The case: Indiana dealership pursues copyright infringement claim against competitor, newspaper.
Where it stands: Court finds competitor’s ad knock-off violates plaintiff’s rights.
The dispute pitted Harbor Motor Co. Inc. of Portage, which does business as Harbor Oldsmobile-GMC Truck, against Arnell Chevrolet-Geo Inc. of Burns Harbor and the Post-Tribune of Gary.
From 1994 to 1997, Harbor advertised its tent sales held at a Portage parking lot in full-color ads in the Post-Tribune, using a design developed by its owners.
Arnell advertised its own July 1997 tent sale at the same parking lot, using an ad that was virtually the same as Harbor’s, the Seventh Circuit U.S. Court of Appeals said.
In fact, when one of Harbor’s owners saw Arnell’s ad, “at first glance, he thought it was Harbor’s own for an upcoming July tent sale” and complained to his advertising agency that it had run on the wrong day, the court said.
Harbor sued for copyright infringement. Before trial, Arnell offered $2,500 and the Post-Tribune offered $7,500 to settle, but Harbor refused.
They then offered a combined $20,100, which Harbor also rejected.
At trial, U.S. District Judge Allen Sharp dismissed the case against the paper on First Amendment grounds, and the jury awarded Harbor $12,500 against Arnell. But because the verdict was less than the final $20,100 settlement offer and because the suit against the paper was dismissed, Sharp ordered Harbor to pay $104,000 to the paper and $71,000 to Arnell for legal fees.
In a unanimous decision, the appeals court overturned the attorney fee awards, found sufficient evidence to hold both Arnell and the Post-Tribune liable, and said Harbor is entitled to a new trial on its claim against the paper.
Harbor’s lawyer, John Harrington of Chicago, said the decision also allows Harbor to seek attorney fees from Arnell.
Arnell has asked the appeals court to reconsider its ruling, according to its lawyer, Robert Brown of Merrillville.
Brown said Arnell no longer contests its liability for infringement, although they “disagree with the jury’s conclusion (on the copyright violation).”
“We want the attorney fee award reinstated,” he said.
Arnell also is asking the appeals court to block Harbor from seeking attorney fees from Arnell.
As for the Post-Tribune, “we’re working on working it out” with Harbor, said the newspaper’s lawyer, Bart Lazar of Chicago.
“It’s an awful lot of litigation over a tent sale advertisement that ran for one day.”