Trade Dress Limits On Copyright Licenses

Factual Background

Plaintiff Nova, doing business as Marilyn Wines, had produced wines under variations of the Marilyn Monroe brand name and with labels bearing the image of Monroe for 20 years. In 1989, Nova obtained from the Monroe estate an exclusive license to use the registered trademark 'Marilyn Monroe,' as well as the common law marks for Monroe's name, image, and likeness, in selling its wines. In 1999, Nova was approached by Tom Kelley Studios, Inc. ('TKS'), the copyright holder in a series of 1949 nude photographs of Monroe taken when the actress was an unknown 23-year-old, referred to as the 'Red Velvet Collection.' In 2004, the parties entered a licensing agreement for the use of the Red Velvet Collection photos, a relationship that deteriorated in mid-2005. TKS's September 2005 revocation of Nova's license to the Red Velvet Collection photographs remains a subject of arbitration. After terminating its arrangement with Nova, TKS promptly entered into negotiations with other wineries for use of the images on wine labels. In the summer of 2006, Nova learned that Adler Fels was planning to release a wine bearing a Red Velvet Collection image. In July 2006, Adler Fels refused to 'succumb to [Nova's] threats' and began marketing the wine in September, at which time Nova proceeded to file suit.

The Court's Decision

Nova sought relief on the grounds of trademark infringement, trade dress infringement, unfair competition, and passing off. Judge Patel swiftly did away with the trademark aspects of the claim on the basis that Nova, as a nonexclusive licensee, lacked standing under 15 U.S.C '114(1) to assert infringement of the Marilyn Monroe trademark. In addition, plaintiff's claim to the common law trademark Marilyn was considered moot as defendant had no intention to use that mark, and the court declined to rule on the Velvet Collection mark under arbitration. As such, the court focused its attention on plaintiff's trade dress claim.

Judge Patel explained that a trade dress infringement claim might succeed if the plaintiff can establish that the asserted trade dress is distinctive and nonfunctional, and defendant's product creates a likelihood of consumer confusion. The court held that Nova was likely to succeed at trial in establishing each of these factors. Nova's trade dress ' described by the court simply as 'placing images of Marilyn Monroe on wine bottles' ' was inherently distinctive, 'because there is no natural connection between Marilyn Monroe and wine.' In discussing the distinctiveness factor, Judge Patel rejected defendant's assertion that Nova's trade dress was merely an unprotectable concept or idea, distinguishing Nova's trade dress from the die-cut photographic greeting cards which were the product itself in Jeffrey Milstein, Inc. v. Gregor, Lawlor, Roth, Inc., 58 F.3d 27, 33 (2d Cir. 1995). Rather, wine labels perform an inherently source-indicating function, and the court likened consumers' connection of Marilyn Monroe with Nova's wines to the protectable association between the iconography of the American West and Marlboro cigarettes in Phillip Morris Inc. v. Star Tobacco Corp., 879 F.Supp 379, 383 (S.D.N.Y. 1995). The court also distinguished the present case from other cases that have considered the use of celebrity images in marketing products. Whereas those cases ' involving the likenesses of Babe Ruth, Elvis Presley, and Tiger Woods ' involved the assertion of very broad rights over the use of a celebrity's image as a trademark, Nova's use of Monroe's image as part of the specific appearance of its products was a recognizable trade dress specifically limited to the sale of wine.

The court made short work of defendant's assertion that Nova's trade dress was aesthetically functional. By denying Adler Fels the right to place Monroe's image on one of its many wine products, the court was clearly not placing Adler Fels at a significant competitive disadvantage. And in discussing the issue of secondary meaning ' which Nova asserted its use of Monroe's image on wine labels had acquired over 20 years ' the court dismissed defendant's claim that the images of Monroe were part of the product itself rather than a source indicator. Unlike the product at issue in Rock & Roll Hall of Fame & Museum, Inc. v. Gentile Productions, 134 F.3d 749, 754 (6th Cir. 1998) (where the product was posters of the actual building), the product being sold here was not Monroe herself (doubtless to the disappointment of Nova's target market), but red wine.

With these factors in mind, the court proceeded to its central inquiry ' whether defendant's use of Monroe's image on its wine labels was likely to cause confusion in the minds of wine drinkers. Judge Patel reviewed each of the seven 'Sleekcraft' factors and held in favor of Nova on all but one of the applicable factors. See AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979). Notably, the court held that the labels at issue were 'virtually identical,' despite the fact that different photographs were used by the parties, and that defendant's Tobacco Tax and Trade Board-imposed 'modesty overlays' were somewhat less modest than Nova's. The court also followed an earlier case of E & J Gallo Winery v. Consorzio del Gallo Nero, 782 F.Supp 457, 465 (N.D.Cal. 1991) in characterizing American wine consumers as 'unsophisticated, 'impulse buyers,” who are thus more susceptible to Madison Avenue chicanery. This is despite the fact that bottles of Nova's Velvet Collection wines start at $200, unlike Gallo Nero's chianti, indicating these were potentially confused consumers with slightly more sophisticated palates (if not simply larger wallets). Despite this, it seems Adler Fels lost credibility on the degree of care issue by arguing that its Monroe label was actually the 'back' of the bottle, and the label containing small-print address, production, and health information was the 'front.' Judge Patel rightfully dispatched this unlikely contention.

