The Briefing by Weintraub Tobin

Getty Images filed a lawsuit against startup tech company Stability AI for allegedly scraping more than 12 million photographs from Getty Images’ portfolio without consent. Scott Hervey and Josh Escovedo discuss this case on this episode of The Briefing by the IP Law Blog. Watch this episode on the Weintraub YouTube channel here. Cases discussed: Getty Images (US), Inc. v. Stability AI, Inc. Visual Arts v. Goldsmith Show Notes: Josh: Getty Images, a preeminent global visual content creator and leading source for visual content, has filed suit against startup technology company Stability AI for allegedly scraping more than 12 million photographs from Getty Images’ portfolio without consent or compensation. Getty Images also alleges that Stability removed or altered Getty Images’ copyright management information, such as watermarks, and provided false copyright management information. Accordingly, Getty Images’ complaint includes claims for copyright infringement, providing false copyright management information in violation of 17 U.S.C. section 1202(a), removal or alteration of Copyright Management Information in violation of Section 1202(b), trademark infringement, unfair competition, trademark dilution, and deceptive trade practices under Delaware law. In order to understand the nature of the claim a bit better, it’s important to understand what these parties do. Scott, do you mind providing a brief overview of what the parties do for our listeners? Scott: Sure. Getty Images is a visual media company and a supplier of stock images, editorial photographs, video, and music for businesses and consumers. It has over 477 million assets, and it generates revenue by licensing the right to use these assets to creatives, the media, corporate entities, and general consumers. Many of you have probably seen their images online, complete with the Getty Images watermarks. They’re all over the place. On the other side of the case, we have Stability AI. Stability AI is a startup technology company that has created an image-generating platform called Stable Diffusion that uses AI to generate computer-synthesized images in response to text prompts. There is an open-source version of Stable Diffusion, as well as a revenue-generating version known as DreamStudio. To simplify the description of what Stability AI does, we can refer to the example used by Getty Images in its Complaint. If a user wanted to generate a photo of a cat wearing a scarf, the user would type “cat wearing a scarf” into Stability AI’s platform, and the platform would generate an image of a cat wearing a scarf. Of course, the returned image would not be a real photo of a cat wearing a scarf, it would be a computer-generated version of a cat wearing a scarf. And it is the process of how the AI platform generated that image that is at the heart of this Complaint. Josh: That’s exactly right. In order to generate images in response to prompts submitted to Stability’s platform, the platform relies on various images that Stability utilized to teach its platform what a cat is and what a scarf is. The platform then utilizes those images to generate a synthesized version of what the user has requested, so in the example above, a cat in a scarf. With that understanding, we can discuss the specifics of Getty Images claim. According to Getty Images, Stability copied over 12 million photographs from its portfolio and used those images to train its Stable Diffusion model. Getty also claims that Stability used associated text and metadata, which it contends are also protected as copyrighted expressions to train its model. This, according to Getty Images, constitutes copyright infringement. Scott: Getty explains in its complaint that its assets are highly desirable for use in connection with AI and machine learning because of its high quality and because the assets are accompanied by content-specific, detail captions, and rich metadata. Apparently, Getty Images has licensed millions of digital assets to technology innovators for various purposes related to AI and machine learning. Of course, here, Getty Images alleges that Stability didn’t even attempt to negotiate a license with Getty Images for the content, but instead copied the images without Getty’s consent, in violation of the Getty Images terms of use and allegedly United States Copyright Law. Josh: But according to a variety of AI technology companies, the practice of using copyrighted materials for the purpose of training an artificial intelligence platform constitutes fair use under United States Copyright Law. Whether that’s true or not remains undecided. The rise of technology has created this issue of first impression, so it remains to be seen how the Courts will apply the fair use doctrine in this context, which, as many of you know, permits the use of copyright-protected work, in certain contexts, to promote freedom of expression and for other purposes. In my opinion, this isn’t an issue that will be decided through just one case. Fair use is a multi-factor analysis that takes a number of items into consideration when determining whether a use was fair under the doctrine. Two of the most significant factors are the purpose or nature of the use and whether the allegedly fair use has an effect on the market for the protected work. With that said, it may be the case that using copyright protected works to train a platform would constitute fair use, but using it to generate new content may not be. In other words, it may be fair to use someone else’s IP to train your platform, but if you use it to generate a new product that may not be fair. Scott: And its even a bit more nuanced than that. For example, if millions of photos were provided to an image generating platform and it generated a novel image, it seems unlikely that that would constitute copyright infringement. On the other hand, if the platform only had a small sample of photos to work with, and if perhaps those photos were from the same creator, the resultant product may constitute infringement. Josh: Exactly. And as to the latter, exactly how different the resultant product would need to be to be considered transformative in nature and therefore protected by fair use is a question that is currently before the Supreme Court in the matter of Andy Warhol Foundation for the Visual Arts v. Goldsmith, which has already been argued and should be decided this term. As many of you know, that case deals with how different a work must be from the original protected work to be considered transformative and not infringing. That decision will have consequences in the AI-IP disputes as well. Scott: There are so many interesting IP issues involved in this dispute, and it’s just getting started. I do not foresee this case resolving right away, so we’ll be watching very closely. Thanks for sharing, Josh.

