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COPYRIGHT Silvers v. Sony Pictures Entertainment,Inc. 9th Circuit; June 3, 2003 Accrued cause of action for copyright infringement may be assigned to third party, thereby granting assignee right to sue for infringement violation. The court of appeals affirmed a judgment of the district court. The court held that an accrued cause of action for copyright infringement may be assigned to a third party, thereby granting the assignee the right to sue for an infringement violation. Appellee Nancey Silvers wrote a script that was made into a television movie called “The Other Woman.” Silvers completed the script as a work-for-hire for Frank and Bob Films II, also known as Von Zerneck/Sertner Films, who owned the copyright to the movie. Subsequently, appellant Sony Pictures Entertainment, Inc. released the motion picture “Stepmom.” After Sony’s release, Von Zerneck/Sertner Films and Frank and Bob Films II executed an “Assignment of Claims and Causes of Action” selling, transferring and assigning to Silvers all right, title and interest in and to any claims and causes of action against Sony, Columbia Tri-Star and any other appropriate persons or entities with respect to the screenplay “The Other Woman” and the motion picture “Stepmom.” The assignors retained ownership of all other rights under the copyright. Silvers then sued Sony in federal district court for copyright infringement and unfair competition, alleging that “Stepmom” was similar to the script she had written for “The Other Woman.” Sony moved to dismiss, claiming that Silvers lacked standing to bring the copyright infringement suit. The district court denied the motion. Sony appealed. An accrued cause of action for copyright infringement may be assigned, without transferring any other copyright right to the assignee. Here, the copyright owner Frank and Bob Films II, by an assignment executed after the release of the alleged infringing work “Stepmom,” transferred any accrued causes of action related to the two films to Silvers. The all-inclusive language of the assignment precisely and clearly specified what rights Silvers obtained. This was a simple assignment of a chose in action. Nothing in the copyright infringement statute, 17 U.S.C. � 501(b), specified or suggested that the legal or the beneficial owners were the exclusive plaintiffs in copyright infringement cases. Further, nothing in the statute prohibited the legal or beneficial owner of the exclusive right under copyright from assigning an accrued cause of action for infringement of that right. Lastly, nothing in the language of the statute prohibited or restricted an assignee of an accrued infringement cause of action from bringing a copyright infringement action. Thus, the district court’s denial of Sony’s motion to dismiss had to be affirmed. Rice v. Fox Broadcasting Company 9th Circuit May 29, 2003 Maker of home video that revealed secrets behind well- known magic tricks could not maintain copyright infringement claim against broadcasting company that aired television special on magic tricks premised on fact that both works featured masked magician. The court of appeals affirmed a judgment of the district court in part, reversed in part, and remanded. The court held that a plaintiff who owns the copyright to a home video that reveals how to perform several well-known magic tricks may not sustain a copyright infringement claim against a broadcasting company that airs a television special premised on the idea of revealing the secrets behind famous magic illusions, on the basis that both works feature a masked magician demonstrating the tricks. Appellant Robert Rice owned the copyright to a home video titled “The Mystery Magician” that revealed how to perform several well-known magic tricks and illusions. Approximately 17,000 copies of “The Mystery Magician” were sold worldwide. Subsequently, appellee Fox Broadcasting Co. aired a series of television specials about magic, premised on the idea of revealing the secrets behind famous magic illusions (Specials). Video copies of the Specials could be purchased by viewers by calling the toll-free number that appeared on the television screen. Claiming that Fox misappropriated the idea for revealing the secrets behind magic illusions and tricks from “The Mystery Magician,” Rice brought suit against Fox and other individuals and entities associated with production of the Specials (collectively, Fox), asserting claims for infringement under the Copyright Act, false advertising under the Lanham Act, and unfair competition under the California Unfair Business Practices Act. The alleged false advertisements consisted of a statement made by the host of the Specials that certain magic secrets would be revealed “for the first on television,” and statements on the jacket cover for the videotape version that claimed magic secrets would be “finally” revealed “for the