Intellectual Property and Tech Law Reports

Universal Furniture Int'l Inc. v. Collezione Europa USA, Inc.

Appellant Collezione Europa USA, Incorporated ("Collezione"), and its adversary in this proceeding, appellee Universal Furniture International, Incorporated ("Universal"), are competing furniture companies. In 2004, Universal sued Collezione in the Middle District of North Carolina, alleging infringement under the Copyright Act with respect to two of Universal’s furniture collections, as well as violations of the Lanham Act and the North Carolina Unfair and Deceptive Trade Practices Act (the "UDTPA"). In opposing the copyright claim, Collezione argued that the furniture at issue is not copyrightable. The district court disagreed, however, concluding that Universal possessed valid copyrights in its furniture designs and that Collezione had infringed those copyrights. See Universal Furniture Int’l, Inc. v. Collezione Europa USA, Inc., No. 1:04-cv-00977 (M.D.N.C. Sept. 14, 2007) (the "Liability Opinion"). The court also concluded in its Liability Opinion that Collezione had misrepresented Universal’s furniture lines as its own, in contravention of both the Lanham Act and the UDTPA. After conducting a thorough hearing on the damages issues, the court awarded more than $11 million to Universal. See Universal Furniture Int’l, Inc. v. Collezione Europa USA, Inc., No. 1:04-cv-00977 (M.D.N.C. Feb. 12, 2009) (the "Damages Opinion").

Collezione has appealed from the rulings made in the Liability Opinion, in favor of Universal, under the Copyright Act, the Lanham Act, and the UDTPA. Furthermore, Collezione contends that the court erred in the Damages Opinion in excluding its proof of deductible expenses. As explained below, we affirm.

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MGA ENTERTAINMENT, INC. V. MATTEL, INC.

Bryant’s employment agreement may not have assigned his ideas for the names “Bratz” and “Jade” to Mattel at all, and the district court erred by holding that it did so unambiguously. Even if Bryant did assign his ideas, the district court abused its discretion in transferring the entire Bratz trademark portfolio to Mattel. We therefore vacate the constructive trust, UCL injunction and declaratory judgment concerning Mattel’s rights to the Bratz trademarks. The district court may impose a narrower constructive trust on remand only if there’s a proper determination that Mattel owns Bryant’s ideas.

The district court also erred in holding, at summary judgment, that the employment agreement assigned works created outside the scope of Bryant’s employment. We therefore vacate the copyright injunction. On remand, Mattel will have to convince a jury that the agreement assigned Bryant’s preliminary sketches and sculpt, either because the agreement assigns works made outside the scope of employment or because these works weren’t made outside of Bryant’s employment. And, in order to justify a copyright injunction, Mattel will have to show that the Bratz sculpts are virtually identical to Bryant’s preliminary sculpt, or that the Bratz dolls are substantially similar to Bryant’s sketches disregarding similarities in unprotectable ideas.

Nothing we say here precludes the entry of equitable relief based on appropriate findings. Because several of the errors we have identified appeared in the jury instructions, it’s likely that a significant portion—if not all—of the jury verdict and damage award should be vacated, and the entire case will probably need to be retried. We express no opinion on this issue here, except to say that any further proceedings must be consistent with our decision.

America thrives on competition; Barbie, the all-American girl, will too.

EQUITABLE RELIEF VACATED. Each party shall bear its own costs.

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FM Industries, Incor v. Citicorp Cr

The decision awarding sanctions against McGrath is reversed. All of the district court’s other decisions are affirmed.

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MGE UPS Systems Inc v. Power Protc Svc LLC, et al

MGE UPS Systems, Inc. (“MGE”) appeals the district court’s Federal Rule of Civil Procedure 50(a) dismissal of its Digital Millennium Copyright Act (“DMCA”) claim against Power Maintenance International, Inc. (“PMI”); General Electric Company (“GE”); GE Consumer and Industrial, Inc.; and GE Industrial Systems, Inc. (collectively, “GE/PMI”). MGE also appeals the district court’s denial of prejudgment interest on MGE’s damages award. GE/PMI cross-appeals on four grounds: (1) whether the district court erred in dismissing GE/PMI’s Rule 50(a) motion because MGE failed to present evidence of damages, or in the alternative, whether the district court erred in dismissing GE/PMI’s Rule 50(b) motion because the $4.6 million jury award was not a reasonable calculation of damages; (2) whether MGE impermissibly double-recovered damages; (3) whether the parties had a tolling agreement in place that permitted MGE to recover damages prior to December 17, 2001; and (4) whether the district court erred in granting MGE injunctive relief against GE/PMI.

