Archive | April 2013

Slim-Fast Copies Skinnygirl Logo

By: Anny Mok

Bethenny Frankel is accusing Slim-Fast of copying her Skinnygirl logo without her permission. On her Facebook page, Bethenny posted:

“Thank you for all of your concern regarding the confusion with Slim-Fast using my logo without permission. They approached me to do a deal for Skinnygirl Daily nutrition bars, which I declined. I’m shocked to see they used it anyway. I will handle this situation immediately. Thank you for always being so protective of me.”

This was accompanied by an image of the Slim-Fast ad:

Image

 This is the Skinnygirl logo:

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Like the Skinnygirl logo, Slim-Fast features a black silhouette with bright red clothing and swirled ponytail. The only major difference is that Slim-Fast uses a curvier figure than the thin figure used by Skinnygirl. 

Skinnygirl has not revealed whether they will be filing a lawsuit against Slim-Fast. However, if they do, they appear to have a strong case. The similarities between both marks are quite substantial and very likely to confuse consumers. Courts look at several factors to determine likelihood of confusion. Some factors include: similarity of the marks, proximity of goods, evidence of confusion, types of goods, and defendant’s intent in selecting the mark. Both companies target the same group of customers – health conscious women. The companies sell similar products – diet food items. Someone shopping in the market for diet foods can easily mistake the Slim-Fast image with that of the Skinnygirl’s or assume that Skinnygirl endorsed Slim-Fast’s use of the mark. Many of Bethanny’s fans commented that they “automatically thought of SkinnyGirl” when they saw the ad.

Additionally, it appears as though Slim-Fast intended to capitalize on the goodwill of Skinnygirl. They could have easily used a different mark. Many companies use black silhouettes, but Slim-Fast specifically used bright red to contrast the black. Perhaps a different color would not make the similarities quite as obvious. They could have used a different hairstyle, but they specifically selected a swirling ponytail.

Based on the aforementioned factors, the likelihood of confusion is overwhelming. If Skinnygirl does bring a trademark infringement suit against Slim-Fast, they are very likely to succeed.

Kanye West and Others Sued Over Sound Sampling

By: Anny Mok

Earlier this month, family members of the late David Pryor filed a lawsuit against Kanye West and others for copyright infringement. The plaintiffs claim that Kanye West’s song “Gold Digger” was an unauthorized sampling of several songs in a 1974 recording of Pryor’s. Other defendants include other record labels that allegedly copied David Pryor’s sound recordings. Such unauthorized copying is an infringement on Pryor’s right to reproduce his work.

One of a copyright owner’s exclusive rights is the right of reproduction. Section 114 of the Copyright Act gives a copyright holder the exclusive right over exact reproductions and works where “the actual sounds fixed are rearranged, remixed, or otherwise altered in sequence or quality.” It also expressly states that a copyright owner of a sound recording is protected against recordings that “directly or indirectly recapture the actual sounds fixed in the recording.” This means that copyright infringement can occur when the actual fixed sounds in a protected sound recording is re-recorded in a new record without the copyright owner’s permission.

Sound sampling is an example of recapturing a sound recording’s fixed sounds. This practice involves the exact duplication of portions of a sound recording and including these portions in a new recording. Sound sampling is particularly popular in the hip-hop industry where clips of previous songs are remixed into new ones.

Courts have varied on how substantial the copying has to be in order to constitute infringement. Where the duplication is de minimis, courts are sometimes reluctant to find that the similarity is substantial enough. These are instances where the sample only played a small part in creating an entirely new song. Other courts, such as the Sixth Circuit, have imposed a bright line rule. In Bridgeport Music v. Dimension Films, the Sixth Circuit held that there is infringement regardless of how little of the recording is copied. It found that sound sampling is different from infringement of musical compositions and that the substantial similarity test is precluded in such circumstances. Any unauthorized sample is an infringement. The Court explained that if someone wants to use a sample, then a license should be obtained from the copyright owner.

The inconsistencies of courts make it difficult to predict what the California court will find in Trena Steward, et al v. Kanye West, et al.  David Pryor’s voice can allegedly be heard for about thirteen seconds into “Gold Digger” and then throughout the record, especially when “get down” plays in the song. If that is the case, perhaps the court will find that there is enough substantial similarity. Alternatively, if it imposes a bright line rule like the Bridgeport court, then the unauthorized use itself will constitute infringement.

Joan Rivers Sued for Invasion of Privacy

By: Anny Mok

The Seventh Circuit affirmed the district court’s dismissal of a lawsuit filed by Ann Bogie against Joan Rivers for invasion of privacy and misappropriation of her image.  Bogie attended a stand-up comedy performance featuring Rivers at the Lake of the Torches Casino in Wisconsin. The comedian made offensive jokes about Helen Keller, Wisconsin, and its citizens. One particular attendee, who had a deaf son, was offended and heckled Rivers during the show. This brief exchange was filmed and featured in a documentary called Joan Rivers: A Piece of Work.

After the performance, Bogie gained entry to the backstage area where she got an autograph and had a sixteen-second conversation with Rivers. Bogie expressed her frustration with the audience member who interrupted the performance. Joan Rivers was more sympathetic towards the heckler. The brief exchange was all filmed and included in the documentary. The sixteen-second conversation was part of the film’s eighty-two minutes. It was 0.3 percent of the entire film.

Bogie disapproved of the film’s footage of her conversation with Rivers. She alleged that it portrayed her as giving approval of River’s offensive remarks about deaf people and the people of Wisconsin. She claims that the distribution of the film invaded her privacy and misappropriated her image for commercial purposes without her consent. She sought compensatory damages and an injunction against further distribution of the film.

