Earlier this month, the Federal Circuit ruled that trademark rulings from the International Trade Commission (“ITC”) do not have preclusive effect.  This means that ITC actions do not bar district court cases, that ITC trademark rulings are not binding on district courts, and that parties are not estopped from raising arguments they’ve raised in front of the ITC to a district court.

Above The Fold - The Fox Rothschild Advertising Law BlogThe ITC is an independent quasi-judicial federal agency that, pursuant to Section 337 of the Administrative Procedure Act, has the authority to conduct investigations, hold trial proceedings, and make determinations on intellectual property disputes.  According to the ITC’s website, “Section 337 investigations conducted by the U.S. International Trade Commission most often involve claims regarding intellectual property rights, including allegations of patent infringement and trademark infringement by imported goods. Both utility and design patents, as well as registered and common law trademarks, may be asserted in these investigations. Other forms of unfair competition involving imported products, such as infringement of registered copyrights, mask works or boat hull designs, misappropriation of trade secrets or trade dress, passing off, and false advertising, may also be asserted. Additionally, antitrust claims relating to imported goods may be asserted.”

The ITC may grant remedies in the form of exclusion orders directing Customs to stop the import of infringing products and cease and desist orders directed to importers and others.  ITC cases generally move more quickly than district court cases and monetary damages are not involved.

 

This week, the U.S. Supreme Court issued a decision in the Product Holdings, Inc. v. Tempnology, LLC N/K/A Old Cold LLC case previously blogged about here and here.  The issue in that case was 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.  The Supreme Court decided 8-1 in favor of the former — i.e. that a bankrupt trademark owner/licensor cannot revoke a trademark licensee’s right to use the already-licensed mark.  This reverses what the First Circuit held and is more consistent with the exception Congress previously created for the licensing of patents and copyrights, where licensees of such intellectual property retain their rights even after a licensing agreement has been rejected by a bankrupt intellectual property owner.

In Monday’s opinion written by Justice Kagan, the Supreme Court found that the protections granted to bankrupt companies by Section 365 of the Bankruptcy Code do not extend this far and that a rejection of licensing obligations by a bankrupt trademark owner/licensor would breach the contract but would not constitute a rescission of the contract.  Justice Sotomayor concurred to point out that non-bankruptcy law could still impact individual cases and that other forms of intellectual property are still governed by different rules.  Justice Gorsuch dissented on the basis of the license agreement at issue having already expired.  Regardless of what happens next in this specific case, the Supreme Court’s ruling has implications for other cases across the country and an impact on future licensing disputes.

The Federal Trade Commission (FTC)  has agreed to settle claims with individual and business sellers of cognitive enhancement products.  The FTC previously filed a claim under the FTC Act, seeking to obtain permanent injunctive relief, restitution, the refund of monies paid, and other relief in connection with the sellers’ marketing and sale of the products.

The FTC accused the sellers of making false claims regarding their products.  Specifically, the sellers were accused of falsely claiming that dietary supplements helped increase users’ concentration, increase brain power, and prevent memory loss.  According to the FTC, the sellers promoted the product on websites designed to look like real news sites, but were actually fake websites.  The websites contained celebrity endorsements, including assertions that celebrities Bill Gates and Stephen Hawking received dramatic results from using the products.  In some instances, the sellers claimed that products had been tested in over 2,000 human clinical trials by the Nottingham Clinical Trials Unit (NCTU).

In a settlement reached earlier this month, sellers have been prohibited from making false claims regarding the efficacy of these products.  Collectively, the sellers will be required to pay over $600,000.

In recent years, an industry known as eSports has grown exponentially. For those who don’t know, eSports, or electronic sports, is a form of competition centered around video games. Primarily, individuals, or teams, compete in organized multiplayer video game competitions. Although people have been competing in video games since their existence, the popularity of organized competition has drastically risen since advanced streaming platforms geared towards video game viewing—allowing spectators to tune in across any device—were introduced. With this increased popularity, forecasters have predicted that the eSports industry will exceed $1 billion in revenue in 2019.

With any $1 billion dollar industry comes opportunity. Anyone that regularly or casually watches traditional sports sees a bevy of advertisements for an endless number of companies. Soon, those who tune in to eSports may find a similar experience. In fact, a popular eSports league gained a significant global partner when Mastercard recently signed with the League of Legends. But advertiser involvement does not end there. Companies such as Monster, Geico, Gilette, 5-Hour Energy, Snickers, and others have all advertised with various eSports platforms in some shape or form.

