The Briefing by Weintraub Tobin

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.  

The heirs of the author who wrote an article upon which “Top Gun” is based, claims the film’s sequel is an infringing derivative work. Paramount has since filed a motion to dismiss the case. Scott Hervey and Josh Escovedo discuss this on The Briefing by the IP Law Blog. Watch this episode here. Show Notes: Scott: We previously reported on the copyright lawsuit filed by the heirs of the author who wrote an article upon which Top Gun is based alleging that “Top Gun Maverick” is an infringing derivative work. Paramount recently filed a motion to dismiss, arguing that the sequel to the 1986 motion picture, Top Gun, does not infringe the copyright in Ehud Yonay’s magazine article. The District Court denied Paramount’s motion to dismiss. We are going to talk about that on this installment of the Briefing…by the IP law blog. Scott: In May 1983, California magazine published the article Top Guns, by Ehud Yonay. This article was an inside look at the real Navy Fighter Weapons School Top Gun based out of Miramar California. When the article was published, it was optioned and in the credits for Top Gun Yonay is credited on the original movie as a writer of the magazine article. On January 23, 2018, the Yonays properly availed themselves of their right to recover the copyright to this article by sending Paramount a statutory notice of termination under Copyright Act, and then filing it with the Copyright Office.as we have discussed previously on this program, subject to the satisfaction of certain conditions, Section 203 of the Copyright Act permits authors or their successors to terminate copyright assignments and licenses that were made on or after January 1, 1978. Upon termination, all rights in the work that were covered by the grant revert to the author, however any derivative work prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after it is terminated, but this privilege does not extend to the preparation of other derivative works after termination. Josh: Paramount filed a motion to dismiss, arguing that that the works are not substantially similar because the Yonay article is a work of unprotectable fact.  In order to state a claim for infringement a plaintiff must show substantial similarity between the works’ protected elements.  Determining whether works are substantially similar involves a two-part analysis consisting of the ‘extrinsic test’ and the ‘intrinsic test.’” The extrinsic test “assesses the objective similarities of the two works, focusing only on the protectable elements of the plaintiff’s expression, Scott: In its motion to dismiss Paramount argued that in applying the extrinsic test and by filtering out the elements that are not protected under copyright law – that is facts, ideas, scenes faire (which are situations and incidents that flow necessarily or naturally from a basic plot premise) and stock elements – the two works are not substantially similar.   In its motion to dismiss Paramount argues that all elements that are alleged to be similar – the history and operations of the “Top Gun” academy; that the pilots pull off risky aerial maneuvers, that manner of combat training and the tactical discussions the pilots have; descriptions and depictions of fighter jets, including their exorbitant cost; pilots doing push-up exercises; pilots’ use of “call signs” as nicknames and depictions of camaraderie amongst pilots, including bar excursions and games —are reported in the Article as factual. Josh: As we predicted, it seems that Yonay’s counsel were ready for Paramount and had evasive maneuvers ready to go.   In reading the district court’s denial of Paramount’s motion to dismiss, the key argument which resonated with the court was, essentially, that it would be contrary to 9th Circuit precedent to dismiss Yonay’s case at such an early stage.  Because the analytical dissection required to separate protectable from non-protectable elements…which also generally involves expert testimony…. and thereafter the determination of substantial similarity between protected elements of works are “usually extremely close issues of fact, the Ninth Circuit generally disfavors dismissals on the ground of substantial similarity at the Rule 12(b)(6) stage., Scott: In its opposition to Paramount’s motion to dismiss, the Yonay’s argue that but for Ehud Yonay’s literary efforts and his story’s evocative prose and narrative, Top Gun and its sequel would not exist. The Yonay’s argue that if Paramount was only interested in facts about the Miramar Naval Air Station, it would have drawn inspiration from the Senate Report Paramount equated Yonay’s article to. The Yonays argue that it was the expressive imagery, startling action, character traits, and themes contained within the original article that were the reason why Paramount optioned the article in the first place.  The Yonay’s point to a list of more than seventy (70) alleged substantial similarities between the original article and the sequel.  That was enough for the court. Josh: The court found that here are enough alleged similarities between the article and Top Gun Maverick for reasonable minds to differ on the issue of substantial similarity, including the filtering out of unprotected elements and additional development of the factual record would shed light on the issues pertinent to the Court’s analysis under the extrinsic test. Scott: I do think the court made the right call here.  The article is not a humdrum recitation of facts; it is a story.  And while facts themselves are not protectable under copyright, the selection and arrangement of those facts and the manner in which the facts are expressed are protectable.  Given that the Yonays were able to present to the court 70 instances of similarities presumably not based on pure facts, greater exploration into these similarities would be necessary.

