9th Circuit Votes Rehearing En Banc in California's Artist Resale Royalty Case

Various artists, their heirs, and foundations sued Christie's and eBay alleging that they violated the California Artist Resale Royalty Act, which establishes a right for artists to receive a portion of the proceeds from resale of their artistic works under specified conditions.  The Act applies to sales of fine art when the seller resides in California or the sale occurs in California.  

France and a number of European countries recognize an artist's right to resale royalties (droit de suite).  California is the only state with a resale royalty law in the U.S.  

Congressman Jerry Nadler (D-NY) has introduced a bill in Congress that would create a federal resale royalty right under limited circumstances.

The district court in California upheld Christie's and eBay claim that the California statute violates the so-called dormant Commerce Clause of the U.S. Constitution because it substantially affects interstate commerce and per se violates the Constitution, thus invalidating the entire California statute.  

The Plaintiffs appealed the dismissal of their claims, the appeals were briefed, and oral argument was heard by a 3-judge panel.

After argument to the panel, the Court asked for further briefing on whether there was an internal conflict of decisions on the Commerce Clause issue within the 9th Circuit.  

After the supplemental briefing, the Court voted to rehear the appeals en banc, prior to any decision on the merits by the panel.  The en banc argument will be heard during the week of December 15, 2014.

Copyright & Public Domain: Supreme Court Denies Conan Doyle's Cert. Petition

The Supreme Court today denied the Conan Doyle Estate's petition for a writ of certiorari without comment.  That leaves the 7th Circuit's decision standing and leaves the Sherlock Holmes characters in the public domain.  

Circuit Judge Posner described the Doyle Estate's attempt to completely protect the Sherlock Holmes characters based on the fact that some of the stories and one novel remain under copyright as "quixotic" in light of the fact that most of Conan Doyle's stories are in the public domain.

See my posts on October 8 and 16, 2014 for more details.

Copyright & Public Domain Update: Conan Doyle Cert. Petition re "Sherlock Holmes" Scheduled for Court's October 31, 2014 Conference

The Court normally issues an order deciding whether to grant cert. on the Monday following its Friday conference.

Respondent Klinger -- who won the case in the 7th Circuit -- waived the right to respond to the petition, giving it a figurative back of the hand.  The Court usually asks for a response before granting cert. where there has been a waiver.

Stay tuned. 

Copyright & Public Domain: Conan Doyle Estate Asks Supreme Court to Review 7th Circuit Decision That "Sherlock Holmes" Characters in Pre-1923 Stories Not Protected

"Quixotic" is how Judge Posner's opinion characterized the Conan Doyle Estate's assertion that the "Sherlock Holmes" and "Dr. Watson" characters are still completely protected by copyright in the United States, despite the fact that fifty-six "Sherlock Holmes" stories and four novels published prior to 1923 have entered the public domain.  Klinger v. Conan Doyle Estate, Ltd., No. 14-1128 (7th Cir., Aug. 4, 2014), slip op. 3 (affirming award of attorney's fees to Klinger after affirming a declaratory judgment against the Estate in an opinion on June 16, 2014). 

The suit began as an action by Klinger for a declaratory judgment that he could use material from the "Sherlock Holmes" stories and books in the public domain in a new  book without infringing the Doyle Estate's copyright in ten remaining stories still under copyright.  This suit came after the Estate had demanded a license fee from Klinger's prospective publisher.  Klinger v. Conan Doylel Estate, Ltd., No. 13 C 1226 (N.D. Ill.).  

The district court granted a declaratory judgment in Klinger's favor, rejecting the Estate's theory  that the early (public domain) Holmes and Dr. Watson characters were "flat" and that the later ones in the still-protected stories are "round," more fully-developed, and thus fully protected.

The Seventh Circuit rejected the Estate's theory:  "When a story falls into the public domain, story elements -- including characters covered by the expired copyright -- become fair game for follow-on authors ...," relying upon the Second Circuit's decision in Silverman v. CBS Inc., 870 F.2d 40, 49-51 (2d Cir. 1989).  Klinger v. Conan Doyle Estate, Ltd., No. 14-1128 (7th Cir., June 16, 2014), slip op. 8.  The court recognized that if any future book by Klinger infringes original elements in Conan Doyle stories still under copyright, the Estate will be free to assert claims.  Id. at 7.  

