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Georgia IP Litigation: September 2012

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Thursday, September 27, 2012, 12:57 PM

Middle District of Georgia Refuses to Expand Use-Based Cyberpiracy Liability Beyond Domain Name "Registrant"

On September 24, 2012, the U.S. District Court for the Middle District of Georgia issued an order dismissing a cyberpiracy claim under the Anticybersquatting Consumer Protection Act ("ACPA") asserted against a defendant corporation.  However, the ACPA claim against individual defendants will remain in the case, at least for the time being.


The court recited underlying facts as alleged in the complaint, accepting them as true only for purposes of considering a dismissal motion under Rule 12(b)(6) of the Federal Rules of Civil Procedure.[1] 

As alleged in the complaint, Plaintiff Pastor Kang formed defendant corporation Our Firm Foundation for Koreans, Inc. (“OFFFK”) in Georgia in 1990 “as an outlet for his [Christian] ministry.”[2]  The Individual Defendants (namely, Paul Im, Chang Sup Shim, and Justin Kim) served with Pastor Kang on OFFFK’s Board of Directors.

In 1993, Pastor Kang founded plaintiff Light for Life, Inc., which “became the official vehicle of Pastor Kang’s ministry . . . .”  Plaintiffs used the trade names “Light for Life” and “Light for Life Ministries,” and established the domain name “www.lightforlife.org.”[3]  Plaintiffs used those trade names as trademarks to identify internationally-distributed copyrighted works, including “written and recorded ministerial works, educational materials, and seminars.”[4]

Deterioration in the relationship between Pastor Kang and OFFFK’s other board members began in April 2009, when two of them indicated a theological disagreement with Pastor Kang “and attempted to usurp control of the Board.”  That deterioration and continued through December 2011, when Pastor Kang “was suffering from serious heart complications,” and the Individual Defendants seized the website, blocked the plaintiffs from accessing it, and changed to website content that plaintiffs described as “derogatory and defamatory.”[5]

Plaintiffs further alleged that during the winter of 2011-12, the Individual Defendants continued to sell the copyrighted works through OFFFK, using the “Light for Life” trademarks in direct competition with Plaintiffs.  In February of 2012, Individual Defendants Im and Shim “filed an annual report with the Georgia Secretary of State purporting to remove Pastor Kang from his position.”[6]

Plaintiffs filed suit on March 30, 2012.  Their amended complaint alleged copyright infringement, cyberpiracy in violation of the ACPA, and unfair competition, among other causes of action.  Defendants filed a motion to dismiss.  OFFFK contended that since it was not a registrant of the domain name, the cyberpiracy count failed as a matter of law.  The Individual Defendants argued that all claims against them should be dismissed “because Plaintiffs have not properly alleged any reason to pierce the corporate veil and bring suit against the directors of OFFFK.”

Court’s Analysis of Defendants’ Dismissal Motion

The Middle District of Georgia first dealt with the cyberpiracy claim, reciting the following cause of action elements:
“To prevail under the ACPA, a plaintiff must prove that (1) its mark is distinctive or famous and entitled to protection; (2) the defendant's domain name is identical or confusingly similar to the plaintiff's mark;  and (3) the defendant registered[, trafficked,] or used the domain name with a bad faith intent to profit.”[7]
Regarding the third element, the court had little problem agreeing with OFFFK that it did not register or engage in trafficking of the domain name.  Plaintiffs themselves alleged that the domain name www.lighforlife.org was registered “‘in the name of another individual as authorized by Pastor Kang, Min Ju Kim.’”[8]  Furthermore, the complaint did not allege that OFFFK engaged in any transactions concerning the domain name, which is required under the statutory definition of “traffics in.”[9]

The court devoted the bulk of its cyberpiracy analysis to the “used” basis for liability recited in the above-quoted third element, since that was the only basis addressed by Plaintiffs in their opposition to the dismissal motion.  Under the ACPA: “A person shall be liable for using a domain name . . . only if that person is the domain name registrant or that registrant’s authorized licensee.”[10]  Plaintiffs argued that the statute extended liability to not just actual domain name registrants, but also “‘to those who have the power of dominion over an offending domain (or their direct agents).’”[11]  The court disagreed, finding that the statute is clear and unambiguous, and that interpreting it to mean “usurping control,” as Plaintiffs advocated, “would effectively rewrite the ACPA to extend liability to an individual who had no role in registering, or even reserving, a domain name.”[12]  Thus, the court dismissed the ACPA count against OFFFK.  Defendants apparently did not raise their substantive argument to advocate dismissal of the ACPA count against the Individual Defendants, however, so the court kept that count in the case against them.[13]

The Middle District of Georgia next turned to the Defendants’ argument that all claims against the Individual Defendants should be dismissed “because Plaintiffs do not sufficiently allege facts to establish their individual liability.”[14]  The court cited authorities holding that while individuals are not held liable for torts of a corporation merely by being an officer or director, they can be held personally liable if they personally participate in the corporation’s wrongful activities.  It then recounted allegations in the complaint specifically directed at the Individual Defendants and concluded that “[t]hese allegations, coupled with Plaintiffs’ allegations against Defendants collectively, are sufficient to allege Individual Defendant[s’] personal participation in tortious conduct.”[15]  As a result, the court declined to dismiss any of the counts against the Individual Defendants.