The U.S. Supreme Court will weigh in on the reach of the Lanham Act and whether it can protect against the infringement of a U.S. trademark in a foreign territory. Scott Hervey and Josh Escovedo discuss this case in this episode of The Briefing by the IP Law Blog. Watch this episode here. Show Notes: Scott: What’s the reach of the Lanham act? Can it protect against the infringement of a U.S. trademark in a foreign territory? The U.S. Supreme Court is taking up the appeal of a 10th Cir case of Abitron Austria GmbH v. Hetronic International, Inc. to hopefully shed light on the matter. This is what we are talking about on this installment of the Briefing by the IP Law Blog. Scott: Here are the underlying facts of Abitron Austria GmbH v. Hetronic International, Inc. Hetronic International, Inc., a U.S. company, manufactures radio remote controls—used to remotely operate heavy-duty construction equipment.  The Defendants distributed Hetronic’s Products in Europe. The distributor relationship deteriorated, and the Defendants began manufacturing their own products—identical to Hetronic’s—and selling them under Hetronic. Brand in Europe. Hetronic sued Abitron in the U.S., and a jury in the Western District of Oklahoma awarded Hetronic over $100 million in damages, most of which related to Defendants’ trademark infringement relating to sales outside of the US. Then on Hetronic’s motion, the district court entered a worldwide injunction barring Defendants from selling their infringing products.  On appeal to the 10th Circuit, the defendants insist that the Lanham Act’s reach doesn’t extend to their conduct, which generally involved foreign defendants making sales to foreign consumers. Josh: The Lanham Act governs federal trademark and unfair competition disputes. It subjects to liability any person who uses in commerce any . . . “colorable imitation of a registered mark,” or “[a]ny person who . . . uses in commerce any” word, false description, or false designation of origin that “is likely to cause confusion . . . or to deceive as to the affiliation,” origin, or sponsorship of any goods.  the Act defines commerce broadly as “all commerce which may lawfully be regulated by Congress. The sole Supreme Court case on the exterritorial application of the Lanham Act is the 70-year-old case of Steele v. Bulova Watch Co., That case involved a Lanham Act claim brought by the Bulova Watch Company, against Sidney Steele, a U.S. citizen residing in Texas. Using component parts he had procured from the United States and Switzerland, Steele assembled watches in Mexico City and branded them ‘Bulova’. The “Bulova Watch Company’s Texas sales representative received numerous complaints from retail jewelers in the Mexican border area [of Texas] whose customers brought in for repair defective ‘Bulovas’ which upon inspection often turned out not to be products of that company.  The Supreme Court held that Steele’s activities were covered by the Lanham Act. The fact that [Steele] affixed the mark ‘Bulova’ in Mexico City rather than in the US was not determinative..” The Court explained that Steele’s “operations and their effects” were “not confined within the territorial limits of” Mexico. Steele had bought components for his watches in the United States.  And Steele’s watches filtered through the Mexican border into the US,” and those “competing goods could well reflect adversely” on Bulova’s “trade reputation in markets cultivated by advertising here as well as abroad.”. The Court further noted that because Steele did not have trademark rights to the “Bulova” mark under Mexican law, applying the Lanham Act to his conduct would not create any conflict with foreign law. Scott: Presently a number of federal circuits have different frameworks for the exterritorial application of the Lanham Act.  