Arnstein & Lehr LLP Intellectual Property Newsletter Summer 2010

8/9/2019 Arnstein & Lehr LLP Intellectual Property Newsletter Summer 2010

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A r n s t e i n & L e h r i n t e L L e c t uA L P r o P e r t y n e w s L e t t e r | s u m m e r 20 1 0

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FTC applies endorsement guides

to bloggers

Supreme Court interprets

copyright suit ling provision

COPYRIGHT Continued on Page 2 FTC Continued on Page 3

Section 411(a) of the Copyright Act (17 U.S.C. 411(a)) provides

that no civil action for infringement of the copyright in any United

States work shall be instituted until...registration of the copyright

claim has been made.... In more than 200 decisions over 100

years, courts have interpreted 411(a) to mean that a court did not

have subject matter jurisdiction until the copyright owner obtained a

copyright registration or, at the least, applied to receive one. Sub-

ject matter jurisdiction refers to a courts statutory or constitutional

power to decide a case. The U.S. Supreme Court has now ruled that

registration is aprecondition to ling a copyright infringement claim,

but courts do have jurisdiction to hear cases involving unregistered

copyrighted works.

InNew York Times Co. v. Tasini, 533 U.S. 483 (2001), the Supreme

Court held that owners of online databases and print publishers were

required to obtain permission from freelance authors before includ-

ing the authors works in such electronic compilations. AfterTasini,

a number of other suits by freelance authors were allowed to proceed

in a consolidated class action in the U.S. District Court for the South-

ern District of New York. Although the named plaintiffs in the class

each owned at least one registered copyright, the class contained

authors with unregistered works.

After more than three years of mediation, the parties reached a

reported $18 million settlement covering around 20,000 authors,

publishers and databases. However, ten freelance authors objected

to the settlement terms and asked the District Court not to certify theclass or approve the settlement. The court approved the settlement

and entered a nal judgment based on the settlement terms. None of

the parties objected to the courts jurisdiction over the case because

of the presence in the class of the authors with unregistered works.

The disgruntled freelancers appealed to the U.S. Court of Appeals

for the Second Circuit. The Appeals Court asked the parties to

argue whether 411(a) deprived the District Court of subject matter

On October 5, 2009, the Federal Trade Commission (FTC) issued it

revised Guides Concerning the Use of Endorsements and Testimoni

in Advertising (16 CFR Part 255). Those Guides became effective o

December 1, 2009. They apply to any advertiser who uses endorse-

ments or testimonials to advertise goods or services, companies or

industries. They are intended as a basis for voluntary compliance b

advertisers and endorsers.

Under the Guides, an endorsement is any advertising message

(including verbal statements, demonstrations, or depictions of the

name, signature, likeness or other identifying personal characteristic

of an individual or the name or seal of an organization) that consum

are likely to believe reects the opinions, beliefs, ndings, or experi

ences of a party other than the sponsoring advertiser, even if the vie

expressed by that party are identical to those of the sponsoring adve

tiser. 16 CFR 255.0(b). The Guides use the term endorsements

for both endorsements and testimonials.

The Guides dene an expert as an individual, group, or institutio

possessing, as a result of experience, study, or training, knowledge

of a particular subject, which knowledge is superior to what ordinar

individuals generally acquire. 255.0(d).

Endorsements must reect the endorsers honest opinions, ndings

beliefs, or experience. However, they cannot convey any represen

tation, express or implied, that would be deceptive if the advertiser

made it. 255.1 (a), (b). An advertiser can only use an expert orcelebrity endorsement for so long as the advertiser has good reason

to believe that the expert or celebrity continues to hold the views

in the endorsement. An ad representing that an endorser uses the

endorsed product must be true at the time the endorsement was give

255.1(b), (c).

Advertisers and endorsers can both be held liable for false or unsub-

stantiated statements made in endorsements or for failing to disclo


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jurisdiction to approve the settlement. All of the parties argued that

jurisdiction existed. Nevertheless, the Appeals Court found that the

District Court had no jurisdiction to certify a class of claims arising

from unregistered works or to approve a settlement covering those

claims. In re Literary Works in Electronic Databases Copyright

Litigation, 509 F.3d 116 (2d Cir. 2007).

