Pattishall IP Blog

January 7, 2016

New Year’s Resolution — Review and Update Website Privacy Policy and Terms of Use

Filed under: Internet, Privacy — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 10:05 am

Jason Koransky F HRby Jason Koransky, Associate

With the changing of the calendar to 2016, now is a good time to look over your company’s often-neglected website privacy policy and terms of use. Here are 10 areas to focus on in reviewing and updating these important areas of your website.

  1. Disclosure of personal information to third parties. Under California law, California residents can request information about how your company or its subsidiaries provide personally identifiable information (“PII”) to third parties for these third parties’ marketing purposes. Your company’s website should include a notice to California residents that provides them a means to request this information. Further, on January 1, 2016, the Delaware Online Privacy and Protection Act went into effect. One of the provisions in this new law requires a website’s privacy policy to disclose the categories of third parties with which a website operator shares PII about the Delaware-resident users of a website. Accordingly, if your company’s website has any users in Delaware, your company must provide this information in its privacy policy.
  2. Disclose categories of PII collected. To comply with state laws such as those in California and Delaware, as well as to be proactive in communicating privacy issues with visitors to your company’s website, your website privacy policy should disclose all categories of PII that you collect from its users.
  3. Cookies? You should audit the use of cookies on your website, and make sure that your privacy policy properly discloses use of cookies. In addition, you should confirm that the opt-out procedures for cookies are up-to-date and functional.
  4. Limit content geared toward children. The federal Children’s Online Privacy Protection Act generally limits the collection of PII from children under 13. The new Delaware privacy law goes a step further. It prohibits the use, disclosure, or compiling of PII of a child under 18 years old if PII will be used in the marketing or advertising of 17 specific categories of goods and services, such as tobacco, tattoos, tanning facilities, or pornography. If your company’s website is not targeted toward children under 18, the website’s terms of use should expressly state this, and ask anyone under 18 not disclose PII.
  5. Tell users how to access PII. If your company’s website collects PII, the privacy policy should disclose how a user may access, review, and request changes to this PII.
  6. Use easy-to-read, straightforward language. With data security and privacy issues increasingly in the news and of concern to consumers, your website should be proactive in communicating its privacy policy. Making the policy user-friendly is a great place to start. Rather than being in hard-to-decipher legalese, the privacy policy and terms of use should use straightforward language that does not require a lawyer to understand.
  7. Make conspicuous links to the privacy policy and terms of use. The new Delaware privacy law requires that the link to your website privacy policy must be clear and conspicuous.
  8. Remove references to the E.U.–U.S. Safe Harbor Framework. In October 2015, the European Court of Justice declared that the Safe Harbor provision that allowed for the transfer of consumers’ personal information from the E.U. to the U.S. was invalid. Your website’s privacy policy, however, may still have references to this framework, such as stating your company’s compliance with it. Even though a new agreement may be negotiated, with the framework invalidated, references to it should be removed.
  9. Is your DMCA agent contact information correct? If your company’s website qualifies as an Internet Service Provider under the DMCA, it needs to have contact information for the DMCA agent to whom someone would submit a copyright infringement claim notification. You should confirm that this information is accurate.
  10. Are all e-mail, telephone numbers, and mailing addresses correct? Finally, your privacy policy and terms of use should provide website users a way to communicate with you about issues that may exist, either via e-mail, phone, or mail. Confirm that contact information is accurate, that your company actually monitors the e-mail addresses set forth on the site, and responds to inquiries that users may communicate to you.

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Jason Koransky is an associate with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois. Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, trade secret and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues. Jason’s practice focuses on trademark, trade dress, copyright, data security and privacy, and false advertising litigation domestic and international trademark prosecution and counseling, and privacy issues. He is co-author of the book Band Law for Bands, published by the Chicago-based Lawyers for the Creative Arts.

