Legal Environment of Business Case Questions 5/29/12

Prepared By: Jennifer Steigert

Prepared For: Lou Oviedo

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Case Brief 22.1 1. BMG Music v. Gonzalez 430 F.3d 888, Web 2005 U.S. App Lexis 26903 (2005) United States Court of Appeals for the Seventh Circuit 2. Key Facts A. Cecilia Gonzalez downloaded 1,370 copyrighted songs on her computer using the Kazaa file-sharing network and kept them on her computer until she was caught. B. BMG Music sued Gonzalez for copyright infringement of these 30 songs. C. Gonzalez argued that her downloading these songs was lawful. D. The U.S. District court granted summary judgment in favor of BMG Music, assessed $22,500 in damages against Gonzalez and issued an injunction. E. Gonzalez appealed. 3. IssueDid Gonzalez engage in copyright infringement? 4. Holding Yes. The U.S. Court of Appeals held that Gonzalez had engaged in copyright infringement. The Court of Appeals affirmed the judgment of the U.S. District Court in favor of BMG Music and the award of $22, 500 in damages and the injunction against Gonzalez. 5. Courts Reasoning The Supreme Court held that: A. Cecilia Gonzalez downloaded 1,370 copyrighted songs on her computer using the Kazaa file-sharing network and kept them on her computer until she was caught B. Gonzalez argued that her downloading these songs was lawful because she was sampling music before choosing which retail versions to purchase. C. There is an increasing problem of people who substitute purchasing retail music with downloaded copies; this has resulted in a decrease in retail music sales. D. Licensed internet sellers such as iTunes typically pay the authors a fee. Companies that provide teasersor samples of musicare offered to customers, but they only provide a portion of the song. If customers wish to listen to the entire song, they must purchase it. E. Instead of erasing the songs Gonzalez decided not to buy, she retained them. F. Authorized previews normally share the feature of evanescence: if a listener decides not to buy (or stops paying the rental fee), no copy remains behind. G. The U.S. District court granted summary judgment in favor of BMG Music, assessed $22,500 in damages against Gonzalez and issued an injunction.

Steigert 3 Case Brief 22.2 1. Menashe v. Victorias Secret Stores, Inc. 409 F.Supp.2d 412, Web 2006 U.S. Dist. Lexis 7763 (2006) United States District Court for the Southern District of New York 6. Key Facts A. As early as Fall 2002, Victorias Secret, a womans manufacturer and retailer, developed a line of lingerie named Sexy Little Things and first used the term in commerce on July 28, 2004. B. In June 2004 Ronit Menashe and Audrey Quock (Menashe) embarked on a joint venture to produce and launch a line of womans underwear. C. In late July or early August 2004, Menashe came up with the phrase Sexy Little Thing and Sexy Little Things. D. On September 13, 2004 Menashe filed an intent-to-use application with the PTO. E. On November 11, 2004, Victorias Secret applied to register Sexy Little Things for lingerie with the PTOs principle register. F. At that time, Victorias Secret learned of Menashes ITU application. They immediately sent Menashe a cease-and-desist letter, informing them that Victorias Secret had been using Sexy Little Things as a trademark prior to the filing date of Menashes ITU application. G. Menashe halted production and filed a lawsuit against Victorias Secret, seeking a declaratory judgment that asked the Court to order that they had not infringed on Victorias Secret claimed trademark. 7. Issue Should Menashe be granted a declaratory judgment of trademark non-infringement for using the terms Sexy Little Thing and Sexy Little Things for their lingerie? 8. Holding No. The U.S. District Court held that Victorias Secret had obtained priority in the mark Sexy Little Things. The District Court dismissed Menashes petition for a declaratory judgment and dismissed the case against Victorias Secret. 9. Courts Reasoning The Supreme Court held that: A. At trial, Menashe testified that since the time she received the cease-and-desist letter, she has not been in a Victorias Secret store to see whether they were selling merchandise under the name Sexy Little Things. B. Plaintiffs determination fails to overcome the overwhelming evidence that Victorias Secret used the term Sexy Little Things in commerce on July 28, 2004. C. Because VSD made bona fide trademark use of the term Sexy Little Things in commerce before Plaintiffs filed their ITU application, and has continued to mark that in commerce, VSD has acquired priority in the mark. D. Consequently, Plaintiffs are not entitled to a declaratory judgment of non-infringement under the Lanham Act.

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Case Brief 26.2 Walker v. Ayres Web 1993 Del. Lexis 105 Supreme Court of Delaware 1. Key Facts A. Elizabeth Star Ayres and Clara Louise Quillen owned a fee simple absolute tract of land in Sussex County, Delaware, known as Bluff Point. B. The tract was surrounded on three sides by Rehoboth Bay and was landlocked on the fourth side by land owned by Irvin C. Walker. C. At one time the tracts were held by a common owner. D. In 1878, Bluff Point was sold in fee simple absolute apart from other holdings, thereby landlocking the parcel. E. A narrow dirt road on Walkers land connected Bluff Point to a public road. F. Ayers and Quillen sought an easement to use this road and Walker objected. G. A lawsuit ensued. A trial court granted an easement. Walker appealed. 2. IssueShould Ayres and Quillens estate be granted an easement against Walkers estate? 3. Holding Yes. The supreme court of Delaware held that an implied easement had been created for Ayres and Quillen to utilize an easement on Walkers property. Affirmed. 4. Courts Reasoning The Supreme Court held that: A. Bluff Point was surrounded on three sides by Rehoboth Bay and was landlocked on the fourth side by land owned by Irvin C. Walker. B. At one time the tracts were held by a common owner. C. In 1878, Bluff Point was sold in fee simple absolute apart from other holdings, thereby landlocking the parcel. D. There is ample evidence in the record to support the finding that the two tracts originated from the unified holdings of one owner, and that an implied easement was created by the severance which landlocked Bluff Point. E. The record also sufficiently supports the finding that navigable access to Bluff Point was not feasible.