. at 6-7.

B&B also sued Hargis in federal district court for trademark infringement. After the TTAB had found in B&B’s favor, B&B argued before the district court that the TTAB’s decision precluded Hargis from further contesting the issue of likelihood of confusion. The court rejected B&B’s argument, and the jury found in favor of Hargis on likelihood of confusion. B&B appealed to the Eighth Circuit, lost, and then prevailed before the Supreme Court.

D.  Issue Preclusion

The Supreme Court explained issue preclusion as follows: “[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” Slip op. at 9, quoting Restatement (Second) of Judgments, §27, p. 250 (1980). Importantly, “issue preclusion is not limited to those situations in which the same issue is before two courts.” Slip op. at 9 (emphasis in original). Therefore, a decision by an administrative agency may also have issue preclusive effect. Id. (more…)

June 26, 2014

Aereo’s Internet-Based Television Streaming Services May Be Wizardry, But the Supreme Court is in No Mood for Magic

Filed under: Copyright, Internet, Litigation — Tags: , , , , , , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 12:17 pm

Ekhoff_Jessica_2 F LRby Jessica Ekhoff, Associate

Describing its Internet-based television streaming services, tech start-up Aereo proclaims, “It’s not magic. It’s wizardry.”[1] In yesterday’s 6-3 decision the Supreme Court disagreed, or at the very least, adopted a staunchly anti-wizardry stance.[2]

Justice Breyer, writing for the majority in American Broadcasting Cos. v. Aereo, Inc., characterized the issue before the Court as whether “Aereo, Inc., infringes this exclusive right [of public performance under §106(4) of the Copyright Act] by selling its subscribers a technologically complex service that allows them to watch television programs over the Internet at about the same time as the programs are broadcast over air.”[3] Despite Aereo’s self-description as a mere equipment supplier doing no “performing” of its own, the Court held in the affirmative.

The Court analyzed the issue in two parts: whether Aereo “performed” under the Copyright Act, and if so, whether the performance was “public.”

In concluding that Aereo did, in fact, perform under the Copyright Act, the majority of the Court turned to the 1976 amendments to the Act, which were adopted, in large part, to bring community antenna television, or CATV—the precursor to cable television—within the scope of the Act. CATV functioned by placing antennas on hills above cities, then using coaxial cables to carry the television signals received by the antennas into subscribers’ homes. CATV did not select which programs to carry, but rather served as a conduit for the transmission and amplification of television signals. Before the 1976 amendments, Supreme Court precedent considered CATV to be a passive equipment supplier that did not “perform” under the Act.[4] After the amendments, to “perform” an audiovisual work such as a television program meant “to show its images in any sequence or to make the sounds accompanying it audible.”[5] CATV thus “performed” the shows it transmitted because it both showed the television programs’ images to its subscribers, and made the accompanying sounds audible. Over a strong dissent authored by Justice Scalia[6], the majority found that, because its services were so similar to those once offered by CATV, Aereo also “performed” under the post-1976 definition of the term.[7]

Having determined that Aereo’s services constitute a performance under the Copyright Act, the Court next turned to the issue of whether those performances are public. Aereo argued its services do not constitute public performance because whenever a subscriber selects a program to watch, Aereo places a unique copy of the show in that subscriber’s folder on Aereo’s hard drive, which no one other than that subscriber can view. If another subscriber wants to watch the same show, she will receive her own copy of the program in her own folder from Aereo. The Court dismissed this argument, finding the “technological difference” inconsequential in light of Congress’s clear intent to bring anything analogous to CATV within the scope of the Copyright Act’s requirements. Under the post-1976 Act, an entity performs a copyrighted work publicly any time it “transmits” a performance. A performance is “transmitted” when it is communicated by any device or process beyond the place from which it is sent, whether the recipients receive the transmission at the same time and place, or at different times and places.[8] Aereo therefore publicly performs a copyrighted television program each time its system sends a copy of that program to a subscriber’s personal Aereo folder.

The majority characterized its holding as a “limited” one, and was careful to emphasize that its decision does not apply to other new technologies, such as cloud-based storage and remote storage DVRs. But with a slew of amici curiae predicting the decision could have a catastrophic impact on the tech industry, there are surely some who will take no comfort from the Court’s assurances. Aereo, unfortunately, may not have a spell to resurrect itself.

