Trademark, Copyright + Advertising

Illustration by Jason Raish – Used With Permission We have previously blogged about the rise of computer generated imagery (CGI) influencers, which are one form of social media bots currently invading the online world. Bots are automated software that perform actions using a set of algorithms. Social media bots run on social media platforms and are generally online accounts that automatically generate posts and otherwise simulate human behavior. Legitimate uses include chatbots that provide automated customer support. But harmful or fraudulent uses of social media bots are widespread and can involve the creation of fake accounts that amplify false or deceptive product reviews, or that artificially inflate a company’s online following, among other misuses. Over 37% of all Internet traffic is reported to be the work of bots. With this backdrop, the Federal Trade Commission (FTC) announced in July 2020 that it had sent a report to Congress on the topic of social media bots and deceptive marketing. The report was in response to direction the FTC had received from Congress late last year asking the FTC to describe for the United States Senate Committee on Appropriations “the growing social media bot market as well as the use of social media bots in online advertising” and “how their use might constitute a deceptive practice.” S. Rept. 116-111, 116th Congress, 1st Sess. at 70-71 (Sept. 19, 2019); see 165 Cong. Rec. S7206 (Dec. 19, 2019). Here are some highlights of the FTC’s report to the Committee: The malicious use of social media bots is “cheap and easy” and “hard for platforms to detect,” and so remains a “serious issue.” 90% of social media bots are used for commercial purposes. Improper commercial use occurs when influencers use them to boost popularity, or online publishers use them to increase the number of clicks an ad receives (thus increasing revenues), among other misuses. Examples of past enforcement action against social media bots by the FTC includes a 2019 complaint against Devumi, a company that sold fake followers, subscribers and views to people trying to artificially inflate their social media presence. The FTC also took action in 2018 against three different online dating services that were alleged to have fake profiles or to be using bots on their sites. The FTC’s enforcement action demonstrates "the ability of the FTC Act to adapt to changing business and consumer behavior as well as to new forms of advertising." But the FTC pointed out that its authority to stop the spread of social media bots is limited by the powers given to it under that Act, which would require it to show in any given case that the use of social media bots constitutes a deceptive or unfair practice in or affecting commerce in order for the FTC to take action. It is unclear from the report how much the FTC will be prioritizing enforcement action against social media bots. However, a follow-up statement from FTC Commissioner Rohit Chopra on the report made clear that the FTC views the social media platforms to be engaging in insufficient policing and that “a comprehensive solution may require the imposition of specific requirements to increase accountability and transparency” possibly with the intervention of Congress. Commissioner Chopra also made clear that the FTC could explore “writ[ing] rules to ensure there is accountability for undisclosed influencer connections and deceptively formatted ads” and must “also fundamentally reform its approach to fake reviews.” Given the increased reliance by companies on social media marketing and online sales in the pandemic era, we expect that deceptive and unfair online marketing issues will continue to be a significant problem requiring further regulatory action.

Over the past decade, the influx of online shopping and home delivery has made every day feel like Christmas. The presence of an ever-growing network of online retailers makes it easier than ever to order just about anything online and have it delivered to your doorstep. While many, if not most, products arrive in non-distinct, brown boxes with clear plastic packaging, do not expect the same boring packaging from cosmetics retailer Glossier, Inc. On May 9, 2019, Glossier filed a trademark application for the color pink in connection with a variety of cosmetic products. Glossier ships its products to consumers in its signature “Pink Pouch,” which includes a bubble wrap lining and zipper closure. In its trademark application, Glossier’s description of the mark stated that, “the color pink and a translucent circle patterns displayed on the bag are claimed as a feature of the mark which is displayed on bags.” (emphasis added). The inclusion of “translucent circle patterns” as a feature of the mark drew a refusal to register on the basis that the “translucent circle patterns” (i.e., bubble wrap) were a functional feature of the mark. According to established trademark law, a mark that consists of a three-dimensional configuration of a product or its packaging is functional, and thus unregistrable, when the evidence shows that the design provides identifiable utilitarian advantages to the user. Valu Eng’g, Inc. v. Rexnord Corp., 278 F.3d 1268, 1274, 61 USPQ2d 1422, 1425 (Fed. Cir. 2002). Furthermore, the trademark examiner cited third party evidence of use of empty, pink pouches with a bubble wrap design as support that Glossier’s packaging lacked distinctiveness and did not serve as an indicator of source in the minds of consumers. To overcome the functionality refusal, Glossier amended the description of the mark to: “The mark consists of the claimed color pink as applied to bags featuring lining of translucent circular air bubbles and a zipper closure.” (emphasis added). The difference in how the bubble wrap feature of the design was described proved crucial to overcoming the functionality refusal. To overcome the lack of distinctiveness refusal, Glossier submitted a variety of evidence to demonstrate the color pink had acquired secondary meaning in connection with Glossier’s Pink Pouch. For traditional trademarks, even though a party can support a claim of acquired distinctiveness based on only five years of consecutive use, when attempting to register a non-traditional trademark (such as a color), historically, applicants have often demonstrated longstanding use of the color in connection with the claimed goods/services (among other factors) to meet the acquired distinctiveness standard (See e.g., U.S. Registration No. 2,131,693 for the color brown, registered January 27, 1998, with a first use date of 1917; U.S. Registration No. 2,390,667 for the color yellow, registered October 3, 2000, with a first use date of 1978; U.S. Registration No. 3,361,597 for the color red, registered January 1, 2008, with a first use date of 1992; U.S. Registration No. 2,416,794 for the color blue, registered January 2, 2001, with a first use date of 1939). Glossier claims October 6, 2014, as the date of first use for its color pink. At first blush, a claim of acquired distinctiveness for a color based on only 6 years of use could fall short as compared to the longstanding use shown in previous color registrations. However, in support of its claim, Glossier submitted evidence of over $100 million in sales in the year 2018, declarations from 98 customers attesting to recognition of the Pink Pouch as originating from Glossier, marketing materials referencing the Pink Pouch, social media posts and media coverage referencing the Pink Pouch, and third party parodies and imitations of the Pink Pouch. This compilation of evidence was sufficient to overcome the refusal, and the color pink was registered on August 25, 2020. Moreover, it appears Glossier may have a second registration for the color pink on the way for its “Pink Box” packaging. See U.S. Application Serial No. 88/422,355, scheduled for publication in the Official Gazette on September 29, 2020. Glossier’s successful registration effort reinforces the notion that the language used to describe a color on a particular product or product packaging is important and can ultimately impact the registrability of the color. Additionally, while no specific amount of evidence is required to demonstrate acquired distinctiveness of a single color trademark, Glossier’s resourceful use of social media and other media outlets to generate such strong sales and consumer recognition of its brand and pink product packaging in a relatively short amount of time is fairly remarkable. With social media and social media influencers now key components of many marketing campaigns, it will be interesting to see if Glossier’s success inspires other brands to capitalize on such readily available resources to quickly develop widespread brand recognition for a specific color or other unique identifier beyond a traditional trademark.

On August 7, 2020, Google and Oracle submitted their final written arguments to the Supreme Court regarding their decade-long copyright battle over the source code animating the Android platform. Now, we focus on the second question presented to the Supreme Court: whether Google’s copying of Oracle’s Java source code is a non-infringing fair use. Recall that in December 2019 we introduced “the copyright lawsuit of the decade.” In March 2020, we covered the first of two questions presented to the Supreme Court: whether Java software interfaces are protected by copyright. Before we could address the second question presented, however, the Supreme Court delayed oral arguments on the matter to the October 2020 term due to the COVID-19 pandemic. The Supreme Court also requested that Google and Oracle submit supplemental briefs addressing the standard of review relating to the fair use defense—i.e., whether the Federal Circuit gave the proper deference to the jury’s finding of fair use when it reviewed it de novo and reversed it. Below, we untangle the substantive and procedural issues that make this second question presented as important as the first. Background Fair use is a defense to copyright infringement. It recognizes that because certain uses of copyright-protected works are beneficial to society, copyright owners’ rights should give way to such beneficial uses. Classic fair use examples are uses of copyrighted materials for educational purposes, news reporting, criticism, or those that transform the work and build upon it to create something new. Here, the question going to fair use relates to Google’s copying of “declaring code” from Oracle’s popular Java programming language. As detailed in our earlier posts, declaring code is a short snippet of code that a programmer can use to call upon implementing code, which in turn performs a specified function. This allows programmers to bypass the need to program each function from scratch. When designing Android, Google developed its own implementing code, but paired it with declaring code that it copied verbatim from Oracle. As such, when a developer uses Oracle’s declaring code in Android, Android performs the function mandated by that code, but uses Google’s own implementing code to do so. In 2016, a 10-person jury in the Northern District of California found that Google’s use of declaring code was a fair use. Unhappy with the verdict, Oracle appealed the decision to the Federal Circuit. In 2018, reviewing the jury’s finding de novo, the Federal Circuit found that, as a matter of law, the fair use defense did not shield Google’s use of Oracle’s declaring code and overturned the jury verdict and remanded the case. Google petitioned the Supreme Court, which granted certiorari in November 2019. In an unusual move, the Supreme Court on May 4, 2020, asked Google and Oracle to submit supplemental letter briefs addressing the standard of review appropriate for the fair use issue. This suggests that the Supreme Court may decide that by reviewing the jury’s finding of fair use de novo, the Federal Circuit applied the incorrect standard of review. Google’s Fair Use Defense Fair use is a statutory defense to copyright infringement. 17 U.S.C. § 107 provides four non-exclusive factors to be considered for a fair use defense: (1) the purpose and character of the use, including whether the use is commercial and/or transformative; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use on the potential market for or value of the copyrighted work. It is undisputed that Google copied the relevant portions of Oracle’s source code verbatim, and did so to create Android, a commercial product. The jury and trial court nonetheless found that Google’s use of declaring code in Android was transformative, minimal, and ultimately, a non-infringing fair use. But on appeal, the Federal Circuit determined that Google’s use was non-transformative and substantial, and thus did not constitute fair use. Notwithstanding the Federal Circuit’s reversal, the jury’s arguably surprising determination that such copying was a fair use warrants a close look at the factors relevant to fair use. As to factor one—the purpose and character of Google’s use—the parties agree that Google’s use of the declaring code is commercial. Google, however, argues that its use was transformative because Java’s declaring code was previously confined to computers. Google also points out that there are non-commercial benefits to its use, such as promoting software innovation by allowing “millions of developers, and more than a billion customers” to use the open-source Android platform. Oracle counters that the declaring code is identical in Java and on Android and even if Google provided new behind the scenes implementing code, they did nothing to change the expression, meaning, or message of the declaring code that was copied. Oracle also notes that Java was previously in use in certain predecessors to smartphones. Although the jury sided with Google, the Federal Circuit found the use commercial and non-transformative. In particular, the Federal Circuit noted that Google copied the declaring code verbatim and is using it in Android for the same purpose it serves in Java. Further, the fact that Google drafted its own implementing code does nothing to change the analysis: “no plagiarist can excuse the wrong by showing how much of his work he did not pirate.” As to factor two—the nature of Oracle’s work—the parties agree that the declaring code serves a function of calling upon implementing code. Google argues that the content of the declaring code is dictated by constraints of the Java language and is therefore, at best, minimally expressive. Oracle responds that the content of each declaring code was specifically chosen by Oracle to communicate to developers the purpose of the declaring code and to make the code memorable. Oracle stresses that whether working in Java or in Android, developers do not care about the implementing code; they care about the declaring code returning a specific result or performing a function. Oracle argues that the Copyright Act is surely intended to provide greater protection to the portion of Java that communicates directly with developers as compared with the implementing code that developers never see. Although the Federal Circuit found that this factor slightly favors Google, it discounted this factor, finding that the declaring code is functional, while noting that all software is functional to some degree. Accordingly, letting this factor control the outcome of the fair use analysis would undermine years of precedent recognizing the copyrightability of software. As to factor three—the amount of Oracle’s work Google copied—the parties disagree as to whether the copied portion is substantial and whether the copied portion is significant. Google argues that (a) the declaring code it used is less than 0.5% of the total Java API, (b) the declaring code comprises small snippets of code scattered throughout Java, and (c) Google only used the declaring code necessary to allow downstream developers to use their Java skills in Android. Oracle retorts that Google copied over 11,000 lines of code and that the declaring code is the important, central part of the Java API because it is the part with which developers are familiar. The Federal Circuit adopted Oracle’s framing, focusing on the 11,000 number rather than the 0.5% figure, and found that Google copied the important parts of Java, noting that “no reasonable jury could conclude that what was copied was qualitatively insignificant, particularly when the material copied was important to the creation of the Android platform.” The Federal Circuit found this factor favored Oracle or was, at best, neutral. As to factor four—the effect of Google’s use on Oracle’s market—the parties dispute whether they are direct competitors and the extent to which Google’s conduct harmed Oracle’s licensing of Java. More imaginatively, Google also argues that its use of Java in Android actually benefits Oracle. Per Google, developers who become familiar with Java declaring code through Android can transfer those skills to Oracle’s computer-based systems. Oracle, however, equates this with a filmmaker copying a book; it is well settled that the filmmaker cannot do so even if the film increases interest in the book. Oracle also relies on its practice of licensing the declaring code to third parties like IBM, arguing that if Google’s use of the declaring code is viewed as “fair” then Java will lose value because anyone in the industry could implement Java’s declaring code for free. The Federal Circuit found Oracle’s evidence of actual and potential harm “overwhelming.” This factor, according to the Federal Circuit, heavily favors Oracle. With factors one and four weighing heavily in favor of Oracle, factor two weighing slightly in favor of Google, and factor three being, at best, neutral, the Federal Circuit found that Google’s use of Oracle’s declaring code “was not fair as a matter of law.” Standard of Review Beyond the substantive issues laid out above, the fair use question before the Supreme Court is significant because of its procedural background—i.e., the Federal Circuit’s de novo review, and reversal, of the jury’s finding of fair use. As just one illustration of how foundational the issues raised by this dispute are, when in May 2020 the Supreme Court asked for supplemental briefing on the standard of review, it specifically asked the parties to consider “the implications of the Seventh Amendment.” The dispute over the appropriate standard of review boils down to whether fair use is primarily legal or factual in nature. Notably, the Federal Circuit acknowledged some ambiguity as to which standard should apply, but found de novo review appropriate in light of the mixed questions of fact and law presented by the fair use analysis. But Google argues that because fair use is primarily a factual question, the proper standard of review is instead the substantial evidence standard, under which the Federal Circuit should have asked whether the evidence was sufficient to allow a rational trier of fact to reach the jury’s verdict. Oracle responds that the Federal Circuit was correct to apply de novo review because fair use is a primarily legal question based on judge-made factors codified in the Copyright Act and elucidated by legal principles derived from case law. Likely seeking to head off further procedural wrangling, Oracle adds that whether fair use is determined de novo makes no difference to the outcome because a party is always entitled to judgment as a matter of law if, under the controlling law, no reasonable jury could find as it did. Notably, the Supreme Court’s instruction that the parties address the Seventh Amendment in their supplemental briefing suggests that it is troubled by Oracle’s argument. The Seventh Amendment provides that “[i]n Suits at common law . . . the right of trial by jury shall be preserved.” The Seventh Amendment also provides that “no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.” In 1935, the Supreme Court interpreted the Seventh Amendment to preserve the right to a jury trial in cases that would have been tried by jury according to the common law of England prior to 1791 when the Seventh Amendment was ratified. This in turn spurred briefing addressing the history of fair abridgment—an eighteenth century precursor to fair use—with both sides gamely insisting that the sparse historical record interpreting this doctrine mandates their preferred result. If you didn’t expect a copyright dispute concerning source code for smartphones to invoke pre-1791 legal concepts, you’re not alone. Though their twists and turns are outside our scope here, the parties’ supplemental briefs are worthwhile reading for anyone interested in the history of copyright law, the Seventh Amendment, and a fresh reminder of just how esoteric copyright law can be. What the Amici Are Saying Of the 61 amici who have weighed in on this case, 39 address the fair use issue. Of that 39, two are in support of neither party, 16 are in support of Google, and 21 are in support of Oracle. Google is supported by private companies, such as Microsoft Corporation and Python Software Foundation, et al., as well as legal scholars and organizations such as The American Library Association, et al. and Copyright Scholars. Oracle is similarly supported by private companies, legal scholars, and organizations, such as Synopsys, Inc., the Motion Picture Association, former register of copyrights Ralph Oman, and the United States. Each of the amici briefs were submitted before the Supreme Court asked for supplemental briefing on the standard of review; nonetheless some of the amici address the issue. An amicus brief from Civ Pro, IP, & Legal History Professors is entirely devoted to the standard of review that applies to the fair use defense. It notes how rare it is for an appellate court to reverse a jury verdict on fair use and argues that doing so violates the Seventh Amendment. Conclusion The Supreme Court is finally set to resolve important questions regarding the scope of copyright protection and the fair use doctrine that could have huge ramifications for the software industry … or is it? As detailed above, the Supreme Court may lean on the standard of review applied by the Federal Circuit to delay further comment on whether Google’s copying constituted fair use. We will update you again after oral argument, which is scheduled for October 7, 2020.

