The Briefing by Weintraub Tobin

In a major win for Meta, a federal court recently dismissed a lawsuit brought by prominent authors who claimed their books were illegally used to train the company’s LLaMA models. But the ruling doesn’t give AI companies a free pass—it reveals the roadmap for how a better-prepared copyright plaintiff could win next time. In this episode of The Briefing, Scott Hervey is joined by his partner Matt Sugarman as they break down: The background of Kadrey v. Meta The court’s detailed fair use analysis A comparison to Bartz v. Anthropic The “third theory” of market harm that could shape future litigation What AI developers must do now to avoid lawsuits Watch this episode on YouTube.

Tara Sattler, a Partner at Weintraub Tobin and an expert in intellectual property law, joins Scott Hervey to unpack a groundbreaking federal ruling regarding AI and copyright. They discuss how training AI like Claude on copyrighted materials can be considered fair use if transformative, but retaining pirated books crosses an ethical line. The conversation highlights the delicate balance AI developers must navigate between innovation and copyright compliance as the legal landscape continues to evolve.

The Supreme Court sidestepped a major copyright showdown—again. What does it mean when infringement claims surface decades later? In this episode of The Briefing, Scott Hervey and Tara Sattler break down the latest in the discovery rule debate, RAD Design’s rejected petition, and how this uncertainty affects creators, businesses, and copyright holders across the country. Watch this episode on YouTube. Show Notes: Scott: In Warner Chapel Music versus Neely, the Supreme Court acknowledged without resolving a major question in copyright law, should plaintiffs be allowed to bring infringement claims years or even decades after the alleged violation happens if they say they just recently found out about it? That question was front and center in Rad Design versus Michael Greckeau Productions. And while many expected the court to finally address it, they declined to take the case. What does this mean for copyright holders, digital content creators, and the businesses defending against those claimed? I’m Scott Hervey, a partner at the law firm of Weintraub Tobin, and I’m joined today by my colleague Tara Sattler. We are diving into the Supreme Court’s decision to leave the discovery rule untouched, at least for now. On in this episode of The Briefing. Tara, welcome back to The Briefing. It’s good to have you back. Tara: Thanks, Scott. Glad to be here, and glad to be getting into some important copyright strategy with you here today. Scott: Right. Yeah. So let’s start by defining what we’re actually talking about, the discovery rule. It’s a judgment doctrine that allows plaintiffs to file a copyright lawsuit within three years of discovering the infringement, even if the infringement happened long before that. Tara: Right. And for years, courts have disagreed on whether the Copyright Act actually allows this. The text of the Copyright Act says that actions must be brought within three years after the claim accrued. But it doesn’t say whether accrual starts at the time of infringement or at the time of discovery. Scott: And that ambiguity is at the heart of the issue. Some courts, like the Second Circuit, have embraced the discovery rule. Others are skeptical. That split was one reason the Supreme Court agreed to hear Neely in the first place. So before we get deeper into the implications of the Supreme Court denying Cert and Rad Design, we should revisit the Warner Chapel Music versus Neely decision because that case really set the stage for all of this. Tara: Absolutely. That case started back in 2018 when music producer Sherman Neely sued Warner Chapel Music and Artist Publishing Group. He claimed that Flowrida’s 2008 song, In the Air, contained an unauthorized sample from a 1984 track Neely co-owned the rights to. Now, that’s a fairly typical copyright infringement claim, but what made this case different was the timing. Scott: Right. So Neely had been incarcerated for a number of years, and apparently, they don’t allow radios in the jail or prison that he was in. And he argued that he only discovered the alleged infringement shortly before his filing of his lawsuit, even though the infringement happened decades earlier. The question that ended up before the Supreme Court was whether under the discovery rule, as applied by some circuit courts, a plaintiff could recover damages for acts of infringement that happened more than three years before the lawsuit was filed. Tara: And that was a hotly contested issue. Some circuits, like the Second Circuit, applied a very strict three-year cap on damages, even when a claim was deemed timely under the discovery rule. That rule came up from the Supreme Court’s prior language in Petrela versus MGM, where Justice Gainsberg wrote that a successful plaintiff can gain retrospective relief only three years back from the time of suit. In contrast, the ninth and 11th circuits had taken the opposite view. They allowed damages to go all the way back to the first act of infringement, so long as the claim itself was timely under the discovery rule. Scott: And in Neely, the Supreme Court resolved that split, writing for the majority, Justice Kagan held that if a plaintiff’s claim is timely under the discovery rule, then there’s no statutory cap on damages. So the court said that the Copyright Act’s remedial provisions, Section 504 and Section 505, do not impose a time-based limit on damages. They simply state that an infringer is liable for either statutory damages or actual damages and profits without any mention of a three-year time limit on those damages. Tara: And the court also criticized the logic of the Second Circuit’s hybrid approach, where a plaintiff could file suit based on discovery but still not recover damages beyond three years. Kagan basically said, That’s incoherent. If a claim is timely, it’s timely, and the plaintiff should be entitled to full relief. Scott: But, and this is a big but, the court explicitly declined to decide whether the discovery rule itself is valid under the copyright Act. Justin Kagan noted that both sides had assumed that the discovery rule applied, so the court didn’t reach the question of whether that assumption was legally correct. That’s where Justice Gorsuch came in. Tara: Yeah, Gorsuch wrote a sharp dissent, and that was joined by Justice’s Thomas and Olito. He argued that the discovery rule has no place in copyright law unless there’s fraud or concealment by the defendant. He pointed out that the Copyright Act contains no discovery language and that for most of its history, courts applied a straightforward rule. The clock starts taking when the infringement happens. Gorsetch essentially said the court should have dismissed the case and waited for one that properly raised the discovery rule issue. Scott: That’s why RAD Design was seen as the next shoe to drop. Rad Design directly asked the court to decide the validity of the discovery rule itself, which the court had ducked in nearly. But instead of taking taking that opportunity, the court decided to duck that one again, and they just let it go. Tara: Let’s talk about the RAD Design case. Scott: Sure. In RAD Design versus Michael Greckeau Productions, it was a professional photography company, sued RAD Design for allegedly using its copyrighted images without permission. Rad Design argued that the claims were time barred. Tara: The Second Circuit applied the discovery rule, saying the case could go forward if the plaintiff only recently discovered the use. Rad Design then petitioned the Supreme Court to rule that the discovery rule has no place in copyright law. Scott: And what did the court do? Nothing. It denied certiority, effectively passing on the opportunity to resolve the circuit split or the question as to the applicability of the discovery rule or legitimacy of the discovery rule. So now we’re left with conflicting rules in different parts of the country. Tara: And we’re left with uncertainty. Businesses with a national online presence could be sued under very different standards depending on where a plaintiff files the case. Scott: But there’s more at stake here than just legal theory. Several amakey, including MBA teams like the Pacers, Nuggets, and Magic, filed briefs supporting RAD Designs, warning that the discovery rule is being abused. Tara: These teams pointed out that they’ve been sued for old social media content, videos posted years ago with arena back background music. The lawsuits allege infringement based on music barely audible in the clips, and yet plaintiffs are seeking damages years after the fact. Scott: And that’s what makes the discovery rule dangerous in practice. It allows plaintiffs, sometimes opportunistic copyright enforcers or trolls, as they’re pejoratively referred to, to delay their claims, drive up damages, and strike when the defendants are least prepared. Tara: And it’s one thing when the rule protects a genuinely unaware plaintiff. But in the digital age, when tools like the wayback-machine make it easy to find online content, it’s hard to justify a rule that allows indefinite delay. Scott: Yeah. Based on all my viewings of prison movies. I’m darn sure that Neely had music in whatever prison he was in. All right, all jokes aside, let’s take a moment to explore how we got here. The discovery rule originated in general tort law, especially in fraud cases. Courts recognize that it would be unfair to timebar claims when a plaintiff didn’t know that they had a claim. Tara: And over time, courts started applying that logic to copyright cases, too, particularly where the infringement wasn’t obvious. But the Copyright Act does not codify this rule, and that’s the problem. Scott: The Petrella versus MGM decision made things even murkier. Justice Gainsberg wrote that Latches isn’t a defense to damages under the Copyright Act, but she also reaffirmed the three-year limitation on damages. Then the discovery rule crept back in through the lower courts. Tara: And Neely really cracked that door wide open by allowing damages going back decades, as long as the claim was timely under the discovery rule. That’s why Justice Gorsuch was so frustrated. He sees the situation where the court’s past statements were being being undermined by a rule it never really endorsed. Scott: All right, so let’s talk about practical implications. So here’s a practical question. What does all this mean for copyright enforcement and for copyright defense? Tara: If you’re a copyright owner, the discovery rule, at least in some circuits, gives you more flexibility. But don’t abuse it. Courts can still look at whether you should have discovered the infringement earlier. And if your delay looks strategic, then that could blackfire. Right. Scott: And I joke about Neely in the music in prisons, but that’s going to be an issue in discovery, right? Whether or not that particular prison allowed radios, whether radios were played, And that’s all about, if you’re a defendant, document everything. And if you get sued, utilize the discovery process to try to uncover whether or not the plaintiff should have discovered the infringement earlier. Archive your post, keep metadata, track when licenses were obtained or expired. You may need to show that any alleged infringement was public and was very discoverable for years. Tara: Yeah, and in litigation, challenge the discovery roll head-on. In circuits that haven’t explicitly adopted it, a strong motion to dismiss may succeed, especially if the plaintiff had access to the content long ago. Scott: In settlement negotiations, highlight the unfairness of retroactive claims. Judges are increasingly aware of copyright trolls. We see that all the time in these cases that we cover. And some are very skeptical of late-breaking claims for ancient posts. Well, I think that’s it for this episode of The Briefing. I think I’ve made enough fun of Neely. Thanks, Tara, for joining me today. And thank you, the listener, for listening to this episode. We hope you enjoyed it. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. And if you have any questions about the topics we covered today, please leave us a comment.

