Letter from AmeriKat: Raging Bull, Brooklyn Nets, Cochlear Hearing Aids, Candy Crush and Hollandaise sauce

The AmeriKat experiences the rush of true love with
Hollandaise sauce

Hollandaise sauce. Several months ago the AmeriKat had never tasted the golden, buttery, lemony silk that was laced over her grilled asparagus starter last night.  Admittedly, the calorie intake is extreme, but having starved herself for most of the past two days and in the midst of an epic 3-week (and counting) battle with a vicious cough, she figured she could take it.  And in any event, it was her birthday.  Many lay claim to Hollandaise sauce's origin story.  Many consider that it was invented by the Dutch who took it to France by the Huguenots with the first reference to the sauce in a Dutch cookbook from 1593. Others claim that the egg, butter and lemon juice emulsion is most definitely French; it is one of the five mother sauces of French haute cuisine after all.  Origin stories lay at the heart of intellectual property litigation.  The question of who invented, created or used something first and, therefore, who is not allowed to use the invention, work or name is the question at issue in all the US IP stories today.  But sometimes, the AmeriKat muses taking off her IP litigator's hat for a moment, the question of origin should surely not be more important than the product itself.  Who cares who can really lay claim to Hollandaise sauce?  Surely, the only thing that matters is that it is just so paw-licking good.

Last Monday the US Supreme Court heard oral arguments in Petrella v Metro-Goldwyn-Mayer, Inc.  The question before the court is whether the doctrine of laches can bar all remedies for civil copyright infringement claims that are commenced within the three-year statute of limitations prescribed by Congress (see question here).  In summary, the doctrine of laches is an equitable defence that, when asserted, prevents a claimant from commencing litigation after an unreasonable delay such that to bring litigation would prejudice the defendant.  In answering this question, the Supreme Court will have a chance to unify the differing approaches that have been plaguing the federal courts of appeals on whether laches wins the day or not.

For Scorsese and DeNiro fans, the case at issue involved the classic 1980 biographical masterpiece, Raging Bull which captured the life of boxer Jake LaMotta.  LaMotta and his friend and collaborator, Frank Peter Petrella wrote three works about LaMotta's life which included two screenplays and a memoir, the rights of which were assigned to MGM predecessor in interest in 1976.  Petrella died in 1981 and ten years later, his daughter Paula, secured the renewal rights for the earlier of the screen plays and asked that MGM cease its exploitation of the film.  This continued for several years, but Ms Petrella did not commence copyright infringement proceedings until 2009.

A California federal court granted MGM summary judgment holding that Petrella's claims were barred by the doctrine of laches.  The Court of Appeals for the Ninth Circuit affirmed this decision and rejected Petrella's arguments that the accrual rule - which provides that a separate claim accrues each time copyright is infringed - should apply for MGM's alleged infringement within the three years of issuing her complaint (i.e. between 2006-2009). The Ninth Circuit held that those claims were still barred by the doctrine of laches as Petrella had waited 18 years before filing her suit.  Petrella's argument before the Supreme Court on Monday  boiled down to the fact that the Court had "never applied laches to constrict a Federal statute of limitations".  MGM's argument boiled down to the principle that although the Copyright Act did not contain language providing for the use of equitable defences against infringement claims, the statute nevertheless did not void their role in copyright law.

Like this film poster from Raging
Bull, which party is going to come
out of the Supreme Court with
their face bloodied?

There were several amici briefs in this case, including from the the American Intellectual Property Law Association (AIPLA) who urged the Court to vacate the Ninth Circuit's decision because it violates Congress's

"express definition of the specific period within which a plaintiff may seek a remedy for copyright infringement.  While a substantial delay that prejudices a defendant may or may not warrant barring equitable relief, laches should not bar all relief for infringing during and following the three-year limitations period.  In particular, due regard for the statute, the legislature and copyright policy goals militates against allowing laches to bar the legal remedy for damages for infringing acts within the limitations period. 

The Ninth Circuit decision should also be vacated because it improperly relies upon trademark jurisprudence.  Despite the general applicability of the principles of equity, courts applying laches should take into account the broader context, including specific attributes of the area of law at issue.   Copyright and trademark laws have distinct policy objectives, applicable statutory provisions, and durations of protection.   These distinctions require that laches be applied with a nuanced approach, rather than a broad brush, as evidenced by the historically different treatment of laches in different areas of the law, including copyright and trademark.  

AIPLA takes no position on who should prevail on the present facts, but instead seeks to address the broader concerns of authors and creators.  Uniformity within copyright law is critical to avoid forum shopping  by copyright owners and declaratory judgment plaintiffs.  In providing uniformity in copyright law, however, the Court should take care not to disturb historical distinctions in applying laches in other areas of intellectual property law, or any other area of law.  Doing so would indeed be “a major departure from the long tradition of equity practice” in separate areas of the law, which “should not be lightly implied.”  Weinberger v. Romero-Barcelo, 456 U.S. 305, 320 (1982)."

If the doctrine of laches was an animal....

The Motion Picture Association of America (MPAA) which comprises of the biggest studios including Paramount, Universal, Walt Disney and Warner Brothers  predictably argued the opposing view arguing that:

"Given the continuing investments that are required to support the long-term distribution of works such as motion pictures and books, copyright infringement claims in those fields that are brought years or decades after the dispositive events can impose significant evidentiary and economic prejudice on studios, publishers, and distributors.  When a plaintiff engages in unreasonable delay that produces such prejudice, laches should be available as a potential defense to claims for equitable relief and money damages in the extraordinary cases where the laches standard is met.  

