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Special Counsel Moves Against Trump & Guitar Battles · Bloomberg Law

0:03
Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
0:10
Speaker 2: Special counsel Jack Smith is urging the Eleventh Circuit Court
0:13
Speaker 2: of Appeals to reinstate the classified documents case against former
0:18
Speaker 2: President Donald Trump, saying a judge made a serious error
0:22
Speaker 2: in dismissing the case. Smith said that Federal Judge Eileen
0:26
Speaker 2: Cannon's decision that he was unlawfully appointed by Attorney General
0:30
Speaker 2: Merrick Garland runs counter to president rulings by judges across
0:35
Speaker 2: the country history, as well as widespread and long standing
0:39
Speaker 2: appointment practices in the Department of Justice and across the government.
0:43
Speaker 2: Joining me is Dave Ahrenberg, Palm Beach County State Attorney
0:47
Speaker 2: to put us on too contact Dave tell Us about
0:49
Speaker 2: Judge Cannon's decision dismissing the case.
0:52
Speaker 1: Judge Cannon made such a bizarre decision that it went
0:56
Speaker 1: against all presidents, and I think will almost certainly be
1:00
Speaker 1: overruled by the Eleventh Circuit. Cannon's best chance to keep
1:03
Speaker 1: this on the books would be if the Supreme Court
1:05
Speaker 1: decides to weigh in and then does something radical like
1:08
Speaker 1: they did in the immunity case. Clarence Thomas has already
1:11
Speaker 1: issued a concurring opinion that provided a roadmap for Judge
1:14
Speaker 1: Cannon to rule the way she did, but no other
1:17
Speaker 1: justice signed on his concurring opinion, So I suspect the
1:20
Speaker 1: Supreme Court would not even go along with her approach.
1:24
Speaker 1: I mean, I'm old enough to remember a guy named
1:26
Speaker 1: Robert Mueller and Robert her and David Weiss. These are
1:29
Speaker 1: all special counsels in recent years, and there was no
1:33
Speaker 1: issue whether they could remain because of the constitutionality of
1:36
Speaker 1: their appointment. Judge Cannon applied a different set of rules
1:39
Speaker 1: to Jack Smith, and she'll be overruled for it. Then
1:42
Speaker 1: the big question is will the Eleventh Circuit remove her
1:45
Speaker 1: from the case. I know Jack Smith would want that,
1:48
Speaker 1: he did not ask for it specifically, but the Eleventh
1:50
Speaker 1: Circuit has the power to do it on its own.
1:53
Speaker 1: Don't know if they're going to do it yet, but
1:54
Speaker 1: maybe that day will come.
1:56
Speaker 2: So Dave explain what her reasoning was why he was
2:01
Speaker 2: wrongfully appointed.
2:03
Speaker 1: There's the Appointment's clause in the Constitution that allows for
2:07
Speaker 1: certain appointments and they have to be confirmed by the Senate,
2:10
Speaker 1: and then there are inferior officers. So called inferior officers
2:13
Speaker 1: that would be the Special Council. But what the lawyers
2:17
Speaker 1: on Donald Trump's side. These are outside lawyers, by the way,
2:19
Speaker 1: and it was bizarre again that Judge Cannon even allow
2:22
Speaker 1: these outside lawyers to participate in the oral arguments. I mean,
2:26
Speaker 1: this became a real political hot potato. This was not
2:29
Speaker 1: a Trump lawyer, but these were outside lawyers that first
2:32
Speaker 1: raised this argument, and they said that under the appointments
2:36
Speaker 1: cause that Jacksmith needed to be confirmed by the US Senate.
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Speaker 1: He is not an inferior officer because he has total independence,
2:43
Speaker 1: so just like the Attorney General, he needs to be confirmed.
2:46
Speaker 1: He wasn't confirmed, therefore his appointment is unconstitutional, and Judge
2:50
Speaker 1: Cannon agreed. Now, the problem with that argument is that
2:53
Speaker 1: Jack Smith is not totally independent. He has a boss,
2:56
Speaker 1: the Attorney General. He has to get approvals and permissions
2:59
Speaker 1: from him, so he's not totally independent. And you know
3:02
Speaker 1: who also has argued that Jack Smith is not independent,
3:05
Speaker 1: Donald Trump. Donald Trump has repeatedly bashed Jack Smith for
3:09
Speaker 1: being a tool of Joe Biden and Merrick Garland doing
3:11
Speaker 1: their political business. So it's kind of ironic that the
3:15
Speaker 1: argument that Donald Trump is proposing is opposite from the
3:18
Speaker 1: argument that the lawyers are proposing. And it's that argument
3:21
Speaker 1: in court that won the day with Judge Cannon, but
3:23
Speaker 1: I don't think it's going to win the day anywhere else.
