A Stunning Confession Potentially Destroys Fairey's Fair Use Defense

By Dave Rein

Source of Poster:  Stephen Fairey; Source of Photograph:  Mannie GarciaDespite depictions in TV shows and the movies, most court cases do not involve dramatic confessions, cover ups and Presidential politics.  Of course, most court cases don't involve Stephen Fairey.  From pasting the Obey Giant (now his Twitter name) and other "Obey" posters on public property (much to the ire of city officials around the country) to talking smack with the Associated Press over the Presidential candidate Obama Hope poster, he seems to seek and thrive on controversey.

But the controversey with the AP over the Obama Hope poster may have seriously backfired on Fairey.  On February 9, 2009, Fairey filed a Complaint in the Southern District of New York saying that his use of a photograph claimed by the AP fell within the fair use defense and therefore, he owed the AP nothing for using the photograph to create the Obama poster.  One former blogger on this site thought that if Fairey's inspiration for the poster did come from the picture of Obama and George Clooney at a press conference as Fairey claimed, then Fairey might succeed.  It is unlikely that we will find out if he was right. 

On October 16, 2009, Fairey confessed that he used a different picture from the same press conference, one that more closely resembles the Obama poster.  A number of bloggers including Tom GralishPhoto District News and others had suspected as much, but Fairey had denied their claims until now.

An AP article appearing in the New York Times could barely conceal its delight of the confession and the news that Fairey's legal defense team from the Stanford Fair Use Project intend to withdrawal their representation because Fairey lied to them and tried to cover it all up. 

Fairey can likely afford to hire other legal counsel, but the legal arguments for his new defense team just got a lot more difficult.  One of the four fair use factors analyzes the amount of copyrighted work taken.  When the Obama Hope poster is compared to the picture that Fairey now confesses to using, this prong may now weigh against him where it may have helped in in the other picture.  

But beyond the simple analysis of the factors, it should be remembered that the fair use defense is an equitable rule.  Fairey's confessed dishonesty undercuts his ability to ask for equity, i.e. fairness.  In other cases, the courts have not looked kindly on those accursed of infringing a work who denied that he or she used the accuser's work and then later tried to invoke the fair use defense.  Further, should this case go to trial, the AP will likely be able to tell the jury that Fairey initially lied about the picture and that he lied because he thought that he would lose if the actual photograph was known.  Much of the jury sympathy that Fairey might have had has likely been lost.

While Fairey's case against the AP still raises interesting questions such as whether the AP or Mannie Garcia, the photographer, own the copyright to the photograph, it now looks like a much anticipated case analyzing the fair use defense will disappoint many.

Fraud On The Patent And Trademark Office Isn't What It Used To Be: In re Bose Corp.

By Dave Rein

With the stroke of a quill pen pulled from their cap or with the tap of a keyboard, the Federal Circuit may have relegated an intensely litigated and debated line of fraud cases to the ancient history books.  Likewise, it may yet send the stock price of Novartis, makers of Maalox, downward.  More on stock prices and Maalox later . . . .

Starting with the seminal case, Medinol Ltd. v. Neuro Vasx, the Trademark Trial and Appeal Board has held that the trademark applicant or registrant commits fraud by claiming the use of a mark in connection with identified products or services when it actually did not use the mark on all of the claimed products or services.  The standard that the Board applied was whether the applicant or registrant made a material representation of fact that it knew or should have known to be false.  The penalty for such fraud was typically death to the trademark registration or at least to the registration of the offending class of products or services.  From 2003 until as late as June of this year with the Esprit IP Limited v. Mellbeck Ltd decision (visit Christina Frangiosa's Privacy and IP Law Blog for more on the case), this had been the state of the law with a few tweaks here and there as the Board soften the impact of the Medinol cases. 

This line of cases kept many a trademark attorney up at night wondering what would happen to their clients' valuable portfolios of trademarks registrations if subjected to a Medinol challenge.  Trademark attorneys and their clients implemented a number of creative strategies, but the concern that the registrations might be canceled must have caused many to gulp down untold amounts of Maalox that surely sent the stock price soaring.

