West Virginia University has requested a preliminary injunction to stop MivaMan, LLC/Fastees.com from producing allegedly infringing t-shirts.  WVU strictly polices the production and licensing of apparel containing its registered and common law trademarks.  It is unclear, however, which trademarks are being used in these shirts.  And likelihood of confusion or actionable dilution seems a bigger question.

From the WVU press release, the list of WVU marks linked above, and local news accounts (here and here), it appears that WVU claims Fastees is infringing trademark rights in the words “West Virginia” in connection with the University, and in the slogan “Let’s go Mountaineers!”, as well as by using the official colors and typeface of the University.  Indeed, many shirts do contain the words “West Virginia” and a couple of them reference the common law mark “Let’s Go Mountaineers!” through the language “Let’s Go! Drink Some Beers!”*  The shirts also use blue and gold, which are the University colors.  Those colors are also the official colors of the state of West Virginia, as adopted by the State Legislature in 1963.

Without having seen the Complaint or being privy to the underlying facts, it is not clear to me that Fastees is using WVU’s marks.  And whether any of this is done in a way likely to be confusing to consumers, or actionably diluting by tarnishment, is further in doubt.  In the WVU Statement, Becky Lofstead, vice president of communications, is quoted as saying, “It is WVU’s responsibility to protect the reputation, integrity, image, and goodwill of the University through the proper use of our federally registered marks.”  While some of the t-shirts sold by Fastees are certainly less than classy, I’m not sure trademark law is the best way to protect the WVU image here.

*The middle exclamation mark is a reference to the stadium chant by fans at football games.  One half of the stadium yells, “Let’s Go!” and the other side follows with a resounding, “Mountaineers!”

“All terms mentioned in this book that are known to be or are suspected of being trademarks or service marks have been appropriately capitalized.  [Book publisher] cannot attest to the accuracy of this information.  Use of a term in this book should not be regarded as affecting the validity of any trademark of service mark.”

My initial questions are:

1/ What is this clause trying to achieve?

2/ Is it an attempt to avoid liability for TM infringement or dilution?  If so, I’m not sure how it would achieve that, particularly as it’s framed in terms of the validity of the mark in the markholder’s hands.

3/ How does the reference to ‘appropriately capitalized’ terms have any bearing on the question as to the potential liability of the publisher for TM infringement or dilution, if indeed that’s what the reference is for?

4/ How does it make sense to frame the clause in terms of ‘not affecting the validity of the TMs’?  Wouldn’t the potential problem for the publisher be a concern by a TM holder that its marks had been infringed or diluted in some way, not that they may be invalid?

Has anyone else come across these types of clauses in print or online publications?

Dublin Dr. Pepper and Dr. Pepper Snapple Group have settled their trademark licensing dispute and Dublin Dr. Pepper, the beverage darling of the Lonestar State, is no more.

Dublin Dr. Pepper is a Texas favorite.  This original Dr. Pepper was created in 1891, and its birthday is still celebrated every year in the town of Dublin, which changes its name to “Dr. Pepper, Texas” each year on that day.  What makes Dublin Dr. Pepper unique in today’s market is the fact that it has continuously (even during difficult times, including WWII sugar shortages) been manufactured with cane sugar—which gives it a distinct (many would just say “better”) taste.

For years, Dr. Pepper Snapple Group and Dublin Dr. Pepper operated under the terms of a licensing agreement.  The agreement provided, inter alia, that the sales territory for Dublin Dr. Pepper would be limited to six counties in Texas, and that Dr. Pepper Snapple Group would approve designs for the Dublin Dr. Pepper bottles.  Several months ago Dr. Pepper Snapple Group filed a complaint alleging that Dublin Dr. Pepper violated the terms of the agreement by selling Dublin Dr. Pepper outside of its agreed-upon six county territory (through internet sales, telephone sales, and otherwise) and creating a likelihood of confusion in the marketplace.

Dublin Dr. Pepper countersued, claiming that Dr. Pepper Snapple Group wanted to create its own “retro” version of Dr. Pepper, using trade dress similar to that of Dublin Dr. Pepper based on designs Dublin Dr. Pepper had submitted for approval in the past.  (Dublin Dr. Pepper is quick to point out that Dr. Pepper Snapple Group’s version was made with refined beet sugars, however, and not cane sugar.)

The settlement agreement provides, among other things, that Dr. Pepper Snapple Group will make a Dr. Pepper with “nostalgic packaging” sweetened with cane sugar that will be distributed to certain parts of Texas—but it won’t be called “Dublin Dr. Pepper.”  Austin station KXAN reports on the story here, and the Wall Street Journal story can be found here.  Dublin Dr. Pepper’s original response and counterclaim to the lawsuit can be found here.  What the newly named “Dublin Bottling Works will be doing next is discussed in the Dallas Observer blog here.

The underlying issues would be good fodder for a trademark class, including establishment of trademark rights, trade dress, geographic designations, geographic limitations on sales, concurrent use, infringement, and trademark policing.

Case Western Reserve’s Journal of Law, Technology & the Internet is searching for a final article to publish in its spring edition. Any scholarly work related to cyber law, intellectual property law or the intersection of technology and the law will be considered. This is a great opportunity to see your research in print and online by the end of the spring semester. The Journal of Law, Technology & the Internet is a recognized student journal at Case Western Reserve University School of Law located in Cleveland, Ohio. Please forward all submissions, along with a CV or cover letter, to the attention of:

dtc22@case.edu | (734) 812-7373

An emerging by-product of Pittsburgh’s claim to be a new entertainment capital (see blog post here – the claim is not entirely without merit, as a lawyer might say) is that the incumbent local copyright / trademark academic gets a particular blend of interesting questions from the local media.

