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Intellectual property licenses can be important in various situations ranging from large scale strategic transactions and IP litigation to day-to-day lower profile transactions. Even the latter can have far-reaching impact on a company’s proprietary assets, particularly if certain IP-related concerns are overlooked.

Foley Hoag presents a webinar covering a range of traps and tips related to IP licenses, including:

  • Identifying less obvious IP licenses in commercial agreements
  • Addressing ownership and rights to IP or technology created in common business relationships
  • Data rights: value, security, risk
  • Avoiding “naked” trademark licenses
  • Blockchain, open source and other current topics
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It’s been rough weather for Google in France. Three weeks after the French ‎Data Protection Authority imposed a record fine against Google for non-compliance with the GDPR, the Paris District Court (“Tribunal de Grande Instance”) invalidated 38 clauses of Google’s Privacy Policy and Terms of Use for Google+, the Internet-based social media network owned and operated by Google.

This decision was rendered on February 12, 2019 in an action that was initiated against Google Inc. in 2014 by an old French consumer not-for-profit organization, UFC QueChoisir. It took 4 years for the case to get to trial, and an additional 11 months to issue a 136 page long decision, which is quite unusual according to French standards.

The court invalidated 38 of the Privacy Policy and Terms of Use clauses for Google+, which amounts to more than half of the total number of clauses.  The clauses were invalidated on various grounds, including non-compliance with the Consumers Code and the Data Protection Law. Google claimed that the Consumers Code did not apply because its Google+ services are provided free of charge.  The court disagreed, finding that the criterion is whether the services are being provided in consideration of something, which, in this case, was Google’s ability to use the information gathered from its consumers to sell targeted advertising.

Among the invalidated clauses include three IP clauses discussed below:

Clause 16 – General License Granted to Google for Content Submitted by Users

Clause 16 of Google+’s Terms of Use provides that users grant Google a worldwide license to use all content submitted by the users for the entire duration of copyright protection, for use in connection with Google’s existing services and for new services that Google may offer in the future.  The court held that this clause was contrary to two rules of French copyright law.

First, ‎the global assignment of rights on future works is prohibited under article L.131-1 of the Intellectual Property Code. This old rule of French copyright law was designed to protect young artists and help them free themselves from publishers or producers who may otherwise have required exclusive publication rights to their future works. This rule still exists today and is used for example to invalidate assignment of rights clauses that can be found in some employment contracts. ‎Clearly, the clause in the Google+ Terms of Use refers to future works globally, since it does not point to any particular work. What is less clear is whether there is an assignment of rights, because the clause grants a license of use and not an assignment.

Secondly, there is a requirement under French copyright law that any grant of right must specify which rights are granted, the territory, the duration of the license, and the authorized use, as required under article L.131-3 of the Intellectual Property Code. The practical consequence of this rule is that in French contracts with authors, grant clauses are usually quite lengthy.  Here, the court held that Clause 16 was too vague and therefore did not comply with article L.131-3, despite the fact that the duration was clearly the entire life of copyright protection, and the territory was clearly worldwide. Although Google explained that the rights being granted were “for the limited purpose of operating, promoting, and improving our Services, and to develop new ones,” ultimately the court found that this “limited purpose” was too broad.

Clauses 13 and 14 – U.S. Style Copyright Infringement Management Terms

Google states in Clause 13 of its Google+ Terms of Use, “We respond to notices of copyright infringement and terminate accounts of repeat infringers according to the process set out in the Digital Millennium Copyright Act [DMCA].” Clause 14 provides that persons who think their copyrights are being violated may submit DMCA notices in accordance with Google’s policy.

The Paris court held that these two clauses ‎address copyright infringement exclusively in light of U.S. law. Since French consumers are not familiar with U.S. legislation and case law, and because Google, according to the French judges, refuses to follow rules other than U.S. rules, the clauses create a significant imbalance, are abusive for purposes of the Consumers Code, and are invalid.

The Practical Effect of Paris Court’s Decision

Although the judgment rendered by the Paris Court is not immediately enforceable, the court ordered Google to make the judgment public within one month by means of a hyperlink on the home page of its website and app.  The court also noted that a daily penalty of 5,000 euros would be imposed for non-compliance.

One might take the view that the decision will have limited impact since Google announced last year that it would sunset the consumer version of its social media network. However, the impact of this decision is potentially much broader, because these clauses do not only apply to Google+, but they also belong to the common terms and policies which govern Google services generally.  The decision also addresses violations of the Data Protection Law.  Stay tuned for our comments on those issues, which will be published soon on our Security, Privacy and the Law blog.

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On March 4, 2019, the United States Supreme Court held that, with certain exceptions, a copyright owner must obtain a copyright registration certificate from the Copyright Office  before filing a copyright infringement suit. The unanimous opinion in Fourth Estate Public Benefit Corp. v. Wall-Street.Com, LLC, authored by Justice Ruth Bader Ginsburg, affirmed the Eleventh Circuit and resolved a split among the circuit courts of appeal. It also has big implications for copyright owners.

