Supreme Court Denies Certiorari in Montz v. Pilgrim Ghost Hunters Lawsuit

In an earlier post, I wrote about the Ninth Circuit’s decision in Montz v. Pilgrim Films and Television, Inc. that a screenwriter’s claim for an implied contract was not preempted by the Copyright Act. Because this is a decision of the Ninth Circuit, which decides cases that originate from California, the case is of tremendous significance to Hollywood movie studios. It has the potential to subject them to liability under California law when they use an idea from a script, even if they do not commit copyright infringement, if there is an implied contract that will compensate the writer if they use the writer’s ideas. Such claims are known as “Desney claims,” based on the California Supreme Court’s decision in Desny v. Wilder, 299 P.2d 257 (Cal. 1956).

Of course, Desny predates the enactment of the Copyright Act of 1976, which expressly precludes the states from regulating the same exclusive rights that the Copyright Act regulates. In Montz, A Ninth Circuit en banc panel was divided on the issue whether the implied contractual claim of the screenwriter survived a preemption challenge, with the majority reasoning that it did because the plaintiff’s implied contractual claim rested on “a bilateral expectation that he would be compensated for use of the idea, the essential element of a Desny claim that separates it from preempted claims for the use of copyrighted material.” The Ninth Circuit concluded that Pilgrim Films and NBC were potentially liable for using material submitted in a screenplay by Montz in the sci-fi television show Ghost Hunters. The Ninth Circuit also ruled that a breach of confidence claim under California law was not preempted.

Defendants asked the Supreme Court to hear the case, but today the Supreme Court declined to do so. The Petition for Certiorari is available at the SCOTUSblog. The defendants argued that the causes of action that the Ninth Circuit decision upheld under California law “would have been preempted in the Second and Fourth Circuits.” While appellate experts thought there was a reasonable chance that the Supreme Court would take the case, its decision not to do so is not that surprising. The Supreme Court only grants a very small percentage of the cases it is asked to hear, and sometimes makes the decision to hold off deciding an issue until there is a very clear Circuit split. While the defendants argued in asking for Supreme Court review of Montz that the Second and Fourth Circuits would have reached a different result based on differing copyright preemption jurisprudence, they could not show a split on the precise issue the Court addressed in Montz. This probably explains why the Supreme Court denied certiorari. It does not mean that the Court necessarily will agree with the Ninth Circuit’s analysis, should it take a future case in this area.


Google’s Post Argument Letter Brief to the Second Circuit Discusses DMCA Red Flags and “Syndication”

The Second Circuit heard oral argument on October 18 in the landmark litigation between Viacom and Google over whether the latter is liable for alleged copyright infringement of Viacom content on YouTube. Google has now submitted a post argument letter brief to the Second Circuit following an unusual order from the Court to both parties following oral argument. Viacom’s response is due by November 8.

The Second Circuit has asked that the parties address the issue of “red flag” awareness under the Digital Millennium Copyright Act (DMCA) and whether Google can claim the protection of the DMCA safe harbor provision, which immunizes service providers from copyright liability, given its “syndication” of YouTube content to third parties. The second question refers to YouTube’s practice of reformatting YouTube content so that it is available not just on personal computers but also on other platforms, including mobile phones, table devices, and Internet-connected televisions. The two questions asked by the Second Circuit are in full:

1. whether and how the red-flag knowledge provision [§ 512(c)(1)(A)(ii)] would apply under the Defendants’ “specific” knowledge construction of § 512(c)(1)(A); and

2.whether YouTube’s “syndication” of videos to third parties falls outside the scope of safe harbor protection for activities that occur “by reason of . . . storage at the direction of a user” under § 512(c)(1).

Viacom owns the rights to such popular shows as South Park and the Daily Show with John Stewart, clips of which it claims were uploaded to YouTube without its authorization. Its lawsuit focuses primarily on YouTube’s early years, before Google’s October 2006 $1.6 billion stock acquisition of the popular startup, when Viacom alleges that copyright infringement was rampant and known to YouTube’s founders. Google counters that under the DMCA, when a hosting website such as YouTube has general knowledge that there is some amount of infringing activity on its site, that is insufficient to subject it to secondary liability for the copyright infringement. Rather, Google argues that a “service provider” (as YouTube is under the definition given in the DMCA) can only be subjected to liability when it has specific knowledge of activity that is clearly copyright infringement.

The argument before the Second Circuit concerned whether the District Court judge was correct in his ruling that YouTube is shielded from liability by the safe harbor provision of the DMCA. Under the DMCA, a service provider that establishes a notice and take down scheme, which includes providing an agent to receive notices of copyright infringing activities, and otherwise complies with the DMCA, is shielded from liability. Much of the recent Second Circuit oral argument reportedly focused on whether, in granting summary judgment, the District Court erred by discounting some factual evidence that might lead a jury to conclude that YouTube’s founders had knowledge of copyright-infringing activity. Viacom has pointed to various emails that it claims provide evidence that YouTube’s founders knew that copyright infringement on YouTube in its early years was wide-spread.

The DMCA precludes liability against a service provider, so long as the service provider has neither “actual knowledge” or what may be called “red flag” knowledge, and upon obtaining actual or red flag knowledge promptly removes or disables access to the copyright-infringing material. The statute describes actual knowledge and red flag knowledge in § 512(c)(1)(A)(i) and 512(c)(1)(A)(ii), respectively, specifying that a service provider is not liable for copyright infringement when the service provider:

(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing; [and]

(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent.

The Second Circuit is clearly concerned with how to articulate a legal standard for liability that leaves room for both subsections (i) and (ii) above to operate independently of each other. Since Google has argued that knowledge of specific infringing activities is necessary to preclude application of the safe harbor, the Second Circuit query to Google asks it to explain how a service provider could be liable under subsection (i) and not (ii), and vice versa.

Google argues that red flag liability could attach under the DMCA in a case in which the service provider knew of facts or circumstances that would have made it apparent to a reasonable person that specific content constituted copyright infringement, even if the service provider lacked the subjective awareness that there was copyright infringement. As Google articulates the standard for liability it has urged upon the Second Circuit:

[T]o disqualify a service provider from the safe harbor for a given instance of infringement, a plaintiff must show that the service provider (a) was actually aware of facts or circumstances (b) from which that particular infringement would have been apparent to a reasonable person, and (c) failed to expeditiously remove the infringing material of which it had such awareness.

Google then argues that Congress evinced an intent to set a high bar before red flag liability could attach under the DMCA. The brief argues that the copyright infringement must be so blatant that it should have been immediately apparent to the service provider. To the extent that any independent investigation is required to verify that the content is actually copyright infringement, Google argues that the situation is not what Congress had in mind.

