In the latest sequel to the ongoing legal drama, DreamWorks has agreed to pay $50 million to settle a class-action based on DreamWorks conspiring with other animation studios not to poach/hire one another’s employees.

As discussed in my prior blogs, there were two major class-actions regarding wage-fixing/anti-poaching agreements.  The first involved most of the major animation studios, including Pixar, LucasFilm, Walt Disney, Sony, Blue Sky and others.

The second class-action involved major Silicon Valley titans, like Google, Apple, Intel, Microsoft, Adobe, Oracle and Intuit. (Id.)

In both cases, defendants were alleged to have agreed not to poach one another’s employees, thereby quashing competition and keeping wages artificially low.

Most of the animation defendants agreed to pay settlements totaling $19 million when “smoking gun” emails came out which clearly showed collusion like the one from Pixar’s VP of Human Resources: “we have a gentlemen’s agreement not to directly solicit/poach from their employee pool.”

Most of the Silicon Valley defendants settled for $415 million when “smoking gun” emails came out which clearly showed collusion like a Google internal memo that we “will not pursue manager level and above candidates for Product, Sales or G&A [General and Administrative] roles –even if they have applied to Google.”

This latest DreamWorks proposed settlement is scheduled for hearing for Court approval in January 2017, leaving Disney/Pixar/LucasFilm as the last animation defendants that have not reached settlement.

It is a topic that I have written on before—the law of “puffery.” Check out my post on The Best Allegation in a Lawsuit. The concept is familiar. Most of us probably tend to be wary of a salesperson’s boasts and are apt to take his or her claims about a product with a grain of salt.

Watching the recent Presidential debate got me thinking again about outsized boasting and grandiose claims.

In the context of commercial transactions, the law recognizes that there are certain statements that ought not to be considered representations of fact and cannot give rise to legal liability if the statements turn out not to be true. It has been held that “[a] statement is considered puffery if the claim is extremely unlikely to induce consumer reliance.” Newcal Industries, Inc. v. Ikon Office Solution (9th Cir. 2008) 513 F.3d 1038, 1053. A statement that is “quantifiable” and “makes a claim as to the specific or absolute characteristics of a product”  may be an actionable statement of fact. Id. This is to be juxtaposed with a “general, subjective claim about a product,” which is “non-actionable puffery.”  Id. For example, labeling a product “premium” is mere puffery because it has “no concrete, discernable [sic] meaning.” Viggiano v. Hansen Natural Corporation (C.D. Cal. 2013) 944 F.Supp.2d 877, 894.

Thus, the more generic the praise—think superlatives like “great,” “tremendous,” and the “best ever”—the less likely a statement will be regarded as an actionable statement of fact. And all the easier to avoid being called to account for real, substantive and quantifiable representations.

As pointed out by the Newcal Industries court, the reason puffery should not give rise to liability is that no one ought to be so gullible as to rely on these types of assertions. I wonder what lesson we might draw from this well established legal premise that might apply to the upcoming Presidential election? Food for thought. Or perhaps I should say, the best advice ever …

Today the Supreme Court agreed to decide an ongoing conflict, pitting a trademark registrant’s First Amendment rights against longstanding law precluding trademark registration of “disparaging” marks.

In This Corner: Trademark Law & the USPTO

Section 2(a) of the Lanham Act, precludes trademark registration of marks that are: immoral, deceptive or scandalous matter; or matter which may disparage …or bring them into contempt or disrepute….” Since World War II, the United States Patent and Trademark Office (USPTO) has relied on Section 2(a) to deny registration to such marks, but in December 2015, for the first time, the legality of Section 2(a) was called into question.

In This Corner: The First Amendment & The Slants

An Asian-American rock band, The Slants, sought to register its name, but the USPTO rejected the name as disparaging. The Slants appealed to a federal district court, which affirmed the USPTO’s decision, but when The Slants appealed to the Federal Circuit, the majority found that Section 2(a) was unconstitutional restraint of free speech under the First Amendment.

The Slants asked the Federal Circuit to order the USPTO to register its trademark, but the court declined. The USPTO issued guidelines, advising trademark applicants that any applications with potentially disparaging marks would be held in limbo until the issue was resolved.  Then the USPTO asked the Supreme Court to decide the issue.

In This Other Corner: The Washington Redskins

Meanwhile in June 2014 the USPTO deregistered the Washington Redskins’ trademark under Section 2(a). The Washington football team appealed, lost in federal district court and appealed to the Fourth Circuit. While that appeal is currently pending, the Washington team has asked the Supreme Court to intercede.

