Daily Business Review: Margaritaville Brand Fight Over Rights in Bahamas

The Daily Business Review shares the details about Kluger Kaplan’s Todd Levine’s latest intellectual property case.  

Margaritaville Brand Fight Over Rights in Bahamas

October 20, 2018

Restaurant operator Boss Investments claims the Margaritaville company is breaking a licensing agreement by allowing a different developer to use the name in the Bahamas for a resort.

Margaritaville — both a name and a laidback feel at tourist venues from New York to Costa Rica derived from Jimmy Buffett’s 1977 hit song — is accused of breaching an agreement for the exclusive use of the trademark in the Bahamas.

Kluger Kaplan Commercial Litigation

Boss Investments Ltd. claims it has the exclusive rights to develop and run venues under the Margaritaville trademark, which includes the name, Buffett images and song lyrics, and associated merchandise under a 2014 agreement.

Boss opened a restaurant, store and bar with live entertainment on Paradise Island, but its plans and partnership with Margaritaville went awry when it wanted to open a second, similar venue.

Boss said Palm Beach-based Margaritaville Holdings LLC; its intellectual property licensor, Margaritaville Enterprises LLC; and the IP sublicensor that signed the Bahamas trademark agreement with Boss, Margaritaville of Bahamas LLC, didn’t hold up their end of the deal.

Instead, they awarded a Margaritaville trademark for the development of another tourist destination on Paradise Island — a $250 million, 150-room resort on 6 acres with a spa, luxury condominiums, an 800-space garage, marina, restaurant and water park, according to Boss’ lawsuit filed Friday in Palm Beach Circuit Court.

Boss sued all three Margaritaville LLCs as well as Margaritaville Development president James Wiseman.

Margaritaville declined comment through a spokeswoman.

Boss said the new Bahamian resort will rise two miles from its existing venue and Margaritaville has discouraged Boss from moving ahead with a second venue at a promising location.

Boss, which opened its first restaurant in the Bahamas in 2015, has the right to open a second Bahamas venue within five years after the first location was open for a year, according to the complaint.

After Boss met with a Margaritaville representative in spring 2017 to show a prospective second location at the Port of Nassau, a busy cruise ship port, Wiseman called Boss to suggest a ” ‘slow play’ moving forward with the proposed location … because Margaritaville had ‘something better in that area for Boss,’ ” the lawsuit alleges.

This turned out to be a stalling tactic so Margaritaville could license its trademark to the resort developer, Boss’s attorneys, Todd Levine and Adam Steinberg, argue in the complaint.

Levine is a founding member and partner at Kluger, Kaplan, Silverman, Katzen & Levine in Miami, and Steinberg is a partner with The Law Offices of Adam J. Steinberg in Fort Lauderdale.

Wiseman and Boss representatives had a good working relationship, and Boss believed Wiseman was going to help with a second location, according to the complaint…

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Timing is Everything: When Does Registration of a Copyright Occur Under the Copyright Act?

Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, Case No. 0:16-cv-60497-RNS (11th Cir. May 18, 2017)

Copyright Registration

Copyrights are a unique category of intellectual property law in that the Copyright Act does not require official registration with the Register of Copyrights in order to have a valid copyright. However, despite the seemingly voluntary nature of this regime, there are incentives for a copyright holder to apply for registration of his or her copyright – namely that you cannot file a suit for copyright infringement without doing so. The term “registration,” as it is used in the Copyright Act, is interpreted differently by the Circuit Courts and on May 18, 2017, the Eleventh Circuit weighed in on the circuit split and answered an important question in copyright infringement cases: when does registration of a copyright occur?

Background

In this case, Fourth Estate Public Benefit Corporation, an organization that produces online journalism, brought suit against Wall-Street.com, LLC for copyright infringement. Fourth Estate licenses articles to different websites, but retains the copyrights to those articles. Fourth Estate licensed articles to Wall-Street.com and, pursuant to their licensing agreement, Wall-Street.com was required to remove all content produced by Fourth Estate when the relationship ended; however, Wall-Street.com continued to display the articles after termination of the relationship.

