When shall we three meet again? (now with edits!)

In thunder, lightning, or in court?
When the motion for costs done,
When the new lawsuit’s lost and won.

ETA: since Kim has taken the time to post a comment, I’ve edited this post to reflect some of what she wrote. Read it over, and see if you’ve changed your mind.

What do you do when you lose one trademark battle in court against an adversary with deep pockets, and wind up owing a lot of money?

You sue the same adversary again, apparently. If you know the story, skip the next five paragraphs.

Those Harry Potter (or Canadian trademark law) aficionados among you might recall that in 2005, a Canadian band called Wyrd Sisters (if you’re reading at work, if you click on that link all the naughty bits are obscured by the guitar — but if that still concerns you, try the Wikipedia entry instead) sued Warner Bros. Entertainment, among others, over the release of the fourth Harry Potter movie, Harry Potter and the Goblet of Fire.

The fourth book of the HP series introduced a band called the “Weird Sisters” — a name evidently drawn from a phrase used repeatedly in Shakespeare’s Macbeth, and referencing the fates — and Warner Bros. had apparently planned to include references to the band name in the Goblet movie and in soundtracks and had engaged in some publicity regarding their plans. The company did, first, engage in some due diligence, and contacted bands already using similar names to obtain consent for the use of the name. One was a U.S.-based band, Three Weird Sisters. Another was the Canadian Wyrd Sisters. Warner Bros. entered into negotiations with the bands (the starting point of Warner Bros.’s offer might have been zero). Three Weird sisters, the bands some payment in exchange for permission to use the Weird Sisters name, and the U.S. band, at least, was going to accept some deal.

The Canadian band, on the other hand — which had already met with some significant measure of success in Canada after nearly twenty years — didn’t like the idea so much. Whatever compensation While Warner Bros. might have offered would have paid offered some compensation for their use of the name, the band leader didn’t think it was enough – what she wanted was acknowledgement in the film credits, but that was apparently not acceptable to Warner Bros. Whatever popularity the band had in Canada, it certainly would be overwhelmed by the notoriety of the Harry Potter franchise, and in her view, the public would think that the band had copied their name from Harry Potter.

In the end, negotiations between the Canadian band and Warner Bros. broke down, and the band leader sued Warner Bros. in Ontario Superior Court and sought an interlocutory injunction against the release of the film. Before the hearing, Warner Bros. decided to pull all reference to the Weird Sisters band. While there is still a band performing in the movie for a short period of time, there’s no reference to the band’s name at all; only those who were acquainted with the book would know what the band’s name might have been. This apparently didn’t find favour with HP fans (if you scroll down on that Three Weird Sisters page, you’ll see a reference to angry e-mails received by that U.S. band as a result of Warner Bros.’s decision), but it was, after all, the safest thing for Warner Bros. to do. They screened the movie for the Wyrd Sisters band leader and her lawyer to show that the movie would not contain and Weird Sisters reference.

But that wasn’t enough. The band leader proceeded with the injunction hearing anyway. sued Warner Bros. in Ontario Superior Court anyway, and sought an injunction against the release of the film. (Although it was reported that the band leader would have been happy with a one-line acknowledgement in the movie, who knows if that was on the table during negotiations, or only after the lawsuit was started.) According to the reasons for judgment issued by the court, the argument was that despite the removal of verbal references to “Weird Sisters”, the damage would be done anyway, because the public would be confused, and would think that in buying the Wyrd Sisters CDs and attending their concerts, they were buying the music or attending the concerts of the band referenced in the Harry Potter franchise. However, the court found that the evidence on this subject was too speculative, and that Warner Bros. had taken every reasonable step to avoid confusion; the motion was dismissed, and months later the band leader was ordered to pay C$140,000 in costs.

After she lost the interlocutory injunction motion, the band leader also filed a Canadian trademark applicaton for THE WYRD SISTERS. When it was advertised for opposition in 2006, Warner Bros. (who by then was owed the $140K) opposed her mark; it seems that opposition is still pending. The band leader also filed a U.S. trademark application in October 2006, which is still pending; it hasn’t reached the stage at which Warner Bros. can oppose it yet.

