NEW YORK LAW JOURNAL MONDAY, APRIL 15, 2002 was not fair use, because it was not that attorney’s fees may be awarded in a tectable. While those features were not func- transformative, and was likely to harm the trademark action under the Lanham Act tional in the “traditional sense,” in that they market for Kelly’s work by reducing visitors where the defendant acted willfully, even if are not essential to the use or purpose of the to his Web site and allowing downloads there is no finding of bad faith or fraud. goods and do not affect their cost or without payment of a license fee. Tamko Roofing Products, Inc. v. Ideal Roofing quality, they were functional because pro- Resolving what it described as an issue of Co., Ltd., 282 F.3d 23 (1st Cir. 2002). With hibiting their use would impose a “significant first impression under the 1976 Copyright that holding, it aligned itself with the Eighth non-reputation-related disadvantage” on Act, the Ninth Circuit held that an and Tenth Circuits, and against the Second, American Eagle. Denying competitors access exclusive licensee does not have the right to Fourth and Fifth. Section 35(a) of the to elements of the claimed trade dress, which transfer its rights without the consent of the Lanham Act, 15 U.S.C. §1117(a), allows for included use of words such as “performance” licensor. Gardner v. Nike, Inc., 279 F.3d 774 a fee award in “exceptional” cases. The court and “outdoor” and certain primary color (9th Cir. 2002). In 1992, Nike signed an found that the legislative history of the act combinations, would “prevent effective agreement giving Sony the exclusive right to indicates that “deliberate” and “willful” competition in the market.” use a cartoon character in connection with conduct may make a case “exceptional.” In sound recordings and associated promotional the case before it, a fee award was justified Patents activity. After Sony assigned its rights to because defendant failed to perform a Gardner, Nike challenged Gardner’s use of trademark search, used the mark after notice Acting en banc, the Court of Appeals for the material, and Gardner sued Nike for a from the plaintiff, and continued that use the Federal Circuit held that the bona fide declaration that Sony’s transfer of rights was even after entry of a preliminary injunction purchaser defense to patent infringement is valid. The Court of Appeals affirmed a prohibiting infringement. not available to non-exclusive licensees. district court order finding that Gardner, as a Having selected plaintiff Terri Welles as Rhone-Poulenc Agro, S.A. v. DeKalb Genetics licensee, lacked standing to sue. The court its 1981 Playmate of the Year, Playboy Corp., 2002 WL 459887 (Fed. Cir., March found that, under §201(d)(2) of the 1976 Enterprises failed in its attempt to prevent 27, 2002). Rhone-Poulenc sued Monsanto Act, an exclusive licensee is entitled to the her from using its trademarks on her Web for infringement, arguing that a non-exclu- “protection and remedies” afforded by the site. Playboy Enterprises, Inc. v. Welles, 279 sive license to practice the patent Monsanto act, but not to rights of “ownership,” such as F.3d 796 (9th Cir. 2002). The Ninth Circuit received had been procured by fraud. The the right to transfer. Moreover, affording an held that Ms. Welles’ use of Playboy marks in Court of Appeals first found that, because of exclusive licensee the right to transfer, the headlines and banner advertisements and in the importance of national uniformity, the court wrote, would jeopardize the licensor’s metatags (keywords used by search engines to bona fide purchaser defense must be right to monitor use of the copyright. identify Web sites) were proper, “nomina- governed by federal law. Looking for In a case involving “the intersection of the tive” uses. The court applied a three-part test guidance to §261 of the Patent Act, which motion picture and video retailing industries, for nominative use: that the product or concerns the recording of assignments and and the emerging commercial enterprise of service is not “readily identifiable” without conveyances, the court found a congression- Internet sales,” a district court enjoined the use of the trademark, that only so much al policy limiting the protections of the bona production of short trailers used to advertise of the mark as is reasonably necessary to fide purchaser rule to licenses that are movies on the web sites of video retailers. identify the product or service is used, exclusive, or transfer “all substantial rights” Video Pipeline, Inc. v. Buena Vista Home and that the user do nothing to suggest in the patent. Entertainment, Inc., 2002 WL 484910 (D. “sponsorship or endorsement by the Tate Access Floors, Inc. v. Interface N.J., March 28, 2002), Civ. No. 00-5236.. trademark holder.” The court held that Architectural Resources, Inc., 279 F.3d 1357 Video Pipeline produces two-minute trailers nominative uses is a defense not only to (Fed. Cir. 2002) firmly rejected the argument of copyrighted movies, which are “streamed” claims of trademark infringement, but that there is a “practicing the prior art” (made available for viewing but not dilution as well. Ms. Welles’ use of a Playboy defense to literal infringement. Defendant downloading) on the Web sites of its clients, mark as part of the background “wallpaper” Interface challenged a preliminary injunc- who rent and sell videos. Granting a of the site, however, did not satisfy this test tion by arguing that its accused product, preliminary injunction motion filed by and therefore was not protected from a claim flooring tiles, simply practiced prior art movie studios who own copyrights in the of infringement or dilution. to Tate’s patent. The Court of Appeals advertised films, the court found that the Construing the doctrine of “functionali- responded that “literal infringement is trailers were unauthorized derivative works ty,” the Sixth Circuit Court of Appeals determined by construing the claims and and that streaming them amounted to affirmed summary judgment dismissing trade comparing them to the accused device, not unauthorized public display and performance dress infringement claims brought by by comparing the accused device to the prior of the works. The court also found that clothing retailer Abercrombie & Fitch art.” While prior art may establish the streaming was not protected under the first against its rival American Eagle Outfitters. invalidity of the claims, “accused infringers sale doctrine, and that Video Pipeline could Abercrombie & Fitch Stores, Inc., v. American are not free to flout the requirement of not invoke a fair use defense. Eagle Outfitters, Inc., 280 F.3d 619 (6th Cir. proving invalidity by clear and convincing 2002). The court found that Abercrombie’s evidence by asserting a ‘practicing prior Trademarks clothing designs and in-store presentation — art’ defense to literal infringement under which American Eagle admittedly copied — the less stringent preponderance of the The First Circuit Court of Appeals ruled were functional, and therefore not pro- evidence standard.” This article republished with permission fromlaw.com . Copyright © 2001 NLP IP Company. All rights reserved..