MJ’s THOUGHTS ON IP LAW
THE DIFFERENCES BETWEEN TRADEMARKS AND COPYRIGHTS AS ILLUSTRATED THROUGH A FICTIONAL SMALL BUSINESS
By MANOTTI L. JENKINS
You and four of your creative, talented, and exquisitely dressed fraternity brothers have been talking about establishing a fashion design business since your college days. Life happens and you go your separate ways for a while, but meet up again at the organization’s Centennial Celebration. The five of you emerge from that prominent event poised to pursue your dream company and to utilize a platform that had not substantially matured during your college days – the Internet.
The five of you establish a limited liability company (LLC) and launch a website. Each of you begins developing various clothing designs that have a certain signature style, including written pattern instructions. You coin a name and create a logo to brand your LLC, as well as names and logos to brand your various clothing products. And you create an electronic newsletter to help with on-line promotion and marketing. In other words, your LLC and its individual members have intellectual property (IP) and you need to protect it.
What can/should you trademark and what can/should you copyright? Are any of the items mentioned not protectable by either trademark or copyright? Let’s first define these two forms of IP, consider the rights each protects, and then point out their differences. This discussion is necessary because many people confuse the two concepts and improperly use them interchangeably, even some non-IP lawyers.
A trademark can be a single word, a short phrase, a design, a symbol, a logo, a sound, a shape, a color, or even a fragrance that identifies or distinguishes the source of the goods or services of one company from the goods or services of another company. A trademark is a vital tool to protect a company’s brand image. It conveys to the purchasing public that a product or service bearing the trademark is produced by the same source, and the trademark can be relied upon by consumers as a quick indicator of the product’s or service’s quality. If it is sufficiently strong, your trademark will cause a psychological response in consumers when they see, hear, or even smell your mark. If a company selling products or services in the same or a related market as another company uses the latter’s trademark (or some colorable imitation of the trademark) in a manner that confuses consumers, there is infringement, which the trademark owner can stop. A trademark primarily develops its strength and validity through use and distinctiveness, and if properly maintained, can last forever.
Items such as songs, poems, books, articles, and other writings (printed or digital), creative phrases, drawings, paintings, printed images, digital photos, websites, and similar things are copyrightable subject matter, as long as they are original and fixed in a tangible medium of expression. “Original” simply means that the author created the subject matter herself and did not copy it from someone else. “Fixed in a tangible medium of expression” is just IP lawyer-speak for saying that the original work is able to be perceived, reproduced, or otherwise communicated, in contrast to being an abstract idea. A copyright arises automatically at the time of creation, and, generally speaking, lasts for the life of the creator plus seventy (70) years.
A short-hand way to understand the difference between a trademark and a copyright is that trademarks protect commercial branding, predominately for the protection of consumers; copyrights protect creativity, mainly for the protection of the creator.
Small businesses need to recognize the differences between trademarks and copyrights for a number of reasons, including so they can know how to appropriately use these different forms of IP for themselves as well as vis-à-vis others. For instance, if you allow competitors and others to sell their wares using your trademark for some period of time without demanding that they stop, your trademark can become invalid as no longer capable of distinguishing a single source; or, at the least, its strength can become substantially diluted. With copyrights, on the other hand, someone may copy your protected, original work of authorship, and although they would be wrong and liable to you for damages, you don’t run any risk of losing any legal rights (although you might lose money from the infringement). Another reason you as a small business owner should know the difference between a trademark and a copyright is that one form of protection will permit you to exclude some types of commercial activities by your competitor, while the other form of protection will not allow such exclusion because the activities would be shielded by certain defenses.
Now, back to our snazzy and industrious fraternity brothers with the on-line fashion design business. First, immediately on creation, they should have their copyright notice placed on their website to give notice to the public of their intention to exclude others from copying their website. Registration of the website with the Copyright Office is not mandatory because there is a low risk that anybody will copy the website and require that you file a lawsuit against them, for which registration is a prerequisite. Then, after having a trademark lawyer conduct a thorough search to make sure there are no impediments, the brothers will want to prominently publish their LLC name and logo on their website, which permits them to establish use of those branding insignia as trademarks before filing for registrations. Although use is not absolutely necessary before filing for a trademark registration, it can accelerate the process of obtaining the registration. As they publish their newsletters on the website to help in the promotion of their business, the brothers should strongly consider filing for copyright registrations on their newsletters, because copying by viewers of different articles and other contents of the newsletters is highly possible.
I purposely saved for the latter part of this discussion the fraternity brothers’ two other activities mentioned above, because they deserve greater explanation. First, the clothing designs. Clothing designs may be registrable and protectable as copyrights and trademarks and they should be. The law recognizes the creativity involved in certain non-functional facets of the fashion designs as copyrightable subject matter. If agreed upon by the brothers, each individual designer will need to assign the copyrights protecting his respective designs to the LLC, because the copyrights originally will be the property of the individual creator/designer. Likewise, if the brothers are successful in creating a certain signature look in their clothing designs that is both recognizable and articulable, and that the buying public can use as a visual “symbol” to know that the clothing designs are produced by these brothers, then the non-functional aspects of those clothing designs may be trademark protectable. Copyright protection of the clothing designs will prevent others from stealing the creative aspects of the brothers’ designs; trademark protection will prevent others fromdeceiving consumers as to the source of the products, while simultaneously protecting the goodwillthe brothers have developed through their signature design styles.
Finally, the written pattern instructions associated with the clothing designs will not be protectable by either copyright or trademarks. This is because the pattern instructions are a description of a procedure, process or method of operation for making something, which the law considers to be functional in nature. As such, the pattern instructions may be protected by a utility patent, which is beyond the scope of this article.
As with all of the Law Offices’ blog posts, this discussion is not intended as legal advice, but anyone interested in a further discussion of these issues to help strengthen (or help to establish) their business should call us for legal advice – (844) MLJLAW1 (844-655-5291).
AS YOU RECORD YOUR HIT SONG, PLEASE DO NOT FALL PREY TO THE “FOUR NOTE” OR “FIVE SECOND”OR “ONE BAR” MYTH ABOUT MUSIC SAMPLING – YOU WILL FIND YOURSELF DEFENDING AGAINST A COPYRIGHT LAWSUIT
By MANOTTI L. JENKINS
In my nearly 20 years of practicing intellectual property (IP) law, I don’t believe I have heard a more widespread myth than the erroneous view that it is legally permissible to sample some very small portion of a copyrighted song without permission. Wrong. Although I am not certain about the genesis of the myth, I assume it finds its origin in a misunderstanding of the “fair use” defense in copyright law as applied to music sampling. In this post, I will attempt to eradicate that myth and clarify the misunderstanding of the “fair use” doctrine, while also imparting some important principles and historical information about music sampling.
First, a little background. Sampling occurs when an artist incorporates portions of a previously recorded song into a new composition. Sampling without permission is a blatant act of copyright infringement, which can subject the bad actor to hundreds of thousands of dollars in damages. Personally, I am a fan of sampling, especially when legally done the right way. Probably my favorite uses of sampling in the hip hop era are the electric piano riffs from my client Bunny DeBarge’s largely unknown song, “A Dream,” that are substantially used in Tupac’s “I Ain’t Mad Cha” and Blackstreet’s “Don’t Leave Me,” and Heavy D’s sample of the JB’s and James Brown’s “Pass the Peas” in his song, “The Overweight Lover’s in the House.” I appreciate sampling’s ability to keep alive many of the old school classics. And while I digress, this departure provides a good segue to allow me to dismiss another popular myth – that sampling originated with the hip hop and rap genres in the early 1980’s. Also wrong.
