by Mike Oliver | May 1, 2013 | Entertainment law, Intellectual Property, Uncategorized
The Second Circuit (an important circuit) recently decided FOREST PARK PICTURES v. UNIVERSAL TELEVISION NETWORK, INC. (June 26, 2012), allowing a “pitch man” to overcome a dismissal of his law suit that claimed Universal took his idea for a television show without paying for it.
Raw ideas that cannot be patented (such as ideas for themes or methods of performance of a TV show) can only be protected by a contract, in most cases. Contrast this with, for example, a script, character development, book, adaptation, or short film – all of which can be protected by copyright. So, people who have a raw idea but no real copyrightable work behind it (and in some cases, even when then they do have copyrightable content, see Fischer v. Viacom International, 115 F. Supp 2d 535 (D. Md. 2000)) must resort to a delicate balance of asking the person they disclose the idea to, to pay them if they use the idea (or not use the idea without an agreement on compensation). Many content owners will not make such an agreement.
In this case, the plaintiff alleged that it had “created a written series treatment for the idea, including character biographies, themes, and storylines” and mailed that to an executive at USA Network, and then later had a meeting with that executive to “pitch” the show; the plaintiff alleged “that it was standard in the entertainment industry for ideas to be pitched with the expectation of compensation in the event of use.” USA Network later came out with the show Royal Pains, a show “in which a doctor, after being expelled from the medical community for treating patients who could not pay, became a concierge doctor to the rich and famous in the Hamptons” – the precise thematic treatment alleged by plaintiff that it had disclosed 4 years earlier.
The problem these cases have is that if the claim essentially sounds in copyright, it must only be brought in Federal Court (and the copyright must be registered to do so) – and worse, copyrights do not protect ideas, only the expression of them. So, to avoid this preemption effect of copyright law, the plaintiff must plead an “extra element” – and in all of these cases, that extra element is contract (a contract requires proof of an offer, acceptance, consideration, and legality – none of those elements are required to establish copyright infringement). This court held that “As long as the elements of a contract are properly pleaded, there is no difference for preemption purposes between an express contract and an implied-in-fact contract.” Hence, the claim survived another day.
We advise our clients to be as express as possible when making pitches, even if in the applicable industry, it is “standard practice” to respect the notion of payment if the idea is used.
For more information contact Mike Oliver.
by Mike Oliver | May 1, 2013 | Business Law, Government, In the News, Infotech, Internet, Technology and Privacy Law, Uncategorized
The article in Networkworld “Cisco network really was $100 million more” is a good example of the danger in responding to governmental requests for proposal (RFP) without considering the publicity downside of significant overpricing.
The article explains that in bidding on a large computer infrastructure project for California State University, Cisco’s bid was over 100 million dollars higher than the closest competitor for the same equivalent products and services. Cisco’s bid, in fact was more than 5 times the accepted bid price. While some premium might be attributable to Cisco’s products – superior quality, service or warranty, that difference is not likely to be worth more than 5 times any other manufacturer’s similar bid.
Government RFP responses in most cases become public. Also, because an RFP is an “apple to apple” response, at least on a unit/performance basis, the only justification for real bid differences normally comes in quality of service (perceived or real), or in product quality distinctions.
With the amount of due diligence that everyone is doing on companies – investors, potential targets, potential joint venture partners, licensees, customers – any business that is responding to an RFP should consider that the response, whether accepted or not, will become publicly available. The article suggests that Cisco might overprice on RFP responses when it senses it has no ability to win the bid. Why? It makes more sense to withdraw from the competitive bidding, than to overprice.
A similar risk presents itself for underpricing. Many companies ask for “most favored nations” (“MFN”) clauses – clauses that require post contractual price adjustments based on later favorable pricing offered to other customers. MFN clauses are dangerous for a host of reasons (one significant one is that if written incorrectly, they make literally every customer contract potentially relevant evidence in a dispute), but if a bidder underprices on an RFP response, in the hopes of later recouping the lower cost through add ons or change orders, that initial pricing is now public and can be used against the bidder if they had issued MFNs to other customers.
In short, many considerations must be reviewed in responding to any governmental RFP – not just pricing, units, metrics and services.
For more information, contact Mike Oliver.
by Mike Oliver | May 1, 2013 | Advertising, Infotech, Intellectual Property, Litigation, Patents, Uncategorized
We have all seen them – the short clips of video advertising we must watch before we are granted access to some other video content. A company known as Ultramercial claims that the “idea” of putting that short advertising clip in front of content was its novel, non obvious and hence patentable invention. A lower court disagreed, and invalidated the patent on subject matter grounds. Last September, however, in Ultramercial v Hulu, the Court of Appeals for the Federal Circuit reversed that decision and remanded the decision for further proceedings (the issue of whether the patent was even valid on novelty or non obvious grounds had not yet been decided).
On May 21, 2012 the Supreme Court of the United States granted certiorari and remanded the case back to the CAFC for further review in light of Mayo Collaborative Services v. Prometheus Laboratories, Inc., a decision in which the process and method of administering certain therapeutic drugs was held to be patent subject matter ineligible.
There has been a distinct level of Supreme Court review of patent cases recently, most of them restricting or limiting the validity and subject matter of patents. This latest remand indicates that the Supreme Court is expecting the CAFC to use these decisions in the internet area as well, to begin at least reviewing, and most likely holding invalid, many business method type patents that do not meet patent eligible subject matter requirements.
There are thousands of issued patents that cover basic functioning of the internet system (or, at least the commercial part of it) – that will be called into question in light of these recent Supreme Court decisions.