The jury hearing Hermes v. Rothschild found the artist’s ‘MetaBirkin’ NFTs constitutes trademark infringement and trademark dilution. Scott Hervey and Josh Escovedo talk about this case on this episode of The Briefing by the IP Law Blog. Watch this episode on the Weintraub YouTube channel here.   Show Notes: Scott: The jury hearing Hermes v Rothschild found Rothschild liable for trademark infringement and trademark dilution.  The matter went to trial after the judge dismissed both Hermes and Rothschild’s motions for summary judgment.  Should the court have sent the matter to the jury and what may be the basis for an appeal. We are going to discuss this case on the next installment of the briefing Scott: Mason Rothschild is an artist who has created a series of digital artworks called MetaBirkins. The artist claims that each work comment on Hermès’ “Birkin” handbags. is a unique, fanciful interpretation of a Birkin bag. Rothschild claims that the depiction of each bag as fur covered, Comments on the animal cruelty inherent in Hermès’ manufacture of its ultra-expensive leather handbags.  He has over 100 pieces as part of the collection and has sold over 1.1 million. Josh: Hermes filed suit in January 2022 alleging trademark infringement and trademark dilution.  Rothschild moved to dismiss, relying heavily on Rogers v Grimaldi. The court dismissed Rothschild’s motion because the amended complaint included sufficient allegations that Rothschild entirely intended to associate the MetaBirkins mark with the popularity and goodwill of the Hermes Birkin mark rather than intending an artistic association Scott: Shortly thereafter both parties moved for summary judgment.  Although the court found that the Hermes’ claims should be analyzed under the Rogers test, the court found that a genuine issue of material fact remained as to whether under the Rogers test Rothchild’s NTFs infringe and/or dilute Hermes’ trademarks. Josh: The Rogers court held that where the defendant’s product is artistic or expressive, the Lanham Act must be interpreted “narrowly in order to avoid suppressing protected speech under the First Amendment.”  The two parts of the Rogers test are artistic relevancy and whether the use of the mark is explicitly misleading. Scott: Citing to a 2012 Southern District of NY case, Louis Vuitton Mallatier S.A. v. Warner Bros. Entm’t Inc., The artistic relevance prong of the Rogers test “ensures that the defendant intended an artistic – i.e., non-commercial association with the plaintiff’s mark, as opposed to one in which the defendant intends to associate with the mark to exploit the mark’s popularity and good will. . Josh: Under Rogers, however, a showing of artistic relevance is easily satisfied: it is met “unless the [use of the mark] has no artistic relevance to the underlying work whatsoever,” and was instead chosen merely “to exploit the publicity value of [the plaintiff’s mark or brand].” Scott: This court, in denying the cross motions for summary judgment said that “there is a genuine factual dispute as to whether Rothschild’s decision to center his work around the Birkin bag stemmed from genuine artistic expression or, rather, from an unlawful intent to cash in on a highly exclusive and uniquely valuable brand name” Josh: In the courts order it cited to Rothschild’s comments to investors that “he doesn’t think people realize how much you can get away with in art by saying ‘in the style of'” and that he was “in the rare position to bully a multi-billion-dollar corporation” as being probative of an intent to exploit. Scott: Right, and this was despite the fact that the court recognized the existence of evidence which suggested that Rothschild viewed the project as a vehicle to comment on the Birkin bag’s influence on modern society.  To me it seems that the court may have evaluated the weight or veracity of the artistic relevance proffered by Rothschild.  Yes, Hermes offered evidence tending to show that Rothschild true intent was to make money and “capitalize on the hype”.  I don’t think the court can do that.  In Dillinger, LLC v. Electronic Arts, Inc the 9th circuit said ““not the role of the Court to determine how meaningful the relationship between a trademark and the content of a literary work must be; consistent with Rogers, any connection whatsoever is enough for the Court to determine that the mark’s use meets ‘the appropriately low threshold of minimal artistic relevance.’” Scott: Even where the use of a trademark bears “some artistic relevance” to an underlying artistic work, the First Amendment does not protect such use if it “explicitly misleads as to the source or the content of the work.  A work is “explicitly misleading” if it “induces members of the public to believe” that it was created or otherwise authorized by the plaintiff. In the 2nd circuit, “This determination is made by application of the Polaroid factors,” As the 2nd Cir said in Twin Peaks Prods., Inc. v. Publ’ns Int’l, Ltd., the opinion written by the same judge who wrote the Rogers opinion, If, after applying the Polaroid factors, a likelihood of confusion is found, it must be “particularly compelling to outweigh the First Amendment interest recognized in Rogers.  The Rothschild court said “Because there remain substantial factual disagreements between the parties with respect to many — if not most — of the eight Polaroid factors, any of which could be dispositive to the outcome, the Court declines to grant summary judgment for either party on this issue.  Does this sound like the court kept in mind what the 2nd cir had said in Twin Peaks? Josh: In Rogers v Grimaldi, the court gave some examples of what would constitute “explicitly misleading” such as a book title “Nimmer on Copyright” for a treatise that was not authored by Nimmer, or “Jane Fonda’s Workout Book” for a book Jane Fonda had nothing to do with. Scott: According to the motions for summary judgment filed by both parties, there doesn’t see, to be that type of evidence.    Hermès pointed to a study it commissioned that found a 18.7% net confusion rate among potential consumers of NFTs, and noted third party social media posts which mistakenly assumed an association and the fact that an IP lawyer in Paris wrongly stated that Hermès and Rothschild collaborated on the METABIRKINS NFTs. According to Hermes, this lawyer thought this because “the names of the NFTs include the famous trademark ‘BIRKIN’ and reproduced the shape of the bag.”  Rothschild pointed out the fact that he never made any affirmative statement linking his project and.  When several publications mistakenly reported an affiliation between Hermès and the MetaBirkins project.  To the contrary, Rothschild’s publicist asked that these publications issue corrections regarding the mistaken affiliation. Rothschild included a disclaimer.  Josh, do you think this rises to the level of explicitly misleads as to the source or the content of the work Scott: And as to Hermes dilution claim, Jack Daniels v VIP products held that the noncommercial use of a mark is expressly excluded from being actionable as blurring or tarnishment. In VIP the court’s stated that “speech is noncommercial if it does more than propose a commercial transaction” and that the “use of a mark may be “noncommercial” even if it is used to “sell” a product”.  The court allowed Hermes dilution claim to go forward.