The roots of sampling go back as far as the 1940’s, when early sound pioneers Pierre Schaeffer and Pierre Henry began collaborating in using disc cutters to create what was then considered “revolutionary” sound collages, such as trains and mechanical noises. In the early 1960’s, musician and composer James Tenney built on that practice when he created his “Collage #1” recording by clipping out portions of, playing with the tempo of, and rearranging a then existing popular song, “Blue Suede Shoes,” by Elvis Pressley. But even prior to that, in the mid-1950’s, musicians Dickie Goodman and Bill Buchanan recorded a song, “Flying Saucer,” which comprised a playful mashup of rock and roll hits. Goodman and Buchanan later recorded other popular songs based on a similar formula, consequently inducing some of the earliest copyright infringement lawsuits involving music sampling. Notwithstanding that history, it cannot be disputed that hip hop and rap have taken sampling to a new level, with the concomitant proliferation of copyright infringement lawsuits against any impermissible uses.
When handled properly, sampling can be very lucrative for the creator of the newer composition. The process of obtaining permission from the owners of the sampled music is known as “sample clearance.” Sample clearance, which comes in the form of a license, must be obtained from two copyright sources and for two forms of copyright: (1) the sound recording copyright, which is usually owned by the record company; and (2) the underlying musical composition copyright, which is usually owned by the songwriter or the publishing company. There are two types of sampling licenses: (1) a flat fee or “buy out” license, which will give you the clear rights to use the sample by paying a flat fee to the copyright owner; or (2) a license based on a percentage of the mechanical royalty rate, which is calculated from the number of records using the sample that are manufactured. Because there are no statutory provisions or common law principles governing sampling fee amounts, the copyright owners can charge whatever they want to charge to license the sample. Flat fee licenses can range from $500 to $15,000 and mechanical royalty rates licenses generally range between 2 cents and 5 cents per record pressed. The license fee amounts vary depending on (1) how much of the sample you want to use (a quarter second is considered a minor use, while five seconds is considered a major use); (2) the actual music you intend to sample (the chorus from a Michael Jackson song will cost more than an obscure drum beat from a Rolling Stones song); and (3) how you will use the sample in your song (it will cost more if you intend to build your entire song around the sample than if you intend to give the sample only minor significance).
Now, back to the primary myth. It does not matter whatsoever how small of a portion of a sample of someone else’s music you use in your song; if you use the sample to make money and without sample clearance, there is a good chance you will find yourself in court defending against a lawsuit. One note from a copyrighted sound recording used without permission can land you in federal court. The test for infringement is whether the sample is “substantially similar” to the original and the judge and jury will make that finding based upon their listening ears. As I discussed above, I suspect this myth finds its genesis in the misunderstanding by many people of the role of the “fair use” defense in copyright cases involving music sampling. For sampling to be considered “fair use,” the threshold determination must be that the sample was used for criticism, comment, news reporting, teaching, scholarship or research. More often than not, sampling is used exclusively to contribute to the money-making capability of the overall recording, which the law does not recognize as a “fair use.” Only after it is determined that the sample was used for one of the above-referenced purposes, then and only then will the law venture to consider, as one of the “fair use” factors, the amount and substantiality of the sample that was used.
So, as you proceed to create the next major hit song and you want to sample “just a note or two” from an old Beatles, Supremes, or Temptations hit, please hire an IP lawyer and obtain clearance. Odds are you will gain far more in the long run and, indeed, by retaining a law office of skilled negotiators, you could end up paying close to nothing for the use.
WITH THE NFL BANKROLLING ITS APPEALS, THE REDSKINS CONTINUE TO DEFEND ITS TRADEMARK REGISTRATIONS, CITING TO A LAUNDRY LIST OF “OFFENSIVE” TRADEMARKS
BY MANOTTI L. JENKINS
This past summer, it was revealed that the NFL is bankrolling the Redskins’ appeals of the cancellation of six of its trademark registrations, as ordered by the U.S. Patent & Trademark Office (“USPTO”) in July 2014 and affirmed by a Virginia federal court in July 2015. On the strength of the NFL’s deep pockets, the Redskins have appealed to the Fourth Circuit Court of Appeals, arguing that the USPTO has fostered arbitrary enforcement by granting trademark registrations that the team believes are “racist, or misogynistic, vulgar, or otherwise offensive,” while ruling to cancel the Redskins’ registrations. This case is likely to go up to the Highest Court in the land, and don’t be surprised if the final decision comes down along ideological lines.
I blogged this past July on the decision by the E.D. of Virginia affirming the USPTO’s cancellation of six Redskins trademarks, pursuant to Section 2(a) of the Lanham (Trademark) Act, 15 U.S.C. § 1052(a), on grounds that the “Redskins” trademark registrations contained matter that “may disparage” a substantial composite of Native Americans and bring them into contempt or disrepute at the time of the trademarks’ registrations (1967, 1974, 1978 and 1990). In that writing, I also predicted that the Redskins would appeal to the Fourth Circuit Court of Appeals and that it was likely the case would go up to the U.S. Supreme Court.
At the end of last month, the Redskins’ lawyers initiated the appeal, which also seeks to overturn the rulings of the USPTO and the Virginia district court on federal Constitutional grounds, citing to the First Amendment and alleged unconstitutional vagueness. The appeal reads: “To our knowledge, of the over three million trademarks registered since 1870, no registration has ever been retroactively cancelled for being disparaging. The Redskins are the first and only. The name is over 80 years old, and the registrations nearly 50.” The Redskins’ high-priced lawyers cite to the following partial list of name brands that have been registered by the USPTO that the Redskins argue could be considered offensive:
- TAKE YO PANTIES OFF clothing
- DANGEROUS NEGRO shirts
- SLUTSSEEKER dating services
- DAGO SWAGG clothing
- DUMB BLONDE beer
- TWATTY GIRL cartoons
- BAKED BY A NEGRO bakery goods
- BIG TITTY BLEND coffee
- RETARDIPEDIA website
- MIDGET-MAN condoms and inflatable sex dolls
- JIZZ underwear
- THUG PORN
- GHETTO BOOTY
- CRACKA AZZ SKATEBOARDS
- OH MY NAPPY HAIR shampoos
- LAUGHING MY VAGINA OFF entertainment
- NAPPY ROOTS records
- BOOTY CALL sex aids
According to the Redskins’ lawyers, “Word limits prevent us from listing more.”
The Fourth Circuit Court of Appeals has historically been considered conservative and inclined to side with institutions like the Washington Redskins on an appeal of this nature, involving issues of free speech, vagueness and IP branding. As such, it would not surprise me if the Fourth Circuit overturned the rulings of the USPTO and the E.D. of Virginia and sided with the Redskins. I have no doubt that this matter will be briefed and argued before the U.S. Supreme Court in 2016. Candidly, as an opponent of the Redskins trademark registrations, I am bracing myself for a disappointing 5-4 decision upholding the registrations.
NOT THAT YOU CARED BEFORE, BUT NOW YOU CAN SING “HAPPY BIRTHDAY” AT A PARTY AND NOT WORRY ABOUT BEING SUED
By MANOTTI L. JENKINS
Happy Birthday to you
Happy Birthday to you
Happy Birthday dear [NAME]
Happy Birthday to you
Believe it or not, those simple lyrics have been the basis for Warner/Chappell Music, one of the defendants in the case, Rupa Marya, et al. v. Warner/Chappell Music, Inc. et al. (C.D. California), to extract millions of dollars in copyright licensing fees from entities wanting to use or publicly perform the lyrics over the past several decades. And to strain your credulity even further, I should also mention that Warner/Chappell Music’s gravy train came to a screeching halt this week over its decision to require one such entity to pay a mere $1,500 for a synchronization license to use those lyrics. That entity, Good Morning to You Productions Corp., and others (the “Plaintiffs”) decided to file a class action lawsuit against Warner/Chappell Music and another company, Summy-Birchard, Inc. (the “Defendants”), seeking a declaration that the copyright registration covering the Happy Birthday To You (“Happy Birthday”) lyrics is invalid.
