Intellectual Property Litigation

A recent Trademark Trial and Appeal Board decision sustained an opposition based on the applicant’s failure to identify a co-owner at the time the application was filed,  resulting in the application being declared void ab initio. Pynk Branded, LLC v. BleuLife Media & Entertainment, Inc. (TTAB July 14, 2017) (non-precedential). The principals of opposer Pynk Branded and applicant BleuLife were former business partners who had collaborated in starting Pynk magazine, a women's fashion and lifestyle publication that was complementary to Applicant’s Bleu magazine. The principal of Pynk Branded was responsible for the creative work and business development in launching the magazine in 2010/2011 and running the operations of the magazine for several years. The relationship subsequently soured, and the two parties split. Opposer contended that there was a mutual understanding that each entity would walk away from their business arrangement with separate ownership of their respective intellectual property assets. In 2013, BleuLife applied to register the PYNK logo, claiming sole ownership of the mark and submitting as a specimen a Pynk magazine cover page from 2011. Pynk Branded opposed. The proceeding had a complicated procedural history, including the failure of opposer to file a trial brief and the submission by both parties of documentary evidence outside of the record. However, relying on opposer's timely-filed reply brief and properly-submitted trial testimony,  the TTAB held that applicant BleuLife Media was not the sole owner of the PYNK logo mark. As the Board stated, "An application filed by one who is not the owner of the mark sought to be registered is void ab initio." Neither party submitted a document memorializing their business relationship, nor did Opposer prove its allegation about the respective rights of the parties after termination of the business partnership. Notwithstanding these deficiencies, Opposer succeeded in meeting its burden of proof that it had at least a partial interest in the PYNK logo mark, based on its principal's creative contributions to the logo and operational business role running the magazine after its founding. Accordingly, the Board declared the application void ab initio and sustained the opposition. The easy lesson to learn from this case is that a written agreement is the way to go to confirm ownership of jointly-created trademarks and determine the respective rights of co-owners upon termination of their business collaboration. Even if there is no written memorialization of rights, the second takeaway from the Board's decision in Pynk Branded is that an applicant can't "fudge" a claim of sole ownership of a mark. If the evidence shows that there was joint ownership of a mark at the time of filing, an application filed in the name of a a partial owner risks being declared void ab initio in an opposition proceeding.

Kendall and Kylie Jenner are beefing with the late Tupac Shakur.  The Jenners are not singers or rappers (yet), but they do have a fashion line, the "Kendall + Kylie" brand.  The famous sisters’ company used images of the late rapper on t-shirts.  However, the images they used were from photographs taken by Michael Miller and Kendall + Kylie allegedly did not obtain a license directly from Mr. Miller prior to using the images. Earlier this month, Mr. Miller filed suit in the U.S. District Court for the Central District of California alleging copyright infringement by the Jenner sisters and their company for using his images without properly licensing them. Representatives for the Jenners denied the allegations, saying that they purchased shirts created by another company that were properly licensed, and then added Kendall and Kylie’s images and their logo.  While not the most original design scheme, it might help them defend against the copyright allegations.  However, it is unlikely to come to that because it turns out, the Jenner sisters only sold two—yes, tu!—Tupac shirts before pulling them from stores.  The Jenner sisters did not only potentially run afoul of Mr. Miller’s copyrights, they also created shirts using images of Notorious B.I.G. (Christopher Wallace), Pink Floyd's "Dark Side of the Moon" logo, Ozzy Osbourne, and more. The Jenner sisters unwittingly invited a copyright infringement action, but also waded into the thorny thicket of “rights of publicity” and “post-mortem rights of publicity.”  We’ve written about those before, after the passing of Prince.  The Jenners received a swift backlash after introducing the shirts—everyone from Christopher Wallace’s mother to Ozzy’s wife Sharon Osbourne objected to the shirts.  Pulling the shirts out of stores quickly may help them avoid a bigger fight with rightful owners of the IP.  Kendall + Kylie can hopefully avoid a fight and shift their focus back to selling bodysuits and rompers without any famous faces on them.  

Earlier this month, four Los Angeles-based graffiti artists, “Rime,” “Host18,” “Taboo” and “Reme” filed suit against the Vince Camuto fashion house and related entities alleging copyright infringement for “inexplicably featur[ing] Plaintiffs’ murals” as “the centerpiece of a marketing campaign for their Spring/Summer 2017 line [ ] without Plaintiffs’ knowledge or consent.”  According to the complaint, Camuto launched the marketing campaign in “video, and still imagery featuring the Murals,” “social media accounts,” and on “various fashion websites.”  The Artists believe that Camuto’s “exploitation of Plaintiffs’ work, brand, and persona damages their reputation.”  Further, the Artists allege that they have “sustained significant injury and monetary damages” as a result of Camuto’s use of the various graffiti murals as part of the new marketing campaign.   While not the first case of its kind, it is the latest in a trend of cases initiated by graffiti artists.  In 2007, the author of the book Tattooed Walls faced a suit by a dozen New York graffiti artists after the author included hundreds of images of graffiti art in the book without permission.  In 2013, Father and son artist duo, Jim Phillips Sr. and Jimbo Phillips, sued Jeremy Scott after Scott showed a collection during New York Fashion Week 2013 that used imagery nearly identical to the Phillips’ work created for skateboard decks.  In 2016, the estate of Dash Snow, a New York-based contemporary and graffiti artist, sued McDonald’s for “inexplicably [ ] using Mr. Snow’s artwork as décor in hundreds of McDonald’s restaurants, and are using his name and signature in a manner suggesting that Mr. Snow created all of the surrounding artwork (which adorns the entirety of McDonald’s graffiti themed restaurants).”  Lastly, in 2015, Rime, one of the plaintiffs in the Camuto lawsuit, sought an injunction and damages against Italian designer Moschino and its creative director, Jeremy Scott, after Scott used elements of Rime’s “Vandal Eyes” mural he painted on a Detroit building in 2012.  In their motion for summary judgment, Moschino and Scott argued "[a]s a matter of public policy and basic logic, it would make no sense to grant legal protection to work that is created entirely illegally” because “[b]razen and willful violations of the law cannot, and, indeed, should not result in the award of copyright privileges.” Moschino and Scott’s argument presents an interesting question: should it matter where a work is displayed? Under the plain language of the Copyright Act, graffiti receive automatic copyright protection regardless of where the art is placed.  Copyright protects any original work of authorship fixed in a tangible medium.  As long as the art is not a copy, graffiti is an original work of authorship and, when placed on a wall, generally meets the requirements for copyright protection.  Further, the plain words of the Copyright Act do not place any restrictions on copyrightability based on the location or placement of art.  But according to Moschino and Scott, graffiti is an unsanctioned form of expression that should not be protected if created illegally.  However, would it be fair to allow Moschino and Scott to promote their brands and profit from this “illegal” art?  In this author’s view, no, it is not: regardless of the type of art or artist or the medium on which the art is displayed, companies and brands should respect the rights of the original artist.

