U.S. Supreme Court

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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.

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Copyright: 72soul / 123RF Stock Photo

Of late, multiple authors of this blog have followed the legal landscape around “scandalous” trademarks. In particular, this post follows up on the USPTO’s petition to the Supreme Court, which we previously covered.

A “scandalous” or “immoral” trademark is one which a member of the public would likely find “shocking to the sense of truth, decency, or propriety; disgraceful; offensive; disreputable,” and generally offensive to one’s conscience or morality. Until recently, trademarks that were “scandalous” or “immoral” were prohibited. However, in December of 2017, the Federal Circuit, in In re: Erik Brunetti, found that the portion of the Lanham Act prohibiting scandalous trademarks unconstitutionally restricted free speech.

On January 4 of this year, the Supreme Court of the United States agreed to hear the appeal of In re: Erik Brunetti to conclusively determine whether the “immoral” or “scandalous” portion of the Lanham Act is in fact invalid under the First Amendment’s Free Speech Clause. In Iancu v. Brunetti, the Court is set to hear argument in April of 2019, with its final decision to come shortly thereafter. If the Supreme Court upholds the lower court’s decision, new and previously “scandalous” trademarks will likely be in front of the Trademark Office. Only time will tell what new and interesting trademarks consumers may start seeing if scandalous trademarks are no longer widely prohibited.

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.

 

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.

 

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).

Yesterday the United States Supreme Court announced that it was granting the petition for writ of certiorari in the copyright infringement case previously discussed on this blog here and here.  The case is Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC and involves the question of when a copyright holder can properly file a copyright infringement lawsuit.

34126235 - copyrightCurrently there is a circuit-split as to whether the term “registration” as used in the Copyright Act includes the mere filing of a registration application or whether it requires that the Copyright Office have actually approved or denied the registration application.  The plaintiff in the case, Fourth Estate Public Benefit Corp., filed suit before the Copyright Office had approved or denied its application, and the Eleventh Circuit affirmed the lower court’s dismissal of its complaint on that basis.  The United States Solicitor General, who the Supreme Court invited to weigh in earlier this year, urged the Court to take the case and uphold the Eleventh Circuit’s position.

The Supreme Court is now poised to resolve the dispute and to give copyright holders clarity as to whether they may file suit merely after filing an application for a copyright registration.

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.

In what may be the final installment of a series of blog posts related to the Lanham Act’s disparaging trademark ban and its effect on the Washington Redskins’ trademarks, the Fourth Circuit finally issued a decision in the Redskins’ case.  When the United States Supreme Court ruled last June in a case involving the Slants rock band that section 2(a) of the Lanham Act was unconstitutional, the fate of the Washington Redskins’ trademarks became clear.  But it took until yesterday for the Fourth Circuit to officially weigh in.

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In yesterday’s simple one-page decision, the Fourth Circuit vacated the lower court’s ruling (which affirmed the U.S. Patent and Trademark Office’s earlier order) that six of the team’s trademarks violated section 2(a) of the Lanham Act.  In other words, as expected, the Fourth Circuit issued an order in line with the Supreme Court’s decision that the disparaging trademark ban is unconstitutional and cannot bar the registration of an allegedly disparaging trademark.  As part of its ruling, the Fourth Circuit dispensed with oral argument and remanded the case to the lower court for further proceedings consistent with the Supreme Court’s decision.  Given that the remand is merely a formality at this point, the Washington Redskins may now finally feel closure on the issue (though in true procedural fashion, the Fourth Circuit’s Notice of Judgment does confirm that there is 90 days to file a petition for certiorari to the Supreme Court).

To trace this blog’s history of this interesting trademark issue, check out blog posts here, here, here, here, here, here, here, here.

This post follows up on my prior blog post regarding the case pending at the United States Supreme Court involving the question of when a copyright holder can properly file a copyright infringement lawsuit.  The petitioner, Fourth Estate Public Benefit Corp., has framed the issue in its petition for certiorari as follows:  “Whether ‘registration of [a] copyright claim has been made’ within the meaning of § 411(a) when the copyright holder delivers the required application, deposit, and fee to the Copyright Office, as the Fifth and Ninth Circuits have held, or only once the Copyright Office acts on that application, as the Tenth Circuit and, in the decision below, the Eleventh Circuit have held.”

34126235 - copyrightFollowing the parties’ respective briefing as to whether the Supreme Court should grant certiorari and thus review the case, the Supreme Court has now invited the United States Solicitor General to submit a brief as well.  In other words, the Supreme Court is interested in the Solicitor General’s view on the issue.  A recent American Bar Association article explains that the Supreme Court has increasingly requested the views of the Solicitor General in order to assess how the United States’ interests are being affected by a lower court’s decision and to determine whether the case is important enough or a circuit split is developed enough to warrant the Supreme Court’s review.  This may mean that the Supreme Court is considering granting certiorari in this case, but it will likely be some time before we learn of that.

Continuing my ongoing coverage of the Lanham Act’s disparaging trademark ban, the Federal Circuit ruled today that the U.S. Supreme Court’s June 2017 ruling striking down the ban on disparaging trademarks also applies to the ban on “immoral” and “scandalous” trademarks set forth in section 2(a) of the Lanham Act.  Applying First Amendment free speech rights, the Federal Circuit overturned the U.S. Patent and Trademark Office’s refusal to allow a trademark applicant to register the term “Fuct” for his apparel brand.  Despite the Supreme Court’s ruling regarding disparaging trademarks, the USPTO had apparently continued to take the position that it would not register immoral or scandalous trademarks.  The Federal Circuit has now rejected that position, finding that the ban on immoral and scandalous trademarks is unconstitutional just like the ban on disparaging trademarks.