Protecting “Deep Throat” And Your Own Neck in a Libel Suit

By Itai Maytal

Can a journalist protect a confidential source’s identity in a libel case without handicapping his defense?

In the recent and highly scrutinized libel case of Obsidian Finance Group, LLC v. Cox, No. CV-11-57-H (D. Or. Nov. 30, 2011), the question was confronted by the court and ultimately answered in the negative.

As one Citizen Media Law Project commentator noted, the blogger-defendant was ruled against in part because she attempted to use a confidential source as both “a sword and a shield.” She tried to protect her confidential source from discovery (the shield), but at the same time use the source to argue she did not act with negligence in writing the blog post at issue (the sword). The court made clear that a journalist could not have it both ways (or in her unique case, either way).

Still, if recent libel cases brought by Donald Trump and Latrell Sprewell are any guide, a journalist relying on confidential sources may still be able to prevail without giving up his sources. If the journalist is able to produce (1) redacted versions of his interviews with those sources (or other evidence that proves their existence), (2) evidence that he disclosed to readers that the challenged statement came from a confidential source and (3) evidence that he took steps to independently confirm facts from those sources, a court may still be willing to dismiss the libel claim against him.

In Trump v. O’Brien, 29 A.3d 1090 (App. Div. N.J. 2011), Donald Trump filed a lawsuit against the author Timothy L O’Brien for writing a passage in his book, TrumpNation, The Art of Being The Donald, that suggested Trump was worth substantially less than he claims. In support of the passage, O’Brien cited three anonymous sources who valued Trump’s worth at between $150 million and $250 million, not the $7 billion Trump estimated. Notwithstanding his reliance on confidential sources, the court ruled in favor of O’Brien because he produced redacted versions of his repeat interviews with those sources – which had “remarkably similar estimates of Trump’s net worth” – and because he had shown that he had taken steps to confirm their statements independently.

As the court affirmed, “There were no significant internal inconsistencies in the information provided by the confidential sources, nor was there ‘reliable’ information that contradicted their reports, so as to provide evidence of actual malice. Nothing suggests that O’Brien was subjectively aware of the falsity of the source’s figures or that he had actual doubts as to the information’s accuracy.”

A similar outcome occurred in the New York case of Sprewell v.NYP Holdings, Inc., 43 A.D.3d 16, 841 N.Y.S.2d 7 (1st Dep’t 2007). In that case, then New York Knicks player, Latrell Sprewell, claimed he was libeled by defendant, Marc Berman, a reporter for The New York Post, when he wrote an article, based in part on information provided by confidential sources, stating that Sprewell had broken his shooting hand in September 2002 by hitting a wall on his boat during an altercation but did not promptly report the injury to the team. Berman noted that Sprewell denied that he broke his hand in the manner Berman claimed.

In determining that summary judgment should have been granted by the trial court, even assuming that Berman’s statements as to how Sprewell injured his hand were false, the appeals court noted that (1) the reports were based on confidential sources and denied by Sprewell, (2) that the reporter sought to verify the informants’ accounts by speaking with plaintiff through his agent and publicist and (3) sought to confirm the reports through other sources.

Based on this circumstances, the court held that the “plaintiff had not presented any evidence that would raise a triable issue of fact concerning actual malice, let alone the clear and convincing evidence of malice applicable on summary judgment.”

As one First Amendment practitioner described it, a journalist who hinges a story on a confidential source and is then slapped with a libel suit is bound to be “naked” in court, unable to refer to key information for his defense. The reality is that reliance upon confidential sources will not bar a court from deciding in favor of a journalist, particularly when the reporter corroborates their existence to the court, and shows that he sought and obtained independent support for what those sources said.

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Appropriation Artist’s Million Dollar Works Deemed Copyright Infringements

This gallery contains 1 photo.

Federal Judge Denies Fair Use Defense to Controversial Art Form (Article first published in MLRC MediaLawLetter in April 2011) By Itai Maytal Is it permissible under U.S. copyright law for an artist to appropriate a protected image of another and then … Continue reading

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Chloé v. Queen Bee: Second Circuit Expands Reach of New York Long-Arm Statute in Online Counterfeiting Case

Chloé v. Queen Bee: Second Circuit Expands Reach of New York Long-Arm Statute in Online Counterfeiting Case

(Article first published in Bright Ideas Newsletter of the IP Section to the New York State Bar Association  in Winter 2010 issue)

By Itai Maytal

I.     Introduction

As e-commerce continues to grow, so have counterfeit markets. The Internet provides counterfeiters the marketing and distribution tools needed to expand their illicit and profitable trade anywhere in the world, without requiring a physical presence to sell their knock-off goods.  Because of this virtual, borderless reality, frustrated trademark owners seeking to enforce their rights in court are often faced with jurisdictional challenges from online counterfeiters.

Sometimes these challenges succeed, forcing trademark owners to chase infringers to their home jurisdictions – however remote and costly that might be – in pursuit of uncertain relief.  It has often been unclear under what circumstances trademark owners could bring trademark infringement actions against out-of-state online merchants without having those actions dismissed on jurisdictional grounds.

Recently, the Second Circuit, in Chloé v. Queen Bee of Beverly Hills, LLC,[1] provided local trademark owners some clarity on this issue by interpreting expansively the reach of New York courts over out-of-state trademark infringers and their employees.  The court  held that a single sale and shipment of a plaintiff’s branded good into New York by a defendant, whether the good is infringing or not, combined with the defendant’s use of an interactive website that sold goods carrying the marks of others in the forum, satisfied New York’s long-arm statute, C.P.L.R §302(a)(1) and the Due Process Clause of the U.S. Constitution.[2]  In arriving at this conclusion, the court noted the need to “update [the Court’s] jurisprudence on personal jurisdiction in the age of internet commerce.”[3]

This article examines the Second Circuit’s “update” and offers insights into its potential impact on trademark owners.

