U.S. Court of Appeals for the Ninth Circuit, Cobbler Nevada, LLC v. Gonzales, Docket No. 17-35041

Attorney’s fees: Copyright: Prevailing party: Dismissal with prejudice: Voluntary dismissal:

The Copyright Act states that the district court “may . . . award a reasonable attorney’s fee to the prevailing party as part of the costs . . . .” 17 U.S.C. § 505. Gonzales is the “prevailing party” because Cobbler Nevada’s contributory infringement claim was dismissed with prejudice. See Cadkin v. Loose, 569 F.3d 1142, 1150 (9th Cir. 2009) (“A defendant is a prevailing party following dismissal of a claim if the plaintiff is judicially precluded from refiling the claim against the defendant in federal court.”). In awarding fees to Gonzales, the district court acted within its discretion. See Entm’t Research 10 Grp. v. Genesis Creative Grp., 122 F.3d 1211, 1216–17, 1228–29 (9th Cir. 1997).

(…) See Kirtsaeng, 136 S. Ct. at 1988–89 (a district court “may order fee-shifting . . . to deter . . . overaggressive assertions of copyright claims”).

(…) To the extent Cobbler Nevada claims that the district court had no jurisdiction to award attorney’s fees after the voluntary dismissal, we reject that argument for the simple reason that Gonzales was not a party to the voluntary dismissal. Wilson v. City of San Jose, 111 F.3d 688, 692 (9th Cir. 1997) (“The filing of a notice of voluntary dismissal with the court automatically terminates the action as to the defendants who are the subjects of the notice.” (emphasis added)). At the time of the voluntary dismissal, the only defendant named in the Second Amended Complaint was the Doe IP address, not Gonzales (fn. 4).

(U.S. Court of Appeals for the Ninth Circuit, Aug. 27, 2018, Cobbler Nevada, LLC v. Gonzales, Docket No. 17-35041, Judge McKeown, for publication)

En l’espèce, le demandeur agit en violation du copyright contre le souscripteur d’une adresse IP, et lui reproche la violation du seul fait de sa qualité de souscripteur. La cour accorde au demandeur un délai approprié pour identifier l’auteur de la violation. Le demandeur n’y parvient pas, puis abandonne ses prétentions en retirant sa procédure. Il avait finalement nommé « Doe IP address » comme partie adverse. Il est par conséquent condamné à payer une partie des honoraires de l’avocat de sa partie adverse, au sens de 17 U.S.C. § 505.

Plus précisément, suite au retrait de sa procédure par le demandeur, la cour a rendu deux décisions de clôture : une décision de clôture « with prejudice », ce qui empêche le demandeur d’agir à nouveau devant une cour fédérale. De la sorte, la partie défenderesse emporte le procès. En tant que partie victorieuse, elle a droit à des dépens. L’autre décision de clôture consiste pour la cour à enregistrer le retrait volontaire de sa procédure par le demandeur (« voluntary dismissal »). A son sujet, le demandeur soutient ne pas pouvoir être condamné à des dépens dans la mesure où son retrait termine la procédure, ne permettant ainsi plus à la cour de rendre une décision (sur les dépens). A tort juge ici la cour : le retrait de la procédure met fin à l’action pour ce qui est des parties. Or la défenderesse était « Doe IP address », et non Gonzales, lequel a droit à des dépens.

U.S. Court of Appeals for the Ninth Circuit, Cobbler Nevada, LLC v. Gonzales, Docket No. 17-35041

Copyright infringement: Contributory infringement: Peer-to-peer: Internet platforms: Distribution: IP address: Leave to amend:

Plaintiff alleged unauthorized downloading and distribution of the film through peer-to-peer BitTorrent networks. The panel held that the bare allegation that the defendant was the registered subscriber of an Internet Protocol address associated with infringing activity was insufficient to state a claim for direct or contributory infringement. The panel also held that the district court did not abuse its discretion in awarding attorney’s fees to the defendant under 17 U.S.C. § 505.

(…) Because multiple devices and individuals may be able to connect via an IP address, simply identifying the IP subscriber solves only part of the puzzle. A plaintiff must allege something more to create a reasonable inference that a subscriber is also an infringer. Nor can Cobbler Nevada succeed on a contributory infringement theory because, without allegations of intentional encouragement or inducement of infringement, an individual’s failure to take affirmative steps to police his internet connection is insufficient to state a claim.

(…) Records subpoenaed from Comcast identified (…) Gonzales as the subscriber of the internet service associated with the IP address.

(…) The only facts in support of Cobbler Nevada’s direct infringement claim were that Gonzales was “the subscriber of the IP address used to download or distribute the movie, and that he was sent notices of infringing activity to which he did not respond.”

(…) During his deposition, Gonzales testified that, once he became aware of the infringing activity, he attempted to find out who the infringer was and instructed everyone to stop infringing. He also testified that the staff took the same steps, but no one was able to identify the infringer (fn. 1).

(…) The magistrate judge ordered Cobbler Nevada to show cause why the Second Amended Complaint should not be dismissed for failure to cure the deficiencies identified in the court’s dismissal of the First Amended Complaint, or for failure to identify the unknown party in a timely manner pursuant to Federal Rule of Civil Procedure 4(m).