Presumably, there would have been some attempt to settle the costs order, if not a further attempt to settle the entire dispute. We can at least guess that the latter, if it happened, didn’t succeed, because the band leader has sued Warner Bros. yet again — this time, in Federal Court.

While the timing of the lawsuit anticipated the release of the fifth movie, Harry Potter and the Order of the Phoenix, she did not seek an interlocutory injunction restraining the distribution of the movie pending trial (and for that matter, unless someone can tell me differently, there is no reference to the Weird Sisters band in the fifth book, nor in the movie… what about those Famous Witches and Wizards cards? and there’s only one reference to the Weird Sisters in the book, easily avoided in a movie rendition). I haven’t seen any of the court documents, so I can only guess that this lawsuit is intended as leverage in negotiations, but Warner Bros. isn’t planning to let that happen: they’re bringing a motion to stay the action.

Posted in legal briefs, themes | 15 Comments

Chain of title

In Spanish, it means chain; in French (if you add an “s” to the end) it means lock. Either way, it seems that somebody secured the resolution they wanted. Now we know why the action was discontinued.

cadena

In text (the notice is on the KnitPicks website, too):

Special Note: In August, our Sierra yarn line will be renamed to Cadena – the exact same fiber content, construction and weight, just a brand new name, and we’ll be adding new colors!

Posted in knitdotbiz, legal briefs, themes | 1 Comment

Mmm… pizza.

CBC just sued Locoboy (sorry about the music playing in the background, at least it’s better than low-quality vanity site background music) for trademark infringement over his Hockey Fight in Canada shirts. Well, he’d been warned; it remains to be seen if he gets benched.

Which reminds me… what ever happened to that American who had been selling shirts adorned with something that looked very much like the exploding pizza logo? And $24.99? Is this a funding thing? Sigh. Someday, I’m going to break down and buy one, anyway.

(Also just learned: the CBC has a blog. If they’ll blog about cease and desist letters they send out, maybe they’ll keep a running commentary on their lawsuit, too. But I do wonder why they didn’t try to get that HNIC domain name.)

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it's not all green yarn

We interrupt the law and economics symposium to announce that since the sewing habit picked up a bit (do you have any idea how hard it is to sew when the only place for your sewing machine requires suspending the electrical cord three feet above the ground across open space, and is in a separate room from the ironing board, on which, by the way, the iron cannot be left unattended whether plugged in or not? Highly inconvenient), I’ve started to run out of room again.

It was about time to face reality anyway, so I’ve started listing stash for sale on this undeveloped site. What’s listed right now is less than half of the first load (aka Rubbermaid tote), and there’s another three loads waiting to be photographed, too. Since it’s a long weekend, I hope to get a lot more done soon.

I thought about uploading the stash stuff to Ravelry, but I’ve barely had time to poke around since I got my invite last month (I’m girlfromauntie, surprise, surprise). Plus, the stash blog was already set up.

(I haven’t read that decision yet. Hey, it’s a long weekend.)

Posted in Uncategorized | 1 Comment

Only until they change their minds

By now, some of you have heard about the U.S. Supreme Court’s antitrust ruling yesterday on resale price maintenance — I know, because you’ve e-mailed me! I haven’t downloaded and read the decision yet, but the court changed the law and, as this article suggests, lifted the ban on distributors fixing minimum prices for their retailers. (No, the case had nothing to do with yarn; it was about handbags.)

This doesn’t mean that all resale price maintenance is legal. What the court did (in a 5-4 decision) was abolish the rule that resale price maintenance is per se illegal, because sometimes fixing minimum prices could actually promote competition (this is not the same as conspiring among competitors to fix a minimum price; this is just about a distributor telling its retailers to sell at a fixed price). Instead, each case of resale price maintenance must be evaluated on a case-by-case basis to determine its anticompetitive effects. In the case at bar, the fixed minimum price gave small businesses the opportunity to compete on customer service against discount chains (whom, I assume, did not sell the exact same high-quality product).