Who really owns WallStreetBets? The man who created the subreddit, or the platform that hosted it? In this episode of The Briefing, Scott Hervey and Tara Sattler dive into the trademark showdown between Jaime Rogozinski and Reddit, and why both the District Court and the Ninth Circuit said no to Rogozinski’s claim of trademark ownership. This case is a cautionary tale for creators and entrepreneurs about what really counts as “use in commerce” under trademark law. Just coining a catchy name or launching a community isn’t enough. If you’re not the one offering goods or services under the brand, you don’t own the trademark. Watch this episode here. Show Notes: Scott:  He created the subreddit. He coined the name. He even filed a trademark application for it. But when Jamie Rogosinski took reddit to court to enforce his claim over the Mark Wall Street bets, both the district Court and the Ninth Circuit told him the same thing. Just because you created the name doesn’t mean you own the trademark. I’m Scott Hervey, a partner with the Law firm of Weintraub Tobin, and I’m joined today by my colleague, Tara Sattler. We are going to talk about Trademark use, ownership, and the Reddit battle over Wall Street bets on this installment of The Briefing. Tara, welcome back to The Briefing. Thanks for being here today. Tara: Thanks for having me. Always glad to be chatting with you, Scott. Scott:  So this one’s a real interesting I think almost everybody knows about the subreddit Wall Street Bets. Can you give us some background on this whole dispute? Tara: Yes, absolutely. So the story starts with Jamie Rogosinsky, and I really hope I’m pronouncing that right. So my apologies if I’m not. But Jamie Rogosinsky, the man widely credited with launching the subreddit feed Wall Street Bets back in 2012. And What began as a niche community for high-risk trading chatter exploded into really a cultural phenomenon in 2021 during the Gamestop and AMC Short Squeez. Right. Scott:  Sensing an opportunity to commercialize the brand. Rogusinski filed a trademark application for Wall Street Bets in 2020, covering merchandise and other goods. But Reddit, which owned and hosted the subreddit platform, wasn’t on board with that. It removed Rogusinski as a moderator for violating its policies and later filed its own trademark application for the same name, this time for an online forum service. Tara: So Rogusinski sued Reddit in early 2023 in the Northern District of California and asserted claims for trademark infringement, unfair competition, and declaratory relief, arguing that he, not Reddit, owned the Wall Street Beats brand. Scott:  Let’s talk about who actually used the mark. So to understand why both the District Court and the Ninth Circuit rejected Jamie Rogosinski’s trademark claim over Wall Street bets, we have to look closely at what each party actually did with the trademark, and more importantly, how the law defines, quote, use in commerce. Tara: Right. So Rowe Kuzinski argued that he was the originator of the mark. He created the subreddit, Wall Street Bets in 2012, moderated it for eight years, and even shaped the visual identity of the community itself. So according to him, he wasn’t just a user, he was the brand in the brand space. Scott: And to bolster that claim, he pointed to several activities movies. First, he published a book in January 2020 that he called Wall Street Bets: How Boomers Made the World’s Biggest Casino for Millennials. He linked it to the subreddit, and he Wall Street Betts’ name directly in the title. Tara: He also announced plans to launch Wall Street Betts’ branded merchandise and even promoted a real money esports trading competition, all under that Wall Street Bets’ name. He highlighted his growing media presence and public persona, and he claimed the public really associated him with the mark and not read it. Scott: But here’s the legal problem. None of Isn’t that moderating a subreddit feed, writing a book, announcing merch ideas, remember, announcing merch ideas, becoming recognizable, counted as trademark use in commerce under the Lanham Act? Tara: Exactly. Courts require that to establish trademark rights, you must be the first in commerce to use the mark in connection with actual goods and services, and that the use needs to be real, public-facing, and commercial, not just conceptual or community-based. Scott: Now, Reddit, on the other hand, didn’t just host the subreddit. It actively operated it. They controlled the platform. They served millions of users and provided forum services under the Wall Street Bet’s name, beginning in 2012. That qualified as commercial use of the mark. Tara: And both the District Court and the Ninth Circuit agreed. Reddit’s provision of online forum services under the Wall Street Betts name constituted a bona fide use in commerce. Owners, long before Rogosinsky’s book or other merch plans ever hit the market. Scott:  Both courts looked at Rogosinsky’s actions and said, You didn’t use the mark as a source identifier for any goods or services, at least not in the way trademark law requires. In fact, the very platform you were using, Reddit, was the one actually offering services under that name. Tara: So, let’s take a look at the District Court’s decision. Judge Maxine Chesney dismissed Rogosinsky’s trademark claims under Rule 12(b)(6), holding that he failed to allege sufficient use in commerce to establish trademark rights. And that’s the key here, the use in commerce. Scott:  Exactly. Under US Trademark Law, specifically the Lanham Act, a trademark is owned by the party who first uses that mark in commerce in connection with specific goods or services. Just being the first to create a name or idea about a name doesn’t automatically for ownership rights. You need to use the mark in a way that identifies you as the source of the goods or the services in the marketplace. Tara: And Judge Chesney noted that according to Rogosinsky’s own complaint, it was Reddit that created and provided the services associated with the Wall Street Betts Mark, the online discussion forum, not Rogosinsky. He may have moderated and participated, but Reddit was the one offering the forum and the services of the forum to the public. Scott:  And further, the court emphasized that Rogosinsky never alleged that he personally provided any goods or services under the Wall Street Betts Mark before Reddit’s use. And later Other attempts, like writing a book or selling merchandise occurred well after Reddit’s platform was already operating under that name. Tara: So then Rogusinski appealed, but the Ninth Circuit, in a memorandum opinion, issued in June of affirmed the district Court’s dismissal, and they doubled down on the importance of the trademark use in commerce. Scott:  Right. The Ninth Circuit Panel agreed that Rogosinsky didn’t plausibly allege priority of use. The court said that even though he created the subreddit and coined the name, that didn’t qualify as use in commerce under trademark law. Tara: The Ninth Circuit found that it was Reddit, not Rogosinsky, that had used the Wall Street Bet Smart in commerce by providing the forum services under that name. And that was really enough to establish Reddit’s priority. Scott:  Right. And it’s a clear message. Creation of a name or even administering an online community doesn’t count as using commerce unless you’re the one providing the commercial goods or services under the mark. Tara: Let’s talk about what use in commerce actually means. The USPTO defines it pretty clearly in the Trademark manual of examining procedures. Or the TMEP. For goods, the mark must appear on the product or packaging, and the product must be sold or transported in commerce. Then for services, the mark must be used in advertising or the performance of those services, and the services must be rendered in commerce. Scott:  Right. And the use must be bona fida use, not just token use or internal use. For example, launching a website that shows the mark and offers services to the public can count. But being a moderator on someone else’s platform or coining a term that others use, that does not count. Tara: In Rogosinsky’s case, even if he was synonymous with Wall Street bets in the early days, He didn’t control the platform or offer the forum services. It was Reddit that did that. And that distinction is what killed his trademark claim. Scott:  So let’s talk about what brand creators can take away from this case. So There’s a couple of things. First, you have to use it or you’re going to lose it. You must use the mark in commerce to acquire trademark rights. Just creating or coining a term isn’t enough. You need control. The services or the goods must come from you, not somebody else. Hosting or moderating a platform that belongs to another entity won’t establish ownership. Lastly, filing. Filing a trademark registration application is ownership. You can file a trademark application based on an intent to use, but that doesn’t confer rights until you actually use the mark in commerce and prove that use by filing a proper specimen with the USPTO. Tara: That’s a great point. Intent to use application can be a really smart way to stake an early claim in a trademark. But if you can’t follow through with that bona fide use in commerce within that a lot of time period, then the application would just go abandoned. Scott: Another lesson, if you’re building a brand on someone else’s platform, whether it’s Reddit, YouTube, or Instagram, you may not own the brand, even if the audience sees it as yours. You need to carefully consider where and how you’re building a brand. Tara: That really is a key point for creators and community builders. You might have started something, but if you build it on someone else’s infrastructure or in someone else’s platform, and you don’t control the commercial use, then you don’t own the trademark. Scott:  It’s not enough to be first, and it’s not enough to be well known. You have to be the first to use the mark in commerce in connection with goods or services, meaning that you need to sell the goods or render services under that brand in the marketplace. Tara: So while Rogosinsky may have been the creative mind behind Wall Street Bets, Reddit’s continuous operation of the forum that name gave them the edge. And the court said it, Reddit owns the mark. Scott:  That’s a tough result for Roguzinski, but a strong reminder of the fundamentals of trademark law. If you’re not the one commercially using the mark, you don’t own it no matter how great your idea is. Tara: Yeah, that’s right, Scott. So at the end of the day, Rogusinski may have started Wall Street bets, but Reddit used it in commerce. And That’s really what Trademark Law is all about. Scott:  Whether you’re launching a startup, building a creator brand, or founding an online community, remember, trademark rights come from commercial use, not just the creative spark. Well, that’s all for this episode of The Briefing. Thanks to Tara for joining me. Thank you, the listener, for listening to this episode. We hope that you enjoyed it. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. And if you have any questions about the topics we today, please leave us a comment.  