Last week, I explained the in’s and out’s of infringment of music copyright to the music critic of the Pittsburgh Post-Gazette (you read that right:  a small urban daily still has a music critic!) in connection with an allegation that Pittsburgh’s own hip hop megastar, Wiz Khalifa, appropriated “Black and Yellow” from a local unknown, who recorded “Pink and Yellow.” The problems that Wiz’s accuser faces are two-fold.  One, it appears to be unlikely that Wiz ever heard or otherwise had access to the plaintiff’s song.  Two, on my quick listen, the original elements of the songs don’t sound much like each other.  The core of the claim seems to be the similarity in the titles — “and Yellow” — which is a thin foundation for a successful copyright suit.

Today, the local angle is Andy Warhol, son of Pittsburgh.   The Velvet Underground has sued the Andy Warhol Foundation, which administers rights to the late artist’s works, for trademark infringement.  I haven’t seen the complaint, but I am told that VU is unhappy that the Foundation licensed the banana image that Warhol designed for the band’s 1967 debut, Velvet Underground and Nico, for use on i-related (that is, Apple iPad-related) products.

The IP issues there are a little bit tortuous.

The complaint apparently alleges that Warhol’s banana image was never “officially copyrighted.”  Presumably the reference is to the possibility that the work was distributed (as cover art) without an appropriate copyright notice.  I don’t have a copy of the album lying around, but if you do, you can check that.  If there was no notice on the cover, then there’s a good chance that the image itself went into the public domain — the copyright public domain, that is, right away.  Just about anything is possible in IP, but that (the absence of notice) strikes me as unlikely.  The other argument that VU has raised is that the image was in the public domain in the first place, apparently because Warhol based his design on a picture of an actual banana.  That argument is unlikely to fly, unless Warhol’s banana is actually identical to the source banana image.  If Warhol made any “creative” changes to the source image, then there’s little doubt that a valid copyright was possible.  Nevertheless, it’s possible that copyright is out of the picture.  If the image is protected by a valid copyright, then the Foundation has an argument under Dastar that arguable trademark claims should not interfere with the Foundation’s right to license the image.   That preemption argument would keep anyone from even getting to the points in the next paragraph.

As for the trademark claim, the suit apparently alleges that the banana image has become the very symbol of the VU.  That may be true, but that doesn’t quite establish the band’s trademark rights; the legal question is whether the band has used the mark commercially so that consumers have come to associate the mark as designating the source of products (or services) that the mark is attached to.  Let’s assume that the band can make *that* case.  Then the question is whether the Foundation infringed the mark — used it in commerce in a way that caused likely consumer confusion.  Usually, one would think that any arguable confusion would arise at the point that the mark is used on the i-products (an iPad cover, say), but it appears that the actual sellers of the products are not targeted.  I’m guessing that the producers don’t have assets worth pursuing.  The Foundation clearly does.  But the tie between signing the license and causing consumer confusion seems … pretty weak.  VU may be Waiting for the Man to provide trademark redress, but at the end of the day, I predict a case of There She Goes Again.

Updated Jan. 13 2012:  Here is a link to the Pittsburgh Post-Gazette story about the case. The story doesn’t get the issue right; the question is not whether the public associates the banana image with VU or with Warhol.  The question is whether the defendant’s use of the mark (assuming that it is a mark), in connection with goods or services, causes a likelihood of confusion in the minds of consumers.  I’ve now had a chance to read the Complaint.  The key allegation reads this way: “The use of the Mark on goods purportedly licensed by defendant will likely cause, and continue to cause, confusion, mistake or deception as to the source or affiliation of such third party goods.”  If that’s the crux of the case, then I don’t think that the Complaint alleges facts sufficient to meet the statutory definition.  The Warhol Foundation has a decent chance of getting the trademark claims dismissed.

The iPad / iPhone cases themselves are produced by Incase, as part of a Warhol collection.

Except, of course, that it wasn’t a Louis Vuitton bag – it was a knockoff. And that can create problems. After all, the use is no longer nominative, and no longer a fair description. Now there is a chance of consumer confusion – people might think the knockoff is a Louis Vuitton and be fooled into thinking that the sub-par stitching (so clearly visible on the screen – yeah right) is Louis Vuitton’s and of poor quality. Trademark people call this “post-sale confusion,” like the kind that comes when you wear a $10 Rolexxx. You weren’t fooled, but others might be fooled.

There’s one problem with the argument – under the Lanham Act, Section 43(a), the unlawful behavior must use the mark in connection with goods and services. That is, a trademark use. Thus, we hold the seller of the Rolexxx liable, but not the wearer, because the wearer is not making a trademark use – they are not using it in connection with goods and services.

That, I suspect, won’t stop Louis Vuitton (or sadly, the courts) here. I suspect that the finding will be that the movie is a “good or service” and that use of the name “Louis Vuitton” will be “in connection” with the movie, and confusing, and thus create liability. I can’t imagine this is what the authors of the Lanham Act had in mind. Nevertheless, courts have accepted survey evidence that credits consumers who think that the movie must have gotten a sponsorship deal with Louis Vuitton, even if they did not. In other words, courts are willing to find a trademark use just because consumers think there was one, even if there wasn’t.

So, this is another one of those “don’t do it” cases. I’m all for pushing the envelope of non-trademark use by having studios refuse to pay just for the right to utter the name of a famous mark. But it is a bad idea indeed to then use a knockoff in the movie. 

Nearly two years ago, I received an email from the Director of Fordham’s Center for Law and Information Policy, stating that the name of our center infringed the rights of Fordham.  I responded that our center, like many others at law schools across the nation*, uses “center” and “law” in its descriptive title, and then refers to the subject matter of the center—in our case, “intellectual property” (in their case, “information policy”).  I assured him that we always use our school’s name in any materials referencing the center.  The trademark professor in me wanted to write a long missive about both trademark law and policy.  The human being in me wanted to make a goofy yet heartfelt reference and say, “Can’t we all just get along?”  Instead, I closed by saying, essentially, that I think what they are doing is great, and I think what we are doing is great, and what law schools across the country are doing by creating enhanced learning opportunities for students in centers of research and dialogue and policy is great.  I also extended an invitation for him to come visit sometime and see the kinds of things we do at Texas Wesleyan.

