Tuesday, 16 January 2018
The USPTO can no longer ban scandalous and immoral trademarks. Erik Brunetti wanted to register the word “FUCT” for his apparel line. The USPTO refused registration because the word sounded like a swear word. Erik appealed to the Federal Circuit. The appeals court overturned the ruling saying that the government’s rule against registering profane, sexual and otherwise objectionable language violates the First Amendment. Acknowledging that the government didn’t have a substantial interest in policing offensive speech, the Federal Circuit opined that the First Amendment “protects private expression, even private expression which is offensive to a substantial composite of the general public.”
**WHY YOU SHOULD KNOW THIS. ** With this decision and the decision in the Slants case (“Bleeping Trademarks” Blawg post of 1/12/2016 and 3/29/2016), the courts have drawn the line in the sand regarding trademark choice. The USPTO is being told not to determine registrability of trademarks based upon whether something is offensive to a certain segment of the population. But the impression a trademark makes is very subjective. A trademark should always take the potential consuming audience into account. In this case, Erik’s market is the skateboarding crowd. To them, the jokey and offensive nature of the mark might be a good selling point. However, the same may not be true if Erik’s market was a more a sedate one, like banking for instance.
Tuesday, 09 January 2018
Welcome to the Second Annual Crippys. The Crippys are awarded to those who achieved infamy by committing Intellectual Property crimes during the previous year. In other words, an IP Criminals Hall of Fame. The field of candidates was crowded last year. But the award winners rose to the top. The 2017 Crippys go to:
Second Runner Up Crippy Goes to David Nosel: David was an executive with Korn/Ferry International. After he left, his ex-assistant gave him a password with which he could access his former employer’s computer system. He used the password to hack into the system and steal trade secrets. David’s conviction for violating the Computer Fraud and Abuse Act (“CFAA”) was affirmed by the Ninth Circuit Court of Appeals. The CFAA criminalizes accessing a computer without authorization or exceeding authorization to obtain anything of value from a protected computer. David argued that it wasn’t hacking because he had a valid password. Somehow, David missed the point. David didn’t have authorization to use the password. So his actions fell squarely within the prohibited acts in the CFFA.
First Runner Up Crippy Goes to Walid Jamil: Walid pled guilty to conspiracy to commit criminal copyright infringement and conspiracy to introduce misbranded food into interstate commerce. A predecessor of Walid’s company, Midwest Wholesale Distributors, was a legitimate exporter of the 5-Hour Energy drink to Mexico. Jamil and his cohorts replaced the Spanish labels with fake English ones so they could sell to the U.S. market. When the stock ran out, Walid switched to fully counterfeit drinks made in a filthy factory. He distributed more than 4 million bottles putting the health of millions of customers into jeopardy. And if that weren’t enough, Walid is also alleged to have been involved in similar schemes involving Equal, Splenda, Truvia, Uncle Ben’s Rice and Pillsbury products. Walid has been sentenced to 7 years in jail plus payment of criminal restitution in the amount of $555,800.00. Walid wins this award for shear audacity and tenacity. He’ll need those skills in prison.
Grand Prize Crippy Goes to Gregory David Justice: Gregory (whose last name has a good sense of irony), a former employee of a defense contractor, pled guilty to one count of economic espionage and one count of attempting to violate the Arms Export Control Act. He tried to sell information about his (now former) employer’s satellite security systems which included trade secrets. Unfortunately for Gregory, he offered the sale to an undercover agent who was posing as a Russian spy. He told the ersatz Russian spy that he loved spy movies and television shows like “Jason Bourne” and “James Bond” and “The Americans”. He sold the secrets for $3,500.00 telling the undercover agent that he needed it for his wife’s medical expenses. Actually, he sent the money to his on-line girlfriend, an alleged European model named Chay. Actually, the “girlfriend” wasn’t named Chay nor was she a model. She was some woman who lived in Florida with her boyfriend and son. Gregory was sentenced to 60 months in jail. U.S. Attorney Sandra R. Brown said, “This defendant sold out his employer and betrayed his country in exchange for a few thousand dollars. His actions posed an imminent threat to our national security.”
WHY YOU SHOULD KNOW THIS. Criminal Intellectual Property activity is no laughing matter. Those who criminally interfere with the Intellectual Property of others cause damage, endanger public health and harm national security. They justly face jail time and fines. So no one should strive to be awarded a Crippy for 2018.
