Pattishall IP Blog

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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January 20, 2015

2015 Resolution: Privacy Compliance

Filed under: Privacy — Tags: , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 11:05 am

Jason Koransky F HRby Jason Koransky, Associate

“Privacy law” cannot be confined to a small, orderly box. Rather, it is a complicated, sprawling, and sometimes difficult tangle of federal and state laws. From the federal Fair Credit Reporting Act and Electronic Communications Privacy Act to state laws addressing use and disclosure of arrest and conviction information, privacy law implicates a broad range of business activities.

Importantly, these laws have major implications for companies that gather, assemble, or otherwise use their customers’ personal identifying information. With so many different types of businesses increasingly focused on creating relationships with their customers by collecting and using personal information, these laws affect a growing number of entities — sometimes in ways that are not readily apparent. Further, data breaches that result in the release of personal information frequently appear in national headlines and often lead to lawsuits.

And privacy law constantly evolves.

For example, proposed federal legislation (the Personal Data Protection and Breach Accountability Act) could potentially create a uniform law addressing requirements to notify consumers in the event of a data breach, which would largely replace the existing patchwork of incongruous state laws. Another piece of proposed federal legislation (the Data Broker Accountability and Transparency Act) would create requirements for a business to ensure the maximum possible accuracy of the personal information it collects and provide people a means to access, review, and dispute this information. In addition, President Obama recently discussed federal legislation to protect student data.

On the state level, examples of new laws being implemented include those related to on-line privacy rights of minors, how websites can collect personal identifying information, and information that an employer may ask a potential employee on a job application.

These laws have tangible and far-reaching implications for businesses, which certainly cannot be taken lightly or ignored. Many businesses now have privacy and information-security offices, which monitor compliance and handle issues that arise. Privacy and data security audits, legal risk assessments, and finding solutions for potential red flag privacy issues are essential to minimize the risk of a data breach and minimize the liability from ensuing lawsuits. Solution-based privacy analyses include, for example:

  • Reviewing how a company uses its consumers’ personal identifying information;
  • Reviewing privacy policies associated with websites, apps, and other products or services;
  • Analyzing systems in place to train employees on the use of consumers’ personal identifying information, as well as systems in place to protect this data; and
  • Reviewing actions that have been taken in past data breaches.

While we cannot predict much of what may occur in 2015, we can say with confidence that during this year privacy issues will continue to grow, evolve, and significantly affect businesses in this information age.

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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. 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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October 2, 2014

Not Quite “Happy Together” – Recording Industry Scores Significant Victory in First Major Pre-1972 Sound Recordings Performance Rights Decision

Filed under: Copyright, Internet, Litigation — Tags: , , , , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 9:40 am

by Jason Koransky, Associate

When Sirius XM broadcasts “Happy Together,” “It Ain’t Me Babe,” and other hit recordings from The Turtles through its satellite and Internet radio services, it infringes the copyrights to these recordings, according to a court in the Central District of California.

In an order issued September 22, 2014, in Flo & Eddie Inc. v. Sirius XM Inc., 2:13-cv-05693 (C.D. California: Public performances of pre-1972 sound recordings protected by California copyright law)[1], the record industry scored a significant victory in the first major court ruling on the issue of state copyright protection for public performances of pre-1972 sound recordings. The court granted Flo & Eddie summary judgment on its claim that Sirius’ unlicensed public performances of its sound recordings violated California Civil Code § 980(a)(2), the section in California’s copyright statute that applies to pre-1972 sound recordings. Flo & Eddie is the corporation owned and operated by Howard Kaylan and Mark Volman, founding members and the lead singer and guitarist, respectively, of the 1960s pop group The Turtles. Because the case involves only California state law, however, the court’s ruling is limited in scope to public performances of these recordings in the state of California.

This case is one of a series of lawsuits that seek royalties for public performances by new media music services such as Sirius XM and Pandora of sound recordings created before February 15, 1972, based on the argument that state law protects these recordings from such unlicensed uses. While music compositions have long enjoyed copyright protection under U.S. copyright law, only in 1972 did Congress extend copyright protection to sound recordings. Individual states, however, had enacted their own copyright statutes, which co-existed with the federal Copyright Act until the enactment of the 1976 Copyright Revision Act, which preempted these state laws. The 1976 federal law, however, expressly carved out a preemption exemption to sound recordings created before February 15, 1972. See 17 U.S.C. § 301(c) (“With respect to sound recordings fixed before February 15, 1972, any rights or remedies under the common law or statutes of any State shall not be annulled or limited by this title until February 15, 2067.”)