You can imagine that distributors will probably be quite pleased with this. At first blush, I can see that the argument makes sense with goods that are carried by large and small retailers alike and that are, as far as the consumer is concerned, non-substitutable. Consider what happened to small, independent book stores. You don’t hear readers saying “I’d like to read the Discworld series, but I don’t want to spend all that money on the books. Can anyone recommend a cheaper substitute that has some sort of special, unseen school for wizards?”* Someone’s going to buy the book, or they’re not; if multiple retailers want to compete, they have to carry the exact same book, not some substitute book about wizards. Considering the number of small shops that have folded, perhaps customers do not attribute a value to customer service that’s equivalent to the price difference between a local bookshop and the local big box store that can afford to discount the retail price. A fixed minimum price might have helped those shops.

One the other hand, it makes less sense when the product is substitutable with goods of similar quality. To bring this back into our context, knitters look for substitute yarns all the time, so even yarns from different suppliers compete on price and quality. Sure, some yarns are unique, but there’s often something just as good, depending on the knitter’s standards. A yarn shop doesn’t need to compete with exactly the same products; it can choose to carry Cascade 220 or Ella Rae Classic, and make its customers understand that the yarns are perfectly substitutable.** If a yarn is competing against other yarns sold by other retailers, then insisting on a minimum retail price arguably harms competition. If a yarn was only competing against itself, because it was the only pure silk yarn spun with pure gold beads shaped like Elvis that was rated for use in -40°C weather,*** then the competition would be between shops selling the same item, and a minimum price may make sense.****

Interestingly, I’m not certain where patterns fit into this. Lots of people will substitute one pattern for another, because they just want a sock with a certain type of heel, or a raglan with some kind of cable decoration, but they don’t want to pay for a pattern, or they have a low ceiling on the price they’re willing to pay. Some patterns, though, are less substitutable than others.

Off to digest.

* Pretend we don’t have libraries.
** Yes, I know some people might threaten a lawsuit over claims that certain yarns are substitutable with certain other yarns. This is the gateway to the fascinating intersection of trademark and antitrust law; trademarks and other intellectual property rights are a form of permissible legal monopoly, contrary to the basic premise that monopolies are bad; businesses are within their rights to legitimately exercise their IP rights to compete against others. Identifying when wielding IP rights becomes an anticompetitive abuse of those rights is a fun question.
*** Don’t get any ideas.
**** I am only making a crazy hypothesis; I am not saying that producing pure silk yarn spun with pure gold beads shaped like Elvis that was rated for use in -40°C weather will keep you on the right side of any country’s antitrust laws.

Posted in knitdotbiz, themes | 6 Comments

But she started it

Today’s lesson is to watch what you say, and how you say it… even when you say it through your lawyer.

Artyarns is seeking a declaratory judgment against Tilli Tomas (or rather, the people behind it, since Tilli Tomas is a business name) because of alleged threats that Tilli Tomas made against Artyarns’s business.

The source of the dispute? Yarns with bling. You know, the ones that command high prices.

The lawsuit, filed last month, alleges that Tilli Tomas (purveyor of various beaded yarns, such as Rock Star) started it by sending a letter (via its lawyer) to Artyarns, threatening to commence suit against Artyarns unless Artyarns stopped selling its own beaded silk yarn. (Memo to Artyarns: ditch the frames. Thanks.) The letter claimed that Artyarns had wrongfully duplicated Tilli Tomas beaded silk yarn designs in 2006 and/or 2007, and that Artyarns had committed acts of unfair competition by contacting Tilli Tomas’s supplier of beaded silk yarn and obtaining samples of that yarn in 2005. The letter also apparently claimed that the Artyarns beaded silk yarns were inferior to the Tilli Tomas yarns. These claims, naturally, are denied by Artyarns. Artyarns wants a declaration that Tilli Tomas has no protectable rights in the configuration, construction, or appearance of beaded silk yarns, and that Artyarns has not engaged in unfair competition.