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December 22, 2015

Federal Circuit Holds: “Disparagement” Clause of Lanham Act Violates the First Amendment

Filed under: Constitution, TM Registration, Trademark (General), TTAB — Tags: , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 5:13 pm

Widmaier_Uli_1 F LRBy: Uli Widmaier

I.  The Court’s Holding:

Section 2(a) of the Lanham Act, 15 USC § 1052(a), provides that trademarks that “disparage . . . persons, living or dead, institutions, beliefs, or national symbols” shall not be federally registered (emphasis added).

On December 22, 2015, the Court of Appeals for the Federal Circuit, ruling en banc, held that this clause “is unconstitutional because it violates the First Amendment.” See In re Simon Shiao Tam, No. 2014-1203, slip op. at 62 (Dec. 22, 2015). Based on this holding, the Court vacated the Trademark Trial and Appeal Board’s determination that the mark THE SLANTS for “Entertainment in the nature of live performances by a musical band” is unregistrable as disparaging people of Asian descent.

II.   Practical Consequences:

The Federal Circuit is the statutorily designated Court of Appeals for all USPTO actions, see 15 USC § 1071(a). By holding that Section 2(a)’s disparagement clause is unconstitutional, In re Tam necessarily invalidates not only that clause, but also all USPTO precedents and rules that are based on in. Therefore, In re Tam has several immediate practical consequences:

  • Any disparagement grounds in currently pending Office Actions are no longer valid.
  • Any disparagement claims in currently pending opposition actions or petitions for cancellation must be withdrawn or dismissed.
  • No future trademark applications can be refused registration on disparagement grounds.
  • No future opposition or cancellation actions can validly be based on disparagement claims.

This describes the situation today. But it may not be the end of the matter. The issue may be bound for Supreme Court review, particularly given that a circuit split may emerge in short order. The famous REDSKINS case, in which the Board used the disparagement clause to cancel six trademark registrations of the NFL’s Washington Redskins, Pro-Football, Inc. v. Blackhorse, No. 1-14-CV-01043-GBL, 2015 WL 4096277 (E.D. Va. July 8, 2015), is currently on appeal before the Fourth Circuit. The case turns in substantial part on whether Section 2(a)’s disparagement clause violates the First Amendment. If the Fourth Circuit disagrees with the Federal Circuit’s holding and decides that there is no constitutional violation, then the Supreme Court is likely to step in and resolve the split between the Fourth and Federal Circuits on this important question of constitutional law.

If the Supreme Court were to agree with the Federal Circuit and hold that the disparagement clause is unconstitutional, then the practical implications listed above remain as they are at the moment. But if the Supreme Court were to hold that the disparagement clause is not unconstitutional, then the clause—and the USPTO regulations that depend on it—would be reinstated. What would that mean to any “disparaging” trademark registrations that were issued in the meantime? The answer is that such registrations would potentially be subject to cancellation on disparagement grounds.

III.   Takeaway:

For the time being, the practical takeaway from the Federal Circuit’s In re Tam decision is this. Trademark owners are now free to register disparaging marks, since the USPTO cannot refuse to register them on the ground of disparagement. And third parties cannot oppose applications or seek to cancel registrations on the ground of disparagement.

But any resulting registrations remain at some risk for cancellation, since the Supreme Court may well decide to review this issue. If so, the Supreme Court may overrule the Federal Circuit’s holding, whereupon the disparagement clause and the USPTO rules and precedents based on it would be reinstated.

Furthermore, a disparagement attack (should it be reinstated) cannot be averted via incontestability, since Section 14(3) of the Lanham Act, 15 U.S.C. § 1064(3), expressly permits incontestable registrations to be challenged on Section 2(a) grounds.

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Uli Widmaier is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals. The firm advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Uli’s practice focuses on domestic and international trademark, copyright, trade dress and Internet law and litigation.

