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

Ashley Gasper is an adult movie actor performing under the name Jules Jordan and is the president and sole shareholder of Jules Jordan Video, which creates the videos in which Gasper appears.  Gasper and his company sued defendants for, among other things, copyright infringement and violation of his right of publicity in connection with 13 copyrighted adult DVDs Gasper alleged defendants had copied and sold.

These two claims went to trial and the jury returned a verdict in favor of Gasper and his company on both.  The trial court then granted defendants' motion for judgment as a matter of law in part, concluding that neither Gasper nor his company had standing to pursue the copyright claims.  But the court rejected defendants' argument that Gasper's right of publicity claim was preempted by copyright law.

The Ninth Circuit disagreed with the District Court on both questions.

As to the preemption issue, the Ninth Circuit concluded that the crux of Gasper's right of publicity claim is that the defendants reproduced and distributed the DVDs without authorization.  His claim thus fell within the subject matter of copyright and he asserted rights equivalent to those within the scope of the Copyright Act.  Gasper's right of publicity claim was therefore preempted by the Copyright Act.

As to the standing issue, the District Court had concluded that the adult movies were "works for hire" under the Copyright Act, that Gasper's company was the author of the works, and that Gasper therefore lacked standing to sue for copyright infringement.  The District Court also implicitly held that Gasper's company lacked standing because the copyright registration was invalid (presumably because Gasper rather than the company was listed as the author).

According to the Ninth Circuit, the issue hinged on whether the creative work was within the scope of Gasper's employment with his company.  The District Court apparently rejected Gasper's testimony on the issue as "concocted at trial."  But the Ninth Circuit found a fatal flaw in the District Court's analysis:

The problem with the district court's analysis is that JJV was a one-man shop.  Gasper was the sole officer, director, and shareholder of JJV, exercised complete control over it, and made all decisions concerning JJV and production of the films.  It was all Gasper all the time.  JJV as employer and Gasper as employee could certainly agree as to the scope of the employee's employment, and could agree that Gasper should retain all copyrights.  Since JJV was Gasper, JJV intended whatever Gasper intended, and if Gasper intended that his creative work be outside the scope of his employment with JJV, there was no one to disagree.

The Ninth Circuit also rejected the proposition that the mistake in listing Gasper as the author on the registration forms invalidated the copyright.

The Ninth Circuit thus held that the District Court erred in concluding that the movies were works for hire and reversed the District Court's decision invalidating the jury verdict of infringement.

The case cite is Jules Jordan Video, Inc. v. 144942 Canada Inc., No. 08-55075 (9th Cir. Aug. 16, 2010).

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Fortune Dynamic has been designing and selling footwear for young women branded with the DELICIOUS trademark since 1997.  In 1999, Fortune registered the DELICIOUS mark for footwear.

In 2007, Victoria's Secret launched a personal care product line under the trademark BEAUTY RUSH.  As part of a promotion for that product line, Victoria's Secret gave away and sold a pink tank top with the word "Delicious" written across the chest in silver typescript.  "Yum" was written in much smaller lettering on the back of the top and "beauty rush" appeared in the back collar.

Fortune sued Victoria's Secret, claiming that Victoria's Secret's use of "Delicious" on the tank top infringed Fortune's rights in its DELICIOUS trademark.  The District Court denied Fortune's motion for a preliminary injunction and granted Victoria's Secret's motion for summary judgment concluding that the likelihood of confusion factors weighed in favor of Victoria's Secret and that Fortune's claims were barred by the fair use defense.

Setting the theme for its analysis, the Ninth Circuit started its discussion off with the "well-established" principle that summary judgment is generally disfavored in trademark cases.  In light of that principle, the Ninth Circuit reversed the grant of summary judgment, concluding that both questions answered by the District Court should have been answered by a jury:

We are far from certain that consumers were likely to be confused as to the source of Victoria's Secret's pink tank top, but we are confident that the question is close enough that it should be answered as a matter of fact by a jury, not as a matter of law by a court.

. . . .

The same is true of Victoria's Secret's reliance on the Lanham Act's fair use defense.  Although it is possible that Victoria's Secret used the term "Delicious" fairly--that is, in its "primary, descriptive sense"--we think that a jury is better positioned to make that determination.

