The Supreme Court to Determine Whether Parody Dog Toys Are Allowable Under Federal Trademark Laws

Author: Benni Amato

We previously wrote about the trademark and trade dress dispute between Jack Daniels and VIP Products’ “Bad Spaniels” parody toy here. Approximately two years later, the United States Supreme Court granted certiorari to weigh in on the case.

Original Motions for Summary Judgment
In 2016, the District Court of Arizona ruled on the parties motions for summary judgment. VIP Prod., LLC v. Jack Daniel’s Properties, Inc., No. CV-14-2057-PHX-SMM, 2016 WL 5408313 (D. Ariz. Sept. 27, 2016). The district court ruled in Jack Daniels’ favor that its marks were valid and rejected VIP’s nominative fair use defense and First Amendment fair use defense. The district court held a four-day bench trial on Jack Daniels’ claims for trademark infringement and dilution in 2017. In 2018, the district court issued a Findings of Fact, Conclusions of Law, and Order that VIP’s Bad Spaniels toy infringed on and diluted Jack Daniels’ trademark and trade dress and issued an injunction prohibiting VIP from selling the Bad Spaniels toy. VIP Prod., LLC v. Jack Daniel’s Properties, Inc., 291 F.Supp.3d 891, 897 (D. Ariz. 2018).

Ninth Circuit Reversal
VIP appealed to the Ninth Circuit Court of Appeals. In 2020, the Ninth Circuit affirmed that Jack Daniels’ trademarks were valid and that VIP’s nominative fair use defense was not, but reversed the district court’s other findings. VIP Prod. LLC v. Jack Daniel’s Properties, Inc., 953 F.3d 1170, 1172 (9th Cir. 2020). The Ninth Circuit found that VIP did not dilute the Jack Daniels marks because the Bad Spaniels toy was used to convey a humorous message, which the First Amendment protected. Further, because the Ninth Circuit found the Bad Spaniels toy to be an expressive work, no likelihood of confusion analysis could take place unless Jack Daniels established one of the two Rogers test requirements—namely, whether VIP’s use of the mark was either “not artistically relevant to the underlying work,” or “explicitly misleads consumers as to the source of content of the work.” In 2020, Jack Daniels filed a petition for certiorari to the United States Supreme Court, which was denied in early 2021. Jack Daniel’s Properties, Inc. v. VIP Prod. LLC, 141 S. Ct. 1054 (2021).

Summary Judgment on the Rogers Test
On remand to the district court, VIP moved for summary judgment, arguing that Jack Daniels could not satisfy either prong of the Rogers test. As to the first prong of artistic relevance, the district court noted that under the Rogers test, any non-zero level of artistic relevance is sufficient. VIP Prod. LLC v. Jack Daniel’s Properties Inc., No. CV-14-02057-PHX-SMM, 2021 WL 5710730 (D. Ariz. Oct. 8, 2021). Since the Bad Spaniels toy relies on Jack Daniels’ trade dress as its punchline, it was found to be artistically relevant.

As to the second prong of being explicitly misleading, the district court noted that this “is a high bar that requires the use to be an explicit indication, overt claim, or explicit misstatement about the source of the work.” Consumer perception or confusion is irrelevant; instead, what is relevant is: (1) the degree to which VIP used the mark in the same way as Jack Daniels, and (2) the extent to which VIP added its expressive content to the work beyond the mark itself. Although the Bad Spaniels toy heavily imitated the Jack Daniels trade dress, nearly every element was altered with VIP’s expressive content. Thus, Jack Daniels could satisfy neither prong of the Rogers test.

That said, the district court criticized the Rogers test, as almost no court has ever found a mark to be irrelevant to a junior use, and the “explicitly misleading” standard displaces the likelihood of confusion test and excuses almost every use short of “slapping another’s trademark on your own work and calling it your own.” Nonetheless, the district court noted that it was bound by Ninth Circuit precedent and ruled in VIP’s favor. The Ninth Circuit affirmed the district court’s rulings, and Jack Daniels again petitioned the Supreme Court for certiorari, the questions on appeal virtually identical to its first petition. VIP Prod. LLC v. Jack Daniel’s Properties, Inc., No. 21-16969, 2022 WL 1654040 (9th Cir. Mar. 18, 2022). This time, however, the Supreme Court has granted certiorari. Jack Daniel’s Properties, Inc. v. VIP Prod. LLC, 143 S. Ct. 476 (2022).

Questions Before the Supreme Court
The questions before the Supreme Court are (1) whether the Bad Spaniels parody products are subject to the traditional likelihood of confusion test or the Rogers test that provides heightened First Amendment protection, and (2) whether the Bad Spaniels parody products are “non-commercial” under 15 USC § 1125(c)(3)(C) and thus prevented from a trademark dilution by tarnishment claim. Previously, the Ninth Circuit had reasoned that speech is non-commercial “if it does more than propose a commercial transaction…and contains some ‘protected expression’…even if used to ‘sell’ a product.” Because the Bad Spaniels product was used to “convey a humorous message” protected by the First Amendment, the Ninth Circuit ruled that VIP was entitled to summary judgment regarding federal and state law dilution claims. The parties are briefing the Supreme Court on these issues, and while no dates have been set for oral arguments, we anticipate the Supreme Court will issue a decision by the end of this year.

About the Author: Benni Amato is a partner in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. Her practice focuses on litigation matters involving trademarks, copyright, trade secrets, patents, internet issues, cybersecurity, contractual disputes, domain name arbitrations, and trademark and copyright prosecution and licensing. Ms. Amato’s biography can be found here.

Andy Warhol’s Prince Series and Issues of Transformativeness in Visual Works

Author: Brady Hagan

The Supreme Court will soon decide a case that, according to the appellants, could cause “a sea-change in the law of copyright” and cast “a cloud of legal uncertainty over an entire genre of visual art.” Indeed, the Court is expected soon to decide Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, a case expected (and hoped by some) to refine the meaning of “transformative use,” a part of fair use analysis, as applied to visual works in copyright infringement lawsuits, an issue on which the Second and Ninth Circuits have split. The key issue in Goldsmith is whether a work of visual art was sufficiently transformative of a photograph it was based on to constitute fair use.

In 1981, photographer Lynn Goldsmith took a photograph of acclaimed pop artist Prince in her studio (the “Photo”). Later, in 1984, Goldsmith licensed the Photo to Vanity Fair for use as an artistic reference.1 Unbeknownst to her, the artist hired by Vanity Fair was pop-art artist Andy Warhol. Vanity Fair’s license allowed it to publish an illustration of the Photo, once as a full page and once again as a quarter page, with co-attribution to Goldsmith. Vanity Fair’s use of the Photograph was thus authorized by Goldsmith, the copyright holder. However, Warhol would independently, and without license from Goldsmith, use the Photo as the subject matter of his Prince Series, rendering the image sixteen times in his characteristic style of sharp, contrasting colors and deep shading, typified by his works like Marilyn Diptych (1962) and Campbell’s Soup Can (1962). The most famous of the Prince Series is a work called Orange Prince, contrasted with the original photo below:

The Prince Series remained part of Warhol’s private collection until he passed away in 1987, at which point much of his life’s work was transferred to The Andy Warhol Foundation for the Visual Arts, Inc. (“the Warhol Foundation”), a non-profit whose mission is “the advancement of the visual arts.” In furtherance of its purpose, the Warhol Foundation donated the Prince Series for exhibition many times to such museum venues as the Museum of Modern Art, Tate, and The Andy Warhol Museum.

Goldsmith finally learned of the Prince Series after Prince’s death in 2016, when publisher Condé Nast (owner of Vanity Fair), published a commemorative edition magazine reflecting on the star’s life, and in which it used a print from Warhol’s Series, crediting the Warhol Foundation while failing to credit Goldsmith. Goldsmith notified the Warhol Foundation that she regarded it as being in violation of her copyright. The Warhol Foundation responded by suing Goldsmith in the United States District Court for the Southern District of New York, seeking declaratory judgment that the Prince Series works did not infringe Goldsmith’s exclusive rights in violation of the U.S. Copyright Act. Goldsmith countersued for declaratory judgment that the Prince Series did infringe her exclusive rights.

