Intellectual Property Newsletter, Winter 2007

ARNSTEIN & LEHR LLP Attorneys at Law

Intellectual Property

President Signs Trademark Dilution Revision Act

About our Intellectual Property Practice Group Arnstein & Lehr's Intellectual Property Practice Group is comprised of attorneys from our Florida and Illinois offices. Our Firm provides legal services related to patents, copyrights, trademarks and trade secrets, including preparation and processing of trademark, patent and copyright applications, consultation regarding infringement, preparation of licensing agreements and related matters. If you have any questions about this article, including how it may impact you or your company, or for updates regarding Intellectual Property Law, please contact the lawyer in the firm with whom you are regularly in contact or one of the following persons in the Arnstein & Lehr Intellectual Property Practice Group: West Palm Beach John A. Turner Miami Jeffrey B. Shapiro Chicago Robert D. Butters James F. Gossett Norman P. Jeddeloh

President Bush has signed into law the Trademark Dilution Revision Act of 2006, which was intended by Congress to remedy the pre-existing law to protect famous trademarks from uses that blur their distinctiveness or tarnish their reputation. The legislation was prompted by recent court decisions refusing certain protection for famous marks against noncompeting uses. The new Act provides that, subject to the principles of equity, the owner of a famous mark that is distinctive, inherently or through acquired distinctiveness, shall be entitled to an injunction against another person who, at any time after the owner's mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, competition, or actual economic injury. The Act also exempts from dilution actions any references to a famous mark by another person other than as a designation of source for that person's own goods or services, as well as all forms of news reporting and news commentary, and all noncommercial use of a mark. Aside from providing for injunctive relief, the new law also permits courts to grant additional remedies, subject to the discretion of the court and the principles of equity, if dilution began after the effective date of the new law and the defendant willfully intended to trade on the recognition of the famous mark or to harm the reputation of the mark. Ownership of a valid registration under the federal Lanham Act is a complete bar to a dilution action against the owner that is brought by another person seeking to protect trademark rights under the common law or a statute of a state.1 Sixth Circuit Holds Liability for Lanham Act Infringement Should Not Be Confined to Producers of Counterfeit Goods, But May Extend to Retailers The U.S. Court of Appeals for the Sixth Circuit, reversing a lower court decision not to grant a preliminary injunction prohibiting a retailer from selling counterfeit goods, has held that Lanham Act liability for selling counterfeit goods need not be confined to the manufacturer of such goods. The ruling came in a suit brought by Lorillard Tobacco Co. against retailer Amuri's Grand Foods, Inc. after counterfeit packages of cigarettes bearing Lorillard's NEWPORT brand were found in defendant's store.

_____________________________ 1 Source: Trademark Dilution Revision Act of 2006. Intellectual Property | Winter 2007 | Page 1

The lower court, refusing to grant a preliminary injunction prohibiting the defendant from selling counterfeit Lorillard products, did so without making specific findings concerning the factors justifying issuance of a preliminary injunction as set forth in prior rulings by the Sixth Circuit. On review of that decision, one of the arguments offered by the defendant was that it was not liable for any relief under federal law for selling the cigarette products in its store, even if they were counterfeit, because it had neither manufactured nor packaged the goods, and consequently had no way of knowing whether the products were counterfeit. The Sixth Circuit, however, declined to excuse the defendant from liability due either to its ignorance or to its role as a retailer rather than a producer of the counterfeit goods. Examining the Lanham Act, the Court of Appeals found that liability for counterfeiting in violation of the Act need not be based on production of counterfeit goods by the defendant, but is based on a finding that the defendant "used" counterfeit goods "in commerce." Furthermore, the Sixth Circuit agreed with other courts that no clearer "use" of goods "in commerce" could be found than offering them for sale. Normally, where a lower court had improperly addressed a motion for a preliminary injunction, the Sixth Circuit said it would point out the error in the lower court's decision and remand the case for reconsideration by the lower court. But, in this case, the Court of Appeals found that the plaintiff, Lorillard, had met all requirements for issuance of preliminary injunctive relief, and the Court of Appeals therefore remanded the case with a direction that the lower court enter a preliminary injunction.2 Eleventh Circuit Determines Appropriate Legal Standard for Good Faith with Respect to Trademark Usage Fair-Use Defense In a case of first impression for that court, the U.S. Court of Appeals for the Eleventh Circuit has determined that the appropriate legal standard for good faith with respect to a trademark usage fair-use defense is whether the alleged infringer intended to benefit from the good will associated with the owner of the mark. The ruling came in a suit brought by a producer of greeting cards and note cards against the U.S. Postal Service, which the plaintiff alleged to _____________________________