Google goes to some length to address the core of the concern the Second Circuit clearly had, which is the possibility that Google’s interpretation might render subsections (i) and (ii) redundant. A standard tenet of statutory construction is that each section of a statute should retain independent significance. Google’s brief argues that its interpretation of § 512(c)(1)(A)(ii), which it describes as “well established,”

in no way renders the actual-knowledge provision superfluous or eliminates a service provider’s obligation to respond to genuine “red flags.” Instead, the knowledge provision and the awareness provision establish alternative ways for a plaintiff to show that a service provider was required—without receiving a takedown notice—to “expeditiously” remove “the material” that the plaintiff alleges was infringing (§ 512(c)(1)(A)(iii)). A service provider might have “actual knowledge” even in the absence of facts or circumstances from which that infringement would be apparent to an objective observer. Alternatively, a service provider, even if lacking subjective knowledge that the material was infringing, might have been aware of facts or circumstances that, by any objective measure, made that infringement apparent. H.R. Rep. 105-551, at 53; S. Rep. 105-190, at 44.

Google’s brief argues that its interpretation is consistent with the DMCA’s overall scheme, which does not place the burden on service providers to investigate and remove infringing material, but places that burden on copyright holders. Google notes that § 512(m) states that “affirmatively seeking facts indicating infringing activity” is not a responsibility that falls to service providers. Google argues that Viacom’s interpretation would upend “carefully wrought notice-and-takedown regime, which worked so well in this case.”

§ 512(c)(1) also specifies that the DMCA immunity is only applicable to cases in which “by reason of the storage at the direction of a user” there is “material that resides on a system or network controlled or operated by or for the service provider.” Viacom argues that because YouTube reformulates user-submitted content so that it is available on a wide variety of platforms, the videos cannot be said to be stored solely “at the direction of a user.”

In its brief, Google argues that Viacom’s argument on this point “is contrary to all the case law and would undermine the basic purpose of the DMCA.” Google argues that case law protects a service provider that uses “software functions” to make user-submitted content accessible. Google warns that any ruling that would create liability for service providers that used software to reformat user submissions would have severe negative consequences. It raises the specter that “[s]ervice providers would be frozen in time, unable to make their services compatible with a new generation of hardware, lest they lose DMCA protection by trying to keep pace with technological change.”

Google also addresses a separate argument made by Viacom, which is that YouTube entered into a contractual relationship with Verizon under which it manually provided approximately 2,000 videos to Verizon. Google argues that Viacom has not demonstrated that any of this content contained copyright-infringing material and that it is “totally irrelevant to this case” since none of Viacom’s videos were provided to Verizon.

It will be interesting to see how Viacom responds to Google’s arguments in its forthcoming brief. I’ll provide a post next week summarizing Viacom’s response.

Questions Regarding Copyright Preemption and the Constitutionality of the California Resale Royalty Act

The New York Times has an article reporting on three class action lawsuits based upon the California Resale Royalty Act, which name as defendants the well-known auction houses Sothebys and Christies, as well as eBay. Separately, the Los Angeles Times reports that the California law is also the basis for class action lawsuits against nine California art galleries, variously located in Los Angeles and San Francisco. The California Resale Royalty Act, uniquely within the U.S., entitles artists to a resale royalty of five percent on sales of fine art in California, or by persons who have been California residents for at least two years, when the the gross resale price is equal to or greater than $1000. The California Arts Council provides some of the details about how the law works in practice. Questions that have lurked for years regarding whether the California law can coexist with the federal Copyright Act, as well as whether it violates the Constitution, are sure to come to the fore as the litigation in these cases runs its course.

The immediate impetus for passage of the California Resale Royalty Act was a 1973 New York auction in which taxi baron Robert Scull sold a painting that he had acquired for $900 fifteen years prior for $85,000–a handsome profit indeed, but one which drew the fierce ire of Robert Rauschenberg, the painter that produced the work. An engraged Rauschenberg, upon seeing his 1958 painting “Thaw” sell for this rather large sum, without any of the proceeds going to him, reportedly shoved Scull following the close of the auction and declared that he had not invested so much hard work into his painting “just for you to make that profit.” He believed that, as a matter of basic fairness, that as the artist he was entitled to a portion of the auction proceeds. In California, the legislature agreed with Rauschenberg’s sentiment and enacted the law at issue in the current class action cases. It was signed by governor Jerry Brown in 1976, with Rauschenberg appearing at the signing ceremony, and went into effect in 1977.

California’s law is in keeping with the philosophical concept of artist’ moral rights, or “droit de suitel,” as they would say in France. One tenet of moral rights laws is that authors should be able to exercise a degree of control over how their artwork, even following the initial sale. In comparison to continental Europe, the U.S. has never been firmly committed to the basic ideas of moral rights in copyright law. Although Congress passed a law in 1990 entitled the Visual Artists Rights Act of 1990 (VARA) that gives artists certain moral rights to proper attribution and protects the integrity of their original work, neither Congress or any state other than California has seen fit to mandate resale royalty payments. In France, legislation giving artists royalties in resales was enacted in 1920. Apparently, the law was inspired by sympathy for the plight of the painter Millet’s granddaughter, who was selling flowers on the street at the time one of Millet’s paintings sold for one million francs. The UK changed its laws in 2005 to give artists royalties from resales. It is interesting to note that in the UK, art dealers and auction houses made the argument that art sales would simply shift to Switzerland and the U.S., given the absence (with the exception of California’s law) of mandatory resale laws in either country.

While there is not a great deal of case law on the validity of California’s law, as noted by the Los Angeles Times, this is not the first time that the enforceability of the law has been at issue. More specifically, in 1977, a legal action brought by Los Angeles art dealer Howard Morseburg argued that the law was unconstitutional. Morseburg argued that the law was preempted by the 1909 Copyright Act. In addition, he argued that it violated the Constitution’s Contract Clause, because the state was interfering with his ability to freely negotiate contracts, and violated the due process clause by depriving him of a fundamental property right. The District Court ruled against Morseburg and the case went up to the Ninth Circuit, which also rejected Morseburg’s arguments that the statute was invalid. The Court ruled that any interference with Morseburg’s right to contract was based in legislation that “serves a public purpose and is not severe.” It found that the California legislature had a rational basis to pass legislation designed to support artists and fairly quickly rejected the argument that the law violated the due process clause.

Of potentially critical importance with respect to the current round of class action lawsuits, at the time when Morseburg filed his test case, the federal Copyright Act of 1976 had not yet gone into effect; it passed in 1976, but went into effect in 1978. There is a major, unresolved legal issue as to whether the Copyright Act preempts the California Resale Royalty Act, since Congress in passing the Copyright Act expressly stated that it was occupying the field and insofar as state laws regulate the same subject matter, it is the Copyright Act, and not the state laws, which are applicable. In the lawsuits described above, the defendants can be expected to argue that the Copyright Act’s first sale doctrine preempts the legislative scheme in California. In addition, they may attempt to argue that the California law is unconstitutional as a Fifth Amendment taking of property without compensation, an issue raised in academic writing on the California Resale Royalty Act.

Copyright preemption cases can be quite tricky. Section 301 of the Copyright Act contains the preemption language of the Copyright Act. Section 301(a) provides:

On and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.

Reviewing courts have typically required state laws to have an extra element that goes beyond the exclusive rights set forth in the Copyright Act before finding that the laws survive preemption. But applying this test has created some sharp differences of opinion on the preemption question, with a good example being the Ninth Circuit’s decision in the recent case Montz v. Pilgrim Films & Television, Inc. I have previously blogged about the preemption issue that the Ninth Circuit faced in that case.

