A Legal Blog by Aaron | Sanders, PLLC

Swimming in the Shark Tank: Even Gladiators Need to Clear Trademarks

Swimming with the Shark Tank

If you’re a fan of Shark Tank, one of the more interesting pitches was by Rachel Zietz in 2016, a (then) fifteen-year old lacrosse player and entrepreneur. She said she was tired of the lousy lacrosse equipment she had been buying from the major manufacturers, who, she suspected, didn’t really understand the sport. She would design better equipment herself. Encouraged by her parents and The Young Entrepreneurs Academy of Boca Raton to form a business around something she loved, she started manufacturing and selling lacrosse equipment. She called her business “Gladiator Lacrosse.” She was only thirteen. It was 2013.

None of sharks invested in her company, though they were all impressed and a few were intrigued. They didn’t doubt her business model or her success. Her company already had revenues of $340,000, in just a matter of two years, so she was clearly tapping into something. They just didn’t see how their involvement and money would add anything to her company. Some also doubted that she could stay involved in her company at such a young age, when she would have so many other commitments. She responded that she has a strong brand: GLADIATOR.

Those about to…

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What Two Hamburger Commercials Tell Us About Early Dismissal of Copyright Cases

Sealing in the Juices While Sealing Out the Lawsuits

It’s sadly true that many copyright cases are garbage, and obviously so, even at a glance. In many circuits, fortunately, trial courts are permitted to subject copyright claims to a kind of smell test. Before the case even really gets going, the defendant may move to dismiss the case under “Rule 12(b)(6).” With this kind of a motion, the court assumes everything in the complaint is true, and limits itself to just what is in the complaint. This rule is a kind of filter, where hopeless lawsuits can be thrown out before the parties really start spending money.

Most Rule 12(b)(6) motions fail because most lawyers can write a complaint well enough to avoid dismissal. You just have to make sure you allege facts that, if true, would have a decent chance of convincing a jury of your client’s claim. That one of your key allegations might rest on some shaky evidence is a problem for another time, so long as you have a good-faith basis that you’ll be able to prove the point.

Tests for “Substantial Similarity” Are Themselves Not Substantially Similar. How Ironic.

But in many circuits copyright claims are a bit…

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Eastern District Tennessee Severs BitTorrent Lawsuit

BitTorrent Swarm ≠ “Transaction or Occurrence”

I used to blog about BitTorrent lawsuits quite a bit, but dropped that in favor of folks who blogged about them much more comprehensively. But there was one BitTorrent lawsuit that I’ve been following pretty carefully because it’s in Tennessee: Dragon Quest Productions, LLC v. Does 1-100, Case No. 3:12-cv-597. The judge* in that case has just severed the case from one case with 100 defendants, to 100 cases with one defendant each. And that’s pretty significant.

* I’m linking to the magistrate’s “Report and Recommendation,” but the judge accepted it in full.

A quick primer about BitTorrent lawsuits. Usually, the plaintiff is the owner of the copyright in either (a) a pornographic film, or (b) a non-pornographic film that didn’t do so well at the box office.* Dragon Quest LLC is definitely in the latter category, its movie, Age of Dragons, having bombed at the box office, despite somehow starring Danny Glover. In either case, the idea is to settle with as many defendants as possible for what lawyers call “nuisance value,” the amount the defendant is willing to pay to avoid the expense and hassle of a lawsuit**. Since the defendants are ordinary…

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Let’s Sue Everyone! More on the Personal Liability of Business Owners for Infringement

Lawyers Sue Too Much, Except When They Don’t

Last week, I discussed the scary court decision, Universal Furniture Int’l, Inc. v. Frankel, in which the owners of a company were found liable for their company’s copyright infringement, even though they were not defendants in the original lawsuit against the company. The copyright owner sued the company and won, and then, when the company filed for bankruptcy, the copyright owner filed a separate suit against the owners. As I explained, if the company is small enough, the owners will be too close the acts of infringement to avoid personal liability. To the court, the only question was whether the copyright owner had to re-prove the copyright infringement. The court held that it didn’t have to because the exact same acts of infringement were involved.

So how does one explain Burberry Ltd. v. Horowitz? In that case, Burberry, the well-known clothing manufacturer, brought an action for trademark infringement against a company called Designers Imports, on grounds that Designers Imports was selling counterfeits of Burberry’s clothing. The court agreed, found Designers Imports liable for $1.5 million, and issued an injunction. Somewhat later, Burberry sued one Asher Horowitz for exactly the same acts of trademark…

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Owner Liable for his Company’s Copyright Infringement

Incorporation? Shmincorporation!

Since Aaron & Sanders is in the business of (among other things) helping start-ups get started up, one of the most frequent questions Tara and I get is whether it was worthwhile to incorporate or form some similar corporate entity, such as an LLC. The short answer is it depends on (1) whether you will need to be entering in any scary contracts (i.e., if you breach it, will you be personally devastated?), and (2) how many owners would there be (a single owner is about ten times easier and cheaper to form than two owners, then it get more complex and expensive from there).

It’s well known that corporate entities “protect” the owners somehow, but there is often some confusion about what the owners are protected from. Corporate entities protect against contract liability only, and even then, only if you are clear it’s your company and not you who is forming the contract.* And, only if you have been treating your corporate entity as something separate and apart from you (otherwise, the contract creditor can “pierce the corporate veil” and reach your personal assets).

* I.e., In the part where it says who the parties are, make…

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