II.                        Factual and Procedural Background

Chloé SA (“Chloé”) is a French fashion house that sells and markets, among other things, luxury women’s handbags and purses bearing the CHLOÈ word mark (Registration #3,291,996).[4]  The company’s exclusive licensee in the United States is Chloé NA, a division of a Delaware corporation operating out of New York.[5]

In November 2005, Chloé NA became aware of an online retail discount designer named Queen Bee of Beverly Hills LLC (“Queen Bee”) during a lawsuit it had brought against a counterfeit handbag vendor that named Queen Bee as its supplier.[6]  Queen Bee is an Alabama corporation that had show rooms in Beverly Hills, California and Huntsville, Alabama.[7]  It did not maintain any offices or employees in New York.[8]  On its two identical websites, Queen Bee described itself as a “leading wholesale and retail designer boutique, offering the latest trends in authentic European designer accessories.”[9]  It advertised “trunk shows” across the country and offered to sell and ship handbags purportedly manufactured by various name brand designers – including Chloé – anywhere in the continental United States and to select locations worldwide.[10]

Chloé investigated Queen Bee and learned that the company was selling unauthorized copies of Chloé handbags for $1,200, plus shipping, which was approximately $400 less than what the handbags sold for in authorized Chloé boutiques.[11] In response, Chloé’s attorneys in New York orchestrated what is commonly described in the trademark community as a “trap sale.”[12]  A paralegal with Chloé’s firm named Rosa Santana was directed to place an online order for a Chloé “Paddington” bag from the Queen Bee site and have it delivered to her Bronx, New York address.[13]  The bag, which a Chloé investigator concluded was counterfeit, arrived with a FedEx shipping label bearing the Beverly Hills, California address of Simone Ubaldelli, a principal of Queen Bee.[14]  During the ensuing lawsuit, Ubaldelli did not dispute that the bag purchased by Chloé’s agent was counterfeit and was not manufactured, produced, or in any manner authorized by Chloé.[15]

In April 2006, Chloé sued Queen Bee and five other defendants, including Ubaldelli, a California resident, in the Southern District of New York for trademark infringement under sections 32(1) and 43(a) of the Lanham Act and the New York General Business Law §349 as well as for common-law trademark infringement and unfair competition.[16]  The case proceeded only against Ubaldelli after the other defendants defaulted, settled, or went into bankruptcy.  The suit was stayed against Queen Bee, which filed for bankruptcy.[17]

In the course of jurisdictional discovery, questions arose as to whether New York courts could properly exercise personal jurisdiction over Ubaldelli and Queen Bee.  While Chloé learned that Queen Bee had shipped more than seventy Chloé handbags in the United States, the only one shipped to New York appeared to be the one purchased by Chloé’s agent, Ms. Santana, the paralegal with Chloé’s firm.[18]  At the same time, Chloé discovered that Queen Bee had shipped at least fifty-two non-Chloé branded items to New York customers.[19]  It also was  revealed that Queen Bee’s principal, Ubaldelli, had supervised and directed those sales.

At the close of discovery, Ubaldelli moved to dismiss for lack of personal jurisdiction, while Chloé cross-moved for partial summary judgment on liability.[20]  Ubalelli argued that the sale and delivery of a single admittedly counterfeit bag to the plaintiff’s investigator could not support jurisdiction in New York because it was a “manufactured contact” or a purchase not made by an actual customer but rather by an agent of the plaintiff.  Ubaldelli also asserted that the sale was only a one-time Internet based sale from a company with no physical presence in the state.  In response, Chloé argued that personal jurisdiction was proper based on the single purchase by its counsel’s paralegal and because the “offers of sale” of counterfeit Chloé bags on the Queen Bee website were accessible to New York residents.[21]

On August 1, 2008, the District Court granted Ubadelli’s motion to dismiss, concluding that the court did not have personal jurisdiction over him based on a “single internet-based sale of a counterfeit retail product.” [22]  The District Court dismissed as moot Chloé’s motion for partial summary judgment. 

The district court found that the trademark infringement claim did not arise from an infringing sale where there could be a likelihood of confusion at the “point of sale” or “postsale.”[23]  The sale of a counterfeit Chloé bag to an agent of the plaintiff in New York was “manufactured” and thus could not by definition generate any confusion for the purchaser, since Ms. Santana knew she was buying a knock-off bag.[24]  Accordingly, the court held that it would violate due process to “permit a plaintiff to manufacture personal jurisdiction by purchasing an allegedly infringing product in a plaintiff’s forum of choice.”[25]  The court discounted the sale and shipment by Queen Bee of non-Chloé goods into New York because, while they indicated purposeful availment of the New York forum “for some business activity,” they did not sufficiently arise out of or relate to the sale of Chloé goods by Ubaldelli, which was the only infringing activity alleged by Chloé.[26]

The district court also declined to exercise personal jurisdiction over Ubaldelli based on Queen Bee’s “commercial interactive website,” even though it permitted users to view allegedly infringing products and place orders for those products.  The district court evaluated the website according to the “sliding scale of interactivity,”[27] which generally holds that a wholly “passive” website is insufficient to support personal jurisdiction over its owner, but an “interactive website” in combination with other relevant forum contacts may be sufficient for jurisdiction.[28] Under this approach, the District Court found that while the Queen Bee site did offer Chloé handbags, it could not support jurisdiction because it was not aimed or directed at New York users, and no New York residents had purchased counterfeit merchandise from Queen Bee, with the exception of the Plaintiff’s agent, Ms. Santana.[29]

On June 29, 2009, the district court supplemented its rationale for granting Ubaldelli’s motion to dismiss in response to plaintiffs’ motion to certify the dismissal as final.[30]  Based on its review of various Supreme Court precedents, the court found that the single Internet purchase by Chloé’s  agent from the Queen Bee site did not manifest the “a continuing relationship,, “prior negotiations,” or “contemplated future consequences” sufficient to support personal jurisdiction.[31]  The court also noted that it would offend traditional notions of fair play and substantial justice to subject Ubaldelli, a California resident, to jurisdiction in New York, when there was “no obvious reason why New York has a greater interest in hearing trademark actions than other federal and state courts.”[32]  Plaintiffs appealed.

III.                        Second Circuit Ruling

The Second Circuit reversed, holding that Ubaldelli’s single act of shipping a Chloé-branded bag into New York, combined with the sale of at least fifty non-Chloé items to New Yorkers through the Queen Bee interactive website, gave rise to personal jurisdiction under the state’s long arm statute, C.P.L.R § 302(a)(1), and the Due Process Clause.[33]  The court based its conclusion on Ubaldelli’s connections to the act in question and to the business activities of Queen Bee in New York.  It then discussed the application of New York’s long-arm statute and the Due Process Clause.