3:25
Speaker 2: Jack Smith's brief covers the landscape of legal arguments, so
3:30
Speaker 2: he starts with Cannon, ignoring decades of precedent, including binding
3:36
Speaker 2: Supreme Court precedent. So tell us about the president.
3:40
Speaker 1: The president is at Special counsels are legit, they're legal
3:44
Speaker 1: under the law, They're inferior officer. An Attorney general can
3:48
Speaker 1: appoint them, whether it's Archibald Cox or Robert Mueller. And
3:53
Speaker 1: over the years have been different statutes in place, and
3:55
Speaker 1: the statutes may have not been re enacted or repealed,
3:59
Speaker 1: but special care Council's remain. And there's never been any
4:02
Speaker 1: court that has looked at this issue, because the courts
4:05
Speaker 1: have they have. There's never been a court that is said, yeah,
4:08
Speaker 1: it's an unconstitutional appointment. You have to be confirmed by
4:10
Speaker 1: the Senate. It's never happened. It didn't happen with Clinton
4:13
Speaker 1: and Kenneth Starr. It didn't happen with Nixon and Archibald Coxino.
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Speaker 1: In fact, in the Nixon case, the Supreme Court did
4:19
Speaker 1: weigh in on this and indicta meaning and just extra
4:22
Speaker 1: language in the opinion. They did say that the special
4:26
Speaker 1: Council was legit. The way that he was appointed was okay.
4:29
Speaker 1: And so this goes against president for years, including Supreme
4:33
Speaker 1: Court President. And so that's why I'm very confident that
4:36
Speaker 1: Judge Cannon is going to be overturned.
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Speaker 2: She drew a distinction between the appointments of independent counsels,
4:43
Speaker 2: you know, it's a predecessor to what's now called a
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Speaker 2: special council, and Garland's appointment of Smith as a special council.
4:52
Speaker 2: And in that nineteen seventy four Supreme Court decision, the
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Speaker 2: Court was talking about a special prosecutor.
5:00
Speaker 1: La duck and talks like a duck.
5:02
Speaker 2: Right, I'm confused about the difference between them. I know
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Speaker 2: that Smith said there's no real difference, but is there
5:07
Speaker 2: a difference.
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Speaker 1: It's a distinction without a difference. Whether you call them
5:11
Speaker 1: independent council special council. They serve under the Attorney General.
5:14
Speaker 1: They have to issue a report, they have to get
5:17
Speaker 1: approvals and permissions. They are not completely independent. The way
5:21
Speaker 1: that they serve, at least a special council is not.
5:23
Speaker 1: And as a result, they don't have to be confirmed
5:26
Speaker 1: by the Senate. This has been litigated in other cases.
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Speaker 1: I mean, Judge Chuck can review this. In DC. There
5:30
Speaker 1: are lots of special councils out there, and we've never
5:33
Speaker 1: seen this before. I mean, we just had a special
5:36
Speaker 1: council investigate Hunter Biden is continuing to investigate Hunter Biden.
5:40
Speaker 1: So I guess Hunter Biden's conviction should be overturned because
5:42
Speaker 1: the Special Counsel David White who prosecuted him was improperly appointed. Unconstitutional.
5:47
Speaker 1: You know, if you do it one way, you got
5:49
Speaker 1: to do it the other way. So she is opening
5:51
Speaker 1: up a count of worms. And that's why the Eleventh
5:53
Speaker 1: Circuit is going to come in and say no, no, no,
5:55
Speaker 1: stay in your lane. You're being reversed. And it's possible
5:59
Speaker 1: because the Eleventh Circuit reversed her multiple times previously on
6:04
Speaker 1: the special master issue in this case, that maybe they'll
6:07
Speaker 1: say enough, we're removing you from the case altogether. That
6:09
Speaker 1: would be Jackson's dream. Don't know if it happens yet,
6:12
Speaker 1: but that could happen one day if she keeps ruling
6:14
Speaker 1: this way.
6:14
Speaker 2: So you're very confident, even though the Eleventh Circuit is
6:20
Speaker 2: very conservative. Suppose Smith draws a very conservative panel.
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Speaker 1: Well, Smith drew a very conservative panel the last time
6:30
Speaker 1: he went to the Eleventh Circuit to ask them to
6:32
Speaker 1: reverse Judge Cannon on the special Master issue. Three judges,
6:37
Speaker 1: one judge, the head judge, Judge Prior, very conservative, was
6:40
Speaker 1: considered for the Supreme Court under a Bush. Then you
6:44
Speaker 1: had the other two judges who were appointed by Donald Trump.