The facts of the case are simple. The plaintiff Fourth Estate had licensed some content to the defendant Wall-Street.com to upload to a website for certain period. When the period ran out, the defendant failed to take the content down from the website, thus allegedly breaching the license. The copyright to the content had not yet been registered, so Fourth Estate filed applications to register it with the Copyright Office and simultaneously filed a copyright infringement suit against Wall Street and its owner. Based on Wall-Street.com and its owner’s motion, the district court dismissed.  The Eleventh Circuit affirmed, holding that Fourth Estate had to wait to bring an infringement suit until the Copyright Office had rendered a decision on the pending applications.

The Circuit Split

Copyright registration is not required for valid copyright ownership, but it is required before you can bring a copyright infringement lawsuit. Section 411(a) of the Copyright Act provides that:

[N]o civil action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made in accordance with this title.

Based on this language, everyone agrees that a copyright suit cannot be filed until “registration … has been made.” However, there was a split on what it means to “make” a copyright registration. The Eleventh Circuit followed the “registration” approach, which argued that “registration” is not “made” until the copyright application is accepted and the registration certificate issues. In other words, you file the application, then the Copyright Office issues a registration certificate, and only then can you sue.

The Ninth Circuit and some other courts had a different view, known as the “application” approach. These courts held that “registration … has been made” as soon as the applicant files the application and pays the application fee. This approach was seen by many as more practical and realistic. It currently takes an average of seven months to get a registration certificate from the Copyright Office. That administrative delay, largely the product of budgetary shortages, can eat through over 25% of the three-year statute of limitations, and is a very long time for a copyright owner to wait while there is ongoing infringement, especially in the digital age.

Justice Ginsburg Endorses the Registration Approach

Justice Ginsburg’s opinion was short and to the point: the registration approach was the “only satisfactory reading” of the statute and therefore, “[t]he phrase ‘registration … has been made’ refers to the Copyright Office’s act of granting registration, not to the copyright claimant’s request for registration.” In other words, you have to get a registration certificate from the Copyright Office before filing suit; the application is not enough.

Bolstering this view, according to the Court, is the fact that there are exceptions to the registration requirement, and these exceptions do not make sense under the application approach. For example, Section 411(a) contains an exception that permits a party to file an infringement suit after an application is filed and rejected, a provision that would be superfluous if the same party could file suit immediately after the application is filed. Similarly, Section 408 of the Copyright Act provides a “preregistration” option for copyright owners who fear prepublication infringement, along with an exception that permits these copyright owners to file suit before the registration process is complete; an exception that would have been unnecessary if the application approach was correct.

Also relevant to Justice Ginsburg’s reasoning was that in 1993, Congress considered but rejected a bill to amend the Copyright Act to allow suit immediately upon submission of an application. Justice Ginsburg concluded her opinion by addressing the practical problems caused by delays at the Copyright Office: “Unfortunate as the current administrative lag may be, that factor does not allow us to revise Section 411(a)’s congressionally composed text.”

Takeaways: The Benefits of Registration Increase

If you are the copyright owner of works that you believe are likely to be infringed, you have more incentive than ever to register (or preregister) those works with the Copyright Office in advance. If you discover infringement of an unregistered work, you will still have the option of invoking the Copyright Office’s Special Handling process, which could take a matter of days. However, if you don’t want to pay the $800 special handling fee, you will have to wait an average of seven months to sue while your work continues to be infringed. And in the meantime, your demand letters may perceived to have less bite than they did before without a valid registration certificate to back them up.

Of course, even before this ruling, there were many other benefits to registration. Registration establishes a public record of your copyright claim and the certificate can serve as prima facie evidence of validity in court (if you register within five years after publication). You can also record the registration with the U.S. Customs Service, which can use the information to identify and bar the importation of pirated or counterfeit copies. Perhaps most importantly, registration has to be made prior to commencement of the infringement, or within three months of the first publication, in order to entitle the owner to statutory damages and attorneys’ fees.

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On January 11, 2019, the Cancellation Division of the European Union Intellectual Property Office (“EUIPO”) rendered a surprising decision that revoked in its entirety the McDonald’s Company’s BIG MAC trademark registration, which had been registered in the EU since December 1998.

This is the latest chapter in a fight between McDonald’s and Supermac’s, a competing chain that operates fast-food restaurants in both parts of Ireland. The fight started in 2014, when Supermac’s wanted to expand into the EU and sought to register a Community Trademark for SUPERMAC’S. McDonald’s challenged the registration as likely to cause confusion with its BIG MAC mark. In a January 20, 2016 decision, the Opposition Division of the EUIPO agreed with McDonald’s and disallowed the SUPERMAC’S registration for those products and services that were the most relevant to McDonald’s business.

In April 2017, Supermac’s fought back and filed a request for revocation of the BIG MAC trademark for lack of genuine use. The request for revocation was filed for all the products and services covered by McDonald’s mark, including various kinds of sandwiches in classes 29 and 30, but also for services rendered or associated with operating and franchising restaurants in class 42.

This was a bold strategy, but it paid off for the Irish company. As to the registration for services (operating and franchising restaurants), the Cancellation Division unsurprisingly agreed with Supermac’s that “there is no single piece of evidence that refers to any of the registered services being offered under the” BIG MAC mark.

As regards the registration for products (sandwiches) the Cancellation Division similarly found that the evidence of use by McDonald’s of the BIG MAC mark was insufficient. This part of the decision may be surprising to some, but it provides useful guidance as to what is required to prove use. Trademark owners must establish the place, time, extent and nature of use for the relevant goods and/or services. These four factors are cumulative; failure to fulfill one condition will lead to revocation. In this case, the Cancellation Division found that the third factor, extent of use, had not been established, because of defects in McDonald’s evidence.

