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Lanham Act Reaches Foreign Defendants’ Extraterritorial Conduct, but Worldwide Injunction Too Broad

by | Sep 2, 2021 |

The US Court of Appeals for the Tenth Circuit upheld a district court’s injunction barring multiple foreign companies from directly or indirectly using a US remote control manufacturer’s trade dress based on the extraterritorial reach of the Lanham Act. However, the Court narrowed the scope of the worldwide injunction to countries where the US company currently markets or sells its products. Hetronic Int’l, Inc. v. Hetronic Germany GmbH, Case Nos. 20-6057, -6100 (10th Cir. Aug. 24, 2021) (Phillips, J.)

Hetronic International is a US company that manufactures radio remote controls for heavy-duty construction equipment. Hetronic Germany GmbH, Hydronic Steuersysteme GmbH, ABI Holding GmbH, Abitron Germany GmbH and Abitron Austria GmbH (collectively, the Distributers) are foreign companies that have distributed Hetronic’s products—mostly in Europe—for almost a decade. Based on an old research and development agreement between the parties, the Distributors concluded that they, not Hetronic, owned the rights to Hetronic’s trademarks and other intellectual property. The Distributors accordingly reverse-engineered Hetronic’s products and began manufacturing and selling their own copycat products, mostly in Europe. The copycat products were identical to Hetronic’s and were sold under the Hetronic brand and the same product names. Hetronic terminated the parties’ distribution agreements, but the Distributers continued to sell their copycat products. The Distributors attempted to break into the US market, selling several hundred thousand dollars’ worth of products before backing off after Hetronic sued. They then focused their efforts on Europe.

Hetronic sued the Distributors, along with their manager and owner Albert Fuchs, under the Lanham Act. The Distributors moved for summary judgment, arguing that the district court lacked subject matter jurisdiction to resolve the Lanham Act claims because the conduct at issue occurred overseas. The Distributors asserted that Hetronic’s claims had to be dismissed because the Lanham Act applied extraterritorially only if a defendant’s conduct had a substantial effect on US commerce, and the Distributors’ conduct did not. The district court rejected that argument and denied summary judgment.

In a separate proceeding initiated by the Distributors in the European Union, the EU Intellectual Property Office (EUIPO) concluded that Hetronic owned all of the disputed intellectual property. Based on the EUIPO proceeding, the district court applied the doctrine of issue preclusion and granted Hetronic summary judgment on the Distributors’ ownership defense. After an 11-day trial, a jury found that the Distributors had willfully infringed Hetronic’s trademarks and awarded Hetronic more than $100 million in damages, mostly for trademark infringement. The district court also entered a permanent injunction prohibiting the Distributors’ infringing activities worldwide. The Distributors appealed.

On appeal, the Distributors accepted that the Lanham Act can sometimes apply extraterritorially but argued that the Lanham Act did not reach their activity as foreign defendants making sales to foreign consumers. Specifically, the Distributors argued that:

  • The district court erroneously concluded that the Lanham Act applied extraterritorially.
  • The injunction lacked the specificity required by Fed. R. of Civ. Pro. 65.
  • The injunction’s worldwide reach was too broad.

The Distributors challenged the district court’s exercise of personal [...]

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Footnote Doesn’t Preserve Claim Construction Argument, but Patent Owner Must Observe “Nose of Wax” Principle

by | Sep 2, 2021 |

The US Court of Appeals for the Federal Circuit rejected an insufficiently developed claim construction challenge and found noninfringement where the patentee argued that a key feature shared by the accused device and the prior art distinguished the prior art from the claimed invention. CommScope Technologies LLC v. Dali Wireless Inc., Case Nos. 20-1817; -1818 (Fed. Cir. Aug. 24, 2021) (Stoll, J.)