Tuesday, 19 December 2017
Dr. Seuss’ Estate doesn’t have the Christmas spirit. Matthew Lombardo wrote a play called “Who’s Holiday”. It’s a sort of sequel to Dr. Seuss’ “How the Grinch Stole Christmas” in which Cindy-Lou Who is all grown up and has issues. Dr. Seuss’ estate is aggressive about protecting the original works (See more below). So, of course, the Estate sued for copyright infringement to block Who’s Holiday. The Estate lost. The court held that “Who’s Holiday” falls squarely within the defense of fair use. Using the four prong fair use test, the court found that the nature of the use was obviously parody and weighs in favor of fair use. “The play subverts the expectations of the Seussian genre, and lampoons the Grinch by making Cindy-Lou's naiveté, Who-Ville's endlessly-smiling, problem-free citizens and Dr. Seuss' rhyming innocence all appear ridiculous. . .” The court found the second prong, the nature of the original work, didn’t play a big role in the analysis. For the third prong, the court held that parody gives a long leash to quote and refer to the original. Even though Who’s Holiday used a substantial amount of the original work, it was not excessive in relation to the purpose of parody. The fourth prong determines whether the alleged infringing work supplants the market for the original. The court found that there was virtually no possibility that someone looking to buy a children’s book would buy tickets to an adult themed play about one of the characters instead.
WHY YOU SHOULD KNOW THIS. As you may remember, Dr. Seuss’ Estate sued ComicMix for copyright infringement. ComicMix had started a Kickstarter campaign to fund the development of a comic mashup between Dr. Seuss’ “Oh, the Places You’ll Go” and Star Trek titled “Oh the Places You’ll Boldly Go.” The Estate’s first complaint was dismissed. (June 27, 2017, “Horton Hears a Vulcan”). The Estate amended its complaint and just defeated a motion to dismiss by ComicMix. So ComicMix’s mission to boldly go to fair use places continues.
Happy Holidays and see you next year with more IP News for Business.
Tuesday, 12 December 2017
Unraveling an ugly holiday sweater Google search could create potential liability. Google AdWords is an advertising service offered by Google that allows a sponsor to pay for advertising and a website link to appear prominently. A problem arose when Ugly Christmas Sweater, Inc. used Tipsy Elves, LLC’s name in its Google AdWords. Tipsy Elves sued Ugly Christmas Sweater for trademark infringement and other related causes of action. Tipsy Elves had a slippery hill to climb to prove its case. The vast majority of trademark infringement cases involving Google AdWords come out against the plaintiff. It appears that the parties settled their differences and Tipsy Elves dismissed its case. Ugly Christmas Sweaters’ Google AdWords no longer come up in a Google search of Tipsy Elves.
WHY YOU SHOULD KNOW THIS. Google AdWords creates an opportunity for competitive advertising that might not be available in any other medium. Pursuing ad words for trademark infringement has problems, so far. Yet it shouldn’t chill pursuing the issue as the courts knit a remedy for sponsored misleading search engine results.
This post is in honor of Golan Christie Taglia LLP’s first annual Ugly Holiday Outfit Contest which is coming up on December 15, 2017. The photo shows GCT associate, Anthony J. D’Agostino, modeling his contest entry.
Tuesday, 05 December 2017
Be careful not to control someone else’s infringing activities. Barcroft Media Ltd. provides a video and image library available for download. Photographer, Jeffrey R. Werner, filed suit against Barcroft alleging that it allowed Valnet Inc. to download his photos without his consent. Jeffrey alleged that Barcroft materially contributed to Valnet’s infringement by granting Valnet a retroactive license. Barcroft brought a motion to dismiss arguing that Jeffrey didn’t state a claim. The court denied the motion deciding that Jeffrey stated a claim for vicarious liability and contributory infringement. Although the court expressed some doubt as to whether Jeffery’s going to be able to prove the facts to support his case.
**WHY YOU SHOULD KNOW THIS. ** A party that is one step removed from infringing activity can get caught in the litigation net under two theories of secondary liability. One type is vicarious liability which has two elements: (1) the right and ability to supervise or control the infringing activity; and (2) a direct financial benefit from that activity. The other type is "contributory infringement" in which one induces, causes or materially contributes to copyright infringement. To avoid secondary liability, it’s always best to step away and not enable potential copyright infringement.
