• IP BLAWG

    A Serious Dent in a Patent Pirate's Treasure

    Beverly A. Berneman
    6/28/16

    SCOTUS tells the Federal Circuit to back off of patent damages rules. Under the Patent Act, a court may increase the damages up to three times of a judgment. Last year, in two decisions, the Federal Circuit Court of Appeals imposed strict limits on the plaintiffs’ ability to get enhanced damages. The Federal Circuit required a plaintiff to show two things: (1) that there was a high likelihood that the infringer’s actions constituted infringement; (2) that the infringer knew the risk. Under this standard, any defense by an accused infringer that was not frivolous would get them off the hook. SCOTUS reversed the Federal Circuit recognizing that the Patent Act left enhanced damages to the discretion of the trial court. SCOTUS acknowledged that Federal Circuit’s test was trying to keep enhanced damages for egregious cases only. But the test was too rigid. Justice Roberts wrote: “[The] threshold requirement excludes from discretionary punishment many of the most culpable offenders, such as the “wanton and malicious pirate” who intentionally infringes another's patent—with no doubts about its validity or any notion of a defense—for no purpose other than to steal the patentee's business.” The two cases will go back to the trial courts to determine the availability of enhanced damages using a less rigid and more neutral test.

    WHY YOU SHOULD KNOW THIS. This decision demonstrates a tension between a trial court and an appellate court. The trial court hears the evidence and decides the facts while applying the laws. The appellate court is supposed to determine whether the court below decided the facts according to the law. In these cases, SCOTUS decided that the appellate court had overreached and encroached on something that should be left to the trial court. The Patent Act recognizes that in certain egregious situations, the willful infringer should pay not only actual damages but enhanced damages to punish the infringer and further compensate the plaintiff. The Federal Circuit’s rigid test wasn’t warranted by the Patent Act and interfered with the trial court’s ability to award enhanced damages.

  • IP BLAWG

    Summer 2016 Update

    Beverly A. Berneman
    6/21/16

    Sometimes, the last word isn’t really the last word. Here are some updates for previous posts:

    Browsing Isn’t a Virtual Handshake Deal (November 17, 2015). Since this post, another court has spoken on the unenforceability of on-line agreements. The Seventh Circuit Court of Appeals affirmed dismissal of a demand for arbitration based upon an alleged on-line click wrap agreement in Sgouros v. TransUnion Corp. The Court analyzed the user experience and determined that on-line customers were not sufficiently notified that their purchases were subject to a Services Agreement that included an arbitration clause “buried on page 8”.

    Apple v. FBI (February 23, 2016). Since this post, a third party came forward and helped the FBI unlock the IPhone. Keep in mind that the IPhone in question is an older model. Newer models of the IPhone have different encryption and security software.

    Fear the Walking Trademark Zombies (March 22, 2016). Since this post, Macy’s Department Stores has brought a motion for sanctions and damages against Strategic Marks. Macy’s alleges that the principal of Strategic Marks violated a confidentiality clause in the settlement agreement by announcing “We won”. The moral of this story is (1) if you settle, you don’t win or lose; and (2) Don’t breach a confidentiality clause no matter how tempting.

  • IP BLAWG

    Ice Cream War

    Beverly A. Berneman
    6/14/16

    Just in time for summer, Mister Softee gets its just desserts courtesy of a federal judge. The war started when Dimitrio Tsirkos decided to rebrand his “Mister Softee” trucks as “Master Softee”, including mimicking the graphic of the delicious ice cream cone. Tsirkos was a former vendor of the venerated purveyor of the taste of summer. As a vendor, Tsirkos had to pay royalties. As a non-vendor, he got out of having to pay Mister Softee. Mister Softee sued and obtained an injunction permanently enjoining Tsirkos from operating his rogue ice cream trucks using confusingly similar branding. Tsirkos refused to surrender. He continued to operate his Master Softee trucks despite the injunction. A federal court judge held Tsirkos in contempt repeatedly and ordered him to pay $329,000.00 in damages. When he still wouldn’t stop, the court entered another order adding $287,258.00 in attorney’s fees and $52,605.00 in costs.

