The last word sometimes isn’t really the last word. Here’s what happened after some previous posts: %CUT%

An implied copyright license doesn’t need to be in writing. %CUT% In Intellitech Corp., v. The Institute of Electric & Electronics Engineers, Inc. a/k/a IEEE, IEEE is a non-profit organization that was trying to set standards for electrical engineers. Intellitech contributed to the “Test Access Architecture for Three-Dimensional Stacked Integrated Circuits.” Intellitech sued IEEE for copyright infringement when IEEE tried to use Intellitech’s contributions. The court denied Intellitech’s motion for summary judgment. The court held that even if Intellitech owned the copyright in the work, IEEE had a non-exclusive implied license to use it because the parties always intended that result.

Property taxes affect us all, whether we’re paying them directly or receiving services or benefits covered by the tax. That’s especially true in Illinois, where property taxes are the 2nd highest in the nation, behind only New Jersey.*

A specimen of use can make or break a trademark application. %CUT% Pitney Bowes wanted to register its new logo design as a trademark for mailing services among other things. For its specimen of use, Pitney Bowes used a screen shot from its website showing a picture of its “Mail&Go” kiosk that featured the new logo. The examining attorney refused the specimen saying that it showed the sale of products but not mailing services. Pitney Bowes appealed to the Trademark Trial and Appeal Board who reversed the refusal. The Board held that the examining attorney should have given greater deference to Pitney Bowes’ common sense explanation that its mailing services were offered to consumers through the self-service kiosk. Ultimately, Pitney Bowes submitted a substitute specimen of use anyway and the trademark has been registered.

There are judicial decisions holding that a business owner can be personally responsible when the owner has control over company finances and exercises such authority by paying company creditors instead of making required payments to a welfare benefit plan. But a recent decision of the U.S. Court of Appeals for the Ninth Circuit holds that an employer does not become an ERISA fiduciary merely because it breaks its contractual obligations to make welfare plan contributions (see Glazing Health & Welfare Fund v. Lamek).

Selling a patent doesn’t extend its limited life. %CUT% Allergan, Inc. owned the patents for Restasis which treats severe dry eyes by producing tears. The terms of the patents were about to expire. So, Allergan “sold“ the patents to the Saint Regis Mohawk Tribe and who then licensed all of the rights relating to the patents back for millions in upfront and annual royalties. In an IPR between Mylan Pharmaceuticals and Allergan, the Tribe unsuccessfully tried to dismiss the proceedings based on sovereign immunity. The PTAB’s decision had several important points which all seemed to spring from the PTAB’s view that any rights the Tribe had were “illusory”. First, it held that Allergan’s exclusive rights to the patent under the license from the Tribe were irrevocable and lasted only until the patents expired or are invalidated. Second, since Allergan retained the right to sue, the Tribe had no interest in the proceedings. Third, sovereign immunity is not a defense to IPR proceedings.

You own your domain name, right? Maybe not. %CUT% While working for the law firm, Trowbridge Sidoti LLP, attorney, Kim Taylor, registered a large number of domain names for the firm, including SyndicationLawyers.com. She registered them in her own name instead of the firm’s, even though they were going to be used by the firm. After she left the firm, Kim refused to transfer the domain names claiming she owned them. Trowbridge Sidoti sued. After 10 hours of deliberation, the jury returned a verdict against Taylor with respect to all of the domain names. The jury found that Taylor’s actions only caused harm with respect to the SyndicationLawyers.com domain name and awarded $7,800.00 in damages.

Agreeing to assign a patent in the future isn’t an assignment at all. %CUT% Three co-inventors of a patent were employed by Company A. The co-inventors signed an employment agreement stating they “will assign” their rights to any patentable invention they created during their employment. Company A transferred its assets to Company B. Only two of the inventors assigned their patent rights to Company B. Based upon the employment agreement between the original company and the third inventor, the USPTO allowed Company B to prosecute the patent without the third inventor actually assigning the patent. Company B dissolved and its assets were transferred to Advanced Video Techs, LLC. Advanced Video then brought a patent infringement suit against HTC Corp. The district court dismissed the case holding that Advanced Video didn’t have standing to bring a patent infringement suit without joining the non-assigning inventor in the suit. On appeal, the Federal Circuit Court of Appeals affirmed the decision that Advanced Video didn’t have standing. The Federal Circuit reasoned that the agreement to assign something in the future, is not an assignment. The third co-inventor only promised to assign a future patent so she still had part ownership of the patent and had to be a party to the infringement suit.

Embedding a Twitter photo can be copyright infringement. %CUT% It all started when Justin Goldman took photos of Tom Brady and posted them on Snapchat. Content on Snapchat is supposed to disappear after a while. These photos didn’t. Instead, the photos ended up being reposted on various social media sites, including Twitter. Some media outlets then embedded the third party tweets with the photos in articles on their respective websites. Goldman filed suit against the media outlets for copyright infringement. The defendants brought a motion to dismiss arguing that they aren’t liable because they were protected under the “Server Test”. The Server Test says that images generated by a search engine, like Google, aren’t copyright infringement because search engines don’t store images. The court denied the motion. This wasn’t a case of linking to the origin of the photos. The defendants actively embedded the images which were immediately available upon opening the offending webpage.