Affidavits? Not entitled to great weight

McDonald’s produced three affidavits, signed by representatives of McDonald’s companies in Germany, France and the UK, claiming significant sales figures and attaching examples of the sandwich packaging, promotional brochures and menus.

The Cancellation Division was not persuaded by this evidence, stating that “as far as the probative value of this kind of evidence is concerned, statements drawn up by the interested parties themselves or their employees are generally given less weight than independent evidence.” This is a useful reminder of an important cultural difference between the U.S. and Europe – generally speaking, witness evidence is given less weight in the EU.

Websites? Not convincing

McDonald’s also submitted printouts from its own websites. But these printouts failed to impress the Cancellation Division because “the mere presence of a trade mark on a website is, of itself, insufficient to prove genuine use unless the website also shows the place, time and extent of use or unless this information is otherwise provided.” McDonald’s had not, for example, provided any evidence about the number of visitors and/or sales through these websites.

Packaging materials and brochures? Not sufficient

As regards the packaging materials and brochures submitted by McDonald’s, the Cancellation Division did not find them convincing because no information had been provided “about how these brochures were circulated, who they were offered to, and whether they have led to any potential or actual purchases.” The documentary evidence therefore did not give sufficient information to support the sales and turnover figures in the affidavits.

In conclusion, the evidence provided was insufficient to show genuine use, even as to sandwiches. The Cancellation Division noted that the methods and means of proving genuine use are unlimited but that in this case, McDonald’s “chose to restrict the evidence submitted.” This may seem strange, but, in our experience, trademark owners are often reluctant to provide detailed commercial information that might be used, for example, by their competitors or by antitrust authorities. It is not always easy to find the right balance between the risk of disclosing information and the risk of losing your trademark rights. In any event, this is not the end of the fight, as McDonald’s has announced it intends to appeal.

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If you haven’t heard already, New York Fashion Week is here! As usual, a lineup of awe-inspiring shows is expected to roll out over the next several days, as it does every September and February, highlighting the latest fashion trends of some of world’s most famous designers.  One of the big stories surrounding New York Fashion Week this year is the amount of cultural diversity expected to appear on the runway.  The Council of Fashion Designers of America recently penned a letter to New York Fashion Week designers, stating “[a]s you cast your New York Fashion Week shows, please remember to promote diversity and inclusion, on and off the runway.”  The Council also released a diversity report making the case for cultural diversity in fashion.  Designers are expected to take heed. In fact, they did just that for the September New York Fashion Week shows, where over 40 percent of New York’s runway models were reported to be models of color.

Although casting for runway shows appears to be moving in the direction of cultural diversity, some believe the fashion industry itself is facing a crisis with cultural appropriation.  Cultural appropriation is the co-opting of intellectual property, cultural expressions, traditional knowledge or artifacts from another’s culture (usually a minority or indigenous group) without their input, consent, credit, or compensation.  Many of us are familiar with claims of cultural appropriation in the entertainment world (for example, Elvis appropriating black music or the Kardashian sisters co-opting hairstyles traditionally worn by women of African descent).

In the fashion world, claims of cultural appropriation are nothing new. Critics argue that western designers steal traditional design elements from marginalized people, which equates to intellectual property infringement, while defenders respond that it’s not cultural appropriation at all, but instead cultural appreciation or inspiration. Sometimes these disputes lead to lawsuits and, unfortunately for brands accused of appropriation, they often play out in the media as well.

Below (in no particular order) are five fashion industry cultural appropriation disputes that made headlines, with some even making their way to court.

Isabel Marant – Mixe Embroidery Design

French designer Isabel Marant, known for her bohemian aesthetics, came under fire when an indigenous Mixe community of Oaxaca, Mexico, accused Marant of copying its traditional embroidery design. The Mixe community alleged that Marant engaged in “plagiarism” by using its 600 year old cultural expression and claiming it as her own novel creation.  This led to a Twitter storm, with posts comparing Marant’s design with the Mixe design, and discussions concerning cultural appropriation in the fashion industry.

Marant responded that she was simply inspired by Oaxacan culture and did not claim exclusive rights to the design.  Ultimately, the Mixe community never took legal action against Marant over the design, but, in an odd twist of fate, French ready-to-wear brand Antik Batik did.  Antik Batik claimed to be the true owner of the copyrights to the Mixe embroidery design, which led to a court battle in France.  Ultimately, the French court held that neither Batik nor Marant could claim rights to the design because it originated from Mixe communities in Oaxaca.  Oaxaca’s congress later declared the Mixe community’s traditional designs and language as Intangible Cultural Heritage per UNESCO guidelines. Although it is unclear whether this protected status equates to intellectual property rights belonging exclusively to the Mixe community, it recognizes their designs as unique to, and originating in, Mixe culture.