    WHY YOU SHOULD KNOW THIS. There are three lessons here. The first is the obvious one. If you’re enjoined from doing something, you stop doing it. The second is how to properly rebrand. Tsirkos’ rebranding was pretty obvious trademark infringement. If he was going to rebrand he could have chosen a way to still get his message across without trying to confuse the public. The third is the cost effectiveness of fighting a fight that has little chance of success. The estimated annual royalty fee is about $3,400.00 per truck. Tsirkos operated 16 trucks. So his royalty payments were about $54,400.00 a year. The total judgment would have paid for about 12 years of royalties. Maybe the royalties weren’t so bad after all.

  • IP BLAWG

    The Phantom of the Trademark Office

    Beverly A. Berneman
    6/7/16

    A phantom trademark can be exorcised. A 'phantom trademark' is in which an integral portion of the mark is represented by a blank or missing information. The USPTO will refuse registration of a phantom mark because it would be hard for someone to identify and distinguish the goods and services covered by the mark. Enterprise Holdings, Inc. got caught in the vortex of phantom marks when it tried to register this trademark for vehicle dealerships, fleet management services and vehicle rental services. The examining attorney refused registration on the basis that the mark was missing information. Part of the problem was that the specimens of use each separately showed the mark with added words “car sales”, “commercial trucks” and “fleet management” in the bottom white space. The examining attorney called this ‘mutilation’ of the mark. Enterprise Holdings, Inc. wouldn’t take no for an answer and appealed to the TTAB. The TTAB reversed the refusal. The TTAB held that the added terms were generic descriptions and could not function as a trademark alone. The added terms can be deleted from the mark without changing the commercial impression.

    TAKE AWAY. This decision is good news for anyone registering a basic trademark that will be used for a family of goods and services. You can come up with a basic design and add generic terms to differentiate separate lines of goods and services. And you don’t have to register each and every version of the mark to get protection.

  • IP BLAWG

    A Tale of Two Structures

    Beverly A. Berneman
    5/24/16

    It looks pretty; but how protectable is it? Two recent cases highlight how different types of IP law protect the structure of a product. In one case, In DeVinci Editrice S.r.l. v. Ziko Games LLC, a court held that the structure of the “Bang!” card game cannot be protected by copyright. While the plaintiff could copyright the artwork on the cards, the game structure, mechanics and rules are not protectable. Millennium Laboratories, Inc. v. Ameritox, Ltd., a court held that the structure of medical test reports can be protected as trade dress as long as the structure isn’t functional. In this case, the owner chose the structure because it didn’t look like any of its competitors’ reports.

    WHY YOU SHOULD KNOW THIS. Functionality. That’s the key. Functionality can destroy copyright or trade dress protection. Both copyrights and trade dress protect something beyond function. Copyright requires the work have at least a minimum amount of creativity and be fixed in a tangible means of expression. An arrangement of items, a recipe or a set of instructions are primarily functional and not protectable. But add a creative element like commentary, graphics, photos or an unusual arrangement of information and you have protectable elements. For trade dress, the protectable element has to be something more than the visual appearance of a product. As discussed in the blog post of 5/3/2016, trade dress protection arises when consumers can identify a source or product by elements of the design beyond the function. So both copyrights and trade dress require the work or design to rise above functionality.

  • IP BLAWG

    A Sword and a Shield for Your Trade Secrets

    Beverly A. Berneman
    5/17/16

    President Obama signed the Defend Trade Secrets Act (“DTSA”) into law on May 11, 2016. It was a long time coming but we’re glad it’s here.

    The DTSA amends the Economic Espionage Act of 1996 to create a federal private cause of action for trade secret misappropriation. Some of the significant provisions are: (1) you can bring an action in federal court; (2) state law causes of action are preserved; (3) immunity for whistle blowers who disclose trade secrets in reporting a suspected violation of the law; (4) limits on injunctive relief if it will interfere with person’s ability to enter into an employment relationship; and (5) the ability to obtain a seizure order without notice in extraordinary circumstances.