(I also told him that we do have a logo, which uses the acronym of the center with the words “Center for Law and Intellectual Property” and our Texas Wesleyan house mark, and I assured him that we always use the name of the school in every piece of material we send about the center, as we have a strong interest in identifying ourselves as a Texas Wesleyan initiative.)

I did not hear from him again.  However, after our email exchange, Fordham revamped the webpage for its center and applied for federal registration of their acronym CLIP for a long list of goods and services (and using the phrase “intellectual property” four times).  That registration issued at the end of October, and the President of Texas Wesleyan has now received a cease and desist letter stating that not only any use of the acronym CLIP but the very name of our center infringes the registered and common law rights of Fordham.

The trademark professor in me wants to write a treatise about trademark law and policy.  The human in me wants to make a goofy yet heartfelt reference and say, “Really?!?”

In this current climate, when budgets are tight and the structure and content of legal education is something we are all debating passionately, when we are all working as hard as we can to provide innovative and dynamic educational opportunities for our students, I can’t help but wonder whether our collective time and resources could be better spent on other things.  On the other hand, in a lemonade-from-lemons sense, my trademark practice students are getting to see the real-world dynamics of practice.  The fact is:  As a university, we are not about to spend our students’ tuition money in this climate defending ourselves in an out-of-state trademark lawsuit, even if we think we are right, even if we think we would win, even if I suspect the best answer on the exam would be “no likelihood of confusion.”

In the end, if we can’t call our center by its descriptive function, perhaps we will go the trademark route.  I always tell my students that FLURM would be an excellent mark, because it is a coined and unattractive word.  Perhaps we’ll change our name from the Center for Law and Intellectual Property to FLURM.  Come to Texas Wesleyan School of Law, and be a part of THE CENTER OF FLURM!  At least then, no one will be confused.

* center such as, eg, the Center for Intellectual Property Law (John Marshall Law School), the Intellectual Property Law Center (Drake Law School), the Center for Intellectual Property Law and Markets (University of San Diego), the Center for Intellectual Property (University of Maryland), the Intellectual Property Center (University of Akron), or the Center for Law and Intellectual Property (Thomas Jefferson School of Law), the Center for Intellectual Property Research (Indiana University Maurer School of Law), to name a few.

This is a good opportunity to recap where I came out at the end of my last post: SOPA in its then-current form was very troubling. The most troubling part was Section 103, which seemed to have been drafted with two inconsistent goals in mind, as if the co-authors were Dr. Jekyll working alongside Mr. Hyde: on the one hand Section 103 appeared to offer limited supplemental remedies in suits brought under existing copyright and trademark law, and on the other it appeared to significantly modify existing law by creating a free-form cause of action and a notice-and-takedown regime that went far beyond what the DMCA enacted thirteen years ago. For the reasons I stated in the post, I believe that the former reading — the Jekyll version if you will — had to be the correct one, because both the alleged new cause of action and the apparent notice-and-takedown regime were radically under-specified. I’m still concerned that critics of the bill are cementing an overly broad reading of it — the Hyde version — by not even acknowledging the Jekyll reading as a possibility. (This is akin to a concern that Jessica Litman has recently expressed as well, that copyright critics may ironically worsen the doctrines they are concerned about by asserting the most damaging interpretation.)

In addition to all that, SOPA as introduced had an overly broad scope for (what I argue are) the supplemental remedies — they appeared not just to apply to sites infringing in the U.S. but as a practical matter immune to traditional means of enforcement — the so-called foreign “rogue sites” — but to any website, anywhere, even one that a U.S. court would have no problem directly enforcing a preliminary injunction against with contempt sanctions. That is, even if Section 103 were amended to make clear, as I believe it should be, that the remedies involving domain names and ad networks are supplemental means of enforcement, it did not expressly limit itself to situations where there is a need for such extraordinary remedies. I would hope that courts would nevertheless apply such limits anyway, but that might be asking a lot from a court unfamiliar with the policy debates.

In advance of today’s hearing, SOPA’s main sponsor, Rep. Lamar Smith, offered a “manager’s amendment” to the bill making several changes. Does Smith’s amendment fix the above problems? Yes and no. The amendment makes two significant changes to Section 103 that address some of the concerns I had. The scope problem has been partially addressed. Section 103, like Section 102, applies to “U.S.-directed sites,” which previously was not geographically restricted in any way. But the amendment changes the definition of “U.S.-directed site” to include only “foreign Internet sites,” meaning sites for which the domain name is registered with a foreign entity, or if there is no domain name, the IP address is assigned by a foreign ISP. This definition still is not as narrow as it should be. It would be preferable to restrict the special remedies of Sections 102 and 103 to situations of last resort — where the ordinary contempt powers of a court would not achieve the goal of stopping infringement. If a site is actually hosted on a U.S. server (i.e., has an IP address assigned by a U.S. entity), then even if it has a foreign-registered domain name, it would seem to be within the practical reach of U.S. courts. (This is an issue of practical authority, not jurisdiction; the court has to have subject-matter and personal jurisdiction or there’s no case.) But overall it’s a step in the right direction.

In addition, the purported notice-and-takedown regime has been completely eliminated, perhaps because it did, as I argued, seem to be a prerequisite to special remedies as opposed to an alternative route to compliance. That is, it actually seemed to impose a waiting period of five days before an action could be filed, during which (despite the use of “shalls” and “musts”) payment providers and advertising networks were only given a opportunity to take voluntary action. The way I was reading the statute, its elimination is probably not an improvement for SOPA critics; I would have simply eliminated the “shalls” and “musts” to make clear it was a prerequisite, not a notice-and-takedown regime.

Rep. Smith’s amendment largely leaves untouched the procedures for getting court orders; it thus continues to contain the confusing language I originally objected to appearing to create a new cause of action. Let me first explain that argument in somewhat more detail than I did in Part II of this series, because I’m not sure it came through clearly (or perhaps people just flat-out reject it). I argue that under the best reading of Section 103, there is no new cause of action for being an “Internet site dedicated to theft of U.S. property.” There are orders that can be entered against such sites, but those orders have to be entered in an action initiated under existing copyright or trademark law.