When two different companies adopt confusingly similar trademarks and use them in different parts of the United States, complications ensue. The adjudication of the respective rights of the parties will depend on the geographic extent to which the marks have become known to customers and will also be affected by whether and when either or both parties applied for federal registration after commencing unregistered use of their marks. A recent 9th Circuit decision clarifies the legal standard on an issue that has engendered a split among the federal circuits in this type of trademark dispute: the ability of a geographically remote junior user of a trademark to establish lawful rights in a discrete part of the United States when it had knowledge of the senior user’s trademark. Stone Creek, Inc. v. Omnia Italian Design, Inc. (9th Cir. July 11, 2017). The court in Stone Creek held the defendant’s knowledge of the plaintiff’s trademark rights defeats any defense of good faith adoption of a mark in a remote geographic area. The court also weighed in on another issue that has split the circuits, ruling that a plaintiff must prove willfulness in order to be awarded the defendant’s profits. Plaintiff adopted its STONE CREEK mark and oval logo design in 1990 for the manufacture and sale of furniture sold directly to customers from showroom locations in the Phoenix area. It obtained a state trademark registration in 1992, but did not obtain a federal registration for its mark until 2012 (filed in 2011). It used its mark on its website at stonecreekfurniture.com, advertised in a nationwide magazine with readership in the Midwest and had sales since inception of approximately $610,000 in the Midwest (out of a total of $200 million). Defendant Omnia became a business partner of Stone Creek in 2003, entering into an agreement to manufacture leather furniture under the STONE CREEK mark. In 2013, Stone Creek discovered that since 2008, Omnia had been selling furniture on its own under the identical STONE CREEK oval logo design to the Bon-Ton Stores retail chain in five states in the Midwest. Omnia claimed that it adopted the STONE CREEK oval logo mark for Bon-Ton because the retailer wanted an “American” sounding name. Omnia also found it desirable to use the STONE CREEK name and logo because (conveniently) it already had marketing materials and a logo design readily available. Omnia’s unauthorized use came to light in 2013 when customers began contacting Stone Creek about warranty and other product-related inquiries about furniture bought from Bon-Ton. Following a bench trial, the district court held there was no likelihood of confusion. The appellate court found this result surprising given that “the case for confusion based on identical marks and identical goods could hardly be stronger than here.” The 9th Circuit faulted the lower court’s “myopic focus” on the geographic separation between Stone Creek’s physical showrooms in Arizona and Bon-Ton’s stores in the Midwest, when the facts showed an overlap in marketing channels as a result of website marketing as well as sales and advertising by Stone Creek in the Midwest. Even though Stone Creek did most of its business in the Phoenix area and the defendant offered survey evidence showing limited brand awareness of plaintiff’s mark in the Midwest, as the court found, “the small volume of the overall sales does not undercut Stone Creek’s distribution of furniture in the Midwest.” In light of the area of overlap, Stone Creek did not have to await the ripening of nationwide enforcement rights under the 9th Circuit’s Mister Donut precedent (similar to the Dawn Donut case in the Second Circuit). On the issue of intent, the 9th Circuit held that Omnia’s knowledge of Stone Creek’s mark gave rise to a presumption of intent to deceive, which Omnia failed to overcome. In particular, “conjectural statements” made by Omnia’s president about the scope of Stone Creek’s business did not amount to a good faith belief that there was no trademark conflict. Interestingly, in a footnote, the 9th Circuit observed that Omnia’s understanding of Stone Creek’s rights would have been relevant to rebutting the presumption of intent to deceive, but because Omnia did not conduct a good faith inquiry into the geographic scope of Stone Creek’s business, it was unable to overcome the effect of the presumption. Based on the factual findings of record, the 9th Circuit determined there was “slam dunk” evidence of likely confusion. With the legal conclusion of likely confusion in hand, the 9th Circuit proceeded to analyze whether Omnia had an effective defense under the century-old Tea Rose-Rectanus doctrine. This doctrine is based on the principle that common law trademark rights extend only to the geographic area where a trademark is known and recognized, such that a later user may in some circumstances acquire rights in certain geographic areas remote from the senior user’s territory. The doctrine potentially applied in this case because at the time Omnia adopted the infringing mark, Stone Creek had not yet applied for a federal trademark registration, and was thus a common law user. Once Stone Creek did obtain a federal registration, its rights, as the 9th Circuit characterized it, were “like Swiss cheese: it stretches throughout the United States with holes cut out where others acquired common-law rights prior to the registration.” However, “to take advantage of the Tea Rose-Rectanus doctrine, the junior user must establish good faith use in a geographically remote area.” As to what constitutes good faith, the circuits have been split: some have held that the junior user’s knowledge of the senior user’s prior use destroys good faith; others have held that knowledge is a factor informing good faith, but the focus should be on whether the junior user intended to benefit from the senior user’s reputation. The 9th Circuit considered the various analyses and came down in favor of the first view: “there is no good faith if the junior user had knowledge of the senior user’s prior use.” The appellate court found that Omnia had affirmative knowledge of Stone Creek’s mark and had not “serendipitously chosen the same mark and independently built up its own brand”. Rather, it knew that its actions came directly at Stone Creek’s expense, potentially blocking Stone Creek from entering into a new market. Accordingly, the 9th Circuit concluded that the Tea Rose-Rectanus doctrine provided “no shelter to Omnia for infringement of Stone Creek’s mark.” With regard to an award of profits, the 9th Circuit examined a split among the circuits as to whether the profits remedy under Section 1117(a) of the Lanham Act requires a showing of willfulness. This had been the law in the 9th and other circuits for many years, in light of language in Section 1117(a) that made monetary recovery “subject to the principles of equity.” The Lanham Act was amended in 1999 to cure an inconsistency in the remedies available for trademark dilution, but in fixing one problem, Congress inadvertently caused another, by including an affirmative reference to a willfulness requirement for dilution but not mentioning willfulness as a requisite for monetary remedies for infringement or unfair competition. After a detailed analysis of the legislative history and other circuit court decisions that had ruled on the issue, the 9th Circuit held: “We now decide that the 1999 amendment does not change the foundation of Ninth Circuit precedent – willfulness remains a prerequisite for awarding a defendant’s profits.” On the issue of remote geographic users and the potential applicability of the Tea Rose-Rectanus doctrine, the Stone Creek case is significant in that it precluded reliance on the doctrine as a defense to infringement based solely on the defendant’s knowledge of the plaintiff’s mark. This may have been the appropriate result in this case, where Omnia had a prior business relationship with the plaintiff and did very little, if anything, to verify whether Stone Creek’s trademark rights extended beyond the state of Arizona. However, in other cases, a defendant may be able to demonstrate that it conducted sufficient due diligence on the geographic scope of the plaintiff’s rights and made a good faith determination that it could adopt the same or confusingly similar mark without conflict in non-overlapping marketing channels. In those instances, it would seem that the remote geographic user defense should in fact be available as a successful defense to a finding of likely confusion.

We have discussed here before new federal legislative protections that are in place to give consumers wide latitude to post online reviews of businesses, whether they be good or bad. A recent decision of the Appellate Division of the Supreme Court of New York in Crescendo Designs, Ltd. v. Reses, provides additional protection for online consumer reviews, confirming that a negative online consumer review can be a protected opinion, rather than unlawful libel. Crescendo Designs, a custom home theater system installation business, installed an expensive system in Reses’ beach home. Dissatisfied with the results when she claimed the system failed and Crescendo didn’t come back quickly enough to resolve the problem, Reses posted a negative review of the system and the services she received on Yelp.com. In her review, she described what went wrong and commented “Terrible service if something goes wrong!”. Crescendo Designs filed a lawsuit claiming, among other things, that the online review constituted libel, i.e., a published statement of fact that was false and damaging to its reputation. The Supreme Court, Suffolk County granted Reses’ motion to dismiss and Crescendo Designs appealed. On appeal, the Appellate Division confirmed the lower court’s finding that the Yelp website review was not actionable as libel, because the review was an expression of opinion by a dissatisfied customer, rather than a published assertion of fact, which is required to maintain a libel claim. It held that “[r]ather than sifting through a communication for the purpose of isolating and identifying assertions of fact,” the courts should “consider the content of the communication as a whole,” and “look to the over-all context in which the assertions were made” to determine “whether the reasonable reader would have believed that the challenged statements were conveying facts about the libel plaintiff.” Taking into account the con­text in which the review was made and viewing the content of the review as a whole, the court found that “a reasonable reader would have believed that the writer of the review was a dissatisfied customer who utilized the Yelp website to express an opinion.” Yelp reviews have not always been held to be protected expressions of opinion. For example, a Staten Island court in Technovate v Fanelli awarded $1,000 in damages to a floor refinishing business against a consumer based on her Yelp review, which contained words such as “scam,” “con artist” and “robs,” finding that the review crossed the line from opinion to libel. As with libel claims asserted against traditional publications, an online review will not be shielded from liability if it contains statements of fact or a combination of fact and opinion deemed to be false and injurious.

Use of profanity by employees, whether in the workplace, outside the workplace, or on social media, presents difficult legal issues for the employer, as highlighted by a recent Second Circuit Court of Appeals decision overturning the firing of an employee who engaged in a highly profane Facebook rant against a supervisor. Although an employer has a justifiable interest in keeping profanity out of the workplace, its interest does not overshadow an employee’s Section 7 protected rights to engage in concerted activity under the National Labor Relations Act (“NLRA”). In yet another NLRA-social media decision (see here and here), the court considered whether the vulgar and offensive language – directed at a supervisor – in an employee’s statement advocating for unionization is protected activity under the NLRA. See NLRB v. Pier Sixty, 855 F.3d 115 (2d Cir. 2017).  The court held that language was protected and overturned the company’s termination of the employee in question. Two days before a union election, an employee posted the following statement on Facebook: Bob is such a NASTY MOTHER F***ER don’t know how to talk to people!!!!!! F*** his mother and his entire f***ing family!!!! What a LOSER!!!! Vote YES for the UNION!!!!!!! The post was visible to the public for three days before the employee took it down. Company management saw the post before it was removed and terminated the employee. An unfair labor practice charge followed shortly afterward, alleging a violation of section 8(a)(1) of the NLRA. Section 7 of the NLRA guarantees employees the right to “self-organization, to form, join, or assist labor organizations . . . and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”  29 U.S.C. § 157 (emphasis added).  Section 8(a)(1), in turn, protects these rights by prohibiting employers from interfering with, restraining, or coercing employees in the exercise of these rights.  29 U.S.C. § 158(a)(1).  Ordinarily, an employer is prohibited from discharging employees for participating in union-election activity, and the employee’s Facebook post did explicitly call for a pro-union vote in the upcoming election.  But the protections of the NLRA are not absolute.  The National Labor Relations Board (“NLRB” or “Board”) has long held that an employee engaged in “ostensibly protected activity may act in such an abusive manner that he loses the protection” of the NLRA. See NLRB v. City Disposal Sys., Inc., 465 U.S. 822, 837 (1984). Here, the NLRB had ruled in favor of the employee. The Second Circuit upheld the Board, agreeing that the statement came close to, but did not cross, the line.  The Board and the court applied a “totality-of-the-circumstances” test.  Although the court gave considerable deference to the Administrative Law Judge’s factual findings (which were upheld by the Board), employers can find some comfort in the court’s note that the post seems “to sit at the outer-bounds of protected, union-related comments.” The court provided several reasons for its decision: First, although the post can be characterized as “dominated by vulgar attacks” on the supervisor, the message addresses the workplace concern of how management treats employees, qualifying the post as “concerted activity for the purpose of collective bargaining.” Second, profanity among employees had been consistently tolerated by the employer, so it could reasonably be inferred that the employee was not fired for mere profanity, but for the protected, union-related content of the comment. Third, the employer had engaged in other unlawful, anti-union conduct as the election approached, including threatening pro-union employees with the loss of their jobs or benefits, and by implementing a “no talk” rule prohibiting discussion of union issues. Fourth, the court gave some weight to the fact that this post was made on Facebook—“a key medium of communication among coworkers and a tool for organization in the modern era,” and that the employee apparently (although erroneously) believed the post would not be publicly available. The court found that the Facebook posting was different from an outburst in the presence of customers. Accordingly, there are a few takeaways for employers to keep in mind. Implement a Clear, Written Policy. To effectively discipline employees for using offensive or vulgar language at the workplace, employers should have a clear written policy against profanity that informs employees of the rules regarding the use of profane or vulgar language in their interactions with colleagues and customers. The policy should specify the consequences for violations. Enforce the Policy Consistently and Uniformly. Employers should be consistent in enforcing any policy against profanity in the workplace. Past failures to enforce or to impose appropriate sanctions may tie the employer’s hands in future situations where a sanctionable activity may arguably be clothed with NLRA-protection. (Consistency would necessarily include, for example, applying the policy to profanity by supervisors and managers as well as by line employees. The employer’s tolerance of profanity by supervisors was cited by the court as proof of inconsistent enforcement.) Consistent and uniform enforcement of the policy is key. Be Careful Not to Limit Protected Activities. The enforcement of a policy against profanity or other inappropriate conduct must be balanced against an employee’s right to engage in protected activities under the NRLA. The employer’s other anti-union conduct in the Pier Sixty case was a factor in the decision. The Pier Sixty court has made clear that not all offensive language loses NLRA-protection. This decision confirms courts’ willingness to broadly construe the coverage of the NLRA, especially when considering employee activities on social media. Employers should carefully consider the context of potential profanity policy violations before taking disciplinary actions. When faced with the question of whether to fire an employee who uses vulgar and offensive language in a Facebook post directed at a supervisor and her family, you should first determine whether the subject matter of the Facebook comment touches on any workplace concerns. If not, there may not be NLRA- protected conduct. But if the subject matter—notwithstanding the vulgarity—is arguably related to working terms and conditions, you should take extra caution to make sure that any discipline will not run afoul of the NLRA. Consider the company’s practice with regard to policing profanity at work. If the company has tolerated profanity use among its employees in the past, you may not be in a good position to sanction an employee for a statement that, although offensive, may be protected under the NLRA. Rebecca Bernhard, David Y. Trevor and Jillian Kornblatt are members of Dorsey’s Labor & Employment practice group and are regular contributors to Dorsey’s Quirky Questions blog. The Quirky Questions blog addresses unanticipated, real life employment questions.