6:46
Speaker 1: So it doesn't get more conservative than that. Three judges,
6:48
Speaker 1: two of them appointed by Donald Trump. All three said
6:51
Speaker 1: you're wrong Canon and chastise her and repudiated her. So
6:55
Speaker 1: no matter how conservative panel will be, I think they'll
6:58
Speaker 1: be the same result as last time.
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Speaker 2: What I think I think is one of the best
7:00
Speaker 2: lines from Smith's brief is quote from before the creation
7:05
Speaker 2: of the Department of Justice until the modern day, attorneys
7:08
Speaker 2: general have repeatedly appointed special and independent counsels to handle
7:12
Speaker 2: federal investigations, including the prosecution of Jefferson Davis, alleged corruption
7:18
Speaker 2: in federal agencies, including the Department of Justice itself, Watergate,
7:22
Speaker 2: and beyond. His argument covers I said before the legal landscape.
7:26
Speaker 2: He also says, and tell me if you think this
7:28
Speaker 2: is going too far, that if this is allowed to
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Speaker 2: stand and could jeopardize the operation of the Justice Department
7:36
Speaker 2: and call into question hundreds of appointments throughout the executive branch.
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Speaker 2: Is that going too far?
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Speaker 1: No, it's true. If you're going to throw sand in
7:45
Speaker 1: the gears here, then everything's at risk. When it comes
7:47
Speaker 1: to the appointment's clause. There'll be a new interpretation of
7:50
Speaker 1: the appointments clause. It just won't affect special counsels. They'll
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Speaker 1: affect any other inferior officer where there is at least
7:56
Speaker 1: an accusation of extra independence. It puts every inferior officer
8:00
Speaker 1: risk of being tossed aside unless they were confirmed by
8:03
Speaker 1: the Senate. And so yeah, there are real ramifications for
8:06
Speaker 1: this radical ruling by Judge Cannon, and that's why I
8:10
Speaker 1: think for sure she's going to be overturned. No, unless
8:12
Speaker 1: the Supreme Court steps in after the Eleventh Circuit and says, no,
8:15
Speaker 1: we're going to now create a new standard, and they could.
8:18
Speaker 1: I mean, I didn't think they were going to rule
8:19
Speaker 1: the way they did in the immunity case, so maybe
8:21
Speaker 1: they're going to do the same thing here. But I
8:22
Speaker 1: still think this decision by Judge Cannon is doomed.
8:26
Speaker 2: So Trump's reply is doing about thirty days. How long
8:31
Speaker 2: will it take do you think for the Eleventh Circuit
8:34
Speaker 2: to decide the case?
8:36
Speaker 1: You know, it's hard to say. I never know with
8:38
Speaker 1: these appellate courts, depends on their workload. And now, because
8:41
Speaker 1: the election is in November and this case is not
8:44
Speaker 1: going to be tried before the election, there's no real
8:46
Speaker 1: sense of urgency to get it done right away. I
8:49
Speaker 1: think it may take a while, but I'm not as
8:51
Speaker 1: uncertained about the decision. I think the decision will be
8:54
Speaker 1: unanimous and it will be scathing, and Judge Cannon needs
8:58
Speaker 1: to worry that she'll be removed from this case and
9:00
Speaker 1: be humiliated based on her decisions that have been out
9:03
Speaker 1: of step with the law multiple times.
9:05
Speaker 2: Is speaking of not rushing things. Smith filed his legal
9:10
Speaker 2: argument one day before the deadline set by the appellate court.
9:15
Speaker 2: I mean, usually you think of special Council offices as
9:18
Speaker 2: being more efficient than that and getting it not waiting
9:21
Speaker 2: until the last minute.
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Speaker 1: Oh, on this one, I have to have disagree with you,
9:25
Speaker 1: and I think by filing a day in advance that
9:27
Speaker 1: was efficient. Most parties were just pilot on the last day.
9:31
Speaker 1: He's got much going on. He did it early, He
9:34
Speaker 1: did it day before he had to. No. No, I
9:36
Speaker 1: give him plants for it. I give him kudos for
9:39
Speaker 1: doing it for federal prosecutors in a high profile case
9:43
Speaker 1: where so much is riding on this. He could have
9:45
Speaker 1: waited another twenty four hours. He did not. No, I
9:48
Speaker 1: think that's fine. I think it's impressive.
9:50
Speaker 2: Let's turn to DC, the DC election interference case for
9:53
Speaker 2: a minute, because, according to Bloomberg sources, Smith has decided
9:58
Speaker 2: against having a he daring to present evidence in the
10:02
Speaker 2: case before voters go to the poll, sort of a
10:05
Speaker 2: mini trial. I wonder what you think about that.