The case will therefore proceed with all asserted counts intact, except for the cyberpiracy count as against OFFFK.

The case is Light for Life, Inc. and David Byung Kook Kang v. Our Firm Foundation for Koreans, Inc., Paul Im, Chang Sup Shim, and Justin Kim, No. 3:12-CV038 (CAR), U.S. District Court for the Middle District of Georgia, Athens Division, assigned to Judge C. Ashley Royal.

[1] Light for Life, Inc. v. Our Firm Foundation for Koreans, Inc., No. 3:12-CV038 (CAR), 2012 U.S. Dist. LEXIS 136622, at *4-*5 (M.D. Ga. Sept. 24, 2012).
[2] Id., 2012 U.S. Dist. LEXIS 136622, at *5.
[3] Id. at *3 and *6.
[4] Id. at *3-*4.
[5] Id. at *5-*6.
[6] Id. at *6-*7.
[7] Id. at *9-*10 (citations omitted; italics and brackets in original).
[8] Id. at *3.
[9] Id. at *13-*14 & n.24 (quoting and citing 15 U.S.C. § 1125(d)(1)(E)).
[10] 15 U.S.C. § 1125(d)(1)(D) (emphasis added).
[11] Light for Life, 2012 U.S. Dist. LEXIS 136622, at *11.
[12] Id. at *12.
[13] The court remarked that “Defendants have not moved to dismiss this [ACPA] count against Individual Defendants (and thus Plaintiffs have not had the opportunity to respond) . . . .”  Id. at *14.  Actually, Defendants did move to dismiss the ACPA count against the Individual Defendants.  They just did not do so on the same ground that was used for dismissing that count against OFFFK.  Instead, they moved to dismiss all counts against Individual Defendants on “corporate veil” grounds.  The ACPA count against the Individual Defendants was vulnerable to dismissal on substantive grounds.  Like OFFFK, none of the Individual Defendants was a domain name “registrant.”  The court clearly ruled that Min Ju Kim “is the only individual who can be held liable for ‘us[ing]’ the domain name.”  Id. at *10.  Yet Min Ju Kim was not a named defendant.  Under the court’s ruling, none of the Individual Defendants could be held liable for "using" the domain name, making the ACPA claim against them vulnerable to a challenge.  Had the Individual Defendants also specifically argued that they were not domain name “registrants” and thus did not meet that statutory requirement for use-based cyberpiracy liability, and that plaintiffs did not allege facts to support a "trafficking" ground against them, the court would have likely dismissed the ACPA count against them, for the same reasons it dismissed that count against OFFFK.  The Individual Defendants should have another opportunity to defeat the ACPA on this substantive ground before trial, at the summary judgment stage.
[14] Id. at *14.
[15] Id. at *16.

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Wednesday, September 26, 2012, 11:42 AM

Timbaland, Nelly Furtado Part of 11th Circuit Copyright Decision Instructive for Creators of Foreign Works

If you are the creator or owner of a "foreign work" -- one first published outside of the United States -- and decide to enforce the copyright within the United States, be prepared.  First, you may want to ensure that you understand the "esoteric" meaning of "published" as set forth in the U.S. Copyright Act. [1]  Then, you will need to marshal sufficient evidence to prove that the first publication occurred outside the United States.  Or, you could negate the need for such efforts by simply registering your foreign work with the U.S. Copyright Office, thereby affording you a prima facie valid copyright and clearing the path for bringing suit against an alleged infringer.

On September 14, 2012, the United States Court of Appeals for the Eleventh Circuit issued an opinion affirming a lower court's decision to toss out a copyright suit against Timothy Mosley a.k.a. Timbaland, Nelly Furtado, and a host of record label companies, based on evidentiary grounds.  The Court concluded that the district court erred in granting Mosley's motion for summary judgment, but nevertheless found that the plaintiff-appellant had failed to provide sufficient evidence that it had complied with the statutory prerequisites prior to filing the action.

For background on the origins of the case, see this article published by Music Radar.  In short, a Finnish record label, Kernel Records Oy ("Kernel"), obtained the rights to a Sound Interface Device (SID) file, titled Acidjazzed Evening, created by Glenn Rune Gallefoss in 2002.  In August 2002, with Gallefoss' permission, an Australian disk magazine called Vandalism News published Acidjazzed Evening.  In December 2002, a Swedish website called High Voltage SID Collection uploaded Acidjazzed Evening to its own website, most likely after obtaining a copy from Vandalism News.  On June 7, 2006, Nelly Furtado released a song, Do It, produced by Timbaland and featuring "sampling" of Acidjazzed Evening.[2]

Kernel first brought copyright claims in Finland against those responsible for Do It, but lost.  Kernel then filed an action in the United States District Court for the Southern District of Florida against Mosley, Furtado, Mosley Music, LLC, Universal Music Distribution Corp., UMG Recordings, Inc., Interscope-Geffen-A&M, EMI Music Publishing, EMI April Music, Inc., Virginia Beach Music, WB Music Corp., and Warner Chappell Music (collectively, Defendants) alleging infringement of its copyright of Acidjazzed Evening.  While the music industry and casual observers saw this as a prime opportunity for a court to weigh in on the permissibility and limits of sampling, the sole focus of the case became whether Kernel could properly litigate its claims.

