Lexmark post-argument panel at AU

American University Washington College of Law 
Program on Information Justice & Intellectual Property 
Presents
Supreme Court Series:
Lexmark International, Inc. v. 
Static Control Components, Inc.
Tuesday, December 3, 2013
4:00pm – 5:30pm
Reception to follow
 
Room 603
American University, Washington College of Law
4801 Massachusetts Ave NW Washington DC 20016 
 
For Registration, CLE info & Webcast (live and archived):
http://www.pijip.org/lexmark/
Issue: Whether the appropriate analytic framework for determining a party’s standing to maintain an action for false advertising under the Lanham Act is (1) the factors set forth in Associated General Contractors of California, Inc. v. California State Council of Carpenters as adopted by the Third, Fifth, Eighth, and Eleventh Circuits; (2) the categorical test, permitting suits only by an actual competitor, employed by the Seventh, Ninth, and Tenth Circuits; or (3) a version of the more expansive “reasonable interest” test, either as applied by the Sixth Circuit in the case or as applied by the Second Circuit in prior cases.
Speakers:
Steven B. Loy – Stoll Keenon Ogden PLLC, representing Lexmark
Seth Greenstein – Constantine Cannon LLC, representing Static Control Components, Inc.
Rebecca Tushnet – Georgetown University Law Center, representing amicus curiae, Law Professors
Marc A. Goldman – Jenner & Block LLP, representing amicus curiae American Intellectual Property Association
Mary Massaron Ross – Immediate Past President of DRI – The Voice of the Defense Bar, representing amicus curiae, DRI
Moderated by: Christine Farley – American University Washington College of Law
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Bike humor

Via Bikearlington on Twitter.  Hardly-Davidson “Born to be Mild” strikes me as a pretty good parody.

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The work of art in an age of mechanical demolition?

Cohen v. G&M Realty L.P., No. 13-cv-05612 (E.D.N.Y. Nov. 20, 2013)

This VARA dispute makes some interesting moves on irreparable harm—it’s hard to see why courts are still stuck in “copyright/TM harm is irreparable” given what they’re doing elsewhere.

 

Plaintiffs sought to prevent the destruction of their graffiti art on the exterior of defendants’ buildings, which are scheduled for demolition.  The art has now been painted over; the opinion explains the court’s decision to deny a preliminary injunction against the destruction.

 

Because of the art, the buildings became a significant tourist attraction known as 5Pointz.  One of the pieces in question:

 

VARA protects against the destruction of works of visual art, but only if they are works of “recognized stature.” To figure out whether plaintiffs’ work qualified, the court went through the history of the art.  Cohen and Wolkoff, the effective owner of the buildings comprising 5Pointz, agreed that the buildings had become a place for distasteful graffiti.  To control the problem, Cohen approached Wolkoff in 2002 to become the curator, and Wolkoff agreed; Cohen was one of the principal contributors to the art and Wolkoff liked his work, though nothing was put in writing.

 

Under Cohen’s supervision, the quality of the art improved and the site “evolved into a mecca for high-end works by internationally recognized aerosol artists” and a “New York must-see.”  But Wolkoff planned to knock down the buildings to make room for two apartment complexes.  The planning commission required that defendants include 75 affordable housing units and 3,300 square feet of exterior art panels “to be used to maintain artist street wall art in the area.” There was no feasible way to incorporate the existing art into the new buildings.

 

The parties’ experts understandably disagreed about whether the 24 works at issue were of “recognized stature,” as required by VARA.  Much of the plaintiffs’ testimony “did not differentiate between these discrete words, and by and large assumed that if the work had artistic merit it was ipso facto of recognized stature.”  Defendants’ expert took a restrictive view, opining that a work of recognized stature should be at a level where scholars agree that it is “changing the history of art.”  (OK, I know there’s not much help in the legislative history, but I can’t imagine that’s the standard!)  The art at 5Pointz was not recognized by scholarly works.  Although the expert acknowledged 5Pointz’s recognition as a tourist attraction, she believed that this wouldn’t satisfy VARA unless visitors came to see a particular work, in which case it would be a work of recognized stature even without scholarly recognition.

 

By contrast, plaintiff’s expert, whose testimony the court found credible, focused on the works’ quality.  She opined that “recognition” meant “there’s enough people that know what [the work] looks like, and feels like and what it’s trying to impart; that it would be, to me, if it was missing from the canon of art history, that it would be a loss.”  She testified that 5Pointz’s public exposure conferred the requisite stature, and pointed to a documentary he made featuring the site.  She also testified about the general reputation of the artists who contributed works, contending that their recognition conferred significance on any work they did.

 

The court then turned to the works’ ephemerality.  Wolkoff always told Cohen that he’d be knocking down the buildings, and there were numerous public statements by Cohen and other artists indicating that they knew the works were temporary.  Cohen allowed some works to be painted over; others he deemed “permanent,” meaning that they would last “[a]s long as [he was] there and the operation’s there.” He chose special places for them—mostly high up, and all around the building.  When a collapsed staircase was removed in 2009, the whole building was painted over with the exception of Lady Pink’s “Green Mother Earth.”  Since then, consistent with past years, about “1,000 new images” had been placed on the buildings each year.  At the preliminary injunction hearing, about 350 survived.

