Judge Puts Lions Gate’s Trademark Suit in a Corner

LOS ANGELES (CN) — A federal judge stopped Lions Gate Entertainment for the second time this week from suing TD Ameritrade over ads parodying the signature dance lift and a famous quote from the movie “Dirty Dancing.”

Lions Gate sued Ameritrade in New York in July 2015 over ads that showed a piggybank running toward and leaping into the upstretched arms of a cartoon customer, over the line “Nobody puts your old 401(k) in the corner.”

The ads were based on the climactic final scene from the hit 1987 movie in which Jennifer Gray’s character, Baby, leaps into Patrick Swayze’s upstretched arms, after Swayze’s character told Baby’s parents, “Nobody puts Baby in a corner.”

Lions Gate owns the rights to “Dirty Dancing.” In its 2015 lawsuit, it claimed the ads violated its common law trademark rights in the key phrase and the dance move, and other rights.

U.S. District Court Judge Dean D. Pregerson ruled in March 2016 that the studio’s trademark claims were pre-empted by federal copyright law. But in August last year, Pregerson partially reversed himself and agreed to look at one trademark issue again.

Lions Gate asked him to reconsider because it could not appeal his ruling, as it had reached a settlement with Ameritrade. Ameritrade did not oppose Lion Gate’s motion to vacate the previous ruling.

Nonetheless, in an 8-page order issued Monday, Pregerson declared that he was right the first time.

The main question was whether Lions Gate was using trademark claims to protect what could only be protected by copyright.

The U.S. Supreme Court ruled in Dastar Corp. v. Twentieth Century Fox Film Corp. (2003) that trademark could be used to protect a “tangible product sold in the marketplace,” but that copyright law would pre-empt trademark claims that focused on “any idea, concept, or communication embodied in those goods.”

Pregerson ruled in March that Ameritrade’s ads were “not likely to confuse consumers as to the actual producer” of the product, that is, the 401(k) accounts. Therefore, Lions Gate’s trademark claims were pre-empted.

Lions Gate challenged his reasoning by arguing that “whether Lions Gate offers financial services … is irrelevant to its ability to plead cognizable trademark claims.”

“The court disagrees,” Pregerson said in his new order.

He concluded that whether Lions Gate offers financial services “is not irrelevant to whether the ad campaign appears to have falsely designated the ‘origin’ or producer of those services as Lions Gate.”

He also ruled Monday that Ameritrade’s use of the signature phrase “involved a communicative product to which Dastar’s reasoning may apply.”

While Ameritrade’s ads “evoke the ‘communications, concepts, or ideas’ embodied in the movie ‘Dirty Dancing,’” Lions Gate’s trademark rights “do not protect rights in a communicative product that are distinct from those already protected by the Copyright Act.”

Neither TD Ameritrade’s attorneys, Kyle C. Bisceglie and Andrew B. Lustigman, with Olshan Frome Wolosky in New York, nor Lions Gate counsel Jill Pietrini and Paul A. Bost of Sheppard Mullin Richter & Hampton’s Los Angeles office, could be reached Tuesday afternoon to discuss the new ruling.

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