A.  Ubadelli’s Connections to Chloé’s Trademark Infringement Claim

Relying on Ubaldelli’s role at Queen Bee as the primary purchaser of infringing handbags and the fact that his Beverly Hills address was on the FedEx package containing the Chloé-branded bag shipped to New York, the Second Circuit first determined that “the evidence supported the conclusion that Ubaldelli either physically shipped or was responsible for the shipment of the counterfeit handbag from California to New York.”[34]  The court also imputed to Ubaldelli Queen Bee’s other business activities in New York – namely the shipment of fifty-two non-infringing goods into New York and an interactive website that permitted the sale of Chloé-branded goods to New York consumers – based on the fact that Ubaldelli shared profits from Queen Bee sales, had joint access to its bank account, used its revenue to pay his rent, and shared in the decision-making and execution of Queen Bee sales.[35]

Having established the defendant’s connection to the allegedly infringing activity, the court proceeded to the two-step inquiry for finding personal jurisdiction over a non-domiciliary in a case involving a federal question.[36]  In its first step, a court must determine whether the laws of the forum state, here New York’s long arm statute, CPLR § 302, confers jurisdiction to reach the defendant.[37]  If so, the court then considers whether the exercise of jurisdiction is consistent with the Due Process Clause of the Fourteenth Amendment.[38]  This requires determining whether the defendant had “minimum contacts” in the forum state to justify the court’s exercise of personal jurisdiction, whether specific or general.  It also requires asking whether the exercise of jurisdiction is reasonable in that it does not “offend traditional notions of fair play and substantial justice.” [39] 

The court concluded that Ubaldelli had transacted business within the state under section 302(a)(1) of New York’s long arm statute.[40]  The section states that “a court may exercise personal jurisdiction over any non-domiciliary…who in person or through an agent…transacts any business within the state or contracts anywhere to supply goods or services in the state.”[41]  The court noted that the New York law is a “single act statute” and thus proof of one transaction in New York is sufficient to invoke jurisdiction even when the defendant never enters New York.[42]  However, because Chloé operated a “highly interactive website” offering counterfeit Chloé bags and sold and shipped a non-trivial number of branded goods into the state, the court declined to resolve whether a single act of shipping a counterfeit Chloé bag was by itself sufficient to support personal jurisdiction.[43]  The Second Circuit wrote that “[v]iewed in their totality, these contacts sufficiently demonstrate [defendant’s] availment of the benefits of transacting business in New York” under the New York long-arm statute.”[44]

In addition to finding jurisdiction was authorized under New York’s long arm statute, the Second Circuit also found that personal jurisdiction over Ubaldelli comported with the due process requirements.  In its “minimum contacts” analysis, the court found that Ubaldelli had “purposefully availed himself of the privileges of conducting activities within the forum state . . . by [Queen Bee’s] develop[ing] and serv[ing] a market for its products in [New York].”[45] 

Unlike the district court, the Second Circuit refused to limit the relevant minimum contacts between Queen Bee and New York to the “narrow subset of one sale that involved a Chloé handbag shipped to Plaintiffs’ law firm.”[46]  Instead, it included in its analysis the more than fifty additional sales of non-Chloé designer handbags in New York.[47]  The court held that the district court’s characterization of these sales as constituting only “some business activity” “too narrowly construe[d] the nexus requirement which merely requires the cause of action to relate to defendant’s minimum contacts with the forum.”[48]  Further, that Ubaldelli did not maintain a “continuous relationship” with any particular New York consumer – a deficit of significance to the district court – was irrelevant.[49]  While such a relationship may be a sufficient condition for asserting jurisdiction, the court found, it is not a necessary one.[50]

Finally, the court of appealst rejected the district court’s reasonableness analysis after applying the five-factor test set forth in Asahi Metal Industry Co., Ltd. v. Superior Court of California, Solano County.[51]  The Asahi Metal test requires courts to consider (i1) the burden on the defendant, (2) the interests of the forum state, and (3) the plaintiff’s interest in obtaining relief.  It also must consider (4) the interstate judicial system’s interest in obtaining the most efficient resolution of controversies and (5) the shared interest of the several states in furthering fundamental substantive social policies.[52]

The court concluded that any burden on Ubaldelli in litigating cross-country from California to New York would be equally burdensome for the plaintiffs and was, in any event, reduced by “modern communication and transportation.”[53]  It also found that New York had a particular interest in providing redress for its residents, notwithstanding the fact that trademark claims can be brought in any forum.  Further, Chloé had a particular interest in obtaining relief in New York given that its headquarters and some of its witnesses were there.  Thus, the court concluded that “Ubadelli’s generalized complaints of inconvenience arising from having to defend himself from suit in New York do not add up to a compelling case that the presence of some other considerations would render jurisdiction unreasonable.”[54]

IV.                        Impact of the Decision

Having won the right to proceed in its action against Ubaldelli, it remains to be seen whether Chloé ultimately will prevail on the merits of its counterfeiting claim.  What is clear though, is that the Second Circuit has significantly expanded long-arm jurisdiction, at least in New York, over Internet counterfeiters in such cases.  Now, when faced with e-commerce sites hawking counterfeits goods, trademark owners can reliably use investigators to determine the extent of the illicit activity and confirm online sales of knock-offs without necessarily jeopardizing the jurisdictional basis of actions they may bring in New York.  They may now be able to obtain specific personal jurisdiction over an out-of-state online defendant if they can show, in addition to a single act of shipping a counterfeit good, that the counterfeiter site engaged in non-trivial online business sales in the state, infringing or otherwise, of branded goods.

Exercising jurisdiction over such Internet merchants may not necessarily be unfair, given the control they generally have in limiting their online presence.  As the International Trademark Association argued in an amicus curiae brief it filed in support of Chloé’s appeal, if an Internet merchant chooses to avoid a jurisdiction, it can do so by providing a passive, informational site or by blocking sales to that jurisdiction.[55]  Conversely, the merchant can elect to service a national market, to advertise, sell, and ship its goods throughout the country.  In that scenario,the merchant should pay a jurisdictional price; otherwise, its conduct would go legally unchecked in the markets in which it operates.[56]

Still, the Second Circuit’s interpretation of the “nexus requirement” for jurisdiction may have exposed more online merchants to claims in the New York forum than is necessary to combat counterfeiting.  Without addressing how so-called “manufactured contacts” should be treated for purposes of trademark infringement claims, the court stated that “an employee’s single act of shipping a bag – any bag, not necessarily a counterfeit one – into the State of New York, combined with the employer’s other business activity involving the State of New York, gives rise to an inference that the defendant ‘purposefully avail[ed] himself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its law.”[57]  The strange implication of this statement seems to be that a trademark infringement claim can arise from the online purchase in the forum of a good later found to be non-infringing from a site that otherwise sells legitimate goods with different marks.  Supporters of the Chloé decision may argue that this concern confuses the jurisdictional question with the merits of the claim.  On the other hand, detractors may argue the decision will needlessly increase the cost of doing business for legitimate businesses as they are haled into forums they are only obliquely connected to.  Ultimately, future decisions will determine the seriousness of these concerns and whether the law should change in response to them.