To establish a claim of copyright infringement, Cobbler Nevada “must show that it owns the copyright and that the defendant himself violated one or more of the plaintiff’s exclusive rights under the Copyright Act.” Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004). Cobbler Nevada has not done so.

(…) In light of Cobbler Nevada’s prior amendments to the complaint and the futility of any further amendment, however, the district court acted within its discretion in not granting further leave to amend. See Salameh v. Tarsadia Hotel, 726 F.3d 1124, 1133 (9th Cir. 2013); Lipton v. Pathogenesis Corp., 284 F.3d 1027, 1039 (9th Cir. 2002).

(…) At the outset, we recognize that Gonzales’s position—a subscriber to internet service—does not fit cleanly within our typical contributory liability framework, which often involves consumer-facing internet platforms. See, e.g., Grokster, 545 U.S. at 919–20 (computer software provider); Amazon, 508 F.3d at 1171 (search engine). Nevertheless, it is no leap to apply the framework of similar technology-based cases to our analysis of Gonzales’s liability.

In Sony Corp. of America v. Universal City Studios, Inc., the Supreme Court held that liability for another’s infringement cannot arise from the mere distribution of a product that is “widely used for legitimate, [non-infringing] purposes.” 464 U.S. 417, 442 (1984). The Court later refined the standard for liability, holding that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” Grokster, 545 U.S. at 919.

“Mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability.”

Secondary sources: Nimmer on Copyright § 12.04.

(U.S. Court of Appeals for the Ninth Circuit, Aug. 27, 2018, Cobbler Nevada, LLC v. Gonzales, Docket No. 17-35041, Judge McKeown, for publication)

Participation à la violation du copyright : rappel des conditions nécessaires à une condamnation. Le cas d’espèce reprend et confirme les décisions de principes déjà rendues dans ce domaine (Napster, Grokster, etc.), bien que ces jurisprudences antérieures concernaient plutôt des plateformes Internet en relation avec des consommateurs (p. ex. des providers de softwares, des moteurs de recherches). Dans certaines de ces jurisprudences, la Cour Suprême fédérale avait jugé que la seule distribution d’un produit largement utilisé à des fins légales ne permettait pas de condamner le distributeur pour participation à une violation d’un copyright, cela même si le distributeur connaissait le potentiel du produit de porter atteinte au copyright, ou même s’il connaissait des cas de violations.

Le détenteur de l’adresse IP ne peut de ce seul fait être condamné pour violation du copyright ou pour participation à la violation du copyright. Il n’est en effet pas nécessairement la seule personne à avoir accès à l’ordinateur ou à la tablette lié à l’adresse IP. Le demandeur doit donc apporter d’autres moyens de preuve visant une personne déterminée comme utilisatrice du moyen informatique lié à l’adresse IP. En outre, le détenteur de l’adresse IP n’est pas tenu de surveiller l’usage de sa connexion Internet. L’important est qu’il ne s’implique pas dans une démarche de violation.

En l’espèce, dès qu’il a été informé de la violation du copyright par le biais de sa connexion Internet, le défendeur a tenté de découvrir l’auteur, et a instruit les personnes admises à utiliser sa connexion de cesser toutes violations.

La cour a accordé au demandeur le bénéfice de l’art. 4(m) des Règles de procédure civile fédérale, lui octroyant un délai approprié pour identifier l’auteur inconnu. Le demandeur a échoué dans ses tentatives d’identification, et a abandonné ses prétentions en retirant sa procédure. D’où sa condamnation aux frais d’avocat adverse au sens de 17 U.S.C. § 505.

U.S. Court of Appeals for the Federal Circuit, Zheng Cai v. Diamond Hong, Inc., Docket No. 18-1688

Trademark: Trade name: Likelihood of confusion: DuPont factors: Cancellation:

Appellant Zheng Cai DBA Tai Chi Green Tea Inc. (“Mr. Cai”) appeals an opinion of the U.S. Patent and Trademark Office’s (“USPTO”) Trademark Trial and Appeal Board (“TTAB”) cancelling registration of his mark “WU DANG TAI CHI GREEN TEA” due to a likelihood of confusion with Appellee Diamond Hong, Inc.’s (“Diamond Hong”) registered mark, “TAI CHI,” pursuant to 15 U.S.C. § 1052(d) (2012). See Diamond Hong, Inc. v. Zheng Cai, Cancellation No. 92062714, 2018 WL 916315, at *5–8 (T.T.A.B. Feb. 14, 2018); see also 15 U.S.C. § 1052(d) (providing a mark may not be placed on the principal register if it so resembles a mark already registered “as to be likely . . . to cause confusion”). We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(B) (2012).

We affirm.

Diamond Hong petitioned for cancellation of Mr. Cai’s mark based on a likelihood of confusion with its registered TAI CHI mark. See Appellee’s Suppl. App. 23. The TTAB found likelihood of confusion, giving limited consideration to Mr. Cai’s briefing because it “contravened” certain provisions of the Trademark Trial and Appeal Board Manual of Procedure (“TBMP”). Diamond Hong, 2018 WL 916315, at *3, *5−7.

