In our previous blog article, we explored the concept of fair use and how courts determine whether the use of copyrighted material is permitted without the rightsholder's permission under the Constitution's statute.
One way to decide whether the fair use law applies is to determine whether the third party engaged in the transformative use of the copyrighted material. New York's active Second Circuit Court recently ruled on two applicable cases, elucidating the intricacies of fair use.
Who's on First?
The Second Circuit decided a very interesting matter about the use of the classic "Who's on first?" routine by the legendary comedy duo Abbott and Costello. TCA Television Corp. v. McCollum, 839 F.3d 168 (2d Cir. 2016).
This familiar routine revolved around the interplay of baseball players oddly named as Who, What, and I Don't Know. Abbott and Costello would go back and forth in an exasperated attempt to understand the situation, asking questions like "Who's on first," which was a statement and not a question-you get the idea.
Hand to God is a stage play that included the "Who's on first?" routine described above, but with a sock puppet telling it. The producers of the play saw the Abbott and Costello routine as something that was commonly known, and they also thought that the way that they used it-as a critique of the social norms governing a small town in the Bible Belt-would suffice and justify their use of the routine.
And the District Court agreed with them. However, the Court of Appeals for the Second Circuit reversed that decision, holding that it was not transformative use because:
The play did not add any new elements, expressions, meaning or message to the classic bit.
The retelling of the "Who's on first?" bit portrayed in Hand to God exhausted the entire routine.
Hand to God's use of the routine was commercial in nature.
The use did affect a derivative market for a license for the routine.
"Who's on first?" has been largely licensed by others.
What is perhaps most interesting about this case-and further evidence of the wisdom in hiring counsel to protect your intellectual property-is that Hand to God still (sort of) won! In a later decision, the court found that Abbott and Costello's heirs had no legal standing to sue for infringement. It appears that after their initial 1944 copyright, Abbott and Costello never renewed it.
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While the framers of the Constitution had no way of predicting the kinds of technology we enjoy today, they did have the foresight to understand the necessity of intellectual property rights. That is why the Constitution gives artists and inventors an exclusive right to their work under Article I, Section 8, Clause 8:
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.
Out of that Constitutional clause, American copyright law was born, and with it, a qualified exception to the same exclusive rights it guarantees called fair use.
Fair use balances the exclusive rights granted to authors by the Constitution and the Copyright Act and gives others an opportunity to use works without infringing on someone's copyright. Some examples of fair use include:
When trying to determine if a work is not fair use, there are additional elements that courts employ in order to make their determinations:
Character of the use
Nature of the copyrighted work
Amount and specialty of the use
Second potential market
If a rightsholder decides to commence a lawsuit, all copyright disputes begin in Federal District Court. However, the Appellate Circuit Courts often have the final say, either reversing or upholding the District Courts. No two Circuit Courts are the same, but one of the most active is New York's Second Circuit.
Many interesting developments emerge from the Second Circuit. This Court decided on two cases that examined transformative use of copyrighted material. Transformative use is an example where the type of character of use element was determinative of whether something is fair use.
One Artist, Two Decisions
Jeff Koons is a New York-based visual artist and sculptor who draws inspiration from the work of others. One such work involved transforming a photograph (of puppies!) into a 3D statue. The photographer, Art Rogers, saw what Koons had done with his photo and became indignant because he felt that Koons stole his theme and his work. In Rogers v. Koons, the court agreed with Rogers, stating that Koons's use, even though it was in a different medium, was not transformative enough to be a fair use. Rogers v. Koons, 960 F.2d 301, 309 (2d Cir. 1992).
Another example, this time in which Koons was victorious, can be found in Blanch v. Koons. In this case, Koons put together a picture involving different clippings of feet. Even though Koons literally lifted one of these images from a Gucci spread in a magazine, the courts said that the way in which he put it together, and used it in the larger piece, was so transformative it was considered as a fair use. Blanch v. Koons, 467 F.3d 244, 253 (2d Cir. 2006).
