Domain Name Seizure

By Janelle H.

   In an effort to curb copyright infringement, the U.S. government through the Department of Homeland Security (hereafter DHS) is starting to seize domain names from Web site owners using in rem warrants. DHS is then repurposing many of the sites to display anti-piracy public service announcements. Such seizure, however, might be illegal. Under this new seizure process the government is not required to prove its case of direct, willful copyright infringement, nor give owners of the domain name due process. This seizure may also be an unconstitutional prior restraint of free speech.

   In Puerto 80 Projects v. U.S. Dept. Homeland Security, ICE (S.D.N.Y. Aug. 4, 2011), U.S. customs agents seized the domain names Rojadirecta.com and Rojadirecta.org. The sites were suspected of being pirate internet sites used to direct users via links to illegal Web broadcasts of live sporting events and Pay-Per-View shows which violated copyright law. There was, however, no directly infringing material on Puerto 80’s Web site. Puerto 80 filed a petition in district court requesting the domain names be released pending trial on the merits of the case. The judge denied the petition because Puerto 80 did not prove seizure would cause undue hardship and “[t]he main purpose of the Rojadirecta Web site . . . is to catalog links to the copyrighted athletic events. Any argument to the contrary is clearly disingenuous.” Puerto 80’s motion to dismiss is pending oral argument.

I. Government’s arguments that domain name seizure is legal

   The government argues that there is rampant online infringement that must be stopped in order to enforce its own copyright laws and protect copyright holders. Returning the domain names would enable Puerto 80 to continue to violate copyright law. Furthermore, domain owners do not experience obvious financial hardship because, like Puerto 80, owners can simply purchase new domain names in other countries and return to business. The government’s position is that this seemingly drastic measure is necessary because many of these pirate sites are foreign—U.S. courts have no jurisdiction over the individuals who run the sites, so th traditional means of enforcement are not feasible. Lastly, the government argues that there is not a prior restraint on speech because people who participate in the sites’ discussion forums can easily find another platform for their speech online.

II. Problems with the legality of domain name seizure

   A. No direct copyright infringement
   
   The government claims that the Web site owners are subject to forfeit the domain names because they have engaged in criminal copyright infringement. Criminal copyright infringement, however, ordinarily requires a showing of willful, direct infringement. Courts have held that linking is not direct infringement. Regarding secondary liability, Puerto 80, if anything, only engaged in vicarious infringfement.  But since vicarious copyright infringement is not covered by the criminal copyright statute, forfeiture is not legal.

   B. Violation of First Amendment

   The Puerto 80 contained user-generated speech via its discussion forums. In order for the government to impose a prior restraint on this user-generated speech, the government must show: (1) the reason for the ban is a government interest of the highest magnitude, and (2) the prior restraint is necessary. To be “necessary”, the proposed harm must be certain and irreparable. Also, the restraint must be effective to prevent harm and no alternatives to the restraint can exist. In Puerto 80, it is not clear that the government has fulfilled its First Amendment burden. Also, the argument that there is no speech infringement if other forums exist contravenes established First Amendment law: “one is not to have the exercise of his liberty of expression in appropriate places abridged on the plea that it may be exercised elsewhere.” Schneider v. N.J. 308 U.S. 147 (1939). Seizure is overbroad too.

   C. Violation of Due Process

   
   Before the government may impose sanctions, the government must provide notice and a hearing  for the accused to challenge government’s actions, except in extraordinary circumstances. Hamdi. The question is if, as a matter of policy, enforcing copyright law should be one of those rare circumstances when less/no process is acceptable.

   D. Seizure may curb Internet innovation

   Seizures interfere with and disrupt the critical Domain Name System infrastructure of the internet. Also, since the government may seize domains at their discretion, internet developers may have less incentive to put their time, creativity and effort into their domains in the future.

The Red Sole Mark

By Fallon S., Corinne S., and Catherine K.

   Just a cursory glance through a fashion magazine will show an image of one of the most widely known ladies’ shoe designs. Scores of celebrities line red carpets and grace the pages of magazines wearing the same brand of high-fashion heels. They have come to signify fashion, glamour, and status. One particular feature of this brand shouts to the world who the producer is – the shoes’ bright red soles. Even most male consumers can recognize that these famous shoes come from one specific source – Christian Louboutin.