Consequently, Fourth Estate filed a complaint against Wall-Street.com and its owner. Fourth Estate’s Complaint, in an attempt to comply with the pleading requirements for copyright infringement, alleged that “applications to register [the] articles with the Register of Copyrights” had been filed, but pled no facts regarding the Register of Copyrights’ actions on the application. In response, Wall-Street.com filed a motion to dismiss arguing that under the Copyright Act a suit for infringement can only be brought after the Register of Copyrights approves or denies the application to register. As further discussed below, this prompted the Eleventh Circuit to finally address the question that currently splits the circuits: whether registration of a copyright occurs upon the filing of an application or after the Register of Copyrights approves or denies registration of the copyright?

Ruling

In its analysis, the Eleventh Circuit sets forth the two approaches to “registration” under the Copyright Act: (1) the “registration” approach, which “requires a copyright owner to plead that the Register of Copyrights has acted on the application – either by approving or denying it – before a copyright owner can file an infringement action,” and (2) the “application” approach, which “requires a copyright owner to plead that he has filed ‘the deposit, application, and fee required for registration’ before filing a suit for infringement.” Fourth Estate Public Benefit Corporation v. Wall-Street.Com, LLC et al., Docket No. 0:16-cv-60497-RNS at p. 5.

The Eleventh Circuit held that, under the clear language of the Copyright Act, the registration approach is correct – a decision that aligns with the minority approach.[1] In reaching its decision, the Court relied heavily on the statutory language in the Copyright Act. For example, the Court cited to §410(a) of the Copyright Act, which states that “[R]egistration of [a] copyright . . . has [not] been made in accordance with” the Act until the Register “register[s] the claim.” Additionally, the Eleventh found that the Act’s use of the phrase “after examination” in discussing registration indicated that registration occurs subsequent to, and not instantaneously with, the filing of the application.[2] Further, the Eleventh Circuit cited §410(b) to further bolster its analysis, as this section acknowledges that the Register of Copyrights has the power to “refuse registration” if the application does not meet copyrightable standards. Clearly, “if registration occurred as soon as an application was filed, then the Register of Copyrights would have no power to ‘refuse registration.’” Fourth Estate Public Benefit Corporation v. Wall-Street.Com, LLC et al., Docket No. 0:16-cv-60497-RNS at p. 8.

Moreover, Fourth Estate argued that the three-year statute of limitations for infringement suits, established by §507(b) of the Copyright Act, supported the application approach. The Court rejected this argument finding that the Copyright Act’s statutory plan is to encourage early registration, and thus, the three-year statute of limitations and the registration approach taken together align with this statutory scheme. The Court further stated that the statute of limitations functions as an incentive for early registration because the potential of losing the right to protect your copyright against infringement “encourages an owner to register his copyright soon after he obtains the copyright and before infringement occurs.[3]Fourth Estate Public Benefit Corporation v. Wall-Street.Com, LLC et al., Docket No. 0:16-cv-60497-RNS at p. 10.

Impact

This decision clarifies the pleading standard for copyright infringement in the Eleventh Circuit. After this decision, in order to state a claim for copyright infringement a copyright holder must allege that the Register of Copyrights has approved or denied the application for registration. Additionally, as suggested by the Court’s interpretation of the Act’s statutory scheme, this decision has the potential to prevent copyright holders from sleeping on their rights and motivate prompt registration. However, since the Eleventh Circuit took the minority approach, copyright holders and attorneys practicing in this field should continue to follow this issue as it is likely that Fourth Estate will petition for a writ of certiorari in the Supreme Court.

 

[1] The Eleventh Circuit followed the Tenth Circuit’s registration approach, whereas the Ninth, Fifth, and Eighth Circuits have all elected to follow the more lenient application approach.