The parties petitioned the Supreme Court, which accepted the case

on the issue of whether 411(a) restricted the subject matter juris-

diction of federal courts over copyright actions. In a unanimous de-

cision, the Supreme Court determined that 411(a) did not deprive

a federal court of jurisdiction to hear and act on a case involving

unregistered copyrights. Rather, that provision is a precondition to

ling a claim that does not restrict a federal courts subject-matter

jurisdiction.

The Court made a distinction between true jurisdictional condi-

tions and nonjurisdictional limitations on causes of action. The

test is whether the statute clearly states that registration counts as

jurisdictional and that Congress ranked that requirement as juris-

dictional. Where the requirement is located in a provision separate

from the statutory provisions giving federal courts jurisdiction to

hear questions involving federal law and copyright claims, it is less

likely to be jurisdictional. Also, 411(a) expressly allows courts to

hear copyright cases without registrations in certain circumstances,

a further indication that registration cannot be jurisdictional.

The Supreme Court declined to decide whether 411(a) is a man-

datoryprecondition to ling a copyright infringement suit. If it is,

a federal district court could decide on its own, without input from

the parties, that a case based on an unregistered copyright should

be dismissed. If it is not, the power to have the case dismissed

would rest in the hands of the party accused of infringement, whocould raise it as an afrmative defense to the suit or in a motion to

dismiss. It remains to be seen how the courts will treat the issue.

Source: Reed Elsevier, Inc. v. Muchnick, United States Supreme Court, No. 08-

103, March 2, 2010

COPYRIGHT Continued from Page 1

First Sale doctrine no protection

or post-purchase conusionAu-Tomotive Gold Inc. (Auto Gold), a producer of automobile

accessories, sold marquee license plates bearing actual VW badges

bought from a VW dealer. The badges were normally used as

replacements for those on VW vehicle hoods or trunks. Auto Goldremoved the prongs from the purchased badges, gold plated some

of them and mounted them on the marquee plates. The packaging

stated that the plates were not produced or sponsored by VW.

VW sent several letters demanding that Auto Gold cease using

VWs trademarks but Auto Gold refused to do so and led suit in

the U.S. District Court for the District of Arizona for a declaratory

judgment that it was not committing trademark infringement. VW

counterclaimed for trademark counterfeiting, infringement, dilution

and false designation of origin.

The District Court granted summary judgment to Auto Gold, rul-

ing that the trademarks were aesthetically functional and therefore

not protected. The U.S. Court of Appeals for the Ninth Circuit

reversed, concluding that consumers buy the Auto Gold products

because of those products identications with company brands,

making the products dependent on VWs source identication. It

sent the case back to the District Court to consider Auto Goldsdefenses, which included the rst sale doctrine. Au-Tomotive

Gold, Inc. v. Volkswagen of America, Inc., 457 F.3d 1062 (9th Cir.

2006). The District Court rejected Auto Golds rst sale and

other defenses and granted summary judgment and a permanent

injunction to VW.

On appeal for the second time, Auto Gold argued that the rst sale

doctrine applied to the badges because it had purchased them from

a VW dealer and could legitimately resell them. The Ninth Circuit,

however, held that the rst sale doctrine was no defense because

Auto Gold created a likelihood ofpost-purchase confusion among

non-purchaser observers who see the plates on purchasers cars.

The U.S. Supreme Court announced the rst sale doctrine inPre-

stonettes, Inc. v. Coty, 264 U.S. 359 (1924). Prestonettes bought

powder and perfumes produced and trademarked by Coty, incor-

porated the Coty powder into a cream and rebottled the perfumes

into smaller bottles. Prestonettes was allowed to compound or

change what it bought and to sell the modied or divided products.

It could also identify those products with a label that Prestonettes

was not connected with Coty and that the contents were Cotys

but were independently rebottled in New York, because it was

exercising its rights of ownership and telling the truth.