CommScope Technologies and Dali Wireless are both in the wireless telecommunications industry. After CommScope sued Dali for infringement of five of its patents, Dali counterclaimed for infringement of two of its own patents. One of Dali’s patents relates to a method of predistorting a signal to account for distortion that occurs when the signal is amplified. The patent describes a training mode in which a feedback loop operates to update lookup tables and an operating mode in which a certain controller is turned off and the lookup table is no longer updated. In particular, the claim recites “switching a controller off to disconnect signal representative of the output of the power amplifier,” which the district court construed to mean “switching a controller to a nonoperating state to disconnect signal representative of the output of the power amplifier.” The accused product has two power amplifiers, and the controller switch continuously chooses between feedback signals for calculating predistortion values. Similarly, one asserted prior art reference discloses a system including multiple power amplifiers and a switch that continuously selects one of the feedback signals. At trial, the jury found the patent both valid and infringed, and the district court denied judgment as a matter of law (JMOL) of invalidity and no infringement.

On appeal, Dali included a footnote challenging the district court’s claim construction. The Federal Circuit held this challenge ineffective for three reasons, writing:

First, an argument that is only made in a footnote of an appellant’s brief is forfeited. Second, even if the argument were in the body of the brief, it is insufficiently developed. Finally, and most importantly, it is irreconcilable with Dali’s statements in other portions of its brief: (1) asserting that the district court’s construction is “unchallenged” and (2) applying the construction in the context of invalidity.

The Federal Circuit also criticized Dali for taking inconsistent positions with respect to application of its claims to the accused product and the prior art “given [the accused device] has a switch that operates identically [to the prior art.” “[t]his case falls squarely within the principle that a ‘patent may not, like a nose of wax, be twisted one way to avoid anticipation and another to find infringement.’” The Court held that no substantial evidence supported the infringement verdict because there was no evidence that the controller in the accused product put itself in the claimed “nonoperating state.” Accordingly, it reversed the denial of JMOL of noninfringement (while affirming the balance of the judgment below).



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Absent Explicit Statutory Language? The American Rule Still Applies

by | Sep 2, 2021 |

The US Court of Appeals for the Federal Circuit vacated a district court’s award of attorney’s fees under the prevailing party rule but affirmed the district court’s denial of the US Patent & Trademark Office’s (PTO) request for expert witness fees under 35 U.S.C. § 145. Hyatt v. Hirshfeld, Case Nos. 20-2321;–2325 (Fed. Cir. Aug. 18, 2021) (Hughes, J.). The case involved prolific inventor Gilbert Hyatt and the latest chapter in his battles with the PTO.

Mr. Hyatt is known for his prolific patent and litigation filings (including hundreds of extraordinarily lengthy and complex patent applications in 1995 alone) and for often “’adopt[ing] an approach to prosecution that all but guaranteed indefinite prosecution delay’ in an effort to submarine his patent applications and receive lengthy patent terms.” After the PTO denied some of his patent applications, Mr. Hyatt elected to pursue a district court appeal under 35 U.S.C. § 145 to challenge the PTO’s decisions. The district court ordered the PTO to issue some of the patents and awarded Mr. Hyatt attorney’s fees as the prevailing party. The PTO spent millions of dollars examining Mr. Hyatt’s applications and sought, under §145, reimbursement of its expert witness fees from the case. The district court denied the PTO’s request for expert witness fees, holding that its shifting of “[a]ll the expenses of the proceedings” to the applicant does not overcome the American Rule presumption against shifting expert fees. The PTO appealed.

The PTO challenged both the award of attorney’s fees and the denial of expert fees. In an earlier appeal by the PTO, the Federal Circuit held that the PTO correctly asserted prosecution laches as a defense against Mr. Hyatt, which “render[s] a patent unenforceable when it has issued only after an unreasonable and unexplained delay in prosecution that constitutes an egregious misuse of the statutory patent system under a totality of the circumstances.” Accordingly, the Court vacated the district court’s decision ordering the issuance of patents, and in this appeal, the Court vacated the district court’s holding that Mr. Hyatt is entitled to attorney’s fees—since he is no longer the prevailing party—and remanded for further proceedings.