Urban Outfitters – Navajo Trademark

In 2012, the Navajo Nation filed a complaint before the U.S. District Court for the District of New Mexico against U.S. fashion retailer Urban Outfitters and its related entities, alleging trademark infringement for the use of the mark NAVAJO in connection with clothing and jewelry. The complaint alleged that Urban Outfitters used the Navajo Nation’s federal registered trademark NAVAJO for fashion products in such a way that falsely suggested they were associated with or made by American Indians, in violation of federal and state trademark laws.  The Navajo Nation also alleged that Urban Outfitters used imagery such as tribal patterns comprised of geometric prints and designs fashioned to mimic and resemble Navajo Indian and tribal patterns, prints, and designs. According to the Navajo Nation, this violated the Indian Arts and Crafts Act, a federal law that makes it illegal to offer or display for sale, a good that “falsely suggests it is Indian produced, an Indian product, or the product of a particular Indian or Indian tribe or Indian arts and crafts organization.”

Urban Outfitters plead a fair use defense, on grounds that its use of “Navajo” merely described a type of style or print.  After a long-fought battle in court, the parties eventually settled their dispute in 2016.  Urban Outfitters and Navajo Nation ended up entering into a supply and license agreement, by which the parties planned to collaborate on a line of Native American jewelry, which sounds like a very good ending for both parties.

MAC Cosmetics – “VIBE TRIBE” Collection

MAC Cosmetics was called out for cultural appropriation after it debuted its VIBE TRIBE line of cosmetics in May 2016.  To market its product, the company used the trademark VIBE TRIBE, together with a trade dress (i.e., product packaging) that many believed looked like Native American prints from the American southwest. MAC also allegedly adopted an ad campaign featuring “ethnic-looking” models wearing feather hair accessories and tribal attire.  Despite product names such as “Arrowhead” for lipstick, “Adobe Brick” for blush, and “Wild Horses” for eyeshadow, MAC stated that its collection “has absolutely no connection to nor was it inspired by the Native American cultures.”  Although no lawsuits were filed by Native American tribes, MAC faced a backlash in social media, with complaints from consumers and others, who felt that MAC was engaging in cultural appropriation.

Ports 1961 – “Only Love Matters” and “Every Color Matters” Shirts 

Ports 1961, a Canadian-based fashion brand, got into serious trouble when its models wore shirts bearing the wording ONLY LOVE MATTERS and EVERY COLOR MATTERS during a runway show in 2017. Many social media users felt the fashion brand’s use of these slogans was a failed attempt to be socially aware, and was insulting to the Black Lives Matter movement. Others saw it as yet another example of the fashion industry attempting to appropriate the cultural expressions of a minority group.  Interestingly, various individuals and companies have attempted to register the slogan BLACK LIVES MATTER as a trademark before the U.S. Patent and Trademark Office (“PTO”).  However, these attempts have largely failed.  According to the PTO, BLACK LIVES MATTER is merely an informational or political slogan and therefore does not function as a trademark, which is probably why no one brought trademark infringement or dilution claims against Ports 1961.

 

Luxury Brands and The Maasai of Eastern Africa

The Maasai tribe are an indigenous, semi-nomadic people settled in Kenya and northern Tanzania. The tribe is known for their distinct traditions, customs, and dress, which is why it is no surprise that their look is often imitated, at least according to Washington, DC-based advocacy group Light Years IP, which specializes in “intellectual property value capture.”  According to Light Years IP, more than 1,000 companies,  including fashion brands Louis Vuitton, Calvin Klein, Diane Von Furstenberg, and Ralph Lauren, have all used Maasai iconography to sell their products, and many fashion companies have allegedly even used their name (with minor modifications) as a trademark.  Light Years IP reports that the tribe’s imagery is so widely copied that the estimated value of the “Maasai brand” is more than $10 million a year, despite the fact that 80% of the Maasai people live below the poverty line and have gained zero benefit from the alleged use of their cultural expression.

Bergdorf Goodman sells a “Masai Striped Metallic Single-Button Jacket” for almost $900 (now on sale for $400).  Neiman Marcus carries several “Masai”-branded dresses and accessories. Louis Vuitton is alleged to have appropriated the Maasai shuka cloth, which appeared in the brand’s Spring/Summer 2012 menswear collection.  At one point, Land Rover (the luxury car company) even attempted to register the mark MAASAI in the U.S. in connection with vehicles, but the company ultimately abandoned their application.

Light Years IP is working with the Maasai people to ensure that they are compensated for the use of their name and cultural expressions.  In 2018, the Maasai struck their first deal with Koy Clothing, a UK retail company, which agreed to pay a license to use Maasai-based designs for their clothing line. Light Years IP, together with the Maasai Intellectual Property Initiative Trust, are looking to have others pay to use Maasai cultural expressions.

 Intellectual Property Protection of Cultural Expressions and Takeaways for Brands Owners

According to the World Intellectual Property Office (WIPO), traditional cultural expressions raise particular legal and policy questions in intellectual property law.  As we have discussed in prior posts, fashion can potentially be protected by existing IP laws, including copyrights and trademarks. For example, traditional cultural prints may be exclusively owned by a particular organization or community under U.S. copyright law (so long as they are original, creative, and physically or conceptually separable from the function of the article) or trademark law (provided they are nonfunctional, distinctive source identifiers).  Some countries also have special legislation for the protection of traditional cultural expressions.  Brand owners should use care when adopting prints, trademarks, product designs, packaging, and advertising campaigns that might appear to represent a cultural expression.  Companies should consider these issues as part of their intellectual property clearance procedures and consult with legal counsel, particularly for important designs that may be part of a global ad campaign.