Though copyright protection exists from the moment "an original idea leaves the mind and finds expression in a tangible medium," the Copyright Act of 1976 requires registration of a "United States work" with the U.S. Copyright Office before bringing an action for copyright infringement.[3]  Kernel did not register Acidjazzed Evening with the Copyright Office before bringing suit, but owing to obligations under the Berne Convention the Copyright Act does not bar the owner of a "foreign work" from bringing suit in the U.S.  It should be noted, though, that foreign works may be registered, which, given the low cost and substantial benefits conferred on copyright registrants (e.g., ability to collect statutory damages and attorney's fees), is highly preferable.

The Copyright Act defines a "United States work" as a work that is first published in the United States or simultaneously in the United States and a foreign nation (whether a party to the Berne Convention or not).  17 U.S.C. § 101.  The case-determinative issue, then, was whether first publication of Acidjazzed Evening in Australia's Vandalism News also occurred simultaneously in the United States.  If so, the work was a United States work and subject to the pre-filing registration requirement.  If not, the case could go on.  The burden is on the plaintiff seeking to bring a copyright action to prove that its work was first published abroad and is exempt from the registration requirement.

First, the Court recited the "esoteric" definition of "publication" set forth in the Copyright Act:
"[T]he distribution of copies or phonorecords or a work to the public by sale or other transfer or ownership, or by rental, lease, or lending.  The offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display, constitutes publication.  A public performance or display of a work does not of itself constitute publication."
17 U.S.C. § 101.  "Publication also occurs 'when an authorized offer is made to dispose of the work in any such manner[,] even if a sale or other such disposition does not in fact occur.'"  The parties agreed that Acidjazzed Evening was published in Vandalism News, but disputed whether the "disk magazine" was first published on the Internet or on a local physical hard drive.  Mosley contended that the disk magazine was first available on the Internet, thereby making it simultaneously available around the world, including in the United States.  Kernel argued that the disk magazine was first published on a local computer drive and thus was initially available only in Australia.

The Court first took on Mosley's and the district court's reasoning that if a work is published on the Internet it is automatically available worldwide.  The Court rejected this reasoning, explaining that numerous works are "online" yet are not publicly available, in places such as restricted websites, peer-to-peer networks, and e-mail systems.  The Court looked at the entire factual record, including conflicting and ambiguous deposition testimony, declarations, and other support, to determine whether the publication was simultaneously available to the public around the world.  The Court found that the district court erred and that Mosley had not met his burden to show that there was no genuine dispute of material fact as to whether Acidjazzed Evening was a United States work.

Though the district court erred in granting Mosley's motion, the Court nevertheless affirmed the decision because it found the record devoid of any support that Kernel had met its burden to show that its work was exempt from the registration requirements.  To do so, Kernel would have needed to show by a preponderance of the evidence (1) that Acidjazzed Evening was published; (2) when that first publication occurred; and (3) in what countries that first publication occurred.[4]  The Court stated that "on this record, no reasonable fact-finder could possibly determine by a preponderance of the evidence those essential facts."[5]  Thus, because Kernel failed to register its work with the U.S. Copyright Office before filing suit, "Kernel's case is doomed."[6]

The reported appellate and district court decisions are Kernel Records Oy v. Mosley et al., 794 F. Supp. 2d 1355 (S.D. Fla. 2011), aff'd, __ F.3d __, 2012 U.S. App. LEXIS 19413 (11th Cir. Sept. 14, 2012).

[1]  Kernel Records Oy v. Mosley et al., No. 11-12769, __ F.3d __, 2012 U.S. App. LEXIS 19413 at *22-23 (11th Cir. Sept. 14, 2012) (citing Estate of Martin Luther King, Jr. v. CBS, Inc., 194 F.3d 1211, 1214 n.3 (11th Cir. 1999) ("[P]ublication is a legal word of art, denoting a process much more esoteric than is suggested by the lay definition of the term.")).

[2]  "Sampling" is the act of repurposing a snippet of another artist's work and incorporating it into a new work.  Sampling has been common in the music industry for decades, and the line between acceptable creativity and unacceptable criminality has been hotly debated.  See http://www.npr.org/2011/01/28/133306353/Digital-Music-Sampling-Creativity-Or-Criminality.

[3]  17 U.S.C. § 411(a): "[N]o civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title. In any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights."

[4]  Kernel Records, 2012 U.S. App. LEXIS 19413 at *47.

[5]  Id.

[6]  Id. at *50.

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Tuesday, September 25, 2012, 4:12 PM

Recent Patent Cases Filed in Atlanta Division

Patent cases have been filed in fairly close succession to one another in the Atlanta Division of the U.S. District Court for the Northern District of Georgia.  Each complaint contains allegations of willful patent infringement.