    WHY YOU SHOULD KNOW THIS. Trade secrets have always been a bit of a stepchild in the IP arena. The 3 other major types of IP, patents, copyrights and federally protected trademarks, are governed by federal statutes. Trade secrets have now stepped into the realm of federally protected IP. The DTSA hasn’t changed the basics. Protection for trade secrets still requires proper identification and reasonable measures to prevent disclosure. However, the DTSA has some twists and turns that need to be properly navigated. For instance, employers have to give employees notice of the whistle blower immunity. And an employer can’t prohibit a former employee’s new employment just because the employee has knowledge that would inevitably result in the use of trade secrets (known as the “Inevitable Disclosure Doctrine”).

  • IP BLAWG

    Bad Reviews Live Forever; Or Not

    Beverly A. Berneman
    5/10/16

    Fake bad reviews are worse than real bad reviews. A competitor of Romeo & Juliette Laser Hair Removal, Inc. posted fake bad reviews on Yelp.com and CitySearch.com using fake accounts. Romeo & Juliette sued the competitor because it was losing customers. The competitor’s defense was “hey, I’m out of business so you can’t touch me.” Not quite. Recognizing that false comments posted on the Internet have an immeasurable detrimental effect, the judge hearing the case entered a permanent injunction requiring the removal of the false reviews.

    WHY YOU SHOULD KNOW THIS. Fake bad reviews are beyond annoying. They can cause an unjustifiable loss of reputation and diminution in revenue. Romeo and Juliette was lucky. It was able to find the fake reviewer. That’s not always easy. Discovering who posted the false reviews can be costly and time consuming. Most review sites have procedures for dealing with fake reviews. But that may not be enough. If the fake bad reviews continue and really hurt a business, there may be no alternative to litigate. The trick is finding the right party to sue.

  • IP BLAWG

    All Dressed Up and Going Everywhere

    Beverly A. Berneman
    5/3/16

    Trade dress can help protect the look and feel of a website. Many businesses put a lot of time and effort into their websites. With good reason. A website is the perfect place to show what the business can do and how it does it. But how can a business protect its well-designed website from being mimicked by a competitor? In Ingrid & Isabel, LLC v. Baby Be Mine, LLC, a California federal court denied the defendant’s motion for summary judgment on the issue of whether the plaintiff’s website could be protected as trade dress. In doing so, the court acknowledged that the "look and feel" of a website qualifies for trade dress protection.

    WHY YOU SHOULD KNOW THIS. Trade dress refers to the visual appearance of a product, packaging or design. Trade dress is protected by the Lanham Act which also protects trademarks. However, registering trade dress has pitfalls. For instance, a website might not be inherently distinctive. So the applicant will have to show that the website has acquired distinctiveness. Also, the elements of design related to trade dress cannot be functional. If you look at the Coke bottle, one of the most famous examples of trade dress, you can see that the line between function and design can be tricky. In the end, a carefully crafted and researched trademark application would probably avoid the pitfalls.

  • IP BLAWG

    I Love This Game (Someone Paid Me to Say This)

    Beverly A. Berneman
    4/26/16

    The FTC had a problem with Machinima, Inc. for not telling anyone that it paid people to post endorsements. Machinima describes itself as the dominant network for fandom and video gamer culture. Its services include distribution, support and monetization of YouTube channels. Things went sideways for Machinima when it paid ‘influencers’ to post YouTube videos that were supposed to be objective opinions about Microsoft’s Xbox One system. The FTC issued an administrative complaint against Machinima for failing to adequately disclose that the influencers were being paid for their opinions. Jessica Rich, Director of the Bureau of Consumer Protection summed it up well. “When people see a product touted online, they have a right to know whether they’re looking at an authentic opinion or a paid marketing pitch. . . That’s true whether the endorsement appears in a video or any other media.” The FTC and Machinima have agreed to settle. Machinima will be prohibited from similar deceptive conduct in the future and it must ensure its influencers clearly disclose when they have been compensated in exchange for their endorsements.

    WHY YOU SHOULD KNOW THIS. It’s ok to pay someone to endorse your product or service. As long as you disclose that it’s a paid endorsement.