The Ninth Circuit recognized that a producers power to control

the resale of its product does not extend beyond the rst sale of

the product and that a purchaser could incorporate a trademarkedproduct into the purchasers new product. However, the Court held

that the rst sale doctrine was no defense to trademark infringement

when it was likely that consumer confusion would arise, includ-

ing post-purchase confusion by non-purchasers. The Ninth Circuit

rejected that defense for Auto Golds license plates because once

the packaging with the disclaimer was removed, the general public

observing the plates had no indication that the plates were not as-

sociated with VW. The purchaser of the trademarked product does

not buy the right to become a free rider, proting from a trademark

causing post-purchase confusion about the products origin. Ac-

cordingly, the injunction granted to VW was upheld.

The rst sale doctrine has counterparts in copyright and patent law.

In 2008, the U.S. Supreme Court unanimously ruled that the patent

exhaustion doctrine (analogous to rst sale) applied to patented

chipsets purchased from a licensed manufacturer and seller, al-

though the licensor tried to require the licensee to notify purchasers

that the license did not cover them. Quanta Computer, Inc. v. LG

Electronics, Inc., No. 06-937 (2008). In 1998, the U.S. Supreme

Court unanimously determined that the rst sale doctrine applied

to copyrighted U.S.-made goods sold into foreign markets and im-

VW Continued on Page 3


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material connections. 255.1(d). A material connection is dened

as a connection between the endorser and the seller of the adver-

tised product that might materially affect the weight or credibility of

the endorsement where the connection is not reasonably expected

by the audience. 255.5. An example is the requirement that the

advertiser disclose to the audience for a television commercial that

the endorser was paid in exchange for the endorsement or would

receive a benet for a favorable endorsement, where the endorser

is not presented as an expert or celebrity. This provision applies to

free samples given by advertisers to third-party bloggers to encour-

age favorable reviews of the product. The Guides require that the

advertiser tell the blogger to disclose clearly and conspicuously

that he or she received the free product from the advertiser and also

that the advertiser adopt procedures to monitor the bloggers post-

ings.

Endorsements are not themselves competent and reliable scientic

evidence, so they cannot be used to substantiate claims about the

performance of an advertised product or service. However, the en-

dorsement is interpreted as a statement that the product or service iseffective for the purpose shown in the ad. Therefore, the advertiser

must have adequate substantiation to support claims made through

endorsements. 255.2(a).

The Guides state that an endorsement relating the experience of one

or more consumers on a central or key attribute of the goods or

services will likely be interpreted by consumers as representing that

the endorsers experience is representative of results consumers will

generally achieve with the advertised product or service in actual

use. If the advertiser does not have substantiation that the endors-

ers experience is typical of what consumers will generally achieve,

the advertiser must clearly and conspicuously disclose the gener-

ally expected performance. It will not be enough in most cases to

use disclaimers such as Results not typical or These testimonials

are based on the experiences of a few people and you are not likely

to have similar results. 255.2(b).

An ad presenting endorsements by people who are represented to

be actual consumers must use actual consumers or clearly and

conspicuously disclose that the actors are not actual consumers of

the advertised product. 255.2(d).

The Guides provide that an expert endorsers qualications must

provide the expertise he or she is represented to possess. 255.3(a).

The experts endorsement must be supported by the actual exercise

of his or her expertise and the experts evaluation must be con-

ducted at least as extensively as someone with the same degree ofexpertise would normally conduct to support the conclusions in the

endorsement. The Guides also cover expert endorsements concern-

ing comparisons with competitors products and claims of superior-

ity. 255.3(b).

Endorsements by organizations must be reached by a process suf-

cient to ensure that the endorsement fairly reects the collective

judgment of the organization. If the organization is represented as

an expert, it must use an expert or experts recognized as such by

the organization or standards previously adopted by the organiza-

tion and suitable for judging the relevant merits of such products.

255.4.