first time,” and “never before” had a magician dared to reveal the secrets behind magic illusions. Fox moved for summary judgment. The district court granted summary judgment on the copyright claim, and granted summary judgment in part and denied in part on the false advertising claims. Rice appealed, arguing, inter alia, that the magician character in his video warranted copyright protection because it visually depicted a graphical character; there were substantial similarities in other expressive elements; and, the district court abused its discretion in disregarding the testimony of Rice’s expert. Fox cross-appealed, challenging the district court’s denial of their motion for summary judgment on Rice’s false advertising and unfair competition claims. In order to establish infringement, two elements must be proved: (1) ownership of a valid copyright, and 2) copying of constituent elements of the work that are original. The latter element may be established by showing that the works in question were substantially similar in their protected elements and that the infringing party had access to the copyrighted work. To determine whether two works are substantially similar, in the context of a motion for summary judgment, the court applies an extrinsic test that objectively measures the articulable similarities between the plot, themes, dialogue, mood, setting, pace, characters, and sequence of events. However, ideas generally do not receive protection, only the expression of such ideas do. Further, the scenes a faire doctrine provides that expressions indispensable and naturally associated with the treatment of a given idea are treated like ideas and are therefore not protected by copyright. The mere fact that both “The Mystery Magician” and the Specials revealed the secrets behind magic tricks did not by itself constitute infringement. Further, Rice’s magician was not sufficiently delineated to warrant copyright protection; The magician appeared in only one home video that sold approximately 17,000 copies, was dressed in standard magician garb, and his role was limited to performing and revealing the magic tricks. Moreover, under the limiting doctrines of merger and scenes a faire, the fact that both works featured a masked magician revealing magic tricks could not constitute copyright infringement. The remaining expressive elements, including dialogue, setting, plot and sequence of events, and mood, failed to meet the substantial similarity required. Even though Rice was unable to show substantial similarity, under the inverse ratio rule, a lower standard of proof of substantial similarity is required when a high degree of access is shown. However, because Rice’s claims with regard to Fox’s access to the copyrighted work were based on speculation, conjecture, and inference, they failed to meet the high degree of access required for application of the inverse ratio rule. As to Rice’s expert witness, the district court engaged in an extensive analysis of the alleged similarities in expressive elements between “The Mystery Magician” and the Specials, and determined that Rice’s claims of substantial similarity were either foreclosed by the limiting doctrines of merger and scenes a faire, or too abstract to constitute copyright infringement. Rice’s expert’s testimony merely restated many of these same generic similarities in expressive content, thus, the district court did not abuse its discretion in disregarding her testimony. Because Rice’s claims of access, as well as his claims of similarities, were too spurious to satisfy the extrinsic test, the district court properly granted summary judgment to Fox on Rice’s copyright infringement claim. As to Fox’s cross-appeal, the alleged false statements made by the host did not constitute commercial advertising or promotion, and was therefore not actionable as such under the Lanham Act. Further, the videotapes of the Specials were not sold in retail stores, thus, the videotape jacket could not be observed by potential consumers, and could not influence the purchasing decision. As such, any deception relating to advertisement of the videos was immaterial. Consequently, the district court erred in denying Fox’s motion for summary judgment on Rice’s Lanham Act claim. Because Rice’s state law claim was dependent on his false advertisement claim under the Lanham Act, it had to be concluded that the district court erred in not granting summary judgment on Rice’s state unfair competition claim as well. Thus, the district court’s judgment on these claims had to be reversed. Warren v. Fox Family Worldwide 9th Circuit; May 13, 2003 Under Copyright Act, grant of royalties to creator of work for hire did not create beneficial ownership interest in that creator in absence of express contractual provision to contrary. The court of appeals affirmed a judgment of the district court. The court held that under the Copyright Act, a grant of