One argument for preemption is based on the interaction between Sections 106 and 109 of the Copyright Act. Section 106 of the Copyright Act gives the copyright holder an exclusive right of initial distribution, but makes clear–by stating that the exclusive rights granted in Section 106 are subject to Sections 107-122–that this exclusive right can only be understood in conjunction with the first sale exception in Section 109. Section 109(a) provides in relevant part:

Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.

The auction houses will no doubt argue that their business model is based upon the copyright law’s first sale doctrine, and that the California law interferes with the careful balance struck by the Copyright Act. Because the exclusive right to distribute the copyrighted work is not unlimited, as Section 109(a) creates an important exception, the argument goes that it regulates an area that is well within the subject matter of the Copyright Act. On the other side, California will argue that the law is fully consistent with the Copyright Act because it does not bar resales of works, nor does it empower copyright holders to bar resale of works or bargain for the terms of resale. Rather, from California’s perspective it is better thought of as state regulation of private contracts. While courts have held that contractual terms in end user agreements are enforceable and are not preempted by the Copyright Act, they may view a state regulation of contracts that overlaps with the Copyright Act as being more vulnerable to a preemption challenge.

There is yet another preemption issue that may be raised in the class action lawsuits concerning the California Resale Royalty Act. This is whether Section 106A, which contains the text of the Visual Artists Right Act of 1990, preempts state laws, such as that of California, which address moral rights. Section 301(f)(1) provides:

On or after the effective date set forth in section 610(a) of the Visual Artists Rights Act of 1990, all legal or equitable rights that are equivalent to any of the rights conferred by section 106A with respect to works of visual art to which the rights conferred by section 106A apply are governed exclusively by section 106A and section 113(d) and the provisions of this title relating to such sections. Thereafter, no person is entitled to any such right or equivalent right in any work of visual art under the common law or statutes of any State.

While this issue may come up in the litigation, I do not think the preemption argument here is persuasive. VARA, as noted above, addresses artists’ rights to attribution and the integrity of their work, but does not have anything to say about other aspects of “droit de suite.” I find it hard to believe that California’s creation of a right to royalties from resales of artwork is “equivalent” to any of the rights that VARA bestows upon visual artists.

The takings clause issue is another legal issue that is likely to feature in the class action lawsuits brought under the California Resale Royalty Act. Emily Eschenbach Barker addresses this issue in a recent article entitled “The California Resale Royalty Act: Droit de (not so) suite,” 38 Hastings Const. L. Q. 387 (Winter 2011). The question is whether, in enacting legislation that mandates that a five percent royalty rate be paid to visual artists from the resale of their artwork the state is taking property without just compensation, in violation of the Constitution. My own intuition, without having fully researched this issue, is that courts are unlikely to find this is an unconstitutional taking under various precedents in the field of regulatory takings law.

To be sure, the class action lawsuits regarding the California Resale Royalty Act raise some interesting legal questions. I’ll keep my eyes open for future developments.

Recap of Supreme Court Oral Argument in Golan v. Holder

Yesterday the Supreme Court heard from both sides in Golan v. Holder, a case that involves a dispute over whether Congress can grant retroactive copyright protection to foreign authors. Congress did so in passing Section 514 of the Uruguay Round Agreements Act, which “restored” copyright protection to foreign authors who were previously ineligible for copyright protection or failed to comply with copyright formalities. Petitioners argue that taking works from the public domain and restoring their copyright protection–examples include works by Shostakovich and Stravinsky–is not authorized by the Progress Clause, which authorizes Congress to set limited terms of copyright protection to promote progress in science and the useful arts. Petitioners further argue that even if Congress had authority to pass the legislation at issue that it infringes upon their First Amendment rights to free expression. Prior to the legislation, all members of the public could perform works that they believed were in the public domain.

As the attorney for the petitioners, Anthony Falzone, presented his argument he faced the most intense questioning from Justice Ginsburg. Justice Ginsburg is the author of the Court’s most analogous precedent, Eldred v. Ashcroft, in which the Court ruled that Congress had the authority to extend existing terms of copyright to, in most cases, the life of the author plus seventy years. Justice Ginsburg that this case involved a situation in which whole categories of work were deemed ineligible for a term of protection and now the U.S. was granting them protection in order to meet its obligations under the Berne Convention. Justice Ginsburg opined: “We are not talking about a case where you’ve had the protection, enjoyed it and then it expired.” Mr. Falzone, however, did not concede the point but repeatedly argued that when Congress determines that a work should receive “zero” protection it still qualifies as a “limited time” for purposes of the Progress Clause.

The Court did not delve too deeply into the dispute between the petitioners and the government over whether the First Congress, in the original Copyright Act of 1790, granted copyright protection to works in the public domain. This historical question is potentially significant insofar as it would set a precedent of Congress restoring works in the public domain. The issue came up in an exchange between Justice Sotomayor and Mr. Falzone. Later in the argument, when the government was presenting its case, Justice Alito suggested that, even if it is true that the Act of 1790 removed some works from the public domain, it “show[s] at most that retroactive protection can be granted when there is an enormous interest in doing so, namely, the establishment of the uniform copyright system at the beginning of the country.”

Another issue that some of the Justices were interested in is whether Congress’s decision to remove works from the public domain furthers progress in science and the useful arts, the basis for Congress’s authority to enact copyright term limits. Mr. Falzone argued that “a statute that does nothing, like this one, but take old works out the public domain without any impact on prospective incentives, cannot stimulate the creation of anything.” This was argument was met with some skepticism from Justice Sotomayor, who argued that the law Congress passed create an incentive for foreign authors to promote their works in the U.S. Chief Justice Roberts joined in, suggesting that the law does create at least some benefit for American authors abroad. He noted that the Court of Appeals described the incentive as “meager,” but said “we haven’t really required much more than that.” Justice Scalia seemed most open to the argument that this law does not further any progress in science or the useful arts.

While Mr. Falzone conceded that copyright laws in general are in some tension with the First Amendment right of expression insofar as some works cannot be reproduced by the public or performed publicly, he argued that this situation was unique. Mr. Falzone stated that “An ordinary copyright statute does not revoke the public’s Federal right to copy and use works in the public domain.” The effect of the legislative scheme at issue here was to take speech away from the public and convert it into private property, which he argued should trigger heightened First Amendment scrutiny. In answering a question from Justice Kennedy about the nature of the public domain, Mr. Falzone stated that “the public domain is owned collectively by the public, and in fact, decisions of this Court going back to the 19th century refer to it as public property.”

Solicitor General Donal Verrilli argued the case on behalf of the government. He argued that rather than set a term limit of zero, Congress had simply not entered into treaties with certain countries, meaning that their nationals were denied copyright protection in the U.S. He went on to state that the law at issue simply grants them the term they would have received had they been eligible for copyright protection when they published their works, or complied with copyright formalities that the U.S. no longer requires.

Justice Alito then asked what would happen in a case in which Congress provided copyright protection to works that had a definite term of years that had expired. Mr. Verrilli urged the Court to hold off on deciding that issue, but stated that Congress may be able to plausibly do so, subject to the limit that any grant of copyright would necessarily have to go to an author.