*     *     *

Jessica Ekhoff is an associate with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois. Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, trade secret and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues. Jessica’s practice focuses on trademark, trade dress, copyright and false advertising litigation, as well as film clearance, media and entertainment, and brand management.

[1] https://www.aereo.com/about

[2] http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf

[3] American Broadcasting Cos. v. Aereo, Inc., No. 13-461, slip op. at 1, 573 U.S. __ (2014).

[4] Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968); Teleprompter Corp. v. Columbia Broadcasting System, Inc., 415 U.S. 394 (1974).

[5] 17 U.S.C. § 101.

[6] Justice Scalia argues that Aereo does not “perform” because it is the subscriber, rather than Aereo, who selects the program she wishes to watch, which in turn activates the individual antennae Aereo has assigned to her for the purpose of viewing that program. This means it is the subscriber who is doing the performing, since she is the one rousing Aereo’s antennae from dormancy and calling up a specific program to watch. Justice Scalia went on to note that although he disagrees with the majority’s interpretation of “perform,” he agrees that Aereo’s activities ought not to be allowed, either because Aereo is secondarily liable for its subscribers’ infringement of the Networks’ performance rights, or because it is directly liable for violating the Networks’ reproduction rights. If future courts fail to find Aereo liable under either of those theories, Justice Scalia advocates relying on Congress to close the loophole. Slip Op. at 12.

[7] Slip Op. at 8.

[8] 17 U.S.C. § 101.

For a printer-friendly version, click here.

January 11, 2013

Air Force 1 trade dress dispute held moot – Nike wins at Supreme Court, but at what cost?

Filed under: Litigation, Trade Dress, Uncategorized — Tags: , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 10:41 am

UW low res

by Uli Widmaier

A sues B for infringing its registered mark.  B counterclaims for cancellation of A’s registration.  A executes a comprehensive covenant not to sue B in the future for using any colorable imitation of A’s mark, and moves to dismiss the lawsuit with prejudice.  B, intent on pursuing its counterclaim, opposes the motion.  The district court holds that the case is moot, and grants A’s motion.  The Court of Appeals affirms, as does the Supreme Court.  Case over.

This is the short version of Already, LLC, v. Nike, Inc., decided unanimously by the Supreme Court on January 13, 2013.  See — U.S. –, No. 11-982 (U.S. January 9, 2013).  To put some meat on the factual bones:  Nike was the plaintiff, Already was the defendant, the mark was the trade dress of Nike’s famous Air Force 1 shoe, for which Nike has a federal registration.  Already sold shoes that Nike felt infringed the Air Force 1 trade dress.  Nike sued, Already counterclaimed.  Nike then reconsidered, successfully mooting the case via a unilateral covenant not to sue.  “The covenant promised that Nike would not raise against Already or any affiliated entity any trademark or unfair competition claim based on any of Already’s existing footwear designs, or any future Already designs that constituted a “colorable imitation” of Already’s current products.”  Already, slip op. at 2.

The Supreme Court’s decision clarifies (to a degree) the burden for showing the existence or absence of an actual controversy where a plaintiff seeks to moot a defendant’s counterclaim via a unilateral covenant not to sue.  But its importance lies just as much, if not more, in the barriers the Court erects against future uses of covenants not to sue, and in the insight it provides into the Justices’ thinking about trademarks and about basic competitive fairness.

The opinion was written by Chief Justice Roberts.  Justice Kennedy wrote a concurrence, which Justices Thomas, Alito, and Sotomayor joined.

