Arkansas IP Litigation Cases for the Week of November 10, 2007

The U.S. District Court for the Eastern or Western District of Arkansas was chosen as the forum for litigating the following case(s), as published by Justia:

  • Coulson Oil Company Inc v. Deweese Enterprises Inc; No. 4:2007cv01102; Filed: November 9, 2007; Court: Arkansas Eastern District Court
    Here is a Trademark Infringement lawsuit involving gas stations run by both companies, both called “Super Stop.” Coulson Oil, an Arkansas based company, seeks a declaratory judgment that they are not infringing the trademark of Deweese Enterprises, a Mississippi based company. Deweese registered a federal trademark for “Super Stop” in 1982. Coulson is arguing that it obtained Arkansas trademark rights due to its continuous use of the name in commerce. Coulson also operates the Super Stop Co-op, a bulk purchasing group for convenience store owners.

SSCOOP

Dell Cybersquatting Case

Last week, the U.S. District Court for Southern Florida unsealed a lawsuit that Dell filed in October. See story here: Dell Takes Cybersquatters to Court. The cybersquatting/typosquatting lawsuit is unique in that they are going after several registrars as being “responsible for registering and profiting off of nearly 1,100 domains that were “confusingly similar” to Dell’s various trademarks.” In the suit they allege that the companies earn “millions of dollars from Internet traffic intended for Dell and dozens of other Fortune 500 companies.” For me, this is the best case this year.

Red Hot Chili Peppers vs. Showtime in Californication Showdown

The band the Red Hot Chili Peppers have sued Showtime Networks for their use of the word “Californication” as the title of one of their shows. It was also the name of RHCP’s 1999 album and song. Claims are being made under federal trademark law and state unfair competition law. There are a number of issues her that could go both ways, but what I found amusing is singer Anthony Kiedis’s statement that:

“Californication’ is the signature CD, video and song of the band’s career.”

I always thought that it was John Frusciante’s guitar in Under The Bridge and Give It Away and the wise hand of Rick Rubin on Blood Sugar Sex Magik that put the band on the map and everything good since has been trying to recapture the feel of those songs. But then again, I became an attorney, so what do I know. Kiedis say’s that Californication is everthing that the band is or has been and I will have to take him at his word.

Full story here and Here.

Complaint here.

And for those who need a history lesson, Californication is a word coined to describe out of control urban sprawl, as noted in this 1972 Time Magazine article:

“Legislators, scientists and citizens are now openly concerned about the threat of “Californication”—the haphazard, mindless development that has already gobbled up most of Southern California.” 

Album info at Amazon

Show info at Showtime.

Arkansas IP Litigation Cases for the Week of November 3, 2007

C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, LP. – Affirmed on appeal; Player names and statistics are in the public domain

Monday, the 8th Cir. affirmed U.S. District Court Judge Mary Ann Medler’s ruling last year in C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, LP. At issue was a purely contractual issue, which we don’t care about here (CBC had a contract with MLB to use players names and stats. When it ended they kept using them), and an issue over the use of the names and likenesses of players, which we very much care about. At issue was whether CBC needed to pay Major League Baseball (or the MLB Players Association) for the use of player’s names and statistics. Last year, the district court said no – that the First Amendment trumped any right of publicity claim the players might have.

On appeal the 8th Cir. first laid out the elements of a right of publicity claim under Missouri law:

In Missouri, “the elementsof a right of publicity action include: (1) That defendant used plaintiff’s name as a symbol of his identity (2) without consent (3) and with the intent to obtain a commercial advantage.”

While the district court found that all the elements of a claim had not been met, here the court held that all three elements were met, and so CBC’s use did support a right of publicity claim. The Court found that there was no consent and, differing from the district court, that the names were being used as a “symbol” of the player’s identities. Here the Court found that while the commercial advantage was not of the type to be included in a right of publicity claim, CBC still derived commercial advantage:

CBC’s use does not fit neatly into the more traditional categories of commercial advantage, namely, using individuals’ names for advertising and merchandising purposes in a way that states or intimates that the individuals are endorsing a product. . . .