have violated its trademark in a perforated border design, used in some of its cards, that evoked the functional flatedged perforation of older postage stamps, after the Postal Service began producing its own line of "stamp art" note cards and greeting cards. In the trial court, the Postal Service had asserted a fair-use defense in response to the plaintiff's infringement claim, and the trial court granted summary judgment to the Postal Service on that defense. On appeal of that determination, the Eleventh Circuit noted that a fair-use defense required showing that the plaintiff's mark was used by the defendant not as a mark, but in a descriptive sense, and in good faith. The Eleventh Circuit had never determined the legal standard for "good faith" in relation to a fair-use defense. In this case, the Eleventh Circuit joined with four other circuits in holding that the legal standard is the same as for any other trademark infringement inquiry into good faith - whether the alleged infringer intended to benefit from the good will associated with the owner of the mark. The Eleventh Circuit then examined the evidence, which indicated that the perforated border design trademark claimed by the plaintiff appeared in plaintiff's cards and incorporated the design of old postage stamps, to which the Postal Service had a copyright and for which the Postal Service had licensed the plaintiff's use. Furthermore, the evidence indicated that the Postal Service, when it developed its own "stamp art" cards, merely incorporated the perforated border of its own original stamp as part of the stamp's images on the cards, and always clearly indicated that the cards were the products of the Postal Service, generally including with its cards information about the history of the stamp or stamp art depicted thereon. For that reason, the Court of Appeals concluded that the evidence did not indicate any intent by the Postal Service to trade on the good will of the plaintiff, and the Eleventh Circuit affirmed the lower court's summary judgment.3 Licensee of Trademark Rights May Not Sublicense to Third Parties Without Original Licensor's Express Consent The U.S. Court of Appeals for the Ninth Circuit, upholding a lower court decision, has ruled that a licensee of trademark and related publicity rights may not sublicense those rights

2 Source: Lorillard Tobacco Co. v. Amuri's Grand Foods, Inc., U.S. Court of Appeals for the Sixth Circuit, No. 05-1642, June 30, 2006. 3 Source: International Stamp Art, Inc. v. United States Postal Service, U.S. Court of Appeals for the Eleventh Circuit, No. 05-13492, July 18, 2006.

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to third parties without express permission from the original licensor. The ruling came in a suit brought by the adopted children of Helen Miller, wife of world-renowned band leader Glenn Miller, and their exclusive licensing agent, who sued Glenn Miller Productions, Inc. for alleged breach of a license agreement for the GLENN MILLER mark.

time after those activities began. Key to that decision was the fact that the plaintiffs had constructive knowledge of those activities more than 20 years before they filed the current suit, since they should have discovered the defendant's activities at that time had they been diligently seeking to enforce their rights in the GLENN MILLER mark.4

Helen Miller's children claimed that the defendant obtained rights in the GLENN MILLER mark by way of a license from Helen Miller in 1956, but thereafter breached the license agreement by attempting to sublicense the mark. The defendant claimed that it had a right to sublicense the mark, or, alternatively, it had not sublicensed the mark, but had merely licensed rights in its own registered GLENN MILLER ORCHESTRA mark.