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In an interesting case pending before the TTAB, law students from the Suffolk University IP and Entrepreneurship Clinic have opposed an application filed by United Trademark Holdings, Inc. to register RAPUNZEL as a trademark for dolls and toy figures.  The students, led by clinic director Loletta “Lolita” Darden, represent Professor Rebecca Curtin, a trademark law professor and mother of a young girl who has purchased dolls.  The Salt Lake City firm of Workman Nydegger is co-counsel in the case.

According to the Notice of Opposition, the Grimm Brothers are widely credited with the modern adaptation of the Rapunzel fairy tale in 1812, and the roots of the story extend much further back than that.  For example, the Persian epic poem Shanahmeh, which was written between 977 and 1010 C.E., features a character named Rudaba who allows her lover to climb her hair up to a tower.  There is evidence of adaptations of the Rapunzel theme going back to the Neolithic era, potentially 6,000 years old.

After detailing the history of the Rapunzel story, the Notice of Opposition lays out the gravamen of the trademark dispute:

The public knows Rapunzel as the character name of a fictional fairy tale character, not as a source indicator. Trademark protection may be precluded in those instances where the proposed mark does not function as a source indicator. In the case of Rapunzel, consumers are accustomed to encountering the name in an associational or information manner unconnected with any goods/services. Here, Applicant is attempting to snatch the name Rapunzel out of the public domain, which would prevent others from referring to their Rapunzel dolls, characters and toy figures by their true name — Rapunzel. As a result, the Board should deny registration of the opposed mark….

The law students created an online petition, titled “Free Rapunzel From the Trademark Tower,” to solicit comments and support, and attached a copy of it to their opposition papers.  As of today, the petition lists over 400 supporters.   It is unclear what, if any, evidentiary value the petition will have, but interestingly the TTAB considered it in ascertaining the plausibility of Professor Curtin’s allegations in connection with standing.

Can the real party in interest please stand up?

The law students have won an important initial skirmish, as to whether Professor Curtin has standing to oppose the application even though she is not a manufacturer or seller of dolls herself.

The TTAB found that Curtin “has sufficiently alleged that she has a direct and personal stake in the outcome of the proceeding and that her belief of damage has a reasonable basis in fact” in light of her allegations that, as a purchaser of dolls, she would be forced to pay higher prices for Rapunzel dolls and toy figures and would be deprived of the opportunity to purchase them from manufacturers other than the trademark applicant.

Clearing the standing hurdle is a significant victory since, somewhat surprisingly, no doll maker (or any other party for that matter) has opposed the application.

Are Curtin’s claims viable?

United Trademark Holdings also moved to dismiss the opposition on substantive grounds.  The TTAB ruled as follows:

  • Curtin’s claim of functionality under Section 2(e)(5) was dismissed with prejudice, as a word mark cannot be functional.
  • Curtin’s claim of fraud was dismissed, with leave to replead; a proposed amended claim was filed on January 22, 2019.
  • Curtin’s claim of genericness was dismissed, with leave to replead; a proposed amended claim was filed on January 22, 2019.
  • Curtin’s claim that RAPUNZEL fails to function as a trademark may go forward.
  • Curtin’s claim that RAPUNZEL is merely descriptive may go forward.

These holdings illustrate that, in a nontraditional case such as this one, the usual theories are sometimes an uncomfortable fit.  It will be interesting to see what happens next, and whether United Trademark Holdings will move to dismiss the Second Amended Notice of Opposition.

The bigger picture

United Trademark Holdings already owns a trademark registration for ZOMBIE RAPUNZEL in connection with dolls, and I found ZOMBIE RAPUNZEL branded dolls on Amazon as part of the “Once Upon a Zombie” series.  Curtin and her team apparently do not consider this a problem, and in the Second Amended Notice of Opposition characterize the ZOMBIE component as a “distinguishing element” that is absent from the present application for RAPUNZEL.

United Trademark Holdings owns trademark registrations and applications for several other marks resembling character names, some including “distinguishing elements” and some not, including:

  • ZOMBIE TINKERBELL
  • ZOMBIE SNOW QUEEN
  • ZOMBIE PETER PAN
  • TEEN CINDERELLA
  • TEEN SNOW WHITE
  • TEEN PETER PAN
  • TEEN SLEEPING BEAUTY
  • THE SNOW QUEEN
  • SNOW MAIDEN
  • 1001 ARABIAN NIGHTS

You get the idea.  The present case is not the first opposition filed against United Trademark Holdings, and it is unlikely to be the last.

Closing thoughts on opportunities for law students

I spoke to Lolita Darden about the case, and why the Intellectual Property & Entrepreneurship Clinic (IPEC) at Suffolk Law School decided to get involved.  Darden explained that RAPUNZEL has been in the public domain for centuries, if not millennia, and that it would be unfair for one company to own the rights in that name.  She sees IPEC’s role as standing up for trademark rights as important, and points out that no one else is looking out for the public interest in this case.

While IPEC allows students in their last year of law school to take primary responsibility for live client matters, under the close supervision of experienced practitioners, the TTAB may be a difficult forum for students to get a taste of what it is really like to litigate a trademark case given the amount of time it typically takes to resolve a TTAB case on the merits.

