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View Full Version : The Dangers of IP Infringments Suits



Bigred
02-14-2014, 10:41 AM
An article on some of the pitfalls of defending IP for large companies in the modern era.

Starbucks plays it Smart with Dumb Starbucks (http://www.corpcounsel.com/id=1202642562939/Starbucks-Plays-It-Smart-With-%27Dumb-Starbucks%27-TM#ixzz2tJbEv7sD)

“You have to think of the ramifications,” Haynes and Boone partner and trademark practice group chair Purvi Patel told CorpCounsel.com. “It’s usually not a good idea for big companies to go after small ones—even if they have a legal case.”

Legally, a brand owner has to prove that the alleged infringing product is likely to cause confusion. Starbucks would probably have a tough time showing that, Patel said. A brand owner could also try to prove dilution of its brand, and in this case Starbucks could possibly win, Patel said.

But Patel, who has never represented Starbucks, said she and her colleagues have debated what they would advise a client to do in similar circumstances. Some felt it best to do nothing. Others said the brand owner should send a nice letter asking the infringer to stop. And still others said the brand owner should go all out—sending a demand letter and pursuing a preliminary injunction.

Jonathan Moskin, a partner who specializes in intellectual property at Foley & Lardner, said big companies are often better off letting the infringement slide—especially if action is likely to bring negative attention. “These are usually lose-lose propositions for brand owners,” he said. “If they win, they’re seen as beating up on an artist, and if they lose, then they come away with a black eye.”

Jonathan Moskin - is the hired gun who represents Games Workshop in the ongoing GW vs CHS IP Infringment litigation.

Seerkarandras
02-14-2014, 10:58 AM
wow...........I wonder if he suggested that and GW decided to go for it anyway?

Chuck Williams
02-14-2014, 11:02 AM
oh, sweet, sweet irony...

Captain Bubonicus
02-14-2014, 11:27 AM
Eh, I guess GW figures that their customer relations couldn't possibly get any worse, so why modify their behavior?

Cap'nSmurfs
02-14-2014, 03:04 PM
I imagine his advice to them was different in the CHS case, which is why he's representing them in that case. Jesus, people.

DarkLink
02-14-2014, 04:10 PM
It's also possible that they ignored his advice and paid him to do this anyways. I've heard GW is pretty notorious for "thanks for the advice, we'll take it under advisement [not really]", not that that's particularly unusual for a corporation.

Wolfshade
02-14-2014, 04:24 PM
Isn't it a facet of English and Welsh IP law that if you fail to defend a perceived un-licensed use of your registered mark you then are giving them a de-facto implied licence which means that you suffer from ip dilution which makes it harder to defend the IP in the future. So the only option is for the court to rule that it is not a use of the ip so is not an implied licence?
Indeed was it not because of this very reason they had to shut down the WAR forum despite being massively in favour of it as it provided a community for those players and them being generally in favour of it?

Wolfshade
02-14-2014, 04:26 PM
It's also possible that they ignored his advice and paid him to do this anyways. I've heard GW is pretty notorious for "thanks for the advice, we'll take it under advisement [not really]", not that that's particularly unusual for a corporation.

That certainly I think has a part or at least in certain areas of it. It is the "I will follow independent advise as long as it agrees with what I've decided/thought anyway".

weeble1000
02-14-2014, 05:23 PM
Isn't it a facet of English and Welsh IP law that if you fail to defend a perceived un-licensed use of your registered mark you then are giving them a de-facto implied licence which means that you suffer from ip dilution which makes it harder to defend the IP in the future. So the only option is for the court to rule that it is not a use of the ip so is not an implied licence?
Indeed was it not because of this very reason they had to shut down the WAR forum despite being massively in favour of it as it provided a community for those players and them being generally in favour of it?

Not in the way you are thinking.

Note that in this article, in fact in Larry's quote above, you have plenty of experienced IP lawyers saying that the proper response is often to let the infringement slide. These are people who understand how to build brands.

Trademarks and copyrights aren't "sue or lose" properties. There are many ways to assert, defend, support, and grow a mark that do not involve filing a lawsuit. Copyrights require even less. An implied license defense is not as simple as 'you didn't sue that guy'. In fact, because copyright infringement cases are so fact specific it is very easy to establish why one alleged infringement is different from another, and so forth.

Copyright and Trademark laws were not written to encourage the filing of thousands of lawsuits.

