Trademark, Copyright + Advertising

We previously blogged about the licensing dispute between the building management of 200 Riverside Boulevard in New York City and DJT Holdings over whether management had the right to remove the Trump Place branding on the building. The building management succeeded in obtaining a declaratory judgment that removal of the Trump Place signage did not violate the terms of the License Agreement with DJT Holdings. As the New York Times has now reported, the Trump Place sign will be removed after a formal poll of residents revealed that nearly 70% of the condominium owners who voted were in favor of removing the sign. The Upper West Side building will now simply be called 200 Riverside Boulevard. The Times credited the building’s “low-key” strategy of bringing a declaratory judgment action in order to reduce the risk of exposure to damages, costs and fees if DJT Holdings carried through on the threat to sue the building over the removal of the signage. Although DJT Holdings had stated its intent to appeal the court’s decision in May, the deadline for appeal expired on October 1 with no appellate action commenced.

On October 10, 2018, President Trump signed the Marrakesh Treaty Implementation Act (“MTIA”), which will allow the United States to join the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled.  The net result of the United States joining the Treaty should be the availability of a wide range of new materials in accessible formats to individuals who are blind or who have disabilities. As described by the World Intellectual Property Office, “[t]he Treaty has a single objective: to increase access to books, magazines and other printed materials for people with print disabilities . . . by making it easier for accessible copies to be created and shared across international borders.”  The Marrakesh Treaty was formally adopted globally on June 27, 2013.  It entered into force for an initial group of twenty member countries, including Canada and Mexico, on September 30, 2016.  By the time the United States becomes a full member, over forty countries will have joined. To accede to the Marrakesh Treaty, the United States was required to amend portions of the Copyright Act, which is a task that began on October 2, 2013, when the United States signed onto the Marrakesh Treaty.  Section 121 of the Copyright Act already contains certain limitations on exclusive rights of copyright owners to allow certain authorized entities (namely, nonprofits and governmental agencies who have a primary mission to provide services to the blind and disabled) to reproduce and distribute works to blind and disabled persons, but the MTIA redefines and expands certain key terms as follows: Current Section 121 Amended Section 121 Applies only to published, non-dramatic works Applies to published literary works as well as musical works fixed in text or notation, but specifically excludes “standardized, secure, or norm-referenced tests and related testing material, or to computer programs, except the portions thereof that are in conventional human language” Eligible persons are defined only as “Blind or other persons with disabilities” Eligible persons are considered one of the following: (1) blind; (2) “has a visual impairment or perceptual or reading disability that cannot be improved”; or (3) “is otherwise unable, through physical disability, to hold or manipulate a book or to focus or move the eyes to the extent that would be normally acceptable for reading” Limits distribution to “specialized formats,” which generally means braille, audio, or digital text, or large print “Specialized format” becomes “Accessible format,” which means an alternate manner or form to permit an eligible person to “have access as feasibly and comfortably as a person without such disability” The MTIA also adds a new Section 121A to the Copyright Act, the purpose of which is to allow for the import and export of works in accessible formats between the United States and other Marrakesh Treaty members by authorized entities.

On September 17, 2018, Judge Steven V. Wilson of the federal court of the Central District of California ruled on General Motors’ motion for summary judgment in Falkner v. GM, a copyright action concerning graffiti artists’ ability to protect their work from infringement by photographers. In short, although the court’s decision makes it unlikely that we’ll see quick resolution of graffiti artists’ copyright infringement claims, it left open whether the Architectural Works Copyright Protection Act’s (“AWCPA”) pictorial representation exemption can be invoked by defendants at trial. For detailed background on this story, see our original post and update #1. Legal Issues We previously reported that, based on the briefs submitted by the parties, whether or not the AWCPA’s pictorial representation exemption bars Falkner’s copyright claim against GM hinged on two questions: (1) whether the public parking garage is an architectural work, and (2) whether Leicester v. Warner Brothers held that the AWCPA’s pictorial representation exemption applies to all pictorial, sculptural, or graphic (“PSG”) elements of an architectural work, including those that are “conceptually separable” from the architectural work. On the first question, the court easily found that the garage is an architectural work, and thus subject to the AWCPA. As expected, the second question proved far more complicated. Analysis The Court’s Treatment of Leicester v. Warner Brothers Both parties primarily relied on a single Ninth Circuit opinion—Leicester v. Warner Brothers—which proved difficult for both the parties and the court to parse. In fact, during oral argument the court stated that “it’s somewhat difficult to discern what the holding is from the case,” and struggled with the same issue that emerged as unresolved in the parties’ briefing: did the doctrine of conceptual separability—discussed in detail in our original post—survive the 1990 enactment of the AWCPA and, if so, is it relevant here? The court’s treatment of Leicester, however, meaningfully departed from the parties’ briefing and its own questioning during oral argument. Specifically, rather than resolve the ambiguities inherent in Leicester’s split decision on conceptual separability, the court instead read Leicester to have articulated a separate, implicit threshold requirement to the AWCPA’s pictorial representation exemption’s applicability—i.e., is the PSG element (e.g., the graffiti) “part of” the architectural work? The court reached this unexpected result by finding that “[a]ll three judges on the Ninth Circuit panel unambiguously agreed” that for the AWCPA’s pictorial exemption to apply to a PSG element, the PSG element must be “part of” an architectural work.” Further, per the court’s reading of Leicester, unless it can be shown that—as a matter of law—the PSG element is “part of” the architectural work, the question of the exemption’s applicability cannot be decided on summary judgment. The court’s reasoning here is striking for a few reasons. First, neither party argued that whether Falkner’s mural was “part of” the garage raised a distinct legal question under the AWCPA. GM appears to have assumed—without expressly stating—that to the extent it raised a legal question at all, whether the graffiti is “part of” the garage is folded into the conceptual separability analysis. And although Falkner argued that the mural was not an “integral part of” the garage, he treated the question of whether a PSG element embedded in a work is “part of” that work as largely interchangeable with whether it is conceptually separable from said work. Second, the Leicester panel did not expressly treat the “part of” analysis as distinct from conceptual separability, and the judges were not uniform in their treatment of the issue. Writing in dissent, Judge Fisher stated that a finding that the PSG element in question is “part of” an architectural work does not preclude a finding that it is conceptually separate. But as Judge Fisher noted, Judge Rymer’s majority opinion did not address whether a PSG element could be both “part of” and conceptually separate from an architectural work. Similarly, despite acknowledging in passing that the PSG element must be part of an architectural work for the exemption to apply, Judge Tashima directed his concurrence to the view that the AWCPA extinguished the doctrine of conceptual separability. Thus, although all three Leicester judges arguably assumed that for the exemption to apply the PSG work must be “part of” an architectural work, this was not the question before the court, and any agreement among them on the issue must be inferred. “Part Of” Factors Despite the Ninth Circuit’s lack of express focus on the issue, the Falkner court determined that Leicester implicitly articulated a set of factors that courts must evaluate to determine whether a PSG element is “part of” an architectural work before it can apply the AWCPA’s pictorial representation exemption. Specifically, the court acknowledged that Leicester did not define a single, determinative test for what renders a PSG work “part of” an architectural work, but found that it described “factors.” The factors include whether the PSG work had a “concept that integrated it into the underlying work,” or whether the PSG work itself “could be considered an architectural feature.” Other factors include whether the PSG work is “designed to appear as part of the building” or when it serves a “functional purpose that is related to the building.” These factors are not clearly stated in Leicester, and are never even described as factors in that decision. The Falkner court’s decision to treat these factors as probative of whether or not a PSG element is “part of” an architectural work appears to be a novel interpretation of both the AWCPA and Leicester. In its summary judgment ruling, the court found that the mural itself is not an architectural feature. The court also found that because the mural was not designed to appear as part of the building or serve a functional purpose related to the building, it could not on the record before it be found to be “part of” the building. Policy Considerations: Does “Conceptual Separability” Raise Different Questions than the Court’s “Part Of” Analysis? An important policy question raised by Falkner v. GM is whether Congress intended the AWCPA to allow photography of publicly viewable buildings irrespective of whether or not those buildings contain PSG elements that might otherwise be independently protectable by copyright. As GM argued in its reply brief, “Joe Public should not be required to research the history of the building and hire architectural experts before he snaps a photograph.” GM made this argument in response to Falkner’s interpretation of the conceptual separability doctrine—i.e., GM argued that if Leicester is read to hold that PSG elements are not covered by the AWCPA’s pictorial representation exemption if they are conceptual separable from the underlying architectural work, then this will create uncertainty for photographers because they will risk costly litigation each time they take photographs outdoors. To avoid this result, GM argued for a bright-line rule: any and all photographs of publicly viewable buildings should be covered by the AWCPA’s pictorial representation exemption, regardless of whether or not the PSG elements are conceptually separable from the underlying architectural work. Although the court did not reach the question of conceptual separability, the court’s holding arguably exacerbated the policy concern identified by GM. By ruling that a set of amorphous factors determines whether a PSG element is “part of” an architectural work—and treating this determination as a threshold question for whether or not the AWCPA’s pictorial representation exemption can apply—the court increased the likelihood that ambiguity and drawn-out litigation will result from Joe Public snapping photographs. Is GM’s AWCPA Defense Still Viable? Finally, the court’s decision is somewhat ambiguous on a key question: is GM’s AWCPA defense still viable in light of the court’s ruling? Although the court noted that it “cannot conclude as a matter of law that the mural is part of the parking garage”—suggesting that whether the mural is part of the parking garage is a factual question that cannot yet be decided—it ultimately held that “Because the Court cannot conclude at this stage that Section 120(a) applies to the mural, as the mural is not part of an architectural work as a matter of law, it cannot reach the issue of whether Section 120(a) permits photographs of the mural” (emphasis added). It is thus not entirely clear (a) whether the court ruled that the pictorial representation exemption does not—as a matter of law—apply to the mural, and thus that Falkner’s copyright infringement can proceed to the merits without further invocation of the AWCPA’s pictorial representation exemption, or (b) whether the court merely observed that although it cannot find—as a matter of law—that the mural is part of the building, GM can nonetheless attempt to establish at trial that the mural is “part of” the garage. Despite the ambiguity, the overall context of the court’s decision suggests that the correct interpretation is (b), and that GM can still assert its AWCPA defense if it can show that the mural is “part of” the garage. But this brings us to a second question: even assuming (b) is the correct interpretation, it is not clear what facts—if any—GM could cite to establish that the mural is “part of” the garage, as the court has construed the question. As described above, the court identified factors that can be relied on to show that a PSG element is “part of” an architectural work. The court then proceeded to find that “undisputed facts” render Falkner’s mural “wholly unlike” the PSG elements in Leicester. In light of the court’s findings, it is not clear what—if anything—GM could do to show that the mural is “part of” the garage. Given the current record, GM’s AWCPA defense appears to have only a modest chance of success. Conclusion The court’s denial of GM’s motion for summary judgment as to Falkner’s copyright infringement claim gives graffiti artists reason to be optimistic that they have the continued right to control images of their work, even when those works appear on publicly viewable buildings. At the same time, by holding that whether or not the AWCPA’s pictorial representation exemption applies to graffiti is a factual matter, the court has made it more likely that disputes involving photographs of graffiti may be long, costly, and uncertain.