An aside: lawsuits of this nature (seeking relief in the form of a declaration that the plaintiff isn’t doing anything wrong, contrary to allegations made by the defendant outside of a lawsuit) aren’t unheard of; and in countries where declaratory judgment actions are a known risk, like the United States, the wording of a letter to a competitor setting out one’s rights is very important: flatly threatening a lawsuit for infringement of rights may be sufficient basis for the competitor to sue you, first, claiming the opposite. Strategically, this puts the would-be plaintiff on the defensive, and gives the competitor more control over the course of the action. Sometimes it’s difficult to avoid this ultimatum in a cease-and-desist letter; you’d either have to bank on the competitor not starting that declaratory judgment action, or start a lawsuit yourself, but delay serving the complaint and try to negotiate a settlement quickly.

The “beaded silk yarn designs” reference, I think, was meant to refer to the design of the yarn itself rather than pattern designs. In a nutshell, Tilli Tomas appears to think its luxury niche product was being copied, and didn’t like it.

Artyarns’s complaint explains that beaded yarns and fabrics have been known for decades, and notes the existence of yarns from companies such as Anny Blatt and Crystal Palace Yarns. While it doesn’t directly address the allegation that Artyarns had somehow unfairly contacted Tilli Tomas’s supplier (one would think such contact would only be unfair if Artyarns secured the supplier’s identity in circumstances involving confidentiality or non-compete obligations), the complaint does explain that Artyarns had started working on a beaded yarn product by contacting potential suppliers as early as July 2004. I don’t know when Tilli Tomas’s products first launched, but the domain name was registered in December 2004, and the earliest Internet mention of Tilli Tomas at TNNA that I could find was only January 2006, although they were certainly out before then: sometime in 2005, certainly.

Artyarns is not seeking damages in this lawsuit; what they want is a declaration that they didn’t do anything wrong. The allegations of unfair competition and inferior quality were made in a letter from legal counsel, so they were not actually made publicly by Tilli Tomas (as far as I know… I was tipped off to search for a lawsuit because of a passing comment from a retailer who observed that Tilli Tomas was upset about the Artyarns yarn, and had taken it to their attorneys). Naturally, starting this lawsuit causes these allegations to be made public via Artyarns’s complaint, but that’s unavoidable (especially when I get hold of it); absent further information, this doesn’t seem to be a case for unfair competition or some kind of misrepresentation on Tilli Tomas’s part.

I personally wouldn’t expect this lawsuit to go all the way to trial. In Artyarns’s place, I’d be hoping to settle with a written agreement from Tilli Tomas that my business was engaged in legitimate competition, and that Tilli Tomas wouldn’t ever attempt to seek any legal remedy against me involving beaded yarns, or any yarn’s appearance, for that matter. After all, with far more dye artisans and distributors of yarns than there are producers, duplication of yarn types is inevitable: consider Artyarns’s Regal Silk, and the subsequent release of very similar, but not identical, Debbie Bliss Pure Silk.

If plying yarns with beads had been a new concept, never seen before, then beaded yarn itself might have been suitable subject matter for a patent (some new, inventive way of combining the beads with the yarn might be patentable, but I don’t think we’ve seen that here). The yarn’s beaded ornamentation might even be suitable subject matter for a design patent, but again, that ornamentation must have been new. In either case, though, it seems that it would be the actual manufacturer of the yarn — not the dye artist — who would have been the party entitled to seek that protection (although that right could be assigned to someone else).

It’s also conceivable that a range of yarns with a very particular ornamental appearance, in the colour or arrangement of the beads, might become sufficiently distinctive of a particular distributor that it could be the subject of trade dress protection (think of it as having trademark rights in the yarn’s appearance) — although as the Artyarn complaint indicates, the letter it received did not particularize what trade dress rights Tilli Tomas thinks it might have, and besides, the Artyarns yarn has different construction and different-sized beads.

