Category: Articles

By Eric Bjorgum, first published in Forum (July/August 2008).

There are many opportunities for plaintiff’s attorneys to pursue intellectual property claims. For copyright and patent claims, the requirement of a federal registration can pose a barrier to immediately filing suit. But one legal theory in intellectual property, perhaps more than any other, is suited to the plaintiff’s bar: so-called “reverse confusion” trademark infringement.

As I will explain below, reverse confusion involves the use by a large company of a trademark confusingly similar to a small company’s older trademark. In the Internet age, reverse confusion becomes more prevalent because marks that could not have been used in the same context (or even the same state) can be seen within seconds of each other. As the Ninth Circuit has stated: “[w]hereas in the world of bricks and mortar, one may be able to distinguish easily between an expensive restaurant in New York and a mediocre one in Los Angeles, see, e.g., Sardi’s Restaurant, 755 F.2d at 723-24, the Web is a very different world.” (GoTo.com, Inc. v. Walt Disney Co. (9th Cir. 2000) 202F.3d 1199, 1206-07 [finding that parties’ services were similar, for purposes of establishing likelihood of confusion of Web site “GoTo” and “Go Network” logos in trademark infringement suit, where both entities operated Web search engines and were, therefore, direct competitors, even if one were to concentrate on the areas of entertainment and leisure].)

Late last year, I went to trial as cocounsel to plaintiff’s powerhouse Panish, Shea & Boyle, LLP in a reverse confusion case (Positive Ions, Inc. v. Ion Media Networks, U.S.D.C., Central Dist. of California, Case No. CV06-4296 ABC (FMx)) involving a dispute over the mark ION between an Internet and television company. In the coming years, it is said that Internet and television will merge in what is known as “convergence.” We learnedmany things about trying such a case and moving it to resolution quickly. This article is intended to pass along some of those insights for plaintiff’s attorneys pursuing these claims.

 

I. BASICS OF TRADEMARK REVERSE CONFUSION,

 

Trademark protection is a valuable right for the little guy. This is because trademark rights are gained through mere use, and they last indefinitely. Remember: the key to trademark law is use in connection with a good or service. A strong trademark is one that is “arbitrary” (i.e., it does not describe the goods or services, such as how “Greyhound” does not describe a bus service) and is used in connection with a good or service in such a way that it identifies the source of the good or service. Trademark rights begin the moment such use begins. The strength of those rights is determined by the extensiveness of the use and arbitrariness of the mark.

A trademark registration will give the user stronger rights nationally, but an unregistered mark can be just as strong if it is supported by strong customer recognition, advertising and national use. For litigation purposes, the claim for infringement of the registered mark is brought under 15 U.S.c. section 1114, and the claim for the use ofthe unregistered mark is brought under 15 U.S.c. section lI25(a) (also known as a “section 43(a) claim” under the Lanham Act, or “federal unfair competition”).

But, practically, claims for infringement of registered or unregistered marks are nearly identical. (GoTo.com, supra, 202 F.3d at 1205 fn. 3.) Infringement of a trademark does not require actual confusion between the marks but only a “likelihood of confusion.” In the Ninth Circuit, likelihood of confusion is assessed under the so-called “Sleekcraft factors.’” The Sleekcraft case requires that, when assessing likelihood ofconfusion, the following factors be considered:

 

• I. strength of the mark;
• 2. proximity of the goods;
• 3. similarity of the marks;
• 4. evidence of actual confusion;
• 5. marketing channels used;
• 6. type of goods and the degree of care likely to be exercised by the purchaser;
• 7. defendant’s intent in selecting the mark; and
• 8. likelihood of expansion of the product lines.

(AMF Inc. v. Sleekcraft Boats (9th Cir. 1979) 599 F.2d 341, 348 -349.)

As a final bit of terminology, the first person or company to use the mark in connection with the good or service is called the “senior user.” The second user of an arguably similar mark in connection with an arguably similar good or service is the “junior user.”

In many trademark cases, the senior user is a large company pursuing its rights (e.g., MatteI’s use ofBARBIE in connection with a toy fashion doll) against a smaller company that the large company alleges is using a similar mark in connection with similar goods (e.g., BARBRA in connection with a doll). However, if trademark infringement were limited to claims by big companies, trademark rights would slowly accrue only for the benefit of large players in the market (remember “likelihood of expansion” is part of the test), leaving little protection for the mall company with a brilliant idea and mark. “Reverse confusion” can level this playing field.

Reverse confusion is just confusion like any other, but the infringementanalysis is slightly altered toward the realities of a small senior user fighting a larger junior user. Thus, in a case of reverse confusion, the small company with the great trademark is the senior user if it was first to use the mark in commerce; the large company is the junior user. The essence of reverse confusion is that, even though there may be little chance that the junior user is trying to capitalize on the smaller senior user’s market share, the small company will have its horizons for growth cut short by the large company. In the seminal Ninth Circuit case of Dreamwerks v. Dreamworks, the court described the larger company’s mark as casting a “shadow” over the small company. In that case, the senior user was a small company that put on science fiction conventions, and the junior user was the well-known Dreamworks film studio. The court stated that, if the roles were reversed, there would be no doubt that the larger Dreamworks would have stated a claim for trademark infringement. As the court explained, “The reason for this, of course, is that a famous mark like DreamWorks SKG casts a long shadow. Does the result change in a reverse infringement case because the long shadow is cast by the junior mark? We think not.” (Dreamwerks Production Group, Inc. v. SKG Studio (9th Cir. 1998) 142 F.3d 1127, 1130.)