Wolfshade
02-14-2014, 05:28 PM
Note that in this article, in fact in Larry's quote above, you have plenty of experienced IP lawyers saying that the proper response is often to let the infringement slide. These are people who understand how to build brands.
I thought that that article was giving the US IP law which is subtly different to English and Welsh law.

weeble1000
02-14-2014, 05:47 PM
I thought that that article was giving the US IP law which is subtly different to English and Welsh law.

Because of the Berne Convention, the differences, to the extent that they exist (and there's not many substantive differences) are close to immaterial. Not completely immaterial, mind, but you're talking about things like whether there's a specific must fit exception in the statute versus one that is implied in the statute and somewhat supported by case law.

In other words, the differences tend to be very fact specific rather than broad stroke, fundamental differences.

Lord-Boofhead
02-16-2014, 12:27 PM
Isn't it a facet of English and Welsh IP law that if you fail to defend a perceived un-licensed use of your registered mark you then are giving them a de-facto implied licence which means that you suffer from ip dilution which makes it harder to defend the IP in the future. So the only option is for the court to rule that it is not a use of the ip so is not an implied licence?
Indeed was it not because of this very reason they had to shut down the WAR forum despite being massively in favour of it as it provided a community for those players and them being generally in favour of it?


Yes but lets not let the facts get in the way of a good anti GW Rant.

weeble1000
02-17-2014, 10:23 AM
Yes but lets not let the facts get in the way of a good anti GW Rant.

I find it utterly ironic that this post fell right beneath mine.

Yes, but let's not let misapprehension of the facts get in the way of a good anti anti GW rant.

Wolfshade
02-17-2014, 10:36 AM
There must be some substantive difference otherwise GW would not have insisted in it being tried under English & Welsh law.
I also think I am missing something (just reading the summary of the convention rather than the whole artilce (http://www.wipo.int/treaties/en/ip/berne/summary_berne.html)) but it appears to me that the Berne convention merely makes a copyright in one state valid in another, and provides for where the minimum protection period is different in different member states.

weeble1000
02-17-2014, 11:32 AM
There must be some substantive difference otherwise GW would not have insisted in it being tried under English & Welsh law.
I also think I am missing something (just reading the summary of the convention rather than the whole artilce (http://www.wipo.int/treaties/en/ip/berne/summary_berne.html)) but it appears to me that the Berne convention merely makes a copyright in one state valid in another, and provides for where the minimum protection period is different in different member states.

Well, GW pushed really hard to be tried under US law in the Chapterhouse case, but again, it was a shades of grey difference in UK vs US law that just happened to be really important given the specific facts of the case. Under UK law, toys are manufactured goods, and therefore arguably fall outside of copyright protection, as had been recently affirmed by the high court in the LucasArts case. US law does not have a specific definition of what a manufactured good is, but does have an exception that useful articles fall outside of copyright protection, which is why the fashion industry has basically no copyright protection as clothing serves a useful function.

It just so happens that UK law is more explicit about what is and is not a useful article in the statute, but the laws are not fundamentally different. The Berne Convention is possible because copyright law is so similar in different countries.

And I daresay you have no idea why GW chose to file suit in a particular venue the WAR case, if that's what you are talking about, whereas we know exactly why GW was arguing for copyright ownership to fall within US law in the Chapterhouse case as GW's arguments are explicit, on the record, and available for public inspection.

I don't even know if GW actually filed a suit over the WAR forums, and I am not sure to what you are referring in any case. If it was an actual lawsuit, it's news to me. If it was just a C&D, then there can be nothing to indicate GW's choice of venue in a lawsuit that was never filed, much less the reasoning behind it.

Wolfshade
02-17-2014, 01:39 PM
I was left with the impression from the various commentaries [regarding CHS] that it was GW who pushed for it to be tried under UK law, not US law. As for the WAR case I too believe that that was a C&D. Or was that just tried under English law as a result of the Berne convention? As the origin state was the UK?

weeble1000
02-17-2014, 02:32 PM
I was left with the impression from the various commentaries [regarding CHS] that it was GW who pushed for it to be tried under UK law, not US law. As for the WAR case I too believe that that was a C&D. Or was that just tried under English law as a result of the Berne convention? As the origin state was the UK?

Well, your impressions were incorrect as described above. There's not much more to say about it than that. The facts are what they are. If you would like me to provide links to the relevant documents I can, though it would take a little searching as they are somewhere in the middle of a 3 year long docket.

I am really not familiar with the WAR forum. To what are you referring?