Notwithstanding its new expansive reading of the New York long-arm statute, the Second Circuit did not revamp the law to the extent INTA and the plaintiffs would have preferred.  The court declined to decide whether an out-of-state defendant’s single act of selling and shipping one infringing good into New York is sufficient to support personal jurisdiction.[58]  However, in keeping with a number of district court decisions, the Second Circuit acknowledged in dicta the possibility that such facts could satisfy the New York long-arm statute.[59]  In so doing, the Second Circuit seems to have invited brand owners to test jurisdiction under these facts in future trademark actions.  Two New York district courts already have applied the Second Circuit’s dicta – perhaps too loosely – in their personal jurisdiction analyses.[60]  In one case, the court allowed the plaintiff to proceed on the basis of only a few online sales made in the forum.[61] Presumably, more New York courts will make similar rulings when pressed by trademark plaintiffs, given the limited sympathy the Second Circuit seems to have with counterfeiters.

V.                        Conclusion

The Internet has largely obviated the need for a brick-and-mortar presence in most markets.  More entities now do business online and, to the dismay of trademark owners, so do counterfeiters.  They sell their illicit wares through auction sites, stand-alone e-commerce sites and email solicitations from virtually anywhere in the world.  Recognizing the enforcement problems this creates for trademark owners, the Second Circuit has now secured, at least in New York, greater access for them to the forum’s courts in trademark infringement actions.  Future cases may expose the excesses of the Chloé decision as it relates to out-of-state non-infringers haled into New York courts on thin trademark infringement claims and oblique connections to the forum.  Until then, trademark owners should take note of the Chloé decision and be further emboldened to pursue their claims against out-of-state counterfeiters and other types of infringers who attempt to avoid liability by operating solely in the virtual marketplace.


Endnotes

[1] Chloé v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158 (2d Cir. 2010). (“Chloé III”)

[2] Id. at 162.

[3] Id. at 165.

[4] U.S. Patent and Trademark Office, Electronic Word Mark Search = Chloé, at http://www.uspto.gov (last visited October 10, 2010)

[5] Chloé III, 616 F.3d at 162.

[6] Id.

[7] Id.

[8] Id.

[9] Chloé v. Queen Bee of Beverly Hills, LLC, 571 F.Supp.2d 518, 521 (S.D.N.Y. 2008)(“Chloé I”)

[10] Id.

[11] Chloé III, 616 F.3d at 162.

[12] Chloé I, 571 F.Supp.2d at 522.

[13] Id.

[14] Chloé III, 616 F.3d at 162.

[15] Chloé I, 571 F.Supp.2d at 522.

[16] Chloé III, 616 F.3d at 163.

[17] Id. at 161 n.1.

[18] Id. at 163.

[19] Id.

[20] Chloé I, 571 F.Supp.2d at 521.

[21] Id.

[22] Chloé v. Queen Bee of Beverly Hills, LLC, 630 F.Supp.2d 350, 351 (S.D.N.Y. 2009)(“Chloé II”)(Describing the holding of Chloé I).

[23] Chloé I, 571 F.Supp.2d at 526.

[24] Id.

[25] Id.

[26] Chloé I, 571 F.Supp.2d at 523 n.3. (district court noting that “Plaintiffs’ cause of action for infringement of the Chloé trademark does not arise out of or relate to Queen Bee’s sales of Gucci, Prada, Fendi, or other designers’ merchandise.”).

[27] Id. at 526 (citing Best van Lines, Inc. v. Walker, 490 F.3d 238, 252 (2d Cir. 2007).  The “sliding scale” was originally proposed in Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1987).

[28] Id. at 528 (citing Energy Brands, Inc. v. Spiritual Brands Inc., 07 Civ. 10644(DC), 2008 WL 2747276, at *7-*8 (S.D.N.Y. July 16, 2008)).

[29] Id. at 530.

[30] Chloé II, 630 F.Supp.2d at 351.

[31] Chloé II, 630 F.Supp.2d at 353 (citing Travelers Health Association v. Virginia, 339 U.S. 643 (1950), McGee v. International Life Insurance Co., 455 U.S. 220 (1957), and Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985)).

[32] Id. at 356.

[33] Chloé III, 616 F.3d at 162.

[34] Id. at 165.

[35] Id. at 169.

[36] Id. at 163.

[37] Id.

[38] Id.

[39] Id.

[40] Id. at 170.  The Second Circuit declined to analyze the jurisdictional question under CPLR §  302(a)(3) even though Queen Bee did not dispute its products were counterfeit and that it advertised its goods on its website, as the court concluded it could find jurisdiction under section 302(a)(1) and because the court recently certified the question of its applicability to the New York Court of Appeals.  See id. at 169 n.3 (referring to Penguin Group (USA) Inc. v. American Buddha, 609 F.3d 30 (2d Cir. 2010)).  The question before the New York Court of Appeals focused on how the ease of infringement via the Internet should change long-arm jurisdiction analysis.

[41] Id. at 169.

[42] Id. at 170.

[43] Acknowledging the holdings of district court within the circuit, the court of appeals held in dicta that a “single act” of selling counterfeit goods into New York could satisfy the long-arm statute under section 302(a)(1).  See, e.g., Baron Phillippe de Rothshild, S.A. v. Paramount Distillers, Inc., 923 F. Supp. 433 (S.D.N.Y. 1996); Mattel, Inc. v. Adventure Apparel, 00-cv-4085, 2001 WL 286827 (S.D.N.Y. Mar. 22, 2001).  While it did not apply this rationale here, by making this observation the Second Circuit seems to have encouraged future brand-owner plaintiffs to bring trademark infringement claims under this jurisdictional theory.

[44] Id. at 170-71.

[45] Id. at 171.

[46] Id. at 167.

[47] Id.

[48] Id.

[49] Id. at 172.

[50] Id.

[51] Asahi Metal Industry Co., Ltd. v. Superior Court of California, Solano County, 480 U.S. 102 (1987).

[52] Id. at 113.

[53] Id. at 172.

[54] Id. at 173.

[55] Brief of Amicus Curiae International Trademark Association in Support of Vacatur and Remand, 09-3361-cv (2d Cir. Aug. 5, 2010).

[56] Id.

