Tuesday, 30 October 2018

What can be the main events in the life of a copyright work in Europe? Here's another map

A few weeks ago, I published a map - that I created for my students - detailing the main potential events in the life of an EU/national trade mark.

Today I have prepared a new student map, this time devoted to the main potential events in the life of a copyright work in Europe. The map should be read in combination with other copyright materials I have produced, including:
This new map, which is not meant at all as exhaustive, can be downloaded here and is reproduced also below. Other students materials are available here.


As always, any feedback is very welcome!


[Originally published on The IPKat on 30 October 2018]

Sunday, 28 October 2018

AG Szpunar advises CJEU to rule that copyright cannot subsist in military report in important fundamental rights case

Freedom of the press
Last year The IPKat reported on two new important referrals to the Court of Justice of the European Union (CJEU) from Germany. One of them, known as the Afghanistan Papers case [it is now Funke Medien NRW GmbH v Federal Republic of Germany, C-469/17] is asking about the interplay between copyright protection and freedom of expression and freedom of the press.

Background

The reference was made in the context of litigation between the German Government and German newspaper WAZ over the unauthorized publication by the latter of the so called 'Afghanistan Papers', ie confidential military reports on the operations of German armed forces in that region in the period 2005-2012.

The German Federal Court of Justice (BGH) stayed the proceedings, and asked the CJEU to clarify whether and to what extent the assessment of prima facie copyright infringement and the applicability of the exceptions in favour of the press (Article 5(3)(c) of the InfoSoc Directive) and for quotation (Article 5(3)(d) of the same directive) is informed by a fundamental rights analysis. 

As readers will know, the Charter of Fundamental Rights of the European Union (Charter) has status of primary source of EU law (on the same foot of the Treaties), and the number of cases in which the CJEU has had to consider the interplay between various fundamental rights (intellectual property is protected under the right to property in Article 17(2)) has increased over the past few years.

What is at stake in the Afghanistan Papers case is whether copyright protection can be trumped by the need to safeguard freedom of the press and freedom of information, and whether fundamental rights may be directly invoked to prevent enforcement of copyright.

AG Szpunar's Opinion

This morning Advocate General (AG) Szpunar delivered yet another thoughtful Opinion that begins with a quote from Erich Maria Remarque's masterpiece, All Quiet on the Western Front.

AG Szpunar highlighted how that novel contains what is probably the best-known military report in literature: 'All quiet on the Western front' [and here's already something interesting: the AG stated that not just the novel, but also that phrase, is entitled to copyright protection. All this is important because in certain countries - including the UK - titles and short phrases have been traditionally considered excluded from the scope of copyright protection. In addition, after Infopaq it has remained uncertain how short a phrase can be to be still regarded as eligible for protection and sufficiently original].

This said, the present case concerns - not a fictional report - but rather an 'entirely real' report. The issues for the Court to tackle are the following:
  1. Does a military report satisfy the requirements for copyright protection?
  2. Must other factors such as freedom of expression, protected by the Charter, be taken into account in order to minimize, or even rule out, such protection? 
The AG advised the Court to reformulate the questions referred and move - not from the German Government's copyright - but rather from the newspaper's freedom of expression/information under Article 11 of the Charter. The question for the CJEU to address would thus be whether Article 11 precludes a Member State from relying on its copyright over documents in order to curtail the freedom of expression laid down in that article.