As another example, assume that a small company has a cola drink called “Purple” that is marketed only in Southern California. That company is accruing trademark rights in the mark PURPLE. If Coca Cola later does a national launch of a cola called “Purple,” consumers outside of California are likely to think Coca Cola was the first “Purple.” Worse, if the small company tries to move into that market, consumers will think that it is trying to copy Coca Cola’s product when, in fact, the small company was the senior user. 2

II. THE POSITIVE IONS CASE

Amidst this daunting legal framework, my firm took on a plaintiff’s reverse confusion case in 2006. The case had personal significance because our firm had established reverse confusion in the Ninth Circuit in the Dreamwerks case, and this was our first foray back into that issue as a plaintiff since then. Also, it was a chance to work with Panish, Shea & Boyle, LLP with whom we have had a long history.

Our client, the plaintiff Positive Ions, Inc., had a registered mark in the word ION for use in connection with placing advertisements for the goods of others on a global computer network. The plaintiff also had over 1,000 domain names starting with “ion,” such as “ionLosAngeles.com” and “ionTelevision.com.” In 2006, a television broadcasting network known as Pax Television changed its name to Ion Television. Positive Ions began to receive email and other communications indicating that consumers may be confused. (Indeed, one voice mail involved a publicized incident of pornography being shown on the defendant’s station in Phoenix, and it appeared that the caller thought the plaintiff was somehow responsible.) Also, our client wanted to put videoon its web pages, and it appeared that it may be cut off by Ion Television.

A. Internet “Convergence” – A Wave of Confusion?

We believed the companies were on a collision course because of the coming “convergence” of television and the Internet. As noted above, the Internet provides a forum for a wave of trademark confusion; convergence is just one subset of that possibility. Throughout 2006 and 2007, the newspapers were full of articles about the demise of broadcast television in favor of television viewable on the Internet. Because Posi ti ve Ions had a trademark registration for use of “ion” in connection with “a global computer network,” it feared that the emergence ofIon Television as a broadcaster meant it would only be a matter of time before Ion Television launched a considerable Internet presence, thus destroying any chance that my client had of showing video on its own Ion Network.

In 2009, all television is set to “go digital” so that there will be no analog broadcast television. Digital broadcast television will be able to carry many more channels on the same radio spectrum that is now used by analog television. Also, there will be a potential for more interaction with the television, so that it will act more like a computer terminal. Companies will begin developing hand held devices to receive digital television, and the lines between television and Internet will become even more blurry.

 

B. Ion – The Trial

 

The case was filed in the Central District of California, and, somewhat to our amazement, proceeded all the way to trial. Brian Pan ish was lead trial counsel, and the case settled on the second day when the defendant’s CEO was on the stand, under Panish’s blistering crossexamination.

The defendant was represented by a large national law firm that pressed every argument. Eventually, during the trial, the court issued rulings on motions in limine that showed considerable downside risk was possible for the defendant. I believe one ruling in particular led the defendant to settle. In that ruling, the court clearly declared that if the defendant lost the case, the court would seriously consider issuing a permanent injunction against the defendant’s continued use of Ion Television. This had essentially reversed an earlier decision by the court in which it granted summary judgment on the issue that the defendant was the “senior user” ofION in television.

After much reflection and consideration of the trial and surrounding events, I concluded that there were things we could have done differently to bring the case into focus more quickly. Hopefully, these lessons will help other plaintiff’s attorneys attempting to negotiate the murky waters of trademark reverse confusion:

1. Consider the injunction your chief remedy:

In reverse confusion, damages are difficult to prove. This is because (unlike the BARBIE example above), the junior user is not trying to trade on the goodwill ofthe smaller senior user company. Instead, the larger company is really snuffing out the potential of the small company. When dealing with startups – particularly on the Internet – proving lost future income can be difficult.

Further, reverse confusion verdicts are trending down. When reverse confusion first arose, use of the traditional corrective advertising remedy (calculated by the large defendant’s advertising budget) resulted in some very large verdicts. The courts eventually developed various factors to limit these verdicts, and proof of all these issues can result in a sideshow from the infringement.

In our case, we sought the trademark damage theories of corrective advertising and damage to the mark, as measured by damage to the plaintiff’s brand. To pursue these theories, we chose expensive experts with complex theories. In the end, the expert witnesses became a distraction and increased the skepticism of the defendant’s counsel.

It is important to remember that in trademark law, an injunction is the preferred remedy. This is because consumer confusion is the main evil to be avoided, and the best way to avoid confusion is to make the infringing party stop using the mark. Damages are always difficult in trademark cases, but more so in reverse confusion. Further, the plaintiff increases the risk that a jury will think it is bringing a bogus claim if the damage numbers are unrealistic and rely on too many PhD’s. Thus, focusing on the injunction remedy can actually help move the case to settlement for money. This was apparent in the Positive Ion case because, once it looked like the defendant had a serious risk of changing its name, the case moved toward settlement. Further, a plaintiff can avoid a lot of briefing and time-consuming Daubert motions before trial if the damages theories are simple and result in conservative numbers.

2. Simplify the case for the court

Keeping the case simple for the court is obviously always a good idea, but it is very important in reverse trademark confusion. We know that courts are busy. A normal “forward confusion” case is difficult enough because trademark infringement(in the Ninth Circuit) requires weighing oft~e eight”Sleekcrajt factors.” Other circuits have similarly complex tests. There is a mass ofcase law dealing with weighing each ofthese factors differently for different situations. The court can be easily distracted. As we saw in the Positive Ion case with the “senior user” argument, the court can be distracted by novel arguments. We perhaps would have been better off focusing the court’s attention on the difficulties of reverse confusion.

