As I previously blogged about, there is a circuit split as to whether, when a trademark owner/licensor files for bankruptcy, the licensee of the trademark can legally continue use of the mark or whether the trademark owner/licensor can reject its obligations under the licensing agreement and effectively prohibit the licensee’s continued use of the mark.  A case arising from the First Circuit, Mission Product Holdings, Inc. v. Tempnology, LLC N/K/A Old Cold LLC, involves this precise question and has made its way to the United States Supreme Court.

At the end of last week, following the submission of briefs from the parties and others, the Supreme Court decided to grant certiorari in the case.  According to SCOTUS blog, the issue presented is: “Whether, under Section 365 of the Bankruptcy Code, a debtor-licensor’s “rejection” of a license agreement—which “constitutes a breach of such contract,” 11 U.S.C. § 365(g)—terminates rights of the licensee that would survive the licensor’s breach under applicable non-bankruptcy law.”

Not surprisingly, the Supreme Court did not provide any reasoning or insight into its decision to grant cert.  Nor did it directly respond to the parties’ positions regarding a recent order in Tempnology’s underlying bankruptcy case, which Tempnology argued (and Mission Product Holdings disagreed) may have a bearing on the Court’s decision to do so.

 

 

Over the past year, including in my blog post last month, we’ve traced the progression of the Coachella/Filmchella lawsuit, which was scheduled for trial earlier this month.  Approximately a week before trial, the parties settled the case and the Court entered a stipulated order as a result.  The order contains a permanent injunction prohibiting the Filmchella defendants from using the Filmchella marks, the Coachella marks, and any confusingly similar marks and requiring them to transfer certain domain names.  Like many trademark cases, this interesting and contested one did not make it to a jury.

The Coachella/Filmchella trademark infringement case, which we have previously covered herehere, and here, is headed to trial in California this October.  Last week, the federal judge assigned to the case denied Coachella’s partial summary judgment motion and ruled that a jury, not the judge, must ultimately decide whether the Filmchella founder committed trademark infringement by way of his movie festival.  The standard the judge had to apply was whether a reasonable juror could find that the two festivals are not similar enough to cause confusion, which is exactly what the judge determined.

As a result, the case will head to trial and will be decided by jury verdict.  Until then, the court’s preliminary injunction in favor of Coachella, which currently prohibits the use of Filmchella, remains in effect.

 

Just when we thought the unconstitutionality of the ban on disparaging and scandalous trademarks had been resolved, the United States Patent and Trademark Office (“USPTO”) is shaking things up.  As a reminder, and as previously covered on this blog here and here, there were two important rulings in 2017 related to the trademark ban set forth in section 2(a) of the Lanham Act.  First, in June 2017, the United States Supreme Court ruled that the disparaging trademark ban is unconstitutional under the First Amendment’s free speech clause and later, in December 2017, the Federal Circuit found that the Supreme Court’s ruling also applies to the ban on immoral and scandalous trademarks.

Refusing to accept the latter ruling, the USPTO has now petitioned the Supreme Court to review the Federal Circuit’s decision and to essentially reinstate the ban on scandalous trademarks.  Although the unconstitutionality of the disparaging trademark ban is settled law from the Supreme Court, the USPTO views the scandalous trademark ban as different and as not violative of the First Amendment.  Whether the Supreme Court will hear the case and will agree with the USPTO remains to be seen.

 

66567075 - ketogenic diet with nutrition diagram written on a note.Yesterday the Trademark Trial and Appeal Board (“TTAB”) affirmed the refusal by the United States Patent and Trademark Office (“USPTO”) to allow a Florida company to register trademarks containing the word “Keto.”  In its ruling, the TTAB explained that the term “keto” is descriptive for ketogenic dietary products, even when combined with the other words making up the company’s trademark registrations.  With the popularity in ketogenic dieting and products, this may serve as an informative ruling going forward.

