Trademark Claims Preempted by Copyright Act

A federal district court dismissed plaintiff’s trademark infringement claims over an ad campaign using the phrase “Nobody Puts Baby in a Corner” because the Copyright Act preempted all aspects of the trademark claim.  In Lions Gate Entertainment, Inc. v. TD Ameritrade Services Company, Inc., 15-05024 (C.D. Cal. 2016) (Available Here), the district court held that trademark claims under the Lanham Act and state law were preempted by the Copyright Act.

Lions Gate Entertainment, Inc. (“Lions Gate”) owns the intellectual property rights in the movie “Dirty Dancing” which used the catch phrase “Nobody Puts Baby in a Corner.”  Defendant TD Ameritrade Services Company, Inc. (“TD Ameritrade”) used the phrase “Nobody puts your old 401(k) in a corner” with a man lifting a piggy bank over his head along to the song “I’ve Had the Time of My Life.” Lion’s Gate alleged trademark infringement based on the scene from Dirty Dancing where the actor says “Nobody puts Baby in a Corner,” which included the music “I’ve Had the Time of My Life” and a dance scene where the actor lifts another dancer over his head. Lions Gate sued TD Ameritrade for copyright infringement, trademark infringement under the Lanham Act and state law, unfair competition and false association. TD Ameritrade moved to dismiss on the grounds that the Copyright Act preempted the federal and state law trademark claims, among other jurisdictional grounds.

The Court relied upon the Supreme Court’s ruling extending the principle of copyright preemption to the Lanham Act and federal trademark protection. See Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 33-38 (2003). The Ninth Circuit has adopted a two-part test for copyright preemption. First, the court “determine[s] whether the ‘subject matter’ of the state law claim falls within the subject matter of copyright as described in 17 U.S.C. §§ 102 and 103.” Laws v. Sony Music Entm ‘t, Inc., 448 F.3d 1134, 1137 (9th Cir. 2006). Second, if the court determines the subject matter is within copyright, then the court “determine[s] whether the rights asserted under state law are equivalent to the rights contained in 17 U.S.C. § 106, which articulates the exclusive rights of copyright holders.” Id. at 1137-38.

The Court found that the Copyright Act specifically covers “motion pictures and other audiovisual works,” such as the film Dirty Dancing, as well as literary works, musical works, and choreographic works – all of which may be at issue here with the song, the screenplay “Corner” quote, and the dance lift. Thus, copyright subject matter covers all factual aspects of the trademark claims. The Court found that it appears that Lion’s Gate seeks to use copyright aspects either to bolster its trademark and unfair competition claims, or as the real basis of the claims- the latter of which is certainly not permissible.

The causes of action were based on TD Ameritrade’s essentially copying Lion’s Gate’s intellectual property and slightly changing the words – thereby creating a derivative work, perhaps – and using the changed sentence in advertising its own products. Under standard state and common-law preemption analysis from the Ninth Circuit, the state and common-law claims alleged here are preempted by copyright law because the same rights are asserted in these causes of action as are asserted in the copyright infringement cause of action, namely reproduction and distribution of the copyrighted work and preparation of a derivative work.

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