Because we think that it is clear that CBC uses baseball players’ identities in its fantasy baseball products for purposes of profit, we believe that their identities are being used for commercial advantage and that the players therefore offered sufficient evidence to make out a cause of action for violation of their rights of publicity under Missouri law.

The Court’s court’s decision helps us all for recent precedent on the First Amendment preempting the type of right of publicity sought to be protected in this case. In doing so it cited to the Supreme Court’s decision 1977 decision in Zacchini v. Scripps-Howard:

The Supreme Court has directed that state law rights of publicity must be balanced against first amendment considerations, see Zacchini v. Scripps-Howard Broad., 433 U.S. 562 (1977), and here we conclude that the former must give way to the latter.

However, in the end, though, the Court talked so much about the “public value of information about the game of baseball and its players” because baseball is “the national pastime” that any value on the First Amendment issue may have been reduced to the facts of this case.

After affirming the contract dispute (there was a dissent on this issue) the 8th Cir. affirmed the district court’s decision. 

Note to students. This case was affirmed on, arguably, different grounds than the district court’s decision and was an appeal from a grant of summary judgment. This case was won and lost on the merits of the arguments contained in the brief’s.

Apologies to Judge Arnold, who wrote this opinion. I typically praise his writing. But knowing he is a baseball fan, I think the subject was too tempting to pass up, and so the precedential portion of the opinion is chock full of information that only serves to reduce its long term value. I will, however, look for you at the next Traveler’s game.

Additional Material:
USA Today story,
Bloomberg story
full text of C.B.C. Distrib. and Mktg., Inc. v. Major League Baseball Advanced Media, L.P., 443 F. Supp. 2d 1077 (E.D. Mo. 2006), and
full text of C.B.C. Distrib. and Mktg., Inc. v. Major League Baseball Advanced Media, L.P., Nos. 06-3357/3358 (8th Cir, Oct. 10, 2007).

Lance Armstrong Foundation v. Ohman et al: We own the color yellow!

Lance asserts ownership of the color yellow, in combination with any word ending in “strong.” Lance Armstrong’s Foundation has sold over 70 mil. of those yellow LiveStrong wristbands for $1 each. And, they are trademarked. No surprise then that they had a problem with the Animal Charity Collar Group, Inc. for their yellow dog collars with either BarkStrong or PurrStrong on them.

In the suit the foundation asserts that the collars “are confusingly similar to, and are likely to cause confusion, mistake or deception” regarding their source of origin.

The foundation wants Animal Charity Collar Group to stop using the phrases, the yellow bands and the Web site barkstrong.net. The lawsuit also seeks to have Animal Charity Collar Group’s Purrstrong trademark canceled and the pending application for the Barkstrong trademark canceled, in addition to unspecified monetary damages.

Full story at Lance Armstrong Foundation sues Oklahoma pet collar company.

Arkansas IP Litigation Cases for the Week of October 6, 2007

The U.S. District Courts for the Eastern or Western District of Arkansas was chosen as the forum for litigating the following case(s), as published by Justia:

  • Thirty Eight Street Inc et al v. Bajrang LLC, No. 07-920 (4:2007cv00920) (E.D. Ark., filed Oct. 2, 2007)

    Thirty Eight Street brought suit against Bajrang for trademark infringement. Thirty Eight Street licensed the name “Best Value Inn” to Bajrang. When the license was terminated, Bajrang continued using the trademark. Complaint contains six claims (including one for Intentional Interference with Prospective Business Relations), but it is the infringement of a registered trademark that has teeth.

    Kevin Lemley, who was my IP Law professor, has a copy of the complaint up on his blog, the Arkansas Business Litigation Blog.