In the rst investigation conducted under the new Guides, the FTCdetermined that it would not pursue an enforcement action against

Ann Taylor Stores Corp. for providing gifts to bloggers who at-

tended a preview of the companys Summer 2010 collection in

January 2010, to encourage them to post content about the event.

The FTC decision was based on several factors: (1 ) this was the

rst such preview event Ann Taylor had conducted, (2) only a

small number of bloggers posted content about the preview, (3)

several of the bloggers disclosed that Ann Taylor had given them

gifts at the preview, (4) there was a sign posted at the preview tell-

ing bloggers to disclose the gifts if they posted comments and (5)

Ann Taylor adopted a written policy after the preview that bloggers

receiving gifts must be told that they must disclose the gifts in the

post. The FTC stated that it expects Ann Taylor to honor that writ-

ten policy and to take reasonable steps to monitor blogger compli-ance with the obligation to disclose gifts.

The FTC investigation highlights the importance of having a

written policy applying to free goods or services provided to any

writers and the duty to monitor what those writers say about a com-

panys goods or services. The company can be liable for misrepre-

sentations made by such writers to the same extent as it is liable for

misrepresentations in its own advertising.

Source: Federal Trade Commission Letter of April 20, 2010, File No. 102-3147

FTC Continued from Page 1

ported back into the U.S. Quality King Distributors, Inc. v. LAnza

Research Intl., Inc., 523 U.S. 135 (1998). The Supreme Court has

accepted a rst sale case for the next term where copyrighted goods

were manufactured outside the U.S. and rst sold overseas but

then were imported into the U.S. Omega S.A. v. Costco Wholesale

Corp., 541 F.3d 982 (9th Cir. 2009), cert. granted No. 08-1423,

April 19, 2010.

Source: Au-Tomotive Gold v. Volkswagen of America, United States Court of

Appeals, 08-16005, May 6, 2010

VW Continued from Page 2


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Federal law provides that an action in the Court of Federal Claims

can be brought whenever the copyright in any work protected un-

der the copyright laws of the United States shall be infringed by the

United States. 28 U.S.C. 1498(b). That provision contains an

exemption from copyright liability with respect to any copyrighted

work prepared by a person while in the employment or service ofthe United States, where the copyrighted work was prepared as a

part of the ofcial functions of the employee, or in the preparation

of which Government time, material, or facilities were used . . . .

In a case brought under that provision by the sculptor Frank Gay-

lord, the U.S. Court of Appeals for the Federal Circuit has held the

government liable for copyright infringement for a postage stamp

containing an image of a number of Gaylords sculptures created

for the Korean War Veterans Memorial (the Memorial).

Gaylord won the competition to select a sculptor held by Cooper-

Lecky Architects, prime contractor for the creation, construction

and installation of the Memorial. The nal design featured 19

stainless steel statues of foot soldiers in formation, known as The

Column. Gaylord created a number of models, incorporatingcritiques and suggestions by Cooper-Lecky, members of the Korean

War Veterans Memorial Advisory Board (VAB) and the Com-

mission on Fine Arts (CFA). Gaylord obtained ve copyright

registrations as sole author of the soldier sculptures, the last one on

May 1, 1995. He received $775,000 for the sculptures.

In 1995 and 1996, photographer John Alli took pictures of the

Memorial at various times of year and day. In January 1996, after

a snowstorm, Alli took numerous photographs of the Memorial and

the soldiers. Because Alli wanted to sell prints of his photos, he

sought out the copyright owner in the underlying work. Mr. Lecky

of Cooper-Lecky told Alli that he was the owner. Alli agreed to

pay an entity established by Lecky a 10% royalty on the sales of theprints. Neither Alli nor Lecky contacted Gaylord.

In 2002, the Postal Service decided to issue a stamp commemorat-

ing the 50th anniversary of the Korean War armistice. It paid Alli

$1500 to use a photograph for the stamp. Alli also referred the

Postal Service to Lecky for permission to use the image but did not

mention Gaylord. About 87 million stamps were made, from which

the Postal Service received over $17 million in revenue. It also

sold the stamps to collectors and sold goods such as commemora-

tive panels and framed art featuring the stamp.