With the latest rule changes having taken effect July 8, 2017, the United States Patent and Trademark Office  continues its efforts to clear deadwood from the federal trademark register. Earlier this year, we reported on the PTO’s finalization of a rule allowing it to require trademark owners to provide multiple specimens of use per class in connection with maintenance filings, or face cancellation of their registrations either in whole or in part. Then, late last month, we reported on a PTO proposal for expedited versions of cancellation proceedings for non-use and abandonment claims. Last week the PTO finalized its rules on Revival of Abandoned Applications, Reinstatement of Abandoned Applications and Canceled or Expired Registrations, and Petitions to the Director, which streamline and harmonize the deadlines for various filings that applicants and registrants may make to restore inactive applications or registrations to active status. The Main Benefits of the New Rules These new rules should help lower the costs of searching, prosecution and enforcement because deadwood will be removed from the PTO’s trademark electronic records system (TESS) faster. There will be fewer times that an application or registration shown on TESS as dead can still be revived or reinstated. This means fewer use investigations to determine the status of a mark, fewer opposition or cancellation proceedings seeking to eliminate blocking but abandoned applications or registrations, and fewer times that alternative marks are selected because a company does not have time to wait and see what happens to a potentially blocking mark. Impacts of the New Rules The new rules will: Promote the integrity and accuracy of application and registration information in TESS Clarify time periods and filing requirements for requests for revival and reinstatement Clarify deadlines for requesting the director to take action on other matters Facilitate the efficient and consistent processing of petitions and requests for reinstatement Remove uncertainty as to whether a request is timely filed Prevent applicants from utilizing the revival process to delay prosecution by asserting non-receipt of an office action or notice of allowance more than once per application or registration Overview of Which Filing to Make and the Applicable Deadlines Here is an overview of which type of filing to make if an application has been abandoned or a  registration has been canceled or has expired, along with the relevant deadlines to make such a filing: With this new rule-making, the PTO attempts to balance its duties to third parties who rely on the accuracy of TESS and to applicants and registrants whose applications and registrations may have lapsed inadvertently. Any petition or request filed more than two months after the notice of abandonment, cancellation or expiration was issued or more than six months after PTO records are updated is likely to be dismissed as untimely. Thus, applicants and registrants should be diligent in checking their applications and registrations every six months after filing documents with the PTO. However, if extraordinary circumstances prevent a trademark owner from timely filing the petition or request more than six months after abandonment, cancellation, or expiration, the owner can file a petition to the director requesting that the director waive the rule and allow a late petition. However, given its new attitude toward delay, we can expect the PTO to grant such waivers sparingly.

You might want to think twice before registering a domain name containing a competitor’s personal name or trademark.  Three-time Tour de France winner Greg LeMond put his “pedal to the metal” recently, suing two Minnesota businessmen under the Anticybersquatting Consumer Protection Act (“ACPA”). LeMond is seeking $6.6 million in damages and a permanent injunction for their alleged registration of 66 domain names containing LeMond’s name and the name of his carbon-fiber business, Grail. The complaint is here.  LeMond alleges that the duo registered the domains in bad faith by seeking to profit from their sale and from third-party advertisements posted on the domains’ websites.  In a letter to the court, one of the defendants is seeking to exit the race early, claiming to be a victim of an unknown identity thief that is actually responsible for registering the domains. As LeMond apparently knows, the ACPA is a powerful lever for trademark owners.  A plaintiff may seek statutory damages of $1,000 to $100,000 per domain name (hence the $6.6 million in requested damages) and injunctive relief to force transfer of the domain names.  Statutory damages are an especially powerful tool because they are awarded based purely on a violation of the ACPA and do not require additional proof of the actual value of the harm caused by the violation.  Courts may also treble actual damages, if proven, and award attorney’s fees in exceptional cases.  A defendant may therefore face significant road rash if it falters in its defense of an ACPA claim. Trademark owners sometimes seek other types of relief when faced with cybersquatters, such as initiating UDRP or URS domain name arbitration proceedings.  These are relatively low-cost options and, if successful, result in the transfer or suspension of the infringing domain.  However, unlike an ACPA claim, a trademark owner cannot seek damages or an injunction in a UDRP or URS proceeding.  The stakes are much higher for a cybersquatter in an ACPA action. This case also shows the value of proactively registering important domain names prior to filing new trademark applications or publicly announcing a new brand.  Once a trademark application is filed, the information it contains is accessible on the U.S. Patent and Trademark Office website.  Unscrupulous third parties sometimes troll new trademark filings to register corresponding domain names in hopes of selling the domains to the mark owner or generating advertising revenue.  Establishing and abiding by a domain name registration policy can help to decrease the likelihood of needing to deal with cybersquatters.

Is there any use of a trademark within the United States that is insufficient to support federal trademark registration? The federal trademark laws are based on the Commerce Clause of the United States Constitution, and trademark registrations granted under Section 1 of the Trademark Act require use in “commerce that can be regulated by Commerce.” See 15 U.S.C. §§ 1051, 1125. At least since the early 1940s, the United States Supreme Court has taken an enormously expansive view of Congress’ powers under the Commerce Clause. See, e.g., Wickard v. Filburn, 317 U.S. 111 (1942). The United States Patent and Trademark Office, while paying lip service to Wickard and its progeny, suggests that “use in commerce” requires commerce that is interstate, territorial (e.g., within Washington, D.C.) or between the U.S. and a foreign country, and casts doubt on the sufficiency of intrastate use unless it is of a type that “taken in the aggregate, would cause a substantial effect on interstate commerce.” See Trademark Manual of Examining Procedure § 901.03, quoting Christian Faith Fellowship Church v. Adidas AG, 841 F.3d 986, 993 (Fed. Cir. 2016). In Christian Faith Fellowship Church, the Federal Circuit reversed a Trademark Trial and Appeal Board decision invalidating a trademark registration for a lack of use in commerce, even though the applicant had made two sales to an out-of-state resident. In what can be seen as either judicial restraint or timidity, while the court concluded that the applicant’s sales to an out-of-state resident was regulatable by Congress, it declined to “define[] the outer contours of Congress’s Commerce Clause” powers with respect to trademark registrations, thereby giving little guidance to trademark applicants as what type of use is “in commerce.” Id. at 992-93. In particular, what would the result be if the applicant hadn’t made any out-of-state sales? In this author’s view, Supreme Court precedent analyzed by the Christian Faith Fellowship court establishes that any use of a trademark in the United States can be regulated by Congress, without regard to whether that particular use may “directly affect” interstate commerce as suggested by the Trademark Manual of Examining Procedure, and the Federal Circuit should have taken the opportunity to more clearly set forth the law. In Gonzales v. Raich, the Court upheld the federal prohibition of marijuana under Congress’ Commerce Clause power, even as to a medical marijuana patient who grew marijuana for her own use and not for sale or distribution to anyone. See 545 U.S. 1, 1-10 (2005). The Court explained that when “a general regulatory statute bears a substantial relation to commerce, the de minimis character of individual instances arising under that statute is of no consequence.” Id. at 17 (internal quotations omitted). The Court further explained that “[o]ur case law firmly establishes Congress' power to regulate purely local activities that are part of an economic ‘class of activities’ that have a substantial effect on interstate commerce.” Id.; see also Taylor v. US, 136 S. Ct. 2074, 2081 (2016) (“And it makes no difference under our cases that any actual or threatened effect on commerce in a particular case is minimal.). As it is beyond reasonable dispute that Congress’ power to regulate trademarks in the aggregate affects interstate commerce, Congress likewise has the power to regulate even purely local trademark uses. Consider that a purely local trademark user may prevent a subsequent federal registrant from using its mark in the local user’s trading area. See 15 U.S.C. §1065. Accordingly, in the author’s view, any use of a mark within the United States should be sufficient to support a federal trademark registration.

