Blog Posts
Intellectual Property
Common Copyright Mistakes That Can Cost Your Business Big
You learned everything you need to know about avoiding copyright infringement in elementary school: don’t copy. And if you do copy, you will be called a copycat. Childish, I know, but it seemed to work. Except copying continues outside of elementary school, and businesses spend time and money resolving claims of unauthorized copying, diverting their attention and resources from their core business. The Problem Although we may learn in elementary school not to copy, the lesson does not always take hold. What harm is there in copying? Who is going to catch us? If it’s online, it’s available for me to use, and I don’t need anyone’s permission. That thinking is one root of the problem. The notion that obtaining permission is too much of a legal slog (too expensive, too time consuming, etc.) is another reason the ‘don’t copy’ rule is ignored (generally seen in tech projects, such as the current use of others’ works to train large language models for AI). More often than not, copiers get caught. This is especially true in the case of parties copying photographs. Photographers are well aware that their photographs are used without permission, and actively police their rights. There have been lawsuits regarding the use of photos of foods used on menus without permission. Creators have received cease and desist letters because they have used, without permission, a photograph as the background for a work they created. Photographers have sued when their images were re-posted on Instagram without permission. Interior design and fashion companies (among others) like to post on their websites and their social media when their items or their work are featured in prominent publications. Such postings are almost always without permission. For example, a wallcovering company could post on its website photos from magazines showing its wallcoverings in houses. The owners of the homes may have consented to the company’s use of the photos, and the magazines may have consented, but that is usually not enough. The photographer must give permission because they generally own the copyright to the photo. Posting photos to social media can also result in claims of copyright infringement if the posts are made without permission. Yes, social media is made for sharing photos. That does not mean that photos can be shared without consent. LeBron James, Gigi Hadid, Versace, Fenty, and Moschino have all been sued for copyright infringement after posting photographs on social media without permission (Gigi Hadid was sued for posting photos of herself taken by paparazzi). News articles, too, present an issue. Reproducing news articles can give rise to copyright infringement claims. Imagine if a company had a news section on its website that reproduced news articles it thought would be of interest to its customers. That would also pose issues. Each article posted would be an infringement. If that posting was a long-running practice (say two or three years), then that company could be in for a significant payment to the owner(s) of the posted articles. If You Copy, Then You Copied Unauthorized reproduction of artistic works is generally known as copyright infringement. The primary defense to copyright infringement is that the original work and the infringing work are not substantially similar, or that one did not have access to the original work. But in the cases we have been discussing, that argument is generally not available, as the copies are usually identical to the original work. Giving credit to the creator of the original work does not avoid a claim of copyright infringement. A photographer or a news organization might decide not to take action if credit is given, but the fact that you gave credit is not a legal defense. In copyright infringement cases, it doesn’t matter that you didn’t intend to infringe. You either infringed or you didn’t. Intent enters the picture, in some situations, when damages are being assessed. Fair use is frequently cited as a defense. While fair use is a defense to a copyright infringement claim, determining whether something constitutes a fair use usually requires determination by a court. Such a determination can take considerable time (a year or more), and it is difficult to predict how a court will decide a fair use question. The fact that the entire work is reproduced will weigh against a finding of fair use, as will the fact that the work has not been transformed into something new — the work has merely been reproduced. If the photograph or news organization has a program for licensing their works, that will also weigh against a finding of fair use. The limited number of defenses works in favor of copyright owners. Copyright Law Favors Copyright Owners If there has been copyright infringement, copyright owners are entitled to recover their actual damages plus the infringers’ profits attributable to the infringement. If the copyright owner timely registered their copyright, they can seek, as an alternative to actual damages, statutory damages, which are generally set by the court and can be up to $30,000 per infringement and up to $150,000 per willful infringement. With timely registration, copyright owners can also seek to recover their reasonable attorney’s fees. That alone is favorable to copyright owners, but recent Supreme Court decisions have decidedly tipped the scales. In one case, the Supreme Court ruled that the Copyright Act’s three-year statute of limitations only applied to when a claim had to be brought, not how far back the copyright owner could reach for damages. In another case the Supreme Court declined to rule on whether the three-year period is calculated from when the copyright owner discovers the infringement or from when the infringement occurs. Most courts calculate it from when the copyright owner discovers the infringement. So take the wallcovering company we discussed above. They have been posting magazine covers and the pages from the magazines featuring their wallcoverings on their website for ten years. One of the photographers used by the magazines to photograph houses learns what the wallcovering company has been doing today. The photographer has three years from the date of discovery to act, and when they do, they can recover damages for every post by the company that infringed the photographer’s rights, even if the post was made ten years ago. That can add up very quickly, and result in payments to copyright owners in the thousands or millions of dollars. What To Do? The penalties for copyright infringement can be steep, making it essential to learn how to avoid copyright infringement exceedingly important. Training employees to ask questions about what they are doing before they do it is a good way to start. Provide users links to images of interest, and do not duplicate them unless you have permission. Linking is not copyright infringement. Ensuring that employees understand the company’s policy against copying and discouraging it is another step. Train employees on what is permissible and what is not. Do not assume that they know — there are many myths and urban legends about what is permissible, and the time to learn what the law actually permits and what it does not permit is before a claim is brought, not after. Hiring your own creators to create photos, images, articles, and the like for your company’s use, is another way to avoid this issue. Yes, there is a cost associated with this. That cost, however, is likely less than the cost of paying to resolve a claim brought by a copyright owner, both in time and in money (and your own attorney’s fees).
November 18, 2025
Intellectual Property
Navigating the USPTO’s New Trademark Fees
It’s finally here. After months of warnings, announcements, and uneasiness about their application, the U.S. Patent and Trademark Office implemented a number of trademark-related fee changes in January 2025. These fees changes, though, are more than just fee increases. Many of the new fee changes will require new filing practices and strategies to keep Trademark Office fees to a minimum, especially for filings by foreign applicants. Make Sure Your Application Has All Required Information In the past, it was possible to file an application without all of the required information. For example, an application could be filed without a signature and the signature submitted later. While this is still possible, applications filed without the required information will now be subject to an “insufficient information fee” of $100 per class. In some instances, these fees will be incurred at the time of filing (the electronic filing form is supposed to indicate what omissions will incur this fee), and in some instances, they will be incurred during the examination. For example, if an application is for the name of a living individual and is filed without written consent, or if the application is for a mark that is a foreign word and is filed without a translation, the application will incur an insufficient information fee during prosecution. Further, the insufficient information fee will be charged to new classes that are added to an application during prosecution if the application was filed with insufficient information. The Trademark Office does permit pre-examination amendments. The Trademark Office has advised, however, that using a pre-examination amendment to supplement an application with information omitted from the application at filing will wind up incurring the insufficient information fee during prosecution, eliminating a tool that was often used when an application needed to be filed in a hurry. These changes will put a premium on evaluating an application before it is filed to make sure that some effort is made to address all necessary requirements (e.g., a description of the mark, a transliteration, a color claim, applicant’s name, address, and domicile; etc.) Use the ID Manual Applications with listings of goods and services taken from the Trademark Office’s ID Manual (available here: https://idm-tmng.uspto.gov/id-master-list-public.html) are now charged a lower filing fee ($350) than those with listings not taken from the ID Manual ($550). Thus, using the ID Manual where possible is beneficial. In order to be entitled to the lower fee, each item in the listing for a particular class must be taken from the ID Manual. If one item in the listing is not from the ID Manual, then the higher fee will be charged. Further, the Trademark Office has explained that if any text is entered in what it calls the “free-form text” box in an application, the higher fee will be charged, even if some or all of the listings are taken from the ID Manual. Using descriptions from the ID Manual is not necessarily a guarantee that an applicant will be able to avoid the higher filing fee. Some descriptions in the ID Manual require applicants to fill in certain information. Guidance from the Trademark Office indicates that if a good faith