Perhaps it was this health concern that caused the Federal Circuit in In re Bose to strongly state that the Board was applying the wrong standard to establish fraud and effectively applying a negligence standard.    The Federal Circuit was perhaps a bit harsh in its criticism given that the Board had lifted the "knew or should have known" standard from a prior Federal Circuit decision, but it is true that the standard that the Board applied was different than anyone else's standard for fraud.

Some have argued that after In re Bose, the only penalty for getting caught listing goods or services that are never used with the mark is to correct the registration because: 1) it is difficult to prove fraud and 2) it will be difficult to justify the cost of pursuing fraud claims given the limited relief that  the Board can award.  If the only realistic penalty is to correct the registration, the argument goes, then it will be much more difficult to keep applicants honest.

Even the "reckless disregard" standard that may have been left open is still a high standard to meet in a Board proceeding and although the PTO's rules prohibit an applicant from making a false statement, until the Board loosens its interpretation of this rule, it provides little comfort to those who are concerned that applicants may cheat if not checked.

John Welch of the TTABlog suggests that one way "to focus an applicant's or a registrant's attention on the issue of use would be to . . . require a specimen of use of every item listed in the application or registration."  He suggests that submitting a catalog or pages printed from the Internet could be deemed sufficient.  I am not sure of the extent legal costs might increase if registration required a specimen showing use of each product or service, but the suggestion is worthy of further discussion.

First, having to submit something -- even if the bar of what the PTO will accept is low -- will ensure that the applicant does some investigation before claiming use on a multitude of goods and services.  Second, the "I didn't know" defense to fraud becomes more suspect if the applicant submits a specimen showing use of the mark on a product when the applicant never sold such products or never used the mark on such products.  

For now, however, given that attorneys and their clients have less fear of their trademark registrations being canceled, fewer will be gulping down bottles of Maalox.  Perhaps Novartis should offer to fund an appeal of the Federal Circuit's decision?

Would You Like An OBAMA Cigar? We Think The USPTO Will Say: "No You Can't."

By Dave Rein

Co-author:  Branden Gregory (more on him later)

We admit that we love trademarks enough that we can pass time away with our feet propped up while running random searches on the USPTO's database of trademark applications.  Sure this time might be better spent working off a few more stubborn winter pounds, but that might have meant missing a few gems. 

During Barack Obama's campaign for President, there were a few applications to register various OBAMA related trademarks which were presumably filed by his supporters and his opponents.  Later, more commercial-oriented applications appeared:  OBAMA bottled water, cigars and other products that we're sure we can't live without.  The applications just keep coming.  And not just here in the U.S.  The IPKAT reported that trademark applications in Europe to register OBAMA marks have appeared in several European countries.

But, did any of these applicants really think the USPTO would register these marks? The USPTO is not going to allow registration of President Obama's name without the President's consent.  Not only will the President politely decline to consent to Obama soft drinks, but we are also willing to bet it will be nearly impossible to get past Obama's personal secretary, Katie Johnson.  As for these marks, in the words of Heid Klum, the host of Project Runway, "You are out!"

As for those marks which "merely" propose using "OBAMA" as a term of the mark, they are not likely to get much further as the USPTO will probably construe the marks as consisting primarily of a surname.  In the eyes of the USPTO, this is a "no no."  We were surprised to learn that the Obama name is relatively unusual in the U.S., but it won't be perceived as unusual any longer.  We can't come up with another meaning for "OBAMA" other than as a surname:  it does not signify a geographical area, have a secondary meaning or translate from Swahili into something other than the President's surname (we'll admit to being a bit rusty on our Swahili).

So why did attorneys agree to file these applications?  It strikes one of us as fairly straight forward that the USPTO won't register the marks, but were we missing something?  Brief interlude . . . one of the best things about summer is that one of us gets to hang around some fantastic summer associates including Branden Gregory who graciously agreed to hit the books and find a way to convince the USPTO to register these marks.   Although fully inspired with the "Yes We Can" slogan, his conclusion was that we are not going to be seeing Obama energy drinks anytime soon. 

Then what was the good-faith basis for filing the applications to register Obama marks?  Did the attorneys tell their clients that perhaps they might get lucky and catch one of the trademark attorneys in a mischievous mood?  That wouldn't be kosher so that can't be it.  Anyone have any thoughts?  Anyone?  Bueller?  . . . Bueller?

