Toilet Paper Trade Dress Suit Rolls On:

On March 1, 2010, Koch Industries Inc.’s George-Pacific unit sued Family Dollar Stores Inc. for trademark infringement.  In the complaint, Georgia-Pacific alleges that Family Dollar and its supplier, Sun Paper Co. of Duncan, infringed Georgia-Pacific’s trade dress for its Quilted Northern and Angel Soft toilet paper.  Family Dollar is a discount retail chain located in Mathews, North Carolina, and is accused of selling toilet paper that resembles the pattern used on Georgia Pacific’s toilet paper as well as using Georgia-Pacific’s Angel Soft and Quilted Northern trademarks without authorization.  Specifically, Georgia-Pacific alleges that its marks are placed on Family Dollar’s products with the phrase “compare to” which creates a false impression that the products are in fact comparable.  Georgia-Pacific claims that the Family Dollar toilet paper is inferior and therefore Georgia-Pacific has suffered harm because customers are confused and likely to think that Georgia-Pacific’s Products are the products sold at the Family Dollar (a form of Reverse Passing-Off).

This litigation is no small matter.  Since 1998, sales of the Quilted Northern toilet paper exceeded $7 billion, and between 2002 and 2009, sales for the Angel Soft exceeded $5 billion.  Thus, the outcome of this litigation will have serious financial implications for toilet paper producers and their marketing programs.  Georgia-Pacific seeks to prevent future infringement by Family Dollar and its distributor in addition to an order preventing Family Dollar from asserting that the toilet products are comparable.  Georgia-Pacific also seeks money damages, costs and attorney fees.  It will be interesting to see how this suit plays out (check back for more updates). 

Georgia-Pacific Consumer Products LP v. Family Dollar Stores Inc., 1:10-cv-00584-JEC, U.S. District Court, Northern District of Georgia (Atlanta).

No Doubt Sues Activision Under Right of Publiciy Claim

The Orange County based rock band, No Doubt, has recently filed a lawsuit in Los Angeles Superior Court, claiming that Activision, the creator of Band Hero (the latest of the Guitar Hero series), exceeded its contractual terms that allowed activition to use the  likenesses of band members Gwen Stefani, Tony Kanal, Tom Dumont and Adrian Young in the video game.   As the band members see it, the game has made the members a part of a “virtual karaoke circus act.”

The complaint states that “Activision has deceived and confused the public into believing that No Doubt authorized the use of its name and likeness for the Character Manipulation Feature of Band Hero and that No Doubt approves and endorses the appearance of its members individually performing songs that are wholly inappropriate and out of character for No Doubt.”   The band members view the Character Manipulation Feature as particularly problematic since users could, for example, have Stefani’s image sing to the Rolling Stones’ “Honky Tonk Woman.” 

Jim Gueiront, No Doubt’s manager, claimed ”[the members] are bitterly disappointed that their name and likeness [were] taken and used without their permission…[Activision] agreed to play three No Doubt songs as a band…. Activision then [without permission] put them in 62 other songs and broke the band up.” 

Activision believes it is within its legal rights and that the lawsuit is meritless: “Activision has a written agreement to use No Doubt in Band Hero – an agreement signed by No Doubt after extensive negotiations with its  representatives, who collectively have decades of experience in the entertainment industry.  Pursuant to that agreement, Activision worked with No Doubt and the band’s management in developing Band Hero.” 

To succeed on a right of publicity claim under California law, a plaintiff must show four elements: (1) the defendant’s use of the plaintiff’s identity; (2) the appropriation of plaintiff’s name or likeness to defendant’s advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury.  Hilton v. Hallmark Cards, 580 F.3d 874, 889 (9th Cir. 2009); Downing v. Abercrombie & Fitch, 265 F.3d 994, 1001 (9th Cir. 2001).  

It will be interesting to see how elements 3 and 4 will be litigated. 

(http://latimesblogs.latimes.com/music_blog/2009/11/no-doubt-sues-activision-over-band-hero.html)

Do Ringtones Played in Public Spaces Violate the Copyright Act?

In an attempt to collect additional royalties from Verizon Wireless and AT&T, ASCAP recently tried to persuade a federal judge that playing a ringtone on a cellular phone in public amounted to copyright infringement. 

Enforcement issues aside, In re Application of Cellco Partnership (09 CIV. 7074) raises important policy questions regarding the scope of copyright.  Are copyright holders overly compensated for their creative efforts under the current regime or are more incentives needed to keep pace with the changes in technology that allow for massive infringement with the single click of a mouse?  Regardless of the policy viewpoint adopted, the public can (for now) take comfort in letting their cell phones ring at the park or the beach without worrying that doing so constitutes copyright infringement. 

At issue in Cellco was whether ringtones playing in public placed constituted a “performance” within the meaning of Section 106 of the Copyright Act, which provides that a copyright owner has the exclusive right “in the case of literary, musical, dramatic, and choreographed works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly.”  Section 101 specifies that to perform or display publically means to “transmit or otherwise communicate a performance … by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”  

The Court reasoned that because only subscribers receive the transmission or alleged performance, such transmission or performance is not available to the public (non-subscribers) and thus not covered by the Transmission Clause.  According to the Court, “there is no qualifying public performance under §106(4) when the customer uses the ringtone to alert her to an incoming call.  Thus, even [if] the downloading of a ringtone is considered as the first link in the chain of transmissions, it does not qualify as a public performance.”   Accordingly, ringtones played in public places did not qualify as public performances within the meaning of Section 106 of the Copyright Act and the Court held that Verizon could not be directly or secondarily liable. 

Verizon was found not to be directly liable because Verizon neither “performs” the music nor engaged in “conduct that can be said to cause a ringtone to be played in public.”  In applying Section 101 of the statute, the Court held “Verizon does not ‘recite, render, play, dance or act [the ringtone] either directly or by means of any device’ and thus does not ‘perform’ the music.”  The Court noted that “Verizon’s only role in the playing of a ringtone is the sending of a signal to alert a customer’s telephone to an incoming call.”

After looking to the exemption from §106(4) found in §110(4) for “those performances of a musical work that occur within the ‘normal circle of a family and its societal acquaintances,” the Court found that Verizon could not be secondarily liable.  The Court reasoned that the “expectation of profit is important to determining whether a performance fits within the §110(4) exemption,” but “Verizon customers are not playing ringtones for any ‘commercial advantage;’ they do not get paid any fee or compensation for these performances; and they do not charge admission.”  Thus, after finding that neither the customers nor Verizon were liable for copyright infringement, the Court granted Verizon’s motion for summary judgment (the Court also granted summary judgment in favor of AT&T “for substantially the same reasons”  in In Re Application of AT&T Mobility, (09 CIV. 7072)).  

Consequently, Verizon Wireless and AT&T do not need public performance licenses for the ringtones they sell to their customers. 

This decision seems to comport with the general policy underlying Copyright Law – to grant copyright holders exclusive rights to their works in order to “promote the Progress of Science and useful Arts.”  If indeed economic rewards to authors should be treated as secondary to the broad dissemination of works for the public benefit, then denying ASCAP’s request for additional royalties in order to give the public access to the works for which they have already paid rings true to me.