[57] Chloé III, 616 F.3d at 165 n.3.

[58] Id. at 170.

[59] Id.

[60] See Pearson Education v. Textbooks Discounters, No. 10-CV-324, 2010 WL 3528866, at *2 (S.D.N.Y. Aug. 20, 2010)(finds personal jurisdiction over trademark defendant in part under the Chloé dicta that stated “the sale of even a single item over the internet that  is shipped into New York can give rise to personal jurisdiction.”); O’Brien & Gere Engineers, Inc. v. Innis Arden Golf Club, No. 5:10-CV-410, 2010 WL 3526207, at *5 (N.D.N.Y Sept. 3, 2010)(denying jurisdiction while misconstruing Second Circuit holding in Chloé to allow for personal jurisdiction through “an employee’s single act of shipping a handbag to New York”)

[61] Pearson Education, 2010 WL 3528866, at *2.

Itai Maytal is an IP and media law associate at Miller Korzenik Sommers LLP.  He is also a member of the Section’s Trademark Law Committee.

Posted in Counterfeit, Jurisdiction, Linkedin, Trademark | Leave a comment

Media Study: Handle online piracy through licenses not lawsuits

A five-month study published today by the online monitoring firm, Attributor, suggests there may be a better model to protecting copyright interests online than the “sue first” model advanced by copyright enforcement companies like Righthaven. The revolutionary model? Turning infringers into licensed users.

For those of you uninitiated to the Righthaven phenomenon, the company is noted for developing the “copyright trolling” business model. According to the Electronic Frontier Foundation, Righthaven searches for sites that post articles from selected publishers, buys the rights to those works, then sues the sites’ owners for infringement. It has filed more than 165 such cases. The company has worked for the Las Vegas Review Journal and claims to have signed other news organizations for its enforcement services.

Not all media companies, which include Harper Collins, John Wiley & Sons, Scholastic, Harvard Business Publishing, the Associated Press, Agencia EFE, Agence France-Press and the Financial Times, prefer this heavy-handed approach to copyright enforcement. The new study by Attributor suggests that may not be a problem.

Between March and July of this year, Attributor tracked the content of many of the nation’s leading news organizations and found that 75 percent of sites copying full articles complied with the rights holders requests without resorting to content takedown notices per the Digital Millennium Copyright Act (DMCA). The sites agreed to either pursue licensing agreements or remove content voluntarily after receiving a courtesy notice of unlicensed copying or after removal requests were sent to search engines to remove the listing from results and to ad networks to remove ads on the page of the copied contents. Such results strongly support the conclusion that seeking licenses of infringers, willful or innocent, can be more profitable and have less collateral public relations consequences than bludgeoning them in federal courts.

Other details about the study include

  • Attributor identified more than 400,000 unlicensed full copies across 44,906 sites from 70,101 online news articles from newspapers spanning pay wall, ad-supported and syndication revenue models with local, national and international distribution.
  • A ‘full copy’ was defined as containing more than 80 percent of the original article and being greater than 125 words.
  • The trial randomly selected 107 sites that used 10 or more full copies for a single rights holder in a 30-day period and generated money from online advertising.
  • The trial run applies the  “graduated response” approach to online copyright infringement, advocated by the “Fair Syndication Consortium,” a group of publishers assembled by Attributor. The consortium’s goal is to promote licensing deals that allow sites to reuse the publishers’ content, even full articles,  in exchange for a portion of the advertising revenue the sites generate.
  • The study, if reproducible, is good news for content providers worried about the obliteration of their businesses by online piracy. It also is potentially good news for the online marketplace of ideas. If more content providers are persuaded by Attributor’s model than Righthaven’s, more individuals will be able to participate online without the constant fear of infringement lawsuits brought by copyright owners.

    Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/11/08/prwebprweb4756854.DTL#ixzz14iLLL9Bl

    Read more: http://latimesblogs.latimes.com/technology/2010/11/attributor-stopping-infringers-without-the-courts-help.html

    Posted in Copyright, Copyright Trolling, Internet, Linkedin | Leave a comment

    Supreme Court to Test Limits of “First Sale Doctrine” in Import Pricing Dispute, Alarming Resellers/Librarians

    By Itai Maytal 

    (Article first published in MLRC MediaLawLetter in August 2010)

    The Supreme Court will determine whether manufacturers can use copyright laws to control import prices of their foreign-made goods in a case that could impact U.S. resellers of media products and libraries with imported collections, among others.

    This Fall, the Court will hear an appeal from a Ninth Circuit Court of Appeals decision that granted a luxury watchmaker the right to use copyright law as a restraint on the discount sales of its imported watches. See Costco Wholesale Corp. v. Omega, S.A., 541 F.3d 982 (9th Cir. 2008), cert. granted, 77 U.S.L.W. 365 (U.S. April 19, 2010)(No. 08-1423). The issue before the Court is whether copyright owners like Omega – which became a copyright owner by placing a copyrighted globe design on its watches – can assert their distribution and importation rights in the U.S. over their foreign-made goods even after the goods are sold.

    If the Court affirms the appellate court’s ruling, it could further narrow the scope of a long-standing principle of U.S. copyright law known as the “first sale doctrine.” This doctrine, as defined in 17 U.S.C. §109, denies a copyright owner the ability to enforce his exclusive distribution rights in copies of a work “lawfully made under this title” after the initial sale or gratuitous transfer of ownership of those copies occurs. Many lower courts, relying in part on the Court’s past dicta, have already interpreted this doctrine to apply only to goods lawfully made in the United States. Thus, in certain jurisdictions, anyone possessing copies of a copyrighted work made abroad may legally have to negotiate with the copyright owner every time they want to dispose of those copies.

    Costco Wholesale Corporation (“Costco”), a large warehouse retailer, and a group of amicus petitioners have argued that a Supreme Court adoption of this narrow interpretation of the first sale doctrine would have negative policy consequences.  It could prevent the resale by retailers like eBay and Amazon.com of gray market goods like music, movies, video games, books or other genuine copyrighted material manufactured abroad, by giving “copyright holders an unfettered right to eliminate these secondary markets.” It could encourage more companies to move their manufacturing overseas to acquire more control over the distribution of their goods. It could lead to price discrimination against U.S. consumers. It might also leave public libraries unable to lend many books, having to first make costly and difficult determinations over whether any of the books in their collections were foreign-made and whether those books should still be circulated.