Also, the Ninth Circuit pattern instructions can be made to fit a reverse confusion case, but the effort to do so should be made early and not just before trial. While it is sometimes advisable to keep as many balls in the air as possible until trial so that counsel can roll with the punches, a reverse confusion case is sufficiently confusing on its own that plaintiff’s counsel will have many chances to alter the presentation of the case as it progresses. For instance, in the Positive Ion case, we argued the “family of marks” doctrine up until trial, as well as potential trademark claims on many of the important domain names used by our client. At the court’s suggestion, we dropped these arguments just before trial, but, in retrospect, we possibly could have done so earlier.

In sum, in reverse confusion, plaintiff’s energy should go toward simplifying and explaining the case to the court. It will be difficult enough to get the jury instructions tailored to the reverse confusion scenario without have a lot of extraneous issues at pretrial.

3. Bifurcation is preferred

Oftentimes, a plaintiff’s attorney will resist bifurcation of liability and damages on the idea that it is good to get the damages evidence before the jury in the first phase. In reverse trademark confusion, this is not always a good strategy. This is because, by the very definition of reverse confusion, the plaintiff will look like it is “swinging for the bleachers” on damages against a large rival. The risk will be that the jury perceives the plaintiff as greedy and relying on smoke and mirrors damages reports.

Worse yet, because damages are difficult to prove, much of the case can be taken up by arguing the damages issue rather than the facts of trademark confusion, which are much more likely to be favorable to the small party. This is particularly so in the Internet context, where courts have held that confusion is more likely by the ability of consumers to quickly switch between web pages. This is a key factor in favor of the plaintiff, and the jury needs to focus on it.

Most importantly, putting off damages until the second phase helps drive the point home that the plaintiff really just wants the defendant to stop using its mark. Thejudge will likely grant an injunction if infringement is found by the jury. The plaintiff should not create an unfavorable impression with the judge by taking up a lot oftrial time trying to establish damages. All of these risks were heightened in the Positive Ion case because start up companies (again, particularly on the Internet) are not known for keeping their books completely up to the date and in order. They are usually too busy trying to stay in business.

Finally – and this will be relief to plaintiff’s attorneys – bifurcation means that the plaintiff does not need to agonize over how much money to request while putting on its liability case. The trial lawyer can focus on liability and the nine factors needed to prove it.

In sum, the coming months and years hold promise for plaintiff’s attorneys looking for to enter the intellectual property market via a plaintiff’s trademark suit. One key driver of that will be the incidence of confusion on the Internet. However, when preparing and trying a case of reverse confusion, it is important to remember to keep the case simple for the court and jury, recognize the power of the injunction remedy, and seriously question your instincts on the question of bifurcation. With these considerations in mind, a plaintiff’s attorney should be able to reach a positive result for the client without losing too much sleep.

1. Trademark cases can be brought in state court as well, though the wisdom of doing so varies with every case, and cases involving federally registered marks can be removed to federal court.

2. In a reverse confusion case, the most important Sleekcrajl factors are (I) the strength of the marks, (2) the similarity of the marks, and (3) the relatedness of the goods. (Moose Creek, Inc. v. Abercrombie & Fitch Co., (C.O. Cal. 2004) 331 FSupp.2d 1214.) Further, in the Web context two of these factors are heavily weighted. The inth Circuit has stated: “In the context of the Web in particular, the three most important Sleekcrajl factors are (1) the similarity of the marks, (2) the relatedness of the goods or services, and (3) the’ ‘simultaneous use of the Web as a marketing channel.” (GoTo.com, supra, 202 F3d at 1205.)

By William Brutocao and Eric Bjorgum, first published in Intellectual Property Today (Sept. 2008)

In early June 2006, the famous Los Angeles mural Ed Ruscha Monument by Kent Twitchell was painted over. Public outcry followed, and Twitchell filed suit under the Visual Artists Rights Act and California Artists Protection Act, which give the artist so-called “moral rights” (from the French droit moral).1 Twitchell also brought claims for conversion, negligence, negligent supervision and California statutory unfair competition. Eventually, thirteen defendants were sued, including the United States, the Los Angeles YWCA and various contractors and subcontractors. Almost two years later, the case settled for $1.1 million.

The case presented a “perfect storm” of issues under the Visual Artists Rights Act (“VARA”, codified at 17 U .S.C. §§ 106A, 113(d)) and the California Artist Protection Act (“CAPA”, at Cal. C iv. Code § 987). Several difficulties with VARA were brought to light, and some changes to the law should be considered. First, some background on the case. Between 1978 and 1987, Twitchell painted the Ed Ruscha Monument (ERM) on a building in downtown Los Angeles owned by the United States Department of Labor (“DOL”) and occupied by the Los Angeles Job Corps Center (“LAJCC”). The LAJCC is operated by the YWCA. The mural was painted at the invitation of a former director of the LAJCC, though Twitchell had total artistic control over the mural and its subject, famous Los Angeles pop artist Ed Ruscha. The mural was not covered by any written agreement, nor was Twitchell paid.

The mural was desecrated in the context of structural work. An engineering firm from Virginia under contract with the government drafted the scope of work and interfaced between the DOL and LAJCC. Several contractors were hired. Work on rebar required that holes be punched in the mural and patched, and the mural was painted over with one coat of primer on Friday, June 2, 2006. The media immediately noticed, and work ceased after one coat—leaving the figure of Ruscha as a ghostly image on the wall.