According to the statute, in an action under § 145, “[a]ll the expenses of the proceedings shall be paid by the applicant.” However, the Federal Circuit agreed with the district court that the statutory language was not sufficiently explicit to overcome the presumption against fee-shifting under the American Rule and that litigants pay their own fees “unless a statute or contract provides otherwise.” In doing so, the Court looked at statutory phrasing, dictionary definitions (e.g., Black’s and Webster’s), legislative history, relevant case law and similarly phrased statutes to confirm whether expert fees were specifically and explicitly contemplated as being included by US Congress in the statute. The Supreme Court of the United States’ 2019 NantKwest decision (that “expenses” under §145 does not invoke attorney’s fees with enough clarity to overcome the American Rule) guided the Court’s analysis as did [...]

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Unhappy Together: No Right of Public Performance under California Copyright Law

by | Sep 2, 2021 |

Addressing for the first time whether California law establishes a right of public performance for the owners of pre-1972 sound recordings, the US Court of Appeals for the Ninth Circuit found no such right for music and overturned a district court’s grant of partial summary judgment. Flo & Eddie, Inc. v. Sirius XM Radio, Inc., Case No. 17-55844 (9th Cir. Aug. 23, 2021) (Lee, J.)

In 1971, Howard Kaylan and Mark Volman of the rock band the Turtles formed Flo & Eddie to control the band’s song rights, including the hit song “Happy Together.” In 2013, Flo & Eddie filed a complaint alleging a violation of California common law and statutory copyright law arising out of Sirius XM’s playing of songs to which Flo & Eddie control the rights. Based on California’s copyright statute (Cal. Civ. Code § 980), Flo & Eddie argued that California law gave it the “exclusive ownership” of its pre-1972 songs—including the right of public performance—which required compensation whenever Flo & Eddie’s copyrighted recordings were publicly performed.

The district court granted partial summary judgment to Flo & Eddie in 2014, finding that California law protected sound recording owners’ right of public performance by granting “exclusive ownership” to the music, and therefore, Sirius XM must pay for playing pre-1972 music. The district court reasoned that “the plain meaning of having ‘exclusive ownership’ in a sound recording is having the right to use and possess the recording to the exclusion of others,” and further explained that there is “nothing in that phrase to suggest that the legislature intended to exclude any right or use of the sound recording from the concept of ‘exclusive ownership.’” The district court looked to individual dictionary definitions of the words “exclusive” and “ownership” to craft a broad meaning for the phrase “exclusive ownership,” ultimately finding that it must include the “right of public performance.” Sirius XM appealed.

In an opinion artfully embroidered with classic rock references, the Ninth Circuit found that the district court erred in finding that “exclusive ownership” under § 980(a)(2) included the right of public performance and remanded for entry of judgment consistent with the parties’ contingent settlement agreement. The Court faulted the district court’s dictionary-based approach to statutory interpretation, instructing that “[d]ictionaries and tools of grammatical construction can help determine plain meaning of specific words, but some phrases have a separate or more specialized ‘term of art’ meaning that cannot be stripped away from its historical context or subject matter area.” To that end, the Court took an expressly textualist approach to interpreting California’s law, looking back to common law in the 19th century when California first used the term “exclusive ownership” in its copyright statute in order to inform the understanding of that term as used at the time.

Based on this inquiry, the Ninth Circuit found that there was no recognized right of public performance for music and that California only protected unpublished works. The Court explained the distinction, stating that “[c]ommon law provides a perpetual copyright [...]

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Greek God or Continent? Defining “Confusing Similarity” under the Anti-Cybersquatting Consumer Protection Act

by | Sep 2, 2021 |

Examining whether a registered mark and a domain name were confusingly similar under the Anti-Cybersquatting Consumer Protection Act (ACPA), the US Court of Appeals for the 11th Circuit affirmed the district court’s grant of summary judgment in favor of the trademark owner because the mark and domains are nearly identical in sight, sound and meaning. Boigris v. EWC P&T, LLC, Case No. 20-11929 (11th Cir. Aug. 6, 2021) (Marcus, J.) (Newsom, J. dissenting). The registered trademark is “European Wax Center” and the domain names in issue are “europawaxcenter.com” and “euwaxcenter.com.”