In 1995, Congress expanded the rights attached to a sound recording when it passed the Digital Performance Right in Sound Recordings Act, which added digital audio transmissions of sound recordings to the exclusive bundle of rights a copyright grants. See 17 U.S.C. § 106(6). SoundExchange has emerged as the performance rights organization that collects the compulsory license fees that non-interactive digital music services—including Sirius XM—pay to perform these recordings.

But Sirius did not pay, and SoundExchange did not attempt to collect, royalties for pre-1972 recordings, as these do not have federal copyright protection. The digital public performance rights that owners of these sound recordings possess have existed in a sort of legal limbo based on the interpretations of state copyright statutes. Flo & Eddie owns the rights to The Turtles’ recordings, and tested these legal waters by suing Sirius for violating California copyright law—and bringing claims for unfair competition, conversion, and misappropriation—for broadcasting its sound recordings.

The case boiled down to statutory construction. The applicable statute, California Civil Code § 980(a)(2), reads (with emphasis added):

The author of an original work of authorship consisting of a sound recording initially fixed prior to February 15, 1972, has an exclusive ownership therein until February 15, 2047, as against all persons except one who independently makes or duplicates another sound recording that does not directly or indirectly recapture the actual sounds fixed in such prior recording, but consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate the sounds contained in the prior sound recording.

Flo & Eddie argued that “exclusive ownership” of sound recordings encompasses the right to control public performances of these recordings. Sirius argued that because the statute did not expressly specify the public performance right, it was not included in the “exclusive ownership” of a recording. Based on the plain language of the statute, its legislative history, and two court decisions which implied that the California statute granted the owner of a sound recording the exclusive right to control public performances of its recordings, the court agreed with Flo & Eddie’s interpretation. As such, because no dispute existed that Sirius had broadcast The Turtles’ recordings without a license, the court granted Flo & Eddie’s summary judgment motion that these public performances infringed their sound recording copyrights. The court also granted Flo & Eddie summary judgment on its unfair competition, conversion, and misappropriation claims.

This case has the potential to create significant revenue streams for major record labels and other owners of pre-1972 sound recordings. Conversely, it presents new licensing and business challenges to Internet, satellite, and other new media non-interactive music service providers. Of course, a treasure trove of artistically and commercially successful music was recorded before 1972—think Elvis, The Beatles, Jimi Hendrix, Miles Davis, Duke Ellington … the list could go on and on. A huge void would exist if Sirius simply stopped broadcasting these recordings. As such, the full implications of the decision in the Flo & Eddie case may take years to emerge, especially considering that the decision applies only in California. For example, a court interpreting another state’s law could issue an opposite decision. But in practicality, Sirius could most likely not block its broadcasts from California. So if this decision is affirmed on appeal, new licensing requirements will likely emerge for digital public performances of pre-1972 sound recordings.

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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, as well as domestic and international trademark prosecution and counseling. He is co-author of the book Band Law for Bands, published by the Chicago-based Lawyers for the Creative Arts.

[1] http://www.soundexchange.com/wp-content/uploads/2014/09/Flo-Eddie-v.-Sirius-XM-Order-on-MSJ.pdf

 

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June 26, 2014

Aereo’s Internet-Based Television Streaming Services May Be Wizardry, But the Supreme Court is in No Mood for Magic

Filed under: Copyright, Internet, Litigation — Tags: , , , , , , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 12:17 pm

Ekhoff_Jessica_2 F LRby Jessica Ekhoff, Associate

Describing its Internet-based television streaming services, tech start-up Aereo proclaims, “It’s not magic. It’s wizardry.”[1] In yesterday’s 6-3 decision the Supreme Court disagreed, or at the very least, adopted a staunchly anti-wizardry stance.[2]

Justice Breyer, writing for the majority in American Broadcasting Cos. v. Aereo, Inc., characterized the issue before the Court as whether “Aereo, Inc., infringes this exclusive right [of public performance under §106(4) of the Copyright Act] by selling its subscribers a technologically complex service that allows them to watch television programs over the Internet at about the same time as the programs are broadcast over air.”[3] Despite Aereo’s self-description as a mere equipment supplier doing no “performing” of its own, the Court held in the affirmative.