 

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October 16, 2015

Second Circuit Authors Guild v. Google, Inc. – Google Books Does Not Infringe Authors’ Copyright

Filed under: Copyright — Tags: , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 4:22 pm

Widmaier_Uli_1 F LRKAB - Low ResBy: Uli Widmaier and Kristine A. Bergman

In the latest development in the 10-year legal battle between the Authors Guild and Google, the Second Circuit affirmed the district court’s grant of summary judgment in Google’s favor and held that Google Book’s search and snippet functions were “transformative” under the test of Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) and thus constituted fair use of the published books under copyright that the plaintiffs had authored.

The court, in a unanimous decision written by Judge Pierre Leval, provides a lucid summary of the relevant facts:

Through its Library Project and its Google Books project, acting without permission of rights holders, Google has made digital copies of tens of millions of books, including Plaintiffs’, that were submitted to it for that purpose by major libraries. Google has scanned the digital copies and established a publicly available search function. An Internet user can use this function to search without charge to determine whether the book contains a specified word or term and also see “snippets” of text containing the searched-for terms. In addition, Google has allowed the participating libraries to download and retain digital copies of the books they submit, under agreements which commit the libraries not to use their digital copies in violation of the copyright laws. These activities of Google are alleged to constitute infringement of Plaintiffs’ copyrights.

Slip op., pp. 2–3.

The plaintiffs made five distinct arguments, each of which the Court rejected:

(1) Plaintiffs argued that Google’s copying of entire books, together with letting readers search them and view “snippets” of them, is not “transformative” under Campbell. Slip op., p. 3.

The court found that making searchable copies and providing snippets to the public was “a highly transformative purpose” because it “augmented public knowledge” and revealed only as much as was essential to “permit searchers to identify and locate the books in which words or phrases of interest to them appeared.” Id., pp. 4, 21. While the snippet view allows users to read portions of the copyrighted book, it “communicates little of the sense of the original” and provides only “enough context surrounding the searched term to help [the searcher] evaluate whether the book falls within her scope of interest” the use was still “highly transformative [for the] purpose of identifying books of interest to the searcher.” Id., p. 23, 33.

(2) Plaintiffs argued that Google’s overall profit motive and its goal of “use its dominance of book search to fortify its overall dominance of the Internet search market” preclude a finding of fair use, even though Google does not charge for access to the books and provides the functionality in question without advertising. Id., pp. 3, 24.

The court saw “no reason in this case why Google’s overall profit motivation should prevail as a reason for denying fair use over its highly convincing transformative purpose, together with the absence of significant substitutive competition, as reasons for granting fair use.” Id., p. 26. The court also noted that “[m]any of the most universally accepted forms of fair use, such as news reporting and commentary, quotation in historical or analytic books, reviews of books, and performances, as well as parody, are all normally done commercially for profit.” Id.

(3) Plaintiffs argued that Google infringes their derivative rights by cutting into potential licensing revenues. Id., pp. 3–4.

The court found that “the copyright resulting from the Plaintiffs’ authorship of their works does not include an exclusive right to furnish the kind of information about the works that Google’s programs provide to the public. For substantially the same reasons, the copyright that protects Plaintiffs’ works does not include an exclusive derivative right to supply such information through query of a digitized copy.” Id., p. 37.

(4) Plaintiffs argued that Google’s digital copies of plaintiffs’ books are vulnerable to hackers who might distribute the books for free on the Internet. Id., p. 4

The court conceded that “this claim has a reasonable theoretical basis, [since] unreasonably expos[ing] the rights holder to destruction of the value of the copyright resulting from the public’s opportunity to employ the secondary use as a substitute for purchase of the original” may rebut a fair use claim. Id., p. 41. However, the court found that plaintiffs’ claim is “not supported by the evidence” because Google Books’ digital scans are protected by “impressive security measures” that were praised by “plaintiffs’ own security expert.” Id., p. 42.

(5) Finally, Plaintiffs argued that “Google’s distribution of digital copies to participant libraries is not a transformative use.” Id., p. 4.