Twitchell pointed out the VARA and CAPA statutes, but application of the law was not straightforward, for several reasons, including: the building is owned by the United States; the mural was completed before the effective date of VARA but after the 1980 date for California’s CA PA statute; and the mural was painted directly on the side of a building. A special 90 day notice provision of VARA applies before some art incorporated into a building can be destroyed or altered, but, apparently, only if the owner of building intended to have the artwork removed or destroyed. 17 U.S.C. § 113(d). One question posed by the case was whether the notice provision applied to anyone other than the owner; this is a thorny issue when there are multiple layers of contractors involved in planning and executing the work.2

Federal Preemption

VARA is part of the Copyright Act enacted to comply with the treaty obligations of the United States. Nimmer, Nimmer on Copyright, § 8D.06. VARA’s preemption provision is similar to the Copyright Act’s, which states that “equivalent” state rights are preempted by VARA. See H.R.Rep. No. 101-514 at 21 (1990), reprinted in 1990 U .S.C.C.A.N. 69 1 5, 693 1. But with VARA creating a novel right, this determination is not simple. For instance, one defendant filed a motion arguing that Twitchell could not pursue his common law claims of negligence or conversion. Judge Florence Marie Cooper denied the motion, finding that the negligence and conversion claims relate not to Twitchell’s moral rights, but to his rights as an owner of personal property.

Mural Ownership

The Court’s ruling on conversion made one thing clear: physical ownership is distinct from moral rights, even in the example of a mural. T his is easier to understand in the case of sculpture attached to a building. However, even a mural painted on concrete like the ERM can be moved by several techniques, one being the so-called “Strappo” method devised in Venice to remove frescoes. T his technique involves spreading dozens of layers of a chemical that adheres to paint more strongly than concrete. The piece is then “reverse jackhammered” off and the “canvas” rolled up and moved. In another case, the Court denied a motion to dismiss based in part on the possibility of applying Strappo.3

There is little or no law addressing ownership of murals in the absence of a written agreement. Both federal and state law acknowledge implicitly that ownership of art is distinct from other rights. VARA states that it applies to “works created before [June 1, 1991] . . . but title to which has not, as of the effective date, been transferred from the author.” California Civil Code § 988(b) reiterates that conveyance of the right to reproduce or “publicly display a work of art” does not disturb the artist’s ownership of the physical work. Similarly, section 988(c) clarifies that any ambiguity should be resolved in favor of the artist. Thus, it appears that a mural is piece of property comprising separate ownership rights of title, possession, copyright and moral rights.

Because of these distinctions, Twitchell could have produced some strange results. By VARA’s own terms, if title had not passed before the effective date in 1991, then VARA applied. However, if title had passed, then Twitchell may have kept his rights under CAPA because the extinction of VARA rights would have meant that CAPA had non-equivalent rights. Similarly, a case in Massachusetts held that the design of a park was not protected by VARA but possibly could be under Massachusetts law. Phillips v. Pembroke Real Estate, Inc., 288 F.Supp. 2d 89 (D. Mass. 2003).

Who and What Are Protected: VARA’s “author” of a “work of visual art” versus CAPA’s “artist” creator of “a work of fine art”

VARA creates rights for “the author of a work of visual art.” The Copyright Act does not define “author” but does define a “work of visual art” at 17 U .S.C. § 101. The definition is quite specific. Most significantly, the definition imports the substantial body of copyright law on the question of works for hire, which are not “works of visual art.”

CAPA does not incorporate the same work for hire concept, but it does exclude certain commercial works from its protection via its definition of artist. CAPA provides rights to an “artist,” who is an “individual or individuals who create a work of fine art.” Civ. Code § 987(b)(1). A “work of fine art” “shall not include work prepared under contract for commercial use by its purchaser.” Civ. Code § 987(b)(2). Finally, “commercial use” means fine art created under a work-for-hire arrangement for use in advertising, magazines, newspapers, or other print and electronic media. Civ. Code § 987(b)(7). Thus, there is a limited “work-for-hire” exclusion under CAPA, but only for works that are used in specific ways.

The CAPA statute provides stronger protection for artists. Twitchell created the ERM at a time when public art was burgeoning in Los Angeles. Many of these artists made a living in any way possible. During the nine years he was working on the ERM, he received grants and funding from various sources. Because of this, some of the defendants were developing an argument that VARA might not apply because Twitchell created the ERM as a work for hire because of grant money he received.

If this argument had been substantiated, it would have involved considerable discovery into loose arrangements arrived at decades ago. CAPA’s approach is more desirable. CAPA limits artist rights only when it is very clear that the art was created pursuant to a contract and for commercial use.

What Rights Are Protected?

VARA and CAPA protect slightly different rights. The most important distinction relates to the right to prevent damage or destruction of the work. Seemingly similar, these provisions may be quite different.

VARA does not explicitly include rights against those who authorize the damage, as contrasted with those who perform the intentional acts. Also, VARA differentiates between works of visual art and such works which also are of “recognized stature.” A literal reading of VARA protects against intentional distortion, mutilation or other modification of a work of visual art generally, but not the destruction thereof; only works of recognized stature are protected against intentional or grossly negligent destruction. There is no comparable dichotomy in CAPA. To be a work of fine art under CAPA, the work has to be of “recognized quality,” which can be subject to expert and artist opinion. Civ. Code § 987(f).

Again, these distinctions had importance in Twitchell. Most significantly, under VARA, Twitchell arguably had no claim against the contractors and engineers who completed and authorized the desecration. His only claim would be against the Government, which for better or worse, had less actual knowledge than almost anyone involved. This limitation of VARA is short-sighted, given the complexities of building ownership and contracting in the contemporary era.

Also, the distinction between preventing modification of “visual art” and destruction of works of “recognized stature” seems to have little practical value, and VARA could ease some confusion by listing ways to prove that a work is of “recognized stature,” as CAPA does for works of “recognized quality.”