The 10th circuit ended up adopting the framework from the First Circuit’s McBee v. Delica Co. Under McBee, where the case is about the “foreign activities of foreign defendants,” the Lanham Act applies “only if the complained-of activities have a substantial effect on [U.S.] commerce, viewed in light of the purposes of the Lanham Act.”  The 10th Circuit also noted, in adopting this test, that if a plaintiff successfully shows that a foreign defendant’s conduct has had a substantial effect on U.S. commerce, courts should also consider whether the extraterritorial application of the Lanham Act would create a conflict with trademark rights established under the relevant foreign law. Josh: The lower court found that the defendant’s conduct had a substantial effect on U.S. commerce. Scott: Right. The district court noted that Hetronic presented more than enough evidence to show that the defendants’ foreign infringing  conduct had a substantial effect on U.S. commerce,” The district court that  “Besides the millions of euros worth of infringing products that made their way into the United States after initially being sold abroad, defendants also diverted tens of millions of dollars of foreign sales from the defendants  that otherwise would have ultimately flowed into the United States.”  Ultimately, the jury in the district court awarded Hetronic $113 Million in damages resulting mostly from the defendant’s foreign activity; the verdict was appealed to the 10th circuit, where it was upheld (although the 10th circuit trimmed the worldwide injunction issued by the lower court to apply to only the countries in which Hetronic currently markets and sells its products. Josh: In January 2022, Abitron Austria and related companies petitioned the supreme court for a review of the 10th circuit’s ruling; Abitron argued that 97% of the sales were for  products made “in foreign countries, by foreign companies, to foreign customers, for use in foreign countries,” The appeals court’s decision to award damages for all of the defendants’ worldwide sales on the grounds that 3% substantially affects U.S. commerce “would allow a very small tail to wag a very large dog,” In May 2022, the Supreme Court asked the Biden administration for the solicitor general to file a brief for the “views of the United States.” Scott: In September 2022, the US Solicitor General filed a brief supporting the Supreme Court’s review of the case. Interestingly, the Solicitor General noted a failure in not only the framework adopted by the 10th Cir for determining the extraterritorial reach of the Lanham Act but the framework adopted by all other circuits…. that each of the tests adopted by the courts of appeals has failed to focus on whether a foreign use is likely to cause U.S. consumer confusion. Josh: The Solicitor General also noted that the ruling in the 10th Circuit conflicts with the Fourth Circuit’s decision in Tire Engineering & Distribution, LLC v. Shandong Linglong Rubber Co., In Tire Engineering. In that case, the Fourth Circuit rejected a Lanham Act claim that relied on a diversion-of-sales theory, concluding that “harm to a U.S. company’s income from foreign infringement” did not support the application of the Lanham Act where the defendant that used the mark was a foreign company. Scott: In early November 2022, the Supreme Court agreed to review Abitron Austria GmbH et al. v. Hetronic International Inc. As is customary, the Supreme Court offered no commentary on its grant of review, and a briefing schedule will be issued later Josh: Thanks, Scott.

