LIKELIHOOD OF CONFUSION®

Originally posted 2010-12-23 08:00:54. Republished by Blog Post Promoter

The Second Circuit, unsurprisingly according to most commentators, has affirmed the decision of the Southern District of New York refusing to find eBay liable for contributory trademark infrintgement in the Tiffany v. eBay case.  I have been following the case since before it was filed (yeah, bitter as usual!) and have written bunches of posts on it — see, look?

In terms of the Second Circuit opinion itself, you can find that here.  If at some point I have something really original to say about it–after all the blogging is done by everyone else–you’ll be the first to know.  But here’s a little roundup of “takes.” First, the WSJ Law Blog on the thrust of the story:

So long as eBay takes steps to remove listings it knows are bogus — and isn’t otherwise willfully blind to fraudulent sales — it can avoid liability, the court ruled.  Judge Robert Sack, writing for the three-judge panel, seemed to hang his hat on the “market”:

We are disposed to think, and the record suggests, that private market forces give eBay and those operating similar businesses a strong incentive to minimize the counterfeit goods sold on their Web sites . . .

EBay received many complaints from users claiming to have been duped into buying counterfeit Tiffany products sold on eBay. The risk of alienating these users gives eBay a reason to identify and remove counterfeit listings. Indeed, it has spent millions of dollars in that effort. . . .

Tiffany had argued that eBay knew it had a problem with counterfeit items being listed on its Web site and did little to clean it up. EBay insisted the obligation rested with the New York jeweler to identify and alert it to auctions of counterfeit Tiffany silver jewelry.

But that’s not the whole story, exactly, though it mostly is.  As Law.com’s Corporate Counsel explains:

The court sent the case back to the district level for more discussion of whether eBay may be guilty of false advertising because it promotes the presence of “Tiffany” products on its site in both direct advertisements and paid ads that pop up when users search for Tiffany on Google and other search engines.

Those ads could be deemed false, because eBay is aware that “a significant portion” of goods advertised as Tiffany items on eBay are actually counterfeit, the court said. (The exact percentage of counterfeit Tiffany items among all those advertised is in dispute). EBay has pointed out that its site contains a special “About Me” page for Tiffany (and controlled by Tiffany) in which users are told that any Tiffany item advertised for sale on eBay is likely to be a fake.

To win a false advertising claim, Tiffany will have to produce evidence that consumers were confused by the advertisements, the court said. So far, Tiffany has not produced that sort of evidence, which usually comes in the form of consumer surveys.

Usually?  Well, usually if anyone’s actually watching, I guess.  Anyway, some more–here’s a great article by a partner at Pattishall McAuliffe (the law firm that bears the name of my late trademark law prof)  named Uli Widmaier that gets to the heart of the matter (I’ve removed the citations for bloggy reading and added a link or two):

In other words, for a defendant to be liable for contributory trademark infringement, the defendant must have knowledge of specific individuals engaged in infringing activities. General knowledge that infringing activity might take place is not enough. This is an application of the “narrow standard” of contributory liability articulated in Inwood Laboratories, Inc. v. Ives Laboratories, Inc. eBay argued in the district court that this standard did not apply, but accepted the Inwood standard for purposes of the appeal.  Thus, the Court “assume[d] without deciding that Inwood’s test for contributory trademark infringement governs.

Tiffany had also argued that eBay was “willfully blind” as to the sale of counterfeit Tiffany goods on eBay’s website. The Court stated that, as a general matter, “[a] service provider is not, we think, permitted willful blindness. When it has reason to suspect that users of its service are infringing a protected mark, it may not shield itself from learning of the particular infringing transactions by looking the other way.” However, the Court declined to impose liability for contributory trademark infringement on this ground because “eBay did not ignore the information it was given about counterfeit sales on its website.”

In sum, the Second Circuit affirmed that a service provider is not permitted to be willfully blind to alleged trademark infringement. But eBay’s removal of listings identified as counterfeit by Tiffany, as well as eBay’s affirmative steps to police its website for counterfeiters were enough to render eBay not willfully blind. Had eBay done less, it might have been found liable. Unfortunately, the decision gives very little guidance as to the dividing line between “willful blindness” and sufficient vigilance.