Infinity Superfoods has voluntarily pulled certain social media content related to COVID-19 following an inquiry from the National Advertising Division (“NAD”) of BBB National Programs. In the same vein as regulatory agencies such as the FTC and the FDA, NAD is currently paying increased attention to advertising claims related to supposed treatments for COVID-19. As part of its monitoring program, NAD challenged a social media post for Infinity Superfood’s Infinity-C dietary supplement, which included an image and text linking treatment of the coronavirus and Vitamin C. First proclaiming that hospitals in New York are treating COVID-positive patients with high doses of Vitamin C, the text went on to tout the Vitamin C delivery powers of Infinity-C. NAD also challenged a blog post referring to treatment of COVID-19 with Vitamin C. NAD took issue with the implication of Infinity Superfood’s advertising, questioning whether the social media and blog posts suggested that users taking Infinity-C would be protected against COVID-19 and requesting substantiation for this implied claim from Infinity. Importantly, as of the time of NAD’s inquiry, neither the FDA nor the CDC has recognized an available approved drug, vaccine, or investigational product to prevent or treat COVID-19. Pursuant to NAD’s inquiry, Infinity Superfoods voluntarily discontinued the challenged social media and blog posts, as well as other implied claims on Infinity-C webpages regarding the product’s efficaciousness underpinned by the supposed benefits of Vitamin C in the treatment of COVID-19. Finally, Infinity revised a Facebook post relating to Infinity-C’s immunity benefits. Expressing gratitude for participation in the self-regulatory process, the company has stated that it “will not expressly and/or impliedly claim that its products cure or treat Covid-19.”

If you’ve never had insomnia, consider yourself lucky. For the rest of us still awake at 3:00 am trying to count sheep, the promise of a plush mattress made out of clouds seems like a dream come true. With social distancing measures now in place, some mattress companies have continued to meet high demand through direct to consumer marketing and sales and many have turned to native advertising in the form of consumer review websites to reach even more insomniacs. But advertisers should take heed that their native advertising doesn’t evolve into a nightmare scenario in violation of the Federal Trade Commission’s (“FTC”) disclosure requirements. TheTMCA has covered native advertising issues numerous times (see FTC Settles Charges with Misleading Websites and Advertising Your Glowing Online Reviews). Casper Sleep, Inc. (“Casper”) recently challenged two of its competitors before the Better Business Bureau’s National Advertising Division (NAD) for review websites allegedly moonlighting as misleading advertising campaigns. In NAD Case #6369 (05/15/2020), Casper challenged Amerisleep, LLC (“Amerisleep”) for making false implied claims of superiority of its mattresses through seemingly independent reviews and ratings on the websites SleepJunkie.org and SavvySleeper.org. In NAD Case #6367 (05/14/2020), Casper challenged Whitestone Home Furnishings, LLC dba The Saatva Company (“Saatva”) for making false implied claims of superiority through ratings and reviews featured on the websites consumermattressreport.com, bestmattresspicks.com, top10mattressesonline.com, and mattressreviewer.org, as well as a false express claim of superiority in the featured tagline “America’s best-reviewed luxury sleep brand.” Saatva was able to throw the covers off the alleged implied claims of superiority, as it claimed its relationship with the websites was as an affiliate only and thus it had no control over the website content. With insufficient evidence in the record to the contrary, Casper failed to establish that Saatva had a material connection to the challenged websites or that the statements constituted advertising by Saatva. Saatva was warned, however, that its express claim “America’s best-reviewed luxury sleep brand” should be discontinued as an unsubstantiated claim to the extent it was based on ratings from review sites that are not representative of reviews across the entire luxury mattress product category, used metrics that were irrelevant to a reasonable consumer’s purchasing decision, or had undisclosed material connections to products reviewed on the sites. Meanwhile, the NAD reviewed Amerisleep’s overall content on the websites SleepJunkie.org and SavvySleeper.org and found its disclosure insufficiently clear and conspicuous to communicate that they are advertising websites owned and operated by Amerisleep. Amerisleep’s disclosure stated: “We may receive financial compensation for products purchased through links or codes on this website. [SleepJunkie.org / SavvySleeper.org] is owned by Healthy Sleep, LLC, which is affiliated with Amerisleep, LLC.” The disclosure statement was also in small font compared to the content on the rest of the webpages, did not appear on every page, and the drop-down menu obscured the disclosure language—all of which worked together to make the disclosure ineffective in the total context of each website. Further, reviews with titles like “Best Mattress Reviews of 2020” that always featured Amerisleep mattresses as the highest recommended products were viewed as akin to saying “we think our mattresses are better than the rest” instead of an objective third-party assessment of the relative benefits of those products compared to competitor products. Don’t sleep on the takeaways from these cases: affiliate links featuring product reviews or endorsements require an obligation to disclose the relationship with the retailers providing revenue from those links. Advertisers must therefore disclose these material connections clearly and conspicuously. Moreover, the disclosure statement will be evaluated in context of the overall website, making the format just as important as the content.

  On June 19, 2020, the Trade Marks (Amendment) Ordinance was published in the Gazette of the Hong Kong Special Administrative Region Government, providing a basis for the application of the Madrid Protocol, consolidating the criminal enforcement powers, and making some other technical amendments to the Trade Marks Ordinance (Cap. 559, Laws of Hong Kong). Getting ready for the implementation of the Madrid Protocol The Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, known as the “Madrid Protocol”, currently has 106 contracting parties including the U.S., China and many other countries and jurisdictions. It provides a cost-effective and convenient solution for trademark owners by allowing them to apply to the International Bureau of the World Intellectual Property Organization (WIPO) through one single office for registration of trademarks, and seek to extend the protection of trademark registrations in multiple jurisdictions by a one-stop application process through such registrations. Currently, Hong Kong entities would need to apply to the individual jurisdictions for registration of their trademarks. Likewise, foreign trademark owners would need to file local trademark applications with the Trade Marks Registry in Hong Kong if they would like to have registered trademark protection in Hong Kong. The Trade Marks Ordinance has now been amended with a new Part XA that deals with international registration under the Madrid Protocol in Hong Kong. The Madrid Protocol has yet to be applied to Hong Kong. The Hong Kong government is now preparing subsidiary legislation to provide for the relevant procedural details, setting up a dedicated information technology system and drawing up detailed workflows for processing various cases under the international registration system. The relevant sections of the Trade Marks Ordinance for the implementation of the Madrid Protocol will come into force on a day to be appointed by the Secretary for Commerce and Economic Development by notice published in the Gazette after completing the relevant preparatory work, which is expected to happen in 2022-2023 the earliest. Consolidating the criminal enforcement powers to the Customs and Excise Department The Customs and Excise Department in Hong Kong has been responsible for enforcing the criminal provisions relating to the infringement of trademarks registered in Hong Kong under the Trade Descriptions Ordinance (Cap. 362, Laws of Hong Kong), whereas the Hong Kong Police has been responsible for the enforcement of offences such as “falsification of the register”, “falsely representing that a trademark as registered” and “misuse of title of ‘Trade Marks Registry’” under the Trade Marks Ordinance. The Trade Marks Ordinance has now been amended to consolidate the criminal enforcement powers by authorizing the Customs and Excise Department to enforce the criminal provisions of the Trade Marks Ordinance. Other technical amendments With the National Anthem Ordinance (Instrument A405) that came into effect on June 12, 2020, the “Absolute grounds for refusal” chapter of the Trade Marks Registry Work Manual in Hong Kong has been updated to provide a new absolute ground for refusal of registration concerning use of the national anthem (or its lyrics or score) in applied-for trademarks, which is now prohibited. The Trade Marks Ordinance has also made corresponding changes to reflect this new absolute ground. Further, under the amended Trade Marks Ordinance, an applicant is now required to provide its “place of incorporation” and “state of incorporation” (the latter for US corporations only) when filing a trademark application or recording a registrable transaction relating to a trademark application or registration (such as a trademark license or assignment) in Hong Kong. However, the Trade Marks Registry will not verify the information provided by the applicant in that respect. As a result of all of these amendments, the Hong Kong Trade Marks Registry also amended the trade mark forms effective from June 19, 2020 with a 6-month transitional period for using the existing forms and the revised forms until December 19, 2020. Hong Kong has been dedicated to improving its IP protection mechanism and to promoting itself as a premier IP trading hub in the region. The recent amendment to the Trade Marks Ordinance that provides the framework for the implementation of the Madrid Protocol is a welcome development. It also further equips Hong Kong to serve as an ideal place for commercial activities and IP trading.