You probably have a friend who’s justifiably obsessed with all things Beyoncé (this author might be that friend). You might also have a friend who’s engaged (a fiancé). When the two intersect, you’ve got a FEYONCÉ. Get it? Check Instagram -- it’s a thing. But did you know all that swag doesn’t come from Queen Bey herself? Last week, a federal judge for the Southern District of New York refused to grant summary judgment on Beyoncé’s claims of trademark infringement, unfair competition, and dilution regarding a line of third party FEYONCÉ merchandise. The individual defendants and their company, Feyonce, Inc., have sold FEYONCÉ apparel and other goods via feyonceshop.com and a related Etsy store since 2016. Though the subject mark plainly references Beyoncé, the court could not conclude that confusion was likely as a matter of law because: “While Defendants clearly selected their mark because of its association with Plaintiff’s mark, it is not at all clear that they hoped to capitalize on confusion between the products.” Knowles-Carter, et al., v. Feyonce, Inc. et al., 16-CV-2532 (SDNY Sep. 30, 2018). To succeed on a claim for trademark infringement, a plaintiff must prove that the defendant’s activities create a likelihood of confusion with the plaintiff’s earlier, protectable mark. Here, the issue is whether the play on words in the FEYONCÉ mark is sufficient to prevent that confusion.  “Evidence in the record indicates that many purchasers of FEYONCÉ products are, in fact, engaged …” and hence, not confused about the mark itself. See id. The question of confusion may then turn on whether consumers are likely to believe that Beyoncé has otherwise "approved" or "sponsored" the FEYONCÉ gear. In the alternative, Beyoncé’s team has asserted claims of dilution by blurring. The law of dilution permits owners of famous trademarks to prevent others from using identical or very similar trademarks even if there is no likelihood of confusion. Dilution by blurring (as opposed to dilution by tarnishment) is defined as an “association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.” 15 U.S.C. § 1125(c)(2)(C). The court seems to take judicial notice of Beyoncé’s fame -- a recent lyric says it best: “No need to ask, you heard about us.” However, summary judgment was denied based on the remaining question of whether the use of FEYONCÉ actually harms the reputation, i.e., impairs the distinctiveness of the BEYONCÉ mark. Or, to the contrary, does the obvious pun actually increase public recognition and promote the reputation of the BEYONCÉ mark? We are monitoring the case for further developments, or a royal decree from Queen Bey.

Although numerous attempts have been made to pass a comprehensive U.S. privacy law over the years, this one might actually succeed.  Efforts have begun on multiple fronts.  From Senate Commerce Committee hearings to several federal agencies vying for which will lead a federal regulatory effort, privacy is a hot topic in Washington, DC.  Businesses should take immediate action to enter the discussions if they have not already done so.  Comments on a proposed federal framework are due October 26, 2018.  The Commerce Committee will hold additional hearings in October.  Industry is coming to the table in an attempt to avoid facing a jumble of inconsistent state privacy laws. Fresh off their European privacy compliance efforts, U.S. businesses have begun facing another significant compliance hurdle:  the monumental California Consumer Privacy Act of 2018 (CCPA), which takes effect in 2020.  Amendments have already been passed to the CCPA and more are in the works for 2019.  Other states have begun considering enacting their own comprehensive privacy statutes.  Facing an increasingly complex and inconsistent patchwork of privacy laws both in states and internationally, U.S. businesses have begun lobbying for a federal standard to preempt the state efforts. On September 26, the United States Department of Commerce National Telecommunications and Information Administration (NTIA) published a Request for Comment (RFC) seeking input from industry participants in developing a “user-centric” set of privacy outcomes and associated goals for federal action to achieve such outcomes.  This RFC was issued into an environment where, simultaneously, the National Institute of Standards and Technology (NIST) is beginning work on a voluntary Privacy Framework.  In addition, the United States Senate Committee on Commerce, Science, and Transportation held a hearing on “Examining Safeguards for Consumer Data Privacy” on the same day.  Given these three concurrent efforts by entities within the federal government, it is apparent that industry pressure on the government to relieve companies of the increasing burden of complying with a growing patchwork of privacy laws has reached a point where federal action is inevitable. The RFC provides industry participants with an immediate opportunity to provide input on such actions through the Executive Branch. The RFC seeks input on seven user-centric privacy outcomes: Transparency – the ability for users to understand what organizations are doing with their data Control – the ability for users to have a say in what organizations do with their data Reasonable Minimization – preventing organizations from collecting or using data for more than reasonable purposes Security – ensuring that organizations protect user data Access and Correction – the ability for users to see and rectify personal data that organizations have collected about them Risk Management – ensuring that organizations take steps to prevent harmful uses of data Accountability – holding organizations responsible for their use of data The RFC also seeks input on eight goals for federal action: Harmonize the regulatory landscape – eliminate or align the patchwork of privacy regulations, at least within the United States Provide legal clarity while maintaining the flexibility to innovate – provide clear rules with which organizations can know they are in compliance Apply comprehensively – apply privacy rules to all organizations to the extent they are not governed by existing sectoral privacy laws such as COPPA, GLBA, HIPAA, and FCRA Employ a risk and outcome-based approach – allow organizations flexibility in compliance with laws (eliminate checkbox compliance) Increase Interoperability – align U.S. privacy laws with international privacy laws to decrease friction for international commerce Incentivize privacy research – encourage development of privacy protections Support FTC enforcement – provide the FTC with clear authority to enforce privacy regulations Provide Scalability – allow for scaled penalties based on reasonable factors In addition, the RFC seeks input on what next steps the Trump Administration should take, which key definitions should be included in any privacy efforts, what resource changes would be needed for the FTC to enforce privacy regulations, the impact of privacy regulation on international commerce, and other ideas commenters have to improve privacy regulations in the U.S., not mentioned in the RFC. Several organizations have already released public comment on proposed frameworks, see Electronic Frontier Foundation, Google, Interactive Advertising Bureau, Internet Association, Microsoft, and U.S. Chamber of Commerce. The RFC was released on the same day the Senate Commerce Committee held a hearing on the same topic, but under a different framework.  Unlike the RFC, the Senate is seeking to draft federal legislation to govern privacy in the U.S.  At yesterday’s hearing, representatives from AT&T, Amazon, Google, Twitter, Apple, and Charter Communications gave testimony to help the Committee formulate an approach to developing broad federal privacy laws.  In the hearing, it was clear that all industry representatives were looking to limit the growing patchwork of privacy regimes that have become a burden for organizational compliance.  Industry participants focused on federal preemption throughout their testimony.  Indeed, Senator Schutz stated that “the holy grail is preemption” from the standpoint of companies while he noted that from his perspective, such an effort is not likely to succeed  if it does not go as far as California’s recent CCPA in terms of consumer rights and protections. Some of the additional takeaways from the hearing, which may be useful for companies thinking about responding to the RFC or increasing their advocacy efforts, are: All companies present recognized the importance of protecting consumer privacy but had developed varying techniques for informing consumers and safeguarding their privacy.  Google, for example, touted its constantly evolving privacy policy and privacy settings controls in its Google Account feature Each company present had differing interests, business models, and approaches to privacy.  For example, Twitter is public by default so its privacy compliance needs will differ from those of companies which collect personal information for internal use only.  Amazon’s representative clearly stated that protecting privacy was critical to meeting its customer expectations.  Marked differences existed between paid service and free service views on several points. Multiple companies opened with statements that transparency, control, portability, security, and uniformity were paramount concerns for developing appropriate privacy regulations. The Committee spent significant time exploring how companies had endeavored to comply with the E.U.’s General Data Protection Regulation (GDPR) in an effort to understand the likely burden on American companies in complying with a similar regulation.  Google stated that it had spent “hundreds of years” of human time with a cost “multiple orders of magnitude” greater than millions of dollars to achieve GDPR compliance. Interestingly, all companies present agreed that the FTC should be provided additional resources to enforce privacy regulations, but most companies did not go so far as to agreeing that the FTC should have more rulemaking authority when it comes to privacy. Both the RFC and Google’s proposed framework suggest that users should have access to personal data they have provided and the ability to correct or have deleted such data.  Because of the January 1, 2020 compliance deadline set in the CCPA and the lead time companies need for the significant compliance efforts required by the CCPA, motivation is high to take quick action on a federal level. The RFC has an October 26, 2018 response deadline.  If you would like more information regarding U.S. or international privacy laws and regulations, please follow our updates in future on the TMCA or those issued from Dorsey & Whitney LLP’s Cybersecurity, Privacy & Social Media industry group.  

As it turns out, all that glitters is not gold.  Or at least that’s probably how Led Zeppelin feels after the 9th Circuit overturned a shiny jury verdict in favor of the iconic British rock band.  The dispute involves a copyright infringement claim that Led Zeppelin and its hirsute founders did not originate the opening guitar riff to “Stairway to Heaven.”   Instead, or so goes Plaintiff’s theory, they copied it from an obscure 1970s song called “Taurus,” written by an arguably even more obscure artist known as Randy Craig Wolfe.  The case was ultimately tried to a California jury, and included blockbuster testimony from both Jimmy Page and Robert Plant—two of the  rockin’ co-founders of Zeppelin.   The jury rejected the claim and rendered a verdict that the two songs were not “substantially similar.”  The plaintiff appealed and many thought (myself included) that the stores would all be closed on appeal.  With a word the Plaintiff got what he came for:  reversal. The 9th Circuit overturned the verdict for principally two reasons—both of which relate to the jury instructions on “substantial similarity” and “originality.”   In connection with the extrinsic test for substantial similarity, the 9th Circuit held the trial court failed to instruct the jury that the “selection and arrangement” of unprotectable musical elements (such as the descending chromatic baseline or the arpeggiated chords on top of that baseline) can be protected for purposes of copyright when they are combined in an original way.  Further, the 9th Circuit said the trial court erred when it instructed the jury that “common musical elements, such as descending chromatic scales, arpeggios or short sequences of three notes” are not protected by copyright.  These errors, says the 9th Circuit, were prejudicial to Plaintiff and can only be rectified with a retrial.  Ooh, this makes me wonder. While the 9th Circuit has repeatedly embraced the concept that combining  unprotectable elements can create a protectable work, this does not seem like a worthy reason for reversal in this case.  Why?  Because this specific musical motif that forms the basis of the copyright claim (descending chromatic baseline with arpeggiated chords on top of it) has been around for centuries.  No offense to Plaintiff (or Messrs. Page and Plant for that matter), but this riff is not original to any of them.  An Italian composer named Giovanni Battista Granata uses this same chromatic baseline and arpegiated melody in a work called “Sonata di Chittarra, e Violino, con il suo Basso Continuo.”  It was  written back in the 1600s.  You can hear it here (go to the 35 second mark).  It might just make you wonder, too, whether Plaintiff has a valid claim for copyright infringement. And as we wind on down the road back to retrial, the 9th Circuit provided guidance on a key evidentiary issue: whether the actual sound recording of Taurus embodies the protected work or the sheet music deposited with the Copyright Office.  The trial court ruled—and the 9th Circuit affirmed—that because the underlying unpublished musical work was created under the 1909 Copyright, it is the deposit copy and not the sound recording that defines the scope of protection for Plaintiff. There is definitely a bustle in Led Zeppelin’s hedgerow because of the 9th Circuit's decision to erase the verdict.  But hopefully the jury will listen very hard, and the right decision will come to it at last, as Lady Justice is buying a stairway to retrial.

