Articles Posted in Intellectual Property

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trademark lawTrademark protection, while commonly associated with brand names, slogans, and logos, is available for almost anything visual or tangible that distinctly identifies a product or service. In some situations, this may include the shape of a product. The U.S. Patent and Trademark Office only has authority to register trademarks within the United States, so California businesses that operate abroad or in international commerce may need to seek additional protection. International registration is possible through a treaty framework known as the Madrid Protocol. The European Union (EU) also maintains a system for trademark registration for its member countries. The European Court of Justice (ECJ), the EU’s highest court, recently ruled on a trademark claim by Nestlé regarding the “four-finger” shape of its KitKat chocolate bar in Société des produits Nestlé SA v Mondelez UK Holdings & Services Ltd. A lower court had ruled that Nestlé’s trademark was invalid under EU law. The ECJ dismissed Nestlé’s appeal, affirming the lower court’s finding that the mark—i.e. the shape of the KitKat bar—did not meet the “distinctiveness” requirement. The legal basis for the ruling is similar to what might happen in a U.S. court. If you have questions about this often nuanced and complex area of law, get in touch with a California intellectual property attorney.

In order to obtain trademark protection through the USPTO, an applicant for registration must be able to demonstrate that they are using the mark in commerce, or that they have a “bona fide intention to use [it] in commerce.” 15 U.S.C. § 1127. The mark itself may consist of “any word, name, symbol, or device, or any combination thereof.” Id. Subject to certain restrictions, any mark that “has become distinctive of the applicant’s goods in commerce” may be eligible for registration. Id. at § 1052(f). The EU has similar requirements. The regulation in force at the time of the dispute in the Nestlé case specified that “trade marks which are devoid of any distinctive character” are ineligible for registration, unless a mark has become distinctive because of its use in connection with a particular good or service. European Council Regulation No. 207/2009 Arts. 7(1)(b), (3).

Nestlé first applied to the European Union Intellectual Property Office (EUIPO) to register the KitKat’s shape in March 2002. The EUIPO approved the application in July 2006. The following year, Cadbury, a competing candy bar maker, filed an application seeking to invalidate the trademark. The EUIPO granted the application and invalidated the trademark in 2011. An appellate board later reversed that decision, accepting Nestlé’s argument that the KitKat shape had acquired distinctiveness under Article 7(3) of Regulation 207/2009. Cadbury, through its parent company Mondelez, appealed this ruling to the European General Court (EGC).
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Copyright law allows the owners of copyrighted works to control or prevent the use of those works by others. The Fair Use Doctrine sets limits on copyright owners’ ability to prevent certain unauthorized uses, such as the inclusion of a copyrighted image in a news report or the use of a copyrighted film clip by a film critic. Courts have also recognized an exception to copyright infringement when the unauthorized use of a copyrighted work is deemed “de minimis,” or too minor and trivial to merit court intervention. A recent New York court ruling, Gayle v. Home Box Office, Inc., No. 1:17-cv-05867, mem. op. (S.D.N.Y., May 1, 2018), addressed a de minimis claim in a case alleging copyright infringement. Courts have reached similar rulings in California intellectual property cases involving music, software, and other copyrighted works.Legal News Gavel

Federal law allows copyright protection for “original works of authorship fixed in any tangible medium of expression.” 17 U.S.C. § 102(a). The owner of a copyrighted work has the exclusive right to use the work for a wide range of purposes, including making and distributing copies of the work and creating new derivative works. Id. at § 106. The Fair Use Doctrine allows certain unlicensed or unauthorized uses, however, “for purposes such as criticism, comment, news reporting, teaching…, scholarship, or research.” Id. at § 107. The statute identifies several factors to consider in determining whether Fair Use should apply, including the “substantiality” of the infringing use.

The de minimis exception gets its name from the legal maxim “de minimis non curat lex,” or “the law does not govern trifles.” It is partly derived from the “substantiality” element of Fair Use, but it is not necessarily an example of Fair Use. The Ninth Circuit has held that “a use is de minimis only if the average audience would not recognize the appropriation.” Newton v. Diamond, 388 F.3d 1189, 1193 (9th Cir. 2004). The Second Circuit has held that the de minimis exception involves copyright infringement that is “so trivial that the law will not impose legal consequences.” Ringgold v. Black Entertainment Television, Inc., 126 F.3d 70, 74 (2d Cir. 1997).
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Legal News GavelPatent law gives inventors and designers to the right to exclusive use of their creations. These rights are similar to those granted by trademark registration, but the process of applying for a patent is usually much more complicated. In the event of infringement, patent and trademark owners have the right to sue for damages and to enjoin further unauthorized uses. A pair of lawsuits filed earlier this year by two competing tech companies demonstrate both the complexity of patent law and the types of business disputes that can arise in connection with alleged patent infringement. California businesses are undoubtedly familiar with many of the patent issues raised in Match Group, LLC v. Bumble Trading Inc. (“Match”), No. 6:18-cv-00080, complaint (W.D. Tex., Mar. 16, 2018), as well as the business torts alleged by Bumble Trading Inc. v. Match Group, LLC (“Bumble”), No. DC-18-04140, orig. pet. (Tex. Dist., Dallas Cty., Mar. 28, 2018).