In this episode of The Briefing, Scott Hervey and Richard Buckley dive into Pepperdine University v. Netflix, a trademark showdown over the use of the name “Waves” in the Netflix series Running Point. After Pepperdine’s attempt to block the series’ release was denied under the Rogers test, the university is back—this time arguing that the Jack Daniel’s Supreme Court decision changes everything. Watch this episode on the Weintraub YouTube channel. Show Notes: Scott: What happens when a Christian university’s proud athletic legacy collides with the creative freedom of Hollywood? That’s the question at the heart of Pepperdine University versus Netflix, a trademark dispute centered around the name Waves. Pepperdine lost its initial attempt to block the release of Netflix basketball comedy ‘Running Point.’ Very funny television show. But the fight is far from over. Now the court must decide whether Netflix use of the Waves mark is protectable artistic expression or actionable infringement. And it all comes down to a legal test some thought was subtle law until the Supreme Court rocked the waters in Jack Daniels versus VIP Products. I’m Scott Hervey, a partner at Weintraub Tobin, and I’m joined today by my partner, Richard Buckley. We are going to unpack this battle over brand identity, free speech, and college sports on this episode of the Briefing. Richard, welcome back to The Briefing. Good to have you. Richard: It’s great to be here again. Scott: Yeah. Did you watch Running Point? Richard: I have not. Scott: Okay, well, you are missing out. You should watch it. It’s quite funny. Richard: I feel like I must now. Scott: All right, let’s get into this. So let’s start with the basics. What’s this case about, Richard? Richard: So Pepperdine’s athletic teams have been known as the Waves since 1937. Netflix and Warner Brothers released a scripted comedy series called Running Point, featuring a fictitious professional basketball team named the Los Angeles Waves. The university sued, claiming trademark infringement and false designation of origin under the Lanham act, among other things. Scott: Pepperdine raised several issues in the complaint. First, they argued that the fictional Los Angeles Waves team, which, by the way, is not a collegiate team. It’s a like an NBA league team, uses the word Waves with a strikingly similar font to Pepperdine’s registered marks. Pepperdine also contended that the colors used by the fictional team were similar to Pepperdine’s and that both marks were used in athletic context. Pepperdine specifically pointed out that an image in the Running Point trailer included a frame jersey with the number 37, which they believe references Pepperdine’s founding year of 1937. Coincidence? I don’t know. But perhaps most importantly, Pepperdine was concerned about reputational harm. They argued that the themes and Running Point, including excessive alcohol and substance use, sexual innuendos in imagery and foul language and other content, didn’t align with Pepperdine’s Christian values and would negatively impact the university’s reputation. Richard: So Pepperdine sought a temporary restraining order, a tro, to block the release of Running Point, which premiered on February 27, 2025. The university argued that the use of Waves, along with similar color schemes in a jersey number 37, would confuse viewers and damage Pepperdine’s reputation. As you previously mentioned, the court denied the TRO for finding that Pepperdine was unlikely to succeed on the merits of its trademark claims because the use of Waves fell under the Rogers test, which protects expressive works unless the use is irrelevant or is explicitly misleading. Scott: Right. We. We previously covered the court’s ruling on the tro, so we’re not going to delve into that too deeply. You can. We’ll include a link to that episode in the show notes here. So. So after the show aired, Pepperdine filed a First Amendment complaint to incorporate new allegations, including claims of widespread use of the Waves mark in marketing. For example, Pepperdine alleged and in the First Amendment complaint included pictures showing Netflix’s use of Waves on tickets for the series premiere. Pepperdine also alleged consumer confusion with regard to third-party sales of Wave merchandise linked to Running Point. Richard: Shortly after Pepperdine filed its First Amendment complaint, Netflix filed a motion to dismiss the first amended complaint based mainly on the argument that the Rogers test still applied and shielded them from liability because Waves, the use of waves, was part of an expressive work and it was not misleading. Scott: Right. And so that brings us here to Pepperdine’s opposition to Netflix’s motion to dismiss. All right, so Pepperdine, in their opposition, argues that Jack Daniels versus VIP products. That decision changed everything. In that case, the Supreme Court ruled that when a trademark is used as a source identifier, Rogers does not apply, even if the use has. Has expressive elements. Pepperdine claims that Netflix used Waves not just expressively, but as branding as a source identifier for the Running Point series. Pepperdine pointed to extensive use of the mark in the series and in marketing of the series, social media, posts, merchandise, and Netflix referring to itself as, quote, home of the Los Angeles Waves. Richard: And Pepperdine argues that that’s enough to knock Rogers out of play, thus triggering the traditional trademark analysis and the likelihood of confusion test under Jack Daniels. Scott: All right, so where does this leave us? So, Richard, what’s your take on how the court might rule? Richard: Hard to say. Pepperdine’s amended complaint is strong on its face. They’ve alleged that Netflix used the WAVES mark pervasively and commercially as a brand identifier, and that could persuade a court not to apply Rogers at this early stage. That said, it’s not a slam dunk. Netflix can argue credibly that Waves is part of the show’s world-building and that viewers aren’t confused about who made. Scott: The show right I agree with you, but I think my prediction here, my prediction is that the court denies the motion to dismiss. At this stage, Pepperdine just needs to plausibly allege source identifying use. And I think based on the use of the WAVES mark outside of the program, I think that Pepperdine may have done just that. Whether Pepperdine will ultimately win on likelihood of confusion, that’s a whole different question. Richard: So with regard to fan made unofficial Waves merchandise that can’t be pinned on Netflix, as you know, Scott, because you’re helping some of your clients with this very issue, that being counterfeit merchandise that includes marks and even images from programs all over sites like Etsy and redbubble. However, I just have to ask, why do you think Netflix printed tickets for the series premiere with the Waves mark on it? And relatedly, why would Mindy Kaling, one of the creators of the show, include as a tag on her Instagram page, home of the Los Angeles Waves this arguably a gift to Pepperdine? Scott: No. Oh, I totally agree with you. I mean, you’re the litigator. You tell me, how would you deal with this situation where you, you defeat, you defeat a tro. Temporary restraining order motion for a temporary restraining order, right? Where, where basically, you know, so goes to tro, usually, so goes the case, but the judge kind of left it open for, for Pepperdine to show use of that mark outside of the program. And, and, and here it is. Now. How do you, as a litigator, if you were handling this case, like how do you deal with that or how would you deal with that? Richard: I think as a general rule, when you have a favorable ruling on a TRO where there is a prediction that’s offered as to likelihood of success on the merits, I think that the, the general advice in all circumstances would be just, you know, hold serve, do, don’t do anything that would, you know, give anybody a chance to revisit these arguments. New ammunition, you know, revisit previously made arguments, just stay cool is generally what I would advise in a situation like that. Scott: Yeah, but I guess according to the timeline in the First Amendment complaint, remember the First Amendment complaint was filed and then Netflix filed its, well, network file this motion to dismiss. Richard: The TRO prior. Scott: Yeah, it was prior. So it’s interesting, right? Netflix, Pepperdine may not have had this additional evidence. They may not have had this evidence of Netflix’s use of the Waves outside of its use in the television program. So let’s. Okay, that, this is an interesting question. Had, had Pepperdigm brought its TRO after filing its first amended complaint with evidence of use of waves outside of the creative context of the program and arguably showing use as a source identifier, where do you, how do you think the court might have ruled? What do you think might have happened? Richard: That’s a great question. It’s very difficult to say, but I think that there would have been some distinction and analysis of, you know, expressive, artistically protected conduct and commercial conduct, which in its opposition to the motion to dismiss, Pepperdine draws a distinction between, you know, know, those two