Posts in Circuit Courts of Appeal

The U.S. Supreme Court today granted cert in Andy Warhol Foundation v. Goldsmith, Lynn, et. al., a case that asks the High Court to review a decision of the U.S. Court of Appeals for the Second Circuit holding  that Andy Warhol’s Prince Series did not constitute fair use of Lynn Goldsmith’s photograph. In its petition for certiorari, filed in December 2021, the Andy Warhol Foundation told the Court that “the Second Circuit’s decision…creates a circuit split and casts a cloud of legal uncertainty over an entire genre of visual art.”

Two recent decisions dealing with high-end watches illustrate the fine line between permissible and infringing modifications when the final product bears a trademark of the original maker. As the trend of “upcycling” or “creative reuse” continues to grow, entrepreneurs should be aware of the potential pitfalls in modifying the products of others. Generally, the first sale or “exhaustion” doctrine protects a reseller of authentic goods from infringement liability—but only when the goods have not been materially altered in any manner and meet the trademark owner’s quality standards. There are, however, some circumstances where courts have found certain modifications to be permissible.

On March 4, the U.S. Court of Appeals for the Eighth Circuit issued a ruling in Tumey v. Mycroft AI, Inc. in which the appellate court overturned the Western District of Missouri’s grant of injunctive relief to Tumey, a patent attorney representing a plaintiff asserting patent claims against Mycroft. The Eighth Circuit found that Tumey had not met the requisite standard of proof to show that Mycroft had engaged in cyber attacks and harassing phone calls targeting Tumey and his family to support injunctive relief. The appellate court also remanded the case with instructions to reassign the case to a different district court judge.

The U.S. Court of Appeals for the Fifth Circuit on Monday vacated and remanded a district court decision that had dismissed Continental Automotive Systems, Inc.’s suit against several standard-essential patent holders and their licensing agent, claiming violations of federal antitrust law and state law. The U.S. District Court for the Northern District of Texas dismissed with prejudice Continental’s Sherman Act claims for lack of antitrust standing and, alternatively, for failure to plausibly plead certain elements. Continental appealed, but the Fifth Circuit said Continental’s claims should have been dismissed for lack of Article III standing because it had not proven that the SEP holders had “denied Continental property to which it was entitled and that Continental thereby suffered a cognizable injury in fact.”

On February 22, the U.S. Court of Appeals for the Ninth Circuit reversed and remanded the U.S. District Court for the Central District of California’s dismissal of a copyright suit filed against Apple Inc. and other defendants explaining that dismissal was improper at the pleading stage because reasonable minds could differ on the issue of substantial similarity. The suit was brought by Francesca Gregorini—writer, director, and producer of the film The Truth About Emanuel. She claimed that the first three episodes of Defendants’ AppleTV+ series, Servant, infringed her copyright. In May 2020, U.S. District Judge Walters dismissed Gregorini’s complaint on the ground that the works were not substantially similar as a matter of law. Gregorini appealed to the Ninth Circuit.

In a 6-3 decision today, the U.S. Supreme Court held that Section 411(b) of the U.S. Copyright Act “does not distinguish between a mistake of law and a mistake of fact; lack of either factual or legal knowledge can excuse an inaccuracy in a copyright registration under §411(b)(1)(A)’s safe harbor.” The decision comes after Unicolors, Inc. petitioned the Court in January of last year, asking whether the Ninth Circuit erred in determining that Section 411 required referral to the Copyright Office on any inaccurate registration information, even without evidence of fraud or material error, in conflict with other circuit courts and the Copyright Office’s own findings on Section 411.

The past year has seen the implementation of brand-new trademark legislation, significant analysis of trademark liability for new technologies, renewed focus on the doctrine of initial interest confusion, the transformation of Nikes into “Satan Shoes,” the functionality of chocolate dipped cookies, and the end to a long-running case involving two multi-million dollar jury awards for willful infringement. As 2021 comes to an end, we look forward to what 2022 has in store.

The Andy Warhol Foundation has petitioned the U.S. Supreme Court, asking it to review a decision of the U.S. Court of Appeals for the Second Circuit holding  that Andy Warhol’s Prince Series did not constitute fair use of Lynn Goldsmith’s photograph. The Second Circuit held in March that “the district court erred in its assessment and application of the fair-use factors and the works in question do not qualify as fair use.” The Court of Appeals further concluded that the Prince Series works were substantially similar to the Goldsmith Photograph “as a matter of law.” The Supreme Court petition argues that “the Second Circuit’s decision…creates a circuit split and casts a cloud of legal uncertainty over an entire genre of visual art.”