Federal law allows patent protection for “new and useful” inventions, or “any new and useful improvement thereof.” 35 U.S.C. § 101. Patents that cover “useful” inventions are commonly known as “utility patents.” A “design patent” covers “new, original and ornamental design[s]” that are associated with a product without affecting its function. Id. at § 171(a). Both types of patents are protected from infringement, defined to include “mak[ing], us[ing], offer[ing] to sell, or sell[ing]” patented material without permission. Id. at § 271.

A trademark is a name, phrase, logo, or other design “by which the goods of the applicant may be distinguished from the goods of others.” 15 U.S.C. § 1052. More general designs and shapes that are associated with particular products are known as “trade dress.” Trademark law protects trade dress to the extent that it serves to identify a product. Federal law allows trademark owners to sue for various acts constituting infringement, including unauthorized use of copies or reproductions of a trademark in ways that are likely to cause confusion or dilution. Id. at §§ 1114(a), 1125(a).
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Legal News GavelCopyright law gives authors of creative works the ability to use those works in commerce, to license their use by others, and to prevent unauthorized use. This applies to a wide range of “works of authorship” that are “fixed in any tangible medium of expression.” See 17 U.S.C. § 102(a). Copyright owners have various exclusive rights, subject to various limitations. A recent Ninth Circuit Court of Appeals decision addressed a limitation on exclusive rights to a pictorial work that may be relevant to California intellectual property cases. The court held that the allegedly infringing work, a logo used in athletic apparel, was not “substantially similar” to a photograph taken by the plaintiff over 40 years ago, and therefore it did not infringe the copyright. Rentmeester v. Nike, Inc., 883 F. 3d 1111 (9th Cir. 2018).

Copyright protection only extends to fixed forms of creative works, rather than the ideas behind the works. A work that uses similar concepts or ideas as a copyrighted work probably does not infringe that copyright unless it copies or reproduces specific, recognizable parts of the copyrighted work. The Ninth Circuit looks at whether a copyrighted work and an allegedly infringing work are “substantially similar” to each other. It outlined this standard in a decision involving the alleged infringement of Apple’s Macintosh operating system (OS) by Microsoft’s Windows OS in Apple v. Microsoft, 35 F.3d 1435 (9th Cir. 1994). The court looked at both “intrinsic” similarities “from the standpoint of the ordinary reasonable observer, with no expert assistance,” and “extrinsic…similarities in both ideas and expression.” Id. at 1442. It ruled against Apple’s infringement claims, concluding that the similar elements of the two OS’s were either licensed uses or were derived “from basic ideas and their obvious expression.” Id. at 1447. See also Mattel, Inc. v. MGA Entertainment, Inc., 616 F. 3d 904, 913-14 (9th Cir. 2010).

The work at issue in Rentmeester is the “Jumpman” logo used by Nike on basketball shoes and other products. The logo is based on a famous photograph of the basketball player Michael Jordan, which was taken by the plaintiff in 1984. The photograph depicted Jordan, who had not yet begun his professional basketball career, in a unique pose “inspired by ballet’s grand jeté.” Rentmeester, 883 F.3d at 1115. Life Magazine published the photograph that year as part of coverage of the upcoming Summer Olympic Games in Los Angeles. The plaintiff licensed the photo to Nike that year “for slide presentation only.” Id. at 1116.

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Legal News GavelInternet users are constantly creating new content. Sometimes, new content finds wide distribution on social media platforms—commonly known as “going viral”—and therefore gains commercial value for the creators. Trademark law can protect content creators’ exclusive rights to names, logos, and designs, and it allows them to license the use of the same to others. A jury in a California federal court recently found in favor of the owners of a trademark involving a cat, who has gained worldwide fame for her unique look. The trademark covers the cat’s likeness and her internet nickname, “Grumpy Cat.” The case involved a licensee who, according to the trademark owner, infringed the trademark by using the cat’s nickname and likeness in more ways than were allowed by the terms of the license. Grumpy Cat Limited v. Grenade Beverage LLC, No. 8:15-cv-02063, complaint (C.D. Cal., Dec. 11, 2015). After a five-day trial in January 2018, the jury awarded the trademark owner $710,001 in damages.

