ok all right you know how the court made the call the case like apple provides computers and phones and just like h and r block provides consulting services so too do my clients provide horse races it is the business that they are in  and customers of my clients access that those products and services in a number of ways i think the most obvious of those is when you actually show up to one of these horse racing venues and you witness those horse races taking place in front of your eyes  but that's not the only way that you can gain access to those products and services for example you can also go to an off site betting facility who has license the video real time video of those races to be displayed at those off site betting tracks and so customers can go to those betting locations and view the video in real time to wager on those games more recently there's been a third way in which customers can gain access to these types of  races and and and videos and other materials and that is by what we're calling historic horse racing systems these are a new way of wagering on horse races that involve showing to a customer an anonymized set of information about a race that's taken place in the past and allowing a patron to wager on those anonymized facts to decide which horse they think is going to win that race and then after the wager is placed to reveal the results of that race so that  the patient understands what they won or lost that wager but also to legitimize the results of that wager so the patron doesn't feel that the computer has just taken their money but there's a legitimate reason why they want to lost the reason we're here today is because there's now a fourth a fourth issue a fourth way in which these patrons are able to wager on horse races and that is through the defendant's system this exact a gaming system and  all the other ways that i've described already in this argument in that fourth way they do not gain access to the videos that my clients provide they do not gain access to the actual races that my client  provides what exactly does is rather than license the actual video from my clients they fabricate their own videos and they put my clients trade names on those videos that is the reason that we are here today that is the reason that we right we're protecting a number of ways certainly we have copyrights in the video itself but in addition to that the trade names that exist for all of our horseracing venues are shown or depicted with that video there on the video and the licensing between the gaming company that shows those videos and the horse racing tracks licenses all that intellectual property including the trademarks which designate the origin of that race the source of that race which is of course what the trademark is designed to do since your question on the fourth the fourth way the one that you're challenging when you see this you're saying it's a reenactment meant to look like a real video that's correct what is done in that fourth instance is rather than all the other ways which is you actually seeing the horses the real horses whether it's in a live broadcast or a recording that's replayed this fourth way the exact a way is a computer generated video like a video game that shows horses trotting down the track towards the finish i guess that's my point i mean no one confuses that with the real race or do they are you claiming that the claim that we are making is that the consumer is confused as to where that race came from did our clients generate that computer video did our clients generate the underlying data that drives that video are our clients sponsoring or otherwise affiliated in some way with this because up until now all consumers who have access to these types of materials have seen a real video with the name of that venue put on top of it but are you saying is there are you saying that the public is can use regarding whether this is actual video of a race conducted at one of your clients then news or are you saying that they're confused they know it's simulated video but they're confused as to who is behind it the customer's experience  anywhere i believe the answer that is yes your honor and the concern more importantly for us is even though i don't think there's any dispute that when someone uses the system it's clear it's an exact a system the question is what about constituent parts of that system the video that's driving at the data that's driving it this is this is these are real races that are being described and that upon right but that's part of the issue your honor is we don't know whether these these her i have does this she's differ from let's say somebody writes a story in a newspaper and say is his the historical fact that this rise occurred in your particular vineyard and that seems to be i mean this is this wagering experience merely describes where the historical of in the race occurred why is it more than that your great question i think there are two reasons number one it's not just that they're saying a race happened they're  actual reenactment of that race they're saying this is the the race that was produced by this company churchill downs this is the race that happened there so they're attaching they're not just reporting a score or anything  these simulated rices that would make somebody think they're the real race a real a video of the real race no your honor no it's all about whether this computer generated information this video is being provided by a horse racing track which is traditionally where this product comes from or whether it's being provided by exacta i feel like i'm being dns because i don't understand i wonder stan really the underlying motivations for this litigation i would assume there's a sort of a racing fan who enjoys going to these particular race there's a similarity there i would be it would be to the advantage of the track owners to have this to arkell that about where these rice occurred had the public become more familiar adult get it would seem to me that this might well be a benefit to your clients well i think the problem here your honor is normally we are we form relationships with these companies and we license our our trade name to them and we partner with them in a way that for trademark perspective allows us to control the quality of the product that we're putting out here our name is being applied but we have no access to the video we have no way to determine that it's accurate we have no way of controlling how it's being presented what about the reality that at the point of purchase your client's names are not being used they're there are there are there are many different ways in which trademark infringement can take place and it's i mean it's