That said, working on cases like this one is a great opportunity for law students.  In what other law school class do you get to cite the Brothers Grimm, Ferdowski, and Saint Barbara and start an online petition?  The parties are well-represented on both sides, and it will be an interesting case to watch.

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If you have ever been tasked with considering what types of intellectual property protection were available for a new packaging design, copyright may not be the first thing that came to mind. After all, it is trademark law that is designed to protect the public’s association with a commercial name or logo, and in some cases the distinctive look (or “trade dress”) of a product and/or its packaging. Copyright, on the other hand, was designed principally to protect an author’s rights in literary and artistic works. Nevertheless, in some cases, copyright may be available as an alternative or supplemental protection for product packaging.

Benefits of Copyright Protection      

Why would anyone bother with copyright protection when trademarks are available? Well, that’s just it: trademark protection may not always be available for a variety of reasons, particularly for new packaging that hasn’t yet built up “secondary meaning,” in other words, consumers don’t yet recognize it and associate it with a particular product or company. Copyright, by contrast, can be registered relatively cheaply and early in the life of a new design, without the need to show commercial distinctiveness or consumer recognition.

Copyright also has certain advantages over trademark when it comes to enforcement. In an infringement action between two similar packaging designs, there is no need to show a “likelihood of consumer confusion,” a multi-factor analysis that often requires expensive consumer surveys.  Copyright law is only concerned with whether the defendant has copied the plaintiff, usually determined by examining whether the works are “substantially similar.” Moreover, copyright law boasts the most effective mechanism (the Digital Millennium Copyright Act) for quickly getting infringing matter taken down from the internet.

The Catch: Originality and Creativity

But here’s the catch: in order to get a copyright registration, you have to show that your packaging design is “original.” Originality in copyright law has two components.  First (the easy part), it must have been “independently created”, i.e., not copied from someone else. Second (here’s the hard part), a work must possess more than a mere de minimus quantity of “creativity.”

Many of the common elements of product packaging design are deemed insufficiently creative for copyright protection, including common geometric shapes, simple color variations, and words and short phrases. Therefore, there are generally two paths by which the owner of a product packaging design can demonstrate the requisite creativity. The first path is to incorporate into the packaging a drawing, logo or other artwork that is creative enough in its own right to merit copyright protection, and emphasize that artwork in the application. For example. General Mills’ copyrighted packaging for Cheerios incorporates a professional photograph (of a heart shaped bowl containing cereal and strawberries). Perhaps it is not an artistic masterpiece, but it clearly demonstrates enough creative authorship (including in the selection of subject matter, angle, lighting, etc.) to merit copyright protection.

The second path is for packaging that doesn’t contain any individual element that is sufficiently creative in its own right. In those cases, the copyright applicant’s best shot is to argue that the selection and arrangement of these uncopyrightable elements, considered as a whole, is creative enough to warrant protection. The Copyright Office offers two examples of this path. The first is a design with a bunch of ordinary white circles at evenly-spaced intervals on a purple background. These geometric shapes are not sufficiently creative for copyright protection, and neither is their run-of-the-mill selection and arrangement.  The second example contains a selection of common shapes that are variably sized, colored, and placed in an irregular pattern. As with the first example, none of the individual shapes are creative, but the overall selection and arrangement of the design demonstrates a sufficiently high number of creative choices to merit copyright protection.

General Mills’ attempt to register the packaging for its Larabar product is instructive as to the difficulty of pursuing the “selection and arrangement” path, especially for clean and minimalist designs. General Mills argued that its wrapper reflected many creative choices, including a logo and slogan, the selection of color, and the placement of the text in a horizontal orientation around a rectangular frame. However, the Copyright Office found that this did not amount to a sufficiently high number of creative choices.

Tips for Your Next Product Packaging Copyright Application

With the foregoing in mind, here are a few tips, and pitfalls to avoid, when planning your next copyright application for product packaging and related correspondence with the copyright office:

Put on your artist hat: Remember that copyright’s heartland is the protection of literature and art, so make sure to use the right lingo and emphasize the artistic aspects of the design. Describe in detail the creative pictorial, graphic and/or sculptural elements that the author contributed. In the event that you are forced to rely on a “selection and arrangement” argument, identify and separately describe as many individual creative choices as possible.

By the same token, avoid terms relevant only to other types of intellectual property, like “trade dress” and “distinctiveness,” which may give the Copyright Office the sense you’ve come to the wrong place. In the Larabar case, General Mills asserted that its wrapper merited copyright protection because it was “unique,” in that nobody else has previously come up with this precise design. The Copyright Office rejected that argument, explaining that uniqueness (or “novelty,” a term of art in patent law) is irrelevant to the “creativity” analysis.  In copyright law, unlike in patent law, a design is either sufficiently creative or it is not, irrespective of whether it is new, novel or innovative.

Shift your shapes: Because copyright law does not protect common shapes, the Copyright Office tends to be suspicious of designs in which geometric shapes dominate. For this reason, the Copyright Office has denied protection to a number of well-known graphic logos, including Adidas’ three black trapezoids and UEFA’s “starball,” a set of stars and octagons in the shape of a soccer ball.

If your packaging consists of common shapes, emphasize any way in which the shapes are irregular, imperfect, inconsistently colored or are arranged in non-traditional patterns. For example, Victorinix AG recently succeeded in convincing the Copyright Office that a series of black and white graphics, consisting of original arrangements of common shapes, was deserving of copyright protection.