EWC runs a nationwide beauty brand titled European Wax Center that offers hair removal services and beauty products and also holds a trademark under the same name. Since 2015, EWC sold cosmetics under the marks “reveal me,” “renew me” and “smooth me.” Bryan Boigris has no direct background related to the production of beauty products, but in April 2016, he claimed an intent to begin selling such products and attempted to register trademarks at the US Patent & Trademark Office (PTO) for “reveal me,” “renew me” and “smooth me,” none of which had been used in commerce before by Boigris. Boigris also registered 11 domain names including, “euwaxcenter.com” and “europawaxcenter.com.” Upon discovery of Boigris’s pending applications, EWC filed for its own trademark applications for “reveal me,” “renew me” and “smooth me” and filed an opposition to Boigris’s pending applications at the Trademark Trial and Appeal Board (TTAB). The TTAB sustained the oppositions.

Boigris elected to contest the TTAB’s decision in district court. Specifically, Boigris sought reversal of the TTAB’s decision and an affirmative declaration that he was entitled to register the disputed marks. EWC counterclaimed for an affirmation of the TTAB’s decision as well as declaratory judgment that it had priority rights in the disputed marks, that Boigris’s use constituted infringement under the Lanham Act, damages and an injunction under the ACPA against Boigris’s use of the two domains, “europawaxcenter.com” and “euwaxcenter.com.” EWC moved for summary judgment on all of its claims, which the district court granted. Boigris appealed the ACPA decision only.

Under the ACPA, a trademark holder must prove that: (1) its trademark was distinctive when the defendant registered the challenged domain name; (2) the domain name is identical or confusingly similar to the plaintiff’s trademark and (3) the defendant registered the domain name with a bad faith intent to profit. Boigris challenged the second element only and did not contest that EWC’s trademarks were distinctive or that he registered the domains in bad faith. Specifically, Boigris argued that the issue of whether or not the “European Wax Center” mark and the “europawaxcenter.com” and “euwaxcenter.com” domains are confusingly similar should have been a question for the jury.

The 11th Circuit affirmed the district court’s ruling, determining that no reasonable jury could conclude that Boigris’s domain names are not confusingly similar to EWC’s mark. The Court acknowledged the difference between the Lanham Act’s traditional multi-factor likelihood of confusion test for trademark infringement and the test for confusing similarity, noting [...]

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Texas Hammer Nails Trademark Infringement Appeal

by | Sep 2, 2021 |

The US Court of Appeals for the Fifth Circuit reversed a district court’s dismissal of an initial confusion trademark complaint, finding that the plaintiff alleged a plausible claim of trademark infringement under the Lanham Act. Adler v. McNeil Consultants, LLC, Case No. 20-10936 (6th Cir. Aug. 10, 2021) (Southwick, J.)

Jim Adler is a personal injury lawyer who trademarked and used several terms, including JIM ADLER, THE HAMMER and TEXAS HAMMER, to market his business, including via keyword advertisements. McNeil Consultants, a personal injury lawyer referral service, purchased keyword ads using Adler’s trademarked terms, which allowed McNeil’s advertisements to appear at the top of any Google search of Adler’s trademarked terms. McNeil’s advertisements used generic personal injury terms, did not identify any particular law firm and clicking on the ads placed a phone call to McNeil’s call center rather than directing the user to a website. The call center used a generic greeting so consumers did not realize with whom they were speaking.

Adler filed suit against McNeil, asserting Texas state law claims as well as trademark infringement under the Lanham Act. McNeil moved to dismiss, arguing that its keyword ads did not create a likelihood of confusion. The district court agreed and dismissed Adler’s complaint. Adler appealed.

To successfully plead a trademark infringement claim under Fifth Circuit law, the holder of a protectable trademark must establish that the alleged infringing use “creates a likelihood of confusion as to source, affiliation, or sponsorship.” To determine whether a likelihood of confusion exists, the Court weighs a non-exhaustive list of several confusion factors, including the similarity of the marks, the similarity of the products, the defendant’s intent and the care exercised by potential consumers.