Journalist Bob Woodward conducted an audio interview with former President Donald Trump for his book ‘Rage’ and later released the tapes as its own audiobook. Now, Trump is suing for copyright infringement. Scott Hervey and Josh Escovedo talk about this case on this episode of The Briefing by the IP Law Blog.   Cases discussed: TRUMP v. SIMON & SCHUSTER INC et al Falwell v. Penthouse Community for Creative Non-Violence v. Reid Read Scott’s article about this dispute on the IP Law Blog here. Watch this episode on the Weintraub YouTube channel here. Show notes: Scott:Veteran investigative reporter Bob Woodward conducted an audio interview of former President Donald Trump for Woodward’s book, Rage. Woodward later released these recordings as a separate audiobook, Trump claims that Woodward did not have his permission to release these audiotapes as a separate audiobook and sued Woodard and his publisher for, among other claims, copyright infringement. Does Trump have a claim or is his copyright claim “trumped up”.  We are going to talk about this. Scott:These are the facts according to Trump’s complaint against Woodward and his publisher, Simon and Schuster. Woodward sought and obtained President Trump’s consent to be recorded for a series of interviews with President Trump and repeatedly informed him that such interviews were for the sole purpose of a book. Woodward interviewed Trump, both in person and over the phone, on numerous occasions during 2019 and 2020.  The audiobook, The Trump Tapes, is comprised of 20 audio interviews, one with Trump during his presidential campaign in 2016 and the remaining 20 from the interviews conducted during his term as president.  In his complaint, trump states that during the Interviews, he repeatedly stated to Woodward, in the presence of others, that he was agreeing to be recorded for the sole purpose of Woodward being able to write a single book. Josh:The complaint notes a December 30, 2019 interview which, according to Trump, exemplifies that the rights granted were limited. Woodward: On the record for the book, unless you— Trump: For the book only, right? Only for the book. Woodward: The book only, yeah, I’m not— Trump: For the book only, right? So, there’s no— Hogan Gidley, the former White House deputy press secretary then says Right. So, there’s no stories coming out, okay. Trump contends that Woodward did not request to expand the scope of release or furnish a release to use the Interview Sound Recordings for an audiobook or any other derivative work, as is customary in the book publishing and recording industries. Trump alleges that he told Woodward numerous times that the Interviews were to be used by Woodward—and Woodward only—for the sole purpose of accurately quoting President Trump for his forthcoming book “Rage”, and not for any other purpose, including providing, marketing, or selling the Interviews to the public, press, or the media, in any way, shape, or form. Scott:So best practices would have been for Woodward to get a written release from Trump assigning over any rights Trump may have had in the interview. According to the complaint that didn’t happen and according a press release by Woodward responding to the complaint, that seems to be the case. Josh:Based on this Trump claims that he owns the copyright in the entire sound recording or at least Trump’s response to the interview questions. But the failure of Woodward to obtain a written release doesn’t mean that Trump owns the copyright in the recording. Scott:True. The audiobook may likely be considered a joint work. According to the Copyright Office compendium, The Copyright Act defines a joint work as a work “prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.” A work of authorship is considered a joint work “if the authors collaborated with each other, or if each of the authors prepared his or her contribution with the knowledge and intention that it would be merged with the contributions of other authors as ‘inseparable or interdependent parts of a unitary whole.’” The key requirement “is the intention, at the time the writing is done, that the parts be absorbed or combined into an integrated unit. Josh:If the audiobook is a joint work, then Trump would own AN INTEREST in the audiobook.  According to the Copyright compendium, the authors of a joint work jointly own the copyright in each other’s contribution. In other words, all the authors are “treated generally as tenants in common, with each co-owner having an independent right to use or license the use of a work, subject to a duty of accounting to the other co-owners for any profits. Scott:Interestingly, there is precedent that an interviewee does not hold any copyright in an interview. In the 1981 case of Falwell v. Penthouse Reverend Jerry Falwell gave an interview to two journalists who sold the interview to Penthouse magazine. Falwell sued Penthouse for infringement of common law copyright, among other claims. In dismissing Falwell’s copyright claim the court said that Falwell “cannot seriously contend that each of his responses in the published interview setting forth his ideas and opinions is a product of his intellectual labors which should be recognized as a literary or even intellectual creation.  And then there is the more recent case of Taggart v. WMAQ Channel 5 Chicago, in which a Chicago television station, videotaped a prison interview with a convicted sex offender in connection with a report on the lax regulation of summer camps. Taggart alleged that he had requested that the tape not be used in any manner, and when WMAQ broadcast an excerpt he sued for copyright infringement and other claims. In ruling on the station’s motion to dismiss the court held that Taggart did not have a copyright interest in unprepared and spontaneous utterances during an interview and dismissed his copyright claim.  The basis of this finding is the Copyright Act’s lack of protection for ideas.  While courts have recognized common law protection for the spoken word, according to the Taggart holding, courts have not and cannot recognize a proprietary interest where there is no tangible embodiment of the expression of an idea  Josh:To qualify as an author under the Copyright Act one must supply more than mere direction or ideas. According to the Supreme Court in Community for Creative Non-Violence v Reid “an author is the party who actually creates the work, that is, the person who translates an idea into a fixed, tangible expression entitled to copyright protection.” Scott:And based on that, the court found the responses given by Taggart “are not an expression of an idea for the purpose of copyright law.” On a more practical level, the judge noted that the granting of protection for the answers to questions “gathered in the daily task of the news reporter would essentially bring the industry to a halt,” Josh:Woodward and his publisher argue that Trump’s claim is meritless and that it will be vigorously defended. I am not so certain that, at this point in time, we can label Trump’s claim as being completely meritless. Scott:I agree with you Josh. It’s not completely clear that the permission Trump granted to Woodard, the basis of an implied license, extended to the audiobook.  And while its entirely clear to me that Trump can’t sue Woodward for copyright infringement, a claim for breach of contract may lie. However, I think it’s questionable whether Trump has any copyright interest in the audio tapes. However, if his is a claim for accounting will also lie.