Copyright protection in a military report

Starting from the former, in order to provide his response, AG Szpunar deemed it necessary to consider, first, copyright protection in the report. To this end, he noted three crucial elements of this IP right:
  • Copyright only vests in the expression of ideas, facts and information, not ideas, facts or information per se (idea/expression dichotomy). This means that 'raw' information, that is information in its unaltered state, is not eligible for protection. This conclusion is in line with Article 1(8) of the Berne Convention.
  • Copyright vests in 'works'.
  • Works must be sufficiently 'original', in the sense of being 'their author's own intellectual creation'. The AG revisited CJEU case law on the point, notably Infopaq and its progeny, and recalled that "[e]lements such as intellectual work and the skill of the author cannot as such justify the protection of the subject matter at issue by copyright if such work and skill do not express any originality."
At this point the AG expressed his doubts that a military report could be original in the sense clarified by the CJEU:
It seems to me to be rather unlikely that the author or authors of those documents, whose identity is unknown but who are probably civil servants or officers of the federal armed forces, were able to make free and creative choices in order to express their creative abilities when drafting those documents. The content of purely informative documents that are inevitably drafted in simple and neutral terms is entirely determined by the information they contain, so that such information and its expression become indissociable, thus precluding all originality. A degree of effort and skill is required to draw them up, but those elements on their own cannot justify copyright protection. During the discussions in that regard at the hearing, the parties also argued that the structure of the documents at issue could itself be protected by copyright. However, that structure consists in setting out evenly spaced information concerning each foreign mission in which the federal armed forces are participating. Therefore, I do not think that the structure of those reports is more creative than their content.
Freedom of expression
In my view, there can be little doubt that the AG was correct in this part of the analysis, and made appropriate considerations in light of CJEU case law on originality [I discuss all this a bit more at length in this Katpost]

But the AG did not stop here. He in fact advised the CJEU to rule out that copyright protection would subsist in the military report also on fundamental rights grounds and the provision of Article 51 of the Charter.

Copyright and fundamental rights

The AG noted how copyright itself contains internal mechanisms allowing possible conflict between fundamental rights, including freedom of expression, and copyright to be resolved. These include the idea/expression dichotomy and exceptions and limitations:
Those exceptions enable works to be used in different situations which may fall within the scope of different fundamental rights and freedoms, without at the same time depriving authors of the substance of their rights, namely respect for the relationship linking them to their works and the possibility of exploiting those works economically.
Copyright, however, is also subject to external limitations:
[t]he application of copyright law, like any other body of law, remains subject to the requirement of respect for fundamental rights, respect which may be reviewed by the courts. If it became apparent that there were systemic shortcomings in the protection of a fundamental right vis-à-vis copyright, the validity of copyright would be affected and the question of legislative amendment would then arise. However, there may be exceptional cases where copyright, which, in other circumstances, could quite legitimately enjoy legal and judicial protection, must yield to an overriding interest relating to the implementation of a fundamental right or freedom.
The AG recalled how the European Court of Human Rights (ECtHR) has addressed the relationship between copyright protection and freedom of expression in cases like Ashby Donald and The Pirate Bay. In neither case did the ECthHR find that freedom of expression had been infringed, due to the nature of the unauthorized acts at issue (respectively, the making available of photographs of fashion shows and the operation of the infamous The Pirate Bay). 


However, the case at hand is different, in that the unauthorized communication of the allegedly protected work (the military report) contributed to a public interest debate and the work consists of official documents of a State of an informative nature.

Copyright protection should be denied/restricted on fundamental rights grounds

The AG considered that the provisions of the Charter are addressed at Member States as per Article 51 therein. The result would be, according to the AG, that copyright protection in a military report should be denied in order not to contravene the spirit and substance of the Charter.

It is true that freedom of expression is not limitless (the European Convention of Human Rights explicitly refers to national security as a possible ground to restrict it), and it is also true that the publication of confidential documents falls within the scope of freedom of expression.

However, national security is not what the background national proceedings are about: the German Government, in fact, has been relying on copyright, not national security, in its litigation.

According to the AG, copyright should not be acknowledged in the military report for the following reasons.

First, it is true that copyright and freedom of expression are fundamental rights. But Member States do not enjoy them: the rationale of fundamental rights is to protect individuals from the State, not vice versa: "If the State were able to invoke its individual rights, other than the public interest, in order to limit fundamental rights, the result would be the destruction of those fundamental rights."

The only ground on which a State could rely upon to justify the limitation of a fundament right would be the public interest, ie something that Germany did not do in the present case.