 

Cohen said in an interview: “Anyone can paint. But not everyone’s art stays up for long. Some works last 12 hours; other pieces remain for two years.” Another artist, Danielle Mastrion, painted a celebrated portrait in July 2013, even though she had “been hearing for years that there’s always a chance that the building can come down,” and was “aware that [the owners] were obtaining approval to knock down the building at the time [she] put the piece on the building.”  Eighteen of the 24 works for which VARA protection was claimed were painted after 2010, and 8 were painted in September, weeks after the planning commission approved the development plan. Thus, “Cohen and his fellow plaintiffs undoubtedly understood that the nature of the exterior aerosol art on Wolkoff’s buildings was transient, and that all of the works that he allowed to be painted on the buildings would last only until they would be demolished to make room for Wolkoff’s housing project.”

 

The court concluded that aerosol art can be visual art protected by VARA.  But VARA only protects a work.  There was no authority to preserve 5Pointz as a tourist site.  Thus, the court’s inquiry was limited to whether a particular work that was destroyed was one of “recognized stature.”  The court concluded that at least some of the 24 works, such as Lady Pink’s “Green Mother Earth,” could be shown to be of recognized stature, though that was for a full merits determination.

 

For preliminary injunctive relief, though, irreparable harm was required, including a showing that damages were inadequate.  And here the court gave short shrift to any nonmonetary interests, which might seem like an odd result in a moral rights case: “plaintiffs would be hard-pressed to contend that no amount of money would compensate them for their paintings; and VARA—which makes no distinction between temporary and permanent works of visual art—provides that significant monetary damages may be awarded for their wrongful destruction.”  Though the court emphasizes the temporary nature of this art, its reasons don’t seem so limited: “paintings generally are meant to be sold. Their value is invariably reflected in the money they command in the marketplace. Here, the works were painted for free, but surely the plaintiffs would gladly have accepted money from the defendants to acquire their works, albeit on a wall rather than on a canvas.”  In addition, the court found that “plaintiffs’ works can live on in other media,” specifically photography.  The works remained protected by copyright law “and could be marketed to the general public—even to those who had never been to 5Pointz.”

 

But, whether this was part of irreparable harm or of balancing hardships, “the ineluctable factor which precludes either preliminary or permanent injunctive relief was the transient nature of the plaintiffs’ works.”  Cohen always knew that the buildings were coming down “and that his paintings, as well as the others which he allowed to be placed on the walls, would be destroyed.”  The court was particularly distressed by the recent creation of many of the paintings, after the planning commission gave its final approval to the new construction.  “In a very real sense, plaintiffs have created their own hardships.”

 

Still, defendants shared some responsibility; Wolkoff “gave his blessings to Cohen and the aerosol artists to decorate the buildings, and he did not choose to protect himself from liability by requiring VARA waivers.”  Also, while he was a genuine art lover, he also benefited economically from all the attention to the site.  Since VARA protects even temporary works from discussion, the judge suggested that damages might ultimately be “significant” if a trial determined that the works were of recognized stature.

 

The public interest would be served by the new apartments, including affordable housing, and its aesthetic interests would be addressed by the new exterior surface available for art.  The court didn’t conceal its preference for defendants to do even more, presumably by way of settlement: “They can make much more space available, and give written permission to Cohen to continue to be the curator so that he may establish a large, permanent home for quality work by him and his acclaimed aerosol artists. For sure, the Court would look kindly on such largesse when it might be required to consider the issue of monetary damages; and 5Pointz, as reincarnated, would live.”
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Hey Jude, WTH? Competitor plaintiff fails despite falsity and presumed harm

Berken v. Jude, No. 12–cv–02555, 2013 WL 6152347 (D. Colo. Nov. 22, 2013)

Berken alleged that Jude and his law firm, Jude Law, LLC (really?), falsely advertised in violation of the Lanham Act and the Colorado Consumer Protection Act (CCPA).  In a decision that seems to misconstrue the meaning of “presumption,” the court denied Berken any relief despite the apparently clear false advertising.

The parties compete as consumer bankruptcy attorneys in Denver.  Jude’s ads appeared “whenever someone googled information on Denver bankruptcy” (note use of “googled” as verb):

$500 Flat Fee Bankruptcy—No Hidden Fees—BBB Accredited

On the firm’s home page appeared this ad:

A similar ad ran in a local newspaper.

Berken lost several customers to Jude’s lower prices, though each testified by affidavit that they weren’t influenced by the pricing ad.  Berken established falsity and materiality, but the court held that he failed to show likely injury.  Recovering damages requires showing actual injury, and the consumer affidavits stated that the ads had nothing to do with their decision to defect from Berken, but rather they were dissatisfied with his rates and persuaded by Jude’s positive reviews.  So much for the damages claims.