attempt to fill in that information is made, the applicant will not be charged the additional fee during examination (use of a description such as “Printed educational materials in the field of specify subject matter” would not be considered a good faith attempt). In those situations, it will be up to the examining attorneys to determine if a good-faith attempt has been made. That will be a subjective determination, and it seems fair to expect the Trademark Office to take its familiar position that one examining attorney is not bound by the acts of another when determining what constitutes good faith. The Trademark Office has also indicated that if a party uses, in good faith, descriptions from the ID Manual and then is required to amend those descriptions, the additional fee will not be charged. Moreover, if an applicant files an application with a description from the ID Manual and then amends to a specification that is not in the ID Manual, the application will not incur the additional charge. One issue with the ID Manual is that it does not list every good or service (this can be a particular issue with new products, technology, etc.). One option for resolving this issue is to ask that a particular description be added to the ID Manual. This can be done by sending an email to tmidsuggest@uspto.gov with the following information: the name of the party submitting the proposed identification; an email address for correspondence relating to the proposed identification; and the proposed identification, which should be concise and no more than 25 words. Depending on how long it takes the Trademark Office to add descriptions to the ID Manual, that may not be a practical option (the Trademark Office’s website suggests that reviews will take 1 to 2 business days, and that accepted updates will be made in the next weekly update, but whether that time frame is accurate remains to be seen). Trademark Office guidance indicates that the insufficient information fee will not apply to issues with descriptions of goods or services. Keep Specifications Short One goal of the Trademark Office is to cut down on lengthy descriptions of goods and services. Thus, the Trademark Office has implemented a new fee of $200 per class where a specification entered as free-form text is in excess of 1,000 characters (the fee does not apply to specifications derived entirely from the ID Manual). The fee applies for each group of characters over 1,000, so a specification over 1,000 characters would incur a fee of $200 and a specification over 2,000 characters would incur a fee of $400. According to the Trademark Office, this fee will only be applied at the time an application is filed and will not be assessed during examination. Consider Filing Multiple Applications Instead of Multiclass Applications While a multiclass application may seem like it would be less expensive, under the Trademark Office’s new rules, it could actually be more expensive. For example, any insufficient information fees will be assessed against each class in an application. Further, if an application has two classes, and the description of goods or services for one is taken from the ID Manual and the other is entered as free-form text, both classes will be charged the additional fee due to the use of the free-form text feature. Additionally, if an application is filed using the free-form text option and a new class is added during examination, the fee for that class will be the higher fee, even if the description of the goods or services in that class is taken from the ID Manual. While it can be difficult to predict whether additional classes will have to be added during prosecution, filing a single class application rather than a multiclass application can reduce the likelihood that the higher fee will be incurred. File Through the Madrid Protocol, If You Can Applications filed through the Madrid Protocol are not subject to the new fees discussed above, making that an attractive means of filing in the United States. Use of the Madrid Protocol already had benefits not afforded to direct filings in the U.S.; applicants who file through the Madrid Protocol have six months in which to respond to any Office Actions that may be issued, rather than the three-month response period for applicants who file directly in the U.S., and this will continue to be the case. Applications filed directly in the U.S. will be subject to the Trademark Office’s new fees, even if those applications are filed based on foreign applications or registrations or claim priority to a foreign application or registration. Anyone considering filing directly in the U.S. based on a foreign application or registration would be well served to match the goods or services description in their home filing to those in the Trademark Office’s ID Manual, if possible, in order to avoid additional fees. If the application is based on a foreign application or registration that has already been filed, consider paring down lengthy specifications to avoid surcharges. A Note on Pending Applications Applications filed before January 18, 2025, will not be subject to any of the new fees if filed as TEAS Standard applications. Applications filed before January 18 as TEAS Plus applications (at the lower filing fee) may incur the insufficient information fee, if appropriate. Conclusion The Trademark Office’s fee changes have ushered in a brave new world of trademark practice in the United States. Only time will tell if these changes will accomplish the Trademark Office’s goals. At this point there are some means of avoiding the imposition of the Trademark Office’s new fees (particularly with some planning), and it is likely that the new fees will cause filers from outside of the U.S. to increase their use of the Madrid Protocol. In the end, though, the new fees and procedures reinforce the importance of working with skilled counsel to secure registration of a mark in as efficient a manner as possible.
February 17, 2025
Intellectual Property
Branding the Produce Aisle: Appealing to Consumer Tastes
Brands are taking over the produce aisle at the grocery store. They have already conquered the cereal aisle, the soda aisle, the chips aisle, and the cookie aisle (my favorite). While there have always been produce brands (Chiquita ® bananas or Dole pineapple), branded fruits and vegetables are proliferating. Newly branded fruits include the Elefante Green Gold pineapple, the Pink Elephant mango, and Cotton Candy grapes. The question is, why is there such a push to put stickers with a brand name on fruits and vegetables? Product Recognition and Differentiation From a legal point of view, product recognition and differentiation is the main reason to adopt a brand name. A brand name helps consumers identify a product, and helps that product stand out from other similar products. Which item are you more likely to remember—an apple or a Jazz apple? A banana or a Chiquita banana? It is possible for branding to be so successful that the brand name loses its ability to differentiate products. This is what happened to brands like aspirin and escalator, and it is something that brands like Xerox and Google fight against. Avoiding consumer confusion—or making sure that a brand name differentiates one party’s goods or services from another’s —is the whole point of trademark law. If consumers can distinguish one party’s brand from another’s, then there is no trademark infringement. If consumers think that the brands are related or associated with each other, then there is infringement. This is why the infringement analysis generally looks beyond the marks being used and the goods or services they are used on to other factors, such as price point, where the goods or services are being sold, and whether there was an intent to confuse consumers. Brand Loyalty Strong, dependable brands can encourage brand loyalty (repeat business). If you buy Cotton Candy grapes and love the way they taste, you are more likely to purchase them again with the expectation that you will be able to experience that great taste again. A negative experience, though, can cause a consumer to search for another brand of product. Brand loyalty can be a powerful driver of business. Think about it. How many times have you gone to the store and purchased something because you (or someone you know) used it before and it worked well? Sometimes brand loyalty is the result of an emotional connection to a brand. Perhaps you remember a brand from your childhood, or interacted with that brand when you were a child. Maybe you had a certain brand of drink with lunch in elementary school, or you remember your grandfather giving you a particular type of candy when you would visit. It could even be that you remember liking the advertising for a product when you were younger. This is one of the reasons why people often try to “revive” defunct brands, a practice that raises all sorts of questions about the ownership of the brand and the goodwill associated with it. Branded Items Seem More Exclusive The fashion industry has long since learned that branding can make a product seem more exclusive. One reason is that branded items can command a higher price. The store brand is almost always less expensive than the branded equivalent, whether in the grocery store or the department store. In some cases, the fruits are considered luxury items. This can be because they are genetically engineered, like Del Monte’s Pinkglow pineapple, which has white flesh, an edible core and low acidity, or the Cotton Candy grape, which is sweeter than a usual grape and tastes like cotton candy. In other cases, it is because small quantities are grown. To protect the names of these new fruits, growers seek trademark protection. After spending years to develop the fruits themselves (intentionally bred varieties of fruit trees and nut trees can be protected by a plant patent in the U.S., and genes, traits, methods, and plant parts can be protected by a U.S. utility patent), there is little reason not to protect the brand name, especially since that is what customers will ask for at the grocery store. Currently there are issued registrations or pending trademark applications for the following: COTTON CANDY, for grapes (Reg. No. 4109691) ELEFANTE GREEN GOLD, for pineapples (Reg. No. 7492189) PINKGLOW, for pineapples (Reg. No. 6330579) RUBYGLOW, for pineapples (Reg. No. 7507675) , for melons (Reg. No. 7154543) Branding is Everywhere It shouldn’t really be much of a surprise that brands are coming to the produce aisle. Branded items have been coming home with us from stores for a long time, and various factors drive the success and longevity of a brand. Without protection, though, a brand’s prospects for longevity are diminished and the brand is subject to appropriation or misuse by others. Trademark protection can help ensure the continued vitality of any brand, whether that brand appears on the most fashionable catwalks, in movie theaters, in a stadium, or in the grocery store.