In this 100th episode of The Briefing by the IP Law Blog, Scott Hervey and Josh Escovedo talk about a company founded by Jack Nicklaus that was awarded a preliminary injunction enjoining him from using his name, image, & likeness in commercial endorsement deals. Watch this episode here. Show Notes: Scott: A company founded by Jack Nicklaus, Nicklaus Companies, LLC has been awarded a preliminary injunction which enjoins Jack Nicklaus from using his name, image and likeness in commercial endorsement deals.  The judge who entered the ruling called it awkward, but its an interesting look at the interplay between non-compete clauses and the transfer of name, image and likeness rights.  We are going to discuss this case on this installment of the briefing by the IP law blog. Scott: In 2007, Jack Nicklaus and GBI Investors, a company owned and controlled by Jack Nicklaus, entered into an agreement with Nicklaus Companies, LLC. a company formed by real estate magnate Howard Milstein, whereby for $145m Nicklaus Companies purchased certain assets of GBI which included substantial portfolio of trademark registrations and applications related to Mr. Nicklaus’ name and signature and “Golden Bear” nickname in the United States and various other countries around the world – more than 600 in the US and 50 other countries.  Also included in the purchase was the exclusive right to the golf course design services rendered by GBI and marketing, promotional and branding businesses of GBI, which included the right to use Nicklaus’s name, image and likeness. The complaint alleges that Nicklaus Companies because the sole owner of and the rights to use all of the intellectual property related to Jack Nicklaus. GBI and Mr. Nicklaus became members of the Company, and Mr. Nicklaus became a manager. Josh: In 2017 Jack Nicklaus retired from his day to day involvement with Nicklaus Companies but, according to the complaint, he still provided services on Nicklaus Companies or its subsidiaries when required. However, the complaint alleges that after Jack Nicklaus retired he repeatedly participated in deals for the use of his name, likeness and trademarks, including personal endorsements outside of the Nicklaus Companies which included Jack Nicklaus being paid to promote a European Tour golf tournament, which included the tournament’s right to use certain Nicklaus IP.  The complaint also alleges that Jack Nicklaus attempted to steer a Nicklaus company opportunity for a marketing and endorsement relationship to a one-off personal appearance deal for his own personal benefit to the detriment of the Nicklaus Companies.  The complaint also alleges that Nicklaus is directly competing with the Nicklaus Companies for golf course design projects and he is personally negotiating to renew his endorsement deal with Rolex. Scott: In the plaintiff’s motion for the temporary restraining order, the plaintiff argues that the 2007 transaction resulted in the purchase of all   golf course design services branded and identified under the Nicklaus, Jack Nicklaus and Jack Nicklaus Signature brands, the various marketing, promotional, and branding activities involving the use and licensing of Jack Nicklaus’ persona endorsements, other commercial rights to publicity, and intellectual property related to his identity and history as a recognizable public figure.  The transaction documents included a purchase agreement whereby GBI transferred the assets, rights and business interests to Nicklaus Companies, a non-compete agreement that Jack Nicklaus signed personally which restricted him from competing with the plaintiff, including providing his personal services as a spokesman or authorize the promotional use of his name or likeness for the business, products or services in competition with Nicklaus Companies for as long as GBI retains an ownership interest in the company, sufficient to elect at least two (2} members of the Board of Managers, but in no event for a period of less than ten (10) years after the date of the Closing” Josh: In opposition to the TRO, Jack Nicklaus argued that he is free to conduct his own business because the non-compete agreement he signed in connection with the 2007 transaction expired when he left Nicklaus Companies in 2017 and most certainly when GBI transferred all of its interests to in Nicklaus Companies back to the company in August 2022…which transfer the company contends is not valid.  Nicklaus argued that it was GBI that sold assets and businesses to the Plaintiffs, not him personally and that he was only bound by the non-compete. Scott: The crux of Jack Nicklaus’ argument was laid out by his counsel in the oral arguments on the TRO motion…that Jack Nicklaus personally never transferred any rights to the Nicklaus Companies personally, that GBI transferred whatever rights it had to the Nicklaus Companies and there was no transfer of Mr. Nicklaus’ name, image, and likeness to GBI before GBI made the transfer to the Nicklaus Companies.  His attorney argued that   The Nicklaus companies assumed that the initial transfer of rights between Jack Nicklaus and GBI occurred, but it didn’t, there’s no documentary evidence it occurred. Josh: So essentially, Jack Nicklaus’ attorney was arguing that, despite the transfer of all of the trademark rights and the rights to golf course design and endorsement and sponsorship business in the name of Jack Nicklaus, because Jack Nicklaus never transferred his name and likeness rights to GBI, once the non-compete expires he can use the name Jack Nicklaus to compete with the Nicklaus Companies in those business sectors. Scott: That’s right.  But it seems that argument did not resonate with the court.  After a 3 day hearing New York Supreme Court Justice Joel Cohen entered a preliminary injunction prohibiting Jack Nicklaus from using his name and likeness to compete with the Nicklaus Companies, although Jack Nicklaus can compete with the Nicklaus Companies for golf course design jobs, he can’t use his name and likeness in doing so.   While the non-compete has expired, the ownership of the Jack Nicklaus intellectual property is with the Nicklaus Companies, and that isn’t something that expires,” Justice Cohen said. “The exploitative value of his name as an endorser of products and the like is where the line is drawn.” Josh: The holding makes sense.  Where a public figure trademarks their name or nickname (such as “the Rock”) and then transfers those trademark rights, any right of publicity one may have in that name or nickname is subject to the trademark rights held by that third party. Scott: Agreed.  And this raises the question about how public figures should go about protecting their “brand”, especially when that brand becomes the brand of a business. It’s easy to address when that business is controlled by the celebrity, but when it’s no longer controlled by the celebrity or when the business takes out loans that are secured by business assets – which generally always include company trademarks, as seen in this case, it can become complicated and convoluted very quickly.