Now we wait. The final brief was submitted this past week in connection with an interlocutory appeal to the Second Circuit of the district court’s denial of a preliminary injunction over use of the WOODSTOCK mark. Potentially at issue in the appeal is whether Plaintiffs or Defendants, or neither, has the superior right to use the WOODSTOCK mark in connection with the sale of cannabis and cannabis-related products. Plaintiffs sued Defendants claiming that Defendants engaged in trademark infringement by selling recreational marijuana under the WOODSTOCK trademark. After filing suit, Plaintiffs entered into a licensing agreement with MM Enterprises, Inc. (“MedMen”)—one of the nation’s largest cannabis retailers—under which Plaintiffs granted MedMen certain rights to use the WOODSTOCK mark in connection with the sale of cannabis and cannabis-related products. Defendants then moved for a preliminary injunction seeking to enjoin Plaintiffs from using or licensing the WOODSTOCK marks in connection with the sale of cannabis and cannabis-related products. Plaintiffs—the producers of the 1969 Woodstock music festival—have used the WOODSTOCK mark in association with concerts, motion pictures, television programs and merchandise. Plaintiffs own a variety of federally registered trademarks for the mark WOODSTOCK, which concern entertainment services, clothing, and other merchandise, such as posters. Plaintiffs claim that recreational marijuana falls within their “natural zone of expansion” and, as a result, Defendants are prohibited from using the mark in association with recreational marijuana. Defendants contend they have “used the WOODSTOCK mark for more than thirty-five years for a variety of goods and services.” Defendants further contend they sought and obtained “federal registration of the WOODSTOCK mark for smokers’ articles and related goods and services,” including tobacco-free electronic cigarettes for medical purposes, vaporizer pipes, and cigarette rolling papers. Defendants claim that “cannabis and cannabis-related products are within a logical zone of expansion for Defendants as to Defendants’ WOODSTOCK marks and registration for smokers’ articles,” and as a result seek to enjoin the MedMen license. After a three day evidentiary hearing, the district court denied Defendants’ request for a preliminary injunction, concluding Defendants failed to establish likelihood of success on the merits because, after analyzing each of the Polaroid factors, Defendants had not demonstrated a likelihood of confusion between smokers’ articles bearing Defendants’ WOODSTOCK marks and the use of the WOODSTOCK mark on adult-use marijuana and marijuana vaping devices. Specifically, the court concluded the similarity of the marks, the proximity in the marketplace, the bridging the gap and the bad faith Polaroid factors all weighed against granting a preliminary injunction for Defendants, and that there was no evidence offered regarding the actual confusion, the quality of products or the consumer sophistication Polaroid factors. The court did conclude that the strength of the mark weighed “only modestly” in Defendants’ favor because while the mark was conceptually strong it was commercially weak, but this was the only factor the court concluded weighed in Defendants’ favor. In short, only one of the eight Polaroid factors weighed slightly in Defendants’ favor, and the remaining seven factors either weighed against Defendants or were not considered because there was no evidence presented for it. The appeal here is interesting because of the arguments and implications surrounding the fourth Polaroid factor—bridging the gap—which describes the senior user’s interest in preserving avenues of expansion and entering into related fields. Here, both parties claim to be the senior user, and both claim that using the WOODSTOCK marks in connection with the sale of marijuana and marijuana-related products fits within their respective “zone[s] of natural [or logical] expansion.” But the district court concluded it could not consider Defendants’ alleged intent to expand into the area of selling recreational marijuana because the sale of recreational marijuana is illegal under federal law. The outcome of the “bridging the gap” Polaroid factor was not determinative at the district court level because of the other Polaroid factors, and likely will not be determinative on appeal. But what if the evidence for all of the other Polaroid factors—except bridging the gap—had established a high likelihood of consumer confusion here? Boiled to its essence, and despite creative arguments to the contrary, it appears both Plaintiffs and Defendants seek federal trademark protection so each can use (and prevent the other from using) the WOODSTOCK mark in connection with the sale of marijuana, which is a federally illegal product. While the Second Circuit will almost certainly follow the same approach the district court did in examining each of the Polaroid factors, it could theoretically simplify the issue by concluding that because the logical “zone of expansion” for which each party seeks federal trademark protection involves a product or service that is federally illegal, the courts will not get involved. The briefs are in, so we shall see.

In a dramatic and widely reported decision of 12 July 2020 in the case known as Schrems II (Data Protection Commissioner v Facebook Ireland Ltd), the Court of Justice of the European Union (“CJEU”) invalidated the decision of the EU Commission that gave legal effect in the EU to the EU-US Privacy Shield scheme. In other words, personal data transfers from the EU to the US can no longer be lawfully undertaken in reliance on the scheme. Intelligence services surveillance powers and the privacy of EU citizens The decision follows a previous judgment of the same court in the same case from October 2015 (known as Schrems I) in which the Safe Harbor scheme, a predecessor of the EU-US Privacy Shield, was also invalidated by the Court. Both decisions proceeded on the same basis, that is, that electronic surveillance programs operated by the US intelligence services under US legislation and under Presidential Executive Orders do not provide legal redress (or at least do not provide sufficient legal redress) to EU citizens whose data may be accessed unlawfully. Therefore, it was held, the schemes, which were designed to allow the free flow of personal data between the EU and the US for participating organisations, did not meet the requirements under EU law to ensure that data subjects have equivalent legal protection to their privacy rights in the US as they have in the EU. In part, the finding of insufficient judicial redress is based on the Court’s conclusion that the constitutional protection provided in the US Constitution under the 4th Amendment (in relation to unlawful searches and seizures) is effectively only available to US individuals, whereas an EU citizen (or resident) is unlikely to have standing in a US court. Further, some of the surveillance programs are based on Executive Order 12333, which provides no judicial redress at all. So, can data still be transferred lawfully to the US? The decision of the CJEU raises many interesting questions but it is now a political matter for the EU and the US to resolve. In the meantime, the practical question for enterprises and institutions that rely on the flow of personal data from the EU to the US (and indeed to other countries) is how to ensure that such data flows are not disrupted. Most companies and organisations do not rely on the EU-US Privacy Shield, as the likelihood of its invalidation by the CJEU has been long anticipated. Many rely instead on the “Standard Contractual Clauses” (“SCCs”) that have been approved by the EU Commission in a series of decisions as a lawful basis for transferring personal data to countries outside the EU. The Court in Schrems II rejected a challenge to the validity of the EU Commission’s decisions adopting the SCCs. However, it does not follow from the decision by any means that the transfer of personal data in reliance on the SCCs remains lawful. In fact, the decision throws serious doubts on that question. The implications of the CJEU’s decision in respect of the use of SCCs are very uncertain. What is clear is that it is the responsibility of the parties to the data transfer (the data controller who transfers the data from the EU and the party that receives the data outside the EU under the terms of the SCCs), and the responsibility of national privacy regulators in the EU member state from where the data is transferred, to ensure that the SCCs provide adequate protection to the privacy rights of the data subjects. It is also clear from the Court’s decision that to ensure adequate protection, the SCCs (together with any additional safeguards that may be put in place) must guarantee that the level of protection that data subjects have in relation to the use of their personal data outside the EU must be equivalent to the protection they enjoy under EU law. The Court made the point very clearly that the SCCs – which naturally do not bind national intelligence authorities in the US – cannot guarantee that personal data that is transferred to the US will not be subjected to surveillance powers without adequate judicial redress to EU data subjects. However, the Court did not say that this means that the SCCs necessarily cannot provide a lawful basis for transferring data to the US. In what circumstances the SCCs can still provide the lawful basis for data transfers and what other “safeguards” can be put in place to ensure that data subjects enjoy an equivalent level of protection for the privacy rights are questions that were left unanswered by the Court. What is the risk and what can be done about it? The current position as a result of the decision in Schrems II is rather extraordinary. EU legislation authorised the EU Commission to adopt the SCCs as a framework for lawfully transferring personal data to countries outside the EU that do not provide an adequate level of protection to privacy rights. The CJEU has determined that the decisions of the EU Commission adopting the SCCs were valid. However, at the same time, the Court held that the transfer of data in reliance on the SCCs may still be unlawful, and it is down to the parties to the transfer (and to national authorities) to determine whether the conditions are met for ensuring the transfer is lawful. For any company based in the EU this is a highly unsatisfactory position. An organisation may have to make the difficult choice between suspending all data transfers to the US (and to other countries where national authorities may have surveillance powers without giving EU citizens sufficient legal redress), which could have serious economic consequences, or taking the risk that continuing such transfers might be held unlawful. The organisation could be open to regulatory action, investigations and legal claims by data subjects and regulators and it could risk significant potential penalties, injunctions and damages claims by data subjects. Organisations that rely on data transfers between the EU and the US will have to develop strategies to avoid or minimise the risk. Some may take the view that as long as national authorities in the relevant member state do not adopt a decision (in general or in specific cases) holding that the transfer of data in reliance of the SCCs is unlawful, it is reasonable to continue to rely on the SCCs. After all, they are based on valid decisions of the EU Commission. It should be noted in this regard that it has been reported that some national regulators (including in Germany and Ireland) have already expressed the view that data transfers to the US under the SCCs should probably no longer be treated as lawful given the rationale of the decision of the CJEA. A more cautious approach may require carrying out a risk assessment and putting in place additional safeguards to the SCCs. The CJEU did not indicate what these safeguards might be. It only pointed to the fact that the relevant provisions of GDPR make reference to such “appropriate safeguards”. Until some guidance emerges, it is for each organisation in each case to consider what additional measures can be put in place, given the circumstances and the assessment of the risk of the transfer in each specific case. Such safeguards can include, for example, encryption and anonymisation of data, introducing additional contractual provisions, procedures and warranties or additional diligence that would at least minimise the risks of data being exposed to surveillance by national intelligence authorities. Finally, organisations can seek to rely on a set of derogations under the GDPR to the rule that restricts the transfer of personal data to countries outside the EU. These derogations include, among others, transfers made with the explicit consent of the data subject, transfers that are required for the performance of contractual obligations and transfers required for the establishment, exercise or defence of legal claims. For many good reasons, organisations historically tended not to rely on those derogations as a sole basis for international transfers of data. Following Schrems II, however, the SCCs can no longer be considered an entirely safe legal route and so in appropriate circumstances it may be better to rely on those derogation.

It is an epic trademark dispute with a lot of bling. Tiffany & Co. vs. Costco. The famed jeweler from the east vs. the titan of warehouse discounts from the west. A jury found that Costco was liable to Tiffany & Co. to the tune of over $21,000,000 for trademark infringement and related claims due to Costco’s use of “Tiffany.” Yesterday, the Second Circuit overturned that sterling verdict and gave Tiffany & Co. a big lump of coal instead. The Court’s decision is an important one regarding descriptive uses of registered trademarks, as well as the trial court’s proper role in wading into the waters of trademark disputes at summary judgment. The setting for this dispute dates back to the late 1800s. That is when Charles Lewis Tiffany first developed a diamond ring designed with “six prongs” that affixed the diamond to the ring. Since that time, numerous advertisements, publications, and many other documents have referred to diamond settings of that style as “Tiffany settings.” Tiffany & Co. owns a small arsenal of federal trademark registrations for the word “Tiffany,” including a registration dating back to 1920 for “jewelry for personal wear.” A number of years ago, Costco began advertising and selling diamond rings to its members using such words as “Tiffany,” “Tiffany set,” or “Tiffany style,” in its point of sale material. Tiffany & Co. did not take a shine to Costco’s use and sued under the Lanham Act and New York law for injunctive relief and damages. After lengthy discovery and motion practice, the trial court granted summary judgment to Tiffany & Co. on its claims for relief. It also rejected Costco’s “fair use” defense that it was only using “Tiffany” to describe the style of “setting” rather than as a source identifier. The case proceeded to trial on damages and Tiffany & Co. received a total verdict of just over $21,000,000. Costco appealed, and won. The Court’s analysis revolved around 3 key pieces of evidence that were considered in the trial court’s summary judgment ruling. First, Tiffany & Co. produced a consumer survey showing consumers were confused. Costco did not commission its own survey, but only attacked the methodology used by Tiffany & Co.’s expert. The trial court found Costco’s lack of a counter-survey meant there was no dispute as to actual confusion. The appellate court disagreed and determined that the jury should have been given an opportunity to weigh in on this competing battle of evidence. Second, although the trial court found Costco’s bad faith undisputed, the appellate court again disagreed. Perhaps Costco was just trying to borrow certain successful features from Tiffany & Co. As the appellate court noted, there is a difference from selling jewelry that “looks like Tiffany’s as opposed to an intent to have its jewelry pass as Tiffany’s.” Finally, the appellate court held that there was competing evidence on the issue of “sophistication” of potential consumers and that the trial court should have let the jury decide that issue too. The case was remanded for a trial on the merits, including Costco’s “fair use” defense that it was only using “Tiffany” in a descriptive sense. Summary judgement is typically tough to get in trademark cases. Tiffany v. Costco is a shiny example of that proposition. This case is also a good reminder about the power of the descriptive use defense to trademark infringement and related claims. Even storied, well-known brands with big bejeweled portfolios aren’t necessarily able to stop all commercial uses of their registered marks.