Christie's Dilemma: Sue When Buyer Refuses To Pay?

By Dave Rein

If you are an average Joe the plumber who happens to have an extra $40 million laying around to bid on an item or two at an auction and you don't pay, the auction company will sue you and will likely win.  The terms at most auction houses are such that it will probably win attorney fees as well.  But, things get a bit more complicated when the refusal to pay is done at the instigation of or has the support of the Chinese government.

I wrote about the recent legal circus surrounding two Chinese bronzes sold as part of the Yves Saint Laurent art collection that the auction house, Christie's held last week.  The latest twist is either a brilliant bit of patriotism or unvarnished commercial sabotage -- depending upon your perspective.

The winning bidder for the bronzes, Cai Mingchao, announced on Monday that it was his patriotic duty to scuttle the auction of the items and that he could not and would not pay for the bronzes.  A video clip of his announcement is found here.   As a prominent bidder of Chinese art, he was allowed to register the day of the auction.  Closer scrutiny would have shown that he was an adviser to the National Treasures Fund which is a group backed by the Chinese government to recover Chinese art.

The contract terms are clear that Christie's could bring an action to enforce the sale, it could sell to the next highest bidder and seek the difference from Mr. Mingchao, or return the bronzes to the seller and sue to recover the expected commission.  Or it could walk away.

But, if Christie's walks away, does it open itself and other auction houses to future games whenever someone decides an item should be returned even if there is no legal basis for requiring the item's return?

Jackie Chan, I get it.  You are upset that items were looted from China and there is no legal recourse.  I'm not weighing in on the moral rights China may or may not have to demand the bronzes' return.  Make your movie about a quest for stolen Chinese relics.  I, for one, will likely go and see it.

I am, however, weighing in on the legal questions.  Unless a reader can point me to some fact that I am missing, Christie's has strong legal arguments to pursue Mr. Mingchao although business concerns may weigh more heavily than the legal ones.  Will pursuing Mr. Mingchao cause Christie's a greater financial loss

Given that Christie's wants to maintain a strong presence in China and has a publicity mess on its hands, it may decide not to antagonize the Chinese government by pursuing damages against Mr. Mingchao.  China has already stated that the sale is going to have "serious affects on Christie's development in China."  Christie's does not have many other alternatives.  It could prohibit Mr. Mingchao or his own auction house from bidding in future auctions, but he could simply use an agent or a shell company to do his bidding.

One potential way that this may hurt the legal efforts to reclaim looted Chinese art is that an attorney representing an auction house or seller can cite this incident to argue that the National Treasures Fund, the Association for the Protection of Chinese Art in Europe or the Chinese government itself are simply trying to scare potential buyers and is again engaging in frivolous litigation.  The tactics that these organizations engaged in this time may encourage a future court to impose the strongest penalty available to discourage others from using the courts for what amounts to a publicity stunt.

What would you do now if you were Christie's?  Would you pursue Mr. Mingchao?  Do you think the recent events will help or hurt China's efforts to reclaim looted art?

No Legal Basis For The Return of Looted Bronzes

By Dave Rein

Not Your Ordinary Garden SculpturesIt is not surprising to find drugs and fashion in bed together and last week was no different.  Opium, a rat, a rabbit, and a  fashion house took center stage at the "Sale of the Century".  Even those whose art budget leans towards items painted on velvet may have heard about the sale of what has been called one of the most important art collections in private hands.  Items owned by the late fashion designer Yves Saint Laurent and his partner, Pierre Berge, received enormous attention even before they hit the auction block in Paris.

Among the items that received unusual attention were two bronze sculptures carved by a Jesuit priest that had been a part of a water-clock at a Chinese summer palace.  China formally protested the sculptures' sale and APCA (the Association for the Protection of Chinese Art in Europe) asked a Paris court to block the sale.  The court ruled that APCA did not have standing and ordered it to pay $1,274 US to both Mr. Berge and the auction house, Christie's.

The decision seems to have sparked strong emotion from the Chinese because the two statutes were looted by the British and French from the the Emperor's Summer Palace during the Second Opium War in 1860.  Putting aside the moral debate however, what struck me was the insistence that the Chinese government has strong legal claims to the bronzes.