In a relatively complex decision involving many historical facts dating back prior to 1893 and copyright principles governed by the 1909 Copyright Act, the California federal court issued its Memorandum Opinion and Order in the case on September 22, 2015. The Plaintiffs won the case and are demanding that the Defendants be compelled to return the “‘millions of dollars of unlawful licensing fees’ they have collected by wrongfully asserting copyright ownership in the Happy Birthday lyrics.”
The gravamen of the dispute was Defendants’ claim that a certain copyright registration bearing No. E51990, filed by a predecessor company to defendant Summy-Birchard, Inc., covered the Happy Birthday lyrics, and that they obtained that registration, which gave them the rights to extract licensing fees from entities who have sought to use and publicly perform the lyrics. The Plaintiffs argued that the E51990 registration did not cover the Happy Birthday lyrics and thus never granted any such rights to the Defendants, and further that the lyrics had entered the public domain decades ago as a result of the failure by the creator of the lyrics to properly protect their creation under the applicable copyright statute. Both sides filed motions for summary judgment against the other’s arguments, requesting that the California federal court rule in their favor as a matter of law, on the basis that no genuine dispute of facts existed on the key issues so as to require a trial.
At the risk of boring you to tears, I will discuss an abbreviated history of the creation of the Happy Birthday lyrics, as captured by the Central District of California. Prior to 1893, two sisters, Mildred Hill and Patty Hill, wrote another song having the same classic melody as the Happy Birthday song, which other song was entitled, Good Morning To All (“Good Morning”). The first historical reference to the Happy Birthday song appeared in print in a 1901 article, although the lyrics were not included in the article, and in 1909, a prayer songbook also made a reference to the Happy Birthday song without publishing the lyrics. The first publication to disclose the full lyrics to the Happy Birthdaysong was a 1911 book, which did not credit anyone with authoring the lyrics, but did mention that the song shared the same melody with the Good Morning song. After 1911, the full lyrics of theHappy Birthday song appeared in other publications – a 1924 book and a 1928 book – neither of which credited anyone with creating the Happy Birthday lyrics. In the early 1930’s, the Happy Birthday song appeared in a series of movies, and in 1933, the song was publically performed in a play.
The legal significance of the previous facts is that, under the 1909 Copyright Act, which was then in effect, a person secured a federal copyright by publishing a work with proper notice. Before that publication, the work would be protected by common law copyright. However, if the work was published without notice, then the author failed to obtain a federal copyright and lost all common law rights in the copyright. Rupa Marya, et al. v. Warner/Chappell Music, Inc. et al. (citing Twin Books Corp. v. Walt Disney Co., 83 F.3d 1162, 1165 (9th Cir. 1996) (“When a work was published for the first time, it lost state common law protection. The owner could, however, obtain federal protection for the published work by complying with the requirements of the 1909 Copyright Act. If the owner failed to satisfy the Act’s requirements, the published work was interjected irrevocably into the public domain precluding any subsequent protection of the work under the 1909 Copyright Act.”)
In 1934, Mildred’s daughter Jessica, who had obtained certain rights as her mother’s heir after Mildred died, filed a copyright infringement lawsuit against the producers of the 1933 play that publically performed the Happy Birthday song, mentioned above. The basis for the lawsuit, however, was not that the producers of the play had infringed any rights in the Happy Birthday lyrics, but instead that they infringed the copyright in Good Morning, which shared the melody with theHappy Birthday song.
During that 1934 litigation, Patty for the first time claimed, in her deposition, that she had written the lyrics to the Happy Birthday song around the same time that she and her deceased sister created the Good Morning song, i.e., prior to 1893. In 1935, the Clayton F. Summy Company (the “Summy Co.”), a predecessor to defendant Summy-Birchard, Inc. in the present case and whose founder and name sake had established a business relationship with the Hill sisters previously, registered copyrights to two works entitled, “Happy Birthday To You.” One of those copyrights bears Reg. No. E51990, which is the primary registration at issue in the present case.
The California federal court did not have the benefit of any contractual agreements from 1935 or before between the Hill sisters and the Summy Co. concerning the publication and registration of Copyright Reg. No. E51990. The court had to rely on evidence presented by the parties of a 1942 federal lawsuit filed by the Hills’ foundation against the Summy Co. That case involved three agreements between the foundation and the Summy Co. Among those three agreements, the Defendants primarily staked their claim that Copyright Reg. No. E51990 covered the Happy Birthday lyrics on the second agreement.
According to the foundation’s allegation in the 1942 case, the second agreement granted Summy Co. “a number of licenses” for “various piano arrangements of the song variously entitled ‘GOOD MORNING TO ALL’ or ‘HAPPY BIRTHDAY TO YOU.’” In its answer to that allegation, the Summy Co. admitted that the second agreement assigned “various piano arrangements of Good Morning To All” to Summy Co. Thus, neither of the parties in the 1942 case contended that the second agreement conveyed any rights pertaining to the Happy Birthday lyrics.
After the California court went through an extensive analysis of the facts and sub-issues in the case, the court summarized the critical issue, as alluded to above:
The distinction between the music and the lyrics [of the Happy Birthday song] as copyrightable elements is critical in this case because [both sides] agree that the Happy Birthday melody was borrowed from Good Morning and entered the public domain a long time ago. The Parties disagree only about the status of the Happy Birthday lyrics. Defendants contend, in brief, that the Hill sisters authored the lyrics to Happy Birthday around the turn of the last century, held onto the common law rights for several decades, and then transferred them to Summy Co., which published and registered them for a federal copyright in 1935. Plaintiffs challenge nearly every aspect of this narrative. They argue that the lyrics may have been authored by someone else, the common law copyrights in the lyrics were lost due to general publication or abandonment before the lyrics were published, and the rights were never transferred to Summy Co.
Although the court found factual disputes with respect to many of the competing arguments between the two sides, the court ruled that there was no evidence supporting the Defendants’ position that Copyright Reg. No. E51990 covered the Happy Birthday lyrics or that the second agreement between the Hills and Summy Co. granted rights to such lyrics to the Summy Co. The court found particularly persuasive the evidence presented by the 1942 litigation, pointing out that the Hills and the Summy Co. both pled in that litigation that the second agreement transferred rights in “piano arrangements” and not any lyrics. The court wrote, quite sarcastically: “Obviously, pianos do not sing.” The court concluded its decision as follows:
Defendants ask us to find that the Hill sisters eventually gave Summy Co. the rights in the lyrics to exploit and protect, but this assertion has no support in the record. The Hill sisters gave Summy Co. the rights to the melody, and the rights to piano arrangements based on the melody, but never any rights to the lyrics. Defendants’ speculation that the pleadings in the Hill-Summy lawsuit somehow show that the Second Agreement involved a transfer of rights in the lyrics is implausible and unreasonable.
As such, proceed with singing the Happy Birthday song at every birthday party you attend without the fear of being sued (but be careful singing the Stevie Wonder version).