Justice Alito how that limit applied in this case, in which Congress restored copyrights to numerous authors who long ago passed away. Mr. Verrilli answered by noting that the legislation at issue only applies to works that are still under copyright protection in the authors’ own country and highlighting the importance to the U.S. of unambigously complying with the Berne Convention. This answer was plainly unsatisfactory from the viewpoint of Justice Scalia, who told Mr. Verrilli that “this is either okay under the copyright clause or it isn’t” and that any treaty obligations were irrelevant to that threshold inquiry. Mr. Verrilli insisted that there were not any textual limitations in the text of the Constitution that precluded Section 514.

Justice Breyer and Mr. Verilli had a rather lengthy dialogue in which Justice Breyer was openly skeptical that Section 514 was doing anything to lead to the creation of new copyrightable works but was only burdening consumers who will now be forced to pay higher prices to acquire works that were previously in the public domain. Justice Breyer described the effects of the law as creating a situation in which “libraries, music lovers, book buyers will either pay more for things already in existence or will simply be unable to get them if they are orphans [works for which the copyright holder is unknown], so that other countries will impose similar kinds of restrictions.” Justice Breyer echoed Justice Scalia’s earlier comments in questioning whether Section 514 promotes any progress in science or the useful arts.

Mr. Verilli argued that Section 514 should not be subject to heightened First Amendment scrutiny. He raised the specter of any future adjustments by Congress of existing copyright laws being subject to First Amendment challenges. The Chief Justice asked whether if the national anthem were suddenly to receive copyright protection, Jimmy Hendrix’s unique rendition would be possible? Mr. Verilli noted that Section 514 contains some protection for derivative works and further emphasized the traditional ways in which copyright laws have been seen to be harmonious with the First Amendment: the idea/expression dichotomy and the fair use exception.

On the First Amendment issued, Mr. Verrilli emphasized the U.S. interest in demomstrating compliance with the Berne Convention. He commented that “Congress enacted section 514 at the urging of executive branch officials who were charged with trying to ensure that we could integrate ourselves into the international system of copyright protection.” He argued that even if intermediate scrutiny applied in the First Amendment analysis, the law at issue would pass muster given the strong U.S. interest in being seen as in compliance with the Berne Convention. Justice Breyer was unpersuaded by this argument, noting that the briefs in the case argued that the U.S. could have passed legislation that was less restrictive of First Amendment rights in order to meet its obligations under Berne.

There were obviously some divergent views at oral argument, and I will update this blog when the Court gets around to issuing its opinion in the case.

The First Amendment Standard of Review in Golan

I previously posted a fairly detailed explanation of the issues before the Supreme Court in Golan v. Holder, a case scheduled for oral argument on October 5. At issue is a law passed by Congress that removes certain works from the public domain, which were denied copyright protection due to foreign authors’ failure to comply with copyright formalities, and “restores” copyright protection to these works. Petitioners argue that this law is a dramatic departure from the traditional understanding that once works enter the public domain, they are there to stay. They argue that Congress’s removal of works that numerous members of the public had used in their professional careers–such as professors and orchestras–infringes on their First Amendment rights to expression.

It is possible that the Court will not reach the First Amendment issue because there is an additional issue regarding whether the law falls within Congress’s power to pass copyright legislation setting a term of protection for a limited period of time. But, assuming the Court finds that Congress did have the authority under the Progress Clause to enact the law, it will still need to address the proper standard of review for the First Amendment issue.

As this is something of a novel First Amendment case, with no clear Supreme Court precedents on issue, the standard of review is not entirely clear. The case that bears the most similarity, Eldred v. Ashcroft, involved the extension of the copyright term for works that were still under copyright protection. The Court did not delve too deeply into the First Amendment issue in that case because it said simply that the extension of a copyright term falls within the traditional contours of Congress’s legislative powers in this area. The Court also argued that copyright law and the First Amendment existed comfortably together, particularly given the idea/expression dichotomy within copyright law and the fair use doctrine.

It is at least conceivable that the Court could apply any of the three standards of review for First Amendment issues: rational basis review, intermediate scrutiny, or strict scrutiny. Most likely, the Court would apply intermediate scrutiny on the basis that the law is content-neutral but clearly does burden some speech. This was the standard of review that the Tenth Circuit, when the case was before them, applied.

The government’s brief argues that rational basis review applies. It quotes Eldred‘s statement that because “Congress has not altered the traditional contours of copyright protection, further First Amendment scrutiny is unnecessary.” It argues that here too Congress has not in fact departed from historical practice in restoring copyright protection to the public domain works. The government’s brief is able to cite historical instances in which Congress passed private bills granting copyright or patent protection to various individuals. It puts forth the following argument as to what the “traditional contours of copyright protection” entails:

Read in context, the phrase “traditional contours of copyright protection” is best understood to refer to the principles that have historically defined the boundary between an author’s exclusive rights in his own works and the right of the public to engage in independent expression, including speech about the copyrighted works and discussion of the facts and ideas contained therein.

In my view, the Supreme Court is unlikely to accept the argument that the wholesale removal of works from the public domain comports with historical practice. It will therefore most likely apply a form of heightened scrutiny on the First Amendment issue, assuming it reaches the First Amendment question. The petitioners in the case have conceded that the law is content-neutral and the government therefore argues that ” to the extent any heightened First Amendment scrutiny is appropriate, the parties agree (and the lower courts correctly held) that Section 514 is a content-neutral regulation of speech and, as such, is subject to intermediate scrutiny.” Petitioners continue to argue in their brief that intermediate scrutiny applies.

One amicus brief argues that the petitioners wrongly conceded that intermediate scrutiny applies. More specifically, an amicus brief filed by the Information Society Project at Yale Law School argues that strict scrutiny should be applied. That brief is available here. The brief repeatedly analogizes the removal of works from the public domain as infringing a fundamental constitutional right (in this case, of the public to use such works) and argues that “[t]he rules of copyright law, like those developed for libel law, obscenity law and the law of seditious advocacy, require special privileges that balance Congress’s interests in regulation against free speech value.”

As I noted earlier, I still expect the Court to apply intermediate scrutiny if it reaches the First Amendment issue. The standard of review is likely to be a point of interest for the Court at oral argument, and I’ll update this post after that has taken place.

The PTO’s Trade Dress About-Face: Acceptance of the Pinch Bottle Application

Leeds’ decisions signaled to companies that she would adopt a more liberal approach to registration. One person who had an active eye on the PTO was Julian Lunsford, trademark counsel to Coca-Cola (her former employer). He recalls that registering the pinch bottle on the principal register was his idea.  He says that he saw the bottle listed on the supplementalregister in the Official Gazette, suggested to counsel for Haig & Haig that they apply for the principal register, and that he assisted. There is other evidence that Coca-Cola keenly awaited the outcome after Haig applied for the principal register, based on its own bottle that it hoped to register. More specifically, in a letter filed in Australia, Coca-Cola stated that “The Coca-Cola Company did not wish to register in the Supplemental Register, believing, as it does, that its Bottle is a technical trademark…But the law on this point is now pending clarification.” Whether Leeds knew about Coca-Cola’s possible role in the pinch bottle registration remains uncertain, but her decision was entirely consistent with the principles that she had long espoused.