A fog of uncertainty surrounds regulations in the marijuana industry. At the federal level, the plant is still a Schedule 1 substance under the Controlled Substances Act and, therefore, federally illegal to possess, sell, and distribute. However, this has not stopped states from implementing their own laws allowing their citizens to take advantage of the plant’s (and associated products’) potential benefits. With these changes, a new industry has developed providing many opportunities. Savvy business owners understand that patents, trademarks, and copyrights provide protection for their business. Protecting intellectual property can be crucial to a company’s success, especially emerging companies, but doing so is never an easy task. For the marijuana industry, with its explosive growth and unsettling legal landscape, it is even trickier given the federal laws in place. That said, there are still many opportunities for intellectual property protection in the marijuana industry. To help navigate the treacherous landscape, we will be publishing a series of posts directed to intellectual property protection for marijuana related businesses. This first post will introduce the intellectual property issues currently facing marijuana businesses and set the stage for later posts on more specific topics, such as Plant Patents, Marijuana-Related Trademarks, Patenting Paraphernalia, and more. To get us started, here are a few common perceptions we would like to smoke out: Misconception #1 – Cannabis and cannabis-related products can’t be patented or trademarked because they are federally illegal. While it is true that marijuana’s possession, use, and sale is federally regulated, the United States Patent and Trademark Office (“USPTO”) has issued and continues to issue patents directed to the plants and their extracts, as well as related devices and methods, including grow techniques, manufacturing methods, extraction techniques, and consumption devices. Like patents, copyrights in the visual artwork of a logo design can be protected by federal registration (provided the design features sufficient creative authorship). This also applies to books, pamphlets, fliers, videos, and websites. Trademark protection can be trickier. Federal trademark applications require submission of specimens of the mark to be registered, and evidence that it has been “lawfully” used in commerce. In some cases, depending upon the mark and its intended use, this may be impossible. That said, an experienced trademark lawyer, such as the authors of upcoming blog posts, may be able to identify avenues for trademark protection. The bottom line is that protection for your intellectual property, from patents to trademarks, is possible and should not be avoided. Even if you never intend to go to court with your U.S. Patent or Registered Trademark, your business may benefit from protecting those assets, because not doing so may be the same as giving them away. Misconception #2 – I can’t send marijuana related inventions and other IP via U.S. mail, so I can’t apply for protection. Securing protection for your intellectual property, in most cases, does not require providing a Schedule 1 substance to the government. The days of providing a working model or sample of your invention to the U.S. Patent Office are long gone (unless you are trying to patent a perpetual motion machine or a time travel device – but those subjects are the focus of a completely different blog…). With regard to trademark and copyright applications, which do require submission of a specimen or copy of the artistic work, it’s likely that some of your rights can be protected without making reference to the controlled substance. Works of art filed with the Copyright Office do not need to be associated with any particular product and trademark applications can be drafted to cover lawful goods only, such as “t-shirts” or “kitchen grinders.” It’s probably wise to then avoid submitting specimens that obviously show you’ve sold a controlled substance or related paraphernalia in interstate commerce. An experienced attorney can help determine options for safely filing those submissions. Misconception #3 – I can’t enforce my IP rights, even if I can get them. This is where it gets a little more sticky and uncertain. Because it is a relatively new concept to obtain intellectual property protection for marijuana and marijuana-related products, it will take some time until enough litigation has occurred to give a clearer picture of the overall trends. To date, we know of only one pending infringement case related to cannabis. It was filed July 30 in Colorado. We won’t know the outcome for several months – maybe even years. This article was original published on the Dorsey Cannabis Blog.  For more information about Dorsey’s cannabis industry practice, visit www.dorsey.com/services/cannabis.

Late last year, in a decision that bears continued attention, the Trademark Trial and Appeal Board held that oppositions to Madrid Protocol applications filed under Section 66(a) are limited to the grounds set forth in the electronic filing ESTTA cover sheet. Serralles, Inc. v. Kabushiki Kaisha Donq. Moreover, an opposer is precluded from amending a notice of opposition to add grounds beyond those set forth in the cover sheet. In Serralles, the opposition was filed based on a likelihood of confusion with the opposer’s marks in various pleaded registrations, covering only rum. In its trial brief, the opposer further argued a likelihood of confusion based on its common law rights in the same marks as used on other goods/services (rum cakes, chocolates, and bar services). The applicant objected to any arguments based on the asserted common law rights, as opposer had not pleaded them in its ESTTA cover sheet. The Board treated the opposer’s position as an attempt to amend the pleadings to add common law rights, denied that attempt, and gave no consideration to the opposer’s common law rights. Its reasoning was simple: Trademark Rule 2.104(c) means strictly what it says and precludes asserting grounds other than those set forth in the cover sheet. Further, Trademark Rule 2.107(b) precludes any amendment to add grounds not set forth in the cover sheet. One might wonder whether attempting to introduce evidence of use of a pleaded mark for goods/services in addition to those set forth in the registration should be construed as new “grounds,” but it seems clear in light of the Board ruling that they are. The Board noted that the cover sheet includes a “check the box” ability to enter unregistered marks and their associated goods/services, and the opposer’s failure to avail itself of that option was essentially dispositive. Experienced practitioners should be aware of the desirability of alleging common law rights that may exist in addition to registration rights in a notice of opposition. Serralles highlights that it is “speak now or forever hold your peace” when opposing Madrid Protocol applications, and the speaking must be done on the cover sheet. What remedies would the opposer have in related proceedings? In fact, the opposer appealed to the Federal Circuit, and the parties reached a settlement in which the applicant amended its application to delete certain goods/services. Perhaps the opposer could have asserted its common law rights in a cancellation proceeding or a district court action, but res judicata may have prevented such procedural steps. In any event, the practice pointer is clear: an opposer to a Madrid Protocol application must be especially vigilant to assert all grounds for opposition and bases for asserted rights – both registered and unregistered – in the cover sheet.

As we reported this spring, the “Music Modernization Act” (MMA) working through Congress avowed to bring the royalty determination formula for digital music services into the 21st Century.  In April, the House of Representatives actually approved the MMA unanimously (415-0), likely one of the few, if only, things the House has agreed upon in some time.  Not to be outdone, the Senate just last week unanimously passed the bill (with significant changes), and renamed it the “Orrin G. Hatch Music Modernization Act,” for good measure.  (Apparently, the Hon. Mr. Hatch is a songwriter in the Christian pop genre, having composed lyrics to more than 300 songs.)  The MMA was sent back to the House for consideration of the Senate changes and was unanimously approved.  Now, President Trump just needs to sign it and what was a mere bill will become a law.  With the exception of satellite radio providers and some streaming services, the vast majority of the music industry is elated about the MMA, which was basically written by and for various interests in the industry. Recall that there are two separate, primary expressions of music subject to copyright: 1) the song composition (i.e., the words and music embodied in sheet music); and 2) the sound recording (i.e., the performance of a song by an artist you hear on the radio or your MP3 digital download).  The ability to collect a royalty for the use of these two forms of the same song is different and it further differs when the sound recording is in a digital form. A license to reproduce the composition (e.g., on a record or CD, or in a digital file) is called a “mechanical right.”  Over time as recording mediums evolved beyond a piano paper roll into phonographs, cassette tapes, compact discs, and now digital files, the mechanical royalty has been applied to each new medium such that the songwriter receives a royalty for copies made.  If copies of the song are sold even once, then anyone else can record and sell their sound recording of the song, without any negotiation over terms, as long as they pay the mechanical license royalty. The primary focus of the MMA is to create a new mechanical rights clearinghouse called the “Mechanical Licensing Collective” (MLC) with a mandate to grant blanket mechanical licenses for streaming and interactive digital music delivery services and to remove the penalty for failure of notice to songwriters.  The MMA charges the Copyright Office to solicit applications for an entity to undertake the functions of the MLC and report to a 14 member board.  The Copyright Office must reevaluate and potentially rebid the MLC provider every 5 years. Any public performance of a musical composition (which includes broadcast radio) is subject to a compulsory license fee to the songwriter only.  The performing artists that make the sound recordings playing on the radio do not receive any compensation for the performance.  However, the providers of “digital performances,” i.e., satellite radio and digital music streaming services do have to pay royalties to the owners of the sound recording (i.e., the performers). The CLASSICS Act (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act), which is rolled into the MMA, extends the rights of owners of sound recordings to collect royalties for digital performances to songs recorded before 15 February 1972, which were exempt under the previous statutory scheme.  Terrestrial broadcasters are still exempt from payment of any license fees to the artists for playing their songs on the radio, for either pre or post 1972 recordings.  This is why satellite radio broadcasters and some of the digital music streaming services are not happy about the MMA. Interestingly, the CLASSICS Act specifically states that pre-1972 recordings are not copyrightable subject matter under the Copyright Act, but that most of the remedies available to a copyright holder under the Copyright Act are available to owners of sound recordings.  Thus, the CLASSICS Act does not preempt state and common-law rights for infringement of sound recordings as presently exist in a few states.  Rather, the new federal law merely complements those other rights. Finally, the MMA incorporates The AMP Act (Allocation for Music Producers Act), which provides for distribution “to a producer, mixer, or sound engineer” who was part of the creative process that created a sound recording, a portion of the payments to which the payee would otherwise be entitled from the licensing of transmissions of the sound recording.  The AMP Act thus creates an entirely new class of rights-holders who are often incredibly involved in the creation and artistic development of sound recordings, but who have never participated in receipt of royalty revenue for performances of the sound recording they helped create.  Note again, these royalties are limited to those collected from digital satellite broadcasts or streaming services and not from radio performances. It appears that the dueling pianos of the House and Senate are now playing the same tune and the MMA will be enshrined in the Copyright Act.  Most industry stakeholders are excited about this “modernization” of the Copyright Act.  Consumers of satellite radio and streaming services may see a rise in fees to cover the additional royalty schemes put in place on decades of music that was previously immune.  Not to fear though—you can still get your music free on the radio.