The court found that “the possibility that libraries may misuse their digital copies is sheer speculation. Nor is there any basis on the present record to hold Google liable as a contributory infringer based on the mere speculative possibility that libraries, in addition to, or instead of, using their digital copies of Plaintiffs” books in a non-infringing, manner, may use them in an infringing manner.” Id., p. 45.

Throughout the decision, the court acknowledged that at risk is an important tool for public knowledge. As the court noted, “giving authors absolute control over all copying from their works would tend in some circumstances to limit, rather than expand, public knowledge. Google Books, however, “augments public knowledge by making available information about Plaintiff’s books.” Id., p. 13. Many of these books, as the court observed, are out of print, so Google Books “provide[s] otherwise unavailable information” about these works. Id., p. 18.

This decision may prove a landmark case for copyright litigants and scholars alike, as it presents useful guidance on how courts should define what is “transformative use.” The battle may not be over yet, however: the next step may be a petition for certiorari.

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Uli Widmaier is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals. The firm advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Uli’s practice focuses on domestic and international trademark, copyright, trade dress and Internet law and litigation.

Kristine A. Bergman is a new associate (pending admission) with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, rejoining the firm after working as a summer associate in 2014. Kristine received her J.D., cum laude, from Loyola University Chicago School of Law in 2015.

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September 3, 2015

California Amends Advertising Law to Provide Guidance for “Made in USA”

Filed under: Advertising, False Advertising — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 4:06 pm

BLC - Low Resby Bradley L. Cohn, Partner

Good news for manufacturers! On September 1, 2015, California amended its false advertising law to provide much-needed guidance on use of “Made in USA” and similar designations of domestic origin.

Effective January 1, 2016, California law provides that “Made in USA” may be used on products where the foreign content is 5% or less of the wholesale value of the product. The law also allows “Made in USA” to be used where the foreign content is up to 10% of the wholesale value of the product, if the manufacturer can show that the foreign components or ingredients cannot be produced or sourced in the United States.

California’s “Made in USA” law has been the subject of significant discussion in recent years, because the statute itself had not provided a clear threshold requirement for domestic or foreign content. There were also concerns that the law was not in conformity with the Federal Trade Commission’s approach for use of “Made in USA”. Multiple class-action lawsuits have been filed over the years against businesses accused of violating the California law, even where defendants claimed that they were in compliance with federal “Made in USA” guidelines.

California’s “Made in USA” statute can be found at Section 17533.7 of the Business and Professions Code. The amendment is California Senate bill 633, approved by the governor on September 1, 2015.

If you have any questions concerning California’s “Made in USA” statute, or false advertising class action defense generally, please feel free to contact Bradley Cohn or Jessica Ekhoff.

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Bradley L. Cohn is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois. Pattishall McAuliffe represents both plaintiffs and defendants in trademark, false advertising, copyright, trade secret and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and advertising issues. Mr. Cohn’s practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, advertising, data privacy unfair competition, trade secret, right of publicity, Internet, and copyright law.

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July 8, 2015

REDSKINS Trademark Registrations Still Canceled After Appeal to Federal Court

Filed under: Constitution, Litigation, TM Registration — Tags: , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 12:45 pm

PB LRby Phillip Barengolts, Partner

Today, the District Court for the Eastern District of Virginia has upheld an administrative ruling that canceled federal trademark registrations for the REDSKINS nickname of the Washington football team despite the team’s constitutional and other challenges. Pro-Football, Inc. v. Blackhorse, Case No. 14-cv-01043 (E.D. Va. July 8, 2015). [1]

Last year, on June 18, 2014, the Trademark Trial and Appeal Board of the United States Patent and Trademark Office (“TTAB”) canceled six of Washington’s federal registrations for the trademark REDSKINS because the name disparages Native Americans.[2] The team appealed the ruling to federal court. It argued, essentially, that Section 2(a) of the Federal Trademark Act (the “Lanham Act”), which prohibits the federal registration of potentially disparaging trademarks, is unconstitutional and that the Native American petitioners did not prove that the REDSKINS trademark is, in fact, disparaging. On cross-motions for summary judgment, the Eastern District of Virginia sided with the Native American petitioners on all counts.