The actual decision in Ex Parte Haig & Haig Ltd., 118 U.S.P.Q. 229, 230 (1958), is not long. The initial examiner had denied registration, citing Federico’s earlier holding and another case that adopted the same rule. Leeds stated that whether the bottle was registrable was not a legal issue; by this, she meant, that its characteristic as a bottle was not the controlling factor. Rather, consistent with her earlier jurisprudence, she held that “in each case the legal conclusion of registrability or unregistrability is determined on the basis of the facts peculiar to the case.”

Leeds stated that use of the bottle was alleged to have gone back to 1901. She placed a great deal of weight on findings issued in 1912, when a judge in Cook County granted injunctiverelief based on the bottle’s distinctiveness. The court’s decree identified Haig & Haig as having designed “a certain package of original, distinctive, and peculiar appearance, or dress, in order that the said whisky might be easily identified and distinguished.” It further described the bottle as “triangular in shape, about eight inches in height, with each of the three sides of the bottle pinched in, or indented toward the center of the same.” Leeds noted that the decree had found that the public associated the shape of the bottle with the beverage inside–so much so that they asked for a “Pinched Decanter” or “Pinched Bottle” when ordering it. She observed that consumers in 1958 likewise asked for “Pinch” or “Pinch Bottle.”

Leeds concluded that a container that was distinctive and had acquired secondary meaning could qualify for the principal register:

Where the record shows that a container of distinctive appearance is adopted for the purpose of identifying an applicant’s brand of product and distinguishing it from other brands, and there is no way of identifying or asking for such brand of product other than by describing the contour of conformation of the container, and both the trade and public, for many years, use the description of the contour or conformation of the container in ordering the applicant’s brand of product, the contour or confirmation may be a trademark–a symbol or device–which distinguishes the applicant’s goods, and it may be registrable on the principal register.

Based on the “peculiar facts” of the case, Leeds ordered the pinch bottle to be registered.In so doing, she accepted that trade dress packaging was appropriate, at least in very limited circumstances, for the principal register.

The Haig application was historic. It set the stage for the registration of the Coca-Cola bottle in 1960 and, more broadly, for the future development of trade dress jurisprudence. Certainly, today’s notion that an inherently distinctive package could be registered without proof of secondary meaning is far different from the “peculiar facts” that Leeds found in the pinch bottle application.

Trade dress was also weaker in the sense that dilution claims were less viable. Aptly illustrating this point is a case involving the pinch bottle, on which a district court in New York ruled in 1966. Haig alleged that an after-shave lotion came in a nearly identical shape to its bottle, although the court noted that “[t]he bottle is about one half the size of plaintiff’s and is not surrounded by wire mesh, as is plaintiff’s, when sold.” The complaint also sought injunctive relief against defendant’s “pinchy” bubble bath product, which also came in the same shape as the pinch bottle. Not only that, it had “the word ‘Pinchy’ imprinted in white letters on one of the indentations” in obvious imitation of the pinch bottle, which had “ ‘Pinch’ in white letters imprinted on one of the indentations. The bubble bath liquid was nearly the same color as the whisky that came in the pinch bottle.191 Despite these similarities, the court declined to issue any injunctive relief. The court found that there was insufficient evidence that the products would confuse the public. Notably, Leeds, who had by that time left the PTO, was “of counsel” to Haig & Haig in the case.

The PTO’s Trade Dress About-Face: Initial Refusal to Register Trade Dress

The first case in which the PTO decided on what the applicant termed a package was Ex Parte Minnesota Mining & Manufacturing Co., 92 U.S.P.Q. 74 (1952). The Minnesota Mining & Manufacturing Company had applied to register the device in which it placed its “scotch” tape. The application was much weaker than Haig’s later application on its facts because the container would seem to be clearly functional. However, Examiner Federico issued a much broader ruling than that.

Examiner Federico, in fact, essentially made the exact argument that Lunney has reprised in his articles on the subject. He placed great emphasis on the prefatory language in section 23, which stated that the list was “[f]or the purposes of registration on the supplemental register.” He noted the similarity in definition between section 45 and the 1860 definition given by Upton in his treatise. Federico reasoned as follows:

Applicant asserts that a court would enjoin a competitor from any attempt to pass off its goods as those of the applicant, but this does not indicate that the court would base its action upon trade mark rights, or that [the] applicant would be entitled to register the article as a trade mark.

Thus, for Federico the Lanham Act still retained the clear distinction between technical trademarks and passing off cases.

Federico presumably had a view that granting trademark protection to anything that was the subject of a design patent would be inconsistent with the underpinnings, and incentives given by, the patent laws. In the case, the Minnesota Mining and Manufacturing Co. had a design patent, but it had not expired and the patent had accordingly not entered the public domain. Federico maintained that the distinction did not matter, as he would have prevented any design patent from becoming a trademark:

It has been held that upon the expiration of a design patent, the subject matter becomes dedicated to the public, and that an extension of protection cannot be obtained under the form of trade mark or analogous protection…The fact that the design patent had not yet expired is considered immaterial; if the design can not be registered as a trade mark after the expiration, it certainly should not be registered shortly before the expiration.

In short, Federico believed that trademark laws and patent laws could not cover the same subject matter. Nor did he think that, through trademark law, a patent holder should be able to do what it could not through patent law.

The PTO’s Trade Dress About-Face: Background

As an LL.M. student studying copyright and trademark law, I took a seminar course on the history of intellectual property law. Rather than being a comprehensive examination of a very large topic, the course consisted of readings of scholarly papers (some of which had not yet been published), and we were assigned to write our own research paper. I chose as my topic the PTO’s changing attitude toward trade dress, and closely examined the acceptance of the Haig “pinch bottle” as registrable on the principal register in 1958. This was the first time that the Patent and Trademark Office (PTO) accepted an item of trade dress onto the principal register and represented a complete about-face from an earlier PTO refusal to even consider trade dress items as registrable on the principal register.

Today, it is commonplace for businesses to register all sorts of trade dress with the PTO and applicants need only show that the item in the application is “inherently distinctive” when it consists of packaging (not the product itself); there is no need for the applicant to demonstrate secondary meaning among the public. However, even a cursory look at the PTO’s early history with respect to trade dress demonstrates just what a profound shift has taken place in the world of trade dress jurisprudence. If anything, today courts are overly protective of trade dress. The doctrine of functionality still provides a guard against granting a company a trademark monopoly of a utilitarian feature of a product, and a recent post in this blog provides a timely example that a product may also be deemed aesthetically functional.

The Lanham Act, as originally enacted, did not explicitly authorize registration of trade dress onto the principal register. Section 45 set forth the definition of a trademark, stating that it “includes any word, name, symbol, or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others.” Although product packaging and other trade dress was not historically eligible for trademark protection, the Lanham Act certainly was watershed legislation that made fundamental changes to the scope of trademark protection. For example, surnames and geographic names were previously categorically denied trademark protection but became eligible for trademark status under the Lanham Act.

