Thursday, May 03, 2018

ABC doesn't find getting rid of pro se (c) and TM claim so simple

 Manigault v. ABC Inc., 2018 WL 2022823, No. 17-CV-7375 (S.D.N.Y. Apr. 12, 2018) (magistrate judge)

An app owner’s copyright and trademark claims against a news organization for broadcasting a news story about apps, including his, survive a motion to dismiss on the merits (though the owner has to replead copyright ownership).  Partly this terrible result is from bad Second Circuit precedent, but partly it stems from a refusal to consider the content of the accused TV segment on a motion to dismiss, although doing so is clearly acceptable because the content is integral to the complaint.  Despite the bad Second Circuit precedent, this is an easy case for dismissal.  Should I have an "argh" tag?

Manigault alleged that he “owns KeyiCam unregistered Trademark, which KeyiCam is Software that takes a picture of a Key and provides the biting code to end user.” ABC allegedly infringed his copyright and trademark rights “by showing a picture of KeyiCam website” “in connection with their News ‘Locked out? Smartphone app might be key to solving problems’ and ‘KeyMe addresses security concerns of key duplication.” ’ “ABC Inc advertised on their [sic] website that... KeyMe isn’t the only game in town, though; there’s also Keys Duplicated and KeyiCam.” Manigault alleged that ABC’s use of the marks similar to KeyiCam “is likely to cause consumers mistakenly to believe that the [goods identical or similar to KeyiCam] emanate from or are otherwise associated with KeyiCam,” causing KeyiCam to lose business.

ABC explained that Manigault’s claim “arises from a consumer news segment that was broadcast on [its 6abc’s] program” reported by journalist Nydia Ha, which “lasted roughly three and a half minutes.” According to ABC, the segment reported by its journalist “reviewed the phenomena of smartphone applications ... that allow consumers to create and store virtual copies of their keys - digital copies which can then be used to order physical duplicates of the keys if they are lost.” “The report focused on one service called KeyMe,” explained how it works and “mentioned the names of the other two services, a screenshot from each business’s web site was displayed on the screen for about a second each.” ABC contends that it “also posted an article on [its 6abc] website summarizing the news report,” which included “hyperlinks to the websites for each of the companies mentioned in the report.”

Since Manigualt was pro se, his allegations had to be construed liberally.

ABC argued that the complaint “is premised on the assertion that the ABC news report is a commercial advertisement for key duplication services. It is not, and so the Complaint must be dismissed as a matter of law.” The magistrate deemed this argument “meritless,” because Manigault’s allegations had to be taken as true on a motion to dismiss, and he alleged that “KeyiCam appeared in ABC Inc advertisements” and “ABC Inc advertised on their [sic] website that ... KeyMe isn’t the only game in town, though; there’s also Keys Duplicated and KeyiCam”; and “KeyiCam is mixed in the broadcasted commercial in ABC News with other similar Startups such as Keyme and Keys Duplicated that offer similar goods and services.”  This was enough.

Likewise, the magistrate rejected ABC’s argument that confusion was implausible and that reference to KeyiCam was nominative fair use.  Without discussing Twiqbal, the magistrate ruled that a challenge to plausibility went to the merits of the trademark infringement claims, as did nominative fair use (citing IISSCC) and First Amendment defenses, thus requiring a summary judgment motion or trial.

So many problems.  First: “confusion over what?”  Construed as liberally as possible, the complaint still has no allegation that there’s confusion over ABC’s connection with Manigault.  Mis-reporting, even assuming that’s what happened, isn’t generally directly infringing, and at most secondary liability would seem to be an issue.  Cf. the Hangover case, in which the court points out that confusion over whether a piece of luggage shown in a movie was actually from LV is not the kind of confusion against which the Lanham Act is directed. Louis Vuitton Mallatier S.A. v. Warner Bros. Entertainment Inc., 868 F. Supp. 2d 172 (S.D. N.Y. 2012) (granting motion to dismiss).

The Second Circuit’s bizarre treatment of nominative fair use has made this harder, but invoking a trademark doesn’t inherently remove 12(b)(6) as an option.  A motion to dismiss should still be viable “where simply looking at the work itself, and the context in which it appears, demonstrates how implausible it is that a viewer will be confused into believing that the plaintiff endorsed the defendant’s work.” Elec. Arts, Inc. v. Textron Inc., No. C 12-00118 WHA, 2012 WL 3042668, at *5 (N.D. Cal. July 25, 2012); see also Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 610 (6th Cir. 2009) (affirming grant of motion to dismiss where the defendant did not use the trademark to identify the source of its products or to suggest an association between the defendant and the plaintiff); Cummings v. Soul Train Holdings LLC, 67 F. Supp. 3d 599 (S.D.N.Y. 2014) (granting motion to dismiss where confusion based on inclusion in artistic work was implausible); cf. Kelly-Brown v. Winfrey, 717 F.3d 295 (2d Cir. 2013) (recognizing that even descriptive fair use, an affirmative defense, can be resolved on a motion to dismiss where the necessary facts are evident from the complaint).  This practice is particularly important given that nominative fair use protects important First Amendment interests, and that early resolution of assaults on news reporting prevents chilling core First Amendment-protected speech.  [Also why we need a federal anti-SLAPP law.]

Similarly, on copyright, the magistrate refused to consider ABC’s fair use argument under 12(b)(6), considering it an issue only for summary judgment motion or trial (not citing any cases).  Here’s one saying that 12(b)(6) is a fine time to resolve clear-cut cases of fair use: TCA Television Corp. v. McCollum, 839 F.3d 168, 178 (2d Cir. 2016), cert. denied, 137 S. Ct. 2175 (2017).

However, Manigault failed to plead ownership of a valid/registered copyright in any specific work, so the claim was dismissed with leave to amend. 

The magistrate also held that there were no allegations that ABC engaged in deceptive acts or practices, so claims for such under New York law had to be dismissed—inconsistent with the TM claims, but it’s hard to be surprised.

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