The decision highlights an important aspect of trademark practice. As the Court admonished the parties, this case concerns the right of the Washington football team to register the REDSKINS trademark– not the team’s right to use the mark. The TTAB also highlighted this point in its decision, but mass media, and even many attorneys, confused this point.

The rights conferred by registration are important and valuable , but the TTAB only has the right to decide whether a trademark may be registered, it has no authority to stop the use of a trademark. Section 2(a) of the Lanham Act, at issue in this dispute, only applies to registration of trademarks. As the Court stated, “Thus, regardless of this Court’s ruling, [the team] can still use the Redskins Marks in commerce.”

As a practical matter, however, a trademark owner who is not permitted to register its preferred mark often chooses not to use that mark, but, ultimately, it is the trademark owner’s choice. This point is crucial for the Court’s decision and crucial for an understanding of when and why to bring an action before the TTAB.[3]

As a result of this limited application of Section 2(a) of the Lanham Act, the statute survived the constitutional challenge brought by the team. In particular, the Court found that Section 2(a) does not even implicate the First Amendment precisely because it does not prohibit the use of a trademark, and therefore, does not prohibit or impinge on any speech.

The Court also found that the federal trademark registration program is government speech under the Supreme Court’s recent decision in Walker v. Tex. Div., Sons of Confederate Veterans, Inc., 135 S. Ct. 2239 (2015).[4] Basically, this means that “the federal government may determine the contents and limits of programs that it creates and manages.” The Court also ruled that the term “may disparage” in Section 2(a) of the Lanham Act is not impermissibly vague – generally or as applied to the team. Finally, the TTAB’s ruling was not an impermissible taking because a trademark registration is not a property interest, as opposed to the underlying trademark itself, which is.

As to the team’s challenges to the ruling that the term REDSKINS may disparage Native Americans, the Court found that evidence found in dictionaries, scholarly and media references, and statements from Native Americans were sufficient to uphold the TTAB’s ruling.

In the previous iteration of this battle, the D.C. Circuit Court of Appeals upheld a ruling that laches barred the Native Americans’ suit. Pro-Football, Inc. v. Harjo, 415 F.3d 44 (D.C. Cir. 2005).[5] Here, for reasons not worth getting into, the District Court found that laches did not apply.

Undoubtedly, the team will appeal this decision to the Fourth Circuit. So, the saga of the REDSKINS trademark registration continues.

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Phillip Barengolts is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois. Pattishall McAuliffe represents both plaintiffs and defendants in trademark, false advertising, copyright, trade secret and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and advertising issues. Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, advertising, unfair competition, trade secret, Internet, and copyright law. He teaches trademark and copyright litigation at John Marshall Law School, and co-authored Trademark and Copyright Litigation, published by Lexis Publishing.

Footnotes:

[1] The full 70-page opinion can be found here: http://www.pattishall.com/pdf/PFI%20v%20Blackhorse%20Decision.pdf

[2] Further background and earlier coverage on the TTAB decision can be found here: http://blog.pattishall.com/2014/06/18/redskins-trademark-registrations-canceled-after-8-more-years-of-litigation/.

[3] The recent decision in B&B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 575 U.S. __ (2015), may have changed this calculus. See http://blog.pattishall.com/2015/03/25/supreme-court-holds-that-issues-decided-by-the-ttab-may-be-preclusive-in-federal-court/. The decision can be found here: http://scholar.google.com/scholar_case?case=15316530830472719965.

[4] http://scholar.google.com/scholar_case?case=2629371590163032730.

[5] http://scholar.google.com/scholar_case?case=2204191829610278162.