The Lanham Act was enacted in 1946 and went into effect in 1947. The PTO initially denied registration to trade dress in 1952, denying an application by the Minnesota Mining & Manufacturing Company for protection of the device that holds its “scotch” tape. The PTO examiner, P.J. Federico, concluded that trade dress could only be registered on the Supplemental Register, if at all.

By the time that the PTO granted trademark status to the Haig whiskey bottle in 1958, an important interim development was the nomination of Daphne Leeds to be Assistant Commissioner at the PTO. She administered the trademark portion of the matters before the PTO. In contrast to Federico, whose principal expertise lay in the area of patent law, she was by training and practice a trademark attorney with an expansive view of what trademark law ought to protect. In granting trademark status to the pinch bottle she noted in her decision that the public associated the shape of the bottle with the product inside so much that it had become commonplace, as early as 1912 for consumers to order the product by asking for a “pinched decanter” or “pinched bottle.”

The Haig application was an especially strong one for trade dress protection based on the clearly unique shape of the packaging and the high degree of secondary meaning. The PTO in 1958 certainly did not find the product’s unique shape to be sufficient for registration, as it would today.

The next two posts are drawn from the paper that I wrote on this subject.

The Issues Before the Supreme Court in Golan v. Holder


While copyright law questions can sometimes concern technical issues of statutory interpretation, a case pending before the Supreme Court goes to the fundamental issue of whether when works enter the public domain they can ever receive copyright protection. The case is Golan v. Holder. The case is scheduled for oral argument before the Supreme Court on October 5. Merits briefs for both sides have been submitted, and are available here at the website for the Center for Internet and Society, which is providing legal counsel to Petitioners in the case.

At issue is a law passed by Congress in 1994, Section 514 of the Uruguay Round Agreements Act, that “restored” copyright protection to foreign works that had previously been in the public domain. Congress passed the law in an effort to ensure that the U.S. due to a situation in which some countries voiced skepticism that the U.S. was in compliance with the Berne Convention and hoped that by restoring copyright protection to foreign works here in the U.S., American works that were in the public domain abroad might likewise have their copyrights restored. Both the MPAA and RIAA offered vocal support for the law at the time of its passage.

Petitioners in the case are described in their brief as “orchestra conductors, educators, performers, film archivists, and motion picture distributors who depend upon the public domain for their livelihood.” Examples of works that were at one point in the public domain and used by practitioners include “Prokofiev’s Classical Symphony and Peter and the Wolf; Shostakovich’s Symphony 14, Cello Concerto (Op. 107) and Piano Concerto (Op. 35); and Stravinsky’s Petrushka.”

Petitioners argue that the law exceeds Congress’s power under the Progress Clause of the U.S. Constitution, from which Congress derives authority to set the terms of patent and copyright protection. In addition, they argue that even if it were within Congress’s power to remove works from the public domain, doing so violates the First Amendment because it is inconsistent with the traditional contours of copyright protection and the government cannot justify the restriction on speech. The government asserts that Congress was within its authority to pass the law under the Progress Clause, presenting a different reading of the key precedent, Eldred v. Ashcroft, than that presented by petitioners. In addition, the government argues that the law is in keeping with the First Amendment based on Congress’s legitimate interest in complying with the Berne Convention.

The case was originally in front of a Colorado District Court and, later, the Tenth Circuit. In its first ruling on the subject, the Tenth Circuit found that the law departed from the traditional contours of copyright law, because there was no history of Congress granting copyright protection to vast swaths of works in the public domain. It therefore held that the law was subject to traditional First Amendment analysis, as opposed to normal copyright terms set by Congress. It remanded to the District Court for further consideration of the First Amendment issue. The District Court held that the law curtailed more speech than was necessary and violated the First Amendment. The case then went back to the Tenth Circuit. The Tenth Circuit disagreed with the District Court’s analysis and held that the First Amendment was no bar to the law, particularly given Congress’s desire to ensure greater protection for works by American authors abroad.

Whether the Progress Clause Provides Authority for Congress to Enact Section 514

In their Opening Brief, petitioners argue that for over 200 hundred years, Congress has revised the nation’s copyright laws without doing what is at issue in this case: extending copyright protection to works in the public domain. They present the facts of this case as an extraordinary departure from the traditional understanding that once a work enters the public domain, it cannot thereafter regain copyright protection. They argue that such a restoration of copyright is not authorized by the Progress Clause of the U.S. Constitution, art. I, § 8, cl. 8. The Progress Clause provides Congress with the following authority:

“To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

According to petitioners, the law at issue violates the “limited Times” language in the Progress Clause. If Congress is able to retroactively restore works that have passed an earlier limit and fallen into the public domain, then any limits set by Congress are unreliable and the public will not be able to trust that they will be able to make continued use of works in the public domain.

Both sides offer competing versions of why Eldred v. Ashcroft supports their position. In that case, the Supreme Court considered whether Congress could enlarge the term of copyright protection for works that had not yet fallen into the public domain. For most works, the new term was the life of the author plus 70 years whereas it had previously been the life of the author plus 50 years. The Court cited a history of Congress repeatedly enlarging the term of copyright protection, and ultimately held, by a 7-2 margin, that Congress was within its authority to extend the term of copyright protection.

Justice Ginsburg’s majority opinion also noted that the new term was on par with that in many European countries, which had taken to granting American authors protection of the life of the author plus fifty years instead of the term they granted their own residents. This is expressly permitted by the Berne Convention’s “rule of the shorter term.”  (Under the rule of the shorter term, a signatory to the Berne Convention is obligated to provide a minimum term of protection that equals the shorter of the terms that both countries provide to copyrighted works.) Thus, in the context of enlarging the term of copyright for works that had not yet entered the public domain, the Supreme Court deemed it a legitimate Congress rationale that doing so would increase the term of copyright protection for American works in Europe.

The government claims that the law falls squarely within the scope of Congress’s power because it treats works that did not receive protection previously due to a failure of the author to comply with previous copyright law formalities (such as the notice requirement) as if they had received copyright protection from the date of publication and, accordingly, they are subject to the same term limit as other works published on the same dates. The government argues, then, that insofar as foreign works have received restored copyright protection, it has always come with a fixed term, and that this all that the Progress Clause mandates.

According to petitioners, the removal of works from the public domain is simply different in kind from the enlargement of the copyright term of works currently under copyright protection because it entails upending the expectation of the public that the public domain will forever remain free to all. Their Brief states that:

This Court in Eldred held that an extended copyright term was still “limited” because it had a definite outer boundary. 537 U.S. at 199. Section 514 is radically different. It destroys the boundary Eldred identified and renders it meaningless.

Thus, petitioners assert that the unpredictability that would result if Congress is able to grant copyright protection to works that have entered the public domain means that the original public understanding that applied when the works entered the public domain would not be followed, contrary to the bargain between authors and the public that they argue is at the root of the Progress Clause.

One aspect of the case that the government must overcome is an apparent concession that it made at oral argument in Eldred. In that case, Justice Souter asked at oral argument whether Congress would be able to extend the copyright term of ” a copyright that expired yesterday.” The Solicitor General answered that there is a “bright line” that would make such an extension problematic, particularly since other parties may rely on the work’s availability at that point. The governor acknowledges the exchange, but insists that the main point the Solicitor General was trying to convey “was that Congress, in enacting the copyright extensions at issue in Eldred, could rationally distinguish between a work whose copyright had very recently expired and a work whose copyright was on the verge of expiring, even if the works had been created only days apart.”