types of conduct. Assuming it had made that argument before and that the cop, that the court had bought into it, then they maybe get a TRO on the commercial activity and, you know, they move forward with their lawsuit in the face of pleading challenges. Scott: Yeah, I think I agree with you. I think what, I think the more likely thing that would have happened had Pepperdine brought TRO after it filed its First Amendment complaint, or if it had this evidence before it filed its initial complaint and brought its tro, I think that the court would probably have found Rogers not applicable, but it would not have enjoyed the airing of the series. I think the court probably could have said, look, you’re, you can, you can recover damages and monetary, you know, you can recover monetary damages. And that’s sufficient because the, you know, the, the weighing of the, the, the, the benefit versus the harm to Netflix, I think the harm would definitely outweigh any benefit that Pepperdine could receive. And plus, I think that it’s, the harm suffered could be covered through economic damages, possibly. I think Pepper and I might argue that his reputational harm couldn’t be covered by economic damages, but I don’t know. I think we find that most things are most, most things can be addressed through money. Richard: Agreed. And I think that if the court had the opportunity to, and it has the opportunity now, I suppose, with the motion to dismiss, but to address the distinction between artistic and commercial activity and to treat them differently, you know, apply Rogers to one and not the other, you know, then you kind of get into like a more realistic look at what is really going on here. I don’t think Pepperdine can credibly argue that when you watch that show, you think that Pepperdine endorses it or has produced it, or this is a Pepperdine production. But I do think that when you go to buy a T shirt in a store and it says waves on it in blue and orange, you know, you might think that’s a Pepperdine shirt, but it could be a, a Netflix produced merchandise. Scott: Yeah, I Mean, I don’t think Netflix. I don’t think it would be wise to produce waves themed merch related to the program. I think they could. I think that’s where you could have some big, big problems. But. But I don’t. But I don’t think that a. A collegiate basketball fan who happens to follow and love Pepperdine Waves, I don’t think that there’s a high degree of overlap between that person and the average viewer of Running Point, because in order to show. In order to show this type of consumer confusion or likelihood of confusion, you have to have. You have to show overlap in the groups of consumers that. That interact with these. With these goods or services. And obviously, this all comes out in expert testimony and survey evidence. And, you know, I’m sure one side will have survey evidence that shows that there is an overlap, and another will have survey evidence that shows that there isn’t an overlap, and it’ll be up to the jury to decide which one they believe. Richard: So, and if the court, you know, accepts everything that’s been alleged as true for purposes of a motion to dismiss, as it is supposed to do, then the lawsuit goes forward. Scott: Right. I think there is one takeaway here for lawyers who do what I do, which is advise studios and production companies on issues just like this, is to make sure that your client kind of understands the risk of. Of running with a brand like this. Because I’m. I’m fairly sure that when they did the script report and they noted that this team was named the Waves, that the script report noted that Pepperdine’s basketball team is also named the Waves. And the lawyer would have gotten a copy of that script report, and the lawyer may probably should have flagged the. The studio and flagged for production. Look, okay, we can use this in the show, but let’s make sure that it’s not used in advertisement or promotions, because that’s when we could have problems. Richard: Right. It’s better to be safe than sorry, and it invites trouble. Scott: Yeah. Richard: To do that. Scott: Oh, yeah. Richard: Especially with all those sort of coalescing factors. Scott: Right. Well, this case certainly has the potential to reshape how expressive works are treated under trademark law, especially in the streaming era, where branding and content kind of bleed together. The Jack Daniels ruling sets the tone, and Pepperdine is testing how far courts are willing to go in reigning in Rogers. Richard: We will certainly be watching this one closely. Scott: Oh, we will. We’ll definitely report back on the court’s ruling. Well, that’s it for today’s episode of the Briefing, thanks to Richard for joining me today, and thank you, the listener or reviewer, for tuning in. We hope you found this episode informative and enjoyable. If you did, please remember to subscribe, leave us a review and share this episode with your friends and colleagues. If you have any questions about the topics we cover today, please please leave us a comment.

Can a car be a copyrightable character? In Carroll Shelby Licensing v. Halicki, the Ninth Circuit said no — ruling that “Eleanor,” the iconic Mustang from ‘Gone in 60 Seconds,’ lacks the distinctiveness and consistency required for copyright protection. In this episode of The Briefing, Scott Hervey and Richard Buckley break down the history of the Eleanor litigation, review the district court and Ninth Circuit rulings, and explain what it actually takes for a character to qualify for copyright protection. Watch this episode on the Weintraub YouTube channel. Show Notes: Scott: Can a car be a character? Well, that’s the question at the heart of a long-running legal dispute over Eleanor, the muscle car made famous in the movie Gone in 60 Seconds. For years, the heirs of the original film’s producer claimed Eleanor was a protectable copyright character, and they tried to stop others, including Carroll Shelby licensing, from building or selling versions of that car. But the Ninth Circuit has now weighed in and has definitive shut that claim down. I’m Scott Hervey, a partner with the law firm of Weintraub Tobin, and I’m joined today by my partner, Richard Buckley. We’re going to talk about Carroll Shelby Licensing versus Halicki and what it takes for a character to receive copyright protection on today’s installment of The Briefing. Richard, welcome to The Briefing. This is a first for you. So, welcome. Richard: Thank you for having me. It’s a pleasure. Scott: Absolutely. Richard is one of our litigators, so that means we keep him in the back of the firm and chained up, feed him raw meat every once in a while, just to So not often enough. Keep him ready to battle. All right. This is right up your alley, a piece of long-running litigation with steadfast defendants and steadfast plaintiffs arguing their claim all the way up to the Ninth Circuit? Richard: It’s a privilege of being older and experienced, I guess. But yes. Scott: All right. Well, let’s get into this one. So the saga over the car, Eleanor, has been years in the making. It began with the 1974 film, Gone in 60 Seconds, which began as an independent action film written and directed by H. B. Tobi Halicki. In that film, Yellow, 1971, Ford, Mustang Fastback named Eleanor, is the featured car in a climactic 40-minute chase scene. The film became a cult hit, and Eleanor became an underground icon. Richard: Right. In 2000, the movie, Gone in 60 Seconds, was remade by Disney and Jerry Bruckheimer, this time with Nicolas Cage behind the Wheel. Also in the remake, Eleanor is a Silver 1967 Shelby GT 500 Mustang. Very different look and different era. Still nicknamed Eleanor and still featured prominently. Scott: Halecky passed away in 1989, and his widow, Denise Halecky, later acquired certain intellectual property rights associated with the 1947 film, including the original script and footage. Denise Halecky, the widow, also began asserting that Eleanor, the car, was a protectable copyright character. Over the years, she and her company sent legal threats or sued individuals and businesses who built or sold Eleanor replicas, or what she claimed to be Eleanor replicas, including muscle car maker, Carroll Shelby, a former race car driver and car designer who was played by Matt Damon in the 2019 movie, Ford versus Ferrari. Great movie, by the way. Richard: Agreed. Those threats, Scott, culminated in the lawsuit that was filed by Carol Shelby licensing and Classic Recreations in 2020. They sought a declaratory judgment that Eleanor was not entitled to copyright protection and that Hyliki had no enforceable rights to stop them from building replicates. Scott: So this case has been winding its way through the district Court for the Central district of California and the Ninth Circuit. There have been many starts and stops and twists and turns in this case. But a summary of the proceedings is as follows. So originally, the district Court sided with Shelby in Classic Recreations. The Court found that Eleanor, in both the 1974 original and the 2000 remake, lacked the distinctive attributes necessary for copyright protection as a character. Richard: The Court emphasized that in the 1974 film, Eleanor was little more than a car with a