The court's inquiry did not end there however. Adler Fels had argued that its rights in the Red Velvet images arising from its licensing agreement with TKS should take priority over Nova's trade dress rights. Underlying this argument is the notion that the lawful use of a copyrighted photograph in a manner specifically granted by the owner of the copyright cannot be held to infringe a product's trade dress where that trade dress makes an unlicensed use of a similar image. While the court could not refer to any prior cases which attempted to resolve such a conflict between copyright and trade dress rights, the closest analogy was Boyle v. United States, 200 F.3d 1369, 1373-74 (Fed.Cir. 2000). In that case, the court noted in dicta that a registered service mark did not permit the owner of that mark to infringe plaintiff's valid copyright. Judge Patel considered that a 'complementary conclusion' was that a valid copyright did not entitle the copyright holder to infringe plaintiff's established trade dress rights. This was particularly so given that 'plaintiff's trade dress rights are considerably broader than the defendant's copyright interests.' Plaintiff's unique trade dress rights, built up over two decades, entitle it to prevent TKS from licensing its images in the narrow realm of wine labels. While Nova was not operating under a valid license agreement covering the image on its labels, its trade dress rights had arisen prior to and independent of any agreement pertaining to the Red Velvet Collection images, and those rights apparently survived the termination of any such agreement.

In addition, the court declined defendant's invitation to 'wade into the murky waters' surrounding Monroe's purported right of publicity, which defendant asserted had not been validly assigned to Nova. Judge Patel questioned the relevance of the issue, which has been the subject of ongoing litigation since the year of Monroe's death. In conclusion, although Nova had by that point already satisfied the disjunctive legal standard for relief, the court ruled that the balance of the hardships also favored Nova, and ordered that a preliminary injunction issue.

Conclusion

Although in this instance the court held trademark (or trade dress) afforded greater rights than copyright or the right of publicity, the court did not set forth any clear standard to determine when one regime should trump the other. Instead, the court relied on the equities of the case, which strongly favored Nova, given that it had built its entire business on the Monroe image as the basis for its brand. While opening the door for claims of trade dress protection from companies that use celebrity images to market their products (even without the benefit of copyright, registered trademarks, or right of publicity protection), the case illustrates that the interplay between and among the different regimes of protection remains very much in doubt.

Factual Background

Plaintiff Nova, doing business as Marilyn Wines, had produced wines under variations of the Marilyn Monroe brand name and with labels bearing the image of Monroe for 20 years. In 1989, Nova obtained from the Monroe estate an exclusive license to use the registered trademark 'Marilyn Monroe,' as well as the common law marks for Monroe's name, image, and likeness, in selling its wines. In 1999, Nova was approached by Tom Kelley Studios, Inc. ('TKS'), the copyright holder in a series of 1949 nude photographs of Monroe taken when the actress was an unknown 23-year-old, referred to as the 'Red Velvet Collection.' In 2004, the parties entered a licensing agreement for the use of the Red Velvet Collection photos, a relationship that deteriorated in mid-2005. TKS's September 2005 revocation of Nova's license to the Red Velvet Collection photographs remains a subject of arbitration. After terminating its arrangement with Nova, TKS promptly entered into negotiations with other wineries for use of the images on wine labels. In the summer of 2006, Nova learned that Adler Fels was planning to release a wine bearing a Red Velvet Collection image. In July 2006, Adler Fels refused to 'succumb to [Nova's] threats' and began marketing the wine in September, at which time Nova proceeded to file suit.

The Court's Decision

Nova sought relief on the grounds of trademark infringement, trade dress infringement, unfair competition, and passing off. Judge Patel swiftly did away with the trademark aspects of the claim on the basis that Nova, as a nonexclusive licensee, lacked standing under 15 U.S.C '114(1) to assert infringement of the Marilyn Monroe trademark. In addition, plaintiff's claim to the common law trademark Marilyn was considered moot as defendant had no intention to use that mark, and the court declined to rule on the Velvet Collection mark under arbitration. As such, the court focused its attention on plaintiff's trade dress claim.

Judge Patel explained that a trade dress infringement claim might succeed if the plaintiff can establish that the asserted trade dress is distinctive and nonfunctional, and defendant's product creates a likelihood of consumer confusion. The court held that Nova was likely to succeed at trial in establishing each of these factors. Nova's trade dress ' described by the court simply as 'placing images of Marilyn Monroe on wine bottles' ' was inherently distinctive, 'because there is no natural connection between Marilyn Monroe and wine.' In discussing the distinctiveness factor, Judge Patel rejected defendant's assertion that Nova's trade dress was merely an unprotectable concept or idea, distinguishing Nova's trade dress from the die-cut photographic greeting cards which were the product itself in Jeffrey Milstein, Inc. v. Gregor, Lawlor, Roth, Inc ., 58 F.3d 27, 33 (2d Cir. 1995). Rather, wine labels perform an inherently source-indicating function, and the court likened consumers' connection of Marilyn Monroe with Nova's wines to the protectable association between the iconography of the American West and Marlboro cigarettes in Phillip Morris Inc. v. Star Tobacco Corp., 879 F.Supp 379, 383 (S.D.N.Y. 1995). The court also distinguished the present case from other cases that have considered the use of celebrity images in marketing products. Whereas those cases ' involving the likenesses of Babe Ruth, Elvis Presley, and Tiger Woods ' involved the assertion of very broad rights over the use of a celebrity's image as a trademark, Nova's use of Monroe's image as part of the specific appearance of its products was a recognizable trade dress specifically limited to the sale of wine.