royalties to a creator of a work for hire, absent an express contractual provision to the contrary, does not create a beneficial ownership interest in that creator. Appellants Richard Warren and Triplet Music Enterprises Inc. (collectively, Warren) entered into a series of detailed written contracts with MTM Productions, now a subsidiary of appellee Fox Family Worldwide, Inc., concerning the composition of music for the television show “Remington Steele.” The agreement stated that Warren would provide services by creating music in return for compensation from MTM. The contracts specified that Warren was, among other things, to compose an original musical score making such revisions in the musical material as MTM might require. The agreements clearly indicated that such composing was to be done for the sole purpose of the Remington Steele program, and that MTM’s judgment would be final in all matters. Warren’s services were to be rendered in such manner as MTM directed, under the instructions and control, in accordance with the ideas of and at the times and places required by MTM. Under the agreements, the parties agreed that MTM would own all right, title and interest in and to Warren’s services and the results and proceeds thereof, and all other rights granted to MTM in the agreement as if MTM were Warren’s employer. MTM was to make a written accounting of all sales of broadcast rights to the series and was required to pay Warren a percentage of all sales of broadcast rights to the series made to third parties not affiliated with the American Society of Composers, Authors and Publishers (ASCAP) or Broadcast Music, Inc. (BMI). Warren brought suit in federal district court against Fox, MTM, appellee Christian Broadcasting Network (CBN), and appellee Princess Cruise Lines, Ltd. (collectively, the companies), alleging infringement of his copyrights in the Remington Steele compositions. The companies moved to dismiss, arguing that the works Warren composed were “works made for hire,” thus, Warren lacked standing because he was neither the legal nor beneficial owner of the copyrights. The district court granted the companies’ motion. Warren appealed. The agreements and accompanying documents reflected that Warren understood that he was supplying his services to MTM as their employee for hire, and that MTM would own all right, title, and interest in his services and the results thereof as works made for hire. That the agreements did not use the talismanic words “specially ordered or commissioned” did not matter, as there was no requirement, either in the Act or the case law, that work-for-hire contracts include any specific wording. The contracts internally designated the compositions as “works made for hire,” and provided that MTM be deemed the author for all purposes. Further, the plain language of the contracts conclusively demonstrated that the works were created at the behest of MTM. Because the works were made for hire, Warren retained no rights of authorship and lacked standing to sue for infringement as a legal owner of the copyrights. Because the Act does not envision a work-for-hire arrangement as an “assignment,” but rather provides for initial vesting of all rights of authorship in the person for whom the work was prepared, a grant of royalties to a creator of a work for hire, absent an express contractual provision to the contrary, does not create a beneficial ownership interest in that creator. Thus, Warren was not a legal or beneficial owner of the copyrights, and lacked standing to sue under the Act. The judgment of the district court had to be affirmed. Ets-Hokin v. Skyy Spirits Inc. 9th Circuit; March 14, 2003 Advertising photos did not infringe on copyrights in earlier photographs where same product was photographed but lighting, angles, shadows and highlighting all differed. The court of appeals affirmed a judgment of the district court. The court held that allegedly infringing commercial product shots of an iconic blue vodka bottle are not virtually identical to an infringement claimant’s photographs, as required upon application of the defensive doctrines of merger and scenes a faire, when the only constant is the bottle itself, and the lighting, angles, and shadows and highlighting of the allegedly infringing photographs differ from the claimant’s photographs, as do the reflections and background. In 1993, appellant photographer Joshua Ets-Hokin took a series of photographs of appellee Skyy Spirits Inc.’s iconic blue vodka bottle for use in a marketing campaign. Skyy later hired two other photographers to photograph the bottle and used these photographs in advertising and other marketing materials. In the second series of photographs, the lighting, angles, and shadows and highlighting differed, as did the reflections and background. Ets-Hokin filed an action in district court against Skyy alleging infringement of his copyrights in the 1993 