Duration of Rights

VARA and CAPA provide rights of different duration. CAPA applies regardless of when the work was created, as long as the acts occurred on or after January 1, 1980. Civ. Code § 987(j). VARA, on the other hand, applies to works created after its effective date of June 1, 1991, and works created before that date but title to which had not, as of that date, been transferred from the author. Rights for works after the effective date endure for the life of the author. Rights for works created before the effective date endure the same length as a copyright, which is now life of the author plus 70 years. 17 U .S.C. § 106A(d); 17 U.S.C. § 302(a).

CAPA has a single term, which expires on “the 50th anniversary of the artist’s death.” Civ. Code § 987(g)(1).

Again, CAPA makes more sense. Indeed, given the periodic lengthening of the copyright term by Congress, it is very strange that in the field of fine art—where the author is often most famous after death—VARA protections would expire upon death. The ERM, as a work created before the effective date of VARA and without a transfer of title, was actually subject to a “life plus 70” term of protection akin to normal copyright law. Aside from being confusing, this state of affairs highlights that VARA should protect beyond the life of the author. Twitchell was 64 when we filed the case and 66 when it was settled. If he had completed the ERM in 1991 rather than 1987, his rights would have disappeared if he died during the case or subsequent appeal.

Remedies

Because VARA is part of the Copyright Act, remedies are basically the same as for copyright infringement, though a detailed determination must be made of the effect on the violation to the artist’s reputation. 17 U.S.C. § 501. This is expensive and requires expert opinion into the abstract question of the effect of an absence from the artist’s resume.

CAPA is self-contained and provides for injunctive relief; actual damages; punitive damages (to be paid in judicial discretion to an organization engaged in charitable or educational activities involving the fine arts); reasonable attorneys’ fees and expert witness fees; and “any other relief which the court deems proper.” Cal. Civ. Code section 987(e).

Once more, the Twitchell case showed that CAPA is superior. One of Twitchell’s primary reasons for pursuing the case was to raise awareness to the plight of mural artists in protecting their work, and also to educate the public about this law. A large punitive damage award given to arts’ rights organization would have served both purposes. Further, there is very little case law on damage to “reputation” under VARA.

Waiver of Sovereign Immunity

Perhaps the most disturbing difference in VARA and CAPA is in waiver of sovereign immunity. Presumptively, CAPA would apply against the government, but not so with VARA.

Under the Federal Tort Claims Act (“FTCA”), the United States waives immunity for torts committed in the various states and submits to the jurisdiction of the local states. Thus, Twitchell’s conversion claim was brought properly in California. In cases originating under the Copyright Act and Patent Act, the United States has waived sovereign immunity, but the cases are tried before the Court of Claims. 28 U.S.C. § 1498.

Thus if violation of VARA is a tort, the government can be sued locally. If not, it may be sued under the Copyright Act. But moral rights are new, and this is not clear. Congress should have clearly expressed a waiver of governmental immunity. With no waiver of sovereign immunity, it is possible that the government could destroy art at will with little or no consequence.

Indeed, in the Twitchell case, the government brought a motion to dismiss for lack of jurisdiction in the District Court. The Court agreed that it did not have jurisdiction over the VARA claim, but it retained jurisdiction over the common law tort claims. The Court’s ruling could lead to a difficult situation where the artist suing the government under VARA must bring suit locally and in the Court of Claims. This is hardly an enticing prospect for the artist.

Recommendations

In conclusion, Twitchell showed VARA to be wanting in many areas. First, it should not simply co-opt Copyright’s work for hire language but should instead create a presumption that the artist maintains VARA rights unless the work was commissioned for a commercial purpose. Second, protections against destruction should apply to all works, not just works of “recognized stature.” Third, VARA rights should extend beyond the life of the author. Fourth, VARA should not be subject to exclusive jurisdiction like copyright law; it should be more akin to trademark law, which recognizes local protections. Finally, VARA should expressly waive sovereign immunity and grant venue in the district where the events occurred.

Because of all these issues, it is recommended that a plaintiff in a VARA case continue to assert all possible state law causes of action.

Endnotes

1. For instance, in France, artists’ moral rights include the right of disclosure, the right to withdraw from publication or make modifications, the right of authorship and the right of integrity. See generally, Lerner & Bresler, Art Law, at 1253, 1254. According to Lerner, moral rights are generally distinguished from more typical legal rights as “personal, perpetual and inviolable and unassignable.”

 

2. The history of the 90 day notice provision is quite complex and was the result of a balancing of interests between the building owner and author. See Patry, “Destruction of Works of Visual Art”, The Patry Copyright Blog , May 25, 2005 for a discussion.

 

3. This was the “Lili Ann Mural” case from San Francisco. Court orders and supporting documents for this case can be found at www.artemama.com.

Flying under the radar with some of intellectual property’s most obscure claims

Last spring, my firm was settling a case brought under the Visual Artists Rights Act, 17 U.S.C. § I06A. We obtained a $1.1 million settlement for our client, artist Kent Twitchell, whose 70-foot mural had been painted over on a building owned by the federal government.

After the settlement was complete, I was talking about the case with my friend, Kevin Boyle, of plaintiff’s firm Panish, Shea & Boyle, LLP. I expressed some doubt that ilie amount of the settlement was sufficient to drive home the point of artist protection to building owners in the future. Kevin’s response was both blunt and eye opening. He said, “That do you mean? You got over $1 million because the government painted its own wall.”

To me, this reaction starkly highlights the differences between being a plaintiff’s attorney and an intellectual property attorney. I was worried about the protection of an abstract right that few people even know about, much less understand. But in the world of the plaintiff’s attorney – where clients can have broken bones, missing limbs or, at the very least, soft tissue injuries and injured careers – it is remarkable to obtain a seven-figure settlement for something as seemingly intangible as a mural. Moreovel~ obtaining such a settlement is not something to ponder endlessly; it is something to celebrate and enjoy, and then move on.