After reviewing the parties’ cross-motions for summary judgment, the District Court granted summary judgment to the Warhol Foundation and against Goldsmith, finding the Warhol prints constituted fair use of the original Photo, notwithstanding Warhol’s lack of license or permission for the use. In doing so, it relied on the general principle articulated by the Supreme Court in Campbell v. Acuff-Rose Music, Inc. that a work is transformative if it “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.” 471 U.S. 539, 579 (1985). Perhaps most central to its holding, the District Court observed:

These alterations result in an aesthetic and character different from the original. The Prince Series works can reasonably be perceived to have transformed Prince from a vulnerable, uncomfortable person to an iconic, larger-than-life figure. The humanity Prince embodies in Goldsmith’s photograph is gone. Moreover, each Prince Series work is immediately recognizable as a “Warhol” rather than as a photograph of Prince – in the same way that Warhol’s famous representations of Marilyn Monroe and Mao are recognizable as “Warhols,” not as realistic photographs of those persons.

Id. at 326. Accordingly, it held Warhol’s use was sufficiently transformative to support a finding of fair use as a matter of law.

Goldsmith appealed to the Second Circuit, which reversed the District Court. 11 F.4th 26 (2d. Cir. 2021). The main target of the Second Circuit’s reversal was the trial court’s holding that Warhol’s works were sufficiently transformative. “[A]s we have previously observed, an overly liberal standard of transformativeness, such as that employed by the district court in this case, risks crowding out statutory protections for derivative works.” Id. at 39. While it endorsed the District Court’s articulation of the general rule above from Campbell (a rule applied in the context of musical works of parody), the Second Circuit took a stricter view of transformativeness in this case, finding Warhol’s work retained and exploited too substantial a quantity and quality of the original photo’s features to constitute fair use such that it infringed Goldsmith’s copyright. The Warhol Foundation appealed to the Supreme Court, which granted certiorari. The United States Copyright Office filed an amicus brief in support of affirming the Second Circuit.

Until the Supreme Court renders a decision, we might make two observations. First, the primary disagreement between the Second Circuit and the District Court below fundamentally pertained to “how much” a creator can borrow from another’s original work, both in terms of quantity and quality, before it would no longer qualify as fair use, and also how much weight should be accorded to a purportedly new “meaning or message” in the derivative work. The Second Circuit essentially found the Prince Series used too much of the original Photo, notwithstanding the significant changes the District Court correctly identified as Warhol’s artistic contributions. It also found that the District Court overemphasized the new meaning or message, one of cultural commentary, that Warhol’s paintings add to the original image.

Second, “there is some inherent tension in the Copyright Act between derivative works, reserved to the copyright holder, which are defined in part as works that ‘recast[ ], transform[ ], or adapt[ ]’ an original work, and ‘transformative’ fair uses of the copyrighted work by others.” Id. at 39. In this author’s view, that tension is theoretically near its peak in visual art, simply given the nature of visual works as often fixed and defined images, not easily borrowed without clear duplication of the original’s inherent elements. Thus, it may be harder for a user of another’s photograph to prove fair use as compared to other artistic mediums, because such appropriation tends to require the direct duplication of fixed, identifiable elements of an image.

Along the same lines, the author might further observe that if the Second Circuit is affirmed, photographers rejoice, because it would become just that much harder for infringement defendants to prove fair use, even in cases of partial or elemental use of original photographs. Further, affirming the Second Circuit would (in theory) give prospective users greater incentive to seek licenses and paid permission from original creators, again, especially photographers, rather than run a then higher risk of litigation and liability for infringement. On the other hand, reasonable commentators tend to speculate that an affirmance of the Second Circuit could chill artistic endeavors. But this raises further questions of the likelihood of enforcement in private, non-commercial contexts anyway, and it arguably downplays the fact that transformativeness is only part of a more holistic fair use analysis. Transformativeness remains only a sub-factor of one of the four fair use factors.

Regardless of the outcome, we will wait eagerly to see whether the Prince prints are indeed transformative, or Warhol’s work infringes.

About the author: Brady Hagan is an associate at Gordon Rees Scully Mansukhani and a member of the Firm’s Intellectual Property Practice Group. Before entering private practice, he clerked for Chief Justice John D. Minton, Jr. of the Supreme Court of Kentucky, and then for Senior U.S. District Judge William O. Bertelsman of the Eastern District of Kentucky. Through his judicial clerkships, Mr. Hagan handled a variety of matters and gained insight into the inner workings of both state and federal courts.


1 As the term suggests, an “artistic reference” refers to a work or object upon which an artist bases his or her new work as an image reference.

Lessons from 28 U.S.C. § 2202: Don’t Forget To Include a Prayer for “Other and Further Relief” In Your Complaint

Author: Hannah Brown

In drafting a complaint, we all subconsciously throw in a catch-all last request in our prayer for relief: “other and further relief as the court may deem to be just and proper.” Upon further reflection, do we know why we do that? Imagine the situation: the jury finds the plaintiff has been damaged in the amount of $50,000, and in awarding judgment, the court says “actually, I think plaintiff deserves another $5,000, and I find that relief to be just and proper. Judgment awarded to plaintiff for $55,000.” It doesn’t happen.

But that doesn’t mean you should take that request out of your complaint or that it serves no purpose. To the contrary, inclusion of such sentence could save you.

The relevant statute is 28 U.S.C. § 2202, which provides: “Further necessary or proper relief based on a declaratory judgment or decree may be granted, after reasonable notice and hearing, against any adverse party whose rights have been determined by such judgment.” This allows a party to seek further relief — whether it be damages, fees, or an injunction — following a court order of declaratory relief.

Litigants may file motions for further relief pursuant to 28 U.S.C. § 2202, following a declaratory judgment. The court’s power to afford relief under this statute is broad, and “the prevailing party [in a declaratory judgment action] may seek further relief in the form of damages or an injunction.” Kaspar Wire Works, Inc. v. Leco Eng’g & Mach., Inc., 575 F.2d 530, 537 (5th Cir. 1978). Indeed, “all necessary or proper relief based on the declaratory judgment should be granted.” Nat’l Fire Ins. Co. of Hartford v. Bd. of Pub. Instruction of Madison County, Fla., 239 F.2d 370, 376 & n.11 (5th Cir. 1956) (emphasis added). The relief need not be necessary to effectuate the declaratory judgment ruling, it only needs to be proper. Horn & Hardart v. Nat’l Rail Passenger Corp., 843 F.2d 546, 548 (D.C. Cir. 1988).

In Edward B. Marks Music Corp. v. Charles K. Harris Music Publishing Co., 255 F.2d 518, 522 (2d Cir.1958), one of the most highly-cited cases analyzing this statute, the court held “the further relief sought [under the statute] … need not have been demanded, or even proved, in the original action for declaratory relief. [Rather,] [t]he section authorizes further or new relief based on the declaratory judgment, and any additional facts which might be necessary to support such relief can be proved … in an ancillary proceeding if … necessary.” (emphasis added).

The statute has proven useful in intellectual property cases. In Fred Ahlert Music Corp. v. Warner Chappell Music, Inc., 155 F.3d 17, 25 (2d Cir. 1998), the plaintiff Ahlert requested declaratory judgment that it was entitled to license the use of the song “Bye Bye Blackbird.” The court agreed, finding plaintiff was entitled to license the song during the relevant period and “to receive 50% of all mechanical royalties … payable for the use of the Song.” Prior to that order declaration, defendant Warner had been receiving these royalties. Accordingly and pursuant to that declaration, the court ordered defendant Warner to: (1) pay Ahlert the sum of 50% of the mechanical royalties paid to Warner by third party Sony, and (2) account for and pay to Ahlert 50% of all other applicable royalties paid to Warner during the relevant term; and (3) pay Ahlert prejudgment interest.

Warner appealed. Warner argued that the district court’s judgment was too broad because it encompassed relief neither sought by Ahlert in the complaint nor litigated at trial. The Second Circuit affirmed, first noting: “In its prayer for relief, Ahlert asked the district court to “grant [ ] such other and further relief as the court may deem to be just and proper,” thus invoking the district court’s power pursuant to 28 U.S.C. § 2202 to provide any “[f]urther necessary or proper relief based on a declaratory judgment or decree … against any adverse party whose rights have been determined by such judgment.” The panel went on to reason that the district court declared that Ahlert, rather than Warner, has the authority to license new uses of the song. The relief awarded by the district court followed directly from that declaration because Ahlert is entitled to receive royalties from post-termination licenses, and the judgment awarding those royalties to Ahlert was “proper relief based on a declaratory judgment.”