Section 1052(d) provides that a trademark may be refused if it consists of or comprises a mark which so resembles a mark registered in the USPTO, or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive. 15 U.S.C. § 1052(d).

In Application of E.I. DuPont DeNemours & Co., our predecessor court articulated thirteen factors to consider when determining likelihood of confusion (“DuPont factors”). See 476 F.2d 1357, 1361 (CCPA 1973). “Not all of the DuPont factors are relevant to every case, and only factors of significance to the particular mark need be considered.” In re Mighty Leaf Tea, 601 F.3d 1342, 1346 (Fed. Cir. 2010).

The thirteen factors are as follows: (1) similarity of the marks; (2) similarity and nature of goods described in the marks’ registrations; (3) similarity of established trade channels; (4) conditions of purchasing; (5) fame of the prior mark; (6) number and nature of similar marks in use on similar goods; (7) nature and extent of actual confusion; (8) length of time and conditions of concurrent use without evidence of actual confusion; (9) variety of goods on which mark is used; (10) market interface between applicant and owner of a prior mark; (11) extent to which applicant has a right to exclude others from use of its mark; (12) extent of potential confusion; and (13) any other established probative fact on effect of use. See Application of E.I. DuPont, 476 F.2d at 1361.

A showing of actual confusion is not necessary to establish a likelihood of confusion.

The Opinion of the U.S. Patent and Trademark Office’s Trademark Trial and

Appeal Board is

AFFIRMED

COSTS

No costs.

(U.S. Court of Appeals for the Federal Circuit, Aug. 27, 2018, Zheng Cai v. Diamond Hong, Inc., Docket No. 18-1688, Circuit Judge Wallach)

Requête en annulation de l’enregistrement d’une marque concurrente, pour risque de confusion. Description des étapes procédurales. Analyse du risque de confusion selon les treize facteurs DuPont. Ces treize conditions n’ont nullement besoin d’être réalisées pour aboutir à la reconnaissance d’une confusion contraire au droit des marques : seuls les facteurs relevant dans chaque espèce sont à considérer.

L’existence d’une confusion effective n’est pas nécessaire pour reconnaître un risque de confusion illicite.

Evidence: Mere allegations

Evidence: Mere allegations:

Enzo Biochem, Inc. v. Gen-Probe Inc., 424 F.3d 1276, 1284 (Fed. Cir. 2005) (“Attorney argument is no substitute for evidence.”)

(U.S. Court of Appeals for the Federal Circuit, Aug. 27, 2018, Zheng Cai v. Diamond Hong, Inc., Docket No. 18-1688, Circuit Judge Wallach)

U.S. Court of Appeals for the Federal Circuit, Sigvaris, Inc. v. United States

Import: Customs: Duty free: HTSUS: Nairobi Protocol:

Sigvaris, Inc. (“Sigvaris”) appeals the judgment of the United States Court of International Trade in which the court found that the subject merchandise is not classified as duty free under the Harmonized Tariff Schedule of the United States (“HTSUS”) subheading 9817.00.96 as articles specially designed for the use or benefit of physically handicapped persons. Sigvaris, Inc. v. United States, 227 F. Supp. 3d 1327 (Ct. Int’l Trade 2017).

HTSUS subheading 9817.00.96 implements the United States’ obligations under the Nairobi Protocol on the Importation of Educational, Scientific, and Cultural Materials (“Nairobi Protocol”). U.S. Customs Serv. Implementation of the Duty-Free Provisions of the Nairobi Protocol, Annex E, to the Florence Agreement (“Customs Implementation”), T.D. 92-77, 26 Cust. B. & Dec. no. 35 (Treas. Dep’t Aug. 26, 1992). The Nairobi Protocol is an international agreement that encourages trade in articles for the handicapped by “expanding duty-free treatment to articles for the use or benefit of the physically or mentally handicapped persons.” Id.

Customs classified the subject merchandise as “other graduated compression hosiery: . . . of synthetic fibers” under HTSUS subheading 6115.10.40 subject to a duty rate of 14.6% ad valorem.

Sigvaris timely protested the classification of the subject merchandise, and sought “special classification” as duty free under HTSUS subheading 9817.00.96.

Customs denied the protest on December 12, 2011. Sigvaris paid liquidated duties according to Customs’s classification but challenged the classification by filing a complaint in the Court of International Trade.

(…) The parties filed cross-motions for summary judgment.

(…) This court has jurisdiction to review the Court of International Trade’s decision under 28 U.S.C. § 1295(a)(5).

“We review the Court of International Trade’s grant or denial of summary judgment for correctness as a matter of law, deciding de novo the proper interpretation of the governing statute and regulations as well as whether genuine issues of material fact exist.” United States v. Am. Home Assurance Co., 789 F.3d 1313, 1319 (Fed. Cir. 2015). “We employ the same standard employed by the Court of International Trade in assessing Customs’ classification determinations.” Otter Prods., LLC v. United States, 834 F.3d 1369, 1375 (Fed. Cir. 2016).