We recently provided some commentary on Gene Simmons and his application to register the “devil horns” rock and roll hand symbol.  Well, you can now KISS that application goodbye, as Mr. Simmons has expressly abandoned his federal trademark application.  No details on the reason for the abandonment were included in the filing with the USPTO, nor does it appear Mr. Simmons has made any public comment on the application. Now rockers everywhere can breathe a sigh of relief that they will be able to sport their devil horns without Mr. Simmons telling them to kiss off.

In its latest effort to clear deadwood from the Trademark Register, the United States Patent and Trademark Office (“PTO”) has issued a Notice of Proposed Rulemaking that proposes an expedited version of a cancellation proceeding known as a “Streamlined Proceeding.”  As described below, the proceedings have the potential for substantial savings to practitioners and trademark owners in terms of both time and money. Current cancellation proceedings have these features: Multiple grounds for cancellation Counterclaims allowed; Separate phases for pleadings, evidence gathering and briefing; Multiple rounds of discovery possible; Depositions taken in evidentiary and testimony phases; Multiple extensions of time possible; Suspensions frequently granted; Oral hearings available on request. Given this relatively flexible, multi-phase approach, the time from filing until a decision on the merits can be several years at best. In contrast, Streamlined Proceedings are proposed to have: Only abandonment and nonuse as grounds; No counterclaims; A combined pleadings/evidence/briefing phase; Additional discovery limited to challenges to the petitioner’s standing; No depositions; One extension request per party; Suspensions only if there is similar district court litigation; No oral hearings. Given this fast-track, single-phase approach and assuming no extensions, the Notice contemplates a time frame of 70 days until a decision if the respondent defaults and 170 days until a decision if the respondent answers. To initiate a Streamlined Proceeding, the petitioner would be required to present facts that establish its standing and set forth the factual basis for the abandonment or nonuse.  This could include providing a declaration outlining a search for use of the mark, or any other evidence of abandonment or nonuse of the mark at issue. After this initial filing, the Respondent would have 40 days to answer the petition.  When answering, the respondent must state any defenses if applicable and provide proof of use or other evidence to counter the abandonment or nonuse grounds. Following receipt of the respondent’s answer, the petitioner would have 40 days to:  (1) take no further action and await a decision, (2) file a reply with rebuttal evidence, (3) withdraw its petition for cancellation without prejudice to its right to file another cancellation on grounds that were not raised in the streamlined proceedings, or (4) file a notice of conversion to a full cancellation and add any new grounds to its pleading.  Because the respondent typically has all the relevant use evidence it needs, the PTO decided not to give the respondent the same ability to convert a Streamlined Proceeding into a full cancellation. Similar to how the PTO hopes that its Streamlined Proceedings would be efficient time-wise, it also believes the proceedings will be cost-effective for trademark owners.  According to its Notice, the PTO expects that the filing fee for a streamlined proceeding would be $300 per class, or $400 per class if filed by paper.  The current cost of filing a petition to cancel is $400 per class, or $500 per class if filed by paper.  While the difference in filing fees is slight, the real savings will be in the streamlined production of evidence and the complete elimination of depositions, briefs and oral hearings -- and the accompanying attorney’s fees for these items. If this proposed proceeding seems familiar, that is because similar proceedings have been used in Canada.  The Canadian Intellectual Property Office’s Section 45 proceedings were developed in an effort to increase timeliness and clearing out of its Register.  According to the Canadian Intellectual Property Office’s FAQ on Section 45 Proceedings, however, these proceedings can still take between two to four years to complete. With this rule-making the PTO has chosen its own streamlined approach.  At a panel presentation during the recent International Trademark Association annual meeting, PTO officials confirmed that they chose the abandonment and nonuse grounds because the PTO already has the statutory authority to implement these changes and would not need Congress to amend federal trademark law to proceed.  Given the current challenging political environment, this seems to be a most practical decision. The comment period is open until August 14, 2017.  Watch this blog for progress reports on the PTO’s streamlined cancellation process.

In its recent decision in Joseph Phelps Vineyards, LLC v. Fairmont Holdings, LLC, the Court of Appeals for the Federal Circuit clarified the proper interpretation of the fame of the  mark factor in determining whether there is a likelihood of confusion under the long-established multifactor test set forth in Application of E. I. DuPont DeNemours & Co., 476 F.2d 1357, 1361 (CCPA 1973).  The Court vacated the Trademark Trial and Appeal Board’s decision declining to find the senior user’s mark to be “famous” for purposes of deciding the issue of likelihood of confusion, and remanded the case for the Board to apply the correct standard for fame. The appeal arose out of a cancellation proceeding in which Joseph Phelps Vineyards, which owned a registration of INSIGNIA for wines, petitioned to cancel Fairmont Holdings’ registration of ALEC BRADLEY STAR INSIGNIA for cigars, tobacco, cigar boxes, cigar cutters and cigar tubes.  The ground for the cancellation was priority and likelihood of confusion.  There was no issue as to priority; Phelps’ registration predated both Fairmont’s filing date and its claimed first use date. The Board began its analysis by considering the fame of Phelps’ mark.  The evidence showed that Phelps had used INSIGNIA for wine since 1978.  Since 2000, it sold between 10,000 and 15,000 cases of wines annually, which generated revenues of $13 million to $20 million per year.  Phelps sold its wine to wine distributors, directly to house accounts that are mainly restaurants and bars, through its wine club, and through a company store at its winery.  Information about its wines was available on Phelps’ website, through which its wines could also be purchased.  INSIGNIA wine won the WINE SPECTATOR Wine of the Year award in 2005, and references to JPV INSIGNIA wine have appeared in “dozens, if not hundreds” of news articles over the years.  The Board noted that two articles Phelps relied on were not about Phelps’ wine.  Instead, the articles mentioned Phelps and its use of trademarks, including INSIGNIA, in discussing California wine makers using trademarks for blends of grapes.  Based on this evidence, the Board concluded “while it appears that [Phelps’] INSIGNIA branded wine has met with success in the marketplace, we are not persuaded on this record that [Phelps’] mark is a famous mark.” In a per curiam decision reversing the Board, the Court held that the Board erred in analyzing the fame of the INSIGNIA mark as an all-or-nothing factor and discounting it entirely in reaching its conclusion that the parties’ marks were not likely to cause confusion.  Because of this error, the Board did not properly apply the totality of the circumstances standard, which required it to consider all the relevant factors on a scale appropriate to their merits. The Board’s all-or-nothing measure of fame was similar to the analysis appropriate for a dilution claim.  While fame for dilution purposes is an either/or proposition, in the context of likelihood of confusion, fame varies along a spectrum from very strong to very weak, which must be determined based on the market for the specific product or service. The Court noted the evidence of record showing that INSIGNIA wine was renowned, both in the wine market and among consumers of fine wine, specifically mentioning the awards INSIGNIA wine had received and the many articles of record mentioning INSIGNIA wine.  Based on this evidence, the Court was “perplexed” that the Board found that INSIGNIA wine has no “fame” and gave no weight to this factor.  The Court held that the Board applied the incorrect standard because fame must be determined from the viewpoint of consumers of similar products.  The record showed that consumers and the wine market recognized the INSIGNIA trademark.  The Court therefore held it was error to refuse to accord any “fame” to Phelps’ mark, and in this case the “fame” factor warranted reasonable weight, among the totality of the circumstances. In a concurring opinion, Judge Newman agreed with the majority’s conclusion and reasoning regarding fame, but also believed the Board erred in its analysis of the relatedness of the parties’ products and the similarity of the marks as actually used.  She therefore would have directed the Board to reconsider all the relevant factors on the question of likelihood of confusion. Courts typically focus on the strength of the senior mark, rather than its fame, in determining whether a likelihood of confusion exists.  Although strength and fame are similar, they are not identical.  “Strength” is a combination of a mark’s conceptual distinctiveness on a spectrum ranging from descriptive to arbitrary or fanciful, combined with the extent of the relevant public’s recognition of the mark in the marketplace.  The wording of this factor in the DuPont decision as the “fame of the prior mark (sales, advertising, length of use),” frames the standard in terms of “fame” as a matter of commercial renown instead of conceptual “strength.”  Although the Court’s Phelps decision does not change the DuPont test, it confirms that “fame” under DuPont refers to a mark’s strength as typically discussed in infringement cases and should be evaluated on a spectrum rather than the all or nothing “fame” required for a dilution claim.

          You may remember, you may recall, A certain infringement suit filed last fall. It was filed by the heirs of the great Dr. Seuss, And now they've run smack dab into the doctrine of fair use. Let me tell you what happened, it's a tale worth telling, For the defendant is cheering, and the plaintiff is yelling. How did this suit start? Why was the doc in a fix? It all started with the company called ComicMix. They do mish-ups and mash-ups, wreaking havoc and heck, And their latest creation mixed Dr. Seuss with Star Trek. They gave it a title, it's surely one that you know, They called it "Oh, The Places You'll Boldly Go!" The plaintiff did not like it, not one little bit, And they fussed and they fumed, and were in quite a twit. So they filed a lawsuit, with a big ferocious bark, "Stop copying our work and infringing our mark!" "Copy, you say?" Defendant said with a hiss, "We are going to file a motion to dismiss!" And file they did, under rule 12(b)(6), Filed their motion, did ComicMix. Perhaps to their surprise, and their utter delight, The Court said, "Hey, ComicMix, you're largely right." The Court said it was fair for the use of the mark, Those claims were gone, tossed into the dark. But the copyright claims, oh those will stay for a while, Plaintiff holds on, and will take those to trial. The Court plowed through fair use, plowed through like a tractor, And it all came down to that last fair use factor. The Court said it wasn't clear if the market value was hurt, That's a question for the jury, it will be on alert. So, the saga continues, there may be no truce, For fair use is on the loose for the great Dr. Seuss!