Arkansas IP Litigation Cases for the Week of September 29, 2007

The U.S. District Courts for the Eastern or Western District of Arkansas was chosen as the forum for litigating the following case(s), as published by Justia:

  • Virgin Records America Inc et al v. Does, Case Number 4:2007cv00863, Filed:  September 20, 2007, Court:  Arkansas Eastern District Court 

    Virgin Records America Inc, Atlantic Recording Corporation, BMG Music, Capitol Records Inc, Elektra Entertainment Group Inc, Interscope Records, LaFace Records LLC, Motown Record Company LP, Priority Records LLC, Sony BMG Music Entertainment, UMG Recordings Inc, Arista Records LLC, Warner Brothers Records Inc and Zomba Recording LLC  have sued multiple Does for copyright infringement under 17 U.S.C. § 101 et seq. for online file sharing (I have a few novel defenses for these cases I need to try out).

  • Lewis & Clark Outdoors, Inc. v. L. C. Industries, Inc., Case Number:  5:2007cv05164, Filed:  September 26, 2007, Court:  Arkansas Western District Court 

    Lewis & Clark Outdoors, Inc.  has sued L. C. Industries, Inc. for trademark infringment under the Lanham Act, 15 U.S.C. 1051 for fraudulently obtaining a federal registration for “Lewis N. Clark.”

Merle Norman Cosmetics, Inc. v. Labarbere: Order Denying Motion to Dismiss Order Denying Motion to Stay Discovery

Evan over at InternetCases.com points to the case of Merle Norman Cosmetics v. Labarbera, summing up the case thusly:

Labarbera moved to dismiss under FRCP 12(b)(6), arguing that the “first sale doctrine” protected her right to resell products she had lawfully acquired in the stream of commerce. Merle Norman responded that the first sale doctrine should not apply, as the doctrine only protects defendants for claims of intellectual property infringement.

It was an interesting argument, but one doomed from the start. In the decision the judge puts the smackdown on some of the creative arguments… reprinted here in its entirety.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

Magistrate Judge Snow

CASE NO. 07-60811-CV-COHN

MERLE NORMAN COSMETICS, INC., a California corporation, Plaintiff,  vs. JOYCE LABARBERA and JANE DOE, Defendants.

ORDER DENYING MOTION TO DISMISS ORDER DENYING MOTION TO STAY DISCOVERY

THIS CAUSE is before the Court upon Defendant Labarbera’s Motion to Dismiss [DE 16] and Motion to Stay Discovery [DE 32]. The Court has carefully considered the motions, Plaintiff’s memorandum regarding the First Sale Doctrine, and Defendant Labarbera’s Response to the Memorandum (effectively a reply memorandum), and is otherwise fully advised in the premises. The Motion to Dismiss became ripe on July 25, 2007. [fn1]

[fn1] As the Motion to Stay is based upon the pendency of the Motion to Dismiss, the Court need not wait for Defendant to respond to the Motion to Stay.


I. BACKGROUND

Plaintiff Merle Norman, Inc. (“Plaintiff”) filed this diversity action against Defendants Joyce Labarbera and “Jane Doe” for various state law claims. As to Defendant Labarbera, Plaintiff’s claims are for tortious interference with contract, civil conspiracy, and deceptive and unfair trade practices pursuant to Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”). [fn2] [fn2] For a complete background of the facts giving rise to this dispute, please refer to the Court’s Order Denying Motion for Preliminary Injunction [DE 21].