On first blush, SOPA Section 103 appears to create a new cause of action; it refers several times to “an action under this subsection,” meaning subsection 103(b) as amended. That subsection begins by stating,

IN PERSONAM.—A qualifying plaintiff may commence an in personam action against—
 (A) a registrant of a domain name used by an Internet site dedicated to theft of U.S. property; or
 (B) an owner or operator of that Internet site.

Section 103(b)(5) provides for relief:

On application of a qualifying plaintiff following the commencement of an action under this section with respect to an Internet site dedicated to theft of U.S. property, the court may issue a temporary restraining order, a preliminary injunction, or an injunction, in accordance with rule 65 of the Federal Rules of Civil Procedure, against a registrant of a domain name used by the Internet site, or against an owner or operator of the Internet site, or, in an action brought in rem under paragraph (2), against the Internet site, or against the domain name used by the Internet site, to cease and desist from undertaking any further activity as an Internet site dedicated to theft of U.S. property.

That’s who the defendants are, and that’s what the court can order as relief in a preliminary or permanent injunction; but what is the cause of action? That is, what is the claim that forms the basis of filing suit, that has to be pleaded in the complaint? There still is not anything in SOPA that states that it is a violation of federal law or someone’s rights to operate an “Internet site dedicated to theft of U.S. property,” as bad as that sounds — it’s just a defined term. Call it “Rutabaga” to avoid confusion. Is there a provision that says if you operate a Rutabaga, you’ve committed a violation? There’s the definition of “qualified plaintiffs,” who are the entities entitled to seek the orders in Section 103(b)(5):

The term “qualifying plaintiff” means, with respect to a particular Internet site, a person with standing to bring a civil action for a violation described in paragraph (1)(C).

OK, what civil actions for violations are described in paragraph 103(a)(1)(C)?

An Internet site is an “Internet site dedicated to theft of U.S. property” if— . . .
 (C) either—
  (i) the site is primarily designed or operated for the purpose of, has only limited purpose or use other than, or is marketed by its operator or another acting in concert with that operator primarily for use in, offering goods or services in violation of—
   (I) section 501 of title 17, United States Code, for purposes of commercial advantage or private financial gain, and with respect to infringement of complete or substantially complete works;
   (II) section 1201 of title 17, United States Code; or
   (III) provisions of the Lanham Act that prohibit the sale, distribution, or promotion of goods, services, or materials bearing a counterfeit mark, as that term is defined in section 34(d) of the Lanham Act (15 U.S.C. 1116(d)) or section 2320 of title 18, United States Code; or
  (ii) the operator of the site operates the site with the object of promoting, or has promoted, its use to carry out acts that constitute a violation of section 501 or 1201 of title 17, United States Code, as shown by clear expression or other affirmative steps taken to foster such violation.

The “violations” mentioned in paragraph 103(a)(1)(C) are violations of copyright and trademark law. There’s nothing in 103(a)(1)(C) that makes being an “Internet site dedicated to theft of U.S. property” itself a violation. So a “qualifying plaintiff” is a plaintiff who can sue the defendants under existing copyright and trademark law. Which means that the “action” referred to in Section 103(b)(1) has to be an action for copyright or trademark infringement, and the remedies provided under 103(b)(5) should be interpreted as applying to a subset of parties liable for copyright or trademark infringement, not defendants in some new freeform action for being “Internet sites dedicated to theft of U.S. property.”

Even if I’m right, all of this is incredibly confusing the way it’s worded, and it would be much better simply to rewrite this section as providing special remedies in a limited number of copyright and trademark actions. But that is what I believe it does right now, confusingly or not.

One final note. The concerns I’ve expressed above are in part concerns that about the breadth of the language and its impact on targeted sites and third parties, such as advertising networks, that will bear compliance costs under SOPA. But I’m also concerned that copyright owners are getting more than they bargained for with this legislation. (I realize it’s quaint, at best, to be concerned about copyright owners.) Legislation that is as unclear as Section 103 has unpredictable outcomes. And the primary industry proponents of this bill will not likely be the ones setting the judicial agenda. Sweeping new powers seem like a good idea if you imagine yourself wielding the power. But the history of copyright legislation indicates that large industry repeat players are not likely the ones who will be bringing most of the high-profile cases. Righthaven does not represent Hollywood businesses; Lexmark is not a member of the DVD CCA; Westbound Records (Bridgeport Music’s co-plaintiff) made its argument that sound recordings lack a de minimis exception to copyright infringement against a record label and a movie studio. Decisions like those tend to become a rallying cry against the law’s ridiculousness, doing long-term P.R. harm to respect for copyrights and trademarks generally. Section 103, even as amended, still applies where it’s not needed, and still confusingly seems to create a cause of action, or at least a remedy, that goes beyond the bounds of traditional copyright and trademark law. Both these aspects need to be reformed before final passage.

[Cross-posted at the Marquette University Law Faculty Blog.]

There is a maxim that “Hard Cases Make Bad Law.” Today I want to talk about a lesser used maxim – when easy cases make bad law. But first, a bit about the case (and Greg has a lot more detail).

I’ve never seen the movie, but apparently the Bella Swan character wears this jacket. A jacket so popular that…it was discontinued before the movie ever came out. Not surprisingly, the jacket became wildly popular. Indeed, Bella wears the jacket in key promo photos, in this country and others. As Greg notes, the image is everywhere.

And so the manufacturer, BB Dakota, brought the jacket back. But here’s the kicker. They renamed it the “Twilight” jacket. And, they put a hang-tag on it that used the very same promo photo described above. Here is one on sale at eBay. To be fair, BB Dakota did not just use the picture – it added information – here is an image of the hangtag, which BB Dakota sent widely with instructions to use the image in advertising, which retailers did.