In addition, the ECtHR has clarified that a restriction on freedom of expression must be necessary: is it necessary in this case to protect copyright by preventing the publication of a military report?

Copyright has two main objectives. The first is to protect the personal relationship between the author and his work as his intellectual creation and therefore, in a sense, an emanation of his personality. This primarily involves the area of moral rights. The second objective is to enable authors to exploit their works economically and thus earn an income from their creative endeavours. This involves the area of property rights, subject to harmonisation at EU level. In order for a restriction on freedom of expression flowing from copyright to be characterised as necessary, it must meet those two objectives. However, it seems to me that the protection by copyright of military reports such as those at issue in the main proceedings meets neither.
Most importantly, copyright cannot be a substitute for lack of public interest: 
Thus, having considered that the interest in protecting the documents at issue as confidential information did not justify the resulting restriction on freedom of expression, the Federal Republic of Germany decided to achieve the same result by invoking its copyright over those documents, despite the fact that copyright pursues completely different aims and it is not even established that those documents are works for the purpose of copyright.
AG Szpunar
According to the AG, holding otherwise would mean that not only the restriction on freedom of expression is not necessary, but is also highly damaging:
One of the most important functions of freedom of expression and its constituent element, freedom of the media, specifically mentioned in Article 11(2) of the Charter, is to enable citizens to keep a check on power, a key aspect of any democratic society. That check can be exercised, for instance, by the disclosure of certain information or certain documents the content or even the existence (or inexistence) of which the authorities would like to conceal. Some information must of course remain secret, even in a democratic society, if its disclosure poses a threat to the essential interests of the State and, in consequence, society itself. Documents must therefore be classified and protected in accordance with the procedures established for that purpose, which should be applied subject to judicial oversight. However, outside the framework of those procedures or if the State itself declines to apply them, the State cannot be allowed to invoke its copyright over any document whatsoever in order to prevent scrutiny of its actions.
Conclusion

All the above considered, the AG advised the CJEU to rule that Article 11 of the Charter, read in conjunction with Article 52(1) thereof, must be interpreted as precluding a Member State from invoking copyright under the InfoSoc Directive in order to prevent the communication to the public, in the context of a debate concerning matters of public interest, of confidential documents emanating from that Member State. That interpretation does not prevent the Member State from applying, in compliance with EU law, other provisions of its domestic law, including those relating to the protection of confidential information.

It will be interesting to see, first of all, whether the CJEU follows the AG in his suggestion to reformulate the questions referred and, most importantly, in the assessment of the interplay between the Government's copyright claim and freedom of expression and of the press.

[Originally published on The IPKat on 25 October 2018]

Friday, 19 October 2018

CJEU weighs on liability of owner of internet connection used to infringe copyright

The face of someone keen to share
their Wi-Fi password ....
What can be the nature of the penalties and measures to be taken in copyright infringement cases? More specifically: Is it compatible with EU law to provide that the owner of an internet connection, through which copyright infringements have been committed, may escape liability thereof by indicating, without the need to provide any further details, a family member who has also had access to such connection?

These were the issues at the centre of Bastei Lübbe, C-149/17, a reference for a preliminary ruling from Germany.

Background

The referral was made in the context of litigation between Bastei Lübbe, a German phonogram producer, and Michael Strotzer, the owner of an internet connection through which an infringement was committed in 2010. 

The latter submitted that he had not committed the infringement himself and that his internet connection was sufficiently protected. He also argued that his parents, with whom he lived, also had access to the connection but, as far as he was aware, they had not committed the infringement either. Following dismissal of Bastei Lübbe’s action at first instance on grounds that the defendant could not be deemed to have committed the relevant infringement, the case reached the District Court Munich I.