The Judges’ Score Card: Key Issues

The Slants, the Washington team and the Federal Circuit majority basically argue that trademarks equal free speech. They contend that Section 2(a) amounts to viewpoint discrimination and is subject to strict scrutiny  review, Section 2(a) fails to withstand “strict scrutiny” and is therefore unconstitutional. “Strict scrutiny” requires the USPTO to prove that Section 2(a) serves a compelling government interest, that it is narrowly tailored to achieve that interest, and that it is the least restrictive means for achieving that interest.

The USPTO, the two federal district courts, and the Federal Circuit’s dissenting opinion argue that trademarks do not equal free speech, and Section 2(a) is not subject to “strict scrutiny.” They contend that Section 2(a) does not prohibit any speech but instead denies the benefits of registration to private disparaging speech. In short, The Slants and the Washington team are entirely free to call themselves whatever they want, to publicize their names and use their names in commerce, but they are not entitled to the extra benefits conferred by federal trademark registration.

TKO or 12 Rounds?

While today’s grant of certiorari is only the beginning of the first round, recent Court decisions upholding hateful speech in other situations would tend to indicate that USPTO may be punching above its weight class and Section 2(a) might hit the canvas.

In a recent episode of CBS’ The Late Show with Stephen Colbert, the host lampooned an apparent cease and desist demand from lawyers contending that Colbert improperly revived his “character” from The Colbert Report, his prior show on the Comedy Central network.

For the uninitiated, some explanation may be in order. Before his current gig on CBS as host of The Late Show, Colbert portrayed the narcissistic, politically right-wing spin doctor of truthiness and host of The Colbert Report, a late night talk show on Comedy Central. Colbert played his over-the-top caricature for years, often as a foil to his left-wing liberal counterpart on Comedy Central, John Stewart.

During The Late Show’s coverage of the national conventions earlier this Summer, Colbert brought back the Comedy Central Stephen Colbert character for a cameo and that is when someone decided to sic the lawyers on him.

Now, I do not pretend to know the details of the assertions made regarding Colbert’s use of his prior host persona. It does, however, present an interesting question in the law of intellectual property. Can it be that an actor like Colbert may not actually own or have a right to use his own name and persona?

One has to raise an eyebrow—as Colbert himself is known to do—at the suggestion that a network has the right to control the use of the name and persona of a performer like Colbert. Still, is it not also true that, as least in a case like Colbert’s, an actor may create such a unique “character” around his own name and persona that his employer might obtain intellectual property rights in the character, much like in the case of an author of a comic book who creates a new superhero for her publisher?

In a landmark 1950s federal court case, the Ninth Circuit Court of Appeals considered whether a literary character, Sam Spade, was copyrightable. In that case, the court observed:

It is conceivable that the character really constitutes the story being told, but if the character is only the chessman in the game of telling the story he is not within the area of the protection afforded by the copyright.

Warner Bros. Pictures, Inc. v. Columbia Broadcasting System, Inc. (9th Cir. 1954) 216 F.2d 945, 950.

This case has given rise to the “story being told” doctrine, though this area of law is murky, with different tests arguably being applied based upon graphically represented characters like cartoon characters versus purely literary characters versus visually depicted characters in television and movies. See discussion in Metro-Goldwyn-Mayer, Inc. v. American Honda Motor Co., Inc. (C.D. Cal. 1995) 900 F. Supp. 1287, 1296.

Based on the “story being told” test, however, a strong argument can be made that the Colbert character is copyrightable. If any character falls into the category of the “story being told,” it is very likely Stephen Colbert’s character Stephen Colbert. The persona of the character himself was the driving force behind the show and the focus of its humor. Colbert’s right wing caricature is certainly a “unique character” with “specific qualities” that remain constant in his depictions, qualities that quite arguably transcend the actor playing the character. Metro-Goldwyn-Mayer, Inc., supra, 900 F. Supp. at 1296.

With all due respect to Mr. Colbert, when an actor creates or portrays a character that, in and of itself, becomes an icon and the focus of a story or other media, like a Rocky or a James Bond, that character may well give rise to intellectual property rights separate and apart from the actor himself or herself.

Can a corporation protect its logo by copyright as well as by trademark law?

Traditionally, when one thinks of works protected by the law of copyright, one thinks of substantial works of authorship such as a novel, a song or a painting. And, indeed, among the required elements to establish a copyright in a work is that the work contain a certain degree of originality and creativity.