Last week, the U.S. Court of Appeals for the Federal Circuit provided important guidance on the standard applicable to resolving disputes over the rightful ownership of a trademark where the mark has been used by a group of individuals in an organization and there is no agreement designating ownership.  In its decision, the Federal Circuit agreed with the Trademark Trial and Appeal Board that three factors should be examined:  (1) the parties' objective intentions or expectations; (2) who the public associates with the mark; and (3) to whom the public looks to stand behind the quality of goods or services offered under the mark.  Utilizing these factors, the Federal Circuit affirmed the Board’s ruling that the mark in question was owned by the group rather than a departed member who claimed to have first conceived of the mark prior to joining the group.  As a result, the departed member’s registration of the mark on the Supplemental Register was cancelled because her application for registration was deemed void ab initio. Lyons v. Am. College of Veterinary Sports Med. & Rehab. involved a dispute between a veterinarian (Lyons) and a group of other veterinarians with whom she worked collaboratively for a number of years on forming an accredited veterinary specialist organization (“VSO”) for treating athletic animals. Lyons largely initiated the project.  During this period, the group began using the mark THE AMERICAN COLLEGE OF VETERINARY SPORTS MEDICINE AND REHABILITATION (“AVSMR”), as the name of the proposed VSO.  Although Lyons was a part of the organizing committee for several years, she ultimately was dismissed from the committee a number of years prior to the group’s receipt of accreditation.  After her dismissal, Lyons obtained a registration for the AVSMR mark on the Supplemental Register, claiming to have used the mark in commerce years before joining the group.  Lyons purported to offer various lectures, seminars and clinical experiences using the AVSMR mark. Meanwhile, the group continued its work and received provisional accreditation for the VSO in 2010, named the American College of Veterinary Sports Medicine and Rehabilitation.  The College began certifying veterinarians, establishing active residency programs and conducting annual meetings, conferences, and education programs in collaboration with other VSOs.  The College successfully petitioned to cancel Lyon’s registration on the Supplemental Register. On appeal, the Federal Circuit examined whether the ownership of the trademark lay with Lyons or the College.  In doing so, it relied on a three-factor test previously used by the TTAB to resolve a dispute regarding the ownership of a Jackson 5 cover band name after the departure of one of its members.  The Board in that case ultimately found that the group was the owner of the mark.  See Wonderbread 5 v. Giles, 115 U.S.P.Q.2d 1296 (TTAB 2015).  In Lyons, the Federal Circuit held that the first factor weighed in favor of the College because the parties’ objective expectations were that Lyons, in conjunction with the rest of the group, would form an accredited VSO, not that Lyons would render her own personal services using the mark.  With respect to the second factor, the Federal Circuit compared Lyons and the College’s respective use in commerce of the mark and found that substantial evidence indicated that the relevant public looks to the College, not Lyons, for services in connection with the mark because Lyons’ use of the mark had not created distinctiveness inuring to Lyons.  Finally, the Federal Circuit found that substantial evidence demonstrated that the relevant public looked to the College, not Lyons, to stand behind the quality of the education and certification services associated with the mark. The Federal Circuit concluded its opinion by noting that even if Lyons was the first to use the mark and may have been the reason why the Group adopted the name, Lyons’ individual use never rose to the level of “use in commerce” required to establish ownership of the mark.  This highlights a misconception that sometimes arises in ownership disputes that the individual who thinks up a name or is the driving force behind the introduction of a product or service to the market is the trademark owner.  As the Federal Circuit’s analysis in Lyons demonstrates, the ownership inquiry in disputes between a departing member and the group from which they departed will focus on whether the individual or entity is actually perceived as putting out the product.  Accordingly, only rarely will an individual be deemed to be the owner of a mark when the mark was, in fact, used by the entity.  The departing member should be mindful of this and seek a written agreement to rights in the mark in advance if sole ownership is desired. Although in those circumstances, a license to the group may be necessary if it is in fact the group entity that is offering the product or service, not the individual member.

On June 9, 2017, Gene Simmons of Kiss rock band fame applied with the United States Patent and Trademark Office (“PTO”) to register the following mark for “Entertainment, namely, live performances by a musical artist; personal appearances by a musical artist” in Class 41:         Simmons describes the mark thusly: “The mark consists of a hand gesture with the index and small fingers extended upward and the thumb extended perpendicular.” Simmons claims to have first used the mark anywhere and in interstate commerce at least as early as November 14, 1974, which, according to Wikipedia, was the year of Kiss’ first major tour.  As his evidence of use, he submitted a photo of himself displaying the sign while standing next to Dave Grohl of Nirvana and Foo Fighters fame. This hand gesture, often referred to as some variation of “devil horns,” has become synonymous with rock and roll, although people certainly disagree about whether the thumb should be extended (authors’ opinion: it shouldn’t be).  Unsurprisingly, a quick internet search will reveal dozens of musicians using this hand gesture, with or without the thumb extended, including Metallica, Dave Navarro, and even John Lennon on the cover of the Beatles 1966 single for “Yellow Submarine,” which predates Simmons’ claimed first use.  Even politicians have been seen using the symbol, including Bill Clinton, Barrack Obama, and Sarah Palin. The PTO is unlikely to allow this application to Rock and Roll All Nite.  When Simmons filed the application, he had to make a declaration that “To the best of [his] knowledge and belief, no other persons, except, if applicable, concurrent users, have the right to use the mark in commerce.”  The examining attorney will likely take note of the widespread use of the symbol to refuse the application on grounds that Simmons does not control or own exclusive rights to it.  The examining attorney may also refuse to accept the specimen, which does not appear to show the mark in use with entertainment services.  Although Dave Grohl does look pretty entertained… Even if the PTO were to allow registration of the mark, it seems Simmons would have an incredibly difficult time enforcing any rights he might claim in the mark.  He would need to show that consumers are likely to be confused about the source of services when others use the hand gesture.  Essentially, his argument would be that concertgoers would be confused as to whether a musician performing at a concert they are attending is, in fact, Simmons because the musician used the hand gesture.  Outside of a very good Kiss cover band, this seems unlikely.  Perhaps Simmons will employ some of his signature makeup to help him keep a straight face…  

Last week, the FTC announced a Complaint and proposed settlement with two trampoline sellers, brothers Sonny and Bobby Le. The Les sold Infinity and Olympus Pro brand trampolines through three websites that touted endorsements of these two brands, while criticizing the qualities of competitive products. The endorsements were conveyed through the use of the Trampoline Safety of America logo (a group described as independent trampoline professionals) with a banner trumpeting “Trampoline of the Year” and the publication of accolades of safety and reliability by the Bureau of Trampoline Review (represented as an independent research organization). The Les’ websites also featured a blog post from a “Trampoline Mom” endorsing the brands sold by the brothers and a YouTube comment recommending the Infinity product as the “best ever owned” while describing the competitor’s product as “crap”. As the FTC revealed, and coming under the heading of "What were they thinking?", the Le brothers were in fact behind all of these purported independent organizations and blog and YouTube comments. Not surprisingly, the FTC found the failure to disclose the material connections associated with all of the challenged endorsements constituted false and misleading advertising for the trampoline products. While most companies would not be as brazen as the Le brothers, the published complaint and proposed consent order is a reminder that the FTC continues to scrutinize online endorsements and will take action when there is a failure to make adequate disclosure that endorsing individuals or organizations are affiliated with or supported financially by the product marketers. The FTC took the opportunity of its press release about the matter to remind marketers that: Advertisers should not create fake review sites, use misleading third-party endorsements or seals or tout products on independent sites without disclosing that the recommendations originate with individuals connected to the company. Material connections between an advertiser and a reviewer must be clearly and conspicuously disclosed – this principle applies to compliments for the advertiser’s products as well as critiques of the competition. Before using reviews and endorsements to support product marketing, consult the FTC Endorsement Guides. You can read more about FTC guidance and prior enforcement actions here, here, here, here, here and here on The TMCA.

As Biggie said “Mo Money Mo Problems” – Last month, a New York-based photojournalist filed suit again Diddy’s record label, Bad Boy Records, for posting a photo of none other than P. Diddy himself on his own Instagram account.  Social media is supposed to about sharing (and sometimes over-sharing),  but that doesn’t mean the laws of copyright don’t apply.  The photograph in question was taken by photographer Matthew McDermott in August of 2016 at Diddy’s new charter school in Harlem.  According to the complaint, McDermott licensed the photograph to the New York Post, but the photograph also appeared on Diddy’s Instagram feed without permission or any attribution. While the photograph is no longer available on Diddy’s Instagram, the complaint claims it received over 42,000 likes. McDermott is suing for unspecified monetary damages.  While cases like this tend to settle without any findings of liability or damages, we will let you know if Bad Boy Records files an answer or any affirmative defenses. Unfortunately, it has become commonplace for brands, celebrities and casual Instagram users to “borrow” photographs without permission and post them on their Instagram feeds. Back in 2014, Kim Kardashian caught a lot of flak for lifting a photograph from Google and posting it on her Instagram feed after her vacation to Thailand.  While she wasn’t sued, she defended herself in the court of public opinion by stating she that never claimed to have taken the photograph in the first place.  In 2016, a Brussels-based photographer called out Harry Styles of One Direction for posting one of his photographs to Styles’ Instagram feed, but Styles’ fans acting as the jury, found the photographer guilty and  harassed him, thereby missing his point entirely. Copyright is alive and well in spite of social media. Brands and advertisers should take care to respect the rights of photographers (from professionals to average people) by obtaining proper permissions to use photographs on their social media feeds.  Such uses are more often than not for commercial purposes, and therefore attribution alone is not enough.  If your brand sees a photo online that it wants to include as part of its feed (whether it features the brand's products or is just a pretty picture), send a direct message asking the photographer for permission.  If you get a positive response, great – if you don’t there are 700 million monthly active users on Instagram and I’m sure someone will let you re-post their photos.