January 8, 2025
Intellectual Property
Protecting Your Most Important Asset: Why Trademark Registration Matters
What would you do with an asset with an almost infinite lifespan that symbolizes your company to your customers? And if that asset was your company’s most valuable asset? You’d protect it, of course. If you run a business of any type, you have such an asset: a trademark, often referred to as a brand name. The question is, are you protecting it? Trademarks reportedly account for about one-third of the stock market value of companies in the S&P 500. If your company is not protecting one of its most important assets, it is putting that asset at risk. The first step in protecting a trademark is registering it with the U.S. Trademark Office. This legal process is best handled by lawyers and involves some costs. In many cases, the cost to register in the U.S. is under $5,000, although it can exceed that amount. Renewal costs are generally under $2,500, with renewal needed every ten years. Given the nearly unlimited lifespan of a trademark, these costs are well worth it when considering the benefits of registration. Banks Will Take Trademarks as Collateral for Loans Some banks, such as IDB, will accept a security interest in a company’s trademarks as collateral for a loan. In today’s business landscape, where many businesses operate virtually and lack significant physical assets, having an asset that a bank can lend against can be crucial for a company’s growth. However, without a registered trademark, a bank may be unwilling to lend against it. At best, the bank may impose higher lending costs if it is willing to lend against unregistered trademarks. Parties Doing Business with a Company Want Assurance that the Company’s Brand is Protected Investors considering investing in a company will want to see that it has taken steps to protect its trademarks. As part of their due diligence efforts, they will ask for the details of trademark applications or registrations. If there are no applications or registrations, providing a transparent and honest explanation is necessary. Potential partners, such as licensees or franchisees, will also want to see that the company has taken steps to protect its trademarks if they invest money to do business with the company, whether by opening a franchised store or manufacturing and selling licensed goods; these partners will want assurance that the company has protected their mutual investment. Trademarks are Crucial to a Company’s Value As noted, a significant portion of a company’s value can be attributed to its brand. Companies with strong brands deliver better value to their shareholders.[1] The value of those assets is critical in business valuations, mergers, or acquisitions, providing leverage and opportunities for future sales and expansion. If you are considering selling your business and retiring, trademark registration can significantly increase its value. Given this potential boost, isn’t the cost of registration worth it? Trademark Registrations May Prevent Others from Registering the Same or a Similar Mark Trademark registrations are listed in the Federal Trademark Office’s online database, which is publicly available and searchable. Anyone searching for a similar trademark should find any registrations that your company owns. Upon discovering your company’s registration, third parties may drop or change their plans. Additionally, when the Trademark Office examines applications filed by others, it will refuse the registration of the same or similar marks for the same or related goods and services. However, if your mark is not registered, the Trademark Office will not block the registration of the same or a similar mark. The Trademark Office only reviews its records during the examination process. It does not search the marketplace, which can result in a competitor registering a similar mark. While it is possible to challenge such a registration, doing so can be costly in terms of time and money. It is far better to prevent this situation by ensuring your mark is registered in the first place. While the Trademark Office will block potentially infringing third-party applications, it does not take action to stop third parties from infringing your company’s trademark. The responsibility to enforce trademark rights falls on the trademark owner. Further, once your company’s mark is registered, you gain nationwide rights that can be enforced against subsequent users. Without a registration, your rights are limited to the geographic area in which your company operates. One other thing. Forming a company with the state is not the same as registering a trademark. The state does not check to see if your name will infringe on anyone else’s name when you form a company. Having a Trademark Registration Makes Enforcement Easier on Online Platforms If someone uses your mark without authorization on social media or an online shopping platform, having a trademark registration makes it easier to enforce your company’s rights and have the online platform take action to stop the infringement. A registration allows the platform to verify your rights, which they cannot do if your company has no trademark registration. Additionally, a trademark registration grants your company access to online protection mechanisms, such as Amazon’s Brand Registry. In cybersquatting cases, which still occur, having a trademark registration simplifies proving your case and recovering the domain name in question. However, a trademark registration does not automatically entitle your company to the corresponding domain name. Legal Benefits of Registration Having a trademark registration provides certain legal advantages. For example, lawsuits for infringement of federal trademark registrations can be filed in federal court. In such cases, registration entitles the trademark owner to a legal presumption of ownership, the right to use the mark, and the mark’s validity (validity presumption applies only to registrations on the Principal Register). These presumptions can streamline court proceedings and reduce legal expenses. Without registration, your company must prove ownership, usage rights, and protection eligibility in every enforcement action, resulting in increased costs. Additionally, marks registered on the Principal Register can achieve incontestable status after five years of registration, provided an appropriate filing is made with the Trademark Office. Incontestable status means the registration can only be challenged on specific, limited grounds. Furthermore, registered marks can use the ® symbol to indicate they are registered. This can prevent third parties from adopting similar marks and, more importantly, prevent infringers from arguing in a lawsuit that your company waived its right to damages by not using the ® symbol. Using the ® symbol helps ensure you do not inadvertently leave money on the table. Foreign Trademark Registrations A U.S. trademark registration does not afford trademark protection outside the U.S.; trademark rights must be protected country by country. However, a U.S. trademark registration can serve as the basis for trademark filings abroad and enable your company to benefit from certain international treaties that may reduce the cost of filing in other countries. Recording Registrations with Customs and Border Protection (CBP) A trademark registration on the Principal Register can be recorded with Customs and Border Protection (CBP). However, there is a fee for this service. Recording your registration with CBP allows them to monitor goods coming into the country. If CBP identifies goods with an infringing or counterfeit mark, they will stop their importation and seize the items. While CBP may request verification that the goods are not legitimate, once that confirmation is provided, CBP will manage the seizure process. Conclusion Trademark registration offers several cost-saving benefits. Legal presumptions and the status of incontestable registrations can reduce court costs. Additionally, registered marks make it easier to enforce rights online. A U.S. trademark registration can also reduce the costs of filing for registrations in other countries and can be recorded with CBP to assist in enforcing your rights. Beyond these cost-reducing benefits, trademarks are high-value assets that can serve as collateral for loans and that investors and business partners will want to see. Therefore, trademarks should be protected with the same diligence as any other asset. Failing to protect this asset can result in its loss and a subsequent loss in value for the company — an outcome no company would or should permit. [1] See The top 100 most valuable global brands 2013 (marketingweek.com).
