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Legal Updates |
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National Athletic Trainers’ Association Inc. v. American Physical Therapy Association et al.
New York v. Microsoft
Eastwood v. Palliser Furniture Ltd. et al.
Ex parte Sacha Baron Cohen et al.
Pritchett v. Pound
Santa-Rosa v. Combo Records
Marder v. Lopez
Natural Wealth Real Estate, Inc. v. Cohen
Canon Latin America, Inc. v. Lantech (CR), S.A.
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National Athletic Trainers' Association Inc. v. American Physical Therapy Association et al. |
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On February 1, 2008, National Athletic Trainers’ Association Inc (“NATA”), claiming to represent 30,000 certified athletic trainers worldwide, filed suit against the American Physical Therapy Association (“APTA”), the main United States organization representing physical therapists. The suit claims that APTA violated the antitrust laws of the Sherman Act, 15 U.S.C. § 2 by monopolization and attempted monopolization and violating Section 1 of the Act through restraint of trade and group boycott. The suit alleges that the APTA falsely told the public that only certified physical therapists can perform “manual therapy,” the “skilled use of hands to evaluate or treat a neuromuscular skeletal condition.” The complaint further alleges that APTA furthers their monopoly on the manual therapy market by conspiring to and engaging in a pattern of conduct designed to prevent NATA members and other certified athletic trainers from completing professional educational requirements to effectively compete in the manual therapy market, including advising its members that it is illegal to train NATA members or other athletic trainers manual therapy procedures and by baring NATA members from education conferences and training programs on the practice. The complaint explains that while plaintiff “acknowledges [that] physical therapy may only be practiced by [physical therapists], the techniques used by [physical therapists] are neither owned by them nor exclusively for their use.” Plaintiffs seek treble damages and permanent injunctive relief.
National Athletic Trainers’ Association Inc. v. American Physical Therapy Association et al., No. 08-158 (N.D. Tex., Dallas Div. filed Feb. 1, 2008)
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New York v. Microsoft |
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On January 29, 2008, District Court Judge Colleen Kollar-Kotelly issued a ruling extending for two additional years the antitrust oversight of Microsoft ordered in New York v. Microsoft Corporation, 224 F. Supp. 2d 76 (D.D.C. 2002). Judge Kollar-Kotelly cited Microsoft’s “extreme and unforeseen delay” in making available “complete, accurate, and useable technical documentation relating to the Communications Protocols that Microsoft is required to make available to licensees” under the Final Judgments, a delay caused by insufficient allocation of employee and economic resources toward generating the technical documentation. In the previous Remedy Judgment, the Court explained that
[t]he mandatory disclosure of the communications protocols relied upon by Microsoft’s PC operating system to interoperate with its server operating systems will advance the ability of non-Microsoft server operating systems to interoperate, or communicate, with the ubiquitous Windows PC client. Advancement of the communication between non-Microsoft server operating systems and Windows clients will further the ability of these non-Microsoft server operating systems to provide a platform which competes with Windows itself.
New York v. Microsoft, 224 F. Supp. 2d at 172-173. The Court found that Microsoft’s delay in disclosing the communications protocols constituted changed circumstances preventing the Final Judgments from achieving their objectives and therefore warranted extending the remedy provisions two years. The plaintiffs, antitrust regulators from 10 states and the District of Columbia, had requested an extension of five years.
New York v. Microsoft, 531 F. Supp. 2d 141 (D.D.C. 2008)
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Litigation and Alternative Dispute Resolution
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Eastwood v. Palliser Furniture Ltd. et al. |
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Clint Eastwood is seeking a federal court injunction against Palliser Furniture Corporation for using his name without authorization by naming one of its home theater chairs “The Eastwood.” The complaint was filed on January 16, 2008 in the Central District of California, alleging claims for false designation of origin and false endorsement in violation of the Federal Lanham Act, in addition to claims for misappropriation of name or likeness under common law and the California Civil Code. The claims are based on the allegation that Palliser’s use of Eastwood’s personality rights was without authorization and creates the false impression that Eastwood is somehow associated with the manufacturer. The complaint explains that the chair dubbed “The Eastwood” is sold and marketed within a line of home theater chairs named by defendants after various living and deceased celebrities, including “The Brando,” “The Cagney,” “The Cooper,” “The Bronson” and “The Connery.” The complaint also states that Eastwood has a long history of rejecting third-party licenses, reserving the exploitation of his personality rights and goodwill associated therewith for motion picture and other business ventures in which he is personally involved. In addition to injunctive relief, the complaint seeks to recover all profits earned as a result of selling the chairs and punitive damages for defendant’s “knowing, willful and conscious disregard” for Eastwood’s rights.