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RIAA v. Library of Congress

By law, the Copyright Royalty Board sets the terms and rates for copyright royalties when copyright owners and licensees fail to negotiate terms and rates themselves. As part of its statutory mandate, the Board sets royalty terms and rates for what is known as the § 115 statutory license. That license allows individuals to make their own recordings of copyrighted musical works for distribution to the public without the consent of the copyright owner.

In carrying out its statutory responsibilities under 17 U.S.C. § 115, the Board instituted a 1.5 percent per month late fee for late royalty payments. It also implemented a pennyrate royalty structure for cell phone ringtones, under which copyright owners receive 24 cents for every ringtone sold using their copyrighted work.

The Recording Industry Association of America challenges those two aspects of the Board’s decision, arguing that they were arbitrary and capricious for purposes of the Administrative Procedure Act. We conclude that the Board’s decision was reasonable and reasonably explained. We therefore affirm the Board’s determination.

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Golan v. Holder

Plaintiffs brought this action challenging the constitutionality of Section 514 of the Uruguay Round Agreements Act (“URAA”), Pub. L. No. 103-465, § 514, 108 Stat. 4809, 4976–81 (1994) (codified as amended at 17 U.S.C. §§ 104A, 109), which granted copyright protection to various foreign works that were previously in the public domain in the United States. The district court granted plaintiffs’ motion for summary judgment, concluding that Section 514 violates plaintiffs’ freedom of expression under the First Amendment. In Case No. 09-1234, the government appeals the district court’s order granting plaintiffs’ motion for summary judgment and denying the government’s motion, arguing that Section 514 is a valid, content-neutral regulation of speech. In Case No. 09-1261, plaintiffs cross-appeal, contending that the statute is facially invalid and that they are entitled to injunctive relief. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we reverse the judgment of the district court and conclude that Section 514 of the URAA is not violative of the First Amendment.

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Benay v. Warner Bros.

Plaintiffs are two brothers, Aaron and Matthew Benay, who wrote and copyrighted a screenplay, The Last Samurai (“the Screenplay”). The Benays contend that the creators of the film The Last Samurai (“the Film”) copied from the Screenplay without permission. They sued Warner Brothers Entertainment, Inc., Radar Pictures, Inc., Bedford Falls Productions, Inc., Edward Zwick, Marshall Herskovitz, and John Logan (collectively “Defendants”), who wrote, produced, marketed, and/or distributed the Film. Inter alia, the Benays alleged copyright infringement under federal law and breach of contract under California law.

The district court granted summary judgment to Defendants on the copyright and breach of contract claims. We affirm on the copyright claim. We reverse and remand on the breach of contract claim.

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Lahiri v. Universal Music & Video Dist. Corp.

Anthony Kornarens is an attorney specializing in copyright law. Kornarens was severely sanctioned by the district court for his five-year bad faith pursuit of a frivolous copyright infringement claim. In its 21-page order, the district court awarded defendants $247,397.28 in attorneys’ fees and $10,808.76 in costs, under 28 U.S.C. § 19271 and the court’s inherent sanctioning power. Kornarens appeals, contending the sanctions were unwarranted and excessive. We disagree and affirm.

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Montz v. Pilgrim Films & Television, Inc.

We consider whether federal copyright law preempts state law claims alleging the unauthorized use of screenplays, videos, and other materials in the production of a cable television series.

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Thomsen v. Famous Dave's of Am., Inc.

Alan R. Thomsen sued Famous Dave's of America, Inc. (Famous Dave's), and two of its sign vendors, alleging copyright infringement and breach of contract. The district court1 granted summary judgment to defendants after concluding that Thomsen had unambiguously conveyed all contested copyrights to Famous Dave's by written contract, and Thomsen appeals. We affirm.

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