The Firm is proud to announce that Emily Mola, a law clerk at Malloy & Malloy, P.L., has earned the 2020 International Trademark Association’s (INTA) Ladas Memorial Award for her article, Trademark Law’s Capability to Protect Traditional Cultural Expressions from Unauthorized Borrowing and Theft. With this award, her article will be considered for possible publication in The Trademark Reporter, INTA’s legal journal.
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11th Circuit Draws Distinction Between the Accrual of Copyright Infringement and Copyright Ownership claims.
In Buddy Webster v. Dean Guitars, the 11th Circuit held that unlike an ordinary copyright infringement claim, which accrues for each infringing act, a claim concerning ownership accrues only once. Under the Copyright Act, a civil copyright action must be brought within three years after the claim accrues. 17 U.S.C. § 507.
This case centered on the late-guitarist Darrell Abbott of the famous heavy-metal band Pantera, and importantly, the lightning storm graphic on his “Dean from Hell” (“DHF”) guitar. Buddy Webster, a successful guitar maker, designed the DHF guitar and commissioned someone to paint the lightning storm graphic on the guitar, which was subsequently given to Abbot in 1987.
In 2004, the late Abbott entered into an endorsement-type contract with Dean Guitars, which started reproducing and selling reissues of the DHF guitar with the lightning storm graphic without Webster’s consent. In 2007, Abbott’s estate claimed sole ownership of the lightning storm graphic. After over a decade of displeasure, Webster filed suit in 2017, alleging copyright infringement based on Dean’s sale of the DHF reissues.
The district court concluded that Webster’s copyright claim was time-barred because the claim accrued more than three years before Webster filed suit, noting that the “gravamen” of Webster’s claim of copyright infringement was ownership. Webster’s main argument was that he owns the lightning storm graphic and that Dean Guitars reproduced the graphic without his consent. Because the parties agreed that Dean reproduced the graphic on the Dean reissue guitar models, the essence of the dispute hinged on ownership.
On appeal, the 11th Circuit noted two different standards for the accrual of copyright ownership claims: (1) the First, Second, Fifth, and Seventh Circuits have held that copyright ownerships claims accrue when the plaintiff learns, or should as a reasonable person have learned, that the defendant was violating his rights; (2) the Sixth and Ninth Circuits have held that copyright ownership claims accrue when there is a plain and express repudiation of co-ownership by one party as against the other.
The 11th Circuit reasoned that Webster’s copyright ownership claim was time-barred under either standard. First, Webster had reason to know his alleged ownership rights were being violated as early as 2004, when he first learned that Dean Guitars was reproducing the DHF reissues. Second, Webster learned in 2007 that Abbott’s estate claimed sole ownership of the lightning storm graphic, an express repudiation of co-ownership. Therefore, Webster’s claim accrued in 2007 at the latest, and the three-year limitation period expired years prior to his copyright action in 2017.
The 11th Circuit affirmed the district court’s decision, and for the first time, it held that unlike ordinary copyright infringement claims, which accrue for each infringing act, a claim concerning mainly ownership accrues only once. Furthermore, any copyright infringement claims flowing from a time-barred ownership claim, were also barred.
For further information, the Court’s opinion can be found below:
Supreme Court Rules that Willful Infringement Is Not A Prerequisite for an Award of Profits in Trademark Infringement Cases
*** APRIL 2020 UPDATE ***
In an unanimous opinion dispelling a split approach among Circuits, the Supreme Court ruled that a trademark infringement plaintiff is not required to demonstrate that the defendant’s trademark infringement activity was willful in order to obtain an award of the defendant’s profits. The question revolved around the language of Section 43(a), 15 U.S.C. § 1125(a), which states:
When . . . a violation under section 1125(a) of this title, or a willful violation under section 1125(c) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled . . . subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.
The Circuits have been split as to how to apply the “principles of equity,” and what role a “willful violation” should play. In order to reward profits, the Second, Eighth, Ninth, Tenth, D.C., and Federal Circuit required a finding that the Defendant acted willfully in the infringing activity, whereas the Third, Fourth, Fifth, Sixth, Seventh, and Eleventh Circuits found that the infringer’s intent was merely one of the many factors in the weighing of the equities. The First Circuit took an alternative approach by requiring willfulness only when the parties are not competitors.
Justice Gorsuch, who authored the Supreme Court’s deciding opinion, noted that an innocent infringer and an intentional one “stand in very different shoes.” While the Justices “do not doubt that a trademark defendant’s mental state is a highly consideration in determining whether an award of profits is appropriate,” this acknowledgement that willfulness of a defendant plays an important role in the determination is a “far cry” from the “inflexible precondition” that willfulness be proven to award profits. As such, an establishment of willful infringement is not required to obtain an award of an infringer’s profits.
It was a historic day for the Supreme Court of the United States, as the high court conducted oral arguments that were broadcasted in a live audio stream for the first time in its history. The format for the argument was also unique, with the Justices asking questions in order of seniority.
The first case to be argued was a trademark case, involving an appeal of the U.S. Patent & Trademark Office’s refusal to register BOOKING.COM, based on the PTO’s position that it is a generic term for hotel reservation services and other related services, such that is incapable of functioning as a trademark. The Applicant appealed the PTO’s decision to a federal court, which ruled in its favor, finding BOOKING.COM to be a registrable (and thus enforceable) trademark. The decision was appealed to the U.S. Court of Appeals for the Fourth Circuit, which affirmed the district court’s ruling and held that it did not commit error when it found that the PTO “failed to satisfy its burden of proving that the relevant public understood BOOKING.COM, taken as a whole, to refer to general online hotel reservation services rather than Booking.com the company,” i.e., as a source-identifying trademark.
The audio of the Supreme Court argument can be found here: https://cs.pn/2SI6DJE. The decision on appeal, from the U.S. Court of Appeals for the Fourth Circuit, can be found here: http://www.ca4.uscourts.gov/Opinions/172458.P.pdf.