This case makes clear that a party is not barred from seeking relief under this statute even if the party forgot to plead for that relief in their complaint. The statute is also useful if a party did not know it needed to plead for the relief. It is illogical for a plaintiff to include a claim for copyright infringement or copyright infringement damages if plaintiff has not yet been declared the owner of said copyright. For example, in Columbia Casualty Co. v. Abdou, No. 15CV80-LAB (KSC), 2016 WL 4417711, at *1 (S.D. Cal. Aug. 18, 2016), plaintiff insurer Columbia brought a complaint seeking declaratory judgment as to whether it was obligated to provide coverage under the policy and included a prayer for “such additional … relief as the Court finds appropriate.” The court found no potential for coverage and granted judgment in Columbia’s favor. Columbia then moved for reimbursement of the defense costs. The court granted them, finding “Even absent a specific demand for money damages in its complaint, Columbia’s request for reimbursement qualifies as ‘proper relief’ under § 2202.” Id.

Case law on this point is consistent: a district court may grant relief, including monetary damages, whether or not the relief “ha[d] been demanded, or even proved, in the original action for declaratory relief.” Fred Ahlert Music Corp. v. Warner Chappell Music, Inc., 155 F.3d 17, 25 (2d Cir. 1998). This is because the statute itself accounts for a process by which the party may present any new facts to support such relief, as the statute allows for a “reasonable notice and hearing” before the court can issue further relief. 28 U.S.C. § 2202; see Westport Ins. Corp. v. Bayer, 284 F.3d 489, 500 (3d Cir. 2002) (stating that upon a motion for further relief, “the district court may resolve this issue after notice and hearing either on the present record or, at its option, by hearing additional evidence”).

While there must be some relationship between the further relief requested and the underlying declaratory relief, the further relief can go beyond the direct enforcement of the precise terms of the declaratory relief. In Horn & Hardart Co., the court issued a declaratory judgment that lease provisions were violated and therefore defendant Amtrak had the right to terminate the lease. Then, relying on section 2022, the court went on to enforce a different lease provision to award Amtrak damages and fees. 843 F.2d at 549. The appellate court affirmed, finding such an award was proper because that relief “follows absolutely from, and is based on” the court’s decision confirming Amtrak’s right to terminate the lease. Id. Even though Amtrak’s request for further relief in the form of rent and fees was not “necessary” to effectuate the lease termination ruling, it was proper. Id.; see also Tractor & Equip. Co. v. Dual Trucking & Trans., LLC, No. 15-5413, 2017 WL 3601212, at *3 (E.D. La. Aug. 22, 2017) (“The purpose of 28 U.S.C. § 2202 is to enable courts to grant further relief, not merely relief already required by the terms of the declaratory judgment.”).

Section 2202 is not useful in every case—of course there must be a declaratory judgment in place for a party to even argue this section’s applicability—but it should and could be used to argue entitlement to damages or an injunction if such relief would flow naturally from a prior judgment. A party can argue that such relief is appropriate where “[t]he district court’s denial of the motion for further relief would effectively render this declaratory judgment meaningless.” United Tchr. Assocs. Ins. Co. v. Union Lab. Life Ins. Co., 414 F.3d 558, 574 (5th Cir. 2005). The lesson learned here is that it is always to one’s benefit to include this catch-all provision for further relief in the complaint, as you never know when you may need it.

About the author: Hannah Brown is Senior Counsel and member of Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group, specializing in trademark, copyright, and patent litigation. She is a former law clerk to the Hon. Janis Sammartino and Hon. Cynthia Bashant of the U.S. District Court, Southern District of California.

Top Gun: Maverick – A New Legal Dogfight Alleges the Sequel is an Unauthorized Derivative Work

Author: Alison Pringle

Top Gun: Maverick is the year’s highest-grossing film at the box office, but there is a copyright dispute brewing off the big screen. As audiences are aware, Top Gun: Maverick is the widely-anticipated sequel to 1986’s Top Gun, but it is likely less well known that the original film was inspired by an article. In 1983, California magazine published an article called “Top Guns” by Ehud Yonay, profiling pilots at San Diego’s Navy Fighter Weapons School in Miramar, then a naval air station and training base.

Weeks later, on May 18, 1983, Paramount secured the motion picture rights to “Top Guns” via an assignment of rights, and the credits in 1986’s Top Gun even included the following: “Suggested by Ehud Yonay’s article ‘TOP GUNS’ in California Magazine.” In 2012, Mr. Yonay passed away.

Fast forward to June 6, 2022, when Mr. Yonay’s widow and son filed a lawsuit against Paramount in the U.S. District Court for the Central District of California (ten days after the Top Gun Maverick’s US release). The Yonays argue they terminated Ehud Yonay’s assignment of rights by sending Paramount a statutory notice of termination and that the copyright in the “TOP GUNS” story reverted back to them on January 24, 2020. Their complaint alleges copyright infringement and seeks a judicial determination that Paramount does not have the rights to make a sequel based on either “Top Guns” or 1986’s Top Gun as derived from the original story. The Yonays also seek an injunction ordering Paramount be stopped from producing, exploiting, or distributing the sequel and any ancillary products.

Under 17 U.S.C. § 203(a), an author (or the author’s heirs) can terminate a copyright transfer or license upon the satisfaction of certain conditions. This section only applies if the transfer or license was granted on or after January 1, 1978 and if the work is not a work for hire. In order to terminate a transfer or license, the author must serve advance notice in writing. Such notice must comply with signature, content, form, service, and recording requirements under the statute and Copyright Office regulations. In theory, this section provides authors a potential option to renegotiate a grant or license by terminating the initial grant.

Section 203 limits the option to terminate for within a 5-year window beginning 35 years after the grant. The termination also cannot take effect until at least two years after written notice. Under this timeline, the Yonays served notice of termination on January 23, 2018, with an effective termination date of January 24, 2020.

While a termination does not affect a derivative work prepared pursuant to the initial grant (i.e. the original 1986 Top Gun) prior to termination, it does prevent preparation of new derivatives based on the original work. According to the Yonays’ complaint, the new sequel is derived from “TOP GUNS” but Paramount failed to re-acquire rights in the story prior to releasing Top Gun: Maverick. Paramount denies the sequel is derived from the original story.

Paramount and the Yonays also dispute whether Top Gun: Maverick was completed prior to January 24, 2020 (the termination notice’s purported effective date) and would thus potentially qualify as an authorized prior derivative work. Paramount announced plans for Top Gun sequel back in 2010 and reportedly filmed the sequel between 2018 and 2019 (the film’s release was delayed due to the COVID-19 pandemic), but post-production work reportedly occurred through 2020.

Time will tell whether Top Gun: Maverick is grounded or Paramount prevails.

About the author: Alison Pringle is an associate in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. Her practice focuses on intellectual property and commercial litigation, with an emphasis on trademark, copyright, contract, technology, and privacy disputes. She also counsels clients on transactional intellectual property issues. Ms. Pringle’s biography can be found here.

Supreme Court Gives “Knowledge” New Meaning in Connection with Copyright Registrations

Author: Alison Pringle

When can a mistake excuse an inaccuracy in a copyright registration? According to the Supreme Court, a good-faith mistake of fact or law in a registration does not preclude a copyright owner from asserting a claim for infringement.

Under the US Copyright Act, copyright claimants must have a valid copyright registration before bringing a claim for infringement. If the registration contains inaccurate information, it can be determined invalid. However, while information provided in a copyright application should be accurate, the Copyright Act’s safe harbor provision in 17 U.S.C. 411(b)(1) provides that the registration is nonetheless valid unless “the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate.” (emphasis added.) Previously, courts had held that the statute only excused a good-faith mistake of fact, not a good-faith mistake of law.

The Court expanded this “knowledge” definition in 17 U.S.C. 411(b)(1) to a lack of either factual or legal knowledge through its recent ruling in Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 211 L.Ed.2d 586 (U.S. 2022).

Background of the Dispute

Unicolors is a textile company that offers fabrics with various artwork designs for use on garments. Unicolors then applies for copyright registrations over these designs. One such design was the “EH101” design—in 2011, Unicolors filed a single copyright application for EH101 and 30 other fabric designs and received a registration certificate.

H&M Hennes & Mauritz, L.P., an international clothing retailer, began selling a jacket and skirt combination in 2015 with a print called the “Xue Xu” design. Soon after, Unicolors brought copyright infringement claims against H&M in the Central District of California.

Unicolors EH101 Design

H&M Xue Xu Design

At trial, a jury found for Unicolors on its infringement claim. The jury awarded Unicolors $817,920 as a disgorgment of H&M’s profits and an additional $28,800 in Unicolors’ lost profits (later reduced to $266,209.33 on remittitur, plus Unicolor’s attorneys’ fees). H&M then moved for judgment as a matter of law on the grounds that Unicolors’ copyright registration was inaccurate and thus, by extension, Unicolors’ infringement claim failed as Unicolors had no valid copyright in the EH101 design.

