Monthly Archives: January 2014

Copyright Protection Denied Due to the Inseparability of an Item’s Artistic Features and its Usefulness

By Contributor Attorney Ashley T. Ellerbe, JD, cum laude, Phi Delta Phi Legal Honor Society, Florida Coastal School of Law, former legal intern for CSX Corporation.

For some copyright holders, the ruling of the United States Ninth Circuit Court of Appeals in Inhale, Inc. v. Starbuzz Tobacco, Inc. may be a disappointing one. Although Inhale, Inc. had a registered copyright for the shape of a hookah water container, that registration would not grant them the protection that they anticipated. 

Inhale sued Starbuzz claiming copyright infringement due to Starbuzz’s use of hookah water containers that were identical in shape to Inhale’s container.  The district court held that although Inhale has a registered copyright, its copyright registration is invalid because the hookah water container is not copyrightable.  The shape of the container is only copyrightable if the sculptural features are capable of existing independently of the utilitarian aspects of the container.  Moreover, the distinctive shape of an item is not a factor in determining whether the artistic features can be separate from its usefulness.  The district court concluded and the court of appeals affirmed that the shape of the container accomplishes its function which is to hold the contents within its shape, thus making the hookah water container uncopyrightable.  Furthermore, to keep a tight seal on Pandora’s Box of potentially similar frivolous claims against innocent defendants, the court of appeals affirmed the lower court’s award of attorneys’ fees and the court of appeals awarded attorneys’ fees that incurred in the defense of the appeal.


Florida legislature updates its LLC Act

The Florida legislature updated its LLC Act, the provisions of which become effective January 1, 2014. Anyone with ownership interests in an LLC is a “member” of the entity. The decision-maker (in the colloquial sense) is called the “manager.” LLCs formerly consisted of three types: manag_ing_-member, manager-managed, and member-managed. The Revised Act eliminated manag_ing_-member LLCs. Unless stated otherwise an LLCs is “member-managed.”

The Florida legislature also attempts to assure transparency among members of an LLC. For example, a member may not “unreasonably restrict” the LLC from maintaining or another member from accessing certain business records. Further, a member may not alter the required member materials or change specific duties in the winding up process. See Fla. Stat. §605.04091 for manager and member duties.

Leaving the LLC and The Liability That Follows

The updated Act grants all members the authority to leave an LLC (known as “dissolution”) by way of the LLC’s operating agreement (Fla. Stat. §605.0602) or what is now known as “wrongful” dissolution See Fla. Stat. §§ 605.0601; 605.0602. However, if a member causes a wrongful dissolution, that member may be liable to both the LLC and its members.” Fla. Stat. §§ 605.0105(3)(i); 605.0601(3).

The Act provides for Statements of Authority, which may give the public notice about who can enter in contracts on behalf of the LLC (“bind”). See Fla. Stat. §605.0302)

Indemnify and Reimbursement

If a member or manager is sued while acting in his/her capacity at the LLC then the LLC may pay the attorney fees. However, the indemnified must repay the LLC if the court finds him/her not entitled to indemnification. See Fla. Stat. § 605.0408. However, the LLC may neither reimburse nor indemnify a member or manager that acted in bad faith or violation of law, received undue distributions, or acted outside his/her capacity of the LLC (See Fla. Stat. § 605.0105(3)(q)). The Florida Revised LLC laws are comparable but do not mirror RULLCA.

Dino Perakis is a Florida Coastal School of Law student anticipating graduation May 2014, current law clerk for US Dist. Court of the Middle Dist. of Florida, Jacksonville, Florida , Judge Monte C. Richardson.