It has been recognized that a corporate logo used as a trademark is nonetheless copyrightable where the logo qualifies, in and of itself, as pictorial or graphic work that meets the general requirements of the law of copyright. See 1 McCarthy on Trademarks and Unfair Competition § 6:18 (4th ed.). Courts have found that a corporate logo can incorporate a “creative drawing” which is a creative work of the sort at the “core” of those types of works protected by the Copyright Act. Bouchat v. Baltimore Ravens Limited Partnership (4th Cir. 2010) 619 F.3d 301, 311.  Indeed, it has been observed that “pictures and logo designs used as marks are no less pictures and designs merely because they appear on labels and in advertisements.” McCarthy, supra, at § 6:18; see Bleistein v. Donaldson Lithographing Co. (1903) 188 U.S. 239 (a pictorial work is no less a subject of copyright protection because it is used to sell goods).

To be copyrightable as a pictorial, graphic, or sculptural work [pursuant to 17 U.S.C. § 102(a)(5)], a work “must embody some creative authorship in its delineation or form.”  37 C.F.R. § 202.10. The logo must demonstrate “artistic features” above and beyond serving as a mere identifier of the source of goods or services.  See Fabrica Inc. v. El Dorado Corp. (9th Cir. 1983) 697 F.2d 890, 894 (pictorial, graphic, or sculptural works must “stand alone” as “works of art,” with “artistic features” separate and apart from their utilitarian purpose); see also John Muller & Co. v. New York Arrows Soccer Team, Inc. (8th Cir. 1986) 802 F.2d 989, 990 (logo for the New York Arrows soccer team lacked the minimum requisite level of creativity to be considered a “pictorial, graphic or sculptural work”).

Even tradedress can be copyrightable where it rises to the level of a unique, creative work of authorship. See Reader’s Digest Association, Inc. v. Conservative Digest, Inc. (D.C. Cir. 1987) 821 F.2d 800, 806 (Reader’s Digest has combined and arranged common typeface and other elements to create a unique graphic design and layout.)

If your company is ever in a position to have to be thinking about pursuing an infringer where trademark protection of a logo is problematic for some reason or perhaps insufficient to bar the particular infringing use at issue, it may be advantageous to consider other theories such as copyright. At the very least, this is a reminder of the need for “creative” thinking about the nature and source of intellectual property protections that may yield alternative sources of protection in many circumstances.

It’s been widely reported in the news and on this blog—a jury in a Federal copyright infringement case has reached a verdict favoring legendary rock band Led Zeppelin, finding that it did not plagiarize the iconic guitar riff from the band’s hit song “Stairway to Heaven.” However, almost nobody is talking about the law behind that verdict.

In the law of copyright, just how similar is too similar when it comes to music? We all know that in the world of popular music, musical styles come and go. There is no question that when a certain “sound” becomes popular, that sound will influence and be echoed by other artists. However, by what standard does the law judge if a musical work is too similar to a prior work?

Among the things that must be proven in any case of infringement of a musical work protected by copyright is that the alleged infringer copied protected elements of the original work. Swirsky v. Carey (9th Cir. 2004) 376 F.3d 841, 844. That may be done by showing that the new work is “substantially similar” to the original work. Two tests are employed by the courts in the 9th Circuit, an “objective extrinsic test” and a “subjective intrinsic test.” Id.

The objective extrinsic test turns on “whether two works share a similarity of ideas and expression as measured by external, objective criteria.” Id. This requires an “analytical dissection,” basically breaking the work down into particular components and comparing them for similarities. Any infringement case involving musical works will involve musicology experts opining on matters such as rhythm, tempo, pitch, chord changes, lyrics, and other stylistic and compositional elements. The courts have observed that there is no “uniform set of factors to be used” in judging the compositional similarity of two works. Swirsky v. Carey, supra, 376 F.3d 841 at 849.

The subjective intrinsic test turns on “whether the ordinary, reasonable person would find the total concept and feel of the works to be substantially similar.” Three Boys Music Corp. v. Bolton (9th Cir. 2000) 212 F.3d 477, 485, quoting Pasillas v. McDonald’s Corp. (9th Cir.1991) 927 F.2d 440, 442.