The HTSUS scheme “is organized by headings, each of which has one or more subheadings; the headings set forth general categories of merchandise, and the subheadings provide a more particularized segregation of the goods within each category.” Wilton Indus., Inc. v. United States, 741 F.3d 1263, 1266 (Fed. Cir. 2013). General Rules of Interpretation (“GRIs”) of the HTSUS govern the proper classification of merchandise entering the United States and are applied in numerical order. Id. According to GRI 1, we look first to the HTSUS headings and any relevant section or chapter notes. Otter Prods., 834 F.3d at 1375. We construe terms from the HTSUS according to their common and commercial meanings, which we presume are the same. Id. We may consult dictionaries, scientific authorities, and other reliable information sources to discern the common meanings. Id.

The Additional U.S. Rules of Interpretation (“ARIs”) also bear on the classification analysis. See Schlumberger, 845 F.3d at 1163 & n.5. However, it is not necessary for us to reach the ARIs in this case, because, even though HTSUS heading 9817 is a use provision, no aspect of the ARIs is dispositive of the issues raised here.

(U.S. Court of Appeals for the Federal Circuit, August 16, 2018, Sigvaris, Inc. v. United States, Docket 17-2237, Circuit Judge O’Malley)

Classification douanière à l’importation, taxation, procédure administrative puis judiciaire de contestation (douane, Court of International Trade, U.S. Court of Appeals for the Federal Circuit). Standard de la preuve (en droit : de novo). Méthode d’analyse des dispositions de HTSUS.

U.S. Court of Appeals for the Federal Circuit, Diebold Nixdorf, Inc. v. International Trade Commission

Import: Tariff Act of 1930 § 337: Patent infringement: Assignment: ITC: ALJ:

Appellants Diebold Nixdorf, Inc. and Diebold Self-Service Systems (together, “Diebold”) appeal the International Trade Commission’s (“ITC” or “Commission”) finding that they violated § 337 of the Tariff Act of 1930 by importing components of automated teller machines (“ATMs”) that infringe claims 1–3, 6, 8, and 9 of U.S. Patent No. 8,523,235 (“the ’235 patent”). Diebold challenges the Commission’s determination that these claims, all of which recite the term “cheque standby unit,” are not invalid for indefiniteness. See Certain Automated Teller Machines, ATM Modules, Components Thereof, and Prods. Containing the Same, Inv. No. 337-TA-989, 2017 ITC LEXIS 1603 (USITC Mar. 13, 2017).

We conclude that the term “cheque standby unit” in the ’235 patent is a means-plus-function term subject to 35 U.S.C. § 112, para. 6, which lacks corresponding structure disclosed in the specification. We therefore reverse the Commission’s finding that Diebold violated § 337.

In February 2016, Intervenors Hyosung TNS Inc. and Nautilus Hyosung America Inc. (together, “Hyosung”), which own the ’235 patent by assignment, filed a complaint with the ITC against Diebold, alleging violations of § 337 by reason of Diebold’s infringement of four patents related to ATMs.

(…) The administrative law judge (“ALJ”), after holding an evidentiary hearing, issued an Initial Decision (…)

The Commission, after undertaking review of the ALJ’s Initial Decision on issues not involving the “cheque standby unit,” issued its Final Determination finding a violation of § 337, in addition to a Limited Exclusion Order and Cease and Desist Orders. Diebold appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(6).

We review the Commission’s final determinations under the standards of the Administrative Procedure Act (“APA”). See 19 U.S.C. § 1337(c) (stating that “any person adversely affected by a final determination of the Commission” may appeal to this court “for review in accordance with chapter 7 of title 5”). Under the APA, we review legal determinations de novo and findings of fact for substantial evidence. Ajinomoto Co., Inc. v. Int’l Trade Comm’n, 597 F.3d 1267, 1272 (Fed. Cir. 2010); Osram GmbH v. Int’l Trade Comm’n, 505 F.3d 1351, 1355 (Fed. Cir. 2007).

(…) Because the ’235 patent fails to disclose any structure corresponding to the function of “holding the at least one authentic cheque to return the at least one authentic cheque to the user responsive to receiving user instructions cancelling depositing of the at least one authentic cheque,” we conclude that claims 1–3, 6, 8, and 9 are invalid for indefiniteness under 35 U.S.C. § 112, para. 2.

CONCLUSION

For the foregoing reasons, we reverse the Commission’s finding that Diebold violated § 337.

COSTS

Costs to appellant.

(U.S. Court of Appeals for the Federal Circuit, August 15, 2018, Diebold Nixdorf, Inc. v. International Trade Commission, Docket 17-2553, Type: Precedential, Circuit Judge O’Malley)

Les étapes de la procédure en violation de la Section 337 du Tariff Act de 1930, la violation reprochée étant l’importation de composants qui porteraient atteinte à un brevet U.S. La procédure devant l’ITC puis devant le Circuit fédéral implique analyse de la question de la violation du droit fédéral des brevets d’invention pour décider/juger si une violation de la section 337 s’est ou non produite. Standard de la preuve : en droit : de novo, en fait : substantial evidence. La procédure a ici été initiée par le titulaire par assignation du brevet U.S.