The Munich court appeared keen on holding Strotzer liable by means of a presumption under German law. However, doubts subsisted in light of certain decisions of Germany’s Federal Court of Justice. Hence, the court decided to refer the case to the CJEU for guidance regarding the correct interpretation of: 
  1. Article 8(1) and (2) of the InfoSoc Directive, in connection with Article 3(1) thereof; and
  2. the meaning of 'effective' within Article 3(2) of the Enforcement Directive, in particular whether “effective” measures for the enforcement of IP rights are still provided for even when the owner of an internet connection used for copyright infringements is excluded from liability to pay damages if the owner of that internet connection can name at least one family member who, besides them, might have had access to that internet connection, without providing further details, established through appropriate investigations, as to when and how the internet was used by that family member.
The AG Opinion

In his Opinion back in June [Katpost here], Advocate General (AG) Szpunar advised the Court of Justice of the European Union (CJEU) to rule that that EU law does not require to provide, at the national level, a presumption of liability of the owner of an internet connection for copyright infringements committed through such connection. 

However, if national law envisages such presumption to ensure the protection of copyright, this shall be applied coherently to guarantee effective copyright protection. In this sense, the right to family and private life under Article 7 of the EU Charter of Fundamental Rights may not be interpreted in such as way as to deprive copyright owners of any possibility of effective protection of their own intellectual property, the protection of which is mandated by Article 17(2) of the Charter.

The CJEU judgment

Yesterday, the CJEU delivered its judgment, and held that the owner of an internet connection used for copyright infringements through file-sharing cannot be exonerated from liability simply by naming a family member who might have had access to that connection (but read further).

Let's what a bit more in detail how the Court reasoned.

(Cutest) High level of protection
InfoSoc Directive: high level of protection

First of all (unsurprisingly), the Court noted how the primary objective of the InfoSoc Directive (see Recital 9) is to grant a high level of protection of copyright and related rights, since such rights are crucial to intellectual creation.

In order to achieve said objective, Article 8(1) mandates upon Member States to provide for appropriate sanctions and remedies in respect of infringements of the rights and obligations set out in the InfoSoc Directive. Such sanctions and remedies must be also effective, proportionate and dissuasive.

Article 8(2) also requires Member States to take the measures necessary to ensure that rightholders, whose interests are affected by an infringing activity carried out on its territory, may bring an action for damages.

Enforcement Directive: harmonization

Then the Court recalled that the objective pursued by the Enforcement Directive (Recital 10) is to approximate the laws of individual Member States in the area of enforcement, in order to ensure a high, equivalent, and homogeneous level of protection in the internal market.

It follows from all this the requirement in Article 3(2) thereof to provide that measures, procedures and remedies made available by the Member States be effective, proportionate, and dissuasive.

Obligations of Member States and national courts

Further to this introductory remarks, the CJEU turned to the specific questions referred. It highlighted how the core of the reference required the Court to explain how an appropriate balance may be struck between the needs of copyright protection (Article 17(2) of the Charter) and effective enforcement (including access to evidence, as per Article 6(1) of the Enforcement Directive) on the one hand, and other fundamental rights, including the right to the protection of private and family life (also protected by the Charter), on the other.

At this point, the Court turned to the obligations of Member States when transposing EU directives into national laws, and those of national courts when interpreting relevant provisions. While the former are required to rely on an interpretation of EU law which allows a fair balance to be struck between the various fundamental rights protected by the EU legal order, the latter have to interpret national law in a manner consistent with those directives, fundamental rights, and the other general principles of EU law.

Article 52(1) of the Charter mandates that any limitation on the exercise of the rights and freedoms recognized by the Charter must respect the essence of those rights and freedoms, and a fair balance be struck between the various fundamental rights.

Kat-balance
Fair balance

It is indeed in light of said fair balance requirement that German legislation at issue in the background proceedings must be assessed.

Article 7 of the Charter provides that 'everyone' (not just family members, who may however enjoy special protection in certain circumstances) are entitled to private life protection. In addition, Article 8(3)(d) of the Enforcement Directive allows Member States to provide for the possibility that the perpetrator of an infringement refuses to provide information which would compel them to acknowledge their own involvement or that of their parents in an infringement of an IP right.

This said, if a national law has the effect of preventing a national court before which a tortious action has been brought from requesting and obtaining evidence relating to the defendant's family members and, thus, proving the alleged infringement of copyright and who was responsible for that infringement, then such law does not strike a fair balance.

