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Halicki V. Carroll Shelby International, Et Al. Appellants' Opening Brief

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Halicki V. Carroll Shelby International, Et Al. Appellants' Opening Brief C.A. No. 06-55807 (consolidated with C.A. No. 06-55806) UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT DENICE SHAKARIAN HALICKI, et al., Plaintiffs and Appellants, vs. CARROLL SHELBY INTERNATIONAL, INC., et al., Defendants and Appellees. _____________________________________ Appeal From The United States District Court For The Central District of California Honorable. James Otero, Judge Presiding D.C. No. CV-04-8813 SJO (PJWx) ______________________________________ APPELLANTS’ OPENING BRIEF ______________________________________ GREINES, MARTIN, STEIN & RICHLAND LLP Timothy T. Coates (SBN 110364) Jens B. Koepke (SBN 149912) 5700 Wilshire Boulevard, Suite 375 Los Angeles, California 90036-3626 (310) 859-7811 Attorneys for Appellants DENICE SHAKARIAN HALICKI, et al. TABLE OF CONTENTS Page CORPORATE DISCLOSURE STATEMENT 1 STATEMENT OF JURISDICTION 2 ISSUES PRESENTED AND STANDARD OF REVIEW 3 INTRODUCTION AND SUMMARY OF ARGUMENT 4 STATEMENT OF THE CASE 10 STATEMENT OF MATERIAL FACTS 12 A. In 1974, Toby Halicki Creates The “Original Gone in 60 Seconds”—Which Catapults “Eleanor” to Stardom 12 1. The story line. 12 2. The star, “Eleanor.” 12 3. Toby creates, promotes and exploits “Eleanor’s” star character status and popularity. 13 4. Toby makes two more films with “Eleanor,” but dies making a sequel. 14 5. After years of probate battles, Halicki obtains rights to “Gone in 60 Seconds” and “Eleanor” and continues to exploit their enduring popularity. 14 B. Halicki Cuts A Deal With Disney To Develop A 2000 Remake, Which Becomes A Box Office Smash And Again Features “Eleanor.” 16 1. The story line. 16 2. “Eleanor” is the unicorn again. 17 C. The Agreement Between Halicki And Disney For The Remake Expressly Reserves To Halicki All Merchandising Rights To The Car Character “Eleanor.” 18 1. Definition of “Property” acquired by Disney. 19 i TABLE OF CONTENTS Page 2. Specific rights acquired by Disney. 19 3. Rights reserved by Halicki. 19 4. Halicki’s merchandising royalty interest in Remake. 20 5. Limited copyright license granted by Halicki. 20 6. Governing law: California. 20 D. Both Parties To The Agreement Confirm Their Mutual Intention Was To Reserve To Halicki All Merchandising Rights To “Eleanor,” Either From The Original Picture Or The Remake—Disney Actually Signs A Separate Acknowledgment Confirming That Intention. 21 E. The Lawyers Involved In The Negotiations Of The Agreement Confirm This Was The Parties’ Intention. 21 F. Both Halicki’s And Disney’s Conduct, After The Remake Was Released, Comport With This Intention. 23 G. Without Halicki’s Consent, Defendants Join Forces And Make Millions By Bootstrapping On “Eleanor’s” Popularity To Manufacture And Sell Replica “Eleanors.” 24 1. Both Shelby and Unique are well aware of “Eleanor’s” popularity. 24 2. Shelby and Unique vie to register an “Eleanor” mark. 25 3. Shelby and Unique eventually join forces, with Shelby licensing “his” Eleanor mark to Unique to build the “Eleanor” replicas. 