Tuesday, 28 November 2017
Submitting an idea doesn’t mean you own it. Author, Dan Rosen, had a screenplay called “Darci’s Walk of Fame”. For those who are not ‘in the know’, the standard elements of a walk of shame are: (1) a one night stand; (2) waking up the next morning in someone else’s bed; and (3) having to walk (or taxi or Uber or Lyft) home in the clothes you wore the night before. Dan was lucky to get a meeting with actress and producer, Elizabeth Banks and her husband to present his screenplay. After discussing the plot line, characters, and themes, Banks and her husband took a pass. Not long after the meeting, Banks starred in the 2014 movie “Walk of Shame” which wasn’t exactly a box office hit. Dan’s assignee, Shame on You Productions, Inc. sued Banks, her husband, and the film’s production based on copyright infringement and an implied contract. The court applied the extrinsic test to determine if infringement occurred. The extrinsic test focuses on specific similarities between two works. Scenes a faire (standard situations that flow naturally from the plot) are disregarded. The two works shared the “walk of shame” premise and some natural elements that flowed from it, but the narratives and characters were different. Shame on You’s case was dismissed and affirmed on appeal.
WHY YOU SHOULD KNOW THIS. When Dan submitted his idea to Banks and her husband, he believed that his idea would belong to him. But, an idea alone is not protectable by copyright. Only the expression of the idea is. This is a prime example of the problem with idea submission cases. When submitting ideas, there’s a Catch 22. It’s best to make sure that proper protections are in place. But anyone in an industry that is prone to idea submissions is reticent about accepting any unsolicited ideas or signing any idea protection documents such as non-disclosure agreements.
Tuesday, 14 November 2017
Trade secrets are a good way to protect a recipe. Sycamore Family Bakery Inc. sold its assets to Bimbo Bakeries USA. Included in the assets was Sycamore’s secret recipe for Grandma Sycamore’s Home-Maid Bread. When Leland Sycamore went to work for US Bakery, US Bakery started selling bread made from the same recipe. US Bakery also mimicked Bimbo’s packaging. Bimbo sued for trade secret misappropriation and false advertising. A jury awarded Bimbo $2 million.
WHY YOU SHOULD KNOW THIS. There are two primary lessons here. First, a properly protected trade secret has a lot of value. Trade secrets are pretty much the only way to protect a recipe. Second, when you sell your trade secret, you can’t use it anymore.
Tuesday, 07 November 2017
A licensee can’t knock out a confusingly similar trademark. Julie A. Moreno licensed the Mexican trademark, DEPORTES CASANOVA, for sports equipment. Julie challenged Pro Boxing Supplies, Inc.’s trademark applications and registrations for CASANOVA due to a likelihood of confusion. The TTAB denied Julie’s petitions. While this looked like a priority of use problem, the real problem was that a licensee and not the owner/licensor was claiming priority of use. The TTAB ruled against Julie because: “Allowing a licensee to claim priority for itself in an inter parties proceeding based on the licensor’s use of the mark (whether through the license or otherwise), could result in a licensee being able to claim de facto ownership of the licensed mark.”
WHY YOU SHOULD KNOW THIS. This was a case of first impression for the Board. The Board had dealt with many cases in which the owner and its licensee jointly enforce the trademarks. But this was the first time the Board had to address whether a licensee alone had standing to enforce a licensor’s trademark rights. The Board said no. So a licensee should always insist that a trademark license either require the owner to challenge confusingly similar marks or join with the licensee to do so.
Tuesday, 31 October 2017
A banana costume could infringe on a banana costume. If you bought a banana costume for Halloween today, you may have purchased a copyright infringing product. Rasta Imposta sued Kmart for selling alleged knockoffs of Rasta Imposta’s banana costume. Costumes are generally considered clothing which are useful articles and can’t be copyrighted (Whimiscality, Inc. v. Rubie’s Costumes which held a child’s pumpkin costume could not be copyrighted). But masks can be copyrighted because they aren’t considered useful articles. (Masquerade Novelty v. Unique Industries which held that animal nose masks can be copyrighted). But would a banana costume be considered clothing and not copyrightable? We’re going to have to live in limbo because Rasta Imposta and Kmart settled.