[2] Section 410(a) of the Act states “When, after examination, the Register of Copyrights determines that, in accordance with the provisions of this title, the material deposited constitutes copyrightable subject matter and that the other legal and formal requirements of this title have been met, the Register shall register the claim and issue to the applicant a certificate of registration under the deal of the Copyright Office.” 17 U.S.C. §410(a) (emphasis added).

[3] The Court also cited to other provisions in the Copyright Act that reflect a statutory scheme encouraging prompt registration. See e.g., 17 U.S.C. §410(c) (stating that registration made “before or within five years after first publication of the work” will be “prima facie evidence of the validity of the copyright.”)

 

Micayla MancusoMicayla Mancuso is an associate at Kluger Kaplan, focusing on general and complex commercial litigation. Before joining Kluger Kaplan as a full time associate, she served as a summer associate at the firm. Prior to this, she served as an extern for the City of Boston Law Department and served as a judicial intern in the Boston Municipal Court for Judge Debra A. DelVecchio. She also served as an intern for the Federal Public Defender for the Southern District of Florida.

Google: A Victim of Its Own Success?

ELLIOT V. GOOGLE, 2017 WL 2112311 (9TH CIR. MAY 17, 2017)

“Google it.”  Of course, we all know what this means. Indeed, the word “Google” has earned such widespread recognition that in 2006 it was added to the dictionary.  While this might be considered the epitome of success, it can be a nightmare in terms of trademark protection.

Google Lawsuit

Background

“Google” is what trademark law refers to as a fanciful mark.  Fanciful marks are made up, and similar to arbitrary marks, have no association to a particular type of goods or services.  For example, “Apple” has no apparent relation to computers just as the names Uber, Twitter, and Amazon give no indication of the particular product or service it provides.  For that reason, fanciful and arbitrary marks generally garner the highest level of trademark protection because it usually takes the trademark owner significant effort marketing its business to reach the point that the public associates its product or service with the mark.

However, when a fanciful term receives such unimaginable success that it transforms itself into a concept or in Google’s case, an entry in the dictionary, it may be in danger of losing its trademark protection and becoming a dreaded “generic” term.  Both “aspirin” and “escalator” were victims of “genericide.”

To determine if a mark has become generic, the Ninth Circuit Court established the “who are you/what are you” test.[1]  Applying this test, a finder of fact would analyze if a term points to the source (who you are), or if a type of good (what you are).[2]  An example is that the trademark “Coke” indicates a soft drink made by “Coca Cola” and the generic term “soda” indicates any carbonated soft drink. Once a term is found to be generic, it has no trademark protection, and can be fairly used by anyone in connection with describing goods or services.

Case

Aware of this risk, Google has vigilantly sought to protect its name.  In 2012 Google discovered that Chris Gillespie (“Gillespie”) acquired 763 domain names that included the term “Google.”  David Elliot (“Elliot”) purchased and registered the domain names using Gillespie’s GoDaddy.com account. Each of the domain names paired the term “Google” with a person, brand or product, such as “googledisney.com” and “googlebarackobama.com.” Google promptly objected to the registration of the domain names and filed a complaint with the National Arbitration Forum (“NAF”) using its dispute resolution procedure. Google argued that the domain names were confusingly similar to the “Google” trademark, were registered in bad faith and constituted cybersquatting.  Google prevailed and NAF transferred the domain names to Google.

Elliot then filed an action in the Arizona District Court (Gillespie later joined in the suit) for cancellation of the Google trademark on the grounds that the word “google” had become a generic term to describe the act of internet searching.

Ruling

After cross-motions for summary judgment, the district court found that Elliot and Gillespie failed to present sufficient evidence to support a jury finding that the public primarily understands the word “google” as a generic name for internet search engines[3].  Elliot and Gillespie appealed to the Ninth Circuit claiming that (1) they had presented sufficient evidence to create a triable issue of fact and (2) that the district court misapplied the primary significance test and failed to recognize the importance of the use of google as a verb.