Don’t rely on standard packaging elements: The Copyright Office is reluctant to grant protection to a design that is heavily reliant on elements typical in product packaging, such as the product name, frames and borders; or functional components such as nutritional information or UPC codes, which are dictated by industry standards or regulations. Moreover, the mere arrangement of these items on the packaging will be insufficiently creative in most instances, because spatial layout is considered a template for expression, not original expression per se. In the case of the Icelandic Cod Liver packaging, the Copyright Office determined that it was comprised of nothing more than uncopyrightable standard design elements such as labels, simple shapes and rudimentary color selections. Moreover, the selection and arrangement of these elements, even if aesthetically pleasing, was not creative, but rather dictated primarily by functional considerations.

Busy is better: In theory, a simple design should stand just as much a chance of being deemed creative as a complex one. But not in practice. A busy design with many parts is more likely to contain pictorial or graphic elements that catch the Copyright Office’s eye as creative. Moreover, a busy design is more likely to manifest the kind of unusual or irregular pattern that the Copyright Office may determine demonstrates a selection and arrangement with a sufficiently high number of creative choices.

Consider the text separately: Copyright Office rules discourage the registration of words, short phrases, typeface and font. However, this does not mean that none of the text on a product or its packaging is copyrightable. Even if your design doesn’t make the grade as piece of visual art, original text of sufficient creativity and length (usually more than a couple of sentences) may be entitled to protection as a literary work, independent of its placement on the packaging design.

Become a temporary nihilist: The design of your packaging may have enormous symbolic meaning to you and your customers, but forget about that symbolism when drafting your copyright applications. Anything that doesn’t appear on the surface of a work does not help make the case for copyright protection. When Nationwide Insurance sought to register its frame logo, the Copyright Office was unimpressed by the argument that this ordinary rectangular shape was creative because it symbolized Nationwide’s efforts to “frame” its services for its customer’s needs. The Copyright Office also ignores other factors not readily apparent on the surface of a work, such as intrinsic value, artistic intent, and the time and effort expended.

Good luck. And remember to be strategic. Copyright protection comes in many forms and, depending on your individual circumstances, your best bet may be to seek protection for just the logo as a standalone work, and/or the packaging design generally as visual art, and/or the text on the package as a literary work. If there is any doubt about which path makes the most sense, consult your neighborhood copyright lawyer for a gut check.

A version of this article was originally published in Packaging Strategies.

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Who said there’s no looking back? It is crucial to consider key takeaways from the most important IP cases from 2018 when planning for 2019. Foley Hoag presents a webinar offering guidance on what we learned this year and what to prepare for in the new year.

Our speakers focus on 2018 developments in copyright, patent and trademark law.

Speakers

If you are in-house counsel and would like to receive a copy of the written materials containing talking points to accompany these slides, please contact us.

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We are pleased to announce a new addition to our collection of IP-focused blog posts directed to start-up companies, this one focusing on cybersecurity.  Here is the complete collection:

Trademark Strategies for Start-Up Companies

Copyright Strategies for Start-Up Companies

Patent Strategies For Start-Up Companies

Domain Name Strategies for Start-Up Companies

Privacy and Data Security Strategies for Start-Up Companies

Foley Hoag provides a full range of services to start-up companies, particularly in the areas of high tech, life sciences, health care, clean technology, education, defense, financial services and entertainment.  Many of our largest clients, including Fortune 500 businesses, first found our entrepreneurial legal services when they were only one or two people with little more than an idea and a dream.  We work closely with start-up and emerging companies from inception through financing, growth and maturity.  We welcome you to learn more about the services that we provide to start-up companies here.

We welcome your comments on our start-up series of blog posts, and your suggestions for other topics.  In addition, we have a webinar series to which business executives as well as in-house counsel may subscribe, described here, in which we often address topics of interest to the start-up community.  Stay tuned!

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You may think the phrase “million-dollar smile” is just a metaphor, but a smile could cost you millions of dollars in litigation damages if you aren’t careful, at least according to Nirvana LLC, the legal entity that owns the intellectual property rights relating to the 90’s rock band Nirvana.

Nirvana’s Smiley Face Logo

If you thought the image of a yellow smiley face was too common to be owned by anyone, then think again. In 1991 when Seattle-based grunge band Nirvana rose to stardom with the release of their song “Smells Like Teen Spirit,” it was virtually impossible to walk down the halls of a high school or college campus without seeing a t-shirt like this:

Nirvana’s front man, the late, great Kurt Cobain, allegedly created the band’s Smiley Face icon in 1991, where it debuted on a flyer announcing the release of the band’s album “Nevermind.” While there are various theories behind the meaning of the logo, one fact cannot be disputed: Nirvana’s Smiley Face logo became one of the most enduring images of the band’s short, but amazing, career.

Nirvana holds a copyright registration for its Smiley Face logo, which it claims to have licensed since 1991 in connection with a variety of merchandise, including t-shirts, hats, hoodies, backpacks, glasses and other products. Nirvana currently licenses the logo to fashion retailers like Target, Urban Outfitters, and Barneys.