Children’s Online Privacy ; COPPA

FTC Approves Modifications to Video Game Industry Self-Regulatory COPPA Safe Harbor Program

FTC

August 14, 2018

Republication

https://www.ftc.gov/news-events/press-releases/2018/08/ftc-approves-modifications-video-game-industry-self-regulatory?utm_source=govdelivery

Children’s Online Privacy: COPPA: Privacy: Data: FTC:

The Federal Trade Commission approved changes to a video game industry self-regulatory program aimed at ensuring compliance with the Children’s Online Privacy Protection Act (COPPA) Rule.

The Entertainment Software Ratings Board (ESRB) applied for approval of proposed modifications to its COPPA safe harbor program. The FTC’s COPPA Rule requires, among other things, that operators of commercial websites and online services directed to children under the age of 13, or general audience websites and online services that knowingly collect personal information from children under 13, must obtain parental consent before collecting, using, or disclosing any personal information from children under the age of 13. The FTC’s COPPA Rule includes a “safe harbor” provision that allows industry groups and others to ask the Commission to approve self-regulatory guidelines that implement the protections of the Rule. Companies that comply with an FTC-approved safe harbor program are exempt from agency enforcement action under the Rule.

Earlier this year, the FTC sought comment on ESRB’s proposed changes to its COPPA safe harbor guidelines. For example, ESRB proposed changes to its definition of “personal information and data” in light of recently issued Commission guidance about collection of audio recordings.

The FTC received five comments from individuals and consumer advocates. For example, the Campaign for a Commercial-Free Childhood and the Center for Digital Democracy jointly recommended changes to ESRB’s proposal. Among their recommendations was that ESRB retain language from the existing program that defines street-level geolocation information as personal information and data, and include language that would make it a requirement – instead of a suggestion – to limit collection of “personal information and data.” Another commenter, the Electronic Privacy Information Center, called for other changes, including asking that the Commission reject a proposed change that would narrow ESRB’s definition of “child/children” to only U.S. residents. The revised guidelines approved by the Commission include a number of changes to address issues identified by commenters.

The Commission vote to approve the changes to ESRB’s COPPA safe harbor program was 5-0.

U.S. Court of Appeals for the Federal Circuit, Gerson Co. v. United States

Import: Customs: Duty rate (Customs): HTSUS interpretation: General Rules of Interpretation (“GRIs”) of the HTSUS: Additional U.S. Rules of Interpretation of the HTSUS: HS (Customs): HS’ Explanatory Notes (EN):

The Gerson Company appeals a decision of the United States Court of International Trade (“Trade Court”) granting summary judgment in favor of the government. See Gerson Co. v. United States, 254 F. Supp. 3d 1271 (Ct. Int’l Trade 2017). In that decision, the court classified Gerson’s imported light-emitting diode (“LED”) candles under subheading 9405.40.80 of the Harmonized Tariff Schedule of the United States (“HTSUS”)—which covers certain “lamps . . . not elsewhere specified or included”— rather than under subheading 8543.70.70—which covers “electrical machines and apparatus,” including “electric luminescent lamps.” We agree with the Trade Court’s classification, and, accordingly, affirm.

Gerson’s imported merchandise consists of finished decorative candle and tea light lamps made of plastic and/or wax. The lamps are designed to resemble ordinary candles, such as votive, pillar, taper, or tea light candles. Unlike ordinary candles, however—which generate light by using a wick to vaporize wax—Gerson’s candles use battery-operated LEDs. Gerson does not dispute that its candles serve both decorative and illuminative functions.

Between January and October 2009, Gerson imported twenty-seven entries of its candles through the Port of Kansas City, Missouri. U.S. Customs and Border Protection (“Customs”) liquidated the merchandise under HTSUS subheading 9405.40.80, which imposes a duty rate of 3.9% ad valorem.

That provision reads:

9405 Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included:

40 Other electric lamps and lighting fittings:

80 Other………………………..……….3.9%

Gerson objected to Customs’ classification in four administrative protests, arguing that its candles should have been classified under subheading 8543.70.70, which imposes a duty rate of 2% ad valorem.

That provision reads:

8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:

70 Other machines and apparatus:

70 Electric luminescent lamps………..2%

Customs denied each of Gerson’s protests, leading Gerson to file suit in the Trade Court.

(We cite here to the 2009 version of the HTSUS in effect when Gerson imported the merchandise at issue.)

The court observed that it is at least “plausible” to read heading 8543 as covering Gerson’s candles to the extent they qualify as “electrical machines and apparatus.” But the court rejected that reading as impermissibly expanding the scope of heading 8543 and unduly narrowing the scope of heading 9405. The court also determined that such a reading would be inconsistent with the World Customs Organization’s Harmonized Commodity Description and Coding System (“HS”) Explanatory Notes (“ENs”), which suggest that chapter 94 is reserved for finished household lamps like Gerson’s candles, while chapter 85 is reserved for unfinished lamps used in conjunction with other electrical devices. The court therefore classified the candles under subheading 9405.40.80.