Petitioner’s contention that applying laches in copyright cases would violate the constitutional separation of powers rests in part on the mistaken premise that judicial application of laches improperly displaces the legislative judgment embodied in the statute of limitations.  But the doctrine of laches serves a distinct purpose and reflects a different set of judgments than the statute of limitations.  Moreover, Congress legislates against the backdrop of traditional equitable doctrines, including laches.  Petitioner does not dispute that other equitable doctrines such as tolling and estoppel may apply in copyright cases.  There is no reason why laches should not also be available.  To the contrary, nothing in the Copyright Act signals any congressional intent to dismantle courts’ traditional discretion to prevent a plaintiff’s unreasonable delay from causing significant prejudice."

For an excellent summary of the oral arguments see this article in Bloomberg and for the oral transcript for all those copyright nerds out there (the Amerikat included) see this link here. If you are a sucker for advocacy you can listen to the oral argument on Oyez here.  For more court documents click here.

Last Thursday, a jury sitting in a California federal court held that Australian hearing implant maker Cochlear Limited's group of implants, sound processors and software infringed two of the Alfred E. Mann Foundation for Scientific Research's patents, including US 5 531 774 relating to a programmable cochlear stimulator.   Based in Santa Clarita, California the foundation is a non-profit medical research foundation which commenced patent infringement proceedings against Cochlear in December 2007.  Alfred E. Mann, otherwise known as the 204th richest man in America and an inventor of medical devices, founded several companies, nine of which it has sold for almost $8 billion.A quick patent search on Google pulled up 2,380 patent and patent applications for the foundation from neural prosthetics to high voltage rectifiers.    The jury, having found that Cochlear wilfully infringed, awarded the foundation $131.2 million in damages.  In a statement, Cochlear said that "no judgment had been entered based on the verdict as important issues still remain to be decided by the judge."  They also stated that they would be asking the judge to overturn the verdict and may file an appeal.  For more information see articles in Bloomberg  and Australian Life Scientist.

The AmeriKat has collected several pyjama/work-out t-shirts over the years.   One of her favorites is her t-shirt with Brooklyn Nets emblazoned on it (thanks dad!).  Readers may recall that the Nets used to be based in New Jersey, but moved to their new home at the Barclays Center in Brooklyn in 2012 with the support of one of it's previous owners, Jay-Z.  Jay-Z has since sold his stake to head coach Jason Kidd.  The Brooklyn Nets name is apparently at the heart of a new $600 million trade mark dispute filed by Dr. Fracois de Cassagnol.  Dr. de Cassagnol filed a pro se complaint (i.e. representing himself) in the Eastern District Court of New York last December alleging that rapper Jay-Z (who is up for several Grammy awards this evening - see here) and Brooklyn Nets minority owner Bruce Ratner found loopholes in the USPTO in order to use the term that Dr. de Cassagnoi allegedly had used, originally in Louisiana, from 2003.  However, Dr de Cassagnol only filed a  trade mark application for the name in 2012.  Dr de Cassagnol also claims that before the team moved to Brooklyn he was assured that they would not use the name "Brooklyn Nets" but would opt for "New York Nets".  The USPTO had previously ruled that none of Dr de Cassagnol's uses were wide enough to prevent the registration of the NBA team's trade mark application. Readers can read the complaint here and the news report from BuisnessInsider here.   In any event, Merpel and the AmeriKat think the life expectancy of this complaint will be a few lives short of the full nine.

A view from the AmeriKat's
daily commute

When she isn't clacking away on her BlackBerry, readers can often spy the AmeriKat on her morning or evening commute flicking her paw across her Samsung screen. It may seem like important work, but don't be fooled.  She is likely just trying to match bright candy shapes to illicit a satisfying "crunch" or "pop" from UK' games manufacturer, King's, Candy Crush Saga.  Its annoyingly addictive so much so its been downloaded more than 500 million times.  However, King's dominance has frightened some in that last June they successfully registered the mark CANDY at OHIM and are applying for similar protection in the US. Other makers of candy-infused games, like All Candy Casino Slots, have started to receive cease-and-desist letters from King, while the maker of CandySwipe is opposing the application for Candy Crush Saga in the USPTO.  The battle for the sugar-addicted games has definitely begun.  Although some commentators have issued surprise that the descriptive word has been able to be registered in the first place, the mark in connection to King has undoubtedly garnered significant reputation (Candy Crush has been downloaded 500 million times, after all).  In an e-mailed statement to BusinessWeek, King stated:

"Our IP is constantly being infringed and we have to enforce our rights and to protect our players from confusion. We don’t enforce against all uses of CANDY—some are legitimate and of course, we would not ask App developers who use the term legitimately to stop doing so.  

The particular App in this instance was called ‘Candy Casino Slots—Jewels Craze Connect: Big Blast Mania Land’, but its icon in the App store just says ‘Candy Slots’, focusing heavily on our trademark. … We believe this App name was a calculated attempt to use other companies’ IP to enhance its own games, through means such as search rankings."

If push came to shove, the question may turn on whether consumers are confused into thinking that the other candy-games  that have "candy' in their title are associated with King's blockbuster.  For an addict like the AmeriKat, it isn't the name or inclusion of the word "candy", that reminds her she is playing Candy Crush, but the bright shapes and satisfying sounds when she matches four or five matching hard candies in a row.  Pure unadulterated joy. For further information, see stories in Businessweek, BGR and GameZebo.