IP Law Chat : IP Law Chat -- Hendricks & Lewis, intellectual property, trademark, copyright and technology attorneys

In Schrock v. Learning Curve Int'l, Inc., the Seventh Circuit took up the issue of the extent of originality necessary for a copyright in a derivative work as well as the question of what permissions are necessary for the author of the derivative work to have a copyright in the work.

HIT Entertainment owns the copyright to the "Thomas & Friends" train characters and licensed Learning Curve to make toy figures of its characters.  Learning Curve then hired professional photographer Daniel Schrock to take photos of the toys for promotional materials.  After Learning Curve stopped using Schrock's photography services, it continued to use his photos in advertising and product packaging.  Schrock then registered his photos for copyright protection and sued Learning Curve and HIT Entertainment for copyright infringement.

The district court granted the defendants' motion for summary judgment concluding that Schrock did not have a copyright in the photos.  The district court, classifying the photos as derivative works (derivative of the "Thomas & Friends" characters), held that for such works, Schrock needed permission from Learning Curve both to make the photos and to copyright them.  Because Schrock had only the former permission, the district court dismissed his claim for copyright infringement.

The Seventh Circuit reversed, concluding that the district court had made a number of errors of law in granting summary judgment to the defendants.

As an initial matter, the Seventh Circuit noted the "deep disagreement" regarding whether photos of a copyrighted work are derivative works but chose not to weigh in on the disagreement, concluding that it need not resolve the issue and assumed for purposes of the decision that Schrock's photos were derivative works.

Turning to the issues it was prepared to decide, the Seventh Circuit first addressed the question of what standard of originality Schrock's photos must meet to qualify for copyright protection.  Specifically, the defendants argued that the photos must meet a higher standard of originality, relying on language from an earlier Seventh Circuit decision, Gracen v. Bradford Exchange, 698 F.2d 300 (7th Cir. 1983).  In Gracen, the court stated that the plaintiff could not maintain a suit for infringement of a derivative work because that work was not "substantially different from the underlying work to be copyrightable."

The Seventh Circuit concluded that this language was not intended to establish a higher standard of originality for derivative works.  Reading Gracen in light of other Seventh Circuit authority, the court identified two general principles:  "(1) the originality requirement for derivative works is not more demanding than the originality requirement for other works; and (2) the key inquiry is whether there is sufficient nontrivial expressive variation in the derivative work to make it distinguishable from the underlying work in some meaningful way."

With respect to Schrock's photos, although they were "highly accurate product photos," there was "minimally sufficient variation in angle, perspective, lighting, and dimension to be distinguishable from the underlying works" to entitle the photos to the limited derivative-work copyright protection.

The Seventh Circuit next addressed the district court's conclusion that Schrock needed the permission of the owner of the copyright in the underlying work both to create the derivative work and to copyright the derivative work.

Noting that copyright in a derivative work--and any other work--arises by operation of law upon the fixation of the original expression in a tangible medium, the Seventh Circuit rejected the district court's reasoning.  Thus, as long as Schrock created the derivative works with permission--which he did--he owned the copyright in those works (assuming the other requirements for copyright were satisfied).  However, because the default rule--that copyright in a derivative work arises by operation of law--can be altered by agreement of the parties, the Seventh Circuit remanded the case to determine whether the parties had done so in this case.

The cite is Schrock v. Learning Curve Int'l, Inc., No. 08-1296 (7th Cir. Nov. 5, 2009).

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A recent trademark decision from the Federal Circuit emphasizes the sometimes critical role procedural issues can play in the outcome of a case.

In 2004, Francis Gary Powers, Jr. obtained registration of the mark THE COLD WAR MUSEUM for museum services based on acquired distinctiveness of the mark under Section 2(f) of the Lanham Act (15 U.S.C. 1052(f)).  Mr. Powers later assigned the rights to the mark to The Cold War Museum, Inc.  During the initial prosecution of the mark after the examining attorney had refused registration, Mr. Powers submitted more than 200 pages of material supporting his contention that the mark had acquired distinctiveness.