We are back from the 2018 National Advertising Division Annual Conference: The Truth About Advertising Law – Recent Developments and Best Practices that took place over two days in downtown New York.  We heard from the NAD Director, NAD staff attorneys as well as staff of the Bureau of Consumer Protection at the FTC.  If you didn’t make it this year, don’t worry – here’s a quick wrap-up of the highlights: Monetary Remedies – In his keynote address, Andrew Smith, the FTC’s Director of the Bureau of Consumer Protection, discussed the recent emphasis on monetary remedies in FTC enforcement actions and on findings and admissions as a part of the settlement process. He closed with a word to the wise, that even though the FTC is operating under a Republican administration that might be perceived as low-regulatory in general outlook, the agency still intends to bring national advertising enforcement actions where appropriate. Numerical Claims - There was a lively discussion of appropriate sample size for market research and statistical analysis – the takeaways were that NAD expects that a sample size will be “robust enough to be statistically significant” and that the survey respondents will be representative of the actual consumer market; helpful insights were provided about the proper way to make numerical ratio claims when comparative results have a confidence level range–definitely consult someone with statistical expertise before making these types of ad claims! Customer Reviews - In the session on use of consumer reviews as a basis for advertising claims, Martin Zwirling of the NAD talked about the importance of transparency, authenticity and the representativeness of consumer reviews.  As we’ve blogged about before, verified consumer reviews are extremely important as well as disclosure of whether consumers were incentivized or provided products for free before posting reviews. Health Claims – As always, we saw a focus on health claims.  One panel covered evidentiary standards in the area of health-related claims in courts, the FTC and NAD, and how they differ. There was a lively debate about p values, but the panel members all agreed that when advertisers make health claims, the claims need to fit the evidence. Social Media Posts as Ads – Leslie Fair, the author of the incomparable FTC Business Blog, noted that over the past year so many of the ad claims that the FTC has focused on have been founds on social media, including on Instagram, Facebook and Twitter.  This was the case with one of the latest FTC enforcement actions in the arena of “made in the USA” claims, where the advertiser posted on social media with #AmericanMade. ICC Marketing Code Updates – The International Chamber of Commerce released an update to its advertising self-regulatory code on September 25 live at the conference. The ICC Marketing Code seeks to protect consumers by setting out the dos and don’ts for responsible marketing to ensure legal, honest, decent and truthful communications and practices. While the basic principles of truth and honesty have not changed, these updates cover: (i) native advertising (i.e. distinguishing marketing communications content from true editorial and user generated content); (ii) new digital mediums; (iii) direct marketing and digital marketing communications; (iv) mobile phones, location-based advertising and interest-based advertising and (v) advertising to children and teen. Until next year.

Late last week, the Trump Administration released the National Cyber Strategy of the United States of America, purportedly the first such document released by the government in 15 years.  According to the introduction by the President, the Cyber Strategy “is a call to action for all Americans and our great companies to take the necessary steps to enhance our national cybersecurity” (emphasis added). The new Cyber Strategy outlines four pillars for advancing the cybersecurity posture of the United States: Protect the American People, the Homeland, and the American Way of Life Promote American Prosperity Preserve Peace through Strength Advance American Influence Language in the first pillar indicates a significant effort may be forthcoming by the federal government to improve threat intelligence sharing with the private sector: The United States Government will strengthen efforts to share information with ICT [Information and communications technology] providers to enable them to respond to and remediate known malicious cyber activity at the network level.  This will include sharing classified threat and vulnerability information with cleared ICT operators and downgrading information to the unclassified level as much as possible. In the same section, the Cyber Strategy indicates a heightened focus on third party information security risk: We will promote an adaptable, sustainable, and secure technology supply chain that supports security based on best practices and standards. The United States Government will convene stakeholders to devise cross-sector solutions to challenges at the network, device, and gateway layers, and we will encourage industry-driven certification regimes that ensure solutions can adapt in a rapidly evolving market and threat landscape. Finally, the language contained in the third pillar, coupled with statements last week by National Security Adviser, John Bolton, have been generating quite a buzz in the cybersecurity community as they signal a shift of American posture in the cyberwarfare arena to a strategically offensive posture. Of note in the third pillar is this language: “All instruments of national power are available to prevent, respond to, and deter malicious cyber activity against the United States. This includes diplomatic, information, military (both kinetic and cyber), financial, intelligence, public attribution, and law enforcement capabilities. The United States will formalize and make routine how we work with like-minded partners to attribute and deter malicious cyber activities with integrated strategies that impose swift, costly, and transparent consequences when malicious actors harm the United States or our partners.” “The United States will work with partners when appropriate to impose consequences against malicious cyber actors in response to their activities against our nation and interests.” “The United States will use all appropriate tools of national power to expose and counter the flood of online malign influence and information campaigns and non-state propaganda and disinformation.  This includes working with foreign government partners as well as the private sector, academia, and civil society to identify, counter, and prevent the use of digital platforms for malign foreign influence operations while respecting civil rights and liberties.” (emphases added) In all, it is yet to be seen what mandates may stem from this strategy to the private sector, but it stands to reason that the current administration will be heightening its focus on private sector cooperation in defending the nation’s infrastructure.  Companies, particularly in the IT sector, should recognize that a new focus on threat intelligence sharing, vendor management, and even the possibility of participating in offensive capabilities are on the near horizon and should begin evaluating their current posture on these fronts (and others mentioned in the Cyber Strategy).

On 12 September 2018, the EU Parliament adopted a revised draft of the directive on Copyright in the Digital Market. The proposed legislation includes some significant changes to the copyright regime and a couple of surprise additions introduced in the last minute by the EU Parliament. These issues will spark much debate in the months to come, particularly surrounding the likely impact of these reforms on the way content is shared, used, disseminated and published on the internet. Though this is a significant step in the legislation process, there is yet a long way forward. Firstly, the draft legislation itself now must be considered by the European Council representing each of the member states of the European Union. This may result in many further changes to the text, possibly significant ones, before the legislation is passed into law. Then, once the directive becomes law, it will have to be implemented through domestic legislation in each member states of the EU. Only then will the full practical impact of the provisions become apparent. The proposed legislation covers several different issues. It introduces modifications to the list of exceptions to copyright protection particularly in the areas of education and research and also creates special new exceptions to copyright protection to allow for data mining activity premised on access to large amounts of copyright materials. But the main emphasis in the draft directive is on reinforcing copyright and helping rightholders protect their works against unauthorised exploitation, particularly in the digital space. Some argue (particularly in the context of Article 13 that deals with the prevention of infringements by content sharing platforms) that this will translate into forcing technology platforms to apply filters and censorship in order to proactively prevent infringing content being shared by their users, which internet activists argue would stifle free speech. However, the legislation is much more nuanced than that and clearly seeks to put in place safeguards against over-protection. Further, the text sets out high-level ideas that will have to be broken down into practical legal rules. This will only happen when the directive is implemented by EU member states. It is very difficult at this stage to predict how some of the principles laid out in the draft directive will be implemented and what impact they will have on the way content is used on the internet. The draft directive also seeks to create new rightholders. Publishers will have their own independent rights equivalent to those of authors, for a limited protection period of 5 years. This is intended to ensure that publishers can claim a fair share of the benefit from the dissemination of their publications by third parties through the internet. The revised text emphasises in this context that copyright protection will not prevent the free use of hyperlinks that lead to protected content published online. However, the new rights of publishers may force search engines and other digital players to pay royalties, for example, when published content comes up in search results. The draft legislation, however, is not all good news for publishers. It introduces radical ideas for the protection of authors who grant exclusive licences to publishers. According to the proposal, authors who license their works to publishers will have statutory rights to receive annual detailed reports regarding the exploitation of their works and will have the right to revoke exclusive licences granted to publishers if the work is not properly exploited. Very similar ideas were recently adopted into law in Germany. The proposal was added only very recently to the draft directive by the EU Parliament. It was not included in the original draft directive published in 2016 by the EU Commission. Query whether other EU member states will agree to adopt a similar protective approach across the EU. The publishing industry, which is set to enjoy the creation of a special copyright protection for publishers, will surely balk at the idea of facing new onerous reporting requirements and potential disruption to their portfolios of works with many of their licences set to become revocable overnight. Another surprise addition in the text of the directive is the novel idea that organisers of sports events will enjoy copyright protection for those events. Sports events do not generally attract copyright protection, although organisers of those events generate significant revenues from selling broadcasting rights (which they can do largely by controlling access to the events). It is not entirely clear why the EU Parliament decided that the sports industry requires additional protection by creating a special type of copyright for sporting events. The draft legislation offers no clue as to what that right might consist of. The new draft Copyright in the Digital Market directive opens up many questions and may indicate significant reforms to come. The legislation, however, is still a long way from being the final product.  Stay tuned to the TMCA for more updates.

Did you know that there are likely billions of unprotected IP works in nearly every consumer electronic sitting on your desk or held in your hand? Today, it seems like every electronics device maker is announcing there are something like seven billion transistors on a single “chip” that measures just a few nanometers, just small enough to easily fit onto your thumb (and intended to be used in a light weight smartphone or similar device).  These new chips have central processing units (CPUs to run the device), graphics processing units (for the visual aspects), and now additional units for machine learning and AI. Technology like this has rendered the little-remembered “mask work” IP right essentially obsolete, which was a new right created by the Semiconductor Chip Protection Act of 1984 to protect the fabrication process for chips through the use of a “mask”.  Back in the old days (of technology), the 1970s, there were only a small amount of “chips” powering these electronic devices, which took years to create, making their creators want some IP protection for all of that money and creativity spent on such designs. At that time, some companies were trying to knock off the “mask” designs of these chips by reverse engineering them, and then selling them at a fraction of the price.  This infringement fell outside the realm of patent law because these pirated designs were not protectable inventions, but rather designs etched onto the chips of already patented devices. But the designs also fell outside the scope of traditional copyright protection, because they were functional and not aesthetic. And trade secret protection failed as well once the design was introduced to the public. After much lobbying by the semiconductor industry, Congress settled on creating a new type of copyright for a “mask work” for these semiconductor designs. In 1984, Congress passed the Semiconductor Chip Protection Act (“SCPA”) and created an entirely new IP right, the first new IP right in 100 years. See 17 USC, Chapter 900. Yet, according to a study from 2012, there were only a little over 1000 mask works registered with the Copyright Office between 2008 and 2012, a fraction of the other types of IP works registered or granted during that time. (See “Copyright Registrations: Who, What, When, Where and Why”, Oliar, Patterson, Powell, Texas Law Review, Vol. 92:1225). Only one federal case, Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555 (Fed. Cir. 1992), ever analyzed the statute in detail and found a violation. Brooktree did upheld a substantial jury verdict under the SCPA, but only where there was a clear ability to compare the protected work and the infringing chip. Mask works have, in practice, proven to be a footnote to copyright law. Technology simply moved too fast to make the SCPA relevant.  Modern smartphones are a demonstration of why this IP right is obsolete.  It would be technically impossible to reverse engineer the “mask” of a smartphone “system on a chip” containing seven billion transistors that fit on your thumb in the time necessary to merit an SCPA violation, which would be similar for virtually all of the chips in electronics these days.  And even pirating a small portion of the design would be useless because the chips are so specialized to be used for a specific company or product that such a design would not be commercially viable.  For that reason, the SCPA never quite found its audience. Chip designers, however, are not without recourse under the IP laws. Many aspects of chips’ designs remain protected by patents, and have been litigated extensively over the years. And any piracy that concerned the industry would probably fall under trade secret law, given that most companies choose to keep designs and aspects of their processes secret. Relatedly, companies do not typically disclose their designs to the public under the SCPA, which is why there are so few mask work registrations. The SCPA appears to be destined for the dustbin of history.