Doctrine of Aesthetic Functionality Does Not Allow Maker of Automobile Accessories to Sell Key Chains and License Plate Covers Bearing Audi and Volkswagen Marks Without Authorization

The lower court found that a licensee of trademark and related publicity rights may not sublicense those rights to a third party without the express permission of the original licensor, extending a well-established "sublicensing rule" from copyright and patent law to trademark and related publicity rights. The Ninth Circuit agreed with the lower court's reasoning, and found that the defendant had violated the 1956 license agreement with Helen Miller by attempting to sublicense rights in the GLENN MILLER mark. In so ruling, the Ninth Circuit noted that, even though the defendant had registered the GLENN MILLER ORCHESTRA mark at the U.S. Patent and Trademark Office, and that registration had become incontestable, that registration did not affect the plaintiffs' ownership of the GLENN MILLER mark, and did not foreclose the plaintiffs from demonstrating that the defendant had breached the 1956 agreement and infringed upon their rights in the GLENN MILLER mark. On the other hand, the Ninth Circuit also went along with the lower court in finding that, even if the defendant breached the 1956 license agreement, the plaintiffs could not now sue for such breach. Both the lower court and the Ninth Circuit found that the plaintiffs were barred by the equitable doctrine of laches from bringing this suit against the defendant because the plaintiffs waited too long to file their suit, even though the plaintiffs did not acquire absolute knowledge of the defendant's activities for some

The U.S. Court of Appeals for the Ninth Circuit has ruled that the doctrine of "aesthetic functionality" did not permit a maker of automobile accessories to sell, without license or other authorization, key chains and license plate covers bearing trademarks owned by Audi and Volkswagen. The ruling came in a suit brought against the automobile manufacturers by Au-Tomotive Gold, Inc., seeking a declaratory judgment that, because the trademarks of Audi and Volkswagen were "aesthetically functional" elements of the products sold by Au-Tomotive Gold, they were unprotected by the federal Lanham Act. Audi and Volkswagen counterclaimed for trademark infringement and dilution. On appeal of a district court summary judgment for AuTomotive Gold on the basis of "aesthetic functionality," the Ninth Circuit reversed the judgment, reversed the lower court's denial of the auto manufacturers' motion for summary judgment with respect to their infringement and dilution claims, and remanded the case for further proceedings. In doing so, the Ninth Circuit found that, even though there might be some aesthetic value to the Audi and Volkswagen marks that would make AuTomotive Gold products more attractive to consumers, the car manufacturers' marks were not functional as applied to Au-Tomotive Gold's products, the approach for which AuTomotive Gold argued would distort basic principles of trademark law, and the doctrine of aesthetic functionality, which had been recognized by some other courts in other cases, did not provide a defense for what appeared to the Ninth Circuit to be a naked appropriation of the manufacturers' marks by Au-Tomotive Gold.5

_____________________________ 4 Source: Miller v. Glenn Miller Productions, Inc., U.S. Court of Appeals for the Ninth Circuit, No. 04-55874, July 19, 2006. 5 Source: Au-Tomotive Gold, Inc. v. Volkswagen of America, Inc., U.S. Court of Appeals for the Ninth Circuit, No. 04-16174, August 11, 2006.

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Self-Screening Methodology by Which Those Who Are Not Website's Intended Users Can Voluntarily Excuse Themselves from Access Held Insufficient to Allow Protection of Website Under Stored Communications Act

different ground from that cited by the lower court. The Eleventh Circuit affirmed dismissal of the plaintiff's complaint because he failed to allege that his website was configured so as to not be readily accessible by the general public.

The U.S. Court of Appeals for the Eleventh Circuit has held that the owner of a website could not sue others for accessing that site without permission under the federal Stored Communications Act if the defendants could access the website merely by registering, creating a password, and then agreeing to additional terms. The Court of Appeals noted that the Act did not provide a cause of action for accessing websites without authorization unless the website was configured so as to not be readily accessible by the general public, and the court found that the "self-screening methodology" used by the plaintiff for protecting his website did not meet that requirement.