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Speaker 1: You know, I'm surprised. I thought that it could benefit
10:12
Speaker 1: the public to see the extent of Trump's involvement before, during,
10:15
Speaker 1: and after January sixth in a mini trial. But I
10:18
Speaker 1: think it's just that Jack Smith has other considerations. First,
10:22
Speaker 1: I think they're really taking the time to really understand
10:24
Speaker 1: the Supreme Court's ruling. They're going line by line, I'm sure,
10:26
Speaker 1: through the indictment and going up and down the ladder
10:29
Speaker 1: talking the Solicitor General to determine what they can presume
10:33
Speaker 1: and what they can't. They want to avoid some gray
10:34
Speaker 1: area and that takes time. But also I think having
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Speaker 1: a mini trial could jeopardize the case in some ways.
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Speaker 1: Number One, it could tip off Donald Trump and his
10:44
Speaker 1: team as to what the evidence is going to be,
10:45
Speaker 1: what the witnesses are going to say. Number Two, it
10:49
Speaker 1: could jeopardize Trump's sixth a men right to a fair
10:51
Speaker 1: trial and thus jeopardize any conviction on appeal if a
10:54
Speaker 1: judge rules that by doing a mini trial putting on
10:57
Speaker 1: all this evidence, it unfairly taints the jury pool, and
11:01
Speaker 1: Jack Smith wants to avoid that. And then third, Jackamith
11:04
Speaker 1: is very careful about protecting his witnesses, and to put
11:08
Speaker 1: Mike Pence on the stand right before the election man
11:11
Speaker 1: would put him at risk, and I think that's part
11:14
Speaker 1: of it. I think he'd worry about him and other
11:16
Speaker 1: defendants being threatened, intimidating, harassed, and so he may just
11:20
Speaker 1: say that we're just going to try this after the election. Now,
11:23
Speaker 1: one other thing on this June there are some people
11:24
Speaker 1: who think that it's because Jacksmith and America Oland don't
11:27
Speaker 1: want to look political by doing a mini trial this
11:29
Speaker 1: close to the election. I think it's a bad reason
11:32
Speaker 1: not to do this mini trial. No matter what you do,
11:34
Speaker 1: You're going to look political. No matter what you do,
11:36
Speaker 1: You're going to be called out for being political. No
11:38
Speaker 1: matter what decision you make. You've got to just follow
11:40
Speaker 1: the evans of the law and tune out the noise.
11:43
Speaker 2: Okay, Coming up, we're going to talk about the Special
11:45
Speaker 2: council filing a new indictment against Trump. In that January
11:50
Speaker 2: sixth case you're listening to Bloomberg, Special counsel Jack Smith
11:55
Speaker 2: has filed a new indictment against Donald Trump over his
11:58
Speaker 2: efforts to undo the twenty twenty presidential election. It keeps
12:02
Speaker 2: the same criminal charges, but narrows the allegations against him
12:06
Speaker 2: following a Supreme Court opinion that conferred broad immunity on
12:10
Speaker 2: former president. The new indictment removes a section that dealt
12:14
Speaker 2: with Trump's interactions with the Justice Department, an area of
12:18
Speaker 2: conduct for which the Supreme Court, in a six to
12:20
Speaker 2: three opinion, said Trump was entitled to immunity from prosecution,
12:25
Speaker 2: and the updated criminal case no longer lists as a
12:28
Speaker 2: co conspirator Jeffrey Clark, a Justice Department official who championed
12:32
Speaker 2: Trump's false claims of election fraud. The indictment retained the
12:37
Speaker 2: allegations that Trump attempted to pressure then Vice President Mike
12:41
Speaker 2: Pence to refuse to certify the electoral vote count. I've
12:45
Speaker 2: been talking to Palm Beach County State Attorney Dave Ehrenberg,
12:49
Speaker 2: and as far as the election interference case, explain why
12:52
Speaker 2: the Special Council had to file a superseding indictment.
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Speaker 1: Because, based on the Supreme Courts immunity ruling, he can't
13:00
Speaker 1: charge him for things that are within his core official
13:03
Speaker 1: duties as president, and one of those things is appointing
13:06
Speaker 1: an attorney general, having communications with the Attorney general and
13:11
Speaker 1: his team and Trump. Amongst the allegations against him is
13:14
Speaker 1: that he improperly tried to pressure the Attorney general, the
13:17
Speaker 1: acting attorney General, and tried to get him removed until
13:21
Speaker 1: he would overturn the election, and was working with Jeff Clark,
13:24
Speaker 1: another member of the DOJ, to try to have a
13:27
Speaker 1: coup within the Department of Justice. The Supreme Court said, now,
13:30
Speaker 1: all that's within the president's core powers, he's immune, and
13:33
Speaker 1: so they've got to drop everything related to that. And
13:36
Speaker 1: then the rule is so broad that you can't even
13:39
Speaker 1: use official acts as evidence for criminal conduct, even when
13:44
Speaker 1: that criminal conduct is unofficial. So you can't call a
13:47
Speaker 1: witness from within Trump's executive branch to testify on something.
