(Originally published in the Entertainment Law column in the New York Law Journal, July 25, 2003.)
The U.S. Supreme Court has decided that the phrase “origin of goods” used in the Lanham Act refers to the producer of the tangible goods that are offered for sale and not to the author of any idea, concept or communication embodied in those goods. In so doing, it reversed the judgment of the Court of Appeals of the Ninth Circuit and held that the Lanham Act does not prevent the unaccredited copying of an uncopyrighted work.
In 1948, General Dwight D. Eisenhower finished writing “Crusade In Europe,” his account of the allied campaign in Europe during World War II. Doubleday published the book, registered it for copyright protection then and granted exclusive television rights to an affiliate of 20th Century Fox Film Corporation (“Fox”). Fox made an arrangement with Time, Inc. to produce a television series consisting of 26 episodes, also called “Crusade in Europe,” based upon Eisenhower’s book, and Time assigned the copyright in the series to Fox. In 1975, Doubleday renewed its copyright in the book as “proprietor of copyright in a work made-for-hire.” However, Fox did not renew the copyright in the television series and it entered the public domain.
In 1988, Fox re-acquired the television rights in General Eisenhower’s book and the right to distribute the “Crusade in Europe” television series on video. It licensed these video rights to SFM Entertainment, which obtained the negatives of the series, restored them and repackaged the series on videotape, and to New Line Home Video, Inc. which distributed the videotapes.
In 1995, Daystar Corporation released a video set entitled “World War II Campaigns in Europe” (“Campaigns”). To produce its programs, Daystar purchased eight beta cam tapes of the original version of the Crusade television series, then in the public domain, copied them and edited the series. Daystar substituted a new opening sequence, credit page and final closing, inserted new chapter-title sequences and narrated chapter introductions and removed references to the book. It created new packaging for its series and a new title.
Daystar manufactured and sold its Campaigns Video Set as its own product. The advertising states: “Produced and distributed by: Entertainment Distributing (owned by Daystar) and makes no reference to the Crusade television series. The screen credits state “Daystar Corp. presents” and “An Entertainment Distributing Production” and lists as Executive Producer, Producer and Associate Producer employees of Daystar. No mention is made of the Crusade television series, New Line’s Crusade videotapes or General Eisenhower’s book.
In 1998, FOX, SFM and New Line (collectively “respondents”) brought an action against Daystar claiming copyright infringement in General Eisenhower’s book and infringement of their exclusive television rights in that book. They later amended their complaint to add claims that Daystar’s sale of Campaigns without proper credit to the Crusade television series constitutes “reverse passing off” in violation of section 43(a) of the Lanham Act and in violation of state unfair competition law. On cross motions for summary judgment, the district court found for respondents on all counts. The Court of Appeals for the Ninth Circuit affirmed the judgment for respondents on the Lanham Act claim, but reversed as to the copyright claim and remanded. With respect to the Lanham Act claim, the Court of Appeals stated that “Daystar copied substantially the entire Crusade in Europe series created by 20th Century Fox, labeled the resulting product with a different name and marketed it without attribution to Fox [, and] therefore committed a ‘bodily appropriation of Fox’s series.’”1 This appropriation was sufficient to establish the reverse passing off. The Supreme Court granted certiorari.
In its discussion, the Court notes that, as originally enacted, section 43(a) created a federal remedy against a person who used in commerce either “a false designation of origin, or any false description or representation” in connection with any goods or services.
Court decisions have concluded that the word “origin” does not merely refer to geographical origin, but also to origin of source or manufacturer, thereby creating a federal cause of action for traditional trademark infringement of unregistered marks. Also, section 43(a) consistently has been found to be broad enough to encompass reverse passing off. The Trademark Law Revision Act of 1988 made clear that section 43(a) covers origin of production as well as geographic origin.
The Court indicates that the gravamen of respondents’ claim is that in the marketing and selling of Campaigns as its own product without acknowledging its nearly wholesale reliance on the Crusade television series, Daystar made a “false designation of origin, false or misleading description of fact or false or misleading representation of fact, which…is likely to cause confusion…as to the origin…of his or her goods.” Daystar’s alleged wrongdoing is that it took a creative work in the public domain, copied it, made minor modifications, and produced its own series of videotapes. The Court states that “if ‘origin’ refers only to the manufacturer or producer of the physical ‘goods’ that are made available to the public (in this case the videotapes), Daystar was the origin. If, however, ‘origin’ includes the creator of the underlying work that Daystar copied, then someone else (perhaps Fox) was the origin of Daystar’s product. At bottom, we must decide what section 43(a)(1)(A) of the Lanham Act means by the “origin” of goods.”
In analyzing that issue, the Court notes that section 43(a) prohibits actions, like trademark infringement, that deceive consumers and impair a producer’s good will. The consumer who is loyal to a brand, while he believes that the company produced, or at least stands behind the production of the product of his choice, surely does not necessarily believe that the company was the “origin” in the sense that it was the very first one to devise the formula or underlying idea as applicable, and typically does not care whether it is. The Court states that the words of the Lanham Act should not be stretched to cover matters that are typically of no consequence to purchasers.
The Court takes notice of the argument that a purchaser’s concern might be different for a so-called “communicative product,” one not valued primarily for its physical qualities such as a hammer, but for the intellectual content that it conveys, such as a book, or, as here, a video. For such a communicative product, the argument is that “origin of goods” should be deemed to include not merely the producer of the physical item, but also the creator of the content that the physical item conveys, such as the author or, here, respondents. The Court states that the problem with this argument is that it causes the Lanham Act to conflict with the law of copyright.
The Court cites cases which indicate that the rights of a copyright holder are part of a carefully crafted bargain under which, once the copyright monopoly has expired, the public may use the invention or work at will and without attribution. Courts have been careful to caution against misuse of trademark and related protections into areas traditionally occupied by patent or copyright.
Further, the Court indicates that construing “origin” to require attribution of uncopyrighted materials would pose serious practical problems. In many cases, figuring out who is in the line of “origin” would be a difficult task. In fact, in the present case, the Court notes that it is far from clear that respondents have that status.
Another practical difficulty of adopting a special definition of “origin” for communicative products is that it places the manufacturers of those products in the position of possibly facing Lanham Act liability for failing to credit the creator of a work on which their lawful copies are based, while on the other hand, possibly facing liability for crediting the creator if that should be regarded as implying the creator’s “sponsorship or approval” of the copy.
In summary, the Court states that interpreting the phrase “origin of goods” in accordance with the common-law foundations of the Lanham Act, (which were not designed to protect originality or creativity), and in light of the copyright and patent laws (which were), yields the conclusion that the phrase refers to the producer of the tangible goods that are offered for sale and not to the author of any idea, concept or communication embodied in those goods. To hold otherwise, would be akin to finding that section 43(a) created a species of perpetual patent and copyright, which Congress may not do. Accordingly, because the Court concludes that Daystar was the “origin” of the products it sold as its own, respondents cannot prevail on their Lanham Act claim. The Court reverses the judgment of the Court of Appeals for the Ninth Circuit and remands the case for further proceeding consistent with its opinion.
1 Daystar Corporation v. 20th Century Fox Film Corporation et al., 123 S. Ct. 2041, June 2, 2003.