Adidas, which manufactures and sells the wildly popular “Yeezy” line of shoes in partnership with rapper Kanye West, recently terminated the relationship after anti-Semitic statements by the star. In this episode of The Briefing by the IP Law Blog, Scott Hervey and Josh Escovedo discuss the trademark and contract issues that Adidas is navigating with shoe designs and future related designs. Watch the video here. Read the Adidas press release here. Show notes: Josh: Following its split from rapper Kanye West, Adidas has announced that it owns the designs formerly associated with the Yeezy mark. We will be discussing how and why that is possible on this installment of the Briefing by the IP Law Blog. Following a personal meltdown that included various antisemitic statements, Kanye West has been abandoned by a variety of his partners and representatives. Among those partners is Adidas, the company that makes and distributes his highly sought after Yeezy shoes. And when I say highly sought after, I mean that these shoes are nearly impossible to get for retail price. If you want a pair, unless you have a connection, you probably have to buy them on the aftermarket. Nonetheless, while the shoe represents a golden ticket for Adidas, Kanye West’s behavior left the company with no choice but to cut ties and move on. But this left a lot of people wondering, would Adidas continue to sell its holy grail of shoes? And more importantly, could Adidas continue to sell the shoes? Scott: That really comes down to a couple of issues. First, can Adidas continue to market shoes in connection with the Yeezy trademark, assuming that it wanted to? The answer to that question is no. That trademark is owned by Kanye West, and presumably, when Adidas terminated its relationship with West, it consequently terminated its license to utilize West’s intellectual property. Josh: That’s right. And the second issue is whether Adidas can continue to use past shoe designs, shoe designs that have been created but not yet released, or shoe designs similar to those that consumers have come to expect from the Yeezy brand. Now that would generally depend on a couple of things. First, it would depend on who is actually coming up with the designs. If Kanye West were the party who came up with the designs and he had licensed the right to use those designs to Adidas, it is possible that Adidas would no longer be able to exploit the intellectual property. In fact, Kanye West was responsible for many, if not all, of the designs. But, that’s where the second thing comes into play. Irrespective of who created the designs, if the contract between Kanye West and Adidas clearly stated that Adidas is the owner of the designs, that would be dispositive. Scott: And it turns out that’s the case. Adidas has come out and said that its contract with West provides that Adidas is the owner of the shoe designs. Accordingly, while Adidas cannot use the Yeezy trademark, and it probably wouldn’t want to as the mark has been significantly tarnished over the last few weeks, Adidas is free to continue selling prior designs and releasing new designs of a similar spirit, the latter of which it would probably free to do anyway. Josh: I suppose this is a prime example of one of the reasons why a company responsible for distribution of a product would want to maintain rights to the designs. It is an extreme example, but it is an example nonetheless. If Adidas had not reserved the rights to the design, and it were not the creator, it would be in a position where it would be unable to continue marketing its wildly successful product. Instead, because of prudent contracting, Adidas is able to do so. Scott:  That’s right. Still, Adidas has said that it will cease production of all Yeezy-related products for the time being. To borrow a term from Disney, I suspect they’ll be putting these back in the Vault and bringing them out at an opportune moment. If these shoes were hard to get when they were being released on a regular basis, I would imagine they are going to be even harder to get when they are resurrected. This has been very interesting, Josh. Thanks for sharing. Josh: Thanks, Scott.  