Great point.  There’s something about trademark law that, for some reasons, makes judges want to make lawyers and businesses guess about liability until it’s too late.  As usual, Eric Goldman gets that, too: Read More…

So: Aereo, right? Kind of a big deal. You might want to read about it. Maybe we should write something about it. Let’s work backward, though:

On April 8, News Corporation announced that it would consider taking Fox—the broadcast television channel—off the air if the service known as Aereo is permitted to continue doing what it’s been doing for a year to date. “Aereo is stealing our signal,” said News Corp’s president Chase Carey. “We believe in our legal rights. We’re going to pursue those legal rights fully and completely, and we believe we’ll prevail. But we want to be clear. If we can’t have our rights properly protected through legal and political avenues, we will pursue business solutions. One such business solution would be to take the network and turn it into a subscription service.” Ah, but no less considerable a legal authority than the United States Court of Appeals for the Second Circuit has determined that, more likely than not, Aereo is not doing anything illegal.

Dapper like a fox.

Unless you’ve been living in a cave—or simply outside New York City—you’ve maybe heard of Aereo, a subscription service that, essentially, enables a subscriber to watch broadcast programming on an Internet device—a computer, tablet, “phablet,” or smart phone. A subscriber has the option of watching a program at the same time that it airs—with a minor delay, to allow for buffering—or to “record” the program and watch it later. (There are noteworthy limits to the recording feature, but those are not germane to the legal issue, as it happens.) Aereo charges a subscriber somewhere between eight and twelve dollars per month for the service (reports differ) and currently provides the service only in New York City and parts of Connecticut, although the company has plans to expand its availability, eventually, to no less than the entire planet.

In March of 2012, two lawsuits sought to stop Aereo, Inc. from doing what it was then going to start doing on March 14. The plaintiffs of the two suits (commenced separately but treated together) are an intimidating consortium, to be sure: all of the broadcast networks in New York City (ABC, CBS, NBC, Fox, THIRTEEN, WNET, WPIX, PBS, Telemundo, Univision… and Disney, among a few other entities). The complaints asserted, principally, that Aereo’s scheme was a blatant infringement of the plaintiffs’ exclusive public performance right provided by Section 106(4) of the Copyright Act. The plaintiffs argued that the mechanics of Aereo’s system is a sham.

What Aereo does—and I’m simplifying here, some—is this: At a facility in Brooklyn, there is an array of dime-sized antennae. When an Aereo subscriber requests that a program be streamed to him or her over the Internet, the facility dynamically assigns an available antenna to that subscriber’s account, and tunes the antenna to the local broadcast station showing the program requested. Other equipment at the facility converts the broadcast signal to a digital stream, which Aereo then sends to the subscriber’s account. What’s important—what was important to the courts, at least—is that at any given moment, any one Aereo antenna is working for at most one subscriber.

So when the plaintiffs moved for a preliminary injunction on their common cause of action based on Section 106(4), Judge Alison Nathan of the United States District Court for the Southern District of New York denied the motion, finding that what Aereo does is not in fact a public broadcast, being that the digitized signal is sent only to a person, and a person is not the public. (Again, I’m simplifying.) Judge Nathan decided that the plaintiffs were unlikely to prevail upon the merits of their claim, ultimately (and that, while the plaintiffs had demonstrated a likelihood of suffering irreparable harm absent an injunction, an injunction would also likely destroy Aereo’s business… which gave Aereo the advantage there). This was on July 11, 2012. The plaintiffs filed their notices of appeal the following day.

As if the plaintiff roster in the two cases weren’t impressive enough, the amici dramatis personae is a Who’s Who of important institutions: the NBA, NFL, NHL, and MLB; Paramount Pictures, Warner Bros., the Directors Guild of America, SAG-AFTRA, the Writers Guild of America, MGM, et al.; ASCAP, BMI, SESAC, et al.; Ralph Oman, former Register of Copyrights of the United States—all in support of the plaintiffs-appellants—and entities including the Computer & Communications Industry Association, the Internet Association, Intellectual Property and Copyright Law Professors, and the Electronic Frontier Foundation, among others, all for Aereo. Even if you knew nothing about the case, you’d know from looking at just the list of people with opinions about it that it’s something big.