See how the words “BB Dakota as seen in Twilight” were added the image? This is where things get interesting. BB Dakota argued that the purpose of the hangtag was “nominative.” That is, it used the image to call Twilight by name, much in the same way I might say, “Did you see Twilight?” The idea is that it can’t be trademark infringement if you are just calling a product by its name.

This is also where things get seriously confused. As Greg makes clear (and others of my IP colleagues have noted offline), nominative use doctrine – though well meaning – is a real mess. The district court here goes down the rabbit hole and does little to clarify things.

Thus, I want to make clear that I agree with my colleagues that the state of the law is a mess, and this opinion is not so great. Greg does a great job of analyzing the problems. Instead, I want to take a step back. Specifically, this was a ridiculously easy case. Greg notes: “What distresses me is not so much the ruling, but how much the opinion exemplifies the general trend in trademark doctrine of ignoring the interests of consumers in favor of the proprietary claims of powerful franchises.”

I would go a step further and say that despite the troubling general trend this is not a case BB Dakota was ever going to win, any time, in front of any judge. This was not a case to make policy, and at no time, whether before or after I entered academia, would I have ever counseled a client to pursue this strategy.

Don’t get me wrong – there has to be a way for BB Dakota to communicate that this was the jacket worn. The added language for example. A poster next to the display with a screen cap from the actual movie. Something, anything, other than renaming the jacket the “Twilight” jacket and putting a promotional poster image on a hangtag.

Note that I say this is an easy case holistically, without reference to specific doctrine (which I will do in a bit). Instead, I say it as a rule of thumb – when you name your product after a well known movie that it appears in, and put the movie poster on a hangtag, you lose. In the same way that you lose if you try to argue that peer to peer music sharing is fair use. You just can’t win, and you never could.

Now, to the part where some of my colleagues might disagree with me. BB Dakota should have lost in this case, as a matter of doctrine and as a matter of policy.

Start with copyright. Yes, the image is everywhere, thanks to fan sites. That’s a fair use and I would say should be protected. Greg takes issue with the court giving dispositive weight to the fact that the whole image was copied. I agree that this has the potential to create bad precedent, but it’s not the first time a court spent little time on a weak fair use argument. Greg worries that cases like this make fair use unpredictable, but (if I haven’t said it already) this one was a predictable loss.

Let’s look at the fair use factors:

1. Nature of the use: non-transformative, slavish copying, and commercial.

2. Nature of the copyrighted work: creative photography that is much more than point and shoot, though admittedly it does have the product at issue in it

3. Amount copied: all of it

4. Effect on the market: It might look like there isn’t any, but consider that the plaintiff Summit might have wanted to license the image for use on sanctioned products (vampire teeth or what have you). If everyone could use this image on products (and this isn’t trademark, so we aren’t limited to non-confusing uses), then the value of that opportunity is reduced.

And the policy: The image was used on the product, in ads, in marketing, etc. There are few (and I can’t think of any) cases where this kind of use is considered fair. It is just not the type of activity that fair use is intended to protect. I can see an argument for a screen capture, or some other image, but the promotional poster? No way.

On to trademark. The first mistake – and I think the one that proves the maxim that easy cases make bad law – was for the court to entertain the nominative use defense at all. This was not a nominative use. A nominative use might have been just the red inset “BB Dakota as seen in ‘Twilight’” That’s information. That’s the name of the movie.

Instead of nominative use, this was a trademark use. They called it “The Twilight Jacket.” They used the promotional poster as a hangtag not only in advertising but on every jacket sold. That’s not naming Twilight, that’s branding the jacket. When viewed this way, you get right to the likelihood of confusion factors. And under those factors there is certainly confusion – it’s the promotional poster! You don’t get much closer to appearing to be sponsored by the makers of Twilight than that. My “actual confusion” survey of one (my wife, who has seen the movie) pretty clearly thought that the moviemakers had sponsored or otherwise were associated with the jacket makers. I won’t go through the confusion factors here, but I believe they clearly favor a finding of likely confusion as to source, sponsorship, or association.

The irony here is that the nominative use defense is suppose to help the defense, but the law in the Ninth Circuit is such a disaster that when you assert it wrongly (as BB Dakota did here) you are almost sure to lose. But sometimes that’s the right outcome. In an effort to give BB Dakota the benefit of the doubt, it considered this ill-applied defense to make this easy case more difficult than it had to be, making the law worse.

And a point about policy. While I agree with Greg about the trend in general, the traditional consumer confusion policies might apply here. I suspect that a) the costume crew used multiple jackets, b) that the jacket survived apparent harms it might not have because those harms were actually special effects, and c) there were repairs made to the jackets over time in shooting. In other words, clothes in movies are indestructible. (Jack Bauer in 24, anyone?). Perhaps someone buying the “Twilight” jacket might have expected that indestructibility. Or more simply, what if manufacturing efficiencies meant that the coloring was off a bit – the Twilight folks, if sponsoring, might want some quality control over that. Or what if the price is higher at retail and secondary markets than it might have been for a jacket that did not have the imprimatur of sponsorship? In all of those cases, consumers suffer, and that is the policy of trademark law.

And that’s why I see this as an easy case – and why the court should have treated it as such with a straightforward slapdown rather than a convoluted application of inapt rules.

I feel like I’m scooping Jacqui here, since she’s the Madisonian Twilight expert, but I was so bothered by the recent district court decision in the Bella’s Jacket Brouhaha that I’m chiming in on the intersection of intellectual property and teen vampires.

Twilight is probably part of basic 21st century cultural literacy, so I’ll presume that, from Jacqui’s posts if from nowhere else, you’re aware of the basic contours of the very profitable films based on Stephanie Meyer’s very profitable books.

So see the jacket at right?  (Image courtesy of SashaW, apparently a big fan of the films.)  See that tiny hangtag on said jacket?  The hangtag presents an image of Kristen Stewart, in the role of Bella, wearing the same jacket.  Apparently, the jacket was originally made by BB Dakota and was formerly known as the “Leigh” jacket.  Production of the jacket was discontinued prior to the making of the first Twilight film.