As to the likelihood of confusion factors, the Ninth Circuit disagreed with the District Court and concluded that a reasonable jury could find that most of the factors weighed in favor of Fortune rather than Victoria's Secret.  The Ninth Circuit also held that the District Court abused its discretion in excluding survey evidence offered by Fortune, noting that its shortcomings went to the weight of the survey not its admissibility.

The Ninth Circuit then addressed Victoria's Secret's fair use defense, acknowledging its merit but ultimately leaving it for the jury to decide:

[I]n light of evidence suggesting that Victoria's Secret used the term "Delicious" as a trademark and suggestively rather than descriptively, together with Victoria's Secret's failure to investigate the possibility that DELICIOUS was already being used as a trademark, there remains a genuine issue of material fact as to whether Victoria's Secret used "Delicious" unfairly.

The Ninth Circuit opinion offers a thoughtful, well-written discussion of the fair use defense, hitting the high points of the defense, including how to determine whether a term is being used as a mark and whether a term is being used only to describe goods or services.

The case cite is Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Mgmt., Inc., No. 08-56291 (9th Cir. Aug. 19, 2010).

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The General Conference Corporation of Seventh-day Adventists is a corporation formed in 1863, marking the official organization of the Seventh-day Adventist Church.  The corporation holds title to various registered marks including "Seventh-day Adventist," "Adventist," and "General Conference of Seventh-day Adventists."  It also used "SDA" as an acronym for "Seventh-day Adventist" but has not registered the acronym.

The defendant, Walter McGill, was originally baptized in a Seventh Day Adventist church affiliated with the plaintiffs.  McGill later separated from the church due to a theological dispute and formed his own church called "A Creation Seventh Day & Adventist Church," which name he said came from a divine revelation.  He apparently was aware that plaintiffs had trademarked "Seventh Day Adventist" but used the name anyway, believing he was divinely mandated to do so.

Plaintiffs sued McGill alleging a number of federal and state law claims including trademark infringement, unfair competition and dilution under the Lanham Act.

McGill filed a motion to dismiss arguing that (1) the District Court lacked subject matter jurisdiction because it could not decide the trademark question without resolving an underlying religious doctrine dispute; (2) the Religious Freedom Restoration Act rendered trademark law inapplicable to him; and (3) Seventh-Day Adventism is a religion and therefore generic and not capable of being trademarked.  The District Court concluded that trademark law did apply, that McGill had waived the RFRA defense, and the issue of whether the trademark term was generic was a factual issue that could not be resolved on a motion to dismiss.

The plaintiffs later moved for summary judgment, which the District Court granted with respect to the infringement claim relating to "Seventh-day Adventist" but denied as to "Adventist" and "SDA."

As to McGill's claim that the District Court lacked subject matter jurisdiction because it could not apply neutral principles of trademark law without resolving an underlying doctrinal dispute (i.e., "who are the 'true' Seventh-day Adventists"), the Sixth Circuit disagreed.  It concluded that "[t]rademark law will not turn on whether the plaintiffs' members or McGill and his congregants are the true believers" and therefore affirmed the District Court's (and its own) subject matter jurisdiction over the case.

The Sixth Circuit noted that McGill's RFRA defense had merit as a factual matter but ultimately concluded that he could not claim the benefit of RFRA because it did not apply in suits between private parties.  The court thus sided with the Seventh and Ninth Circuits, which had reached a similar conclusion.

The Sixth Circuit also appeared to acknowledge the merit of McGill's genericness argument, noting that "well-known terms that society understands to refer to a particular faith in general are generic, and no single party can prevent others from using them."  But because whether a name is generic is a question of fact, the Sixth Circuit concluded that "[i]t would be inappropriate to conclude as a matter of law, regardless of the evidence that could be adduced . . . that the public considers 'Seventh-day Adventist' to refer generically to a religion."

Finally, the Sixth Circuit affirmed the grant of summary judgment on the trademark infringement claim relating to the mark "Seventh-day Adventist," specifically addressing only McGill's assertion that the District Court misjudged the relevant factors in light of the relevant public:

McGill argues that the relevant public--those who believe in the imminence of Christ's return and that the Sabbath should be observed on Saturday--are so discerning that there is a genuine issue of material fact about the likelihood that they would confuse McGill's church for the plaintiffs' church.  But while it may indeed be hard to envision a person mistakenly joining the wrong church, it is not at all difficult to imagine a person consuming McGill's published materials and ascribing his teachings to the General Conference, especially in light of the relatedness of the parties' services and similarity of the marks.