A Florida bankruptcy court has terminated FTX’s naming rights agreement for an NBA arena. Scott Hervey and Josh Escovedo discuss this case on this episode of The Briefing by the IP Law Blog. Watch this episode on the Weintraub YouTube channel, here.  

The recent Reilly v. Wozniak 9th Circuit decision upheld a 1950s ruling that requires a promise to pay to be present for an implied contract to exist. Scott Hervey and Josh Escovedo discuss this case and how the Desny decision applies to idea theft cases in California in this episode of The Briefing by the IP Law Blog. Watch this episode on the Weintraub YouTube channel here. Show Notes: S: In a previous episode we discussed recent applications of the 1950 case, Desny v Wilder, which set the ground rules for an idea theft case in California. A recent non-citable 9th Circuit opinion on an idea theft looks at the promise to pay element.  We are going to talk about this on the next installment of The Briefing by the IP Law Blog. In California, an idea theft claim is based in large part on the California supreme court case of Desny v Wilder. In Desny, the plaintiff Victor Desny wrote a script depicting the real-life story of Floyd Collins, a boy who made headlines after he was trapped in a cave eighty feet underground.  In an effort to market his script, Desny called Billy Wilder, a writer, producer and director at Paramount Pictures. Desny could not get through to Wilder and subsequently stripped his scrip to the bare facts so that Wilder’s secretary could copy it in short-hand over the phone.  After reading his synopsis, Desny told Wilder’s secretary that Wilder and Paramount could use the script only if they paid him a reasonable amount for doing so.  Shortly thereafter, Wilder created his own movie script mirroring Densy’s. Because Densy’s script was based on historical facts, and because Desny only conveyed the bare minimum of those facts to Wilder’s secretary, both parties conceded for the purpose of the appeal that the synopsis was not sufficiently original to form the basis of a federal copyright claim. The Court, however, held that Densy stated sufficient facts to establish the existence of an implied-in-fact contract between the parties. The California Supreme Court explained that where an idea is furnished by one party to another, a contract sometimes may be implied even in the absence of an express promise to pay; a contract exists where “the circumstances preceding and attending disclosure, together with the conduct of the offeree acting with knowledge of the circumstances, show a promise to pay.” J: In the recent case of Ralph Reilly v. Steve Wozniak, et al, Reilly, an IT professor, claimed that he had a verbal agreement with Wozniak to create a new high-tech online university based on a course design and outline developed by Reilly.  Apparently, at least accordingly to Reilly, the two shook hands on a deal, and Reilly developed the course outline.  Later Reilly learned that Wozniak had partnered with Southern Career Institute Inc. to create “Woz U.”  Reilly claims that he went to two pitch meetings with Wozniak.  Wozniak claimed that he never agreed to compensate Reilly and further that he never made any money off of Reilly’s idea because Southern Career Institute reached out to Wozniak to license his name and likeness. S: In an appeal from the district court’s dismissal of Reilly’s contract claim, Reilly argued that a party claiming breach of a contract for conveyance and use of an idea does not need to show that the claimant offered the idea to the defendant for sale, because California law provides a broad equitable basis to find implied-in-fact contracts for the use of ideas.  Reilly alleged that it was understood that he and Wozniak would “jointly market,” and be his “partner in exploiting,” Reilly’s idea.  The court said that these facts, as alleged by Reilly, do not show an offer for sale but rather the intent to enter into future business relationships.  According to the 1987 9th Circuit case of Aliotti v R. Dakin and Co., “no contract may be implied where an idea has been disclosed not to gain compensation for that idea but for the sole purpose of inducing the defendant to enter a future business relationship.” It was in this precise context, the contemplation of a partnership, that Aliotti and Faris held that an idea must be disclosed for sale for an implied-in-fact contract to exist. As such, the 9th Circuit said that the district court did not err in granting summary judgment because there was no genuine dispute of fact as to whether Reilly offered his idea to Wozniak for sale. J: What about the 9th Circuit’s 2011 holding in Montz v Pilgrim, in which the court said that it sees “no meaningful difference between the conditioning of use on payment … and conditioning use on the granting of a partnership interest in the proceeds of the production.” This ruling seems contrary to that. S: The 9th Circuit did say that in Montz, and I can see how readers of the short ruling could be confused.  To understand what the 9th Circuit is saying here, you have to go back to the district court’s ruling on the motion for summary judgment.  There the district court drilled down on what Reilly was pitching to Wozniak.  Reilly wasn’t pitching an idea for Wozniak to acquire.  Rather, what Reilly pitched was the concept that Reilly could use Wozniak’s name as part of a pitch to potential financiers for an online computer school.   An implied-in-fact contract requires a “reasonable expectation of payment which can be inferred from the facts and circumstances.”  The district court found that the evidence establishes that Reilly initially solicited Wozniak’s “endorsement” to start the Woz Institute of Technology, but not an agreement for payment. The alleged “deal” between Wozniak and Reilly – strongly contested by Wozniak – happened much later.   As you know, that won’t support a Desny claim J: The court in Desny commented on that specific factual scenario: “[t]he idea man who blurts out his idea without having first made his bargain has no one but himself to blame for the loss of his bargaining power. The law will not in any event, from demands stated subsequent to the unconditioned disclosure of an abstract idea, imply a promise to pay for the idea, for its use, or for its previous disclosure.” S: The district court found that a reasonable juror could not conclude that Plaintiff and Wozniak formed an implied-in-fact contract under Desny because that Plaintiff did not seek to sell anything to him.  I think the 9th Circuit potentially confused the issue with its discussion of Aliotti when it could have just said that the district court did not err in granting summary judgment because there was no genuine dispute of fact as to whether Reilly offered his idea to Wozniak for sale.