I haven't poured through English court records to see what sorts of cases GW has filed there, but I haven't heard of GW filing any actual intellectual property infringement lawsuits other than the Chapterhouse case and the Curse case, both in the US. A C&D has no venue. It isn't a lawsuit. It has no particular relevance to any court of law. It's just a communication sent from one party to another demanding the cessation of certain activities and is not legally binding in any way. With a C&D in hand you can file for declaratory judgment and get venue, but that would be you filing a lawsuit, as a plaintiff, against the party that sent you the C&D.

As some lawyers might say, a cease and desist is "just a piece of paper."

Wolfshade
02-17-2014, 02:56 PM
Sorry, yes I am solely talking about the CHS studio case, which while it was tried in the US was done so under UK law.
http://docs.justia.com/cases/federal/district-courts/illinois/ilndce/1:2010cv08103/250791/258/0.pdf

United States law permits suit only by “[t]he legal or beneficial owner of an
exclusive right under a copyright.” 17 U.S.C. § 501(b). The parties agree that because
6 GW’s products were created in England, its ownership of copyrights with respect to
those products is governed by that country’s law. Saregama India Ltd. v. Mosley, 635
F.3d 1284, 1290 (11th Cir. 2011); see also Rudnicki v. WPNA 1490 AM, No. 04 C 5719,
2009 WL 4800030, at *7 (N.D. Ill. Dec. 10, 2009) (“Under the [Berne] Convention, the
law of the signatory country with the closest relationship to the international work at
issue governs determination of copyright ownership.”).


So, under the Berne Convention the case though in Chicago was tried under UK law.

weeble1000
02-17-2014, 03:59 PM
Sorry, yes I am solely talking about the CHS studio case, which while it was tried in the US was done so under UK law.
http://docs.justia.com/cases/federal/district-courts/illinois/ilndce/1:2010cv08103/250791/258/0.pdf


So, under the Berne Convention the case though in Chicago was tried under UK law.

No. That is not correct.

Being a lawsuit filed by a company with a US division against a US defendant in a US court, it was tried under US law. The claims were made under US law. Prayers for relief were based on US State and Federal statues. Chapterhouse Studios tried to get the court to judge the ownership of the works at issue under UK law because they were allegedly created in the UK. If, under UK law, there was no copyright to own, then there was no way to file a lawsuit because no property would exist in the first place. The Berne Convention would allow a work of art originating in the UK to be asserted against a party in the US. The Berne Convention basically says that if you make a work of art in one country it counts for all countries party to the treaty.

The argument made by Chapterhouse Studios was that if you did not have a work of art under the laws of the country of origin, no work of art would exist, i.e. you wouldn't own anything in the US because you never owned it in the UK first. Bear in mind that none of GW's asserted works of art were registered with any government agency, so GW was required to demonstrate ownership in order to make a claim at all.

Chapterhouse Studios argued that the asserted works of art simply did not exist; that under UK law they were not works of art in the first place and therefore no property existed to be asserted in a court of law. In order to have a copyright you have to have an original work of art. If what you have is not art, but a manufactured good, you do not have a copyright.

US case law gave the Court freedom to interpret this issue either way, because lower courts from different districts had ruled both ways and there was no higher court decision. Because the Berne Convention is a treaty, it falls under the purview of the United States Congress, and the issue we are discussing is a choice of law issue related to the Berne Convention. The Berne Convention is vague about what laws should apply in this very specific circumstance because although the treaty essentially says that if you have a work of art in one country, it is considered to be a work of art in all participating countries (and therefore falls under the laws of that country), there is a dead space in terms of when and how you establish if a work of art exists in the first place.

On the one hand, the Court could have said that you have to have a work of art in the country of origin before the treaty attaches.

On the other hand the Court could have said that you treat the expression as a work of art under US law for all purposes, including whether or not it is a work of art in the first place.

The Court chose to do the latter, adopting US law to every issue in the case, including whether a work of art existed to be asserted.

Games Workshop worked very, very hard to keep the case entirely within US law because Chapterhouse Studios obtained a report from a preeminent expert on UK copyright and trademark law who opined that Games Workshop's asserted works were in all probability not works of art in the UK.

This report is on the public record and is absolutely damning to Games Workshop if it ever files a lawsuit asserting any of its miniatures in a UK court of law. According to Professor Lionel Bently, a toy is not art in the UK, but rather a manufactured good, protectable by 5 year renewable design rights for up to 15 years, meaning that the vast majority of GW's miniatures would be totally and completely up for grabs to the public as GW has never registered any of its works as an industrial design. Anything 5 years old would be, and if Professor Bently is correct, is currently, right now, at this moment, completely up for grabs.

Do you follow?