Another relevant consideration in the Ninth Circuit’s infringement jurisprudence is what is known as the “inverse-ratio rule.” Under that rule, the greater the showing made as to the actual access to the original work by the alleged infringer, the less rigorous the showing of substantial similarity must be. Three Boys Music Corp. v. Bolton, supra, 212 F.3d at 486. In other words, if the evidence were to show that a songwriter had seen the original work performed just before writing his or her hit song that supposedly infringed that original work, then less evidence is required to prove the substantial similarity between the two works. In the Stairway to Heaven case, the plaintiff offered evidence that Led Zeppelin and the plaintiff’s band Spirit had toured together and  Spirit had performed the song that included the opening guitar section that Led Zeppelin had allegedly copied. Access aside, the jury concluded that the works were not sufficiently similar.

Accordingly, infringement of a musical work involves a complicated analysis under the law. That analysis can turn on circumstantial evidence as to how the songs came about, as well pure musical theory. So all that glitters is not necessarily gold in the law of music infringement.

In Robert Plant’s world, all that glitters is not gold, and all that sounds like another artist’s work is not stolen from that artist. Fortunately for Plant and his Led Zeppelin bandmates, a Los Angeles jury agreed. That jury found on Thursday that the estate of Randy Craig Wolfe, the lead guitar player for a Zeppelin contemporary, Spirit, had not proved that the iconic opening guitar riff to “Stairway to Heaven” was lifted from Spirit’s “Taurus.”

The Lawsuit

The suit alleged that Led Zeppelin copied parts of Stairway from Spirit’s single, “Taurus.” Wolfe, who wrote Taurus, stated prior to his death that “it was a rip-off” of his music. His estate now seeks damages and writing credit for Wolfe.

After listening to Taurus,  it is safe to say that even casual fans of Zeppelin’s work can likely identify the chords that Wolfe believed Zeppelin to have “ripped off.” There is also little question that Page and Plant had access to Spirit’s work. Between 1968 and 1969, the two bands played five shows together. Spirit played “Taurus” at each of those shows.

The Jury’s Findings

Indeed, the jury expressly found that members of Led Zeppelin had heard “Taurus.” Nonetheless, a half-an-hour after listening to both songs one last time, the jurors issued their verdict that the songs lacked substantial similarity in their extrinsic elements.

Wolfe’s estate has already vowed to appeal the decision, perhaps based on U.S. District Judge R. Gary Klausner’s refusal to allow the jury to hear alternative versions of Spirit playing “Taurus.” Judge Klausner ruled that the jury should not hear these recordings because Wolfe’s copyright extended only to the sheet music filed with the U.S. Copyright Office.

Vindication of Oft-Accused Artists

Thursday’s verdict comes as something of a vindication for a band that has repeatedly faced copyright infringement claims and accusations. The opening lyrics for “Whole Lotta Love” are remarkably similar to the final verse of the Muddy Waters song “You Need Love.” “The Lemon Song” contains a number of lyrics similar to Howlin’ Wolf’s “Killing Floor,” a song Zeppelin played routinely during the same 1968-1969 American tour in which it opened five shows for Spirit. Copyright infringement suits related to both of these works, as well as several others, resulted in out-of-court settlements and song-writing credit given to the plaintiff. “Stairway” is the first song over which the band has litigated infringement claims through trial.

[Note: This post was authored by Jason Horst.]

Last week the final judgment was entered by United States District Court Judge William Alsup in favor of Google following a jury trial in its long running legal battle with Oracle over Google’s use of bits of the JAVA programming language in Google’s Android smartphones. With a single check mark on a verdict form, the jury in Oracle America Inc. v. Google Inc. (United States District Court for the Northern District of California, Case No. C 10-03561 WHA) found that Google’s use of certain JAVA components was “fair use.”

For six long years Google and Oracle had locked horns, including an earlier trial and trip up to the United States Supreme Court. Oracle, the owner of the JAVA programming language developed by Sun Microsystems, sought more than $9 billion dollars in damages, claiming that internet giant Google’s mobile smartphone operating system, Android, infringed portions of JAVA.

Oracle’s copyright claims included the contention that the Android operating system improperly utilized the structure, sequence and organization of certain components of the JAVA programming code known as “APIs,” essentially modular chunks of software that serve as the interface to certain program libraries implementing different software functions. Use of such publicly available APIs, short for “application programming interface,” is common place in the software industry. On this issue, the question for the jury was whether or not the use of JAVA’s APIs by Google amount to fair use under the law.