The Supreme Court will bring finality to several IP disputes this year. Scott Hervey and Josh Escovedo provide an overview of the trademark and copyright cases to watch on this episode of The Briefing by the IP Law Blog. Watch this episode on the Weintraub YouTube channel here.   Show Notes: Josh: It’s always good to start off the year with an overview of the trademark and copyright cases to watch for the year. This year, we have a couple of cases that we’ve previously discussed on The Briefing when they were on appeal with the circuit courts, but we will now see the Supreme Court bring finality to the issues. Scott: This sounds like great information to me, Josh. Let’s get into it. Josh: We’ll start with Andy Warhol Foundation v. Goldsmith, which we’ve discussed at length on this show. In that case, the Supreme court will decide whether the Andy Warhol Foundation made fair use of a photo of the late artist Prince. In short, the matter at issue will address when a work is sufficiently transformative to qualify for fair use protection under the Copyright Act. In the matter below, the Second Circuit reversed the decision of the District Court and held that the Warhol work was not transformative because it maintained the “essential elements of its source material” and was not “fundamentally different and new.” This is the first time since 1994 that the Supreme Court has addressed fair use in the context of an artistic work. This is one I’ll be looking forward to. Scott: Next, we have Abitron Austria GmbH v. Hetronic International. In that case, US-based remote-control maker Hetronic International sued its former European partners Abitron Austria for trademark infringement. The Defendants in that action argued that since 97% of the sales related to the verdict were “purely foreign” and no one affiliated with the companies was based in the United States, Hetronic International needed to pursue the action abroad. Of course, Hetronic disagrees and contends that trademark law under the Lanham Act extends beyond U.S. Boards. This case should bring clarity to an issue that is constantly disputed in sizable Lanham Act cases—the materiality of foreign sales. For that reason, TM practitioners will certainly be keeping an eye on this one. Josh: Next up is my favorite case of the year. Jack Daniel’s v. VIP Products. As many of you know, this is the Ninth Circuit dispute arising out of VIP Products creation of a parodic dog toy styled like a Jack Daniel’s bottle but called Bad Spaniels. The toy is filled with comedic references related to dogs, but it’s no laughing matter to Jack Daniel’s. The case will determine the proper balance between trademark rights and free speech. The district court and the Ninth Circuit found that VIP’s use was protected by the First Amendment. Now, the Supreme Court will determine whether the Ninth Circuit made the right decision, and will provide some guidance and hopefully clarity on how these competing interests must be balanced. As we’ve discussed in the past, there is a difference in opinion on how these matters should be addressed and given the low bar for artistic relevance, it is imperative that the Court provide guidance, as these disputes will continue to arise. Scott: We’re definitely looking forward to that one. Next up, we have Genius v. Google. This action is present before the Supreme Court, but the Court has not yet granted cert. In this case, Genius sued Google for breach of contract over music transcriptions. In the petition for cert, Genius argued that the Second Circuit and the District Court wrongfully found that a preemption clause in the Copyright Act precluded its breach claim against Google and LyricFind for allegedly stealing song lyrics from its site for Google’s search result. The Second Circuit’s decision, affirming the decision below, held that Genius hadn’t shown that its claims are “qualitatively different” from a copyright claim on lyrics, which notably it didn’t hold the copyright to. The petition states that the Court must clarify whether the Copyright Act’s preemption clause permits a plaintiff to use “state-law contract remedies to enforce a promise not to copy and use its content.” The Supreme Court has requested the Solicitor General’s opinion on whether copyright law preempts the breach of contract claim. All in all, this sounds like pretty interesting case as well. Josh: It sure does. And finally, we have Green v. DOJ. In that case, two computer scientists have challenged the Digital Millennium Copyright Act’s ban on circumventing digital locks on copyrighted works. The engineers filed suit against the federal government seeking to enjoin enforcement of the DMCA’s anti-trafficking and anti-circumvention provisions. The district court refused and the DC Circuit affirmed the decision below. Apparently, the DC Circuit also commented that it lacks jurisdiction over claims of facial unconstitutionality on First Amendment grounds because the District Court did not rule on that issue. The case has been remanded to the District Court for further consideration. I suspect this case will be pending for a while, but we’ll keep an eye on it just the same. Scott: In fact, we’ll keep an eye on all of these cases. Thanks for sharing, Josh.

