First on the agenda was a motion to strike some of the exhibits. This motion was quite properly granted, because the exhibits demonstrated the theoretical limits of what one could do with NCSoft's system, not actual infringements. Marvel, as part of its complaint (well, third amended complaint), had included copies of several of its own attempts to use the NCSoft system to "duplicate" its characters. In other words, any "infringement" was done by the licensor (or at least its agent), and therefore is not an infringement. Even Marvel partly conceded this point. What it really does is point out some of the artificiality of pleading rules, not "bad faith" or anything like that. Under some circumstances, what Marvel's counsel did would be proper; just not these.
Of more interest, the judge split on dismissal of actual claims. First, he refused to dismiss copyright claims, because the pleading rules for direct copyright infringement (unlike for trademark) do not require examples of each potential infringement. "[C]omplaints which allege present copyright ownership by the plaintiff, proper registration, and infringement by defendant have been held sufficient" (slip op. at 3). He also upheld as sufficient claims for contributory copyright infringement (id., slip op. at 3) and for vicarious copyright infringement (id., slip op. at 4, citing Ellison v. Robertson, 357 F.3d 1072 (9th Cir. 2004) (PDF of slip op.)).
Of more interest to this discussion, some of the trademark infringement claims did not fare so well. First, the mark for Captain America is pretty poorly registered: It does not include the image, and the Court refused to extend a theory of direct infringement from the word mark "Captain America" to "Statesman" through a theory of "some broader 'goodwill' belonging to the trademark holder" (slip op. at 4). Contributory infringement didn't fare much better, because the actual infringers (the users) are (in the court's opinion) not using the marks in commerce. Id., slip op. at 5. Vicarious infringement failed as a theory on the registered mark for the same reason. Id.
That's it for the registered trademarks. Common-law trademarks, however, fared much better, at least for direct infringement. From the opinion, it appears that the only reason for dismissal offered was an alleged failure to identify the mark(s) at issue; Judge Klausner quite properly trashed this hypertechnical, and nonsensical, objection. Id., slip op. at 5. Contributory and vicarious infringement claims for common-law trademarks fell afoul of the same problem as did the registered mark, though: the end-users aren't using the marks in commerce. Id., slip op. at 56. The related claim under California law for interference with economic advantage, though, was sufficient to survive dismissal. Id., slip op. at 6.
OK, that's part I of the law review article format. I've described the opinion. What does it all mean? Really, four things:
- That when one registers a mark, one needs to register the full scope of the mark and not rely upon evolving "goodwill" to protect the registration.
- That failure of registration nonetheless does not indicate that all trademark causes of action have also failed, because common-law trademarks may well be good enough.
- That the whacky copyright law applicable to characters in the Ninth Circuit is still the law of that circuit (that's why the copyright claims were not dismissed).
- Most importantly, that vicarious and contributory infringement claims will not lie against a forum that merely enables noncommercial copying of marks. This is a rather shaky conclusion, though; it is not logically consistent with upholding the interference with economic advantage count, which by its nature indicates that there was a commercial aspect of the infringements. Frankly, I think Judge Klausner was probably jumping the gun here; this is properly an issue to be resolved on summary judgment, not on a motion to dismiss.