Advertising a discount that disappears at point of purchase is a problem. %CUT% A customer of Hobby Lobby, wanted to buy a picture frame. She believed she was getting a 50 percent discount on a photo frame due to an in-store sign stating "Photo Frames 50% OFF the Marked price.” Hobby Lobby didn’t honor the discount but instead pointed to disclaimer language that said, "DISCOUNTS PROVIDED EVERY DAY; MARKED PRICES REFLECT GENERAL U.S. MARKET VALUE FOR SIMILAR PRODUCTS." The customer brought a class action suit based on false advertising as well as other causes of action. Hobby Lobby’s motion to dismiss was denied. The court held that a reasonable consumer could have been misled despite the disclaimer language. So the suit will proceed.

All transactions involving the purchase or redemption of employer stock by an Employee Stock Ownership Plan (“ESOP”) must be conducted at fair market value. This assures that the statutory prohibited transaction exceptions available to compliant ESOPs will apply. Fair market value for private companies must be determined by an independent appraisal. This would include annual valuations and, more important, the valuation of the ESOP’s critical acquisition of the employer stock that it is required to maintain as its “principal investment.”

Tequila and cigars go together like love and marriage; or maybe not. %CUT% El Galan Inc. tried to register the word “Ternura” for a brand of cigars. The USPTO refused registration because Don Francisco Spirits LLC had already registered the same word for tequila. The USPTO said that the two products are “related”, meaning that they are complementary and linked in the minds of consumers. El Galan appealed to the TTAB. The TTAB affirmed the refusal. The TTAB reached back into history and cited a 1955 ruling by the Fifth Circuit in favor of the famous Scotch whiskey brand, Johnnie Walker, against a company that wanted to use the name for cigars. Because, after all, everyone connects whiskey and cigars. So according to the USPTO and the TTAB, the same is true for tequila and cigars. The TTAB pulled back a little by saying that the opinion should not be interpreted to mean that cigars and alcoholic beverages will always be considered related.

Software can have lots of layers like an onion which can be trouble for an infringement lawsuit. %CUT% In CSS, Inc. v. Herrington, CSS complained that the defendants infringed on three of its copyrighted software programs. The programs were made up of a lot of different components, including third party software and abstract ideas. The court’s opinion peeled the layers of CSS’s software onions to get to the decision. First, the court peeled off the function that each program performed because they were "ideas" of the programs and not their expression. Then the court peeled away the client/server architecture used by each of the programs because that was non-copyrightable industry-standard. Next came the third party components because they didn’t belong to either party. Next came the arrangement of the third party components didn’t have enough creativity for copyright protection. Then the court peeled away the layer that was the name/address algorithm because it was unoriginal and not copyrightable. Once the court got to the small onion core of protectable software that was left, the court held that CSS didn’t prove substantially similarity between CSS’s onion core and the defendants’ onion core. CSS may have had something that was protectable, but after peeling away the uncopyrightable components of its software it couldn’t prove infringement.

With March Madness upon us, we must remember its bumpy trademark road. %CUT% March Madness is the uber-famous trademark of the National Collegiate Athletic Association’s championship basketball tournament. But the NCAA was not the first to use the trademark. The Illinois High School Association was. The IHSA unsuccessfully tried to stop the NCAA from using it. The court held that both had the right to use the name. Eventually, the NCAA acquired the IHSA’s rights. Once the NCAA acquired the rights, it aggressively protected the trademark. The NCAA has been able to squelch the unlicensed use of the trademark and anything that comes perilously close such as “April Madness” (for entertainment service), “Markdown Madness” (for auto sales services), “Skate Madness” (for skateboarding competitions) and “Freestyle Madness” (for various entertainment services).

Similar trademarks don’t necessarily result in a likelihood of confusion. %CUT% Two recent decisions considered whether similar trademarks can coexist without causing customer confusion. In Allstate Insurance Co. v. Kia Motors America Inc., Allstate argued that Kia’s “Drive Wise” brand infringed on its “Drivewise” trademark. Kia’s product was a high end add-on for Kia’s cars. Allstate’s product was a program to reward safe driving by its insurance customers. The court held that the goods offered by the parties were not identical or even related. Customers who wanted an add-on for their car would not be confused by similar words used for an insurance company’s safe driving incentive. And the reverse would be true as well. Another case involved a similar set of facts and came out the same way. In Destileria Serralles Inc. v. Kabushiki Kaisha Donq DBA Donq Co. Ltd., the Trademark Trial and Appeal Board ruled that a Kabushiki’s Japanese bakery chain named “Donq” was not confusingly similar to Destileria’s rum brand “Don Q”. Destileria argued that many brands of liquor cross over into other types of goods and so there would be “overlap” in the minds of the consuming public. The TTAB rejected the argument because Destileria’s brand is marginally famous and purchasers would be less likely to expect expansion into other goods.

