Justices Fine-Tune Coverage of Trademark Act

The Supreme Court on Monday dealt a setback to the writers and producers of older works, ruling that the original creators of films, books and songs whose copyrights have expired do not have a right to be credited on new works that rely on the original.

In an 8-0 decision, the justices reversed the rule that prevails at federal courts in California and said that works in the public domain can be freely copied and revised for sale to the public -- and without crediting the original creator.

Legal experts praised the ruling for clarifying the difference between copyrights and trademarks. Copyrights and patents protect creators -- authors and inventors -- while trademarks are intended to protect consumers from being fooled by counterfeit products.

The Trademark Act does not protect producers when competitors sell cheap knockoffs of their brand-name items, the high court said.

Monday’s decision overturned a $1.5-million verdict won by the Twentieth Century Fox Film Corp., which owned the rights to a 1949 documentary on World War II called “Crusade in Europe.” In 1977, the copyright to this film expired.

In the 1990s, an Oregon firm known as Dastar, anticipating a resurgence of public interest in World War II, edited the original, added other war footage and marketed the videotape set for $25 as “Campaigns in Europe.” Dastar sells its tapes at Wal-Mart and Costco stores.

Lawyers for Fox sued Dastar in federal court in Los Angeles, contending that sale of this repackaged film series “without proper credit” violated the Trademark Act.

The Trademark Act protects brand-name goods as well as the consumers that buy them. Federal judges in California and New York have been especially protective of authors, composers and producers. In recent years, they have extended the act to protect original creators on the grounds that consumers deserve to know the “origin of goods.”

Based on this theory, U.S. District Judge Florence-Marie Cooper in Los Angeles ruled for Fox and said Dastar violated the act by marketing its tapes “without proper attribution.” She awarded Fox all of Dastar’s profits on its tape series.

In a brief opinion, the U.S. 9th Circuit Court of Appeals upheld the $1.5-million verdict, commenting that Dastar was guilty of “palming off” Fox’s film as its own. But the U.S. Supreme Court took up the case of Dastar vs. Twentieth Century Fox and ruled Monday that there is no such right to “proper credit” under the Trademark Act. Justice Stephen G. Breyer did not take part in the case. His brother, a judge in California, was involved in the case in lower courts.

Justice Antonin Scalia said the judges in California had wrongly mixed copyright law and trademark protection.

“Once the patent or copyright monopoly has expired, the public may use the invention or work at will and without attribution,” Scalia said.

Moreover, Dastar did not just copy and resell Fox’s film, he said. “It made modifications ... and produced its very own series of videotapes,” he said.

The phrase “origin of goods” in the Trademark Act does not require a seller to disclose who wrote the original work, Scalia concluded. “We do not think the Lanham Act [the federal trademark law] requires this search for the source of the Nile and all its tributaries,” he said.

Librarians, researchers and Internet archivists lauded the decision.

“This removes a cloud that has been hanging over libraries and authors who use preexisting material,” said Jonathan Band, a Washington lawyer for the American Library Assn. “The 9th Circuit has been progressively expanding this right to attribution. No one knew how far it would go.”

Experts in intellectual property also praised the ruling for clarifying the law.

“The Supreme Court understands that trademark owners have been overreaching and broadening the Trademark Act beyond what was intended,” said Tyler T. Ochoa, a trademark expert at Whittier Law School. “This is a fourth decision in a row that unanimously reversed a trademark ruling.”

Earlier this year, the court rebuffed Victoria’s Secret, which had used the Trademark Act to block a strip-mall seller of sex toys from using the name “Victor’s Little Secret.” The court said the lingerie retailer had no proof that it suffered “actual harm” from the strip-mall store.

Three years ago, the court also sided with Wal-Mart in a dispute over knockoff goods. In that opinion, Scalia said the producers of brand-name goods could not use the act to stop Wal-Mart from selling similar knockoffs because consumers were not fooled. They knew they were buying a cheaper version of the original designer clothes.

Monday’s ruling was not a final defeat for Fox, however.

Scalia’s opinion left open the possibility that Fox could claim that Dastar had engaged in false advertising by marketing the old film as its own.

Fox also recently revived its copyright claim to the 1949 film. It owns the rights to Gen. Dwight D. Eisenhower’s book “Crusade in Europe,” which was the source for the original film.

“This is far from over,” said Dale Cendali, a lawyer for Fox.