For some unknown (to me) reason, a costume designer in the employ of Summit Entertainment LLC (the studio responsible for the Twilight franchise) thought that Bella (Kristen Stewart) should wear the jacket in Twilight.  Examples of such wearing from the film are here.  And Summit used the image of  Bella in her jacket as part of the promotional materials for the film, including the iconic Bella/Twilight shot, which is plastered all over the Internet.

So far so good, legally.  Since fashion design is not protected by copyright law (at least at present!) and because consumers don’t think that every piece of clothing in a movie is a sponsored product placement (at least at present!), the makers of the Twilight film did not need to get a license from BB Dakota in order to use images of the jacket in the promotion of Twilight.

Now, admittedly, there is a long-shot claim that might have been made by BB Dakota.  If people looked at the jacket in the film and associated it with BB Dakota, BB Dakota could have claimed that the appearance of the jacket in the movie suggested to viewers that BB Dakota sponsored the film made by Summit.  And if they had thought that, they would have been wrong about that implied endorsement, and that confusion could have been the basis of a trademark claim by BB Dakota.

The standard for that claim is extremely daunting, though.  Not only would BB Dakota have to prove what is called “secondary meaning” in the “trade dress” of its jacket design, it would have to show that consumers actually understood that the appearance of the jacket in the film was indicative of Dakota’s sponsorship of the film.  And even if it did that, BB Dakota would still have to overcome a very powerful (to my mind, at least) potential First Amendment defense on the part of Summit.  Simply put, Summit should not need to seek a license to have a character wear a jacket in a film–to require that would limit Summit’s freedom of expression.

Still, film makers do worry about potential claims like that.  Trademarks in many films and television shows are blurred and/or genericized due to trademark infringement liability concerns.  (They also blur and genericize, in many cases, because company logos can be protected by copyright and fair use is a risky defense.)

Putting aside the law for a second, was it fair for Summit to use the jacket in the film without compensation to BB Dakota?  After all, making a hoodie jacket can be a creative act.  Summit used the Leigh jacket in a film and BB Dakota was not paid for its creative contribution to the film.  But then again, BB Dakota benefited from the use.  If you are BB Dakota, having a troubled & angsty, vampire-loving heroine wear your hoodie jacket in a film targeted at young women is a great way to get young women interested in purchasing said hoodie jacket.  So arguably, Summit did BB Dakota a big favor by having Bella wear the Leigh jacket.  It seems like BB Dakota must have seen things this way–there’s no sign in the factual record that BB Dakota had even an inkling of annoyance that might have lead it to consider the (long shot!) trademark claim it might have brought against Summit.

So the Twilight movie comes out and the many Twilight fans who idolize Bella and identify with her turbulent romantic life seek out her jacket.  It is out there in the stores of a few retailers, but there are not many to go around.

Then things get interesting and the facts get disputed.  As far as I can make out, there are some brief emails from some non-legal folks at BB Dakota to some non-legal folks at Summit that authorize BB Dakota to use a particular image of Bella wearing the jacket in connection with the sales of the jacket.  Apparently, there are some confused talks internally within BB Dakota and there is also some confusion in communications with retailers.  The end result is that the iconic Bella Twilight promotional image is used on the hangtag that goes with the jacket, in part because someone non-legal at BB Dakota suggests that the words “As seen in the movie Twilight” would make that okay.  (However, the tag apparently did not actually use those words.  Update & correction: Professor Risch, in the post following this one, tracks down the tag, which does add those words!) The jacket was also, apparently, referred to in marketing as “the Twilight jacket,” though someone at BB Dakota denies this usage originated with the company.

Again, let’s pause to consider what’s fair now as opposed to what’s exactly legal.  Summit used the jacket in its film without asking permission from BB Dakota.  Now BB Dakota wants to sell the jacket as the jacket worn by Bella in Twilight without permission of Summit.  BB Dakota obviously wants to capitalize on the popularity of the movie, but mostly it wants to capitalize on the new popularity of the jacket it makes.

The key issue is that it adds a small hangtag to the jacket with the iconic Bella image, the one plastered all over the Internet and recognized by Twilight fans as Bella wearing the (BB Dakota) jacket.  Is it fair for BB Dakota to add this hangtag?  Note that this jacket is the jacket that Bella wore in the film, so to the extent the Twilight fans get this information it is truthful and useful information.

Summit sued. Why?

Well, let’s step into Summit’s shoes.  Imagine you are an executive at Summit, policing and monetizing the IP rights to your billion-plus dollar intellectual property franchise.  You’re making tens of millions from licensing your IP alone.  But this isn’t an easy job.  You’re up to your neck in complex negotiations, lengthy agreements, and enforcement efforts.  You want to land the best deals for getting your product line in front of consumers and you want to spin your IP into other areas: games, posters, t-shirts, and anything else you can sell to your demographic.  You’ve got pirates already doing that internationally.  At the same time, you want to maintain the quality in your brand and you don’t want to overexpose Twilight.  But you are also now ringed with hundreds of competitors in the teen supernatural space who are inching their way as closely as possible to the niche genre that you dominate, and who are more than willing to monetize any inch of the terrain that you don’t enter.

I admit that if my day-to-day job consisted of policing and monetizing the IP rights associated with Twilight, I might be a bit miffed if I saw the iconic Bella image on a hangtag of a jacket marketed as the Twilight jacket, since I would view the image and the terms “Bella” and “Twilight” as the core IP that I oversee, and I would probably view the unauthorized use of that IP as free-riding on Twilight’s economic value and goodwill.  If I happened to be a little bit on the aggressive side about the scope of the IP rights in Twilight, this is probably a good thing–it is what my employer wants.  When you’re bullish on the size and value of what you’ve got, you start your negotiations from a strong initial position.  In fact, the less I worried I was about the letter of IP law and the more immersed I was in negotiating IP deals, the more I’d be miffed by that hangtag if I worked for Summit.  (See, e.g, Jim Gibson on how industry IP negotiation dynamics generally push IP rights to expand.)