The appellate decision, issued on April 1, 2013, is long and dense and needs to be read more than once to be fully understood, but the upshot of it is that the District Court denial of the plaintiffs’ motion for a preliminary injunction (decision here) was held to be proper. (Judge Denny Chin dissented, but he was outnumbered two to one.) Judges Droney and Gleeson made a point of acknowledging that Aereo’s set-up seems evidently designed specifically to be legal, insofar as the law was lain down by the 2008 decision of the Second Circuit in Cartoon Network v. CSC Holdings (a case referred to as “Cablevision”). In that case, the court had ruled that Cablevision’s Remote Storage Digital Video Recorder (RS-DVR) did not infringe copyright holders’ reproduction and public performance rights. And the same analysis and conclusion now apply to Aereo’s setup. Attempts by the plaintiffs to distinguish Cablevision were not well received, as it were.

“Though presented as efforts to distinguish Cablevision,” the decision reads, “many of Plaintiffs’ arguments really urge us to overrule Cablevision. One panel of the Court, however… cannot overrule a prior decision of another panel…. Plaintiffs have provided us with no adequate basis to distinguish Cablevision from the Aereo system. We therefore see no error in the district court’s conclusion that Plaintiffs are unlikely to prevail on the merits.”

To be continued in Part Two…

LoC got wind—and then a copy—of this letter, dated as of the date of this post, to ICANN in support of the creation of a new top-level domain. Further updates as events warrant.

An excerpt:

Abstract

The undersigned respectfully present this white paper to the Internet Corporation for Assigned Names and Numbers (ICANN) in order to advance the case for the creation of a new top-level domain (TLD), to wit: “.pineapple.” The creation of such a TLD would without question help resolve the longstanding debate over what Internet content is pineapple-related, and thereby aid service providers in discharging their responsibility under the Tropical Plant Communications Act of 1996.

View the entire white paper here.

Originally posted 2007-02-14 12:31:04. Republished by Blog Post Promoter

Instapundit.com asks,

IS YOUTUBE LOSING ITS SHEEN? “Some observers hoped when the subpoenas came to light that Google’s history of resisting US government subpoenas would lead to non-cooperation in this case. The moral high ground is clearly far smaller in this case, though.” Yes, this isn’t about national security, it’s about power for the entertainment industry. No moral high ground in resisting that.

Hm, what’s with the snark, exactly? What happened here? The link above is to Tech Crunch, which explains:

Three weeks after receiving a subpoena from the U.S. District Court in Northern California, YouTube has reportedly identified a user accused by 20th Century Fox Television of uploading episodes of the show 24 a week prior to their running on television. That user, named ECOTtotal, is also alleged to have uploaded 12 episodes of The Simpsons, some quite old. Apparently Google and YouTube were willing and able to identify the owner of the username ECOTtotal, acording to a report on InternetNews.com.Some observers hoped when the subpoenas came to light that Google’s history of resisting US government subpoenas would lead to non-cooperation in this case. The moral high ground is clearly far smaller in this case, though. YouTube has handed over user names before upon request prior to its acquisition.

I don’t think I understand Glenn’s “moral high ground” point at all. This is stealing. Read More…

Originally posted 2007-07-18 08:59:25. Republished by Blog Post Promoter

When doesn’t the law defer to Internet anonymity? Is it when lives and reputations are ruined? Do they bend when privacy is broached, families are smeared, confidences betrayed on Web servers and Internet archives and caches that never die?

Probably not. On the other hand, when there’s a publicly-traded security at stake — now that’s a problem!

Originally posted 2008-07-21 13:30:08. Republished by Blog Post Promoter

Mike Masnick on a key question:  Whether copyright fair use, no matter how obvious, may be ignored by a would-be copyright owner when sending a DMCA takedown notice that but for the fair use defense is “reasonable”:

The DMCA has provisions for a copyright holder to assert ownership, at which point the service provider needs to takedown the content. Whoever posted the content can protest that the content was legally posted — which is exactly what happened in this case. However, the DMCA also says that filing a false DMCA notice opens one up to damages from those whose content was taken down. This was in an effort to discourage false DMCA notices. This provision was used last year against Viacom for its false takedowns on satirical clips of the Colbert Report.