Considering the allegations of the complaint, the Court of Appeals noted that they described "in essence, a selfscreening methodology" by which those seeking access would have to register, create a password, and indicate agreement with certain terms, which prohibited access by anyone associated with DirecTV. In the view of the Eleventh Circuit, such a methodology did not create the inference that the website was not readily accessible by the general public, as required for protection under the Act, even though the defendants in this case, in order to access the website, would have been required to lie in indicating their agreement with the stated terms.6

Defendant DirecTV had been involved in a nationwide effort to stop the pirating of its encrypted satellite transmissions by individuals who intercepted the transmission without paying fees to DirecTV. As part of its strategy, DirecTV had initiated thousands of suits, one of which was against the plaintiff, who then created his noncommercial website as a "private support group" for "individuals who have been, are being, or will be sued by any Corporate entity." To gain access, one was required to register, create a password, and agree to additional terms that, among other things, expressly forbid access by DirecTV and its agents. In this case, the plaintiff sued DirecTV and certain alleged agents of that company, arguing that they violated the federal Stored Communications Act by accessing his website without authorization. A lower court dismissed the suit, finding that the Act, which was created to update existing wiretapping laws to protect electronic communications, did not apply to electronic bulletin boards such as the plaintiff had created on his website. On appeal, the Eleventh Circuit agreed with the lower court that the plaintiff had failed to state a cause of action for which relief could be granted under the Act, but on a

Legitimate Commercial Transport or Sale of Trademarked Goods by Failing Business, as Part of Good Faith Effort to Deplete Inventory, Held Sufficient to Defeat Claim of Abandonment The U.S. Court of Appeals for the Ninth Circuit has held that a summary judgment determination of trademark abandonment by a lower court was inappropriate in a case where the record supported an inference that the trademark holder - a small, troubled business - was continuing to transport and sell trademarked goods in the ordinary course of trade as part of a good faith effort to deplete its inventory. The ruling came in an infringement suit brought by the successor in interest to Ronald Mallett, who sold a backpack/luggage line under a federally registered trademark for years before running into business difficulties and assigning his mark to the plaintiff in this case. The defendant argued that Mallett had abandoned the mark before assigning it to the plaintiff, and the trial court agreed, giving summary judgment to the defendant in the infringement case and ordering cancellation of the assigned mark. On appeal, the Ninth Circuit noted that Mallett's business had been failing for some time before the assignment, and,

_____________________________ 6 Source: Snow v. DirecTV, Inc., U.S. Court of Appeals for the Eleventh Circuit, No. 05-13687, June 1, 2006.

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at that time, he was selling only a few backpacks and promoting them at trade shows in an attempt to deplete his inventory, before he eventually assigned his remaining inventory, along with his trademark, to the plaintiff in the infringement suit. The lower court concluded that Mallett's use of his mark while depleting his inventory was neither bona fide nor in the ordinary course of trade, and that he therefore abandoned the mark prior to the assignment. But the Ninth Circuit disagreed. The Ninth Circuit noted that trademark law required two things for an abandonment to take place: discontinuance of bona fide trademark use in the ordinary course of trade and an intent not to resume such use. But the Court of Appeals held that Mallett's use of his mark to deplete his inventory through sale of the product before the assignment constituted legitimate transport or sale of trademarked goods and, even for a failing business, that was sufficient to defeat the claim of abandonment by the defendant in the infringement suit, though Mallett's commercial sale of trademarked goods might have been nominal or limited, because the sales were made for a legitimate business reason other than sustaining rights to the mark. Consequently, the Ninth Circuit reversed the trial court's grant of summary judgment to the defendant in the infringement suit and vacated the lower court's order canceling the assigned registration.7 Likelihood of Confusion Issue Previously Litigated and Decided in Cancellation Proceedings Cannot Be Re-litigated in Subsequent Infringement Action The U.S. Court of Appeals for the Third Circuit has held that a trademark registrant, having successfully argued that there was no likelihood of confusion between its registered mark and other marks in a cancellation proceeding, could not then sue the owner of the other marks for infringement, since that would require re-litigation of the likelihood of confusion issue. The ruling came in a suit by Jean Alexander Cosmetics, Inc. against L'Oreal USA, Inc., in which the plaintiff argued that there was an infringement of its EQ SYSTEM mark and associated design by L'Oreal's SHADES EQ mark. In this case, the plaintiff had previously been required to defend its registration for the EQ SYSTEM mark before

