On this day in 1997, the Ninth Circuit held that the National Enquirer violated the Lanham Act and the California right of publicity by publishing an “exclusive interview” with Clint Eastwood that never actually occurred. In Eastwood v. National Enquirer, Inc., the actor brought an action against the National Enquirer alleging that an article fabricating an interview with Eastwood misrepresented the article’s origin, association and/or endorsement in violation of section 43(a) of the Lanham Act, and violated Eastwood’s right of privacy and misappropriated his name, likeness, and personality under Cal. Civ. Code § 3344 and California common law. Writing for the court, Judge Alex Kozinski said that the editors of the Enquirer “intended to convey the impression — known by them to be false — that Eastwood willfully submitted to an interview by the Enquirer.” This, said Kozinski, satisfied the “actual malice” standard under New York Times v. Sullivan. Therefore, Eastwood was entitled to damages. The court upheld the verdict of over $800,000 in damages and attorneys fees.
According to the Guardian, Warner Bros. has sued a Swiss manufacturer for copyright infringement of the film and fictional character Harry Potter. The condom manufacturer, Magic X, has been selling “Harry Popper” condoms since 2006 and claims its product has nothing to do with Harry Potter. The Guardian offers the following description of the packaging:
He has the trademark round spectacles and the regulation magic wand. But his tongue is extended in a lascivious manner and his thoughts are purely carnal. For good measure, he is in the guise of a pink, pimpled prophylactic.
The Daily Telegraph has the image of the packaging here.
On this day in 2005, a federal court held that STARBOCK BEER did not infringe the STARBUCKS trademark. In Bell v. Starbucks U.S. Brands Corp., the U.S. District Court for the Southern District of Texas held that the Old Quarter Acoustic Café, an informal music venue, did not infringe the Starbucks mark by selling beer with the STARBOCK BEER and/or STAR BOCK BEER mark. The plaintiff had applied for a federal trademark registration for STARBOCK BEER, and subsequently sought a declaratory judgement that his mark did not infringe the STARBUCKS mark. The court found no likelihood of confusion between the two marks based on the café’s limited use of the mark. Notably, the court said that the STAR BOCK BEER logo was very different in appearance than the STARBUCKS “Siren” logo. In the STAR BOCK BEER logo, “Star,” “Bock,” and “Beer” were on three different lines, with the colors red, blue, and white. The logo also included the words “Since 2003” and “Born in Galveston – The Old Quarter Acoustic Café.” The court said that the café could continue to sell its beer with the STAR BOCK BEER mark, but only in conjunction with the musical activities at the café, and only with the STAR BOCK BEER logo. The court granted a permanent injunction against any broader use of the STAR BOCK BEER or STARBOCK BEER mark.
The Smoking Gun reported that Jersey Shore star Nicole Polizzi’s trademark application for SNOOKI has been rejected by the U.S. Patent and Trademark Office (USPTO). On May 12th, the USPTO issued a non-final action refusing registration of the mark based on a likelihood of confusion with a previously registered mark, ADVENTURES OF SNOOKY. Polizzi’s trademark application sought to register the mark in International Classes 16 (“Printed matter, namely, books”) and 41 (“Entertainment in the nature of personal appearances by a television personality”). The ADVENTURES OF SNOOKY mark is already registered in Class 16 for “a series of children’s books.” It is important to note that the USPTO did not refuse to register the mark for the services described within Class 41. Polizzi has until mid-November to respond to the rejection, and can appeal if a final refusal is issued.
On this day in 1982, the California Labor Commission awarded Richard Pryor more than $3 million in a dispute with his former manager. In Pryor v. Franklin, TAC 17 MP 114, Pryor claimed that his former manager, David McCoy Franklin, acted as both an unlicensed talent agent and a personal manager. Under California’s Talent Agencies Act (Cal. Lab. Code §§ 1700-1700.47), an agent — a person who seeks employment for his or her client — must be licensed by the state. Managers need not be licensed, but generally cannot seek employment for their clients. The Labor Commission found that Franklin obtained employment for Pryor in many areas of the business, that Franklin referred to himself as Pryor’s agent, and that he was often the only one who negotiated contracts on Pryor’s behalf. The Commission said it was irrelevant that the initial contact was made by the interested parties rather than Franklin. Regardless of who makes the initial contact, a talent agent’s license is required in order to negotiate an artist’s employment agreement. The Commission also found that Franklin misappropriated money that should have been paid to Pryor.
In a recent SEC filing made in preparation for Skype’s upcoming IPO, the company revealed that BSkyB, Rubert Murdoch’s British satellite broadcasting company, has challenged the registration of the Skype trademark in the European Union, India, Norway, and Brazil. The broadcaster claims that Skype is too similar to BSkyB’s “SKY” mark. OHIM, the EU agency responsible for registering community trademarks valid throughout the EU, rejected registration of the Skype mark on July 6th based on a likelihood of confusion. Skype said that it intends to appeal the decision.
On this day in 2005, a Delaware court ruled that the board of directors of the Walt Disney Company did not breach their fiduciary duty by giving Michael Ovitz a $140 million compensation package. In In re Walt Disney Co. Derivative Litigation, shareholders brought a derivative action suit, alleging breach of fiduciary duty of loyalty by Ovitz and a breach of duty of due care by the directors who approved his employment agreement. Ovitz, former agent and co-founder of the Creative Artists Agency (CAA), was wooed to Disney by then-CEO and friend Michael Eisner. However, Ovitz turned out to be “‘a little elitist for the egalitarian Walt Disney World cast members [employees],’ and a poor fit with his fellow executives.” About 14 months after Ovitz was hired, he was shown the door. Because he was terminated without cause, he received his full $140 million compensation package.
The court found that Ovitz did not breach a fiduciary duty of loyalty because his contract was negotiated prior to his employment and, therefore, before he owed any fiduciary duty to the company. More significantly, the court found that the directors did not breach their fiduciary duty of care in approving Ovitz’s compensation package. In Delaware, the fiduciary duty of due care requires that directors “use that amount of care which ordinarily careful and prudent men would use in similar circumstances” and that they “consider all material information reasonably available.” Under the business judgment rule, corporate directors are presumed “to have acted on an informed basis” and “in the honest belief that the action taken was in the best interests of the company [and its shareholders].” The court will not second-guess a business decision made by the directors so long as it is made in good faith, is reasonably informed, and has a rational business purpose. The court found that the directors took the minimally sufficient steps to inform themselves of the employment agreement before approving it, and that they acted in the good faith belief that hiring Ovitz would be in the best interests of Disney. Therefore, the court held, the directors did not breach their duty of care in approving Ovitz’s pay package.