Art Phakes Strikes Back!

April 2005
The Licensing Book

When last we left Art Phakes, he was defendant in a federal litigation initiated by Larry Lexus the Licensing Lawyer on behalf of a consortium of artists, licensing agents and manufacturers of products using licensed artwork. 

The Scheme

Mr. Phakes had been charged with copyright infringement and trafficking in counterfeit products through an elaborate scheme by which he and his henchmen routinely visited art licensing shows displaying previously unpublished works, methodically photographing those works considered by Mr. Phakes to have the greatest merchandising potential, and transmitting the digital photographs to Asian manufacturing facilities where they would be retained pending indications of planned uses by legitimate manufacturers.  As soon as Phakes surreptitiously learned the product plans of major licensees, he would promptly develop his own line of knock-off products tracking those soon-to-be introduced by legitimate licensees.  (More about this shrewd operation appears in a March, 2004 article in this publication.)

The New Scheme

Today, exactly one year later, Mr. Phakes is perched in a parapet atop the ornamented roof of the brownstone in which the functional, yet sumptuous, offices of Larry Lexus are housed.  Phakes peers downward through one of the crenels encircling the battlement surmounting the parapet.  He has selected a position where he can observe the entrance to the building eight floors below. 

From his gloved hands protrudes the small antenna of a remote triggering device.  The scene is completed by a massive, glowering stone gargoyle that previously had guarded the elaborate facade of the brownstone.  Today, however, this particular gargoyle hangs suspended from a thick, braided cable extending through an embrasure located two floors below Phakes' position.  The gargoyle swings perceptibly in the chill breeze as the taught cable groans under its weight, directly above the stairway rising from the street to the entrance of the building. The cable includes a release device linked electronically to the trigger in Phakes' hands. 

Phakes patiently awaits the arrival of the limousine that will deliver Larry Lexus, unsuspecting, to the base of the stone stairway, and to his peril.

Crime and Punishment

While he waits, Phakes' mind wanders back to the events that transpired during the weeks of the now-concluded copyright litigation.  Phakes' legal team had filed brilliantly (and expensively) crafted briefs, and lead litigator Gregarious Buttlesworth had made all conceivable arguments with his usual perspicacity and finesse.  Nevertheless, the meticulous preparation by Team Lexus had enabled Larry and his associates to introduce flawlessly an elaborately choreographed presentation that described with particularity the covert sequence by which Art Phakes managed to market near duplicates of licensed products almost simultaneously with the launch of the legitimate lines. 

During a brief adjournment, Counselor Buttlesworth had sighed in frustration within ear-shot of Larry Lexus.  Lexus approached and offered a friendly pat on the back in unspoken commiseration with the position in which Buttlesworth found himself.  No member of the Licensing Bar was held in greater regard by Larry Lexus than Gregarious Buttlesworth. 

Buttlesworth properly had set out a detailed comparison of the copyrighted works to the accused works.  His analysis rested accurately upon insistence that only the protected elements of the plaintiffs' works be compared to their counterparts in the accused works.  He argued that elements that are not original, or those dictated by fact, feature, function or convention cannot be protected by copyright and should be excluded from the comparison.  Also taken into account, he argued, must be all dissimilarities between the claimed and accused works.

Pros and Cons

Buttlesworth acknowledged that there were indeed similarities between the various products, but argued that those were limited to unprotected aspects of the copyrighted works.  With respect to admittedly protectable elements, he emphasized minute differences in shape, color, feel and even slight differences in angular positions of comparable elements.  He also described a process by which the accused products might have been created without infringement, while at no time claiming that such had been the actual process of creation.  His argument was intended to create doubt in the minds of the jurors, without putting himself in the position of suggesting the argument as fact - his pride and integrity would not permit him to do so.

In response, Larry had argued that the pattern of copying was so clear and his evidence so striking that a conclusion by the Court of copying was inescapable.  Furthermore, since sufficient protectable elements of the original works were obviously the subject of copying, infringement of copyright was clearly established.  For the benefit of the jury, Lexus congratulated Mr. Buttlesworth for arguing a brilliant defense.  Yet he concluded that the egregious and systematic nature of the defendant's activities precluded all interpretations but those most damning to Phakes.

After an uncomfortably long deliberation, the jury returned a verdict completely favoring the plaintiffs and granting an award of damages against Phakes of near epic proportion.  Not only were the objectively calculated damages suffered by the various victims of Art Phakes' activities required to be reimbursed, but since Larry Lexus had advised his clients to obtain copyright registrations prior to publishing their works, the Court added an award of attorney's fees and costs as well as an increment of "statutory damages" in the amount of $150,000 per infringement, considering each and every accused product as a separate infringement.  Calculated in this fashion, the assessment of damages reached to well into eight figures.

Stoned

After the award had been announced and the judge and jury had left the courtroom, Art Phakes ignored his legal team and strode out of the building radiating silent rage.

Distaining similar acrimony, opposing counsel turned and shook one another's hands.  Larry Lexus expressed sympathy for the difficult position of his friend.  He felt no sympathy toward Art Phakes, whom he considered a criminal.  In furtherance of this opinion, Larry invited the attention of the U.S. Department of Justice to the case and provided to the U.S. Attorney much of the mass of evidence he had accumulated to convince the jury of the strategies and tactics of Art Phakes and other complicit individuals. 

Interrupting his reverie, Phakes glared downward, as the arrival of Larry Lexus' limousine caught his attention.  Lexus was returning to his office after visiting with the U.S. Attorney to assist in the development of a criminal complaint against Phakes.  As he exited the vehicle, Larry's eyes were drawn upward, but his young associate distracted him and both strode intently toward the entrance to the brownstone. The stone gargoyle's hollow eyes stared unseeing to the pavement far below. Art Phakes' hand tightened on the release mechanism.

To Be Continued …

 

Practices

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