WHY YOU SHOULD KNOW THIS. Happy Halloween.
Tuesday, 24 October 2017
We celebrate the premier of Season 2 of Netflix’s hit horror series, Stranger Things, with a not-so-spooky cease and desist letter. The popularity of Stranger Things seeped into the culture. So much so, that in August 2017, Chicago-based Emporium Arcade Bar opened a pop-up location called “The Upside Down” which was designed to look like the sets from the series. The only problem was that they didn’t get permission from Netflix. Netflix’s in-house lawyers sent a cease and desist letter. Netflix took an even-tempered, but effective, approach. The letter could be summarized but it’s much better to see it in its entirety:
"Danny and Doug,
My walkie talkie is busted so I had to write this note instead. I heard you launched a Stranger Things pop-up bar at your Logan Square location. Look, I don’t want you to think I’m a total wastoid, and I love how much you guys love the show. (Just wait until you see Season 2!) But unless I’m living in the Upside Down, I don’t think we did a deal with you for this pop-up. You’re obviously creative types, so I’m sure you can appreciate that it’s important to us to have a say in how our fans encounter the worlds we build.
We’re not going to go full Dr. Brenner on you, but we ask that you please (1) not extend the pop-up beyond its 6 week run ending in September, and (2) reach out to us for permission if you plan to do something like this again. Let me know as soon as possible that you agree to these requests.
We love our fans more than anything, but you should know the Demogorgon is not always as forgiving. So please don’t make us call your mom."
The bar owners cooperated and closed down as planned.
WHY YOU SHOULD KNOW THIS. Owners have a right to shut down infringement of their Intellectual Property. Sending a cease and desist letter to the infringer is a first step. But cease and desist letters come in all shapes and sizes. An aggressive letter may be appropriate for stopping an infringing competitor. But not so much when dealing with a small company who might have infringed unintentionally. Netflix received a lot of good press for its handling of the Stranger Things pop-up bar. It got the point across without hurting the bar’s owners and alienating the fan base.
Tuesday, 17 October 2017
The Defend Trade Secrets Act of 2016 can go nuclear to stop misappropriation. The Defend Trade Secrets Act of 2016 (“DTSA”), which created a federal cause of action for misappropriation, has one amazing feature that’s new to trade secret litigation. It allows the court to order seizure of stolen trade secrets in “extraordinary circumstances” without advance notice. This has been called the “nuclear option”. Because it’s a draconian remedy, courts have been reluctant to enter seizure orders. The recent case of Mission Capital Advisors LLC v. Romaka, gives a clue for determining extraordinary circumstances. According to court documents, Romaka had downloaded Mission Capital’s entire 65,000 person client list while he was receiving employment offers from Mission Capital’s competitors. In granting an order for seizure, the court cited Romaka’s activities such as downloading the files while he was absent from work for several weeks; he said that he deleted the files, when he hadn’t; and he had downloaded other proprietary information and stored it on his computer. Although Romaka was cooperative originally, he didn’t respond to Mission Capital’s attempts to contact him. The court ordered U.S. Marshalls to go to his home, make a forensic copy of his computer and then permanently delete the files.
WHY YOU SHOULD KNOW THIS. The DTSA nuclear option cannot be invoked in every case. The "nuclear option" in the guise of a seizure order is still being explored by litigants and the courts. But, the Mission Capital test may help shape the appropriateness of the remedy.
Tuesday, 10 October 2017
WHY YOU SHOULD KNOW THIS. The enforcement of on-line terms and conditions has been problematic for courts. The amorphous quality of an on-line terms and conditions means there is no signature demonstrating agreement, no version control and no way to verify that a party actually read the terms. So, many courts have come up with a test for enforceability. The primary components are that (1) the terms and conditions have to be easily accessible; and (2) the user has to do something affirmative to show agreement. According to the Second Circuit Court of Appeals, Uber was able to show both components in this case. Of note is that Kalernick couldn’t have created his Uber account without agreeing to the terms. So Kalernick’s faulty memory about it was not an excuse. Alas, Uber may have won the battle and lost the war by participating in the litigation before it sought to enforce the arbitration clause.