July 24, 2024
Intellectual Property
AI-Generated Works Dilemma: Balancing AI Terms of Service With Contractual Obligations
Like any emerging technology, AI is entangled with legal issues. These legal issues may not make for compelling entertainment, but they are important in shaping the use and potential of AI. The Legal Intelligencer Pop culture generally depicts artificial intelligence (AI) in extremes, from benevolent helpers like Rosie the Robot from “The Jetsons” to malevolent entities bent on humanity’s destruction, like HAL 9000 from 2001 or SkyNet from “The Terminator” movies. While these depictions make for captivating entertainment, they are far from the reality of today’s AI. Like any emerging technology, AI is entangled with legal issues. These legal issues may not make for compelling entertainment, but they are important in shaping the use and potential of AI. While no member of the Jetson household had to accept terms of service before instructing Rosie the Robot, contracts—terms of service—governing the use of AI, such as Dall-E and Midjourney, carry significant implications that users and their counsel should understand. This is especially true when creators utilize AI to generate works and designs for clients. For example, consider the scenario where a furniture store commissions a design firm to create a unique carpeting design that can be used to manufacture carpets to be sold at the store. Looking to expedite the creation of the design, the designer inputs a prompt to their chosen AI tool, which promptly generates a design. Let’s use this scenario as the starting point to explore some pertinent questions. Ownership of AI-Generated Designs Under U.S. copyright law, ownership of designs typically resides with the creator unless they assign their rights to their client in writing (copyright assignments must be in writing; see 17 U.S.C. Section 204). In this case, though, there is another layer. Who owns the work created by the AI? To answer that question, one must turn to the AI’s terms of service. Midjourney’s terms of service state that “User owns all assets they create with the services to the fullest extent possible under applicable law.” (see “Terms of Service,” visited March 9, 2024). Similarly, Dall-E’s terms of service state that “as between you and OpenAI, and to the extent permitted by applicable law, you retain your ownership rights in Input and own the output. We hereby assign to you all our right, title, and interest, if any, in and to output” (see “Terms of Use,” visited March 9, 2024). While such terms may resolve the issue in many cases, they fall short here because the assignment may not have much value. The Copyright Office has determined that copyright in AI-generated work can only be registered if there is a sufficient level of human involvement, although the specific level of involvement remains unclear [see Thaler v. Perlmutter, No. CV 22-1564 (BAH) (D.D.C. Aug. 18, 2023)]. While this ruling may not directly affect the question of ownership, it significantly impacts the enforceability of rights in AI-generated works. AI-Generated Designs Are Not Exclusive When clients hire a designer to create a carpeting design, they often seek an exclusive, original design distinct from designs used by others. In the traditional situation without AI involvement, the contract between the designer and the client typically states that the design will be exclusive to the client, even if the client does not own the copyright in the design. While Midjourney and Dall-E’s terms of service state that the user owns all rights in the AI-generated work, they also contain language giving the AI the right to use that output. Thus, Midjourney’s terms of service state that: by using the services, You grant to Midjourney, its successors, and assigns a perpetual, worldwide, non-exclusive, sublicensable no-charge, royalty-free, irrevocable copyright license to reproduce, prepare derivative works of, publicly display, publicly perform, sublicense, and distribute text and image prompts You input into the services, as well as any assets produced by You through the service. This license survives termination of this agreement by any party, for any reason. Dall-E’s terms of service are slightly less explicit, stating, “We may use content to provide, maintain, develop, and improve our services, comply with applicable law, enforce our terms and policies, and keep our services safe.” The meaning of both provisions is the same: any work created by the AI will be incorporated back into the system and utilized to generate new works in response to new user prompts. While Midjourney offers a potential solution, if users pay a subscription fee, this option only requires Midjourney to use its best efforts to refrain from publishing any output. This scenario raises multiple questions for our carpet designer. If the contract requires exclusivity for the design, AI utilization would seemingly breach this provision. Dall-E’s terms of service acknowledge the potential dissemination of designs to others, noting that “due to the nature of our services and artificial intelligence generally, output may not be unique and other users may receive similar output from our services.” This makes it very difficult, if not impossible, for designers utilizing AI to assure clients of design exclusivity. Further, the Copyright Office’s stance on copyright in AI-generated works means that neither the designer nor the client could sue a third party for infringement if that third party used a design incorporating elements of the AI-generated design. A lawsuit for copyright infringement cannot be brought without a copyright registration, as the U.S. Supreme Court ruled in Fourth Estate v. Wall-Street.com, 586 U.S. ___, 139 S. Ct. 881 (2019). However, as discussed above, the Copyright Office generally does not issue registrations for AI-generated works. What If the AI-Generated Design Infringes on Someone Else’s Work? A standard agreement between a designer and their client typically includes a warranty and representation that the design will be original and noninfringing. However, can a designer who uses AI to create a design genuinely make such a representation? At best, it appears challenging to assert a complete absence of infringement. More than contractual breaches are at stake. The designer’s reputation could be on the line, too, if it becomes known that AI was used to create a design that unintentionally infringed upon another’s work. Taking this a step further, multiple lawsuits are pending alleging copyright infringement because the AI involved in these cases was trained using copyrighted materials. Assuming these allegations are true, it is possible that in response to a designer’s prompt, an AI could generate a work incorporating elements of someone else’s copyrighted material or the entirety of someone else’s material, potentially leading to copyright infringement liability for the designer. The designer could also be liable to those involved in manufacturing the carpet for the store and possible wholesale partners, making the consequences for the designer that much worse. While no such cases have yet emerged in the United States, multiple AI companies have offered to indemnify users against claims of copyright infringement (see “OpenAI offers to indemnify ChatGPT customers for copyright infringement,” visited March 9, 2024). However, the value of such indemnification offers may be limited, especially if the AI companies are flooded with requests and cannot afford to indemnify all users. Furthermore, it remains unclear whether such indemnification from the AI companies would extend to the designer’s client in cases of resale. Although their interests are likely aligned, clients may prefer assurance that their interests will be actively defended. Additionally, the indemnification offered by the AI companies may not cover claims for breach of contract by the client against the designer, leaving the designer potentially liable to their client. Conclusion If Rosie the Robot had to grapple with these contract issues, completing her assigned tasks might have become more challenging (perhaps imposing legal requirements on SkyNet could have prevented its homicidal tendencies). The reality is that we must consider these legal provisions, which can carry significant consequences for AI users, most of whom likely overlook them. One solution is to avoid using AI altogether when creating designs, but this seems increasingly unrealistic with each passing day. Rather, contractual language may have to be updated to account for AI and how it functions. However, this adaptation will require time, and likely involve legal disputes. In the meantime, it’s crucial for all parties, including designers, to recognize the risks associated with using AI. Reprinted with permission from the April 16, 2024, edition of The Legal Intelligencer © 2024 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.
May 1, 2024
Intellectual Property
Elevating Your Brand: Insights from Bridgerton's Licensing Success
When Bridgerton returns, its influence won’t be confined to the small screen. Now, thanks to a licensing arrangement with Ruggables, you can bring the elegance of Bridgerton into your home. Known for their diverse collaborations with iconic brands like Star Wars, Architectural Digest, Keith Haring, and Jonathan Adler, Ruggables has extended the Bridgerton aesthetic to your home. Since February, Bridgerton rugs have adorned homes, adding a touch of sophistication reminiscent of the beloved period drama. And the collaboration doesn’t stop there – a partnership with Bath & Body Works brought Bridgerton-inspired scents into personal care this past March. Given Bridgerton’s immense popularity, its expansion beyond the small screen should come as no surprise. In fact, it is following a path well-worn by other entertainment giants: licensing. Licensing can be a powerful tool for expanding a brand’s footprint, yet it carries significant risks. While a well-executed licensing program, such as the one that accompanied the release of last summer’s Barbie release, can create the illusion of ubiquity and fuel a seemingly insatiable demand for branded merchandise, it’s essential to recognize that success in licensing is not easily achieved. Behind every triumph lies diligent effort and meticulous planning. The initial step involves figuring out which products seamlessly complement the brand. Bridgerton’s meticulous attention to detail and well-appointed sets, such as Danbury House or Aubrey Hall, coupled with the buzz surrounding the show’s aesthetic, make a collaboration with Ruggable an ideal choice. This partnership effortlessly extends the visual appeal of the show into the homes of its audience. Next up is the crucial step of ensuring that the brand to be licensed is protected, which involves filing trademark applications to protect the mark associated with the goods slated for licensing. Notably, Netflix owns a U.S. trademark registration for BRIDGERTON covering entertainment services. It has a pending application covering an array of goods and services (e.g., cosmetics, electronic devices, jewelry, handbags, home linens, dishware, clothing, toys, and food). However, it is worth noting that rugs are notably absent from this coverage. One of the most critical parts of licensing is finding a partner you can trust (such as Ruggable, which boasts licensing arrangements with other major brands, likely facilitating its collaboration with Bridgerton). Why? Through licensing, you are giving up some control over your brand. It’s imperative to have confidence that your partner will exercise the same care about your brand as you do and that they will work hard to make the license successful. Plus, ensuring they fulfill their obligations under the license, such as making timely payments and adhering to ethical standards like avoiding child labor, is crucial. Remember, your licensing partners are a reflection of your brand; any missteps on their part could tarnish your reputation, especially in the eyes of discerning observers like Lady Whisteldown. Of course, no one has a crystal ball, and unforeseen events can create issues. That is precisely why a well-drafted license agreement is essential to any licensing effort. This agreement should comprehensively outline all the pertinent business terms, including territory, duration, channels of trade, licensed products, royalty rates, and more. Additionally, it should have mechanisms for termination, should such action become necessary. If, for some reason, the license arrangement does not work out, it is the terms of the license agreement that will control the parties’ relationship moving forward. From a brand owner’s point of view, the quality control provisions within a license agreement hold paramount importance. There are several compelling reasons for this. Firstly, the brand owner’s primary objective is to uphold the brand’s reputation by ensuring that licensed products maintain high-quality standards and reflect the brand’s core values. Consequently, license agreements often grant brand owners the authority to approve prototypes and production items. It's imperative for brand owners to promptly provide approvals to avoid disrupting marketing plans. Secondly, failure to exercise quality control could result in what is known as “naked licensing,” which can result in the potential forfeiture of their trademark rights. While a good quality control provision in the license agreement serves as a preventative measure to a naked license situation, the brand owner’s active monitoring of product quality is essential. After all, consumers seeing a brand on a product will assume that the product meets certain standards of quality. And as you know, dear reader, Queen Charlotte can be exacting. This year’s diamond of the licensing season could well be the rug collaboration. If you are seeking to elevate your brand to new heights of success in the upcoming season, I’m here to provide professional guidance in crafting and executing a dynamic licensing program. Let’s work together to ensure your brand shines brighter than ever before in the competitive world of licensing.