    However, then Solicitor General Elena Kagan, representing the federal government, argued in her certiorari-stage brief that the concerns raised by Costco and its amici, while serious and legitimate, have not materialized and that the Ninth Circuit decision was consistent with prior findings of the Court and other Circuits. Still, the fact that the Court took the case against the recommendation of the Solicitor General could signal a new interpretation of the Copyright Act of 1976.

    Factual Events Underlying this Lawsuit

    As outlined in Costco’s brief to the Court, Omega manufactures luxury watches in Switzerland and sells them globally through a worldwide network of authorized distributors and retailers. None of these distributors appeared to be restricted by Omega from reselling its watches to anyone else in any geographic region.

    For many years, Costco obtained Omega watches from the “gray market” through a series of transactions. Omega first sold its watches to authorized distributors overseas. One or more of these authorized dealers then imported these watches from places like Paraguay into the U.S. and sold them to a stateside importer, who finally sold them to Costco. This stream of commerce enabled Costco to sell “genuine brand name merchandise to its members at prices lower than its competitors,” as it gave the company access to lower priced goods from foreign markets.

    In 2003, in response to complaints from authorized merchants regarding the alleged arbitrage practices of discount retailers like Costco, Omega began to engrave on the back of its watches a small emblem, less than five millimeters across, allegedly to use the Copyright Act to restrict the resale of its products. The copyrighted emblem consisted of three Greek “Omega” symbols inside a circle.  Omega knew for many years of the “gray market” and of Costco’s activities, it did not object, presumably because the watches were authentic goods and U.S. trademark and patent laws would not necessarily block their sales. Omega appeared to develop a copyright strategy for controlling when and where its watches were sold.

    Omega’s Copyrighted Globe Design

    The following year after Omega added its emblem to its watches and registered them with the Copyright Office, Costco purchased 117 imported Seamaster watches and sold 43 of them for $1,299, which was more than a third less than what the brand preferred.

     Procedural History

     Omega sued Costco for copyright infringement under its exclusive rights of importation and distribution under Sections 602(a) and 106(3) of the Copyright Act of 1976 respectively, stating that it did not authorize the sale of those watches, which were also “copies” of its copyrighted globe design. Costco filed a motion for summary judgment, arguing that the first-sale doctrine under Section 109(a) denied Omega the ability to enforce its exclusive distribution right and, by extension, its importation right under Section 602(a). Costco’s motion was granted by a district court, but then reversed on appeal on the grounds that Section 109(a) did not apply to foreign-made goods.

    In deciding to reverse, a Ninth Circuit panel first determined that a 1998 Supreme Court case, Quality King Distributors v. L’Anza Research International, 523 U.S. 135 (1998), was not controlling. There, the Court ruled that U.S. copyright holders could not control the distribution of U.S. copyrighted goods that were imported and resold. However, the Ninth Circuit noted that Quality King only concerned goods manufactured in the U.S., not allegedly infringing imports that were manufactured abroad. The appellate court also noted that Quality King, in dicta, was consistent with its Circuit’s position that copies of a work copyrighted under Title 17 are not necessarily “lawfully made under [Title 17]”, the language of Section 109(a), even when made by the owner of a U.S. copyright. The appellate court found that concluding otherwise, and applying the first-sale defense to goods manufactured abroad, would impermissibly extend the Copyright Act extraterritorially.

    Briefs Before the Supreme Court

    In its appeal to the Supreme Court, Costco argued that the Ninth Circuit’s ruling was inconsistent with the plain text of Section 109(a) of the Copyright Act. It argued the correct meaning of the phrase “lawfully made under this title” is any copy made with the authorization of the copyright owner as required by Title 17. Here, any copies of its watches made or otherwise authorized by Omega were “lawfully made under this title” because Omega had the right to do so under 17 U.S.C. 106(1), as their copyright owner. Costco also argued that applying the first sale doctrine to goods manufactured abroad would not lead to extraterritorial application of the Copyright Act because “Omega seeks to use the Act to prevent or punish another party’s actions, contending that Costco’s distribution of its watches in the United States constitutes copyright infringement.”

    Costco and supportive amicus briefs from eBay, Amazon.com, Google, and consumer advocate and retail industry associations have further asserted that if the Ninth Circuit decision is affirmed, it would encourage U.S. copyright holders to transfer manufacturing operations overseas so as to prevent lawful resale of their goods at discounted prices. This could have a dramatic impact on the U.S. economy, leading to higher national unemployment. In addition, the potential infringement liability arising from this decision for after-markets of any foreign manufactured goods would deter otherwise lawful importation of authentic products, depriving customers of cheaper goods and disrupting e-commerce and trade in general. The American Library Association also submitted a brief in support of Costco, stating that the Ninth Circuit decision “threatens the ability of libraries to continue to lend materials in their collections.”

    In its brief opposing the petition, Omega argued that the lower courts and prior Supreme Court rulings were not in conflict over whether goods manufactured abroad benefited from the first sale doctrine and that the plain meaning of the right of importation under Section 602(a) and the first sale doctrine under Section 109(a) support the Ninth Circuit decision. They also questioned their adversaries’ hypothetical claims that the Ninth Circuit’s decision mandated significant, adverse economic hardship and countered that applying Section 109(a) to foreign manufactured goods would disrupt long-standing marketing practices based on market-specific distribution rights.

    Conclusion

    Courts in various Circuits appear to have been following the 12-year old dicta in the Supreme Court’s Quality King case, which stated that goods manufactured overseas and then imported and sold are not protected by the first sale doctrine. Publishers and other content providers who wish to split foreign rights from U.S. rights so as to prevent arbitraging of the price differentials of their works between different markets may not wish to see the statute read differently. Still, the amicus briefs in the Costco v. Omega case from a cross-section of the business world and consumer-based community argue that it is time to reject “the place of manufacturing” distinction made by the Supreme Court in its previous analysis of the first sale doctrine. Ultimately, a new set of justices on the Supreme Court bench since the Quality King decision was first handed down may agree with this new collective perspective.

    Itai Maytal is an associate attorney at Miller Korzenik Sommers LLP and was the 2009 First Amendment Fellow to the New York Times Company.

     

    The petitioner in Costco v. Omega is represented by Englert, Orseck, Untereiner & Sauber LLP. The respondent is represented by Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C.