The result, in fact, is that family members of the owner of an internet connection, through which copyright infringements were committed, would be granted absolute protection. On the contrary, copyright enforcement would be ineffective and so would be the sanctions against the actual infringer.

However, things would be different if the law provided that the owner of the internet connection could be held liable in tort. What EU prohibits is national legislation which provides the owner of an internet connection used for copyright infringements through file-sharing cannot be held liable to pay damages if they can name at least one family member who might have had access to that connection, without providing any further details as to when and how the internet was used by the relevant family member.

Comment

The CJEU judgment has several points of contact with the earlier AG Opinion. The parallel with  banking secrecy in Coty Germany has been instrumental to the particular outcome suggested, first, by the AG, and then achieved by the Court.

Besides the particular details of the case, from a broader perspective the judgment is interesting in that it reiterates some common topoi in CJEU copyright case law (I discuss all this more at length in this forthcoming monograph):
  • High level of protection
  • Interpretation of EU copyright provisions in light of fundamental rights
  • Need to strike a fair balance between different fundamental rights

First, the Court reiterated that copyright is deserving of a high level of protection. This is a standard that the CJEU has relied upon almost invariably every time when deciding a case concerning economic rights and enforcement/remedies, with the result that the outcome of the relevant case would favour an expansive approach to the scope of copyright protection. The principle that protection must be at a high level is stated explicitly in both the InfoSoc Directive (Recitals 4 and 9) and the Enforcement Directive (Recital 10).

Second, the judgment refers to the Charter of Fundamental Rights. Over time, the Court has increasingly referred to the need of interpreting relevant provisions in EU directives in light of fundamental rights. Since the 2007 Treaty of Lisbon the Charter has had status of primary EU law source, on the same foot as the Treaties. The result has been arguably a process of constitutionalization carried out by the CJEU also in the field of copyright, although some critics have considered such process merely cosmetic and underlying a de facto harmonizing agenda on the side of the Court instead.

Third, the obligation to strike a fair balance has also been referred in several cases. Said obligation is imposed on Member States when transposing relevant EU legislation and national authorities and courts when interpreting resulting national provisions. The CJEU made all this clear in decisions like PromusicaeLSG-Gesellschaft zur Wahrnehmung von LeistungsschutzrechtenBonnier Audio and OthersDeckmyn andVrijheidsfondsCoty Germanyand Mc Fadden.

[Originally published on The IPKat on 19 October 2018]

Thursday, 18 October 2018

Italian Supreme Court holds that an unauthorized derivative work may be both infringing and protectable

Big Red
Can copyright vest in mascots and characters? This, in a nutshell, is the question that the Italian Supreme Court had to address in Ralph v Mediaset and Others, decision 14635/2018 [Katpat to Valentina Borgese for the heads up and the text of the decision]

The Italian court answered in the affirmative, and provided some helpful guidance on copyright subsistence, derivative works, and infringement.

What happened?

In 1979 Ralph Carey created what would become the mascot of the Western Kentucky University (WKU) basketball team, a red character named Big Red. In 2009 he brought proceedings before the Milan Court of First Instance against broadcasters RTI and Mediaset and the creator of well-known TV programme Striscia La Notizia, claiming that the likeness of mascot/TV character Gabibbo (‘operating’ since 1990) would infringe copyright in Big Red.

The Milan court sided with Carey: in 2012 it held that Gabibbo infringed copyright in Big Red. It also awarded damages for EUR 200,000.

Further to an appeal to the Milan Court of Appeal, however, Gabibbo was found non-infringing. The appellate court held that Gabibbo [the translation from Italian is mine] “displays an amount of originality that is such as to make it [or, rather, him] a different work”. Nonetheless, it acknowledged that Big Red, a “goofy humanoid”, would be eligible for copyright protection. The court did not address the issue of the Gabibbo being a derivative work and what is known in Italian copyright law as 'plagio evolutivo'.

