A blog about patent, copyright and trademark law in the U.S. District Court
for the Southern District of New York

Court Dismisses Copyright Infringement Claim Based on Choice of Law Provision in Contract

In a June 21, 2016 ruling, Judge Jesse M. Furman dismissed the plaintiff's copyright claim because of a choice of law provision in the parties' contract calling for the application of English law.  The plaintiff publishes a website with copyrighted content.  Subscribers are licensed to use it by being provided with a user name and password.  The defendant subscribed, but then allowed a number of its employees to use the single licensed user name and password.  The parties' agreement had a choice of law provision providing:
Where you visit, register and/or subscribe to a [Metal Bulletin] Site . . . these Terms (and any dispute or claim arising out of or in connection with these terms, including non-contractual disputes or claims), to the maximum extent permissible under the law of the territory that you are located in, will be governed by the laws of England and Wales and will be subject to the non-exclusive jurisdiction of the English courts.
The plaintiff sued the defendant in the Southern District, asserting U.S. copyright infringement and breach of contract claims.  Judge Furman dismissed the copyright claim based on the parties' choice of law provision.  In dismissing the claim, the Court reasoned:
As an initial matter, there is no question that [the plaintiff's] copyright claim falls within the scope of the parties’ choice-of-law clause. That clause provides broadly that English law applies to the Terms and, significantly, to “any dispute or claim arising out of or in connection with these terms, including non-contractual disputes or claims.” (Terms § 22.1). Where, as here, a defendant is alleged to have infringed a copyright by exceeding the scope of a license, “the copyright owner bears the burden of proving that the defendant’s copying was unauthorized under the license.” . . . Thus, the question of whether [the defendant] infringed [the plaintiff's] copyrights will necessarily turn, at least in part, on the Terms. . . . It follows that [the plaintiff's] copyright claim arises “in connection with” the Terms and thus falls within the scope of the choice-of-law clause.
Judge Furman also rejected the plaintiff's contention that the clause -- which the plaintiff drafted -- was somehow unenforceable, noting the high burden required to support such a contention.

Court Denies Preliminary Injunction in Trademark Infringement Action

In a June 17, 2016 ruling, Judge Coleen McMahon denied the plaintiff's motion for a preliminary injunction against trademark infringement, and ordered the plaintiff to show cause why the entire action should not be dismissed.  Despite two registration's for the plaintiff's mark with the PTO, the Court found that the mark was essentially a copy of the flag of the former Kingdom of Laos.  Judge McMahon ruled that "[i]t is axiomatic that a design comprising a flag cannot be trademarked."  The Court rejected the plaintiff's argument that the former Kingdom had abandoned the flag in 1975, similarly finding that under the PTO's Trademark Manual of Examining Procedures, "'former flags of existing countries, states or municipalities are refused.'"  Without a protectible mark, Judge McMahon noted that none of the plaintiff's claims appeared to state a claim for relief, and issued the order to show cause as to why they should not be dismissed.
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