Gaylord sued Alli for copyright infringement in 2006 and Alli

settled with Gaylord for 10% of Allis net sales. Gaylord also sued

the government for copyright infringement in the Court of FederalClaims for the Postal Services use of Allis photograph on the

stamp and other goods. The court held that Gaylord was the sole

author of the copyright to the sculptures and that The Column was

not an architectural work under the Architectural Works Copyright

Protection Act (AWCPA), which contains an exemption for pho-

tographs of buildings located in or visible from a public place. 17

U.S.C. 120(a). However, the court agreed with the government

that use of the image on the stamp was a fair use under copyright

law, not an infringement. Gaylord v U.S., 85 Fed. Cl. 59 (2008).

On appeal, the Federal Circuit concluded that Gaylords copyright

was valid, he was the sole author of The Column, the stamp copied

original elements of The Column and the government could not

establish that it had made fair use of the image on the stamp.

To evaluate a claim of fair use, courts weigh four factors: (1) the

purpose and character of the use, whether the use is commercial or

for nonprot educational purposes; (2) the nature of the copyrighted

work; (3) the amount and substantiality of the copied portion to the

copyrighted work as a whole; and (4) the effect of the copy on the

potential market for or value of the copyrighted work. 35 U.S.C.

107. If a use is transformative, altering the original work with

new expression, meaning, or message, a court is more likely to

nd it was fair use.

The Federal Circuit focused on the purpose and character of the

stamp, not on Allis photograph, in determining that the use was

not transformative. As both the stamp and The Column shared the

same purpose of honoring Korean War veterans, the stamp did notincorporate The Column into a larger commentary, criticism or

biographical work and it did not impart a different character to the

work, the stamp was not transformative of The Column.

The Court also found that the use was commercial in nature, the

underlying work was expressive and creative and a substantial

number of the soldiers in The Column were used in the stamp. The

only factor not weighing in Gaylords favor was the stamps low

impact on the value of The Column and potential market for deriva-

tive works, in that the stamp was not a suitable substitute for The

Column itself. Accordingly, the stamp was not a fair use.

Furthermore, the suggestions, comments and criticisms of Cooper-Lecky, the VAB and the CFA did not amount to co-authorship

because they were not independently copyrightable contributions

to the work. Cooper-Leckys other features for the Memorial did

not appear in Gaylords copyright registrations or on the stamp.

Gaylord translated the competing and conicting ideas, comments

and suggestions made by Cooper-Lecky, the VAB and the CFA into

his copyrightable expression of the soldiers.

Moreover, the government failed to rebut Gaylords prima facie

presumption of validity from the copyright registrations. Although

he included the language fully approved and fully approved by

all federal commissions in his description of the nature of his au-

thorship in some of his copyright applications, he was still the sole

author of The Column. Approval, noted the Court, like commentand criticism, is not authorship.

Lastly, the Federal Circuit concluded that because it is not a hu-

manly habitable structure The Column does not fall within the

denition of an architectural work under the AWCPA, as it is

not a building, architectural plans or drawings. 17 U.S.C. 120.

The Court sent the case back to the Court of Federal Claims to

determine a damage award for Gaylord.

Postal Service inringes copyright in Korean War Memorial sculptures


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Judge Newman led a lengthy dissent, contending that the stamp

was a fair use of a photograph of a public monument that was

designed and built with public money and was unambiguously

covered by the contract and statutes under which this Memorial was

built.

Judge Newman relied on Walton v. United States, 551 F.3d 1367

(Fed Cir. 2009) for the conclusion that Gaylord was in the service

of the United States when he created The Column and that such

service was sufcient to exempt the government from infringe-

ment, whether or not government resources were used. However,

in Walton, a federal prisoner was paid by a government corporation

to create desk blotter calendars for government agencies, using

government-furnished computers as part of his assigned duties

within a government facility. As Gaylord did not use government

resources to create his statues the exemption does not appear to ap-

ply here, whatever service means.