26 4. Shelby admits that he began to use “Eleanor,” because his marks were mentioned in the Remake. 27 5. Defendants use both “Gone in 60 Seconds” and “Eleanor” to promote their replicas. 28 H. The Media Seize On Defendants’ Marketing Efforts And Misleadingly Dub Shelby As “Eleanor’s” Creator. 30 ii TABLE OF CONTENTS Page I. Halicki First Learned Of Defendants’ Infringement In February 2004 And Demanded They Stop—When Defendants Refused, She Sued. 32 ARGUMENT 33 I. THERE ARE GENUINE ISSUES OF MATERIAL FACT AS TO WHETHER HALICKI HAS STANDING TO SUE DEFENDANTS FOR TRADEMARK AND COPYRIGHT INFRINGEMENT, AMONG OTHER CLAIMS. 35 A. Halicki Has Standing To Sue For Trademark Infringement Because Halicki Owns The Common-Law Rights To The Unregistered Marks, “Eleanor” And “Gone In 60 Seconds.” 35 1. The Halickis began using the marks some 30 years before defendants did—Halicki thus owns the marks. 37 2. How one construes the Agreement doesn’t affect this basis for standing. 37 3. Defendants’ infringement of Halicki’s marks is patent and obvious. 38 B. Halicki Has Standing To Sue For Copyright Infringement Because The Character “Eleanor” From The Remake Is A Derivative Work From The “Eleanor” In The Original Picture. 41 1. “Eleanor” in the Remake is a derivative work. 41 2. As the copyright owner, Halicki can sue for defendants’ infringement of the derivative work. 44 C. There Are Genuine Factual Issues As To Whether The Disney Agreement Reserved To Halicki, Not Disney, The Merchandising Rights To “Eleanor,” Whether As Portrayed In The Original Picture Or The Remake. 47 1. California law on interpreting contracts requires the admission of extrinsic evidence on the parties’ mutual intent here. 47 iii TABLE OF CONTENTS Page 2. The Agreement reserves “Eleanor” merchandising rights to Halicki. 48 3. The extrinsic evidence also shows the parties’ mutual intention was that Halicki reserved the “Eleanor” merchandising rights. 52 4. The parties’ subsequent conduct confirms the parties’ mutual intention was that Halicki reserved the “Eleanor” merchandising rights. 54 D. Genuine Factual Issues Exist As To Whether Halicki Has Standing To Sue For Copyright Infringement As A Beneficial Owner Of The Copyright In “Gone in 60 Seconds.” 56 E. Genuine Factual Issues Exist As To Whether Halicki Has Standing To Sue For Trademark Infringement Or Unfair Competition Because Of Halicki’s Contingent Royalty Interests In The Remake. 58 F. Genuine Factual Issues Exist As To Whether Halicki Has Standing To Obtain Declaratory Relief, Namely The Cancellation Of The Shelby Trust’s Registration Of “Eleanor.” 59 II. DEFENDANTS’ RAMPANT USE OF THE “ELEANOR” AND “GONE IN 60 SECONDS” MARKS CAN, IN NO WAY, BE SEEN AS FAIR USE. 61 A. Defendants Didn’t Really And Can’t Successfully Assert Their Use Is Classic Fair Use. 61 B. Defendants’ Infringement Also Is Not Nominative Fair Use, Because Their Use Of The Marks Was Unnecessary And Done To Trade On The Popularity Of “Eleanor” And “The Gone In 60 Seconds” Franchise. 