Tuesday, 03 October 2017
Prior art can stop a patent. Dr. Steven Chudik sought to patent an implant for a portion of the humerus bone that would be utilized as part of shoulder replacement surgery. The Patent Trial and Appeal Board held that a French patent barred issuance of the patent as prior art. The Federal Circuit affirmed. So Dr. Chudik won’t be getting a patent.
WHY YOU SHOULD KNOW THIS. A patent has to be new, useful and non-obvious. “New” was Dr. Chudik’s problem. An invention isn’t new if there is prior art. The term, “prior art” sounds straightforward but can have a lot of nuances. In a nutshell, prior art is any of the following: (i) a description of the invention in a patent issued anywhere in the world prior to the patent applicant inventing it; (ii) a description of the invention in a printed publication published anywhere in the world prior to the patent applicant inventing it; or (iii) the invention is publicly known in the US, but not necessarily patented or published, prior to the patent applicant inventing it.
The ultimate question of whether any of these exist is best left to an experienced patent attorney who can do a due diligence search.
Tuesday, 26 September 2017
Catchy phrases don’t always function as trademarks. Melissa Benson wanted to trademark her slogan “Still Spooning”. It appeared on her interesting mix of goods, flatware and fishing lures. Milk & Honey LLC, who sells houseware using the same trademark, opposed the registration. The Trademark Trial and Appeal Board didn’t accept Milk & Honey’s objection based on Benson’s mark being merely a descriptive argument. But, the Board accepted Milk & Honey’s second argument that the words didn’t function as a mark. The Board looked at Benson’s specimens of use and determined that the consuming public would perceive the words as ornamental and reference to the engraving on the goods. So the opposition was sustained and the mark wasn’t registered.
WHY YOU SHOULD KNOW THIS. Look at the photo accompanying this post. This is a good example of an ornamental use that (alone) is not trademark use. Not every designation that is used in connection with goods or services functions as a trademark. Words that are informational in nature, or that express support, admiration or affiliation don’t function as trademarks and so can’t be registered. There can be a fine line between functioning and not functioning as a trademark. So, each trademark has to be evaluated on its own basis.
Tuesday, 19 September 2017
During the 2016 to 2017 term, the US Supreme Court was able to put in the final word on some disputed areas of the law. But in others, not so much. Here’s a roundup:
In TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514 (2017), SCOUTS held that the Patent Act fixes venue for patent infringement actions (1) in the judicial district where the defendant resides, or (2) where the defendant has committed acts of infringement and has a regular and established place of business. The problem is that the opinion didn’t go into great detail about prong #2.
In SCA Hygiene Prod. Aktiebolag v. First Quality Baby Prod., LLC, 137 S.Ct. 954, 197 L.Ed.2d 292 (2017), SCOTUS held that laches cannot be used as a defense to an infringement action that was brought within the six-year statute of limitations in the Patent Act.
In Star Athletica, L.L.C. v. Varsity Brands, Inc., 137 S.Ct. 1002, 197 L.Ed.2d 354 (2017), SCOTUS held that designs appearing on useful objects can be copyrighted as long as the design is separate from the functionality of the useful object. The problem is that the opinion didn’t give any guidance on how to test separatbility.
In Matal v. Tam, 137 S.Ct. 1744 (2017), SCOTUS held that the US Trademark’s Office could not refuse to register a disparaging trademark because it would violate First Amendment free speech. This may not be the last word. There are other pending cases involving issues that were not directly addressed in this opinion.
WHY YOU SHOULD KNOW THIS. These decisions were extremely narrow. SCOTUS raised more questions than they answered. Be assured that this Blawg will cover those answers when they happen. For more information about these decisions and their implications, as well as updates in other areas of the law, visit Golan Christie Taglia LLP’s Summer Newsletter at https://gct.law/newsletters/39.
Tuesday, 12 September 2017
An employee can’t unlearn information that belongs to a former employer. The “Inevitable Disclosure Doctrine” is a term of art in trade secret law. The Doctrine applies to bar a former employee with knowledge of the employer’s trade secrets and confidential information from accepting a similar role with the employer’s competitor. In Utilisave, LLC v. Miele, the Third Circuit Court of Appeals affirmed the entry of a preliminary injunction under the Doctrine. The preliminary injunction was based on the substantial overlap between the former employee’s old job and his new one which was basically the same role, in the same industry, for the same geographic territory. With this kind of overlap, the court felt the former employee was likely to use confidential information and trade secrets to the detriment of his former employer. The preliminary injunction was warranted even though there wasn’t actual misappropriation of any particular trade secret or confidential information.