just the normal point is that the point of sale something is misleading and the nature of this is to bet first find out later where this race was run and then i guess there you're going to lose your money but legitimizing that but it's also in the brochure is it's there is also in the marketing materials yes that's correct well and you know people bet your race track too right you're going to lose or at least i know i don't know anything that horse racing but i think that getting out of how your your course places you could not only if i could answer that maybe sustainably i would say trademark laws designed to protect more than confusion as to whether the system as a whole is our system or exacta system there are any number of ways in which trademark law protects designation of source and source can include where the product as a whole is coming from where constituent parts of the product are coming from or whether it's an affiliation or sponsorship and so it's a broader issue when the question that just as a question what happened to this case if all you have is we're going to give you the you don't know the horses you don't know where the race is all you know is their statistics in which they've won it's a through h or whatever you bat and when it's over you just hear the results and the track at which it was so you know you can check to make sure that was the results of that track would they be displaying are our trade names in that process it looks you know it looks just it looks just like this except you don't see the whole race you just see the final tally who came in first through eight you see this video obviously not real view of the track but video but it's a track with horses just standing still they're not moving and then you have the name of the track where it happened in the day and so forth what would you have a claim then we would here's why i'm so what's the difference between your hypothetical and what's happening here i thought part of the experience here was also this quote quasi reenactment yes if you go see you don't have that little video at the end well it's a minute half or whatever it's a very short video but i think you're honest question is what happens if we remove the video and just say here's the score here's the result in the sixth circuit and i think the circuit does it properly when you when you have a case in which one company is using another's trade name to refer to that other company which is what we have here normally should see normally in other circuits like the ninth circuit that's considered potentially a nominee to fair use and so there's a question about whether you satisfy these separate elements for naaman to fair use in the sixth circuit this circuit says we're not going to look at knowledge of fair use instead we're going to conduct a likelihood of confusion analysis to determine whether that use of the third parties trade name as an identifier for source so to trademark use constitutes a confusion a confusing use as the consumers would see it because after all that's really the whole point of all this and so you would say not much risk of confusion what we would say is we need to do that evaluation and just to understand a way out of time but to to leave to leave this thought into risk question yes i'm sorry ron what's the potential risk of confusion at that point i don't i don't get it i mean you're betting on anonymous race and because you like to bet and then you find out the results and you have to have some way of measuring whether it's accurate which requires date and track the the question is not from our perspective the question is whether the consumers the the appropriate consumer base is confused and i think one of the things that i would say ron and i agree with you by the way that as you remove pieces your move the video it gets to be a harder trademark infringement case of is any question about that but but the point of the likelihood of confusion analysis is to step into the shoes of that consumer and see whether one of the circumstances they are confused or not and the point i would make here is this case was resolved rule twelve that analysis has never been performed so for example one issue that i think is an important one here is up until the use of the exacta system every consumer who waged in these types of situations always saw a race which was the product of my client venue's every single race they ever saw ever came from my clients venues and now those same consumers with that contextual background are being presented with an animation of a race just like the real ones they used to see with a trade name on it  now they're seeing an animation of a race except we didn't produce that race anymore it's been produced by someone else and our trade names being put on it and so one of the questions is a consumer with that background having seen and dealt with a particular repeated pattern of a product coming from my clients with our name on it in a certain package now the package is the same but the product is different so it's like the bumblebee tuna case right where you're allowed to say we've got bumblebee tuna in our product we make a tuna salad we can say we have bumblebee tuna in it we're referring to that third party trademark third party company we're saying we're going to be tuning it it's like that case except the tuna isn't bumblebee tuna the race isn't our race it's something that's been fabricated by the exacta systems company and it is not ours but our trade name is being slapped on a little ok i just have a few questions first of all weird where does this program where two people interact with this there are a number of places i think my understanding is that right now the only place that exists is at the kentucky downs horse racing track so you can go outside and see an actual horse race or if there are no horse races taking place you can go inside and wager on these electronic was ok so it's actually taking place in the type of venue that formally had the video so at the same venue you actually can do live racing you can do simon kast video wagering and you can do this electronic wagering so again everything else that they've dealt with so far the source of that racing ok is from the venue all right so identifier one of the one of the points i sadly didn't get a chance to make is in this case unlike many of the other cases that are cited in the briefing we do not have trademarks that have two meanings so apple is a perfect example apples of fruit apples also a company that makes laptops the non trademark use cases are cases in which you're saying i got a bushel of apples there is no non trademark use for oak lawn before oak lawn was a trade name it wasn't anything if