But injunctive relief doesn’t require actual damages, only likely injury.  Courts may presume injury when the parties are “obvious competitors” with respect to the service being misrepresented.  Because they provided the same services in the same market, and because consumers use only one bankruptcy attorney at a time, Berken was entitled to a presumption of injury.  “However, Plaintiff has failed to support that presumption with any evidence of injury.”  He didn’t show that he lost specific clients or that he lost revenues generally, or show any consumer testimony, surveys, or market studies showing how Jude’s ads affect consumer behavior.  Thus, he failed to establish a reasonable basis for his claim of likely injury. This also killed the state-law false advertising claim.

Comment: buh?  I thought that those entitled to a presumption could rely on it, in the absence of rebuttal. Otherwise, what’s a presumption for?
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Right of publicity question of the day

Does this mortgage broker’s ad, quoting Mr. Rogers, violate any right?

Text: “If you could only sense how important you are to the lives of those you meet, how important you can be to the people you may never even dream of. There is something of yourself that you leave at every meeting with another person.–Fred Rogers.”  What that has to do with home loans is left as an exercise for the reader.

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ABA Journal Blawg 100

I’m on the ABA Journal’s Blawg 100, which is a real treat!  Check out the many worthy news sources there.

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coincidental co-creation

Author’s note from William Pene du Bois, The Twenty-One Balloons (1947):

Just before publication of The Twenty-One Balloons, my publishers noted a strong resemblance between my book and a story by F. Scott Fitzgerald entitled “The Diamond as Big as the Ritz,” published by Charles Scribner’s Sons. I read this story immediately and discovered to my horror that it was not only quite similar as to general plot, but was also altogether a collection of very similar ideas. This was the first I had heard of the F. Scott Fitzgerald Story and I can only explain this embarrassing and, to me, maddening coincidence by a firm belief that the problem of making good use of the discovery of a fabulous amount of diamonds suggests but one obvious solution, which is secrecy. The fact that F. Scott Fitzgerald and I apparently would spend our billions in like ways right down to being dumped from bed into a bathtub is altogether, quite frankly, beyond my explanation.

Wikipedia notes that, as with many pairs of works with surprising similarities, there are also significant differences in tone, intended audience, and other events.
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transformative work of the day

I Ship It, by notliterally—a hilarious parody of Icona Pop’s song that is also a love letter to fandom.

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Reply brief in Lexmark v. Static Control

Lexmark’s Reply Brief, to finish out the set.  Obviously I disagree, but I’ll limit myself here to one argument I think is disingenuous to the point of misleadingness: the equation of antitrust treble damages and fees, which are mandatory and punitive (“shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee,” 15 U.S.C. § 15) with Lanham Act damages and fees (which allow but do not require the court to increase a damage award up to three times over what the plaintiff proved as actual damages, as long as that’s reflecting the court’s assessment of the true damages and “not a penalty,” and only provide for a fee award in “exceptional” cases, 15 U.S.C. § 1117).

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Retailer’s California claims against supplier proceed

TRC & Associates v. NuScience Corp., 2013 WL 6073004, No. 2:13–cv–6903 (C.D. Cal. Nov. 18, 2013)

TRC, a supplement retailer, sued NuScience and Lumina based on their sales to TRC of a dietary supplement, Cellfood.  TRC alleged that defendants misrepresented Cellfood’s ingredients, safety, and efficacy. Defendants allegedly actively concealed a key ingredient that poses a “severe health hazard” and misrepresented compliance with federal regulations.

The court found that TRC had Article III standing.  It allegedly bought more than $700,000 of Cellfood from Lumina (the distributor; NuScience is the manufacturer) in reliance on misrepresentations from both, leaving it with unsold product and potential liability for product already sold.  It also alleged damage to its reputation. 

The court declined to hold TRC’s claims barred by the FDCA at this point, despite Pom Wonderfuland even though allegations in the complaint referred to defendants’ violations of the FDCA and an FDA warning letter to Lumina.  Most of the cases barring enforcement of the FDCA under another cause of action are Lanham Act cases, not common-law fraud cases like this one; the complaint here was based on alleged affirmative misrepresentations—the alleged fraudulent conduct was not the violation of the FDCA but what defendants allegedly told or failed to tell TRC.  But the court expressed willingness to revisit the issue later.

Also, TRC’s UCL and FAL claims didn’t attempt to apply California law extraterritorially.  TRC is a Nevada corporation with a principal place of business in Ohio; Lumina is incorporated and headquartered in Florida.  But NuScience is a California corporation with its principal place of business in California.   State remedies can be invoked by out of state parties who are harmed by wrongful conduct occurring in California.  Here, the allegedly fraudulent conduct occurred in California—the material misrepresentations originated with NuScience in California, traveled through Florida, and ended up in Ohio.  Cellfood is made in California.  The ingredients of Cellfood and the representations about it were at issue in the case.  Given the complaint’s allegations, the relationship between the defendants allowed a reasonable inference that Lumina had some role in the alleged California misconduct.
Posted in california, fda, http://schemas.google.com/blogger/2008/kind#post, preemption, standing | Leave a comment