Plaintiff sells cosmetics through franchised “studios.” Its franchise agreements with studio owners ban resales of its products via the internet. In this case, Plaintiff alleges that Defendant Labarbera obtained Merle Norman cosmetics from a studio owner (“Jane Doe”) and then resold the products via Ebay over the Internet. At the preliminary injunction hearing held in this case, Defendant Labarbera raised the defense of the “First Sale Doctrine,” as a complete defense to all of the claims in this case. After taking evidence and denying the preliminary injunction motion, the Court directed Plaintiff to respond in writing to Defendant’s motion to dismiss pursuant to the First Sale Doctrine. Labarbera does not deny that she made those sales. Rather, the disputed factual issue is whether Labarbera obtained the Merle Norman items she sold over the Internet from a studio owner, or from some other source. In denying the motion for preliminary injunction, the Court determined that Plaintiff had not met the stringent burden for obtaining a preliminary injunction. However, for purposes of consideration of the motion to dismiss, however, the Court assumes that the facts alleged in the Complaint are true.

II. DISCUSSION

A. Motion to Dismiss Standard

Defendant Labarbera argues that the First Sale Doctrine requires dismissal Plaintiff’s claim for failure to state a claim. Until the recent Supreme Court decision in Bell Atlantic Corp. v. Twombly, 550 U.S. —, 127 S.Ct. 1955 (2007), courts routinely followed the rule that, “a complaint should not be dismissed for failure to state a claim unless it appears beyond a doubt that the plaintiff could prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Marsh v. Butler County, 268 F.3d 1014, 1022 (11th Cir. 2001). However, pursuant to Twombly, to survive a motion to dismiss, a complaint must now contain factual allegations which are “enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true.” 127 S. Ct. at 1965. “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 1964-65. Taking the facts as true, a court may grant a motion to dismiss when, “on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action.” Marshall Cty. Bd. of Educ. v. Marshall Cty. Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993).

B. First Sale Doctrine

Defendant asserts that the “First Sale Doctrine,” which is part of federal copyright law, protects her right to sell products lawfully acquired in the stream of commerce. [fn3] Allison v. Vintage Sports Plaques, 136 F.3d 1443, 1447-48 (11th Cir. 1998). In Allison, the Eleventh Circuit extended the doctrine to a tort action, specifically the right to publicity. Id. In this case, the Plaintiff conceded at the preliminary injunction hearing that if Labarbera’s source is a flea market, than she can make the sales in question without committing a tort. However, as discussed above, Plaintiff asserts that if Labarbera is working in conjunction with a studio owner to violate the Merle Norman franchise agreement, then the First Sale Doctrine does not protect such tortious acts, as the only intellectual property rights are protected. Defendant asserts that the First Sale Doctrine is not so limited.

[fn3] The second legal issue initially raised by Labarbera concerns the jurisdictional requirement of an amount in controversy greater than $75,000. In its Order denying the motion for preliminary injunction, the Court denied the motion to dismiss as to this jurisdictional argument. Court’s Order Denying Motion for Preliminary Injunction at pp. 8-9 [DE 21].

There has been no further Eleventh Circuit decision discussing the First Sale Doctrine. However, another judge within the Southern District of Florida stated that: “Courts have limited this doctrine to cases where there is no other conduct of infringement or where the defendant is not culpable for anything more than mere reselling of a product.” Bulova Corp. v. Bulova Do Brasil Com. Rep. Imp. & Exp. Ltd., 144 F.Supp.2d 1329, 1331 -1332 (S.D.Fla. 2001). Plaintiff argues that if Labarbera is reselling products obtained from an authorized distributor who is prohibited from selling these products over the Internet, then she is tortiously interfering with the Merle Norman-distributor contract and/or conspiring to violate that contract, and therefore not merely reselling goods.

In a fairly recent decision involving similar facts, the United States Court of Appeals for the Tenth Circuit discussed the First Sale Doctrine in the context of trademark infringement claims under the Lanham Act, but did not apply the Doctrine to tortious interference claims nor civil conspiracy claims. Australian Gold, Inc. v. Hatfield, 436 F.3d 1228, 1235-38, 1241 (10th Cir. 2006). While Defendant Labarbera argues that her conduct is no where near as egregious as the defendants in Australian Gold, the point at this early stage of this litigation is that the First Sale Doctrine has not been accepted as a complete defense to tortious interference and civil conspiracy claims. Therefore, the Court will deny the motion to dismiss in its entirety. [fn4]

[fn4] The Court also notes that Defendant Labarbera misunderstands the nature of Plaintiff’s claims. It is not automatically true that one cannot be liable to another just because there is no contract governing the parties’ conduct to one another. Plaintiff’s claims are tort claims for acts that Florida common law (or statutory law) has recognized are actionable. Plaintiff, of course, has to prove the elements of a claim to ultimately win the case.