The start of a new year is a good opportunity for companies to review and take stock of their intellectual property assets. Scott Hervey and Josh Escovedo talk about the importance of this review on this episode of The Briefing by the IP Law Blog. Watch this episode on the Weintraub YouTube channel here. Show Notes: Scott: As 2023 commences, it’s time for companies to take review and take stock of their intellectual property assets.  This applies to companies that have never taken serious steps to protect intellectual property, and those companies that understand the value of intellectual property and take active steps to secure and protect those assets.   We are going to talk about this on this next installment of the Briefing by the IP Law Blog Scott: Intellectual property is a company asset, just like inventory.  No CEO or CFO would think of running a company where they didn’t know the extent of company inventory.  Likewise, it makes no sense for a company not to have a firm understanding of all of its potential intellectual property assets.  Even companies that regularly take steps to protect intellectual property through, for example, registering trademarks, or registering copyrights, a yearly review can prove beneficial. Josh: Understanding the extent of a company’s IP holdings usually start with what’s known to the company, such as all registered copyrights, trademarks or patents, domestic and foreign.  After compiling a list of those IP assets, the next step would be to review what the company is using and compare that to the list of registered or pending IP.  For trademarks, a good place to start is the company’s marketing and promotional materials, website, mobile app, and social media.  If these materials show use of trademarks, logos, or slogans that are not already the subject of a trademark registration or application, then these marks should be cleared for use to prevent unintended liabilities, and they should be considered for possible registration. Scott: Don’t overlook company social media accounts, domain names, and toll-free numbers, which may also serve as potential trademarks.  And be sure to confirm that all domain names and social media accounts are registered to the company; you would be surprised at how many times a domain name or social media account is registered to an individual company employee and not the company itself.  Also, if the company has changed the graphic user interface to any of its technology products or has changed product packaging, point of sale displays, or product design, these may also be protectable trade dress. Josh: When looking into company assets protectable under the federal copyright laws, one should check the company’s website, marketing materials, manuals, YouTube videos, podcasts, posted content on Instagram, TikTok and the like, photos, software, blog posts, articles, white papers, etc.  Although the cost benefit analysis of securing protection may result in a conclusion that registration does not economically make sense for every single piece of content, the company should at least maintain inventory of its copyrightable works. Scott: A company should always be aware of any new inventions under development, and its good practice to investigate the status of any inventions developed by company employees during the past year.  Such inventions may be protectable under federal patent laws.  An inventor must secure a patent application within a very short period of time in order to prevent the work from falling into the public domain.  Companies that routinely produce new inventions should put into place a process which enables inventors to disclose a potential invention to a responsible executive well prior to the invention being disclosed to the general public. Josh: In addition, a company should take stock of those items that it considers proprietary trade secrets.  Trade secrets are items not generally known by the public but have economical value and are the subject of reasonable precautions to maintain their secrecy.  In general, trade secrets have no duration of protectability and there is not a method for registering a trade secret in the United States. Scott: Items that may be protected by state trade secret laws include software source code and related documentation; customer lists, employee knowledge, training and experience; proprietary terminologies, definitions and formulas; specially developed customer information; sales practices; negative information such as negative results from research and development projects; and customer and consumer surveys.  Each of the above could constitute proprietary trade secrets depending upon whether its owner took reasonable steps to maintain its trade secret status. Scott: A special note about customer data.  In addition to regularly reviewing IP assets, a company should regularly make sure that its privacy and data use policies comport with the manner in which it collects and uses customer and employee data.  In the US, privacy laws are generally driven by state law, but there may be applicable federal law depending on the nature of the information collected.  If a company conducts business internationally, it may have to adhere to the privacy laws of foreign countries. Josh: After looking at all known IP assets, look into what may be unknown.  Sometimes marketing departments and independent divisions spin out valuable intellectual property assets that, for one reason or another, never made it past the desk of general counsel or a responsible executive. Scott: Intellectual property rights acquired by way of contractual agreements may sometimes be overlooked.  Items that were developed or created through the use of independent contractors, such as consultants, photographers, website and application developers, software developers, advertising agencies, graphic artists, production companies, and the like may be company assets depending on contract terms.  If the company intends to own all of the rights, including any intellectual property rights, in the works created by these independent contractors then the agreements with these independent contractors should have proper intellectual property vesting language – such as work made for hire language and/or an assignment provision.  If the agreements with these independent contractors were only verbal or did not contain such language, then the company needs to make another resolution: make sure it actually owns the intellectual property it paid for.   Sticking to this resolution would include a review of standard independent contractor and employment agreements to confirm they have proper assignment language and confidentiality provisions. Josh: Unintended liabilities can also result from the company’s interaction with independent contractors that have been hired to create something for the company.  Whether it is a website designer hired to redesign a company website, a software developer hired to work on a company’s app, a graphic artist hired to create a new logo or artwork, or a copyrighter hired to write content, we have seen countless instances of these types of vendors taking shortcuts and “borrowing” assets from existing sources.  Unless a company executive is closely managing these vendors when they do their work, it would difficult to determine whether or not they engaged in acts that may be considered infringement until such time as the company receives a cease and desist letter. Scott: However, there are precautionary steps a company can take to prevent unintended liabilities.  A company should always have written agreements with vendors which unconditionally requires them to indemnify the company for any claims of infringement resulting from the works they were hired to create.  Additionally, a company should require these vendors to carry insurance that would provide coverage for such a claim (either E&O or professional liability insurance) and that the company be named an additional insured on such policies. Josh: Lastly and most important, the company should have a general understanding of who they are doing business with.   A little time spent researching whether the vendor has negative claims with the Better Business Bureau, has licensing issues, generally has satisfied customers, whether there are any lawsuits pending, etc., can tell a company quite a bit about the work habits and ethics of any potential vendor. Scott: After a working intellectual property inventory list has been created, the next step is to identify those items that are already the subject of active protection efforts (i.e. pending or issued registrations) and those that are not.  Then, the company executives, along with corporate counsel and if appropriate outside intellectual property counsel, should review the list of unprotected intellectual property assets and determine whether taking steps to secure protection makes economic sense.  Sometimes, a company might find that the cost to secure protection of an intellectual property asset outweighs the potential economic value of that asset or that protection would be duplicative.  

