Editor’s note: Below is an excerpt from a speech given on June 9 by Joseph R. Dreitler, a partner of Jones Day, at the annual meeting of the International Collegiate Licensing Association
By Joseph R. Dreitler, Esq.*
In the last six years, the courts have retreated from what had been an expanding view of trademark law. In some cases they have abandoned their 50-year old precedent and ignored century old unfair competition law to stop those who would create a business off of another party’s rights.
This, of course, has significant ramifications for those in the sports industry.
In 1953, the Second Circuit Court of Appeals recognized the right of publicity in Haelan Laboratories v. Topps Chewing Gum, 202 F.2d 866 (2d Cir. 1953), cert. denied, 346 U.S. 816, (1953). Topps claimed that defendant, another chewing gum company, had induced professional baseball players to breach their contracts with plaintiff. The court found a person has an alienable right to the publicity value of one’s photo. Id. at 868.
Yet in 2003, in a 2-1 decision the Sixth Circuit held it was acceptable behavior for an “artist” to use both Tiger Woods’ trademark rights and his rights of publicity by generating 250 seriographs and 5,000 lithographs — featuring Woods in a pose strikingly similar to a poster of Woods, licensed to and sold by Nike. Under a novel theory, which I describe as, “if I raise the First Amendment, I can steal your intellectual property rights,” the Sixth Circuit didn’t even bother with overwhelming survey evidence of consumer confusion.
In 1977, the U.S. Supreme Court acknowledged the right of publicity in Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S. 562 (1977). The Court decided that defendant TV station violated the human cannonball’s common law rights under Ohio common law, by broadcasting a tape of his performance. Zacchini held that state-law publicity rights create an economic incentive for performers. Given that the U.S. Supreme Court held in Zacchini that there is no conflict between the right of publicity and the First Amendment, it is incomprehensible that the Sixth Circuit read the First Amendment in Tiger Woods as trumping both trademark and publicity rights.
Trademark law is merely one prong of the broader law of unfair competition.
In American Chiclet Company v. Topps Chewing Gum, Inc., 208 F.2d 560 (2nd Cir., 1953), the Second Circuit restrained the defendant from using a package similar to plaintiff’s Chiclets. Judge Learned Hand wrote:
“As soon as we see that a second comer in a market has, for no reason that he can assign, plagiarized the ‘make-up’ of an earlier comer, we need no more; for he at any rate thinks that any differential he adds will not, or at least may not, prevent the diversion and we are content to accept his forecast that he is ‘likely’ to succeed.
Indeed, the idea of bad intent being inferred is a cornerstone of unfair competition. That’s because it is often difficult to prove. An entire line of cases recognizes that “One of the elements to be considered in deciding whether there is confusing similarity is the intent of the actor who adopts the designation.”
In the 1981 case of Chevron Chemical Co. v. Voluntary Purchasing Groups, Inc., 659 F.2d 659, 702, 212 USPQ, 904, 910-911 (5th Cir. 1981), the Fifth Circuit held that §43(a) “created a federal cause of action for ‘infringement of unregistered trade dress that was distinctive — and being knocked off by a competitor’.”
Then in 1983, the Sixth Circuit further expanded the protection of unfair competition and common law right of publicity in Carson et al. v. Here’s Johnny Portable Toilets, Inc., 218 USPQ 1 (CA 6). The suit was based on the defendant’s adoption of the mark “Here’s Johnny” for its brand of portable toilets. The phrase was associated with Johnny Carson, then star of “The Tonight Show”. The Sixth Circuit found that there was no likelihood of confusion or trademark infringement.
But the majority held Carson’s right of publicity had been violated by use of Here’s Johnny on a toilet.
The basis of the right is that a celebrity’s identity can be valuable in the promotion of products, and the celebrity has an interest that may be protected from the unauthorized commercial exploitation.
The Carson court noted that if a celebrity’s identity is commercially exploited, there is an invasion of his rights – whether or not his “name or likeness” is used.
This opinion holds that Carson’s right of publicity was invaded because Defendant “intentionally appropriated his identity for commercial exploitation.”
Circling back to intent, in 1991 the Sixth Circuit held that a finding of intent can be critical, in Esercizio v. Roberts, 944 F.2d 1235 (6th Cir. 1991). The Court found that the exterior design features of plaintiff’s “Daytona Spyder” and “Testarossa” sports cars constitute trade dress which has acquired secondary meaning. The court found that secondary meaning may be presumed from defendant’s intentional copying. In addition, survey evidence and expert testimony established that Ferrari’s exterior design and shape distinguish them.
Here is when things really started to go wrong.
In a 2-1 decision in 1998, the Sixth Circuit reversed a trial court’s holding that a photographer who took photos of the Rock ‘N Roll Hall of Fame, produced posters, labeled them as such, and sold them in competition with similar posters sold by the Hall, had violated the Hall’s trademark rights in its very distinctive building design.