  • IP BLAWG

    Tort Reform and IP Law Meet Cute

    Beverly A. Berneman
    4/19/16

    The passive licensor can find itself on the receiving end of a huge strict liability judgment. Or not. Strict liability means if you’re anywhere in the chain of commerce of a defective product, you’re liable for damages caused by it. This can be really harsh for passive trademark licensor who does nothing more than license a name of the product. Tort reform has been trying to find ways to lessen the hit on anyone who is in the chain of commerce but really had nothing to do with the design or manufacture of the product. The defendant in Shukrullo Dzhunaydov v. Emerson Elec. Co., et al., licensed the trademark of what turned out to be a defective product. The license allowed the defendant/licensor to inspect the use of the trademark and have some control over the product. But it didn’t exercise those rights. The court held that the defendant/licensor wasn’t liable for damages caused by the defective product.

    WHY YOU SHOULD KNOW THIS. A trademark license has to give the licensor some sort of quality control over the use of the licensed product or service. Otherwise it’s a “naked license”. A naked license will cause the licensor to lose rights in the trademark. Here’s the problem. The trademark licensor must exercise sufficient control over the product to protect trademark rights, but not have sufficient control over the product to be liable under a strict liability theory. The defendant/licensor in Shukrullo Dzhunaydov had the ability to exercise control of the product but didn’t. That’s risky for the licensor’s trademark rights although it certainly helped on the strict liability issue. A carefully drafted license agreement should help balance the risks.

  • IP BLAWG

    Alice's Topsy Turvy IP Protection

    Beverly A. Berneman
    4/12/16

    The answer to being ousted from the wonderland of patents is to go through the looking glass to copyrights. Since SCOTUS’ 2014 decision in Alice Corp. v. CLS Bank International, over 70% of software patents have been struck down as being too "abstract". In answer to this, Synopsys registered its software code for static timing analysis (STA) with the U.S. Copyright Office. When AtopTech started selling STA that was eerily close to the one belonging to Synopsys, Synopsys sued for copyright infringement. A jury awarded Synposys over $30 million in damages against AtopTech.

    WHY YOU SHOULD KNOW THIS. The Alice decision has created a tumultuous time for software protection. Without patent protection, software developers and their counsel had to come up with other ways to protect the code. As Synopsys showed us, copyright protection is a viable alternative. But it’s not a one size fits all solution. Software might also be protectable as a trade secret. So, software needs to be evaluated on a case by case basis to determine the appropriate method of protection.

  • IP BLAWG

    The New York Yankees Didn't Get the Joke

    Beverly A. Berneman
    4/4/16

    The New York Yankees were not amused when someone tried to register parodies of its famous trademarks . IET Products thought it would be funny to register trademarks that parodied the New York Yankees longtime logo and catch phrase. IET replaced the bat on the logo with a syringe referring to alleged steroid use by the players. Not willing to stop there, IET also sought to register “The House that Juice Built” as a parody of the famous catch phrase “The House that Ruth Built” (meaning Babe Ruth for the initiated). The TTAB refused to allow registration of IET’s marks. The TTAB reasoned that IET wasn’t really interested in making commercial use of the marks because they were going to be used as an “ornaments” on IET’s goods.

    WHY YOU SHOULD KNOW THIS. In honor of the opening of the 2016 baseball season, we discuss the parody of famous baseball trademarks. A parody of a trademark is not really a source or product identifier. Rather, it is a non-commercial use that comments on or makes fun of the original. So IET could probably still adorn T-shirts and baseball caps with its parodies. But, it can’t register the parodies as trademarks. Can the Yankee’s stop IET some other way? The TTAB addressed that issue even though it really wasn’t part of the proceedings. The TTAB surmised that if the Yankees brought a federal trademark dilution claim, IET may be able to use parody as a fair use defense.

  • IP BLAWG

    Some Updates

    Beverly A. Berneman
    3/29/16

    Sometimes, the last word isn’t really the last word. Here are some updates for previous posts:

    Dancing Baby Has a Partial Reason to Keep on Groovin' (September 22, 2015). Since this post, the 9th Circuit Court of Appeals amended its opinion to clear up a couple of things. First, the amended opinion clarifies that the original opinion didn’t mean to endorse using an algorithm to determine fair use. In other words, the copyright owner can’t automate the fair use analysis. Second, the amended opinion removed the suggestion that the fair use consideration doesn’t need to be thorough. This is all more good news for the Dancing Baby’s mother.