Carey thus appealed this new decision to the Italian Supreme Court, claiming that the appellate court – in holding the Gabibbo non-infringing – had erred in its interpretation and application of relevant provisions in the Italian Copyright Act.

Copyright protection of the “goofy humanoid”

With regard to copyright protection of Big Red, the Supreme Court noted that this would be deserving of protection as pantomimic work in relation to: its comical character, appearance, and sparkling personality.

Gabibbo
The characteristics of Gabibbo

However, the idea of creating a humanoid mascot with a humorous temper could be expressed in several different ways. 

At this point the Supreme Court (oddly) referred to the concept of individual character in design law, as interpreted by the Court of Justice of the European Union (CJEU) in PepsiCo and Easy Sanitary Solutions, to hold that the overall impression produced by Gabibbo is different from Big Red. 

In particular, unlike Big Red, Gabibbo is: shorter, fatter, does not wear shoes, is not athletic, has a smooth skin, and sports different accessories (a bow tie, cuffs, and some sort of apron-shirt). In addition, Gabibbo is characterized by a loud voice, and speaks in a dialect that is typical of the city of Genoa, while Big Red is mute. Also Gabibbo is a reporter, while Big Red is just a mascot that invites fans to cheer for and support the team.

A derivative work and, thus, an infringement?

The Supreme Court held that the Court of Appeal had erred in its interpretation of the law (with particular regard to ‘plagio evolutivo’ under Articles 4 and 18 of the Italian Copyright Act), by excluding that an original work derived from an existing work could not be protectable and infringing at the same time. The making of derivative works falls under the control of the owner of the copyright in the first work: it is not sufficient that the latter work is original to exclude infringement of copyright in the first work. This means that even if a work has been derived (copied) from an earlier work and displays an original character of its own, it may be nonetheless an infringement of copyright in said earlier work.

And, noted the Court, the creator of Striscia La Notizia was well-aware of Big Red’s existence: in a number of interviews he even admitted that Gabibbo had been derived from Big Red.

The Supreme Court, therefore, sent the case back to the Milan Court of Appeal (though in a different composition), to undertake a new assessment on the merits of the case, and determine whether Gabibbo is an infringement of copyright in Big Red.

Big Red Kat
Comment

Italy, like most EU Member States, does have an open-ended list of protectable works: this means that – unlike countries like the UK, Ireland and Austria – the law does not require to determine what category a certain work belongs to for copyright protection to subsist.

As readers will know, for unconventional works life has not always been easier in jurisdictions with closed lists of protectable categories: in the UK, for instance, copyright protection has been denied to the assembly of a scene (Creation Records) and the Stormtrooper Helmet from the Star Wars films (Lucasfilm, in which the Supreme Court rather oddly also required an artistic intention on the side of the author for a work to be considered artistic). In addition, for a long time uncertainties have subsisted in relation to copyright protection of TV formats [see here].

The Big Red/Gabibbo dispute is a helpful reminder that a work may be indeed eligible for self-standing copyright protection, while being also an infringement of someone else’s copyright. If the latter work reproduces protectable elements of the former work, then – as per the CJEU Infopaq decision – this might be sufficient for an issue of potential infringement to arise … even if you’re a goofy humanoid!

[Originally published on The IPKat on 18 October 2018]

Monday, 8 October 2018

Does FEYONCÉ blur BEYONCÉ's distinctiveness?

Beyoncé's Drunk in Love
Would you think that products carrying the word FEYONCÉ are sponsored by or affiliated with famous singer Beyoncé, or blur the distinctiveness of her mark? 


The facts

The defendants started selling merchandise using the brand name FEYONCÉ, as well as some phrases from Beyoncé's songs. Their products were targeted at the engaged to be married ... that is fiancés. The items were sold through the website feyonceshop.com, as well as etsy.com.

The defendants had even tried to obtain US trade mark registrations, but the USPTO refused them on grounds of confusing similarities with the registered BEYONCÉ trade mark.