The General Data Protection Regulation, or GDPR, took effect May 25, 2018. As predicted, the GDPR has complicated access to WHOIS information (commonly used to look up the contact information for website domains for, among other things, stopping others from infringing IP rights) and given ICANN (the corporation that manages WHOIS data) a headache.

ICANN (Internet Corporation for Assigned Names and Numbers) continues to struggle to identify a proposal that bridges the gap between the requirements of the GDPR and access to WHOIS information. On the day the GDPR took effect, ICANN passed a Temporary Specification, which attempted to facilitate GDPR compliance while also preserving parts of the WHOIS system of domain name registration data. This temporary guideline states the registrar and registry operator must provide reasonable access to personal registration data to third parties for: (1) legitimate interests, except where those interests are overridden by the interests or fundamental rights and freedoms of the registrants or (2) when the specified request is deemed lawful by the European Data Protection Board (EDPB), a court having jurisdiction, or applicable legislation or regulation.

First, these temporary specifications have not prevented the brand enforcement problems I previously discussed. For example, some European domain name service registrars have decided to no longer collect WHOIS information. Furthermore, Brian Winterfeldt has reported that a California-based registrar has declined a data access request related to a specific enforcement effort of intellectual property rights and that other registrars are responding to such requests on a “case-by-case basis with no transparent or predictable criteria.” More alarming is the report that at least one global company has estimated its ability to enforce trademark rights against infringing domains may drop 24%.

Second, the EDPB still has problems with ICANN’s proposal. On July 5, 2018, the EDPB urged ICANN to develop new legal justifications for why it asks for the data that makes up the WHOIS database and provided further guidance in developing a GDPR-compliant WHOIS model. ICANN appears to be taking the EDPB’s guidance to heart and is hopeful they can create a GDPR-compliant-model that satisfies their purpose of providing WHOIS data to those who need it.

Unfortunately, only time will tell if a GDPR-compliant WHOIS database will emerge. In the meantime, it has become more difficult to determine who is in charge of websites infringing on intellectual property rights making brand enforcement more challenging.

When a trademark owner/licensor files for bankruptcy, there is an open question as to whether the licensee of the trademark can legally continue use of the mark or whether the trademark owner/licensor can reject its obligations under the licensing agreement and effectively prohibit the licensee’s continued use of the mark.  When it comes to the licensing of patents and copyrights, the question is already closed: Congress created an exception in U.S. bankruptcy law that allows licensees of such intellectual property to retain their rights even after a licensing agreement has been rejected by the intellectual property owner who has filed for bankruptcy.  However, whether purposely or not, Congress did not mention trademarks in the exception, thereby leading to the current question.

The U.S. Supreme Court is currently considering whether to grant certiorari in a case that would answer this question and resolve a circuit-split on the issue.  That case is Mission Products Holdings, Inc. v. Tempnology, LLC N/K/A Old Cold LLC, which was decided by the First Circuit early this year in favor of the trademark licensor, Tempnology.  The First Circuit held that Tempnology’s rejection of its licensing agreement with Mission Products Holdings caused the latter to lose its trademark rights under the parties’ agreement in light of Tempnology’s bankruptcy.  Now Mission Products Holdings, Inc., the trademark licensee, has filed a petition seeking review by the Supreme Court and a ruling that a trademark licensee’s rights to use a trademark cannot be revoked upon the trademark owner/licensor filing for bankruptcy.

The International Trademark Association (INTA) has already filed an amicus brief asking that the Supreme Court take the case and resolve the dispute in favor of trademark licensees, who make significant investments in their businesses using the licensed marks.  According to INTA’s brief, trademarks “are the most widely used form of registered intellectual property” and a ruling in favor of trademark licensees “enhances the value of trademark licenses and promotes the stability of the trademark system.”  Tempnology’s response to Mission Product Holdings’ petition is due in early September, and the case is set for conference in late September, after which the justices may decide to hear the case (or not).

When evaluating how to address what you believe constitutes infringement, false advertising, or unfair competition, the decision to send a cease and desist letter or to file a lawsuit becomes an important one.  Is there a right approach in each instance?  No.  There are pros and cons to each and, in a typical lawyer answer, the best approach “depends.”