Eastwood v. Palliser Furniture Ltd. et al., No. 08-00266, complaint filed (C.D. Cal. Jan. 16, 2008)
See email attached PDF’s. doc # 80286
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Ex parte Sacha Baron Cohen et al. |
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Kathie Martin, who owns and operates the Etiquette School of Birmingham, filed a lawsuit against Sacha Baron Cohen, Twentieth Century Fox Film Corporation and other production companies associated with the film Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan (hereinafter referred to as "the Borat movie"), stating claims alleging fraud and deceit, quasicontract and unjust enrichment, commercial appropriation and invasion of privacy, and intentional infliction of emotional distress. Martin alleged that she had been embarrassed and humiliated by scenes in the Borat movie in which she is seen teaching etiquette to the film’s main character during a dinner party, and she claims that she thought she had been legitimately hired to teach etiquette to a foreign reporter for inclusion in a documentary film.
On April 26, 2007, the trial court denied defendants’ motion to dismiss based on the forum selection clause in the contract signed by Martin and Springland Films (one of the defendant production companies) that provided that New York County, New York was the exclusive venue for Martin’s claims. The defendants sought mandamus relief from the denial of their motion to dismiss.On January 18, 2008, the Supreme Court of Alabama found that the primary purpose of the transaction between plaintiff and defendants was interstate commerce, “specifically, to provide for Martin's appearance in a film that might be used ‘without restriction in any media throughout the universe.’” Consequently, the Court found that the Commerce Clause of the United States Constitution precluded the courts of Alabama from applying a state law rendering void contracts made by foreign corporations that fail to first obtain a state certificate of authority to transact business within Alabama. The Court concluded that Martin could not then prevent the petitioners from enforcing the consent agreement between the parties, which includes a forum selection clause, the clause under which defendants had previously brought a motion to dismiss based on lack of jurisdiction.
Ex parte Sacha Baron Cohen et al., (In re: Kathie Martin v. Sacha Baron Cohen et al.) [Ms. 1061288] (Ala. Jan. 18, 2008) Jefferson Circuit Court, CV-06-7333.
A copy of the Supreme Court of Alabama’s opinion can be found at:
http://www.alabamaappellatewatch.com/1061288.PDF
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Pritchett v. Pound |
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The Fifth Circuit affirmed the District Court’s grant of summary judgment to the plaintiff, a consulting firm, which had sole ownership of books written by the defendant as works made for hire and held that the plaintiff’s declaratory judgment action was not barred by the statute of limitations. An employment contract governed Pound’s employment with Pritchett, providing that any written materials he produced in the scope of his employment would be on behalf of and belong exclusively to the employer. The deceased defendant co-wrote two handbooks sold and paid for by the employer which also received all profits. When Pound died, his widow signed a release discharging the employer from any claims she might have against it. But, she and Pound’s estate subsequently sued Pritchett in state court, alleging co-ownership in the copyrights and seeking an accounting of and royalties from the book sales. After failing in its effort to remove the case to federal court, Pritchett filed suit in the District Court seeking a declaratory judgment that it was the sole owner of the copyrights in the books, to which Pound’s widow and estate asserted counterclaims. The Fifth Circuit affirmed the District Court’s holding that Pritchett was the sole owner of the books, consistent with the employment agreement. Pritchett’s ownership of the copyrights defeated the claims for royalties and the Court did not address any effect the release may have had. Further, the Court affirmed the finding that the statute of limitations did not bar Pritchett’s declaratory judgment action, noting that such actions are usually sought by defendants and do not bar the defense asserted to defeat a plaintiff’s claims. Accordingly, the Court of Appeals found that Pritchett’s “claim” that the books were works for hire was a defense to Pound’s initial state court claim and that Pritchett’s declaratory judgment action did not accrue until Pound’s estate asserted accounting claims. Because the work for hire assertion was made by Pritchett in 2003, it was within the three year statue of limitations period. The Fifth Circuit also affirmed the District Court’s award of attorneys’ fees to Pritchett as the prevailing party.