WHY YOU SHOULD KNOW THIS. The problem with the Inevitable Disclosure Doctrine is that a person can’t simply unlearn and segregate knowledge when it comes to performing a job. If an employee is barred from taking similar positions with other employers, the employee has limited ways to earn a living going forward. For this reason, the Doctrine has come under a lot of scrutiny. Some courts apply the Doctrine on an extremely limited basis. According to Utilisave, the right time to apply the Doctrine is when the employee is going to use that knowledge in pretty much the same position the employee held with his former employer.
Tuesday, 05 September 2017
Business divorces can put trademarks in limbo. Devon Johnson and Latresa Moore launched the fashion and lifestyle magazine, PYNK, in 2011. It only took two years for the team’s relationship to sour. The parting of the ways was not all that simple. Johnson kept the magazine, but hasn’t posted new content for a long time. Moore set up her own ThinkPynk website and a Pynk Magazine Instagram feed. Johnson tried to trademark the word and design mark for “Pynk”. Moore opposed registration saying that she is a co-owner and Johnson can’t register the mark alone. The TTAB granted the opposition. The board said that it wasn’t possible to delineate what intellectual property and assets remained and with whom. Since Johnson could not show that he was the sole owner, he couldn’t register the marks.
WHY YOU SHOULD KNOW THIS. The start of a business is a heady time as the founders launch the new venture. The last thing anyone wants to think about is planning for a split up. But ignoring the possibility shouldn’t be an option. Planning for the worst case scenario seems pessimistic, but it’s just good business. If the parties don’t plan, then like Johnson and Moore, they fight over the spoils when the parties are in an adversarial position. Then everyone loses. Moore will have trouble registering the marks because Johnson can claim joint ownership. Since the parties don’t appear to be getting along, valuable trademarks may be lost to both parties.
Tuesday, 29 August 2017
The super-powers of technology have decided to address the increasingly convoluted and confusing world of patents. Google, Amazon, Intel, Dell, Cisco, Oracle, Salesforce and Adobe are all on the same virtual page. Members of this illustrious group of tech companies recognize that innovation in the form of new and better products is fundamental to economic growth and American jobs. But, there is a “patent quality crisis” of baseless patent assertions and active patent troll litigation. So these tech super-powers have banded together to form the “High Tech Inventors Alliance” ("HTIA"). The goal is to advocate for a balanced patent policy both in the application process and in the courts. They intend to speak up when tech issues are debated in the courts, the Patent and Trademark Office and the media. You can visit their website at https://www.hightechinventors.com/.
WHY YOU SHOULD KNOW THIS. You’re not the only one. It’s easy to see the patent process as costly and uncertain. The members of HTIA recognize that the current state of patent prosecution and protection isn’t sustainable. HTIA has already commented on a House Judiciary IP Subcommittee Hearing about the effect of low—quality patents on innovation and economic growth. Hopefully, HTIA will continue the conversation.
Tuesday, 22 August 2017
If you don’t use your trademark, someone else can claim priority over you. SPV Coach Company, Inc. filed a trademark application for ARMBRUSTER STAGEWAY in connection with vehicles, namely, customized limousines. Executive Coach Builders, Inc. opposed registration claiming that it had started using the mark before SPV and so had priority of use. The TTAB denied the opposition holding that Executive Coach had abandoned the mark. Further, Executive Coach couldn’t prove that it had any intent to resume use of the mark once it was abandoned. The TTAB cited Executive Coach’s lack of any documentary evidence and the inconsistent and contradictory testimony of its president to support the abandonment ruling. Executive Coach’s alleged use of the abandoned mark was isolated and de minimus. Executive Coach took no orders for branded vehicles. Executive Coach’s domain name didn’t identify the goods or services. Displays at Executive Coach’s plant merely showed historical and not current use of the trademark. So, SPV had priority because of its constructive use of the mark after Executive Coach’s abandonment.