    Happy Birthday to All of Us (October 20, 2015). Since this post, someone else stepped forward claiming to be the owner of the song. In the end, all parties settled. Under the terms of the settlement, (1) Warner/Chappell has to give back about $14 million in royalties it collected; (2) none of the claimants are going to demand royalty payments in the future; and (3) the court declared that the Happy Birthday lyrics are in the public domain.

    “Bleeping” Trademarks (January 12, 2016). Since this post, USPTO published a formal guide for examiners requiring suspension applications seeking to register offensive and disparaging marks. The buzz is that the USPTO is going to appeal The Slants and similar rulings to determine whether these types of trademarks are protected by First Amendment free speech. Until then, examiners are to issue “advisory refusals”.

    Can I Copyright This? (March 1, 2016). Since this post, the U.S. Supreme Court refused to hear an appeal of the ruling that the Batmobile can be protected by copyright because its bat-like appearance and high-tech gadgets make it a fictional character.

  • IP BLAWG

    Fear the Walking Trademark Zombies

    Beverly A. Berneman
    3/22/16

    If you don’t use your trademark, it could become a zombie.  Macy’s Department Stores has been absorbing local department stores and their trademarks for decades. Once Macy’s takes over, it rebrands the store. But, those old department store trademarks still exist in the minds of the consuming public. In other words, the dead trademarks became zombies. Seeing the marketing potential of zombie trademarks, Strategic Marks started selling T-shirts using them. Macy’s filed a trademark infringement suit against Strategic Marks and won. It helped that Macy’s hadn’t really abandoned most of the trademarks. It was using them in its “Heritage Collection”. In the end, the parties settled and Macy’s transferred some trademarks to Strategic Marks.

    WHY YOU SHOULD KNOW THIS. If you stop using a trademark for more than 3 years, the law presumes that you abandoned it. Then someone can start using your trademark and get a free ride on the goodwill you established. If you stop using a trademark but intend to revive it in the future, there are steps you can take to escape the 3 year presumption. Of course, this isn’t a problem if the original owner is out of business or has no intention to revive the trademark. For instance, Leaf Brands revived “Hydrox” for cookies after it confirmed that the owner of the trademark had no interest in resurrecting the brand.

  • IP BLAWG

    Puzzle Me This Land O' Lakes

    Beverly A. Berneman
    3/15/16

    The Seventh Circuit is puzzled how anyone could confuse Land O’ Lakes dairy products with Land O’ Lakes fishing tackle.  It all started when Land O’ Lakes (the dairy guys) wanted Land O’ Lakes (the fishing tackle guy,) to license the name. The fishing tackle guy refused.  So the dairy guys opposed the fishing tackle guy’s trademark application. Then the fishing tackle guy filed suit. In the end, the Seventh Circuit affirmed the district court’s judgment dismissing all claims. Judge Posner stated: “Can one imagine Land O' Lakes advertising: ‘we sell the finest dairy products and the best fishing tackle?’ . . . So in this unusual case two firms sued each other though neither had been, is, or is likely to be harmed in the slightest by the other. The suit was rightly dismissed.”

    WHY YOU SHOULD KNOW THIS. It’s natural to want to protect your trademark from anyone who uses it. Certainly, you want to protect against customer confusion. But there are limits. Likelihood of confusion does not arise when two parties adopt the same or similar word or phrase and use it for diverse products or services. Just ask Pandora for music and Pandora for jewelry.

  • IP BLAWG

    Surprise Yosemite! Someone Else Owns Your Trademarks

    Beverly A. Berneman
    3/8/16

    Someone registered the trademarks associated with Yosemite National Park and it wasn’t the National Park Service. How could that happen? Until recently, the National Park Service had a concessions contract with Delaware North Parks & Resorts Inc. to run Yosemite National Park attractions, including the Ahwahnee Hotel, the Wawona Hotel, Curry Village and Badger Pass. Delaware North lost the contract in an open bidding process. Delaware North filed suit claiming that the bidding process was unfair. Then Delaware North pointed out that one of its subsidiaries had registered the trademarks associated with Yosemite. Now Delaware North won’t let the National Park Service and the successful concessions contractor use the trademarks. The National Park Service has brought a proceeding before the Trademark Trial and Appeal Board seeking cancellation of the registrations based upon “False Association”, “Abandonment” and “Dilution”.

