September 2006

From the editors of Wolters Kluwer Law & Business, this update describes important developments from CCH and Aspen Publishers intellectual property and computer law publications.

If you have any comments or suggestions concerning the information provided or the format used, we'd like to hear from you. Please send your comments to john.arden@wolterskluwer.com.

COPYRIGHT

Copying of Bar Exam Questions Warranted Award of $11.9 Million
A bar review course provider violated the Copyright Act when it copied more than 100 questions from a bar exam for use in its exam preparation courses, the federal district court in Philadelphia ruled. Accordingly, after a four-day bench trial, the provider was enjoined from further copying and ordered to pay $11.9 million in damages—one-third of its revenues over a five-year period. The bar exam questions were entitled to copyright protection because they “may reflect original expression in their wording, particularized facts, and answer choices,” the court concluded. While teaching the legal principles tested on the bar exam was permissible, doing so using copyrighted matter was not. An admission by the course provider’s founder that he used the notes of employees who had taken the bar exam to generate almost all of the sample questions and answers was direct evidence of copying. Nearly all of the 113 challenged questions were substantially similar to bar exam questions. Accordingly, a national organization of bar examiners was entitled to actual damages and an apportionment of the course provider’s revenues resulting from the unlawful copying. The organization was awarded more than $11.9 million, which was one-third of the $35.7 million the provider generated from its three-day course from July 2001 though 2005 (National Conference of Bar Examiners v. Multistate Legal Studies, Inc., dba PMBR, ED Pa, CCH Copyright Law Reports ¶29,233).

Copyright Bill Addresses Digital Music Licensing, Orphan Works
A bill intended to provide for the licensing of digital delivery of musical works, to set a limitation on the remedies in cases in which a copyright owner cannot be found, to increase the statutory damage awards for the music industry, and to expand the FBI’s role in combating piracy was introduced in the House of Representatives on September 12. The proposed Copyright Modernization Act of 2006 (H.R. 6052), sponsored by U.S. Rep. Lamar Smith (R-Tex), was referred to the House Judiciary Committee. The bill combines previously-introduced bills—including the Orphan Works Act of 2006 (H.R. 5439) and the Section 115 Reform Act of 2006 (H.R. 5553)—into one piece of legislation.

Copying, Web Posting Did Not Confer Jurisdiction
An Arizona court did not have general or specific jurisdiction over a Maryland defendant by virtue of the defendant’s copying of confidential information from servers in Korea and her posting of the information on a web site, the federal district court in Phoenix held. The defendant did not have substantial, continuous, and systematic contact with Arizona. There was no evidence that her conduct was expressly aimed at the state. Thus, a copyright infringement claim against the defendant was dismissed (Dahn World Co. Ltd. v. Chun, D. Ariz., CCH Copyright Law Reports ¶29,224).

TRADEMARK

Dilution Bill Clears Congress, Awaits President’s Approval
A federal trademark anti-dilution bill—designed to protect famous marks from uses that blur their distinctiveness or tarnish their reputations—cleared Congress on September 25 and was presented to the President on September 29. The proposed Trademark Dilution Revision Act (H.R. 683) would amend Sec. 43 of the Lanham Act by replacing the current anti-dilution section with one that authorizes owners of famous marks to enjoin the use of a mark “that is likely to cause dilution by blurring or dilution by tarnishment.” The measure was proposed in response to the U.S. Supreme Court’s 2003 decision in Mosley v. V Secret Catalogue, Inc. (CCH Trademark Law Guide ¶60,064), which held that the Federal Trademark Dilution Act required a showing of actual dilution, rather than a likelihood of dilution. The bill defines “dilution by blurring” as an “association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.” It defines “dilution by tarnishment” as an “association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.” H. R. 683 contains exclusions for use of a famous mark in (1) comparative advertising, criticism, commentary, or parody; (2) news reporting or news commentary; and (3) noncommercial designations of source. The legislation would become effective immediately upon approval by the President.

Use of ‘‘What Happens in Vegas” Slogan Infringed State Agency’s Mark
A sporting goods company's use of the mark, "What Happens in Vegas Stays in Vegas," on women's “intimate apparel" was likely to cause confusion with the mark, "What Happens Here Stays Here" ("WHHSH"), which was owned by a Nevada governmental agency responsible for advertising Las Vegas as a travel destination, according to the federal district court in Las Vegas. “WHHSH” was a strong mark that had achieved nationwide recognition due to the agency's promotional efforts, the court said. Tourism and the sale of clothing were complementary, and the marks were similar. In context, there was no doubt that the “WHHSH” mark referred to Las Vegas. Evidence of actual confusion (including a survey) also supported a finding of likelihood of confusion (R&R Partners, Inc., D. Nev., CCH Trademark Law Guide ¶60,876).

BRICK OVEN Was Generic Term for Style of Frozen Pizza
The term BRICK OVEN was generic as a matter of law when used in connection with pizza, including frozen pizza, the U.S. Court of Appeals in St. Louis has held, affirming a decision of the federal district court in St. Paul, Minnesota (CCH Trademark Law Guide ¶60,634). A frozen pizza manufacturer was not entitled to exclusive use of the term. Three prior refusals by the Patent and Trademark Office to register the phrase on genericness grounds constituted persuasive evidence that the term was generic. The evidence in the record established that "brick oven pizza" was merely pizza cooked in a brick oven, and it referred to a type or style of pizza that was sold in both restaurants and in the frozen food aisles of supermarkets. It was undisputed that numerous companies and third parties used the term BRICK OVEN PIZZA in its generic sense (Schwan's IP, LLC, 8th Cir., CCH Trademark Law Guide ¶60,875).