If you have encountered any issues accessing WHOIS information, the International Trademark Association (“INTA”) wants to hear from you. Due to changes in privacy law brought on by the European Union’s General Data Protection Regulation (“GDPR”), it is becoming more difficult or impossible to access once-commonly available public WHOIS information, which consists of registrant information for domain names. We have written on this topic in more detail here and here. Here’s the short story: because providing WHOIS information risks violating GDPR, which could result in the imposition of potentially catastrophic fines, some domain name registrars are opting not to provide WHOIS information, despite requirements by the Internet Corporation for Assigned Names (“ICANN”) that registrars provide the information. As a result, it is becoming more difficult for rights holders to identify and take action against owners of domain names containing infringing materials. To help track and catalogue these issues, INTA has created a dedicated email account at whoischallenges@inta.org. Those encountering WHOIS problems are encouraged to send the following information to INTA: Where the problem is occurring (country, location, or jurisdiction). What the nature of the problem or case is (a procedure, a piece of evidence, or a venue). Anonymous descriptions of the actors or people involved (provide industry and/or non-specific information about the actors involved). INTA plans to use this information as part of its advocacy efforts. So if you have encountered any issues, be sure to alert INTA. It is worth noting that it is still possible to file arbitration proceedings against infringing domain names, using the Uniform Domain Name Dispute Resolution Policy (“UDRP”) or Uniform Rapid Suspension System (“URS”), even if the WHOIS information for the domain names is not available. According to the World Intellectual Property Organization (“WIPO”), a complainant should simply list the registrant information exactly as it appears in the WHOIS report, even if that information consists only of the word “Redacted.” Once alerted of a UDRP or URS proceeding, ICANN-compliant registrars are required to give the arbitration provider the full, unmasked registration data for the domain name(s) covered by the complaint. The complainant typically would receive this information and then, if necessary, may amend or withdraw its complaint based on the information revealed.

Last Friday, the 9th Circuit Court of Appeals finally put to bed a copyright dispute that many viewed as nothing short of bananas.   Naruto v. Slater—dubbed the “Monkey Selfie” case—raised the novel (if not bizarre) question of whether a non-human primate has standing to sue for infringement under the U.S. Constitution and the Copyright Act. In case you have been monkeying around and have not kept up on this case, here is a quick snapshot of what happened and how we got here:  Naruto is a “crested macaque,” which as near as I can tell means Naruto is a monkey.  At all times relevant hereto, Naruto lived in a wildlife reserve in Indonesia.  Back in 2011, Wildlife photographer David Slater—with camera in hand—visited Naruto’s island habitat.  Slater left his camera unattended.  It was then snatched up by Naruto who ended up taking a number of “selfies.”  Slater returned to the U.K. and published a book containing the Naruto selfies. We eventually come to find out that Slater did not obtain a copyright assignment or even a license from Naruto! PETA catches wind of this and, as a “next friend” of Naruto, sues Slater on Naruto’s behalf for copyright infringement in the U.S. District Court for the Northern District of California.   Naruto sought injunctive relief, disgorgement of profits, actual damages, and attorneys’ fees.  (Side note:  Naruto was overreaching a bit on the request for attorneys’ fees because he did not register his selfies before the act of alleged infringement by Slater). The trial court found the copyright claim to be too far of a walk in the wild, and dismissed the case.  The 9th Circuit affirmed.  The majority analyzed three issues: (1) whether PETA had standing to bring the case on behalf of Naruto (answer: “no”); (2) whether Naruto himself had Article III standing (answer: “yes”); and (3) whether Naruto had statutory standing under the Copyright Act to bring the claim (answer: “no”).  In addressing this final issue of standing under the Copyright Act, the majority noted there were “several provisions” of the Act regarding copyright transfers from the “author” to “children” that suggested that animals don’t have standing.  There are arguably several other provisions the majority could have cited.  For example, each copyright application needs to be “certified” by the claimant. See 17 U.S.C. § 409.  How exactly would Naruto go about making such a certification?  Moreover, a copyright plaintiff (in certain circumstances) is entitled to elect between statutory damages and actual damages.  See 17 U.S.C. § 504(c). How would we know if Naruto made such an election? In any event, the concurring opinion argued that the whole case was nothing short of a circus and because PETA had no “next friend” standing the case was frivolous and should have been dismissed without any further discussion or analysis. That might have been the end of the matter for the 9th Circuit, but an “unnamed Ninth Circuit judge” requested a rehearing en banc, which was ultimately denied on Friday by a vote of the entire Court.  With that final act, it is now safe to say that “monkey see, monkey sue,” simply will not do at least in the 9th Circuit.   But as George Carlin once said, “Just because you got the monkey off your back doesn’t mean the circus has left town.”  For all we know, the circus just might be headed to Washington D.C.

Last month we blogged about Falkner v. General Motors Co.—a federal court action filed earlier this year that may decide whether graffiti artists can enforce their copyrights in graffiti appearing on publicly-viewable buildings when photographed and distributed without their consent. As we detailed in our post, this issue raises novel and complex legal questions. On August 27, 2018, Judge Wilson of the Central District of California heard oral arguments on GM’s motion for summary judgment. As we wait for the court to rule, we bring you up to speed on the current state of play. The parties’ summary judgment briefing highlighted a key ambiguity at the center of the dispute: neither the Architectural Works Copyright Protection Act (“AWCPA”) nor the Ninth Circuit decision interpreting it clearly resolve whether pictorial, graphic, or sculptural (“PSG”) elements can be freely photographed after they are incorporated into architectural works. Consistent with that ambiguity, the court’s questions at oral argument were primarily directed to Leicester v. Warner Bros.—the Ninth Circuit opinion that both Falkner and GM cite for competing propositions regarding the status of PSG elements like the graffiti at issue. In fact, the court stated that “it’s somewhat difficult to discern what the holding is from the case” before openly grappling with whether or not it resulted in binding precedent. The court struggled with the same issue that emerged as unresolved in the parties’ briefing: did the doctrine of conceptual separability survive the 1990 enactment of the AWCPA and, if so, is it relevant here? GM’s counsel attempted to resolve the issue by arguing that regardless of Leicester’s holding, conceptual separability is irrelevant because the graffiti in question cannot be separated from the building. Instead, he focused on the AWCPA’s intent, characterizing the statute’s exemption allowing photographs of architectural works and any incorporated PSG elements as a “rule of practicability.” He thus hinged GM’s position on what amounts to a policy argument, insisting that “the person taking the picture shouldn’t need a copyright expert standing next to them to decide whether they can do that.” GM’s counsel maintained that the AWCPA and Leicester require the court to grant GM’s motion for summary judgment as a matter of law and policy, and implied that all photographs of buildings that depict PSG elements are exempt from copyright infringement suits because it would be impracticable to find otherwise. But when the court pressed GM’s counsel on the AWCPA’s impact on pre-AWCPA copyright protections and Leicester’s failure to clearly resolve whether conceptual separability survived the statute’s enactment, GM’s counsel softened his position. Instead of arguing that a bright-line rule exempts all photographs of architectural works without exception, he proposed a novel interpretation by arguing that conceptual separability survives “only to the point that if you can find a way to isolate the mural and take a picture of the mural, then Mr. Falkner can get his copyright, and he can be protected against people just selling copies of the mural by themselves.” The court appeared skeptical of this interpretation, noting its absence from the Ninth Circuit’s analysis in Leicester: “I mean, why didn’t they just say what you said and call it a day?” Undeterred, GM’s counsel argued that “two of them did,” adding that “it’s not our position that conceptual separability is dead” if graffiti can “literally” be separated from the architectural work. GM’s counsel did not offer a framework for putting this proposal into practice, and his efforts to ground it in Leicester only served to underscore that decision’s ambiguity. Further advancing the view that Leicester may be too ambiguous on the question of conceptual separability to act as binding precedent, Falkner’s counsel agreed that Leicester may be binding on the court, only to argue that its holding is the opposite of the one identified by GM’s counsel. In short, neither the parties’ arguments nor the court’s questions suggest which way the court will rule on GM’s pending motion for summary judgment. The only thing that is clear at this point is that Leicester’s status as binding precedent on the question of conceptual separability is in doubt. And regardless of the outcome, the court’s ruling in Falkner v. General Motors Co. may well give the Ninth Circuit a chance to clarify the scope of the AWCPA’s photography exemption as it applies to separately copyrightable works embedded in architectural works.

A recent Second Circuit decision in a case involving two companies using the ROGUE mark for apparel sets the record straight on what it means to have common law priority of rights in a mark for a category of goods in different trade channels. Excelled Sheepskin & Leather Coat Corp. v. Oregon Brewing Company (2d Circ. July 27, 2018). The opinion confirms that a senior user of a mark for a category of products has protectable prior rights across a wide range of trade channels even if it was not the first user of a mark in each and every marketing channel. Oregon Brewing Company (“OBC”) was founded in 1988 and first sold ROGUE-branded clothing, including t-shirts, hats, sweatshirts and aprons, in about 1989, as an adjunct to its primary beer and brewing business. The apparel items were sold through the United States in its pubs, brewery, bed and breakfasts and hop farm. Starting in the mid-1990s and continuing through the early 2000s, OBC expanded its trade channels to beer festivals throughout the country, mail order nationwide and to retailers like Fred Meyer, Cost Plus and Whole Foods. In 2011, OBC began selling its ROGUE clothing through department and “clothing-only” stores such as Urban Outfitters, Nordstrom and Sears. Excelled, a company founded in 1927, first began selling leather clothing under the ROGUE brand in 2000. Following the 2008 recession, it expanded its product line to include more non-leather products, and began selling a variety of clothing and footwear items bearing the ROGUE mark in department and clothing-only stores like Nordstrom, Saks and Macy’s as well as through websites, including its own. Both Excelled and OBC applied to register the ROGUE mark for clothing in 2004 and 2005, respectively. Ultimately, the two parties entered into a consent agreement that enabled OBC to secure a registration of ROGUE for all clothing “excluding jackets, coats and skirts” with a further narrowing requested by the USPTO to specify “sold primarily in the trademark owner’s brewpubs and website.” OBC consented to Excelled’s registration of ROGUE for “jackets, coats and skirts” based on Excelled’s agreement to delete shirts, pants and vests from its pending application. Excelled’s ROGUE mark ultimately registered for “clothing, namely, coats, jackets, vests, shirts and pants” -- without the deletions to which it had allegedly agreed with OBC. In 2012, Excelled sued OBC for trademark infringement arising from OBC’s sale of ROGUE-branded apparel in department and clothing-only stores beginning in 2011. OBC asserted counterclaims for infringement based on Excelled’s sale of t-shirts, sweatshirts and hats beginning in 2009 and for cancellation of four of Excelled’s federal trademark registrations on the ground of fraud. On cross-motions for summary judgment, the district court granted judgment in favor of Excelled on its trademark infringement claims, dismissed OBC’s counterclaims, awarded damages and fees and entered an injunction against OBC’s sale of ROGUE apparel except where its branded beer is sold as a complement to its brewing and beverage business. The essential premise of the district court’s ruling was that Excelled had priority of rights in the ROGUE mark in department and clothing-only stores, since Excelled had exploited that sales channel first, even though Excelled was not the prior user of the ROGUE mark on clothing in other channels. The district court further concluded that OBC’s rights in the ROGUE mark for clothing were limited to “sales as complements to and for promotion of its beer business.” The Second Circuit held that the district court had gotten the rules of trademark priority all wrong. As the court explained, OBC had been continuously selling ROGUE-branded clothing throughout the United States since 1989. “Even if those uses were intended primarily to support OBC’s ROGUE trademark for beer, they were nonetheless bona fide continuous nationwide sales in significant quantities and were sufficient to establish a protectable priority in use of the mark for the sale of such goods.” Even more importantly, while OBC’s first use of the ROGUE mark for clothing did not give it exclusive rights to expand into unrelated good or services, OBC’s rights were not limited to the types of stores in which it had exploited the mark: “The law does not limit the owner’s trademark rights to the types of stores in which it has sold, leaving the mark up for grabs in any other types of stores.” The fact that OBC did not sell its ROGUE clothing prior to 2011 in department and clothing-only stores “does not mean that a new user was free to usurp OBC’s priority in such stores.” As the court emphasized, the dispute at hand did not involve OBC undertaking to use the ROGUE mark on goods for which Excelled had established priority. “OBC maintained its senior common law rights against Excelled’s intervening junior use of the mark for the same items of ROGUE-branded clothing that OBC had sold continuously since 1989.” Finally, the appellate court underscored that Excelled’s federal registrations did not change the analysis. The district court “reasoned incorrectly” that Excelled’s federal registration conferred any substantive trademark rights against infringement beyond the common law rights acquired through use of the mark. Accordingly, Excelled’s registrations did not confer priority over OBC’s prior common law use rights. The reversal of fortune for Excelled was wide-ranging: the Second Circuit reversed the grant of summary judgment to Excelled on its infringement claims, the award of an injunction and damages and fees against OBC. The court further reversed the district’s dismissal of OBC’s counterclaims for infringement and cancellation of Excelled’s trademark registrations and remanded those claims for trial. The decision is interesting not only for its clarification of the rules of common law trademark priority, but also for the court’s robust interpretation of OBC’s rights in the ROGUE mark for apparel based on nationwide use in expanded trade channels, even though the use of the mark on clothing items had originated as a promotional vehicle for OBC’s primary beer and brewing business.