UPS Sued Over Patent Relating to Method for Providing Notification of Express Mail Delivery

On September 14, 2012, Lewisville, Texas-based Mobile Telecommunications Technologies, Inc. ("MTEL") sued Atlanta-based United Parcel Service, Inc. ("UPS") for alleged infringement of U.S. Patent No. 5,786,748 ("the '748 Patent"), which issued in July 1998.

MTEL states that the '748 Patent "present[s] novel methods for, inter alia, giving prompt notifications to concerned parties of the actual delivery of express mailings."  The '748 Patent ends in 3 claims, the sole independent claim calling for a method comprising several steps, one of which recites the relaying of certain numbers to a "paging operations center."

Its complaint includes allegations that, "on information and belief, UPS offers package tracking services that provide information on the status of a shipment via Short Message Service (SMS)," and that "[a] user may track a package by entering an identification number and a mobile telephone number to a telephone capable of receiving SMS messages."

MTEL's complaint seeks injunctive and monetary relief, enhanced damages due to alleged willful infringement, and attorneys fees.

The case is Mobile Telecommunications Technologies, LLC v. United Parcel Service, Inc., No. 1:12-cv-03222-AT, filed 09/14/12 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, assigned to U.S. District Judge Amy Totenberg.

Graco Children's Products Asserts 4 Patents Directed to Side-to-Side Motion Infant Swing

On September 17, 2012, Graco Children's Products, Inc. ("Graco") filed an infringement action against its competitor Kids II, Inc. ("Kids II"), alleging that Kid's II's InGenuity "child sway product" (such as the Cozy CooSway Seat) infringes Graco's U.S. Patents Nos. 7,563,170; 7,883,426; 8,029,377; and 8,187,111 (collectively "the Graco Patents").

Graco alleges that it, "through its research and development staff, invented a novel infant soothing swing that mimics the natural swaying motion of a parent or other caregiver while cradling an infant."  The complaint asks not only for monetary and injunctive relief, but also for trebling of damages due to alleged willful infringement and for attorneys fees due to this being an alleged "exceptional case."  Graco alleges that, "[o]n information and belief, certain persons who were members of the Graco research and development staff have been hired by Kids II for the purpose of developing children's products to be offered by Kids II," and that those hired persons "have knowledge of Graco's infant soothing swing technology or the Graco Patents or both."

The case is Graco Children's Products Inc. v. Kids II, Inc., No. 1:12-cv-03246-SCJ, filed 09/17/12 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, assigned to U.S. District Judge Steve C. Jones.

Subsidiaries of Mueller Water Products Assert 3 Patents Directed to Underground Water Sampling and Purging Apparatus

On September 21, 2012, two subsidiaries of Mueller Water Products, Inc., namely Mueller International, LLC and Mueller Co. LLC (collectively "Mueller") filed an infringement action against Canada-based Singer Valve Inc. and Charlotte, NC-based Singer Valve, LLC (collectively "Singer"), alleging that Singer's "Total Automatic Purging System (TAPS) product" infringes Mueller's U.S. Patents Nos. 6,035,704; 6,358,408; and 6,635,172.

Mueller describes each of the asserted patents as generally relating to "water quality maintenance devices and more particularly to a water sampling and purging apparatus for automatically maintaining water quality in a low flow area of an underground water distribution system."  Similarly, Mueller describes Singer's TAPS product as "a system for automatic flushing or purging subterranean pressurized water distribution systems to enhance water quality."

Mueller seeks monetary and injunctive relief, enhanced damages due to alleged willful infringement, and attorneys fees due to an alleged "exceptional case."

The case is Mueller Int'l, LLC and Mueller Co., LLC v. Singer Valve Inc. and Singer Valve, LLC, No. 1:12-cv-03307-RLV, filed 09/21/12 in the U.S. District Court for the Northern District of Georgia, Atlanta Division, assigned to U.S. District Judge Robert L. Vining, Jr.

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Monday, September 24, 2012, 4:52 PM

Southern District of Georgia Debuts on This Blog

On September 20, 2012, two trademark lawsuits were filed in the U.S. District Court for the Southern District of Georgia, providing our first occasion for covering events in that court since the launch of this blog in early July 2012.  One case generated publicity even before it was filed.

Virginia's Regent University Follows Through on Stated Intention to File Suit Against Georgia's Board of Regents

The genesis of the first of these two lawsuits was an announcement that on August 7, 2012, the Board of Regents for the University System of Georgia had voted to combine Augusta State University ("ASU") and Georgia Health Sciences University ("GHSU"), and to name the consolidated university GEORGIA REGENTS UNIVERSITY.  “The other two names that were being debated were Georgia Arts & Sciences University and University of Augusta - one that drew high praise from students and residents alike.”[1] 

According to a university website, the inaugural class for the new university will enroll in fall 2013, and “[t]he $1.3 billion university will include nine colleges, nearly 10,000 students, more than 650 acres of campus, nearly 150 buildings, more than 1,000 full-time faculty, approximately 5,600 staff, an integrated health system and a growing intercollegiate athletics program.”