So it really isn’t too surprising to me that Summit brought a lawsuit against BB Dakota based on the hangtag shown in the picture.  It is disappointing to me, though, that Summit won its case so handily.

Actually, I think it is pretty clear that, starting from first principles, the public interest in IP law would have required a ruling in favor of BB Dakota.  But the case came out otherwise.  (An appeal might be nice, though who knows if it would come out better.)  The district court opinion, by Judge Feess of the Central District of California, is partially about bad Ninth Circuit legal precedent and partially about a rather dismissive approach by the court to BB Dakota’s various arguments.

So let’s look at the opinion.  If you want to read it, the ruling is here on Scribd.

(NB: from here on I will get a bit technical and assume the reader knows the basics of trademark law and civil procedure.)

The ruling grants summary judgment to Summit on two claims: trademark infringement and copyright infringement.  On Summit’s trademark dilution claim, it finds that dilution has occurred, but decides the question of Twilight’s fame needs to be tried.  It rejects BB Dakota’s trademark infringement claim.  I’ll comment on these four rulings in reverse order.

BB Dakota’s TM Infringement Claim

Remember the long shot claim that I suggested BB Dakota could have made based on the use of the jacket in the film?  Well, it asserted that as a counterclaim, which was fair enough as a litigation (and potential settlement) strategy. Unsurprisingly, though, the court found it was a loser.

I think Judge Feess, however, went a bit too far in criticizing BB Dakota’s argument.  From the excerpts in the opinion, it seems like BB Dakota was making the argument it had to make on this claim — people recognized the Leigh (now re-christened Nicola) jacket as the product of BB Dakota and presumed BB Dakota had sponsored Twilight.  It also conceded that it was the Twilight movie that made the jacket popular.

What’s the problem with that?  Judge Feess seems to think it would be impossible for people to watch Twilight and understand that BB Dakota, not Summit, created Bella’s jacket.  Apparently, he thinks that all new brand value created in the Twilight movie must be brand value owned by Summit:

“Common sense dictates that BB cannot sue summit for appropriating or trading off that which Summit has created.”

The thing is that Summit didn’t create the jacket.  Fans that went looking for Bella’s jacket quickly ascertained, based on their own research into the movie and the jacket, that the jacket was made not by Summit, but by BB Dakota.  So yes, Twilight could have created secondary meaning for a jacket made by BB Dakota.  That is a possibility.

As I said before, though, I think the claim was a loser out of the gate, but I think it should have been dismissed on the basis of either BB Dakota’s abandonment of the trade dress prior to the film’s debut or BB Dakota’s failure to provide sufficient evidence of secondary meaning–or some other ground.  But I don’t think the observation that “Summit made the Twilight film” should have killed this claim.

Summit’s Dilution Claim

I can’t get too upset about this one because, like most trademark law professors, I can’t really make heads or tails of what trademark dilution is.  Perhaps that’s why we all keep writing about it?

Under the TDRA, my current impression is that dilution is more or less about preventing unauthorized dilutive associations with famous marks.

So…

Did consumers associate Bella’s jacket with Twilight?  Yes.

(I might add: Does the TDRA’s standard of trademark “association” have any redeeming basis in rational legal thought?  Probably not.)

(I might also add: Does the TDRA have even a smidgen of connection with the public’s interest in trademark law?  No.)

The court finds that the use of Summit’s marks by BB Dakota was dilutive.  It finds this becasue trademark dilution is all about divorcing trademark law from consumer protection and letting it morph into a sort of quasi-copyright protection for “famous” marks.  I’ll note that this is in blatant violation of what the Supreme Court stated about the fundamental nature of trademark law in The Trademark Cases, but I think most trademark lawyers get that — very few people have offered cogent defenses of trademark dilution.  So it is not the court’s fault that it finds the use here dilutive under the TDRA; it’s Congress’s fault for enacting the law in the first place.

Curiously, though, the district court is not convinced that Twilight is famous.  (!!!)

In the early days of the FTDA, the precursor to the TDRA, some courts were strict about fame this way. Then, over time, they decided that very local companies like Wawa (the local coffee and sandwich chain around Philadelphia) were famous for dilution purposes.  The TDRA is designed to prevent that result, but I don’t think it will prevent Summit from successfully arguing that Twilight is famous.  (If dilution law made sense, I might ask if the Twilight mark were famous for clothing, but since the TDRA is so gloriously market-agnostic, completely out of keeping with any sensible understanding of trademark law, I can’t ask that question.)

Summit’s Copyright Claim

Summit’s copyright claim is based on the iconic image of Bella.  BB Dakota used the image in the hangtag and in some other marketing materials (e.g. emails and website.) In other words, it used the same image that is plastered all over the Internet and that several legal bloggers have used to illustrate their commentary on this case.  BB Dakota defended on the basis of consent, equitable estoppel, and fair use.  I’ll ignore consent and estoppel, since I don’t see any problems with the way the court handled those.  But Judge Feess really glosses over BB Dakota’s fair use arguments in a way I find disturbing.

For starters, Judge Feess accepts Summit’s argument that “[w]holesale copying of copyrighted material precludes application of the fair use doctrine.”  The cite is to a pre-Sony case, Marcus v. Rowley (9th Cir. 1983).  I doubt the standard adopted here is really the correct fair use standard (woe be to certain legal bloggers otherwise!) — instead I’d rather say that verbatim copying weighs (strongly?) against a finding of fair use.  Since the “amount used” is the third factor in the fair use test, it would be sort of odd to have a bright-line rule that if that factor = 100%, there is no need to consult the other factors.  Indeed, many courts now have permitted entire works to be copied and found that copying the entire work can be fair use.