The federal Lanham Act defines a “trademark” as “any word, name, symbol, or device, or any combination thereof,” which a person is using or “has a bona fide intention to use” for business or commercial purposes. 15 U.S.C. § 1127. It prohibits the unauthorized use of a trademark in connection with the marketing, advertising, or sale of goods or services if it “is likely to cause confusion, or to cause mistake, or to deceive.” Id. at § 1114(1). It also prohibits unauthorized uses of a trademark that falsely designate the origin of goods or services, or that dilute the “distinctiveness” of a famous trademark. Id. at §§ 1125(a), (c).

License agreements allow individuals or businesses to use someone else’s trademark for commercial purposes, usually in exchange for a license fee or other compensation. Businesses may choose to do this in order to capitalize on a trademark’s popularity or goodwill. Trademark owners are responsible for monitoring not only compliance with the license agreement but also the quality of the goods and services that bear the trademark. Failing to do so is known as “naked licensing,” and it can result in the loss of trademark protection. Barcamerica Intern. v. Tyfield Importers, Inc., 289 F.3d 589, 596 (9th Cir. 2002).

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Legal News GavelAs a legal concept, “ownership” has long been fraught with complexity. The increasing use of digital technologies has raised questions about what it means for consumers to “own” a device like a car or smartphone. The owner of such a device unquestionably has the exclusive right to possession of the device. Their use of the device, or the software and other digital technology contained within the device, is subject to multiple legal restrictions. This includes limitations on the ability to repair devices and equipment. Some consumers are pushing back, asserting their right to repair property that they arguably own. The right-to-repair movement might have started with Northern California’s tech industry, but it has expanded to include a wide range of products and populations. Farmers, for example, are now pushing back against companies like John Deere, which they claim have prevented them from repairing their own farm equipment.

Using the iPhone as an example, a consumer “owns” the device itself. They could use it as a coaster or a doorstop if they wanted, but if they decide to use it as a smartphone, they do not own the technology that allows the device to function as advertised. They only hold a license to use that technology. The Digital Millennium Copyright Act (DMCA) prohibits “circumvention of copyright protection systems,” which refers to various systems used in electronic devices to protect copyrighted materials, including software and firmware. 17 U.S.C. § 1201. End-User License Agreements (EULAs) also restrict consumers’ use of various devices. Consumers may risk legal consequences for modifying a device, or even merely by trying to repair it. Many iPhone repairs require a trip to the Apple Store to have a technician do the work, which can be inconvenient and expensive.

Companies like Apple must balance their intellectual property rights with customer satisfaction. Some companies have noted that restricting certain repairs protects both their customers and the integrity of their products, such as by limiting the ability of hackers to get too familiar with their systems. Manufacturers of wearable devices like fitness trackers may sell user data to third parties—with consent through an EULA. Restricting consumers’ ability to tinker with their devices protects those additional revenue streams.

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Legal News GavelBusinesses rely on name and product recognition to develop customer loyalty and stand out in the marketplace. Products and services introduced into the market may have distinctive names, logos, or designs—known as trademarks or service marks—that help consumers identify them. Trademark law allows businesses to protect the value of these marks, such as by prohibiting their use by others. The extent of trademark protection is a matter of perpetual dispute. A truly distinctive name, such as Coca-Cola or Pepsi, is undoubtedly entitled to trademark protection, as are easily recognizable logos. When a particular color is intrinsically connected to a product design, it could be eligible for trademark registration, but the burden of proof is heavy. A cereal maker recently sought trademark protection for the color yellow, as used in its product packaging, but its application was denied. The Trademark Trial and Appeals Board (TTAB) affirmed this denial. In re General Mills IP Holdings II, LLC, Ser. No. 86757390, opinion (TTAB, Aug. 22, 2017).

The federal Lanham Act defines a trademark in part as “any word, name, symbol, or device, or any combination thereof” that a person uses “to identify and distinguish his or her goods.” 15 U.S.C. § 1127. A design, symbol, or name can be eligible for trademark registration under § 2(f) of the Lanham Act if it “has become distinctive of the applicant’s goods in commerce.” Id. at § 1052(f). The applicant can demonstrate this by showing “substantially exclusive and continuous use” of the mark for at least five years prior to the application date. Id.

Businesses have trademarked colors on multiple occasions. The trademark claim typically involves a distinct color used in a particular way. Five years ago, a federal appellate court held that a fashion designer could obtain trademark protection for a particular shade of red that it used on the soles of its shoes. Christian Louboutin v. Yves Saint Laurent America, 696 F. 3d 206 (2d Cir. 2012). Other recognizable color-based trademarks include the brown delivery vans used by United Parcel Service, the pink insulation produced by Owens-Corning, and the green and yellow color scheme used in the equipment manufactured by John Deere.