In the midst of the chaos of the COVID-19 pandemic, the California Attorney General announced on Friday that the final California Consumer Privacy Act (CCPA) regulations have been approved and are now in effect. The process that began in late 2019 (with some interesting twists - remember this:)     has finally come to an end and now companies will at least know the text of the regulations they must follow. CCPA enforcement began on July 1, 2020 but such enforcement, until Friday, was limited to only the raw text of the statute. We should expect new enforcement actions to be focused on the CCPA regulations going forward. The regulations are not a mere restatement of the statute. They contain many new obligations on companies for CCPA compliance. For example, the statute requires a business to respond to requests to know and requests to delete within 45 calendar days. However, the regulations now impose a requirement that a business confirm receipt of such requests within 10 business days. Thus, a company with individual rights processes built around the 45 day statutory timeline without a request acknowledgement at a sooner time built in may now be out of compliance with the CCPA. Any company that is subject to the CCPA should act quickly to ensure compliance in light of these finalized regulations. The final text of the regulations can be found here.

Veronica Morales, a wedding/event planner providing services under the trademark BLUE IVY (depicted above), has unsuccessfully challenged a pending application for the mark BLUE IVY CARTER, filed by BGK Trademark Holdings, LLC (Beyoncé Giselle Knowles-Carter). The decision contains some helpful lessons on how to pursue a discovery dispute in accordance with Board procedures to ensure that an opposing party’s allegedly recalcitrant conduct can be used against it on a trial on the merits. In addition, in attempting to prove an applicant’s lack of bona fide intent to use, relying on ill-advised statements made by the husband of the applicant to a reporter – in this case, Jay-Z – is not a recipe for success as an evidentiary matter. Blue Ivy Carter, the eldest child of Beyoncé Knowles-Carter and Jay-Z, was born January 7, 2012. Ms. Morales filed a trademark application at the PTO for the mark BLUE IVY in February 2012 for her event planning services, which registered in October 2012. Ms. Morales claimed first use of the BLUE IVY mark in commerce in October 2009. BGK filed an application for the mark BLUE IVY CARTER on January 26, 2012, on an intent-to-use basis, for a variety of consumer goods and services. The BLUE IVY CARTER application subsequently abandoned in February 2016 because no evidence of use was filed within the deadline. BGK filed an identical replacement intent-to-use application for the BLUE IVY CARTER mark in January 2016, which was approved and published for opposition in January 2017. Ms. Morales opposed the registration of the BLUE IVY CARTER mark claiming: 1) a likelihood of confusion with her own BLUE IVY mark for wedding/event planning services; 2) no bona fide intent on the part of BGK to make use of the BLUE IVY CARTER mark for the goods/services in the application; and, 3) fraud on the PTO. The Trademark Trial and Appeal Board dismissed all three claims in the Opposition in favor of BGK. Most notably, Ms. Morales failed to establish any admissible evidence that BGK lacked a bona fide intention to use the BLUE IVY CARTER mark, and missed an opportunity to compel BGK to respond to discovery requests through established rules of procedure before the Board. In a trademark opposition, an Opposer has the initial burden to demonstrate by a preponderance of the evidence that an applicant lacked a bona fide intent to use the mark on the identified goods and/or services in a trademark application. One manner in which an Opposer may establish prima facie evidence of a lack of a bona fide intention to use a mark is to show that the applicant does not have any documentary evidence to support its alleged intent to use as of the filing date of a trademark application. Ms. Morales relied heavily on that argument, and stated that BGK “acted in a recalcitrant and uncooperative manner throughout the case, disclosing no substantive information in response to interrogatories and producing no documents in response to requests for production.” In fact, BGK had objected to all of Ms. Morales’ interrogatories and requests for production, but said that supplementary responses would be provided after the execution of an agreed upon or Board-ordered protective order. A few months later, the Board issued an order providing its standard protective order. BGK never responded to the interrogatories or requests for production in a substantive manner, but said it was due to “Opposer’s misconduct,” Contending that “Opposer used [her] discovery requests as a weapon to pry into the personal life of Mrs. Carter and to threaten and intimidate her.” The Board in its opinion stated that both parties “painted an incomplete picture.” While the Board issued an order for a standard protective order, the Board also denied Ms. Morales’ motion to compel the production of documents she wanted because she did not make a good faith effort to resolve the discovery dispute between the parties. Ms. Morales had the opportunity to raise the issue of the subsequent unsatisfactory supplemental discovery responses from BGK before the Board, but she did not timely file a renewed motion to compel. If she had filed a renewed motion to compel and the Board had granted the motion, it would have remedied the unsatisfactory responses. Ms. Morales did not follow the Board’s “clear procedures during discovery and prior to trial.” Interestingly, Ms. Morales also pointed to the filing of an identical prior trademark application as bad faith and evidence of no bona fide intent to make use of the mark. The refiling of a new intent-to-use based trademark application for the same mark is not particularly unusual. The Board has found a pattern of bad faith conduct in previous cases where multiple applications have been filed for the identical mark (16 applications for the same mark, for example), but one new trademark application for the identical mark will not and did not establish a pattern of bad faith conduct. Ms. Morales also relied on the content an interview of Jay-Z, which was published in a 2013 article in Vanity Fair magazine. The interviewer reported that Jay-Z said during the interview that he and Beyoncé filed a trademark application for their daughter’s name “merely so that no one else could.” Ms. Morales contends that the statement made by Jay-Z shows the true intent behind filing the trademark application and is “an admitted pattern of abusing the trademark process.” The argument failed because not only was Jay-Z’s statement hearsay within hearsay, but Jay-Z is also not a party to the proceedings, so his statements were deemed irrelevant. In addition, a hearsay exception that might be applicable to a party as an admission against interest was also inapplicable, again, because Jay-Z was not a party to the opposition proceeding. The Board found none of the evidence or arguments compelling and dismissed the Opposition. We will monitor and report upon the filing of an Appeal to the Federal Circuit or the commencement of a civil action before a district court.

An administrative enforcement action is one of the ways to enforce registered trademark rights in China against infringers, especially counterfeiters. Such enforcement actions are conducted by the Administration of Market Regulation (MSA) and its local branches. After receiving a complaint of trademark infringement, an MSA officer would need to first determine whether the complained-of act should be deemed trademark infringement before he can proceed to consider the enforcement steps, such as to raid and seize infringing goods and issue a penalty decision. In order to unify the standard and enforcement practice on the determination of trademark infringement, the China National Intellectual Property Administration (CNIPA) issued “The Standard For Determination Of Trademark Infringement” on June 15, 2020 to provide guidelines to the enforcement officers in determining the issues relating to trademark infringement. The Standard contains 38 Articles that offer operational guidance to the various issues an enforcement officer often encounters and needs to determine in administrative actions, such as what constitutes “trademark use”, the similarity of marks and goods or services, the element of “confusion”, and the considerations in respect to conflicting rights. The Standard appears to be an overall reflection and consolidation of the existing laws, judicial interpretations and administrative regulations on substantive issues relating to the determination of trademark infringement from an administrative enforcement perspective. We highlight some of the issues addressed by the Standard that foreign brand owners may be interested to know about. Trademark Use The starting point in evaluating trademark infringement is to determine whether the complained-of use constitutes “trademark use”. Articles 3 to 7 of the Standard provide open-ended descriptions of instances of trademark use, such as the use on the product, packaging, containers, shop signage, transaction documents or in advertising or exhibitions. The Standard specifically includes the use of a mark on an instant messaging tool, internet social media platforms, apps and 2-dimensional bar codes as examples of trademark use. It appears to be the majority view of trademark practitioners in China that the Standard has taken a cautious approach towards the issue of OEM use of a mark, i.e., whether the use of a mark on products manufactured in China solely for purpose of export and that will not be sold in China will be regarded as “trademark use” and hence whether such use constitutes trademark infringement, depending on the answer to the question. The Standard only provides an “overall consideration” approach under Article 7 that the determination of the issue of “trademark use” should be based on an overall consideration of the intent of the user, the manner of use and advertising, the general industrial practice and the ordinary consumer’s perception. Suspension of Administrative Actions The Standard expressly provides under Article 35 that an administrative enforcement action may be suspended in the following three circumstances: an invalidation action against the registered trademark is pending; the registered trademark is under the grace period for renewal; or the registered trademark is facing other ownership dispute. Note that a local enforcement officer still has discretion in deciding whether or not to suspend an enforcement action. For example, a request for suspension may nonetheless be rejected if the enforcement officer takes the view that the invalidation action against the registered trademark apparently has no merit. Infringement Liability of Organizers And E-business Platforms Under Article 30 of the Standard, a market or exhibition organizer, a lessor of sales counters or an e-business platform will be held liable for trademark infringement if it fails to exercise its duty of care in managing the business venue, and fails to take preventive steps when it knows or ought to know that an operator in the market, a participant in an exhibition, the lessee of the sales counter or an e-business operator is committing trademark infringement, or it fails to take necessary steps to stop infringing activities after being notified of an effective administrative or judicial enforcement order. This is the first time that systematic guidelines have been issued by the CNIPA covering most of the substantive issues in administrative actions on whether or not a trademark infringement complaint should be entertained. It provides an additional and presumably authoritative legal source for trademark owners who wish to enforce their registered trademark rights in China via an administrative channel. However, we have also observed that the Standard avoids certain complicated issues relating to trademark infringement, such as the OEM issue discussed above, and the issue relating to parallel importing and keyword search infringement. Foreign brand owners may be better served by judicial actions in relation to these complicated kinds of trademark infringement.

Earlier this month, a federal magistrate judge in the Northern District of Illinois granted a defendant’s request for a protective order to avoid in-person depositions of its experts, by requiring that the depositions instead be conducted remotely in light of the COVID-19 pandemic. The court’s ruling is relevant to all IP litigators, as it is consistent with a growing trend during the pandemic to conduct depositions and other aspects of legal proceedings remotely to address the health concerns of all those involved, while ensuring that cases are not grinding to a halt. Background The underlying lawsuit was brought in 2016 by Sonrai Systems, LLC (“Sonrai”), an information technology company operating in the waste hauling industry, against its former vice-president (Romano); Romano’s new employer, The Heil Co. (“Heil”); and Sonrai’s former business partner, Geotab, Inc. (“Geotab”). Sonrai alleges, among other things, that Romano engaged in a scheme with the other defendants to use Sonrai’s confidential technology and information to assist Heil in launching a product first developed by Sonrai. The case has now lasted four years, and the parties are nearing the end of discovery. Sonrai sought to take in-person depositions of Geotab’s experts either in Chicago, where the case is venued, or in North Carolina, where the experts are located. Geotab’s counsel, located in Boston, moved for a protective order to require that the depositions instead be conducted remotely in light of the pandemic. The Court’s Order on the Motion for a Protective Order The Magistrate granted the motion, exercising the court’s broad discretion under FRCP 26(c) to decide when a protective order is appropriate and to what degree protection is required, as well as its discretion under FRCP 30(b)(4) to order that a deposition “be taken by telephone or other remote means.” Unsurprisingly, the court found that pandemic-related health concerns provide “good cause” for remote video conferencing depositions under the circumstances, and any prejudice to Sonrai was not sufficient to overcome these health risks. In so ruling, the Magistrate began by reiterating that a national emergency has been declared due to the spread of the COVID-19 virus, and the CDC has noted that the best way to prevent illness is to minimize person-to-person contact. To protect all involved in litigation, courts around the country have authorized video teleconferencing for both criminal and civil proceeding and courts continue to advise caution when proceeding with litigation. These guidelines remain in effect and are changing rapidly as the pandemic continues to evolve around the United States. The Magistrate went on to outline certain heightened risks, and impracticability, in the present case, including: (a) Geotab’s counsel, who would need to travel for the deposition, has regular contact with immediate family members in high risk categories; (b) Geotab’s counsel would be required to self-quarantine for 14 days upon his return to Massachusetts from the depositions; (c) North Carolina, where the experts were located, has experienced a recent surge in COVID-19 cases and hospitalizations; and (d) Geotab’s experts, upon traveling to Illinois for the depositions, would need to self-quarantine for 14 days before sitting for the depositions, making the deposition impracticable. The Magistrate then went on to address Sonrai’s prejudice arguments, which were based upon two main concerns that: (1) it would be prejudiced by the inability to meet and assess Geotab’s experts and their testimony in person; and (2) remote depositions would be too cumbersome given the number of documents that will be referenced throughout the depositions. The court recognized these as valid concerns, but found they were not sufficient to overcome the good cause shown to conduct the depositions remotely. With respect to the first concern, the Magistrate noted that many other courts have found that remote videoconferencing depositions offer the deposing party a sufficient opportunity to evaluate a deponent’s nonverbal responses, demeanor, and overall credibility. In fact, the court reasoned that Sonrai’s ability to assess witness credibility might actually be impeded during an in-person deposition given the face mask mandates in place in the relevant jurisdictions; an impediment that presumably would not be present for a remote deposition. With respect to the second concern, while indicating he was sympathetic to the logistical concerns, the Magistrate again found that this was insufficient to outweigh the health risks involved, particularly given the advancements in remote deposition technology, and Geotab’s offer to make its LiveLitigation platform available to all parties during the deposition. In granting the protective order, however, the Magistrate ruled that Geotab must bear the additional costs (including those associated with the LiveLitigation platform) that are created by use of the videoconferencing format. Practice Points Although the court was careful to note that its holding “is not tantamount to a finding that concerns raised regarding COVID-19 will always suffice to support… requiring remote videoconferencing,” it’s apparent that remote depositions have become the new normal during the pandemic. Parties who face objections from opposing counsel to requests to proceed by video would be wise to study this decision.

