The Ninth Circuit created quite a stir in the trademark world with its February 23, 2011 ruling in Fleischer Studios v. A.V.E.L. A., Inc. (pdf) I discussed why that decision is problematic from a trademark perspective in my post, Betty Boop Court Misses the Trademark.
Following the court’s decision, Fleischer, the appellant, filed petitions for rehearing and rehearing en banc. The Ninth Circuit withdrew its February opinion and replaced it with a new opinion on August 19, 2011. Instead of affirming the district court’s decision on the trademark issues, as it did in its February opinion, this time the Ninth Circuit vacated the district court’s holding with respect to the word mark and remanded the case to the district court for further proceedings on the trademark infringement claims.
To briefly recap what this case is about, Max Fleischer created the Betty Boop character in the 1930s. He later sold the rights to the cartoon and character. The Fleischer family revived the Fleischer cartoon business in the early 1970s and repurchased intellectual property rights to the Betty Boop character. A.V.E.L.A. sold Betty Boop merchandise without a license from Fleischer. Fleischer then sued A.V.E.L.A. for copyright and trademark infringement.
The Ninth Circuit undertook a different analysis in its revised opinion. It did not mention the Dastar or Job’s Daughters cases at all, which it so heavily relied on in its initial opinion. Instead, the court took a much more narrow approach and steered clear of any discussion of functionality.
Federal registration of Betty Boop image. The Ninth Circuit upheld the district court’s rejection of the evidence presented on Fleischer’s ownership of a federal registration in the Betty Boop mark. The significance of a federal registration is that it confers on the mark a presumption of validity. 15 U.S.C. §1115(a). The evidence on registration was not presented in a timely manner and the district court did not abuse its discretion in refusing to consider it. The Ninth Circuit also declined to take judicial notice of the image trademark registration.
Common law trademark in Betty Boop image. A mark that is not federally registered can be protected as a common law trademark. A party asserting a common law trademark must establish “secondary meaning” in the mark. Secondary meaning has to do with source identification. It is a belief by consumers that products connected with the mark come from the same source. Secondary meaning is established with evidence. In this case, the only evidence on secondary meaning presented was from Fleischer’s Chief Executive Officer, which the court considered to have very limited probative value. The court stated
The probative value of such evidence is so limited, in fact, that standing alone, it is not sufficient to withstand summary judgment. Thus, the company CEO’s uncorroborated, and clearly self-interested testimony did not create a genuine issue for trial as to whether Betty Boop has acquired secondary meaning.
(Opinion pdf pages 14-15)
Word trademark. Fleischer claims a registered trademark in the words “Betty Boop.” The district court held that the “fractured” history of intellectual property rights concerning Betty Boop prevented Fleischer from proving secondary meaning and thus prevented Fleischer from establishing one of the required elements of an enforceable trademark. The fractured history theory has not been adopted by the Ninth Circuit or any other circuit. It came from Universal City Studios, Inc. v. Nintendo Co. Universal claimed to own a trademark in the King Kong name and sued Nintendo for trademark infringement and unfair competition over Nintendo’s gorilla in its Donkey Kong game. The district court granted summary judgment to Nintendo, ruling that because at least four entities held rights to King Kong, Universal was unable to establish a single source of origin and therefore unable to establish secondary meaning.
The Ninth Circuit held that the mere fact of fractured ownership is not conclusive evidence of a lack of secondary meaning and that something more is required to show that there is no secondary meaning. In Universal, the something more was “evidence of extensive use and licensing of similar images by other companies, the oddly-defined trademark that was legally carved out from other images of the same character, the widespread confusion amongst potential licensees and licensors regarding from whom one should license the mark, and the other image of the same character that had acquired secondary meaning.” (Opinion pdf page 16).
In contrast, the district court in the Betty Boop case stated:
Here, as in Universal, merchandising intellectual property rights in a famous fictional character were divided and parceled out to various entities over many decades....Although there is no evidence of other current, authorized uses of Betty Boop trademarks, [Fleischer] acknowledges that other entities retain copyrights in various Betty Boop works.
(Opinion pdf page 16, emphasis added by the Ninth Circuit).
The Ninth Circuit found that the existence of the possibility that other copyright owners may be destroying the secondary meaning in the Betty Boop mark is not enough to rule in favor of A.V.E.L.A. on summary judgment. The district court erred on the word mark issue and the Ninth Circuit vacated the holding on this issue and remanded the case to the district court “for further proceedings on Fleischer’s trademark infringement claims regarding the Betty Boop word mark.” (Opinion pdf page 17).
This case is Fleischer Studios, Inc. v. A.V.E.L.A., Inc., No. 09-56317.