The Court analyzed the issue in two parts: whether Aereo “performed” under the Copyright Act, and if so, whether the performance was “public.”

In concluding that Aereo did, in fact, perform under the Copyright Act, the majority of the Court turned to the 1976 amendments to the Act, which were adopted, in large part, to bring community antenna television, or CATV—the precursor to cable television—within the scope of the Act. CATV functioned by placing antennas on hills above cities, then using coaxial cables to carry the television signals received by the antennas into subscribers’ homes. CATV did not select which programs to carry, but rather served as a conduit for the transmission and amplification of television signals. Before the 1976 amendments, Supreme Court precedent considered CATV to be a passive equipment supplier that did not “perform” under the Act.[4] After the amendments, to “perform” an audiovisual work such as a television program meant “to show its images in any sequence or to make the sounds accompanying it audible.”[5] CATV thus “performed” the shows it transmitted because it both showed the television programs’ images to its subscribers, and made the accompanying sounds audible. Over a strong dissent authored by Justice Scalia[6], the majority found that, because its services were so similar to those once offered by CATV, Aereo also “performed” under the post-1976 definition of the term.[7]

Having determined that Aereo’s services constitute a performance under the Copyright Act, the Court next turned to the issue of whether those performances are public. Aereo argued its services do not constitute public performance because whenever a subscriber selects a program to watch, Aereo places a unique copy of the show in that subscriber’s folder on Aereo’s hard drive, which no one other than that subscriber can view. If another subscriber wants to watch the same show, she will receive her own copy of the program in her own folder from Aereo. The Court dismissed this argument, finding the “technological difference” inconsequential in light of Congress’s clear intent to bring anything analogous to CATV within the scope of the Copyright Act’s requirements. Under the post-1976 Act, an entity performs a copyrighted work publicly any time it “transmits” a performance. A performance is “transmitted” when it is communicated by any device or process beyond the place from which it is sent, whether the recipients receive the transmission at the same time and place, or at different times and places.[8] Aereo therefore publicly performs a copyrighted television program each time its system sends a copy of that program to a subscriber’s personal Aereo folder.

The majority characterized its holding as a “limited” one, and was careful to emphasize that its decision does not apply to other new technologies, such as cloud-based storage and remote storage DVRs. But with a slew of amici curiae predicting the decision could have a catastrophic impact on the tech industry, there are surely some who will take no comfort from the Court’s assurances. Aereo, unfortunately, may not have a spell to resurrect itself.

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Jessica Ekhoff 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. Jessica’s practice focuses on trademark, trade dress, copyright and false advertising litigation, as well as film clearance, media and entertainment, and brand management.

[1] https://www.aereo.com/about

[2] http://www.supremecourt.gov/opinions/13pdf/13-461_l537.pdf

[3] American Broadcasting Cos. v. Aereo, Inc., No. 13-461, slip op. at 1, 573 U.S. __ (2014).

[4] Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968); Teleprompter Corp. v. Columbia Broadcasting System, Inc., 415 U.S. 394 (1974).

[5] 17 U.S.C. § 101.

[6] Justice Scalia argues that Aereo does not “perform” because it is the subscriber, rather than Aereo, who selects the program she wishes to watch, which in turn activates the individual antennae Aereo has assigned to her for the purpose of viewing that program. This means it is the subscriber who is doing the performing, since she is the one rousing Aereo’s antennae from dormancy and calling up a specific program to watch. Justice Scalia went on to note that although he disagrees with the majority’s interpretation of “perform,” he agrees that Aereo’s activities ought not to be allowed, either because Aereo is secondarily liable for its subscribers’ infringement of the Networks’ performance rights, or because it is directly liable for violating the Networks’ reproduction rights. If future courts fail to find Aereo liable under either of those theories, Justice Scalia advocates relying on Congress to close the loophole. Slip Op. at 12.

[7] Slip Op. at 8.

[8] 17 U.S.C. § 101.