The Fifth Circuit explained that Adler alleged initial interest confusion, which exists where the confusion creates consumer interest in the infringing party’s services even where no sale is completed because of the confusion. The Court noted that this case presented the first opportunity for the Fifth Circuit to consider initial interest confusion as it pertains to search engine keyword advertising. Relying on Ninth Circuit precedent and parallel reasoning to its own opinions on initial interest confusion in the context of metatag usage, the Court concluded that Adler’s complaint alleged a plausible claim of trademark infringement under the Lanham Act.

The Fifth Circuit noted that initial interest confusion alone is not enough to raise a Lanham Act claim. The Court explained that if a consumer searches TOYOTA and is directed to search results containing a purchased ad clearly labeled as selling VOLKSWAGEN products, a consumer who clicks on the VOLKSWAGEN ad has been distracted, not confused or misled into purchasing the wrong product. Distraction does not violate the Lanham Act. However, the Court explained that where the use of keyword ads creates confusion as to the source of the advertisement—not mere distraction—an infringement may have occurred. Because McNeil’s advertisements were admittedly generic and could have been associated with any personal injury law firm, the Court found that the keyword [...]

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No Service, No Notice

by | Sep 2, 2021 |

Addressing the notice requirements of Fed. R. of Civ. Pro. 65(a)(1), the US Court of Appeals for the Fifth Circuit vacated a preliminary injunction, finding that the aggrieved party did not have sufficient notice of the possibility of a preliminary injunction. Document Operations, L.L.C., v. AOS Legal Tech., Inc., Case No. 20-20388 (5th Cir. Aug. 23, 2021) (Per Curiam) (unpublished).

In 2017, Doc. Ops. entered into a licensing agreement by which AOS Japan would serve as the company’s exclusive representative and marketing provider in Japan for its virtual data room technology. Later, Doc. Ops. learned that a competing product known as AOS VDR had been developed by AOS Korea and would soon be marketed in the two Asian countries. Despite protests from AOS Japan that AOS Korea developed AOS VDR independently, Doc. Ops. filed suit alleging violation of the Texas Uniform Trade Secrets Act and for common law breach of contract, fraudulent inducement, conversion, civil conspiracy and breach of fiduciary duty.

The licensing agreement mandated that AOS Japan protect Doc. Ops.’ confidential information and also prohibited AOS Japan from acting to “represent, promote, develop, or otherwise try to sell within [Japan] any lines of product that. . . compete with [the technology].” Doc. Ops. sought a temporary restraining order (TRO) as well as preliminary injunction and filed and emailed copies of the complaint and TRO motion to AOS representatives. Once a Zoom hearing was scheduled, Doc. Ops. again contacted AOS to inform it of the hearing date. When AOS failed to appear at the hearing, the district court chose to reschedule the hearing three weeks later in order to ensure that AOS was aware of the hearing.

During this three-week interval, Doc. Ops. continued to communicate relevant dates and filings with AOS, which had appointed Texas-based counsel. One of these communications included a letter from Doc. Ops. to the district court stating that if the district court granted its TRO motion, Doc. Ops. would seek to conduct limited expedited discovery to prepare for a subsequent preliminary injunction. AOS failed to appear at the second hearing, stating that it would not appear until served with process. Subsequently, the district court not only granted the TRO motion and the related request for expedited discovery but also issued a preliminary injunction against AOS. AOS appealed both the preliminary injunction and the order granting expedited discovery.

The Fifth Circuit first explained that Rule 65 requires sufficient notice for a preliminary injunction, which the Supreme Court of the United States has interpreted as implying a hearing where the defendant is given a fair opportunity to oppose the preliminary injunction. The Court contrasted the notice requirement for preliminary injunctions from the more informal notice requirement for TROs. While TRO hearings are sometimes converted into preliminary injunction hearings, this conversion has two requirements: Sufficient notice and an opportunity to meaningfully prepare and respond.