I.    The Holding:  Burdens and Burden-Shifting

Both the district court and the Second Circuit held that, once Nike had executed the covenant not to sue, the burden was on Already to show that the case had not become moot.  Slip op., Kennedy concurrence at 1.  This was “wrong.”  Id.  “Under our precedents, it was Nike’s burden to show that it could not reasonably be expected to resume its enforcement efforts against Already.”  Slip op. at 5, quoting Friends of the Earth, Inc., v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 190 (2000) (quotation marks omitted).  In other words, the “voluntary cessation doctrine” articulated in Friends of the Earth applies to Nike, who in this situation was the party who voluntarily ceased the allegedly wrongful conduct (i.e. a lawsuit based on an allegedly invalid registration) .  Id. at 5-6.  This burden imposed on Nike by the doctrine is a “formidable” one.  Id. at 6. (more…)

January 18, 2012

Peter and the Wolf Leave the Public Domain – Supreme Court Holds Copyright Restoration Law is Constitutional

Filed under: Copyright — Tags: , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 5:59 pm

by Uli Widmaier

On January 18, 2012, the U.S. Supreme Court held in Golan v. Holder, No. 10-545, 565 U.S. — (2012), that a law bestowing U.S. copyright protection on certain foreign works that had previously been in the public domain is constitutional under both the Copyright Clause of the Constitution and the First Amendment.  Justice Ginsburg authored the opinion.  Justice Breyer wrote a dissenting opinion, joined by Justice Alito.  Justice Kagan took no part in consideration or decision of the case.[1]

The Supreme Court’s holding is important because it affirms the accession of the U.S. to a system of international IP protection under the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention), the World Trade Organization (WTO), and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  It also clarifies the reach of Congress’s authority under the Constitution to legislate in the copyright arena.

1.     Background

In 1989, the U.S. joined the Berne Convention for the Protection of Literary and Artistic Works.  Article 18 of the Berne Convention provides that “a work must be protected abroad unless its copyright term has expired in either the country where protection is claimed or the country of origin.”  Golan, at 3.  The U.S., however, did not comply with Art. 18.  Prior to 1998, U.S. copyright protection of foreign works was limited.  A foreign work did not enjoy copyright protection in the U.S. for one of three reasons: (1) the U.S. did not protect works from the country of the origin at the time of the work’s publication; (2) the U.S. did not protect sound recordings fixed before 1972; and (3) the work’s author had not complied with certain statutory formalities relating to copyright notice, registration, and renewal, that were formerly required under U.S. copyright law.  See Golan at 1, 4.

When the United States joined both the WTO and TRIPS, continued noncompliance with Art. 18 of the Berne Convention could have given rise to significant sanctions such as “tariffs or cross-sector retaliation.”  Golan at 8.  To bring the U.S. into compliance with Art. 18, Congress in 1998 enacted Section 514 of the Uruguay Round Agreements Act (URAA), codified at 17 U.S.C. §§ 104A & 109(a).  Section 514 “restores” copyright protection to foreign works that were not protected in the U.S. for one of the three reasons set forth above.[2]  Specifically, “restored” copyrights in such works “subsist for the remainder of the term of copyright that the works would have otherwise been granted . . . if the work never entered the public domain.”  17 U.S.C. § 104A(a)(1)(B).

Section 514 grants copyright protection to works that were previously available in the U.S. without such protection.  In other words, it removes these works from the public domain.  This has significant real-world effects.  For example, prior to enactment of Section 514, orchestras could rent the sheet music for famous musical works such as Prokofiev’s Peter and the Wolf, Stravinsky’s A Soldier’s Tale, or the great symphonies of Shostakovich for relatively low fees.  With U.S. copyright in these works newly established, the rental fees became drastically higher, making it economically impossible for many ensembles to afford to perform these works.  See generally Brief of the Conductors Guild as Amicus Curiae supporting Petitioners (filed Nov. 24, 2010).[3]

2.     The Supreme Court’s Analysis

The petitioners appealed from a Tenth Circuit ruling rejecting their argument “that Congress, when it passed the URAA [including Section 514], exceeded its authority under the Copyright Clause and transgressed First Amendment limitations.”  Golan, at 11.  The Supreme Court disagreed, refuting each of the petitioners’ arguments.

(a)     Copyright Clause – “Limited Times”

The Copyright Clause states in relevant part that “Congress shall have Power . . . [t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors . . . the exclusive Right to their . . . Writings.” Art. I, §8, cl. 8.

Petitioners argued that “removing works from the public domain . . . violates the ‘lim­ited [t]imes’ restriction by turning a fixed and predictable period into one that can be reset or resurrected at any time, even after it expires.”  Golan at 14 (citations and quotation marks omitted).  According to Petitioners, the works in question had enjoyed an initial “limited term” of “zero” duration, and it was unconstitutional to extend that term.