THE BEST IP PROTECTION FOR SOFTWARE? COPYRIGHTS ARE THE WAY TO GO FOR SMALL BUSINESSES AND INDIVIDUAL INVENTORS
BY MANOTTI L. JENKINS
No other intellectual creation has divided legal scholars and practitioners concerned with the proper protection of intellectual property (IP) more ardently than has software. IP journals and treatises spend considerable page space capturing the debates about whether copyrights or patents are the better form of IP protection for this 20th Century phenomenon. Given the major issues that generally affect small businesses and individual inventors, such as keeping costs relatively low and getting the most “bang for their buck,” I believe copyright protection is generally the best way to go. In undergoing this analysis and reaching this conclusion, I am assuming that many, if not most, small businesses and individual inventors will seek to commercialize their software IP on the open market comprised of substantially sized commercial entities. In any event, as I discuss below, copyright protection has certain limitations vis-à-vis patent protection that the small business and individual inventor would have to be prepared to live with.
But first, a little background. A good, basic definition for software is a computer program having a set of statements and instructions that are used in a computer to accomplish a certain result. And therein lie the seeds of the dispute – copyright law protects “literary works,” i.e., the “set of statements and instructions” portion of the definition, while patent law (utility patents) protects “functional systems, processes, and methods of operation,” i.e., the “used in a computer to accomplish a certain result” portion of the definition.
The distinction is illustrated even further when you consider the three basic elements of software: source code, object code, and documentation. Source code is the original code in program languages, which specialists in the field can read. Object code is the code read by the computer and which can be read by humans only when it is transformed into source code. Copyright law protects the “expression” of an idea, but not the idea itself. In contrast, patent law protects underlying processes and inventive features. Hence, whereas copyrights will protect the precise manner of “expression” of the ideas and inventions within the source code and the object code, patent law will protect the actual “inventions” themselves that are embodied in those codes.
When considering which form of IP protection is most beneficial to small business and individual inventors, the three major factors to consider are costs, time and value. The first two factors are pretty straightforward, while the third factor is a bit more complex.
Regarding the costs factor, expenses related to copyright protection are substantially less than expenses related to patent protection. Depending on the specific circumstances, the U.S. Copyright Office charges between $35 and $55 for registering one work by a single author. The U.S. Patent & Trademark Office (PTO), on the other hand, charges $730 for a “small entity” to file an original (non-provisional) patent application and charges $400 for a “micro entity” to file the same. Copyright attorney fees for pursuing registration of one work by a single author, depending on the precise situation, usually range between $350 and $500 on a flat fee basis. In contrast, patent attorney fees, depending on the precise situation, are often hourly (but are sometimes based on a flat fee), and can range between $4,000 and more than $10,000 for completion of the entire patenting process.
Concerning the second factor – time – issuance of a registered copyright generally takes much less time than issuance of a patent. Copyrights, including software copyrights, presently issue in approximately eight months. Because of major backlog in the PTO, patent applications covering software have an average total pendency time of approximately 37.5 months (a little more than three years).
The third factor is value.
Valuation of software, like valuation of IP generally, can be a somewhat complex undertaking and is subject to various approaches. The major approaches used by valuation experts are: 1) the cost approach (the historical cost to develop an asset); 2) the income approach (calculates the present value of future income streams specifically attributable to the asset); and 3) the market approach (values the asset by comparing it to publicly available transactions involving similar assets with similar uses). Without getting too bogged down in any one of those approaches, I would simply acknowledge that the non-complex factors to consider in the value determination are the amount of upfront expenses that must be incurred to develop and protect the software and the time it takes to obtain IP protection. The goal, of course, is for that number to be lower for both of those factors, which, as addressed above, favors copyright protection.
On the other hand, the scope of the IP protection must be factored into the value analysis. In other words, what facet of the software is being protected by patents as opposed to what facet is being protected by copyright, and how does that query impact the value of the software on the open market. Patents protect the behavior, logic and functioning of the software program. And while a single software copyright registration protects the registered source code, the registered object code, and the user interface from literal copying, patent protection is more robust because it gives the software inventor exclusive rights to the underlying processes and inventive features contained within the codes. Accordingly, copyright protection cannot prevent someone from designing around the idea by rewriting the underlying code differently to achieve the same functionality, while patent protection will prevent such appropriation. Depending on the market and its participants, this difference could make potential purchasers of the software more inclined toward obtaining the software protected by patent than by copyright.
Although the scope of patent protection for software is indisputably greater than that of copyright protection, two additional considerations counsel in favor of copyright protection for software that is being developed and marketed by small companies and individual inventors. First, it is generally understood that software products have a maximum life-cycle of approximately five years. As discussed above, patent applications covering software have an average total pendency time of a little more than three years before a patent will issue by the PTO. Therefore, chances are the software could be outdated before the patent issues, which certainly lessens the value of pending patent protection on the open market.
Second, and most importantly, on June 19, 2014, the U.S. Supreme Court issued a decision, authored by Justice Clarence Thomas, that has put software patents in jeopardy. In the case ofAlice Corp. v. CLS Bank, 134 S. Ct. 2347, 573 US __, 189 L. Ed. 2d 296, the Court imposed substantial obstacles in the path of software developers for obtaining and sustaining patent protection. In the roughly fifteen months since the Alice decision, several software patents have been invalidated by the courts and many patent applications seeking to protect software have been rejected by the Patent & Trademark Office. For the small business and individual inventor, this must be a scary thought given their inability to recoup the expenses that were invested in the patent applications on the front end and during the patenting process.
While the issue is certainly more complicated than this blog post will attempt to explore, suffice it to say, on balance, it is my view that copyright protection for software provides greater benefits to small businesses and individual inventors who desire to commercialize their creations.
DON'T INTENSIFY THE "BLUR": WHY THE "BLURRED LINES" VERDICT AND RULING WILL BE AND SHOULD BE REVERSED ON APPEAL
BY MANOTTI L. JENKINS
Let’s not get it twisted here. As an avid music consumer, especially of old school R&B, I absolutely love “Got to Give It Up” and Marvin Gaye may be my favorite solo artist of all times (not to mention that one of my daughters fell in love with the dude posthumously back when she was about age 6, and still feels the same in her late 20’s). But as an IP lawyer and copyright infringement litigator, I consider the potential “blur” created by the March 10, 2015 verdict of a Los Angeles federal jury particularly troubling and legally unsupportable. By that verdict, the jury found Robin Thicke, Pharrell Williams, and Clifford Harris, Jr. (“T.I.”) liable for copyright infringement to the tune of nearly $7.4 million owed to the Gaye family, having concluded that the 2013 “Blurred Lines” mega-hit infringed Gaye’s 1977 mega-hit (on July 13, 2015, the trial judge decreased the award to $5.3 million, but also rejected a motion for a new trial filed by the attorneys for Thicke, Pharrell and T.I.).
In short, this case is a textbook example of why “the law” must protect all of us from the possibility of jury verdicts improperly influenced by the “unlikeability” of important witnesses, interpretations of irrelevant testimony, and misapplication of admittedly complex legal principles. In other words, this case should have never gone to the jury; the judge should have dismissed the case on pretrial motions. By not doing so, and exacerbating the problem by committing a major evidentiary error during the trial, the judge allowed the line to be blurred between “inspiration” and “infringement.” But I predict that the Ninth Circuit Court of Appeals will get it right and return the music copyright world back to its proper place.