Trade secrets can be an asset in a divorce. %CUT% Donald Bailey and his ex-wife, Geraldine Bailey, were in the midst of a very messy divorce. As part of the proceedings, Geraldine wanted to determine the value of their marital assets. So Geraldine’s law firm sought discovery against Donald’s two companies, Zegato Solutions Inc. and Aldmyr Systems, Inc. The two companies had trade secrets that were worth about $350 million, according to Donald. Donald then brought a suit against the attorneys claiming that they stole and copied the trade secrets. Dismissal of the suit was affirmed by the Fourth Circuit Court of Appeals. The Fourth Circuit agreed with the lower court that the law firm was entitled to explore Donald’s assets on behalf of Geraldine.

Website framing can be copyright infringement. %CUT% “Framing” is the display of content on a website that is independent of the original content creator. In Leader’s Institute LLC v. Jackson, Robert Jackson left Leader’s Institute to work for a competitor, Magnovo Training Group. Leader’s Institute sued claiming misappropriation of trade secrets and trademark infringement. Magnovo brought a counterclaim alleging that Leader’s Institute had committed copyright infringement by framing Magnovo’s copyrighted content on Leader’s Institute’s website. The court granted partial summary judgment to Magnovo on the copyright infringement claim. The court held that programming its website to display Magnovo’s copyrighted works is considered an unauthorized public display of a work of authorship under Copyright Law.

Nick Saban is the highest paid college football coach in the country. In 2017, he was reportedly paid $11 million by the University of Alabama. If he is paid that amount in 2018, the recently passed Tax Cuts and Jobs Act (the “Act”) will impose an excise tax on Alabama, his employer, of over $2 million!

A trademark can’t block competitors from using descriptive words. %CUT% Attorney, Candace L. Moon, wanted to become the “on-stop shop” for the legal issues in the craft beer industry. So she tried to register “The Craft Beer Attorney APC” as a trademark. The uproar from other attorneys was deafening. No less than 10 other law firms filed oppositions to registration of the trademark. They argued that the words “Craft Beer Attorney” were generic because other attorneys need to use those words to describe their services. One firm wrote: “Such use is and would be in derogation and violation of the First Amendment rights of third parties, who have a bona fide need to use such a generic term or phrase to accurately describe and reference their own similar services.” Candace withdrew her application and the TTAB entered judgment in favor of the opposers.

You don’t need an Oracle to predict the outcome of working outside the scope of a license. %CUT% Rimini Street, Inc. was hired by one of Oracle USA, Inc.’s licensees to develop and test updates for the licensee’s customers. But Rimini started using Oracle’s software to develop products for its other clients who didn’t have a license from Oracle. Oracle sued and won a copyright infringement judgment. Rimini appealed and lost at the 9th Circuit Court of Appeals. Rimini had two interesting affirmative defenses that were rejected by the court. First, Rimini said it had an express license. While it had an express license with respect to a single licensee, it didn’t have a blanket express license to use the software for anyone else. Second, Rimini argued that Oracle was misusing the copyright. Copyright misuse is an equitable defense against copyright infringement allowing copyright infringers to avoid infringement liability if the copyright holder has engaged in abusive or improper conduct in exploiting or enforcing the copyright. In other words, Rimini was accusing Oracle of being a copyright bully because Oracle wasn’t allowing Rimini to get a head start with Oracle’s future software licensees. The court rejected this argument. As the owner of the software, Oracle had every right to control the use of its software by potential future licensees.

If you want a patent, be careful about when you make your first sale. %CUT% Helsinn Healthcare S.A. applied to patent a formula that would reduce nausea and vomiting resulting from chemotherapy. When it sued Teva Pharmaceuticals USA Inc. for patent infringement, Teva argued that the patent was barred because Helsinn sold the formula more than a year before it applied for the patent. The Patent Act bars the patentability of an “invention [that] was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.” An invention is made available to the public when there is a commercial offer or contract to sell a product embodying the invention and that sale is made public. There was no question that Helsinn had entered into a distribution agreement more than a year before the patent application. So the issue was whether the agreement between Helsinn and its distributor was a “sale” which would bar the patent. The Federal Circuit Court of Appeals ruled that the sale to the distributor qualified as a commercial sale that would bar the application.

The USPTO can no longer ban scandalous and immoral trademarks. %CUT% 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.”

Your retirement plan may have an outside third party administrator (TPA) to assist with plan administration. However, a TPA typically is not a fiduciary to the plan and does not act as “plan administrator” (that’s usually the employer itself as provided in a typical TPA services agreement). This leaves the employer ultimately responsible for the plan’s compliance with all applicable legal requirements. So, even if your TPA makes a mistake, the employer is likely on the hook for any resulting liability because the TPA’s services agreement usually imposes damage limits and employer indemnities that protect the TPA.

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:%CUT%

Dr. Seuss’ Estate doesn’t have the Christmas spirit. %CUT% 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.