13:52
Speaker 1: These are things that they are going to have to
13:54
Speaker 1: meticularly go through to make sure they're not running a
13:57
Speaker 1: foul of this very broad and very infusing Supreme Court opinion.
14:02
Speaker 2: But the conspiracy to obstruct an official proceeding that remains.
14:07
Speaker 1: That will remain, even though there was a different Supreme
14:09
Speaker 1: Court decision that limited the use of that statute destruction
14:13
Speaker 1: of an official proceeding. But I think you can still
14:16
Speaker 1: charge that. You just can't use his evidence some of
14:20
Speaker 1: the communications that may provide proof that he did obstructing
14:25
Speaker 1: official proceeding. You have to try to get a conviction
14:29
Speaker 1: with one hand, time behind your back. Thanks to the Supreme.
14:31
Speaker 2: Court, Smith's team and Trump Steam are scheduled to file
14:34
Speaker 2: briefings August thirtieth on how they want to proceed ahead
14:38
Speaker 2: of a September fifth hearing before the judge. So perhaps
14:42
Speaker 2: we'll learn even more then. Thanks so much, Dave. That's
14:45
Speaker 2: Dave Ahrenberg, Palm Beach County State Attorney. Sharp. Turn now
14:49
Speaker 2: to intellectual property law and guitars. Who doesn't love a
15:12
Speaker 2: guitar battle to determine which player is the most skilled.
15:16
Speaker 2: But recently, the guitar battle that's been getting the most
15:19
Speaker 2: headlines is the one in court between two guitar companies
15:22
Speaker 2: over trademark rights. Gibson Guitars argues that Dean Guitar's use
15:27
Speaker 2: of the V and Z shapes ripped off its trademarks,
15:31
Speaker 2: and Gibson won the first round when a jury decided
15:34
Speaker 2: in twenty twenty two that Dean sold counterfeit guitars. But
15:39
Speaker 2: Dean won the second round when a federal appeals court
15:42
Speaker 2: recently reversed the decision, saying the trial court had wrongly
15:46
Speaker 2: excluded evidence and ordered a new trial. So are they
15:51
Speaker 2: back to square one? Joining me is intellectual property attorney
15:55
Speaker 2: Ronald Beanstock of Scurency Hollandbeck. He represented Armadillo, the maker
16:00
Speaker 2: of Dean guitars, at the federal appellate court. Can you
16:04
Speaker 2: start by talking about what Gibson was accusing Dean of.
16:08
Speaker 3: There's a lot of guitar history here, and we're going
16:11
Speaker 3: back to the seventies, So set the way back machine
16:15
Speaker 3: and maybe it's just back to the future part of
16:17
Speaker 3: four five. We're talking about electric guitars here, and much
16:20
Speaker 3: more so on the rock side. Of things not really
16:22
Speaker 3: jazz guitars. You know, there are a lot of different
16:25
Speaker 3: types of electric guitars, and everybody has a sort of
16:27
Speaker 3: thing about growing up with. My first guitar was this,
16:31
Speaker 3: and so I've stayed with that body style. Some people
16:35
Speaker 3: are devotas and by ten fifteen of a certain style.
16:38
Speaker 3: So we're going back to the seventies when upstart companies
16:42
Speaker 3: started to make these guitars that weren't being made by
16:46
Speaker 3: the older builders, if you will, The Gibsons defenders think
16:49
Speaker 3: of this nature and started to compete with them. And
16:52
Speaker 3: one of those competitors was a company called Dean Guitars
16:57
Speaker 3: started in the Midwest nineteen seventy six nineteen seventy seven,
17:01
Speaker 3: starts to bring out instruments, in particular shapes. Two of
17:04
Speaker 3: the shapes at issue here are shapes you've seen before.
17:08
Speaker 3: One is called a V literal V Gibson. The first
17:12
Speaker 3: was a flying V and an Explorer shape or called
17:16
Speaker 3: by Dan at the time the Z shape. And to
17:20
Speaker 3: just make matters more complicated, stay with me on this.
17:23
Speaker 3: These were guitars originally introduced by Gibson in nineteen fifty eight.