Before we consider the adverse consequences that likely resulted from a reportedly extremely arrogant and tainted Robin Thicke during the trial, we must first discuss the legal standards that apply to this copyright infringement case. But even before we go there, just so I am not accused of advocating the use of “legal technicalities” to overturn the jury verdict, I should reiterate the position I took when I first heard about the allegations of copyright infringement in this case – as much as I love Marvin, I know that he DID NOT and COULD NOT have a monopoly on any song that uses a cowbell, an electric piano, a strong bass line, falsetto male singing, and background party noise highlighted by shouting male voices. The vocal melodies and lyrics of the two songs are, in my judgment, very different. Now that that’s out of the way. . . .
Under the 1976 Copyright Act, music can be protected by two forms of copyright: the first is for the MUSICAL COMPOSITION, which covers the lyrics and the written music, and the second is for the SOUND RECORDING, which covers the precise fixation of a series of musical as well as spoken sounds, in addition to other sounds in the musical work, which is often referred to as the master recording. Musical works created prior to 1978 such as “Got to Give It Up,” however, were governed by the prior 1909 Copyright Act, which did not extend copyright protection to the SOUND RECORDING, but only to the MUSICAL COMPOSITION.
In the “Blurred Lines” case, the evidence was presented that Marvin Gaye recorded “Got to Give It Up” in 1976 and registered the musical composition with the U.S. Copyright Office in 1977, having submitted to the Copyright Office sheet music of the lyrics and some of the melodic, harmonic, and rhythmic features. After Gaye died on April 1, 1984, his family became the copyright owners of the musical composition. According to the evidence presented during the trial, neither Gaye nor his family ever registered a copyright on the sound recording of “Got to Give It Up” once the 1976 Copyright Act became effective. Therefore, the only facet of “Got to Give It Up” protected by registered copyright is the creativity expressed in the sheet music.
The attorneys for Thicke, Pharrell and T.I. filed motions for summary judgment (i.e., requesting that the judge rule in their clients’ favor as a matter of law) after the evidence had been gathered during the pretrial discovery phase of the litigation. Under copyright law, for a plaintiff (which was the Gaye family on the infringement claim) to prove copyright infringement, she must prove that she (1) owns a valid copyright in the work she is claiming was infringed, and (2) the defendant copied protected elements of that work. When there is no proof of direct copying, the law permits the plaintiff to show copying circumstantially, i.e., that the defendant had access to the copyrighted work and that the two works under consideration are substantially similar.
The issue of “substantial similarity” is determined through a two-part test: (1) an objective extrinsic test and (2) a subjective intrinsic test. The first test should be used by the judge at the summary judgment stage, and requires the judge to analytically dissect the work into its elements and separate out the unprotected elements, leaving only the protected elements available for a comparison of substantial similarity. The judge in this case ruled that only the lead sheets defined the scope of the Gaye family’s copyrighted compositions and not any of the sound recordings. He went on to hold that “Blurred Lines” contained material that was substantially similar to what he considered to be the protected copyrighted material in the lead sheets of “Got to Give It Up,” under the objective test, which sent the case to the jury to apply the subjective test. The judge found such substantial similarity despite the testimony of the testifying expert of Thicke, Pharrell and T.I. that the similarities the judge found were “scenes a faire” (i.e., note sequences that necessarily follow from a common theme, that are not protectable) and “commonplace and generic building blocks of musical compositions.”
After the judge let the case go to the jury, he committed the greatest evidentiary error that will cause the verdict and the judge’s legal conclusions to be reversed: the judge allowed evidence of the sound recording of “Got to Give It Up” to be presented to the jury as if the copyright at issue protected the sound recording, as opposed to the musical composition only. As discussed above, this was not the case and for the judge to permit evidence of the sound recording before the jury was unfairly prejudicial and reversible error. The oddity is that the judge, during his threshold phase of the analysis, properly limited the general scope of what was covered by the “Got to Give It Up” copyright to the creativity fixed within the sheet music. Where he veered off course was to permit evidence of the sound recording of “Got to Give It Up” before the jury as if it is protected by copyright and thus the subject of the substantial similarity test, which it is not.
Although that was the major legal error, it was accompanied by all sorts of other tidbits of testimony that probably collectively spelled the death knell for Thicke, Pharrell and T.I. at trial. First and foremost, reportedly Thicke presented an excessively arrogant demeanor during his testimony, including admitting that he was high on drugs and alcohol while recording the “Blurred Lines” track. He also admitted that he had lied by claiming a songwriting credit for the song when in fact Pharrell wrote and produced the song. According to the trial transcript, Thicke testified: “The biggest hit of my career was written by somebody else and I was jealous and wanted credit. . . . I felt it was a little white lie that didn’t hurt his career but boosted mine.”
Also problematic and likely confusing to the jury was Pharrell’s testimony that he was “inspired” by the Marvin Gaye song when writing his song, as well as the evidence of Thicke’s interviews before the trial, during which he consistently said that “Got to Give It Up” was one of his “favorite songs of all times,” and that he “wanted to make something with that groove.” But neither a same or similar “groove” as another song nor “inspiration” from another song equates to copyright infringement. In fact, the music industry is inundated with songs inspired by prior songs and that adopt the same or similar grooves as prior songs. It is, indeed, the nature of the rhythmic and creative beast that pop culture is built on the foundation of what has come before.
The best quote I have heard that captures the problem with the “Blurred Lines” verdict, which eroded the distinct line that the law has created between inspiration and copying, was offered by another IP legal commentator: “The jury blurred the lines between protectable elements of the musical composition and what is unprotectable, which is a musical style or genre, the groove exemplified by Marvin Gaye.”
I have confidence that the Ninth Circuit will not intensify that blur, but will instead eliminate it, by reversing the jury’s verdict and overturning the trial judge’s rulings. At the least, I expect that the Ninth Circuit will require a new trial, absent the inadmissible evidence, but I also anticipate that the dispute will be settled before a new trial commences.
THE COPYRIGHT OFFICE SEEKS TO ADDRESS THE “WIDESPREAD AND SIGNIFICANT” PROBLEM OF “ORPHAN WORKS”
BY MANOTTI L. JENKINS
Just by way of example, I assume most people know that every photograph taken by someone in the last 30 years (and beyond, but I’ll just leave it there) is protected by copyright. The photograph may not be federally registered with the U.S. Copyright Office (yet), which registration would grant certain advantages, but the moment the photograph was taken and “fixed in a tangible form,” copyright law provided certain exclusive rights to the person who took the picture – for her lifetime plus seventy (70) years.
As such, have you ever desired to write a book or create anything to be published and you sought to use photos you found on-line, but there was no way for you to determine who took the photos, and thus whose permission you should seek to use them? There is a name for such photos. They are called, “orphan works,” which term is defined as “copyrighted works whose owners may be impossible to identify and locate.”
It is important for everyone to understand, as the U.S. Copyright Office has recognized, that “anyone using an orphan work does so under a legal cloud, as there is always the possibility that the copyright owner could emerge after the use has commenced and seek substantial infringement damages, an injunction, and/or attorney’s fees.” (emphasis added) And this problem of course is not limited to photos; there are often written pieces and other creative works that the general public may find useful to include in a budding project, but it is virtually impossible for a person to locate the author or copyright owner. Does anyone benefit when such projects have to be aborted or substantially circumscribed because of this problem?
As the Copyright Office has recognized for some time, the uncertainty and risk associated with using orphan works produce “gridlock” that undermines the goals of the copyright system. The Copyright Office has specifically determined that, “[f]or good faith users, orphan works are a frustration, a liability risk, and a major cause of gridlock in the digital marketplace.” On the other hand, “[b]y foregoing use of these works, a significant part of the world’s cultural heritage embodied in copyright-protected works may not be exploited and may therefore fall into a so-called ‘20th-century digital black hole.’”