The court made short work of defendant's assertion that Nova's trade dress was aesthetically functional. By denying Adler Fels the right to place Monroe's image on one of its many wine products, the court was clearly not placing Adler Fels at a significant competitive disadvantage. And in discussing the issue of secondary meaning ' which Nova asserted its use of Monroe's image on wine labels had acquired over 20 years ' the court dismissed defendant's claim that the images of Monroe were part of the product itself rather than a source indicator. Unlike the product at issue in Rock & Roll Hall of Fame & Museum, Inc. v. Gentile Productions , 134 F.3d 749, 754 (6th Cir. 1998) (where the product was posters of the actual building), the product being sold here was not Monroe herself (doubtless to the disappointment of Nova's target market), but red wine.

With these factors in mind, the court proceeded to its central inquiry ' whether defendant's use of Monroe's image on its wine labels was likely to cause confusion in the minds of wine drinkers. Judge Patel reviewed each of the seven 'Sleekcraft' factors and held in favor of Nova on all but one of the applicable factors. See AMF Inc. v. Sleekcraft Boats , 599 F.2d 341 (9th Cir. 1979). Notably, the court held that the labels at issue were 'virtually identical,' despite the fact that different photographs were used by the parties, and that defendant's Tobacco Tax and Trade Board-imposed 'modesty overlays' were somewhat less modest than Nova's. The court also followed an earlier case of E & J Gallo Winery v. Consorzio del Gallo Nero , 782 F.Supp 457, 465 (N.D.Cal. 1991) in characterizing American wine consumers as 'unsophisticated, 'impulse buyers,” who are thus more susceptible to Madison Avenue chicanery. This is despite the fact that bottles of Nova's Velvet Collection wines start at $200, unlike Gallo Nero's chianti, indicating these were potentially confused consumers with slightly more sophisticated palates (if not simply larger wallets). Despite this, it seems Adler Fels lost credibility on the degree of care issue by arguing that its Monroe label was actually the 'back' of the bottle, and the label containing small-print address, production, and health information was the 'front.' Judge Patel rightfully dispatched this unlikely contention.

The court's inquiry did not end there however. Adler Fels had argued that its rights in the Red Velvet images arising from its licensing agreement with TKS should take priority over Nova's trade dress rights. Underlying this argument is the notion that the lawful use of a copyrighted photograph in a manner specifically granted by the owner of the copyright cannot be held to infringe a product's trade dress where that trade dress makes an unlicensed use of a similar image. While the court could not refer to any prior cases which attempted to resolve such a conflict between copyright and trade dress rights, the closest analogy was Boyle v. United States , 200 F.3d 1369, 1373-74 (Fed.Cir. 2000). In that case, the court noted in dicta that a registered service mark did not permit the owner of that mark to infringe plaintiff's valid copyright. Judge Patel considered that a 'complementary conclusion' was that a valid copyright did not entitle the copyright holder to infringe plaintiff's established trade dress rights. This was particularly so given that 'plaintiff's trade dress rights are considerably broader than the defendant's copyright interests.' Plaintiff's unique trade dress rights, built up over two decades, entitle it to prevent TKS from licensing its images in the narrow realm of wine labels. While Nova was not operating under a valid license agreement covering the image on its labels, its trade dress rights had arisen prior to and independent of any agreement pertaining to the Red Velvet Collection images, and those rights apparently survived the termination of any such agreement.

In addition, the court declined defendant's invitation to 'wade into the murky waters' surrounding Monroe's purported right of publicity, which defendant asserted had not been validly assigned to Nova. Judge Patel questioned the relevance of the issue, which has been the subject of ongoing litigation since the year of Monroe's death. In conclusion, although Nova had by that point already satisfied the disjunctive legal standard for relief, the court ruled that the balance of the hardships also favored Nova, and ordered that a preliminary injunction issue.

Conclusion

Although in this instance the court held trademark (or trade dress) afforded greater rights than copyright or the right of publicity, the court did not set forth any clear standard to determine when one regime should trump the other. Instead, the court relied on the equities of the case, which strongly favored Nova, given that it had built its entire business on the Monroe image as the basis for its brand. While opening the door for claims of trade dress protection from companies that use celebrity images to market their products (even without the benefit of copyright, registered trademarks, or right of publicity protection), the case illustrates that the interplay between and among the different regimes of protection remains very much in doubt.