17:29
Speaker 3: In nineteen fifty nine as an attempt to say that
17:32
Speaker 3: Gibson to be competitive with the upstart in those days
17:36
Speaker 3: Fender Fender Guitars was building solid body guitars. Gibson did
17:41
Speaker 3: not build a lot of solid body guitars, and they
17:44
Speaker 3: brought these these unusual guitars out solid body guitars, showed
17:48
Speaker 3: them at a major trade show and they were miserable failures.
17:52
Speaker 3: They made one hundred of one of them, the V
17:54
Speaker 3: and twenty two of the Explorer, and they were gone
17:58
Speaker 3: and you didn't see another one of these V guitars
18:01
Speaker 3: until nineteen sixty seven when Jimmy Hendrix started playing a
18:05
Speaker 3: V that was hand painted by a friend of his.
18:09
Speaker 3: And you didn't see the Explorer shave come back until
18:13
Speaker 3: Dean and another company called Hamer started building these, saying hey,
18:18
Speaker 3: I can bring these back, I can reintroduce these, and
18:21
Speaker 3: they did and brought them back in around seventy seven
18:24
Speaker 3: with features and parts that people were looking for.
18:29
Speaker 2: And what was the guitar market like.
18:31
Speaker 3: So guitars can be very analogous to cars. I am
18:36
Speaker 3: not a car guy necessarily, I am a guitar guy.
18:39
Speaker 3: But there's hot rotted versions of these guitars literally where
18:43
Speaker 3: pickups the thing that picks up the sound from the
18:45
Speaker 3: strings is a very specific bill and certainly it's electronics,
18:51
Speaker 3: so there's a certain sound to it, and you go,
18:53
Speaker 3: I like that sound. I can't get that from my
18:55
Speaker 3: other more standard Gibson's orfenders. That's how competition occur in
19:00
Speaker 3: the guitar marketplace. Musicians say I really want that sound,
19:04
Speaker 3: or i'd like that guitar that I enjoy playing that
19:07
Speaker 3: looks like this, but it doesn't have the features I want.
19:10
Speaker 3: So can you put those features into that shape? Sure
19:13
Speaker 3: I can, says builder. I can do that, and I'll
19:16
Speaker 3: put them into the marketplace. And maybe it's a fancier
19:20
Speaker 3: wood top veneer of a very track of wood, or
19:23
Speaker 3: a certain paint job or finish. Very much like fancy cars. Right,
19:28
Speaker 3: everybody wants to have their car hot, ride it up
19:30
Speaker 3: a little bit, and that's how you get here. So
19:34
Speaker 3: that's the background of the where Dean started. Dean makes
19:39
Speaker 3: these guitars for a solid ten plus years, and like
19:44
Speaker 3: most companies upstart companies, they go through some trials and tribulations.
19:49
Speaker 3: There's a couple of versions of that company, and eventually
19:52
Speaker 3: in the nineties it is sold and eventually Armadillo distributor
19:57
Speaker 3: buys the brand, Dean puts the brand on a higher
20:01
Speaker 3: level in the marketplace and brings it out and starts
20:03
Speaker 3: selling Dean model guitars and continuously does that. So you've
20:07
Speaker 3: effectively got these guitars, these shapes for forty plus years.
20:13
Speaker 2: So that brings us up to Gibson's suing. Dean tell
20:17
Speaker 2: us what happened there.
20:19
Speaker 3: In twenty nineteen, Gibson sued Armadillo slash Dean, saying, hey,
20:26
Speaker 3: you're infringing and making counterfeit products, and of course Amadillo
20:30
Speaker 3: Dean's response in the trial, which we did not handle,
20:33
Speaker 3: was logically, we've been making these for a long time.
20:37
Speaker 3: Latches should apply. What have you guys been doing for
20:40
Speaker 3: the last forty something years? And more importantly, happy to
20:43
Speaker 3: be account offit. We put our name on it, and
20:46
Speaker 3: it's got a very specific unique headstock. That's our trademark.
20:50
Speaker 3: We have a trademark on that.
20:51
Speaker 2: Doesn't Gibson have a trademark on the shape.
20:54
Speaker 3: Gibson doesn't apply for a trademark into the latter part
20:57
Speaker 3: of the nineties for these two guitar body shapes and
21:01
Speaker 3: their two dimensional outlines of the V just the body
21:06
Speaker 3: of the V and the two dimensional outline of the
21:10
Speaker 3: body of the z Or Explorer. They do get those
21:14
Speaker 3: two trademarks, yes they do.
21:16
Speaker 2: So Gibson is accusing Armadillo Dean of violating those trademarks.