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Legal News GavelTrademark registration allows businesses to protect some very valuable assets—the names, logos, and related designs that clearly identify them to the public. The U.S. Patent and Trademark Office (USPTO) oversees trademark registration in accordance with the federal Lanham Act, which prohibits the registration of marks under certain circumstances. Section 2(a) of the Lanham Act, known as the Disparagement Clause, bars the USPTO from registering any mark that “may disparage…persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” 15 U.S.C. § 1052(a). The statute does not define “disparage,” and this vagueness is part of what led the U.S. Supreme Court to strike down the Disparagement Clause as a violation of the First Amendment right to free speech. Matal v. Tam, 582 US ___ (2017).

Both the USPTO and the Trademark Trial and Appeal Board (TTAB) acknowledge that “disparagement” is a highly subjective concept that must be evaluated on a case-by-case basis. The TTAB has identified two factors that can help identify material that might be barred by the Disparagement Clause. First, would a reasonable person, considering the context of the mark, interpret it as “refer[ring] to an identifiable” person or group of people? Second, would a “substantial composite” of that group of people view the mark as disparaging? See Harjo v. Pro-Football, Inc., 50 U.S.P.Q.2d 1705 (TTAB 1999); see also 284 F.Supp.2d 96 (D.D.C. 2003), 415 F.3d 44 (D.C. Cir. 2005).

The Harjo case referenced above involved a professional football team with a name believed by many to be disparaging to Native Americans. The proposed trademark at issue in Matal is generally known as a disparaging term for people of Asian descent. The plaintiff in that case is a member of a band who uses the word as its name and who sought to register it as a trademark. The band members, all of whom are of Asian descent, stated that they wanted to “drain [the word’s] denigrating force as a derogatory term for Asian persons.” The USPTO rejected the application under § 2(a). The plaintiff appealed, claiming in part that the Disparagement Clause is an unconstitutional content- or viewpoint-based restriction on speech.

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Legal News GavelSelf-driving cars have been a subject of great interest in Silicon Valley recently. The technology that would make autonomous vehicles viable on a wide scale is not here yet, but numerous companies are working to make it a reality. As with any new technology, competition can easily lead to conflict. In this case, a company affiliated with the tech company Google has filed suit against the ridesharing company Uber and others, alleging infringement of trade secrets and patent rights, as well as unfair business practices. Waymo LLC v. Uber Technologies, Inc. et al., No. 3:17-cv-00939, am. complaint (N.D. Cal., Mar. 10, 2017).

Unlike other forms of intellectual property, the value of a company’s trade secrets depends on their confidentiality. State and federal trade secret laws therefore focus on preventing or dissuading the misappropriation of trade secrets. A business must show that information meets several criteria in order to invoke trade secret protection. The information must have economic value based on the fact that it is not known to others and not easily discoverable by others who are in a position to benefit from it, and the business must have made reasonable efforts to safeguard the information’s secrecy. 18 U.S.C. § 1839(3), Cal. Civ. Code § 3426.1(d).

California law allows the owner of trade secrets to obtain injunctive relief preventing “actual or threatened misappropriation.” Cal. Civ. Code § 3426.2. If a court finds that an injunction would be “unreasonable,” it can order a person to pay “a reasonable royalty” for use of the information. Id. A court can award damages for “actual loss” or “unjust enrichment caused by misappropriation,” along with punitive damages in an amount up to twice the total amount of damages in cases of “willful and malicious misappropriation.” Id. at § 3426.3. Federal law contains similar provisions for damages and specifically allows courts to order “seizure of property necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.” 18 U.S.C. § 1836(b)(2).

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Legal News GavelOperating an online business requires careful attention to numerous potential liabilities, including copyright infringement. Any online service that allows users to post or share information needs to be aware of the federal laws and regulations dealing with potential copyright infringement. The Digital Millennium Copyright Act (DMCA) is a far-reaching law dealing with copyright on the internet and other digital systems, first enacted by Congress in 1998. Title II of the DMCA, also known as the Online Copyright Infringement Liability Limitation Act (OCILLA), creates a “safe harbor” for certain internet service providers (ISPs). The U.S. Copyright Office recently issued new rules regarding safe harbor protection, which took effect toward the end of 2016.

The DMCA covers a wide range of copyright issues, including a prohibition on attempts to circumvent copy-prevention systems in digital media devices. The statute also allows technicians to make temporary copies of software for the limited purpose of computer repair, reversing a court ruling that this constituted copyright infringement. See MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993). As the internet has gained prominence, and websites that allow users to upload and share content have become features of daily life for millions of people, the “safe harbor” provisions have perhaps become the most important provisions of the DMCA.

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