Source: Gaylord v. United States, United States Court of Appeal for the Federal

Circuit, No 2009-5044, February 25, 2010

TTAB requires ordering

inormation in web page

specimens or goodsTo obtain most federal trademark registrations, the mark must be

used in commerce on or in connection with the goods. The Lanham

Act denes use in commerce as the bona de use of the mark

in the ordinary course of trade. 15 U.S.C. 1127. For goods, the

mark must be placed in any manner on the goods or their contain-

ers or the displays associated therewith or on the tags or labelsafxed thereto. In contrast, an acceptable specimen of use for

services is use or display of the mark in the sale or advertising of

services.

The U.S. Patent and Trademark Ofce (PTO) has long required

that electronic specimens of use for goods (1) contain a picture

of the goods, (2) in close proximity to the mark and (3) provide

information necessary to order the goods. However, in a previous

decision, the U.S. Court of Appeals for the Federal Circuit called

that three-part test into question when it decided that a picture of

the goods in an electronic specimen such as a web page was not

mandatory. In re Sones, 590 F.3d 1282 (Fed. Cir. 2009). The

Trademark Trial and Appeal Board (TTAB) has now re-empha-

sized the importance of the presence of ordering information and

indicated what form it should take.

Quantum Foods, Inc. led an intent-to-use application for the

trademark PROVIDING PROTEIN AND MENU SOLUTIONSfor processed meats, beef, pork, poultry and seafood sold in por-

tions; fully cooked entrees consisting primarily of meat, beef, pork,

poultry or seafood. When its initial specimen of use was rejected

by the trademark examiner, Quantum Foods submitted a substitute

specimen consisting of a printout of a page from its web site. On

the page, the mark was displayed just above three pictures of meals

with meat products on plates. The examiner concluded that the

text under the three plates described aservice that Quantum Foods

provided, namely, customized menu solutions, but did not describe

any of thegoods listed in the application. Although the web page

would have been an acceptable specimen of use for services, the

examiner rejected it as a specimen of use for goods because the

examiner did not see necessary ordering information or a web link

for ordering the goods. Quantum Foods appealed that decision tothe TTAB.

On appeal, Quantum Foods argued that the web page did show

ordering information in that one of the four boxes with pictures ap-

pearing at the top of the page was labeled For Foodservice and if

a consumer put the cursor on that box a drop-down menu provided

a Contact Us link. Clicking on that link sent the consumer to a

customer service page containing the e-mail address and toll free

number for contacting Quantum Foods customer service depart-

ment, where orders for the goods can be placed. Quantum Foods

contended that the For Foodservice square was thus a visible

web link to order the goods. The TTAB refused to accept that evi-

dence because it was not submitted to the examiner prior to the ap-peal but also indicated that the Contact Us web page was no more

than corporate contact information that might eventually result in a

sale but did not provide ordering information for the goods.

The TTAB agreed with the examiner that the web page did not con-

tain any instructions informing consumers that they would be able

to order the goods if they clicked on the For Foodservice box.

The TTAB noted that, even if a consumer using a link on a web

page in an electronic store was similar to a consumer in a brick and

mortar store seeing a shelf talker and taking an item to a cashier, the

web page at issue did not provide a link for ordering the goods. If

a web page merely gives information about the goods but does not

provide a means for ordering them, it is only promotional material

that is not an acceptable specimen of use of the mark for goods.

The offered specimen had no sales form, pricing information, offers

to accept orders or special instructions for placing orders on the

page. The web page had no information normally associated with

ordering products via the Internet or the telephone. The TTAB

concluded the web page offered as a specimen merely advertised

and informed the public about the company and its goods, without

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Celebrity allowed to pursue alse endorsement claimCelebrity product endorsements are often sought after but usually

require the celebritys permission to use his or her name or likeness

in association with a product and payment to the celebrity. When a

celebritys name or likeness is used impermissibly, the celebrity can

sue for false endorsement.