However, “[a]lmost immediately, the name choice drew controversy in the Augusta area where many residents wanted ‘Augusta’ to be part of the name.”[2]  An Augusta Chronicle article called the reaction “visceral and immediate,” reporting on the establishment of a Facebook page called “Everyone Against ‘Georgia Regents University’ Sound Off” by a 2010 ASU graduate.[3]  That article reported over 2,700 “likes” for that page; as of the time of this writing, the “likes” now total over 5,200.
Yet the first signs of controversy from the name choice were made known even before the vote occurred, and arose not from the Augusta community, but from Virginia.  “Regent University, founded in 1978 by televangelist Pat Robertson as CBN University, took its current name in 1990.”[4]  In an August 4 letter to the Board of Regents, an attorney for Regent University expressed the view that selection of the name GEORGIA REGENTS UNIVERSITY “‘could create confusion and lead people to think the Georgia and Virginia institutions are related.’”[5]  The letter concluded with a request that the Board choose another name, and a Board spokesman indicated that the Board would take the letter under advisement.[6]

Reacting to the Board’s August 7 vote, Regent University announced on August 22 that it intended to file a trademark lawsuit against the Board.[7]  Dr. Carlos Campo, the president of Regent University, released the following statement: “Regent University has consistently taken steps to protect its trademarked name.  We have respect for the Georgia Board of Regents but we believe that their selection of the name Georgia Regents University is an unfortunate infringement of our valuable federally registered trademark.”[8]

On September 20, Regent University filed its lawsuit in the Augusta Division of the U.S. District Court for the Southern District of Georgia.  Named as defendants are not only the Board of Regents itself, but also the Board d/b/a ASU and the Board d/b/a GHSU.  Additionally, the complaint lists as defendants 18 individual Board members.  The complaint identifies two federal registrations for the word mark REGENT UNIVERSITY and one for that expression with a design. 

“Instead of honoring the historic and rich tradition of the Augusta community,” states the complaint, “Defendants decided on the name GEORGIA REGENTS UNIVERSITY without regard to Regent's well-known trademark rights.”  The complaint includes not only trademark counts against the defendants, but also two counts based on 42 U.S.C. § 1983 in conjunction with the 14th Amendment to the U.S. Constitution, among other counts.

The case is Regent University v. Board of Regents of the University System of Georgia, et al., No. 1:12-cv-00141-JRH-WLB, filed 09/20/12 in the U.S. District Court for the Southern District of Georgia, Augusta Division.  The case has been assigned to U.S. District Judge J. Randal Hill.

Choice Hotels Sues Holdover Licensee of Rodeway Inn® Marks
The second of the two lawsuits recites a fact pattern commonly alleged in trademark cases involving hotel franchises, namely, that a local franchisee operating an establishment under the hotel's name experiences termination of the franchise agreement, but then continues to use the franchisor's mark after that termination, without the franchisor's permission.  Persons who continue to use licensed marks following termination of a franchise agreement (which typically includes a license to use the franchisor's marks) are commonly referred to as "holdover licensees."  We already have a prior post recounting such a fact pattern in a case involving Holiday Inn.® 
The lawsuit filed September 20 in the Brunswick Division of the Southern District of Georgia involves the RODEWAY INN® family of marks, allegedly owned by the plaintiff Choice Hotels International, Inc.  Choice Hotels asserts that it has used those marks since 1962 and owns several registrations for those marks.
The complaint alleges that in September 2005, Choice Hotels entered into a Franchise Agreement with defendants, licensing to them rights to use the RODEWAY INN® family of marks at a Brunswick property, but that later, "Defendants defaulted on their material obligations," including on payment of monthly franchise fees.  Choice Hotels contends that it issued a Notice of Default in August 2010 that was not cured, and that it then issued a Notice of Termination in April 2011 that "instructed the Defendants to immediately cease and desist use of any and all marks owned by Choice Hotels."  Choice Hotels further alleges that in 2012, it discovered that the defendants were continuing to use the RODEWAY INN® family of marks at the Brunswick site.  The complaint asserts counts against the defendants for infringement of a federally-registered trademark and for false designation of origin § 43(a) of the Lanham Act.
The case is Choice Hotels International, Inc. v. Bijal LLC, Yogesh Patel and Kanaiyalal Patel, No. 2:12-cv-00156-LGW-JEG, filed 09/20/12 in the U.S. District Court for the Southern District of Georgia, Brunswick Division.  The case has been assigned to U.S. District Judge James E. Graham.

[1] Chris Walsh, AHU and GHSU become Georgia Regents University, Aikenstandard.com, Aug. 9, 2012, available in http://www.aikenstandard.com/story/0809-Georgia-Regents-University.
[2] Va. University Sues Over ‘Regents’ Name, Associated Press, Aug. 23, 2012, available in http://www.gpb.org/news/2012/08/23/va-university-sues-over-regents-name.
[3] Tom Corwin, Opponents denounce Georgia Regents University Name, The Augusta Chronicle, Aug. 9, 2012, available in http://chronicle.augusta.com/news/health/2012-08-08/protesters-denounce-georgia-regents-university-name.
[4] Aaron Applegate, Regent U. objects to proposed Georgia college name, The Virginian Pilot, Aug. 7, 2012, available in http://hamptonroads.com/2012/08/regent-u-objects-proposed-georgia-college-name.
[5] Id.
[6] Id.