    Posted in Copyright, Uncategorized | Tagged , , , | Leave a comment

    Libel Lessons from Across the Pond – What British Courts Can Learn from the United States’ Chilling Experience with the “Multiple Publication Rule” in Traditional Media and the Internet

    Here is the abstract and link to a recent article I wrote, “Libel Lessons from Across the Pond,” for the ABA Journal of International Media and Entertainment Law on a comparative libel law issue as between the United States and the United Kingdom. The full title of the piece is as follows: “Libel Lessons from Across the Pond – What British Courts Can Learn from the United States’ Chilling Experience with the “Multiple Publication Rule” in Traditional Media and the Internet”

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1655046

    Journal of International Media and Entertainment Law (3 J. INT’L MEDIA & ENT. L.121) – Published by the American Bar Association Forums on Communication Law and Entertainment and Sports Industries and The Donald E. Biederman Entertainment and Media Law Institute of Southwestern Law School.

    Abstract:

    At a time when the United Kingdom was still a global empire and the United States a sapling nation, the “multiple publication rule” (“MPR”) was a core principle of defamation law for both countries. This common law rule, begun in the mid-nineteenth century, essentially permits plaintiffs to file lawsuits for one defamatory act in multiple jurisdictions, and under an endlessly renewable statute of limitations. The MPR is consistent with early defamation law, which dictated that each time a libelous article was brought to the attention of a third person, a new publication had occurred, and that each publication was a separate, fresh tort, actionable wherever it transpired. However, by the early 1940s, exploitation of the rule, together with technological breakthroughs like the high-speed printing press, convinced U.S. courts that the rule endangered the viability of the publishing industry by threatening it with overwhelming, endless litigation. The vast majority of U.S. courts eventually abandoned the rule, where the alleged libel involved traditional media, and, later, the Internet. Meanwhile, across the pond in the United Kingdom, the multiple publication rule is still in effect today—decades after the U.S. abandoned it. Yet, policymakers in London are reconsidering the soundness of the rule, in the wake of its recent online applications by libel plaintiffs against both U.K. and foreign citizens. To complement this effort, this article provides a comprehensive account of the U.S. courts’ more than 100 year entanglement with the MPR, along with a comparison of U.K. and U.S. common law, to bring greater clarity and direction to British discourse on a legal matter of international significance.

    Posted in Comparative Law, Defamation, Internet, Libel, Linkedin, Multiple Publication Rule, Publication, Reputation, Single Publication Rule | Leave a comment

    Use of 7-Second Historic TV Clip in Broadway Show Deemed “Fair Use”

    Use of 7-Second Historic TV Clip in Broadway Show Deemed “Fair Use”

    Federal Judge Grants Jersey Boys’ Motion for Summary Judgment in Copyright Action

    By Itai Maytal (first author) – Originally published in MLRC Medialawletter July 2010

    A Broadway production’s display of seven seconds of historic footage during its reenactment of a famous rock-and-roll group’s television debut is fair use, a California federal district court judge ruled last week.

    In the copyright infringement case, Sofa Entertainment Inc. v. Dodger Productions, Inc. No. Civ. 08-02616 (C.D. Cal July 12, 2010), Judge Dolly M. Gee granted summary judgment in favor of the defendant producer of the musical, Jersey Boys, finding its use of an introduction by the late television variety show host, Ed Sullivan, was fair use. Judge Gee explained that the use of the seven-second television clip in the stage-version introduction of the band, Frankie Valli and The Four Seasons, was “decidedly transformative,” was not “the heart” of the copyrighted work at issue, and could not reasonably usurp an “existing or potential market” for the plaintiff-copyright owner.

    The Backdrop Behind the 7-Second Clip Controversy

    Jersey Boys is a dramatic work of biographical and cultural history that has been staged in multiple cities including New York, Chicago, Las Vegas, London and Los Angeles. The two-and-a half hour production tells the story of Frankie Valli and The Four Seasons and their impact on popular culture in the early 1960s. It traces how the group was formed and how its members struggled out of the Jersey swamps to make their way to success. For example, the musical recounts the band members’ youthful criminal indiscretions as they brushed with both the law and the mob, illustrates the genesis of some of their major hits, and how the band found their way through the daunting maze of the record business in the 1960’s. The show also covers many of the band members’ personal problems involving their marriages, their financial difficulties, and the death of Valli’s daughter.  In addition, the musical illustrates their setbacks from the U.S. arrival of The Beatles and other British performers during the “British invasion,” their comeback, and their later break-up.

    Judge Gee's decision confirmed that there was no basis for Plaintiff's claim that the use of a seven second historic clip in the context of a two-and-one half hour biographical and historical play was in any way improper.

    This lawsuit arose from the musical’s unauthorized use of a 7-second copyrighted video clip of host Ed Sullivan introducing The Four Seasons on the January 2, 1966 episode of The Ed Sullivan Show (“the Clip”). The Clip is displayed on a large screen at the end of the musical’s first act. Immediately before the Clip is played, an actor portraying The Four Seasons’ member Bob Gaudio addresses the Jersey Boys audience and says:

    “Around this time there was a little dust-up called The British Invasion. Britannia is ruling the air waves, so we start our own American Revolution. The battle begins on Sunday night at eight o’clock and the whole world is watching.”

    As these lines are spoken, the actors portraying The Four Seasons are seen preparing themselves to perform on The Ed Sullivan Show. Old-style CBS cameras bearing the CBS logo roll across the stage The audience is led to feel they are backstage with the band-performers, setting up their instruments, facing the back of the stage as if the Sullivan audience is in front of them.

    Then, just as the actor playing Gaudio completes his line “…the whole world is watching,” the Clip is played in the middle of three video screens above the stage—which display stills and video images from the 1960s throughout the show. In the Clip, a black-and-white head-shot of Ed Sullivan appears and says: “Now, Ladies and Gentlemen, for all the youngsters in the country, The Four Seasons.” Mr. Sullivan then waves his left hand toward where The Four Seasons are to perform, at which point the Clip ends and the actors in Jersey Boys perform a song on stage.

    There is no further use of the Clip and no other segments from The Ed Sullivan Show appear in the musical. Moreover, the Clip has no music nor does it display any images of the original Four Seasons or performances of any kind. It is simply a pedestrian headshot video depiction of Mr. Sullivan providing these ordinary words of introduction.

    In 2008, Plaintiff Sofa Entertainment, owner of The Ed Sullivan Show library, filed a complaint in district court in the Central District Court of California, asserting a single copyright infringement claim against Defendant Dodger Productions for its use of the Clip in the Jersey Boys musical. Upon receipt of the claim, it was decided not to remove the Clip from the show. The parties then filed cross motions for summary judgment.