Pritchett v. Pound, No. 05-41445 (5th Cir. filed Dec. 18, 2006)
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Santa-Rosa v. Combo Records |
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The First Circuit affirmed the District Court’s dismissal of the plaintiff’s claims on appeal for rescission of his recording contract with the defendant and for a declaratory judgment that he had ownership in the recordings. Santa Rosa, a salsa singer, producer and composer, sued Combo Records for compensation from the sales of five albums, recorded fifteen years earlier and sold by Combo since that time. Santa Rosa recorded four albums between 1986 and 1989 and Combo later released a compilation of the plaintiff’s songs, paying him an advance on royalties. Since 1989, Combo sold the albums but never paid Santa Rosa additional royalties or provided royalty statements. Santa Rosa did not request additional royalties until he brought suit in 2004 seeking rescission for material breach of contract, damages for unjust enrichment, a declaratory judgment as to the ownership of the recordings and violation of the Lanham Act. While the parties disputed the existence and terms of the contract, the Second Circuit held that Santa Rosa’s contract claim was preempted by 17 U.S.C. § 301(a) of the Copyright Act because he sought rescission, not damages. The Court of Appeals did not decide whether a mere breach of contract claim is preempted by the Copyright Act, but found that if the contract was rescinded the Court would need to look to the Copyright Act to determine the plaintiff’s ownership rights. Accordingly, Santa Rosa’s only remedy was under the Copyright Act and the Court affirmed the dismissal of the contract claim. The Second Circuit also affirmed the District Court’s ruling that the plaintiff’s declaratory judgment claim for ownership of the recordings was barred by the statute of limitations. 17 U.S.C. § 507(b) provides that such actions must be brought “within three years after the claim accrued,” and begins to run when the plaintiff knows or should have known of the basis for the claim. Because Santa Rosa was obviously present when he recorded the albums for Combo Records, he had reason to know of his claim of ownership to the recordings as soon as each album was created, which claim began to accrue more than three years before he brought suit. Therefore, the Second Circuit affirmed the District Court’s ruling that his declaratory judgment action was barred by 17 U.S.C. § 507(b).
Santa-Rosa v. Combo Records, No. 05-2237 (1st Cir. filed Dec. 15, 2006)
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Marder v. Lopez |
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The Ninth Circuit upheld the district court’s dismissal of the plaintiff’s claims in Marder v. Lopez, where the general release she had signed in the 1980’s “constituted a waiver of all claims against Paramount arising out of any of her contributions to the film Flashdance,’” allegedly based on her life. The Appeals Court further upheld the dismissal of plaintiff’s suit against Sony and Jennifer Lopez under the Lanham Act, the Copyright Act and the state law right of publicity and unfair competition based on its finding that because the plaintiff could not assert a valid copyright interest in the work and had no evidence of copyright ownership, she could not bring an infringement action based on a music video featuring Lopez which recreated scenes from the movie. In 1982, the plaintiff signed a general release, purporting to discharge Paramount and its subsidiaries from claims arising out of the creation of Flashdance in connection with her providing information to the studio, understanding that it would use the information to create a screenplay. Subsequently, in 2003, Sony released a music video of a song by Lopez, which featured her performance in scenes recreated from the movie. Giving effect to the parties’ mutual intent at the time they entered the contract, the court found that the language of the release was quite broad and that the plaintiff had “released a broad array of claims relating to any assistance she provided during the creation of” the film. As a result, the court held that the release precluded each of plaintiff’s claims against Paramount and that because she could not sue it to assert co-ownership in the film, she could not establish “a prima facie case of copyright infringement against Sony and Lopez.”
Marder v. Lopez, 450 F.3d 445 (9th Cir. 2006)
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Intellectual Property
Business Transactions and Organizations
Publicity, Privacy and Defamation
Business Disputes
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Natural Wealth Real Estate, Inc. v. Cohen |
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Plaintiffs, various financial institutions, brought a defamation claim and action against prominent recording artist Leonard Cohen and other defendants to enjoin defamatory statements published on Mr. Cohen’s website regarding the loss of his funds allegedly at the hands of the plaintiffs.
Mr. Cohen hired plaintiff Tactical Allocation Services, LLC (“Tactical”) directed by the plaintiff Neal Greenberg to invest for him the assets placed into three charitable trusts. The assets were derived from the sales of Mr. Cohen’s intellectual property and were intended to provide long-term financial support. However, Mr. Cohen allegedly drew large sums from the trusts, depleting the principal amounts and impeding plaintiffs’ efforts to successfully invest. Mr. Greenberg warned defendant Kelley Lynch, Cohen’s manager, who oversaw and had power of attorney over Cohen’s financial dealings, and Cohen that he was spending too much and absent a change of habit would become destitute. Mr. Cohen proceeded to sell additional intellectual property and to convey the intellectual property to an entity of his creation called Traditional Holdings LLC, in which he held one percent interest and Ms. Lynch held 99%. Traditional Holdings sold the intellectual property to Sony Music and then served as an annuity for Mr. Cohen under Ms. Lynch’s management to enable Mr. Cohen to benefit from the sale without suffering adverse tax consequences. Traditional Holdings hired plaintiffs to invest its assets.