April 23, 2024
Intellectual Property
Lights, Camera, Trademark: The Unsung Heroes of the Oscars
Oscar night is the most glamorous night in Hollywood. The red carpet. The gold statuettes. The gowns. The tuxedos. The stars. The trademarks. That’s right, the trademarks. They are essential to the movie industry, and when we celebrate the best in the movies, we should also celebrate the unforgettable trademarks that go along with the motion picture industry. The equipment used to make and show movies are all emblazoned with trademarks. We’ve all seen PANAFLEX or PANAVISION cameras in behind-the-scenes documentaries. Most of us have seen movies in IMAX, and we have heard movies in DOLBY SURROUND SOUND, DOLBY ATMOS, or DTS. Or maybe we’ve even seen a movie in CINEMASCOPE (Disney’s 20,000 Leagues Under the Seas, for example). We’ve probably watched movies with special effects from ILM, DIGITAL DOMAIN, and WETA. Almost all of us have seen a movie in an AMC or REGAL CINEMAS theater, or maybe we have seen where the stars have signed their names and left their handprints outside of GRAUMAN’S CHINESE THEATER in Los Angeles. That theater is so well-known that the look of the building is registered as a trademark. The studio and production company names that appear at the beginning of films are great examples of trademarks, indicating the source of the movie that viewers are watching. PARAMOUNT, PIXAR, WARNER BROTHERS, RKO, UNIVERSAL, SONY, COLUMBIA PICTURES, A24, ORION PICTURES, FOCUS FEATURES, BAD ROBOT, and AMBLIN are all trademarks. So are the roaring lion that introduces MGM films, the Twentieth Century Fox Fanfare, and Netflix’s “Tudum” sound. The water tower on the Warner Brothers lot is also a trademark. That brings us to the movies themselves. The U.S. Trademark Office will not register the title of a single work (this is true for books, too); rather, it will only register the title of a series (meaning two or more movies). While none of this year’s Best Picture nominees are part of a series, plenty of movie series titles are registered trademarks: BACK TO THE FUTURE, JURASSIC PARK, STAR WARS, MISSION: IMPOSSIBLE, DUNE, THE GODFATHER, BARBERSHOP, MADEA, and GODZILLA to name a few. Even some characters and props are the subjects of trademark registrations. Mickey Mouse, for one, is a registered trademark (trademark protection for characters is not always available). There are trademark registrations for multiple lightsaber hilts, as well as the X-Wing Fighter. In Europe, the owner of James Bond has a number of trademark registrations, including one for the well-known gun barrel sequence, and one for one the famous spy’s iconic poses. At least some movie brands have received legal advice and sought trademark protection. Thus, there are registrations for STAY PUFT (for marshmallows), STARK INDUSTRIES (for clothing), THE DAILY PLANET (also for clothing), WILLY WONKA (for candy), BUBBA GUMP (for restaurants), THE MIGHTY DUCKS (for hockey). Of course, we should not forget that Mattel has a trademark registration for the shade of pink associated with BARBIE. And yes, the golden statuette itself is a trademark, so all those who took one home took home a trademark. It’s the most glamorous night in Hollywood, and the trademarks have the best seats.
March 7, 2024
Intellectual Property
Trademark Use in the U.S.
Demystifying What Constitutes an Acceptable Specimen of Use Evidence of use is, in most circumstances, essential to securing and maintaining a U.S. trademark registration. Subject to certain limited exceptions involving foreign trademarks, the U.S. Trademark Office will not issue a U.S. trademark registration without appropriate proof of use. Similarly, to maintain a U.S. trademark registration, a registrant must submit adequate proof of use to the Trademark Office. While this sounds straightforward, in practice, it can sometimes be very difficult to find evidence of use that the Trademark Office will accept. According to the Trademark Manual of Examining Procedure, § 904, specimens “are required because they show the manner in which the mark is seen by the public.” Acceptable specimens can be labels and tags affixed to goods or the containers for goods (but not mockups), stampings on products, commercial packaging, screenshots from a computer program or a frame of a movie or video, a website from which software can be downloaded, point of sale displays, catalogs with ordering information, websites from which products can be ordered, and manuals. TMEP §§ 904.03 (a) through 904.03 (k). On the other hand, printer’s proofs, mockups, renderings, and advertising materials are generally not acceptable as evidence of use. TMEP §§ 904.03 (a) through 904.03 (k). Once evidence of use is submitted, the Trademark Office will examine it carefully. If it is not accepted, an Office Action will be issued, after which one will have the ability to submit a substitute specimen that was in use as of the pertinent date (usually the date on which the original specimen was submitted). TMEP § 904.05. Obtaining an acceptable specimen is often one of the most difficult parts of preparing a trademark application or a maintenance filing. This is in part because the Trademark Office examines them so carefully but also partly because there is a desire to avoid the expense of repeated filings with the Trademark Office. Indeed, failure to submit an acceptable specimen can lead to the refusal of an application, as demonstrated by a recent case. Hi-Tech Pharmaceuticals, Inc. sought to register EXPERIMENTAL AND APPLIED SCIENCES as a trademark for use in connection with dietary and nutritional supplements. As evidence of use, it submitted an original specimen and a substitute specimen. The original specimen was five pages long, consisting of a screen capture of a web page showing five different products. The proposed mark did not appear on the first page, but it did appear on close-ups of two supplement bottles that were part of the specimen. The close-ups showed the proposed mark on the lower back portion of the label, on one line of a four-line group. All four lines were the same color, appeared in the same font size and style, and had the same justification. The proposed mark appeared at the end of the following sentence: “Developed and exclusively manufactured by Experimental And Applied Sciences”; because of its positioning, the proposed mark was on the second line. The next line had the applicant’s address, and the following line had the applicant’s phone number and website address. The Examining Attorney refused registration of the mark, taking the position that the evidence of use showed the proposed mark being used as a trade name, not as a trademark (the submitted evidence did not show the proposed mark anywhere else on the bottle). The Trademark Trial and Appeal Board affirmed on appeal, agreeing with the Examining Attorney that the “applicant would be hard-put to present the term in a less prominent manner.” (emphasis in original). The TTAB explained that the proposed mark appeared as part of a visual unit and that, as a result, the impression was that the proposed mark should be read in the context of the lines around it. Therefore, registration was refused. An acceptable specimen would have led to a different result. While the Hi-Tech Pharmaceuticals case was in the context of seeking registration of a mark, it applies with equal force to maintenance filings—an improper specimen can lead to the cancellation of a registration mark. Thus, in either context, it is important to work with experienced counsel to make sure that a mark is being used in a manner that demonstrates trademark use and that will be accepted by the Trademark Office. If there is any doubt about whether the Trademark Office will accept use, please contact me (preferably well in advance of any deadlines).