name and a role in a chase scene. It had no anthropomorphic qualities, personality traits or development. The court also noted that Eleanor appeared differently in the two films, different models, different colors, different eras, undermining the argument that it was a consistent, protectable character. Scott: Right. Haleke appealed to the Ninth Circuit, where the Ninth Circuit affirmed the lower court, the court reviewed its earlier precedent on character copyright ability, notably the DC comics versus towel case involving the Batmobile, and concluded that Eleanor did not meet the standard. Richard: That, Scott, is a perfect segue for us to talk about what it takes to copyright a character. Scott: Right. Let’s do that. Let’s take a look at DC comics versus towel. That’s a 2011 case involving the Batmobile. In that case, the court noted that the owner of a copyright in a work embodying a character can acquire copyright protection in the character itself. In determining whether a copyright protection protection may be afforded to characters, visually depicted in a television series or in a movie, the Ninth Circuit employed the standard known as the character delineation test. If a character is especially distinctive or constitutes the story being told, the character is entitled to receive protection separate and apart from the work in which that character appears. The court noted that characters that have received copyright protection, like and Rocky Balboa, have displayed consistent, widely identifiable traits. Richard: In that case, the court said that the Batmobile is akin to the Godzilla character, which was the subject of its own copyright lawsuit. Although Godzilla assumed many shapes and personalities in the various Godzilla films, the court found that Godzilla had developed a constant set of traits that distinguished him, him, him, him, him or her or it from other fictional characters, thus meriting copyright protection. Scott: Right. And not every character is entitled to copyright protection. One of the key findings to whether a character is entitled to copyright protection is whether that character is especially distinctive. To meet this standard, a character must be sufficiently delineated and displayed consistently with widely identifiable traits. The Ninth Circuit, in the Batmobile case, a three-part test to help determine whether a character is entitled to copyright protection. First, the character must generally have physical as well as conceptual qualities. Even if the character does not maintain the same physical appearance in every context. I mean, as we know, the Batmobile changed as did Godzilla. Second, the character must be sufficiently delineated to be recognizable as the same character whenever it appears. There’s no mistaken making Dracula when it appears. This means that the character must display consistent identifiable character traits and attributes, although the character need not have a consistent appearance. Third, the character must be especially distinctive and contain some unique elements of expression. Richard: This is obviously a fact-specific and involved test. Scott: Oh, absolutely. This is how the Ninth Circuit applied this test in the Batmobile case. The court found that because the Batmobile has appeared graphically in comic books and as a three-dimensional car in a television series in motion pictures, it has physical as well as conceptual qualities and is thus not a mere literary character, thereby satisfying the first factor. As for the second, the court found that the Batmobile was sufficiently delineated to be recognizable as the same character whenever it appears. Richard: The court also noted that the Batmobile had maintained distinct physical and conceptual quality since its first appearance in the comic books back in 1941. The vehicle is equipped with high-tech gadgets, weaponry used to aid Batman in fighting crime. It’s almost always bat-like in appearance with bat emblems on the vehicle. The bat-like appearance has been a consistent theme throughout the comic books, television series, and motion pictures, even though the specific bat-like characteristics have changed from time to time. Scott: That’s right. In addition to its status as Batman’s loyal bat-themed sidekick, complete with the character traits and physical characteristics you just mentioned, the Batmobile also has its unique and highly recognizable name. It’s not merely a stock character. Thus, the court found that the Batmobile is especially distinctive and contains unique elements of expression. So that’s how the court found the Batmobile to be a protectable character. Richard: So now, let’s look at how the Ninth Circuit applied the toll test to Eleanor. First, the court looked at whether Eleanor is a character with physical and conceptual qualities. Does the character exist beyond a mere literary description? While Eleanor has physical qualities, it lacks any conceptual qualities. Eleanor has no anthropomorphic traits. Scott: Right. Next, the court looked at whether Eleanor’s appearance is consistent. Is it sufficiently delineated to be recognizable as the same character whenever it appears across multiple works or iterations? I think Batman, right? Whether it’s Adam West or Christian Bale, the essential traits are the same. Here, in this case, the court said the answer is no. Eleanor’s physical appearance changed frequently throughout the various films. Richard: Lastly, the court looked at whether Eleanor is distinctive and has a unique expression. The character must be more than a stock figure. It has to be sufficiently distinctive to constitute original expression. This is often the hardest factor to prove, and Eleanor failed here, too. The court said that Eleanor is not especially distinctive. Nothing distinguishes Eleanor from any number of sports cars appearing in car-centric action films. Scott: This case reinforces that the threshold for character protection is high, and it prevents copyright from being used to monopolize common concepts like a fast car in a chase scene. It’s a win for fans, builders, and for creativity. It’s also a reminder that copyright isn’t meant to protect every reoccurring object in a film. All right, let’s talk about what this case means for filmmakers who want to create a protectable character. So let’s talk about some key strategies to keep in mind. Richard: Okay, first, develop distinctive personality traits. It’s not enough to just give a character a cool name or a memorable name or a cool look. Courts want to see original expressive qualities like unique speech patterns, emotional depth, or consistent behavior. Think of characters like Jack Sparrow or Walee They stand out because they think, they act, and they respond to the world. Scott: Right. R2d2 and C3PO for sure, or Chuy, Chewbacca. All right. Second, ensure consistency across appearances. If the character appears in multiple works, like R2D2 and C3PO, the core identity must be recognizable. In this case, the fact that Eleanor looked so different in the original film film and the remake undermine the argument that it was the same character. Richard: Third, give nonhuman characters anthropomorphic traits. Courts are more likely to recognize copyright in a robot or a car if it behaves like a person. That might mean giving it a voice, facial expressions, or agency within the story. The Batmobile in DC comics versus toll passed this test, and in contrast, Eleanor didn’t. Scott: Right. Fourth, avoid generic designs and tropes. A muscle car and a car chase isn’t enough. Copyright doesn’t protect ideas, only original expression. So even if your character starts with a familiar trope, you’ll need to add something unique to elevate it beyond just a cliché. Richard: Number five, show, don’t just tell. Giving something a name like Eleanor doesn’t automatically make it a character. You have to show who the character is through storytelling, interactions, and a role in the plot. Scott: Sixth, make the character central to the story. If the character is just a backdrop or a tool, like a vehicle, a weapon, or a setting, it’s harder to argue for copyright protection. Courts want to see that the character drives some portion of the narrative and has a meaningful arc or function. Richard: Finally, my favorite step, document your development process. If protectability ever becomes an issue, being able to point to notes, concept art, character Bibles, or draughts can make a big difference in demonstrating originality. Scott: Richard, spoken like a true litigator. The bottom line, copyright protection for characters is possible, but you have to earn it through distinctive, expressive storytelling. The ruling in Carroll Shelby Licensing versus Halicki reinforces that courts won’t extend protection lightly, and that’s a valuable lesson for every creator. Later. Well, that’s all for today’s episode of The Briefing. Thank you, Richard, for joining me today. And thank you, the listener or a viewer, for tuning in. We hope you found this episode informative and enjoyable. If you did, please remember to subscribe and leave us a review and share this episode with your friends and colleagues. If you have any questions about the topics we cover today, please leave us a comment.