On May 17, 2017, the Ninth Circuit affirmed the finding that a claim of genericide must always relate to a particular type of good or service, and that use of ‘Google’ as a verb is not synonymous with a finding of genericide[4].

Impact

Like Google, trademark owners must always be vigilant, monitor the public’s use of its mark and take affirmative steps to correct any public misuse to protect against potential claims of genericide.

 

Terri Meyers

Terri Meyers is a Partner at the Miami firm of Kluger Kaplan Silverman Katzen & Levine, P.L. and leads the firm’s Intellectual Property department.

 

 

 

Mayda_Nahhas

Mayda Nahhas is a law clerk at Kluger Kaplan Silverman Katzen & Levine, P.L., a rising third-year law student at Nova Southeastern University – Shepard Broad College of Law, the Goodwin Alumni Editor for Nova Law Review Vol. 42, and the Founding President of Nova Southeastern University Fashion Law Association.

 

[1] Official Airline Guides, Inc. v. Goss, 6 F. 3d 1385 (9th Cir. 1993).

[2] Yellow Cab Co. of Sacramento v. Yellow Cab of Elk Grove, Inc., 419 F.3d 925, 929 (9th Cir. 2005); Filipino Yellow Pages, Inc. v. Asian Journal Publication, Inc., 198 F.3d 1143, at 1147 (9th Cir. 1999).

[3] Elliot v. Google, 2017 WL 2112311 at 2 (9th Cir. 2017).

[4] Id. at 3.

Supreme Court’s First Ruling on Fashion Copyright

Broadening Intellectual Property Rights for the Fashion Industry

Fashion Copyright

Case:

In a first ever fashion copyright decision, the U.S. Supreme Court analyzed whether design elements on a cheerleading uniform could be copyright protected.

At issue were two competitor manufacturers of cheerleading uniforms, Star Athletica, LLC (“Star Athletica”) and Varsity Brands, Inc., Varsity Spirit Corporation and Varsity Fashions & Supplies, Inc. (collectively “Varsity”).

Varsity had successfully acquired approximately 200 copyright registrations for two and three dimensional designs that appear on its cheerleading uniforms. Varsity sued Star Athletica for infringing five of Varsity’s copyright registered designs. In 2014, the District Court held that fashion related patterns for apparel were non-copyrightable if the work of art was not identified separately from its garment. It reasoned that the cheerleading uniform’s designs served a useful function of identifying a cheerleading uniform as such.

Background:

Under the Copyright Act of 1976[1], uniforms and other clothing are generally considered useful articles and therefore such items cannot be copyright protected. The fashion industry has customarily relied on other areas of intellectual property law such as trademark, trade dress or design patents to protect their fashion designs and brand. This is because although some elements of fashion can be protected by copyright law such as drawings, photographs, editorial content and software embedded in wearable tech, before this ruling, fashion designs were not copyright protectable.

Ruling:

The Supreme Court, in a majority 6-2 decision, reversed the District Court’s decision and ruled in favor of Varsity Brand, finding that individual design elements incorporated into such useful articles are eligible for copyright protection.

The Sixth Circuit’s decision held that the designs were “separately identifiable” because a blank cheerleading uniform can appear side-by-side a designed cheerleading uniform and both would still be identified as a cheerleading uniform. It further reasoned that the designs could stand-alone because the designs could be incorporated onto other tangible mediums.

Impact:

This decision marks an important milestone for the fashion industry and will no doubt spawn further litigation as designers press newfound copyright protection and copycats wonder what is safe. A designer wishing to obtain protection for a design must still prove ownership of an original “pictorial, graphic, or sculptural work which include two-dimensional and three-dimensional works of fine, graphic and applied art[2],” and obtain a registration from the U.S. Copyright Office. Although registration is not required to prove ownership of an original work of art, registration is a requirement in order to maintain a copyright infringement action in federal court.