In 2007, Cold War Air Museum Inc. filed a petition to cancel the registration arguing that the mark was merely descriptive for museum services related to the Cold War.  In support of this claim, it submitted search engine results evidencing the public's understanding of the term "cold war" and excerpts from the mark owner's website and brochure to demonstrate that the museum's contents all related to the Cold War.

The mark owner responded by arguing that even if the mark was descriptive it had become distinctive and was therefore eligible for registration under Section 2(f), that the PTO had accepted evidence submitted during prosecution as sufficient proof of distinctiveness and thus the mark was now presumed valid.  It also argued that the challenger had not presented any evidence showing that the mark should not have been registered under Section 2(f).  The mark owner did not resubmit the evidence of acquired distinctiveness that had been submitted during prosecution.

The TTAB granted the cancellation petition finding that the challenger had proven that the mark was "highly descriptive" and had not acquired distinctiveness.  The TTAB then shifted the burden to the mark owner to show to the contrary.  Although the TTAB acknowledged that evidence of acquired distinctiveness had been submitted during prosecution, it concluded that it could not consider the evidence because the evidence had not been resubmitted in the cancellation proceeding.

The Federal Circuit held that this conclusion was in error and fatal to the TTAB's decision granting the petition for cancellation.  Emphasizing that registration of the mark under Section 2(f) afforded it both a presumption of validity as well as a presumption that the mark had acquired distinctiveness, the Federal Circuit stated that the challenger to the registration must therefore produce sufficient evidence to rebut these presumptions.

First, the Federal Circuit concluded that the TTAB had erred in concluding that it could not consider the evidence of acquired distinctiveness submitted during prosecution as the applicable regulation, 37 C.F.R. 2.122(b), unambiguously states that the entire registration file is automatically part of the record in a cancellation proceeding.  As a result, the challenger must rebut evidence of acquired distinctiveness in the registration file in order to satisfy its burden of proof.

Second, the Federal Circuit held that the challenger had failed to satisfy this burden.  To the contrary, the challenger's arguments in the cancellation proceeding related exclusively to the descriptive nature of the mark, which is irrelevant to the validity of a Section 2(f) registration.  The challenger presented no evidence relating to the acquired distinctiveness of the mark and therefore failed to rebut the presumption of validity.  And, given that failure, the Federal Circuit also concluded that the TTAB had erred in shifting the burden to the mark owner.

The Federal Circuit therefore reversed the TTAB's decision granting the petition for cancellation.

The cite is The Cold War Museum, Inc. v. Cold War Air Museum, Inc., No. 2009-1172 (Fed. Cir. Nov. 5, 2009).

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1800Mattress.com IP, LLC appealed from the TTAB's decision finding that the mark MATTRESS.COM was generic for the services identified in its application for registration, namely, "online retail store services in the field of mattresses, beds, and bedding."  1800Mattress.com challenged the decision arguing that (1) the only generic term for such services is "online mattress stores," (2) businesses outside the genus of online retail store services use "mattress.com" as part of their domain names, (3) the TTAB improperly looked to the components of the mark rather than the mark as a whole, and (4) the TTAB improperly disregarded the nature of the mark as a mnemonic and "as being capable of evoking the quality of comfort in mattresses."  None of these arguments swayed the Federal Circuit.

The Federal Circuit readily agreed with the TTAB's finding that the relevant public understands MATTRESS.COM to be no more than the sum of its constituent parts (the parties did not dispute the genericness of the components), specifically, "an online provider of mattresses."  Nor was it relevant whether the public referred to online mattress retailers as "mattress.com" as the inquiry is what the relevant public would understand upon hearing the term.  And on a related argument, the Federal Circuit rejected 1800Mattress.com's assertion that there could be only one generic term, "online mattress stores."

 Finally, the Federal Circuit agreed with the TTAB's finding that the ".com" "tail" of the mark did not "evoke the quality of comfort in mattresses" and that the mark is not a mnemonic, noting that 1800Mattress.com had failed to prevent any evidence to support such an argument.

The cite is In re 1800Mattress.com IP, LLC, No. 2009-1188 (Fed. Cir. Nov. 6, 2009).

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