If your company relies on online reviews, influencer partnerships, or digital marketing strategies, it’s important to be aware of FTC Rules and the distinctions between real reviews and paid ads. Scott Hervey and Jessica Marlow discuss the dos and don’ts of consumer reviews on this featured episode of The Briefing. Watch this episode on the Weintraub YouTube channel.   Show Notes: Scott: On August 14th, 2024, the Federal Trade Commission announced a final rule that will combat fake reviews and testimonials. All parties involved in influence or marketing or companies that have significant e-commerce businesses need to know about these rules, what they prohibit, and the consequences for violating them. Joining me to break down these new rules is fellow Weintraub partner Jessica Marlow on today’s installment of The Briefing. Jessica, welcome back to The Briefing. It’s been a while. Jessica: It has. Thank you for having me. Scott: Good to have you back. We’re talking about one of your favorite topics, influencer marketing. Jessica: Absolutely. FTC, they’re coming up with new rules all the time, so I’m excited to dig in. Scott: Yeah. Well, so let’s start out with a rule that I think a number of online brands, companies that have significant online businesses, will find maybe problematic. So the FTC says that it’s an unfair or deceptive act or practice and a violation for a business to provide compensation or other incentives in exchange for the writing or creation of consumer reviews expressing a particular sentiment, whether negative or positive, regarding a product, service, or business that is the subject of the review. In other words, no pay-to-play for consumer reviews. Now, according to the FTC notes, this section doesn’t address testimonials such as a blogger or an influencer paid review. This section only applies to consumer reviews. Also, the FTC pointed out that this section doesn’t prohibit paid or incentivized consumer reviews, only those where the compensation is provided in exchange for expressing a specific sentiment. Jessica: What about a campaign where a brand solicits positive feedback on a product in exchange for a discount on a future purchase? Something like, Tell us how much you loved our product, and we’ll give you 10% off your next purchase. Scott: The FTC that just because a business expects a review to be positive doesn’t mean that there is an express or an implied requirement that the review needs to be positive to obtain an incentive. The condition that the review needs to be of a particular sentiment in exchange for the incentive, it needs to be expressed or implied by the circumstances. However, let’s be clear that review gating, where a business only asks for positive reviews for customers while filtering out negative views, is itself illegal. Jessica: The rule also says that companies are prohibited from creating, writing, or selling fake reviews or testimonials. This would prohibit reviews attributed to a person that doesn’t exist. This would include AI-generated fake reviews, but not necessarily AI-generated summaries of actual reviews or reviews by real people who do not have actual experience with the business, its products, or its services, or that maybe misrepresent their experience of the person giving it. The rule also prohibits businesses from buying fake reviews or testimonials or disseminating such reviews or testimonials when the business knew or should have known that the reviews or testimonials were fake or false. Something to think about for brands or agencies that contract directly with influencers. Make sure that your agreement requires actual use of the reviewed product and that the review reflects the reviewer’s actual experience. Scott: Yeah, I agree with that. I think having that rep and warranty in an agreement is a way that a business can say, Well, there’s no way that I should have known that these testimonials given by this person are fake. They had no personal knowledge of the product or these reviews or testimonials did not actually reflect their own personal experience because the contract had these reps and warranties that said that the person giving the testimonial had to use it and that they could only give their personal experience as a testimonial. That’s a really good point. The prohibition on fake reviews also extends the company insiders or their relatives. The rule prohibits procuring or disseminating a review from a company insider or their relative when that review is about the business or one of its products or services, when the business knew or should have known that the reviewer, either materially misrepresented, either expressly or by implication, that the viewer exists. So one, it’s a review by a fake person, or two, that the reviewer did not have actual experience with the business or its product or service, or that the review misrepresents that reviewer’s actual experience. Jessica: The prohibition does not apply to reviews or testimonials that resulted from a business making generalized solicitations to purchasers to pose reviews or testimonials about their experience with the product or service or the business, or that appear on a website or platform as a result of the business merely engaging in consumer review hosting. Scott: We mentioned above that businesses can’t create or sell fake testimonials. But the flip side of that coin is that The rule also says that businesses cannot buy consumer reviews or disseminate reviews or testimonials that are fake, either that they’re from a fake reviewer or that they materially misrepresent the reviewer’s experience with a the product or the service. They also can’t provide compensation or incentives for reviews expressing a particular sentiment. Jessica: The rule also addresses insider reviews. The rule prohibits an officer or a manager of a business from writing or creating a consumer review or consumer testimonial about the business or one of its products or services unless there is a clear and conspicuous disclosure of the officer’s or manager’s material relationship to the business. If the relationship is otherwise clear to the audience, then in the case of consumer testimonials, this disclosure isn’t necessary. Officers, managers, employees, or the relatives must disclose their relationship to the company when writing reviews, and companies must ensure that such disclosures are made when they know about these relationships as well. Scott: It’s quite frequent to see insiders provide some type of product review on TikTok or Instagram. Sometimes, there’s a disclosure about their relationship with the company and their employment status with the company. Other times there isn’t. But companies take note, if your head of social media marketing is also a generator of your TikTok or Instagram content, you need to make sure that you disclose the fact that this person is a company insider. There are some review websites that misrepresent their relationship to a business being reviewed. These rules prohibit a business from materially misrepresenting, either expressly or by implication, that a website, organization, or entity that it controls, owns, or operates provides independent reviews or opinions, other than consumer reviews, about a category of business products or services, including the businesses or one or more of the products or services that it sells. Jessica: The role also prohibits review suppression. So, companies can’t use unfounded legal threats, intimidation, or false accusations to prevent or remove reviews. And they also can’t misrepresent the displayed reviews represent most or all of the submitted reviews if negative reviews are being suppressed. Scott: The rule also includes a prohibition against the use of fake social media influence indicators. Businesses are prohibited from selling, distributing, purchasing, or using fake indicators of social media influence, like number of followers, number of subscribers, likes, etc, for commercial purposes. Jessica: Let’s talk about the impact of this rule on companies and brands that have some online focus. Scott: Sure. The first is review management. Companies need to be extremely cautious about how they manage their online reviews. They can’t artificially inflate positive reviews or suppress the negative ones. Jessica: And how about transparency? There’s an increased need for transparency, especially when employees or affiliates are the ones leaving those reviews. Scott: Right. And that ties into marketing practices. Social media marketing strategies need to be authentic, avoiding the use of fake followers, fake likes, or fake engagement metrics. Jessica: Let’s focus for a second on customer feedback. Companies should really focus on genuine customer feedback rather than incentivized or manipulated reviews. Scott: Then let’s not forget the lawyers. Legal compliance Compliance. Online businesses need to establish clear policies and training to ensure compliance with these rules across all digital platforms. Might I suggest maybe an audit of these practices every year or so because as we know, the FTC is always either changing rules or adopting existing rules to fit current times. Jessica: Absolutely. I think that plays into platform responsibility. If a company hosts reviews on its platform, it needs to ensure representation of all reviews. Scott: Influencer partnerships. When working with influencers or celebrities, companies must ensure proper disclosure of relationships and the authenticity of the testimonials given by those influencers or celebrities. Agreed. Now, these regulations aim to create a more honest and transparent online marketplace. At least that’s the goal of the FTC. This could potentially level the playing field for businesses, but it requires more diligence to in managing a business’s online presence and managing both negative and positive customer feedback. Thank you for joining us for today’s episode of The Briefing. We hope you found this episode informative and enjoyable. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. If you have any questions about the topics we covered today, please leave us a comment.

Exploring the intriguing legal battle over Jack Nicklaus’s brand rights, experts unravel the complexities of personal branding in the creator economy. They discuss how Nicklaus managed to reclaim control of his name, image, and likeness, shedding light on critical contractual agreements that investors must understand. The implications of the court's ruling serve as a warning for influencers and venture funds alike. Learn about the vital need for clear agreements and the potential pitfalls in branding transactions that can shape the future of personal brands.