Vogue Magazine is suing 21 Savage and Drake after they created mock Vogue Magazines to market their new album. Scott Hervey and Josh Escovedo discuss the dispute on this episode of The Briefing by the IP Law Blog. Watch this episode here. Show Notes: Josh: Conde Nast, the publisher of Vogue magazine, filed a Complaint against Drake and 21 Savage in the United States District Court for the Southern District of New York, alleging claims under the Lanham Act concerning Drake and 21 Savage’s promotion of their recent collaboration album Her Loss, which was released on November 4. In the Complaint, Conde Nast alleges that Drake and 21 Savage ran a deceptive campaign and utilized Vogue’s reputation by creating fake Vogue magazine covers to promote the album. According to the Complaint, they even thank editor-in-chief Anna Wintour for her support. Scott: The complaint also includes allegations that Drake and 21 Savage misled the public into thinking the fictitious Vogue covers were from a real issue that would have been released on October 31. Conde Nast has been clear that none of this promotion was authorized by the company, especially not the alleged distribution of copies throughout North America, or the placement of so-called counterfeit covers along streets and buildings in various cities. The Complaint also takes issues with the fact that Drake and 21 Savage have posted similar content to more than 135 million social media followers. Josh: One of Drake’s posts featuring the faux Vogue ad included a caption that states, “Me and my brother on newsstands tomorrow!! Thanks, @voguemagazine and Anna Wintour for the love and support on this historic moment. ‘Her Loss’ Nov. 4th.” Conde Nast was obviously displeased since it has been using the mark in commerce since at least 1892, and in connection with digital advertising since 1998. It is, without question, one of the most well-known fashion publications in the world. Surely it is that reputation that led to Drake and 21 Savage using this idea for promotion. Scott: According to Conde Nast, the campaign has created significant confusion among the public, as well as the media, with several media companies actually believing that the cover feature was real. As a result, they even ran stories about the artists landing the cover of Vogue for the album. Josh: Making matters even more significant, Drake and 21 Savage’s public relations team sent emails announcing that copies of the putative Vogue magazine would be handed out in specific countries, and then, according to the Complaint, they proceeded to distribute a near-exact reproduction of the October Vogue magazine, including Vogue’s copyrighted content, with a Drake and 21 Savage cover in those areas. There were, of course, some pages that had been changed to include superimposed promotions for Her Loss on the pages or to include photos of Drake. Scott: According to Conde Nast, its attorneys reached out to the Defendants and sent cease-and-desist demands prior to filing suit, but its warnings were not heeded. The Complaint includes claims for trademark infringement, counterfeiting, false designation of origin, unfair competition, trademark dilution, false advertisement, and other violations of NY law. Josh: Most recently, Conde Nast moved for and obtained a temporary restraining order precluding Drake and 21 Savage from using fake Vogue maagzines and covers or using the likeness of its editor-in-chief to promote Her Loss, with the Court expressly finding Conde Nast has a likelihood of success on the merits of its claims. The order stated that the rappers are “Confusing consumers about the origin, sponsorship, and approval of the bogus Vogue cover.” The Court also directed Drake and 21 Savage to appear before the Court on November 22, 2022 to show cause as to why the restraining order should not convert to a preliminary injunction for the duration of the case. That will be Drake and 21 Savage’s opportunity to respond to Conde Nast’s contention. We will certainly want to keep an eye on that, but before we wrap up, do you think the Court is headed the right direction with this Scott?