[7] Tom Corwin, Regent University to file suit over Georgia Regents Name, The Augusta Chronicle, Aug. 22, 2012, available in http://chronicle.augusta.com/news/education/2012-08-22/regent-university-file-suit-over-georgia-regents-name?v=1345672835.
[8] Id.

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Friday, September 21, 2012, 3:13 PM

Hip-Hop, Christmas, and Vampires: 3 New Copyright Cases Filed in Atlanta Division

What do hip-hop tracks, Christmas-themed works, and vampires have in common?  Usually not much, but they are all subjects of copyright cases recently filed in the Atlanta Division of the U.S. District Court for the Northern District of Georgia.  Three complaint filings occurred within three days of one another.

Soulja Boy's "Swag Daddy" Charged as Infringing Work

On September 14, 2012, plaintiffs Hip Hop Frat House and Michael J. Garcia filed a complaint against defendants DeAndre Cortez Way (aka "Soulja Boy") and S.O.D. Money Gang Entertainment, Inc. for copyright infringement, breach of implied contract, and related causes of action.

According to the Complaint, plaintiff Garcia created two musical compositions, one called "Racks" in or around 2010, and another that included "Racks" or a derivative thereof, in or around June 21, 2011.  The Complaint alleges that Mr. Garcia registered those works on or around September 9, 2010 and August 8, 2011, respectively. 

The Complaint further alleges that in or around June 2011, an agent of plaintiff Frat House e-mailed to Way Mp3 files of several musical compositions, including "Racks," "for the sole and exclusive purpose of having him consider the tracks for his use in the production of future musical compositions, upon issuance of proper licenses or assignments for the outright purchase by Way or S.O.D."

Plaintiffs allege that following a period of several weeks during which time Frat House's agent sent several follow-up e-mails to Way that went unanswered, Way created the track "Swag Daddy," "which was based upon and made full use of the track 'Racks' in complete, unedited form," and that the track appears on Way's album "21:EP," accessible on certain websites.

The complaint recites six counts, or claims for relief.  In their breach-of-implied-contract claim, plaintiffs allege: "In using 'Racks' in the creation of 'Swag Daddy,' Defendants effectively accepted the offer to license or purchase the track from Plaintiffs, and Defendants knew or should have known that Plaintiffs would expect reasonable and adequate compensation for the benefit conveyed to Defendants, despite the lack of a formal agreement permitting such use."

The case is Hip Hop Frat House and Michael Garcia v. DeAndre Cortez Way and S.O.D. Money Gang Entertainment, Inc., No. 1:12-cv-3224-JOF, filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on 09/14/12.  The case has been assigned to Senior U.S. District Judge J. Owen Forrester.

Christmas-Themed Product Seller Files Declaratory Judgment Action

On September 17, 2012, Stone Mountain-based Mud Pie, LLC ("Mud Pie") filed a declaratory judgment action against Kentucky-based company Clay Chick Ceramics, LLC ("Clay Chick").  The lawsuit seeks a judgment declaring that certain Clay Chick copyrights are invalid and not infringed by Mud Pie.
Mud Pie describes itself as "a leader in the gift, baby, and women's accessories sectors of the giftware and home accents market, with a target demographic of female consumers."  It describes Clay Chick's products as "personalized items and ornaments" and states: "Similar to Mud Pie, Clay Chick has its items manufactured in China and sells them online to high-end retail boutiques."
Mud Pie's complaint alleges that in January of 2008, it "designed a triangular-shaped reindeer face [shown at right] for use on Christmas gift items, including baby clothes and ornaments," and that in 2010, it designed its "'North Pole' collection of tabletop items and giftware," which included a reindeer design inspired by its 2008 design as well as "classic images" of a snowman and Santa Claus.

Mud Pie further alleges that in late 2008, Ms. Stacy Vollet created Clay Chick and designed three Christmas ornaments - a triangular-shaped reindeer face, a Santa Claus face, and a snowman face (collectively, "the Christmas icons") - that she licensed to Clay Chick, which then sold them.  That same year, according to the complaint, Clay Chick published a design for "a ceramic ornament consisting of a top view of a baby's black-with-white-polka-dots 'Mary Jane' style shoe ["the Baby Shoe icon"]."

In September 2011, Mud Pie alleges, it designed a baby shoe-themed picture frame, which it first sold in January of 2012 ("the Baby Shoe Frame").

According to the complaint, Clay Chick's counsel twice threatened Mud Pie with litigation, once in September 2011 over the North Pole collection, and again in September 2012, over both the North Pole collection and the Baby Shoe Frame.  The complaint also alleges that in January 2012, Clay Chick obtained copyright registrations for the Christmas icons and for the Baby Shoe icon.

Mud Pie alleges that it "is reasonably apprehensive that if it continues to sell its North Pole line and Baby Shoe frame, it will be sued by Defendants for copyright infringement," and contends that its products are not substantially similar to Clay Chick's registered works.  Mud Pie therefore seeks a declaratory judgment of noninfringement.

