Posts in Circuit Courts of Appeal

The U.S. Court of Appeals for the Second Circuit today invoked the Supreme Court’s decision in Jack Daniel’s Properties v. VIP Products to affirm a district court’s finding that MSCHF Product Studio, Inc.’s shoe, the Wavy Baby Sneaker, likely infringed Vans, Inc.’s Old Skool shoe. The Second Circuit ultimately affirmed the district court’s grant of a preliminary injunction and temporary restraining order for Vans. The Wavy Baby Sneaker is made by MSCHF, a Brooklyn-based art collective that “has recently focused its artistic expression on ‘sneakerhead culture.,’” according to the Second Circuit opinion. Upon release of the Wavy Baby Sneaker, MSCHF’s co-Chief Creative Officer said in a statement: “’The Wavy Baby concept started with a Vans Old Skool sneaker’ because no other shoe embodies the dichotomies between ‘niche and mass taste, functional and trendy, utilitarian and frivolous’ as perfectly as the Old Skool.”

In 2017, screenwriters Lee Alfred and Ezequiel Martinez Jr. embarked on what would be a five-year journey for their copyright infringement claim against Walt Disney Pictures over the Pirates of the Caribbean franchise. Now, one year after it resolved, their legacy lives on through a new era of copyright litigation in Hollywood. Courts continue to rely on the Ninth Circuit’s decision in the Pirates case to allow screenwriters and other artists to proceed past the pleading stage. With that pendulum swing, litigants in copyright cases over Hollywood films will face a range of undeveloped issues. This article provides a brief recap of the impact from the Pirates case and identifies several open issues that litigants are likely to address in future cases as a result.

On November 20, the U.S. Supreme Court denied a petition for writ of certiorari filed in Tata Consultancy Services Ltd. v. Epic Systems Corp. The denial leaves in place an appellate court decision awarding $280 million for unjust enrichment and punitive damages in a trade secret misappropriation case where the plaintiff suffered no economic harm and the defendant gained no actual benefit from the misappropriated information.

On September 7, the U.S. Court of Appeals for the Third Circuit issued a precedential decision on trademark functionality doctrine in PIM Brands Inc. v. Haribo of America Inc. In affirming the district court’s grant of summary judgment, the Third Circuit found that PIM’s federally registered trademark to a wedge-shaped candy with green, white and red stripes should be canceled because the mark as a whole identifies the candy’s flavor.

The U.S. Court of Appeals for the Eleventh Circuit yesterday backed a Georgia district court’s finding that Diamond J Wholesale LLC and its owner, Raj Solomon, willfully infringed trademarks owned by Top Tobacco, L.P., Republic Technologies (NA), LLC, and Republic Tobacco, L.P. (Top Tobacco). The ruling upholds an $11 million verdict in favor of the tobacco companies. A jury in the U.S. District Court of the District of Georgia awarded Top Tobacco $11 million in damages against the wholesale company and its owner in March of 2022.

A group of herring fishermen have filed their opening brief with the U.S. Supreme Court in a case that asks the Court to overturn its “Chevron doctrine,” which says courts should defer to administrative agencies’ interpretation of the statutes delegated to them. In the 1984 ruling in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., the Supreme Court held that a court “may not substitute its own construction of a statutory provision for a reasonable interpretation made by [the agency charged with administering the statute],” where the statute is ambiguous.

The U.S. Court of Appeals for the Ninth Circuit yesterday upheld a district court ruling that embedding images from Instagram posts in third-party websites does not constitute copyright infringement. The case has to do with two photographers’ images that were embedded and posted with articles run by Buzzfeed News and Time from the photographers’ public Instagram accounts. The district court and the Ninth Circuit both cited Perfect 10 v. Amazon as precluding relief.

The U.S. Supreme Court (SCOTUS) ruled today in Abitron Austria v. Hetronic International that Sections 1114(1)(a) and 1125(a)(1) of the Lanham Act are not extraterritorial in nature and that “‘use in commerce’ provides the dividing line between foreign and domestic applications of these provisions.” The decision of the U.S. Court of Appeals for the Tenth Circuit, which upheld a $96 million damages award for Hetronic, was thus vacated and remanded. Justice Alito authored the opinion for the Court and Justices Jackson and Sotomayor each filed concurring opinions—though Sotomayor’s concurrence reads more like a dissent.  

