Betty Boop Trademark Ruling Revised

The Ninth Circuit created quite a stir in the trademark world with its February 23, 2011 ruling in Fleischer Studios v. A.V.E.L. A., Inc. (pdf)  I discussed why that decision is problematic from a trademark perspective in my post, Betty Boop Court Misses the Trademark

Following the court’s decision, Fleischer, the appellant, filed petitions for rehearing and rehearing en banc.  The Ninth Circuit withdrew its February opinion and replaced it with a new opinion on August 19, 2011.  Instead of affirming the district court’s decision on the trademark issues, as it did in its February opinion, this time the Ninth Circuit vacated the district court’s holding with respect to the word mark and remanded the case to the district court for further proceedings on the trademark infringement claims.

To briefly recap what this case is about, Max Fleischer created the Betty Boop character in the 1930s.  He later sold the rights to the cartoon and character.  The Fleischer family revived the Fleischer cartoon business in the early 1970s and repurchased intellectual property rights to the Betty Boop character.  A.V.E.L.A. sold Betty Boop merchandise without a license from Fleischer.  Fleischer then sued A.V.E.L.A. for copyright and trademark infringement.

The Ninth Circuit undertook a different analysis in its revised opinion.  It did not mention the Dastar or Job’s Daughters cases at all, which it so heavily relied on in its initial opinion.  Instead, the court took a much more narrow approach and steered clear of any discussion of functionality.

Federal registration of Betty Boop image.  The Ninth Circuit upheld the district court’s rejection of the evidence presented on Fleischer’s ownership of a federal registration in the Betty Boop mark.  The significance of a federal registration is that it confers on the mark a presumption of validity.  15 U.S.C. §1115(a).  The evidence on registration was not presented in a timely manner and the district court did not abuse its discretion in refusing to consider it.  The Ninth Circuit also declined to take judicial notice of the image trademark registration.

Common law trademark in Betty Boop image.  A mark that is not federally registered can be protected as a common law trademark.  A party asserting a common law trademark must establish “secondary meaning” in the mark.  Secondary meaning has to do with source identification.  It is a belief by consumers that products connected with the mark come from the same source.  Secondary meaning is established with evidence.  In this case, the only evidence on secondary meaning presented was from Fleischer’s Chief Executive Officer, which the court considered to have very limited probative value.  The court stated

The probative value of such evidence is so limited, in fact, that standing alone, it is not sufficient to withstand summary judgment.  Thus, the company CEO’s uncorroborated, and clearly self-interested testimony did not create a genuine issue for trial as to whether Betty Boop has acquired secondary meaning.

(Opinion pdf pages 14-15)

Word trademark.  Fleischer claims a registered trademark in the words “Betty Boop.”  The district court held that the “fractured” history of intellectual property rights concerning Betty Boop prevented Fleischer from proving secondary meaning and thus prevented Fleischer from establishing one of the required elements of an enforceable trademark.  The fractured history theory has not been adopted by the Ninth Circuit or any other circuit.  It came from Universal City Studios, Inc. v. Nintendo Co.  Universal claimed to own a trademark in the King Kong name and sued Nintendo for trademark infringement and unfair competition over Nintendo’s gorilla in its Donkey Kong game.  The district court granted summary judgment to Nintendo, ruling that because at least four entities held rights to King Kong, Universal was unable to establish a single source of origin and therefore unable to establish secondary meaning.

The Ninth Circuit held that the mere fact of fractured ownership is not conclusive evidence of a lack of secondary meaning and that something more is required to show that there is no secondary meaning.  In Universal, the something more was “evidence of extensive use and licensing of similar images by other companies, the oddly-defined trademark that was legally carved out from other images of the same character, the widespread confusion amongst potential licensees and licensors regarding from whom one should license the mark, and the other image of the same character that had acquired secondary meaning.”  (Opinion pdf page 16).

In contrast, the district court in the Betty Boop case stated:

Here, as in Universal, merchandising intellectual property rights in a famous fictional character were divided and parceled out to various entities over many decades….Although there is no evidence of other current, authorized uses of Betty Boop trademarks, [Fleischer] acknowledges that other entities retain copyrights in various Betty Boop works.

(Opinion pdf page 16, emphasis added by the Ninth Circuit).

The Ninth Circuit found that the existence of the possibility that other copyright owners may be destroying the secondary meaning in the Betty Boop mark is not enough to rule in favor of A.V.E.L.A. on summary judgment.  The district court erred on the word mark issue and the Ninth Circuit vacated the holding on this issue and remanded the case to the district court “for further proceedings on Fleischer’s trademark infringement claims regarding the Betty Boop word mark.”  (Opinion pdf page 17).