The Washington, D.C. professional football team recently announced plans to cease using the name “Redskins” in favor of a new name. The “Redskins” name has been the source of both cultural and trademark conflict through the years. This sort of name change raises a number of legal issues that are germane to all types of companies who are considering rebranding. We have highlighted a few of these in brief below: 1) Trademark clearance searching: Comprehensive searches should be conducted in key jurisdictions to ensure there will be no conflicts with existing rights that are associated with the new name. It is generally not sufficient only to search the federal trademark register in the United States, as common law (unregistered) rights could exist that will impact the ability to use the new name. Clearance searches are not limited to the new name, by the way. If there will be logo elements, those should be searched separately. 2) Meaning or connotation of the new name: In the case of a change from a name like “Redskins,” special attention should be paid to whether the new name presents a conflict at a cultural level. For example, is it a word that is considered derogatory of any particular race or nationality? Does the word translate to an unsavory term in a commonly-spoken foreign language? 3) Domain names and social media accounts: Once a name or potential alternate names are selected, the corresponding domain names and social media accounts should be obtained before any applications for the name are filed or the name is publicly announced. 4) Trademark applications: Intent-to-use applications should be filed as early as possible to lock down prospective rights in the new name. If there are alternate names being considered and budget allows, applications should be filed for the alternate names as well. Note that trademark applications in the United States are public record, so there will be no way to keep the name or alternate names secret once the applications are filed. 5) Additional trademarks: In the case of the Washington football team, will there be a new mascot? If so, steps (1) through (4) above should be followed for the name or potential names of the mascot. 6) Copyright ownership: If there will be any logo elements to the new branding that are not created by employees, make sure the designer(s) sign a written assignment assigning their rights to the company. The foregoing are just a few of the legal issues that must be considered before embarking on a rebranding effort. Here at The TMCA, we will follow the renaming developments in D.C. and will let you know if anything interesting happens along the way.

Two exciting new programs launched by the U.S. Patent and Trademark Office (USPTO) are poised to accelerate IP protection for COVID-19 related products. Due to medical device shortages and the constant question of when (and if) a vaccine will make it to market, the pace of innovation has been on the forefront of people’s minds throughout this global pandemic. In late March 2020, some even theorized that suspending patents altogether was a radical but necessary step to accelerate innovation and save lives. Supporters of this extraordinary move argued that temporarily allowing companies willing to step up and produce products when the patent-holders could not meet the unprecedented demand for their vitally important products, such as valves for ventilators, would not cause patent-holders to lose money since they clearly were unable to meet demand on their own. The USPTO has not gone quite that far, but it has made two important steps to accelerate the process of granting protective rights for products or processes that could aid in the fight against the novel coronavirus. First, the USPTO announced in May that it would be fast-tracking patent examinations for COVID-19 related applications from small and micro entities. This Prioritized Examination Pilot Program will take up to 500 qualifying applications for products or processes that are subject to an FDA approval for COVID-19 use. Second, on June 15th the USPTO announced that it would also offer a prioritized examination program for trademark and service mark applications for certain COVID-19 medical products and services, defined as pharmaceutical products or medical devices used to prevent, diagnose, treat, or cure COVID-19, if they are subject to FDA approval, and medical services or medical research services that are aimed at fighting COVID-19. Given the well-documented shortages in Personal Protective Equipment (PPEs) and other necessary medical supplies, along with the global race to produce a vaccine, these priority track processes could prove critical in getting new, potentially life-saving products onto the market quickly. Standard prioritized examination fees will not be charged under either program, and the USPTO has announced a goal of making final dispositions of these applications within less than a year. Both programs began accepting applications as of June 16, 2020, meaning applicants can immediately take advantage of these unique procedures to try to get their products onto the market in time to assist in the world’s fight against COVID-19.

The rise of Artificial Intelligence (AI) over the past decade is undeniable, and we reap its benefits throughout the day when using our smartphones, managing our bank accounts, listening to a customized playlist, shopping online, etc. What may be less apparent to the casual observer is the use of AI in creative endeavors. Some AI technologies have reached a point where they can now effectively perform creative tasks, such as inventing devices or machines, composing music, or even writing novels. We are only now beginning to see the impact of such uses of AI in the development of intellectual property law. The development of AI creation applications is raising important questions for intellectual property policymakers. Last year, the USPTO sought public comment on IP protection for inventions created using AI. It received nearly 200 responses and launched a page on its website providing information on AI initiatives, public notices and responses, and outside resources. This move left many to wonder whether AI innovations would begin to receive increased IP protection, where, historically, such protection has been thin or nonexistent, when the creative process is known. The USTPO recently responded to such speculation when it issued its decision confirming the refusal for patent protection for an invention generated by “DABUS,” an AI machine. Stephen Thaler filed U.S. Patent application number 16/524,350 with the USPTO last July, with the sole inventor listed as “DABUS, the Creativity machine that has produced the…invention.” The USPTO issued a Notice to File Missing Parts of Nonprovisional Application, requesting identification of each inventor by name, and refused to examine the patent. Thaler petitioned that this notice be vacated, which was denied, and then Thaler petitioned for reconsideration. In denying Thaler’s petition for reconsideration, the USPTO pointed to statutes such as 35 U.S.C. §§ 100(f)–(g) and § 101, which use words such as “individual” and “whoever” in the context of inventorship to conclude that the Patent Act requires a human “natural person.” The USPTO also cited Federal Circuit precedent stating that the mental step of conception of an invention must be performed by a natural person, rather than corporations or sovereigns. It should be noted that the issue of inventorship, while necessary for validity, would likely not have been reached had Thaler named himself as inventor on the patent application, as the determination of the true inventor is still based solely on the supposition of a good faith filing by the patent applicant under current USPTO patent examination procedures. Furthermore, the process by which the invention was created is not something that the USPTO will examine, and so the use of AI in the inventive process is not going to negative an applicant’s claim of inventorship. Non-human creators face similar obstacles in obtaining other types of IP protection as well. Just as AI machines are generating new inventions, AI programs are engaging in the creative process of generating musical compositions. As one example, LifeScore, an AI-augmented adaptive music platform, recently announced that it will be providing a live, adaptive soundtrack for Artificial, an interactive sci-fi and award-winning television series. LifeScore takes recorded musical raw material and processes it, via a proprietary AI platform, to create musical compositions that uniquely adapt to a listener’s environment and inputs without sounding synthetic or repetitive. For Artificial, viewer reaction will influence the music generated by LifeScore. While AI musical compositions have started to create a stir in the music industry and even win awards, the question remains: will these soundtracks ever enjoy copyright protection? Notwithstanding the fact that the word “human” does not appear in the U.S. copyright statutes, currently, the answer to this question is no. As stated in the U.S. Copyright Office’s Compendium of U.S. Copyright Office Practices (Section 306), “Because copyright law is limited to ‘original intellectual conceptions of the author,’ the Office will refuse to register a claim if it determines that a human being did not create the work” (citing Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 58 (1884)). This concept has also been more recently illustrated in the famous monkey selfie case where copyright protection was denied to a Celebes crested macaque, since the macaque is not a human. The question of copyright protection for computer-generated works is also not a new one; in fact, in 1965, the Copyright Office raised this concern when it stated that the office had previously received an application for a musical composition created by a computer, and it estimated “that both the number of works proximately produced or ‘written’ by computers and the problems of the Copyright Office in this area will increase.” This prediction has come to fruition. Some may argue that the lack of IP rights to encourage investment and innovation to transform inventions and other works into merchantable commodities may disincentive such innovation and creation. At least for now, it seems as if IP law is not yet aligned to afford IP protection to the dramatic developments in AI technologies over the past decade. The USPTO has signaled that it is not ready to knowingly grant patents for innovations created without a human inventor. As companies seek to secure patent protection for more complex inventions, it stands to reason that some may simultaneously seek to obfuscate the inventive process or the involvement of AI machines in their creation. We can expect the USPTO to adapt its procedures over time to account for this, so companies should be prepared for more investigation into inventorship issues in the future. It will also be interesting to see if the Copyright Office is willing to change its tune and allow AI-generated works to enjoy copyright protection, especially when such works are receiving recognition in other forms.

We recently blogged about an April 2020 decision of the federal court for the Southern District of New York, which dismissed a copyright infringement suit brought by Stephanie Sinclair, a Pulitzer-Prize winning photojournalist, against the online publisher and entertainment platform, Mashable. Mashable had embedded a public Instagram post of Sinclair’s featuring one of her images in one of Mashable’s news pieces, after unsuccessfully approaching Sinclair for a license. Judge Wood dismissed the case at that time based on the Court’s view that Instagram’s terms granted a valid sublicense of Sinclair’s photo to users of Instagram’s application programming interface (API), such that Mashable was free to embed the photo using this API. On June 24th, Judge Wood revised her ruling on a motion for reconsideration filed by Sinclair. The Court did not change its earlier holding that, by agreeing to a combination of Instagram's Terms of Use, Privacy Policy and Platform Policy, Sinclair had authorized Instagram, through such terms, to grant API users a sublicense to embed Sinclair’s Instagram content. But the Court reconsidered its prior view that Instagram had actually exercised its right to grant such a sublicense to Mashable and other API users. According to Judge Wood, while “courts may find a license on a motion to dismiss where the terms of the governing contracts are clear”, the Court held that the following language of Instagram’s Platform Policy was, in fact, insufficiently clear to warrant a dismissal of Sinclair’s suit since it was open to more than one interpretation: “[Instagram] provide[s] the Instagram APIs to help broadcasters and publishers discover content, get digital rights to media, and share media using web embeds.” In reaching this conclusion, Judge Wood held that the Court “did not give full force to the requirement that a license must convey the licensor’s ‘explicit consent’ to use a copyrighted work.” Judge Wood also brought her holding into line with a June 1 decision of the Southern District court in McGucken v. Newsweek, another copyright case involving the use of an embedded image, which held that the terms of Instagram’s Platform Policy were insufficiently clear to warrant the dismissal of McGucken’s claims against Newsweek. The revival of the case comes on the heels of a statement made by Instagram in early June to the digital publication Ars Technica that “[w]hile our terms allow us to grant a sub-license, we do not grant one for our embeds API." Instagram has also disclosed possible changes to its platform to allow content creators to disable embedding even if their images are posted publicly. It remains open whether fair use considerations, or the server test, which provides that websites that display copyrighted images without authorization are not liable if that image is retrieved from a third-party server and not hosted by the website’s own server, and which has been upheld by the Ninth Circuit, may continue to shield online publishers against infringement.

The Supreme Court handed down its decision today, affirming that BOOKING.COM is a protectable and registrable trademark for “hotel reservation services,” and rejecting the premise that a generic.com term is ineligible for trademark protection. The Court held that the USPTO’s attempted advancement of a per se rule that a “generic.com” results only in a generic combination “is not borne out by the PTO’s own past practice and lacks support in trademark law or policy.” Such a rule would be “an unyielding legal rule that entirely disregards consumer perception [and] is incompatible with a bedrock principle of the Lanham Act: The generic (or nongeneric) character of a particular term depends on its meaning to consumers, i.e., do consumers in fact perceive the term as the name of a class or, instead, as a term capable of distinguishing among members of the class.” In short, the Court found that “[b]ecause ‘Booking.com’ is not a generic name to consumers, it is not generic.” We at the TMCA.com have blogged about this case for many years as it weaved its way from the Trademark Office up to the Trademark Trial and Appeal Board, to the Eastern District of Virginia, through the Fourth Circuit and finally to the Supreme Court. And with the Court’s decision today, the story will come to an end with a registration certificate.