62 CONCLUSION 65 CERTIFICATE OF COMPLIANCE 66 iv TABLE OF AUTHORITIES Cases Page Allard Enterprise, Inc. v. Advanced Programming Res., Inc. 249 F.3d 564 (6th Cir. 2001) 36 Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 106 S. Ct. 2505 (1986) 4 Brother Records, Inc. v. Jardine 318 F.3d 900 (9th Cir. 2003) 61, 63 Burroughs v. Metropolitan-Goldwyn-Mayer, Inc. 519 F. Supp. 388 (S.D.N.Y. 1981) 42 Cairns v. Franklin Mint Co. 292 F.3d 1139 (9th Cir. 2002) 4 Cortner v. Israel 732 F.2d 267 (2d Cir. 1984) 56, 57 DC Comics, Inc. v. Reel Fantasy, Inc. 696 F.2d 24 (2d Cir. 1982) 40, 45 Digital Envoy, Inc. v. Google, Inc. 370 F. Supp. 2d 1025 (N.D. Cal. 2005) 54 Grupo Gigante SA De CV v. Dallo & Co., Inc. 391 F.3d 1088 (9th Cir. 2004) 36 Horphag Research Ltd. v. Pellegrini 337 F.3d 1036 (9th Cir. 2003) 61, 62, 63 Hydro-Dynamics, Inc. v. George Putnam & Co., Inc. 811 F.2d 1470 (Fed. Cir. 1987) 36 v TABLE OF AUTHORITIES Page Cases Johnny Blastoff, Inc. v. Los Angeles Rams Football Co. 188 F.3d 427 (7th Cir. 1999) 36 Kamakazi Music Corp. v. Robbins Music Corp. 534 F. Supp. 69 (S.D.N.Y. 1982) 56 Kavruck v. Blue Cross of California 134 Cal. Rptr. 2d 152 (Cal. Ct. App. 2003) 52 Lamb v. Starks 949 F. Supp. 753 (N.D. Cal. 1996) 44 Lewis Galoob Toys, Inc. v. Nintendo of America, Inc. 964 F.2d 965 (9th Cir. 1992) 4 Litchfield v. Spielberg 736 F.2d 1352 (9th Cir. 1984) 42 Maffei v. Northern Insurance Co. of New York 12 F.3d 892 (9th Cir. 1993) 54 Metropolitan-Goldwyn-Mayer, Inc. v. American Honda Motor Co., Inc. 900 F. Supp. 1287 (C.D. Cal. 1995) 41 Micro Star v. Formgen Inc. 154 F.3d 1107 (9th Cir. 1998) 42 Morey v. Vannucci 75 Cal. Rptr. 2d 573 (Cal. Ct. App. 1999) 48, 53 New Kids on the Block v. News America Public, Inc. 971 F.2d 302 (9th Cir. 1992) 62 vi TABLE OF AUTHORITIES Page Cases New West Corp. v. NYM Co. of California, Inc. 595 F.2d 1194 (9th Cir. 1979) 36 PPX Enterprises, Inc. v. Audiofidelity, Inc. 746 F.2d 120 (2d Cir. 1984) 58 Pacific Gas & E. Co. v. G. W. Thomas Drayage etc. Co. 422 P.2d 641 (Cal. 1968) 48, 53 Rebel Oil Co. v. Atlantic Richfield Co., Inc. 51 F.3d 1421 (9th Cir. 1995) 4 Sengoku Works Ltd. v. RMC Intern., Ltd. 96 F.3d 1217 (9th Cir. 1996) 36, 37 Sid & Marty Krofft Television Product, Inc. v. McDonald’s Corp. 562 F.2d 1157 (9th Cir. 1977) 44 Southern Pacific Transport Co. v. Santa Fe Pacific Pipelines, Inc. 88 Cal. Rptr. 2d 777 (Cal. Ct. App. 1999) 47, 55 Star-Kist Foods, Inc. v. P.J. Rhodes & Co. 735 F.2d 346 (9th Cir. 1984) 59 Stewart v. Abend 495 U.S. 207, 110 S. Ct. 1750 [109 L.Ed.2d 184] (1990) 41 Tri-Star Pictures, Inc. v. Leisure Time Products, B.V. 749 F. Supp. 1243 (S.D.N.Y. 1990) 58 Trident Center v. Connecticut General Life Insurance Co. 847 F.2d 564 (9th Cir. 1998) 48 vii TABLE OF AUTHORITIES Page Cases U.S. Cellular Investment Co. v. GTE Mobilnet, Inc. 281 F.3d 929 (9th Cir. 2002) 55 Universal City Studios, Inc. v. J.A.R. Sales, Inc. 216 U.S.P.Q. (BNA) 679 (C.D. Cal. 1982) 42, 46 Walt Disney Product v. Air Pirates 581 F.2d 751 (9th Cir. 1978) 41 Warner Brothers, Inc. v. Gay Toys, Inc. 658 F.2d 76 (2d Cir. 1981) 40 Warren v. Fox Family Worldwide, Inc. 328 F.3d 1136 (9th Cir.
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