This case is Fleischer Studios, Inc. v. A.V.E.L.A., Inc., No. 09-56317.

Corporate Officer Found Liable for Copyright Infringement in Online Copying Case

This case discusses the potential liability of a corporate officer for the infringing acts of the corporation.  Defendant Larry Chasin, CEO of the corporate defendant IDS, filed a motion for summary judgment against Plaintiff Blue Nile.  Blue Nile filed a cross motion for summary judgment against defendant Chasin on the issue of Chasin’s liability for copyright infringement.  Judge Thomas S. Zilly, Western District of Washington, Seattle, denied Chasin’s motion for summary judgment and granted Blue Nile’s motion for summary judgment, finding Chasin liable for copyright infringement (pdf).

Facts

Blue Nile, Inc. is an online jewelry and diamond retailer.  It alleged that defendants Ideal Diamond Solutions, Inc. (IDS) and Larry Chasin infringed its copyrights by posting Blue Nile’s copyrighted images of diamonds and jewelry on websites owned and operated by IDS and Chasin.

Chasin created IDS to provide brick and mortar jewelry retailers with web services to enable them to compete online.  The court determined from declarations and the parties’ moving papers that IDS was the “brainchild” of the defendant Chasin, that it is a small company and that defendant Chasin controlled the company’s corporate affairs.

Chasin did not dispute the allegations of infringement in Blue Nile’s moving papers.  The bases for Chasin’s motion for summary judgment and his defense to Blue Nile’s motion were “1) he cannot be held liable for copyright infringement because he had no role in creating the infringing websites and no knowledge that content used on the websites was copyrighted by Blue Nile; and 2) he cannot be held liable for IDS’s alleged infringement.”  (Opinion pdf pages 2-3).

The court found that Chasin was mistaken as a matter of law and that no genuine issue of material fact existed and therefore granted Blue Nile’s motion and denied Chasin’s motion.  (Opinion pdf page 3).  The court did not rule on whether IDS infringed Blue Nile’s copyrights, but the order is written on the assumption that IDS did infringe.

Summary Judgment

Summary judgment shall be granted if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law.  Fed.R.Civ.P. 56(c).

(Opinion pdf page 3). 

The non-moving party must demonstrate that there is a genuine issue of material fact for trial by identifying “specific facts” to establish a genuine issue.

This blog also discusses the standard for granting summary judgment in Ninth Circuit Upholds Ruling that Sony’s God of War Video Game Not Infringing in Dath v. Sony, Photograph of Model Dancing Copyrighted Bronze Dance Steps Could be Fair Use and Copyright Infringement Suit Regarding Precast Concrete Vault Drawings Yields Summary Judgment Rulings.

Personal Liability for Copyright Infringement

Copyright is a strict liability tort; therefore there is no corporate veil and all individuals who participate are jointly and severally liable.

(Opinion pdf page 4.)

Corporate officers are liable as joint tortfeasors with the corporation when the corporate officer is the dominant influence in the corporation and determines the policies that produce the copyright infringement.

Because Chasin controlled the corporation, his argument that he did not create the infringing websites or know that infringing material was posted was not a defense.  The court stated that

[t]he Copyright Act is a strict liability regime under which any infringer, whether innocent or intentional, is liable.

(Opinion pdf page 5).

The court also indicated that there is a genuine question of material fact regarding whether Chasin is an “innocent infringer.”  Innocent infringement is discussed in my post Fair Use in AP Fairey Dispute but not in Cooks Source Magazine Controversy.  The distinction between an innocent infringer and an intentional infringer is important in calculating damages under the Copyright Act.  17 U.S.C. §504(c)(2).  Regarding innocent infringement, §504(c)(2) states:

In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages…

Vicarious Liability for Copyright Infringement

The court ruled that Chasin is alternatively “liable for vicarious copyright infringement because he had the right and ability to supervise the infringing activity and also had a direct financial interest in such activities.”  (Opinion pdf page 5).  Chasin admitted that he had the ability to remove infringing content, that he controlled corporate affairs, that he invested his own money in IDS and that he received a salary and benefits from IDS.

Vicarious liability is also discussed on this blog in Game Developer Alleges Copyright and Computer Fraud and Abuse Act Violations in Suit Against Unknown Defendants.

This case is Blue Nile, Inc. v. Ideal Diamond Solutions, Inc., et al., No. C10-380Z, Western District of Washington at Seattle.

Perfect 10 Denied Preliminary Injunction Against Google, Affirmed by Ninth Circuit

Perfect 10 has a long history of legal action against Google.  The Ninth Circuit does not recount that history in its most recent opinion, but refers the reader to Perfect 10 II, 508 F.3d 1146.

