Nobody Puts Your Old 401(k) in the Corner: Parody or Trademark Infringement?
July 6, 2015 by Katherine Imp
Did this title make you think of the 1987 film, DIRTY DANCING?
Unless you’ve been living under a rock for 28 years, the answer is probably yes. According to the American Film Institute, “nobody puts baby in a corner” is one of the top 100 greatest movie quotes of all time.
Unfortunately for TD Ameritrade, the creator of “nobody puts your old 401(k) in the corner,” popular quotes generate revenue. And Lionsgate has no intention of giving TD a free pass.
TD Ameritrade’s DIRTY DANCING ad spoof ran for seven months before TD received a cease and desist letter from Lionsgate, coupled with a 7-figure settlement demand. On June 26, TD fought back, filing for declaratory relief against Lionsgate in the Southern District of New York. Lionsgate responded by filing its own lawsuit on July 2 in the Central District of California, asserting claims like false association, unfair competition, trademark infringement and trademark dilution.
Who should win?
There is no question that Lionsgate has protection under copyright law. Lionsgate copyrighted the motion picture back in 1987 when DIRTY DANCING was first released. However, the Supreme Court has unequivocally held that a “parody” qualifies as fair use. Meaning, TD can use some elements of the film DIRTY DANCING without Lionsgate’s permission so long as the use qualifies as a parody.
Trademark law is a little trickier. Trademark law seeks to prevent confusion among consumers as to the origin, sponsorship or approval of goods or services. As a result, the central issue in every trademark infringement case is the likelihood of consumer confusion.
Unlike copyright law, parody is not a defense to a claim of trademark infringement. Instead, the “likelihood of confusion” test requires an analysis of several factors, including freedom of expression concerns.
Last fall, Lionsgate filed trademark applications with the USPTO for use of the quote “nobody puts baby in a corner” in connection with various goods (e.g., paper-based items, clothing, glass and household items). This filing took place one month before the TD ad was released.
In its complaint, Lionsgate also argued that its common law trademark rights (rights to a trademark not registered with the USPTO) date back to 1987.
That said … I’m with TD on this one. For one, TD’s “use” of the DIRTY DANCING quote is in connection with the financial services industry, not the goods encompassed in the trademark applications filed last fall. Secondly, TD’s “use” of the quote was intended to amuse, not confuse. In fact, I’d further argue that because the quote is so recognizable, consumers would actually have an easier time distinguishing between a parody and the original.
However, I also understand why Lionsgate won’t back down until it receives a 7-figure settlement check from TD Ameritrade. Lionsgate is an entertainment conglomerate whose sole value is in its intellectual property rights. Giving TD a free pass, regardless of whether the use was proper or improper, opens the door for other third parties to push the boundaries between fair use and infringement.
Whether or not these powerhouses decide to settle or battle it out in court remains to be seen, but one thing is for sure: Nobody puts Lionsgate in a corner.
Katherine (Kate) Imp is an entertainment attorney at Ramo Law PC and Chicago native. She specializes in film finance, production and distribution for clients in Illinois and across the country. Contact Kate at @KatherineImp or firstname.lastname@example.org.
Disclaimer: The information in this column is intended for general information purposes only and should not be construed as legal advice.