The U.S. District Court for the Eastern District of California has

allowed a false endorsement claim under 43(a) of the Lanham Act

(15 U.S.C. 1125(a)) to proceed against AT&T Mobility. The con-

troversy concerned AT&Ts press release about a new emergency

preparedness service that mentioned General Charles Yeager and

his historic feat of breaking the sound barrier in a jet plane. Yeager,

a retired general in the US Air Force, gained acclaim during WWII

as a ghter pilot and later became famous as the rst person to

break the sound barriers known as Mach 1 and Mach 2. He earned

a lifetime of aviation and speed records and used his fame to his

prot by speaking to organizations and charging for his endorse-

ments of products and companies.

AT&Ts announcement, issued without Yeagers authorization,

read: Nearly 60 years ago, the legendary test pilot Chuck Yeager

broke the sound barrier and achieved Mach 1. Today, Cingular

is breaking another kind of barrier with our Mach 1 and Mach 2

mobile command centers, which will enable us to respond rapidly

to hurricanes and minimize their impact to our customers. It did

not contain Yeagers picture or mention his name in any headline or

headings, nor did it offer any products or services for sale.

Yeager sued for false endorsement under the Lanham Act and

related California state law rights of privacy and commercial mis-

appropriation, alleging AT&Ts use of his name and identity in the

publication impaired his ability to negotiate representation agree-

ments with other cellular and wireless providers. AT&T arguedthat the reference was noncommercial speech and both merely

incidental and a permissible fair use. An incidental use is use of a

name for purposes other than to take advantage of the reputation,

prestige or other value associated with a celebrity, in a eeting and

inconsequential manner.

The Court determined that Yeager had an actionable interest

because his achievements in breaking the sound barrier were used

to attract attention to AT&Ts services by linking them to a public

concern, in a carefully crafted strategy to promote AT&Ts brand.

A company cannot rely on the First Amendment right to publicize

a matter of public interest where it uses a celebritys identity in

commercial speech. A publication need not offer products or ser-

vices for sale to be commercial speech if it was distributed with an

economic motivation to promote a companys services. Use of Yea-

gers name was not merely incidental. AT&T intended to make an

association between breaking the sound barrier and breaking new

barriers of disaster preparedness, so that the public would make

positive associations with and think highly of AT&T.

Because Yeager alleged that the publication was an advertisement/

promotional article and that the reference to him was mislead-

ing and likely to cause confusion as to his afliation with AT&T,

there was a triable issue whether the use was permissible nomina-

tive fair use or an unauthorized implied endorsement. The Court

relied in part on Cairns v. Franklin Mint Co., 292 F.3d 1139, 1150

(9th Cir. 2002), in which the U.S. Court of Appeals for the Ninth

Circuit held that the nominative fair use defense protected the sale

of commemorative plates featuring the likeness of Princess Diana.

The nominative fair use defense applies where a defendant uses a

plaintiffs mark to describe the plaintiffs product for purposes of

comparing it to the defendants product. One of the tests for the

nominative fair use is that the user must do nothing that would, in

conjunction with the mark, suggest sponsorship or endorsement by

the trademark holder. Since Yeager alleged that AT&Ts refer-

ence to him was likely to cause confusion and deceive consumers

as to the afliation between Yeager and AT&T, his allegations were

enough to defeat a motion to dismiss.

To what extent can the name or likeness of a deceased celebritybe used in commerce? Does a celebritys right of publicity survive

death? The answer depends on where the celebrity was domiciled

when he or she died. In Cairns, the Ninth Circuit concluded

that heirs of Princess Diana had no right to sue for a violation

of Californias postmortem publicity statute because she was

domiciled in England at the time of her death and England did not

recognize any right of publicity, much less a postmortem right.

Floridas right of publicity statute (Fla. Stat. 540.08) gives a

transferable right of publicity that lasts for 40 years after death,

while Illinois (765 Ill. Comp. Stat. 1075/30) provides postmortem

rights for 50 years after death. New York, however, does not

recognize a posthumous right of publicity.

Source: Yeager v. Cingular Wireless LLC, United States District Court for the

Eastern District of California, No. 2:07-cv-02517, December 7, 2009

Update on patent mismarking damagesOn remand, the District Court awarded $6,840 in damages to

Bon Tool for patent mismarking, based on the full selling price

of the mismarked items rather than the prot margin (see Spring

2010 issue).