the Trademark Trial and Appeal Board in a cancellation proceeding brought by L'Oreal's predecessor in interest, which argued that there was a likelihood of confusion between the EQ SYSTEM mark and L'Oreal's then unregistered SHADES EQ mark. At that time, the plaintiff in this case successfully argued to the Board that there was no likelihood of confusion between the marks, and the Board agreed, denying the petition to cancel filed by L'Oreal's predecessor because, among other things, there was no likelihood of confusion between the marks. Relying on the Board's decision in the cancellation action that there was no likelihood of confusion between the marks, L'Oreal then sought to register its SHADES EQ mark, and the mark was approved for publication, which entitled third parties to file an opposition. Jean Alexander filed a notice of opposition, arguing that the SHADES EQ mark would likely be confused with the EQ SYSTEM mark. But the Trademark Trial and Appeal Board held that the likelihood of confusion issue had been fully and decisively litigated in the cancellation proceedings, and the Board granted summary judgment in favor of L'Oreal in the opposition proceeding. Jean Alexander then filed a complaint for trademark infringement against L'Oreal in federal district court, specifically alleging likelihood of confusion. The district court dismissed the complaint, holding that the doctrine of issue preclusion, also known as collateral estoppel, prevented Jean Alexander from re-litigating the likelihood of confusion issue and foreclosed its claim for trademark infringement. On appeal of the district court decision, the Third Circuit agreed that the likelihood of confusion issue had been actually litigated and previously decided in the cancellation proceeding between the parties. The Third Circuit noted that the Board's conclusion on likelihood of confusion in the cancellation proceeding was not its only basis for denying the cancellation petition, but one of two independently sufficient grounds on which the Board resolved the case (the other having to do with priority of rights). But the Court of Appeals found no reason not to apply the doctrine of issue preclusion under those circumstances, and affirmed the district court's dismissal of Jean Alexander's infringement complaint.8

_____________________________ 7 Source: Electro Source, LLC v. Brandess-Kalt-Aetna Group, Inc., U.S. Court of Appeals for the Ninth Circuit, No. 04-55844, August 14, 2006. 8 Source: Jean Alexander Cosmetics, Inc. v. L'Oreal USA, Inc., U.S. Court of Appeals for the Third Circuit, No. 05-4321, August 14, 2006. Intellectual Property | Winter 2007 | Page 5

