Lucasfilm Can't En-FORCE Its Copyright in England
Under the category of "protect your stuff overseas or else it might not be yours for long", we turn now to a recent case involving Lucasfilm, Star Wars and England's IP laws.
Star Wars is one of the most recognizable and profitable franchises in the world. Just tell someone to "use the Force" or make a passing remark about someone acting like "Darth Vader," and people will instantly correlate your reference to the Star Wars trilogy of movies, or to the Star Wars cartoon, or to Star Wars merchandise...you get the point, I'm sure.
So when Lucasfilm found out that a company in England was selling Star Wars-related merchandise without permission, it did what any responsible copyright holder should do: it filed a lawsuit to stop the copyright infringement from continuing. But as Lucasfilm learned, sometimes not even the Force can overcome issues of international law....
The first lawsuit was filed in California (home of Lucasfilm Ltd.), and alleged that Shepperton Design Studios (located in England) and its owner, Andrew Ainsworth, were creating and selling unauthorized replicas of the helmets worn by Stormtroopers in the Star Wars movie trilogy.
Neither Shepperton nor Ainsworth showed up to the California fight, and Lucasfilm received a default against both for $20 million. (More on that amount in a moment...)
Next, Lucasfilm was off to England where it sought to enforce its default judgment against Shepperton and Ainsworth.
In England, Ainsworth admitted that he was selling Stormtrooper helmets through his Shepperton Design Studios website, but claimed he had the right to do so because his company was the original maker of the designs of the merchandise he was selling. (Not a bad argument, but one which likely could have be overcome by an unambiguous, written agreement addressing both the ownership issue and the conflict of international law issue. If one existed here, it certainly wasn't mentioned in the High Court's decision—and that's a problem. Read on.....
The case made its way to the High Court of Justice in England, which ruled that Lucasfilm could NOT enforce its default judgment in England. Why? Because under English copyright law, the Stormtrooper helmets created by Ainsworth were "sculptures", and Ainsworth held copyright rights in the sculptures that he created.
You can read the High Court's ruling HERE. In my opinion, the best part of the decision appears on page 2, where the English Court commented that "Lucasfilm has obtained a default judgment for trade mark and copyright infringement in California against [Ainsworth] in the sum of US$20m. That sum sounds strange to English ears given that [Ainsworth] only sold about $US14,500 worth." Strange indeed. Or perhaps the Court simply doesn't understand good ole American math as calculated by attorneys. (I know that last statement will upset my litigator friends. So be it.)
But what of the U.S. default judgment? Won't a court in England enforce a U.S. judgment? Answer: maybe not. The High Court pointed out that an EU member state would have no problem enforcing judgments from other EU-member states. However, the High Court was reluctant (indeed, refused) to enforce a judgment from a non-EU member state (i.e., the United States) where (i) the defendant was a resident of England, and (ii) none of the infringing activity took place outside of England.
My opinion: the High Court was CORRECT. We should not assume that a foreign court will (or should)automatically enforce a U.S. judgment anymore than we would assume that a U.S. court would automatically enforce judgments from overseas. (Could you imagine if American courts had to enforce everything that was handed down by a foreign court? Think about how scary that would be.)
Bottom line: when it comes to intellectual property, the law is territorial. Put another way, unless you take steps to actively protect your intellectual property in every geographic area in which your company does business, your company could lose control of its intellectual property outside of the United States.
If you're doing business overseas, you need to think seriously about this issue. Protect your stuff overseas, or it may not be yours for long.
And may the Force be with us all.
Star Wars is one of the most recognizable and profitable franchises in the world. Just tell someone to "use the Force" or make a passing remark about someone acting like "Darth Vader," and people will instantly correlate your reference to the Star Wars trilogy of movies, or to the Star Wars cartoon, or to Star Wars merchandise...you get the point, I'm sure.
So when Lucasfilm found out that a company in England was selling Star Wars-related merchandise without permission, it did what any responsible copyright holder should do: it filed a lawsuit to stop the copyright infringement from continuing. But as Lucasfilm learned, sometimes not even the Force can overcome issues of international law....
The first lawsuit was filed in California (home of Lucasfilm Ltd.), and alleged that Shepperton Design Studios (located in England) and its owner, Andrew Ainsworth, were creating and selling unauthorized replicas of the helmets worn by Stormtroopers in the Star Wars movie trilogy.
Neither Shepperton nor Ainsworth showed up to the California fight, and Lucasfilm received a default against both for $20 million. (More on that amount in a moment...)
Next, Lucasfilm was off to England where it sought to enforce its default judgment against Shepperton and Ainsworth.
In England, Ainsworth admitted that he was selling Stormtrooper helmets through his Shepperton Design Studios website, but claimed he had the right to do so because his company was the original maker of the designs of the merchandise he was selling. (Not a bad argument, but one which likely could have be overcome by an unambiguous, written agreement addressing both the ownership issue and the conflict of international law issue. If one existed here, it certainly wasn't mentioned in the High Court's decision—and that's a problem. Read on.....
The case made its way to the High Court of Justice in England, which ruled that Lucasfilm could NOT enforce its default judgment in England. Why? Because under English copyright law, the Stormtrooper helmets created by Ainsworth were "sculptures", and Ainsworth held copyright rights in the sculptures that he created.
You can read the High Court's ruling HERE. In my opinion, the best part of the decision appears on page 2, where the English Court commented that "Lucasfilm has obtained a default judgment for trade mark and copyright infringement in California against [Ainsworth] in the sum of US$20m. That sum sounds strange to English ears given that [Ainsworth] only sold about $US14,500 worth." Strange indeed. Or perhaps the Court simply doesn't understand good ole American math as calculated by attorneys. (I know that last statement will upset my litigator friends. So be it.)
But what of the U.S. default judgment? Won't a court in England enforce a U.S. judgment? Answer: maybe not. The High Court pointed out that an EU member state would have no problem enforcing judgments from other EU-member states. However, the High Court was reluctant (indeed, refused) to enforce a judgment from a non-EU member state (i.e., the United States) where (i) the defendant was a resident of England, and (ii) none of the infringing activity took place outside of England.
My opinion: the High Court was CORRECT. We should not assume that a foreign court will (or should)automatically enforce a U.S. judgment anymore than we would assume that a U.S. court would automatically enforce judgments from overseas. (Could you imagine if American courts had to enforce everything that was handed down by a foreign court? Think about how scary that would be.)
Bottom line: when it comes to intellectual property, the law is territorial. Put another way, unless you take steps to actively protect your intellectual property in every geographic area in which your company does business, your company could lose control of its intellectual property outside of the United States.
If you're doing business overseas, you need to think seriously about this issue. Protect your stuff overseas, or it may not be yours for long.
And may the Force be with us all.
Posted by Bradley Gross at 1/13/2010 10:29 AM 
Categories: Intellectual Property
Tags: intellectual property copyright
Categories: Intellectual Property
Tags: intellectual property copyright
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