Mud Pie also seeks a declaratory judgment of invalidity of Clay Chick's copyrights for the Christmas and Baby Shoe icons.  Regarding the Christmas icons, Mud Pie states that they are scenes-a-faire and therefore are not subject to copyright protection."[1]  Regarding the Baby Shoe icon, Mud Pie contends that it is "an image found in the public domain."

The case is Mud Pie, LLC v. Clay Chick Ceramics, LLC and Stacy Vollet, No. 1:12-cv-3242-CAP, filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on 09/17/12.  The case has been assigned to U.S. District Judge Charles A. Pannell, Jr. 

Iceland-Based Company Files TRO Motion over IP in Vampire and Werewolf Role-Playing Games

The Parties

On September 18, 2012, plaintiffs CCP hf (based in Reykjavik, Iceland) and its wholly-owned subsidiary CCP North America (based in Stone Mountain, GA) (collectively "CCP") filed a complaint asserting counts for not only copyright infringement, but also for unfair competition under federal and Georgia law, as well as related state law claims.  Defendant iFree Studio, Ltd. ("iFree") is a Chinese company based in Hong Kong.  On the same date, CCP also filed a Motion for Temporary Restraining Order ("TRO") and Preliminary Injunction against iFree.

The Copyrights

CCP alleges that it succeeded to the intellectual property interests of White Wolf, Inc., a company that merged with CCP in 2006.  CCP identifies as two of its “signature product lines” the role-playing game Vampire: The Masquerade and a game identified by its rulebook titled Werewolf: The Apocalypse, with those games having been first published in 1991 and 1994, respectively. 

CCP states: “According to Vampire: The Masquerade, the first vampire was Caine, slayer of Abel.  God cursed Caine for killing Abel by making him a vampire.”  Additionally, CCP alleges that using basic storylines from those product lines, it created the World of Darkness, a world in which vampires and werewolves live. 

CCP’s derivative works from the above product lines “number in the hundreds,” according to the complaint, and include “companion books to the role-playing games, novels, updated rulebooks, storyteller guides, videogames, a television series produced by Spelling Entertainment, action figures and other merchandise bearing the copyrights and trademarks of CCP.”  CCP alleges that readers of its books are estimated to number in the millions – 6 million for Vampire: The Masquerade and 3 million for Werewolf: The Apocalypse.  CCP’s complaint identifies a total of 23 copyright registrations for its signature lines and derivative works.

The Trademarks

CCP’s complaint states: “Throughout CCP’s works, various unique terms were created to describe aspects of the World of Darkness.  Many of these terms have been used in such a way as to constitute trademarks, which have been registered with the [USPTO].”  CCP proceeds to list such trademarks, both registered and unregistered, for example:
  • “World of Darkness” (registered)
  • “Kindred” (unregistered) and “Kindred of the East” (registered)
  • “Camarilla” (registered) – defined by CCP as “the largest of vampire sects and are the protectors of the Masquerade, an organized campaign enforced by the Camarilla to convince people that vampires do not exist.”
  • “Jyhad” (unregistered) – defined by CCP as a term used “to describe the war between vampire sects.”
iFree’s Accused Game

iFree markets a game called Vampire War, which CCP alleges is available through online sources such as Microsoft Windows® Phone, the iTunes® App Store, Google Play, www.vampire-war.com, “and potentially other locations on the internet.”  At the iTunes® App Store, iFree describes its game as follows:

Ah, a newborn, welcome to the world of darkness!
For centuries uncounted, we kindreds stand atop of the world, reigning over the reigns of the mortal worlds.
There was a challenger - lupines, or werewolves called by the mortals, which we have fought for centuries and merged victory against them in the end.
And hence came the Jyhad, divided all our clans into three sects - the Camarilla, the Sabbat, and the independent Inconnu. We take different paths towards our final death in Gehenna.
And so like every old story, here began the conflict for the sarcophagus which is rumored as containing the body of the Third Mortal Caine, the first vampire, as some believed. Truth or not, with the civil war broke among the kindreds and sects, there again rise the lupines, and mortals like witch-hunters.

My Prince, my story has ended. Now how would you lead us to finish this chaos and bring us back to the dominance we once held?

CCP quotes the above text verbatim and includes a printout of that web page as Exhibit B to its complaint.

Parties’ Interaction Prior to Lawsuit

The parties apparently began sparring over IP issues in the context of Microsoft’s DMCA (Digital Millennium Copyright Act) Policy.  Apparently, CCP submitted a claim of infringement under that policy, which caused iFree to respond on August 15, 2012 by submitting a “Content Infringement Counter Notice Form,” shown in Exhibit A to iFree’s complaint.  In that form, iFree indicated, among other things, that it: (1) disputed CCP’s claim of infringement; (2) removed Vampire War from the Microsoft Marketplace; and (3) consented “to the jurisdiction of the Federal District Court for the judicial district in . . . any judicial district in which Microsoft may be found.”  Among its bases for noninfringement, iFree contended: “[T]he only similarity of the two games is a character of the back ground [sic], they are two stories about vampire [sic], or the story between vampire [sic] and other races.”