Accordingly, the Copyright Office recently pro
duced an exhaustive memorandum outlining legislation it is proposing to address the problem. The highlights of the legislation are as follows (and I paraphrase the salient points in an attempt to translate the “legalese”):
• Limit what can be awarded to a copyright owner for infringement against users who can prove that they have in good faith and diligently attempted to locate the copyright owner and were unable to find him or her;
• Limit monetary compensation for infringement of an orphan work by an eligible user to “reasonable compensation” – the amount that a willing buyer and a willing seller would have agreed upon immediately before the use began;
• Permit a U.S. court, in its determination of whether a particular search qualifies as “diligent,” to take into account the determination by the court of a foreign country that a search was sufficiently diligent, as long as the court of the foreign country provides similar treatment to qualifying U.S. searches;
• Preclude monetary relief for infringements of orphan works by eligible non-profit educational institutions, museums, libraries, archives, or public broadcasters, for noncommercial educational, religious, or charitable purposes, provided the eligible entity promptly ceases the infringing use;
• Limit the scope of injunctions (a ruling that discontinues the use) against the infringement of an orphan work if it is combined with “significant original expression” into a new work (by the user or infringer), provided the user or infringer pays reasonable compensation for past and future uses and provides attribution;
• Explicitly preserve the ability of users to assert a “fair use” defense against an infringement action for uses of orphan works. A “fair use” defense would insulate the user totally from liability.
These proposals, and the others not referenced, appear to create an appropriate balance to preserve the objectives of the copyright system. And while any such legislation will not necessarily remove all of the problems of uncertainty for users, it is a step in the right direction.
THE “LOOK AND FEEL” OF YOUR RESTAURANT MAY BE PROTECTABLE AS YOUR EXCLUSIVE REGISTERED TRADE DRESS
BY MANOTTI L. JENKINS
You quit your job and invest all of your 401(k) savings into opening a sushi restaurant. A substantial portion of the money goes into the design and preparation of the décor of your restaurant. Your doors have been open for several years and the décor of your restaurant has become a major hit with your customers. The public loves it! Your restaurant, including the décor, is featured in local magazines. You advertise extensively, capturing the look of your restaurant in vivid color photos. Business booms!
John and Jane Jefferson, sushi lovers who often discuss opening a sushi restaurant, visit your establishment for a meal. They love it, particularly your eclectic combination of wall and floor colors, table arrangements, chair designs, countertop material, and wall hangings comprised of old Japanese photographs. They decide to open a sushi restaurant in another part of town and they duplicate your décor, down to the unique way you arrange your tables! Their business also flourishes.
Can you do anything about this? Of course you can.
A restaurant that has become publicly recognized and identifiable for having a certain “look and feel” can protect that public image through trade dress law. Established in IP law as a form of trademark, a business’ trade dress connotes the general impact of many features – usually visual – when brought together to create an overall look and feel, thereby presenting a total brand image. A December 2012 article, entitled “Restaurant Trade Dress Series, Part 2: Restaurant décor as trade dress,” which was published in the Restaurant, Winery & Liquor Law Blog, nicely summarizes what U.S. courts have determined can qualify as a restaurant’s trade dress:
[A] restaurant’s protectable image includes unique and recognizable features, such as the visibility of food preparation areas in a restaurant, stacked cartons of beer, produce and other items in the patron areas of the restaurant, and the general appearance of the exterior of [a] restaurant, the identifying sign, the interior kitchen floor plan, the décor, the menu, the equipment used to serve food, the servers’ uniforms and other features re-flecting on the total image of the restaurant.
As with a trademark, restaurant owners who believe they have a protectable trade dress in some facet of their restaurant’s public display should register their trade dress with the U.S. Patent and Trademark Office (USPTO). Instead of presenting a word, phrase or logo to the USPTO as the “source indicator” for which his client seeks protection, the restaurant’s lawyer will describe the details of the trade dress in the application. In The Katiroll Company, Inc. v. Kati Roll and Platters Inc., Civ. Act. No. 10-3620 (GEB), a 2010 case filed in federal district court in New Jersey, at issue was a dispute between two fast food restaurants that sold katirolls, described as “a type of street food that originates from India.” Id. at p. 1. The judge’s Memorandum Opinion provides an example of how a trade dress lawyer might describe her client restaurant’s trade dress:
Plaintiff’s stores are decorated in “an orange color scheme including orange interior and exterior surfaces, orange signage, a menu with an orange background and orange decorative elements.” Each store also has “an unpainted red brick wall” and “light brown 12 [inch] square ceramic tile[s] on the floor.” In addition, the layout of each of Plaintiff’s locations“features an open glass front with windows unobstructed by café curtains or other coverings, limited seating in front with the counter further back and an open kitchen plan” and although limited seating is available, the restaurants are generally small and “geared to take-away business.”
Id. at pp. 3-4.
To stop a copy-cat from benefiting from the goodwill your restaurant has developed, you have to bring a lawsuit. The law requires you to prove certain factors, a critical one of which is that your restaurant’s trade dress is either “inherently distinctive” (i.e., that it intrinsically identifies a source) or has acquired “secondary meaning” (i.e., in the minds of the public, the primary significance of the trade dress is to identify the source of the food and ambiance of the restaurant rather than actual food and ambiance themselves). Many trade dress cases turn on this factor. In particular, with respect to the “secondary meaning” issue, the courts have identified four sub-factors: (1) long use; (2) advertising; (3) sales volume; and (4) identity of service or origin in the minds of the purchasing public. Katiroll Memorandum Opinion, pp. 13-14.
As such, if you believe you have protectable trade dress in your restaurant: (1) hire an attorney to obtain a federal registration for it; (2) make sure your restaurant has some longevity; (3) advertise extensively with color photographs; (4) keep your sales up; and (5) make sure your décor is unique and clearly intended to capture your customers’ attention to let them know the décor is intended as a brand identifier for your eating establishment.
TAKE GOOD CARE OF YOUR VALUABLE TRADEMARK AND IT WILL STAY LOYAL TO YOU FOR A LIFETIME
By Manotti L. Jenkins
People often say, “nothing lasts forever.” At least in theory, that maxim is false when applied to trademarks. On the other hand, people also say, “too much of a good thing is bad.” In the trademark world, that adage has demonstrable truth.
Two of the three primary forms of intellectual property have a limited life of government protection (utility patents last for twenty (20) years after the application filing date; copyrights generally last for seventy (70) years after the death of the author). However, a major benefit any business enjoys in obtaining a trademark is that it is an asset that can have a perpetual life – i.e., it can live forever. But, if not very careful, the business can do certain things to kill it or facilitate its death.
Ponder the fact that the following words and phrases were once U.S. trademarks until they became “genericized”:
- aspirin (formerly a U.S. trademark of Bayer)
- cellophane (formerly a U.S. trademark of DuPont)
- dry ice (formerly a U.S. trademark of the Dry Ice Corp.)
- escalator (formerly a U.S. trademark of Otis Elevator Co.)
- heroin (formerly a U.S. trademark of the Friedrich Bayer Co.)
- laundromat (formerly a U.S. trademark of Westinghouse)
- thermos (formerly a U.S. trademark of Thermos GmbH)
- trampoline (formerly a U.S. trademark of the Griswold-Nissen T & T Co.)
- videotape (formerly a U.S. trademark of Ampex Corp.)
“Genericized” trademarks are words or phrases that at one time were legally recognized as “source indicators,” but through some market activity (or non-activity by the owner) became the generic name of a general class of a product or service. In other words, if the public begins to use your trademark as the name to identify all products within a class of goods or services, your trademark ceases to become a source identifier and thus dies by overbroad association.