Finally, Justice Ginsburg found the analysis of separability of the design from the useful article unnecessary because the designs at issue are not designs of useful articles, rather, the designs are themselves copyrightable pictorial or graphic works reproduced on useful articles[3].” Given that the design is copyrightable, Justice Ginsburg points out that the right “includes the right to reproduce the work in or on any kind of article, whether useful or otherwise[4].” This common-sense approach may send a clear message to the U.S. Copyright Office as they review the inevitable influx of copyright registrations which will follow this opinion.

 

Terri MeyersTerri Meyers is a Partner at the Miami firm of Kluger Kaplan Silverman Katzen & Levine, P.L. and leads the firm’s Intellectual Property department.

 

 

 

Mayda_NahhasMayda Nahhas is a law clerk at Kluger Kaplan Silverman Katzen & Levine, P.L., a second-year law student at NSU Shephard Broad College of Law and Founding President of NSU Fashion Law.

 

 

 

[1] 17 U.S.C. § 101 (2010).

[2] 17 U.S.C. § 101.

[3] Star Athletica, Inc., 2017 WL 1066261, *14.

[4] 17 U.S.C. § 113(a) (2010).

Standard for Expert Opinions Uncertain in Light of the Supreme Court of Florida’s Recent Decision

 

Case

The Florida Supreme Court has declined to follow the Florida Legislature’s decision around expert witness testimony requirements. On February 16, 2017, the Supreme Court of Florida declined to adopt the 2013 amendments to the Florida Evidence Code which replaced the Frye standard for expert witnesses with the Daubert standard. The ruling shows that the interplay between the Florida Supreme Court and the Florida Legislature may create confusion and uncertainty for attorneys and judges about the standard they should apply for expert witness opinions going forward.

 

Florida Supreme Court

 

Background

In January 2013, the Florida Legislature amended the Florida Evidence Code regarding expert opinions. The purpose of the amendment was for Florida to shift from the Frye standard to the Daubert standard for expert witness opinions, in order to put Florida in line with the federal courts and most states. What’s the difference between the two?

  • The Frye Standard: an expert opinion based on a scientific technique is only admissible if such technique was “generally accepted” as reliable in the relevant scientific community.
  • The Daubert Standard: a more stringent and slow process, which requires additional hearings to determine the validity of expert opinion.

 

Ruling

The FL Supreme Court declined to adopt the new amendments, and therefore Florida will continue to use the Frye standard, unless or until challenged in a “proper case or controversy” where the Supreme Court of Florida has an opportunity to review the constitutional issues it referenced. The Court explained that even though it is the policy to adopt provisions of the Florida Evidence Code as the Legislature suggests, they have declined to on occasion “because of significant concerns about the amendments, including concerns about the constitutionality of an amendment.”

The Court noted ‘grave constitutional concerns’ with the change. The concerns were not discussed in detail in the opinion, but touched upon the constitutional right to a jury trial and denying access to the courts.

Justice Polston, concurring in part and dissenting in part, disagreed with the majority for rejecting to replace the Frye standard, honing in on the fact that the Daubert standard is followed not only in federal courts, but also in “36 states.” Justice Polston continued, stating he knew of “no reported decisions that have held that the Daubert standard violates the constitutional guarantees” and in fact, cited to case law across the nation stating the opposite.

 

Impact

The ruling could have a substantial impact in the trial courts. For example, when a party objects to the admissibility of an expert witness opinion based upon the Daubert standard, the opposing party may argue that, based on the Court’s ruling, the Daubert amendments are unconstitutional. A party seeking to admit expert testimony could also argue that the amendments are procedural in nature, and because they were not adopted by the Supreme Court of Florida, the court should use the Frye standard in ruling on the motion.

Unless or until the FL Supreme Court rules differently on the issue, it appears this ruling is likely to cause confusion in courts across the state in applying the standard for admitting, challenging, or excluding expert opinions under the Florida Evidence Code.

 

 

Gina RhodesGina Rhodes is an associate at Kluger, Kaplan, Silverman, Katzen & Levine, P.L. and focuses her practice on commercial litigation disputes in both state and federal court.