The Supreme Court recently sounded the death knell for patent litigation in the Eastern District of Texas, overruling the Federal Circuit’s interpretation of 28 U.S.C. § 1400(b) and dramatically reducing forum shopping in patent cases.  In TC Heartland LLC v. Kraft Foods Group Brands LLC, the Supreme Court overturned nearly thirty years of Federal Circuit case law that permitted plaintiffs to file patent lawsuits wherever a defendant would be subject to personal jurisdiction. The Court held that under 28 U.S.C. § 1400(b) “a domestic corporation ‘resides’ only in its State of incorporation.” This will significantly reduce the filings in the Eastern District of Texas but may increase the number of filings in jurisdictions such as California or Delaware, where many corporations are incorporated. What does that mean for venue in copyright cases, governed by 28 U.S.C. § 1400(a)?  For several reasons, we don’t expect to see any dramatic shift in venue for copyright cases.  Although similar to the patent venue statute addressed in TC Heartland, § 1400(a) differs in a few noteworthy ways: Copyright Venue – § 1400(a).  Civil actions, suits, or proceedings arising under any Act of Congress relating to copyrights or exclusive rights in mask works or designs may be instituted in the district in which the defendant or his agent resides or may be found. Patent Venue – § 1400(b). Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business. The logic of the Supreme Court’s restrictive interpretation of the term “resides” in §1400(b)  would seem to apply equally to that same term in §1400(a) , although there is room for some argument given the Court’s careful observation that it was simply applying its past precedent and was not asked to reconsider the correctness of that past precedent.   Even if the term “resides” is interpreted narrowly, the other provisions of the copyright statute would prevent any dramatic restriction in copyright venue. The copyright statute is broader in two key ways: In addition to the location where a defendant resides, a copyright action may be initiated in any location where a defendant “may be found.” Some courts have held that, for purposes of § 1400(a), a defendant “may be found” in any jurisdiction in which it is subject to personal jurisdiction.  See, e.g., Time, Inc. v. Manning, 366 F.2d 690, 697-98 (5th Cir. 1966); Isbell v. DM Records, Inc., No. Civ.A.3:02-CV-1408-G, 2004 U.S. Dist. LEXIS 10394, 2004 WL 1243153, at *13 (N.D. Tex. June 4, 2004); CAVU Releasing, LLC v. Fries, 419 F. Supp. 2d 388, 394 (S.D.N.Y. 2005).  If this broad interpretation is applied, then any reduction in the scope of “resides” is counteracted by a broad reading of “may be found.” Unlike the patent statute, the copyright statute examines the location of both the defendant and its agent, which provides an opportunity for broader venue. While TC Heartland signals a dramatic shift in venue for patent cases, it does not portend a similarly dramatic shift for copyright cases.

Lynn Goldsmith is a professional photographer who rose to fame in the 1970’s for her portrait photography, especially for her work with musicians and other entertainers.  Her work has appeared on over 100 album covers.  In 1981, Goldsmith took this publicity photo of Prince:                 In 1984, Goldsmith granted Vanity Fair a license to use the publicity photograph in exchange for a fee. Andy Warhol needs no introduction.  His work, particularly his silkscreen portraits, is instantly recognizable.  In 1984, Warhol created a series of 16 silkscreen portraits of the late musician Prince, one of which is depicted below: Now, more than 30 years after Warhol originally created the Prince series, Goldsmith is claiming that Warhol’s Prince series infringes her copyrights in the publicity photo.  In April, The Andy Warhol Foundation for the Visual Arts, Inc. (“The Warhol Foundation”) sued Goldsmith in the Southern District of New York seeking a declaratory judgment that: (i) Andy Warhol’s series of Prince silkscreens (a) do not infringe Goldsmith’s copyright because they do not copy the publicity photo and are not derivative works; and (b) constitute fair use because they transform Goldsmith’s underlying photography; and (ii) Goldsmith’s claims are barred by the statute of limitations and/or laches. A “derivative work” is defined in the Copyright Act as “a work based upon one or more preexisting works, such as a[n] … art reproduction.”  A work is considered “transformative” if it adds value to the original in the creation of new information, new aesthetics, new expression, new meaning, or new insights and understandings.  A transformative work still copies from an original, but the transformative nature may be sufficient to deem the copying permissible, i.e., a fair use. It seems obvious that Warhol’s Prince series is based on the publicity photo.  In fact, in its complaint, The Warhol Foundation even admits that Warhol’s Prince series was inspired by Goldsmith’s publicity photograph.  Yet, The Warhol Foundation is still seeking declaratory judgment that the Prince series is not a copy or derivative work of the publicity photo.  Because Warhol had access to the publicity photo, the real inquiry is whether Warhol copied any protectable expression.  In this regard, The Warhol Foundation devotes 4 pages in its complaint to pointing out all of the differences between the Prince series and the publicity photo, such as the lines on Prince’s face, the angle of Prince’s face, and the amount of eye makeup Prince is wearing and appears to be setting this up for a defense of fair use under Cariou v. Prince (the artist, not the musician). In 2013, the Second Circuit Court of Appeals held that Prince’s repurposing of Cariou’s photographs in his paintings constituted fair use, in part because of the transformative nature of Prince’s paintings.  While describing what constitutes a transformative work, the Court expressly mentioned Andy Warhol’s work, “[m]uch of Andy Warhol’s work, including work incorporating appropriated images of Campbell’s soup cans or of Marilyn Monroe, comments on consumer culture and explores the relationship between celebrity culture and advertising.”  Cariou v. Prince, 714 F.3d 694, 706 (2d Cir. 2013) (emphasis added).  If the district court adopts this reasoning, it could be problematic for Goldsmith.  On the other hand, the Second Circuit has just recently indicated that it may be more difficult to prove a work is transformative when a new work uses the original work in the same manner as the original. See TCA Television Corp. v. McCollum, 839 F.3d 168 (2d Cir. 2016) (finding that a Broadway production’s use of a portion of the “Who’s on First?” comedy routine was not sufficiently transformative). Goldsmith has not yet filed an answer in the proceeding, but we will be watching to see how the case progresses.  

Section 411(a) of the Copyright Act provides, in pertinent part, that "no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title." For many years, this provision has spawned a debate throughout the federal circuit courts as to the meaning of "registration."  On one side of the debate are the courts that adhere to what is referred to as the "application approach."  These courts require a copyright plaintiff to plead facts sufficient to establish that an application to register the infringed work has been properly submitted to the Copyright Office before filing a suit for infringement.   See, e.g., Cosmetic Ideas, Inc. v. IAC/Interactivecorp, 606 F.3d 612, 619 (9th Cir. 2010) (concluding that registration occurs when the owner files an application); Positive Black Talk Inc. v. Cash Money Records Inc., 394 F.3d 357, 365 (5th Cir. 2004), abrogated in part by Muchnick, 559 U.S. 154. On the other side of the debate are those courts that embrace the "registration approach," which requires the copyright plaintiff to plead facts sufficient to show that a certificate of registration has issued. La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195, 1197 (10th Cir. 2005) (concluding that registration occurs when the Register approves an application).  The 7th Circuit has issued seemingly conflicting opinions on the issue. Compare Chi. Bd. of Educ. v. Substance, Inc., 354 F.3d 624, 631 (7th Cir. 2003) (“[A]n application for registration must be filed before the copyright can be sued upon”) with Gaiman v. McFarlane, 360 F.3d 644, 655 (7th Cir. 2004) (“[A]n application to register must be filed, and either granted or refused, before suit can be brought”).  Other circuits have acknowledged the ongoing debate but have declined to decide the issue.  See, e.g., Alicea v. Machete Music, 744 F.3d 773, 779 (1st Cir. 2014) and Psihoyos v. John Wiley & Sons, Inc., 748 F.3d 120, 125 (2d Cir. 2014). The 11th Circuit recently jumped into the fray in Fourth Estate Public Corporation v Wall-Street.com, LLC.  It embraced the registration approach.  In essence what the court held is that the path to registration is a three-step process.  Step 1 requires an application to be filed. Step 2 requires the Register of Copyrights to examine whether "the material deposited constitutes copyrightable subject matter."   Assuming the Register decides that the material is protectable, "the Register shall register the claim and issue to the applicant a certificate of registration," which is Step 3.  Under the "application approach," only Step 1 is completed without regard to the remaining steps.  Thus, the 11th Circuit believed the “text of the Copyright Act makes clear that the registration approach” is correct. For those keeping track, the circuit breakdown on this issue is something like this: 2-2-2-1. Two circuits for the application approach; two circuits for the registration approach; two circuits that aren't sure; and one conflicted circuit. Perhaps it is time for SCOTUS to break this three-way tie?