The case cite is Gen. Conference Corp. of Seventh-Day Adventists v. McGill, No. 09-5723 (6th Cir. Aug. 10, 2010).

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MGE sued Power Maintenance International, Inc. and GE ("GE/PMI") for, among other things, violations of the Digital Millennium Copyright Act in connection with MGE's uninterruptible power supply machines ("UPS") and MGE's copyrighted software used on those machines.

As to MGE's DMCA claim, MGE's UPS machines require use of MGE's copyrighted software to complete full servicing of the machines.  MGE instituted security measures related to use of its software, succinctly described by the Fifth Circuit:

The software requires connection of an external hardware security key (called a "dongle") to the laptop serial port.  Each dongle has an expiration date, a maximum number of uses, and a unique password.  When the software is activated, it searches for a properly programmed dongle before it will fully launch.  Once launched, the software will go through a second series of protocol exchanges with the data located on the UPS machine's microprocessors to confirm that MGE software is communicating with MGE hardware.  If the protocol exchange is successful, MGE's software proceeds to collect system status information for the technician.

After MGE introduced the security technology, hackers published information on the Internet disclosing how to defeat the security features of a hardware key.  Once that key is defeated, the software can be accessed and used without limitation.  GE/PMI apparently admitted that it recovered a laptop that contained hacked MGE software and had used the software in five instances.

During an off-record jury charge conference, the District Court dismissed MGE's DMCA claim and MGE appealed that decision, among others.

But the Fifth Circuit affirmed the dismissal of the DMCA claim, concluding that MGE had not shown that GE/PMI circumvented MGE's software protections in violation of the act.  Specifically, the Fifth Circuit found that MGE had not shown that bypassing its "dongle" infringed a right protected by the Copyright Act, which is the type of "access" the DMCA was intended to reach.  The Fifth Circuit concluded that the DMCA required that the "owner's technological measure must protect the copyrighted material against an infringement of a right that the Copyright Act protects, not from mere use or viewing."  MGE's "dongle" only prevented initial access to the software rather than protecting against copyright violations and therefore circumventing the "dongle" did not give rise to a DMCA claim.

The case cite is MGE UPS Systems Inc. v. GE Consumer & Indus. Inc., No. 08-10521 (5th Cir. July 20, 2010).

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AOL owns trademark registrations for stylized representations of the mark ADVERTISING.COM.  The parties agreed that the genus of the services AOL offered under these marks is online or Internet advertising.  AOL sued Advertise.com claiming that it infringed AOL's trademark rights by using ADVERTISE.COM and a stylized version of that mark that was confusingly similar to AOL's stylized ADVERTISING.COM marks.

AOL moved for a preliminary injunction, which the District Court granted, enjoining Advertise.com from using any design mark that is confusingly similar to AOL's stylized ADVERTISING.COM marks and from using ADVERTISE.COM or any other name confusingly similar to ADVERTISING.COM.  The District Court concluded that AOL was likely to show that the ADVERTISING.COM marks--including the standard text mark--are descriptive and therefore protectable.

Advertise.com appealed to the Ninth Circuit, arguing generally that the standard text mark ADVERTISING.COM is generic and therefore not protectable.  It did not appeal the part of the preliminary injunction enjoining Advertise.com from using any design mark that was confusingly similar to AOL's stylized ADVERTISING.COM marks.

The Ninth Circuit disagreed with the District Court's conclusion that AOL was likely to prevail on the merits and found (after a somewhat lengthy analysis) that the record demonstrated that Advertise.com was likely to rebut the presumption of validity afforded AOL's ADVERTISING.COM mark and prevail on its claim that the mark was generic.  The Ninth Circuit thus reversed and vacated that portion of the preliminary injunction that enjoined Advertise.com from using the name ADVERTISE.COM or any other name confusingly similar to AOL's ADVERTISING.COM marks.

The case cite is Advertise.com, Inc. v. AOL Advertising, Inc., Nos. 10-55069, 10-55071 (9th Cir. Aug. 3, 2010).

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