Justice Scalia on Trademark and Copyright: Dastar, Penguin-Shaped Cocktail Shakers and “Guilt by Resemblance”

by Foley Hoag LLP - Trademark, Copyright & Unfair Competition
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When we decided to mark the passing of Justice Antonin Scalia by recounting a few of his copyright and trademark opinions, we were somewhat surprised to discover that there really hadn’t been that many. In fact, we located only seven matters in which Justice Scalia contributed a written opinion on a substantive issue of trademark or copyright law, and only four were majority opinions. Here they are, in chronological order:

K Mart Corp. v. Cartier, 486 U.S. 281 (1988)

In 1922, the United States began regulating the importation of gray-market goods, that is, foreign-manufactured goods bearing a valid U.S. trademark that are imported into the U.S. without consent of the U.S. trademark holder. Section 526 of the Tariff Act prohibited gray-market imports, but the implementing regulations provided for various “common control” exceptions, which allowed the importation of goods manufactured abroad by affiliates of the trademark holder. In 1984, an association of U.S. trademark holders challenged these regulatory exceptions as invalid and inconsistent with the broad prohibition set forth in the statute. In a deeply wonky opinion complex enough to merit its own Lonely Planet guide, Justice Kennedy cobbled together a majority and held that most of the exceptions were a permissible interpretation of the statute. Justice Scalia, then in his second term on the Court, disagreed and dissented, arguing that the regulations contradicted the statute. “The authority to clarify an ambiguity in a statute,” Justice Scalia wrote, “is not the authority to alter [] its unambiguous applications, and [Section 526] unambiguously encompasses most of the situations that the regulation purports to exclude.”

Feltner v. Columbia Pictures, 523 U.S. 340 (1998)

Several broadcast television stations continued airing masterpieces such as Who’s the Boss, Silver Spoons and T.J. Hooker even after they had stopped paying royalties, leading to a fairly slam dunk copyright claim by Columbia Pictures. Columbia prevailed on summary judgment and exercised its option under Section 504 of the Copyright Act to collect statutory damages (in lieu of actual damages), which were supposed to be measured by what “the court considers just.” The stations demanded a jury trial on what the amount of statutory damages should be, but the District Court and Ninth Circuit refused. Justice Thomas, writing for the Court, reversed. Although the text of Section 504 afforded no jury right, the Court held that the Seventh Amendment nevertheless required it. Justice Scalia, in concurrence, felt that this constitutional issue should have been avoided altogether, because there was a “fairly possible” reading of Section 504 that did in fact provide for a jury trial right. Justice Scalia noted that, according to certain dictionaries, the word “court” was not necessarily limited to a judge, but could also mean anyone duly assigned to administer justice, including a jury.

College Savings Bank v. Florida Prepaid, 527 U.S. 666 (1999)

Justice Scalia authored his first majority opinion on a trademark or copyright issue nearly a dozen years into his tenure. College Savings, a private bank engaged in the business of education financing, had brought suit against Florida Prepaid, an arm of the Florida government that offered competing services. College Savings claimed that Florida Prepaid made false claims about its own services in violation of Section 43(a) of the Lanham Act. Florida Prepaid asserted that it was protected by sovereign immunity, but College Savings argued that Florida’s sovereign immunity was expressly abrogated by the 1992 Trademark Remedy Clarification Act (TRCA). Justice Scalia, writing for a slim 5-4 majority, held that the Eleventh Amendment did not give Congress the authority to abrogate state sovereign immunity. Moreover, although the Fourteenth Amendment did give Congress this authority, such authority was limited to situations involving the deprivation of property without due process. Here, however, Justice Scalia held that the relevant false advertising provisions of the Lanham Act’s did not invoke “property” rights, because a claim that a competitor lied about its own product does not involve the “right to exclude others.” Justice Breyer dissented, joined by Justices Stevens, Souter and Ginsberg.