Visual Artists Rights Act Does Not Apply to "Site-Specific Art" The U.S. Court of Appeals for the First Circuit has decided that the federal Visual Artists Rights Act of 1990, which gives the authors of visual art certain rights in preventing its destruction, does not apply to "site-specific art," defined as a work of art having a location that is essential for the work to retain its meaning and integrity. The ruling came in a suit by sculptor David Phillips under federal and state law to prevent the moving of certain sculptures Phillips had created for display in Eastport Park, a South Boston, Massachusetts public sculpture park with a nautical theme. In this case, Pembroke Real Estate, Inc., which leased the land on which the park was built, proposed to redesign the park and move some of the sculptures originally placed there, including some of Phillips' sculptures. Phillips sued Pembroke, arguing that moving any of his "site-specific art" displayed in the park would amount to a destruction of that art contrary to the Visual Artists Rights Act and state law, since the location of "site-specific art" is critical to its meaning and integrity. A federal district court ruled against Phillips on his federal law claims and certified his state law claims to the Massachusetts Supreme Judicial Court, which held that state law also did not prevent the moving of Phillips' sculptures as proposed by Pembroke. Consequently the federal district court entered judgment for Pembroke on all counts. On appeal, Phillips argued that the district court was wrong in concluding that the federal Act did not prohibit moving his "site-specific art." But the Court of Appeals disagreed, holding that the federal Act did not apply to "site-specific art" at all and therefore did not prevent Pembroke from moving any of Phillips' "site-specific art," even if moving the artwork from its original site would, essentially, destroy it. In so doing, the Court of Appeals noted that the term "site-specific art" did not appear in the Act. Yet, in the view of the Court of Appeals, a holding that the Act applied to "site-specific art" would have far-reaching effects that could dramatically impact real property interests and laws, giving artists rights that would encumber private and public land with restrictions lasting

beyond the life of the artist, since, once a piece of art was considered site-specific and protected by the Act, it could not be moved or otherwise altered by the property owner absent consent of the artist. Because the Act did not mention "site-specific art," and because of the potentially far-reaching impact the protection of such art under the Act would have, the Court of Appeals refused to read the Act so as to provide protection for such artwork. Since the plain language of the Act did not protect "site-specific art," the Court of Appeals stated that, if such protection was necessary, Congress should do the job, as the Court of Appeals could not do it by rewriting the statute in the guise of statutory interpretation.9 Court Can Consider Evidence of Specifications for Product in Expired Utility Patents to Determine Whether Product Elements Can Be Trademarked The U.S. Court of Appeals for the Sixth Circuit has held that a court can consider evidence that product features for which trademark protection is sought in an infringement suit were disclosed in expired utility patents, finding, on the basis of that evidence, as well as claims made in product advertising, that the alleged trademarks are functional and unprotectable. The ruling came in a suit brought by Fuji Kogyo Co., LTD, a Japanese maker of fishing tackle, against American distributors of competing goods that allegedly displayed features of Fuji's products for which Fuji claimed trademark protection. In this instance, the Sixth Circuit noted that Fuji had obtained various utility and design patents covering fishing line guides, which guide fishing line along the axes of a fishing rod. When the patents began to expire, Fuji sought trademark protection for many of the features embodied in its fishing line guides, obtaining three trademark registrations for such product elements. In the case before the court, Fuji was suing the American distributors for alleged infringement of the three registered trademarks and an unregistered mark. But a federal district court dismissed Fuji's suit, finding that all of Fuji's trademarks were functional and canceling all three of its registrations.

_____________________________ 9 Source: Phillips v. Pembroke Real Estate, Inc., U.S. Court of Appeals for the First Circuit, No. 05-1970, August 22, 2006. Intellectual Property | Winter 2007 | Page 6

On appeal of that decision, the Sixth Circuit affirmed, concluding that the district court's determination that Fuji's trademarks were functional was not clearly erroneous. In doing so, the Sixth Circuit held that the district court correctly considered evidence that some of the product elements for which Fuji sought trademark protection were disclosed in the specifications for Fuji's expired utility patents, determining on the basis of that evidence, as well as utility claims made for those product features in Fuji's own advertising, that the product elements for which Fuji sought trademark protection were actually functional features of the products and, therefore, ineligible for trademark protection.

Action Tapes' copyrights in a portfolio of graphic embroidery designs that Action Tapes imbedded on disklike memory cards which enabled computerized sewing machines to stitch the imbedded designs on fabric and apparel.