It has been observed that the use of APIs is arguably not particularly transformative, an important consideration in deciding fair use (for a broad primer on the boundaries and rules of fair use under copyright law, see my earlier postings Google’s Effort to Digitize Millions of Books is Fair Use and Using “Borrowed” Images in Your Blog). On the other hand, the open source nature of JAVA and the functionality of APIs — standardized code modules designed to function as interfaces with other code — arguably mitigate in favor of a finding of fair use. The jury agreed and vindicated Google’s position that it was fairly building on industry standards and open source protocols.

Of course, the battle will rage on in the appellate courts when Oracle likely appeals. Followers of IP law may be treated to more musings on the law of fair use by Ninth Circuit or even the United States Supreme Court.  Stay tuned.

Two years ago, a federal judge rocked the music industry in holding that pre-1972 recordings may be protected under state copyright laws and are protected by California copyright law.  This holding, in a case brought against SiriusXM, had vast potential ramifications, as it would mean that radio and internet radio stations playing such recordings would have to pay out millions of dollars in royalties that they had never anticipated paying. CBS Radio, however, just scored a legal victory that, if it stands up, would effectively eliminate any artist’s ability to recover royalties for pre-1972 recordings.

Seeking a way to shift the paradigm of the SiriusXM case and the string of similar suits that preceded and followed it, when ABS  Entertainment, which owns the pre-1972 recordings of Al Green and others, sued CBS, iHeartMedia, and Cumulus, CBS decided to throw something of a legal “Hair Mary.”  It argued that “CBS does not play vinyl sound recordings.”  Rather, it plays only re-issued or remastered versions of pre-1972 recordings.

United States District Judge Percy Anderson grabbed CBS’s Hail Mary in the end zone, finding that the sound engineering process in remastering an album constitutes “copyrightable originality.”  As such, CBS was permitted to treat the recordings as post-1972 recordings.

Judge Anderson’s ruling comes despite ABS’s warning that accepting CBS’s remastering argument would result in the owners of sound recordings trumping artists’ rights over their works in all cases.  The judge addressed this point in a footnote, distinguishing the “original expression added by a sound engineer during the remastering process” from the naked conversion between formats (i.e., vinyl to MP3).

The reason that this issue exists is that, on February 15, 1972, Congress brought sound recordings under federal copyright law, but not retroactively. Prior to 1972, musical recordings were protected only be state copyright laws, many of which are based in common law, court-made rules that are not codified in statutes and, at least in many instances, do not require registration in order to protect recorded material.  Works that are copyright protected by state common law are harder to track than those protected by a registered federal copyright.

[This post was written by Jason Horst.]

Moving from the celebratory to the spiritual, the lawyers who (literally) brought you “Happy Birthday” once again find themselves looking to overcome entrenched copyright interests related to one of the country’s most well-known anthems.  Attorneys Mark C. Rifkin and Randall Scott Newman, who recently succeeded in bringing “Happy Birthday” into the public domain, are aiming for a follow-up hit, filing suit against The Richmond Organization (TRO) and Ludlow Music over the copyright to the Civil Rights anthem “We Shall Overcome.”

TRO has held copyrights for “We Shall Overcome” since the early 1960s and has collected millions of dollars in fees for its use since then.  “We Shall Overcome” was popularized by folk singer Pete Seeger in the late 1940s and returned to prominence during the Civil Rights Movement in the 1960s.

Seeger Did Not Write “Overcome”

Rifkin and Newman, as they did in the “Happy Birthday” case, assert on plaintiffs’ behalf that the song is derived from works pre-dating the copyrighted versions.  “We Shall Overcome,” they say, is virtually identical in its musical and lyrical composition to “We Will Overcome,” which Mr. Seeger published and copyrighted in 1948.  Thus, say Rifkin and Newman, “[b]ecause the copyright to the 1948 publication of People’s Songs, Reg. No. B184728, was never renewed and thus expired  in September 1976, … We Shall Overcome entered the public domain no later than that date.”

Origins of the Song Date Back to Early 1900s

The attorneys actually believe that the song entered the public domain far earlier.  Indeed, “We Will Overcome” is a turn-of-the-20th-Century African-American spiritual that Mr. Seeger freely admits learning from a friend.  According to a Library of Congress blog post from 2014, the song appears to have roots in two different songs from that period, one from which its lyrics are derived, and the other from which it draws its melody.  The individual(s) who combined the two, however, is not currently known.

Only time will tell whether Rifkin and Newman turn out to be one hit wonders, or whether they can “Overcome” once again.  If only there were a song they could use to motivate themselves…

[This post was written by Jason Horst.]