Monday, August 06, 2007

The Ninth Circuit's Likelihood of Confusion

As a Northern Californian who lives in the East, I have a split personality: as a matter of personal feelings, Northern California will always be home. (Southern California is alien territory best appreciated by its own denizens). But professionally, I have only practiced on the East Coast and am continually baffled by the Ninth Circuit’s substantial similarity copyright decisions, going back to the root of all evil, the 1977 Sid & Marty Krofft case. (562 F.2d 1157). The whole extrinsic-intrinsic stuff makes no sense to me, and to make matters worse, the circuit has developed lists of factors to be considered depending on the subject matter involved. I wish the court of appeals would ditch the whole unwieldy and unhelpful edifice and start from scratch with a much simpler approach, preferably that followed in the Second Circuit.

The Ninth Circuit’s most recent case, Jada Toys, Inc. v. Mattel, Inc., 2007 WL 2199286 (9th Cir. Aug. 2, 2007), poses a different problem, confusion between trademark and copyright law. The opinion, by a district judge, does a good of framing the facts, the parties’ contentions, and the decision below:


Jada Toys is a California corporation that specializes in the distribution and sale of miniature diecast toy cars, trucks, and other vehicles. Generally, these vehicles are scale model replicas of actual vehicles. From 2001 to 2004, Jada produced a line of toy trucks called HOT RIGZ. In 2001, Jada filed an application for a trademark registration of the term HOT RIGZ with the United States Patent and Trademark Office (“U.S.PTO”). The trademark was issued by and registered with the U.S. PTO in 2002, though Jada used its HOT RIGZ trademark in advertising material and on its toys and their packaging from 2001 to 2004. Mattel is also a toy company. Among its many lines of toys is its familiar HOT WHEELS miniature vehicle brand, which it has been marketing since 1968. The HOT WHEELS vehicle line includes small scale versions of big rig trucks. Since 1968, Mattel has employed the use of a flame logo (“68 logo”) to identify the HOT WHEELS brand. In 1982 Mattel developed a complementary version of the 68 logo, this one incorporating the Mattel seal, to be used in conjunction with the sale of its product. Mattel owns U.S. federal trademark registrations for both of these flame logos. On April 20, 2004, Jada filed an action against Mattel, asserting claims for trademark infringement, false designation of origin, and unfair competition. Jada's allegations, however, were not related to its HOT RIGZ mark; rather, Jada claimed that Mattel's advertising and sale of its OLD SCHOOL and NEW SCHOOL lines infringed on Jada's use of its registered trademark OLD SKOOL. Mattel asserted various affirmative defenses and counterclaims. Among the counterclaims were allegations that Jada's HOT RIGZ mark infringed on Mattel's HOT WHEELS mark. Mattel also counterclaimed for copyright infringement and dilution. Ultimately, each party submitted motions for summary judgment. On March 15, 2005, the district court issued its ruling regarding the parties' motions for summary judgment. As to Jada's claims relating to Mattel's OLD SCHOOL and NEW SCHOOL marks, the court granted summary judgment in Mattel's favor. And as to Mattel's counterclaims for infringement, copyright, and dilution, relating to Jada's use of its HOT RIGZ logo, the court granted summary judgment in Jada's favor. In granting summary judgment as to Mattel's infringement claims, the district court relied on the dissimilarity of the marks alone to determine that no likelihood of confusion existed. Mattel timely appealed the grant of summary judgment as to its counterclaims.
To recap: each side lost on its claims. Mattel appealed; the Ninth Circuit reversed. On the trademark claim, the court of appeals expressed concern over use of dissimilarities alone to support a finding of no likelihood of confusion. This concern inexplicably spilled over into the court’s copyright analysis:


This Court employs a two-part test to determine whether two works are substantially similar. The first part, the extrinsic test, focuses on the similarity of the ideas expressed. Sid & Marty Krofft Television Prod., Inc. v. McDonalds Corp., 562 F.2d 1157, 1164 (9th Cir.1977). The extrinsic test is objective and involves an analysis of “the type of artwork at issue, the materials used, the subject matter, and the setting for the subject.” Id. The second part, the intrinsic test, focuses on the similarity in expression. Id. This test is subjective and thus turns on the impressions of the average reasonable observer. Id. In this case, the district court concluded that because the marks at issue were not similar, the extrinsic test was not met. It also found that since the marks were not similar, no reasonable person could believe that they conveyed a similar expression and therefore the intrinsic test had not been satisfied. We hold, however, that a reasonable trier of fact could conclude that the marks are objectively similar. It could also be argued that, given the similarity of the marks, a reasonable observer of the two marks could understand the HOT RIGZ mark to be expressing the sense that the product sold under that mark is, essentially, a HOT WHEELS product. Therefore, the district court's entry of summary judgment in favor of Jada as to Mattel's copyright claim is reversed.
The part that is objectionable is this, “a reasonable observer of the two marks could understand the HOT RIGZ mark to be expressing the sense that the product sold under that mark is, essentially, a HOT WHEELS product.” That’s a trademark analysis, not a copyright analysis. One can only hope that such confusion of two very different rights and infringement of them is limited to the facts of this particular case.

10 comments:

Aaron Silverstein said...

That opinion is astonishing. I expect such mistakes when the media attempts to distinguish between the very different rights, but not a circuit court of appeals.

Dean C. Rowan said...

I'll read the opinion, but for now a remark about geography and demography. "Home" for me is Southern California, where I enjoyed the companionship of split personality even before I relocated to the Berkeley area. However, your example of a "denizen" is surely an atypical one. That particular pocket of SoCal (Hollywood, Beverly Hills, and environs) is fairly tiny, and easily avoided by the rest of us, who over time learned where the action really was in that vast sprawling mess. Having said that, I concede that the Jada Toys opinion emerged from Pasadena.