February 29, 2024
Intellectual Property
Upcycling, Customization, and Trademark Infringement
With its potential environmental and sustainability benefits, upcycling is a popular trend. Likewise, product customization, allowing consumers to express their own style, is also popular. As illustrated by two cases involving watches, both can give rise to claims of trademark infringement and counterfeiting. Rolex Watch USA, Inc. v. BecekerTime, L.L.C. BeckerTime is a seller of decades-old preowned watches containing Rolex parts. BeckerTime identifies such watches as “Genuine Rolex,” but they include both Rolex and non-Rolex parts. Before taking action, Rolex purchased two watches from BeckerTime. BeckerTime added diamonds as hour markers to the refinished watch dials by drilling holes in the dials and inserting aftermarket diamonds or other stones and settings in the holes. As part of the refurbishment process, BeckerTime strips the dial down to bare metal, and once the refurbishment is complete, it reapplies Rolex’s trademarks. When selling the modified watches, BeckerTime lists a retail price with a comparison price labeled as “New MSRP (if all factory)”— even though Rolex does not and has never sold a similar watch. Additionally, BeckerTime adds various non-Rolex parts (such as bezels with added diamonds, bands, or straps). BeckerTime issues an “Authenticity Guarantee” for each watch it sells and has held itself out as a “Certified PreOwned Watch Dealer” with a “Rolex Certified Master Watchmaker” even though Rolex has not certified BeckerTime or its watchmaker. Moreover, the parts added by BeckerTime are integral to the function of the watches and do not bear any markings indicating that BeckerTime is the source of the watches. To be sure, BeckerTime did indicate on its website that the replacement parts were not genuine Rolex parts, that the alterations it makes would void any Rolex warranty, and that BeckerTime is not affiliated with Rolex. That was not enough to stave off legal action. Rolex sued BeckerTime for trademark counterfeiting and trademark infringement in September 2020. After a bench trial, the court found that BeckerTime infringed Rolex’s trademark by counterfeiting Rolex watches and issued an injunction precluding BeckerTime from using Rolex’s trademark in specific ways. Both parties appealed, and the court of appeals largely upheld the injunction. The court of appeals explained that “BeckerTime does more than recondition or repair vintage Rolex watches.” According to the court of appeals, BeckerTime sold watches that were materially different from those sold by Rolex; the watches could not be called genuine Rolex watches. The court of appeals also pointed out that customers were confused as to whether the watches were entirely genuine Rolex and that BeckerTime had received complaints about the quality of the watches. As a result, the court of appeals affirmed the injunction, although it did instruct the lower court to clarify one point. Hamilton Intern. Ltd. v. Vortic LLC Like the BeckerTime case, this case also involved watches. The outcome was very different. Robert Thomas Custer founded Vortic and endeavored to make a watch that would be entirely made in America. After learning that no active company in the U.S. made watch movements, Vortic began salvaging and restoring parts from antique American-made pocket watches manufactured in the late 1800s and early 1900s. The parts, which included antique parts from watches bearing Hamilton’s trademark, were then encased in new wristwatches. One of the watches Vortic made was named “The Lancaster,” after the city where the Hamilton Watch Company was originally based. The Lancaster features restored antique pocket watch movements and front dials made by Hamilton. The front dial bears the HAMILTON trademark. The watch strap, case, and various internal parts were either manufactured by Vortic or came from modern U.S. sources. The back of the watch has a glass cover through which the watch parts, some of which bear the HAMILTON trademark, can be seen. The cover is surrounded by a metal ring with Vortic’s name and serial number for the watch, as well as the watch’s name. Buyers received the watch in a wooden box with Vortic’s name and a booklet that displayed the Vortic logo and explained its manufacture and restoration process. The box also included an authentication card with Vortic’s name and serial number, which was signed by the watchmaker. Vortic’s advertisements emphasized the antique and authentic nature of the watch’s parts. In July 2017, Hamilton sued for trademark infringement and counterfeiting. After a bench trial, the court ruled in favor of Vortic, finding that there was no likelihood of customer confusion. Hamilton appealed, and the court of appeals affirmed the lower court’s ruling. The court of appeals pointed out that Vortic took genuine parts from Hamilton watches, refurbished and repaired them, and modified them into a wristwatch and that consumers would view the watch as an antique pocket watch modified into a wristwatch rather than as an entirely new product. Further, the court of appeals explained that Vortic took many steps to disclose that it was not affiliated with Hamilton and that its watch used refurbished original parts. This could be seen in advertisements, the marks on the watch itself, and the fact that the watches themselves are presented to consumers as restored antique pocket watch parts modified into a wristwatch. The court of appeals contrasted this with other cases (including cases brought by Rolex) where there was no disclosure of the changes made to the watch and pointed out that there was no evidence of consumer confusion in the record. So, What Is Permitted? Anyone seeking to reuse a previously manufactured product or parts from a previously manufactured product should make sure to disclose to consumers exactly what has been done. Further, it is important to make clear that there is no affiliation between the upcycler/customizer and the original manufacturer. These seem to be the key differences between the Rolex decision and the Vortic decision. However, strict compliance with those requirements does not mean that reusing a previously manufactured product cannot give rise to a claim for trademark infringement. One thing that does seem settled is that customization of a product purchased by a consumer is permitted so long as the customized product is intended for the consumer’s own use and not for resale (in the BeckerTime case, it appears that BeckerTime was customizing watches for sale, rather than in response to consumer requests). If you are contemplating reusing someone else’s products or are concerned that a third party reusing your products will result in consumer confusion, please feel free to contact me.
February 14, 2024
Intellectual Property
Laughing in the Face of Copyright: The Unsettling Case of AI-Generated Comedy and Digital Immortality
George Carlin had quite the career. His seven dirty words routine was the centerpiece of litigation about the government’s power to censor indecent material on the airwaves that went up to the Supreme Court. He won awards for his comedy specials and albums (full disclosure: Jammin’ in New York is a personal favorite). He appeared in movies like The Prince of Tides, Bill & Ted’s Excellent Adventure, Cars (where he voiced Fillmore), and was the conductor on Shining Time Station. Carlin passed away in 2008, and he is now at the center of a new lawsuit raising questions about whether AI should be used to “resurrect” deceased artists, who controls the legacy of deceased artists, and who can profit from their “resurrection.” On January 9, 2024, Dudesy LLC (“Dudesy”) released an hour-long video entitled “George Carlin: I’m Glad I’m Dead (2024). The introductory voiceover explained that Dudesy, using some type of AI, fed George Carlin’s standup routines into the training database for the AI; the AI was then used to create the video. The introductory voice further stated, “I listened to all of George Carlin’s material and did my best to imitate his voice, cadence, and attitude, as well as the subject matter I think would have interested him today.” The video quickly made the rounds on social media. By January 25, Carlin’s estate, which had nothing to do with the video, filed suit against Dudesy and the individuals associated with the making of the video. The lawsuit, filed in federal district court in Los Angeles, asserts three claims: violation of the common law right of publicity, violation of the statutory right of publicity, and copyright infringement. The first two claims are based on the unauthorized use of Carlin’s name, voice, and likeness in the video. The third claim is based on the copying allegedly occurring when Carlin’s standup routines were fed into the AI to create the video. The lawsuit claims that Dudesy saw the video as a profit center, not just a way to make people laugh. Dudesy promoted the video with social media posts providing links to its online store and Patreon page from which subscribers can purchase monthly subscriptions. And a YouTube channel associated with Dudesy that posted videos relating to the hour-long special with the same hyperlinks and advertisements. Further, in anticipation of a likely claim that the video was a “fair use,” the lawsuit alleges that the video “has no comedic or creative value absent its self-proclaimed connection with George Carlin. It does not, for example, satirize Carlin as a performer or offer an independent critique of society.” In the wake of the filing of the lawsuit, Dudesy now claims that the video was not written by AI but instead by Chad Kultgen. Mr. Kultgen, together with Will Sasso, hosts the Dudesy podcast—a podcast that was used to promote the video. If it is true that a human wrote the script for the video, that might negate the copyright infringement claim insofar as it relates to the use of AI, but it still leaves Dudesy facing the California right of publicity claims for their efforts to “resurrect” George Carlin. The question of who, if anyone, has the right to “resurrect” a performer or personality depends on state law; slightly less than half of the states recognize a post-mortem right of publicity. The case neatly crystallizes the issues surrounding AI as it impacts the legacies of performers and other celebrities and touches on similar issues that were at the core of last year’s Hollywood strikes. Thirty years after it came out, the movie Jurassic Park remains prescient. And Dr. Malcom’s indictment of John Hammond and InGen applies with equal force to the burgeoning use of AI: “your scientists were so preoccupied with whether or not they could that they didn’t stop to think if they should.” If you need to talk with someone about whether or not you should, contact me or one of my intellectual property colleagues at Offit Kurman.