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July 7, 2015

Amazon.com Sued for Bait and Switch

Filed under: Internet, Litigation, Trademark (General) — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 2:52 pm

baa_hiresBy: Brett A. August

In an important case for all companies whose products are sold on Amazon.com, the Ninth Circuit Court of Appeals overturned a district ruling yesterday that Amazon could not be sued for trademark infringement when it presented the goods of one watch maker in response to a search for another brand of watches.  In Multi Time Machine Inc. v. Amazon.com Inc., Case No. 13-55575, the Ninth Circuit (in a 2-1 decision) ruled that Amazon’s practices could confuse consumers into believing the watches displayed in the search results are put out by a company related to the manufacturer of the searched-for watches.

This is an important result for all vendors of branded goods who believe they are losing business to competitors due to Amazon’s failure to tell users of its website that the goods for which the customer is searching are not available on Amazon.com. The court noted that Amazon’s competitors – such as Buy.com and Overstock.com –  inform customers when the goods in their search terms are not sold on those websites.

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Brett August is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals. The firm advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Brett’s practice focuses on domestic and international trademark, copyright, unfair competition, and Internet counseling and litigation.

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June 4, 2015

Wait, Wait, Don’t Tell Me – The Gov’t has Reduced Filing Fees ?

Filed under: TM Registration, Trademark (General) — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 3:33 pm

rws_high_resby Robert W. Sacoff, Partner

The big news (this will sound a little wonky, but you really should know it) is that the USPTO has just recently (effective January 17, 2015) reduced certain trademark filing fees.  How often does that happen ?

Previously, the government fee for the filing mode most commonly used, TEAS, was $325 per class, for an electronic filing. Paper filing is still possible, at a higher fee, $375 per class, but hardly anybody does it any more.  Many applicants eschewed the “TEAS PLUS” option, even though it had and still has a lower filing fee (previously $275, reduced now to $225, per class) because it handcuffs you to using only the exact wording for the goods and services that comes straight out of the Acceptable ID Manual, which can be problematic for all but the simplest product descriptions.  But now, the USPTO has created a new filing mode, called TEAS RF, for Trademark Electronic Application System Reduced Fee (they do love their acronyms), which is an attractive hybrid.  It lowers the filing fee to $275 per class, and requires only that you do what you probably do anyway, like file everything electronically, provide an email address, and agree to email communications with the USPTO. It does not restrict you to using the exact ID Manual terminology like the TEAS PLUS option still does. USPTO data since January shows the desired results: “regular” TEAS applications have dropped, TEAS RF applications have increased, and overall efficiency has improved. See the Director’s Forum blog post of May 29, 2015 at http://www.uspto.gov/blog/.

The recent rulemaking also reduced the renewal filing fee from $400 to $300 per class.  You will still have to file a Section 8 Declaration of Use when you renew (the procedure was bifurcated previously to comply with the TLT, Trademark Law Treaty), and the Section 8 filing fee is still $100 per class.

The filing options, fees and requirements are laid out in a nice USPTO chart at http://www.uspto.gov/trademarks-application-process/filing-online/reduced-fees-teas-application-filing-options

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Robert Sacoff is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois. Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, trade secret and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.

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March 25, 2015

Supreme Court holds that issues decided by the TTAB may be preclusive in Federal Court

Filed under: Litigation, TTAB — Tags: , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 9:53 am

Widmaier_Uli_1 F LRBy: Uli Widmaier

A.  The Supreme Court’s Holding

On March 24, 2015, the Supreme Court held for the first time that “a court should give preclusive effect to TTAB decisions if the ordinary elements of issue preclusion are met.” B&B Hardware, Inc. v. Hargis Industries, Inc., No. 13-352, slip op. at 2.

In other words, “[s]o long as the other ordinary elements of issue preclusion are met, when the usages adjudicated by the TTAB are materially the same as those before the district court, issue preclusion should apply.” Id., slip op. at 22. The Supreme Court remanded the case for a determination whether the conditions for preclusion are met. Id.

