The U.S. Supreme Court raised questions about the multibillion-dollar trade in goods outside authorized distribution channels, hearing arguments in the case of a graduate student sued for selling foreign-edition textbooks in the U.S. at discount prices.
The copyright dispute may restrict the so-called gray market, with ramifications for publishers, retailers, entertainment companies, manufacturers and consumers. Retailers that offer gray-market products, led by EBay Inc. and Costco Wholesale Corp., are seeking limits on copyrights. The motion picture, music, software and publishing industries say the gray market illegally undercuts their U.S. sales.
The high court case, argued yesterday, concerns Supap Kirtsaeng, who was ordered to pay John Wiley & Sons Inc. $600,000 for importing the publisher’s copyrighted textbooks from his native Thailand and selling them in the U.S. for a profit.
Allowing copyright holders to sue over such importations would give them “endless, eternal downstream control” over sales of their goods, Kirtsaeng’s lawyer, E. Joshua Rosenkranz, told the court.
“Your reading is, essentially, once a copy is sold anywhere, the copyright owner loses control of distribution everywhere,” Justice Ruth Bader Ginsburg told Rosenkranz.
Justice Stephen Breyer asked Wiley & Sons’ lawyer, Theodore Olson, whether a ruling for the publisher would mean that someone who bought a Toyota that included copyrighted sound and global-positioning systems couldn’t sell the car without getting permission from the copyright holders.
Olson said that in some cases an implied license, or “fair use” doctrine, would protect people.
Gray-market products are genuine goods that retailers acquire through unauthorized channels to exploit the lower prices manufacturers sometimes charge overseas. Imports of those products to the U.S. cost makers as much as $63 billion in sales a year, according to a 2009 Deloitte LLP analysis conducted for Bloomberg News.
The case poses a question that deadlocked the Supreme Court 4-4 in a 2010 clash between Costco and Swatch Group AG’s Omega unit over discounted watches.
Justice Elena Kagan didn’t take part in that case and now stands to cast the deciding vote.
The case is Kirtsaeng v. John Wiley & Sons, 11-697, U.S. Supreme Court (Washington).
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LNG Energy Solutions Accused of Infringing Marlin Gas Patent
LNG Energy Solutions LLC, a project of the Idaho National Laboratory, Rice Energy, and R-V Industries Inc., was sued for patent infringement by Marlin Gas Transport Inc.
The suit, filed Oct. 24 in federal court in Tampa, Florida, accused LNG of Cannonsburg, Pennsylvania, of infringing patent 6,953,045. That patent, issued in October 2005, covers a system for the delivery of compressed natural gas.
Marlin Gas of Whiteland, Indiana, said LNG is making, using or selling infringing gas delivery systems. This alleged infringement had deprived Marlin of sales it would have otherwise made, and profits it would have earned, the company said in its pleadings.
It asked the court for an order barring further unauthorized use of its patented technology, together with money damages, and asked that those damages be tripled to punish LNG for its actions. Additionally, it seeks awards of attorney fees and litigation costs.
LNG didn’t respond immediately to an e-mailed request for comment.
The case is Marlin Gas Transport Inc. v. LNG Energy Solutions LLC, 8:12-cv-02431-EAK-TGW, U.S. District Court, Middle District of Florida (Tampa).
Dow Chemical Fights Off Challenge to $61.7 Million Nova Verdict
The U.S. Supreme Court left intact a $61.7 million verdict won by Dow Chemical Co. in a patent fight with Nova Chemicals Corp. over the plastic used in grocery bags.
The justices yesterday rejected an appeal by two Nova units found to have infringed patents held by Dow, the largest U.S. chemical company. The patents cover polymers that are thinner and stronger than conventional plastic.
Nova, owned by Abu Dhabi-based International Petroleum Investment Co., argued unsuccessfully that Dow had transferred the patents to a holding company and no longer had the legal right to enforce them.
The award has grown with interest, and Dow has said it will seek additional damages for infringement in later years and in Canada.
A federal jury in Wilmington, Delaware, sided with Dow in 2010, and the federal appeals court that handles patent cases upheld the verdict. Dow is based in Midland, Michigan.
The case is Nova v. Dow, 12-243, U.S. Supreme Court (Washington).
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Hollywood Chamber Tells Brooklyn Brothers ‘BBHollywood’ Not OK
Brooklyn Brothers, a New York-based ad agency, is the target of a cease-and-desist letter after it posted an image of the iconic “Hollywood” sign on its website, altered so it now reads “BBHollywood,” according to the Hollywood Reporter.
