Letter from AmeriKat

Will the NHL score a touchdown in the Supreme Court?

The AmeriKat is nursing her burnt tail and whiskers having just returned from the most English of summer pastimes, the Henley Royal Regatta (admittedly not the most American way of celebrating the Fourth of July!) A similar American pastime which also entails the provision of sun, food, alcohol and a semi-enthusiastic interest in the sport is the American football tailgate. This less refined American pastime follows the schedule the National Football League (NFL) games of 32 teams every year from August to February. Comprising of the NFL’s multi-billion dollar revenue are royalties generated by the licensing of each team’s trade marks and logos to retailers and consumers.

Last Monday, the Supreme Court granted certiorari in American Needle Inc. v National Football League. After a decline in revenues from the team’s trade mark licences in 2000, an agreement was negotiated between the teams and Reebok International. In the agreement the teams contracted not to compete with each other in licensing their merchandise and not to permit any of these licences to be given to Reebok’s competitors for at least ten years. Consequently, American Needle’s and other manufacturers’ licences were not renewed and consumer prices for the teams’ merchandise rose. American Needle filed a complaint on 1 December 2004 alleging that this agreement violated Section 1 and Section 2 of the Sherman Act. The Sherman Antitrust Act provides that every contract made between two or more persons in restraint of trade is declared to be illegal and every person who monopolizes any part of trade or commerce shall be guilty of a felony. Corporations found guilty of these two sections must pay a fine not exceeding $100,000,000.

The NFL applied for a summary judgment motion claiming that they were exempt from the rule because they constituted a single entity and do not fulfil the plurality requirement required in the Sherman Act. The NFL oddly won on this argument in July 2007 before the district court and in August 2008 before the Seventh Circuit. As a result of these two decisions American Needle issued a write of certiorari to the Supreme Court. The AmeriKat is confused to how the district and Seventh Circuit courts could have held that the NFL is a single entity for the purposes of the Sherman Act, given that the Supreme Court in Radovich v NFL and eight other appellate court decisions since Radovich have held that the NFL and other professional sports leagues are subject to Section 1. Although an exemption is currently enjoyed by professional baseball (Federal Baseball Club of Baltimore v National League 259 U.S. 200 (1922)), the Supreme Court made clear that if given an opportunity to revisit the decision they would not find that professional baseball enjoyed such an exemption.

One would assume that the NFL, having won in the federal courts would have kept silent about the issue of the appeal. Not so! The spokesman for the NFL, Greg Aiello, stated that the league looked forward to explaining why the court should extend a favourable appeals court rulings on how anti-trust laws apply to the NFL. Other sports leagues like the National Basketball Association (NBA) and the National Hockey League (NHL) have come out in support of the NFL. Bill Daly, the NHL’s deputy commissioner, said the NHL looks

"looks forward to the Supreme Court finally resolving what has become an oft-litigated, contentious issue in litigation involving professional sports leagues. We are hopeful that that resolution will ultimately result in less litigation and will allow professional sports leagues to operate in a less costly and more efficient manner."
However, a former lawyer for the Federal Trade Commission and the Justice Department’s antitrust division, Stephen Ross, explained that he was concerned about the court’s decision to take the case. “This case did not need to be heard by the court unless it had a broad plan from withdrawing the pro-consumer protections of the antitrust laws to sports fans.”

The AmeriKat does not see that there should be any hope for the NFL in convincing the Supreme Court that the commercial activities between their 32 teams can ever represent a single entity. The NFL is already an incredibly powerful market force, and where the law can inhibit anti-competitive and monopolistic practices (such as was the instance in the Reebok contract) the Court must uphold their decision in Radovich.

Caught in the Rye

On Wednesday, District Judge Batts granted a preliminary injunction against the publication of the sequel 60 Years Later: Coming Through the Rye in the United States. As the IPKat reported last month, District Judge Batts initially granted a temporary injunction against publication while she decided whether the sequel was a parody and thus benefited from the fair use defence. In her 37 page Memorandum and Order, District Judge Batts held that the defendant’s work did not benefit from fair use and that in establishing a prima facie case of copyright infringement Salinger could restrain publication of 60 Years Later.

Citing Campbell v Acuff and Sun Trust Bank v Houghton Mifflin, District Judge Batts lambasted any contention held by the defendants that 60 Years Later was a work of parodic comment or criticism: “the Court found such contentions to be post-hoc rationalizations employed through vague generalizations about the alleged naiveté of original, rather than reasonably perceivable parody.”

Left: might the 76-year old Caulfield look like this, one wonders?

Specifically, the Court found that the 76 year-old Holden Caulfield regurgitated the same perspectives and characterizations as he did when he was 16. The Court held that such identical perspectives already depicted in Catcher would not benefit from protection as a parody in 60 Years Later. In coming to this conclusion the Court looked unfavourably on public statements issued by Colting and the publishers prior to the case which contended that 60 Years Later was a ‘tribute and sequel’ and a ‘free-standing novel’ which had nothing to do with Catcher. It was only when faced with a lawsuit did Colting and the publishers contend that the book was a parody (see footnote 3 of the Order). The AmeriKat wonders whether authors and publishers of derivative or transformative works will now be managing their pre-publication PR more closely in light of this judgment.

District Judge Batts also held that the transformative nature, though present in respect to the addition of J.D. Salinger as a character in 60 Years Later, was limited. The Court also ruled that the quantity and quality of the copyright material used from Catcher in 60 Years Later was “more than necessary in the alleged transformative purpose in criticizing Salinger and his attitudes and behaviour.” It must be noted that it was not solely the use of Caulfield as the protagonist that was unacceptable, it was the extent and similarity of the details of his character as detailed in Catcher that fell foul of the fair use defence. Additionally, the Court held that 60 Years Later was the type of work that in general, Salinger would develop or license others to develop, i.e. a derivative work that necessitates the permission of the copyright owner. Although District Judge Batts concluded that it was unlikely that 60 Years Later would “undermine the market for Catcher itself, it is quite likely that the publishing of 60 Years…could substantially harm the market for an authorized Catcher sequel or other derivative works.”

District Judge Batts’s written judgment was not a surprise to the AmeriKat, but her contention that the character of Holden Caulfield benefits from the protection of copyright is still surprising. As previously stated, the AmeriKat waits with baited breath for an appeal on this point.

Everything is Bigger in Texas

The court rooms of eastern Texas would not, as many may assume, have tumbleweeds blowing through the jury box. Instead, the Eastern District is known as having the most patent infringement lawsuits filed of any district in the United States and the most claimant-friendly with patent owners wining 77% of trials. The trend continued last week with the highest ever award of damages in a patent case in the United States. After a reported five hours of deliberation, the jury in Centocor Inc v Abbott Laboratories awarded the Johnson & Johnson unit $1.67 billion for Abbott’s willful infringement. The claim was over a process exclusively licensed to Centocor by NYU which is used to produce their Remicade arthritis drug which inhibits the TNF protein which causes inflammation. Centocar contended that Humira was made using this identical process. The AmeriKat wonders whether Abbott’s own lawsuit pending in a Boston court over their entitlement to royalties from J&J for the Simponi drug could go someway in lessening the blow of the billion dollar judgment against them [note: for a more personal account of the same trial, see "I think he should've shown a little more emotion" here].

Letter from AmeriKat Letter from AmeriKat Reviewed by Annsley Merelle Ward on Sunday, July 05, 2009 Rating: 5

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