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June 18, 2014

REDSKINS Trademark Registrations Canceled After 8 More Years of Litigation

Filed under: TM Registration, Trademark (General), TTAB — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 3:38 pm

 

PB LRby Phillip Barengolts, Partner, and Kristine A. Bergman, Summer Associate

In the long-running dispute between representatives of Native Americans and Pro-Football, Inc. AKA the Washington Redskins (“Washington”), the Trademark Trial and Appeal Board of the United States Patent and Trademark Office (“TTAB”) cancelled six of Washington’s registrations for the mark REDSKINS.[1] It was not the first time the TTAB ruled against Washington, finding that the REDSKINS trademark was disparaging and, therefore, not registrable under Section 2(a) of the Federal Trademark Act.[2] Of course, that has been the nickname of the Washington football team since 1932.

Despite mass media misinterpretation of the implications of this opinion, as the TTAB expressly stated, “This decision concerns only the statutory right to registration under Section 2(a). We lack statutory authority to issue rulings concerning the right to use trademarks.” (emphasis original). This decision does not require the Washington team to change its name. It does not prevent the team from continuing to use the REDSKINS nickname in marketing. It does not affect the team’s ability to license merchandise using the REDSKINS name.[3] Furthermore, it does not prevent the team from suing to enforce its rights in the REDSKINS name against others who may try to use it.[4] It merely prevents the team from enjoying the special protections afforded to an owner of a federal registration.[5]

Ultimately, the TTAB found that the registrations for REDSKINS “were disparaging to Native Americans at the respective times they were registered…” This finding is remarkable because the original registration for THE REDSKINS issued in 1967.

In its analysis, the TTAB first determined that the term “redskins,” although associated with the football team, had not been “stripped” of its ethnic meaning. Second, the TTAB found that a “substantial composite” of Native Americans were disparaged by the mark. [6] The primary basis for this conclusion was a resolution issued in 1993 by the National Congress of American Indians (“NCAI”), which represented approximately 30 percent of Native Americans during the relevant time. This resolution also was found to be competent evidence of the past views of Native Americans.

The TTAB also revisited Washington’s laches defense, which was discussed in the Harjo case. The TTAB rejected the defense because it “does not apply to a disparagement claim where the disparagement pertains to a group of which the individual petitioner or petitioners comprise one or more members.” Laches is an equitable defense and, therefore, the TTAB highlighted that “it is difficult to justify a balancing of equities where a registrant’s financial interest is weighed against human dignity.” Moreover, the TTAB noted that laches is inapplicable in cases presenting a broader public policy concern. Finally, the TTAB stated that, even on the merits, the defense could not stand because there was no showing that the petitioners had unreasonably delayed in bringing the petition after each reached the age of majority or that there was economic prejudice to Washington due to the delay.

Unusually for a TTAB decision, there was a dissent. Lest the dissenting judge be deemed insensitive, the primary criticism levelled at the majority was that the evidence presented by the petitioners was insufficient to prove that “redskins” was a disparaging term in 1967 (and when the subsequent trademark registrations issued). For purposes of the eventual appeal, the dissent has some merit because the evidence relied on by the petitioners was the same as that relied on by the Harjo petitioners – and which was deemed insufficient by the D.C. Circuit to support the TTAB’s original decision finding REDSKINS disparaging.

Despite pressure from the Obama administration, Washington team owner Dan Snyder has refused to change the team’s name.[7] So, stay tuned for the eventual appeal.

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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 petitioners 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. Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, 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.

Kristine A. Bergman is a summer associate with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP.

 

[1] http://ttabvue.uspto.gov/ttabvue/v?pno=92046185&pty=CAN&eno=199.

[2] The original petition to cancel the REDSKINS trademark registrations was brought on September 10, 1992, and the petitioners prevailed before the TTAB. See Harjo v. Pro Football, Inc., 30 U.S.P.Q.3d 1828 (TTAB 1994). The United States District Court for the District of Columbia reversed the TTAB’s original decision, which was upheld by D.C. Circuit Court of Appeals. However, that ruling relied on the defense of laches because the petitioners had waited too long to bring the petition to cancel after reaching the age of majority — the issue of disparagement on the merits was not resolved.

[3] Unless a specific license had a requirement that the mark be registered, which the NFL undoubtedly would not have agreed to, given the long pendency of this objection.

[4] But see http://tushnet.blogspot.com/2014/06/unregistrable-means-unprotectable-by.html. The decision discussed by Prof. Tushnet here addresses very different facts, but it raises an interesting potential defense to any infringement claims Washington may bring over the REDSKINS mark in the future, if the TTAB decisions is upheld on appeal, of course.