February 7, 2024
Intellectual Property
Recipes, Trademarks and Décor
Feasting on the Lessons of Il Mulino’s Intellectual Property Battle When thinking about restaurants, most people think of a savory meal in a pleasant setting. I think about that, too, but more often than not, my thoughts turn to a restaurant’s intellectual property and what can be protected (a danger of the trade, I suppose). Restaurant names can be protected as trademarks, recipes as trade secrets, and the plating of an entrée may be protected by a design patent. A recent case involving the well-known Italian restaurant Il Mulino touches on many of these aspects of protection. Still, perhaps most interestingly, that case found that the look of the restaurant’s interior, its trade dress, is protectable. According to the court, this case is the latest in a long-running dispute over intellectual property relating to the Il Mulino restaurants. Defendants had been involved in opening and operating Il Mulino restaurants, an enterprise that involved various entities; one entity owned the intellectual property and licensed it to various locations. In 2020, some of the Il Mulino entities filed for bankruptcy. As a result of the bankruptcy, plaintiffs acquired those entities, including the entity that owned the intellectual property. The defendants opened Il Mulino Tribeca in 2018, and the location closed in September 2023. On September 15, 2023, the defendants opened a new Italian restaurant in the same space as Il Mulino Tribeca. The lawsuit was filed in November, with plaintiffs seeking to preliminarily enjoin the defendants from using proprietary recipes, certain restaurant names, the trade dress of Il Mulino Tribeca, a former Il Mulino location, and certain property from Il Mulino Tribeca in their new restaurant. Each claim warrants review, particularly the trade dress claim. The Trade Dress of Il Mulino Tribeca The court explained that the Plaintiffs defined the trade dress of Il Mulino Tribeca as consisting of the following elements: an art collection of black and white photographs arranged in a perfectly symmetrical design, covering almost one entire interior wall of the restaurant; custom artwork commissioned for Il Mulino Tribeca’s back wall that evokes the restaurant’s Tribeca home by referring to its location “Below Canal St[reet]”; (3) white-washed brick and high ceilings painted matte black; and unique, hand-blown glass pendants hanging near the entrance of the restaurant. All of the above appear in the Defendants’ new restaurant. The court found that the above definition was sufficiently precise and that the claimed trade dress was not functional. According to the court, “Il Mulino Tribeca’s décor plainly does not affect a customer’s “use or purpose” of the restaurant nor the cost or quality thereof. A customer could just as easily enjoy veal parmigiana in the absence of glass pendants or white-washed brick.” The court also pointed out that the trade dress analysis focuses on the trade dress as a whole, not particular elements that may be used by competitors. Finding that the trade dress was also inherently distinctive since it did not convey any information about the restaurant’s services or cuisine, the court concluded that the claimed trade dress was entitled to protection. Since the trade dress was entitled to protection, the court next determined whether there was a likelihood of consumer confusion. The court found that there was a likelihood of confusion even though the claimed trade dress was weak because there was little evidence that consumers associated the trade dress with Il Mulino. In reaching its finding, the court pointed out that the trade dress in the two restaurants was very similar (not surprising since the new restaurant opened in the exact location as the old restaurant and since social media posts for the new restaurant used images that seemed to draw on social media posts for Il Mulino Tribeca); that both restaurants were Italian; and that defendants seemed to be trying to capitalize on the reputation of Il Mulino. On that basis, the court found a likelihood of consumer confusion and preliminarily enjoined the defendants’ use of the claimed trade dress. Infringement of the IL MULINO Trademark The plaintiffs did not fare so well on their other claims. They claimed that the new restaurant’s name, Il Giglio, infringed on the IL MULINO trademark. Apparently, a prior restaurant affiliated with Il Mulino had operated under the name Il Giglio, but the court did not think consumers would associate the new Il Giglio with the old one. Likewise, the court pointed out that Il Mulino and the new Il Giglio used different fonts for their names and that “Mulino” and “Giglio” sound different and have different meanings. Proprietary Recipes The court seemed prepared to protect any of the plaintiffs’ proprietary recipes that the defendants might be using. However, in the court’s eyes, plaintiffs did not present sufficient evidence that the defendants were doing so—the claims were based mostly on the review of a menu and photos of similar-looking preparations of entrees. The court pointed out that neither party presented witnesses at the preliminary injunction hearing, and the plaintiffs did not seek expedited discovery before moving for a preliminary injunction. As a result, the evidence relating to the improper use of the plaintiffs’ proprietary recipes was insufficient. Interestingly, the court raised the possibility of a confusion-based theory as to the plating of dishes (particularly Il Mulino’s branzino) but did not pursue it since plaintiffs failed to develop it. Personal Property Finally, the court declined to enjoin the defendants’ use of certain personal property allegedly belonging to plaintiffs, such as tableware and tens of thousands of dollars of alcohol. According to the court, this personal property was not part of the trade dress, and plaintiffs could be compensated for the use of this property if its use was not enjoined. The court’s decision is a good example of the many different types of intellectual property a restaurant may have and how willing a court will be to protect that intellectual property. If you have questions about protecting your restaurant’s intellectual property or about someone who might be using your restaurant’s intellectual property without authorization, contact me or one of my intellectual property colleagues at Offit Kurman.
February 2, 2024
Intellectual Property
Decorating Danger: Pitfalls in Using Images of Rooms Decorated with Your Furnishings
Everyone does it. A light fixture is featured in a prestigious publication, or a rug is shown in a home featured by an interior design publication. The image (and perhaps an image of the publication’s cover) is quickly reposted on Instagram, added to the company’s website, placed in promotional materials, and otherwise used to promote sales. There’s just one problem. Use of the image could result in costly charges of copyright infringement. Copyright Ownership: Under U.S. law, the general rule is that the author of a work owns the copyright in the work unless the work was created within the scope of their employment, in which case their employer owns the work. In most cases, the photographers working for publications like Interior Design, Architectural Digest, House Beautiful, or Coastal Living are not employees but independent contractors, which means that the photographers, and not the publications, own the copyright in the photos they take and the photos shown by the publications. As a result, the photographer (not the publication) must give permission for any reproduction of their photo, including reproductions on social media or websites. Photographers, not publications, generally own the copyright in photos featured in prestigious publications. Reproduction requires explicit permission from the photographer, extending to social media and websites. Strict Liability in Copyright Infringement: Reproduction without permission is copyright infringement. Copyright infringement is a strict liability offense, meaning there is no defense to whether infringement occurred — either something was copied without permission, or it was not. There are defenses that can be asserted , but these are directed to the amount of damages, not whether there has been infringement. Giving credit to the photographer or the publication is not a defense. Similarly, the fact the one didn’t make any money directly from the use of the photo is not a defense. The fact that an image was available online is generally not a defense. Nor is a court likely to find that such a use is a fair use — to find out if a use is fair use (essentially arguing that no permission was needed), it will probably be necessary to take the case to trial, involving expense in terms of time and money. Costs of Copyright Infringement: If a photographer has timely secured a copyright registration for their photos, they are entitled to statutory damages of up to $30,000 per infringement (and up to $150,000 per infringement if the infringement is shown to be willful). The idea of such an award is to deter future infringement. In addition, the photographer is entitled to their reasonable attorney’s fees if a timely copyright registration was made. Reproducing images without permission can lead to costly consequences. Photographers with timely copyright registration can seek damages up to $30,000 per infringement or $150,000 if willful, plus attorney’s fees. Importance of Written Permission: Having permission from the photographer would defeat a claim of copyright infringement, but that permission should be directly from the photographer and should be in writing. Permission from the publication in which the photo appears is probably not enough unless the magazine owns the copyright in the photos. Reality Check — Cease and Desist Letters: Think it can’t happen? It has already happened and will happen again. Entities you know have received cease and desist letters from photographers. Others have been sued (roughly half of the copyright infringement lawsuits filed in the U.S. involve the unauthorized use of a photograph). In either case, payment has likely been made, and either a license permitting the images to stay up has been obtained or the images have been removed. Entities have received cease and desist letters and faced lawsuits for unauthorized photo use. Roughly half of U.S. copyright infringement cases involve unauthorized photo use, resulting in payments and image removal. Protection Against Claims: The best way to protect against a copyright infringement claim is to make sure you have permission to use the photo showing your product or the room you designed or styled (if possible, take the picture yourself!). If a photographer refuses to give you permission, don’t use the image. If you are not sure if you need permission or have permission, contact me or one of my intellectual property colleagues at Offit Kurman — an ounce of prevention is worth a pound of cure.