WHY YOU SHOULD KNOW THIS. If a trademark isn’t used for 3 consecutive years, it is deemed abandoned. The presumption of abandonment can be overcome if the owner can prove intent to resume use. Executive Coach had two problems. First, SPV started using the mark after Executive Coach abandoned it. Second, Executive Coach couldn’t prove it intended to resume use of the abandoned mark. A trademark owner can avoid Executive Coach’s fate by never letting non-use go for more than 3 years. And during that period, at the very least, the owner should document marketing activity and other affirmative acts designed to resume use.
Tuesday, 15 August 2017
News and commentary about a dad’s big oops is fair use. Proud dad, Kali Kanongataa, accidently live streamed a video of his partner giving birth to their son. The video went viral. As often happens in the world of viral videos, Kanongataa’s video gave rise to a commentary by the media. Much of the commentary involved showing short clips from the 45 minute video. Kanongataa sued ABC, NBC, Yahoo and COED Media for copyright infringement. The judge dismissed the case on the basis of fair use. But, it didn’t stop there. The judge ordered Kanongataa to pay the defendants’ attorney’s fees. The judge said, "no reasonable lawyer with any familiarity with the law of copyright" would have filed the cases.
WHY YOU SHOULD KNOW THIS. Copyright infringement is the unauthorized use of the works of another. Fair use is a defense to copyright infringement. Fair use is a necessary component of copyright law because it protects uses that are essential to open dialog and creativity. A fair use analysis isn’t always simple or straightforward. But using small clips of a video for news or commentary falls squarely within the parameters of fair use. This case points out that no matter how aggrieved one may feel about the use of their content, rushing into court without an objective fair use analysis can cost a plaintiff far more than the embarrassment of a viral video.
Tuesday, 08 August 2017
Similar trademarks can co-exist with the blessing of the TTAB. Bras for Cause, Iowa, Inc. tried to register BRAS FOR THE CAUSE for charitable fundraising services. Soroptimist International of Glendale California, CA opposed registration because it wanted to register BRAS FOR A CAUSE for the same types of services. In the end, the parties settled allowing each party to use their marks. The opposition proceeding became a concurrent use proceeding. At first, TTAB refused to accept the concurrent use agreement because of concerns that the parties would be offering similar services in potentially overlapping geographic territories. This would lead to marketplace confusion. The parties submitted a revised agreement that staked out their territories so there would be no overlap. TTAB accepted the revised agreement and both parties were allowed to proceed with restricted registrations.
WHY YOU SHOULD KNOW THIS. Federal trademark law provides nationwide protection for a trademark; even if the trademark isn’t used everywhere in the U.S. As this case demonstrates, sometimes parties with the same or similar trademarks can stake out their territory and still get registrations. However, TTAB doesn’t rubber stamp these agreements. Trademark law still has an interest in minimizing confusion in the market place. So, concurrent use agreements have to be carefully drafted to make sure that the risk to confusion is relatively small.
Tuesday, 01 August 2017
No matter how right you are, you need to register a copyright before filing suit. Section 411(a) of the Copyright Act requires registration of a copyright before bringing suit. Federal Circuits are split on how to interpret this. Some circuits say filing an application is enough. Other circuits say the plain language of the statute requires actual registration. In Fourth Estate Public Benefit Corporation v. Wall-Street.com, LLC, the Eleventh Circuit Court of Appeals went with registration means registration. Wall-Street licensed content from Fourth Estate. After the license expired, Wall-Street continued to post Fourth Estate’s content without permission. Fourth Estate applied for registration and then filed suit before the works were actually registered. In affirming the dismissal of the suit, the Eleventh Circuit focused on the fact that the Copyright Office had to examine the application before registration. So filing the application can never be enough.
WHY YOU SHOULD KNOW THIS. As often happens, Fourth Estate probably didn’t have a mechanism to regularly register its copyrights. Although the application process is pretty straightforward and the Copyright Office fees are very affordable ($35 to $55 per application), many businesses see copyright registration as a “nice to have” instead of a “need to have”. If a copyright owner doesn’t have regular application process, what should the owner do when an infringement occurs? The Copyright Office has a special handling process where for a filing fee of $800, it will expedite a decision regarding registration. The usual registration process can take several months to complete. The special handling process takes one to three weeks.
