LOS ANGELES (CN) — A federal judge reversed himself to give Lion's Gate Entertainment another chance to prove TD Ameritrade improperly used an iconic line from "Dirty Dancing" — "Nobody puts Baby in a corner — in advertising.
The ads parodied the film's climactic scene in which Patrick Swayze accompanies the quote by catching and lifting Jennifer Gray's character Baby over his head in the final dance.
TD Ameritrade ran ads of a cartoon man catching and lifting a large piggy bank over his head, alongside the line: "Nobody puts your old 401k in the corner."
Lion's Gate, which owns the rights to "Dirty Dancing," sued TD Ameritrade in New York in July 2015 for copyright and trademark infringement. The case was transferred to Los Angeles in September.
U.S. District Judge Dean D. Pregerson ruled in March that the film company's trademark claims were preempted by federal copyright law. He also rejected its assertion that its trademark in the "in a corner" line was diluted by the brokerage's ads.
On Monday, however, Pregerson reversed that second ruling, saying he'd relied on outdated law.
"The court's prior [ruling] was erroneous and must be reconsidered," the judge wrote.
In his March ruling, Pregerson followed a Ninth Circuit decision based on an old federal trademark statute. Under that law, for a new trademark to infringe an older trademark, it had to be "identical, nearly identical or substantially similar to the senior mark."
The Trademark Dilution Revision Act of 2006, however, dropped the "identical" requirement.
Pregerson said his previous ruling "was not particularly clear about the effect the lack of identity between the marks."
Therefore, he reanalyzed the facts, looking especially at whether TD Ameritrade's ads could be found "likely to cause dilution by blurring or dilution by tarnishment" of Lion's Gate's trademark.
The question then became whether Lion's Gate was using the "in the corner" line as a new trademark of its own or merely as an advertising slogan. Since the claims in the lawsuit allowed for both views, the suit could not be dismissed.
"Given that the parties do not dispute a slogan can be used as a trademark and given Lions Gate's allegations that defendants intended to use this phrase as part of branding campaign, the cause of action survives the Motion to Dismiss," Pregerson wrote.
TD Ameritrade attorney Kyle C. Bisceglie, with Olshan Frome Wolosky, in New York could not be reached for comment late Wednesday.
Lion's Gate's lead attorney Jill Pietrini, with Sheppard Mullin Richter & Hampton's Los Angeles office, did not return a call seeking comment.
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