With this amount of popularity and a high advertiser involvement, the potential for growth in the eSports industry remains strong. In 2018, various brands were projected to invest an estimated $694 million in the eSports industry. That number is thought to grow up to $1.4 billion by 2021. Although the eSports industry has already grown exponentially, such growth may not yet slow down. As such, keep an eye out for more and more advertising efforts from global organizations in the eSports industry as the industry continues to grow.

Earlier this month, at the request of the United States Patent and Trademark Office, the Federal Circuit Court of Appeals officially set a trademark registration requirement by making an earlier ruling precedential.  That previously-unpublished ruling, which affirmed an earlier Trademark Trial & Appeal Board ruling, clarified the specific types of sales transaction information that are needed on a trademark applicant’s website to satisfy the “use in commerce” requirement for obtaining a trademark.

In evaluating “use in commerce,” the Federal Circuit distinguished between a website that merely advertises a product and a website that provides information important to buying the product.  Ultimately, the Federal Circuit affirmed that a website would need to display the product’s price range, minimum quantity requirement, acceptable payment methods, and shipping method.

As a result of this ruling, each trademark applicant should ensure that the proper detail is available on its website before filing for trademark registration when it plans to rely on its website to satisfy the “use in commerce” requirement.

 

I only (very briefly) fell for one April Fools’ prank this year.  Yesterday the University of Wisconsin tweeted what appeared to be a press release announcing that fans could no longer perform their “Jump Around” tradition at home football games due to concerns regarding seismic impacts.  After realizing my mistake and the fact that it was April 1, I wondered what company pranks I missed throughout the day.  It turns out there was no shortage.  Like every year, multiple brands took the opportunity yesterday to announce hilarious new product features and company changes, all in the spirit of light-hearted marketing and (presumably) increased consumer and media attention.  Hasbro announced that Mr. Potato Head would become Mr. Avo Head, which surely sparked the interest of avocado-loving millennials.  Red Lobster announced that it would be converting its straws to red licorice, which many tweeters hoped was true.

For additional examples of brands pulling April Fools’ pranks and a history of such pranks, read this online Vox article titled “Can a brand pull a prank?.”  For a list of bests from this year, read this online Time article titled “Here Are the Best April Fools’ Day Pranks of 2019.”

Earlier this week, the European Parliament voted in favor of a directive overhauling the European Union’s online copyright rules.  These controversial changes, following extensive lobbying and a 348-274 vote, implicate an intersection between regulators, content creators/authors, and internet companies like online platforms and news aggregators (think: social media sites, internet news sites).  The changes seek to impose liability on online platforms when users upload material that infringes on another’s copyright, a key difference from the U.S.’s Digital Millennium Copyright Act, which protects internet companies that promptly remove infringing content.  The changes would result in internet companies needing to monitor for infringing content and news aggregators being required to negotiate licensing deals with creators (i.e. paying for the articles they publish/share).

34126235 - copyrightProponents say the changes protect creators and place necessary obligations on internet companies; opponents believe the changes go too far and would limit privacy and freedom of expression.  Opposition to the changes continues to mount, as final approval and legislation is still subject to EU Ministers and member states.

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With the 2019 NCAA Men’s and Women’s College Basketball Tournaments in full swing, most people probably aren’t thinking “hmm, I wonder if the NCAA owns any trademarks related to the Tournament?” But, maybe they should be.

To date, the NCAA owns over twenty-four trademarks related to its annual Basketball Tournaments. Unsurprisingly, those trademarks include such well-known phrases as “March Madness,” “Final Four”, “Elite Eight,” and “The Big Dance.” However, many would be surprised to learn that the NCAA has also trademarked such lesser-known phrases as “And Then There Were Four” and “68 Teams, One Dream.”

Primarily, organizations like the NCAA trademark non-generic phrases or slogans that are suggestive of their product (in this case, the Tournaments) in an effort to protect its rights in licensing, advertising, and its general reputation. With those goals in mind, the NCAA is not shy about protecting its trademark rights. In fact, the NCAA provides guidance on its website regarding its trademark rights, noting that the “NCAA must be vigilant against the unauthorized use of its trademarks, tickets and references to its championships.”