III. CONCLUSION

Accordingly, it is ORDERED AND ADJUDGED as follows:

1. Defendant Labarbera’s Motion to Dismiss [DE 16] is hereby DENIED;

2. As the Motion to Dismiss is denied, there is no basis to stay discovery, so Defendant’s Motion to Stay Discovery [DE 32] is hereby DENIED;

DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County, Florida, this 3rd day of August, 2007.
 

Toyota Motor Corp. v. LexusCash.com

Lexus Sues Adult Site Owners - Toyota brought suit agaist LexusCash.com. Lexus, a division of Toyota, apparently has a problem with this adult web site and adult model using the name Lexus. Plaintiff seeks an injunction and attorneys fees, no monetary damages. The lawsuit alleges that LexusCash.com, and the couple who run the site, including the woman who goes by the name of ‘Lexus Cash,’ “use[] the mark ‘Lexus’ in an unwholesome and unsavory context” and therefore could damage the reputation of its cars and company.” I don’t have the time to parse the entire complaint, but there is no need. I have seen enough strippers named Porsche, Mercedes, and yes, even Lexus, to know that these car brands are popular monikers for those who get naked for a living. For a stage name, unconnected to the car business, if these girls have the cash for the battle, they should win.

This suit brought up another issue, what if her name actually had been Lexus instead of Katie Lynn. A quick search of the SSI popular name database garnered the following results for people named after expensive cars.

Porsche did not place in the top 1000 since 1992, but Mercedes and Lexus did.

Mercedes

Year of birth Rank
2006 440
2005 385
2004 339
2003 333
2002 293
2001 284
2000 285
1999 263
1998 224
1997 241
1996 212
1995 191
1994 189
1993 171
1992 177
Note: Rank 1 is the most popular, rank 2 is the next most popular, and so forth. Name data are from Social Security card applications for births that occurred in the United States.

Lexus

Year of birth Rank
2004 969
2003 877
2002 768
2001 771
2000 671
1999 627
1998 519
1997 469
1996 449
1995 532
1994 592
1993 738
1992 985
Note: Rank 1 is the most popular, rank 2 is the next most popular, and so forth. Data are not shown for some of the years you specified because the name Lexus was not in the top 1000 names for those years. Name data are from Social Security card applications for births that occurred in the United States.

On a lark I checked a couple other names that, based on my cultural knowledge, I thought might get a hit.

Armani

Year of birth Rank
2006 698
2005 721
2004 728
2003 703
2002 773
2001 640
2000 650
1999 683
1998 658
1997 640
1996 738
1995 920
1994 980
Note: Rank 1 is the most popular, rank 2 is the next most popular, and so forth. You did not specify the sex for the name Armani, so we used male data based on popularity. Data are not shown for some of the years you specified because the name Armani was not in the top 1000 names for those years. Name data are from Social Security card applications for births that occurred in the United States.

Chanel

Year of birth Rank
2006 917
2005 918
2004 922
2003 a
2002 a
2001 930
2000 819
1999 795
1998 694
1997 601
1996 560
1995 618
1994 531
1993 421
1992 393
a Not in top 1,000 names for indicated year of birth
Note: Rank 1 is the most popular, rank 2 is the next most popular, and so forth. Name data are from Social Security card applications for births that occurred in the United States.

And finally, here is a nice story on the trend of people naming their kids after consumer goods. 

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