Anyone with a legitimate interest can oppose the registration of a trademark. But what does “legitimate interest” actually mean. It looks like Rapunzel may help answer that question.

Boards of review don’t have the final say about property tax assessments, however they’re a necessary stop in the appeal process. Taxpayers who are unhappy with their board decision have two options: appeal to the state Property Tax Appeal Board (PTAB) as described in my Aug. 24, Sept. 12 and Nov. 27 blogs; or, file a tax objection complaint in the circuit court. You cannot file appeals in both venues. The good news is that taxpayers who miss the 30-day filing deadline for taking an appeal to the PTAB still have time to pursue the tax objection remedy.

In my blog post of August 1, 2017, I posed the copyright litigation dilemma: “To File or Not to File”. On March 4, 2019, the US Supreme Court resolved the dilemma once and for all.

Department of Labor proposed regulations would allow certain employers (including employer groups or associations) and business owners with no employees to share a single 401(k) plan. This arrangement would transfer administrative and compliance responsibility to the sponsor of the retirement plan under a multiple employer plan, or “MEP.”

Public information can’t be a trade secret because it’s, well, public. But a combination of public information arranged or organized in a unique, economically advantageous way, can be a trade secret. That’s what Diego DeAmezaga learned to his chagrin. Diego worked for AirFacts, Inc. a software company that licenses auditing software for air fare comparisons. Diego worked painstakingly and expertly to create flow charts that AirFacts used in its software development. When Diego left AirFacts, he attached the flow charts to his resume. AirFacts brought suit against Diego for trade secret misappropriation under the Maryland Uniform Trade Secrets Act (MUTSA). The Maryland District Court dismissed the complaint. The Fourth Circuit Court of Appeals reversed the dismissal. The Court held that the flow charts had independent economic value separate from the public information they contained. AirFacts had taken reasonable measures to keep the flow charts secret by requiring employees to sign confidentiality agreements and giving only a few employees access to certain accounts. So the public information in the flow charts were trade secrets.

In the olden days, you’d buy an album and when you grew tired of it you’d sell the album to a used record store. That’s because you owned the physical record and once you bought it, that record was yours to do with as you please. This is called the “First Sale Doctrine”. Nowadays most people download their tunes. They still buy or rent it but now they don’t have a physical embodiment of the music. Relying on the First Sale Doctrine, ReDigi Inc. had offered a service whereby you could upload your digital music that you legally purchased from iTunes and resell it. Capitol Records LLC had a problem with that. Capitol Records sued ReDigi for copyright infringement arguing that the First Sale Doctrine doesn’t apply to digital files. The act of uploading the files to ReDigi’s server was creating a copy without permission. The Second Circuit Court of Appeals affirmed a judgment in Capitol Records’ favor. ReDigi also argued that its use was Fair Use. The court held against ReDigi on that as well because ReDigi was commercially motivated, made no changes to the copyrighted works, used the entire works, and resold the digital music files in the same market as the copyright owners.

Mistakes happen. If a mistake occurs in the property tax process, it could be costly if not corrected. Fortunately, some errors are fixable -- even those that may have occurred in a previous year or years -- thanks to what is known as a Certificate of Error, or in property tax parlance, a C of E. When an assessment error is discovered, taxpayers can seek relief by filing a C of E with local assessing officials. However, be advised that the granting of a C of E by an assessing authority is discretionary, not mandatory.

Using your name as a trademark is doable. Even if someone else has the same name. %CUT% A surname is considered a descriptive trademark because it references a person or company who’s providing the goods and services. Generally, descriptive marks can’t be registered as trademarks. But, the recent case between The Saint Louis Brewery (“SLB”) and Phyllis Schlafly and Bruce Schlafly (the “Schlaflys”) demonstrated how to get a trademark in a surname. The Schlaflys are family members of the late Phyllis Schlafly who was a writer and political activist best known for her opposition to the women's movement and especially the Equal Rights Amendment. Bruce Schlafly is a doctor and he uses his name in his medical practice. SLB marketed its beer using a logo design that incorporated the name of one of the founders, Thomas Schlafly, for about 30 years. SLB sold more than 75,000,000 units of beer, not counting restaurant sales. SLB applied to register the word mark “Schlafly” saying that the surname has acquired distinctiveness through secondary meaning (connecting the name to the goods) and was no longer merely descriptive. The Schlaflys opposed the registration. The Schlaflys argued that being associated with beer was going to have a negative effect on the name. The Trademark Trial and Appeal Board (“TTAB”) denied the opposition. The Schlaflys appealed to the United States Court of Appeals for the Federal Circuit (“CAFC”) arguing that the use of the name violated the First Amendment and their Due Process Rights. The Schlaflys argued that the name “Schlafly” is recognized primarily as Phyllis Schlafly’s surname, and that the CAFC should adopt a new test called the “change in significance” test, “whereby a surname cannot be registered as a trademark without showing a change in significance to the public from a surname to an identifying mark for specified goods.” The CAFC rejected the Opposers’ arguments and affirmed the TTAB’s decision.

