Archive for the ‘Copyrights’ Category

Hypothetical License Analysis Questioned in Oracle v. SAP

Friday, February 25th, 2011

In a massive filing this week, European business-software giant SAP AG is looking to have a new trial on damages. The liability phase was concluded last fall, and the jury’s award of $1.3 billion to Oracle Corp. plus $14 million in pre-judgment interest is the only point of contention left.

Coming on the heels of the recent high-profile reviews of IP infringement damages analyses sparked by the Uniloc v. Microsoft and the Versata v. SAP cases, this latest motion asks the Court to question the proper application of the Georgia Pacific factors, which arose in the context of Patent Law, to determine a reasonable royalty to determine the proper remedy for the Plaintiff in this copyright infringement case, and offering the alternative of the disgorgement of defendants’ profits, among other case-specific issues.

According to the motions, damages should be reduced to a level commensurate with Plaintiff’s own expert’s determination of Oracle’s Lost Profits, which are less than $300 million. In a way, part of the argument is that, in analyzing the “hypothetical license” scenario, Oracle’s expert improperly included in the royalty the reimbursement of Oracle’s overall R&D investments and disregarded evidence of the actual extent of the use made of the infringing information and the actual number of customers SAP acquired.

We shall continue to monitor the changing damages landscape, not only from the perspective of legislative reform, but also from the increasingly acute scrutiny of patent infringement damages expert reports.

Fictional beer and the future of Trademark Law

Wednesday, February 23rd, 2011

Duff-Cerveza-270x300In the fictional world of The Simpsons, Duff Beer is a popular brew. What if you developed a real-life beer with the same name and had instant brand awareness? That is what Mexican entrepreneur Rodrigo Contreras thought when considering how to invest the proceeds the book he published, The Achievements of President Fox, a 136 page collection of blank pages.

Contreras’ real-world Duff Beer has been selling in Mexico and Europe (but not widely in the USA), and The Financial Times has even written a profile piece on the venture, where Contreras insists he contacted Fox and the producers of The Simpsons in 2006 but got no response. Tellingly, the FT piece quotes a happy bartender explaining why sales have needed little in advertising: “The moment you offer customers Duff Beer from The Simpsons, they rip it out of your hands.” This is an example recently highlighted in a very thorough note by Benjamin M. Arrow, published in the latest issue of the Fordham Intellectual Property, Media & Entertainment Law Journal, which has gotten deserved attention from the intellectual property community.

The situation above clearly suggests a trademark infringement, but it is not a straight forward application of the Lanham Act. The Duff identifier is not really used in commerce as a beer trademark, except within the fictional world. Copyright law, on the other hand, does not protect de minimis expressions like these. Nevertheless, it seems obvious that Contreras’ Cerveza Duff is trading on the goodwill of the fictional brand.

Twentieth Century Fox indeed has the only registration of the trademark “Duff Beer” in the US; it is a mark for Class 25, covering merchandising apparel such as shirts, t-shirts, tops, swimwear, shorts, pants, caps, or hats. They are missing coverage for the actual beer category though, that is a not-so-tiny technicality in defending a brand.

From the perspective of potential trademark infringement damages in a fictional trademark case, there may be a few potential theories to pursue, but the most promising ones would be related to unfair competition and the attribution of a portion of an alleged infringer’s profits to the advertising and goodwill generated by the show’s producers and distributors legitimately accruing to the fictional mark.