21:22
Speaker 2: Was Dean's main defense, that the shapes were generic.
21:27
Speaker 3: So the defense position is that these body shapes have
21:31
Speaker 3: been made by countless third parties, and we can prove it.
21:34
Speaker 3: We have evidence to prove that, and we're going to
21:37
Speaker 3: show that at trial that everybody, not just us, we're
21:40
Speaker 3: not alone here, that everybody in the guitar marketplace for
21:44
Speaker 3: some period of time. And remember Gibson stopped making these
21:48
Speaker 3: guitars for a long time. One well over five to
21:52
Speaker 3: six years and the other one is more like sixteen
21:55
Speaker 3: to seventeen years. Gibson, they weren't focused on these guitars
21:58
Speaker 3: per se. They may have made some of their own,
22:00
Speaker 3: but everybody else was making them, and everybody else was
22:02
Speaker 3: advertising them and saying here, this is my version of
22:06
Speaker 3: this guitar style. Look that I have different things online.
22:10
Speaker 3: You should try mine, and then you also have them
22:13
Speaker 3: advertising using and it's very big in the instrument business.
22:17
Speaker 3: Endorsers very much like sports equipment. Look at us. We've
22:21
Speaker 3: got this famous guitar player, and musicians are heavily influenced
22:27
Speaker 3: by who plays what. You know, when you've got a
22:29
Speaker 3: famous guitar player playing a certain style of guitar, people
22:33
Speaker 3: gravitate and they go, I want one of those. In
22:35
Speaker 3: the instrument side of things, we call it gas guitar
22:38
Speaker 3: acquisition syndrome. Got to have that, I got to have that,
22:41
Speaker 3: and people seldom have one guitar. People have lots of
22:45
Speaker 3: guitars Armadillo. Dean's position is that lots of people made these. Therefore,
22:49
Speaker 3: we're going to prove that these marks are actually generic. Sure,
22:53
Speaker 3: you may have gotten a registration and at the time
22:56
Speaker 3: people didn't oppose, and that happens. But just like the
22:59
Speaker 3: Fen case, the Stuart Specter Versuspender Music Instrument Corporation case,
23:04
Speaker 3: we're going to show decades of usage by other companies
23:09
Speaker 3: makes this generic and have a trademark in something that's generic.
23:12
Speaker 3: On the eve of trial, the court held something different.
23:15
Speaker 3: The court allowed a motion in Lemonae which was a
23:18
Speaker 3: wholesale solusion of evidence of all of these prior years
23:23
Speaker 3: of usage by third parties because they're being accused of
23:26
Speaker 3: copying them, but you can't have a trademark in something
23:28
Speaker 3: that's generic. On the eve of trial, the court allowed
23:32
Speaker 3: a motion in Lemonae which was a wholesale solusion of
23:35
Speaker 3: evidence of all of these prior years, and that affected
23:40
Speaker 3: the trial, and hence, I think, is how you get
23:43
Speaker 3: the somewhat unusual decision. The verdict from that trial, four
23:47
Speaker 3: thousand dollars worth of damages latches applies. But you're a counterfeitter.
23:53
Speaker 2: How far back did the judge allow evidence of similar shapes?
23:59
Speaker 3: Only ninety two, So that's still a long time. Well,
24:03
Speaker 3: remember when the guitars got brought out. They were brought
24:06
Speaker 3: out in the fifties, they stopped making them and other
24:09
Speaker 3: people made them sixties, seventies, eighties, nineties. So you've got
24:15
Speaker 3: four decades of evidence of third parties. And all these
24:20
Speaker 3: third parties go to the largest guitar market in the
24:23
Speaker 3: United States. Not all of them are made in the US,
24:26
Speaker 3: but they're imported here. So you've got decades of other
24:30
Speaker 3: third parties bringing guitars like this into the United States
24:34
Speaker 3: and selling them here, advertising and selling them here.
24:36
Speaker 2: Now, the Fifth Circuit reversed. Tell us about the Fifth
24:40
Speaker 2: Circuit's decision.
24:41
Speaker 3: We were brought into handle the appeal. So the Fifth
24:44
Speaker 3: Circuit fully reversed and remanded and said that it was error,
24:48
Speaker 3: that was abusive discretion by the lower court to have
24:50
Speaker 3: had this wholesale exclusion of evidence, and said that the
24:56
Speaker 3: defendant was deprived of fully being able to present the
24:59
Speaker 3: evidence they f that they could in terms of proving
25:02
Speaker 3: the genericism of the marks. So it's been reversed and remanded,
25:06
Speaker 3: and you know, there'll be a new trial.