H&M argued Unicolors violated Copyright Office Regulation 37 CFR §202.3(b)(4), which states a single registration covers multiple works if those works were “included in the same unit of publication.” As the copyright application at issue sought registration for 31 separate designs, H&M argued the designs needed to be included in the same unit of publication. However, the designs at issue were not first offered together. Instead, some designs were marketed publically while others were marketed only to a specific customer and withheld from Unicolors’ public showroom for several months. Thus, the registration contained inaccurate information.

Unicolors took the position that it was not aware the 31 designs it was registering together did not satisfy the Act’s requirement for a “single unit of publication” when it submitted its application.

Supreme Court Opinion

The Court held that if Unicolors “was not aware of the legal requirement that rendered information in its application inaccurate,” it therefore “could not have included that information in its application with knowledge that it was inaccurate.” The Court looked to other provisions of the Copyright Act and legislative history to support that “knowledge” in the context of 7 U.S.C. 411(b)(1)’s safe harbor provision means “actual, subjective awareness of both the facts and the law.”

In delivering the Court’s opinion, Justice Breyer made an illustrative analogy:

Suppose that John, seeing a flash of red in a tree, says, ‘There is a cardinal.’ But he is wrong. The bird is not a cardinal; it is a scarlet tanager. John’s statement is inaccurate. But what kind of mistake has John made? John may have failed to see the bird’s black wings. In that case, he has made a mistake about the brute facts. Or John may have seen the bird perfectly well, noting all of its relevant features, but, not being much of a birdwatcher, he may not have known that a tanager (unlike a cardinal) has black wings. In that case, John has made a labeling mistake. He saw the bird correctly, but does not know how to label what he saw.

Thus, the Court determined the difference between these two types of mistakes did not matter. Unicolors’ error was one of labeling (i.e., regarding the proper scope of the label “single unit of publication”). Therefore, the Court held that Unicolors’ registration was valid, and Unicolors satisfied this prerequisite for its infringement claim.

Future Implications

The impact of this ruling on copyright registrations and litigation remains to be seen, but it will have important implications for copyright applications, owners, and defendants alike. One side of the coin is reflected in the dissent, where Justice Thomas states, “The Court imposes an actual-knowledge-of-law standard that is virtually unprecedented except in criminal tax enforcement.” Generally, ignorance of the law is no excuse, but the Opinion expressly states that this principle “does not apply in this civil case concerning the scope of a statutory safe harbor that arises from ignorance of collateral legal requirements.”

On the other side of the coin, under the ruling, copyright owners appear to have more leeway to claim lack of knowledge regarding an inaccuracy in their registration applications. Nonetheless, any lack of knowledge must still be found to be in “good faith.” Willful blindness, or circumstantial evidence demonstrating an applicant was actually aware of inaccurate information, may continue to support a finding of actual knowledge.

About the author: Alison Pringle is an associate in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. Her practice focuses on intellectual property and commercial litigation, with an emphasis on trademark, copyright, contract, technology, and privacy disputes. She also counsels clients on transactional intellectual property issues. Ms. Pringle’s biography can be found here.

Damages Claims Not Barred by Prior TTAB Cancellation Proceedings

Author: Violaine Brunet

The “Ebonys” is a 70s soul group, which helped create the “Philadelphia Sound,” incorporating elements of soul, funk, disco. The group was founded in 1968 by David Beasley (“Beasley”) and other members. William Howard joined the band in the 1990s, but departed after a few years.

In 2012, Howard registered “THE EBONYS,” as a federal trademark registration with the PTO (the “ ‘469 mark”), which prompted Beasley to ask the Trademark Trial and Appeal Board (the “TTAB”) to cancel the registration (the “ ‘469 mark”). However, the TTAB dismissed Beasley’s 2013 and 2017 petitions.

Unsatisfied with the outcomes of the TTAB proceedings, Beasley sued for trademark infringement in federal court in 2019. The District Court granted Howard’s motion to dismiss Beasley’s Complaint on the grounds of claim preclusion. The District Court reasoned that claim preclusion barred Beasley from asserting the claim because it turned on “facts and legal theories [that] were all actually litigated in” the 2017 petition, and Beasley could have raised any priority of use arguments in his 2013 petition. The trial judge further concluded that claim preclusion applied even though Beasley sought a damages remedy that he did not pursue at the TTAB.

Beasley then appealed the trial court’s decision to the Third Circuit Court of Appeals. The central issue of this appeal was whether Beasley’s prior losses in cancellation proceedings before the TTAB precluded Beasley’s Section 43(a) claim (pertaining to damages for trademark infringement) before the District Court. The Court of Appeals held that they do not. Specifically, the appellate court stated that “a limit to claim preclusion applies to cases, like this one, where a plaintiff seeks damages or an injunction in a section 43(a) infringement action after pursuing a cancellation claim before the TTAB.”

The Appeals Court held that the TTAB is “not a general-purpose tribunal for trademark disputes. Instead, it has limited jurisdiction ‘to determine only the right to register’ a trademark and cannot ‘decide broader questions of infringement or unfair competition.’ ” (citations omitted) (emphasis added) “[T]he TTAB’s jurisdiction is narrow,” while the “statutory provision [Section 43(a) infringement action] under which Beasley sues is broad.” (emphasis added).

The Court wrote that “[b]ecause the TTAB has no jurisdiction to consider whether an infringer’s use of a mark damages a petitioner seeking cancellation, and in turn cannot award any remedy beyond cancellation for the injuries a petitioner has suffered. . . a Section 43(a) claim is not one that could have been brought in a TTAB cancellation proceeding.” (emphasis added).

This decision from the Third Circuit provides some comfort and reassurance to litigants that they can bring their claims before the TTAB without fear of waiving their rights to bring any future trademark infringement actions in federal courts, including actions that seek monetary and injunctive relief, which are not available in the TTAB.

On a related note, this Third Circuit decision joined the rulings of the Ninth and Second Circuit, which held that that preclusion is tightly limited to only those issues actually decided on the merits in the TTAB and for which the TTAB has jurisdiction to decide.

About the author: Violaine Brunet is an associate in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. Her practice focuses on litigation matters involving copyright, trademarks, and patents. Ms. Brunet also has experience in international law from her work in the Superior Court of Quebec in Quebec City, Canada. Ms. Brunet’s biography can be found here.

SCOTUS to Review Intent Standard for Invalidation of Copyright Registrations

Author: Reid Dammann

Under the current version of the Copyright Act, registration of a copyright claim is not a condition of copyright protection. 17 U.S.C. § 408(a). However, a certificate of copyright registration is a prerequisite to bringing a civil copyright infringement action. See 17 U.S.C. § 411(a). By statute, a certificate of registration satisfies this prerequisite “regardless of whether the certificate contains any inaccurate information,” unless the following two-part test is met: “(A) the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate; and (B) the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.” 17 U.S.C. § 411(b)(1).

Section 411(b)(2), in turn, requires that courts seek the advice of the Register of Copyrights before finding that a certificate of registration does not support an infringement action. Palmer/Kane LLC v. Rosen Book Works LLC, 188 F. Supp. 3d 347, 348 (S.D.N.Y. 2016) (“[C]ourts are in agreement that the provision is mandatory in nature[.]”) (citing DeliverMed Holdings, LLC v. Schaltenbrand, 734 F.3d 616, 623 (7th Cir. 2013) (“Instead of relying solely on the court’s own assessment of the Register’s response to an inaccuracy, the statute obligates courts to obtain an opinion from the Register on the matter.”)). In other words, a court must first obtain the Register’s guidance before finding that the provision of knowingly inaccurate information would have caused the Register to refuse registration. Although the statute by its terms requires a referral “in any case in which inaccurate information described under [§ 411(b)(1)] is alleged,” 17 U.S.C. § 411(b)(2), to protect against the potential for abuse inherent in this process, courts generally agree that they may first require the party seeking invalidation to establish as a factual matter that “(1) the registration application included inaccurate information; and (2) the registrant knowingly included the inaccuracy in his submission to the Copyright Office.” Palmer/Kane LLC, 188 F. Supp. 3d at 349.