For more information, contact Mike Oliver.
by Mike Oliver | May 1, 2013 | Advertising, Intellectual Property, Trademarks, Uncategorized
Not so fast, says the 4th Circuit. Many lawyers and bloggers had assumed Google would win its case in which Rosetta Stone alleged that Google was contributing to the infringement of Rosetta Stone’s trademarks . . . but Google mostly lost on appeal.
The Rosetta Stone case involves use of “adwords” – Google adwords are purchased and give the user the right to place sponsored advertising on the front page and other pages, when a user searches for the term that was purchased. If the term is a trademark, often the advertising links to sites that are either not authorized to sell the goods, sell infringing goods, or sell competing goods.
In Rosetta Stone, Ltd. v Google, the 4th Circuit held that Rosetta Stone’s claims for direct trademark infringement, contributory trademark infringement and dilution arising from Google’s adword program could proceed to trial.
On direct infringement, the Court “assume[d] […] that Google’s policy permitting advertisers to use Rosetta Stone’s marks as keywords in the AdWords program and to use Rosetta Stone’s marks in the text of advertisements constituted an unauthorized use “in commerce” and “in connection with the sale, offering for sale, distribution, or advertising of any goods or services.” That left only likelihood of confusion to be addressed. In reviewing the lower court decision, the 4th Circuit agree that not all of the 9 factors must be used, particularly where the competing use is nominative – that is, where the use actually identifies the trademark owners’ goods. So, it focused on three factors – intent, actual confusion, and sophistication of the consuming public.
Evidence was presented that showed that Google believed that allowing use of trademark Adwords might cause some confusion (based in part on Google’s change in policy that allowed trademarks also to be included in titles and on ads – something it did not permit until 2009), and this was enough to overcome the intent element weighing solely in favor of Google as the lower court had found.
On actual confusion, evidence was presented both anectodally – by consumers who were confused, and by survey evidence. Google itself had done internal confusion studies, that showed 94% of users who saw ads with trademark terms in them were confused at least once.
Finally on the sophistication of the consuming public element, the 4th Circuitheld that the lower court wrongfully rejected evidence of lack of sophistication based solely on price (the product is expensive) noting that “[t]he evidence also includes an internal Google study reflecting that even well-educated, seasoned Internet consumers are confused by the nature of Google’s sponsored links and are sometimes even unaware that sponsored links are, in actuality, advertisements.”
Hence, after rejecting other defenses such as the functionality defense, the direct infringement claim was permitted to go to trial.
On the claim of contributory infringement, Google lost because evidence was presented that Rosetta Stone notified Google that known infringers were purchasing adwords for sponsored links – however, Google never terminated such users.
Finally, Google lost on the dilution claim, largely because the lower court had applied a defense (the defense that the defendant must have used the mark on its own goods and service and such use must have been fair), as an affirmative element of the claim. If anything on this point, which Google might win at trial, the case stands for the proposition that a plaintiff need not plead or prove the absence of statutory defenses, as a part of its claim.
If Google allows this to go to trial (unlikely) and loses, it could be subject to substantial damages, and worse, could open the door to many other claims by other trademark holders.
For our clients, this decision bolsters the ability to assert that Google might be directly and contributorily infringing a trademark when it allows adwords and advertising to be placed on its site that causes customer confusion. Not every use of a trademark term will do so, but if a trademark owner can obtain such information on confusion, this case would support at least a notice and demand to Google to cease such use. In addition, this case certainly supports an active trademark protection effort – to police misuse of trademarks and report them to Google (and any other search system provider) as the failure to remove such infringing content can constitute indirect contributory infringement.
For our clients that provide such portals and search services, this case essentially reinforces what our advice has been all along – that you must build into the system a means to remove allegedly infringing content upon notice. While there is no equivalent DMCA protection for trademarks, the failure to remove infringing content after notice can lead to a lawsuit like this.
For more information, contact Mike Oliver.
by Kim Grimsley | May 1, 2013 | Business Law, Intellectual Property, Internet, Technology and Privacy Law, LegalEase, Uncategorized
Dilemma: You find out that a company has copied an article that you created from your website, and it is using it on its website as if it had written the article itself. You want to stop them from using your article but you do not have a copyright registration for anything on your website. What can you do to stop them?
Copyright registrations offer numerous benefits, including the benefits of bringing an action for copyright infringement to enjoin the infringing company from using your work and obtaining statutory damages. A copyright registration is required to file a lawsuit for copyright infringement. However, even at this stage where a company is using your work and you do not have a registration, you could file an application for copyright registration on an expedited basis and then file an action for infringement. Regarding damages, those are limited in this situation to actual damages, whereas if you had previously obtained a copyright registration, typically you could obtain statutory damages and be eligible attorneys’ fees, which could be significantly higher than actual damages.
In addition, even without a registration, you are still protected under United States copyright laws, and there are options available to you to stop others from using your material without your permission without filing a lawsuit.
One option is to send the infringer a demand letter stating that you are the owner the work, that they are using your material without your authorization, and that they must take it down immediately. Such a letter could cause the infringer to immediately take down the work. Another course of action is to send a notice and takedown letter to the web hosting company (i.e. GoDaddy) indicating that the site is infringing upon your copyright and requesting that the web hosting company take the work down. Additionally, many web hosting companies have their own policies in place, which can typically be found on their website and which will assist a party when their work has been infringed upon.
Also keep in mind that if the possibility of a working relationship could exist between the of the infringer and you or if the exposure may actually be helpful to you by giving you credit for your work, you could try a telephone call first to see if an arrangement can be made where the company can be given a license to use your work. If that does not work, you can proceed with the other options.
For more information, please contact Kim Grimsley.
