Tag Archives: trademark law

Nobody Puts Your 401K in the Corner: Should Dirty Dancing IP Prevail?

by Katherine Imp

Did this title make you think of the 1987 film, Dirty Dancing?

Unless you’ve been living under a rock for 28 years, the answer is probably yes. According to the American Film Institute, “nobody puts baby in a corner” is one of the top 100 greatest movie quotes of all time.

Unfortunately for TD Ameritrade, the creator of “nobody puts your old 401(k) in the corner,” popular quotes generate revenue. And Lionsgate has no intention of giving TD a free pass.

TD Ameritrade’s Dirty Dancing ad spoof ran for seven months before TD received a cease and desist letter from Lionsgate, coupled with a 7-figure settlement demand. On June 26, TD fought back, filing for declaratory relief against Lionsgate in the Southern District of New York. Lionsgate responded by filing its own lawsuit on July 2 in the Central District of California, asserting claims like false association, unfair competition, trademark infringement and trademark dilution.

Who should win?

There is no question that Lionsgate has protection under copyright law. Lionsgate copyrighted the motion picture back in 1987 when Dirty Dancing was first released. However, the Supreme Court has unequivocally held that a “parody” qualifies as fair use. Meaning, TD can use some elements of the film Dirty Dancing without Lionsgate’s permission so long as the use qualifies as a parody.

Trademark law is a little trickier. Trademark law seeks to prevent confusion among consumers as to the origin, sponsorship or approval of goods or services. As a result, the central issue in every trademark infringement case is the likelihood of consumer confusion.

Unlike copyright law, parody is not a defense to a claim of trademark infringement. Instead, the “likelihood of confusion” test requires an analysis of several factors, including freedom of expression concerns.

Last fall, Lionsgate filed trademark applications with the USPTO for use of the quote “nobody puts baby in a corner” in connection with various goods (e.g., paper-based items, clothing, glass and household items). This filing took place one month before the TD ad was released.

In its complaint, Lionsgate also argued that its common law trademark rights (rights to a trademark not registered with the USPTO) date back to 1987.

That said … I’m with TD on this one. For one, TD’s “use” of the Dirty Dancing quote is in connection with the financial services industry, not the goods encompassed in the trademark applications filed last fall. Secondly, TD’s “use” of the quote was intended to amuse, not confuse. In fact, I’d further argue that because the quote is so recognizable, consumers would actually have an easier time distinguishing between a parody and the original.

However, I also understand why Lionsgate won’t back down until it receives a 7-figure settlement check from TD Ameritrade. Lionsgate is an entertainment conglomerate whose sole value is in its intellectual property rights. Giving TD a free pass, regardless of whether the use was proper or improper, opens the door for other third parties to push the boundaries between fair use and infringement.

Whether or not these powerhouses decide to settle or battle it out in court remains to be seen, but one thing is for sure: Nobody puts Lionsgate in a corner.

Katherine Imp is a transactional entertainment attorney at Cummins & Associates, Ltd., specializing in production legal, film finance and intellectual property matters. Contact Katherine at @KatherineImp or kimp@cumminsassociates.com.

Disclaimer: The information in this post is intended for general information purposes only and should not be construed as legal advice.

To see the original post, and similar articles, check out Katherine Imp’s SCREEN Magazine column, Street Legal


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Filed under Copyrights, Entertainment Law, Intellectual Property, Motion Picture, Trademarks

Supreme Court May Put a Stop to the “Hokey-Pokey” Approach to IP Ownership

by Elizabeth Swanson

You put your right foot in, you put your right foot out,

You put your right foot in, and you shake it all about,

You do the Hokey-Pokey and you turn yourself around.

That’s what it’s all about![1]

On June 25, 2012 the U.S. Supreme Court granted YUMS’ Petition for a Writ of Certiorari in Already, LLC dba Yums v. Nike, Inc., No. 11-982.  This grant is important because its result may change federal court  jurisdiction in both patent and trademark infringement declaratory judgment cases.

The “Question Presented,” according to YUMS, is as follows:

“Whether a federal district court is divested of Article III jurisdiction over a party’s challenge to the validity of a federally registered trademark if the registrant promises not to assert its mark against the party’s then-existing commercial activities.”

YUMS explains its logic in its STATEMENT OF THE CASE:

1.     The issue cannot be resolved by litigation because it concerns the constitutional scope of Article III jurisdiction;

2.     Both trademark registrations and issued patents are evidence of the exclusive rights granted to the owners;

3.     Under 15 USC §1119, a person accused of infringement may ask a court to award judgment declaring that the mark is invalid;

4.     When validity is challenged under §1119, the owner may be willing to settle and to include a broad covenant not to sue, as in the YUMS case below;

5.     There may also be an argument that the court is divested of Article III jurisdiction because there are then no more claims of infringement, and this is often used as part of a litigation strategy;

6.     The Ninth Circuit has a pattern of holding that a covenant not to sue does not divest the district court of Ariticle III jurisdiction (Bancroft & Masters, Inc. v. Augusta National Inc., 223 F.3d 1082 (9th Cir. 2000);

7.     The Supreme Court has followed the Ninth Circuit’s reasoning with respect to patent cases including Lear, Inc. v. Adkins, 395 U.S. 653 (1969), MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83 (1993), and Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249 (1945);

8.     The Federal Circuit stated its rule regarding dismissal after settlement in patent cases in Super Sack Mfg. Corp. v. Chase Packaging Corp., 57 F.3d 1054, 1059-60 (Fed. Cir. 1995).  There, the Federal Circuit held  that the patent owner can divest a federal court of Article III jurisdiction over the defendant’s counterclaim for a declaratory judgment of patent invalidity by promising not to sue.  Judge Dyk has argued in a subsequent case against this “Super Sack” rule.  See Benitec Australia, Ltd. v. Nucleonics, Inc., 495 F.3d 1340, 1350-55 (Fed. Cir. 2007) (Dyk, J., dissenting).

9.     When the appeal was brought by YUMS, the Second Circuit stated that it was not persuaded that jurisdiction still exists.  This meant that a plaintiff could file an infringement case and not have to deal with the issue of validity and enforceability of its mark if it covenanted not to sue before a judgment was issued.  This interpretation is inconsistent with those followed by both the Federal Circuit and the Ninth Circuit, and can be viewed as a limitation of the power of federal courts in trademark cases.

If the Supreme Court agrees with YUMS and holds that once you are in court, you are there to the end, not withstanding a covenant not to sue, it may change litigation strategy for both patent and trademark owners;  filing a complaint could become less like dancing the Hokey-Pokey and more like an actual commitment – and attorneys would then need to make full disclosure of that changed risk to their clients.

[1] Written by Roland Lawrence LaPrise, (with Charles Macak and Tafit Baker) 1950 Copyright Acuff-Rose Music, Inc.

Elizabeth Swanson’s Century City practice includes all aspects of patent, trademark and copyright prosecution, trade secret management, and also includes infringement matters and litigation.  Ms. Swanson has been practicing only IP law for over 22 years.

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