The takeaway is that the line between fair use and infringement is subjective and takes nuance to discern. The owners of intellectual property owe it to themselves to make the investment of qualified counsel before they find themselves in court. As the saying goes: an ounce of prevention is worth a pound of cure.
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If you thought that US Supreme Court justices lacked romantic proclivities, you're wrong!
Some months ago, in a conversation between the justices about a very important copyright issue involving fashion, Justice Stephen Breyer stated, "The clothes on the hanger do nothing. The clothes on the woman do everything." Justice Elena Kagan immediately interjected with, "That's so romantic!"
Romantic or not, the justices were determining whether or not a feature of a useful article is protectable under Section 101 of the Copyright Act.
Star Athletica, LLC v. Varsity Brands, Inc.
This case involves two large manufacturers and distributors who compete in the cheerleading apparel industry.
Star Athletica, the petitioner, created a new cheerleading uniform in 2010. The stripes, chevrons, zig zags, and color blocks are all part of the description of the uniform in dispute. Varsity Brands sued for copyright infringement; Varsity owns a copyright registration for a two-dimensional cheerleader uniform drawing and photo.
The case was first heard in the United States District Court for Tennessee. That court decided that Varsity's design cannot apply, because it is a uniform and the design could not be conceptually separated from the utilitarian aspect of the objects themselves.
However, the United States Court of Appeals for the 6th Circuit reversed that decision, finding that the design is copyrightable. This reversal resulted in a petition to the US Supreme Court.
This case has prompted a lot of conversation and initiatives about whether you can protect a certain design, especially in the fashion industry. Traditionally, the protection for the fashion industry was offered by design patents in addition to trademark protection for the brand. Design patents give protection to a certain design if there is a novelty, which is hard to prove.
In Star Athletica, LLC v. Varsity Brands, Inc., the Supreme Court held that "a feature incorporated into the design of a useful article is eligible for copyright protection only if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic, or sculptural work--either on its own or fixed in some tangible medium of expression--if it were imagined separately from the useful article into which it is incorporated." Star Athletica, L.L.C. v. Varsity Brands, Inc., 137 S. Ct. 1002, 1005, 197 L. Ed. 2d 354 (2017).
Applying copyrights to three-dimensional useful articles, i.e. clothing, high-end fashion designers will get closer protection for their products that get knocked off by smaller players even before their product hits the stores. This decision brings a new standard to the forefront of the fashion industry.
And with this decision, the Supreme Court case on "romance" is adjudicated!
Recent word from colleagues in the United Kingdom is that while European Union trademark filings and registrations still cover the UK, with Brexit underway the best bet these days is to file for EU coverage and UK coverage if the UK is a target for your business.
This is not to say that EU marks will not be honored in the UK in some fashion-the point is that with the current Brexit-generated uncertainty the safest plan is to secure intellectual property under UK IP laws to have confidence as to how that intellectual property will be treated.
This is not an emergency, but it is an inevitability. Consider your coverage, your business, use of your IP, develop a plan, and implement it. Contact us any time to discuss.
In Clarilogic v. FormFree Holdings, the Court Of Appeals upheld the District Court for the Southern District of California holding that the claims of U.S. Patent Application No. 8,762,243 ('243 Patent) are ineligible under 35 U.S.C. § 101 because they are directed to an abstract idea and contain no additional elements that transform the nature of the claims into a patent-eligible application of the abstract idea.
The '243 Patent is entitled "System and Method for Electronic Account Certification and Enhance Credit Reporting." Generally, the claimed computer implemented system gathers a potential borrower's financial data from a third party, applies an "algorithm engine" to the gathered data, and outputs a report. The claims do not recite any specific rules implemented by the "algorithm engine." Rather, the rules implemented by the "algorithm engine" are obtained from third parties who define rules used to identify information.