Perfect 10 makes its copyrighted photographic images of nude models available for viewing on a password-protected, paid-subscription website.  These copyrighted images produce essentially all of Perfect 10’s income.   Perfect 10 opposes the display of thumbnail versions of its images by Google’s search engines.  This appeal arises out of Perfect 10’s motion for a preliminary injunction following the Ninth Circuit’s remand in Perfect 10 II.

Perfect 10 argued that it was entitled to an injunction because Google’s web and image search and related caching feature, its Blogger service, and its practice of forwarding Perfect 10’s takedown notices to chillingeffects.org constituted copyright infringement.

(Opinion pdf page 4).

The district court denied Perfect 10’s motion for a preliminary injunction.  The Ninth Circuit first discussed the applicable standard for issuing a preliminary injunction in copyright cases.  It then discussed whether Perfect 10 established that it was likely to suffer from irreparable harm if the injunction did not issue.

Preliminary injunction.

A plaintiff seeking a preliminary injunction must establish (1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4) that an injunction is in the public interest.

(Opinion pdf page 5).

Perfect 10 argued that since it made a strong showing that it was likely to succeed on the merits of its copyright claims, the district court was required to presume that it would suffer irreparable harm and grant the motion for an injunction.  In other words, because Perfect 10 believed that it established it was likely to establish copyright infringement, the district court should automatically issue the injunction.

The Ninth Circuit discussed how even though there is support for Perfect 10’s argument in previous Ninth Circuit decisions, the standard articulated by Perfect 10 is not the law.  In eBay Inc. v. MercExchange, L.L.C., the U.S Supreme Court indicated that the permissive language in the Copyright Act regarding injunctive relief did not demonstrate a congressional intent to depart from traditional equitable principles in granting an injunction in a copyright case and that, therefore, an injunction should not automatically follow a determination of copyright infringement.  Prior to the Supreme Court’s ruling in eBay, federal district courts routinely granted injunctions to prevailing rights holders in both patent and copyright cases.

The Ninth Circuit rejected Perfect 10’s argument for an automatic injunction and ruled that “the propriety of injunctive relief in cases arising under the Copyright Act must be evaluated on a case-by-case basis in accord with traditional equitable principles and without the aid of presumptions” that favor issuing the injunction.  (Opinion pdf page 8).

Although the injunction at issue in eBay was a permanent injunction, not a preliminary injunction such as Perfect 10 requested, the Ninth Circuit determined that the standard is essentially the same.

Irreparable harm

The district court ruled that Perfect 10 failed to establish that it would suffer irreparable harm if the preliminary injunction did not issue.  The Ninth Circuit held that “Perfect 10 has not shown a sufficient causal connection between irreparable harm to Perfect 10’s business and Google’s operation of its search engine.”  (Opinion pdf page 11).  To support its conclusion, the Ninth Circuit pointed to the failure of Perfect 10 to establish that the business was ever financially sound, the free access of Perfect 10 images on other search engines and the failure of Perfect 10 to identify even one former subscriber who stopped paying for the service due to the availability of the images on Google for free.

This opinion is Perfect 10, Inc. v. Google, Inc., No. 10-56316.

Ninth Circuit Upholds Ruling that Sony’s God of War Video Game Not Infringing in Dath v. Sony

On July 29, 2011, the Ninth Circuit filed what must be one of its shortest opinions in a copyright case:

We adopt and affirm the district court’s well-reasoned opinion in Bissoon-Dath v. Sony Computer Entm’t Am., Inc., 694 F. Supp.2d 1071 (N.D. Cal. 2010).

Dath v. Sony Computer Entertainment, No. 10-15783.

Facts.

The Plaintiffs Jonathan Bissoon-Dath and Jennifer B. Dath alleged that Sony Computer Entertainment of America, Inc., and one of Sony’s former employees infringed their copyrights in five works with the God of War video game, developed by Sony for its PlayStation 2 and PlayStation Portable video game consoles.  Plaintiffs wrote five works describing the story of Spartan kings at war against Athens, the involvement of the Greek Gods, how the Gods choose a mortal to achieve peace and how the mortal eventually secures peace and democracy in Greece.  Plaintiffs started distributing their works in early 2002.

Sony’s God of War video game also involves the tale of war between Sparta and Athens, but the mortal chosen by the Greek God Athena to end the war later becomes the Greek God of War, overseeing modern wars such as World War II and the Vietnam War.  Sony released the game in March 2005.

Plaintiffs filed this case in February 2008.  After the parties were unable to resolve the case through alternative dispute resolution, the defendants filed a motion for summary judgment.