Thus, before referring the issue to the Register, a court may determine whether the allegedly inaccurate information is, in fact, inaccurate. Where the factual record is insufficient to make such a determination, a court may choose to “await further factual development at the summary-judgment stage or at trial before issuing a referral.” King-Devick Test Inc. v. NYU Langone Hosps., 17-CV-930 (JPO), 2019 WL 3071935, at *9 (S.D.N.Y. July 15, 2019). If a court ultimately determines that a registration contains inaccuracies, the Register will then “advise the court whether the inaccurate information, if known, would have caused the Register of Copyrights to refuse registration.” 17 U.S.C. § 411(b)(2). The Court “must request a response from the Register before coming to a conclusion as to the materiality of a particular misrepresentation.” DeliverMed Holdings, LLC, 733 F.3d at 623-25 (discussing the “new procedure for courts confronted with a registration allegedly obtained by knowing misstatements in an application”).

Recently, the United States Supreme Court granted certiorari in Unicolors, Inc. v. H&M Hennes & Mauritz.1 In this case, Unicolors submitted thirty-one fabric designs to the U.S. Copyright Office, but indicated that all thirty-one designs were published as a bundle, presumably, to save fees. However, the Ninth Circuit has held that a collection of works may be registered under a single-unit registration only when the works were first published in a singular, bundled unit. Here, Unicolors testified at trial that some of the designs included in the single-unit registration were published to different customers at different times, so its submission of all thirty-one images as a “collection” contained known inaccuracies. The District Court did not request the Register of Copyrights’ insight because it held that invalidation required a showing at trial that Unicolors intended to defraud the Copyright Office—which was not shown. The Ninth Circuit remanded the case to the District Court on the grounds that the District Court erred by imposing an intent-to-defraud requirement for registration invalidation and erred in concluding that Unicolors’s application for copyright registration did not contain inaccuracies despite the inclusion of confined designs. The issue presented to the United States Supreme Court, is whether 17 U.S.C. § 411 requires referral to the Copyright Office where there is no indicia of fraud or material error as to the work at issue in the subject copyright registration.

As part of its argument, Unicolors asserts that the Ninth Circuit ruling creates a circuit split with the Eleventh Circuit, which holds that scienter is necessary. See Roberts v. Gordy, 877 F.3d 1024, 1029-30 (11th Cir. 2017) (holding that 411(b)(1) requires a showing of “intentional or purposeful concealment of relevant information” to render a registration invalid). Unicolors argues that the Eleventh Circuit in Gordy noted that the promulgation of the PRO-IP Act, which, according to the Gordy court, “amends section 411 of the Copyright Act to codify the doctrine of fraud on the Copyright Office in the registration process,” ostensibly reaching the opposite conclusion as the H&M panel. Id.

Unicolors argues that several opinions in the Ninth Circuit have implied that there is an intent-to-defraud requirement for registration invalidation. See L.A. Printex Indus., Inc. v. Aeropostale, Inc., 676 F.3d 841, 853-54 (9th Cir. 2012); see also Lamps Plus, Inc. v. Seattle Lighting Fixture Co., 345 F.3d 1140, 1145 (9th Cir. 2003) (stating that inaccuracies “do not invalidate a copyright… [unless] the claimant intended to defraud the Copyright Office by making the misstatement”) (quoting Urantia Found. v. Maaherra, 114 F.3d 955, 963 (9th Cir. 1997)); Three Boys Music Corp. v. Bolton, 212 F.3d 477, 486-87 (9th Cir. 2000).

Unicolors further argues that the Ninth Circuit’s supposed misinterpretation of 17 U.S.C. 411(b) contravenes legislative and administrative guidance, and that its position is in line with the relevant administrative and legislative bodies as well as the leading copyright treatise. According to Unicolors, these cited authorities correctly interpret that the PRO-IP Act codifies the doctrine of fraud on the Copyright Office. See U.S. Copyright Office, Annual Report of the Register of Copyrights, Fiscal Year Ending September 30, 2008 12–13 (2008) (“passage of the PRO IP Act strengthens the intellectual property laws of the United States” and specifically, “it amends section 411 of the copyright law to codify the doctrine of fraud on the Copyright Office in the registration process.”); see also U.S. Copyright Office, Annual Report of the Register of Copyrights, at 9 (2009) (Copyright Office further clarified that subsection (b) was added to section 411 “to create a new procedure for infringement actions [ . . . ] on issues that may involve fraud on the Copyright Office.”); 2 MELVILLE NIMMER AND DAVID NIMMER, NIMMER ON COPYRIGHT 7.20 (2018) (“[t]he legislative history for the PRO IP Act explains that the amendment aims to close the loophole whereby ‘intellectual property thieves’ argue ‘that a mistake in the registration documents, such as checking the wrong box on the registration form, renders a registration invalid and thus forecloses the availability of statutory damages’”).

Unicolors also contends that not only is there a split in the Eleventh Circuit, but also that there is a split in the Third Circuit because the Third Circuit requires an “intentional omission” of a material fact to invalidate, noting that “mere inadvertence,” is “insufficient.” See Mon Cheri Bridals, Inc. v. Wen Wu, 383 F. App’x 228, 232 (3d Cir. 2010) (citations omitted). Unicolors also posits that there is a further split in the Seventh Circuit, which has indicated, though not explicitly held, that 411(b)(1) requires a showing of fraud as well. In analyzing applicability of 411(b)(1), the Seventh Circuit in DeliverMed Holdings, LLC, 734 F.3d at 616, 625, fn.3, referred to the statutory provision as “the fraud on the Copyright Office inquiry” and weighed facts to determine if there was a knowing misrepresentation sufficient to seek to invalidation.

H&M’s position is that there is no circuit split, Roberts v. Gordy is an outlying case, and that this exact issue in this matter has already been presented to the United States Supreme Court, who previously denied certiorari. See Gold Value v. Sanctuary Clothing, 925 F.3d 1140 (9th Cir. 2019), cert. denied (no such intent-to-defraud requirement). Further, H&M argues that the statutory language is clear and that there is no need to consult legislative history. H&M argues that the plain meaning of the statute controls – stating “[a]s this Court has stated repeatedly, ‘when the meaning of the statute’s terms is plain, our job is at an end. The people are entitled to rely on the law as written, without fearing that courts might disregard its plain terms based on some extra-textual consideration.” Bostock v. Clayton County, Georgia, 140 S. Ct. 1731, 1749 (2020) (citing Carcieri v. Salazar, 555 U.S. 379, 387 (2009)). The express languge of 411(b) states only that the “inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate[,]” and thefore, by the statutory plain terms, a higher degree of scienter—i.e., fraud—is not required. 17 U.S.C. § 411(b)(1)(A).

Intent-to-defraud requires that one willfully deceives, with intent to induce another to alter position to the other’s injury or risk. This could come in the form of an intentional misrepresentation, negligent misrepresentation, concealment, or a false promise. Courts generally provide that fraud requires a misrepresentation, knowledge that the misrepresentation is false, intent to deceive, justifiable reliance by the victim, and resulting damages, so it is plain to see that a decision by the United States Supreme Court in this matter effectively determines whether it will be more difficult to invalidate a copyright registration in future copyright litigation.

About the author: Reid Dammann is a partner in Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. His practice focuses on litigation matters involving copyright, trademarks, trade secrets, and patents, with a particular emphasis on software. Mr. Dammann is a registered patent attorney with an advanced dual degree in Computer Science and Electrical Engineering. Mr. Dammann’s biography can be found here.

1 959 F.3d 1194 (9th Cir. 2020)

When Communications Confer Personal Jurisdiction: A Cautionary Tale for Clients and Attorneys

Author: Garrett Fahy


It is a question many intellectual property lawyers navigating a potential infringement case have undoubtedly pondered: how many communications with opposing counsel over a budding infringement dispute are enough to subject the attorney’s client to personal jurisdiction in the infringer’s home (and possibly foreign) forum? (And if they have not pondered it, they now have good reason to.)

In Trimble, Inc., Innovative Software Engineering, LLC v. Perdiemco LLC (2019-2164) (May 12, 2021), the Federal Circuit defined the number and type of communications and contacts that will subject a client to personal jurisdiction in a foreign and potentially inconvenient forum in a declaratory judgment patent infringement case: twenty-two communications in a three month period, even in service of potential settlement discussions, is enough to subject an attorney’s client to jurisdiction in a foreign forum if the court finds the communications constitute sufficient purposeful availment.


Defendant PerDiemCo, LLC (“PerDiemCo”), a Texas LLC, is the owner of eleven patents (via assignment) having a common specification and relating to electronic logging devices and geofencing. Electronic logging devices log the hours and activities of truck and other commercial vehicle drivers to help their employers comply with federal and state safety regulations. PerDiemCo accused Trimble, Inc. (“Trimble”) and Innovative Software Engineering, LLC (“ISE”) of infringement in letters and other communications in the fall of 2018. Robert Babayi, a resident of Washington, D.C., is the sole owner, officer and employee of PerDiemCo, which rented office space in Marshall, Texas. Mr. Babayi had never visited the rental office in Marshall and had no employees in Marshall.