In reviewing the district court decision, the Sixth Circuit noted that the lower court faced something of a conundrum because Fuji had obtained utility and design patents covering features of its fishing line guides, and while product elements disclosed in a utility patent were presumed functional, the features of a product disclosed in a design patent were legally presumed to be nonfunctional. However, the Sixth Circuit held that the district court was correct in evaluating and weighing all of the available evidence as to functionality of the claimed trademarks in this case, rather than relying on evidentiary presumptions. Furthermore, the Sixth Circuit held that it was not clearly erroneous for the district court to conclude that the preponderance of the evidence indicated the alleged trademarks were functional and overcame any presumption of nonfunctionality attaching to the product elements disclosed in the Fuji design patents.10

At the trial court level, both parties in this case moved for summary judgment, and a federal district court granted summary judgment in favor of the store owner, concluding that Action Tapes' memory cards contained only data, and not computer programs protected by the Act. Action Tapes appealed that decision, and the Eighth Circuit affirmed, but on a different ground - that Action Tapes failed to prove it applied for registration of computer program copyrights before commencing its infringement suit.

Computer Program Registration Copyright Application Required for Copyright Owner to Sue Under Computer Software Rental Amendments Act The U.S. Court of Appeals for the Eighth Circuit has held that a copyright owner cannot sue for infringement under the federal Computer Software Rental Amendments Act of 1990 unless the copyright owner has applied for registration of copyrights in a computer program, depositing source code with the Copyright Office. The ruling came a suit by Action Tapes, Inc. against the owner of a sewing machine supplies store that allegedly infringed

Action Tapes argued that the store owner violated the Computer Software Rental Amendments Act by repeatedly renting Action Tapes memory cards to customers without Action Tapes' permission. The Act prohibits a person in possession of "a particular copy of a computer program" from disposing of that copy for commercial purposes by "rental, lease, or lending," unless authorized to do so by "the owner of copyright in (the) computer program."

The Court of Appeals noted that application for registration of copyrights is necessary before any copyright owner can bring an infringement suit under federal law, and the court reasoned that, since the Act extended a particular type of protection to copyrights in a specific type of work, it was necessary for a copyright owner to apply for copyright registration of a "computer program" in order to protect copyrights under the Act, meeting whatever requirements the Copyright Office had established for registration of computer programs. In this case, Action Tapes had not sought a copyright registration for a "computer program" by meeting the requirements of the Copyright Office for registration of such works, including the depositing with the Copyright Office of source code for the program reproduced in a form visually perceptible without the aid of a machine or device, either on paper or microform. Instead, Action Tapes had applied for, and obtained, six visual arts copyright registrations, and Action Tapes argued that its

_____________________________ 10 Source: Fuji Kogyo Co., LTD v. Pacific Bay International, Inc., U.S. Court of Appeals for the Sixth Circuit, No. 05-5854, August 23, 2006. Intellectual Property | Winter 2007 | Page 7

visual arts registrations sufficed to satisfy the requirement that a copyright owner apply for registration of copyrights before commencing an infringement suit, even if the suit was brought under the Act. The Eighth Circuit disagreed, however, noting that Action Tapes was seeking the benefit of a statute that conferred extra protection on the owners of a limited category of copyrights, and in order to obtain the benefits of the Act, a copyright owner was required to comply with the Copyright Office's promulgated regulations instructing applicants as to what material they must deposit in order to obtain a copyright "in a computer program," which included source codes. Because Action Tapes never deposited source code with the Copyright Office, and had sought and obtained copyright registration only for the designs imbedded in its memory cards and then stitched on fabric, not the instructions that caused a computerized sewing machine to stitch the design, Action Tapes was barred from bringing its claims for protection under the Act.11

If you would like further information about any of the topics mentioned in this publication, please contact James F. Gossett at [email protected] or 312.876.7833. Disclaimer: This newsletter provides information on current legal issues. However, this information should not be construed as legal advice or an opinion as to particular situations or applications.

_____________________________ 11 Source: Action Tapes, Inc. v. Mattson, U.S. Court of Appeals for the Eighth Circuit, Nos. 05-3309 and 05-3520, August 30, 2006.

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