   In Christian Louboutin v. Yves Saint Laurent, Inc., 778 F.Supp.2d 445 (S.D.N.Y. 2011), a New York District Court judge, Victor Marrero, denied Louboutin a preliminary injunction against an American competitor, Yves Saint Laurent (YSL). Louboutin moved for an injunction to stop YSL from allegedly infringing Louboutin’s trademark by selling YSL’s own red sole shoes.

   Mr. Louboutin began coloring the outsoles of his women’s shoes in 1992 with a glossy “Chinese red” in order to give the line of shoes “energy” and because he regarded the color as “engaging, flirtatious, memorable and the color of passion.” He invested large amounts of capital to promote the shoes and to build a reputation as a high-fashion women’s shoe designer. The fashion industry responded so positively to the shoe that the name Louboutin nearly became synonymous with the term “high-fashion” and became a fixture in A-list celebrity culture. The name is also featured heavily in pop-culture through songs, television shows, and movies.

   However, Judge Marrero, of the New York Federal District Court, still refused to grant the preliminary injunction on the grounds that he believes Louboutin’s trademark registration for the use of lacquered red outsoles does not merit protection under the Lanham Act, a federal statute governing trademark laws in the United States.  The Lanham Act protects “any word, name, symbol, or device, or any combination thereof… which a person has a bonafide intention to use in commerce and applies to register… to identify and distinguish his or her goods from those manufactured and sold by others and to indicate the source of the goods.”    

   The United States Patent and Trademark Office had awarded Louboutin a trademark on January 1, 2008. Louboutin approached YSL in January 2011, taking issue with four YSL shoe designs, which bear red soles as part of a monochromatic red design. YSL refused to withdraw the shoe designs, leading Louboutin to file action under the Lanham Act asserting amongst other things, trademark infringement. In order to qualify for Lanham Act protection, Louboutin must demonstrate that the Red Sole Mark merits protection and that YSL’s use of the similar red sole is “likely to cause confusion” as to the origin of the shoes.

   Judge Marrero, however, was of the opinion that Louboutin has no likelihood of success on the merits of trademark infringement.  The judge explained that even though a color can sometimes be trademarked when the color has attained a secondary meaning, if that color is also functional then it is not entitled to trademark protection. A color being functional means that the color is essential to the use or purpose of the product, the color affects the cost, or the color affects the quality of the product.  The judge reasoned that unlike industrial markets where colors are often trademarked to indicate the source (e.g. pink insulation or yellow post-its), in the fashion market, color is also used for ornamental or aesthetic purposes. Judge Marrero distinguished other fashion cases where colors were trademarked based on the fact that they were applied to the arrangement of the colors to create distinct and recognizable images, rather than a single color like the “Red Sole Mark” at issue in the Louboutin case.

   A plausible argument can be made for Louboutin that Judge Marrero focused too much on framing the issue as trademarking the color red in general. Clearly no fashion designer would ever be able to trademark one particular color for general purposes. The issue in the Louboutin case might reasonably be framed as Louboutin’s desire to trademark a particular color that is displayed in such a way and in such a strategic manner on a shoe, that it is more like an arrangement of colors and therefore should be allowed trademark protection. Although the outsole is not an arrangement of various colors, the single red shade is in fact arranged and placed on the shoe in such a way as to create a “distinct and recognizable image purposefully intended to identify [Louboutin] while at the same time serving as an expressive, ornamental, and decorative concept.” Id. at 451.

   Judge Marrero also asserts that placing an “off limits sign on any given chromatic band by allowing one artist or designer to appropriate an entire shade…” would unduly hinder commerce and competition. Again, however, the judge might not be  giving sufficient weight to the argument that Louboutin is not trying to “appropriate an entire shade”, but is asking to trademark the application of a shade of color to a very specific part of the product.  Such a use would not put the shade of red off limits entirely to shoe designers.