The declaratory judgment Plaintiffs, Trimble and its wholly owned subsidiary ISE, manufacture and sell positioning and navigation products and services that rely on the Global Positioning System (GPS). Trimble and ISE offer electronic logging devices and related services, and Trimble sells geofencing products. Trimble is incorporated in Delaware and headquartered in Sunnyvale, California (in the Northern District of CA). Trimble’s subsidiary, ISE, is an Iowa LLC with its headquarters and principal place of business in Coralville, Iowa.

Mr. Babayi of PerDiemCo launched the first communicative salvo in October of 2018, sending a letter to ISE in Iowa accusing ISE’s products and services of using technology covered by at least PerDiemCo’s electronic-logging-device patents. Mr. Babayi also attached to his letter a draft and unfiled complaint for the Northern District of Iowa which included a claim chart, proposed a license to PerDiemCo’s patents, and attached a draft non-disclosure agreement. In response to a letter from Trimble’s chief IP counsel, Mr. Babayi responded by alleging Trimble also infringed PerDiemCo’s patents and included a claim chart. Further calls followed and PerDiemCo then offered to enter into binding mediation.

In subsequent communications, PerDiemCo made additional allegations of infringement against Trimble concerning electronic logging devices, bringing the total number of asserted patents to eleven, and later alleged Trimble’s geofencing products infringed claims of six of the eleven already asserted patents that related to geofencing. In the course of these communications, PerDiemCo threatened to sue Trimble for patent infringement in the Eastern District of Texas and identified counsel it had retained for that purpose.

Plaintiffs’ Complaint for Declaratory Judgment of Non-Infringement

In January of 2019, Trimble and ISE filed a complaint for declaratory judgment of non-infringement in the Northern District of California, and alleged that PerDiemCo was subject to jurisdiction under a specific jurisdiction theory. PerDiemCo moved to dismiss, arguing the court lacked personal jurisdiction under Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355 (Fed. Cir. 1998). The district court held it lacked specific personal jurisdiction over PerDiemCo because even though Trimble had established PerDiemCo’s minimum contacts through its cease-and-desist letters and other communications that were purposefully directed at Trimble, a California resident, and Trimble’s declaratory judgment claim arose out of PerDiemCo’s activities, the court, applying Red Wing, held that exercising specific personal jurisdiction over PerDiemCo would be constitutionally unreasonable.

The Federal Circuit’s Opinion

The question for the Federal Circuit was whether Red Wing precluded the federal district court for the Northern District of California from asserting personal jurisdiction over PerDiemCo, based on its communications to Trimble. The court determined Red Wing does not preclude personal jurisdiction, and the district court had personal jurisdiction over PerDiemCo, a Texas LLC. Why?

First, the exercise of jurisdiction focuses on the “nature and extent of ‘the defendant’s relationship to the forum state,’” Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1024 (2021) (“Ford”) (quoting Bristol-Myers Squibb Co. v. Superior Ct. of Cal., 137 S. Ct. 1773, 1779 (2017)), and the exercise of specific personal jurisdiction requires that the “plaintiff’s claims… ‘must arise out of or relate to the defendant’s contacts’ with the forum.” Id. The defendant must take some act by which it purposefully avails itself of the privilege of conducting activities within the forum state, and the contacts must show that the defendant deliberately reached out beyond its home. Id.

In Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355 (Fed. Cir. 1998), Hockerson-Halberstadt, Inc. (“HHI”) a Louisiana corporation with its principal place of business in New Mexico sent three demand letters in a three-month period to Red Wing Shoe Co., a Minnesota corporation with a principal place of business in Minnesota. Id. at 1357. HHI and Red Wing exchanged letters, in the course of which HHI made further allegations of infringement against Red Wing and offered Red Wing a nonexclusive license. Id. The court held HHI’s efforts were insufficient to constitute purposeful availment of the forum state on the grounds that a patentee should not subject itself to personal jurisdiction in a forum solely by informing a party who happens to be located there of suspected infringement, and basing personal jurisdiction on such contacts alone would not comport with principles of fairness. Id. at 1361. The court also said the cease-and-desist letter that included an offer of a license was more like an offer for settlement rather than an arms-length negotiation in anticipation of a long-term continuing business relationship. Id. And principles of fair play and substantial justice afforded a patentee sufficient latitude to inform others of its patent rights without subjecting itself to jurisdiction in a foreign forum. Id. at 1360-1361.

Post-Red Wing legal developments also set PerDiemCo’s actions apart from the plaintiff in Red Wing and rendered appropriate the district court’s exercise of jurisdiction over PerDiemCo.

First, the Supreme Court clarified in cases after Red Wing that the personal jurisdiction analysis in a patent case is not different on account of special patent policies. SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954, 964 (2017). In other words, there is no patent-specific statute for personal jurisdiction purposes. TC Heartland LLC v. Kraft Foods Grp., 137 S. Ct. 1514, 1518 (2017).

Second, the Supreme Court has held that communications sent into a state may create specific personal jurisdiction, depending on the nature and scope of such communications. South Dakota v. Wayfair, Inc., 138 S. Ct 2080 (2018). As the Court said in Quill Corp. v. North Dakota, 504 U.S. 298, 308 (1992), an entity that repeatedly sends communications into a forum state “clearly has ‘fair warning that its activities may subject it to the jurisdiction of a foreign sovereign.’” And the Federal Circuit has tracked this reasoning, finding that in the context of patent litigation, communications threatening suit or proposing settlement or patent licenses can be sufficient to establish personal jurisdiction. Jack Henry & Associates, Inc. v. Plano Encryption Technologies, LLC, 910 F.3d 1199 (Fed. Cir. 2018) (exercise of personal jurisdiction over a defendant was reasonable after the defendant sent communications to eleven banks located in the forum, identifying the patents, alleging the Banks were infringing the patents and inviting non-exclusive licenses.).

Third, the Court’s decision in Ford means that “a broad set” of a defendant’s contacts with a forum are relevant to the minimum contacts analysis. There, in deciding the question whether Montana’s and Minnesota’s courts could exercise personal jurisdiction over Ford for accidents involving Ford cars that took place in the states despite the vehicles not being sold in either state, the Court focused not on the contacts related to the specific vehicles, but Ford’s broader efforts to sell similar vehicles in each state. Ford’s “veritable truckload of contracts” with the states were relevant to analyzing the connection between Ford’s forum contacts and the plaintiff’s suit. Id. at 1031-32.

In short, while the “limited number of communications” in Red Wing—three—was not sufficient to constitute purposeful availment of the forum state, the Federal Circuit here found that twenty-two communications was more than sufficient in light of the nature of the communications, the expanding scope of the communications from ISE initially to later include Trimble and its alleged infringement, PerDiemCo’s retention and identification of counsel in Texas and its history of filing lawsuits all over the country, which was its core business effort. PerDiemCo “repeatedly contacted Trimble and ISE in California, accumulating an extensive number of contacts with the forum in a short period of time.”

The Federal Circuit found that PerDiemCo went far beyond informing plaintiffs of its patent rights without subjecting itself to jurisdiction, and its attempts to extract a license were more akin to an arms-length negotiation in anticipation of a longer term continuing business relationship, over which a district court may exercise jurisdiction. And, an obvious fact, Trimble was headquartered in California. Plaintiffs’ declaratory judgment action related to PerDiemCo’s contacts with California, and the minimum contacts or purposeful availment requirement was easily met here.

Finally, as to the five factors from Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) and World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) bearing on whether the exercise of personal jurisdiction would comport with fair play and substantial justice, the court found they all weighed in favor of exercising jurisdiction. First, as to the burden on the defendant, the court found given that PerDiemCo’s history of suing in Texas, threatening to sue in Iowa, its burden of litigating in California was only slightly greater than litigating in Texas or Iowa. Second, as to the forum state’s interest in adjudicating the dispute, the court found California and the Northern District had a significant interest as Trimble resides there. Third, as to plaintiffs’ interest in obtaining convenient and effective relief, Trimble had an interest in protecting itself from patent infringement by obtaining relief from a nearby federal court in its home forum, and Trimble’s employees and documents were located there. Fourth, as to the interstate judicial system’s interest in obtaining the most efficient resolution of controversies, that interest did not counsel against jurisdiction in California. Fifth and finally, as to the shared interest of the several states in furthering fundamental substantive social policies, the court found no conflict between the interests of California and any other state because the same body of patent law would apply regardless of the forum.

