Tuesday, December 18, 2007

These shadows keep on changing

Allen v. Ghoulish Gallery, 2007 WL 4207923 (S.D. Cal.)

Previous discussion here. Plaintiff and defendant sell “changing portraits” – antique photos that appear to change into a spooky creature or ghost when the viewer shifts position. Plaintiff’s website opened in 2003, defendant’s in 2004. Plaintiff sued for copyright infringement, false advertising, and related business torts; defendant counterclaimed for false advertising, trade libel, and related business torts.

Plaintiff registered his copyright in 2004. The registration certificate lists the title of the audiovisual work as “Haunted Memories Changing Portraits Website,” but there was no certified copy of the contents of the website. Plaintiff gave the court a CD-ROM, claiming it was a duplicate of the CD-ROM submitted to the Copyright Office, but couldn’t authenticate it as such. Thus, the court held, plaintiff was not entitled to the statutory presumption of validity. (Comment: This is not an area of procedure with which I’m familiar, and I suppose this is a practical result, but it still seems a little odd.) In any event, plaintiff was able to establish by his testimony and by use of the Wayback Machine that a series of images appeared on his website as it existed in December 2004, which his copyright covered.

But that wasn’t good enough to show infringement. Plaintiff claimed copyright protection in the fonts of his business name and his tag line, various background images, the pictures in his changing portraits, the frame image he used around the pictures, the use of mini-biographies for his characters, and the use of “Little” for child characters. Though the selection, coordination and arrangement of the website was original, the court found that defendant hadn’t infringed any original elements. Specifically, the font used in the business name was commonly used in the “Haunt Industry” in which both parties participate, and is in the public domain; the font used in the tag line was off-the-rack, as were other page elements such as a “Buy It Now” button. The use of “Little” for children is not original, nor did plaintiff show that he created the background images. He created the mini-biographies, but defendant didn’t copy those.

The frame image came from a frame plaintiff bought from an art supply store; he photographed it and used it on his site. The court assumed that his “efforts” were enough to qualify for copyright protection, but the frame itself is commonly used to display scary photographs, and not a proper subject for copyright protection. (I find this analysis mysterious; effort, sweaty or not, can’t create copyright protection in the US, but if his photo were copyrightable, then the key question is whether defendant copied that photo, not whether the frame itself is commonly used. The court noted that defendant’s frames were different.)

There was still a question of whether defendant copied protectable selection, coordination or arrangement. The court found no substantial similarity; using the extrinsic test, the similarities were only general – the same fonts for the company name and taglines; links running on the left side of the pages; framed portraits on both sites have similar matting. But the color schemes were different (mostly black with white, green, purple and yellow versus black with earth tone, blue, orange, and different shades of green and yellow) with different backgrounds. The layouts also differed somewhat, and the characters in the portraits were all different. Finding no substantial similarity objectively, the court also found none subjectively.

Plaintiff alleged that defendant falsely advertised that his Ghoulish Gallery had been in business since the 1990s; disparaged plaintiff’s business; and fabricated customer feedback on his own site. Defendant counterclaimed for unfair competition in copying plaintiff’s business, buying www.ghoulishgallery.com to capture internet traffic intended for defendant’s www.theghoulishgallery.com), and advertising that he is the "originator" of haunted changing portraits. Another mystery: defendant didn’t counterclaim for cybersquatting: that would have been a pretty obvious clean kill. Regardless, both domain names now resolve to the same place.

However, as with the earlier opinion, the court analyzed these as false advertising claims, beginning with the requirement of commercial advertising or promotion, here defined as “1) commercial speech; 2) by a defendant who is in commercial competition with plaintiff; 3) for the purpose of influencing consumers to buy defendant's goods or services.” Thus, the court ruled, disparaging remarks weren’t commercial advertising or promotion; nor was “redirecting [] internet traffic.” (That seems wrong. Disparaging commercial speech doesn’t have to connect all the dots to be a sales pitch, albeit an indirect one.)

Plaintiff’s complaint against defendant’s claim that the Ghoulish Gallery had been in business since 1995 was more successful. The court didn’t find defendant’s substantiating evidence credible. This was a literally false claim, at the top of the main page of the website. The court found it material because there were only four competitors in the market, and a customer deciding among them, “all else being equal,” would likely go with the one that had been in business since 1995 instead of the one that had only been around since 2003.

The court presumed actual deception and reliance, and thus awarded $2500 in damages and an injunction.

Defendant challenged plaintiff’s statements, “I’ve had a good run these past two years as the ORIGINATOR of Spooky Changing Portraits based on antique photo images” and “Let there be no confusion. ‘Haunted Memories Changing Portraits’ was the first to take antique photographs, create scary transforming images, and offer them as a successful line of products. NOBODY was in this business selling this particular product before I was. I can PROVE IT with facts, not with hot air! I would never make this claim if it were not true!” Though the concept of changing portraits is more than a century old, there was no evidence that anyone made them with antique photos before plaintiff did, so the counterclaim failed, proving again that proper qualification is an advertiser’s best friend.

Various other allegations of dirty deeds fell short of justifying relief on either side.

The court concluded that the following statement was “not sufficiently factual to be proved right or wrong”: “This individual asks potential customers to believe him when he alleges that he was the first. Yet in the previous sentence, he admits that his company was launched in 2003. The Ghoulish Gallery was started in 1992--a full twelve years earlier! One has to wonder what else someone like this might be lying about? The quality of their work? Their return policies? Perhaps even their customer feedback? ... From this one example alone, you should be able to determine who is being honest with their customers and who is not.” Plaintiff also couldn’t show special damages; it seems to me that the statement is plainly defamatory in that it attacks plaintiff’s honesty, which would obviate the need to show special damages. "He's lying about X. What else is he lying about?" is a pretty classic defamatory accusation.

Defendant then counterclaimed for defamation based on plaintiff’s post on a public message board accusing him of “hypercompetitiveness,” which he suggested “resembles a diagnosable mental disorder.” The evidence before the court suggested that the audience for the posts basically thought “a pox on both their houses” – both sides had become irrational; the readers didn’t think plaintiff’s post made a factual claim. The court, weirdly, treated this in the abstract: the statement that hypercompetitiveness resembles a diagnosable mental condition was insufficiently factual to be proven right or wrong, as was the statement that defendant was hypercompetitive. In context, it was opinion, but context is pretty important.

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