[5] Perhaps of greatest importance in the context of merchandising would be the unavailability of a claim of counterfeiting, for which registration is required.

[6] Of note, the TTAB stated that a “substantial composite” need not be a majority and ultimately found that “thirty percent is without doubt a substantial composite.”

[7] U.S. Patent and Trademark Office Cancels Redskins Trademark, Huff. Post (June 18, 2014 at 10:22 A.M), http://www.huffingtonpost.com/2014/06/18/redskins-trademark-canceled_n_5507169.html.

 

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June 12, 2014

Supreme Court Permits Competitor False Advertising Suits to Proceed Under Lanham Act Despite FDA Regulation

Filed under: False Advertising, Litigation — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 2:51 pm

PB LRby Phillip Barengolts, Partner

Today, the Supreme Court provided competitors with a powerful new tool to combat potentially false and misleading statements on food and beverage labels, or any other FDA regulated materials – a cause of action for false advertising under the Lanham Act. The unanimous opinion[1] in POM Wonderful LLC v Coca-Cola Co., Slip Op. No. 12-761, 573 U.S. _ (2014)[2], specifically permits POM to proceed with its false advertising claim that Coca-Cola’s MINUTE MAID juice, which contains 99.4% apple and grape juice, .3% pomegranate juice, .2% blueberry juice, and .1% raspberry juice, but displays the words “pomegranate blueberry” in all capital letters (as shown below), misleads consumers, overruling the Ninth Circuit’s ruling to the contrary.

POM v Coca Cola Picture

The key issue before the Court was whether The Federal Food, Drug, and Cosmetic Act (FDCA), which regulates labeling of food and beverages, among other things, precludes[3] a false advertising claim over an FDCA-compliant label. The FDCA prohibits false or misleading labeling. 21 U.S.C. § 343(a). The FDCA does not allow private parties to enforce its provisions through a lawsuit. 21 U.S.C. § 337. Here, Coca-Cola complied with the Food and Drug Administration (FDA) requirements for juice labeling. 21 CFR § 102.33(d).

Both the district court and the Ninth Circuit had ruled in Coca-Cola’s favor, essentially finding that since the FDA did not impose label requirements as stringent as those sought by POM through its lawsuit, then POM should not have a private right of action to impose such requirements under the Lanham Act. The Court, however, found that the “FDCA, by its terms, does not preclude Lanham Act suits.” Slip Op. at 9. Furthermore, the Court noted that when Congress enacted the preemption provisions of the FDCA, “if anything [Congress] indicated it did not intend the FDCA to preclude requirements arising from other sources” and that “pre-emption of some state requirements does not suggest an intent to preclude federal claims.” Slip Op. at 11, citing Setser v. U.S., 566 U.S. __, __ (2012) (slip op., at 6-7).

Ultimately, the Court chose to read the Lanham Act and FDCA as complements – one protecting against unfair competition, the other protecting public health and safety. Slip Op. at 11. Indeed, the Court noted that “[a]llowing Lanham Act suits takes advantage of synergies among multiple methods of regulation.” Id. at 12. This decision will have consequences for companies in regulated industries – especially those in the food and beverage fields – because, before placing products into the marketplace, they will now need to review labels and statements both to assure compliance with FDA regulations and in light of Lanham Act principles to avoid competitor suits.

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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, 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. Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, 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.

 

[1] Justice Breyer did not participate in considering this case.

[2] Read the entire opinion here: http://www.supremecourt.gov/opinions/13pdf/12-761_6k47.pdf.

[3] This is not a preemption case – preemption addresses the situation when state and federal laws conflict. The Court made sure to point this out in its opinion. The FDCA does preempt certain state laws on misbranding. 21 U.S.C. §343-1(a).

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May 20, 2014

Can California Chrome THREE-PEAT? Its Owners Sure Hope So

Filed under: Advertising, TM Registration — Tags: , , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 3:28 pm

Paul Borovay F LRBy Paul A. Borovay, Associate

California Chrome, the horse that won both the Kentucky Derby and the Preakness Stakes over the last three weeks, has the opportunity to be the first Triple Crown winner in 36 years if it wins the Belmont Stakes on June 7. While California Chrome flirts with history next month, its owners are securing its rights in the horse’s name to capitalize on its (potential) legacy.[1]

As ESPN.com reported this morning,[2] Steven and Carolyn Coburn and Perry and Denise Martin, who make up the horse’s ownership entity of Dumb Ass Partners, filed for the trademark CALIFORNIA CHROME, Ser. No. 86/281,678, for “[a]thletic apparel, namely, shirts, pants, jackets, footwear, hats and caps, athletic uniforms.” According to the article, California Chrome’s owners hope to cash in on licensing deals that are likely dependent on California Chrome winning at the Belmont Stakes.