Breaking attorney-client privilege can open a floodgate of information in infringement litigation.

In McLain v. Poppell, it was alleged that Dr. Poppell, owner of the Emerald Coast Eye Clinic and trustee of its 401(k) plan with total investment discretion, invested plan assets primarily in VirnetX, a publicly traded company whose principal business was acting as a “patent troll” (a company that acquires patents and uses them primarily to sue other businesses for alleged patent infringement).

The Copyright Act allows the recovery of actual damages; but not everything is included. %CUT% Rachel Ann Nunes wrote a novel called Bid for Love. Tiffanie Rushton admitted that she copied some of Bid for Love for her book, The Auction Deal. Rachel sued Tiffanie for copyright infringement. Rachel claimed that her actual damages were the lost sales of two books she didn’t write because of the emotional distress she suffered as a result of the infringement. The court held that the Copyright Act does not provide for the recovery of damages for emotional distress. So Rachel had no actual damages. However, she still is entitled to statutory damages.

The grandkids didn’t play nice when it came to a famous restaurant trademark. %CUT% The nationally famous Palm steakhouse was founded in New York City in 1926 by John Ganzi and Pio Bozzi. The Palm enhances their patrons’ steak eating experience by decorating the walls with caricatures of famous people contributed by cartoonists who often exchanged their cartoons for meals. Eventually, the grandchildren took over management. One set of grandchildren became the majority shareholders and the other set of grandchildren were relegated to the ignominious status of minority shareholders. In 2012, the minority filed suit against the majority for breach of fiduciary duty based upon gross mismanagement and self-dealing with restaurants that were owned and operated solely by the majority. The chief issue was the sweetheart trademark license deal the majority’s restaurants were getting. Even though Palm was a national brand with almost 100 years of fame, the majority’s restaurants only paid a flat license fee of $6,000 a year for decades. The court agreed with the minority and entered judgment in their favor. In assessing the damages, the court accepted the minority’s expert damage witnesses’ conclusions that the majority’s restaurants should have paid a reasonable royalty of 5% of gross sales. The court concluded that the undervalued license agreements were self-dealing by the majority and an example of textbook fiduciary misconduct. Even though the statute of limitations limited the damages to six years of royalties, the royalty damages were over $68 million. Additional damages for other breaches of fiduciary duty were also awarded, along with interest and attorney fees, which increase the total judgment to over $120 million.

Illinois is home to both the Windy City and a very flat, windy prairie. When the state’s first wind turbine went online in rural Lee County in 2003, no one could have guessed that 15 years later over 2,600 of these devices would be operational and account for 6.2% of all in-state electrical production.*

Welcome to the Third Annual IP Hall of Fame. In past years, we have awarded Crippys to those who achieved infamy by committing Intellectual Property crimes during the previous year. This year we add the Hippy for an IP hero whose good deeds are an antidote for those with nefarious intent. Click here to see the winners. %CUT%

I’m Dreaming of a White ...

Sometimes the long road of Intellectual Property infringement ends up in Bankruptcy Court. Then the normal rules can change. %CUT% Tech Pharmacy Services, who owned patents for pharmaceutical dispensing machines sued Provider Meds LLC and its affiliated companies for patent infringement. The parties ended up settling. As part of the settlement, Tech Pharmacy licensed the patents to Provider Meds. The Provider Meds' companies filed Chapter 11 bankruptcy reorganization cases. The cases were later converted to Chapter 7 liquidation cases and a Chapter 7 trustee was appointed. But, Provider Meds somehow managed to not list the patent license on their bankruptcy schedules. The Chapter 7 trustee had 60 days from the date of conversion of the cases to assume the licenses. Since the trustee didn’t know about the licenses, the trustee didn’t assume them. Since they weren’t assumed, they were deemed rejected by operation of law. Rejection means that Tech Pharmacy would no longer have to honor the license agreements. The Chapter 7 trustee sold Provider Meds’ assets to RPD Holdings. Imagine RPD’s surprise when it realized the sale didn’t include assignment of the Tech Pharmacy patent licenses. RPD appealed. The Fifth Circuit Court of Appeals affirmed the lower court rulings that the rejected licenses couldn’t be resurrected.