The Rock ‘N Roll majority justified both the intentional and commercial use of another’s property by stating that the building was “fanciful, but not in a trademark sense”.
The majority opinion in “Rock ‘N Roll” ignored a clearly demonstrated intent to profit off of the plaintiff’s property, plus a survey that indicated considerable confusion between identical products.
Why did it happen? In the words of Pogo, we have met the enemy and he is us!
After the Supreme Court’s 1992 Two Peso decision that trade dress should be protected like any other type of trademark; . . .and the Qualitex decision that a color could be protected as a trademark if secondary meaning was present, the courts were deluged with trademark and trade dress claims on arguably functional products and features that did not function as trademarks.
The Seventh Circuit (Judge Posner) expressed its frustration in Publications International Ltd. v. Landoll Inc. 164 F.3d 336 (7th Cir. 1998), a case where the plaintiff claimed trade dress rights in the paper, binding and gilding of a cook book —
“[A] seller should be encouraged to make his products recognizable by consumers at a glance as his product and not that of another seller.”
“However, a seller should not be able to use trade dress and obtain a monopoly over elements that are not associated with a single producer or do not indicate source.”
Every circuit was seeing these kinds of cases and they didn’t like what they were seeing. Many of these cases were brought by companies whose patents were expiring. Trade dress claims were alleged near the end of the patent term in an effort to extend the life of the patent, with no evidence that the product design was promoted a trademark. In short, courts saw lawyers attempting to misuse trademark law to prevent competition.
In 1998, the Trademark Law Treaty Implementation Act (“TLT”) was passed, further cutting back on protection so that : (1) incontestable registrations may be canceled at any time on the grounds of functionality; and (2) functionality may be asserted as a defense to an infringement suit, even an incontestable registration.
Then, in 2000 the Supreme Court decided Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 120 (2000). The court unanimously held that in an action for infringement of unregistered trade dress under 43(a), a product’s design is distinctive, and therefore protectable, only if the plaintiff can prove secondary meaning.
The Supreme Court was certainly sending a message that it did not like the flood of cases alleging trade dress protection under the Lanham Act — for things that had never been promoted — or recognized by the public as origin indicating.
In 2001, the Sixth Circuit decided the TrafFix case (TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001) 200 F.3d 929), holding that springs on this movable road sign — that were once the subject of patent protection – could be the subject of trade dress protection. The Supreme Court reversed 9-0, AND created an incredibly expansive definition of what is functional, and thus, can not be protected as a trademark: “[i]n general terms, a product feature is functional, and cannot serve as a trademark, if it is: (1) essential to the use or purpose of the article, or (2) if it affects the cost or quality of the article.
The court found that once it had been shown that the dual spring design of the road sign was functional, the court was wrong to continue with further analysis – the design can never be protected as trade dress. Case dismissed!
In ETW (Tiger Wood’s initial’s) v. Jireh, 332 F.3d 915 (6th Cir 2003), the defendant made a painting of Tiger Woods after his first Master championship titled “The Masters of Augusta”. He produced 250 serigraphs (Silk-screens) and 5,000 lithographs, all of which had the name Tiger Woods on the container. It was similar to the Woods poster sold by Nike under license.
Woods is not like Allison v. Vintage Sports Plaques, (40 USPQ2d 1465) N.D. Ala. 1996, Affm’d 11th Cir. (1999), where the defendant purchased actual trading cards of athletes and put them in plaques and clocks and sold them. In that case, the court held that once the genuine cards were sold, the “first sale” doctrine allows any subsequent purchaser to re-sell the cards. Alabama’s common law of right of publicity does not bar such resale, and the court found the card is the dominant part of the clocks and plaques.
Well, Woods sued for trademark infringement, unfair competition, deceptive trade practices, and violation of Ohio’s common law right of publicity.
Yet the majority decision totally ignores circuit precedent on intent; a survey which showed 62% source confusion; the Supreme Court’s Zacchini decision; and “Here’s Johnny”.
First, the Woods court held, “[A]s a general rule, a person’s image or likeness cannot function as a trademark. Our conclusion is supported by the decisions of other courts”. Regrettably, the court’s support for this, Pirone v. MacMillan, Inc., 894 F.2d 579 (2nd Cir. 1990) does not stand for that proposition.
Pirone was a trademark infringement and unfair competition case brought by the licensing agent for Babe Ruth’s daughters. The defendant published The MacMillan Baseball Engagement Calendar, a weekly appointment calendar. Each week included a photo of a ballplayer, ball field, or other item of interest. Several of the 52 weeks had old photos of Babe Ruth. The Second Circuit found the photos in the calendar using the image of Babe Ruth only to identify a great baseball player, not an indicator of source. This is not a trademark use and not an infringement.
Compare that to Tiger Woods, where the defendant’s entire product WAS Tiger Woods, his name, his persona, his likeness swinging a golf club.