William Patry said...

Dean, I knew I could get some comment from that. And I am happy yours was made from the North.

Crosbie Fitch said...

Trademark: Avoiding authorship confusion through similar appearance or naming, especially deliberate deception.

Copyright: Preventing one artist's work being used as the basis for another's. Similarity of works creates suspicion that one may have been the basis for the other, though does not necessarily constitute proof.

Trademark: Protecting the truth of authorship for the benefit of all.

Copyright: Suspending the liberty of all artists for the commercial benefit of one.

Anonymous said...

During an oral argument I saw in Pasadena before a Ninth Circuit panel one of our local counsel forgot himself and relying on local custom referred to an earlier panel's decision as one coming from the Ninth Circus. He caught himself too late although I noted that the members of the panel did smile probably trying to resist the temptation of saying: "Yes we are!"

Christian T. said...

An opinion like this, at the Circuit Court of Appeals no less, raises particular concerns about overlapping IP protections. The intermingling of analysis regarding TM and copyright issues is sure to muddy the waters as far as the applicability of either is concerned. Although this is case is unusual in the sense that it enabled what appeared to be a trademark to ostensibly be protected under the auspices copyright law, the greater concern is the potential of expired copyrights being protected under trademark law.

Rebecca Tushnet said...

I read the case to make sure I wasn't missing something. The problem here is much worse than confusion of copyright & trademark. The court's opinion, appallingly, suggests that HOT WHEELS is a copyrightable phrase that could be infringed by HOT RIGZ. That's more nuts than usual. Maybe the claim below was about some particular trucks; I sure hope so. (I'd even accept something about the visual marks.) Because reversing summary judgment on the copyright claim as described is incredibly incompetent.

William Patry said...

Rebecca, agreed; it thought it most powerful just to quote the court itself.

Bruce Boyden said...

The mark at issue appears to be the Hot Wheels flame logo -- but the court opinion does make it sound like the word mark was part of the substantial similarity analysis, which would seem to contradict the words and short phrases rule. Based on a quick search I can't find the Hot Wheels logo copyright registration. Mattel's reply brief (the only one I could find on Westlaw) gives some sense of their argument:

Jada's brief does little to persuade that summary judgment against Mattel's claim for copyright infringement was correct. Jada does not dispute in its brief, and has never disputed the fact that Mattel owns valid copyrights in the HOT WHEELS flame logos.... Thus the validity of Mattel's copyrights is established in this case and on this appeal. Jada also fails to contest, and thus concedes by omission, that it had access to Mattel's copyrighted HOT WHEELS flame logos, and this element too is established in Mattel's favor in this case and on this appeal.... The sole issue before this Court is whether the parties' respective flame logos are substantially similar, such that copying can be inferred, thus requiring denial of summary judgment....

First, the protectable elements of the works in question must be identified.... In a pictorial or graphic work, determining the protectable components of expression requires analysis of: (1) the text, (2) arrangement of text, (3) artwork, and (4) association between artwork and text in each work. See Roth Greeting Cards v. United Card Company, 429 F.2d 1106, 1109 (9th Cir. 1970)....

In the HOT WHEELS flame logos at issue, several protectable elements of expression are present. First, the logo incorporates text -- HOT WHEELS. This text is a protectable element of expression. See Roth, 429 F.2d at 1109. Second, the arrangement of the HOT WHEELS text is fanciful with the initials “H” and “W” capitalized, some letters leaning to one side, and the base of the letter “t” curving out at the bottom instead of going straight down. Mattel arranges the text HOT WHEELS artistically inside a flame logo, with licks of flames sweeping out the back. The arrangement of text is protectable. Id. Third, Mattel creates a flame logo out of the text, using the color red for the flame and a graded yellow coloring for the lettering on the text, starting with dark yellow on top and fading gradually to white at the bottom of the letters. This artwork incorporating text and graphics in the shape of a flame is protectable. Id. Finally, the text HOT WHEELS is situated within the flame logo, with licks of flames shooting out the back of the logo (to the left side[FN11]), suggesting speed. This association of text within the flame artwork is also a protectable element of Mattel's flame logos. Id.

FN11. Jada used the HOT RIGZ flame logo with flames shooting out either the left or the right side of the logo, apparently depending on what direction the toy vehicle inside the package was facing. (Jada's Brief, p. 29.)...

Relevant factors for evaluating objective similarity of pictorial or graphic works include the text, arrangement of text, art work, and association between art work and text. See Roth, 429 F.2d at 1109 (emphasis added). When such elements are compared, it becomes clear that Jada has imitated the protectable elements of Mattel's famous HOT WHEELS flame logos. For instance, the text of both logos is very similar. Both logos include the word HOT and a second term meaning “vehicles,” ending in the “z” sound. The arrangement of text in both logos is comparable because both incorporate similar words written in fanciful fonts in a horizontal logo. The text in both logos is situated inside a flame with licks of flame shooting out. The art work is also very similar in that both logos are horizontal designs with flames shooting from what appears to be the back (Mattel's logo shows flames shooting from the left side, Jada's logo often has flames shooting from the left side). The colors of the parties' respective flame logos are very similar, in that both are warm tones incorporating red for the flame (Mattel's flame is red, Jada's truck cab is red and its flame turns from red to orange to yellow). The color of the text of both logos is graded yellow, starting dark yellow at the top and gradually turning white at the bottom of the letters. Also, the background of Mattel's flame logos is blue, and Jada's flame logo is outlined in blue. Finally, the association between artwork and text is very similar because both logos place the text inside a flame logo with flames shooting from the back to indicate speed....

William Patry said...

Bruce, thanks so much for research and extensive analysis.