Updating a trademark can be risky if someone else gets in ahead of you. %CUT% Inn at St. Johns, LLC registered its name “5ive Restaurant” in logo form. So far so good. Eleven years later, St. Johns decided to update its trademark to 5ive Steakhouse in logo form. But St. Johns got derailed. Three years after St. Johns registered its first trademark, OTG Management Inc. registered 5Steak. (All 3 mark drawings appear to the left). The United States Patent and Trademark Office (“USPTO”) refused registration of St. Johns’ 5ive Steakhouse due to a likelihood of confusion with the OTG’s 5Steak registration. The Trademark Trial and Appeal Board affirmed the refusal.

A trade secret isn’t really a secret without proper measures of protection. %CUT% Kevin Barker, a vice president of Yellowfin Yachts, left the company to start a competing company, Barker Boatworks. Yellowfin sued Kevin and his new company for trade dress infringement and for trade secret misappropriation. Yellowfin alleged that Kevin downloaded hundreds of files with customer specifications, and drawings. The Eleventh Circuit Court of Appeals affirmed summary judgment in Kevin and Barker’s favor. First, the court disposed of Yellowfin’s trade dress claims because it couldn’t prove any customer confusion between its designs and Barker’s designs. In addressing the trade secret misappropriation claim, the court affirmed the lower court’s ruling that the customer information wasn’t a trade secret because boat owners have to register with the State of Florida. Then the court focused on Yellowfin’s measures of secrecy and found them wanting. While the information was password protected and only certain employees had access, the Eleventh Circuit concluded that “Yellowfin effectively abandoned all oversight in the security” of the information at issue because Yellowfin: (1) encouraged Kevin to store the information on his personal devices and didn’t ask him to delete the information when he left the company; (2) didn’t ask Kevin to use security measures for the information on his personal devices; (3) allowed Kevin access to the information even though he refused to sign a confidentiality agreement; and (4) none of the information was marked ‘confidential’.

When taking a case to the Property Tax Appeal Board (PTAB), it’s only natural to hope for the best. However, not everyone receives the result they desire. Fortunately, any party dissatisfied with a PTAB decision can appeal it.*

Whether you are an accountant, lawyer, banker, business consultant or investment advisor, many of your business clients will have a 401(k) or other qualified retirement plan. You may not specialize in retirement plans, but consider the following as the kinds of things you might do to assist your clients and prospects with their retirement plans:

Trade show materials may be a patent buster. %CUT% Trade shows are a way to showcase products and innovations in an industry. Materials distributed at a trade show are usually promotional and are designed to get more sales and establish a beacon in the marketplace. But, trade materials that identify inventions could bust a patent. The US Patent Trial and Appeal Board (the “Board”), in an inter parties review (“IPR”) between Nobel Biocare Services AG v. Instradent USA, Inc., held that certain claims in Nobel’s patent for a dental implant screw were not patentable because they were anticipated. “Anticipated” is similar to “prior art” which means that the claimed invention isn’t new. Instradent, the IPR petitioner, argued that Nobel’s invention for a dental implant screw had already been disclosed in a product catalogue from Alpha-Bio Tech Ltd. (“ABT”). Instradent proved that ABT disclosed the product in a catalogue it distributed at a 2003 dental trade show in Cologne, Germany. ABT had a rather small booth at the show and not much of a presence. But people at the trade show had seen the catalogue. So it was considered publication of the prior art. On appeal, the Federal Circuit affirmed the Board’s determination that the ABT catalogue was prior art and so some of Nobel’s claims in the patent were not patentable.

Captain America, Thor and Iron Man can’t save your party guests without a license. %CUT% Characters for Hire, LLC (“CFH”) advertises premium entertainment for parties and private events by booking actors dressed like popular characters. CFH offers hero characters and famous characters from popular scifi/fantasy movies. Understanding that Disney, Marvel and LucasFilm own the rights to characters that fall into those categories, CFH used generic names like "Big Green Guy" (Hulk) and “The Dark Lord” (Darth Vader). Similarly, CFH advertised themed parties that referenced Plaintiffs’ movies, such as “Frozen Themed” (Frozen), “Avenging Team” (The Avengers), and “Star Battles” (Star Wars). But CFH used the original images of the characters in its ads (see picture). After CFH ignored several cease and desist letters, Disney, Marvel and LucasFilm sued. The court entered summary judgment against the plaintiffs on trademark infringement. The court appeared to put a lot of weight on the fact that the plaintiffs couldn’t show actual confusion and there was enough notice that CFH was not affiliated with the plaintiffs. But the court will proceed on the other counts of unfair competition, dilution and copyright infringement. So CFH can’t breathe a sigh of relief yet.

Even Halloween can’t escape copyright. %CUT%

Illinois law requires a general assessment of all property in the state to be made every four years, except in Cook County.*

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