What It Means/Practice Pointers

In light of this recent decision, what is the message for IP attorneys practicing in this area? First, be mindful of the residency or principal place of business of the company you are accusing of infringement. A good question to ask before sending the third, fourth or fifth letter may be: does my client want to defend a lawsuit in ________ (home of alleged infringer)? Its home forum may soon be the forum for your client’s dispute, no matter how far it is from your client, or you. One practice pointer may be: do your research first and include every possible infringement allegation against the other company (or its parent or subsidiary entities) in one letter, rather than in an escalating series of letters addressing new/different allegations against different entities.

Conversely, if your client is being accused of infringement by a corporation and attorney from a foreign forum, keep up the contacts and communications and invite more – they may temporarily incur short-term costs but help your client keep a declaratory judgment case you file in its home forum, which could decrease long-term larger costs.

Second, if you are accusing a foreign corporation of infringement and repeatedly corresponding with that company’s counsel, be mindful that every aspect of your correspondence or matter handling, beyond the merits, will be scrutinized in the context of a personal jurisdiction analysis, and there is no trophy for most communications; there may be more travel costs.

Third, remember that escalations of the engagement beyond mere communications could amount to your client’s purposeful availment of the accused infringer’s forum. Thus, beyond letters, emails or phone calls, transmission of draft complaints, submission of potential license agreements, requests for mediation, and identification of counsel who will prosecute an infringement action are contacts courts will scrutinize in the context of the personal jurisdiction analysis. And courts may not look favorably on clients whose counsel increase the scope and scale of their accusations only to later claim an unbearable burden in litigating in the home forum of the accused party.

In short, what may be regarded as mere zealous or creative advocacy for a client could, absent any intention towards this end, land the client in a foreign forum. To borrow from the well-known phrase, the road to a foreign forum is paved with good intentions.

About the author: Garrett M. Fahy is Senior Counsel and a member of Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. He handles trademark, copyright, and patent litigation in a variety of commercial sectors and technologies.

An NFT Called “Copyright Infringement”

Author: Hannah Brown

This story begins in 1982, when Andy Warhol met Jean-Michel Basquiat. Warhol and Basquait, two famous and successful artists, agreed to collaborate on an exhibition. In 1985, photographer Michael Halsband went to dinner with Basquait, which led to Halsband agreeing to photograph the poster for Basquait and Warhol’s collaborative to be titled “Paintings.”1 Halsband then took this famous picture of Warhol and Basquait on July 10, 1985:

This photo has been referred to as “perhaps one of the most iconic portraits of the two artists.”2

Fast forward to 2019, and enter New York artist CJ Hendry. Hendry is known for her realistic and incredibly detailed drawings. Hendry created an illustration based on Halsband’s photograph. Halsband sent Hendry a cease and desist letter, claiming copyright infringement.3 Halsband demanded that Hendry destroy her work. Complying, Hendry spray-painted over the piece. A screenshot of Hendry’s Instagram story shows the final result:

In fact, Hendry recorded herself spray-painting over the image with black paint:4

But, where things get really interesting is what Hendry did next. She turned the video into an NFT, or non-fungible token, and explained infra, and put it up for auction. The NFT was titled “Copyright Infringement.” As of April 16, 2021, the NFT was listed for sale at $6,685 at A search of SuperRare’s website shows Hendry’s NFT is no longer for sale on the site. How much the NFT sold for, if at all, is unknown.

Before diving into the issue of NFTs and Hendry’s video, the first issue is, did Hendry infringe Halsband’s work with her drawing of the photo? The answer is likely yes. Hendry creates incredible and realistic drawings. A quick look at her Instagram account shows her true talent and the realistic and detailed art that she can create with (what appears to be) colored pencils.

While an image of Hendry’s drawing of Halsband’s photograph is not available on her Instagram account, the below screenshot of her Instagram story gives us an idea of what it must have looked like:

It appears Hendry more or less reproduced the photograph in her drawing. A copyright of a work of art may be infringed by reproduction of the object itself. Home Art Inc. v. Glensder Textile Corp., 81 F.Supp. 551 (S.D.N.Y. 1948) (oil painting reproduced in scarf); Leigh v. Gerber, 86 F.Supp. 320 (S.D.N.Y. 1949) (painting reproduced by publication without consent in a magazine).

After receiving the cease and desist letter, Hendry took to Instagram to express her frustration with Halsband and his legal team, saying that she looks up to Halsband, and wondering how her drawing could not be seen as a compliment to him and his work. As noted above in her Instagram post, Hendry notes she was never going to sell the piece and was never going to profit off of it. However, a person can be liable for copyright infringement even if they have not gained profits from the infringing work. A plaintiff may recover statutory damages “whether or not there is adequate evidence of the actual damages suffered by plaintiff or of the profits reaped by defendant,” Harris v. Emus Records Corp., 734 F.2d 1329, 1335 (9th Cir. 1984), “‘to sanction and vindicate the statutory policy’ of discouraging infringement.” Peer Int’l Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th Cir. 1990) (quoting F.W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228, 232 (1952)).6

Hendry could argue that her work was fair use of Halsband’s photograph under 17 U.S.C. § 107. In analyzing fair use, courts consider: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. Id. But, as noted, Hendry did not take this issue to court and did not fight Halsband’s claim with a fair use defense. Instead, she destroyed the work and sold the video of her doing so as an NFT.

A brief explanation of an NFT is helpful. NFT stands for non-fungible token. NFTs are digital files, for example videos or digital art, and the buyer of the NFT gets to claim that they own the original digital work.7 NFTs are called “non-fungible” because they are unique, original, and cannot be interchangeable (unlike dollars bills or Bitcoin currency.) Your first thought may be: why would anyone ever pay for a digital work that they could download for free? You’re not alone in this thought, and as one author put it: “If all of this sounds bizarre, that’s because it is. The idea of paying for the symbolic ownership of a digital image that lives somewhere on the web and can be captured on a screenshot or right-click-download within seconds, is so alien it seems either idiotic or ironic.”8 But there is certainly a market for them, with videos and tweets selling for hundreds of thousands or millions of dollars.9

This leads to two other questions: (1) Does Hendry’s video of her painting over her drawing created using Halsband’s photograph, constitute copyright infringement? and (2) Can Hendry then copyright that video/NFT?

The answer to the first question is: maybe. While certainly Hendry’s video of her spray painting over her work is original content, it is likely that the video contains, at least in part, an image of Halsband’s copyrighted photograph (see the image above showing the drawing as Hendry begins to paint). However, it is also possible that her use of the photograph in the video as a whole was de minimis. “For an unauthorized use of a copyrighted work to be actionable, the use must be significant enough to constitute infringement.” Newton v. Diamond, 388 F.3d 1189, 1192–93 (9th Cir. 2004). “Even where there is some copying, that fact is not conclusive of infringement. Some copying is permitted. In addition to copying, it must be shown that this has been done to an unfair extent.” West Publ’g Co. v. Edward Thompson Co., 169 F. 833, 861 (E.D.N.Y.1909). If Hendry created a lengthy video of the spray painting, and the photograph was only in a small portion of that video, it is possible that this would not constitute infringement if her use of the photo was minimal when looking at the video as a whole.

The answer to the second question is: the NFT likely meets the criteria for copyrightability, but Halsband would probably object to the NFT becoming copyrighted. To be copyrightable, a work must be original and fixed in a tangible medium of expression. Hendry’s video of herself is original content (non-fungible literally means original and unique). But, the video would include Halsband’s copyrighted image. A copyright including another copyrighted image could lead to issues. Indeed, Hendry even titled her work “Copyright Infringement”!

In an analogous situation: a person cannot copyright a video of themselves if that video contains another’s copyrighted song. You may have heard of Nathan Apodaca, better known as 420Doggface208, or the man who went viral while skateboarding, drinking juice, and listening to Fleetwood Mac. Apodaca attempted to mint the video of himself as an NFT. But, because the video contained copyrighted material, i.e. the song, Stevie Nicks allegedly would not agree to Apodaca creating an NFT featuring her song.10

In fact, Halsband probably could have objected to Hendry making the video into an NFT, and profiting off of it, in the first place, due to use of his photograph. Halsband had sent Hendry a cease and desist letter already, and nothing would have stopped him from doing so again, this time requesting she desist from selling the NFT in an auction. Certainly, the point of Hendry’s NFT was to destroy what Halsband deemed an infringing work, and the NFT contained an image of that work. But, as noted above, Halsband may lose due to the de minimis defense.