photographs. The district court originally granted summary judgment in favor of Skyy on the ground that Ets-Hokin’s photographs were not sufficiently original to merit copyright protection. The court of appeals reversed, holding that the photographs met the minimal threshold of originality required for copyright protection, but noted that such protection was limited by the doctrines of merger and scenes a faire, which applied because of the narrow range of artistic expression available in the context of a commercial product shot. The court of appeals instructed the district court to consider those defenses on remand, which it did. Ets-Hokin appealed. Skyy cross-appealed the denial of attorneys fees it sought for fees incurred after remand from the Ninth Circuit. Under the merger doctrine, courts will not protect a copyrighted work from infringement if the idea underlying the work can be expressed only in one way, lest there be a monopoly on the underlying idea. In such an instance, it is said that the work’s idea and expression merge. Under the related doctrine of scenes a faire, courts will not protect a copyrighted work from infringement if the expression embodied in the work necessarily flows from a commonplace idea. Likewise, when similar features of a work are as a practical matter indispensable, or at least standard, in the treatment of a given idea, they are treated like ideas and are therefore not protected by copyright. Though the Ets-Hokin and Skyy photographs were indeed similar, their similarity was inevitable, given the shared concept, or idea, of photographing the Skyy bottle. Applying the limiting doctrines, subtracting the unoriginal elements, Ets-Hokin was left with only a thin copyright, which protected against only virtually identical copying. Skyy’s photographs were not virtually identical to those of Ets-Hokin. Indeed, they differed in as many ways as possible within the constraints of the commercial product shot. The only constant was the bottle itself. The photographs were therefore not infringing. The Supreme Court has identified the following non-exclusive list of factors to guide the award or denial of attorney’s fees: frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case), and the need in particular circumstances to advance considerations of compensation and deterrence. The Ninth Circuit has added as additional considerations: the degree of success obtained, the purposes of the Copyright Act, and whether the chilling effect of attorney’s fees may be too great or impose an inequitable burden on an impecunious plaintiff. The only factor to weigh in Skyy’s favor was the degree of success obtained. The remaining factors were either neutral or favored the denial of fees. A district court’s fee award does not constitute an abuse of discretion unless it is based on an inaccurate view of the law or a clearly erroneous finding of fact. The district court’s denial of Skyy’s fee request had no such basis, and was not an abuse of discretion. The judgment of the district court had to be affirmed. TRADEMARK Horphag Research Ltd v. Pellegrini 9th Circuit; May 9, 2003 Nominative fair use defense to Lanham Act claim of trademark infringement not available to defendant who made unauthorized use of trademark on Internet Web site to advertise and sell products and as meta- tag for Internet search engines. The court of appeals affirmed a judgment of the district court in part, vacated in part, and remanded. The court held that a defendant who, without authorization, uses a trademark on an Internet Web site to advertise and sell various products, and as a meta-tag for Internet search engines, may not avail himself of the nominative fair use defense to a claim of trademark infringement under the Lanham Act. Appellee Horphag Research Ltd. applied to register the trademark “Pycnogenol” for its pine bark extract product. Appellant Larry Garcia operated various Internet sites to advertise and sell pharmaceutical products, including “Pycnogenol” and “Masquelier’s: the original French Pycnogenol.” Garcia admitted to using Horphag’s trademark in his Web sites and as a meta-tag for Internet search engines, although he was not authorized to do so. Horphag filed an action against Garcia in federal district court, alleging trademark infringement, false designation of origin, and trademark dilution under federal law, as well as trademark dilution and unfair competition under California law. After a four-day trial, the district court granted Horphag’s motion for judgment as a matter of law, finding that Garcia infringed and unlawfully diluted Horphag’s trademark, Pycnogenol. Further, the district court awarded attorneys’ fees to Horphag, finding that Garcia’s infringement was willful and deliberate. Garcia appealed the judgment as a matter of law and the award of attorneys’ fees. Garcia’s use of Horphag’s Pycnogenol trademark in his Web sites and in the meta-tags for his