Both petitioners and the government present different versions of history regarding the historical practice of Congress granting copyright protection to works in the public domain. An important point of dispute is whether Congress granted protection to works in the public domain when it passed the Copyright Act of 1790. It goes without saying that if Congress did, this dramatically reduces the impact of petitioners’ argument that what Congress has done here is a radical departure from historical precedent. In addition, the Supreme Court gives weight to early legislative enactments in judging the original understanding of the Constitutional text.

On this point, the government argument is as follows:

The first federal copyright statute, enacted by the First Congress in 1790, granted copyright protection to “any map, chart, book or books already printed within these United States.” Act of May 31, 1790 (1790 Act), ch. 15, § 1, 1 Stat. 124; see Eldred, 537 U.S. at 194. At that time, many of the “map[s],” “chart[s],” and “books” “already printed” had no copyright protection. The unmistakable effect of the 1790 Act thus was to grant copyright protection to works that had previously been in the “public domain.”

The government’s Brief then goes on to explain that copyright law, previous to the Copyright of 1790, was determined by state law, and that three states did not have copyright statutes in effect. In addition, of the ten other states, seven did not provide protection to maps and charts.

The petitioners spend a considerable portion of their Reply Brief countering the government’s historical arguments. On the issue of whether the First Congress granted copyright protection to works in the public domain at that time, they say that the answer is “no.” Their Reply Brief states that

The 1790 Act authorized protection for maps, charts, and books that were “already printed” but only for authors who “have not transferred to any other person the copyright” in such works, or others who “have purchased or legally acquired the copyright of any such” work. Copyright Act of 1790, ch. 15, § 1, 1 Stat. 124 (emphasis added). In both cases the 1790 Act explicitly presupposes existing copyrights. It does not suggest any intent to protect works that were previously unprotected, or remove anything from the public domain.

In addition to arguing about the Copyright Act of 1790, Petitioners and the government offer competing versions of subsequent Congressional copyright law enactments. The Petitioners emphasize repeatedly that Congress has amended the nation’s copyright law nineteen times, and at each point left works in the public domain without copyright protection. The government points to some private bills that Congress passed restoring copyright protection to copyrights and patents, and claims that this provides adequate historical precedent for the law under review. However, Petitioners respond that the constitutionality of these private bills is debatable and that, in any event, fails to establish that Congress has the authority to pass the sweeping legislation at issue here. They also attempt to differentiate the circumstances that gave rise to the private bills from Section 514: “Section 514 does not relieve authors who missed deadlines despite their best efforts in securing protection, for otherwise eligible works. It applies to millions of works the Copyright Act made categorically and expressly ineligible for protection, and removes them from the public domain decades after Congress placed them there.”

If the Supreme Court is inclined to reverse the Tenth Circuit on the basis that Congress’s authority, derived from the Progress Clause, does not extend to restoration of foreign works, it will be easy enough to do so while distinguishing the Eldred holding. It will be interesting to see how much, if any, the Court’s reading of history plays in the decision. Eldred itself though was careful to note that its holding only applied to works that were currently under copyright protection. If the Court finds that Congress had adequate authority under the Progress Clause, then it will need to reach the First Amendment issue that was the focus of the Tenth Circuit.

Whether Copyright Restoration of Foreign Works is Consistent with the First Amendment

In Eldred, the Supreme Court also discussed why enlarging the term of copyright protection for works not yet in the public domain does not run afoul of the First Amendment. More specifically, the Court noted that Copyright law’s dichotomy between ideas (not protected) and expression (protected), and the fair use doctrine ensure that the grant of copyright monopolies is compatible with the underlying purpose of the First Amendment. The Court concluded by declaring that “when, as in this case, Congress has not altered the traditional contours of copyright protection, further First Amendment scrutiny is unnecessary.”

Petitioners argue that the Tenth Circuit was correct that Congress here altered the traditional contours of copyright protection, making this case, unlike Eldred, deserving of First Amendment scrutiny. They write that “[u]nlike the term extension statute that was before the Court in Eldred, Section 514 takes away vested and established public speech rights.” They further argue that the idea/expression dichotomy and fair use doctrine fail to ameliorate the injury caused by the government passing a law that prevents them from reproducing the entirety of expressions that used to be in the public domain.

Petitioners argue that Section 514 is subject to intermediate scrutiny, since it is content-neutral and burdens their speech rights. They argue that it is substantially overbroad. The Tenth Circuit justified the burden on free speech by arguing that the Section 514 was narrowly tailored to promote Congress’s goal of ensuring that American authors abroad received reciprocal treatment by similarly having copyright protection to their works restored. Petitioners argue that this is not even a legitimate governmental goal under the Progress Clause. They frame the issue as Congress taking away the speech rights of the public in order to create a windfall for foreign authors here in the hopes that American authors will receive a similar windfall abroad. Petitioners argue that ” [t]he government cannot claim a legitimate – much less important – interest in sacrificing public speech rights simply to create economic benefits for any private party.”

The Government, in its Brief, first disputes that Section 514 is subject to heightened scrutiny. This is because, based on some of the same historical disputes described earlier, the government denies that Section 514 alters the traditional contours of copyright law. The Government argues that the “practical effect” of the law at issue in Eldred and Section 514 is the same because in both cases the term of copyright is finite. If the Court were to adopt this view espoused by the government, then it would apply a rational basis standard of review and Section 514 would surely be upheld. The government cites three reasons that it believes that Section 514 should be upheld. It argues, as the Tenth Circuit did, that Congress hoped the statute would yield greater protection for American works abroad. But it also argues that Section 514 places the U.S. squarely in compliance with the Berne Convention, and corrects historical inequities because foreign works were denied protection based on their authors’ failure to comply with copyright formalities.

The government argues that it is undisputed that Berne requires the restoration of foreign works. Petitioners argue that the legislation could have been crafted to allow them to continue to exploit works in the public domain. The government argues, however, that granting absolute immunity to reliance parties that had previously made use of the works before their copyright was restored would not place the U.S. in true compliance with the Berne Convention. Although the government disputes the extent to which some foreign countries have granted protection to reliance parties, petitioners insist in their Rely Brief that “[a]t least nine Berne signatories provide varying forms of permanent protection to reliance parties.”

Petitioners, in their Reply brief, make the argument that Section 514 went well beyond the requirements of Article 18 of the Berne Convention, which is the basis for the government’s argument that Berne requires the restoration of foreign works. Petitioners write that “the government does not contend Berne required the United States to remove anything from the public domain, or enact Section 514.” Petitioners then argue that even assuming arguendo that the U.S. was not in compliance with Berne, the government could have complied with Berne without enacting a law that took works previously in the public domain and granted a copyright to foreign authors of the works. As mentioned above, one argument that petitioners make is that Congress could have granted greater protection to reliance parties who had acquired the restored works prior to the enactment of Section 514. They complain that Section 514, in addition to giving only a one-year window in which restoration parties can make use of the works, abandons copyright law’s traditional first sale doctrine. Petitioners conclude their argument on this point by stating that “[w]hatever government interests treaty participation might create, it does not create an interest in burdening more speech than a treaty requires.”