California Chrome’s owners will not be the only ones this spring hoping to cash in on an outcome dependent trademark. Pat Riley, the owner of the trademark THREEPEAT, Reg. No. 4,051,757, hopes to capitalize on the mark once again if the Miami Heat manage to repeat as NBA champions for a third straight year. [3] Riley first applied for the THREE-PEAT mark in 1988, Reg. No. 1,552,980, when his Los Angeles Lakers were on the cusp of winning three consecutive NBA championships only to be swept by the Detroit Pistons in the championship series.

While he was unable to exploit the mark in the 1980s, Riley has monetized it several times since then. For example, Riley reported earned over $300,000 in licensing revenue when the Chicago Bulls won three consecutive championships (twice) in the 1990s.[4]   Meanwhile, the New York Yankees and Los Angeles Lakers have also won three consecutive championships each, adding even more licensing revenue to Riley’s coffers.

Interestingly, Riley’s first registration for THREE-PEAT, the ’980 Registration discussed above, was cancelled in 2008 because he failed to file an acceptable declaration under Section 8 of the Trademark Act. Additionally, an individual filed a petition to cancel the ’980 Registration in 2001, arguing that the mark did not serve as a trademark and had become generic.[5] Holding that the petitioner failed to show that the mark did not function as a trademark or that the mark was generic, the Trademark Trial and Appeal Board (“TTAB”) noted that a type of athletic accomplishment in itself (i.e., winning three consecutive championships) did not necessarily indicate that the term “conveys any meaning, let alone a generic meaning, about [Riley’s] goods.” Pet. Cancel, p. 9. Additionally, the TTAB stated that the placement of Riley’s THREE-PEAT mark on t-shirts was consistent with how trademarks are generally used as a source identifier. Id. Last, the TTAB said that as long as Riley controls the nature and quality of his licensees’ goods, “the mark does not have to indicate a single physical source of the goods, but may also indicate a single, i.e., consistent, source of quality, regardless of the actual physical source or producer of the goods.” Id at 10.

While Riley’s most recent THREEPEAT mark, Reg. No. 4,051.757, was filed in 2010 under Section 2(f), there remains the question whether the mark has now become generic for the feat of winning three consecutive championships. While the petition to cancel the mark was unsuccessful in 2001, a mark can become generic over time. With more teams winning consecutive championships, and with more individuals invariably using the mark in a descriptive or generic manner for winning three consecutive championships, time will tell whether someone will contest the marks validity in the future and what will be the ultimate result.

With that said, Riley’s ability to monetize a mark that only has value when a series of exceptional events occurs in the future proves that patience really can pay off. While it may look like California Chrome’s owners’ gaze is affixed on the finish line on June 7, their foresight to file a trademark application last week demonstrates that their vision for both California Chrome and CALIFORNIA CHROME really starts when the race is over.

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Paul A. Borovay 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, 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.   Paul’s practice focuses on litigation in trademark, media, online gaming and entertainment, advertising, as well as trademark prosecution and counseling.

 

[1] ESPN.com reports that the horse was bred for $10,500 and has now won $3.45 million on the track. See http://espn.go.com/horse-racing/triplecrown2014/story/_/id/10957336/california-chrome-owners-file-trademark-horse-name

[2] Id.

[3] As reported on this blog only July 25, 2012, there is some debate as to whether Riley or ex-Los Angeles Lake Byron Scott coined the term THREE-PEAT. Nevertheless, Riley owns the rights to the mark. See http://blog.pattishall.com/2012/07/25/who-owns-a-trademark-jeremy-lin-wins-linsanity-as-anthony-davis-fights-for-his-unibrow/

[4] http://espn.go.com/nba/story/_/id/9360787/miami-heat-owner-pat-riley-had-foresight-patent-three-peat-not-three-heat-espn-magazine

[5] Christopher Wade, Pet. Cancel No. 21,869, 2001 WL 1028372 (Trademark Tr. & App. Bd. Sept. 6, 2001).