The U.S. Supreme Court denied the petitions for certiorari in a number of IP cases today, including three the U.S. Solicitor General had recommended rejecting. In Genius v. Google, ML Genius Holdings (Genius) attempted to sue Google for posting song lyrics from its website in Google search results. Genius’s petition asked the High Court to answer the question of whether the Copyright Act’s preemption clause allows a business “to invoke traditional state-law contract remedies to enforce a promise not to copy and use its content?”

The U.S. Supreme Court today delivered a ruling that flows from a trade secrets theft case, holding that “the Constitution permits the retrial of a defendant following a trial in an improper venue conducted before a jury drawn from the wrong district.” The underlying case involves a software engineer, Timothy Smith, who stole trade secrets from StrikeLines, a company that uses proprietary technology to identify private, artificial reefs that individuals construct to attract fish and then sells the coordinates. Smith, an avid fisherman, was angered by this approach as he felt StrikeLines was profiting off of the work of private citizens. He therefore figured out how to obtain StrikeLines’ data and announced on social media that he was willing to share it.

The U.S. Supreme Court held today in Jack Daniel’s Properties v. VIP Products that the Rogers test, used to “protect First Amendment interests in the trademark context,” is not relevant “when an alleged infringer uses a trademark as a designation of source for the infringer’s own goods.” The Court therefore vacated the U.S. Court of Appeals for the Ninth Circuit’s ruling that said VIP’s dog toy mimicking a Jack Daniel’s whiskey bottle was an expressive work entitled to First Amendment protection. Justice Kagan authored the unanimous opinion for the Court, while Justice Sotomayor, joined by Justice Alito, and Justice Gorsuch, joined by Justices Thomas and Barrett, each filed concurring opinions.

Last week, the United States Court of Appeals for the Ninth Circuit issued a ruling in a copyright dispute between Erickson Productions and Kraig Kast, ultimately reversing and remanding the case back to the district court for a jury trial. The appeals court ruled that the district court erred by not conducting a jury trial after a first appeal by Kast. The case began when Jim Erickson of Erickson Productions accused Kast of the unauthorized use of three copyrighted photos on his developmental website. The case was heard before a jury in the United States District Court for the Northern District of California, which awarded Erickson $450,000 in damages after finding that Kast willfully infringed on the copyright.

At today’s hearing in Jack Daniel’s v. VIP Products, the U.S. Supreme Court Justices suggested to both sides that there might be an easier way out on the facts of this particular case than either party is proposing, but weighed the need to overturn the Second Circuit’s test in Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989), which some of the Justices characterized as injecting unnecessary confusion. Though the Court seemed equally concerned about retaining a way for defendants making clearly parodic use of a mark to get out of litigation quickly, which Rogers is intended to do, they questioned both sides about why in this case they couldn’t either find for Jack Daniel’s by just saying that VIP is clearly using a source identifier on a commercial product, or remand to the district court to say they failed to properly weigh the parody or proximity factors of the product, for instance. Overall, the Justices seemed skeptical that the product in question represents a non-commercial use.

The U.S. Supreme Court today heard oral arguments in Abitron Austria GmbH v. Hetronic International, Inc., which asks the Court to consider whether the U.S. Court of Appeals for the Tenth Circuit erred in applying the Lanham Act extraterritorially to Abitron’s foreign sales, “including purely foreign sales that never reached the United States or confused U.S. consumers.” The Justices struggled with the appropriate reach of the Lanham Act and whether reversing the Tenth Circuit would require overruling Steele v. Bulova Watch Co., 344 U.S. 280, 282-285 (1952), but overall seemed to be considering the need for a new or narrowed test to account for the realities of modern commerce.

Jack Daniel’s Properties, Inc. filed its reply brief with the U.S. Supreme Court on Friday, March 10, in a major trademark case set to be argued on March 22. The brief contends that the country’s most popular brands are at risk of losing their brand identity if the Court affirms the U.S. Court of Appeals for the Ninth Circuit’s view that a poop-themed dog toy mimicking Jack Daniel’s Whiskey bottle is an expressive work entitled to First Amendment protection. In November 2022, the Supreme Court granted Jack Daniel’s petition for a writ of certiorari, which seeks to clarify whether the First Amendment protects VIP Products, LLC’s humorous use of Jack Daniel’s trademarks for commercial purposes against claims of infringement and dilution.