Beyoncé and the entity that owns (lots of) her registered trade marks, BGK Trademark Holdings, brought proceedings against them for: 
Feyoncé's #DRUNKINLOVE vest
The first round

The plaintiffs requested the US District Court for the Southern District of New York to issue partial summary judgment in their favour and issue a permanent injunction against the defendants.

According to the judge (District Judge Alison J Nathan), 
There can be no dispute that in marketing to fiancé purchasers, defendants chose the formation "FEYONCÉ" in order to capitalize off of the exceedingly famous BEYONCÉ mark. 
Likelihood of confusion and unfair competition

However, the question is not this, but rather whether this 'capitalization' would be sufficient to establish likelihood of confusion, which is required under 15 U.S.C. § 1114. Would a rational consumer mistakenly believe that that FEYONCÉ products are sponsored by or affiliated with BEYONCÉ products? 

The court recalled the test in Polaroid Corp. v. Polaroid Elecs. Corp., 287 F.2d 492,495 (2d Cir. 1961), according to which one needs to consider:
  1. the strength of the senior mark, 
  2. the similarity of the marks [this is a key factor - see Louis Vuitton Malletier v. Dooney & Bourke, Inc.454 F.3d 108, 117 (2d Cir. 2006) - and requires to consider the overall impression created by the signs at issue]
  3. the proximity of the products in the marketplace, 
  4. the likelihood that the owner of the senior mark will bridge the gap, 
  5. actual confusion, 
  6. the presence of bad faith on the part of the defendant, 
  7. the quality of the defendant's products, and 
  8. consumer sophistication.
The court noted that the plaintiffs' and defendants' marks have a high degree of similarity, as just two letters - B and F - are dissimilar. The defendants' sign is however a play on words (so that the mark sounds like 'fiancé'), and this might dispel the risk of confusion. In Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC, 221 F. Supp. 2d 410, 417 the 2nd Circuit held in fact that 
If the difference is ... such to convey to the ordinary viewer that this is a joke, not the real thing, then confusion as to source, sponsorship, affiliation or connection is unlikely.
Evidence suggests that consumers got the pun, as many purchasers of FEYONCÉ products were, in fact, engaged.

Merpel's favourite Beyoncé song: Kitty Kat 
Although some of the Polaroid factors would weigh in favour of a finding of likelihood of confusion, the court concluded that it was not be possible to say - as a matter of law - whether such confusion is likely. The same would be the case in relation to unfair competition.

Trade mark dilution

Turning to the issue of dilution, the court considered the particular case of blurring. Dilution by blurring occurs when the "association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark". Relevant factors to consider include:
  1. the degree of similarity between the marks,
  2. the degree of distinctiveness of the famous mark,
  3. the extent to which the owner of the famous mark is engaging in exclusive use of the mark,
  4. the degree of recognition of the famous mark,
  5. whether the use of the junior mark intended to create an association with the famous mark, and
  6. any actual association between the mark and the famous mark. 
As it was found in Louis Vuitton Malletier, SA. v. My Other Bag, Inc., 156 F. Supp. 3d 425, 434 (S.D.N.Y. 2016), the key question is whether the kind of association a defendant creates is likely to impair the distinctiveness of plaintiff's mark. The court concluded that:
A reasonable factfinder may determine that, given the similarity between the two marks, Defendants' use of FEYONCÉ impairs the distinctiveness and selling power of the BEYONCÉ mark. However, because Defendants' have not merely co-opted the BEYONCÉ mark, but rather repurposed it in a way that can be distinguished from the original, a reasonable factfinder could also conclude that there is little risk of dilution.
Conclusion

The court denied plaintiffs' request for summary judgment and a permanent injunction. This means that the parties will meet next month to discuss settlement and possible dates for trial. 

If this case continues, it will be an interesting one to follow: it is likely to require consideration of the degree of protection of well-known trade marks [or is it, rather, well-known persons?] and how far that can go and interfere with third-party free speech, including humorous distortions and puns.

[Originally published on The IPKat on 8 October 2018]