On the one hand, sending a cease and desist letter has the potential of resolving the issue outside of court, with fewer legal fees and on a quicker timeline.  It also has the effect of placing the other party on notice of your claim and allowing you to make an argument for willfulness down the road (if the party continues the conduct despite the allegations).

On the other hand, filing a lawsuit shows the seriousness of the allegations and preserves your choice of venue—i.e. which court you want to be in.  Sending a cease and desist letter first would let the other party know that there is a potential of a lawsuit, which would allow that party to file a declaratory judgment action in its own choice of venue before you have the chance to do so.  As a reminder, under the Declaratory Judgment Act, a party who has been accused of illegal conduct like infringement, false advertising, or unfair competition can affirmatively file suit and ask that a court declare its conduct lawful.

Deciding which approach to take will depend on the situation and any prior history with the alleged infringer or advertiser.  Make sure to weigh all of your options and discuss with your legal counsel if necessary.

Justice Anthony Kennedy of the United States Supreme Court announced his retirement yesterday, after having served three decades on the bench.  Justice Kennedy is known for casting the swing vote in a number of major cases and has drafted opinions on a myriad of hotly-contested issues, including LGBT rights and the First Amendment.  His retirement places President Trump in a position to select a conservative justice that will shift the ideological balance of the Court for years to come.

How this will impact future rulings in advertising, trademark, and other intellectual property cases remains to be seen, but we can certainly expect a more conservative slant from the bench going forward.

There are over 330 million domain names supporting over 1.8 billion websites having a unique hostname on the internet right now. But who owns each of these? There are many reasons one may want to identify the owner or operator of a particular domain or website. In addition to law enforcement and cyber security, owners of IP need to be able to enforce their rights against illegal use of their IP or bad faith domain name registration and use. For example, if your trademark is being infringed by its use on a particular website, you would want to be able to identify the owner, send a cease and desist, and/or sue. Somewhat similar to registering a home or motor vehicle, domains or websites are typically registered and information useful to identifying the individual responsible for the domain or website has, historically, been publically available.

WHOIS is a system established in the 1980s, as the modern internet was emerging. It is used to look up domain registrations in databases that store the registered users or assignees of, e.g., a domain name or IP address. Currently, the name, mailing address, phone number, and administrative and technical contacts of those owning or administering a domain name must be made publicly available through WHOIS, pursuant to the Internet Corporation for Assigned Names and Numbers, or ICANN. WHOIS is not an independent database, but rather relies on third-party accredited entities to manage data and registration. According to ICANN, it is “committed to implementing measures to maintain timely, unrestricted and public access to accurate and complete WHOIS information, subject to applicable laws.” Id.

Enter the General Data Protection Regulation, or GDPR, which is a European Union data protection regulation that will apply to any company that transacts with EU citizens, regardless of the location of the business. The GDPR requires any business that collects any personal data to request explicit permission from the subject before using that data. Personal data is defined as any information that can be used to directly or indirectly identify that person, e.g., a name, photo, email, computer IP address, etc. Under the GDPR, enterprises must limit access to personal data to only authorized individuals that specifically require access to that data. The penalties for violations are significant – up to 20 million Euros or more – and there are no exceptions for enterprise size or scope. Id. The GDPR goes into effect May 25, 2018.

ICANN has been struggling to identify a proposal that bridges the gap between the requirements of the GDPR and the access to WHOIS information. The proposals, thus far, do not do enough to assuage the fears of the third party entities that manage WHOIS data that their actions of publishing information to WHOIS are sufficient and justifiable. On the other hand, brand owners and other WHOIS users are concerned that the proposal takes an unjustifiably conservative approach. Thus, ICANN expects a WHOIS blackout period starting May 25, 2018. Going forward, there may be significantly less publicly available information to conduct enforcement investigations, send cease and desist letters, or prepare and file suit.

Online brand enforcement is about to become much more difficult if not, in some cases, nearly impossible.