With NFTs becoming more and more popular and profitable, this leads to an important piece of advice for anyone looking to create an NFT: consider whether your NFT is using another’s intellectual property. This could be use of a copyrighted image or even a song within the NFT. There does not appear to be any intellectual property requirements for creating an NFT; the creator does not have to certify that their work is completely their own creation.11 There is no agency needed to “approve” or “register” the NFT like is done when one seeks to register a copyright or trademark. It is important for creators of NFTs to review their work to ensure it is their original content, or that they have the permission from the author of the work, and that nothing they are putting online will get them in trouble.

About the author: Hannah Brown is an associate and member of Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group, specializing in trademark, copyright, and patent litigation. She is a former law clerk to the Hon. Janis Sammartino and Hon. Cynthia Bashant of the U.S. District Court, Southern District of California.

6 This would be different if Hendry were fighting a criminal copyright infringement claim. To prevail on an allegation of criminal copyright infringement, a plaintiff must establish “infringement, that the infringement was willful, and that it was engaged in for profit.” Mattel, Inc. v. MGA Ent., Inc., 782 F. Supp. 2d 911, 1042 (C.D. Cal. 2011) (quoting United States v. Bily, 4066 F. Supp. 7266, 733 (E.D. Pa. 1975)).
9 .

Is Fair, Fair? A Look into the Supreme Court’s Landmark Decision in Google v. Oracle

Author: Ross Kirkbaumer

After a decade of back-and-forth battles in the district and circuit courts, the Supreme Court ruled that Google’s copying of Sun Java’s API was fair use, reversing the Federal Circuit’s ruling that Google’s copying was not a fair use.[1]


Google obtained a startup firm by the name of Android, Inc. with the goal to develop a software platform for smartphones. Google wanted the Android platform to be “free and open, such that software developers could use the tools found there free of charge.”

During this time, programmers were familiar with using a programming language known as Java created by Sun Microsystems (“Sun”) on its Java SE platform. Google began speaking with Sun about possibly licensing the entire Java platform for the Android smartphone technology, but negotiations were halted, and Google started building a new platform.

Since programmers were already familiar with Java, Google copied around 11,500 lines of code from the Java SE platform so that programmers would be able to easily work with the Android platform. The 11,500 lines of code were part of tool called an Application Programming Interface (“API”).

Specifically, Google copied the “‘declaring code,’ instructions that describe pre-written programs in Java.”[2] According the Court, “[W]ithout that copying, programmers would need to learn an entirely new system to call up the same tasks.”

Fair Use

Under the Copyright Act, 17 U.S.C. § 107:

“[T]he fair use of a copyrighted work . . . for purposes such as criticism, comment, news reporting, teaching . . . scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

The Majority Decision

With Justice Breyer delivering the opinion for the majority, the Court decided not to take up the issue of whether the lines of code were copyrightable stating that “purely for argument’s sake . . . the entire Sun Java API falls within the definition of that which can be copyrighted.” As discussed below, the Court held that the four factors above weighed in favor of fair use.

First Factor

The Supreme Court stated that the copied declaring code “embodies a different form of creativity,” highlighting the fact that Sun’s intent was to attract programmers and to make its API “open.” Additionally, the Supreme Court contrasted the declaring code from computer programs by explaining the declaring code’s significance “lies in its efforts to encourage programmers to learn and to use [Sun Java’s API] so that they will use (and continue to use) Sun-related implementing programs that Google did not copy.”

Accordingly, the Court concluded that “the declaring code is, if copyrightable at all, further than most computer program[s] . . . from the core of copyright.” Because of this, the nature of the declaring code weighed in favor of fair use.

Second Factor

By examining the purpose and character of the work, the Court stated that Google’s purpose of using the Sun Java API was to create new products by expanding the use and usefulness of the Android-based smartphones. The Court explained that “[T]o the extent that Google used parts of the Sun Java API to create a new platform that could be readily used by programmers, its use was consistent with that creative ‘progress’ that is the basic constitutional objective of the copyright itself.”

The Court emphasized that the jury during the district court proceeding heard a variety of ways in which re-implementing an interface can further the development of computer programs: (1) shared interfaces are necessary for different programs to speak to each other; (2) re-implementation of interfaces is necessary if programmers are able to use their acquired skills; (3) reuse of APIs is common in the industry; (4) Sun had used pre-existing interfaces in creating Java; and (5) Sun executives thought that widespread use of the Java programming language would benefit the company.

Since the purpose and character of Google’s copying was transformative, this factor weighed in favor of fair use.

Third Factor

With respect to the third factor, the Court contemplated whether the 11,500 lines of code should be viewed in isolation or as one part of the greater whole. The Court noted that Google did not copy the lines of code because of their creativity or beauty, but because programmers had already learned to work with Sun Java API’s system and it would have been incredibly difficult to attract programmers to build its Android smartphone system without the lines of code.

The Court ultimately held that “Google’s basic objective was not simply to make the Java programming language usable on its Android systems. It was to permit programmers to make use of their knowledge and experience using the Sun Java API when they wrote new programs for smartphones with the Android platform.” Therefore, the substantiality factor weighed in favor of fair use.

Fourth Factor

For this particular factor, the Court pointed out that it must consider the amount of money that Oracle might lose, the source of the loss, and the public benefits the copying will likely produce.

With respect to the amount of money lost, the Court explained that the jury could have found that Google and Android did not harm the actual or potential markets for Java SE. The Court noted that based on the evidence, Sun was poorly positioned to succeed in the mobile phone market and there was evidence that Android and Java SE were operating in two distinct markets.

In addressing the source of the loss, the Court stated that Google’s copying helped it make “a vast amount of money” and enforcement by Oracle could have given Oracle “a significant share of these funds.” The Court, however, affirmed this sub-factor weighed in favor of Google because the “source of Android’s probability ha[d] much to do with third parties’ . . . investment in Sun Java programs.”

In discussing the public benefits, the Court noted strongly that Oracle’s enforcement would risk harm to the public because the enforcement could have inhibited “creative improvements, new applications, and new uses developed by users who have learned to work with that interface.”

Since all four factors weighed in favor of fair use, the Supreme Court reversed the Federal Circuit’s decision against Google.

What About Justices Thomas & Alito?

In the dissenting opinion,[3] Justice Thomas did not understand why the majority avoided the principal question of whether declaring code is protected by copyright law. According to Justice Thomas, declaring code is copyrightable.

Additionally, Justice Thomas opined that the Federal Circuit was correct in determining that the harm Google cause to Oracle was overwhelming because “Google eliminated the reason manufacturers were willing to pay to install the Java platform,” and “Google interfered with opportunities for Oracle to license the Java platform to developers of smartphone operating systems.”

Impact of Google’s Victory

While the Supreme Court hailed Google as the victor, the jury is still out with respect to who benefits most from this decision. Professor Johnathan Barnett from the University of Southern California, Gould School of Law stated that “the devaluation of IP rights under rulings such as Google v. Oracle is likely to discourage investment by (and in) the inventors, artists, and entrepreneurs who stand at the foundation of a robust innovation economy.”[4] Chicago-Kent College of Law professor Lori Andrews asserts that the Court’s decision was “good news for developers looking to further interoperability of programs” and can have potential benefits for consumers.[5] Further, the Copyright Alliance believes that the decision “‘has the potential’ to broaden the fair use doctrine, something that would open the door to greater unauthorized use of copyrighted material,” and possibly more lawsuits.[6]

A copy of the Court’s opinion can be accessed here.

About the author: Ross Kirkbaumer is an associate and member of Gordon Rees Scully Mansukhani’s Intellectual Property Practice Group. His practice focuses on intellectual property enforcement and litigation. His bio can be found here.

[1] Justices Breyer, Roberts, Sotomayor, Kagan, Gorsuch, and Kavanaugh ruled in favor of fair use while Justices Thomas and Alito dissented. Justice Amy Coney Barrett did not take part in the consideration of the decision.
[2] Steven Tepp, Google v. Oracle Perspective: Google’s Android ‘Cheat Code’ was to Copy Oracle’s Code, IPWatchdog
[3] Justice Thomas filed the dissenting opinion, in which Justice Alito joined.
[4] Johnathan Barret, Have tech platforms captured the Supreme Court?, The Hill
[5] Madeleine Carlisle, How Google’s Big Supreme Court Victory Could Change Software Forever, Time
[6] Ted Johnson, Supreme Court Rules For Google Over Oracle In Closely Watched “Fair Use” Copyright Case; Industry Groups Express Concerns Over Impact On Content Protection, Deadline