When family feuds become federal trademark cases, this blog takes notice. In this edition, the U.S. Court of Appeals for the Eighth Circuit wades into a dispute between divorced lawn care proprietors. Their divorce “Mutual Separation Agreement” split their business in half but, for a time, permitted both businesses to use the same name. Central to the dispute—how would consumers know whether they would receive the same quality from the spouses’ separate businesses as they did when the spouses worked together? Trademarks identify a product’s source. Consumers know products with the same mark share a common source and expect consistent quality. Licensing creates a potential problem—when a trademark holder licenses its mark, what if the licensee’s product quality is not consistent with the licensor’s quality expectations? The public would be deceived if products with the same mark had varying levels of quality. To weed out this problem, courts prohibit “naked licensing”—a trademark becomes unenforceable if the mark’s owner licenses it without attempting to ensure the licensee’s quality will be consistent with that of the owner. (Consistent quality does not necessarily mean high, medium, or low quality—the doctrine merely ensures consumers receive from a licensee whatever quality they have come to expect from the licensor.) Spouses Randy and Linda operated Lawn Managers, Inc. together around St. Louis, Missouri, for twenty years. Lawn Managers offers lawn fertilizer, weed killer treatments, and related services. Perhaps seeking greener pastures, the two divorced in 2012. Their divorce settlement sought to divide their business. They agreed Linda would open a new business and could use the “Lawn Managers” trademark for two years before adopting a new name—Progressive Lawn Managers. The two businesses split customers, equipment, and employees. Acrimony grew quickly after the divorce agreement. Randy and Linda were not on speaking terms. As the two years ended, the parties disagreed about whether Linda’s new marketing materials were confusingly similar to the “Lawn Managers” name. Among other things, Randy argued the word “Progressive” was not prominent enough in Linda’s new logo. Randy’s business then registered the “Lawn Managers” mark with the U.S. Patent and Trademark Office and sued Linda’s business for infringement. The trial court found in Randy’s favor. On appeal, Linda’s business did not contest the district court’s finding of infringement but instead pressed its defense that the parties’ divorce settlement was a naked license that invalidated the “Lawn Managers” trademark. She asserted the agreement did not give Randy’s business any control over the quality of her business’s lawn care. The majority—Chief Judge Lavenski R. Smith and Circuit Judge Jane Kelly—disagreed. As they explained, to determine whether a licensor has exercised sufficient quality control, a court should evaluate three factors: whether the licensor retained contractual rights to control quality; actually controlled the quality of a trademark’s use; or reasonably relied on the licensee to maintain quality. The divorce settlement didn’t say anything about quality control, and the parties agreed there was no evidence that Randy’s business exercised actual quality control over Linda’s business. Thus, the case turned on the third means of control—reasonable reliance on the licensee. Past cases found reasonable reliance when the licensor and licensee had a long-term professional association, often called a “special relationship.” Courts occasionally find this “special relationship” permits a licensor to exercise sufficient control without a formal agreement or actual quality control efforts. Hindsight matters—courts emphasize a lack of evidence of deviating quality in the licensee’s products when they find reliance was reasonable. Here, the majority found the parties’ 17-year marriage, the absence of any complaints about the quality of Linda’s new business, and the structure of the parties’ divorce agreement supported the trial court’s finding that Randy’s business could reasonably rely on Linda’s business to maintain quality. The majority highlighted that the divorce agreement meant the parties were effectively operating the same business for two years, that Linda’s business sought to emulate Randy’s business, and that Randy’s employees were in a position to observe whether Linda’s employees were delivering services of equal quality. The majority emphasized that the naked license doctrine requires a high degree of proof—clear and convincing evidence—because a naked license invalidates a trademark. The majority concluded there was sufficient evidence to support the trial court’s finding that Linda’s business failed to reach that high level of proof. Dissenting, Circuit Judge Jonathan A. Kobes initially observed that “No one thinks the Marital Separation Agreement (MSA) is a model trademark transaction.” He then posited that a close working relationship between licensor and licensee might provide enough quality control to protect a mark, but a past relationship between now-divorced spouses doesn’t cut it. He agreed with the majority that a prior relationship could provide the basis for reasonable reliance but he argued some evidence of ongoing control was required. Judge Kobes cited Randy’s testimony that there was “no way possible” for him to control the quality of Linda’s business. Judge Kobes also cited evidence that consumers were confused about the absence of a relationship between the two businesses, highlighting the need for quality control to protect the public. As the majority emphasized, naked licensing is a hard defense to prove. But trademark holders who license their marks – whether in a marital divorce, a business divorce or in the ordinary course of business – should be careful to maintain some control over the quality of the products to which the licensee applies the mark. Contractual provisions are ideal, but even if there is nothing in writing, exercising control or oversight in fact can help establish that the requisite quality control was in fact taking place. That quality can be high, medium, or low so long as consumers get the quality they expect from products bearing the trademark.

Just two months ago, we published a post about an Eastern District of Pennsylvania decision in the Pellegrino v. Epic Games case regarding Epic’s online battle royale video game, Fortnite. In that case, saxophonist Leo Pellegrino alleged that a Fortnite “emote” (i.e., a feature sold by Epic to players to allow their avatars to perform a particular gesture, dance, etc.) titled “Phone It In” impermissibly copied his signature dance move. The court dismissed all of Pellegrino’s claims except for false endorsement, but he voluntarily dismissed the rest of his case on April 29, 2020. On May 29, 2020, a federal district court in Maryland granted Epic another victory by dismissing with prejudice all claims against it for its use and sale of a different emote, “Running Man.” Plaintiffs Jaylen Brantley and Jared Nickens alleged in their complaint that in 2016 they created, named, and popularized a dance called the “Running Man” and incorporated it into breaks during basketball games at the University of Maryland. The dance went viral on social media, and Brantley and Nickens encouraged others to post videos on social media of themselves performing Running Man. Running Man became even more popular after Brantley and Nickens were invited to bust their move on The Ellen Show. Despite the allegations in the their current complaint, Brantley and Nickens told noted dance aficionado Ellen DeGeneres that they copied the dance after New Jersey high school students Kevin Vincent and Jeremiah Hall, who also appeared on the show, created it, and posted it on Instagram. Regardless, Brantley and Nickens now allege that “[t]he Running Man has become synonymous with Plaintiffs [Brantley and Nickens], who are credited with creating the dance and video that became ‘viral.’” They further allege that Fortnite’s Running Man emote is an unauthorized copy of their Running Man dance. Therefore, they asserted claims for invasion of the right of privacy/publicity (Count I), Lanham Act and common law unfair competition (Counts II and III), unjust enrichment (Count IV), Lanham Act and common law trademark infringement (Counts V and VI), Lanham Act trademark dilution (Count VII), and Lanham Act false designation of origin (Count VIII) against Epic. Repeatedly citing Pellegrino, United States District Judge Paul W. Grimm dismissed all of Brantley and Nickens’s claims with prejudice. First, he held that Counts I, III, IV, and VIII are preempted by the Copyright Act. The two-prong test for copyright preemption requires finding (1) that the work is within the scope of subject matter specified in 17 U.S.C. §§ 102-103 and (2) that the rights granted under state law are equivalent to the exclusive rights with the scope of federal copyright under 17 U.S.C. § 106. “Choreographic works” are specifically recognized as a copyrightable work under 17 U.S.C. § 102(a) of the Copyright Act when they are fixed in a tangible medium, but copyright protection does not extend to ideas embodied in those works. Moreover, there is an important distinction between a choreographic work—i.e., “a related series of dance movements and patterns organized into a coherent whole”—and a mere dance—i.e., “social dance steps or simple routines” like “the basic waltz step, the hustle step, the grapevine, or the second position in classical ballet”—because only the former can be protected by copyright. Although Judge Grimm concluded that Running Man falls somewhere on the spectrum between a choreographic work and a dance, he explained that this distinction ultimately did not matter since “the scope of copyright preemption is greater than the scope of copyright protection,” and Running Man is within the “general subject matter” of copyright under a choreographic work. Accordingly, Running Man meets the first prong of the copyright preemption test. Regarding the second prong, Judge Grimm determined that the plaintiffs’ claims for invasion of right of publicity/privacy, common law unfair competition, unjust enrichment, and false endorsement were equivalent to the exclusive reproduction, performance, distribution, and display rights that are exclusive to the Copyright Act. Therefore, these claims are preempted by federal copyright. For similar reasons, Judge Grimm dismissed plaintiffs’ Lanham Act unfair completion and false designation of origin claims for being properly the subject of the Copyright Act, not the Lanham Act since they pertained to the copying of ideas or concepts and failed to allege facts indicating confusion in the market place. Finally, Judge Grimm concluded that Brantley and Nickens failed to plausibly allege a valid trademark as required by their trademark infringement and dilution claims. Plaintiffs failed to allege that Running Man is a valid trademark that identifies a good or service as required by 15 U.S.C. § 1127. Although plaintiffs alleged that Running Man is distinctive and immediately recognizable based on their likenesses, the court pointed out that, “as a general rule images and likenesses do not function as trademarks.” In addition, Brantley and Nickens failed to adequately allege that Running Man identifies a unique good or service, essentially arguing that Running Man is a trademark for the plaintiffs performing Running Man. This argument fails, however, because trademarks are not goods or services and cannot be used to identify themselves. Thus, all claims were dismissed with prejudice. Brantley once again confirms that content creators, such as Epic and other video game companies, are generally allowed to put dance moves into their own work without violating publicity, privacy, trademark, or copyright laws, provided that the only thing being copied are the movements of the dance. There are limits, however. Copying the dancer’s likeness could still be a violation of the dancer’s privacy and publicity rights. In addition, context matters. Had Epic used the dance in a college basketball video game instead of a battle royale video game, this case might have been a closer call. Moreover, if a dance actually were somehow used to identify a unique good or service, then copying that dance could run afoul of the trademark laws. However, as long as content creators are only copying the latest popular dance steps and not the dancers, they should be pleased with this decision.

In the 1980s and early 1990s, thousands of posters of former Major League star Lenny Dykstra undoubtedly decorated the bedroom walls of New York Mets and Philadelphia Phillies fans. Following a recent decision by Justice Robert Kalish of the New York Supreme Court (the trial-level court in New York), Dykstra now may be a poster child of a different sort: the libel-proof plaintiff. The notorious Dykstra had his libel suit against his former teammate Ron Darling dismissed in Dykstra v. St. Martin’s Press LLC, et al.  Dykstra—who most recently has been making a meal out of celebrating his second straight year without an arrest—could not pursue his libel claim because he is the rare libel-proof plaintiff, incapable of being damaged by the allegedly defamatory statements in Darling’s latest book, 108 Stitches: Loose Threads, Ripping Yarns, and the Darndest Characters from My Time in the Game. Dykstra sued Darling, his ghost writer and his publisher for defamation and intentional infliction of emotional distress arising out of a story in Darling’s book describing a racist tirade by Dykstra aimed at Dennis “Oil Can” Boyd, an African American pitcher for the Boston Red Sox, right before the opening pitch of Game 3 of the infamous 1986 World Series—the pivotal game won by the Mets in which they began to turn the Series in their favor, aided in large part by Dykstra’s lead-off home run off of Boyd. As described by Darling, “Oil Can was on the receiving end of the ugliest piece of vitriol I’ve ever heard – in a bar, on a baseball diamond . . . anywhere . . . . [A]s Oil Can was taking his final warmups on the mound, Lenny was in the on-deck circle shouting every imaginable and unimaginable insult and expletive in his direction – foul, racist, hateful, hurtful stuff.” Although Darling avoided repeating the specific taunts from Dykstra, he suggested that the taunting was “worse . . . than anything Jackie Robinson might have heard, his first couple of times around the league.” Dykstra claimed that Darling’s story was libelous and (a) tarnished the Mets’ 1986 World Championship, (b) branded Dykstra as a racist; (c) was maliciously intended to attack Dykstra, his prowess as a professional athlete, and his ability to earn a living going forward, and (d) caused Dykstra emotional distress and irreparably harmed his reputation. The defendants sought dismissal based in part on the rarely used libel-proof plaintiff doctrine, which bars a defamation claim as a matter of law where false statements on a particular subject cannot further harm the plaintiff’s reputation on that subject. As the court put it, this defense is not based upon “whether the statements were defamatory in nature but rather whether Dykstra’s reputation precludes this action.” The defendants argued that Dykstra’s reputation as a racist, bullying bigot meant that he could not be damaged further by Darling’s story. In a pointed opinion, the court agreed, ultimately reaching the damning conclusion that “[P]rior to the publication of [Darling’s latest] book, Dykstra was infamous for being, among other things, racist, misogynist, and anti-gay, as well as a sexual predator, a drug-abuser, a thief, and an embezzler. Further, Dykstra had a reputation—largely due to his autobiography—of being willing to do anything to benefit himself and his team, including using steroids and blackmailing umpires.” Besides the headline-grabbing nature of the court’s recounting of Dykstra’s exploits—and Darling’s story about one specific and particularly shameful episode of the Dykstra experience—this case is notable because the court applied the libel-proof plaintiff doctrine at the motion-to-dismiss stage. New York has a procedural rule (CPLR 3211(a)(1)) that permits early dismissal based on documentary evidence, when those documents conclusively establish an affirmative defense as a matter of law. Often such evidence includes prior judicial proceedings, deeds, wills, contracts and other legal documents. Here, however, the court dismissed Dykstra’s libel claim based primarily upon the “litany” of public stories about Dykstra’s poor reputation, including Dykstra’s autobiography, magazine articles, newspaper and online news reports, a book by the former editor of a magazine run by Dykstra, a 2017 book by Darling, Dykstra’s robust litigation history, including being the subject of 24 legal actions, and Dykstra’s prior criminal convictions and the publicity they received. Unlike the documentary evidence often relied upon at the dismissal stage, much of this evidence was not offered for the truth of its contents (avoiding a hearsay objection), but instead to demonstrate the widespread availability of negative information about Dykstra’s character—particularly as it pertained to the subject of Darling’s story: racist, unsportsmanlike, and abusive behavior. So the news stories or the anecdotes from Dykstra’s former colleagues did not have to be truthful to support the libel-proof plaintiff defense; their mere existence was sufficient as a matter of law to establish that Dykstra’s reputation could not be further harmed by Darling’s story. In reaching this conclusion, the court found an absence of any basis for using its limited resources to determine whether “Dykstra engaged in yet another example of bigoted behavior over thirty-years ago . . . .” Instead, the court noted that Dykstra could tell his side of the story to the public. Dykstra claimed to have enlisted Boyd and Mets legends Doc Gooden and Daryl Strawberry to dispute Darling’s story, and the court urged him to further those efforts to address any perceived harm to his reputation. Although it is unclear whether Dykstra has taken the court up on its suggestion to use his public platform to tell his side of the story, he has used that platform to accuse Justice Kalish of having “a very flexible interpretation of the law,” and to call him a “hack judge,” to question why Darling would pick him as an enemy because, according to Dykstra, he’s “the last (bleeping) guy you’d want to pick,” to threaten Darling with “pending doom” based on some unspecified “ugly truth” about Darling’s baseball career, and to threaten to reveal dirt on Darling and Mets ownership (this last threat was part of a video posted to Twitter taken on the side of the road following a car crash in which Dykstra claims “a bunch of hillbillies” rear-ended his Uber). Who knows, if Dykstra follows through on these threats, he and Darling may find themselves on opposite sides of a libel lawsuit in the future. On Dykstra’s lawsuit, unless he succeeds on appeal, he at least got one thing right: the case is “never going to (bleeping) trial.”