In what could be a harbinger of things to come for business models negatively impacted by the throttling of data flow under the European Union’s General Data Protection Regulation (“GDPR”), Nielsen Holdings was named in a putative class action Complaint on August 22, 2018, for allegedly misrepresenting the anticipated effects of GDPR on Nielsen’s business model.  Importantly, the class action takes aim not at Nielsen’s ability to comply with GDPR, but rather the effects of GDPR on the big data platforms used by Nielsen.  Nielsen provides consumer market analytics, particularly regarding digital media and e-commerce.  When big data platforms and associated analytic providers began restricting access to consumer data in order to comply with GDPR, it apparently negatively impacted Nielsen’s business model.  Those effects surfaced in Nielsen’s latest Q2 financial report, causing its stock to drop by more than 25 percent, and giving rise to the class action claims. The claims are based on Nielsen’s downplaying of anticipated changes in the privacy space, as initially provided by the company’s CEO, who stated, “For measurement, we still have the access to all the data that we need for our measurement products including our relationship with Facebook.”  When Nielsen released its Q2 report, however, the company conceded, “Our results are significantly below our expectations as revenues were impacted by GDPR and changes to the consumer data privacy landscape.  We have several hundred clients and data partners in this space and market changes have been disruptive.”  In the Q2 report itself, Nielsen acknowledged it had missed its targets, and downgraded its EBITDA margin growth, net income, and free cash flow. The claims are hardly a slam dunk.  Beyond the traditional challenge of linking the difference in anticipated versus actual performance to a specific event like the ripple effects of GDPR, the plaintiff class will have to prove that Nielsen and its CEO knew—at the time it issued its public statements—that Nielsen likely would in fact be materially and negatively impacted by the GDPR’s effect on the big data ecosystem, particularly the availability of data necessary for Nielsen’s model.  Critical to this inquiry will be the actual analysis conducted by or on behalf of Nielsen as to the impacts of GDPR on Facebook and others, and on which Nielsen and its CEO may have relied in earlier statements designed to reassure investors. The important take-away from these claims, certainly for publicly traded analytical services companies likely to be affected by changes in the privacy space but perhaps even others as well, will be to consider carefully any public statements about the impacts of GDPR and similar privacy initiatives in the US and abroad.  Establishing that Nielsen knew its data sources were restricting access in a manner that would affect Nielsen’s business model, and that Nielsen failed to reflect that knowledge in its public statements will be required to prove claims for violations of Sections 10(b) and 20(b) of the Exchange Act (the latter against Nielsen’s individually named CEO and CFO), as well as Rule 10b-5 violations. Many companies, including those squarely in the wheelhouse of new privacy requirements, rolled out new privacy policies and practices only moments before GDPR took effect, or are still in the process of doing so.  Analysts are asking more informed and challenging questions about the impact of GDPR.  While ‘I honestly don’t know’ may be an accurate response and avoid liability for wrongly predicting the financial fallout from GDPR and similar initiatives, it may not be much comfort to investors.

In three separate opinions, a panel of the Ninth Circuit revived a pro se plaintiff’s claim that defendants’ television series “Empire” infringed upon his copyrighted “treatment” for a television series entitled “King Solomon.”  A treatment is a brief, written work that embodies the writer’s ideas for a show.  The district court dismissed plaintiff’s complaint concluding he had failed to allege facts showing Empire had copied protectable elements of his treatment for King Solomon. While the majority of the Ninth Circuit agreed that plaintiff had failed to allege facts showing coping of protected elements of the treatment, it concluded the district court erred by not granting leave to amend.  The majority concluded leave to amend was necessary because plaintiff could have alleged facts showing a striking or substantial similarity between the two works, and additional facts establishing a “plausible chain of events” whereby defendant had access and opportunity to copy plaintiff’s work. In a concurring opinion, Judge Wardlaw also focused on the substantial similarity element of an infringement claim, and argued that it was “virtually unheard of” to dismiss a complaint for lack of substantial similarity at the pleading stage before any discovery.  Judge Wardlaw also wrote that judges are not “trained in the process of developing a short treatment into a fully developed television show,” and suggested that “[d]iscovery and the expertise of persons who understand the landscape of television at the time King Solomon was written would have greatly informed the decision as to substantial similarity.”  Judge Wardlaw also opined that leave to amend was appropriate. By contrast, in her dissent, Judge Nguyen acknowledged that plaintiff could potentially amend to allege copying, but argued that copying alone is not enough.  Instead, a plaintiff must also allege facts establishing “unlawful appropriation,” or copying of protectable elements.  Judge Nguyen opined that whether an element of a work is “protectable” is a question of law for the court, and that while expert testimony and discovery could be useful for establishing what similarities exist between two works, the court alone decides what elements of the work are protectable.  The district court’s role, in the first instance, was to "filter out" the unprotectable components from the protectable, and then decide whether there were any similarities between the protectible expression and the allegedly infringing work.  Both works were before the district court and the Ninth Circuit, and Judge Nguyen argued that when the unprotectible ideas were disregarded, there were simply no similarities between the two works as a matter of law. It will be interesting to see where this case goes next.  It is somewhat unusual to have three separate opinions from a three judge panel.  Moreover, the concurring opinion and dissenting opinion are like ships passing in the night.  The concurring opinion contends discovery and expert opinion is relevant to whether plaintiff can establish copying, but does not address whether such additional information is necessary if there are no protectable similarities between the two works.  Similarly, the dissent fails to acknowledge that after a court differentiates the protectable from the non-protectable, a fact question could still exist regarding whether any protectable ideas are strikingly or substantially similar, and whether it would be useful to have expert opinion or discovery on this issue.  The dissension at the Ninth Circuit makes this case potentially ripe for en banc review.  The defendants have filed a request for an extension of time to seek en banc review, which request has already been granted.  

A trademark will be deemed abandoned under Section 1127 of the Lanham Act when the mark’s use has been discontinued “with intent not to resume such use.” Proof of non-use for three consecutive years will give rise to a presumption of abandonment, which can be rebutted by evidence of plans to resume use of the mark. What constitutes sufficient evidence of an intent to resume use of a trademark?     In a recent decision by the Court of Appeals for the Fifth Circuit, the owner of the trademark COWBOY LITTLE BARREL for bourbon was unsuccessful in overturning a jury verdict of abandonment due to insufficient evidence concerning the reasons for the lack of use and plans to resume use. Allied Lomar, Inc. v. Lone Star Distillery, LLC. According to U.S. Patent and Trademark Office records, Allied claimed first use of COWBOY LITTLE BARREL in August 1995. It obtained a registration in 2003 and filed maintenance documents in 2009 and in 2013, alleging current use of the mark in commerce at those times. In 2015, Lone Star Distillery, LLC (now doing business as Garrison Brothers Distillery), filed a cancellation proceeding against Allied’s registration at the Trademark Trial and Appeal Board, triggered by a refusal of its COWBOY BOURBON trademark application. Lone Star contended that Allied had not sold bourbon under the COWBOY LITTLE BARREL trademark since 2009 and that at least one of its maintenance filings constituted fraud on the PTO. Allied then filed suit in the Western District of Texas, asserting claims of trademark infringement, false advertising, false designation of origin and unfair competition against Garrison Brothers and its sales of liquor under its COWBOY BOURBON mark. At trial, Allied’s president testified that it had not sold product under the mark because the company specializes in old, rare and expensive whiskeys and that a lack of sales was due to a bourbon shortage. Garrison Brothers presented evidence disputing Allied’s contention, highlighting inconsistent testimony concerning Allied’s price lists. The end result was a jury verdict in favor of Garrison Brothers. Ultimately, the Fifth Circuit upheld the jury verdict because Allied’s evidence amounted to “a vague, subjective intent to resume use of a mark at some unspecified future date.” What would suffice as evidence of an intention to resume use of a mark?  A 2010 decision of the Court of Appeals for the Federal Circuit addressing a similar issue comes to mind: The Crash Dummy Movie, LLC v. Mattel, Inc. Mattel challenged an application to register CRASH DUMMIES for a line of games and playthings filed by The Crash Dummy Movie, LLC (“CDM”). Mattel based its challenge upon its common law trademark rights obtained through its predecessor-in-interest, Tyco Industries, Inc. Tyco owned several trademark registrations for CRASH DUMMIES trademarks for a variety of products, which the PTO cancelled in 2000 for failure to make required maintenance filings. Tyco sold toys under the CRASH DUMMIES marks through at least 1994 and entered into several licenses for the use of the marks for a broad range of products. In 1995, CDM entered into an option agreement with Tyco to produce a motion picture based on the toys sold under the CRASH DUMMIES marks. That option expired in 1996 and Tyco declined to enter into another option agreement with CDM. Tyco subsequently experienced financial difficulties and began negotiations with Mattel for an acquisition. In 1997, Tyco assigned its trademark portfolio, including the CRASH DUMMIES marks, to Mattel. Due to the size of the acquisition, the two businesses did not fully integrate until late 2004 or early 2005. Beginning in 1998, Mattel worked on developing a new line of toys under the CRASH DUMMIES marks, including researching, developing, and testing the new toys as early as 2001. It ultimately reintroduced the toys into the market in December 2003. In March 2003, CDM filed an application for CRASH DUMMIES for games and playthings, which Mattel opposed. The only issue was whether Mattel had common law trademark rights in the CRASH DUMMIES marks sufficient to challenge CDM’s application. The TTAB concluded that Mattel had rebutted the presumption of abandonment of its common law trademark rights by showing “reasonable grounds for the suspension and plans to resume use in the reasonably foreseeable future when conditions requiring suspension abate.” Mattel was able to rebut the presumption of abandonment arising from the period of non-use through the testimony of its marketing manager and business records that demonstrated product development activities in an effort to actively retool the CRASH DUMMIES toy line. Practical business applications: Keep careful and specific business records about market research, product development plans and relevant business negotiations pertaining to an intent to resume use of a mark if there are periods of non-use of a trademark. Make no public statements about the permanent cessation of use of any trademark unless there is an absolute intent to abandon trademark rights. If plans are uncertain or there is a possibility of resumption, better to characterize any public announcement of the discontinuance of product sales as a hiatus or otherwise temporary or interim.