The Fifth Circuit found that while AOS certainly had notice that a preliminary injunction was looming, it lacked sufficient notice that this relief would [...]

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The Application of “Authentication by Comparison” at the PTAB

by | Aug 26, 2021 |

Directly addressing the application and operation of the Federal Rules of Evidence in proceedings before the Patent Trial & Appeal Board (Board), the US Court of Appeals for the Federal Circuit affirmed-in-part and reversed-in-part two inter partes review (IPR) decisions, criticizing the Board’s refusal to consider a particular reference relied upon by the patent challenger on the basis of failure to authenticate. Valve Corp. v. Ironburg Inventions Ltd., U.S. Federal Circuit Court of Appeals Nos. 20-1315, -1316, -1379 (Fed. Cir. Aug. 17, 2021) (Dyk, J.)

The Board found that an IPR petitioner, Valve Corporation, failed to show that several challenged patents were unpatentable based on a non-authenticated copy of a critical prior art reference (the Burns article). The Burns article was a printed copy of a 2010 online review of an Xbox 360 controller. Simon Burgess, a co-inventor of the patents at issue, had facilitated the publication of the Burns article by providing a test controller to Dave Burns (who worked for an online gaming magazine) for promotional purposes. Valve appealed the Board’s decision.

Valve argued that the Burns article copy submitted in connection with the IPR (the Exhibit) was merely a printout of the same online article cited and enclosed in the prosecution histories of the challenged patents, as well as another of Ironburg’s patents directed toward similar subject matter. The Board concluded that Valve failed to show that the Exhibit was the same version of the Burns article that appeared in the prosecution history and that it was not obligated to compare the documents in the absence of testimony from Valve that the two were identical. Valve appealed.

In reviewing the Board’s decision, the Federal Circuit first referred to the principles of authentication by comparison under Fed. R. Evid. 901(b)(3), which permits authentication of a document by a comparison with an authenticated specimen “by an expert witness or the trier of fact.” While the Court did note a discrepancy in the dates shown in the Exhibit and in the Burns article in one of the prosecution histories, the Court found that the difference in dates did not bear on the subject matter being disclosed, which was “virtually identical” between the two, as well as identical to the version of the same article in the other two relevant file histories. The Court held that the Board was obligated to perform this comparison and erred by failing to do so.

After determining that the Exhibit was “substantively the same” as the versions of the Burns article from the relevant prosecution file histories, the Court addressed the question of whether the Exhibit was a printed publication under 35 U.S.C. § 102(a)(1). The Board found “overwhelming evidence” that the Burns article was accessible prior to the critical date of the patents at issue, based in significant part on the fact that Mr. Burgess had provided a controller to Mr. Burns with the purpose of a “dialogue with the intended audience,” an indicia of public accessibility. The Board also noted its agreement with [...]

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Objective Indicia of Nonobviousness for Design Patents: Same Nexus Requirement as Utility Patents

by | Aug 26, 2021 |

The US Court of Appeals for the Federal Circuit reversed two decisions by the Patent Trial & Appeal Board (Board), finding that a soup company and soup dispenser manufacturing company failed to prove the unpatentability of two design patents covering can dispensers. The Court also concluded that the analysis for objective indicia of nonobviousness for utility patents also applies to design patents. Campbell Soup Co. v. Gamon Plus, Inc., Case Nos. 20-2344, 21-1019 (Fed. Cir. Aug. 19, 2021) (Moore, J.)

Gamon Plus owns two design patents directed to “the ornamental design for a gravity feed dispenser display,” or a can dispenser. Gamon’s commercialized embodiment is called the iQ Maximizer gravity feed dispenser. For nearly a decade, Gamon sold tens of millions of dollars’ worth of its iQ Maximizer to Campbell Soup. Campbell attributed increased soup sales in part to the iQ Maximizer in its 10-K Securities and Exchange Commission reports (an industry publication) and in an internal marketing study. Campbell later began purchasing similar gravity feed dispensers from Trinity Manufacturing.