   Lastly, Judge Marrero places importance on the fact that Louboutin himself described the choice of color as giving the shoes “energy” and because it’s “engaging”, “sexy”, and “attracts men to the women who wear [his] shoes.” The judge believes that these adjectives signify that the red outsoles are in fact “functional” and therefore not protectable. While this analysis may have merit, it could be argued that this analysis takes Louboutin’s use of these adjectives much too literally. Just because those words, taken in their most literal sense, can indicate a type of function does not mean that Louboutin was using them in this sense. Artists often describe the feelings and aesthetic qualities of art pieces as energetic, engaging, and sexy. These qualities do not amount to functionality, they are merely descriptive words similar to “pretty” and “cute”.  In no way is something functional because it is “cute”.   In terms of functionality, the red soles are not essential to the use or purpose of the product (color of soles is not essential to whether one can walk in them or not) and the red soles do not affect the cost or the quality of the product (it is the name “Louboutin” that makes the shoes pricey, not the color.  A simple Google search turns up other shoes with colorful soles selling at around $60 USD, proving it is not the color that brings in the bucks.)

   As for YSL’s counterclaims, their strongest argument may be that of Unfair Competition. If YSL is in fact “known” for its monochromatic shoe designs and it is prevented from ever using red soles, then the designer would never be able to produce monochromatic red shoes.  However, weighing the claims against each other, it is not surprising that Louboutin has decided that it will take the case all the way to the Supreme Court, if necessary.  Louboutin’s red sole mark is its signature. The red soles have acquired a secondary meaning and they serve to identify the source of the shoes.

   The Red Sole Mark has arguably attained one of the strongest secondary meanings that exist in the fashion world. Refusal to protect that mark could allow other designers to follow suit and enjoy a windfall from Louboutin’s artistic creativity and ingenious marketing decision.

   On the flipside, Louboutin’s trademark protects “a lacquered red sole on footwear”.  The registration covers all women’s high fashion designer footwear, which encompasses all styles of shoes.  It wouldn’t be unfair to say that the trademark description seems to be overly broad.  It is confusing as to whether “china red” is protected, whether the lacquer or gloss is protected, whether either would be protected without the other.   Lastly, perhaps the court can simply require Louboutin to narrow their trademark description, thus allowing YSL to enjoy their piece of the pie too?  We will have to wait and see how this case will affect trademarking colors in the fashion industry.

Protecting Hollywood’s Business Model

By Erin H., Corey C., and Annie M.

   At the core of copyright law is the rule that mere ideas are not the subject of copyright, but what may be protected is the artist’s particular expression of those ideas.  This doctrine is called the idea-expression dichotomy.  Due to this doctrine, every idea, theory, and fact in a copyrighted work becomes instantly available for public exploitation at the moment of publication.

   Recently, Larry Montz, a parapsychologist with self-proclaimed clairvoyant abilities, ran up against the idea-expression dichotomy when he attempted to sue both NBC and Syfy for misappropriation of his idea.  Essentially, Montz had developed an idea based on his own proclaimed paranormal experiences for a reality television show that would follow a team of paranormal investigators around the country, documenting their finds.  From 1996 to 2003, Montz and Daena Smoller, his publicist and producer, pitched the idea to television studios and producers, including representatives of NBC and Syfy.  While the studios all claimed that they were not interested, three years later the show Ghost Hunters aired; a reality television show that was essentially the same show as the one Montz had pitched.

   Montz and Smoller filed suit against NBC and Syfy, arguing that they had stolen his idea for a reality-television show without paying him and therefore breached an implied contract to compensate him for his work if they used the idea.  The lower court sided with the studios, determining that Montz’s contract claims were preempted by federal copyright law.  Because of the idea-expression dichotomy, federal copyright law does not protect ideas, and therefore the studios were essentially only “stealing” an unprotected idea and not a protected expression of it.

   

   On appeal, the 9^th Circuit reversed and sided with Montz and Smoller, finding that copyright law did not preempt his claims.  The Court’s reasoning for this relied on the concept that the idea for the show was clearly outside the scope of protectable subject matter that copyright law is designed to cover.  Because of this, the copyright act does not apply at all, and would not bar Montz and Smoller’s breach of implied contract claim.

   So what does this mean for the future?  According to Montz’s attorney, Graham LippSmith, “It's a big issue for the entertainment industry.  It means the little guy is still going to be protected, people trying to find their way into the entertainment industry."  Hollywood’s current business model of informal meetings and interchange of ideas will be protected, as this process is crucial to the development of new ideas and the flourishing of the film industry.  The studios can be guaranteed new ideas, and the “little guy” will be compensated accordingly.  Despite the studios’ position on this case, it is essentially win-win.