Trademarks perform a number of important functions. Scott Hervey and Josh Escovedo discuss the spectrum of trademark strength in this episode of The Briefing by the IP Law Blog. Watch this episode here.   Show Notes: Scott: Trademarks perform a number of important functions. They are consumer road signs; they tell consumers which products to buy. They are a company’s public persona; they epitomize of all the positive (and negative) qualities of a company or a product. Lastly, trademarks represent a solemn promise to the purchasing public that the products or services branded with a company’s mark will meet certain standards. Yet, even with marks as important as they are, some business select marks that are intrinsically weak and have limited protection. WE are going to talk about the spectrum of trademark strength on this installment of The Briefing by the IP Law Blog Scott: Trademarks can be one of the more valuable assets a company owns. Trademarks generate brand equity based on the amount a consumer will pay for a branded product as compared to a non-branded product. For some companies, brand equity can make up a substantial portion of its value. For example, according to a 2001 ranking by Interbrand, the Coca-Cola brand, valued at $68,945,000, represents 61% of Coca-Cola’s market capitalization as of July, 2001. Xerox’s brand, valued at $6,019,000, represents 93% of Xerox’s market capitalization as of July, 2001. Josh: In business, branding comes as second nature. In order to survive in a competitive environment, a business must separate itself and its products from the pack and summarize these differences in a concise and succinct manner. This is even more important for emerging companies who are new to the field and in competition against established businesses with market share. Scott: Given the important function of trademarks, it is imperative that an emerging company identify its marks, analyze whether the marks are strong or weak, and then protect the stronger marks from infringement, being diluted and from becoming generic due to public misuse. Josh For the most part, a trademark can be anything. According to the Lanham Act, the Federal law that deals with trademark issues, a trademark can be a word, a saying, or a logo.  A Trademark can even consist of a sound (think Intel), color (pink for Corning ware fiberglass insulation) and a smell.  As long as the proposed mark meets the essential purpose of functioning as a trademark, that is, it serves to identify the manufacturer of the goods or provider of the services, it can properly be categorized as a trademark. The proposed mark must mentally trigger an association between the mark owner and the goods or services bearing the mark, otherwise it is not a trademark. Scott: And while it’s true that a trademark can be anything, not everything can and should be a trademark. Josh: That’s right Scott.  There are certain marks that will be denied protection as a trademark. Marks which consist of immoral, deceptive or scandalous matter or matter which disparages any person, living or dead, institutions, beliefs or national symbols, are not registrable or protectable. Scott: Neither are marks which resemble flags of code or arms or other insignias of the United States or of any state or municipality or of any foreign nation, or marks which utilize the name, portrait or signature of a particular living individual without that individuals consent  Also, marks which consist or comprise of a portrait of a deceased president of the United States are not registrable during the life of the president’s widow except by written consent of the widow  In addition, certain organizations, by acts of Congress, have been granted exclusive rights to use certain marks.  For example, the United States Olympic Committee has been granted exclusive right to use a number of “Olympic” symbols, marks and terms Josh: Marks which describe the intended purpose, function or use of the goods, the size of the goods, desirable characteristics of the goods, the nature of the goods or the end effect upon the user are really not the best choice for a trademark. This type of mark is considered merely descriptive and is not registerable on the principal register absent establishing secondary meaning. Scott: Its iron Josh how often companies gravitate toward a descriptive mark.   The penchant for a descriptive mark was explained to me by a client – they work because the consumer knows exactly what they are getting.  That’s useful in the short term but does nothing for brand building. Josh: Here is a few examples of descriptive marks – NICE ‘N SOFT® for bathroom tissue or PARK ‘N FLY® for off-airport auto parking services are descriptive marks.  The same is true with respect to marks that identify the place in which the goods or services originate and therefore are geographically descriptive. Scott: The major reasons for not protecting marks that are merely descriptive is to prevent the owner of a mark from inhibiting competition in the sale of particular goods and to maintain freedom of the public to use language which naturally describes the goods or services, thus avoiding the possibility of harassing infringement suits by the registrant against others who use the mark when advertising or describing their own product Josh: Marks that are merely self-laudatory and descriptive of the alleged merit of a product are regarded as being descriptive. Laudation does not per se prevent a slogan or mark from being registerable. Like other descriptive marks, a mark that is self-laudatory may be registerable upon establishing secondary meaning.  However, courts have refused registration even on the Supplemental Register of marks that are so highly laudatory and descriptive of the alleged product that they are incapable of functioning as a trademark Scott: One step up from descriptive marks, but miles away as far as protectability goes, are suggestive marks.  Suggestive marks are registerable on the Principal Register without proof of secondary meaning.  Suggestive marks are those which, while not really descriptive of the product’s qualities, nevertheless, suggest some benefit or property of the product.  An example involves ROACH MOTEL® for insect traps, in which this mark was enforced against an infringer using “Roach Inn.”  The Court explained, We do not find the mark ROACH MOTEL® to be a merely descriptive mark.  While roaches may live in some motels against the will of the owners, motels are surely not built for roaches to live in.  Hence, the mark is fanciful on conception. Indeed, its very incongruity is what catches one’s attention  Josh: The determination of whether a mark is merely descriptive and therefore not registerable absent evidence of secondary meaning or merely suggestive has always been a challenging task.  The Trademark Trial and Appeal Board (the quasi-judicial body responsible for adjudicating issues which arise concerning the registration of a trademark ) has opined that there is “a thin line of demarcation involved in making a determination as to whether a term or slogan is suggestive or merely descriptive and, apropos, thereto, when a term stops suggesting and begins to describe the goods in connection with which it is used, it is, at times, a difficult question to resolve.” Scott: The Board suggested that in determining whether a mark has crossed the threshold from suggestiveness to descriptiveness, the following factors should be analyzed:  (1) is the mark used in a trademark sense and not in a descriptive manner to describe the goods; (2) is the mark an expression that would be or is commonly used to describe the goods; (3) does the mark possess some degree of ingenuity in its phraseology; (4) does the mark say something at least a little different from what might be expected from a product, or say expected things in an unexpected way; and (5) does the mark possess more than a single meaning, namely, a double-entendre, which imparts to it a degree of ingenuity and successfully masks or somewhat obscures the intended commercial message Josh: The strongest marks are those which are coined words, having no intrinsic meaning or arbitrary words which, although they might exist as words in the English language, have no conceivable rational connection to the product, e.g. KODAK® (coined) for film and CAMEL® (arbitrary) for cigarettes.  Because such coined or arbitrary marks are inherently distinctive, no proof of secondary meaning is necessary before a court will protect the trademark rights of the senior user of such marks.  