i well it's not it doesn't have another meaning correct whether there's an non trademark use is really this case but in any event now you've made the point that hereto fore whatever dave watch that's been something other than live has been the product of one of your plaintiffs in the sense that it was produced at the track and that now there's a new product that looks like that looks like it's produced by your plane lives but it's not it's a different product what does that product consist of and maybe this goes back to judge sutton's question but what is the product consist of  if it's a prior race that baxley that is a fact i mean this claim this case is not about them telling people that this was the rays at at churchill on this day or whatever and these are the result and it's not true i mean so what's the product that is no that's and you're not saying that there's confusion in whether that video is real or not so what is it it's whether the when the consumer sits down at that station to play that game and sees that video is the consumer thinking oh it's very clear that this is coming from and has nothing to do with oaklawn or is the consumer thinking oh oakland generated a computer version of it's the results of its race or generated data from which a computer version can be created why does everything all right well i mean it does it's not the venue for every single i'm using that as an example of how different every time the customer pat pli used that to see a different venue so why would he think oakland for example had anything to do with it because  that's placed on the particular video they're looking at and so this is analogous to people that want well in a sign will cast scenario where someone's in a parlor and viewing a number of different races taking place a number of different tracks they may wager on oaklawn race and watch that video which says oakland but they looked different when that's the real race they look different and i understand i see there's a confusion there the point isn't is this real or not the point is is this thing this video that i'm seeing being on third by the venue or created by the venue yes your honor could it be if they all look at zach the same well they don't because the results are different they're all generic correct but the question is really again trademark law is broader than just is this whole system mind trademark law is all about sponsorship all about affiliation all about where the data under law is coming from confusion about whether the video is real or not but rather whether given the history of this type of material always coming from our clients whether it's coming from the venue whether it's coming from the venue did you say to the judge this is in approach don't rule now there really are i mean we've played an adequate claim there really are issues we have people who are going to testify to confusion we weren't given permission to have oral argument on this issue i certainly would have said that and we certainly said in the briefing thank you thank you very much  so i'm here on behalf of the exacta systems mr william hoskins is here on behalf of kentucky downs i'm going to do the argument if you have any specific questions for kentucky downs i may defer to mr hoskins otherwise i'm here to state our position answer your questions on a theme rather unfair that you can get around whatever copyright law is put you in the position of having to get licenses say this is just historical and then do the simulations that look like a horse race and put their name down i mean why don't you have to just say louisville or lexington or some other stand in need of what why don't you the owner then you get to use their name and make it sound like and take advantage of these ra your honor that's answered a by the supreme court's decision in feis publications for says rural telephone facts are not protected bill that's that's basically what the supreme court said in that case and companion cases i would say  telephone books and people's telephone numbers and basically the complaint was the former telephone company said well you can't copy our telephone directories because we put all this effort into collecting all these facts and the court said no no these are facts can collect you can make a telephone book in the other two cases there are major league baseball cases the fell players case or situations where people were using the names of players from the n f l image league baseball they were using their statistics in to do it for example fantasy football and things like that and the courts basically said look these are facts you're free to use facts happened with purely factual reenactments of football super bowls where it's animated so it's you know no one would look at it and think that's that's someone's video of what really happened in one thousand nine hundred nine so what it is is that santa mated and you get to watch the whole game and the producer of it doesn't have to pay anything to the n f l or the teams and that would be defended or copyright law if that was considered to be an unfair use of the copy underlying copyright information i went out that would be problematic though but however what yes it would be problematic it would be yes however it would not be a problem if i reported the finish of the game that the patriots won on a field goal and she just did that that's what we do to your honor i thought there is this reenactment it's three seconds it's just the finish of the race we just show the horses are crossing the finish line for three seconds and the reason we do this is not because we're trying to trade off of their rights it's because the government of the state of kentucky in the commonwealth of kentucky has ordered us if you're going to put to understand which take a step back to understand what these machines are their machine  hopefully the court has some experience with slot machines they look like a slot machine exactly what are you what are you accusing us of you know i'm not accusing you of anything your honor but there look like a slot machine and they're played in a very similar fashion basically the people walk up there  if you look at the only evidence that's really in front of in the cage which is the exhibits to the back of the complaint there's a series of screw and you can see in this on page one fifty eight and it shows you the series of screens that the patron would would see you as they walk up to the machine the top screen is the last screen they see when the wagers actually accounted for the earlier screens give them the basic information they need to make to place the bet that horse racing is not shown in the earlier screens they have no idea what horse race