The Court noted that when "the focus of the claims" is "on collecting information, analyzing it, and displaying certain results of the collection and analysis," the claims are directed to an abstract idea. Moreover, claiming an algorithm engine without defining a specific set of rules implemented by an algorithm engine performing the analysis is the "height of abstraction."
Defendant Form Free argued that its invention is "transformative" and thus eligible for patent protection. Specifically, Form Free argued that the invention is "transformative" because it takes in financial data and outputs a report. The Court disagreed, stating that the claimed method simply changes the way electronic information is displayed using an unknown and unclaimed algorithm engine. As such, without any limitations in how the gathered data are changed, there is no "transformative" effect. After all, as the Court stated, "Data are still data."
A business method claim, or any other type of method claim, must specifically define all the method stops including those that help make the method novel. Single processing data to arrive at an output is simply too abstract to be patent eligible subject matter.
We admit we are talking about Adidas a lot lately, but that is because (i) we truly love their gear, and (ii) they have really been active. After some bruising encounters with United States trademark law, Adidas SA recently found itself on the ropes again, this time at the hands of a church in Zion, Illinois. The marks in question are a study in phonics:
ADIZERO running shoes by Adidas vs. ADD A ZERO hats by Christian Faith Fellowship.
In 2005 a small congregation by the name of Christian Faith Fellowship, based in Zion, Illinois, registered a wordmark and a logo mark with the United States Patent and Trademark Office for hats emblazoned with the phrase "ADD A ZERO." The hats were not a big seller, with only two of them recorded as being sold-critically, with one being paid for by a check drawn on a Wisconsin bank.
In 2009, Adidas was ready to roll out its new, lightweight running shoes, which it dubbed "ADIZERO." Upon petitioning the USPTO for protection, Adidas' claim was denied based on the the existence of Christian Faith Fellowship's prior registration. The USPTO found there to be a likelihood of confusion.
Adidas appealed this decision to the Trademark Trial and Appeal Board (TTAB), arguing that Christian Faith Fellowship's hats are not a source identifier and that they had sold a very limited number of the hats without showing any significant use in commerce which generally denotes interstate commerce. Christian Faith Fellowship then produced the Wisconsin bank check mentioned earlier, claiming that it indeed had engaged in interstate commerce, even if only for two sales. The TTAB ultimately decided in favor of Adidas, citing the small number of hats that were sold.
Christian Faith Fellowship appealed the TTAB's decision and found itself battling Adidas before the Federal Circuit. In an effort to get the case thrown out, Adidas argued for a de minimis exception because only two hats had been sold, and Christian Faith Fellowship did not truly engage in interstate commerce. Its argument was denied and the court went on to nullify the TTAB's decision because case law was clear that the sale of two hats was sufficient to establish interstate commerce.
The circuit court remanded the case back to the TTAB where it is currently under review.
This case is interesting because many practitioners disagree with the Federal Circuit's ruling. They say it sets a very low standard for interstate commerce and sets up too many obstacles for large producers of trademarked products. What's your ruling?
The USPTO and Trademark Trial and Appeal Board ("TTAB") joined the rest of us in attempting to improve with a New Year's resolution. However, instead of already giving up on gym membership plans, the USPTO has taken 2017 by storm with an emphasis on digital efficiency, some rule changes, and everyone's favorite, increased fees.
Whether you are a seasoned practitioner, or an individual navigating the trademark thickets yourself, you should bookmark this page for reference now that January 14, 2017, rule changes are in effect.
It's not very often that one hears the words "efficient" and "government" uttered in the same breath. But come January 14, we should have fewer action items when dealing with the USPTO and TTAB in general.
Thanks to the USPTO's 2017 resolution to save the environment, or in the alternative, settle a grudge with the paper industry:
E-Filing is no longer preferred, but expected and mandatory with the TTAB.
This requirement appears to only be waivable via petitioning the office.
This includes correspondence between the parties (i.e., say goodbye to the 5-day snail mail grace period and hello to composing, even more, e-mails).