    WHY YOU SHOULD KNOW THIS: This situation gives rise to a bunch of issues. First, and probably foremost, foundations, not-for-profit organizations, museums and parks can register trademarks just like everyone else. The National Park Service is probably kicking itself. Yosemite’s hotels and tourist destinations have been around for over 80 years. Why didn’t someone think to register the trademarks? Second, Delaware North may not have had a right to register those marks in the first place. Delaware North’s rights were specifically related to its concession agreement with no independent rights. The examining attorney in at least one trademark application questioned this. According to the National Park Service, Delaware North submitted redacted copies of the concession agreement to give the impression that Delaware North had a right to register the marks. Third, what good are those marks going to be to Delaware North now that it lost the concessions contract? How valuable can those trademarks be outside of Yosemite? One last thing, look carefully at the picture. The Wawona name is still on the hotel. This picture appeared on Yosemite’s website this weekend.

  • IP BLAWG

    Can I Copyright This?

    Beverly A. Berneman
    3/1/16

    In 1991, the U.S. Supreme Court decided that the standard of creativity for copyright protection required a minimal level of creativity. Over the last year, numerous decisions explored how low that level of creativity can go.  The First Circuit Court of Appeals held that a chicken sandwich and its recipe are not copyrightable (Norberto-Colon Lorenzana et al. v. South American Restaurants, Corp.). The Ninth Circuit Court of Appeals held that series of yoga poses is not copyrightable (Yoga College of India LP et al. v. Evolution Yoga LLC et al.). However, the Ninth Circuit Court of Appeals held that the Batmobile is copyrightable because it is considered a “character” (DC Comics v. Towle).

    WHY YOU SHOULD KNOW THIS. Copyright protects works of authorship. Protection begins once the works are fixed in a tangible means of expression. Even though it’s not necessary, registration of the works is always advisable. Registration establishes a presumption of authorship and gives the author access to the Federal Courts and a host of remedies in the case of infringement. Many businesses have works that might be, at least partially, copyrightable. For instance, a menu in a restaurant could be copyrightable if it had more than just a list of items and their prices, such as graphics, pictures, designs and narratives. Blogs or the white papers that appear on a website are also copyrightable. And so much more depending on the level of creativity involved. Every business should consider the copyrightability of important facets of their business and then properly protect it.

  • IP BLAWG

    Apple v. FBI

    Beverly A. Berneman
    2/23/16

    After the shootings in San Bernardino last December, the FBI recovered an iPhone used by one of the shooters. The FBI doesn’t know the password and can’t unlock the phone. The FBI wants Apple to hack its own software by creating a back door into the phone. No denying that the FBI has a serious problem. If it tries different passwords looking for the right one, the iPhone might lock down. The FBI wants Apple to create a new operating system that will allow the FBI access to the phone. But it’s not so simple. As Apple CEO, Tim Cook said in an open letter to customers, “Specifically, the FBI wants us to make a new version of the iPhone operating system, circumventing several important security features, and install it on an iPhone recovered during the investigation. In the wrong hands, this software — which does not exist today — would have the potential to unlock any iPhone in someone’s physical possession.” See the entire letter at http://www.apple.com/customer-letter/.

    WHY YOU SHOULD KNOW THIS: The San Bernardino shootings were a horrific act of terrorism. Exploring the shooter’s call history, contacts, etc. might lead to some valuable information in fighting terrorism. But, the FBI’s request has too many unintended consequences. First, there’s a Constitutional problem. Tim Cook’s open letter addresses the First Amendment and security concerns which are, and should be, the primary focus. Second, there’s a damaging business consequence. The value of Apple’s brand is partially linked to the robust security of its devices. If that security is compromised, Apple’s brand could suffer. Third, the FBI wants Apple to hack its own security measures at its own expense, literally and figuratively. Apple will need to dedicate personnel and resources to create a whole new operating system. Fourth, once the hack exists, it can come back and haunt all of us in the future.