they're betting on to finish accurate i know it's accurate in the sense of who won and lost but his or the horse is in the right lane and the distance you know you won by want to have flanks and that's actually just because the law requires that as well what is the kentucky horse trading horse trading horse racing commission requires that there be a video reenactment as part of this that's part of the regulations accuracy that is i don't know  what the reason is they did it but they did it that way just at the just to the finish yes and recently what happened is there was an argument in kentucky that we went through as to whether had to be live video or not live video if they wanted to protect them maybe that was the idea and kentucky said you can do it with a with a reenactment like ours you don't have to have live video what's really if you want to know what's really going on here i don't know how much outside of a motion dismiss record i can get into but this is one case among many between these parties what's really happened is these people had these machines at kentucky downs and then they had a breakdown in their relationship to kentucky jones brought in exactness machines and these people have sued stop us from competing with them in the area of horse historical horse racing machines would be happy to license it i'm sorry for that to happen to license it actually that's that's a question i think that what with what the actions they've taken thus far that if you look at the brochure the tracks we've got from the brochure are mount mirror because see you know rockingham park inter paradise and none of those three tracks are in this case that's what's on our brochure so when a customer let me give you the customer experience the customer walks up to the machine knowing they're basically going to play what's a quad what they view as a chance to be machine and it's a more like a slot machine experience because it happens rapidly you put your money and you're given anonymously the the away of possible bets you can make huge so like your horses and then you're pushing huge you push go what happens next as you get a little quick three second video and which was the kentucky requires us to do that and we're required to put location your honor one of the things that he said time to handicap sure you can set see it rapid fire i mean you could almost a lot of customers just don't bother to do the handicapping they just they do the automatic feature but if you wanted to as a customer sit back and handicap you can sit there and take your time and handicap it but what i'm saying about is the reenactment only happens for three seconds at the very end after you've already placed your bet your money is in the machine and and you don't know which track you're going to get up front kentucky horse racing horse racing commission to present a case on these are consumers who were confused and then you say that's not realistic and you bring in other people who weren't in the judge waves and says is that really possible and then supreme court to basically and in my experience shifted the analysis they basically say look if you're going to bring a complaint you don't bring it on in a conclusory basis and say there's a likelihood of confusion and therefore do something court you have to plead specific facts and these facts mr brophy just gave you about the about the quote experience of the customers are nowhere to be found in the record are you saying that the claim for copyright infringement in the first place and then we've got a failure use argument if i'm not i'm not sure of that that i have this entire i'm not sure i have everything that might be considered in the trademark and the other is fair use my understanding is this yet in the trademark the court looks at it and says to me that's a non clear that's a clear non trademark fair use we're done we don't have to spend time and money  on on discovery and experts and all the rest i can dismiss this case if for any reason the court has a doubt that there might this might generate a small sum some small amount of confusion because the likelihood of confusion standard doesn't say there absolutely be no confusion it's because you can't help everybody there you're going to find some people who are going to be confused but the likelihood of confusion standard basically says we decide there's going to be too much possible confusion we're going to allow that in the fair use standard kind of stands in the middle and says well we see where there might be a little bit of confusion but in it i'm told roll when you look at the the interests of the public in free speech and what have you versus the interest in the trademark owner that small amount of confusion is not a big deal and the alleged infringers actions were in good faith there has not been a single fact that we were in bad faith in fact the only facts the district court found was the kentucky horse racing commission's rules are you've got to have a little reenactment you got to put the location and you got to put the date of the race now your honor response your question if i said the late the race was in louisville kentucky what if i told you the race was in santa ana california do you know maybe you know what the track is what if i told you is in rockaway new jersey to me the people are just like he said these gamblers are people who understand horse race betting that's one of the things that's missing in this we're not talking about people who've never bet on a horse race horse the people who bet here and when you bet on a horse race when you get that little ticket that i bet on a horse race guess what it has on it has the name of the track it has the number of the race and the date that's just how they communicate in this business newspaper or the newspapers there's a great example they give you the names of the track which the judge referred to in his decision judge starters did it so this is just like what you see in the newspapers the name of the track the name the number of the race and the date and that's how you keep track of that i think the reality is your honor is i think a lot of a lot of the people who are going up to these machines are not interested in sitting there for an hour a minute and a half watching the race they're interested in finding out that they would lose the battle sheet i think there a number of people who may feel that way about it because they have seen these people playing these machines they play them fairly rapidly and they do have a function where you can skip the the choosing but there are some people who sit there very  studiously and you know go through the odds and pick the ration but i think the kentucky horse racing commission