The plaintiff’s lawyer and the IP lawyer have much to learn from each other. Last year, I actually tried a plaintiff’s IP case with Panish, Shea & Boyle, and working around such seasoned trial lawyers, I learned a lot about trying a case. However this is a magazine largely for plaintiff’s attorneys; you don’t need another article on trying a case, especially from someone who tries comparatively few. But you may benefit h-om an explanation of some of the obscure intellectual-property rights floating around the ether every day. Like in law school, you don’t want to miss an issue. In the real world, such an oversight means more than missing a good grade – it means missing a case.

Lately, I’ve worked on two major pieces of IP litigation on the plaintiff’s side, and I’ve learned about some other laws that surprised me. There are a variety of intellectual-property rights that do not make the headlines. We all hear about the major patent verdicts and copyright claims. For a plaintiff’s attorney, these cases are hard to get, as more defense firms seek a piece of the action, and they can be very expensive to pursue. But plaintiffs’ intellectual property is not solely the province of big firms trying to cash in. A variety of claims can be brought that are off the beaten path, and also serve to level the playing field as the plaintiff is less likely to run into a defense team that spends its time litigatin similar cases. Some of these issues are explained below.

The Visual Artists Rights Act

The case mentioned above, Twitchell v. West Coast General, et al., involved a six-story-tall figure of Los Angeles artist Ed Ruscha, which was painted over a nine-year period by Kent Twitchell. Many people know TwitcheLl for his portraits of musicians located above the 110 Freeway in downtown Los Angeles. The mural in our case, The Ed Ruscha Monument CERM”), was considered by some to be more artistically important because it depicted an artist from Los Angeles and represented a major work done directly on concrete (the musicians were transferred from studio paintings).

Using a hyper-realist technique, Twitchell painted the mural with a small watercolor brush, guided by photos that he took. He hung his own scaffold each day and even paid for his own parking. The mural had appeared in many books and articles and was world famous, despite its somewhat out-of-the-way locale in downtown Los Angeles at the intersection of Olympic and Hill. Yet on June 2, 2006, contractors unceremoniously painted over the ERM.

Just under two years after the mural’s destruction, a group of defendants including the U.S. government, agreed to pay $1.1 million to settle a lawsuit brought by Twitchell. The lawsuit accused the defendants of violating

Twitchell’s rights under the federal Visual Artists Rights Act (YARA), passed by Congress in 1990, and the California Art Preservation Act (CAPA, found at Civ. Code, § 987). Both statutes require, among other things, that artists must be given 90-days advance notice before a property owner can take any action that may destroy or damage a qualifying work of art.

The law

Both VARA and CAPA provide that if qualifying artwork is freestanding, such as a piece of sculpture that is not part of a building, intentional damage or destruction is most likely prohibited – even if the property owner owns the artwork. This may seem odd, but these laws deal with “moral rights,” which are more like bullet points on a resume than property rights. The artist has a right to protect his or her reputation via protection of the right of “integrity” (i.e., avoiding defacement of the work) and the right of “attribution” (i.e., having the work associated with the author). Destroying or mutilating a piece of art affects the artist’s reputation forever, regardless of who owns the art.

Who is protected and what rights are protected?

VARA creates rights for “the author of a work of visual art.” The Copyright Act does not define “author” but does define a “work of visual art” at 17 U.S.C. § 101. The definition is specific and includes what most of us would call “art.” It also imports the substantial body of copyright law on the question of works for hire, which are not “works of visual art.”

CAPA does not incorporate the work for hire concept, but it excludes some commercial works. CAPA provides rights to an “artist,” who is an “individual or individuals who create a work of fine art.” (Civ. Code, § 987(b)(l).) A “work of [me art” “shall not include work prepared under contract for commercial use by its purchaser.” (Civ. Code, § 987(b)(2).) Finally, “commercial use” means fine art created under a work-for-hire arrangement and for use in advertising, magazines, newspapers, or other print and electronic vmedia. (Civ. Code, § 987(b)(7).)

What rights are protected?

VARA and CAPA protect slightly different rights. The most important distinction relates to the right to prevent damage or destruction of the work. Seemingly similar, these provisions may be quite different.

VARA does not explicitly include rights against those who authorize the damage, as contrasted with those who perform the intentional acts. Also, VARA differentiates between works of visual art and such works which also are of “recognized stature.” A literal reading ofVARA protects against intentional distortion, mutilation or other modification of a work of visual art generally, but not the destruction thereof; only works of “recognized stature” are protected against intentional or grossly negligent destruction. There is no comparable dichotomy in CAPA. To be a work of fine art under CAPA, the work has to be of “recognized quality,” which can be subject to expert and artist opinion. (Civ. Code, § 987(£).)

Effective dates and duration of rights

VARA and CAPA provide rights of different duration, with different effective dates. CAPA applies regardless of when the work was created, as long as the acts occurred on or after January I, 1980. (Civ.Code, § 987U).) CAPA has a single term, which expires on “the 50th anniversary of the artist’s death.” (Civ. Code, § 987(g)(l ).)

VARA, on the other hand, applies to works created after its effective date of June I, 1991, and works created before that date but title to which had not, as of that date, been transferred from the author. Rights for works after the effective date endure for the life of the author. Rights for works created before the effective date, endure the same length as a copyright, which is now life of the author plus 70 years. (17 U.S.C. § 106A(d); 17 U.S.C. § 302(a).)