A copy of the complaint, filed May 15, 2007, is available here.

Posted in knitdotbiz, themes | 14 Comments

Rinse and repeat

Okay, the quoting myself gimmick is done, so here it is, plain and simple: another extension of time sought and granted in the great, excruciatingly boring trademark opposition battle between SFSE and Deb Stoller. The basis for the extension was that the parties continue to be in settlement discussions (you might wonder whether these settlement discussions are actually being pursued with diligence, or if, like the publisher of the Stitch ‘n’ Bitch books, they’re all napping).

Now: the discovery period is scheduled to close on August 14, 2007; SFSE’s opportunity to provide testimony will close on November 12, 2007, and Deb Stoller’s on January 11, 2008; and SFSE’s rebuttal testimony opportunity will end on February 25, 2008. Briefs on the merits from either side will be exchanged in the couple of months following that last date, so look for the parties to actually advance an argument on the merits in Spring 2008. Or maybe ask for another extension on August 14.

Posted in stitch v. bitch, themes | 2 Comments

The environmental choice

A machine shop in Wisconsin is retooling its business to include high-end aluminum knitting needles. The needles will feature polished steel caps (no circs then, I guess) and anodized finishes, and be made entirely in the U.S. with a price point that appears to be something like 3 or 4 times the typical cost for similar needles.

Reading between the lines, the cost of the product is the consequence of keeping the manufacturing in the U.S., rather than exporting the labour to another country where the cost is cheaper and environmental standards aren’t so strict:

As it turned out, the manufacturing process was the bigger challenge, even for the owner of a job shop.

For example, the jewel tones she wanted for the needles couldn’t be applied in Wisconsin, because the state’s environmental laws forbid it. So she found a shop just over the border in Illinois that could do it.

Oh. Uh… good for Illinois. I don’t know much about aluminum, and despite its accessibility I’m probably not trying it at home anytime soon. The Aluminum Anodizers Council states that anodizing is environmentally friendly, explaining that it is used on cookware. That’s not my definition of environmentally friendly, but then the Council’s FAQ goes on to say that it is not “difficult” for anodizers to comply with state and federal environmental regulations. Assuming this is the case, then either it’s about the waste from anodizing in colour, the Wisconsin source for anodizing doesn’t want to handle these orders for some reason, or it’s not difficult to comply with Illinois state requirements because they’re too lax. I have no idea.

I started out wondering about the competition in this market (both Boye and Knit Stix are definitely cheaper and are also coloured anodized aluminum, although it’s unclear to me where they’re made)… but then I looked at the photographs of the needles. Although I use circs nearly exclusively, I almost want a pair of the stiletto points to hurt people with. At that price point, though, I’d probably just spend more and get something forged just for me.

I think the opportunity for anodized aluminum knitting accessories is in needles coloured to match iPods. And in small, vaguely iPod-shaped cases for carrying coordinating stitch markers, yarn needles, and a little pair of snips.

Posted in Uncategorized | 7 Comments

Virtual windowshopping

Google Street View can be used to pick out storefronts. (Clicking on that link will tell you more about the service, but will also load a video which you may or may not find annoying.)

Here’s Purl, the shop in Soho (which is apparently attempting to be the only yarn shop in the U.S. with a name beginning with “Purl”… more later). Click on the “Street View” button, and you’ll see a little gold man; click on him, and you’ll get a street-level picture of Sullivan. Rotate towards the side of the street with the storefronts (you might have to move up the street a little), and you’ll see the little pale aqua storefront (the one without awnings or discernible signage).

Or try Artfibers in San Francisco. When I clicked “Street View” I had to drag the little man to the right place, and because my aim wasn’t very good I had to move west until I could see the Artfibers sign suspended at second-storey height (the shop is up a flight of stairs, not at ground level).

Posted in Uncategorized | 2 Comments