Web sites satisfied the terms of trademark infringement in the first instance. Thus, the only question was whether Garcia adequately presented a defense to infringement under the Lanham Act. There are two “fair use” defenses to trademark infringement: classic fair use, and nominative fair use. The classic fair use defense applies only to marks that possess both a primary meaning and a secondary meaning, and only when the mark is used in its primary descriptive sense rather than its secondary trademark sense. Because the Pycnogenol mark did not posses any meaning other than its use as a registered trademark, Garcia’s use of the trademark did not qualify for the classic fair use analysis. There are three factors to consider in determining whether a defendant is entitled to the nominative fair use defense: (1) the product must not be readily identifiable without use of the mark; (2) only so much of the mark may be used as is reasonably necessary to identify the product; and (3) the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder. By using the mark so pervasively, Garcia exceeded any measure of reasonable necessity in using the Pycnogenol mark. Moreover, the constant use of Horphag’s Pycnogenol trademark and variants thereof likely suggested that Horphag sponsored or was associated with Garcia’s Web sites and products. Therefore, Garcia could not successfully assert this defense. The district court’s judgment with respect to Horphag’s trademark infringement claim had to be affirmed. The district court’s judgment on the trademark dilution claim had to be vacated and remand for reconsideration in light of the Supreme Court’s decision in Moseley v. V Secret Catalogue, Inc., 123 S. Ct. 1115 (2003), which expanded on the requirements for a trademark dilution claim under the Federal Trademark Dilution Act and emphasized the requirement of proof of actual dilution to succeed on such a claim. As to the award of attorneys fees, under the Lanham Act, a court may award the prevailing party reasonable attorneys fees in exceptional circumstances. Exceptional cases include cases in which the infringement is malicious, fraudulent, deliberate or willful. The district court’s findings that Garcia’s infringement was willful and deliberate were supported fully by the record. Thus, the award had to be affirmed. KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. 9th Circuit; April 30, 2003 Where holder of incontestable mark complains that most salient feature of its mark is being imitated and a likelihood of confusion might result, conclusive presumption that mark has acquired secondary meaning extends to most salient feature of mark. The court of appeals reversed a judgment of the district court. The court held that when the holder of an incontestable mark is complaining that the most salient feature of its mark is being imitated and a likelihood of confusion may result, the holder of the mark does not have to show that the salient feature, apart from the mark, has acquired secondary meaning; rather, the conclusive presumption that the mark has acquired secondary meaning extends to the most salient feature of the mark. Appellant Lasting Impression I Inc., a permanent makeup manufacturer, owned a trademark that consisted of the term “micro colors,” set in white, within a black box. The mark was registered in 1993 as both a design and word mark and became incontestable in 1999. Appellee K.P. Permanent Make-Up Inc. (KP), a direct competitor of Lasting Impression, used the term “micro colors” on its products and brochures beginning in 1990. In 1999, KP began using the term “micro color” in its marketing brochures in a stylized format. Upon receiving a cease and desist letter from Lasting Impression in 2000 demanding KP discontinue its use of the term “micro color,” KP brought an action in district court for declaratory relief against Lasting Impression and its distributor, appellant MCN International, Inc. (collectively, Lasting), asserting that Lasting did not have the exclusive right to use the term “micro colors” and that the term was generic and incapable of receiving trademark protection. Lasting counterclaimed, alleging that KP’s use of the term infringed Lasting’s incontestable, registered mark. The parties filed cross motions for summary judgment and summary adjudication. The district court concluded that the term “micro colors” was generic, or if not generic, descriptive. The district court recognized that Lasting’s registered logo mark was incontestable. However, it ruled that the logo mark’s incontestable status did not apply to the term “micro colors,” because the registration was for the micro colors logo, and not merely the term. The court determined that KP was entitled to continue use of the term “micro color,” in the manner that it had been since 1991, and that Lasting could continue to use its trademarked logo. Lasting appealed. The Lanham Act allows the holder