There are two major ways businesses can prevent this from happening. First, businesses must “police” their trademarks. This means they must designate a person or group, internally or externally, to conduct constant informational searches and pay close attention to the Trademark Office Official Gazette to determine if anyone is using the business’ trademark, or a colorably similar name, logo or phrase as that of the business, in association with similar or related products or services. If any such uses are found, the business must immediately send a “cease and desist” letter to every entity using the offending mark, name, logo or phrase as stated. Regarding the Trademark Office Official Gazette, the business should use the formal process provided by the Trademark Office to challenge the registration of any mark, name, logo or phrase that is colorably similar to its trademark.
Second, it is very important to make sure your advertising strengthens your trademark and associated products or services without causing the purchasing public to “over-associate” your trademark with the products or services of others. This is not always easy to do, especially when the quality of your product or service truly matches the lofty representations of your advertising (ergo, the challenges to the continued trademark status of GOOGLE, KLEENEX and XEROX over the past several years). As such, a company’s advertising campaign should be strategic and scientific, recognizing the important balance between desirable repetition and undesirable oversaturation. One effective campaign is to use extensive comparative advertising programs whereby your product or service bearing the trademark is compared to, and juxtaposed against, the products or services of your competitors, also using the contrasted names of those competitive products or services. This allows the purchasing public to consistently differentiate your trademark and products from those of your competitors.
On the “don’t do” side, your advertising should never suggest that your trademark is so “catchy” or “well-known” that the purchasing public has come to refer to competing products and services by your trademark’s name. This may sound like an obvious “don’t do,” but not necessarily. For example, I was involved in litigation several years ago in which I represented the party accused of trademark infringement. Our client was indisputably using the trademarked name, so we were not arguing that our client’s product name did not infringe the mark. Instead, we argued that the plaintiff’s trademark, because of extensive use, had become a generic name for the class of products at issue and thus was invalid. We were successful in persuading the judge during a preliminary hearing that the plaintiff would not succeed on the merits of its trademark infringement claim because it was likely the trademark would be ruled invalid. A major piece of evidence we relied upon was the trademark owner’s advertising documents in connection with the trademark and the associated products. In the documents, the trademark owner touted its trademark as “having become a part of the national vernacular” and as being “extensively popular” as a result of its “catchy phraseology” and the associated “cutesy product design.” While we also used evidence of the use of the trademark name in connection with competitive products, the evidence of the trademark owner’s advertising statements qualified as adverse admissions that the trademark had been “genericized.”
The moral of this story: Take good care of your valuable trademark and it will stay loyal to you for a lifetime.
DESIGNING YOUR OWN DREAM HOUSE, INCLUDING THE FAÇADE? THROUGH AN UPFRONT WRITTEN AGREEMENT WITH YOUR ARCHITECT, YOU CAN OWN THE COPYRIGHT AND PREVENT OTHERS FROM COPYING YOUR HOUSE DESIGN
By Manotti L. Jenkins
Many people have creative ideas to design their own dream homes, including the exterior of the house. Some of those people also take the additional step of illustrating those design ideas on paper before hiring an architect to “professionalize” the design process. Are you one of those people? If you put the creative energy into designing a particularly stylish and unique house and paid architects and builders for its construction, would you be annoyed if someone else saw it, liked it, hired an architect to copy your design, and built a house that was virtually a copy of yours? Well, for about twenty-five years, U.S. copyright law has granted you the right to prevent such offending activity.
In 1989, the United States joined the Berne Convention, an international copyright treaty, which required the U.S. to extend copyright protection to “constructed buildings.” As a result, effective December 1, 1990, Congress amended the Copyright Act to include protection of “architectural works,” which is defined as:
"[T]he design of the building as embodied in any tangible medium of expression including building, architectural plans, or drawings. The work includes the overall form as well as the arrangement and composition of spaces and elements in the design, but does not include individual standard features. . . ."
As a junior intellectual property lawyer for a relatively large law firm in the mid-1990’s, I litigated a case on behalf of a plaintiff owner of a copyright covering the design of a constructed house. That case involved the unlawful copying of the exterior or “façade” of the house and we were able to obtain a successful result for our client. The copyright owner was the architect who prepared the design drawings and plans for the house, which is usually the case. Although the home owner pays for the architectural drawings and plans, copyright law grants the exclusive rights of copyright ownership to the “creator” of the “original work of authorship,” who is usually the architect. The copyright protection that extends to the house design, based on those drawings and plans, also typically is granted to the architect.
So how does the creative homeowner get around this so as to be empowered to personally prevent the copying of her or his dream home? By including as an important criterion for selecting an architect that he or she agree in writing to transfer all of the copyrights protecting the house design to you, once the registrations issue. Your substantial creative input in the design process should be an important aspect of any necessary negotiations. Such transfer would give you all of the rights of copyright ownership over your home design – the right to exclude others from copying the design of, and subsequently building, the house itself (including the façade); from copying the drawings embodying your home design; from publicly displaying your home design in any medium; and from creating derivative works of your home design.
And just as a warning to the would-be house design copyist: the days of seeing a house you like on the street, taking a photograph of it, and asking an architect to reproduce it for you, are over – at least to the extent you could do this with impunity.
WHEN A BIG COMPANY COMES AFTER YOUR SMALL COMPANY AND ATTEMPTS TO BULLY YOU OUT OF YOUR TRADEMARK, AN AGGRESSIVE RESPONSE MAY BE APPROPRIATE
By Manotti L. Jenkins
In this information age, characterized by, among other things, the vital importance of brand recognition and strength, small businesses have generally come to realize the importance of developing, registering and enforcing their brand names, tag lines, and logos – under federal trademark law. But what should a small business owner do when a very large company, in a similar business as his or her business, has a name or trademark very similar to his or her business’s trademark, and decides to seek to bully the small business out of its important commercial identifier?
In some instances, the small company does not have the proverbial leg to stand on; in such cases, an early resolution without too much brand and financial harm to the small company is advisable. But there are many other situations in which the small company has a strong defense, the large company is more vulnerable than it wants to admit, and the facts and the law present a favorable situation for the apparent underdog, or at least, a "toss up." Here are some pointers that I have employed successfully as a trademark litigator and counselor, having represented many Davids against many Goliaths in circumstances such as the latter:
1. When you receive the cease and desist letter from the behemoth, take it seriously, but try not to take it too personally. All trademark owners are required to "police" their trademarks by going after others who they believe are infringing their marks, regardless of how much smaller the perceived offender is than they are. Not taking it personally allows you to keep a level head in waging your defense.
2. Always seek an experienced trademark litigator to represent you, preferably one who has experience representing small businesses. You should not attempt to handle such matters on your own because too much is at stake. Retaining an experienced trademark litigator with extensive experience representing small businesses ensures you will be represented by someone who understands and appreciates the peculiar issues facing small businesses, especially regarding their brands. If you can find such an attorney who also has represented large companies in her or his career, that would be most optimal because he or she will know how large companies and their trademark lawyers think, as well as the strategies they tend to employ.
3. Make sure to inform your attorney about the history of your business’ use of the trademark, including what inspired your use of the mark. There is a possibility that your business’ use of the trademark could have preceded the large company’s use of the mark, which could give your business’ use senior rights over the larger company’s use. In addition, there may be something about what inspired you to use the mark that could be relevant to your defense.