A law firm has filed a trademark infringement lawsuit against its namesake. Scott Hervey and Josh Escovedo discuss this case in this installment of The Briefing by the IP Law Blog. Watch this episode here.   Show Notes:  Scott: Lewis Brisbois Bisgaard & Smith, LLP is suing Lewis Brisbois Bisgaard & Smith, LLP in a Texas federal court for trademark infringement. No, this is not law firm schizophrenia. But it is a weird case that may exemplify the strength of common law trademark rights. Scott: Lewis Brisbois Bisgaard & Smith is a well-regarded national law firm with 1,600 lawyers across many states, including Texas. Since 2002 Lewis Brisbois has operated under the business name Lewis Brisbois Bisgaard & Smith, and since 2009 the law firm has operated an office in Texas. The firm also owned a registered trademark for Lewis Brisbois Bisgaard & Smith, but apparently, that trademark registration went abandoned in 2020. This fact is a plot point later on in our story. Josh: So who is this other Lewis Brisbois Bisgaard & Smith. Scott: Yes, it’s time for this weird twist.  Michael Bitgood and Richard JonesMay 26, 2022, Bitgood filed a registration for a domestic limited liability partnership, “Lewis Brisbois Bisgaard & Smith, LLP” in the Office of the Secretary of State of Texas. Bitgood listed the services as mediation and related services. They then filed an assumed name certificate in the Office of the Secretary of State identifying the Bitgood Entity’s assumed name as “Lewis Brisbois Bisgaard & Smith.”  I am sure you are asking why would Bigtood and Jones do this. Well, it seems that the law firm represented some third parties to defend an unrelated case where the plaintiffs were Bitgood and Jones. After Bitgood and Jones formed their entity, they amended the complaint and added their new entity, Lewis Brisbois Bisgaard & Smith, as a plaintiff and then added the law firm and the law firm’s lawyer handling this other case as defendants.  Against the law firm and its lawyer, Bitgood, Jones and the Bitgood entity…the other Lewis Brisbois Bisgaard & Smith…allege that they are using the Bitgood Entities name in an illegal and unauthorized manner reasonably calculated to create mass confusion and damage. Josh: I think my head is about to explode. Let me see if I get this right.  Bitgood and Jones sued some third parties. Lewis Brisbois Bisgaard & Smith represent these third parties in the lawsuit.  Bitgood and Jones, then…I assume thinking it provides them with some type of strategic leverage in their underlying lawsuit, form an entity in Texas, Lewis Brisbois Bisgaard & Smith, LLP, they then add that entity as a plaintiff in their first lawsuit and add the law firm and lawyer as defendants claiming, essentially, trademark infringement.   Scott: You have it correct. I am sure you are asking yourself, why would they do that?  Well, there was a clue to that in Bitgood and Jones’ amended complaint. They claimed that the law firm failed to renew their filing with the Texas Secretary of State, which is why they were able to file their incorporation. This seems to be part of some plan to cause the law firm to be unable to represent the defendants in the underlying lawsuit. Josh: So going back to your lead-in for this story, I assume the law firm filed a trademark infringement lawsuit. Scott: That’s right, they did.  And Bitgood and Jones filed a motion to dismiss. Apparently Bitgood and Jones thought they hit the pot of gold at the end of the rainbow when they discovered that the law firm’s federal trademark registration went abandoned on July 10, 2020.  But, as you know, Josh, that’s not the end of the story. Josh: No, it isn’t. Bitgood and Jones failed to consider the common law trademark rights the law firm has in its name. Scott: Trademark rights stem not from the registration of a mark but from actual use in commerce. While some civil law nations follow the “first to file” rule, which grants senior rights to the first party to win the race to the trademark office, the United States follows the rule that ownership and priority go to the party who was first to use. Common law rights are defined by the scope of actual use and the geographical territory in which the mark was used. While a merchant may acquire common law trademark rights in the name of a brick-and-mortar business, that interest is limited to the geographic area in which the merchant actually does business.  As such, another merchant in another town can use the exact same name for a similar business and not infringe the common law rights of the first merchant if the first merchant does not advertise or do business in that town. Josh: This case raises two great takeaways as I see it.  The first is that the Lewis Brisbois federal trademark – which is a composite mark- probably should not have gone abandoned without a substitute application… preferably a plain word mark. Being filed prior. The composite mark went abandoned July 10, 2020 and the law firm did not file any new trademarks until September 29, 2022. Now maybe they had a reason for the lapse; it does seem like they have new branding on their website, so maybe this is all a case of unfortunate timing.   These are not inexperienced lawyers.   However, a good rule of thumb for all trademark owners is to make sure that all trademark renewal dates are well calendared and responded to time as there is no grace period for failing to file a renewal on time. Scott: The second lesson is one that Bitgood and Jones will soon learn.  Don’t forget about common law trademark rights.  Sometimes clients fail to appreciate the business using a brand in one or two states that hasn’t filed a federal trademark application.  Those mark owners can still sue for trademark infringement and still prevent you from adopting a confusingly similar mark, as I am sure Bitgood and Jones will come to appreciate.

