UNFAIR COMPETITION AND RELATED LEGAL ISSUES FOR MULTIMEDIA PRODUCERS

Outline for Seminar Given by Harris Tulchin at University of California, Los Angeles, and at Beverly Hills, CA Interactive Finance Meeting of International Interactive Communications Society

I. UNFAIR COMPETITION:

• 1) All-encompassing term for "Dirty Tricks"
  
• 2) Lanham Act 15 USC 1125 protects against:
  

  a) misappropriation
  

  b) passing off
  

  c) trademark infringement
  

  d) invasion of right of publicity
  

  e) false advertising
  

  f) likelihood of causing consumer confusion
  

  g) unauthorized commercial endorsements
  

• 3) Seminal International New Service case referred to below INS case - invokes fundamental rules of honesty and fair dealing - equity.

II.MISAPPROPRIATION - INS vs AP 248 US 215

A. International News Services took Associated Press "hot news" items from east coast newspapers and telegraphed the material to its west coast newspapers which were printed and distributed to the public before the AP newspapers in the same geographic area.
B. Copyright laws did not protect AP because --

• 1. "news" consisted of facts which were not copyrightable, and
  
• 2. AP did not, at the time, copyright the expression of those facts.
  

C. No Breach of Contract because there was no contract between the parties.
D. Supreme Court developed a new category of protection to keep pace with the new technology - misappropriation.

III.1960's SEARS & COMPCO decisions -- seemed to have preempted state unfair competition laws when a federal statute was applicable (i.e., patent, copyright, trademark laws).

IV.BONITO BOATS v. THUNDER CRAFT BOATS -- involved a Florida statute that prevented the use of a process for copying the design of boats. The design of the boat was clearly within patent protection, but the design was patented.

A. Supreme Court held that unfair trade practices, including misappropriation, are not preempted by federal statutes, as long as they add the extra element of consumer confusion, and are not in conflict with federal statutes.

V.LANHAM ACT - Section 43(d) - 15 USC 1125.

A. Codified state unfair competition laws in a federal statute.
B. Applies only in interstate commerce.
C. State unfair competition laws still apply to intrastate commerce.
Section 43(a) provides:

a. Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any work, term, name, symbol or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact which --

• 1. is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such with another person, or as to the origin, sponsorship or approval of his or her goods, services, or commercial activities by another person, or
  
• 2. in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or another person's goods, services or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
  

b. Any goods marked or labeled in contravention of the provisions of this section shall not be imported into the United States or admitted to entry at any customhouse of the United States. The owner, importer, or consignee of goods refused entry at any customhouse under this section may have any recourse by protest or appeal that is given under the customs revenue laws or may have the remedy given by this chapter in cases involving goods refused entry or seized.

D. Defenses include:

	1. innocent infringement	5. laches
	2. First Amendment		6. unclean hands
	3. Fair use 			7. abandonment
	4. Parody			8. estoppel
	9. acquiescence of use

E. Remedies:

	1. injunctive relief		4. attorneys' fees
	2. accounting			5. costs
	3. damages

F. Section 43 of Lanham Act - provides a viable alternative in those states which do not recognize a right of publicity.

• 1. Violation of Section 43(a) is easier to prove than violation of New York's right of publicity statute.
  

G.WAITS vs. FRITO LAY - (1992)

• 1. Singer Tom Waits brought an action against Frito Lay for using a voice in a commercial that sounded like Waits.
  
• 2. Court found a violation of Section 43(a) holding: "courts have recognized false endorsement claims brought by plaintiffs, including celebrities, for unauthorized imitation of their distinctive attributes, where those attributes amount to an unregistered commercial "trademark."
  

H. WHITE vs SAMSUNG ELECTRONICS

• 1. Samsung made a commercial with a robot dressed up as Vanna White on the set of a show that was recognizable as "Wheel of Fortune."
• 2. White brought suit under
  

  a. Cal Section 3344; - the right of publicity statute -- Lanham Act
  

  b. Lanham Act Section 43(a) -- for passing off.
  

• 3. Court dismissed Cal 3344 because "look alikes do not fall within the scope of 3344;
  
• 4. Court upheld White's claim under Section 43(a) "passing off" provisions.
  

  a. Court held that even though Samsung intended to "spoof" Vanna White, it also intended to confuse consumers regarding the endorsement.
  

VI.Example: SHOWING THE RELATIONSHIP BETWEEN a Right of Publicity Claim and a Lanham Act claim.

A. A celebrity's picture is used in an ad, but the ad has conspicuous disclaimers stating that the celebrity does not endorse the product.

• 1. Lanham Act claim -- would be denied -- no passing off, no endorsement;
  
• 2. Publicity claim -- would be upheld -- for the commercial use of celebrity's photo without her consent.
  

VII.PASSING OFF - KING vs. INNOVATIVE BOOKS (LAWNMOWER MAN CASE)

A. Producers of the movie "Lawnmower Man" gave famous author Stephen King a "based upon the story" credit and a possessory credit: "Stephen King's Lawnmover Man."
B. King had nothing to do with the making of the movie, although the screenplay was based upon his short story, -- Evidently, the movie was very different than the story.
C. King sued under the Lanham Act claiming that the use of his name in a possessory credit constituted "passing off" and intended to confuse the public as to his participation in the movie.
D. Possessory credits are usually reserved for Directors and sometimes, Producers.
E. Court held that use of the possessory credit was an unauthorized "passing off" which was likely to cause confusion as to King's creative participation in the movie under Section 43(a) of the Lanham Act.

VIII.REVERSE PASSING OFF is also actionable under the Lanham Act.

• 1) In Smith vs. Montoro (1981) an actor who had appeared in a film found that his name had been removed from the credits and replaced with the name of another actor.
  
• 2) Court held this conduct violated Section 43(a) of the Lanham Act as "revers

Bally Total Fitness v. Faber, dismissing a lawsuit against a Bally sucks logo and website. The court: The explosion of the Internet is not without its growing pains. It is an efficient means for business to disseminate information, but it also affords critics of those businesses an equally efficient means of disseminating critical commentary.