NBA superstar and reigning NBA MVP Giannis Antetokounmpo recently filed a series of trademark infringement lawsuits in the Southern District of New York against online retailers and their operators. In the lawsuits, Antetokounmpo claims that the retailers were selling merchandise bearing his nickname—the Greek Freak—along with his likeness. Over the past several years, as Antetokounmpo rose to NBA stardom, he began building a brand, with himself as the centerpiece. Antetokounmpo, who was born in Greece, filed for, and obtained, a trademark for GREEK FREAK, and began selling merchandise bearing that mark and his likeness. In the recent complaints he filed, he claims to have sold “tens of thousands of dollars” of product bearing the GREEK FREAK mark and has licensed his “name/nickname and/or likeness to various brands and campaigns.” He has also sought to register a variation of the mark, GREEK FR34K, which replaces the “ea” in Freak with 34, his jersey number for the Milwaukee Bucks. That mark has been approved for registration and, with no oppositions having been filed, will likely be registered soon. The current S.D.N.Y. lawsuits—Antetokounmpo v. Hill et al., (No. 1:20-cv-3530); Antetokounmpo v. Dickson, (No. 1:20-cv-3572); Antetokounmpo v. Dimoulis, (No. 1:20-cv-3575); Antetokounmpo v. SportsMarketUSA Corp. et al., (No. 1:20-cv-3615); Antetokounmpo v. Jones et al., (No. 1:20-cv-3669); Antetokounmpo v. Settleman et al., (No.1:20-cv-3670); and Giannis Antetokounmpo v. Steve Jones; Katherine B Jones (No. 1:20 cv 4010); and Giannis Antetokounmpo v. Bryant Yarborough dba Bonafide Icon (No. 1:20 cv 4060)—all make the same fundamental allegations: the defendants were selling merchandise online bearing Antetokounmpo’s name, nickname and/or likeness and they refused to cooperate after receiving cease and desist letters from Antetokounmpo. In addition to bringing infringement and related claims under the Lanham Act, Antetokounmpo alleged several state law claims (in total, each complaint contains 13 causes of action) and seeks both injunctive relief and monetary damages. None of the defendants has answered yet, and it will be interesting to see how they attempt to justify their conduct and otherwise respond to the allegations. The recent lawsuits are not the first lawsuits Antetokounmpo has filed to protect his rights. Last year, he filed a similar trademark infringement lawsuit against an artist (Antetokounmpo v. Bhogal, No. 19-cv-6304) who was selling clothing bearing the GREEK FREAK mark and using GREAK FREAK as the name of a clothing collection. That case settled late last year, about a month after it was filed, and before the defendant answered. Similarly, earlier this year, Antetokounmpo filed another trademark infringement case, this time against a company selling mobile phone cases containing his GREEK FREAK mark (Antetokounmpo v. Sportz Cases, LLC, 20-cv-1392). That case appears to have settled, as well, as it was voluntarily dismissed earlier this month. One takeaway from all the lawsuits that he has filed is that Antetokounmpo defends his trademark rights as aggressively as he defends his opponents on the basketball court. We will continue to monitor the cases and report back with updates if any move past the pleading stage. In the meantime, to learn more about NBA players enforcing their personal brands through litigation, check out the TMCA’s coverage of Kawhi Leonard and Michael Jordan.

Lucky Brand has emerged victorious in the latest skirmish of its nearly 20-year trademark litigation battle with Marcel Fashions, a competitor in the apparel business. In Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc., its second trademark decision of this term, the Supreme Court unanimously reversed the U.S. Court of Appeals for the Second Circuit, holding that Lucky Brand is not precluded from raising a defense that it could have raised in a previous lawsuit between the same parties. The Lucky Brand opinion, however, rested on narrow grounds and left for another day the questions of whether there is such a thing as “defense preclusion” and, if so, when it is appropriate. The first round of this war began in 2001, when Marcel sued Lucky Brand, alleging that Lucky Brand’s use of the phrase “Get Lucky” infringed Marcel’s registered trademark for GET LUCKY. That case ended in a settlement, whereby Lucky Brand agreed to cease using the phrase “Get Lucky,” and Marcel released certain claims regarding Lucky Brand’s use of its own trademarks (which included various marks containing the word “Lucky”). In the second round (commenced in 2005), Lucky Brand sued Marcel for violating certain of its trademark rights, and Marcel in turn filed several counterclaims based on Lucky Brand’s alleged continued use of the phrase “Get Lucky.” While Lucky Brand initially argued that the counterclaims were barred by the prior settlement agreement, it did not pursue that defense and the court in the 2005 Action permanently enjoined Lucky Brand from copying or imitating Marcel’s “Get Lucky” mark. In 2011, Marcel again sued Lucky Brand for continuing to infringe the “Get Lucky” mark, though the allegations involved different marks used by Lucky Brand claimed to be infringing and different conduct than in the 2005 Action. After extended litigation, Lucky Brand moved to dismiss, arguing—for the first time since early in the 2005 Action—that Marcel had released its claims in the 2001 Action settlement agreement. Marcel countered that Lucky Brand could not invoke the release defense because it could have pursued that defense in the 2005 Action, but did not. The U.S. Court of Appeals for the Second Circuit agreed with Marcel, holding that the doctrine of “defense preclusion” prohibited Lucky Brand from raising the release defense in the 2011 Action when it had failed to do so in the 2005 Action. In a decision authored by Justice Sotomayor (who practiced in the field of trademarks and intellectual property law prior to ascending to the bench), the Supreme Court reversed and remanded the case to the Second Circuit. The Supreme Court framed the key issue as whether “defense preclusion” is a valid application of res judicata, a term that encompasses both issue preclusion (also known as collateral estoppel) and claim preclusion. Issue preclusion, which precludes a party from re-litigating an issue actually decided in a prior case and necessary to the judgment, did not apply here because the scope of the settlement release was never actually litigated in the 2005 Action. The related doctrine of claim preclusion prevents parties from raising issues that could have been raised and decided in a prior action—even if they were not actually litigated. The question at issue here was whether claim preclusion barred Lucky Brands from asserting its settlement defense in the 2011 Action. The Supreme Court noted at the outset that “[t]here may be good reasons to question any application of claim preclusion to defenses.” It did not need to resolve this more general question, however, because for claim preclusion to bar a defense in a later action, the two suits must arise from the same transaction or involve a “common nucleus of operative facts.” In Lucky Brand, the Supreme Court held that the two suits “were grounded on different conduct, involving different marks, occurring at different times” and “[t]hey thus did not share a ‘common nucleus of operative facts.’” Specifically, in the 2005 Action, Marcel’s claims were based on a combination of Lucky Brand trademarks and the use of the phrase “Get Lucky,” while the 2011 Action did not involve any use of the “Get Lucky” phrase. Moreover, the 2011 Action concerned conduct that occurred after the conclusion of the 2005 Action. The Supreme Court noted that this principle is particularly salient in the trademark context, “where the enforceability of a mark and likelihood of confusion between marks often turns on extrinsic facts that change over time” and “liability for trademark infringement turns on marketplace realities that can change dramatically from year to year.” The Lucky Brand decision underscores what all legal practitioners take for granted: the facts matter. Here, because the two actions involved different facts and claims, the Supreme Court found that Lucky Brand’s failure to invoke its release defense in the 2005 Action did not bar it from raising that defense in the 2011 Action. As noted, however, the Supreme Court left undecided the larger issue of whether it is ever appropriate to apply claim preclusion to bar defenses, and there are compelling policy considerations for either position. On the one hand, one of the goals of claim preclusion is to resolve issues at the earliest opportunity – and this principle would seem equally applicable to defenses. On the other hand, requiring defendants to litigate every possible defense at every stage in litigation might have the deleterious effect of increasing litigation time and costs – which preclusion doctrines seek to minimize. It will be interesting to see how this issue plays out and whether the Supreme Court eventually resolves it definitively. In the meantime, litigators (particularly in the trademark field) would be well-advised to carefully analyze the relevant facts in order to determine whether a defense is required – or could potentially be barred – by the doctrine of “defense preclusion” since that doctrine appears to have survived for possible future application under the proper factual circumstances.

A lot has happened since we last checked in on the Corn Syrup battle between the parent companies of Bud Light, Miller Lite, and Coors Light. The Seventh Circuit Court of Appeals, in a split opinion, issued an intervening order on October 18, 2019, finding that the District Court failed to properly issue the injunction as a standalone document, as required by Federal Rule of Civil Procedure 65(d)(1)(C). The dissent to that opinion argued that there is no requirement that an injunction be a separate document as long as it is clear, and that there is no reason to remand just to require a district court to copy and paste the injunction on a separate page. On remand, the District Court re-issued the same injunction, as predicted by the Seventh Circuit dissent, and the parties again cross-appealed to the Seventh Circuit. Finally, on May 1, 2020, the Seventh Circuit issued an opinion addressing the merits of the injunction, and tore it apart. The basic facts of this case are relatively straightforward. Bud Light uses rice as a source of sugar in the brewing process, Miller Lite and Coors Light use corn syrup as their source of sugar. In 2019, Bud Light began advertising that Bud Light is not brewed with corn syrup. As Bud Light’s advertising campaign evolved, they dropped the “brewed with” qualifier and advertised that Bud Light contains no corn syrup or simply used “No Corn Syrup” on their packaging and in advertisements. Bud Light also ran comparative advertisements wherein “No Corn Syrup,” “100% Less Corn Syrup,” and similar slogans were displayed next to Bud Light and “Yes Corn Syrup” and similar slogans were displayed next to Miller Lite and Coors Light. As you may recall from our prior post, the District Court for the Western District of Wisconsin grappled with the issue of whether Bud Light’s “No Corn Syrup” advertisements, while factually accurate, would mislead consumers into thinking that Miller Lite and Coors Light contain corn syrup in the final product. When issuing the injunction, the Court determined that advertisements that do not make it clear that they are referring to the brewing process are likely to deceive consumers into believing that the finished products, Miller Lite and Coors Light, contain corn syrup in the beer itself. It was on this basis, and to those advertisements, that the court issued the preliminary injunction. The Seventh Circuit agreed that Bud Light “has made statements from which some consumers doubtless infer that some corn syrup. . . makes it into the beer.” However, the Seventh Circuit reasoned that because MolsonCoors lists corn syrup in its list of “ingredients” for both Miller Lite and Coors Light, “their statements yield the same inference.” According to the Court, MolsonCoors brought this problem on itself” by choosing such a word as “ingredients” with multiple meanings, and if Anheuser-Busch has led consumers to believe that an ingredient is in the finished product, “it is hard to see why those statements can be enjoined.” The injunction against Bud Light’s packaging and advertisements was removed because, according to the opinion, it is not false or misleading “for a seller to say or imply, of a business rival, something that the rival says about itself.” It appears that the Seventh Circuit’s opinion did not fully consider whether Bud Light’s advertising was misleading by implication. There was never any dispute that Miller Lite and Coors Light use corn syrup as an ingredient in the brewing process and that Bud Light’s advertisements were factually correct. The Seventh Circuit’s opinion boils down to an assertion that because the statements were factually correct and MolsonCoors made a similar factual statement via its ingredient lists, the factually true statements in Bud Light’s advertising is not deceptive or misleading. But this ignores the differing context of each company’s mention of corn syrup, and the full context in which advertising claims appear is critical to determining whether a consumer will be misled. It is entirely possible that consumers were likely to be misled by Bud Light’s “No Corn Syrup” ads whereas they were not by a mention of corn syrup in Miller Lite and Coors Light ingredient lists. The Seventh Circuit’s invitation to MolsonCoors to release similar ads—“If MolsonCoors does not like the sneering tone of Anheuser-Busch’s ads, it can mock Bud Light in return”—can be used to test the limits of the Seventh Circuit’s reasoning. Because Bud Light lists rice in its ingredient list, what if MolsonCoors ran an ad campaign saying “No Rice” or “100% Fewer Grains of Rice” in relation to Miller Lite and Coors Light? The District Court and the Seventh Circuit seem to agree that some consumers might think Bud Light contains rice in the final product. But, if Bud Light loses customers who don’t like the idea of rice in their beer, the Seventh Circuit’s reasoning wouldn’t allow them any recourse. Perhaps where the Seventh Circuit went wrong was its assumption “common usage equates a product’s ingredient list with its constituents” and that people infer “that things on the [ingredient] list are in the finished product.” That assumption might be true in a salad, but is less true in baked goods, and even less true in products that undergo fermentation or other complex reactions. No one would expect grapes in their wine or hops in their beer. It will be interesting to see if this case between the three largest light beer brands in the country progresses to trial without the preliminary injunction in place. The Seventh Circuit’s parting words on remanding the case was that the “first issue” the district court should consider on remand is “whether any question remains for trial, or whether our decision instead wraps up the proceeding” – signaling, perhaps, the appellate court’s view that the case should end with its opinion. Whether the “No Corn Syrup” campaign is ultimately misleading or deceptive is still up for debate. We will keep you updated as the case progresses.  