One recurring thorn in the side of copyright owners is Cloudflare, the San Francisco-based web performance, optimization, and security company. Cloudflare offers many services to its customers, including a content delivery network that utilizes hundreds of servers around the world to cache its customers’ content. When an end user requests content from one of Cloudflare’s customers, it is delivered to that user from the cached copy on the nearest Cloudflare server—not the customer’s own web host server. This saves on bandwidth costs, improves security, and decreases page load times. It also raises important questions about Cloudflare’s liability for contributory copyright infringement when it knowingly allows infringing content to remain on its cache servers. Under Ninth Circuit precedent, web hosting services like Cloudflare can be held contributorily liable for assisting in the infringement under the material contribution theory. However, a recent district court decision misconstrued the case law to conclude otherwise in Mon Cheri v. Cloudflare.

The U.S. Supreme Court heard oral argument today in Unicolors v. H&M. The case asks the Court to decide whether the Ninth Circuit properly construed the language of 17 U.S.C. § 411 relating to whether courts must have evidence of intent to defraud before referring copyright registration validity questions to the Copyright Office. While the questioning seemed to favor Unicolors overall, at least one Justice today asked why a change in the question presented at the merits stage of the briefing shouldn’t result in the case being dismissed as having been “improvidently granted.”

In mid-October, a pair of lawsuits were filed in the Eastern District of Virginia by different groups of professional models seeking damages and injunctive relief under the Lanham Act from adult entertainment clubs for the unauthorized use of the models’ images in promotional materials. The filings come at about the same time that the U.S. Supreme Court is considering a petition for writ of certiorari from the U.S. Court of Appeals for the Second Circuit which asks the nation’s highest court whether the Second Circuit was wrong to create a public prominence requirement that prevents lesser known models from being able to assert their rights to their own likeness.

On October 5, the Senate Judiciary Committee considered the nomination of Judge Lucy Koh, currently of the U.S. Federal District for the Northern District of California, to an appointment by President Biden to the United States Court of Appeals for the Ninth Circuit. After that hearing, several Senators submitted written questions, which Judge Koh responded to last week. There is no indication that Judge Koh’s nomination to the Ninth Circuit is in jeopardy, but it is noteworthy, and at least somewhat unusual, numerous Senators asked Judge Koh virtually the same questions regarding her decision in FTC v. Qualcomm. This level of overlapping interest by multiple members of the Senate Judiciary Committee, which IPWatchdog.com has learned was not coordinated and developed organically, is normally reserved for nominees to the Supreme Court, and even then, typically reserved to social or constitutional issues. So, even though it is believed Judge Koh can and will easily receive a favorable confirmation vote, the questions relating to the intersection of antitrust and patent law demonstrate a keen awareness and interest in these issues on the Senate Judiciary Committee.

On September 30, the U.S. Court of Appeals for the Second Circuit issued a ruling in Horror Inc. v. Miller in which the appellate court affirmed a summary judgment ruling in the District of Connecticut which found that Victor Miller was an independent contractor when writing the script for the 1980 classic horror film Friday the 13th. The ruling enables Miller to move forward with copyright termination notices served on Horror, which became the successor-in-interest to the rights to Friday the 13th, so that Miller can claim copyright in the original screenplay.

On September 22, publishing company Canada Hockey L.L.C., doing business as Epic Sports, and Michael Bynum, a sportswriter and editor, filed a petition for rehearing en banc in their appeal of a copyright case against both Texas A&M University and a pair of school officials. In their petition, the plaintiffs argue that the original panel decision erred in failing to find constitutional violations of both the Fifth Amendment’s Takings Clause and due process under the Fourteenth Amendment for Texas A&M’s unlawful reproduction of the plaintiffs’ copyrighted work regarding the history of the legendary 12th Man at Texas A&M.

On September 23, the U.S. Court of Appeals for the Third Circuit reversed in part a decision by the U.S. District Court for the Eastern District of Pennsylvania, ultimately holding that Karen Hepp’s complaint against Facebook was not barred by Section 230 of the Communications Decency Act of 1996.In 2018, Hepp was informed by a coworker that a photo of her was being used online. The photo of Hepp was taken without her knowledge or consent and she never authorized the use of the image in any advertisements.

Hepp’s complaint cited two sets of posts online of the photo, which Hepp alleged under Pennsylvania law violated her right to publicity. The first post appeared on Facebook as an advertisement to a dating app. The advertisement encouraged Facebook users to use the app and used the image of Hepp to promote the dating service. The second post appeared on Reddit, where a user linked to a post on Imgur. The Reddit post was upvoted hundreds of times and incited indecent user commentary regarding the photo of Hepp.