Remedies

Because VARA is part of the Copyright Act, remedies are basically the same as for copyright infringement, though a detailed determination must be made of the effect on the violation to the artist’s reputation. (17 U.S.C. § 501.) This is expensive and requires expert opinion into the abstract question of the effect of an absence from the artist’s resume.

CAPA is self-contained and provides for injunctive relief; actual damages; punitive damages (to be paid in judicial discretion to an organization engaged in charitable or educational activities involving the fine arts); reasonable attorneys’ fees and expert witness fees; and “any other relief which the court deems proper.”

Final recommendations on VARA and CAPA

If you ever represent a plaintiff who has had their rights violated under the moral rights’ statutes, there are several other points to seriously consider. First, bring suit under both VARA and CAPA. It is difficult to know at first which will apply, and VARA’s federal preemption clause is not clear. Further, CAPA provides better remedies. Second, bring state tort claims as well, like conversion. We brought a conversion claim in the Twitchell matter and the Court found that it was not preempted. Finally, damages are difficult to calculate because they may be partly based upon the artist’s reputation. Keep track of your time because both statutes allow for attorneys’ fees.

Protections for consumers of art

Several laws provide consumer protections regarding the authenticity of art and collectibles. One such law is Civil Code sections 1740 et seq. providing for the authenticity of fine art prints for sale at $100 or more. This law was recently the subject of a publicized class action suit against the Los Angeles Museum of Contemporary Art (MaCA).

In the suit, MaCA was charged with selling art prints without the required certificates of authenticity. The fines for violating the authenticity statute can be severe: up to $1,000 per incident with possible trebling of damages.

Under Civil Code section 1742, an art dealer cannot sell or consign a “multiple” unless a certificate of authenticity is provided before the sale. A “multiple” is defined as a “fine print, photograph (positive or negative), sculpture cast, collage, or similar art object produced in more than one copy.” A “fine print” is produced by “engraving, etching, woodcutting, lithography, and serigraphy” as well as multiples produced by photographic means. (Civ. Code, § 1740.)

The contents of the certificate of authenticity are identified in Civil Code section 1744. Under that section, the certificate of authenticity must state, generally: (i) the artist’s name; (ii) if the artist’s name appears on tlle multiple, an explanation of whether it was signed or how the name got there; (iii) a description of the medium or process through which the multiple was produced; (iv) if the multiple or sculpture represents a reproduction from a different medium, a statement establishing the different media; (v) if (iv) applies and the multiple is unsigned, a statement ofwhether the artist approved the multiple; (vi) if the author was dead when the multiple was made, a statement establishing this; (vii) if applicable, a statement that the master was created during the artist’s life and multiple after death; (viii) applicable statements if the multiple was created from prior limited editions or multiples; (ix) as to multiples created after 1949, a statement of the year or approximate year it was produced (before 1950, a statement of the year or period when the particular master was made is sufficient); (x) whether the multiple is part of a limited edition, statements regarding the edition size and use of the artist’s signature; and (xi) whether the master has been destroyed or altered after the current edition.

Any dealer or dealer consignee who sells or offers to sell a multiple without a certificate of authenticity or provides untrue information related to authenticity must refund the purchase price and pay interest in exchange for return of the print. If the acts or omissions were willful, the amount paid for the print will be trebled. The prevailing purchaser may also be entitled to attorneys’ fees and expert fees. Violators may also be liable for a civil penalty of $1,000 per incident.

In the recent class action brought under the statute, the plaintiff (a Los Angeles art collector) alleges that the Los Angeles Museum of Contemporary Art and Louis Vuitton North America were responsible for a failure to follow Section 1740. The Plaintiff bought prints at an exhibition by Japanese artist, Takashi Murakami. The prints depicted Louis Vuitton handbags that were designed by Murakami; the intent of the prints was to show the intersection of Murakami’s artistic work with commerce. Two limited edition prints costing $6,000 each were signed but not numbered, although the certificates of authenticity indicated the prints were numbered. Two other prints selling for $855 each, came with no certificates of authenticity.

A similar statute in federal court warranting mention is the Indian Arts & Crafts Enforcement Act of 2000, codified at 25 U.s.c. section 305e. This Act operates essentially as a false advertising law directed at protecting Native Americans, except that it contains much more explicit and harsh damages provisions than found in the Lanham Act. Under Section 305e, a civil action may be brought against anyone who “directly or indirectly, offers or displays for sale or sells a good, with or without a Government trademark, in a manner that falsely suggests it is Indian produced, an Indian product, or the product of a particular Indian or Indian tribe or Indian arts and crafts organization.” The suit may be brought by the Attorney General or “(B) by an Indian tribe on behalf of itself, an Indian who is a member of the tribe, or on behalf of an Indian arts and crafts organization; or (C) by an Indian arts and crafts organization on behalf of itself: or by an Indian on behalf’ of himself or herself.”

Violation of Section 305e imposes strict liability for each commercial transaction involving a “false suggestion” that merchandise was manufactured by Indians. (Native American Arts, Inc. v. Village Originals, Inc. (N.D. Ill. 1998) 25 F.Supp.2d 876.) Damages include the greater of: treble the gross profits earned by the defendant “as a result of the activities found to violate the subsection” or “in the case of each aggrieved individual Indian, Indian u-ibe, or Indian arts and crafts organization, not less than $1,000 for each day on which the offer or display for sale or sale continues.” Finally, the punitive damages and attorneys’ fees are expressly provided for under the statute. One court has found that the punitive damages language is not unconstitutionally vague. Punitive damages provision of Indian Arts and Crafts Act (IACA) was not unconstitutionally vague, although statute did not spell out standards for such an award; act did not call for excessive damages, but merely authorized their award. (Native American Arts, Inc. v. BundyHoward, Inc. (N.D.Il1.2001) 168 F.Supp.2d 905.)