  • IP BLAWG

    That's Not What I Signed Up For

    Beverly A. Berneman
    2/16/16

    The New York State Division of Human Rights used a licensed photo of Avril Nolan in an ad about HIV. Now it’s dealing with a judgment for defamation. What went wrong? It all started when Avril posed for a photo that was going to be used for an article about New Yorkers who are interested in music. Imagine her surprise when the New York State Division of Human Rights (“NYSDHR”) used her photo with the caption “I Am Positive (+), I have Rights,” implying that she was HIV positive. Avril is not HIV positive. She sued NYSDHR for defamation. NYSDHR argued that it licensed the photo from Getty Images so it shouldn’t be liable for defamation. Avril won against the NYSDHR. Avril also sued Getty Images for violating her right of publicity. Getty Images argued that the photo was used in violation of the license so it wasn’t liable to Avril. Getty settled with Avril after its motion to dismiss was denied.

    WHY YOU SHOULD KNOW THIS. Photos, footage or images can greatly enhance a business’ public presence. Licensing the images from stock agencies like Getty Images, Corbis or Flickr can protect a business from claims of infringement. NYSDHR tried to get it right by licensing Avril’s photo. NYSDHR went wrong when it lulled itself into a false sense of security by: (1) not reading the use limitations in the license; and (2) failing to consider whether Avril would be damaged by making it appear that she was HIV positive when, in fact, she wasn’t (which is surprising for a Human Rights agency). BTW, you can find a picture of the offending ad in news reports about the lawsuits. It didn’t seem right to use the image for this post. So I didn’t.

  • IP BLAWG

    What Happens to "G-r-reat Ideas"

    Beverly A. Berneman
    2/2/16

    Kyle Wilson had a great idea for a cereal breakfast bar. So he submitted to Kellogg Co.’s "G-r-reat Ideas” portal. When Kellogg used the idea without paying him, Wilson sued. Kellogg’s portal allowed submissions of ideas. But the terms and conditions said that Kellogg wasn’t obligated to pay for a submitted idea; even if Kellogg decided to use it. Wilson lost his suit against Kellogg. The court held that Kellogg’s terms and conditions clearly warned idea givers, like Wilson.

    WHY YOU SHOULD KNOW THIS. Kellogg taught Wilson, and us, a valuable lesson about idea submissions. Idea submissions are all about expectations. The idea giver usually wants something in return from the idea receiver. The idea receiver is not always ready, willing or able to fulfill the idea giver’s expectations. Hollywood sees this all the time. That’s why no one in Hollywood accepts unsolicited treatments or scripts. The best for both sides is what Kellogg did. It invited idea submissions. But, the idea submission portal made it clear that Kellogg would not be obligated to pay for the idea. This managed expectations on both sides.

  • IP BLAWG

    Playing at Trademark Use Gets Nowhere

    Beverly A. Berneman
    1/26/16

    The owner of the PLAYDOM trademark learned that trademark use and “website under construction” don’t play nice together. David Couture got a registered trademark in 2008 for PLAYDOM. His specimen of use was a website page that described his company’s services. But it also said “Website under construction”. Years later, another company tried to register PLAYDOM. The applicant, Playdom Inc. (later acquired by Disney Co.) was refused registration based upon a likelihood of confusion with Couture’s trademark. Playdom Inc. brought a cancellation proceeding and won. The Federal Circuit Court affirmed the TTAB cancellation holding that the website advertised Couture’s readiness to perform services but he didn’t render any services until 2 years later. This decision has come under fire because prior case law saw “offering services” to be the same as “rendering services”. Critics also argue that the Lanham Act (15 U.S.C. §1053) establishes a different standard for use for services; a standard that Couture met. So the fact that Couture was offering his services should have been enough.

    WHY YOU SHOULD KNOW THIS. Trademark rights depend on the use of the mark in connection with goods and services. For some, this case demonstrates that there can be a fine line between developing a trademark and actually using it. For others, this case demonstrates a break with established precedent to create a new standard of use for services. No matter which side you’re on, the fact is that we now have to be very careful in establishing use for a service trademark.

  • IP BLAWG

    In Memoriam: David Bowie

    Beverly A. Berneman
    1/19/16

    David Bowie, a musical and cultural icon known for pushing boundaries, passed away on January 10, 2016. Did you know that he also pushed the boundaries on monetizing Intellectual Property? In 1997, Bowie was looking for a new revenue stream. With the help of investment banker, David Pullman, Bowie issued asset-based securities for current and future revenues from 25 of his albums recorded before 1990. And thus the term ‘Bowie Bonds” came into being. Bowie used some of the money he raised to buy back songs from his former manager. Although revenue from the bonds suffered some bumps in the road acclimatizing to digital downloads, Bowie Bonds are still considered a success. So successful that other famous musicians, such as James Brown and Iron Maiden, also used the Bowie Bond model to raise revenue.