The Supreme Court made short work of the “zero” argument.  “[S]urely a ‘limited time’ of exclusivity must begin before it may end.”  Golan, at 15.  More generally, the Court held, the term “limited times” is “best understood to mean confined within certain bounds, restrained, or circumscribed.”  Golan at 14 (citations and quotation marks omitted).  Section 514 provided a “restrained” and “circumscribed” copyright term for these former public-domain works and thus does not violate the “limited times” clause.  Golan at 14-15.

Moreover, the Court found ample historical precedent of Congress’s removing works from the public domain and giving them copyright protection.  Importantly, the Court noted, “the Copyright Act of 1790 granted protection to many works previously in the public domain.”  Golan at 16.  In short, the Court held, “[g]iven the authority we hold Congress has, we will not second-guess the political choice Congress made be­tween leaving the public domain untouched and embrac­ing [the Berne Convention] unstintingly.”  Golan at 19.

(b)     Copyright Clause – “Promote the Progress of Science and useful Arts”

Petitioners argued that the Copyright Clause mandates that any copyright laws passed by Congress must “promote the Progress of Science and useful Arts.”  Golan at 20.  But a law providing new copyright protection to an existing work in the public domain cannot possibly incentivize the creation of new works.  Therefore, according to Petitioners, such a law is unconstitutional.  Id.  The Supreme Court disagreed.  “A well-functioning international copyright system would likely encourage the dissemination of exist­ing and future works. . . . The provision of incentives for the creation of new works is surely an essential means to advance the spread of knowledge and learning. We hold, however, that it is not the sole means Congress may use “[t]o promote the Pro­gress of Science.” . . . Congress determined that exem­plary adherence to Berne would serve the objectives of the Copyright Clause. We have no warrant to reject the ra­tional judgment Congress made.”  Id. at 22-23.

3.     First Amendment

Petitioners argued that they “enjoyed ‘vested rights’ in works that had already entered the public domain,” and depriving them of these rights by withdrawing the works from the public domain violates petitioners’ First Amendment rights.  Golan, at 26.  The fact that copyright law protects First Amendment interests via doctrines such as the idea/expression dichotomy or the fair use doctrines cannot, in Petitioners’ view, compensate for Congress’s “unprecedented foray into the public domain.”  Id. (quotation marks omitted).

The Supreme Court noted that this argument depends on a premise the Curt had already rejected, “namely, that the Constitution renders the public domain largely untouchable by Congress.”  Id.  Moreover, the Court noted, granting copyright protection to Prokofiev’s Peter and the Wolf or to Shostakovich’s symphonies merely puts these works on equal footing in the marketplace with “music of Prokofiev’s U.S. contemporaries: works of Copland and Bernstein, for example, that enjoy copyright protection, but nevertheless appear regularly in the programs of U.S. concertgoers.”  Golan, at 29.  The Court stated that there is no “free speech principle [that would disarm Congress] from protecting works prematurely cast into the public domain for reasons antithetical to the Berne Convention.”  Id. at 28.

In short, “[b]y fully implementing [the Berne Convention], Congress ensured that most works, whether foreign or domestic, would be governed by the same legal regime.”  Id. at 30.  Neither the Copyright Clause nor the First Amendment prevents Congress from determining “that U.S. interests were best served by our full participation in the dominant system of international copyright protection.”  Golan, at 32.

4.     The Dissent

In dissent, Justice Breyer argued that the Copyright Clause embodies a strong “utilitarian view of copyrights and patents” and places “great value on the power of copyright to elicit new production.”  Golan, Breyer Dissent, at 5, 7.  Therefore, since a law bestowing copyright on existing works that were – often for decades – in the public domain does not in any meaningful way elicit the production of new works, the law – Section 514 – is unconstitutional.  See id.  Justice Breyer also notes the “speech-related harms” arising from Section 514, such as “restricting use of previously available material; reversing payment expectations; [and] rewarding rent-seekers at the public’s expense.”  Id. at 16.