B.  The Reach of the Supreme Court’s Opinion

In B&B, the issue to which preclusion may apply was likelihood of confusion. But the principle announced by the Supreme Court is not limited to likelihood of confusion. Given the wording and rationale of the Supreme Court’s opinion, practitioners and trademark owners should expect any TTAB decision to have a preclusive effect if it meets the conditions for preclusion articulated by the Supreme Court. These conditions are discussed below.

That would include TTAB decisions on issues such as secondary meaning, inherent distinctiveness, genericness, abandonment, functionality, dilution, and others. Any TTAB decision on these and other issues will be preclusive if it meets the Supreme Court’s conditions. Therefore, the potential reach of the Supreme Court’s holding is broad and may have substantial implications for trademark owners.

C.  Facts

B&B owns the mark SEALTIGHT for metal fasteners in the aerospace industry; Hargis owns the mark SEALTITE for metal fasteners in the construction trade. Slip op. at 6. B&B opposed Hargis’s application to register SEALTITE and prevailed in the TTAB, which found a likelihood of confusion between the two marks. Id. at 6-7.

B&B also sued Hargis in federal district court for trademark infringement. After the TTAB had found in B&B’s favor, B&B argued before the district court that the TTAB’s decision precluded Hargis from further contesting the issue of likelihood of confusion. The court rejected B&B’s argument, and the jury found in favor of Hargis on likelihood of confusion. B&B appealed to the Eighth Circuit, lost, and then prevailed before the Supreme Court.

D.  Issue Preclusion

The Supreme Court explained issue preclusion as follows: “[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” Slip op. at 9, quoting Restatement (Second) of Judgments, §27, p. 250 (1980). Importantly, “issue preclusion is not limited to those situations in which the same issue is before two courts.” Slip op. at 9 (emphasis in original). Therefore, a decision by an administrative agency may also have issue preclusive effect. Id. (more…)

March 16, 2015

‘Blurred Lines’ Verdict Creates Unpredictable Music Copyright Landscape

Filed under: Copyright — Tags: , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 3:47 pm

Jason Koransky F HRby Jason Koransky, Associate

The recent verdict that Robin Thicke and Pharrell Williams’ hit “Blurred Lines” infringed the copyright to the late Motown legend Marvin Gaye’s composition “Got To Give It Up” has generated significant media attention.[1] And this coverage has certainly been compounded by the eye-popping $7.4 million in damages the California jury awarded Gaye’s heirs.

Controversy and debate have raged about whether the jury was correct, with the primary issue being whether Thicke and Williams actually copied “Got To Give It Up,” or were simply inspired by Gaye’s late-’70s soul/funk composition. Of course, copyright protection does not extend to a musical idea, genre, or overall “feel” of a song. Rather, copyright protects a musical expression fixed in a tangible medium — here, the written composition filed with the U.S. Copyright Office for “Got To Give It Up.” (Gaye’s estate does not own the copyright to the sound recording of “Got To Give It Up,” and thus could not assert that “Blurred Lines” infringed the recording.)

Thicke and Williams made this idea vs. expression dichotomy the primary issue in their complaint for a declaratory judgment of non-infringement: “Being reminiscent of a ‘sound’ is not copyright infringement. The intent in producing ‘Blurred Lines’ was to evoke an era. In reality, the Gaye defendants are claiming ownership of an entire genre, as opposed to a specific work . . . .”

The jury disagreed with this argument. Weighing evidence such as competing expert testimony, recordings of the compositions (interestingly, the judge only allowed the jury to hear a new recording of Gaye’s composition that was made for the litigation and which was based on the music filed with the Copyright Office), and testimony from Thicke and Williams regarding the creation of “Blurred Lines,” the jury found that Thicke and Williams incorporated too many elements of “Got To Give It Up” into “Blurred Lines,” such that it crossed the line from “inspired by” to “copying.”