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May 6, 2014

Doing Your Due Diligence Before Picking A Name

Filed under: Due Diligence, TM Registration — Tags: , , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 3:04 pm

Paul Borovay F LRBy Paul A. Borovay, Associate

Entrepreneur Magazine recently published an article about things to consider before naming your business.[1] It is a good (and short) read for anyone considering starting a company, or even for those individuals who have a company and are thinking about rebranding it under a new name or concept.

To start, consider what makes a company name so important: it must be unique, easy to spell, and nowadays, ideally, play nice with Google’s, Yahoo’s, and Bing’s be-all and end-all algorithms, among other necessaries. As the Entrepreneur article points out, several names, like Apple, Snapple, Oreo and Virgin, are fun to say and easy to spell – and they stick in consumers’ minds.

But the article fails to mention one important aspect about the “picking a name process:” entrepreneurs must do their due diligence before investing time and money in a name.[2] There is nothing worse than getting excited about the perfect name only to be sued for infringing someone else’s trademark after launch.

There are several ways to avoid this scenario. A good start is to check the United States Patent and Trademark Office (USPTO) website to see whether someone else is already using your name. The USPTO provides for both word and design mark searches. Next, conduct your own internet search. If you get several results with a name that is similar to your proposed name but covers different goods or services, you might be okay. Trademark attorneys focus on these types of risk analyses.

One of the most popular services trademark attorneys offer are clearance opinions. First, the attorney will conduct a clearance search for your proposed mark. A clearance search may be obtained from a professional search vendor and reviewed by the attorney. The professional search vendors offer the broadest coverage, including reviewing federal and state trademark registrations, business names across the country (or world if you would consider selling your goods or services abroad), similar internet and domain name references, and variations and colorable imitations of your proposed name revealed through their own proprietary databases.[3] These searches are far more comprehensive than anything you or I could do on our own. They are not cheap, but they really show just how unique and protectable your name might be. Following the search, a trademark attorney will provide you an opinion assessing whether the mark is available for use, as well as your likelihood of getting a state or federal registration.

If you plan to operate your business internationally, securing the advice of a trademark attorney is definitely the way to go, as different countries have very different trademark systems. If you don’t secure trademark rights in the countries where you want to do business, someone else might easily register your name there, and there might not be anything you could do about it.

Once you do secure your perfect company name, you should consider retaining a watch service. As the name suggests, a watch service watches federal and state trademark registrars for similar trademark applications. Getting an early start to protecting the brand you have spent so much time and money developing is imperative and will help keep the scope of your rights in your name as broad as possible.

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Paul A. Borovay 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, 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.   Paul’s practice focuses on litigation in trademark, media, online gaming and entertainment, advertising, as well as trademark prosecution and counseling.

 

[1] As a complete disclosure, neither I nor this law firm has any connection to Entrepreneur Magazine – though I do own a subscription.

[2] An Entrepreneur Magazine article published on April 8, 2011, titled How Can I Find Out Whether a Business Name Is Already Taken? did discuss the importance of trademark searches.

[3] For example, would you think to search for the term “Fit You” if you were conducting your own trademark clearance search for your proposed new company name “U Fit”? Maybe, but maybe not. See You Fit, Inc. v. Pleasanton Fitness, LLC, 8:12-CV-1917-T-27EAJ, 2013 WL 521784 (M.D. Fla. Feb. 11, 2013).

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May 2, 2014

Defend Trade Secrets Act Would Create Federal Private Right-of-Action For Trade Secret Misappropriation Under Economic Espionage Act

Filed under: Trade Secret — Tags: , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 10:59 am

PB LR

 

by Phillip Barengolts, Partner

 

On April 29, Senators Orrin Hatch and Chris Coons introduced the Defend Trade Secrets Act, which would create a federal private right-of-action under Economic Espionage Act.

Currently, claims for trade secret misappropriation generally are brought in state courts regardless of the scope of the misappropriation. The resulting state-by-state protection can create problems for trade secret owners in developing global non-disclosure policies required to maintain protection for these extraordinarily valuable assets, which include secret formulas, customer lists, manufacturing techniques, business processes, advertising strategies and sales methods.