The TTAB is taking service requirements off our plates.
This thankfully relieves us of cancellation and opposition service duties for initial pleadings, replacing first-class mail with a link embedded in an e-mail sent to other parties to the matter.
This is also an opportunity to make sure that all of the contact information you may be responsible for is up-to-date.
You and/or your clients get to give the government more money!
A total of 10 TTAB-related fees will be adjusted. Six fees for initiating a proceeding will increase, depending upon whether filed electronically or on paper.
After an initial request for extension, there are now four new fees established for electronic and paper-filed requests to further extend time to file a notice of opposition.
There are fees for extensions of time to oppose billed per application rather than per class.
Moreover, the per-class fee for an initial application for registration filed on paper is going from $375 to $600 per mark, per class (supporting anti-paper conspiracy theorists).
A full list of fee changes is provided here by the USPTO.
Relevant to a smaller segment of readers but important nonetheless, there has been some tweaking to evidentiary procedure. One huge takeaway in this department is that witness testimony can now be submitted by affidavit alone. The hassles of live depositions should subside, however:
Live depositions are still an available cross-examination tool for opposing parties in examining a witness affidavit;
Notices of reliance have had their capacity expanded to record registrations and introduce supporting digital content;
Of concern is that the efficiency seemingly sought after by the USPTO may be undermined by overwhelming amounts of evidence likely to now be submitted, delaying proceeding considerably.
Gone are the days of unlimited requests. We now have the number "75" restraining our decision making when it comes time to talk document production and admission strategy, and further (likely in the name of efficiency), the discovery period is now a bright line six-month ordeal.
With the digitalization and constant technological progress of society, new and interesting trademark requests will continue to appear and challenge existing definitions and requirements. We at W. R. Samuels Law will continue to keep our ears pressed to the ground in order to detect new trends in trademark law before they have an impact on our clients. For more information, contact us.
Law Clerk Jerry Jakubovic is a 3L at New York Law School and a current Law Clerk at W.R. Samuels Law.
The most interesting grudge match in professional soccer this season isn't between FC Barcelona and Real Madrid, but rather the intellectual property lawyers representing Barcelona and footwear giant Adidas.
"Kit" sponsoring--sponsoring the uniforms of a team--is a highly competitive business dominated by Nike and Adidas. For example, Adidas pays top-rated Manchester United €83.5 million a season for the privilege of providing uniforms emblazoned with its three-stripe logo.
Never one to shy away from defending its brand, Adidas opened a new front in its rivalry with Nike the day after Nike signed a deal for a kit design and sponsorship with FC Barcelona at a record-breaking €155 million a season. Adidas took umbrage with the new kit design, which features seven stripes; four blue and three red, in an alternating sequence with smaller, vertical stripes within each of the larger ones. Note: FC Barcelona's jerseys have always featured some kind of stripe pattern since the inception of the club.
This clash of sportswear titans is currently unfolding at the United States Patent and Trademark Office (USPTO), Opposition No. 91230938. FC Barcelona's 2016 jersey design having already attained a trademark, Adidas filed a notice of opposition with the USPTO. It contends that its emblematic three-stripe mark precedes Barcelona's mark and therefore makes it invalid.
Indeed, Adidas has been using its three-stripe pattern in the United States and worldwide since 1952 for footwear and 1967 for apparel. Adidas claims it is trying to protect the goodwill it has worked to establish its brand since then, and if Barcelona's Nike-sponsored design were to stand, Adidas' goodwill would be diluted.
As mentioned earlier, Adidas is no stranger to the legal system when it comes to protecting its mark. Recently Adidas took action against fashion designer Marc Jacobs and clothing store Forever 21 for apparel that featured four stripes and three stripes, respectively, along the sleeves. That said, Adidas also has a history of working constructively with other designers, including its Yeezy line of sneakers made in conjunction with Kanye West.
This development is recent and the adjudication at the USPTO is ongoing. Stay tuned!