Gerson timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(5).

(…) The proper classification of merchandise entering the United States is governed by the General Rules of Interpretation (‘GRIs’) of the HTSUS and the Additional United States Rules of Interpretation.

(…) We therefore begin, as we must, “with the language of the headings.” Orlando Food Corp. v. United States, 140 F.3d 1437, 1440 (Fed. Cir. 1998).

(…) As the Trade Court observed, the term “electrical machines and apparatus” recited in heading 8543 “is not free of ambiguity” standing alone. Gerson, 254 F. Supp. 3d at 1277. On the one hand, it is “plausible” to read heading 8543 broadly as encompassing Gerson’s candles, at least in a “hyper-technical sense,” because the candles use electricity to operate and therefore arguably qualify as “electrical machines and apparatus.” Id. at 1276–77. On the other hand, the terms “machine” and “apparatus” generally connote equipment designed specifically to carry out a particular function. See Webster’s New World College Dictionary 67 (4th ed. 2009). Those terms would seem not to cover Gerson’s candles, which are decorative articles that also serve an illuminative function.

(…) When so read, the HTSUS makes clear that Gerson’s candles belong in heading 9405 rather than in heading 8543. If one were to read heading 8543 as covering Gerson’s candles, it would cover every electric lamp, because all such lamps use electricity to generate light. And, by operation of Note 1(f), such lamps could not be classified under heading 9405. In other words, heading 9405 would be constrained to only non-electric lamps. That reading, as the Trade Court noted, “would impose a specific, and drastic, limitation on the scope of heading 9405, HTSUS that the article description for that heading does not express or suggest.” Gerson, 254 F. Supp. 3d at 1278.

(…) Unlike the HTSUS section and chapter notes— such as chapter 94’s Note 1(f)—the ENs “are not legally binding or dispositive, but they may be consulted for guidance and are generally indicative of the proper interpretation of the various HTSUS provisions.” BenQ Am. Corp. v. United States, 646 F.3d 1371, 1376 (Fed. Cir. 2011). We cite here to the 2007 version of the ENs that were in effect when Gerson imported its merchandise.

(…) The World Customs Organization’s Explanatory Notes, which accompany each chapter of the HTSUS.

(…) Chapter 85’s ENs, by contrast, state that chapter 85 includes “certain electrical goods not generally used independently, but designed to play a particular role as components, in electrical equipment,” including “electrical filament or discharge lamps.” EN 85(A)(6); HS Hdg. 85.39. These ENs therefore suggest that chapter 85 was intended to include at least unfinished lamps that are used in conjunction with other electrical equipment. As the Trade Court found, Gerson’s candles more closely resemble the lamps described in chapter 94 than they do the lamps described in chapter 85. Gerson, 254 F. Supp. 3d at 1277.

(…) Gerson’s and its amici’s “bottom-up” analysis—which begins with a subheading and proceeds upward through the headings—is backwards. Classification under the GRIs must take a “top-down” approach, beginning, “as it must, with the language of the headings,” and ending with the language of the subheadings.

(…) In particular, under GRI 1, a court must first determine whether the merchandise is correctly classified under a particular heading of the HTSUS. See Otter Prods., 834 F.3d at 1375 (“According to GRI 1, the HTSUS headings and section or chapter notes govern the classification of a product.”); BenQ, 646 F.3d at 1376 (“When determining the correct classification for merchandise, a court first construes the language of the headings in question, in light of any related section or chapter notes.”); see also Orlando Food, 140 F.3d at 1440 (“When determining which heading is the more specific, and hence the more appropriate for classification, a court should compare only the language of the headings and not the language of the subheadings.”). “Only after determining that a product is classifiable under the heading should the court look to the subheadings to find the correct classification for the merchandise.” Orlando Food, 140 F.3d at 1440; see LeMans, 660 F.3d at 1316 (“We are first to look to headings, then subheadings, to determine the proper classification”).

(…) Headings “are to be evaluated without reference to their subheadings, which cannot be used to expand the scope of their respective headings.” R.T. Foods, Inc. v. United States, 757 F.3d 1349, 1353 (Fed. Cir. 2014).

(U.S. Court of Appeals for the Federal Circuit, August 6, 2018, Gerson Co. v. United States, Docket 18-1011, Precedential, Circuit Judge O’Malley)

Classification contestée d’un produit importé, application et interprétation du HTSUS, référence au HS et à ses notes explicatives.

Manière de lire et analyser le HTSUS (depuis les titres en direction des paragraphes, et non l’inverse), ses règles générales d’interprétation et ses règles d’interprétation additionnelles.

U.S. Court of Appeals for the Eleventh Circuit, August 3, 2018, Direct Niche, LLC v. Via Varejo S/A

Domain name: Prior use in commerce: Common law mark: E-commerce: Internet law: Trademark: Uniform Dispute Resolution Policy: OMPI (UDRP): Anticybersquatting: ACPA: Consumer law:

Appellant Direct Niche, LLC initiated this case against Appellee Via Varejo S/A under the Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1114(2)(D)(v), seeking to obtain a declaratory judgment that its registration and use of the domain name casasbahia.com is not unlawful under the ACPA. Via Varejo maintained that Direct Niche is not entitled to the requested relief because Direct Niche registered the casasbahia.com domain with a bad faith intent to profit from Via Varejo’s common law service mark, Casas Bahia.