    WHY YOU SHOULD KNOW THIS. David Bowie’s career was a study in breaking the mold. He taught us not to be relegated to accepting the familiar path as the only path. When we free our minds, we can change our thinking. And sometimes when we change our thinking, we can create new and successful methods for achieving our goals. Thank you David and rest in peace. We’ll miss you.

  • IP BLAWG

    "Bleeping" Trademark

    Beverly A. Berneman
    1/12/16

    Thanks to The Slants, the Washington Redskins’ trademark may live to fight another day. In June 2014, the Washington Redskins lost the trademark of their name because the term “redskins” was offensive. The Slants, an all Asian American dance rock band, tried to register their name as a trademark. The USPTO refused registration on the basis that the mark was “offensive” and “disparaging”. The Slants appealed the ruling. The Federal Circuit Court overturned the ruling. The court acknowledged that disparaging marks can be considered hurtful speech that harms members of oft-stigmatized communities. But the First Amendment protects even hurtful speech. According to the court, the government (in the form of the USPTO), cannot refuse to register disparaging marks because it disapproves of the expressive message conveyed by the marks. That means, the Washington Redskins may have a good shot at getting their trademark reinstated.

    WHY YOU SHOULD KNOW THIS: On the surface, the decision seems to authorize anyone to attempt to register a trademark no matter how offensive and hurtful it might be to a group of people. But there are still limits. Just as the First Amendment has a limitations such as not screaming ‘FIRE’ in a crowded theater, there still will be limitations on trademark registration. On the practical side, choosing an offensive or disparaging trademark could have market consequences by alienating a group of potential customers. So a business considering the adoption of an offensive or disparaging trademark should proceed cautiously.

  • IP BLAWG

    Caterpillar Gets Caught in its Own Butterfly Net

    Beverly A. Berneman
    1/5/16

    Caterpillar, Inc. is dealing with a $74 million trade secret verdict for misappropriating a supplier’s trade secrets. The supplier, Miller UK Ltd., had an agreement with Caterpillar to sell components. Miller brought suit against Caterpillar alleging that Caterpillar used its power as Miller’s largest customer to force disclosure of Miller’s trade secrets. Apparently, Caterpillar’s strategy was to cancel Miller’s contract and then produce its own components without having to pay Miller. The jury found in favor of Miller.

    TAKE AWAY: This is a prime example of overreaching by one side and placating an important customer by giving away the store on the other side. What could both sides have done differently? On Caterpillar’s part, management has to have set policies against using unsavory means to an end. Clearly, this is an abuse of bargaining power that had dire consequences for Caterpillar. On the other hand, Miller should have had a set policy about trade secret disclosures. Employees should know what they can and can’t disclose. And if disclosure of trade secrets is considered necessary to keep a customer (which would be rare), the disclosure decision should be made by top level management after determining the purpose of the requested disclosure and setting disclosure parameters and restrictions on use after disclosure.

  • IP BLAWG

    Santa Claus is Coming to Songwriter's Heirs

    Beverly A. Berneman
    12/22/15

    The heirs of the composer of “Santa Claus is Coming to Town” got an early Christmas present from the Second Circuit Court of Appeals. The song was composed in the 1930s. The 1976 Copyright Act allows a copyright owner to terminate a license during a five year period beginning 35 years after the date of execution of the license. The composer’s heirs served a notice of termination on the publisher, EMI. Due to confusion created by the intricacies between pre and post 1976 copyright law, plus the existence of two license grants that were signed 30 years apart, EMI refused to accept the termination. The Second Circuit held in the heirs’ favor. The heirs are going to get holiday royalties until 2029.

    TAKE AWAY: If you own a copyright or if you inherited a copyright, don’t try to figure out the termination process alone. It is full of land mines. BIGGEST TAKE AWAY: How fun is that? A Santa copyright decision during the Christmas season? Happy Holidays and see you next year.