The question then, is whether or not filing a takedown notice on content that is used in a way consistent with “fair use” is a misuse or not. Universal Music’s claim is that it is not reasonable for the copyright holder to take fair use into consideration before sending a takedown notice. At a first pass, it sounds like the judge agrees.

As ridiculous as this whole situation is, the judge and Universal Music may be correct under the existing law.

A corrollary:  Is fair use grounds for a DMCA recipient to disregard a DMCA takedown notice?  Hat tip to aggregator Tech Verdict.

UPDATE from Carolyn Wright.

Originally posted 2010-12-28 08:30:01. Republished by Blog Post Promoter

First posted July 12, 2010.

The essential role played by credit card companies in online trademark infringement was recognized in Gucci America, Inc. v. Frontline Processing Corp. In that case, the court allowed contributory infringement claims to go forward against companies that had established credit card processing for an online counterfeit merchant. The payment for the counterfeit goods sold on its website was part of the infringing process, the court reasoned, drawing on Judge Kozinski’s dissent in Perfect 10, Inc. v. Visa Intern. Serv. Ass’n, and most of the infringing sales – of which the companies allegedly knew or should have known – were consummated using credit cards.

Gucci v. Frontline arose out of successful trademark infringement litigation brought by Gucci, the well-known manufacturer of luxury goods, against an online merchant operator of a website called “TheBagAddiction.com,” in which the owners admitted to liability for selling counterfeit Gucci products. Thereafter, Gucci turned to the three companies that had helped the merchant obtain credit card services, alleging both vicarious and contributory liability for trademark infringement. One of the three defendants, Durango Merchant Services acted as a middleman, while the other two, Frontline Processing Corporation and Woodforest National Bank, provided credit card processing services to the merchant.

In rejecting the defendants’ motion to dismiss, the court allowed the contributory liability claims to go forward as to all three defendants, but on different legal theories in accordance with their roles. As to Frontline and Woodforest, the court found the pleadings sufficient to allege contributory trademark infringement, based on their knowledge and control over the infringing activity on the website. As to the middleman, Durango, the court found the pleadings sufficient to allege contributory infringement based on an inducement theory.

As to Frontline and Woodforest, the court also found the pleadings stated a claim for contributory trademark infringement, based on the defendants’ knowledge and control over the infringing activity on the website. Citing eBay and Perfect 10, the Gucci court reiterated the direct control and monitoring test, stating that

[e]ven if a defendant does not seek out and intentionally induce a third-party to commit trademark infringement, it may still be held liable for the infringement if it supplied services with knowledge or by willfully shutting its eyes to the infringing conduct, while it had sufficient control over the instrumentality used to infringe.

Moreover, an allegation of the defendants’ general knowledge that infringement is taking place is not sufficient. “[A] service provider must have more than a general knowledge or reason to know that its service is being used to sell counterfeit goods,” the court emphasized, citing further language in Tiffany that “’Some contemporary knowledge of which particular listings are infringing or will infringe in the future is necessary.’”

Both credit card processing companies either knew or should have known that they were servicing an infringing site, under the facts alleged, the court concluded. In both cases, a Durango agent had a dual role as both an employee of his company and a sales representative for the two credit card companies, and the court consequently accepted the allegations charging the companies with his knowledge. Thus, regarding Frontline, Gucci alleged that that company was aware of customers’ written acknowledgement of purchasing “replicas” as directed by the Durango agent. Read More…

Originally posted 2009-08-04 18:02:22. Republished by Blog Post Promoter

Attorney Scott Wolfe, flush with victory, sends along this update on the Louisiana lawyer advertising rules I blogged about last fall, when I said, “Get that?  According to this, everything posted online by a Louisiana lawyer — and God help a Web 2.0-oriented shop such as Wolfe or, say, LIKELIHOOD OF CONFUSION®— has to be run past a Louisiana oldlaw censor at $175 a pop!  Even assuming it isn’t bounced, that’s a lot of pops per pixel.”  The judge, it seems, agreed:

On Monday, federal Judge Martin Feldman declared unconstitutional Louisiana’s new regulations of attorney advertising on the Internet.

