World Intellectual Property - IP Laws - US
US courts decisions on IP-related matters:
There have been several important US copyright and trademark cases, including music file sharing, copyright termination/restoration, fair use of trade marks and the famous mark doctrine. The key decisions of US courts in these areas are:
Music file sharing:
In a copyright decision involving the Grokster music and file sharing software, the US Supreme Court ruled out that "one who distributes a device with the object of promoting its use to infringe copyright, is liable for the resulting acts of infringement by third parties". In Grokster, the device at the issue was actually free software that allows computer users to share electronic files through networks of computer users who communicate directly with each other rather than through a centralized server. The plaintiffs included various motion picture studios, recording companies, songwriters and music publishers whose content was being shared online by Grokster users without authorization. The plaintiffs alleged that the distributors of the Grokster software were contributory copyright infringers because they knowingly and intentionally distributed that software to enable users to reproduce and share with other users the plaintiffs copyrighted music and other works protected by copyright.
The US Court of Appeal ruled in favour defendants, holding that they could not be liable on a contributory copyright infringement theory under the Supreme Court decision in the case Sony Corp. vs. Universal Studios, in which the fair use doctrine was held to protect the makers of videotape recorders from liability for taping by users. The Supreme Court reversed the decision holding that the court misapplied the holding in Sony, and that the fact that a product is capable of substantial non-infringing uses is no defence to a contributory copyright infringement claim, where the defendant actively induces infringing uses.
Copyright termination/restoration:
In the first test by a US appellate court of the newly added right of authors' heirs to terminate prior copyright grants under the Copyright Term Extension Act, the US Court of Appeals in the case (Milne vs. Slesinger) ruled that a notice of termination served by the grand-daughter of AA Milne, author of the book was invalid. The notice of termination was intended to recapture merchandising rights in the book that Milne had granted to Slesinger and that Slesinger had assigned to Disney Enterprise. The court further held that the agreement was a permitted exercise of freedom of contract because it was made five decades after the Pooh works and was signed by the author' son who at the time had the right to terminate the grant.
With regard to copyright restoration, the Court in case (Good Luck Troll vs. Uneeda) ruled that the US copyright was restored pursuant to Uruguay Round Agreements Act, the legislation enacted to implement the US GATT treaty requirements and restore US rights to foreign authors whose works had lost copyright protection for failure to comply with statutory formalities under the earlier US law. The court also rejected Uneeda's argument that it was a reliance party that could avail itself of a limited statutory exemption from the effects of restoration.
Fair Use trade mark defence:
The US Supreme Court resolved a split among the federal appellate courts on the significance of likely confusion for a fair use defence to a trade mark infringement claim, and the obligation of a party defending on that ground to show that its use is unlikely to cause consumer confusion. The Supreme Court held that a defendant has no independent burden to negate the likelihood of any confusion in raising the trade mark fair use defence, that the term is used descripotively, not as a mark, and fairly in good faith. The Court expressly noted that "fair use can occur along with some degree of confusion".
Famous mark doctrine:
A number of US courts have applied the famous marks doctrine to hold that, even absent use of a mark in this country, the owner of a foreign mark can establish trade mark rights here superior to those of a domestic user of the same mark if the foreign mark achieved renown in the US prior to the domestic user's first use. In Empresa Cubana Del vs. Culbro Corp., the US Court of Appeals for the Second Circuit heard an appeal from a decision in which the lower court applied the famous marks doctrine to hold that a Cuban entity owned US rights to the celebrated Cohiba mark for cigars. However, the court did not rule on the issue whether the famous marks doctrine is valid under US law, as it held instead that the express terms of regulations promulgated pursuant to the Trading with the Enemy Act prohibited the transfer of property, specifically including trade mark rights, to any Cuban entity. Months later, a judge of the US District for the Southern District of New York held that the famous marks doctrine cannot apply here because the US Trademark Act of 1946 confers trade mark rights only upon a showing of use of a mark in interstate United States commerce. Since this decision confused the previous decision, further developments in this area are being envisaged.
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