The Woods’ majority then referred to Rogers v. Grimaldi, 875 F.2d 994 (2nd Cir. 1989), a Second Circuit decision. Rogers used a balancing test that permitted use of “Ginger and Fred” as the title of a motion picture about two fictional Italian cabaret performers, that had no further reference to, or any use of Fred Astaire and Ginger Rogers.
The cases cited in Woods all recognized a need to balance any defense of “artistic use” with the trademark owner’s rights and the need to avoid confusion. The Woods court ignored this basic principle of trademark and unfair competition law.
The holding is that no matter what Woods could prove, he could not win. He could not succeed under trademark, unfair competition or right of publicity law, as all of this unlawful conduct is protected by the First Amendment. That’s the end of the case.
For support the court first looked to the California case of Hoffman v. Capital Cities/ABC, Inc., 255 F.3d 1180 (9th Cir. 2001), a Ninth Circuit decision. Unremarkably, Dustin Hoffman failed in his right of publicity claim under state law against Los Angeles magazine for using a computer-generated image of Hoffman in updated Tootsie clothing (and similar computer images of other actors) in a fashion article that promoted clothing advertised in the magazine.
The Woods court cited Comedy III Productions Inc. v. Gary Saderup Inc., 58 USPQ2d 1823 (Calif. Sup. Ct. 2001), a 2001 California Supreme Court case that fully supported Tiger Woods’ claim. The issue was whether the sale of lithographs and t-shirts bearing the Three Stooges likenesses violated their heirs’ right of publicity under California law. That court flatly rejected a claim that “fair use” under copyright law should be imported into the law of right of publicity, but instead created a “transformative test”.
The court found that when an artist’s skill and talent is subordinated to the overall goal of creating a conventional portrait of a celebrity so as to commercially exploit his or her fame, then the artist’s right of free expression is outweighed by the right of publicity. In holding that the artist had violated the Stooges right of publicity, the court noted that the marketability and economic value of artist’s work derives primarily from the fame of the celebrities depicted. While that alone does not necessarily mean the work receives no First Amendment protection, the court found no transformative elements in his works that would require such protection.
Yet, the Sixth Circuit found that the defendant’s knock off Woods lithograph’s fit within the transformative test, and, the First Amendment totally and completely nullified any claim of unfair competition, regardless of intent, confusion, whatever.
There was a stinging dissent. Regarding the majority’s sweeping first amendment defense, the dissent states that “…the majority’s analysis not only fails in its disjointed approach but in its outcome as well.”
The dissent concluded by noting that, “The majority’s failure to allow a jury to decide if the evidence of confusion is sufficient to find liability is in complete contravention to the intent of Congress, the principles of trademark law, and the well-established body of jurisprudence in this area.”
And indeed, the question is, how did this happen? As someone who has spent their entire career in this area I am deeply troubled by a circuit court basically gutting a century of statutory and case law. Yet, we must take part of the blame for the courts being cautious, some might say skeptical, in its current approach to trademark and right of publicity law.
Here is a recent example of a claim that must drive judges crazy.
There is the recent publicity stunt of the woman in Chicago who has run a ceramics studio since 1997 called “You’re Fired”. Apparently, seeing the success of Donald Trump, she hired a lawyer to threaten Donald Trump’s use of the term “You’re Fired” in connection with the television show and related merchandising of shirts and other paraphernalia. Susan Brenner does NOT own a registered trademark of You’re Fired (her 1998 application of the words in stylized form showing flames for SHOPS FEATURING ART AND PARTIES WITH AN ART THEME was abandoned in 1999), but she did retain a lawyer.
The National Law Journal quotes the lawyer as saying about Trump, “he has to come to terms with us….and a license with a small percentage would satisfy my client. Or a buyout”.
The U.S. Supreme Court has recently accepted cert. on another trademark case. This time, to determine if the defense of fair use in trademark law requires the party asserting it to show an absence of likelihood of confusion as the Ninth Circuit ruled in KP Permanent Impression, or whether it is an absolute defense and it doesn’t matter whether the public is confused.
No one should have any doubt that the Supreme Court will, for the fourth time in five years, cut back further on trademark rights. The copyright defense will be imported into trademark law – even if the public is confused. The Supreme Court has seen these aberrational misuses of trademark law actually occur in real life. And their response, right, wrong or otherwise, is to keep cutting back on the scope of protection for trademarks. The sky may not be falling, but would anyone in this room argue that the scope of protection for trademarks today is far less than it was in 1997. Only by talking about it, bringing legitimate cases and taking a public stand against abusive and frivolous cases can we hope to move the pendulum back towards the center.
*Joe Dreitler is a partner at Jones Day. Based in Columbus, Ohio. He has 25 years of experience in global trademark clearance, brand development, prosecution and portfolio management, advertising review, and client counseling for consumer goods corporations.