The Supreme Court ruled yesterday that Lexmark’s decision to sell its patented printer ink cartridge exhausted all of its patent rights in that cartridge, regardless of any contractual restrictions Lexmark attempted to impose on the purchaser’s use and resale of that cartridge and regardless of whether the sale was domestic or international. Lexmark makes and sells toner cartridges for printers and offers buyers two options: One is to buy a cartridge at full price with no strings attached, allowing the buyer to refill the cartridge when depleted. The other is to buy a discounted cartridge through Lexmark’s Return Program under which the buyer agrees not to refill the cartridge nor to give/sell the empty cartridge to anyone other than Lexmark. Lexmark sued Impression Product, Inc., for refurbishing and reselling used Lexmark Return Program ink cartridges. The Supreme Court held that Lexmark pushed the patent law too far. The Court held that Lexmark’s original sale of the printer cartridge extinguished its patent rights for that cartridge under the “exhaustion” principle. This principle (sometimes called the first-sale doctrine) states that once a patented product is sold, purchasers may do what they please with the product. The Supreme Court confirmed that the principle applies to sales made in the US as well as abroad. So, someone who purchases a good from a patentee or its licensee, can no longer be liable to the patentee for patent infringement. In dicta, the Court noted that a patentee could via contract limit a licensee. For example, a patentee could contractually limit a licensee to only sell to non-commercial end users and require the licensee to obtain an agreement from the end users promising not to use the product in business. In such a case, patent exhaustion does not apply to the licensee because the patentee is not selling it a good, but only a portion of a right (i.e., the right to exclude the licensee from making and selling otherwise infringing goods). However, patent exhaustion does apply to the end user because the patentee via the licensee sold the end user a good. Therefore, if the end user violates a contract limitation on commercial use, the patentee’s only remedy is for breach of contract. Other industries attempt to restrict post-sales activities: patented drugs that are sold abroad but may not be imported to the US, bio-engineered seeds which farmers must buy new each year, and companies that limit the “right to repair” their products after they are sold. Companies like Lexmark—which try to maintain control of a product after sale—will have to adjust their business models. Depending upon the industry, using contract law instead of patent law may not be as attractive to patent holders. For example, in some industries it may be impractical to require end users to sign a contract limiting their use of a product and/or impractical to sue all such end users. In the Lexmark case, even assuming Lexmark required its end users to sign a license restricting reuse, it would have no way of knowing which end users had violated the agreement by selling an empty cartridge to a refurbisher and would have no remedy against the refurbisher (who has no contract with Lexmark) in contract or under patent law. It would also be logistically difficult to keep track of all of the end user licenses. Moreover, the remedy for using a product outside the scope of that license after the sale would  now fall under standard contract law remedies. Time will tell how companies react to this narrowing of patent protection for patent holders.

When faced with a random (but very important) question, how often is our response: “I’ll google it”?  Using google as a verb, similar to the above question, was at the center of a recent decision by the U.S. Court of Appeals for the Ninth Circuit in David Elliott v. Google, Inc.  The appellate court affirmed the district court’s summary judgment holding that Appellants failed to establish  a genericness attack on the google mark because (1) the Appellants did not demonstrate how the public uses the word google with regard to a particular good or service and (2) public use of a trademark as a verb does not automatically constitute generic use. One of the Appellants had registered 763 domain names including the word “google,” such as googledisney.com and googlebarackobama.com. Google filed a complaint with the National Arbitration Forum and the domain names were transferred to Google. The Appellants then filed an action in federal district court in Arizona, alleging that the google trademark had become generic. Appellants moved for summary judgment motion, arguing that a majority of the relevant public uses the word google as a verb when referring to internet searching, and that public use of  the trademark as a verb had genericized the mark. Google cross-moved for summary judgment, arguing that the Appellants failed to provide sufficient evidence to show that the public uses the word google as a generic term to refer to internet search engines (i.e., the services in connection with which the google trademark is registered).  The district court granted Google’s motion, and Appellants appealed to the Ninth Circuit. The 9th Circuit explained that 15 U.S.C. § 1064(3) provides that a trademark can be cancelled when the trademark “becomes the generic name for the goods or services… for which it is registered.”  (Emphasis added).  As such, the Ninth Circuit held that “a claim of genericide must relate to a particular type of good.  Even if we assume that the public uses the verb ‘google’ in a generic and indiscriminate sense, this tells us nothing about how the public primarily understands the word itself, irrespective of its grammatical function, with regard to internet search engines.” In other words, (1) cancellation of a registration on the ground of genericness requires a showing that the word is used generically in connection with the specific goods or services identified in the registration; and (2) using a trademark as a verb is not sufficient to establish the genericness of a mark, since verb usage does not demonstrate how the public views the trademark with regards to the goods or services.   Consequently, the Appellants failed to establish that the google trademark had become generic. To provide additional clarity to its decision, the appellate court examined the evidence provided by the Appellants and determined that the evidence (including lyrics from T-Pain’s “Bottlez”) merely demonstrated that google can be considered a verb for using search engines.  But the 9th Circuit found that none of the evidence demonstrated that the public uses the word google as a generic term for internet search engines.  As such, the court affirmed the district court’s decision. The key takeaways are that public use of a trademark as a verb is not sufficient by itself to meet the burden of proof on a genericness claim and that, to support cancellation of the registration on the ground of genericness, the evidence must show genericness of the mark in connection with the specific goods or services identified in the registration.

In the UK, you can be. But the law is about to change and will become much clearer. New legislation will make life a bit easier for IP owners who seek legitimately to enforce their rights. Unjustified threats will remain actionable, but it will be easier to see where the line is drawn. UK law has for many years provided for a cause of action against unjustified threats to bring proceedings for patent, trade mark or design infringement. The provisions on unjustified threats were intended to discourage IP owners from adopting bullying tactics – dispatching baseless threats of infringement against all and sundry. More specifically, the law takes issue with making frivolous threats against downstream traders, such as retailers and distributors. Such traders often have insufficient economic interest in the allegedly infringing product and rather than resisting a baseless complaint may prefer to stop selling the product, so as not to be dragged into proceedings in which they have little interest. There is nothing wrong in enforcing IP rights. It has always been a good defence against an “unjustified threats” claim if the IP owner can demonstrate that an infringement had indeed been committed. But an aggressor can cause real damage to the supplier of the accused goods simply by making threats against distributors and retailers, even if the allegation of infringement has no legs to stand on. This is not just unfair – it is also economically inefficient. The law, therefore, is intended to encourage the IP owner to go after the source – the manufacturer or the importer of the goods. If the claim is bad, the person with a direct interest in the product will surely fight it. Unfortunately, the law as it stood for many years failed to achieve those aims. In essence, it shot too widely with the consequences of potentially discouraging legitimate IP enforcement. The new legislation refocuses the “unjustified threats” provisions, properly targeting the problem and avoiding a variety of unintended consequences that characterized the existing law. In addition, the same set of rules will apply for trade marks, patents and designs (avoiding situations where a single case that concerns more than one IP right is subject to different sets of provisions relating to “unjustified threats”). Changes introduced by the new legislation include, among other things, a tighter defence to the IP owner where the enforcement action is directed at a manufacturer or importer; a clearer definition of “permitted communications” that fall short of an actionable threat (including enquiries designed to identify the manufacturer or importer of allegedly infringing goods) and a defence to regulated professional advisers when they act on behalf of clients. The new legislation was rushed through at the end of the last Parliament before it was dissolved ahead of the coming general elections. The law will come into effect when the next government decides to trigger it.

A few weeks ago we blogged about the FTC’s warning letter writing campaign to brands and influencers about disclosure of material connections on Instagram. At that time, the FTC had only released sample letters – one for celebrities, athletes and other influencers and another for marketers. This week, the FTC released copies of the 90 letters, which include screenshots of the Instagram posts that the FTC found troubling.  In reviewing the letters and posts, we gleaned a few more tips for our loyal readers: As we noted in our first post, the FTC doesn’t think #partner is enough, but what about “#[YourBrandsName]_Partner”? The warning letters indicate that the FTC likely thinks that’s an effective disclosure. Note initial caps in the hashtag and the underscore between the brand name and the word partner.   A lot of people have been asking if a more specific thank you would be enough even if #thankyou[Brand] is not  a clear  disclosure. Based on the letters, the FTC doesn’t think so.  The letters pointed out that even a post that says Thanks @[brand] for these [products] “is probably inadequate to inform consumers of a material connection because it does not sufficiently explain the nature of your relationship to the company; consumers could understand a ‘thank you’ simply to mean that you are a satisfied customer.” To contact Fara, click here.

