Tuesday, September 19, 2017
Ninth Circuit Revives Action Over Copycat TV Show
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals has reinstated an action by one television network against another alleging that the defendant launched a copycat show, rendering it liable under a “trade dress” theory.
The plaintiff is seeking damages of at least $20 million, trebled based on willful infringement, plus attorney fees.
Although the two networks, Vietnamese Broadcasting Service (“VBS”) and KVLA—which broadcast nearly exclusively in Vietnamese and are virtually unknown outside the Vietnamese-American community—the theory found viable by the court in an unpublished memorandum on Friday, should it ultimately prevail, could have a widespread effect on U.S. broadcasters and production companies seeking to mimic successful formats.
The copied show is called “Dau Gia Tren Truyen Hinh,” translated into English as “Fight Price on Television.” Plaintiff VBS, which has four television stations and is available over the Internet, launched it in 2011.
It is a live auction program centering on sales of jewelry, with an emphasis on diamonds.
It was hosted for four years, starting in April of 2012, by former beauty queen Tram Ho. She left the show in the spring of 2016.
According to her allegations in lawsuits—first in a counterclaim in federal court, now in an Orange Superior Court suit—her departure was the result of repeated sexual overtures by the Rev. Joseph C. Nguyen who owns and operates the Huntington Park-based VBS.
On June 1, 2016, KVLA, a Huntington Beach television station which is available via the Internet, began broadcasting “Diamond at a Surprise Low Price,” hosted by Ho.
According to the complaint, the new production is “essentially a complete copy” of the VBS program “and is intended to cause confusion to Vietnamese and other viewers so that they are likely to believe that they are watching” the VBS show “or that there is some affiliation, relationship, license, endorsement, or sponsorship” between the two programs.
The complaint alleges that Ho was still under contract to VBS and that KVLA wooed to its camp other personnel connected with “Fight Price on Television.”
The pleading sets forth that the KVLA show, in addition to featuring Ho, has the “same vendors (some), same unique style as provided by the same technician, same time slot of 5:00 pm-7:00 pm, but on Mondays, Wednesdays and Friday,” while the VBS program “is on Tuesdays and Thursdays,” and, imitatively, displays “the least to most expensive” items and auctions “approximately 30 items each show,” with a price range of $300-$3,000.
District Court’s View
In denying a preliminary injunction on Jan. 19, District Judge Cormac J. Carney of the Central District of California said:
“VBS’ success on its unfair competition and trade dress infringement causes of action depends on the presence of a valid, non-functional trade dress….VBS defines their trade dress in terms of a set of parameters including timeslot, price range, length of show, camera angle and lighting techniques, and auction format….However, the list of elements all go to the overall configuration of the show and VBS does not present sufficient reliable evidence that they are likely to prevail on the merits that this configuration is non-functional. The fact that there were alternative functional choices does not transform functional choices into protectable trade dress.”
In reversing, the Ninth Circuit declared:
“The district court erred in holding that because the overall configuration of VBS’s live auction television show was functional, VBS failed to carry its burden of showing a likelihood of success on the merits of its trade dress infringement claim. As with restaurants’ trade dress infringement claims, VBS can claim protectable trade dress in the overall look and feel of VBS’s live auction show, regardless whether individual elements that constitute part of the claimed trade dress are functional.”
VBS’s action also asserts that Ho, in violation of a confidentiality agreement she entered into upon gaining employment with VBS, provided a customer list and database to KVLA. It seeks to enjoin “stealing or misappropriating Plaintiffs’ trade secrets.”
Carney, in declining to enjoin use of the list, said:
“VBS’ success on its trade secrets claims depends on the purported trade secret not being readily accessible to a reasonably diligent competitor….The only concrete trade secret that VBS alleges Tram Ho misappropriated was VBS’ customer lists and databases….Notably, customer lists may constitute trade secrets, but only if they contain information that is not readily accessible….VBS has provided no indication that their customer lists, rather than their databases broadly, contain non-readily accessible information….Accordingly, they have not met their burden of demonstrating likelihood of success on the merits on their trade secrets claims.”