25:08
Speaker 2: Gibson had asked for an on bank hearing of the
25:12
Speaker 2: full Fifth Circuit. What happened to.
25:14
Speaker 3: That the initial appeal was a three to zero decision,
25:17
Speaker 3: and they requested on bank and that was rejected. Outright,
25:21
Speaker 3: It's hard.
25:21
Speaker 2: For you to judge this as the attorney who won
25:25
Speaker 2: at the Fifth Circuit, but you're going back to trial
25:30
Speaker 2: basically starting again. How big a victory was this.
25:33
Speaker 3: I think there's two crucial issues here. One is, you know,
25:38
Speaker 3: everybody loves to claim a victory lap. This is truly
25:40
Speaker 3: a victory lap. They can't be claimed because that decision
25:44
Speaker 3: in the lower court did prevent the defense from being
25:48
Speaker 3: able to present this evidence. And there's other issues here
25:51
Speaker 3: that probably won't make its way through the process because
25:55
Speaker 3: they's somewhat extra territorial. But there's precedent for this type
25:59
Speaker 3: of case in other jurisdictions. You know, in Japan, there
26:03
Speaker 3: was a high court decision in Japan in two thousand
26:07
Speaker 3: that said that all Gibson trademarks were generic because everybody
26:11
Speaker 3: had used them, if you will, copy them in Japan
26:15
Speaker 3: unfettered for decades, and they didn't have any protectable interest
26:20
Speaker 3: now in this intellectual property in Japan. So you can
26:22
Speaker 3: make any type of product in Japan that may look
26:25
Speaker 3: like a Gibson model, and that's been going on for
26:28
Speaker 3: twenty four years. There's a case in Europe, in the
26:31
Speaker 3: EU that one of these models, this Flying D model,
26:35
Speaker 3: that is also now to be judged generic. It was
26:38
Speaker 3: appeal that lost. So you've got other other jurisdictions that
26:41
Speaker 3: understand that certain guitar bodies, certain guitar shapes have become generic.
26:47
Speaker 3: Everybody's made them, everybody's used them. And that's why I
26:50
Speaker 3: go back to that Fender case because that's exactly the
26:54
Speaker 3: same theory. Vender tried to bring trademark applications for three
26:59
Speaker 3: of the most popular guitar shapes in the world and
27:02
Speaker 3: they were unable to. I know that because I tried
27:04
Speaker 3: that case. The matter is very clear. The parallels are
27:07
Speaker 3: so stark that there are enough popular guitar shapes that
27:10
Speaker 3: people make their versions of them and have made them
27:13
Speaker 3: for decades. And the impact is that the usage of
27:17
Speaker 3: third party in other cases. I think this case that's
27:20
Speaker 3: the President, is.
27:21
Speaker 2: The Gibson's more popular than the Dean. I mean, what
27:25
Speaker 2: as far as today's musicians, Well, these.
27:28
Speaker 3: Are pretty specific. These are interesting guitars that you really
27:31
Speaker 3: the v literally you can't really play sitting down, so
27:34
Speaker 3: it's just like a rock guitar kind of thing. It's
27:37
Speaker 3: definitely an image type of guitar. And then the Explorer
27:40
Speaker 3: is also a little more difficult to play sitting down,
27:43
Speaker 3: also very sort of rock. Look, we remember they were
27:45
Speaker 3: brought out in fifty eight and fifty nine during the
27:47
Speaker 3: Sputnik era, sort of space age for the time. Are
27:51
Speaker 3: they more popular? I don't think these were anybody's best sellers,
27:58
Speaker 3: but I think these particular shapes were very much associated,
28:02
Speaker 3: particularly in the seventies and eighties with Dean that people
28:07
Speaker 3: knew the the V's and as they called them, Disease
28:11
Speaker 3: were amongst two out of the three most popular Dean
28:15
Speaker 3: guitars because they had, like I said, specific shape, but
28:18
Speaker 3: different finishes and different features that were really popular. But
28:23
Speaker 3: are they the most popular. No, they're not the most
28:26
Speaker 3: popular for anybody.
28:28
Speaker 2: Well, it will be fascinating to see if there's a
28:31
Speaker 2: different verdict the second time around. Thanks so much for
28:34
Speaker 2: joining us. That's Ronald Beanstock, a partner at Scarency Hollandbeck.
28:39
Speaker 2: And that's it for this edition of the Bloomberg Law Podcast.
28:42
Speaker 2: Remember you can always get the latest legal news by
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Speaker 2: subscribing and listening to the show on Apple Podcasts, Spotify,
28:49
Speaker 2: and at Bloomberg dot com, slash podcast, slash Law. I'm
28:53
Speaker 2: June Grosso and this is Bloomberg