Is graffiti protectable under the Copyright Act? In principle, yes because it is a graphic art. But graffiti tends to appear on buildings that are visible from a public place, and photographs of such buildings are exempt from copyright infringement suits. So what happens if someone photographs a building that features graffiti, and the graffiti ends up in a marketing campaign—can the graffiti artist bring a claim for copyright infringement? On August 27, 2018, Judge Stephen V. Wilson of the federal district court for the Central District of California will hear oral arguments on GM’s motion for summary judgment in Falkner v. General Motors Co.  His decision is expected to impact graffiti artists’ ability to protect their works under the Copyright Act. Facts Although Falkner v. GM’s policy and legal questions are novel and complex, the underlying facts are straightforward. Falkner—known in the art world as Smash137—is a graffiti artist. Although Falkner has exhibited in museums and galleries around the world, he is known for his outdoor paintings. One such painting is a large mural covering two perpendicular walls of a public parking garage in downtown Detroit, Michigan. Alex Bernstein, an independent photographer, photographed a Cadillac while the vehicle was parked at the same Detroit public parking garage in which Falkner’s mural appears. Part of Falkner’s mural is visible in the background of Bernstein’s photograph. Bernstein submitted the photograph of the Cadillac featuring part of Falkner’s mural to GM, which then used the photograph in an online marketing campaign. Falkner brought two causes of action against GM: copyright infringement and a violation of the Digital Millennium Copyright Act for the falsification, removal, or alteration of copyright management information. GM then moved for summary judgment. We focus on the copyright infringement cause of action here. Legal and Policy Background   Falkner v. GM tests the boundaries of the Architectural Works Copyright Protection Act (“AWCPA”). Enacted in 1990, the AWCPA granted independent copyright protection to architectural works, applicable to buildings created after December 1, 1990. The AWCPA, however, also created an exemption that allows anyone to photograph protected architectural works—and any pictorial, graphic, or sculptural (“PSG”) elements incorporated into them—without liability for copyright infringement. The AWCPA thus avoided turning tourists or photographers into unwitting copyright infringers when they take pictures that include protected architectural works that are publicly viewable. But whether that same exemption also had the effect of eliminating separate copyright protection for independent, creative contributions to larger architectural works (e.g., graffiti) is a question Falkner v. GM may now decide. At first blush, it may seem odd to treat graffiti—which typically appears without input or consent from the building’s architect—as equivalent to a design element that was made in connection with the building itself. But whether that distinction is relevant under the AWCPA remains uncertain. Indeed, per GM, graffiti is no different from any other design element. In support of this view, GM primarily relies on Leicester v. Warner Bros., a Ninth Circuit opinion from 2000 that found photographs of a courtyard and adjacent towers were exempt from copyright infringement under the AWCPA. The majority held that the pictorial representation exemption was intended to be broadly construed to cover all elements of an architectural work “so that publicly visible buildings could freely be photographed.” Leicester, however, offers uncertain guidance: the panel split three ways into majority, concurring, and dissenting opinions. And, as discussed in more detail below, Leicester fails to clearly answer whether the AWCPA eliminated or retained copyright protection for conceptually-separable PSG elements attached to architectural works. GM nonetheless relies on Leicester to argue that Falkner’s copyright claim is barred, contending in its reply brief that allowing photographers to freely photograph buildings was an objective of the AWCPA: “Joe Public should not be required to research the history of the building and hire architectural experts before he snaps a photograph.” Because the exemption is intended to protect the public from unwittingly infringing copyrights while taking pictures of building that are viewable in public space, GM argues that it must be interpreted to allow photographs of embedded PSG elements regardless of whether or not they are separate from the architectural work. A competing policy question is whether graffiti—or any other independent PSG element—should retain copyright protection after it is made part of an architectural work. Falkner points out that pictorial works such as his mural have always been protectable under copyright law, and argues that the AWCPA was not intended to remove that protection where the artist did not collaborate with the architect, and where the mural plays no functional or architectural role. Falkner argues that if GM’s view prevails, all graffiti that exists on a building—that is, most graffiti—will lose copyright protection from infringing photographs. Falkner’s argument thus echoes Leicester’s dissent, which noted that the AWCPA was not designed to eliminate copyright protection for independent, creative contributions to architectural work. Legal Issues Whether or not the pictorial representation exemption bars Falkner’s copyright claim against GM hinges on two questions: Is a public parking garage an “architectural work”? Did Leicester hold that the pictorial representation exemption applies to all PSG elements of an architectural work, including those that are “conceptually separable”? Is A Public Garage An “Architectural Work”? A threshold question for the Court to decide is whether the parking garage in the photograph is an architectural work. If it is not, then the AWCPA does not apply and the statute’s pictorial representation exemption would not bar Falkner’s copyright infringement claim. Falkner insists that the garage is not an architectural work because it is a utilitarian structure that contains no protectable creative elements. Falkner cites statutory language, legislative history, and case law to argue that covered “architectural works” are limited to “buildings,” and the definition of “buildings” excludes non-habitable utilitarian structures such as bridges, walkways, tents, recreational vehicles, mobile homes, and boats. Thus, under Falkner’s view, the pictorial representation exemption does not apply because the structure on which the mural is painted is not an architectural work. In support of this argument, Falkner relies on Gaylord v. United States, which affirmed a lower-court’s finding that the Korean War memorial is not an architectural work, at least in part because it is not intended for occupancy. See 595 F.3d 1364, 1371 (Fed. Cir. 2010). GM counters that the statute’s definition of protected “architectural works” uses the word “building,” which is undefined. Turning to the legislative history, GM argues that the term building also covers structures that are used, but not inhabited, by human beings—e.g., churches, gazebos, and garden pavilions. GM chose not to address Gaylord v. United States in its reply, and cites no authority to support its view that a parking garage is an architectural work. That said, at least one court has considered this question before. In Moser Pilon Nelson Architects, LLC v. HNTB Corp., the court found a parking garage to be a building within the meaning of the AWCPA, noting that it is “surely a permanent and stationary structure as much designed for human occupancy as a gazebo or a garden pavilion.” 2006 U.S. Dist. LEXIS 58334, *17-18, 80 U.S.P.Q.2D (BNA) 1085, 1091, Copy. L. Rep. (CCH) P29, 235. Is “Conceptual Separability” Relevant? PSG elements incorporated into a building are subject to the same pictorial representation exemption as the underlying architectural work. But whether the exemption applies if the PSG element is “conceptually separable” from the architectural work remains unsettled. The doctrine of conceptual separability predates the AWCPA, and refers to copyright protections retained by PSG elements that were embedded in buildings which were themselves not protected under the copyright laws at the time. Both Falkner and GM rely on Leicester to reach opposing conclusions regarding the relevance of conceptual separability following enactment of the AWCPA. GM argues that Leicester decided that the conceptual separability doctrine does not apply to PSG elements embedded in architectural works. Specifically, GM argues that although the Leicester majority found that the PSG element in that case was not conceptually separable from the architectural work in which it appeared, the concurring opinion went further and stated that conceptual separability does not apply to the AWCPA’s pictorial representation exemption. (Somewhat confusingly, GM argues that the majority agreed with the concurring opinion’s view on this point.) In effect, GM argues that the majority and concurrence agreed that the AWCPA extinguished any independent copyright protection covering PSG elements embedded in buildings, regardless of whether or not the PSG element in question is conceptually separate from the building itself. Falkner disputes GM’s interpretation of Leicester and its contention that the AWCPA extinguished copyright protections for conceptually separate PSG elements. Like the dissent in Leicester, Falkner contends that there’s no indication that Congress intended the AWCPA to extinguish rights that existed before its enactment. Falkner thus argues that even if the parking garage is an architectural work, photographs of his mural are not covered by the pictorial representation exemption because the mural is conceptually separate from the parking garage. Conclusion On August 27, 2018, Judge Wilson will have the opportunity to decide whether graffiti artists can bring copyright infringement claims against those who photograph their work when it appears on buildings. We’ll report on the decision as soon as it becomes available.

Back in February, we covered the trademark dispute between the U.S. Army and the Las Vegas Golden Knights professional ice hockey team.  As we predicted, the Army and the Golden Knights have now settled that matter by executing a co-existence agreement allowing both parties to continue using their respective marks. Although that dispute is now resolved, and hockey stars are in the midst of their well-deserved off-season breaks, professional hockey continues to make trademark news this summer.  On July 23, the National Hockey League filed a federal lawsuit, accusing a group of Illinois-based companies and their owner of trademark infringement, false association, dilution, copyright infringement, and unfair competition.  According to the NHL’s complaint, defendants The Hockey Cup LLC, ABC Stein LLC, and A&R Collectibles, Inc. are all owned and managed by one Roger Dewey, who is also named as a defendant in the lawsuit.  The NHL alleges that the “unauthorized use of NHL intellectual property is the very foundation of Defendants’ businesses,” and that Defendants have “made extensive, unauthorized use of NHL and Member Club trademarks and trade dress when marketing and selling products to the public.”  The NHL takes particular exception to Defendants marketing and selling a plastic beer stein (which the complaint labels the “Infringing Stein”) that is a replica of the NHL’s famous Stanley Cup trophy.  The complaint includes the following depictions of the Stanley Cup and the “Infringing Stein”: [one_half]The STANLEY CUP Trophy [/one_half] [one_half_last]The Infringing Stein [/one_half_last] A cause of further distress to the NHL is the fact that Defendants allegedly market the Infringing Stein to create a false impression that the NHL is associated with Defendants and their products.  For example, the complaint claims that Defendants have called the Infringing Stein “The Stanley Stein” and “The Hockey Cup,” have paired images of the Infringing Stein with other NHL trademarks, and use packaging that imitates what the NHL calls the “well-known travel case for the actual Stanley Cup trophy” (depicted in the complaint with the below illustrations). [one_half]The STANLEY CUP Trophy Case [/one_half] [one_half_last]The Infringing Stein Case [/one_half_last] To make matters even worse (from the NHL’s perspective), the Infringing Stein is allegedly “poorly designed and made cheaply,” which the NHL contends causes additional damage to its goodwill and reputation.  Indeed, the complaint quotes Amazon.com reviews as stating that the Infringing Stein is “impossible to clean,” has “no beer flow,” and (gasp!) is “terribly difficult to fill and drink out of and results in flat bear [sic].”[1]  As hockey fans will know, drinking champagne from the Stanley Cup is a time-honored tradition for trophy winners (Alex Ovechkin was pictured in a Las Vegas club drinking champagne from Lord Stanley’s trophy after winning the Cup this spring).  We have yet to hear of a Stanley Cup winner complaining that the Cup is difficult to drink out of or that it “results in flat [champagne]”! As one might expect, the NHL’s lawsuit is not the opening volley in this battle.  Indeed, had Defendants simply gone about their business, quietly selling cheap plastic Stanley Cup replicas, it’s possible the NHL would have left them alone.  Instead, however, Defendants filed intent-to-use trademark applications in the PTO in 2017 for the following design marks to be used on mugs and beer cups: [one_half][/one_half] [one_half_last][/one_half_last] The NHL then filed an opposition to Defendants’ trademark applications, citing twelve NHL Stanley Cup-related trademark registrations and alleging Defendants’ marks would create a likelihood of confusion.  Defendants responded aggressively, to say the least – filing counterclaims in the PTO seeking cancellation of all twelve of the Stanley Cup registrations cited in the NHL’s opposition.  Apparently incensed by Defendants’ cheek, the NHL then commenced this lawsuit. Given their past conduct in the PTO, Defendants are not likely to fold easily.  Legally speaking, however, they may be on thin ice.  Notably, even though the NHL does not appear to currently sell beer mugs or steins in the shape of the Stanley Cup, it is not required to prove lost sales to prevail in this lawsuit.  Instead, the NHL need only show that there is a likelihood of confusion as to source, sponsorship, connection, or affiliation.  In other words, if a consumer goes online, sees the Infringing Stein, and is likely to think that the product or its manufacturer is affiliated with the NHL (not an unreasonable assumption), that is probably enough.  We will continue to follow the developments in this case but – as of now – the smart money seems to be on the NHL emerging victorious. [1] A review of Amazon.com reveals that the Infringing Stein is actually fairly popular – with a review score of 4.2 out of 5 – suggesting that the NHL may have cherry-picked some of the less enthusiastic reviews.