Even if the Chinese government instead of APCA had filed the lawsuit, it is difficult to see how the case was anything more than an attempt to garner public attention.  The Shanghai Daily mentions that the UNESCO Convention on Stolen and Illegally Exported Cultural Objects would not apply a statute of limitations in this case -- suggesting that other provisions would obligate the bronzes' return to China.  If that is the argument, then it is a silly one.  The UNESCO Convention does not apply at all as it  would only apply to objects taken or exported after the convention became effective for the respective parties.  I think it is safe to say that nobody needs to run to the appendix of the the convention to see if China and France signed the UNESCO Convention (or any other convention) during the Qing Dynasty.  The first countries to sign the UNESCO Convention signed it in 1970 and everyone agrees that the bronzes were taken in 1860 -- long before there was any notion of a convention.  The same is true for those who point to the Uniroit Convention on Stolen or Illegally Exported Cultural Objects which was signed in 1995.

I know enough that I would be lost if opposing counsel started talking about the Napoleonic Code, but courts in most states in the U.S. would probably throw the case out too.  The sculptures were not exactly hidden away in the attic of a recluse.  Rather, it was well known that Laurent  and Berge owned the sculptures and only when the bronzes came up for auction was any effort made to demand their return.  Suffice to say, that most courts would likely hold that the statute of limitations would have run under state law in that if the Chinese government had exercised due diligence in searching for the sculptures, it would have had no trouble learning of their whereabouts.

It appeared that the bidders were not concerned about the legal ramifications as the sculptures sold for about $40 million US -- multiples of the initial estimates, but we learned on Monday that  the winning bidder had no intentions of paying.  His actions are discussed in a separate blog posting.  Is the combination of a lawsuit and fake bidding an effort to scare real bidders?

Perhaps the weak legal arguments or simple taunting prompted Mr. Berge to offer to return the sculptures if China "only" agreed to abide by human rights and allow the Dali Lama to return to Tibet. 

What do you think?  Did China have stronger legal arguments or was it resigned to making a moral appeal that at the end of the day, the items were admittedly looted? 

Copying the Copyright Infringement Complaint: A Sidebar in the YouTube Litigation

By Pete Salsich III

The tri-frontal attack on YouTube's business model spawned an interesting (probably to lawyers only) side skirmish the other day when a second class action complaint was filed by mandolin player and former Grateful Dead jammer David Grisman.  Grisman, along with his company Dawg Music and his partner Craig Miller, seek to represent a class of other musicians and copyright owners whose works are posted on YouTube without permission or compensation.  This filing falls on the heels of the class action complaint filed earlier this month by the English Premier League charging YouTube with massive copyright infringement.

The allegations in the two complaints are largely the same.  In fact, for the most part they are EXACTLY the same.  And that raises the question, asked by the Wall Street Journal Law Blog, whether wholesale copying of a filed complaint--alleging copyright infringement, no less--is itself copyright infringement.  Copies of both complaints are posted there.

This may be a bit of "inside baseball" to non-lawyers, but the blog post, and in particular the extensive comments thread, expose a heated debate that goes beyond the copyright question and touches on significant questions of legal ethics.  For example, many lawyers use form books or keep form files of different pleadings that they can lift from when preparing a new filing.  This can be very useful and efficient both for the lawyer and the client, and is probably not very controversial when you're talking about a simple appearance form or routine discovery requests.  However, what about a 40-page complaint?  Even if it contains similar factual allegations and legal theories, don't the lawyer's ethical obligations -- to investigate all the facts he or she alleges, for example -- require some modicum of originality?  And what about the bill the lawyer sends to the client? Is it OK to do wholesale copying if you only charge your client for the time it takes you to change the caption and the signature block? 

As to the copyright question, I tend to agree with Keith Henning at the copywrite blog.  He references an article by Professor Davida H. Isaacs applying a fair use analysis to the copyright question (see Davida H. Isaacs, The Highest Form of Flattery? Application of the Fair Use Defense against Copyright Claims for Unauthorized Appropriation of Litigation Documents, 71 Mo. L. Rev. 391 (2006)) as well as Professor Nimmer, but ultimately concludes that the allegations of fact in a complaint typically do not contain the level of originality required for copyright protection.  I don't think wholesale copying of this type is a good (or ethical) practice, but I'm not sure that it is copyright infringement.