The decision on summary judgment.

Summary judgment is a pretrial motion to decide the case on its merits without a trial.  The case is decided as a matter of law, relying on the evidence obtained by the parties as of the time the motion is made.  See my posts Photograph of Model Dancing Copyrighted Bronze Dance Steps Could be Fair Use and Copyright Infringement Suit Regarding Precast Concrete Vault Drawings Yields Summary Judgment Rulings for more detailed discussions of the requirements.  Those posts also discuss substantial similarity and scenes a faire, concepts relevant to this case.

Although summary judgment is not highly favored on questions of substantial similarity in copyright cases, summary judgment is appropriate if the court can conclude, after viewing the evidence and drawing inferences in a manner most favorable to the non-moving party, that no reasonable juror could find substantial similarity of ideas and expression.

(District court opinion page 1078).

The “substantial similarity” referred to by the court in the quote above is an aspect of the test used by the court to determine copyright infringement.  The plaintiff must prove that 1) she owns a valid copyright in the work and 2) “the defendant copied protected elements of that work.”  (District court opinion page 1078).  In this case, the defendants did not dispute the validity of the plaintiffs’ copyrights.  The issue on summary judgment was whether plaintiffs could establish that defendants copied the protectable elements of their works.

A plaintiff may establish copying either (1) by presenting direct evidence of copying or (2) by showing that the defendant had access to the work and that the works at issue are substantially similar.

The plaintiffs did not present direct evidence of copying and relied on showing access and substantial similarity.  The Ninth Circuit recognizes a relationship between access and substantial similarity with its “inverse ratio rule.”  When there is a high degree of access, a lower standard of proof of substantial similarity is required. 

The “substantial similarity” element includes a two-part test of its own:  1.  The extrinsic test is an objective test which examines whether “there are substantial similarities in both ideas and expression.”  (District court opinion page 1079).  2.  The intrinsic test is a subjective inquiry into the similarity of expression and is a test for the jury to apply.  The court considers only the extrinsic test on summary judgment.

Copyright law only prohibits copying of the protectable elements of a plaintiff’s work.  Ideas are not protected, but the expression of those ideas is.  General plot ideas and scenes a faire,stock scenes, are also not protected.  A particular sequence of a significant number of unprotectable elements may itself be a protectable element.  The court determines what the protectable elements are and disregards the non-protectable elements.

The court ruled that “no reasonable juror could find substantial similarity of ideas and expression, even if access to all of plaintiffs’ works were proven.”  The court examined the protectability of plaintiffs’ works and the articulable similarities between the works, using the following elements:

  • Plot
  • Themes
  • Dialogue
  • Mood
  • Settings 
  • Pace
  • Characters
  • Sequence of Events

Plot.  The court found similarities between the two plots, but stated that “[o]nce the unprotectable elements are filtered, the two stories’ plots are similar only at a level of abstraction that is barely meaningful, if at all.”  (District court opinion page 1082).

Themes.  The court found that the themes are quite different.  Plaintiffs’ works focus on the establishment of peace and democracy, while God of War focuses on violence, divine forgiveness and continued war.

Dialogue.  The court found that the dialogue similarities either referred to different things in the plaintiffs’ works and God of Waror were clichéd and unprotectable.

Mood.  The court found the mood for plaintiff’s works to be light-hearted, with some darker scenes sprinkled in for contrast and the mood of God of War to be dark and extremely violent.

Settings.  The court found that the shared settings of Greece, Athens, Mount Olympus, Sparta and the Underworld were generic and clichéd and unprotectable elements of stories concerning ancient Greece and Greek gods.

Pace.  The court found that plaintiffs’ works are relatively fast-paced and that God of War is very fast paced, but that the pace of the game is indicative of a violent video game and not of copying plaintiffs’ works.  In addition, the storyline in plaintiffs’ works is linear, whereas in God of War it is repeatedly interrupted with flashbacks.

Characters.  “Greek gods, dialogues among them about mortal affairs, rivalries among the gods, and mythical beasts such as the Hydra or the Nemean Lion are unprotectable elements; it is uncontroversial that they have been used widely in both ancient and modern artistic works, in the naming of astronomical bodies and spacecraft, and in other fields.”  (District court opinion page 1088).

Sequence of Events.  As indicated under the Pace element, the plaintiff’s storyline is linear, with scenes occurring in chronological order, while the scenes in God of War jump around through flash-backs.

In summing up, the court indicated that plaintiffs’ works were comprised of stock elements used in literary and artistic works for a long time.  Even though a particular sequence of stock elements can be protectable, in this case, the sequences of elements and relationships between the elements in the two works were entirely dissimilar.