COMPUTER & INTERNET LAW

Retailer May Be Liable for Website Inaccessible to the Blind
A federal district court in San Francisco declined to dismiss a class action lawsuit against retailer Target Corp., alleging that its Target.com website discriminates against the blind. The National Federation of the Blind (NFB) and its California affiliate alleged that Target's failure to include technologically simple features to make Target.com accessible to the blind violated the American with Disabilities Act and California's Unruh Act and Disabled Persons Act. Target moved to dismiss the complaint, arguing that the ADA and the California statutes guaranteed physical access to “any place of public accommodation,” but that Target.com was not a "place of public accommodation." The NFB contended that unequal access to the website denied the blind the full enjoyment of the goods and services offered at Target's brick-and-mortar stores, which are places of public accommodation. The court agreed with NFB, ruling that Target.com's inaccessibility could be discriminatory under the ADA to the extent that it "impedes the full and equal enjoyment of goods and services offered in Target stores." The California Unruh Act and Disabled Persons Act claims were allowed to proceed because the statutes specifically incorporated ADA violations (National Federation of the Blind v. Target Corp., ND Cal., CCH Guide to Computer Law ¶49,177).

Google’s Sale of Keywords Is Not Trademark Use
Search engine Google's sale of keyword ads, featuring the well-known trademark of a computer services franchisor (Rescuecom), did not constitute a "use in commerce" under the Lanham Act, the federal district court in Syracuse, New York has ruled. Google's “AdWords” program enabled advertisers to purchase certain keywords. When Internet users typed those words into Google's search engine, the program generated "Sponsored Links" to the advertiser's websites. Google also promoted its advertising services via a "Keyword Suggestion Tool," which identified "Rescuecom" as an effective search term. However, Google's employment of "Rescuecom" to trigger Sponsored Links was not trademark use because Google did not display the mark in any way that indicated source or origin. Contrary to the franchisor’s claim, Google did not prevent users from accessing Rescuecom's website through the search engine. Users merely had to click on the appropriate link in the search results. The alteration of search results was not a trademark use because there was no allegation that Rescuecom's mark was displayed in any of the Sponsored Links results. The franchisor’s inability to show use in commerce caused the court to dismiss the federal trademark infringement, false designation of origin, and dilution claims. The court then dismissed the franchisor’s state infringement, dilution, and tortious interference claims for lack of supplemental jurisdiction (Rescuecom Corp. v. Google, Inc., ND, N.Y., CCH Computer & Internet News Alert, October 4, 2006).

Communications Decency Act Protects ISPs from State Criminal Liability
The Communications Decency Act (CDA) protects Internet service providers from liability under state criminal laws for posting illegal content from their users, the federal district court in Philadelphia has ruled. Internet access providers sued Pennsylvania law enforcement officials under a federal law (42 U.S.C. §1983) that permits a cause of action against the government when it deprives individuals of their civil rights. The service providers alleged that law enforcement officials violated their rights under the CDA by executing a search warrant and enforcing a Pennsylvania statute that criminalized the knowing distribution and possession of child pornography. The state argued that the CDA did not apply to criminal causes of action and that the CDA did not confer an enforceable right under §1983. The CDA shields Interactive computer service providers from being treated as “the publisher or speaker of any information provided by another information content provider." 47 U.S.C. §230(c) (1). The CDA further provides that: "No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section." 47 U.S.C. §230(e) (3). The court acknowledged that subsection (c) (1), standing alone, does not specify whether that prohibition applies to civil and/or criminal actions. However, when subsection (c)(1) is read in conjunction with subsection (e)(3), the meaning of the statute becomes clear: no "cause of action" may be brought, and no "liability" may be imposed, under any state law that treats a provider of interactive computer services as the publisher or speaker of information provided by others, the court observed. Moreover, the CDA makes no attempt to limit "cause of action” or "liability" to the civil context (Voicenet Communications, Inc. v. Corbett, ED Pa, CCH Guide to Computer Law ¶49,184).

Computer and Internet Integrated Library Now Available
A new electronic library for computer and Internet law is now available on the CCH Internet Research Network. The Computer and Internet Law Integrated Library brings together news, analysis, commentary, and full text reporting of laws, regulations, and court decisions. The core library consists of CCH Guide to Computer Law and five treatises from Aspen Publishers—Law of the Internet, Drafting Internet Agreements, Law of Electronic Commerce, Scott on Computer Law, and Scott on Multimedia Law. Subscribers to the core library will receive Computer and Internet News Alert e-mails, Advance Release Documents, Practitioners Perspective columns, and two Aspen monthly journals—The Journal of Internet Law and The Computer & Internet Lawyer. Seven optional add-on publications will enable subscribers to customize their libraries to suit their practices. For further information, pricing, or a demonstration of the library, contact your Account Representative by calling 888-224-7377.