Mr. Cohen instructed the plaintiffs to follow Ms. Lynch’s directions concerning management of Traditional Holdings’ assets and, purportedly at Mr. Cohen’s direction and on his behalf, Ms. Lynch continued to make unsustainable withdrawals from the trusts and from Traditional Holdings. In 2004, Mr. Cohen and Ms. Lynch parted ways and began issuing competing directives to plaintiffs, each blaming the other for Mr. Cohen’s financial distress. After allegedly attempting but failing to extort the lost sums from plaintiffs through plaintiffs’ insurance companies, defendants, using Mr. Cohen’s fame as a prominent recording artist, allegedly published defamatory statements about the plaintiffs, posting such defamatory statements on Mr. Cohen’s web site and submitting them to the press, blaming plaintiffs for the loss of the monies.
Mr. Cohen instructed the plaintiffs to follow Ms. Lynch’s directions concerning management of Traditional Holdings’ assets and, purportedly at Mr. Cohen’s direction and on his behalf, Ms. Lynch continued to make unsustainable withdrawals from the trusts and from Traditional Holdings. In 2004, Mr. Cohen and Ms. Lynch parted ways and began issuing competing directives to plaintiffs, each blaming the other for Mr. Cohen’s financial distress. After allegedly attempting but failing to extort the lost sums from plaintiffs through plaintiffs’ insurance companies, defendants, using Mr. Cohen’s fame as a prominent recording artist, allegedly published defamatory statements about the plaintiffs, posting such defamatory statements on Mr. Cohen’s web site and submitting them to the press, blaming plaintiffs for the loss of the monies.
On February 21, 2008, the Court granted plaintiffs’ motion for summary judgment as to Mr. Cohen’s breach of contract counterclaim, which contended plaintiffs had breached their contractual duty by sending monthly email reports that were false and misleading, which purportedly enabled Ms. Lynch to make unauthorized withdrawals. The Court determined that although defendant wants to blame plaintiffs for the depletion of the accounts, under the terms of the agreement with Tactical, both Mr. Cohen and Ms. Lynch were “the client.” The Court went on to paraphrase Justice Holmes in noting that the person reposing confidence in Ms. Lynch was not plaintiffs, but Mr. Cohen, and since the unauthorized transactions went on for a period of two years, plaintiffs could reasonably have expected Mr. Cohen to notice if anything was wrong; he could not, therefore, blame plaintiffs for his own negligence in this regard.
Natural Wealth Real Estate, Inc. v. Cohen, No. 05-cv-01233-LTB-MJW (D. Colo. filed Dec. 4, 2006)
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Canon Latin America, Inc. v. Lantech (CR), S.A. |
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In a conflict involving alleged breach of a distributorship agreement between Canon Latin America, Inc. (“Canonlat”) and Lantech (CR), S.A., (“Lantech”), Lantech filed an action against Canon in Costa Rica seeking indemnity from Canon and damages for hiring a new distributor when Canon was unable to collect payment from Lantech. Canon then brought an action against Lantech seeking a declaratory judgment as to choice of law and forum provisions of the parties’ distribution agreement, an injunction enjoining the parties from litigating in Costa Rica, and a preliminary injunction enjoining Lantech from taking any action to further its proceedings against Canon in Costa Rica. Acknowledging that enjoining foreign proceedings raised significant and substantial issues of international comity and sovereignty, the United States District Court for the Southern District of Florida nonetheless granted a preliminary injunction enjoining the furtherance of the foreign suit because Lantech’s action frustrated the policy of the federal courts of enforcing the forum selection clause included clearly in the parties’ written agreement. In addition, the Court found that Lantech’s action was “vexatious” since it forced Canon to post a one million dollar bond in order to avoid losing its right to import products into Costa Rica. However, on November 21, 2007, the Eleventh Circuit reversed, vacated the injunction and remanded the case for dismissal of Canon’s outstanding claims. The Court of Appeals reasoned that at least one of the threshold requirements for issuing an anti-suit injunction are not satisfied and that Canonlat has not shown that resolution of its claims in the district court would be dispositive of Lantech’s claims in Costa Rica, a prerequisite to determining whether the injunction was proper.
Canon Latin America, Inc. v. Lantech (CR), S.A., No. 05-20297 (S.D. Fla. filed Sept. 27, 2006)
A copy of the Eleventh Circuit’s opinion can be found here.
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