4. Remember that the possibility may also exist that the history of your trademark’s use could present problems for the validity of the large company’s mark. In other words, Goliath’s brand and financial health could also be rendered vulnerable by its very act of aggression. If so, Goliath has just as much to lose, if not more, than you do. As such, make sure that your attorney provides you with not only your settlement and early resolution options, from the vantage point of weakness, but also your best options to wage an aggressive fight, which could ultimately make you the stronger party legally.
In short, there is nothing about a company’s size and resources that makes its trademark more valid and senior than another company’s mark. Sometimes, the facts have to be allowed to unfold and they may actually bring Goliath to its knees before protracted litigation.
VIRGINIA FEDERAL JUDGE PERSUADED THAT THE “REDSKINS” TRADEMARK REGISTRATIONS “MAY DISPARAGE” MANY NATIVE AMERICANS
By Manotti L. Jenkins
On July 8, 2015, U.S. District Judge Gerald Bruce Lee of the E.D. of Virginia issued an exhaustive, 70-page Memorandum Opinion and Order in the case of Pro-Football, Inc. v. Amanda Blackhorse, et al., Case No. 1:14-cv-01043-GBL-IDD. The parties in this “Redskins Trademark Registration Cancellation” case presented the matter to the federal judge after the Trademark Trial and Appeal Board (“TTAB”) ordered the cancellation of six of Pro-Football, Inc.’s (“PFI”) “Redskins” trademark registrations.
The judge’s ruling was based on his analysis of “two sets of cross-motions for summary judgment” filed by each side (in other words, each side filed two motions against the other side seeking to have the Judge resolve the key legal issues in its favor). Judge Lee ruled in favor of the “Blackhorse Defendants” on each motion, thereby affirming the TTAB’s ruling and directed the U.S. Patent and Trademark Office (“USPTO”) to “schedule the cancellation” of all six of the Redskins trademark registrations.
It is important to note, as an initial matter, what the district judge did NOT and could NOT rule in this case (as some people mistakenly believe): the NFL team currently named the “Redskins” is not precluded by this decision from using the name “Redskins.” By ordering the cancellation of the “Redskins” trademark registrations, the judge merely prevents the team from being able to “‘call upon the resources of the federal government in order to enforce that mark.’” (Judge Lee’s Opinion, quoting In re Fox, 702 F.3d 633, 640 (Fed. Cir. 2012)). Hence, the team and PFI cannot exercise the major benefit of a federal trademark registration – that being, to EXCLUDE others from using the name and related logos, symbols, etc. Therefore, once the registrations are officially cancelled, the team and PTI will enjoy hollow rights, at best, in continuing to use the name.
The Blackhorse Defendants had filed a petition with the TTAB to cancel the registrations of six of the “Redskins” trademarks owned by PFI. The basis for the petition was that, pursuant to Section 2(a) of the Lanham (Trademark) Act, 15 U.S.C. § 1052(a), the “Redskins” trademark registrations contained matter that “may disparage” a substantial composite of Native Americans and bring them into contempt or disrepute, at the time of the trademarks’ registrations (1967, 1974, 1978 and 1990). After some litigation, the TTAB agreed with the Blackhorse Defendants and, on June 18, 2014, scheduled the cancellation of the registrations of the “Redskins” trademarks. The case was filed shortly thereafter in the E.D. of Virginia, requesting that the federal court review the TTAB’s decisionde novo (i.e., with “new” eyes and not giving deference to the TTAB’s findings and determination).
The case raised Federal Constitutional issues and Federal Trademark law issues. Judge Lee disagreed with PFI and agreed with the Blackhorse Defendants on all of the issues, but we will focus here on the Federal Trademark law issues (summarily, the district judge disagreed with PFI that Section 2(a) of the Lanham Act violated PFI’s First Amendment rights or its Fifth Amendment rights).
As for the trademark claims, the provision at issue was also Section 2(a) of the Lanham Act. That provision states that trademark registration should be denied to any mark that “[c]onsists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute. . . .” (emphasis added). Based on this provision, the ultimate question before the district judge was whether the “Redskins” trademarks contained matter that “may disparage a substantial composite of Native Americans and bring them into contempt or disrepute, at the time of the trademarks’ registrations (1967, 1974, 1978 and 1990).”
Early in his analysis, Judge Lee cited to precedent to hold, very importantly, that the phrase “substantial composite is not necessarily a majority.” (emphasis added). With that holding as the cornerstone, and recognizing that the USPTO “does not, and practically cannot, conduct a poll to determine the views” of Native Americans, Judge Lee found for the Blackhorse Defendants based on three sources: (1) dictionary evidence; (2) literary, scholarly, and media references; and (3) statements of Native American individuals and groups.
Regarding the dictionary evidence, the district judge first determined that the meaning of the matter in question in all six of the “Redskins” trademarks is a reference to Native Americans. The judge based this determination on PFI’s own admissions, as well as the fact that “the team has consistently associated itself with Native American imagery,” including the use of a spear, a Native American profile on the helmets, the team’s marching band wore Native American headdresses as part of their uniform from at least 1967-1990, and other imagery. The judge cited to eleven dictionaries preceding and falling within the relevant years, which defined “redskins” as a term referring to North American Indians and characterizing “redskins” as “offensive or contemptuous.”
Regarding the literary, scholarly, and media references, Judge Lee cited to twenty-seven examples, including Encyclopedia Britannica and other sources and media references, and all preceding and falling within the relevant dates, that referred to the term “redskins” in a derogatory or disparaging manner.
Regarding the statements of individuals or group leaders, the district judge focused on a 1972 meeting between PFI’s president and a few major Native American organizations about the “Washington Redskins” team name. The judge found that in March of that year, a delegation of Native American leaders met with the then-president of PFI, Edward Bennett Williams, to demand that the team change its name. The judge also found that each of the leaders represented a substantial segment of the Native American population. The judge referenced sworn declarations made by the leaders, in which each discussed his or her history, personal experiences, and perceptions of the term “redskin.” In analyzing this evidence, the judge concluded, as with the other categories of evidence, that “the Redskins marks consisted of matter that ‘may disparage’ a substantial composite of Native Americans during the relevant time period.”
In reaching its decision, the Court considered and rejected the major contrary evidence and arguments put forth by PFI: (1) a 1977 “All-Indian Half-Time Marching Band” and Native Americans “naming their own sports teams ‘Redskins’”; and (2) “Native Americans’ own extensive use of the term ‘Redskins’ for different nicknames and the names of over twenty local sports teams using the name.” The district judge found the evidence and arguments unpersuasive, because they “do not show that there is not a substantial composite of Native Americans” who find that the matter was one that “may disparage” Native Americans.
In support of this conclusion, Judge Lee relied heavily on a TTAB decision in the case of In re Heeb Media, LLC, 89 U.S.P.Q.2d 1071, 2008 WL 5065114 (T.T.A.B. 2008). That case involved an effort to register the mark “HEEB” for apparel and the publication of magazines. Despite finding that “there was a movement within the Jewish community to take command of the term ‘heeb’ and not be offended by it,” as well as the fact that many of the most established Jewish philanthropies and cultural organizations openly and actively supported the magazine of the owner seeking trademark registration, the TTAB held that the evidence showed there was “still a substantial composite of Jewish individuals who would find the term ‘heeb’ to be one that ‘may disparage’ the Jewish community.”
This writer agrees with the decision of U.S. District Judge Gerald Bruce Lee of the E.D. of Virginia, but certainly recognizes that the fight will not stop here. PFI will appeal the decision to the 4thCircuit Court of Appeals and I expect that the U.S. Supreme Court is also likely to weigh in on this very controversial issue.