After nearly 30 years of litigation, a federal court has canceled General Cigar’s U.S. trademarks for COHIBA cigars — all because of a little-known treaty and a Cuban brand once favored by Fidel Castro. What does this mean for U.S. trademark law and the future of the COHIBA brand? Tune in to this week’s episode of The Briefing as Scott Hervey and Jessica Corpuz unpack this high-stakes decision. Watch this episode on the Weintraub YouTube channel. Show Notes: Scott: It’s a battle decades in the making. Two cigar companies, one Cuban and one American, locked in litigation over one of the most iconic cigar trademarks in the world, Cohiba. And in a recent decision, a federal District Court in Virginia upheld a ruling canceling the US trademark registration long held by General Cigar. The reason? A rarely used international treaty and the trademark’s Cuban origin. I’m Scott Hervey, a partner with the law firm of Weintraub Tobin, and I’m joined today by my partner, Jessica Corpuz. We’re going to talk about the Cohiba Trademark decision and what it means for brand owners on today’s installment of The Briefing. Jessica, welcome to The Briefing. It’s been a little while, but it’s good to have you back. Jessica: Thanks for having me, Scott. Scott: So this case isn’t It’s new. In fact, this dispute has been going on for nearly 30 years, and it’s between Cigar General, which is a US company, and Cuba Tobacco, a Cuban state-owned enterprise. Both claim rights to the Cohiba trademark. Have you ever had a Cohiba cigar? Jessica: Not personally, no. Have you? Scott: I have, yes. Outside of the United States, of course. Cigar General in the US, which held the Cohiba trademark, and Cuba Tobacco, which held that trademark in Cuba. Jessica: Yeah, that’s right. So it all started in the late 1990s, when Cuba Tobacco applied to register Cohiba in the United States. The problem was that General Cigar already had registered the Cohiba marks, a wordmark and a stylized version, both used for cigars. Cuba Tobacco asked the USPTO to cancel General Cigar’s registrations, claiming it had prior rights under international law. Scott: Right. Initially, the ETTAp suspended the cancellation case while Cuba Tobacco pursued litigation in federal court. That case made its way all the way up to the Second Circuit, which blocked Cuba Tobacco from getting injunctive relief, saying that any court-ordered transfer of the trademark to a Cuban company would violate US sanctions under the Cuban Assets Control Regulations. Jessica: Exactly. But then things shifted. The federal circuit later said that Cuba Tobacco could still pursue cancellation Installation of General Cigar’s marks at the T tab under a separate theory. Article 8 of the Inter-American Convention, sometimes known as the Pan-American Convention, a treaty both the US and Cuba are parties to. Scott: Okay, so let’s pause here for a second and let’s unpack a few things. First, let’s get some background on the Pan-American Convention. The Pan-American Convention, now you know why they call it the Pan-American Convention, is formerly known as the General Inter-American Convention for Trademarks and Commercial Protection. That’s a long one, was signed in 1929 and entered into force in 1931. It was one of the earliest multinational efforts to create a uniform protection system for trademarks and commercial names across the Americas. And this was at a time when international trademark protection was really still developing. The convention was groundbreaking for expanding reciprocal rights among member nations and recognizing foreign trademark rights that went way beyond traditional territorial principles. Jessica: Yeah. So the convention’s core goal was to protect legitimate business interests and prevent unfair competition across national borders. It sought to establish a framework whereby companies in one signatory country could assert rights against conflicting registrations in another. This included not just registration-based protections, but also protections based on prior use and legal recognition in the country of origin. Article 8, which is the key provision issue in the Coheba litigation, reflects that exact purpose, allowing a trademark owner in one contracting state to cancel conflicting mark registered another if it had prior legal protection and the registrate had knowledge of the original use. Scott: While the Pan-American Convention has often taken a back seat to more prominent treaties like the Paris Convention or the TRIPS Agreement, the Pan-American Convention remains in force and has been recognized by US courts as self-executing, meaning that it becomes US law upon ratification without the need for additional legislation to actually implement the treaty. That status gives it the same force as federal law. And as the Cohiba case shows, it can be a powerful tool in cross-border trademark disputes, especially among countries, well, primarily among countries that are parties to the treaty like the United States and Cuba. Jessica: So, Scott, what other countries are members of the Pan-American Convention? Scott: In addition to US and Cuba, member states include Mexico, Guatemala, Honduras, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Peru, Brazil, and Paraguay. Jessica: It’s really too bad that China isn’t a member, huh? Scott: Right. Given the problems US brands have in China with Chinese actors filing for Chinese trademarks that belong to a growing brands in the US before those brands file in China, the ability to use Article 8 in China to cancel a trademark would be a wonderful thing. Jessica: It would be great. But here, let’s talk about Article 8. So it allows a trademark owner in one contracting state, in this case, Cuba, to cancel a mark registered another here in the United States if two key elements are met, right? Scott: Right. And the first element is that the foreign mark was protected in the country of origin prior to the US registration. And the second is that the US registrant had knowledge of the foreign mark’s use before the filing in the US. The idea is to prevent companies from racing to the trademark office in another country to grab a brand that they know is being used abroad, exactly like they do in China. In this case, Cuba Tobacco had registered its Cohiba mark in Cuba in the early 1970s and had been selling the cigars since 1970, including diplomatic gifts and retail outlets for foreign nationals in Havana. And yes, Cohiba really was Fidel Castro’s favorite cigar, and he often gave it to dignitaries as gifts. Jessica: Well, the court actually found that General Cigar knew all of this. In fact, internal memos from 1977 referred to Cohiba as, Castro’s Cigar, and noted that it was used in Cuba. Still, General Cigar pushed ahead with its application in March of 1978, apparently deciding that securing a US registration was more important than avoiding a conflict. Scott: So the TTAB ultimately canceled General Cigar’s registration under Article 8, finding both legal protection of the Cuban mark and knowledge on the part of General Cigar. And when General Cigar appealed to the federal court in Virginia, the court upheld the TTAB’s decision. Jessica: So, General Cigar tried to argue that the cancellation itself was a prohibited transfer of property under US embargo laws. But the court disagreed, finding that the Cuban Assets Control Regulations didn’t bar the T-Tab from canceling the registration because a cancellation, unlike a court order transferring a mark, doesn’t hand property over to a Cuban entity. It simply removes the registration. Scott: Right. Now, that’s right. And that’s an important distinction and one that could have broader implications. This ruling reinforces that international treaties, even lesser-known ones like the Pan-American Convention, can create real, enforceable rights in US trademark law. Jessica: Yeah. And it also underscores the importance of good trademark hygiene. If a company knows about an existing foreign brand and still tries to register it here without disclosure, it may be vulnerable under Article 8. Scott: So Jessica, what do you think? Is this the end of the line for General Cigar and its use of Cohiba? Jessica: Not necessarily. The ruling doesn’t actually give Cuba tobacco the US rights yet. It just clears the way. Whether Cuba tobacco can actually register and use the market in the US still remains to be seen, especially since the embargo is still in place and the CACR limits Cuban companies’ ability to acquire US trademarks. Scott: Okay. So let’s talk about what happens now for a General Cigar, given that its trademark registration for Cohiba has been canceled. Cancellation doesn’t automatically mean that General Cigar has to stop using the mark. In the United States, trademark rights are based on use, not just registration. That means that General Cigar could, in theory, continue using the Coheba brand in commerce just without the benefit and legal presumptions that come with federal registration. Jessica: Yeah, but that comes with some serious risk. Without a federal registration, General Cigar loses the legal presumption of ownership, the to enforce the mark in certain venues and keep protections like nationwide constructive notice. More importantly, Cuba Tobacco, now holding a potential priority claim under Article 8 of the Pan-American Convention, may be in a stronger position to argue that general cigars continued use of cohiba actually constitutes infringement. Scott: So could Cuba tobacco sue for trademark infringement in the United States? Possibly, but there’s a catch. The US embargo against Cuba still bars many commercial transactions, including the transfer of trademarks. The Second Circuit, as we know, previously held that giving ownership of the Cohiba mark to Cuba tobacco through a court order would violate the Cuban asset control regulations. So unless Cuba tobacco obtains a specific license from the US Treasury Department’s Office of Foreign Asset Control, it may still be blocked from enforcing or benefiting from trademark rights in the US, even if it technically has priority. Jessica: Yeah. In short, General Cigar is in a complete legal gray zone. It can still sell cigars under the coheban name, but it does so without the protection of a federal registration and with a potential infringement claim looming, if and when US sanction policy changes or if OFAC issues a license. It’s really a stark reminder here that trademark law doesn’t operate in a vacuum and that the geopolitical forces can shape even the most brand-driven legal battles. Scott: I guess one could say that general cigars use of Coheba is somewhat smoky and cloudy right now. That was terrible. Well, thanks for joining me today, Jessica. That’s all for today’s episode of The Briefing. Thanks to Jessica for joining me. And thank you, the listener or viewer, for tuning in. We hope you found this episode informative and enjoyable. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. And if you have any questions about the topics we covered today, please leave us a comment..