Many IP owners wonder what they need to do to ensure the continued protection of their EU trade marks and Community Registered Designs after Brexit. Some attorneys, since the referendum, encouraged clients to file in the UK to secure those rights. This would have been an expensive strategy. This week, the UK government gave some reassurance on this issue through a ministerial statement in Parliament that promised that these registered EU rights will become UK rights automatically and at no cost when the UK leaves the EU system. See the report on the CITMA website here. Contrary to most issues surrounding Brexit, this one does not depend on an agreement being reached between the UK and the EU. How to deal domestically with EU registered rights after Brexit is purely a matter for the UK. So this announcement is quite significant. The statement given in Parliament is not detailed but unsurprisingly the UK government wishes to ensure a smooth transition and as little administrative burden as possible which is best achieved by giving full effect in the UK to all EU registered rights, automatically. There are many technical questions that remain open and which may be answered, partially or fully, once legislation is published in this regard. First and foremost the question concerning EU applications that are pending on the cut-off date. Other legal issues include the rules on non-use and reputation, etc. in trade marks and issues such as the availability of prior designs in the market in connection with the novelty and individual character requirements for CRDs. I expect after Brexit the “naturalised” EU registrations will be treated as if they were always UK registrations and subject to normal rules under UK law that treat the UK territory as the relevant market. This seems to be the simplest solution. If so, some of those EUTMs (probably the vast majority of those more than 5 years old) that will convert automatically to UK rights may become vulnerable overnight to non-use challenges (if they were not put to use in the UK). There will also be some questions for the EU to resolve post Brexit, the most obvious one whether use of an EUTM in the UK before Brexit will be relevant for non-use challenges and for assessing reputation of an EU registration after Brexit. Hopefully, the EU will pass legislation in due course to clarify the position on these kind of issues. We will not have many more details for at least several more months, but this announcement puts to rest the key concerns regarding the effect of Brexit on registered EU rights.  

Hi, Readers!  It’s theTMCA.com here, checking in to see how we’re doing.  See, we try hard to make our posts on trademarks, copyrights, and advertising law entertaining and informative for you.  We know that there are a million places for you to get your legal updates, and we work hard to make you glad you chose to come here for yours. In 2017, you rewarded our hard work by landing theTMCA.com a spot on the Web 100, the American Bar Association Law Journal's list of the top law blogs, podcasts, and tweeters.  We were thrilled!  Let’s face it, almost all recognition is nice, but this recognition was extra nice because it resulted purely through the nominations made by YOU, our loyal readers.  That’s why we are secretly still beaming with pride. But do you still like us? Are we still satisfying your cravings for IP legal news delivered with a twist of humor? If the answer is “Yes!”, would you consider helping us make the list again by nominating us for the 2018 Web 100? If the answer is “Meh…”, please please please contact us and tell us what we can do better.  We do this for you, and we want to do it right. Thank you all so much for your support. Sincerely, Your TMCA.com Blogging Team

Earlier this month Brett Kavanaugh was nominated to be the next United States Supreme Court justice.  If confirmed, he will replace the retiring Justice Anthony Kennedy.  Politics aside, Kavanaugh has lodged a lengthy stint as judge on the U.S. Court of Appeals for the D.C. Circuit, and is no stranger to deciding tough trademark and copyright disputes. In the copyright arena, Kavanaugh weighed in on the following: In Soundexchange, Inc. v. Librarian of Congress, 571 F.3d 1220 (D.C. Cir. 2009), he joined the court in affirming the Copyright Royalty Board’s rates for songs played on satellite radio stations.  He also wrote a brief concurring opinion suggesting that the Board is unconstitutional because it is made up of “principal officers” of the government that should be confirmed by the Senate, not appointed by the Library of Congress alone. In Recording Indus. Ass’n of Am., Inc. v. Librarian of Cong., 608 F.3d 861 (D.C. Cir. 2010), Kavanaugh wrote a decision  upholding the Copyright Royalty Board’s rates for ringtones and late payments penalties, stating the Board adequately explained the reasoning behind setting both rates. Kavanaugh also authored the opinion in Indep. Producers Grp. v. Librarian of Cong., 792 F.3d 132 (D.C. Cir. 2015), affirming the Copyright Royalty Board’s rates for retransmitting cable broadcasts of sports programs.  But later in 2015, in Settling Devotional Claimants v. Copyright Royalty Bd., 797 F.3d 1106 (D.C. Cir. 2015), he joined the court in determining that the Board’s royalty rates for retransmitting religious and devotional programming was “quintessentially arbitrary and capricious.” And on the trademark side: In Estate of Coll-Monge v. Inner Peace Movement, 524 F.3d 1341 (D.C. Cir. 2008), he joined the court in reversing the determination that a non-profit corporation could not be a related company whose use of a trademark was controlled by a trademarks registrant, under the “related company” provision of the Lanham Act. In Empresa Cubana Exportadora de Alimentos y Productos Varios v. U.S. Dept. of Treasury, 638 F.3d 794 (D.C. Cir. 2011), cert. denied, 566 U.S. 986 (2012), in a 2-1 decision, Kavanaugh wrote the opinion ruling that a company owned by the Cuban government did not have a vested right to perpetual renewal of its trademark after the amendment to the Cuban Assets Control Regulations removed the trademark exception.  According to the opinion, the regulations stated that exceptions were revocable at any time, despite the assumption that U.S. trademark registrants acquire a perpetual right to renew their marks so long as they continue to be in commercial use when the marks are first registered. Kavanaugh’s views appear to support the administrative decision-making process, particularly that of the Copyright Royalty Board.  We will have to stay tuned to learn if these views also support the administrative powers of the U.S. Patent and Trademark Office.

On June 28, 2018, the California Legislature unanimously passed, and the Governor immediately signed, a sweeping expansion of data privacy protections for residents of California.  Assembly Bill No. 375, entitled the “California Consumer Privacy Act of 2018” (the “CCPA”) goes far beyond current U.S. privacy protections, and in many respects emulates elements contained in the European Union’s General Data Protection Regulation, including the ability of a consumer to require that personal information be deleted by a covered business. The CCPA is effective on January 1, 2020.  This post summarizes some of its operative provisions, including new consumer rights, industry coverage considerations and implementation concerns. The CCPA is complex, and changes by the legislature (though likely not significant) and interpretation by the California Attorney General will be forthcoming.  Further, the provisions of the CCPA specifically authorize any business or third party to request guidance from the California Attorney General on compliance.  A more detailed discussion of the CCPA’s provisions and history can be found here. Consumer’s Privacy Rights Under the CCPA The CCPA establishes several privacy rights for California consumers (i.e., California residents): The right to know what personal information is being collected; The right to know whether personal information is sold or disclosed and to whom; The right to say “no” to the sale of personal information; The right to access personal information; and The right to equal service and price, even if any privacy rights created by the CCPA are exercised. Coverage Businesses will have to assess whether they must comply with the CCPA.  The CCPA applies to any sole proprietorship or corporate entity of any type (including affiliated entities based upon a 50% ownership or control factor) that: (i) collects consumers’ personal information, whether alone or jointly with others; (ii) does business in the State of California, and (iii) satisfies one or more of the following thresholds: The business has annual gross revenues in excess of $25,000,000; Alone or in combination with others, the business annually buys, receives for the business’s commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households, or devices; or The business derives 50% or more of its annual revenues from selling consumers’ personal information. Compliance Procedures Required by Covered Businesses To implement the new consumer privacy rights, the CCPA imposes several complex compliance and implementation requirements on covered businesses. These requirements must be completed within the next 18 months, and include: Modification of disclosures and websites to educate consumers on their privacy rights and allow consumers to exercise those rights. Train a team and establish processes to substantively respond within 45 days to consumers’ requests about the business’s use of personal information. Businesses will be obliged to deliver the requested personal information twice a year. Systems design to establish robust information governance policies and procedures, including: (a) mapping current data collection processes, data repositories and transfer protocols; (b) updating privacy policies; (c) developing and adopting policies, procedures and technologies to comply with the CCPA’s covered business obligations; (d) testing and verification; and (e) training and monitoring. Comments The scope of the CCPA potentially encompasses any company that does internet business with a California resident, as well as all retail and commercial activity that includes the collection of data relating to a California resident and retained, sold or transferred by a covered business. Given its provisions, significant proactive diligence by covered businesses will be needed to allow for compliance with the CCPA by January 1, 2020.  Thus, as early as possible, businesses should commence the process of evaluating coverage under the CCPA, as well as designing and implementing an effective compliance program. As both U.S. and international businesses begin to understand the scope of the CCPA, the reality of dealing with compliance dictates of the CCPA, the GDPR and the laws of other U.S state jurisdictions may bring new urgency to considering a federal privacy law that preempts laws such as the CCPA. Whether that resembles the new EU privacy protections of the GDPR, which are already experiencing significant growing pains, or some other improved but less proscriptive approach, remains to be seen. In any event, California is widely regarded as the bellwether of state innovation, and other states are sure to follow many, if not most, of the privacy protections now contained in the CCPA. Stay tuned for further updates on the CCPA, as “clean up” legislation and California Attorney General interpretations and regulations will be forthcoming.

TheTMCA.com blog has had a busy first half of 2018 with a total of 62 posts so far this year. Thank you to our loyal readership, which keeps growing. In case you missed them, here are our top 8 posts of 2018 so far, with topics including the new GDPR privacy law, the Trump brand loss in a trademark license battle, music copyright issues and the large number of works entering the public domain next year. What's up with WHOIS? The GDPR May Limit or Prevent Access to Domain Name Registration Info Trump Brand Loses Trademark Licensing Dispute – Rules of Contract Law Prevail "Sleevey Wonders" are "Arm Tight" in California Lawsuit Tune Up: Initial Lessons from Gibson's Most Recent Trade Dress Lawsuit Adnan Syed Won a New Trial (Again), But the Serial Podcast Lost its Own Appeal Large Number of Works Set to Enter the Public Domain in 2019 Extra Foam, Please: Common Sense Prevails and Court Finds that Starbucks Lattes Contain Foam Did The 9th Circuit "Blur the Lines" in its Latest Music Copyright Case?