Marc Jacobs’ Smiley Face Logo

Inspired by the Seattle music scene of the 90’s, in 1993 designer Marc Jacobs, who was the head designer at Perry Ellis at the time, launched a collection of clothing called the “Grunge Collection.” The “grunge” look included plaid flannel shirts, mismatched patterns, knitted or backwards caps, printed granny dresses, ripped and faded jeans, and ill-fitted pants, accessorized with Doc Martens, combat boots, or high top sneakers. Unfortunately for Jacobs, many Seattle music purists at the time mocked his high-fashion nod to their grunge look, and Perry Ellis allegedly fired him over the collection. To some, the grunge look was considered, well, “ghastly,” and although I personally wore flannel shirts tied around my waist throughout much of high school, this video clip (quoted below) from one of my favorite 90’s cult films sums up the grunge look perfectly:

So okay, I don’t want to be a traitor to my generation and all but I don’t get how guys dress today. I mean, come on, it looks like they just fell out of bed and put on some baggy pants and take their greasy hair – ew – and cover it up with a backwards cap and like, we’re supposed to swoon? I don’t think sooo! ….

– Cher Horowitz, lead character from the movie Clueless

Fast forward 25 years later, Marc Jacobs, undeterred and now head of his own fashion brand, has resurrected many of the same designs from his 1993 Grunge Collection, only this time he is calling it the “Redux Grunge Collection,” and among the collection are fashions bearing a yellow Smiley Face design.

Nirvana’s Lawsuit Against Marc Jacobs

On December 28, 2018, Nirvana filed a complaint in California district court against Marc Jacobs for copyright and trademark infringement. Nirvana alleges that Marc Jacobs is using a smiley face design “that is obviously similar to, and an intentional copy of, Nirvana’s copyrighted image . . . with the minor differences unlikely to be noticed by the consuming public.” Nirvana further alleges that Marc Jacobs’ campaign to market its Grunge Redux Collection even borrows song titles from Nirvana’s music, like the wording “sure smells like teen spirit,” which appears on certain product pages on Marc Jacobs’ website, and “Come As You Are,” another Nirvana song title, which appears on Mac Jacobs promotional materials.

Marc Jacobs has not yet filed an answer in response to Nirvana’s complaint. It will be very interesting to see how this lawsuit plays out. For example, will Marc Jacobs make a fair use defense on grounds that its design is transformative and/or a parody? Will he challenge the originality and distinctiveness of Nirvana’s yellow smiley face logo design?

Other Smiley Face Lawsuits

Believe it or not, intellectual property fights over the ubiquitous, universal symbol for happiness are nothing new. Companies other than Nirvana have brought frown-inducing lawsuits claiming exclusive rights in smiley face designs.

Wal-Mart has used a minimalist, yellow smiley face logo for decades to alert shoppers to deals, but that smile faded to a frown in 2001 when it discovered The Smiley Company and its founder Franklin Loufrani was earning millions for licensing a similar yellow smiley face around the world. After Loufrani filed a U.S. trademark application to secure the exclusive right to its smiley face logo in the United States, Wal-Mart took action by commencing an opposition proceeding before the Trademark Trial and Appeal Board of the United States Patent and Trademark Office. In its opposition, Wal-Mart alleged that Loufrani’s smiley face was not distinctive enough to function as a trademark, and even if it was, Wal-Mart had prior and superior rights in its own smiley face design. Wal-Mart also alleged that Loufrani’s logo was likely to cause consumer confusion with its logo.

The opposition went on for nine long years until the Board issued a decision in Wal-Mart’s favor. The Board held that while neither parties’ respective smiley face logos were inherently distinctive, Wal-Mart’s logo had acquired distinctiveness in the United States while Loufrani’s had not. The Board also held that Loufrani’s logo was likely to cause confusion with Wal-Mart’s logo.

Undeterred, in 2009 Loufrani filed a lawsuit in Illinois district court, alleging that his smiley face logo was “readily distinguishable” from Wal-Mart’s. The parties eventually settled their dispute in 2011, and both parties continue to use their respective logos.

If you thought IP disputes over smiley faces were limited to fashion companies and big retailers, well you are sadly mistaken. In 2015, Pennsylvania-based restaurant chain Eat n’ Park, which owns a trademark registration for a smiley face logo in connection with cookies, sued Chicago American Sweet and Snack for using a smiley face on its cookies.

To many social media users, the dispute appeared absolutely ridiculous. Based on court documents, the parties appear to have settled their dispute before that ridicule could continue for too long.

Ownership Rights in the Smiley Face Design

While companies like Nirvana, Wal-Mart, and Eat n’ Park might claim IP rights to the depiction of a smiley face, many believe that the original yellow smiley face was first created over 50 years ago in Worcester, Massachusetts by graphic artist Harvey Ball. As legend goes, Ball conceived of the design in 1963 when he was asked to create an iconic graphic to raise the morale of insurance company employees after a series of corporate mergers. Ball apparently completed the design in less than 10 minutes and received $45 in cash for his work. The State Mutual Life Assurance Company (now known as Hanover Insurance) created tons of buttons bearing Ball’s iconic design as a way to get its employees to smile more. While we do not know if Ball’s design actually worked to boost employee morale, the smiling face became an iconic image.

Although neither Ball nor State Mutual appear to have tried to register the design as a trademark or assert their copyright over others, they may have the strongest historic claim to this iconic symbol.

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