Wal-Mart Stores v. Samara Bros., 529 U.S. 205 (2000)

Clothing designer Samara brought Lanham Act and copyright infringement counts against Wal-Mart, alleging that the retailer was selling knock-offs of its children’s apparel. Samara asserted that its clothing designs were protectable as inherently distinctive trade dress for purposes of Section 43(a). The Second Circuit upheld a jury verdict in favor of Samara, but a unanimous Supreme Court reversed, in an opinion authored by Justice Scalia. The Court held that, in an action for unregistered trade dress infringement, the plaintiff was required to prove secondary meaning in order to establish distinctiveness. The Court also held that product design, like color, cannot be inherently distinctive. Justice Scalia wrote “that product design almost invariably serves purposes other than source identification,” and therefore “[c]onsumers are aware of the reality that, almost invariably, even the most unusual of product designs — such as a cocktail shaker shaped like a penguin — is intended not to identify the source, but to render the product itself more useful or more appealing.”

Dastar v. Twentieth Century Fox, 539 U.S. 23 (2003)

Probably the most important copyright or trademark decision by Justice Scalia involved a World War II documentary series called Crusade in Europe. Twentieth Century Fox owned the rights to the series, but for some reason let the copyright expire. Dastar took full advantage of the public domain status of the program by purchasing a copy, editing it down to about half its length, and then selling copies of this shortened derivative work under the DASTAR mark. Twentieth Century Fox, unable to rely on copyright law, turned to the Lanham Act, claiming that Dastar was engaged in reverse passing off under Section 43(a), because it was misrepresenting the “origin” of the product.  But Justice Scalia, writing for the majority, disagreed and held that the “origin” of a product for trademark purposes meant the origin of the object consumers are purchasing, not the author or inventor whose ideas led to the product’s creation. Justice Scalia used Coke and Pepsi as examples: the Lanham Act protects a consumer’s right to know that the bottle of Coke he or she is purchasing isn’t really a Pepsi, but it doesn’t protect a consumer’s right to know the name of the individuals who invented Coke or Pepsi. Dastar effectively ended the use of Section 43(a) as remedy to correct the improper attribution of authorship in scholarly and creative work; in fact, some argue that Justice Scalia’s opinion effectively caused that the United States to fall out of compliance with the Berne Convention.

Lexmark International v. Static Control Components, Inc., 134 S. Ct. 1377 (2014)

Lexmark, the manufacturer of printers and printer cartridges, allegedly made false statements about Static Control, the maker of a chip that facilitated the recycling and reuse of Lexmark’s cartridges. Static Control brought a claim for false advertising, but the District Court, noting that the parties were not direct competitors, dismissed the case for lack of standing.  The Sixth Circuit reversed and Lexmark appealed. Writing for a unanimous Court, Justice Scalia agreed that Static Control had standing, because it fell within the “zone of interests” protected by the Lanham Act; that is, although not a direct competitor, Static Control had adequately alleged that certain commercial speech by Lexmark was likely to cause it lost sales or harm to its business reputation.

ABC, Inc. v. Aereo, Inc., 134 S. Ct. 2498 (2014)

Aereo offered a service that allowed viewers to watch broadcast television programs over the internet through the remote control use of tiny dime-sized antennae that serviced only one viewer at a time. The Supreme Court held that Aereo’s service infringed the broadcasters’ exclusive right to publicly perform their work. Justice Scalia, in his last published opinion on a copyright or trademark issue, dissented on the grounds that what Aereo did was not a performance by Aereo at all; rather, the viewers were the ones “calling all the shots” by directing the antennae to transmit infringing programs.  Justice Scalia further argued that the majority opinion imposed on Aereo “guilt by resemblance,” holding it liable for copyright infringement not so much because it violated the text of the Copyright Act, but because it resembled past technologies that were found to have done so. Justice Scalia perhaps summed up a large chunk of his judicial oeuvre with the concluding exhortation: “the proper course is not to bend and twist the Act’s terms in an effort to produce a just outcome, but to apply the law as it stands and leave to Congress the task of deciding whether the Copyright Act needs an upgrade.”

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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