Scott Wolfe Jr. and Wolfe Law Group, who practice construction law in New Orleans, Louisiana, challenged the new lawyer advertising regulations as they applied to the Internet. Wolfe argued the regulations failed to consider the differences between television and Internet advertising, and regulated Internet ads without a need.

More here from the ABA Journal, and here’s the opinion.

Originally posted 2009-02-03 20:30:18. Republished by Blog Post Promoter

First, this vintage LOC item:

Fred von Lohmann of the EFF calls out YouTube:

Fair use has always been at risk on YouTube, thanks to abusive DMCA takedown notices sent by copyright owners (sometimes carelessly, sometimes not). But in the past several weeks, two things have made things much worse for those who want to sing a song, post an a capella tribute, or set machinima to music.

First, it appears that more and more copyright owners are using YouTube’s automated copyright filtering system (known as the Content ID system), which tests all videos looking for a “match” with “fingerprints” provided by copyright owners.

Second, thanks to a recent spat between YouTube and Warner Music Group, YouTube’s Content ID tool is now being used to censor lots and lots of videos (previously, Warner just silently shared in the advertising revenue for the videos that included a “match” to its music).

This is a somewhat unexpected twist in the copyright crackup.   Far from slowing the crackup down, this action by Google in the service of the barons of copyright is a harbinger of the End Days.

And not just for copyright.  Google’s old (as in five years ago) image as the funky un-company, the Apple of the Internet, is pretty much history.  It has quickly become, instead, Microsoft.

That’s not good for Google.  And while, like Microsoft, Google isn’t going anywhere too fast, it’s also, like Gatesland, pretty clearly on the wrong side of history.

Now, the very-today update from Mike Masnick:

In the past couple of days I’ve received emails from two separate people who found that public domain material they put on YouTube was taken down to companies claiming ownership of the work. In both cases, the stories seem pretty ridiculous, and for all the complaining that copyright holders do about how awful it is that they need to “police” their own content on YouTube, it seems like those who are getting hurt are people who are putting up public domain material and getting shut down — often with little recourse. . . .

You’ve got to read the whole thing, which is a mess, but which Mike is all over.  It’s truly getting ridiculous out there, however — this is the promised big copyright crackup, all right.

It’s two posts in one (I like to pull that off when I can), not even counting this one:  Mike Masnick on Eric Goldman on the settlement of the Google / Rosetta Stone case that gets everyone so agitated alla time:

Perhaps the most well known [adwords lawsuit against Google] was the one that Rosetta Stone filed back in 2009 (the ninth such case). That case has been kicking around for years, with various ups and downs. Rosetta Stone even went so far as to supportSOPA’s predecessor, COICA, in the hopes that it would be useful in making Google liable for the ads others placed on its site. We had thought that a clear headed judge would point out the obvious, but instead, we got a massively confused ruling that was quite troubling in which it was unclear if the judge really understood the issues at play. Given all of this, it’s not a huge surprise that Google figured out a way to settle the case out of court. While it probably had to pay a small sum to make that happen, Eric Goldman notes, nothing in what’s been announced suggests that Google agreed to change any of its practices. He also notes that, at this point, nearly every such case against Google has ended in a Google win or quiet settlement in which Google’s policies are left intact:

Irrespective of the specific settlement terms, ending this case is a strategic win for Google because it takes out the last “major” US trademark owner challenger to AdWords.  Combined with the recent dismissal of the Jurin lawsuit, Google is now down to two pending US trademark lawsuits over AdWords: CYBERsitter and Home Decor Center.  Despite CYBERsitter’s recent intermediate “win,” I don’t think either of the two remaining lawsuits are dangerous to Google.  As a result, Google is tantalizingly close to successfully running the table on all of the US trademark challenges to its AdWords practices.  When this happens, Google will have legitimized the billions of dollars of revenues it makes by selling trademarked [sic] keywords in AdWords.

Eric may be slightly more optimistic on this than I am. Having seen so many of these cases come and go, I still expect others to jump in, in the hopes of getting offered a similar “settlement” just to go away. Hopefully one of the remaining cases ends in a clear judicial smackdown against companies who are trying to stretch trademark law well beyond its intended purpose.