In response, CCP’s counsel sent a cease-and-desist e-mail (printout at Exhibit C to complaint) to an iFree representative listing certain copyrights claimed by CCP, as well as trademarks allegedly used in Vampire War.  Following those lists, that e-mail stated: “As you can see from the above, your contention that the only infringing similarities are in the ‘background’ and your use of ‘World of Darkness’ is neither correct nor credible.”  The e-mail warned that unless iFree removed Vampire War from all Internet locations by September 3, 2012, CCP would file suit and seek emergency injunctive relief.

CCP’s Causes of Action Asserted Against iFree

The first, second, and third counts in the complaint are copyright infringement, federal unfair competition under § 43(a) of the Lanham Act, and violation of the Georgia Uniform Deceptive Trade Practices Act (“GUDTPA”), respectively.

The fourth count of CCP’s complaint is for unfair competition under § 23-2-55 of the Official Code of Georgia.  That section provides: “Any attempt to encroach upon the business of a trader or other person by the use of similar trademarks, names, or devices, with the intention of deceiving and misleading the public, is a fraud for which equity will grant relief.”  Read literally, the statute limits the remedy for violation to equitable (thus, injunctive) relief, but there is some legal ambiguity on that issue.[2]  “Relief under [§ 23-2-55] depends upon showing of intent to deceive.  However, this intent may be presumed if encroachment is done with knowledge of the prior right.”[3]  “In place of an affirmative showing of specific intent, Georgia courts will apply [§ 23-2-55] when it is shown that: (1) the defendant was put on notice or had knowledge of the plaintiff's [mark] and (2) the similarity in [marks] is likely to confuse or mislead the public.”[4]

The fifth count seeks injunctive relief under GUDTPA and under § 23-2-55.

The final count of CCP's complaint is for recovery of litigation expenses under § 13-6-11 of the Official Code of Georgia, based on its allegation that “iFree Studio acted in bad faith, has been stubbornly litigious, and caused CCP unnecessary trouble and expense . . . .”  Some legal authorities regarding this statute may be found in a prior blog post.

CCP’s Motion for TRO and Preliminary Injunction

CCP filed this motion on September 18, the same date that it filed its complaint.  The motion is accompanied by an affidavit of a Senior Producer from CCP North America, Inc. essentially averring to the facts recited in the complaint.

In an order entered on September 19, however, the Northern District of Georgia indicated that it will not set a hearing date on the TRO motion "until the court is satisfied that the defendant has notice of the motion and an opportunity to participate in the hearing."  In that order, the court denied CCP's motion to effect service of the complaint and motion upon iFree by e-mail.  As of the time of this writing, no hearing date has been set.

The case is CCP hf and CCP North America, Inc. v. iFree Studio Ltd., No. 1:12-cv-3249-CAP, filed in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on 09/18/12.  The case has been assigned to U.S. District Judge Charles A. Pannell, Jr.

Note:  In an unrelated matter, CCP was itself recently sued for patent infringement in the Northern District of Georgia by Recognicorp, LLC.  See prior blog post regarding that litigation.

UPDATE:  On October 19, 2012, the court entered a Consent Order Granting Permanent Injunctive Relief.  See our November 13 post.

[1][S]cenes a faire, which include ‘[i]ncidents, characters, or settings that are indispensable or standard in the treatment of a given topic[,] are not copyrightable.’”  Corwin v. Walt Disney Co., 475 F.2d 1239, 1251 (11th Cir. 2007) (citation omitted).  See also Walker v. Time Life Films, Inc., 784 F.2d 44, 50 (2d Cir. 1986) (observing that there is no protection for common elements in police fiction, such as “drunks, prostitutes, vermin and derelict cars” and “foot chases and the morale problems of policemen, not to mention the familiar figure of the Irish cop”).
[2] Reis v. Ralls, 250 Ga. 721, 725, 301 S.E.2d 40, 44 (1983) (“We find that the sellers have succeeded in showing that the buyers are knowingly using a confusingly similar name.  Thus equity will enjoin.”).  Despite the foregoing, the Supreme Court of Georgia refused to limit relief for trade name infringement to injunctions.  Diedrich v. Miller & Meier Assoc., 254 Ga. 734, 737, 334 S.E.2d 308, 311 (1985) (“The contention is made that if the right to protection of a trade name exists, the remedy is limited to injunctive relief and damages do not lie.  We disagree.”) (citing O.C.G.A. § 51-1-6).  This is so even though § 23-2-55 is the statutory protection against trade name infringement.  Corrpro Cos., Inc. v. Meier, No. 3:03-CV-31, 2007 U.S. Dist. LEXIS 74897, at *5 (M.D. Ga. Oct. 5, 2007) (“‘Georgia protects tradenames by both common law and statute.’ Future Prof'ls, Inc. v. Darby, 266 Ga. 690, 691, 470 S.E.2d 644, 646 (1996).  O.C.G.A. § 23-2-55 is a codification of the unfair competition principle regarding trade names . . . .”).
[3] Giant Mart Corp. v. Giant Discount Foods, Inc., 247 Ga. 775, 776, 279 S.E.2d 683, 685 (1981).
[4] Thompson v. Alpine Motor Lodge, Inc., 296 F.2d 497, 500 (5th Cir. 1961).

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