Source: The Forest Group Inc. v. Bon Tool Co., United States District Court

for the Southern District of Texas, No. H-05-4127, April 27, 2010


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The Intellectual Propert Practice Group counsels clients on matters related to the protec-tion o trademarks, coprights, domain names and trade secrets, including preparation andprocessing o trademark and copright applications, unair competition, rights o privacand publicit, review o Web sites and advertising claims, and preparation and registration ocontest and game promotion rules.

Ms. Grubner is a partner in the rms Chi-cago oce. She concentrates her practiceon intellectual property, specializing intrademarks, copyrights, domain namesand sweepstakes, contests and game pro-motions. Ms. Grubner is a speaker or the

Chicago and Milwaukee Bar Associations, the Midwest Societyo Proessional Consultants and Society o Proessional Journal-ists. In July 2009 Ms. Grubner was named to the list o Lead-

ing Lawyers in Advertising & Media Law by Leading LawyersNetwork.

Mr. Rothman is a Florida Bar board certi-ed Intellectual Propert lawer and apartner in the rms West Palm Beachoce. Mr. Rothman represents individ-ual and corporate clients in intellectualpropert inringement litigation involv-

ing patents, trademarks, coprights, trade secrets, trade libeland related commercial matters. His litigation practice alsoincludes signicant ocus on electronic discover issues suchas e-discover management and motion practice relating toe-discover.

Judith L. Grubner312.876.7885

[email protected]

Joel B. Rothman561.650.8480

[email protected]

USE Continued from Page 5

Misha Kerr is an intellectual propertyassociate in the rms West Palm Beach

oce.

Misha J. Kerr

[email protected]

showing an actual offer for sale and the opportunity and means to

complete an on-line purchase. Because the Contact Us link did

not take a potential customer to an order form, it was not a means

to order goods by mail or telephone but only location informa-

tion about the company. To constitute an acceptable point-of-sale

display associated with the goods, a web page must do more thanpromote the goods and induce people to buy them there must be

adequate ordering information provided so that the web page is

calculated to consummate a sale.

The TTAB acknowledged that the Federal Circuit in Sones speci-

cally held that a picture was not a mandatory requirement for an

electronic specimen. However, the TTAB found that information

necessary to order the goods was a critical element in a web page

specimen for goods. The TTAB concluded that there must be a

way for a consumer visiting a web page to order the goods being

promoted for the page to serve as a specimen of use for goods.

Prior to 1992, the PTO did not accept a catalog page as a specimen

of use for goods, nding that catalogs were merely advertising ma-terials. However, after a U.S. District Court characterized a catalog

page as a point-of-sale display associated with the goods, the PTO

created the three-part test described above and new categories

of acceptable specimens for catalogs and for electronic displays.

Lands End, Inc. v. Manbeck, 797 F. Supp. 511 (E.D. Va. 1992);

TMEP 904.03(h) and (i). In Sones, the Federal Circuit rejected

a bright-line rule requiring a photograph with every Internet

marketing specimen for goods because there was no requirement

that a product package in a store contain a picture of the goods. A

description of the goods sufcient to identify them was enough.

Given this more lenient position taken by the Federal Circuit

toward the picture requirement, it is no surprise that the PTO

has become stricter about the ordering information requirement.

Although shopping cart functionality has not previously been

required if enough information was present in the specimen to

order the goods in some other way, this case is an early warning

that examiners may be looking for such functionality in the future.

Specimens that only provide a list of distributors or the contact

information for the seller are likely to be rejected. This test for the

Statement of Use specimen will also be applied to the Declaration

of Use that must be led between the fth and sixth years after

registration and every ten years with renewal applications.

Source: In re Quantum Foods, Inc., Trademark Trial and Appeal Board, Applica-tion Serial No. 78/960,554, April 15, 2010

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Arnstein & Lehr LLP Intellectual Property Newsletter Summer 2010