The lower court dismissed the suit under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief could be granted. The court ruled that there was no invasion of privacy because there was no reasonable expectation of privacy in the backstage area and a reasonable person would not consider the alleged intrusion highly offensive. It also ruled that the misappropriation claim fails because it fell within two common law exceptions: (1) newsworthiness or public interest in the information, and (2) incidental use. The Seventh Circuit affirmed the dismissal.

There are two elements to an invasion of privacy claim: (1) the intrusion occurred in a place that a reasonable person would consider private, and (2) the intrusion would be highly offensive to a reasonable person. The court found that the conversation occurred in a crowded backstage area where a camera and cameraperson were clearly within close proximity to Bogie and Rivers. These facts led the court to conclude that no reasonable person would have an expectation of privacy in such a situation or be highly offended by the distribution of the film.

The tort of misappropriation is aimed to preserve a person’s right to control the commercial aspects of their identity. Bogie alleges that her consent was not obtained before the film’s distribution. One exception to misappropriation liability is if there is a legitimate public interest or newsworthiness in the information obtained. The court construed this exception broadly and found that there was a public interest in Joan River’s work. Another exception is if the commercial use of the person’s name or likeness was incidental, or in other words, the use of the person’s likeness was not a substantial part of the use and commercial purpose. The court found that there was no evidence the brief exchange was used to advertise for the documentary. It was just sixteen seconds out of an eighty-two minute documentary. Thus the use was only incidental, barring a misappropriation claim.

Supreme Court Skeptical of Special Treatment of Reverse Payments in FTC v. Actavis

By: Amelia Wong

On Monday, March 25, 2013, the Supreme Court heard oral arguments for the Federal Trade Committee v. Actavis (Federal Trade Committee v. Watson in the 11th circuit opinion) case. In the case at hand, Solvay Pharmaceuticals, Inc., obtained a patent for a pharmaceutical formulation used in AndroGel, a treatment for low testosterone in men. Actavis (previously Watson Pharmaceuticals) and Paddock Laboratories, Inc., submitted separate abbreviated new drug applications for a generic version of AndroGel and a certification stating that the generic would not infringe on Solvay’s AndroGel.[1] Actavis and Paddock decided to partner with Par Pharmaceutical Companies, Inc. by sharing litigation costs and promoting Paddock’s generic version of AndroGel. Solvay sued Actavis and Paddock for patent infringement, but the Actavis/Paddock patent was soon approved by the FDA and to enter the market for sale within a year. Solvay reached a settlement to defer the AndroGel generic into the market until 2015 by paying $19-30 million annually to Watson, $2 million annually to Paddock, and $10 million annually to Par.[2]

The Federal Trade Committee (FTC) filed a claim challenging the settlement and unfair methods of competition and monopoly.[3] The district court dismissed the FTC’s complaint for failure to state a claim. The Eleventh Circuit took a “scope-of-the-patent” approach by affirming the claim stating that, “absent sham litigation or fraud in obtaining the patent, a reverse payment settlement is immune from antitrust attack so long as its anticompetitive effects fall within the scope of the exclusionary potential of the patent.”[4] The Third Circuit rejected this decision by applying the In re K-Dur Antitrust Litigation, stating that reverse payments should be subjected to a “quick look of reason analysis” where the standard for unlawful and anticompetitive agreements involved “any payment from a patent holder to a generic patent challenger who agrees to delay entry into the market [is] prima facie evidence of an unreasonable restraint of trade.”[5]

At the oral arguments, the government argued that payments to competitors to stay out of the market violate antitrust principles, similar to the idea of price fixing. The government also claimed that if the patent litigation proceeded, no payments would go from the patentee to generic manufacturer. The drug companies claimed that the “scope-of-the-patent” standard should apply to settlements, which can be subject to antitrust scrutiny. However, the drug companies argue that unlawful anti-competitive behavior can only be determined where the underlying patent litigation if a sham or if patent was obtained by fraud.[6]

Several justices seemed skeptical that a special rule should be adopted for reverse payment agreements, but were concerned about the effect of pay delay settlements. Justice Breyer implied that judges could identify collusive agreements to divide profits and questioned why the standard “rule of reason” should not apply. Justice Sotomayor also questioned whether the simple existence of a payment made activity illegal. However, Justice Scalia took a stronger stance stating that drug companies could not be participating in “illegal activity” if they were still acting within the “scope-of-the-patent.”

Additionally, a significant focus of the arguments was the purpose of The Drug Price Competition and Patent Term Restoration Act of 1984, commonly known as the Hatch-Waxman Act. The purpose of the Act was to promote challenges to patents by generics. Settlements like these tend to prevent challenges, which is detrimental to consumers. However, most challenges settle, which is a result of the Hatch-Waxman framework. The tension between the purpose and framework of Hatch-Waxman creates a need to either change the legislation or adapt an entirely new antitrust law.

Allowing “pay-for-delay” could enable pharmaceutical companies to charge up to five times the cost of their products.[7] Pharmaceutical giants can hold onto a monopoly of lifesaving medicine and jack up prices. Because generics are 80-90% less than the brand name pharmaceutical companies[8], generics prevent the pharmaceutical giants from a major profit. The Supreme Court is to reach a decision by June 2013 and corporate interests seem to be upheld by the majority of the court seeming to favor the drug companies. However, due to the justices’ lack of unity, district courts will probably continue considering pay-for-delay on a case-by-case basis, consistent with the trend of modern antitrust law.[9]