Trademark reverse confusion

Finally, I will make a short mention of trademark reverse confusion. “Reverse confusion” is a doctrine of trademark law whereby a small company using a trademark (registered or unregistered) has a cause of action against a larger company that enters a similar market using a similar mark.

The theory is that the small company with superior trademark rights will fall into the “shadow” of the larger company with more marketing muscle, and consumers will come to believe that the small company is actually the second in the market.

This theory of liability should become increasingly viable as the Internet “converges” with other media. Companies and services that used similar marks but were previously separatedby locale or business may now be put side-by-side via the Web, thus increasing the potential for trademark confusion. As the Ninth Circuit has stated: “[w]hereas in the world of bricks and mortar, one may be able to distinguish easily between an expensive restaurant in New York and a mediocre one in Los Angeles, … the Web is a very different world.” (GoTo.com, Inc. v. Walt Disney Co. (9th Cir. 2000) 202 F.3d 1199, 1206-07.)

Last year, I was co-counsel with Panish, Shea & Boyle on a reverse confusion trial. I have written a separate article on the trial, with some tips on how to approach such a case. That article appears in the August / September edition of the CAOC’s Forum magazine. Rather than copy my own article, I will summarize some of the highlights below.

First, remember: the key to trademark law is use in connection with a good or service. Trademark rights begin the moment such use begins. The strength of those rights is determined by the extensiveness of the use and arbitrariness of the mark. A trademark registration will give the user stronger rights nationally, but an unregistered mark can be just as strong if it is supported by strong customer recognition, advertising and national use.

Second, trademark infringement turns on a “likelihood of confusion.” In the Ninth Circuit, likelihood of confusion is assessed under the so-called “Sleekcraft factors,” drawn from the decision in AMF Inc. v. Sleekcraft Boats (9th Cir. I979) 599 F.2d 341, 348 -349. (Trademark cases can be brought in state court as well, though the wisdom of doing so varies with every case, and cases involving federally registered marks can be removed to federal court.)

Sleekcmft requires that, when assessing likelihood of confusion, the following factors be considered:

• strength of the mark;
• proximity of the goods;
• similarity of the marks;
• evidence of actual confusion;
• marketing channels used;
• type of goods and the degree of care likely to be exercised by the purchaser;
• defendant’s intent in selecting the mark; and
• likelihood of expansion of the product lines.

Reverse confusion was first recognized in the Ninth Circuit’s Dreamwerks case, wherein the Court reversed a defense summary judgment for the first Dreamwerks, a small company that put on “Star Trek” conventions. (Dreamwerks Production Group, Inc. v. SKG Studio (9th Cir. 1998) 142 F.3d 1127, 1130.)

Finally, here are key strategic considerations when pursuing a reverse confusion case for the Plaintiff:

• Consider the injunction your chief remedy
  In reverse confusion, damages are difficult to prove. This is because the larger company is really snuffing out the potential of the small company. However, even though damages are hard to prove in reverse confusion, a finding of inh-ingement will almost certainly result in an injunction. If you are dealing with a large company and advertising budget, the company should be willing to come forward with a reasonable settlement to protect its name.
• Simplify the case for the court
  With eight factors, trademark cases are difficult to try. Reverse confusion is even more difficult. But a “David vs. Goliath” story lends itself nicely to a reverse confusion case. Also, be aware that typical trademark jury instructions can be tweaked for the reverse confusion scenario. Do the research and deal with instructions early.
• Bifurcation is preferred
  Oftentimes, a plaintiff’s attorney will resist bifurcation of liability and damages on the idea that it is good to get the damages evidence before the jury in the first phase. This is not a good strategy in reverse confusion. The plaintiff will look like it is “swinging for the bleachers” on damages against a large rival. Bifurcation wi1l save tedious expert testimony for later in the case, and it will alleviate the plaintiff’s attorney from having to worry about asking for too much in damages.

Claims based on state law causes of action

As seen by the use of “title” in the discussion of the mural case above, the federal VARA law appears to distinguish between title and possession of a work of art, in the traditional manner of personal property. Indeed, in the Twitchell case, we brought a claim for conversion, and the Court denied a motion to dismiss and agreed with us that there exists a distinct property right in the mural itself, in addition to copyright and other rights. We were even able to show that it may be possible to move the mural through the use of techniques originally devised for moving frescoes in Venice.

Thus, a plaintiff’s attorney should always remember to search for common-law claims in any intellectual property case. For instance, California has a comprehensive trademark statute Uust updated last year), although patent and copyright laws are generally preempted by federal statute. However, several common-law claims are typically brought in conjunction with intellectual property cases, including: common law unfair competition (as distinguished from Section 17200 unfair competition) in a trademark infringement case because punitive damages are available under the common law; breach of implied contract or conversion in an idea theft case (because copyright protection can be very narrow); interference with contract or business advantage in any intellectual property case involving a market of third parties; unauthorized use of another’s name, voice, signature, photograph or likeness in advertising (Civ. Code, § 3344), and, of course, a Section 17200 claim in any case (at least for the prospect of injunctive relief).

Conclusion

Intellectual-property law is not just a playground for the big law firms. Many of the skills developed in representing plaintifTs transfer over to intellectual property cases, especially the ability to present an effective “David vs. Goliath” case. Moreover the plaintiff’s lawyer should be aware that many protections exist for rights that go beyond the typical big federal patent, copyright and trademark cases that appear in the media headlines. I hope that by reviewing some of the claims and remedies discussed in this article, the plaintiff’s attorney will be made aware of these and related issues to explore when a client comes through the door.

By Eric Bjorgum, first published in The Advocate (Jan. 2009).