Hard to disagree with Mike here.  There’s always going to be a litigator who, when pressed by his client to solve the dread menace (or is it a threat?) of “diversion” via Google AdWords — i.e., competition, typically, via what is essentially comparative advertising — will reluctantly agree to open up a litigation file and accept a hefty retainer to show how can-do he is when it comes to that meeting-all-your-legal-needs thing.  Whether it’s a purported new legal theory, or the prospect of at least getting what Rosetta Stone got, or just the illusion of motion, dynamism or whatever, these cases will be filed.

Running the table, in fact, doesn’t really count unless and until you get that decision that (1) resolves the legal issue and (2) is portable across jurisdictions.  Absent that, there’s no single “table”:  there’s always someone ready to chalk up the cue and set up a new rack of balls, even if it’s in another hall.  And knowing that Google doesn’t really want to face the risk of an adverse decision, notwithstanding that on the merits it probably ought to win most of the issues in play, provides all the chalk, and all the balls, my esteemed colleagues in the IP “enforcement” bar need.

Originally posted 2006-12-11 21:43:28. Republished by Blog Post Promoter

It’s our future.  Instapundit rounds up developments, which Julie Hilden is all over.  I’ve made my point on this topic — less a legal than a cultural observation.

Originally posted 2009-08-12 23:59:27. Republished by Blog Post Promoter

I posted this in August, 2006. I don’t think the question has been answered yet:

We wrote about the Kinderstart lawsuit against Google, claiming an unfairly depressed Google search rank, last March. There have been further, very interesting, developments, exemplified by this this colloquy reported by Dawn Kawamoto:

David Kramer, a Wilson Sonsini attorney also representing Google, said the search giant’s PageRank system is subjective, using a combination of reviews into whether a Web site is adhering to its guidelines and is worth a user’s time to view.

“Google is constantly evaluating Web sites for standards and quality, which is entirely subjective,” Kramer said.

The judge probed Kramer on the topic of whether Google engages in misleading behavior, and whether it uses objective criteria to evaluate sites–rather than solely relying on subjective reasoning.

“What if, say, Google says it uses facts one through 10 to evaluate a site, but actually uses number 11 to decide its rank. Isn’t that misleading?” the judge asked.

Kramer, however, said Google readers understand that the site’s ranking system is subjective and based on Google’s opinion about whether a site is worth viewing.

A repeated theme in the article is that Google keeps urging that it has “no obligation” to “promote its rivals.” Which it certainly doesn’t seem as if it does. On the other hand, once a company becomes a sort of common carrier — I am pushing this here — is there really no point at which all purchasers of its services should be treated equally? (Very un-free-markety of me to suggest this, but I’m the conservative blogger who’s not a libertarian.) Avoiding a ruling that in any way characterizes Google search results as commodities is also evidently on the mind of the Google attorney who’s insisting, despite the obvious risk of doing so, that Google results, in some cases, are subjective, not objective.

And what is that risk? A ruling, or a suggestion (I don’t know enough about the case to know if this is a claim) that, far from a commodity like potatoes, electric power or fake Vuitton bags, Google results are commodities’ evil twin, a service so unique to Google, and so very, very central to the “market” (definition of which is the heart and sould of the matter) that Google has a — dare we say it? A monopoly! For let’s not kid ourselves: If it were 1966, not 2006, this search advertising business — with both Google and Yahoo at the table — would already be negotiating a consent decree with the government, and not the kind Google is looking for. If certain fringe elements were to succeed in their political ambitions, don’t be surprised if that yet happens, doing for the next decade what the Clinton Administration’s Microsoft brililant, and of course progressive, antitrust suit did for the ’90′s.

But we digress. Add this to the story from last week involving an advertiser’s complaint that Yahoo! buying search terms on Google to redirect users searching for a third website that competes with Yahoo!, and what do you have? New dimensions, or at least invitations by lawyers to open new ones, in unfair competition, antitrust, tortious interference and other traditional areas of law.

Will judges build on the existing doctrines of law and merely apply them to new industries and new technologies? Or will they do as they have done in trademark, and invent new bases for recovery to “fix up” perceived injustices that those pokey legislatures haven’t gotten to? We’ll keep watching.

UPDATE: Yeah? See? Uh-huh!!