An 11th Circuit Opinion in the ‘Floribama Shore’ trademark case provides guidance on establishing artistic relevance under the Rogers Test. Scott Hervey and Josh Escovedo talk about this case in this episode of The Briefing by the IP Law Blog. Watch this episode here. Show Notes: Scott: Despite challenges to the application of the Rogers test outside of traditional artistic works, the Rogers test remains a valuable defense to TV and movie producers sued for trademark infringement. Establishing that the producer’s use of the allegedly infringing mark has artistic relevance is one of the two factors of Rogers and a recent 11th Circuit opinion cementing MTV’s win over the use of Floribama Shore as the title of a docu-series shows provides guidance on steps producers should take in order to establish the existence of artistic relevance. Scott: MTV FLORIBMA SHORE is the title of an MTV docu-series modeled after the JERSEY SHORE franchise.  The series purports to celebrate youth culture, profiling a summer of fun for eight young adults in the Florida panhandle. The Flora-Bama Lounge is a restaurant and marina facility located on the Florida Alabama border that has been in operation since 1964.  The owners of the lounge were not happy with MTV’s use of FLORIBAMA as the title of its series, especially after MTV held a few casting sessions at the Flora Bama Lounge, and sued for trademark infringement. Josh: In the district court case MTV moved for summary judgment which was granted. The owners of the Flora-Bama lounge appealed to the 11th circuit. Scott: In the 9th Circuit (as well as the 2nd, 5th, 6th and 11th Circuits), the test for determining whether the use of a third-party trademark in an expressive work (i.e, use of a brand within a movie, TV series, video game, etc., including as part of the title of an expressive work is the 2nd circuit’s test from the 1989 case of Rogers v. Grimaldi. The Rogers test was adopted by the 9th Circuit in Mattel inc v MCA Records (better known as the “Barbie Girl” case). Under the Rogers test, the use of a third-party mark in an expressive work does not violate the Lanham Act “unless the title has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work.” Under the Rogers test, the first inquiry is whether the use of the third-party mark has “some artistic relevance”. The threshold for this test is extremely low; basically, if the level of artistic relevance is more than zero, this is satisfactory. If there is greater than zero artistic relevance in the use of the third-party mark, the next analysis is whether the use of the third-party mark explicitly misleads as to the source or content of the work. Josh: In its opinion the court goes into great detail over how MTV eventually chose the title to its series.  MTV wanted to build out the Jersey Shore franchise like the Real Housewives, by establishing multiple series in different locations.  MTV began to develop a seventh Shore series, this one focused on Southern beach culture Scott: MTV commissioned a survey of 300 young people familiar with the region to measure awareness and perceptions of the culture and nightlife in various beach towns in the “gulf Shore” region spanning from Biloxi, Mississippi, to Panama City Beach, Florida. The report noted the term “Florabama” to describe the region. Of the 300 people surveyed, about 34% had heard of the term “Flora-bama,” with half of the 34% identifying it as the bar and the other half identifying it as the region.  The filming location for the series was Panama City Beach, 100 miles from the lounge.  An MTV executive testified that the selection of MTV ‘Floribama Shore’ was the title of the series was driven by finding a title, like Jersey Shore, that would “define the subculture” featured in the series, that “Floribama” offered “a very distinct sense of what part of the country and subculture that is.” This executive ALSO testified that because Florida has “multiple subcultures,” a name like “Florida Shore” would not have sufficiently identified the Gulf Coast setting. And “Florida Shore,” of course, would include Miami, which McCarthy noted “has its own sort of codes.” Josh: The court also noted that MTV wanted a Jerseyesque type of show and Floribama screamed louder than Gulf Shore. Scott: Even though the bar for artistic relevance is low, I still think it’s a good idea for producers to go through the additional step to actually lay the groundwork for establishing artistic relevance at the time the producer makes its choice to use a potentially infringing mark

The Supreme Court granted Jack Daniel’s petition for certiorari and will hear the trademark infringement case involving a parody dog chew toy that resembles the Jack Daniel’s Whiskey Bottle. Scott Hervey and Josh Escovedo discuss this latest development in this episode of The Briefing by the IP Law Blog. Watch this episode here.