Jeff Lotman, chief executive officer of Los Angeles-based Global Icons licensing agency, said he’s consulted with legal counsel because the sign is in apparent violation of the licensing rights of his client, the Hollywood Chamber of Commerce, the newspaper reported.
Brooklyn Brothers is headed by Guy Barnett, who told the Hollywood Reporter that “BBHollywood” isn’t a logo, and was intended as “a fun visual” to get his fledgling company known.
Delta Lambda Phi Sues Gay-Oriented Group for Infringement
A gay-oriented Greek letter fraternity sued a student group founded at the University of California, Santa Cruz, for trademark infringement.
The suit, filed in federal court in Eugene, Oregon, Oct. 24, pits Washington-based Delta Lambda Phi National Social Fraternity against Delta Lambda Psi. According to court papers, the Washington-based group was founded in 1986 and presently has 30 chapters across the U.S. It has several pending applications filed in 2012 to registered “Delta Lambda Phi” and “DLP” as trademarks.
The association of the Greek letter Lambda with gay rights issued began in 1970, when the Gay Activists Alliance of New York selected the letter as a symbol of liberation, according to the website of Lambda GLBT Community Services. Among the other organizations that make use of the symbol are New York-based Lambda Legal and the Lambda Youth Project of Hayward, California.
According to court papers, the California group began using Delta Lambda Psi in 2005. The website of the Oregon chapter of Delta Lambda Psi proclaims the organization to be “an all-inclusive, queer Greek frarority.” The website says Delta Lambda Psi is neither a fraternity or sorority.
The Washington group -- Delta Lambda Phi -- said the public is likely to be confused because the two names are so similar and to assume, falsely, that the two organizations are affiliated. Both groups “serve the interests of the gay, bisexual, transgender, progressive and related communities at colleges and universities, as well as alumni,” the Washington group said in its pleadings.
It asked the court to bar Delta Lambda Psi from using marks “confusingly similar” to the Washington group’s trademarks, and for an award of money damages and profits derived from the alleged infringement, in addition to attorney fees and litigation costs.
Delta Lambda Psi’s website is no longer operational and a message seeking comment and sent through the organization’s Facebook page wasn’t returned immediately.
The case is Delta Lambda Phi National Social Fraternity v. Delta Lambda Psi, 6:12-cv-01912-AA, U.S. District Court, District of Oregon (Eugene).
Trademark Related to Noble Laureate to Bring Fortune to Engineer
Chinese author Mo Yan’s winning the Nobel Prize in literature for his “Red Sorghum Clan” has meant a bonanza for a Beijing engineer who registered “Mo Yan Zui” as a trademark for liquor in 2006, 21st Century Media’s MorningWhistle.com website reported.
The engineer said he is selling the trademark for 10 million Chinese yuan ($1.6 million), which is 10,000 times what he paid to register the mark, according to MorningWhistle.com.
Mo, who is the first Chinese to win the Nobel prize for literature, is suddenly so popular that sales of his books have doubled, and his publisher is planning an initial public offering, MorningWhistle.com reported.
The author’s announced plan to enter the wine business is what created the interest in the engineer’s trademark, according to MorningWhistle.com.
Yelp Sued by Village Voice Publisher Over ‘Best of’ Trademark
Yelp Inc., operator of the social networking user-review site, was sued for trademark infringement by the publisher of the Village Voice newspaper.
According to the complaint filed in federal court in Arizona Oct. 25, San Francisco-based Yelp is accused of infringing Village Voice Media Holdings LLC’s “Best of” trademarks. The Voice said it has been using these marks since 1979, and registered them with the U.S. Patent and Trademark Office.
The Phoenix-based publisher objects to Yelp’s use of “Best of Phoenix,” “Best of San Francisco,” “Best of Miami,” and similar terms on its Web pages. To no avail, the Voice said it sent Yelp a cease-and-desist letter on Sept. 18.
Yelp’s use of these phrases causes confusion in the marketplace, and unfairly piggybacks on the fame and goodwill the Voice has developed for its trademarks, the company claims in its pleadings.
The Voice claims it will be damaged by “a loss of reader loyalty, advertising sales and profits” if Yelp continues to use “Best of” phrases.
It asked the court to bar Yelp’s use of “best of,” and for awards of money damages, litigation costs and attorney fees.
Yelp declined to comment on the lawsuit, according to spokeswoman Rachel Walker.
The case is Village Voice Media Holdings LLC v. Yelp Inc., 2:12-cv-02285-MHB, U.S. District Court, District of Arizona (Phoenix).
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