After a four-day bench trial, the United States District Court for the Southern District of Florida agreed with Via Varejo and entered judgment accordingly. On appeal, Direct Niche challenges only the district court’s finding that Via Varejo has used the Casas Bahia mark in commerce in a manner sufficient to establish ownership rights. After careful review of the record and briefs of the parties, and with the benefit of oral argument, we affirm.

Via Varejo is a Brazilian corporation with its principal place of business in São Paolo, Brazil. Via Varejo is the parent company of the Casas Bahia chain of retail stores. Casas Bahia is a multi-billion dollar retail brand with around 22,000 employees and over 750 stores throughout Brazil. Via Varejo owns a trademark portfolio for its Casas Bahia mark, including about forty trademarks in countries around the world. At the time of the bench trial, Via Varejo had pending applications for three Casas Bahia service marks in the United States. Via Varejo uses the Casas Bahia name to sell electronics, furniture, appliances, and other consumer goods. In addition to brick-and-mortar stores, Via Varejo has utilized the Casas Bahia brand in e-commerce since 2009, operating under the domain name casasbahia.com.br (the Casas Bahia Website).

Via Varejo does not operate any physical Casas Bahia stores in the United States and does not ship goods ordered online to the United States, although millions of Internet Protocol (IP) addresses located in the United States access the Casas Bahia Website every year.

In addition to the sale of products to consumers, Via Varejo also generates income from the Casas Bahia Website through the sale of advertising space to third-parties, including U.S. companies. Via Varejo does this in three ways: (1) preferred product placement, (2) a banner advertising program, and (3) its marketplace seller program.

Direct Niche is a limited liability company in Minnesota whose sole business is the acquisition of Internet domain names. At the time of trial, Direct Niche’s portfolio contained over 150 domain names, purchased through online auctions and sales, or through direct registration on websites like GoDaddy.com. Direct Niche monetizes the domain names it owns through resale, or by “parking” advertisements on the domain. “Parking” is an arrangement in which the domain name owner provides a third-party company with the exclusive right to “park” pay-per-click or other revenue-generating advertisements under the domain name. The “parking” company then pays Direct Niche a portion of the profits it generates from the advertisements. In this way, Direct Niche capitalizes on the web traffic to a particular domain. Any traffic to these domain names stems from the prior use of the domain name by a different owner, which often is, or was, a real business.

On June 15, 2015, Direct Niche registered the domain name casasbahia.com (the Domain) after purchasing it in an online auction. Direct Niche paid $22,850 for the Domain, the most it had ever paid for a domain name, and twenty times what it pays on average for a domain name. Direct Niche uses the Domain to generate revenue through the parking of advertisements. Traffic to the Domain occurs when individuals manually type casasbahia.com into their web browsers and are directed to the Domain where the parked advertisements appear.

In July 2015, Via Varejo filed a complaint under the Uniform Dispute Resolution Policy (UDRP) challenging Direct Niche’s registration of the Domain. A panelist with the World Intellectual Property Organization (WIPO) issued an Administrative Panel Decision on October 17, 2015, ordering that the Domain be transferred to Via Varejo. As a result, Direct Niche filed this lawsuit on November 5, 2015, seeking a declaration that its registration or use of the Domain was not unlawful under the ACPA, and requesting an injunction against the transfer of the Domain. See 15 U.S.C. § 1114(2)(D)(v).

This section of the ACPA provides a remedy to aggrieved domain name registrants against “‘overreaching trademark owners.’” See Barcelona.com, Inc. v. Excelentisimo Ayuntamiento de Barcelona, 330 F.3d 617, 625 (4th Cir. 2003) (quoting S. Rep. No. 106-140, at 11). Specifically, this provision states:

A domain name registrant whose domain name has been suspended, disabled, or transferred under a policy [such as the UDRP] may, upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this chapter. The court may grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant.

15 U.S.C. § 1114(2)(D)(v).

Via Varejo maintains that Direct Niche is not entitled to the relief it seeks because its registration and use of the Domain did violate the ACPA, specifically, 15 U.S.C. § 1125(d)(1)(A). Under this provision, a person is liable to the owner of a mark if he registers or uses a domain name that is identical or confusingly similar to the mark with a bad faith intent to profit from the use. See 15 U.S.C. § 1125(d)(1)(A).

Specifically, the district court found that Via Varejo had appropriated ownership rights to the Casas Bahia mark in the United States because it used the mark in commerce to provide advertising services for others. The court further determined that the Casas Bahia mark is inherently distinctive; the Domain is identical or at least confusingly similar to the Casas Bahia mark; Direct Niche registered the domain with the bad faith intent to profit; and Direct Niche is not entitled to the statutory safe harbor defense. Based on these findings, the district court entered final judgment in favor of Via Varejo.