The Conan Doyle Estate file a petition for a writ of certiorari on September 15, 2014 which, perhaps advisedly, only presents an Article III jurisdictional issue, not the copyright issue on the merits.  Conan Doyle Estate, Ltd. v. Klinger, No. 14-316 (S. Ct., filed September 15, 2014). 

The issue presented by the Estate in the Supreme Court is whether the lower courts lacked Article III jurisdiction to declare non-infringement of copyright based solely on Klinger's claim that his future work will be based solely on the "Sherlock Holmes" and "Dr. Watson" characters portrayed in works are in the public domain.  The Estate contended the case could not be decided without having an existing work by Klinger to compare to the ten Conan Doyle stories still protected by copyright.  The Estate asserts there is a circuit conflict on the availability of declaratory relief, relying on various patent cases, and with the Court's decision in Calderon v. Ashmus, 523 U.S. 740 (1998) (no Article III jurisdiction to review habeas-related issue where failure to exhaust state remedies).  

The cert. petition's "Question Presented" is limited to the Article III issue, but the Estate also contends there is a circuit conflict on the merits regarding the extent of copyright protection for characters in relation to the public domain, citing Warner Brothers Entertainment Inc. v X One X Productions, 644 F.3d 584 (8th Cir. 2011) (holding that public domain publicity photos and materials of principal characters portrayed in Tom & Jerry cartoons and Gone With the Wind and Wizard of Oz movies did not thrust the characters in the movies into the public domain, with narrow, limited exceptions).  Pet. 18-20.

The Seventh Circuit rejected the Estate's jurisdictional argument, holding that only a question of law was presented:  "whether [Klinger] is free to copy the characters of Holmes and Watson as they are depicted in the stories of Arthur Conan Doyle that are in the public domain."   Klinger v. Conan Doyle Estate, Ltd., No. 14-1128 (7th Cir., June 16, 2014), slip op. 7.  

A response to the the Estate's cert. petition is due by October 17, 2014; amici are welcomed by both sides.

2d Circuit Affirms Dismissal of "Reverse Confusion" Trademark Claim re "ibooks" Against Apple

In a 71-page opinion, District Judge Denise Cote gave chapter and verse of the ways in which plaintiffs failed to establish triable issues of fact in their  "reverse confusion" trademark claim against Apple Inc. for its use of "iBooks" for its software ebook reading app.  J.T. Colby & Co. v. Apple Inc., No. 11-cv-4060 2013 WL 1903883 (S.D.N.Y. May 8, 2013), aff'd in unpublished opinion (2d Cir. No. 13-2227-cv, Sept. 29, 2014).  

Plaintiffs are small, independent book publishers who used "ibooks" as an imprint for hard copy books and ebooks.  Plaintiffs sought to protect their unregistered mark under Section 43(a) of the Lanham Act.

Apple conceded that plaintiffs were senior users of the mark but claimed that it was unaware of plaintiffs' mark when Apple began using it.  Apple sought summary judgment after discovery, arguing that plaintiffs' mark was merely descriptive and thus unprotectable and that there were no triable issues of fact supporting likelihood of confusion with Apple's mark.  

Judge Cote agreed. She granted summary judgment dismissing plaintiffs claims, first finding that plaintiffs' was merely descriptive, and no triable issues on likelihood of confusion, applying the eight-factor test in Polaroid Corp. v.. Polarad Electronics Corp., 287 F.2d 492 (2d Cir. 1961).  

The 2d Circuit's unpublished decision affirmed Judge Cote's summary judgment for Apple.  It agreed that plaintiffs had failed to establish triable issues as to likelihood of confusion.  It thus found it unnecessary to address whether plaintiffs' mark is protectable at all.  

The 2d Circuit concluded:  "[Apple] does not publish books and the Plaintiffs do not create a marketplace to purchase them; their products do not directly compete, serve a similar purpose, or appear in the same channels of commerce."  Slip Op. 4-5.  The Court also rejected plaintiffs contention that there were triable issues as to Apple's good faith in adopting its mark.