January 24, 2024
Intellectual Property
Trademarks in Your Cereal Bowl
A Closer Look at Post’s Fruity Pebbles Trademark Application It’s likely that you, your kids, or your grandchildren have eaten them. Have you ever thought, though, that you could identify what you are eating just by the fact that multicolor rice crisps are in your bowl? It’s probably not the first thing you think of while you are eating, paying more attention to their crunch and the sound they make when they are in milk. We’re talking about Post’s Fruity Pebbles cereal, of course. While you may not have been thinking that you could identify the contents of your bowl just by looking at the colors in it, Post Foods LLC (“Post”) was thinking that. Thus, Post filed a U.S. trademark application to register the colors of Fruity Pebbles as a trademark for use in connection with breakfast cereals. Interestingly, that application was initially refused, and that refusal was affirmed in a decision issued by the Trademark Trial and Appeal Board on January 4, 2024. There were two main reasons for the refusal. First, in its application, Post defined the mark as “consist[ing] of the colors of yellow, green, light blue, purple, orange, red and pink applied to the entire surface of crisp cereal pieces,” as shown in the image below (the application did not claim the shape of the cereal crisps, which makes sense since each crisp has a different shape). However, the application sought registration of the claimed mark (the colors) for use in connection with breakfast cereals, not crisp cereal pieces or breakfast cereals consisting of crisp cereal pieces. Post argued that it sought registration of the colors shown in the drawing as applied to crisp rice cereal pieces. Ultimately, the Trademark Office held that the mark that Post sought to register was the combination of colors as applied to breakfast cereals. This was because the shape of the rice crisps was not claimed as part of the mark and because the application identified the goods as breakfast cereals (which could cover cereals in ring-like shapes as well as cereals shaped like rice crisps). Having determined what mark Post sought to register, the Trademark Office next considered whether the mark was registrable. The Trademark Office concluded that the claimed mark did not function as a source identifier and, thus, that it was not registrable. Why did the Trademark Office reach that conclusion? It was not because the claimed mark consisted of colors—the Trademark Office has long recognized that colors can be trademarks. Rather, it was because, in the Trademark Office’s view, Post had not come forward with sufficient evidence to show that consumers associated the colors used for Fruity Pebbles with breakfast cereals. The evidence showed that a wide variety of breakfast cereals had similar multicolor cereal combinations. Some were for other crisp rice cereals, and some featured diverse shapes. The Trademark Office referenced Fruit Loops; Cap’n Crunch’s OOPS! All Berries corn and oat cereal; Trix Fruity Shapes cereal; Trader Joe’s Fruity O’s cereal; Best Choice Fruity Crisp Rice cereal; Wegmans Fruity Rice Crisps cereal; Clover Valley Fruity Bites rice cereal and others to support this conclusion, as well as articles from various publications. With so many cereals using multicolor combinations, in the Trademark Office’s view, the use of a similar combination on Fruity Pebbles would not cause consumers to identify the cereal as being Fruity Pebbles. Additionally, the Trademark Office pointed out that much of the evidence submitted by Post to support its application pertained to its use of the multicolor combination on crisp rice breakfast cereals, not to the broader breakfast cereals identified in the application. In view of this decision, anyone interested in registering a trademark in the U.S. should keep the following in mind: In the U.S., it is possible to register colors and product configurations as trademarks (it is much more difficult to do this elsewhere in the world); While colors and product configurations can be registered as trademarks in the U.S., it is not an easy thing to do and often requires the submission of extensive evidence showing that consumers recognize the mark; and The advice of experienced trademark counsel is crucial in prosecuting applications like this, from identifying the goods to be covered by an application to assessing whether there is sufficient evidence to establish that a mark functions as a source identifier. At Offit Kurman, we can assist with all aspects of trademark prosecution; please reach out for a consultation or if you have any questions.
January 17, 2024
Intellectual Property
Behind the Headlines: Understanding the Nuances of Mickey Mouse's Public Domain Status
Public Domain Day is a relatively new celebratory event observed on January 1. The purpose of this day is to celebrate the entry of works that were protected by copyright into the public domain. Before Public Domain Day, articles routinely appear reporting on the works entering the public domain name. In recent years, works entering the public domain have included The Great Gatsby (which became the basis for a musical that is likely heading to Broadway), The Jazz Singer, Metropolis, and Winnie-the-Pooh. Before this year's Public Domain Day, articles heralded Mickey Mouse entering the public domain. The implication, of course, is that Mickey Mouse will thus be free for everyone to use — after all, isn't that what it means when something enters the public domain? Not necessarily. Mickey Mouse is not necessarily entering the public domain, but his first appearances in two shorts, Steamboat Willie and Plane Crazy, are. Anyone wanting to use Steamboat Willie or Plane Crazy is free to do so. Either (or both) can be shown without permission from or the need to pay royalties to Disney. The same may be true of the version of Mickey Mouse shown in Steamboat Willie and Plane Crazy. That version of Mickey Mouse is in black and white, does not speak, and does not wear red pants. However, like many other well-known characters (Sherlock Holmes and James Bond, for example), Mickey Mouse has changed over time and has traits and characteristics that are still protected by copyright; only the earliest works featuring Mickey Mouse are now in the public domain. So, Mickey Mouse, as he appeared in Fantasia, is still off-limits. This is why the trailer for the recently announced slasher film Mickey's Mouse Trap uses the Steamboat Wille version of Mickey Mouse as its villain. The survival horror game Infestation: Origin also features the Steamboat Wille version of Mickey Mouse as its villain. That version of Mickey Mouse also appears set to be the villain in another recently announced untitled horror film. There is another reason Mickey Mouse is not free for everyone to use. Mickey Mouse is undeniably a symbol of Disney, and a consumer seeing goods or services being offered in conjunction with Mickey Mouse is likely to believe that those goods or services are associated with or endorsed by Disney. In other words, Mickey Mouse functions as a trademark. Indeed, Disney has multiple trademark registrations for Mickey Mouse (and for Minnie, Goofy, Pluto, Donald, and many other characters), and any effort to use Mickey Mouse to indicate the source of a product or service will likely be met with a claim of trademark infringement. Moreover, Walt Disney Animation Studio adopted a clip from Steamboat Willie as its logo, strengthening its ability to claim the early version of Mickey Mouse as a trademark. Practical considerations will also limit the availability of Mickey Mouse. Disney is no stranger to litigation and is positioned to impose significant costs on anyone it believes is using more of Mickey Mouse than they are entitled to use. In fact, Disney may very well seek out cases to litigate to concretely establish the scope of its rights in Mickey Mouse (the estate of Sir Arthur Conan Doyle did this with respect to Sherlock Holmes, resulting in a ruling in 2014 that at the time, certain of Holmes' characteristics are in the public domain and that certain of his characteristics are not). So, while we can celebrate the entry of Steamboat Willie and Plane Crazy into the public domain, one shouldn't assume that Mickey Mouse is likewise now in the public domain. The only sure thing to come from such an assumption is litigation, as it has been reported that Disney has announced its intention to continue to protect its rights. If you have any questions about using Steamboat Willie, Plane Crazy, or any other work that is in the public domain, reach out to Offit Kurman's intellectual property group for a consultation.
January 9, 2024