The Defend Trade Secrets Act would amend the Economic Espionage Act to provide an owner of a trade secret with significant remedies for misappropriation, including:

  • the ability to obtain an ex parte order to: a) copy electronically stored information from the alleged thief to preserve evidence of the misappropriation; and b) seize “any property used, in any manner…to commit or facilitate the” misappropriation;
  • injunctions to protect the trade secret;
  • damages for actual losses plus unjust enrichment to the extent not compensated by the award of actual losses, or a reasonable royalty in lieu of damages; and
  • if the misappropriation is willful or malicious, exemplary damages of no more than 3 times the actual damages or reasonable royalty awarded.

The requirements for the seizure order will follow those under the Lanham Act.

If the Defend Trade Secrets Act ultimately becomes law, it would provide businesses with a significant tool to protect their valuable intellectual property. Given the bipartisan support, it stands a good chance. In the meantime, companies seeking to protect their trade secrets will continue to rely upon the state-by-state protection currently in place.

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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, 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. Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, 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.

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April 29, 2014

Performance of Magic Trick Protected Under Copyright Law, Nevada District Court Holds

Filed under: Copyright, Litigation — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 11:03 am

SIA-LRBy: Seth I. Appel, Associate

A renowned illusionist has achieved a very real victory in court. The U.S. District Court for the District of Nevada held that Teller’s performance of his Shadows magic trick is protected under copyright law, even though the magic trick itself is not. Teller v. Dogge, 110 USPQ2d 1302 (D. Nev. 2014).[1]

Teller – a well-known magician, best known as half of Penn & Teller – has performed Shadows for over three decades. This illusion involves a spotlight pointed at a vase containing a rose, projecting a shadow onto a screen as shown below:

Magic Trick-Teller Blog Post

Teller, wielding a large knife, slowly cuts the leaves and petals of the rose’s shadow on the screen. Meanwhile, the corresponding leaves and petals of the real rose fall to the ground.

Teller brought a lawsuit against Gerard Dogge, a Dutch performer who uploaded to YouTube two videos of himself performing a similar illusion, entitled The Rose and Her Shadow.

Dogge’s caption for the videos stated: “I’ve seen the great Penn & Teller performing a similar trick and now I’m very happy to share my version in a different and more impossible way with you.” Dogge admitted that he posted the videos in an attempt to sell the illusion’s secret.

The court last month court granted Teller’s motion for summary judgment on his copyright infringement claim, holding that Teller’s performance of Shadows is subject to copyright protection. While magic tricks are not protected under copyright law, the court explained, the Copyright Act protects “dramatic works” and “pantomimes.” 17 U.S.C. § 102(a). “The mere fact that a dramatic work or pantomime includes a magic trick, or even that a particular illusion is its central feature does not render it devoid of copyright protection,” the court found.

The court rejected Dogge’s argument that Teller had waived his copyright because his partner, Penn Jillette, had issued a challenge of sorts, publicly stating that “no one will ever figure out” Shadows. This statement, the court observed, “merely provokes others to unearth the secret, not perform the work.” And for copyright purposes, the secret behind the trick is insignificant: “the performance it is used for is everything.”

Having determined that Teller’s illusion merited copyright protection, the court had no trouble finding infringement. Applying the Ninth Circuit’s two-part analysis – an “extrinsic test” and an “intrinsic test” – the court found that Teller’s Shadows and Dogge’s The Rose and Her Shadow were substantially similar.

The court noted that the two parties’ illusions were “nearly identical twins,” even though their secrets may have been different.

In discerning substantial similarity, the court compares only the observable elements of the works in question. Therefore, whether Dogge uses Teller’s method, a technique known only by various holy men of the Himalayas, or even real magic is irrelevant, as the performances appear identical to an ordinary observer.

Last week the court set trial for June 2, 2014, to determine whether Dogge committed willful infringement and to decide Teller’s unfair competition claim.

In its summary judgment order, the court noted that the magic community has traditionally blackballed performers who reveal other magicians’ secrets. This case confirms that wronged magicians also may have another avenue for relief, in federal court.

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Seth I. Appel is an associate attorney at 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, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Mr. Appel’s practice focuses on litigation, transactions, and counseling with respect to trademark, trade dress, copyright and Internet law.

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[1]http://scholar.google.com/scholar_case?case=12052870780115350990&q=teller+v+dogge&hl=en&as_sdt=400006.

 

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