of a protectable trademark to hold liable any person who without consent, uses in commerce any registered mark in connection with the sale of any goods or services that is likely to cause confusion. Trademarks are generally divided into four categories: (1) generic; (2) descriptive; (3) suggestive; and (4) arbitrary or fanciful. Generic terms are not registerable, and a registered mark may be canceled at any time on the grounds that it has become generic. Merely descriptive marks, which describe the qualities or characteristics of a product, may be registered only if the holder of the mark shows that the mark has acquired distinctiveness through secondary meaning. No incontestable right can be obtained in a mark that is the generic name for the goods or services. To determine whether a term has become generic, courts look to whether consumers understand the word to refer only to a particular producer’s goods or whether the consumer understands the word to refer to the goods themselves. If the disputed term is identified with all such goods or services, regardless of their suppliers, it is generic. Federal registration of a trademark endows it with a strong presumption of validity. The general presumption of validity resulting from federal registration includes the specific presumption that the trademark is not generic. This presumption of validity extended to the most salient feature of the mark, the words “micro color.” The burden was on KP to produce sufficient evidence to overcome the presumption. At the summary judgment stage, all inferences from facts must be drawn most favorably to the non-moving party. In evaluating the summary judgment awarded to KP, those inferences had to be drawn in favor of Lasting, as the non-moving party. If the challenger can demonstrate through law, undisputed facts or a combination thereof that the mark is invalid, the trademark holder cannot survive summary judgment. KP presented no evidence that “micro colors” was used or understood by consumers as a generic term rather than a brand name. Lasting presented evidence that micro colors was used and understood as a brand name not a generic term. There was no genuine issue of material fact as to whether the salient part of Lasting’s trademark, the words “micro colors,” was generic. A reasonably minded jury could not conclude from the evidence produced that “micro colors” is a generic term. KP’s motion for summary judgment could not be upheld on this ground. Furthermore, Lasting’s motion for summary adjudication on the issue of genericness should have been granted. A descriptive mark that has become incontestable is conclusively presumed to have acquired secondary meaning. A defendant in a trademark infringement action cannot assert that an incontestable mark is invalid because it is descriptive and lacks secondary meaning. The district court erred in requiring that Lasting demonstrate secondary meaning in the term apart from the mark. A registered mark may be infringed even if the exact mark is not being imitated and the challenger of an incontestable mark cannot assert that the most salient feature of the mark is descriptive and lacks secondary meaning. Thus, when the holder of an incontestable mark is complaining that the most salient feature of its mark is being imitated and a likelihood of confusion may result, the holder of the mark does not have to show that the salient feature, apart from the mark, has acquired secondary meaning. Rather, the conclusive presumption that the mark has acquired secondary meaning extends to the most salient feature of the mark. Thus, Lasting’s incontestable registration was conclusive evidence that the mark was non-descriptive or had acquired secondary meaning, and there was no need to require a showing of secondary meaning in the term “micro colors” apart from the mark. Therefore, KP’s motion for summary judgment could not be upheld on this ground. Section 1115(b)(4) of the Lanham Act allows a fair use defense to the infringement of an incontestable mark. “Classic fair use” is that in which the alleged infringer has used the trademark holder’s mark only to describe his own product, and not at all to describe the trademark holder’s product. When the classic fair use defense is raised, it is necessary to analyze likelihood of confusion. Likelihood of confusion exists when consumers viewing the mark would probably assume that the goods it represents are associated with the source of a different product identified by a similar mark. The application of the factors considered in determining whether a likelihood of confusion exists involves numerous genuine issues of material fact. Because there were genuine issues of material fact concerning the likelihood of confusion, KP’s motion for summary judgment could not be upheld on this ground. Thus, the judgment of the district court had to be reversed.

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