Cardi B was cleared of liability in an action alleging that she misappropriated a man’s likeness by using his unique back tattoo on the cover of her 2016 mixtape. Scott Hervey and Josh Escovedo discuss this in this installment of The Briefing by the IP Law Blog. Watch this episode here. Show Notes: Josh: Rap star Cardi B has been cleared of liability by a California jury in the Central District in the action alleging that she misappropriated a man’s likeness by using his unique back tattoo on the cover of her 2016 mixtape. That’s what we’ll be discussing on this installment of The Briefing by the IP Law Blog. Josh: On October 21, 2022, a federal court jury found Cardi B was not liable for misappropriation of a man’s likeness by using his back tattoo on the cover of her 2016 Gangsta Bitch Music Vol. 1 mixtape to make it look as if he were performing a sex act on Cardi. This all began in 2017, when Kevin Michael Brophy, a tattoo model and marketing manager for surf and skate company RVCA, filed suit against Cardi over the aforementioned mixtape cover after sending a cease-and-desist letter that went unanswered. According to Brophy, the tiger and serpent tattoo on the model on the cover resembles his own and constitutes a misappropriation of his likeness under Civil Code section 3344 and false light invasion of privacy. Brophy claims that he was angry because “It looks like I’m giving oral sex to somebody that’s not my wife, or somebody that’s not my partner, and an image that I never signed off on, ever. Being a father of two and a devoted husband and a man of faith as well, this goes against everything that I stand ford, and I would never ever sign off on something like this.” Scott: Brophy claims that he suffered shame, embarrassment, and humiliation after learning that portions of his tiger back tattoo had been overlaid onto the back of the black model featured on the cover of Cardi’s 2016 mixtape. For those reasons, he sought compensatory, punitive, and disgorgement of profits from the mixtape. Josh: But irrespective of the claimed damages, the jury ultimately concluded that Cardi B was not liable to Brophy. This came after hearing testimony from Brophy and his wife and his alleged humiliation and concerns, as well as testimony from Cardi and her former manager who stated that the model on the mixtape cover was not Brophy and that the image had been substantially altered, giving rise to First Amendment protection under the transformative use doctrine. The jury also hear from the graphic designer who edited the image. He said that he found the back tattoo somewhere on the internet after searching for a backpiece tattoo.” He also claimed that he made several changes to it, removing certain pieces, color correcting, and rearranging other parts of the tattoo before overlaying the image onto the model’s back. Scott: During closing argument, Plaintiff’s counsel argued that the defense was continuously trying to explain how the tattoo was transformed, yet they denied using Brophy’s likeness. According to Plaintiff’ counsel, if they weren’t using Brophy’s likeness, then they wouldn’t have had to argue about how they had changed it. Plaintiff’s counsel argued that Brophy’s likeness was material to the vision for the mixtape and that Brophy’s back tattoo is what makes Cardi look strong and in control. Of course, the jury obviously rejected these arguments, ultimately finding in favor of Cardi. Josh: That’s right. But here’s a question for you Scott, even though this is taking place in the Ninth Circuit, if the law from the recent Illinois District Court case involving Randy Orton applied, would the tattoo artist have a claim against Cardi for copyright infringement? I know we would have to evaluate the merits of Cardi’s fair-use defense in greater detail, but let’s assume for the sake of the discussion that it were not fair use. Would Brophy’s tattoo artist have a claim even though it seems Brophy himself would not? Josh: I don’t think the Court’s decision in the Orton matter was correct, and I think it will be reversed and remanded by the Seventh Circuit, but IF it applied, I think Brophy’s tattoo artist would have potentially had a claim against Cardi. Luckily for Cardi, it was Brophy bringing the claim.