Warner Music Group just sued DSW for using 200+ hit songs in social media ads—without permission. Those TikToks could now cost $30M. On this episode of The Briefing, entertainment and IP attorneys Scott Hervey and Tara Sattler break down the legal firestorm and what every brand needs to know before hitting “post.” Watch this episode on the Weintraub YouTube channel. Show Notes: Scott: A major music label just did the legal equivalent of a mic drop on one of America’s best-known shoe retailers. Warner Music Group has filed a lawsuit against Designer Brands Inc, the parent company behind DSW, accusing them of using more than 200 hit songs by artists like Cardi B, Fleetwood Mac, and Lizzo in TikTok and Instagram videos without a license. And they’re not just suing for direct infringement, they’re going after DSW for contributory and vicarious infringement tied to the influencer content. I’m Scott Hervey, a partner at the law firm of Weintraub Tobin, and I’m joined today by my partner, Tara Sattler. We’re going to talk about the DSW lawsuit and the lesson for brands that engage and Influencer Marketing on today’s installment of The Briefing. Tara, welcome back to The Briefing. We’ve got another, I don’t know, A scary piece of influence or marketing gone wrong here on the docket today. Tara: Yeah, we definitely do. I’m looking forward to talking about it with you. Scott: So earlier this month, Warner Music Group filed a federal lawsuit against DSW, claiming that over 200 of its copyrighted songs were used in social media ads on TikTok, Instagram, and other platforms without getting permission. Tara: Yeah, this isn’t about just one rogue post. The complaint alleges that DSW DSW’s marketing team, its influencers, and its in-house content creators, produced and shared branded videos that featured hit songs like Up by Cardi B and Barbi World by Nicki Minaj without securing proper licenses. Scott: The complaint alleges that DSW knows all about licensing music for advertising and that it had previously licensed music for use in its traditional ads. The complaint alleges that DSW knew exactly what it was doing when it skipped the licensing process for its influencer marketing ads. Tara: Right. In the complaint, Warner Music Group states that DSW, like many retailers, has shifted much of its marketing focus from traditional advertising to promoting its products through social media platforms like Instagram and TikTok, as well as through paid partnerships with well-known social media influencers. Scott: And as you and I discussed on a different episode, as we know, more than 50% of advertising spend has moved from traditional TV to social media. From my experience with my own brand clients, it seems that brands find social media advertising more effective and less expensive than traditional advertising. Well, I mean, less expensive when you don’t get named as a defendant in a claim like this. Tara: Right. Here’s what Warner Music Group is doing for. First, direct copyright infringement based on DSW’s posts. Second, contributory copyright infringement based on the content created for DSW by the influencers. And third, vicarious copyright infringement because DSW benefited financially from the infringing influencer content and had the ability to control or remove the content. Scott: Right. So this is where this type of advertising campaign gets more expensive than traditional media. Warner Music Group is asking for statutory damages of up to $150,000 per work. That’s $30 million if they win on the 200 songs. Now, the judge has discretion whether to award up to the full amount of statutory damages. But still, it’s a substantial… This is going to be a substantial bill to pay either way. Tara: Yeah, that definitely is expensive. So let’s take a step back and briefly talk about copyright infringement. Management and the different claims made by a Warner Music here. Scott: Sure. Copyright law protects creative works like music, videos, photos, and more. It gives the copyright owner the exclusive right to reproduce, distribute, publicly perform, and publicly display that work. When a brand or an influencer uses a copyrighted work, whether it’s a song or an image in a post without permission, technically, that’s infringement. And unless the use qualifies as fair use, which is very narrow in a commercial context, the copyright owner has a claim. Tara: And we’ve covered numerous cases of celebrities being sued for posting a photo that wasn’t taken by them, even where that post wasn’t part of an integration. Using a photo or music on TikTok or Instagram may seem casual or informal, but the Copyright Act doesn’t make exceptions for viral marketing or these types of posts. Scott: Right. No, that’s a really good point. All right, so let’s break down the three claims that Warner is making. Let’s start with the claim for direct copyright infringement. This is the most straightforward. Warner says that DSW itself posted videos on its own official social media accounts using the copyrighted music without a license. It’s similar to airing a commercial on TV with a Beyoncé track you didn’t pay for. If you post it, you’re liable. Tara: Yeah. The second claim is a claim for a contributory copyright infringement, and this covers the influencer angle. Warner Music alleges that DSW encouraged, collaborated with, and paid influencers to create videos featuring its products and the copyrighted music. Even if the influencer technically uploaded the video, if DSW helped plan or promote it and knew about the infringement, DSW can also be held viable. Scott: Right. Lastly, Warner Music alleges that DSW engaged in vicarious copyright infringement. This one is all about control and profit. If DSW had the right and ability to supervise the content and directly benefit it from it through increased sales or through brand visibility, it can be held vicariously liable, even if it didn’t know about the infringement at the time. So it’s a serious trifecta of liability here. Tara: That’s exactly right. I think this DSW lawsuit It is definitely a wake-up call for brands relying on social media marketing. Scott: Right, and a lot of brands do. Here’s the bottom line. If you’re using music in a video, and if that video promotes your product or your brand in any way, you need a license. This is true whether you post a video yourself or whether you repost an influencer’s content that was made for your brand. Tara: Also, it doesn’t matter whether the video or photo runs on the brand’s channels or on the influencer’s social channels. If the video is the result of an integration and it just runs on the influencer’s channels, the brand may still be liable for contributory copyright infringement. Scott: It doesn’t matter if the music is only a 15-second clip. I get that a lot, and I’m sure you do, too. The client-client will say, What I only use two seconds? Or my understanding is, If you only use five seconds, it’s fair use. No, there’s no magic number that equals fair use. Fair use is, as you know, if you listen to this podcast, it’s a multifactor test, and it’s much more than the amount and substantiality of the work that’s used. Also, it doesn’t matter if it’s trending, and it definitely doesn’t matter that TikTok or Instagram provided the video or audio unless they state in their license that it is available for use for commercial purposes. It’s your responsibility to make sure that that the work, the music or video, is cleared for commercial use. To help avoid lawsuits like this, here’s a checklist of terms every brand should include in its influencer agreements. Tara: Okay, here we go. First, consider including a music usage clause. Require influencers to use only music that is licensed by the brand, royalty-free, or from a platform’s cleared for Commercial Use Library and require the influencer to show proof of licensing. Also, prohibit use of any commercial tracks without prior written approval. Lastly, have influencers warrant that their content is not infringing of any third-party IP rights. Scott: The brand should also have content review rights, retain the right to review and approve all videos before publication, and have the ability to require the influencer to make changes after the video is posted. Also, disclosure obligations. This one is a pretty basic requirement, but your contract should require compliance with FTC guidelines on sponsored content and make sure that the influencer is required to provide proper disclosure. Tara: Also, influencer agreements should have an indemnification clause. So include provisions requiring that influencers indemnify the brand for any legal claims arising from unlicensed content that they create or post. However, don’t over rely on the indemnification clause. If the influencer is agreeing to indemnify the brand and doesn’t really have the financial capacity to do that, then the brand still has significant exposure. Scott: Right. That’s a great point, Tara. Also, brands should have takedown requirements in their agreements. Require influencers to promptly take down any content if the brand request that it be done, especially if there’s a legal claim that arises. Lastly, licensing education. Now, this is not a bad idea, and I don’t know if it’s regularly done by the brand, but provide influencers with basic education or guidelines about music licensing, especially what not to do. Now, the downside of this is that this type of information could be used against the brand in litigation like this. So maybe, I think in the contract, just having more discussion about the requirement of music licensing and maybe have a phone conversation with the influencer if they’re not quite sure about exactly what this means. Tara: Yeah, and I think one other thing to do is that If an influencer acknowledges to a brand that they have licensed to a music library, the influencer might not appreciate or fully understand that there are different tiers of licensing and that a basic license may not cover certain uses commercial uses. So brand should require influencers to confirm that they understand that platform music libraries are not automatically created for branded content. Scott: Right. I think this is part of a growing trend that shows that labels and other content owners are watching what brands do on social media, especially when it involves popular music or maybe a popular meme or some other type of trend. The fact that something is viral doesn’t mean that it’s legal. And the casual, fast-paced nature of influencer content doesn’t excuse copyright violations. So if you’re a brand working with influencers, take a hard look at your contracts, your approval process, and Most importantly, your understanding of music licensing. Because in this new era of marketing, a 50-second TikTok with one song can come with $150,000 price tag. Tara: Well, I think that’s right, Scott. Scott: Well, that’s all for today’s episode of The Briefing. Thanks to Tara for joining me. And thank you, the listener or viewer, for tuning in. We hope you found this episode informative and enjoyable. If you did, please remember to subscribe, leave us a review, and share this episode with your friends and colleagues. And if you have any questions or any comments about the topics we covered today, please leave us a comment.