The government and petitioners actively dispute the extent to which the government has a legitimate interest in promoting the restoration of works by American authors abroad. As mentioned earlier, this was the justification that the Tenth Circuit relied upon in upholding the law against a First Amendment challenge. While petitioners argue that the law is designed to give a windfall to authors whose works are now in the public domain, the government that this argument is foreclosed by the Court’s reasoning in Eldred. The government argues that the law is simply properly (albeit belatedly) rewarding authors for their creative achievements. Petitioners retort that the government’s rationale that the law will further the production of creative works glosses over the fact that the alleged incentives to creation are “secured by sacrificing the public’s First Amendment rights.” Petitioners’ basic point is that it is simply not appropriate for the government to balance a supposed benefit to private parties against the injury to the public by contracting the number of works in the public domain.

I do not expect the third justification offered by the government–the need to correct historical inequities–to play a very important role in the case. The basic problem with this argument, as petitioners note, is that American authors were subject to the same formalities, such as the notice requirement. It is not altogether clear how the Court will rule on the two other justifications offered by the govermnent, however. This case is the first of its kind to reach the Supreme Court.

Judge Rules Louboutin Red Soles Functional, Declines to Issue Injunction in Case Against YSL

I previously posted a blog entry on Christian Louboutin’s lawsuit against Yves Saint Laurent (YSL), which concerns Saint Laurent’s introduction into the market of women’s shoes with red soles. I raised the possibility that the red soles served a functional purpose and that Louboutin would therefore be unsuccessful in pressing a trademark infringement claim against YSL. A District Court judge has now indicated that he is of the view that the red sole is functional, and has denied Louboutin’s motion for a prelininary injunction. The order from Judge Victor Marrero is available here.

Louboutin is well-known for selling high-end women’s shoes in which the sole is a red lacquer color. The Louboutin red soled shoe has adorned the likes of Oprah, Scarlett Johansson, and Halle Berry. The character Carrie Bradshaw in Sex and the City sports them, and Jennifer Lopez has sung a song about them. Louboutin therefore perceived the YSL red soled shoe coming onto the market with some concern. Louboutin filed a lawsuit in the Southern District of New York in April 2011, alleging trademark infringement and citing its registration with the USPTO of a trademark for women’s shoes with red soles.

In my previous post, I raised the possibility that however much Louboutin feels that YSL has copied its business idea, its claim might fail based on the doctrine of trademark functionality. Essentially, things that serve a valuable utilitarian purpose–whether it is making a product cheaper to produce, easier to use, or aesthetically more attractive–are ineligible for trademark protection. (They may be eligible for patent protection in some cases.) While the doctrine of aesthetic functionality has a somewhat checkered history, with a number of judges at times voicing a degree of skepticism, the Supreme Court has now firmly endorsed it, and has specifically done so in the context of trademarked colors. In Qualitex Co. v. Jacobson Co., 514 U.S. 159 (1995), the Supreme Court indicated that colors may qualify for trademark protection, but cautioned that the aesthetic functionality doctrine would preclude a color giving a competitor an unfair advantage:

[W]here a color serves a significant nontrademark function–whether to distinguish a heart pill from a digestive medicine or to satisfy the “noble instinct for giving the right touch of beauty to common and necessary things,” G. K. Chesterton, Simplicity and Tolstoy 61 (1912)–courts will examine whether its use as a mark would permit one competitor (or a group) to interfere with legitimate (nontrademark related) competition through actual or potential exclusive use of an important product ingredient.

In his order, Judge Marrero embarks on an extended discussion of color’s ability to create an element of visual appeal that goes far beyond mere recitation of legal precedents. He gives what he allows to be a “fanciful hypothetical” involving Monet and Picasso to illustrate the ability of color to create an allure in a product:

Suppose that Monet, having just painted his water lilies, encounters a legal challenge from Picasso, who seeks by injunction to bar display or sale of those works. In his complaint, Picasso alleges that Monet, in depicting the color of water, used a distinctive indigo that Picasso claims was the same or too close to the exquisite shade that Picasso declares is “the color of melancholy,” the hallmark of his Blue Period, and is the one Picasso applied in his images of water in paintings of that collection. By virtue of his longstanding prior use of that unique tinge of blue in context, affirmed by its registration by the trademark office, Picasso asserts exclusive ownership of the specific tone to portray that color of water in canvas painting. Should a court grant Picasso relief?

The Court continues its analysis by making clear that in its view, the world of painting and the world of fashion are not all that different. One might question whether the Court’s analogy is truly apt, insofar as it is highly unlikely that any art patron would be confused as to the painter of a painting they were buying, but the point the Court is trying to make concerns the necessity of preserving free rights to colors in the fashion industry, lest one competitor gain the sole ability to produce visually appealing fashion items. The Court concludes that if one accepts that a painter should not be granted a monopoly over use of a color, then “[i]f as a principle this proposition holds as applied to high art, it should extend with equal force to high fashion.”

In analyzing the Louboutin red sole specifically, Judge Marrero notes the “significant, nontrademark functions” that he states Louboutin has conceded influenced his design choice in choosing red for the soles of his line of women’s shoes. Louboutin has stated that the red coloring conveys “energy” and is “engaging,” and that it gives the shoes a “sexy” look that “attracts men to the women who wear my shoes.” This is on par with what I wrote in my previous post on this subject about why red in particular may be a functional color in this case. Just as red has obvious connotations when one chooses a car, so too it does in the world of clothing. Louboutin’s statements merely state what is intuitively apparent to consumers when it comes to the color red’s ability to give a product a certain feel.

In addition to accepting Louboutin’s own statements regarding significant nontrademark aspects to his color choice, the Court also makes the argument that the red coloring serves to significantly affect the price of the goods, and therefore is also functional. Although the Court allows that adding red to the soles would tend to raise production costs slightly, “for high fashion designers such as Louboutin and YSL, the higher cost of production is desirable because it makes the final creation that much more exclusive, and costly.”

The Court concludes that Louboutin is unlikely to succeed on its trademark claims after going into some detail regarding the exact color that Louboutin identifies it uses on its shoes (Chinese red), and whether it properly stated such information in its original trademark application. But these details do not appear to matter too much to the Court’s ultimate conclusion, which is really much broader. The Court evidently does not believe that color should ever receive protection in the fashion industry. In the Court’s words, it “cannot conceive that the Lanham Act could serve as the source of the broad spectrum of absurdities that would follow recognition of a trademark for the use of a single color for fashion items.”

Although the Court tries to distinguish Qualitex as involving industrial items–the case centered on the coloring of dry cleaning presses–Qualitex itself did not make any effort to limit its holding to industrial products. Thus, to the extent that the Court’s order goes beyond merely stating that Louboutin’s red soles are functional and declaring a per se rule that color in the fashion world is always functional, it will be interesting to see whether this analysis is followed by other courts. But the basic ruling that Louboutin’s red soles are functional is not that surprising.