The Court should therefore have scrutinized “with some care the reasons claimed to justify [Section 514] in order to determine whether they constitute reasonable copyright-related justifications for the serious harms, including speech-related harms, which [Section 514] seems likely to impose.”  Id. at 16-17.  Applying such scrutiny, Justice Breyer concludes that “the Copyright Clause, interpreted in light of the First Amendment, does not authorize Congress to enact this statute.”  Id. at 24.

5.     Conclusion

In Golan v. Holder, the Supreme Court strongly affirmed Congress’s authority to legislate freely in the copyright area.  “The judgment §514 expresses lies well within the ken of the political branches.”  Golan, at 32.  Neither the Copyright Clause nor the First Amendment imposes strict or inflexible limitations on Congress’s power.

From a political perspective, the Supreme Court’s decision has the important effect of affirming the place of the United States within the legal structure of international intellectual property law.  In deciding the case, the Supreme Court had Congress’s intent to protect the United States’ international interests firmly in mind.  “Those interests in­clude ensuring exemplary compliance with our interna­tional obligations, securing greater protection for U. S. authors abroad, and remedying unequal treatment of foreign authors.”  Id.

*  *  *

Uli Widmaier is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals. The firm advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Uli’s practice focuses on domestic and international trademark, copyright, trade dress and Internet law and litigation.


[footnotes]

[1] A copy of the opinion and the dissent is available at: http://www.pattishall.com/pdf/golanscotusruling.pdf.

[2] The Supreme Court noted that “[r]estoration is a misnomer insofar as it implies that all works protected under Section 104A previously enjoyed protection. Each work in the public domain because of lack of national eligibility or subject ­matter protection, and many that failed to comply with formalities, never enjoyed U. S. copyright protection.”  Golan, at 10 n. 15.

May 25, 2010

Supreme Court Makes the Call: NFL Not Exempt from Antitrust Law when Licensing Team Trademarks for Merchandise

Filed under: Antitrust, Licensing — Tags: , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 7:27 pm

By Uli Widmaier, Esq.

Reversing the Seventh Circuit, the Supreme Court unanimously held that the National Football League’s trademark licensing activities are “not categorically beyond the coverage” of federal antitrust laws.  American Needle, Inc., v. NFL, No. 08-661, slip op. at 1 (S. Ct. May 24, 2010).  The Court concluded that the league’s actions constitute “concerted activity” under Section 1 of the Sherman Act, meaning that, on remand, the district court will evaluate American Needle’s claims under the Rule of Reason standard.  Id. at 18.  This does not mean that the NFL necessarily will be found liable under the Sherman Act, or that such an outcome is even likely.  Writing for the Court, Justice Stevens emphasized that the NFL may very well prevail under the Rule of Reason test, since NFL teams may have “a perfectly sensible justification for making a host of collective decisions.”  Id.  Nevertheless, American Needle’s antitrust claim will proceed for the time being. (more…)

April 27, 2010

Supreme Court to Examine Application of Copyright Law’s First Sale Doctrine to Importation of Gray Market Goods

Filed under: Copyright, Gray Market — Tags: , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 9:18 pm

by Uli Widmaier, Trademark Attorney

Does copyright law’s first sale doctrine apply to imported goods manufactured abroad that are not intended for the United States market?  That is the question on which the Supreme Court recently granted certiorari in Costco Wholesale Corp. v. Omega, S.A., No. 08-1423 (Apr. 19, 2010).  Costco purchased genuine Omega “Seamaster” from an entity that acquired the watches outside the U.S. and imported them into the U.S. without Omega’s authorization.  Costco ultimately sold the watches to consumers at 35% below the price Omega normally charged in the U.S.  To stop this practice, Omega engraved a small design on the back of these watches, registered it with the U.S. Copyright Office, and then sued Costco for copyright infringement in the Central District of California, alleging violations of Sections 106(3) and 602(a) of the Copyright Act, 17 U.S.C. §§ 106(3), 602(a).  The district court entered summary judgment in Costco’s favor, but the Ninth Circuit Court of Appeals reversed.  Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9th Cir. 2008). (more…)

April 9, 2010

Supreme Court Justice John Paul Stevens to Retire: An Important Contributor to Copyright, Trademark, and First Amendment Law Steps Aside

Filed under: Copyright, First Amendment, Pattishall — Tags: , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 10:41 pm

by Uli Widmaier, Trademark Attorney

Earlier today, Associate Justice John Paul Stevens informed the President of his intention to resign from the U.S. Supreme Court at the end of the current term.  It is with utmost respect and admiration that we consider his contributions to the development of intellectual property and Internet law.