    Fair Use Granted

    On July 12, 2010, Judge Gee granted Dodger Productions’ motion for summary judgment and denied Plaintiff’s partial summary judgment, finding the Defendant’s use of the Clip was fair. In so ruling, the Court considered each of the four statutory factors for fair use. 17 U.S.C. §107.

    (1) Purpose and Character of the Use

    Judge Gee found that the first factor weighed in favor of the Defendant, noting the use of the Clip was “decidedly transformative.” Judge Gee cited to Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) and held that “the more transformative the use of a copyrighted work, the more likely it is that the use will come within the protection of the fair use defense.”

    Specifically, Judge Gee found that the use of the Clip was transformative as it “served as a historical reference point in The Four Seasons’ career, which use the Ninth Circuit has contrasted with uses that ‘serve the same intrinsic entertainment value that is protected’ by the copyright in the copied work” quoting Elvis Presley Enterprises, Inc v. Passport Video, 349 F.3d 622, 629 (9th Cir. 2003).  She rejected Plaintiff’s argument that the Clip was merely a re-broadcasting of a portion of a copyrighted episode of The Ed Sullivan Show, noting that the lines spoken by the actor portraying The Four Seasons’ member Bob Gaudio prior to the Clip’s appearance had served to “frame the transformative use” of the Clip in the musical. She also rejected Plaintiff’s argument that Ninth Circuit case law required a voice-over or other explicit “introductions” to render a use transformative.

    While Judge Gee observed that Jersey Boys’ use, a “dramatic production intended to entertain,”  was not among the examples of fair use set forth in the  preamble of §107 (works reproduced “for purposes such as criticism, comment, news reporting teaching…, scholarship, or research”), Judge Gee recognized that the list was not exhaustive.  Against the urging of the Plaintiff, the Judge refused to distinguish between documentaries and dramatizations of historical events for the purposes of fair use. Though Judge Gee saw a commercial dimension to Jersey Boys which could weigh against fair use, she did not accord this aspect of the first factor great weight as the Defendants sought “to profit in very small measure by the inherent entertainment value of Ed Sullivan’s [short] introduction of The Four Seasons.”

    (2) Nature of the Copyrighted Work

    Judge Gee found that the second factor weighed only slightly in favor of fair use. She explained that the fact the Clip at issue had already been broadcast weighed in favor of Defendant, given that unauthorized use of a previously published work is more likely to constitute a fair use than an unpublished work.

    (3) Amount and Substantiality of the Portion Used

    As to the third factor, Judge Gee found this favored fair use, not only because the Clip represented quantitatively a small portion of the episode at issue, (1/400th or 0.0023 percent of the 45 to 50 minute episode (excluding advertisements), by Defendant’s calculation), but because it was not the heart of Plaintiff’s copyrighted work.  Judge Gee held that “the actual performances by featured talent were, and are, the heart of The Ed Sullivan Show generally, and that is true of the episode on which The Four Seasons performed.” She ruled that the introduction by Ed Sullivan at most could be an “artery to the heart of the episode.” Finally, even if the Clip were to be the “heart” of the recording of Plaintiff’s full episode, Judge Gee concluded that there was no evidence in the record that would lead a reasonable jury to conclude the Clip is “the heart” of the Jersey Boys. (It certainly occupied an infinitesimal amount of the musical itself, accounting for nothing more than 1/100th or 0.0009 percent of its 130 minute runtime.)

    (4) Effect on the Market

    Finally, Judge Gee found the effect upon the potential market, weighed in Defendant’s favor.  She recognized that the “marketability of Jersey Boys cannot reasonably be said to be primarily dependent on Defendant’s transformative use of the Clip.” Judge Gee ruled that the extent to which the Defendant profited from the use of the Clip itself was minimal and they used none of it to market the Show. She further noted that Plaintiff introduced no evidence that it currently licensed or planned to license the Clip in support of its argument that Defendant’s use was depriving it of income from licensing fees. Judge Gee agreed with Defendant that the notion any such market existed for the introductions of Ed Sullivan was “speculative at best.”Further, Judge Gee noted that to the extent that “any existing or potential derivative market [for the Plaintiff] is, in fact, one for similarly transformative uses [like the Defendant’s], this factor is less likely to weigh in Plaintiff’s favor.” This is because “the market for potential derivatives uses includes only those that creators of the original works would in general develop or license others to develop.” quoting Campbell, 510 U.S. at 592. The loss of revenues from the transformative market cannot count for market impact under the fourth factor.

    In short, Judge Gee found all four fair use factors favored a ruling that the Defendant’s use of the Clip was fair. The fact that (1) the use of the Clip was decidedly transformative in nature, (2) the short Clip was published and (3) not the heart of Plaintiff’s work, and (4) the use of the Clip had no credible effect on the value of the original copyrighted work, led Judge Gee to reject Plaintiff’s copyright claims on fair use grounds.

    Conclusion

    At least for the Plaintiff, this decision was foreshadowed by a ruling in one of its previous copyright cases. In the Ninth Circuit’s decision, Elvis Presley Enterprises, Inc v. Passport Video, 349 F.3d 622 (9th Cir. 2003), the court made a “close call” against a  fair use defense where some 30 minutes of Elvis TV performances were used by a defendant. But, it also ruled that a use of a “small number of clips to reference an event for biographical purposes seems fair” and that it would be “permissible” to use Elvis clips from television shows “to note their historical value.” Here, only one 7-second clip of historic import was used by the Defendant. Unlike the Elvis Presley case, this was not a close call at all.

    Indeed, Judge Gee’s decision confirmed that there was no basis for Plaintiff’s claim that the use of a 7-second historic clip in the context of a two-and-one-half hour biographical and historical play was in any way improper. Plainly, the use of the Clip played a transformative role in the Jersey Boys telling of the cultural history and life stories of the band members. The limited use of the Clip, a single, fractional excerpt of Plaintiff’s copyrighted work, helped transport the audience back to the cultural and historic setting of the 1960s so that their understanding of the events presented in the musical was meaningful; and it did so without any significant economic consequence to the Plaintiff.

    David S. Korzenik of Miller Korzenik Sommers LLP and Walter R. Sadler of Leopold, Petrich & Smith represented the Defendant. Mr. Korzenik was supported by his firm associates Mona Houck and Itai Maytal. Mr. Sadler was supported by his firm associate Nicholas Morgan. Plaintiff was represented by Jeffery McFarland, George Hedges and Noah Helpern of Quinn Emanuel Urquhart Oliver & Hedges, LLP. and by Jaime Marquart of Baker Marquart Crone & Hawxhurt.

    Posted in Copyright, Fair use | Leave a comment