The TMCA has been covering two pending trademark infringement cases brought by JaM Cellars against The Wine Group’s “Flavor First” line extension of its Franzia brand, and since our last post, there have been two developments of note. In the first case, involving JaM’s claim that the Franzia RICH & BUTTERY Chardonnay infringed JaM’s registered BUTTER mark, Judge Gilliam of the federal district court for the Northern District of California issued an order on April 17, 2020 denying The Wine Group’s motion for summary judgment. After noting that there was “no evidence of actual confusion by consumers,” and perhaps previewing the key issues to be litigated at trial, the Court identified several issues of material fact bearing on the issue of likely confusion that required a jury determination. First, what is the strength of the BUTTER mark, an issue that turns not only on the commercial success of the brand in the marketplace, but also on whether the word “butter” is descriptive or suggestive. Second, whether the parties’ respective wine products should be considered closely related goods or, as The Wine Group contends, materially different because they are sold at different retail price points in different packaging. And third, whether RICH & BUTTERY is being used in a trademark sense as a brand identifier for the wine, as JaM argues or, as The Wine Group contends, as a product descriptor. In a further analysis of The Wine Group’s fair use defense, the Court also found that issues of fact precluded summary judgment. Interestingly though, the Court commented that it “finds some persuasive force in Defendant’s argument that the use of “buttery” instead of “butter” (an adjective instead of a noun) leans in favor of a description….” A further notable comment from Judge Gilliam closed his ruling on the summary judgment motion: “While the Court has some reason to be concerned based on this and other lawsuits that Plaintiff may be effectively attempting to monopolize use of the term ‘buttery’ to describe Chardonnay, summary judgment is not warranted. It remains to be seen whether judgment as a matter of law may be appropriate at or after trial.” Thus, while The Wine Group lost its dispositive motion, it might take some comfort in the Court’s concern about whether JaM is attempting to preclude a competitor from using a descriptive term. In a second development on May 11, 2020, Judge Gilliam entered an order consolidating the RICH & BUTTERY case with the subsequent separate litigation brought by JaM against The Wine Group. The later-field case, which was the subject of our earlier post, involves claims by JaM Cellars that Franzia’s BOLD & JAMMY cabernet sauvignon and packaging infringes JaM Cellars’ rights in its JAM mark. A jury trial that had been scheduled for July has now been pushed back for the consolidated proceedings until December. Stay tuned!

In an oral ruling last month, Oregon District Court Judge Michael W. Mosman granted Nike’s motion dismissing NBA star Kawhi Leonard’s claims that he rightfully owned “The Claw” logo. The Claw is a logo depicting Leonard’s initials “KL” and jersey number “2” in the palm of an outstretched hand. Although no written order has been issued yet, the ruling reveals potential pitfalls facing athletes or celebrities attempting to build out brands with personalized logos or trademarks. Leonard, who led the Toronto Raptors to its first NBA title last year, is nicknamed “The Claw” (or “The KLaw” - using Leonard’s initials) because of his enormous hands. Those powerful paws, reportedly as big as Wilt Chamberlain’s and measuring over 11 inches long, are credited as one of the reasons behind Leonard’s success as a basketball player. Nike, which signed Leonard to an endorsement deal in 2011, set out to immortalize Leonard’s iconic hands in a logo, just as it had done with Michael Jordan’s iconic free throw line dunk in the Jumpman logo. (Incidentally, Judge Mosman is the same judge who dismissed claims challenging Nike’s copyright ownership of the Jumpman logo in Rentmeester v. Nike, Inc., No. 3:15-cv-00113-MO, 2015 U.S. Dist. LEXIS 77468 (D. Or. June 15, 2015)). The eventual “Claw Design” was created by Nike artists during the course of Leonard’s endorsement deal, but it shared similarities with a prior drawing Leonard created and provided to Nike. Both drawings include the letters “K” and “L” as well as the number 2 (Leonard’s jersey number) on an outstretched hand. Nike copyrighted The Claw design and listed itself as the author as an employer for hire, indicating that its employees—rather than Leonard—created the work. In late 2018, Nike’s endorsement contract with Leonard expired. Instead of re-signing with Nike, Leonard and his giant hands inked a new deal with New Balance. Intent on continuing to use The Claw as part of his personal brand with his new partner New Balance, Leonard sued Nike in 2019 seeking a declaration that he authored and owns the The Claw, and that Nike was neither the creator nor owner of the logo. Leonard’s claims were originally brought in the S.D. of California, but Nike was successful in transferring the case to its backyard: the District of Oregon. After the case was transferred to the District of Oregon, Nike answered, asserted counterclaims, and moved under Federal Rule of Civil Procedure 12(c) for judgment on the pleadings. The focus of Nike’s motion was dismissal of Leonard’s copyright claims, and recognition that Nike owned the copyright to The Claw. In his complaint, and in response to Nike’s motion, Leonard alleged that because he drew a previous draft logo and shared it with Nike, he was the actual owner of the subsequent Claw Design. Nike’s motion argued that its design was “obviously distinct” from Leonard’s, and that Nike never claimed ownership of Leonard’s own drawing. Nike’s Rule 12(c) motion further relied on a provision in its endorsement contract that stated “Nike shall exclusively own all rights, title and interest in and to any logos, trademarks, service marks, characters, personas, copyrights, shoe or other product designs, patents, trade secrets or other forms of intellectual property created by Nike (and/or its agents), consultant or athlete in connection with this contract.” Leonard claimed that his drawing, which was made before the endorsement deal was signed, was not made “in connection with” the endorsement contract. Although Leonard did not dispute that The Claw was made in connection with the contract, he claimed it was derivative of his drawing and ineligible for copyright protection. Ultimately, the court ruled in favor of Nike on its claim that it owned The Claw copyright. The minute entry from the hearing noted the court’s position: “As stated on the record, I grant the motion with respect to defendant Nike's ownership of the Claw design….” Although it isn’t clear from the minute order whether the court found The Claw to be independently copyrightable by Nike, or a derivate work of Leonard’s that Nike owned by contract, Oregon Live reports that the Judge stated, “It’s not merely a derivative work of the sketch itself…I do find it to be new and significantly different from the design.” In other words, Nike’s logo was sufficiently original to merit independent copyright protection, regardless of any inspiration from Leonard’s sketch. This case is a reminder of the potential importance of securing copyrights over trademarks. For instance, if The Claw was merely trademarked, Nike could lose its trademark protection by ceasing to use The Claw on advertising or merchandise for a period of time (generally three years), which would be expected after the endorsement deal expired. But because Nike copyrighted The Claw, there is no requirement that Nike actually use the copyright in commerce to retain sole ownership. In addition, this case is a warning to athletes, celebrities, or other public persons that they should take care to clearly define in endorsement contracts the ownership of personalized copyrights or trademarks that might become part of their personal brand.

In June of 2017, channeling the Seussian musings of the case at hand, we first introduced you to the Southern District of California case, Seuss Enters., L.P. v. Comicmix LLC, 372 F. Supp. 3d 1101 (S.D. Cal. 2019), which promised to have a major impact on copyright fair use rulings. Since the time of our first blog post, an important ruling in the case has transformed how “mash-ups” factor into a fair use defense. By way of background, Plaintiff Seuss Enterprises is the assigned copyright owner of the late Dr. Seuss’s works, including the piece at issue in this case—Oh, the Places You’ll Go! Defendants include the aforementioned company and individuals (“Defendants”) with experience in writing television shows and illustrations, with notable credits including work on the famous sci-fi series, Star Trek. They decided to collaborate on the creation of a “Seuss-style Star-Trek” theme of backgrounds for use with a book and related merchandising. In a nod to inspiration culled from Dr. Seuss’s work, Defendant called the project, Oh, the Places You’ll Boldly Go! (“Boldly!”). Defendants successfully raised enough money and interest to work with distributors, but before Boldly! could be published, Plaintiff filed suit in the Southern District of California, halting Defendants’ efforts to release and monetize the book. In its lawsuit, Plaintiff alleged both copyright and trademark infringement, as well as a claim for unfair competition. Defendants moved to dismiss all claims, but the Court only granted the motion as to Plaintiff’s trademark and unfair competition claims, noting that Plaintiff’s “general illustration style is not protectable.” Plaintiff’s copyright infringement claim survived, for the time being. In summary judgment briefing on Plaintiff’s remaining copyright claim, Defendants admitted they copied from Dr. Seuss’s work to inspire their own designs and illustrations, including attempts to make them “nearly identical.” But such copying, the Defendants claim, was “essential to the parody,” relying heavily on the copyright doctrine of fair use to shield themselves. In its March 12, 2019, order on Defendants’ motion for summary judgment, the court ruled in favor of Defendants, despite the explicit “copying” of the underlying work. First and foremost, the court held the Defendants’ work was not a parody, despite claims to the contrary, because Defendants’ work merely used the Seussian illustration style and story format as a medium to convey particular adventures and tropes from the Star Trek universe. But Boldy! made no attempt to comment on or ridicule Dr. Seuss’s work. Instead, the court defined Defendant’s works as “most appropriately” a “literary and pictorial ‘mash-up.’” The court held that “the copied elements are always interspersed with original writing and illustrations that transform [Dr. Seuss’s] pages into repurposed, Star-Trek centric one.” Although Defendants certainly “borrowed” from the Dr. Seuss original, even “at times liberally,” the court found the borrowed elements were always adapted or transformed in the Seussian cosmos theme of the project. Circling back to the main thrust of a copyright infringement analysis, the court evaluated whether Defendants copied more than is necessary to accomplish the transformative purpose. Such an evaluation was key to determining whether Defendants’ use of Plaintiff’s work was justified fair use, or whether Defendants’ improperly infringed. And although Defendants did use certain discrete elements foundational to the Dr. Seuss work, they did not use Dr. Seuss’s words, his characters, or his universe. At the essence of the mash-up, “portions of the old work [were] incorporated into the new work, but emerge[d] imbued with a different character.” Therefore, Boldly! was a transformative mash-up, and the court granted summary judgment against Plaintiff’s final claim for copyright infringement. Plaintiff appealed the decision to the Ninth Circuit Court of Appeals. Numerous interested parties filed amicus briefs in support of either Seuss Enterprises or Comicmix, clearly indicating the outcome of this case has ramifications for copyright infringement claims moving forward. Oral arguments were originally scheduled for April 1, 2020, but given current events, arguments were pushed back until April 27, 2020. As that new schedule held, we anticipate a ruling in late summer, early fall 2020. But until then, as we part, we’ll leave you with our own Seussian stylings: Defendants claimed they copied that, they borrowed this; To channel Seuss in the great unknown abyss; “We had to use the style and theme; So that our readers would understand the dream.” But as expected, Plaintiff continued to cry foul; And on MSJ, refused to throw in the towel. “It is blatant infringement, you see; Surely, district judge, you must agree!” Alas, Plaintiff has found a worthy adversary, As the judge ruled Defendants didn’t use more than was necessary; She found the mash-up continues to rule the day; But we’ll have to see what the Ninth Circuit has to say. The moral of this chapter is clear, If you borrow from there, and copy from here; Make sure you do not take too much, And transform what you do, adding your own touch. Mashups are interesting, and creative too, But take more than you need, and someone might sue; So we will leave you with a parting chore, Always try to go where no creator has gone before.