does not require us to play the whole race and so we just have to play the finish and if the kentucky is your question or if the kentucky horse racing commission did not require us to put this information in the machine in order to be because we can't put these machines in without their approval that's the problem here if we don't have their problem we can't do this and so i don't know if the kentucky horse racing commission would say if i simply put rockaway in new jersey if that's going to be enough to identify to the person where the race was it's much better to say one of the track tapes because that's the that's the way people talk in this industry w hat if they required that you have actual video i mean they can authorize you to violate the other party's right you're right they can't do that but they did not require that and then maybe i misunderstood the is his actual historic is betting on actual historic racing with the actual replay a bailable at these venues is well is not ok so your option is the venue where you are simulcast from other venues that are actually racing there that day and this or is there another option i believe these are the three options you can it if there's a real horse race going on which is really what the services are there providing you can go but i'm not simulcast means there's a real horse race going on at another track and of course when i get a simulcast ticket it tells me the name of the track at the but the only thing here but they're also getting money they're sharing the pool but they're not licensing the trademark rights but aren't they sharing in the pool they're getting money but not because the trademark rights are getting money because they're giving the video right right ok but said but this is the only historical racing at these venues correct that the can at kentucky downs at least is the only one but we used to have their system and then we replaced it with this i think it's very important to step back for me and and look at this where we are in this case we're not after trial we're not summary judgment we really rule twelve dismissal and what do you have in your complaint supporting the likelihood of confusion we allege a number of things use of the video appending our name to the video the fact that that appending of our name and showing that video with our name  indicated a source of confusion because of sponsorship and affiliation we had we had a number of things put in our complaint related to that the the district court's decision didn't find that our pleading was insufficient that's not what's up on appeal here the only issue up on appeal at this point is is this a trademark use and if so does fair use apply i'm looking it i'm looking at the trade mark infringement section of your compliance and in order for it to do anything other than and ledge you know a likeliness to cause confusion it's got to be tad to some factual allegation earlier in the comply because it's certainly not in the trademark infringement section on page so where would i look to fand that actual allegations with respect to likelihood of completion i don't have with me at this moment your honor but for example we allege that they do show the adversary would have been correct under the current pleading standards but there's got to be something other than the legal confusion then the then the ultimate conclusion left of it legal conclusion because that's not one of the issues that rip on appeal and but but well i mean you're here on an appeal from the dismissal based and it's correct that the district court didn't talk about names are the facts i'd like him to answer but always look if you go onto another one that is correct though the allegation of of trademark infringement here and the likelihood of confusion arises from the ethics ation of our trade name on a video it is we just the know it's not anything else it's well as the ethics ation of the trade name on a video that is not ours but that purports to be from our racetrack and it's also the alley really not the use of your day appears in the video i thought your name appeared like somewhere over here after is the video concluded to show where the rights to curd the our name is is literally placed onto the video as it's shown just the way that in some old simulcast you have the real video will isn't only the youth's not the use of your night it's the placement of the name on the video it's the use of our name in the particular way they're using it so they're using our name and that's that's what i want to get to is we have to look at this in the structure that have been the answer to the initial question about why is this any different from printing the name of your client as a location in the kne is the questions that are before this court are is this use a trademark use and answer that question you have to ask is are mark being used as an identity for source the answer is unquestionably yes exact a says that they're briefing they say they're using our twelve the six problem the trademark use question i believe is a i don't want to say thing that's wrong because i don't know whether it also includes underlying factual questions i don't i guess my my reaction is it's much more of a legal question than like that of confusion point that is certainly true there are yes but if if as is the case here this is a trademark use this is not like any other cases where you're using the trademark in its apple sense to describe the fruit they are using our trade name to designate the source of the races that they're showing it is a trademark use and so the the district court's decision that this was a non trade mark hughes is not correct for that resource of the information the source of the races yes but that's the same as in a newspaper and that's they struck the act right and that's so that is that is a trademark use then the question under the sixth circuit framework is apply the likelihood of confusion factors to determine whether in this instance it's an acceptable use of the trademark or a and unacceptable use of the trademark but in order to do that you have to look at the likelihood of confusion factors which has not taken place here yet but before you got to that let's assume you concluded this is a trite marquees you've still at this juncture got to figure out whether fair use bars to climb from proceeding further that's correct your honor what i would say about that is in the sixth circuit there is only one type of fair use and that's classic fair use and there are two important requirements for that classic fair use number one it has to be a use of the mark in its descriptive sense apple is a fruit not apple is a computer here they fail that test because they're using