Last month the United States District Court for the Western District of Washington held that a Digital Millennium Copyright Act (“DMCA”) Takedown Notice triggered a policyholder’s obligation to notify its claims-made insurer.  The case, National Union Fire Insurance Co. v. Zillow, Inc., occupies a unique position at the intersection of copyright and insurance law.  The case also stands as a warning to practitioners unfamiliar with insurance law principles that courts enforce notice requirements in claims-made policies more scrupulously than occurrence-based policies. The case originates out of a dispute between VHT, Inc., a property-photography company and Zillow, Inc., the popular website for real estate listings.  Zillow held a limited license to use VHT’s photographs on its website.  After concluding that Zillow had violated its limited license, VHT sent Zillow a Takedown Notice under the DMCA.  (Takedown Notices like the one in Zillow stem from the DMCA’s safe-harbor provision for online service providers.  See 17 USC § 512(c).  The safe-harbor provision shields providers from copyright liability for infringing content on the provider’s website.  To fall within the safe-harbor, the infringing content must be posted by website users, not the provider.  Another requirement for falling within the safe-harbor provision is that the provider must expeditiously remove the infringing content if notified about the copyrighted material.)  Here, after receiving the Takedown Notice from VHT, Zillow failed to take down the subject pictures. Nearly a year after sending the Takedown Notice, VHT sued Zillow.  Zillow then notified its media-liability insurer, National Union Fire Insurance Company, of the lawsuit.  National Union initially agreed to defend Zillow.  After National Union learned of the earlier Takedown Notice, however, it informed Zillow that its policy did not cover the lawsuit.  The National Union policy was a claims-made policy.  A claims-made policy covers claims only if the actual claims are made during the policy period.  It does not matter when the underlying occurrence took place, such as the posting of infringing material.  National Union took the position that the claim was made at the time Zillow received the Takedown Notice, which took place under the previous policy, which National Union had also underwritten.  Under the previous policy, Zillow was generally required to notify National Union of a claim within 45 days of the end of the policy period.  Zillow argued the claim was made when VHT sued Zillow, not when Zillow received the Takedown Notice. On a motion for judgment on the pleadings, the court agreed with National Union.  In considering whether the Takedown Notice constituted a claim, the court noted that the policy defined a “Claim” as “(1) a written demand for money, services, non-monetary relief or injunctive relief; or (2) a Suit.”  Because the Takedown Notice constituted a written demand for non-monetary relief, i.e., demanding that Zillow take down the images, the court concluded that the Takedown Notice was a “Claim,” and that Zillow’s failure to notify National Union of the Takedown Notice within 45 days of the end of the previous policy period precluded coverage. The court next considered Zillow’s argument that even if the Takedown Notice was a “Claim,” it was sufficiently distinct from the litigation such that the litigation was covered, even if pre-litigation expenses relating to the Notice were not.  To succeed on this argument, Zillow had to persuade the court that the policy’s “relation-back provision” was inapplicable.  A relation-back provision treats related claims as arising when the original claim is made.  Under such provisions, the policyholder forfeits coverage for all aspects of a claim if it fails to notify the insurer when it first learns about the claim. Zillow argued that the claims were unrelated.  First, Zillow argued that the Takedown Notice and lawsuit were unrelated because they cited different provisions of the Copyright Act than the Takedown Notice.  Second, Zillow pointed out that the lawsuit involved considerably more infringing images than the Takedown Notice.  The court was unpersuaded.  The court explained that what was important was that the Takedown Notice and the lawsuit both involved “the same relevant acts.”  Because the Takedown Notice and lawsuit both involved allegations that Zillow had copyrighted VHT images on its website that extended beyond Zillow’s limited license, the court concluded the two claims arose out of the same relevant acts.  Consequently, the court concluded that the two claims were related and Zillow did not comply with the notification requirements with respect to the Takedown Notice and the lawsuit. Lessons abound for copyright and insurance law practitioners in National Union Fire Insurance Co. v. Zillow, Inc..  First, a copyright lawyer may see the legal effect of a Takedown Notice as relating solely to the DMCA’s safe-harbor provision.  But a Takedown Notice may also trigger an insured’s obligation to notify an insurer of a claim.  Here, Zillow did little to respond to the Takedown Notice.  It would be unwise, however, for an insured to decline to notify an insurer of a Takedown Notice simply because the insured believed it had properly responded to the Takedown Notice.  Oftentimes a liability policy’s obligation to provide defense costs can be as important, if not more important, that its obligation to indemnify for an actual judgment.  If the copyright holder later brings suit, regardless of whether there is a strong safe-harbor defense, the insured will want to know its defense costs are covered. Second, this case highlights the distinction between claims-made and occurrence-based policies when it comes to providing notice.  Those more familiar with occurrence-based policies may have wondered why the court did not consider whether the delay prejudiced National Union.  Due to the unique underwriting considerations attendant to claims-made policies, see generally Stine v. Cont’l Cas. Co., 349 N.W.2d 127, 130-31 (Mich. 1984), a majority of courts enforce notification provisions in claims-made policies even absent prejudice.  Consequently, the court in Zillow did not need to consider whether National Union was prejudiced by the late notice before enforcing the notice provision as written. Third, even though a carrier need not show prejudice, policyholders should be mindful of the reasons for the notification provisions when deciding whether to notify an insurer.  If Zillow had notified National Union about the claim, National Union arguably could have protected its interests.  For example, National Union could have prevailed on Zillow to take down the infringing material and investigated whether there was other infringing material.  Instead, National Union was powerless to do anything since Zillow failed to notify National Union of the Takedown Notice. Fourth, policyholders will need to analyze the policy language and language of the Takedown Notice closely.  Had the notice in Zillow simply notified the insured that there was infringing material on its website without demanding that Zillow take the infringing material down, the notice may not have qualified as a claim.  Regardless, the insured should always err on the side of notifying the insurer of a claim.  There is little downside to providing notice, while there can be enormous consequences for failing to provide notice.  In Zillow, the underlying copyright case ended with a judgment of over $8 million, plus attorneys’ fees.  Much, if not all, of this judgment would have been covered under Zillow’s policy. In sum, policyholders should review Takedown Notices carefully and consider carefully the reasons for the notification provisions when deciding whether to notify an insurer of a potential claim.

In Phelan Holdings, Inc. v. Rare Hospitality Management, Inc., a federal court in the Middle District of Florida recently held that consumers were unlikely to be completely at sea when distinguishing between two trademarks for casual dining restaurants that begin with the phrase “You Can’t Fake.”  The plaintiff, Phelan Holdings, uses the catchphrase “You Can’t Fake Fresh” for its seafood shack restaurants.   Phelan got a bit crabby about the Defendant Rare Hospitality’s use of the slogan “You Can’t Fake Steak” for its LongHorn steakhouses.  Phelan captains twelve seafood restaurants in Southwest Florida that are festooned in bright, beachy decor and that cater mainly to tourists.  The LongHorn restaurants are a national chain of rancher-themed restaurants designed with dark, warm colors and cowboy art, typically located in suburban areas to herd in locals. Concerned that this cowboy chain might befuddle its customers, Phelan alleged trademark infringement through a reverse confusion theory.  Reverse confusion occurs when a larger junior user saturates the market with a trademark that is confusingly similar to the trademark of a smaller, senior user.  In reverse confusion cases, the senior user loses the value of its trademark because the public assumes that it is affiliated with the larger company or that the senior user is the “infringer.” The district court analyzed the Eleventh Circuit likelihood of confusion factors, acknowledging the incontestability of Phelan’s mark. It found that while the linguistic similarity of the phrases tipped slightly in Phelan’s favor, the restaurants are strikingly dissimilar in terms of atmosphere and menu.  Even though the two restaurants both compete for casual diners in the same geographical location, the Court emphasized that the Crab Shack aimed its claws at tourists whereas mainly locals hung their boots at the LongHorn.  Further, Rare Hospitality generally promotes its restaurant services through national television broadcasts, whereas Phelan primarily utilizes local media. There was no evidence that Rare adopted the mark in bad faith. The Court then considered what is often the most persuasive evidence of the likelihood of confusion:  actual confusion.  While Phelan conceded that there had not been a single instance of actual marketplace consumer confusion in four years of co-existence with Rare’s mark, it presented a consumer survey in which Phelan’s expert concluded that there was somewhere between "13% and 26%" actual confusion between the parties’ slogans.  The Court rejected the survey due to the fatal flaw of using the wrong universe of respondents.  In conducting its survey, Phelan’s expert solicited responses from Rare’s consumer base—local residents of Southwest Florida.  But because Phelan alleged a theory of “reverse confusion” it should have surveyed its own customer base, or tourists of Southwest Florida.  Without persuasive evidence of actual confusion, Phelan simply had no lifeline and its case was cast into the sea by the Court. Selecting the proper survey universe is the meat and potatoes of any Lanham Act survey.  It is important that counsel and expert carefully consider this vitally-important element because, at the end of the day, you just can’t fake confusion.  

We teach girls to shrink themselves To make themselves smaller We say to girls "You can have ambition But not too much You should aim to be successful But not too successful Otherwise you will threaten the man" - Chimamanda Ngozi Adichie In honor of International Women’s Day, State Street Global Advisors installed a statue of a Fearless Girl standing in front of Wall Street’s Charging Bull. The statue by artist Kristen Visbal was an overnight sensation, drawing both admiration and outrage. Commissioned by State Street to make a statement about the gender pay gap and the underrepresentation of women in the boardroom, Fearless Girl became an instant icon of modern feminism and predictable target of misogynist attacks. According to a recent report from Bloomberg, the resulting media coverage and ongoing volley of impassioned Tweets has been worth $7.4 million in free advertising for State Street. Among those feeling threatened by the placement of Fearless Girl is sculptor Arturo Di Modica, creator of the Charging Bull. His attorney has demanded that the statue be removed, citing “issues of copyright and trademark” and stating that “damages must be awarded …” See: Press Conference. Whether a valid  copyright or trademark claim has been asserted by Di Modica is still to be determined. The crux of most trademark claims is that the defendant’s use of a trademark is likely to cause confusion as to the source, sponsorship, or authorization of goods or services. Missing from this case are both a proprietary mark and likelihood of confusion. Neither of the statues, nor their combination, appears to serve a source identifying function (i.e., they are not used as elements of State Street’s brand). Even setting aside this threshold issue, it would be difficult for Di Modica to establish that the public is likely to believe that he is the source of or has authorized or licensed Fearless Girl. Copyright law at least provides a better fit for this challenge. As an original work of creative authorship, the Charging Bull is protected by copyright and one of the exclusive rights afforded to copyright owners is the right to prepare derivative works. According to the Copyright Office, “[a] derivative work is a work based on or derived from one or more already existing works.” Circular 14. Here, it seems Di Modica’s gripe is that Fearless Girl fully incorporates and changes the intended message of his Charging Bull. This would be an interesting theory of derivative works and one that should strike fear in the hearts of museum curators everywhere. If we accept that Fearless Girl is a derivative work because of its proximity to Charging Bull, then we must also ask whether it is a fair use. The law is clear that “the fair use of a copyrighted work … for purposes such as criticism [or] comment … is not an infringement …” 17 USC § 107. If Fearless Girl is indeed a transformative use, adding new expression and altering the meaning of Charging Bull as Di Modica claims, then this is a classic case of fair use. That leaves us with VARA, the Visual Artists Rights Act of 1990. VARA is a piece of federal legislation that expands copyright law by providing artists certain “moral rights” in works of visual art. One such right is “the right to prevent any intentional distortion, mutilation, or other modification of [a] work which would be prejudicial to his or her honor or reputation …” 17 USC § 106A. In order to assert such a claim, Di Modica would first need to establish that he didn’t transfer title to the work prior to the Act’s effective date in 1990 – an uncertain proposition for one who illegally dropped the Charging Bull in front of the New York Stock Exchange in the middle of the night in 1989. See ChargingBull.com. But does Di Modica really want to assert that this statue of a brave little girl is prejudicial to his honor? Fearless Girl is an inspiration and this author hopes she can stay.