Does this verdict represent a slippery slope in copyright law, in which songwriters now have grounds to plead infringement when another composition has a similar “feel” but does not actually copy a song? Further, could this decision extend to other media, such as film, literary works, or photography, in which new works are often inspired by those which precede them? (more…)

January 22, 2015

Supreme Court Finds Tacking to Be an Issue of Fact

Filed under: Trademark (General) — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 9:17 am

Jason Koransky F HRby Jason Koransky, Associate

The doctrine of “tacking” deals with priority in trademark law. A trademark owner “tacks on” its period of using an earlier version of its mark to the time it has been using the current version of the mark. For tacking to be accepted by the court or the T.T.A.B., however, the respective versions of the marks must be “legal equivalents,” creating “the same, continuing commercial impression.” In a rare opportunity to decide a substantive issue of trademark law, on January 21 the Supreme Court in a unanimous opinion held that tacking is an issue to be decided by a jury. See Hana Financial, Inc. v. Hana Bank, 574 U.S. __ (2015). In affirming the Ninth Circuit’s decision that tacking is an issue of fact, the Court settled a circuit split, with the Federal Circuit and Sixth Circuit having held tacking to be an issue of law.

In this case, the petitioner Hana Financial began using its HANA FINANCIAL mark in commerce in 1995, and in 1996 obtained a federal registration of a logo that included the HANA FINANCIAL mark for financial services. Meanwhile, in 1994, the respondent Hana Bank started to advertise financial services under the name Hana Overseas Korean Club in the United States, targeting Korean expatriates. These advertisements included the name “Hana Bank” in Korean. In 2000, Hana Bank changed its name to Hana World Center, and in 2002 it started operating a bank in the U.S. called Hana Bank.

In 2007, Hana Financial sued Hana Bank for infringing its HANA FINANCIAL mark, and in response Hana Bank claimed priority based on tacking. The case went to trial, at which the jury was given a tacking instruction. The jury found that Hana Bank did not infringe the HANA FINANCIAL mark, and the district court denied Hana Financial’s motion for judgment as a matter of law.

In its brief and straightforward opinion, the Court wrote that tacking was properly in the jury’s hands as an issue of fact because “the tacking inquiry operates from the perspective of an ordinary purchaser or consumer.” It emphasized that it has “long recognized . . . that, when the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decisionmaker that ought to provide the fact-intensive answer.”

The Court acknowledged that courts could decide a tacking issue in a bench trial or on summary judgment or judgment as a matter of law when the facts warrant such a determination. But when the parties request a jury trial, and summary judgment or JMOL is not warranted, tacking must be decided by the jury.

The Court rejected the four arguments Hana Financial made for why tacking is an issue of law. First, even though the “legal equivalents” test in tacking involves the application of a legal standard, the court found no reason why the jury could not properly apply that standard, essentially stating in dicta that the jury could consider this mixed question of law and fact. Next, it rejected Hana Financial’s argument that tacking questions must be decided by comparing the marks at issue to the marks in other tacking cases. Third, it found that juries deciding tacking would not make the trademark system “unpredictable.” Finally, it found that courts have not historically decided the issue of tacking as a matter of law, and that Hana Financial’s cited cases in which the court ruled on tacking included bench trials and summary judgments.

On its facts, Hana holds only that tacking an issue of fact for the jury. But the analysis seems to apply to other issues in trademark law as well, such as likelihood of confusion – even though the opinion does not address these other issues. If Hana is extended to such other issues, it could make it more difficult to obtain summary judgment in trademark litigation.

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Jason Koransky is an associate with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois. Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, trade secret and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues. Jason’s practice focuses on trademark, trade dress, copyright and false advertising litigation, domestic and international trademark prosecution and counseling, and privacy issues. He is co-author of the book Band Law for Bands, published by the Chicago-based Lawyers for the Creative Arts.

 

 

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