In particular, dealing with and working around these trademarks can pose a challenge for business owners. For example, each year bars and restaurants have the potential to see increased revenue during tourney time. Die-hard and casual fans alike come to such establishments to eat, drink, and watch the excitement of the tournament, potentially causing a boon to a business’s profit. However, potentially infringing on the NCAA’s trademark rights by, for example, using its trademarked terms to advertise to patrons can have very real negative consequences. As a result, business owners should be wary of using any terms that encroach on the NCAA’s trademarks, and should consider erring on the side of generic, non-suggestive advertising.

The USPTO is seeking to change its federal trademark laws for trademark applicants, registrants, and parties who have are domiciled outside the United States.  The proposed change would require applicants, registrants, and parties to hire a U.S.-licensed attorney for representation at the USPTO.  Additionally, U.S.-licensed attorneys representing anyone before the USPTO in trademark matters would be required to provide their bar membership information and confirm their status as an active member in good standing.  U.S. attorneys meeting these qualifications could still represent foreign and domestic trademark applicants and registrants at the USPTO.

The proposed change is a response to the “increasing problem of foreign trademark applicants who purportedly are pro se and who are filing inaccurate and possibly fraudulent submissions that violate the Trademark Act (Act) and/or the USPTO’s rules.”  Foreign applications sometimes file applications claiming a mark’s use in commerce, but rely on mocked-up or digitally altered specimens that show the mark may not be in use.  Several of these applicants rely on advice or assistance from foreign individuals and entities who are not authorized to represent trademark applicants before the USPTO.

The USPTO also learned that U.S. attorneys have received emails from persons located in China and possibly other locations, offering to pay the attorneys to use their information in trademark filings.  The USPTO believes the solicitations are an effort to circumvent the U.S.-attorney requirement.

Public comments were accepted until March 18, 2019.  Whether the proposed change will be implemented is to be determined.

View the full text of the proposed change here.

SCOTUS has finally resolved the copyright registration debate but in doing so has emphasized a statute of limitations issue of which we should all be aware. This post follows up on my colleague’s prior posts (and here) regarding when a copyright holder can properly file a copyright infringement lawsuit.

Pursuant to 17 U.S.C. § 411(a), “no civil action for infringement of the copyright in any United States work shall be instituted until…. registration of the copyright claim has been made in accordance with this title.” As previously noted, some circuits have adopted a “registration approach,” which interprets the statute to mean a plaintiff must have a registration of their copyright before they can bring suit. Other circuits have adopted the “application approach,” holding that simply applying for and pursuing a copyright registration is all that is required to maintain a suit for infringement.

This circuit split was recently resolved by the Supreme Court, which adopted the registration approach. “[R]egistration occurs, and a copyright claimant may commence an infringement suit, when the Copyright Office registers a copyright.” However, because an author gains its exclusive copyright rights immediately upon the work’s creation, SCOTUS clarified that “[u]pon registration of the copyright… a copyright owner can recover for infringement that occurred both before and after registration.” Notably, any recovery is still also dependent upon other factors such as when publication occurred, fair use, etc.

The Court acknowledged the time for registration has increased from one to two weeks in 1956 to several months today, due in large part to staffing and budgetary shortages. Because of the long wait to obtain registration, the petitioner, Fourth Estate, raised the concern that under the registration approach a copyright owner may lose the ability to enforce her rights if the Copyright Act’s three-year statute of limitations runs out before the Copyright Office acts on her application for registration. The Court dismissed petitioner’s fear as “overstated” because the “average processing time for registration applications is currently seven months, leaving ample time to sue after the Register’s decision, even for infringement that began before submission of an application.”

This raises an interesting and rare, if not novel, issue. By requiring a potential claimant to apply for and obtain a registration on their copyright before filing suit, the statute of limitations is, in essence, substantially shortened. That is, a copyright owner cannot wait until the end of the statute of limitations period to act. If she intends to sue, she must file an application for registration months before the statute of limitations expires. Moreover, even if the applicant acts diligently and submits their application months in advance, registration is entirely dependent upon a third party, the Copyright Office. Accordingly, the statute of limitations could pass before registration occurs through no fault or want of diligence on the copyright owner’s part. Because further budgetary shortages are entirely possible, if not likely, this problem is only likely to grow.