Tuesday, 25 July 2017
The unauthorized use of someone else’s subscription password can result in multi-million dollar liability. eVestment Alliance LLC offers a subscription to its trade secret protected database of investment products and performance data. An eVestment subscriber hired Compass iTech LLC to help analyze the eVestment’s data. Compass then used the subscriber’s password about 3,000 times to download information from eVestment’s database for its own benefit. eVestment discovered the activity and shut off access to the database. Compass sued for defamation and unfair trade practices. eVestment counterclaimed. eVestment was granted summary judgment on all of Compass’ claims. On eVestment’s counterclaim, a jury found that Compass deliberately misappropriated eVestment’s trade secrets and violated the Computer Fraud and Abuse Act. The jury awarded eVestment $2.5 million in compensatory damages and $1.2 million in punitive damages.
WHY YOU SHOULD KNOW THIS. Compass’ first mistake was to use someone else’s password as mechanism for unauthorized access to a competitor’s protected trade secrets. Compass’ second mistake was to race to the courthouse and file suit on a very shaky foundation. As Compass learned, a subscription to a database grants a limited right to use it under certain terms and conditions. Using someone else’s password doesn’t give you any rights. And if you use the password in order to unfairly compete with a competitor, the competitor may be able to get a multi-million dollar judgment against you. Of course, eVestment’s success resulted from carefully protecting its database with reasonable measures to restrict access to its trade secrets.
Tuesday, 18 July 2017
The denizens of Bikini Bottom could be confused by a real Krusty Krab restaurant. Viewers of the cartoon, SpongeBob SquarePants, are familiar with the underwater (and, of course, fictional) eatery, The Krusty Krab. When IJR Investments, LLC wanted to register the trademark, “The Krusty Krab”, for a dry land real restaurant, Viacom International, Inc., sued for trademark infringement, unfair competition and other causes of action. IJR argued that Viacom never registered the trademark and Viacom only has a fictional restaurant. So, IJR argued, it was free to use the name. The court rejected IJR’s arguments. The court looked at Viacom’s use of the name. It appeared in 166 out of 203 SpongeBob episodes over the 17 year run of SpongeBob. There were 2 successful movies and substantial merchandizing. Viacom’s substantial use for 2 decades established that the name acquired secondary meaning in the minds of consumers. Thus, Viacom had established enforceable common law rights in the name. The court entered judgment in favor of Viacom on its trademark and unfair competition claims.
WHY YOU SHOULD KNOW THIS. This case demonstrates how a trademark owner can establish rights in a common law trademark; even if the trademark relates to a fictional product. Here’s a list that is not, by any means, exhaustive: (1) Active, continuous use of the trademark over a span of time; (2) Large advertising and promotional budget; (3) Active merchandising; and (4) Licensing of the trademark. Note, however, that rights in a common law trademark can be restricted to the geographic location in which they are used.
Tuesday, 11 July 2017
The good news is that the parties settled their trade secret litigation. The bad news is the release language in the settlement agreement. Security Camera Warehouse, Inc. sued Bowman, one of its former owners, for trade secret misappropriation. During the settlement negotiations, unbeknownst to Security Camera, Bowman still had access to Security Camera’s servers and downloaded Security Camera’s trade secrets. After the parties signed a settlement agreement, Bowman set up a new company and competed with Security Camera using the information he took during settlement negotiations. Security Camera brought a second suit against Bowman for trade secret misappropriation. The court held that Security Camera’s claims were barred by the release in the settlement agreement from the first case. The language specifically released Bowman from any claims that Security Camera may have in the future based on events that occurred before the execution of the settlement agreement.
WHY YOU SHOULD KNOW THIS. The troubling part of this decision is that Bowman apparently committed trade secret misappropriation while seeking to settle with Security Camera. So Bowman knew a material fact that he withheld from Security Camera. Perhaps the judge should have addressed this situation before coming to his decision. Be that as it may, there are several options to avoid this outcome. First, include representations and warranties in the settlement agreement where defendant affirmatively states that he is not in possession of any trade secrets belonging to the plaintiff. Second, include a requirement that the defendant destroy or return all copies of the trade secret (digital or otherwise) and provide an affidavit confirming compliance. Third, and most importantly, do not release unknown future claims.