IP/Entertainment Law Weekly Case Update for Motion Picture Studios and Television Networks -- June 6, 2013

Table of Contents

Fortres Grand Corp. v. Warner Bros. Entertainment Inc., U.S.D.C., N.D. Indiana, May 16, 2013
 Click here for a copy of the full decision.

  • District court dismisses computer software company’s trademark claims against Warner Bros. based on references in Batman film The Dark Knight Rises to fictional “clean slate” software program, finding there could be no consumer confusion as to source of fictional product or of defendant’s film and that Warner Bros.’ use of “clean slate” was protected by First Amendment.

Plaintiff Fortres Grand makes computer security software named “Clean Slate” that erases all evidence of a user’s activity on a computer. Defendant Warner Bros. Entertainment Inc. produced the 2012 Batman film The Dark Knight Rises and related promotional websites, which make reference to a fictional computer program called “clean slate,” which is sought after in the film by the villainess Catwoman for its ability to erase digital records of her criminal past from every computer in the world. Fortres Grand sued Warner Bros. for federal trademark infringement and unfair competition under federal and Indiana state law.

The district court granted Warner Bros.’ motion to dismiss, finding that plaintiff’s allegations failed to establish any consumer confusion as to the source of its product – an essential element of plaintiff’s claims. Noting that trademark infringement protects only against mistaken purchasing decisions, not against confusion in general, the court found that any consumer confusion must be determined in the context of the parties’ actual products – plaintiff’s Clean Slate program and defendant’s film. In order to state a claim, Fortres Grand had to plausibly allege either (1) that consumers believe the fictional “clean slate” software is connected to Fortres Grand, or (2) that consumers believe The Dark Knight Rises is connected to Fortres Grand. As to the first possibility, the court found it impossible because the Batman “clean slate” software is fictional and cannot be purchased. Likewise, the court found the second scenario implausible because Fortres Grand is not in the motion picture business and no reasonable moviegoer would think it had a connection to The Dark Knight Rises.

The district court also found that, even if consumer confusion could exist, defendant’s use of “clean slate” was protected by the First Amendment. As the Second Circuit explained in Rogers v. Grimaldi, the Lanham Act is inapplicable to artistic works as long as the work’s use of a trademark is both “artistically relevant” to the work and not “explicitly misleading” as to the source or content of the work. The court found that defendant had satisfied both of the Rogers factors. The phrase “clean slate” was artistically relevant to The Dark Knight Rises because it formed part of the film’s plotline, and defendant’s use was not “explicitly misleading” because, as discussed above, no moviegoer would reasonably believe that Fortres Grand sponsored the defendant’s film. The court noted, however, that Fortres Grand did not assert a claim for trademark dilution, likely because its mark was not sufficiently “famous.” The court therefore did not address whether a fictional product or service could be the basis of a trademark dilution claim, which generally prevents the use of a famous trademark in a way that lessens its uniqueness.

Ingenuity 13 LLC v. Doe, U.S.D.C., C.D. California, May 6, 2013
 Click here for a copy of the full decision.

  • After dismissal of copyright infringement lawsuits brought by “porno-trolling collective,” district court sanctions plaintiffs, related entities and attorneys, awarding attorneys’ fees, doubled for punitive measure, and referring attorneys to state and federal bars for discipline and principals to IRS and criminal authorities.

In a particularly animated order issuing sanctions under its inherent authority, the district court outlined the contours of a scheme by which the plaintiffs and their related entities, related individuals and attorneys “outmaneuvered the legal system” by accusing individuals of copyright infringement based on their alleged downloading of a single pornographic video using a peer-to-peer BitTorrent file-sharing system, and then offering to settle at a sum “calculated to be just below the cost of a bare-bones defense.” The court previously issued an Order to Show Cause as to why plaintiffs’ counsel should not be sanctioned for ignoring the court’s discovery-stay order, filing complaints without reasonable investigation and defrauding the court by asserting a copyright assignment secured based on a stolen identity. After the court recognized counsel’s role in a nationwide “porno-trolling collective” and copyright-litigation scheme, the court expanded the scope of its order.

Although the court issued its previous order under Rule 11 of the Federal Rules of Civil Procedure, the court determined that sanctions under Rule 11 were procedurally inappropriate because the underlying lawsuits had already been dismissed and Rule 11 prohibits monetary sanctions on the court’s own initiative without notice prior to dismissal. Instead, after setting forth its factual findings detailing plaintiffs’ deceptions before the court – including naming individuals as defendants without evidence that they had actually downloaded a viewable copy of the video and forging a copyright assignment – the court exercised its inherent authority to award “fitting sanctions” for plaintiffs’ “bad faith” conduct. In addition to awarding attorneys’ fees and costs of more than $40,000 to defendants, the court doubled the award as a punitive measure justified by plaintiffs’ “brazen misconduct and relentless fraud.” The court also referred the plaintiffs’ attorneys to their respective state and federal bars as well as to the district’s discipline committee. Finally, the court suggested that the plaintiffs’ conduct resembled a RICO enterprise and referred the matter to the U.S. Attorney’s Office and the Internal Revenue Service for potential criminal prosecution and notified all other judges before whom the plaintiffs’ attorneys have pending cases.

Westlaw decisions are reprinted with permission of Thomson/West. If you wish to check the currency of these cases, you may do so using KeyCite on Westlaw by visiting http://www.westlaw.com/.

Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.

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Loeb & Loeb LLP on:

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