Gamon sued Campbell and Trinity for design patent infringement. Campbell and Trinity then petitioned for inter partes review (IPR) of Gamon’s patents. In its final written decisions, the Board found that Campbell and Trinity failed to prove unpatentability because the prior art was not similar enough to the claimed designs to constitute a proper primary reference. Trinity (Campbell) appealed.

In that appeal, the Federal Circuit disagreed, vacated and remanded. On remand, the Board again held that Campbell and Trinity failed to prove unpatentability, finding that the claimed designs would not have been obvious over the prior art. The Board reasoned that although the prior art alone had the same overall visual appearance as the claimed designs, there existed objective indicia of nonobviousness, including Gamon’s commercial success in selling iQ Maximizers to Campbell, Campbell’s praise of—and commercial success in—using the iQ Maximizer and Trinity’s copying of the iQ Maximizer. The Board presumed a nexus between those objective indicia evidences and the claimed designs because it found the iQ Maximizer to be coextensive with the claims, meaning that the product was essentially the disclosed invention with unclaimed features being insignificant. The Board also found that Gamon established such a nexus regardless of the presumption. Campbell and Trinity again appealed.

Again the Federal Circuit reversed, concluding that the claimed designs would have been obvious over the prior art. In doing so, the Court confirmed the Board’s finding that the prior art and the claimed designs shared the same overall visual appearance (which Gamon did not challenge) but found that the Board’s presumption of nexus and finding of a nexus-in-fact between the claimed designs and the evidence of commercial success and praise were not supported by substantial evidence. As for the presumption, the Court considered whether the iQ Maximizer was coextensive with the claimed invention. Nexus is presumed if the objective indicia evidence is tied to a specific product that is “coextensive” with the claimed invention. The Board recognized that the claimed portions of [...]

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When Pictures Aren’t Pictures: Real Estate Agent-Generated Floor Plans Are Outside Copyright Infringement Exception for Pictorial Representations

by | Aug 26, 2021 |

Examining whether the Architectural Works Copyright Protection Act enacted in 1990 protects the creation of floor plans, the US Court of Appeals for the Eighth Circuit held that such technical drawings generated for practical, rather than artistic, purposes are not covered by a statutory exception that removes the right to control pictures, paintings, photographs or other pictorial representations of their work from architects. Designworks Homes, Inc. et al. v. Columbia House of Brokers Realty, Inc. et al., Case Nos. 19-3608, 20-1099, -3104, 20-3107 (8th Cir. Aug. 16, 2021) (Arnold, J.)

The facts of the case are relatively simple: In the course of selling designed homes, homebuilders hired real estate agents to generate floor plans for use in their listings. The designers of the homes registered copyrights in the homes themselves, then sued the homebuilders and their real estate agents for copyright infringement.

The issue for the Court was whether 17 U.S.C. § 120(a), a statute designed to limit the scope of copyright protection for architectural works, applied to the floor plans that the real estate agents developed. Section 120(a) excludes from the scope of a copyright in an architectural work “the right to prevent the making, distributing, or public display of pictures, paintings, photographs, or other pictorial representations of the work.” The district court held that the floor plans fell within Section 120(a)’s exclusion and, thus, were not covered by the copyright.

The Eighth Circuit disagreed. Employing numerous canons of statutory construction, the Court held that the functional floor plans were neither pictures nor “other pictorial representations” within the meaning of the statute. Drawing from 1990s dictionaries, the Court reasoned that although a floor plan could conceivably be a picture, context showed otherwise. For example, Congress used the phrase “technical drawings” elsewhere in the copyright statute; thus, had Congress intended to exclude them here, it knew how to do so. Moreover, the types of floor plans at issue here were—in the Court’s view—not similar to the other listed categories of items for which copyright protection had been curtailed as the plans did not have any artistic expression.

Practice Note: Not all hope is lost for the homebuilder or developer. Although the Eighth Circuit declined to expressly consider other defenses, it explained that there were others that very readily could apply, including the doctrine of fair use.



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