The issue on appeal is whether Via Varejo owns the Casas Bahia service mark in the United States. Appropriation of service mark ownership rights under common law requires “‘actual prior use in commerce.’” See Planetary Motion, Inc. v. Techsplosion, Inc., 261 F.3d 1188, 1193 (11th Cir. 2001) (quoting Tally-Ho, Inc. v. Coast Cmty. Coll. Dist., 889 F.2d 1018, 1022 (11th Cir. 1989)).

Planetary Motion, Inc., 261 F.3d at 1194-95 & n.8. To determine whether a party has proved “use in commerce” sufficient to establish ownership, this Court has consistently applied the two-part test set forth in Planetary Motion:

“Evidence showing, first, adoption, and, second, use in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark, is competent to establish ownership, even without evidence of actual sales.”

(…) “The typical evidence of use in commerce is the sale of goods bearing the mark,” however, “in the absence of actual sales, advertising, publicity, and solicitation can sufficiently meet the public identification prong of the test.”

(U.S. Court of Appeals for the Eleventh Circuit, August 3, 2018, Direct Niche, LLC v. Via Varejo S/A, Docket 17-13937, District Judge Howard, sitting by designation, published)

  

Procédure à suivre en cas de contestation de l’enregistrement par un tiers d’un nom de domaine. En l’espèce, la requérante est établie au Brésil et non aux U.S., où elle ne déploie que des activités de type E-commerce. Sa marque étrangère n’est pas enregistrée comme nom de domaine aux U.S., ni en tant que marque. L’intimée en profite et enregistre aux U.S. ce nom de domaine pour son propre compte, générant du trafic Internet lucratif. La requérante saisit l’OMPI selon l’UDRP. L’OMPI ordonne le transfert du nom de domaine à la requérante. L’intimée ouvre alors action devant l’U.S. District Court (action en constatation, requête de prononcé d’une injonction), puis saisit l’U.S. Court of Appeals. L’intimée soutient que la requérante abuse de sa marque, comportement que prohibe l’ACPA, qui peut permettre de revendiquer l’attribution d’un nom de domaine nonobstant la marque propriété d’autrui. La requérante invoque pour sa part 15 U.S.C. § 1125(d)(1)(A) de l’ACPA, disposition selon laquelle celui qui enregistre ou utilise un nom de domaine identique ou similaire à une marque d’autrui, avec l’intention de mauvaise foi de profiter de l’usage du nom de domaine, engage sa responsabilité envers le titulaire de la marque.

In casu, la requérante n’avait donc pas enregistré le nom de domaine (ni la marque), mais l’usage de ce nom et de la marque dans le commerce U.S. était suffisant pour lui conférer un droit exclusif. L’usage dans le commerce aux U.S. consistait à fournir des services publicitaires pour autrui (des tiers domiciliés aux U.S. pouvaient placer de la publicité sur le site Internet de la requérante). L’usage est suffisant s’il peut être prouvé qu’il est suffisamment public pour identifier ou distinguer les produits dans un segment approprié de la collectivité publique. L’existence ou l’absence de ventes n’est pas déterminante. En l’absence de ventes, la publicité et les sollicitations peuvent suffire.

Le jugement est en faveur de la requérante.

U.S. Court of Appeals for the Eleventh Circuit, Direct Niche, LLC v. Via Varejo S/A

Jurisdiction: Trademark infringement in a foreign country: Unfair competition in a foreign country:

In Bulova Watch, the Supreme Court addressed the extraterritorial reach of the Lanham Act where infringing conduct occurs in a foreign country. See Bulova Watch, 344 U.S. at 281 (“The issue is whether a United States District Court has jurisdiction to award relief to an American corporation against acts of trademark infringement and unfair competition consummated in a foreign country by a citizen and resident of the United States.”); see also Int’l Café, S.A.L. v. Hard Rock Café Int’l (U.S.A.), Inc., 252 F.3d 1274, 1278 (11th Cir. 2001). This Court applied Bulova Watch in International Café where we held that “the Lanham Act confers jurisdiction over extraterritorial disputes involving trademark infringement and unfair competition when: 1) Defendant is a United States corporation; 2) the foreign activity had substantial effects in the United States; and 3) exercising jurisdiction would not interfere with the sovereignty of another nation.” See Int’l Café, S.A.L., 252 F.3d at 1278. Thus, the “substantial effects” test derived from Bulova Watch on which Direct Niche relies concerns the jurisdiction of United States courts over trademark infringement occurring in a foreign country. This case does not involve extraterritorial infringement.

(U.S. Court of Appeals for the Eleventh Circuit, August 3, 2018, Direct Niche, LLC v. Via Varejo S/A, Docket 17-13937, District Judge Howard, sitting by designation, published)

Les cours de district fédérales sont compétentes pour connaître des actions en violation du droit à la marque et en concurrence déloyale s’agissant d’actes commis hors territoire U.S., à condition que la partie défenderesse soit une personne morale U.S., que l’activité à l’étranger déploie des effets substantiels aux Etats-Unis, et que nulle interférence avec la souveraineté d’un autre pays n’est à craindre.