Judge Feess then goes on to say that if, arguendo, all four factors were considered, the Bella hangtag would still fail to be a fair use.  BB Dakota made what I think is a plausible case for fair use by marching through the four factors, but the court called it “extraordinarily wooden–at best.”  The court’s analysis, though, extraordinarily brisk–at best.  Judge Feess spends about a sentence or two on each factor and completely glosses over the fact that the image is being used not to sell consumers hangtags, but to inform consumers that this is the same jacket that Bella wore in Twilight. But the specific context of the use here is hardly noticed.  Opinions like this are why predicting the outcome of copyright fair use cases is so impossible.

Not that Judge Feess could have considered this, but why do we even protect copyright in hangtags?  Lisa Ramsey has explained that when images like this are used for advertising promotion, there really isn’t much need for copyright protection.  I tend to agree.  Indeed, the ubiquity of the Bella image on the Internet seems to indicate that Summit isn’t too bothered by its reproduction, when it is not used in conjunction with the sale of jackets.

Summit’s Trademark & Unfair Competition Claims

Of all the rulings, the trademark ruling was the one I found the most disheartening.  In theory, the question the court should be considering is whether the use of the hangtags confused consumers about the source of the jacket.  That’s what trademark law is about.  So did placing the iconic Bella image on the hangtag lead consumers to believe that Summit produced or exercised quality control over the production of the jacket?

Usually courts in the Ninth Circuit march through a list of factors to determine this, but in cases like this one, where the defendant is using the mark to make reference to the plaintiff’s goods, the Ninth Circuit has saddled its district courts with the bizarre doctrine of “nominative fair use.”  I say “bizarre” with full knowledge that this may be an idiosyncratic view–many trademark lawyers know all about New Kids on the Block and think Justice Kozinski’s invention was keen and nifty.  In my opinion, though, the Supreme Court in KP Permanent correctly determined that the so-called defense was actually a presumption in favor of the plaintiff on the issue of consumer confusion.  Judge Kozinski recently revisited the doctrine in Tabari, as Rebecca Tushnet notes in this blog post, but I don’t think he improved the situation very much.

Essentially, the Supreme Court in KP Permanent said that if there is a fair use defense to trademark infringement, then that defense should be raised by the defendant — after the plaintiff meets the burden of establishing a likelihood of consumer confusion created by the defendant’s use.  So what’s the rule in the Ninth Circuit now?  According to Tabari, the plaintiff now has the burden of disproving that the nominative fair use test applies.  If the plaintiff succeeds in negating the defense, this establishes the likelihood of confusion.

If the Ninth Circuit’s nominative fair use test had some strong connection to ascertaining actual consumer confusion — i.e. whether consumers thought that Summit sponsored the jacket — this might be okay.  It would amount to a specialized test for determining confusion in a specialized set of cases.  Federal courts have plenty of these specialized trademark infringement tests and its makes sense to have customized rules for special sorts of cases.

The problem is that the nominative fair use test is skewed toward treating trademarks like copyrights, not toward determining consumer confusion.  The three prongs are whether:

(1) the product was “readily identifiable” without use of the mark;

(2) defendant used more of the mark than necessary; or

(3) defendant falsely suggested he was sponsored or endorsed by the trademark holder.

It’s the second prong of the nominative fair use test that becomes especially pernicious in a case like this.  A test like this makes the exact copy on the hangtag, especially the typeface, important to the court.  BB Dakota’s use of the distinctive typeface borrows “too much” of the Twilight trademark.

But what does that “too much” have to do with how likely it is that consumers would think Summit was actually the party selling or authorizing the sales of the jackets?  The first two prongs of nominative fair use seem way out of line with the standard factors in a consumer confusion analysis, such as the sophistication of purchasers and the proximity of markets.

Nominative fair use in the Ninth Circuit is described as a shield for defendants, but it really operates as a sword for plaintiffs.  The nominative fair use test prevents the court from squarely considering what is going on in the minds of consumers, instead requiring it to get caught up in the misappropriation of the distinctive typeface used on the hangtag.

It would have been nice if Judge Feess could have thought about the Sleekcraft factors, but Tabari says that is not allowed.  Even if Sleekcraft controlled, it is possible that consumers would have believed the Summit endorsed the sale of the jackets due to the hangtag.

Trademark law today very often involves parties that don’t produce goods licensing their marks for use by parties that do produce goods.  So Pixar might license a toy maker to make toys for it.  If an unlicensed entity were to make a toy bearing the Pixar brand and a customer were to buy that toy due to Pixar’s reputation for quality, the consumer could be harmed if the unlicensed good had inferior qualities to those that Pixar would guarantee.

But that’s not the case here!  This is not a situation where some random company starts to make a random jacket and sells it as a “Twilight jacket.”  Rather, this is a case where Summit made a movie where Kristen Stewart did wear this exact jacket in Twilight.  Twilight fans purchasing what BB Dakota is selling are getting exactly what they want: they are getting Bella’s jacket. No harm, no foul–BB Dakota should win.

Of course, BB Dakota doesn’t get to make this argument because trademark law doesn’t even permit BB Dakota to raise it.

Indeed, if Summit were to make its own jacket and sell it to consumers as Bella’s jacket (which it may well do after this case), then that would actually be more deceptive than what BB Dakota did.  The jacket that Summit sells will not be the jacket that Bella wore.  It may be licensed, but the BB Dakota jacket is Bella’s jacket.  Summit did not make Bella’s jacket.

Judge Feess, of course, did not have the freedom to point that out.  He applied the law that applies in the Ninth Circuit, and he didn’t have the freedom to invent an alternative to the nominative fair use dictated by Tabari.

What distresses me is not so much the ruling, but how much the opinion exemplifies the general trend in trademark doctrine of ignoring the interests of consumers in favor of the proprietary claims of powerful franchises.  Ideally, trademark doctrine would primarily reflect government’s solicitude for the public’s interest in truthful commercial communication.

So this has been a longish post (3500 words!), but thanks for reading it through to the end.  Sometimes it seems the smallest things, like the hangtag on a hoodie jacket, provide the easiest avenues for complaining about the largest problems with the contemporary scope of trademark law.