Again disagreeing, the appeals court set forth:
“The record shows that VBS’s customer list contains identifying information that is not readily accessible to the public or to other businesses, including purchase histories, methods of payment, and amounts of payment. Moreover, because VBS has listed individuals who have already expressed an interest in purchasing jewelry from an auction television show, the customer list has independent economic value to VBS’s competitors….Therefore, the district court erred in rejecting VBS’s trade secret misappropriation claim on the ground that VBS failed to show that a reasonably diligent competitor could not readily obtain the information in the customer list.”
Both networks tout vitamin and herbal remedies. VBS included in its lawsuit an assault on claims made in connection with Arthro-7, a product of Nutrivita, Inc.—which operates out of KVLA’s premises and is apparently linked to it—marketed as an aid to joint and cartilage health.
(Nutrivita previously unsuccessfully sued VBS Distribution Inc., VBS’s dietary supplement arm, for infringement.)
“VBS’ success on its false advertising claims depends on the presence of a false or misleading claim….VBS claims that the following statements constitute false advertising: that Arthro-7 has ‘100% herbal ingredients,’ is ‘100% natural,’ is ‘100% natural herbal,’ has ‘Over 8 Million Bottles Sold!’ and is ‘Doctor Recommended.’…VBS argues that the herbal claim is false because Arthro-7 includes collagen and gelatin, which derive from animals….Defendants claim that ‘the scope of the definition of herbal in the dietary supplement industry is often extended to include minerals, shells, and certain animal products.’…While both VBS and Defendants fail to cite any support for their statements….VBS bears the burden and accordingly has not met its burden of demonstrating success on the merits of the false advertising claim.”
VBS argued that the claim that Arthro-7 is “Doctor Recommended” was bogus because the “doctor” who endorsed the product was merely a podiatrist—foot doctor—not an MD. As Carney sized it up:
“VBS states it ‘is axiomatic that to the public the use of Dr. or Doctor, without more preceding or following, indicates a medical doctor and only a medical doctor.’…That ipse dixit statement, given the individual is board-certified,…does not suffice to demonstrate likelihood of success on the merits of the false advertising claim.”
The Ninth Circuit responded that Nutrivita’s claim that Arthro-7 was “100% herbal” was “contradicted by Arthro-7’s own ingredient list, which includes animal products.” It noted that “there is no evidence in the record that ‘herbal’ means something other than ‘of, relating to, or made of herbs,’ ” as defined in a dictionary it cited.
The memorandum opinion added that “VBS’s claim that Nutrivita’s advertising statement, ‘8 Million Bottles Sold,’ is literally false is essentially undisputed by Nutrivita; indeed, its CEO admitted there was no basis for this claim.”
It did not, however, fault Nutrivita’s representation that Arthro-7 is “Doctor Recommended,” saying that the statement “is not literally false, and VBS provided no evidence to substantiate its claim that the statement would be misleading to the public.”
The three-judge panel said:
“Because the district court erred in analyzing VBS’s claims of trade dress infringement, trade secret misappropriation and false advertising, we reverse and remand to the district court to reconsider the elements of the preliminary injunction analysis in light of this disposition.”
Signing the opinion were Circuit Judges William A. Fletcher and Sandra Segal Ikuta, joined by Chief Judge Nancy Freudenthal of the District of Wyoming, sitting by designation.
The case is VBS Distribution, Inc. v. Nutrivita Laboratories, Inc., 17-55198.
Carney on March 1 dismissed Ho’s counterclaims alleging sexual harassment by Nguyen, a Catholic priest. Carney said:
“Tram Ho’s allegations are deeply concerning. But this Court is a court of limited jurisdiction. All of Tram Ho’s counterclaims are based on California law. and the parties are not diverse….Tram Ho’s counterclaims lack an independent jurisdictional basis and accordingly must be DISMISSED.”
There was no appeal. Rather, Ho filed an action on March 24 in Orange Superior Court.
The complaint avers that Nguyen “made repeated and unwanted sexual advances, smothered her with hugs and kisses, and once tried to force himself on her...groping her breasts and genitals against her will.”
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