A close personal friend of former Pattishall McAuliffe managing partner, Beverly Pattishall (1916-2002), Justice Stevens has written some of the most influential decisions in these areas.  Undoubtedly, the most famous of these is his majority opinion in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), which defined the law of contributory copyright infringement for decades to come.  Universal challenged Sony’s sale of home videotape recorders on the ground that purchasers could use the devices to infringe content providers’ copyrights by copying television programs.  The facts of the case ensured that the decision would guide the interplay of technology and copyright law through the tumultuous growth of the Internet.  Sony was a complex and hotly contested case, decided 5-4 with a powerful and lengthy dissent by Justice Blackmun.  Nevertheless, its holding can be distilled into a simple but immensely influential formula: selling a technology that may enable third parties to infringe existing copyrights does not give rise to liability for contributory copyright infringement if the technology is “capable of commercially significant noninfringing uses.”  Id. at 442 (emphasis added).  Speaking through Justice Stevens, the Supreme Court found that Sony’s Betamax videotape technology indeed was capable of such uses; therefore Sony’s sale of Betamax equipment did not constitute contributory copyright infringement.  Id. at 456. (more…)

March 9, 2010

U.S. Supreme Court Upholds Federal Court Jurisdiction Over Copyright Infringement Claims For Unregistered Works: Reed Elsevier Inc. v. Muchnick

Filed under: Copyright — Tags: , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 5:58 pm

By Belinda J. Scrimenti, Esq.

Nearly nine years after its seminal decision regarding copyright law and electronic publication in New York Times Co. v Tasini,[1] the United States Supreme Court addressed jurisdictional issues arising from authors’ post-Tasini claims.  On March 2, 2010, the Court held in Reed Elsevier, Inc. v. Muchnick,[2] that, while Section 411(a) of the Copyright Act makes registration a precondition to filing a copyright infringement suit, it is not a jurisdictional requirement.  The decision likely will lead to final resolution of an $18 million settlement in the underlying litigation.  The Supreme Court’s unanimous holding[3] reversed the Second Circuit Court of Appeals’ decision,[4] which held that the district court lacked jurisdiction to certify a class and approve a settlement because some of the class members’ copyrighted works were unregistered. (more…)

July 17, 2009

Supreme Court To Review: Does a Multi-Team Sports League Act as a Single Entity & Avoid Antitrust Liability When Licensing Individual Team Trademarks?

Filed under: Antitrust — Tags: , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 2:58 pm

by Sanjiv Sarwate, Trademark Attorney

On June 30, 2009, the Supreme Court agreed to review the Seventh Circuit’s decision in American Needle, Inc. v. National Football League, a case illustrating the intersection of trademark law and antitrust law.  American Needle manufactures headwear, and held a license from NFL Properties to manufacture, sell, and promote headwear bearing NFL team logos, names, and other indicia of origin.  NFL Properties initially licensed multiple parties to manufacture headwear bearing team logos.  However, in 2000, the NFL teams directed NFL Properties to solicit bids for an exclusive headwear license, which was eventually won by Reebok.  NFL Properties allowed licenses granted to other entities, including American Needle, to expire.  American Needle then brought suit, alleging that the exclusive license violated Section 1 of the Sherman Act, which forbids any “contract, combination, or conspiracy in restraint of trade.”

American Needle argued that because each NFL team owned its trademarks separately, the exclusive contract between NFL Properties and Reebok restrained other manufacturers’ abilities to obtain licenses from the teams.  Thus, the exclusive license between NFL Properties and Reebok restrained trade in violation of the Sherman Act.  The NFL argued that it is a “single entity” for purposes of licensing team trademarks, and therefore immune from liability under Section 1 of the Sherman Act.  The district court granted summary judgment to the NFL on the “single entity” defense and American Needle appealed. (more…)

Older Posts »

Blog at WordPress.com.