The Briefing by Weintraub Tobin

The Federal Circuit Court of Appeals invalidated seven patents owned by an AI technology company after applying the two-step Alice test. Scott Hervey and Audrey Millemann talk about this decision on this episode of The Briefing. Watch this episode on the Weintraub YouTube channel here.   Show Notes: Scott: Under the Alice test for patent subject matter eligibility, the Federal Circuit Court of Appeals continues to strike down patents directed to abstract ideas. The case of People AI, Inc. V. Clary, Inc. was just such a case in which the Court invalidated seven patents owned by People AI. We are going to talk about this case and the Alice test on this next installment of The Briefing by Weintraub Tobin. Welcome to another episode of The Briefing by Weintraub Tobin. I am joined today by my partner, Audrey Millemann, a patent attorney who wrote an intriguing article titled a Prototypical Corporate Salesperson Is Not Patentable. We’ll be discussing the recent People AI v. Clary, Inc. Case and its implications on patent subject matter eligibility under the Alice test. Welcome, Audrey. Audrey: Hi, Scott. How are you? Scott: Great to have you here today, Audrey. So, let’s start by discussing the Alice test for patent subject matter eligibility. Can you explain the two-part test established by the Supreme Court in the 2014 case of Alice Corp. Versus CLS Bank International? Audrey: Yes, I can. Patent subject matter eligibility refers to whether an invention falls within categories of subject matter that can be patentable. So that’s referred to as patent eligible subject matter and by statute. And that’s federal statute. Section 101 of Title 35 of the United States Code provides that there are four categories of patent eligible subject matter, and they are articles of manufacture, machines, processes, and compositions of matter. And there are exceptions to those categories of patent eligible subject matter which the courts have decided over the years. And they include things like natural phenomenon, laws of nature, and abstract ideas. And those things are deemed to fall within patent ineligible subject matter, meaning they are not something that can be the subject of patent protection. So, the Supreme Court in Alice in 2014 developed a test for determining whether a claimed invention falls within patent ineligible subject matter, meaning whether it is something that is not eligible for patent protection. It’s a two-part test. And under the first step, the Court examines whether the invention falls within one of those types of ineligible subject matter, meaning natural phenomena, laws of nature, or abstract ideas. And if the invention falls within one of those categories, then the Court would proceed to step two. Under step two, the Court looks to see if there is some kind of inventive concept or something that improves the technology such that it takes it out of the patent ineligible subject matter and makes it into patent eligible subject matter. Now, this is a very complicated test, and courts have been struggling with how to apply it for years. Since it was decided. Scott: In the People AI versus Clary case, the Court invalidated seven patents owned by People AI based on the Alice test. Can you explain the basis of that Court’s decision? Audrey: Yes. People AI is a company that provides business analytics or software for customer relations management. So, they developed software that would take the notes and contacts that a salesperson would have. So, their notes of meetings, telephone calls, emails, and the software would automatically match it up to the particular customer that was involved. So, this was previously done by salespersons with using a pen and a notebook. And People AI developed software that would automate that process, which made it much more reliable, more accurate, so it would be less errors and much faster. And they patented that software, which basically was a data management kind of a system. Scott: And People AI sued Clary Inc. And Set Sail Technologies, Inc. For patent infringement. Correct. Audrey: Yes, they did. The defendants were competitors of People AI, and they sued them for People AI sued them for patent infringement of seven of their patents. The defendants then moved for judgment on the pleadings in the district court arguing that those patents were invalid because they were directed to patent ineligible subject matter, meaning abstract ideas. The district court applied the Alice test, as we’ve discussed it, and found that, yes, the patents are invalid because they are directed to abstract ideas. They’re directed to what a salesperson would do. And automating what people used to do manually does not make something patentable. The Federal Circuit, which is the Court of Appeal that addresses all appeals from patent infringement cases, affirmed the district court’s decision and held that automating that previously manual process doesn’t necessarily lead to patentable subject matter. Scott: Now, the court’s ruling seems to emphasize the importance of an inventive concept. Can you shed some light on why the court deemed these patents as lacking such a concept? Audrey: Well, yes, although it’s difficult because, as I said, that test is very complicated. But the decision hinged on the fact that the court believed there was no inventive concept, there was nothing in the invention that would transform and that’s a key word that the Supreme Court used that would transform patent ineligible subject matter, an abstract idea, into something that was patentable. And the Supreme Court has been very clear that simply using a computer to automate something that has previously been done manually doesn’t add an inventive concept. You need something that changes the technology or transforms it beyond merely automating. Scott: It very interesting. So, with that in mind, what are some key takeaways for inventors and companies looking to patent their inventions after this ruling? Audrey: Well, the key takeaway is really that companies need to be very cautious about trying to patent things that are simply transforming manual processes into automated or computer managed processes. They have to be very cautious in doing that and consider, is there something about their invention? Can they describe something about their invention that transforms what is an abstract idea into something that is more patent eligible? Scott: And with the Alice test being used to reject patent claims during the examination process and invalidate patents in courts, how can applicants better navigate this framework to improve their chances of obtaining a patent? Audrey: Well, the first thing they can do is to carefully analyze what their invention is, to determine if it really does fall within patent ineligible subject matter. And if it does, it may be worth considering whether one should apply for a patent at all. If the decision is made to go forward and apply for a patent in such a situation, then the goal is to try to describe the invention in such a way that there is an inventive concept, or that the invention transforms what is something ineligible into something that is eligible subject matter. And also important in that is the patent attorney who is drafting the patent application. That person has to be very careful and thoroughly drafting to make sure that they describe whatever possible inventive concepts the invention has. And also, they need to be thorough in their arguments with the Patent Office, because that prosecution of the patent is going to go on for several years. They need to be very careful in arguing to try and demonstrate that the invention does, in fact, have an inventive concept beyond simply automating a previously manual process. Scott: Well, Audrey, thank you very much for shedding light on People AI versus Clary Inc. And the complexities of patent subject matter eligibility under the Alice test. You always do a really great job of making complex matters a little bit more understandable, and this discussion certainly helped me better appreciate the importance of inventive concepts when seeking patents. The road to patent protection will always have its challenges, but with the right approach, inventors and companies can safeguard their innovations effectively. Again, Audrey, thank you so much. It was a pleasure having you on the briefing. Audrey: And thanks, Scott, for having me. Scott: Well, that wraps it up for today’s episode of The Briefing by Weintraub Tobin. We hope you found this discussion interesting and valuable. Please remember to subscribe to our podcast and to our YouTube channel so you never miss an episode.

Exploring the concerns of deepfakes and AI-generated likeness in the entertainment industry, discussing the limitations of California's right of publicity statute and the challenges of making a common law claim, exploring New York's right of publicity statute and potential conflicts, examining the use of AI-generated likeness in modern day dramas, and discussing a Supreme Court case on broadcasting performer's act and right of publicity.

Brandy Melville and Redbubble are involved in a trademark infringement lawsuit. They discuss the legal standard for determining liability and contributory infringement. The court ruling in favor of Redbubble in a previous case is also explored, raising questions about online marketplace liability for trademark infringement.

Alexis Hunley v. Instagram has been referred to as one of the top copyright cases to watch this year. Scott Hervey and Jamie Lincenberg discuss this case on this episode of The Briefing. Watch this episode on the Weintraub YouTube channel here.   Show Notes: Scott: It’s been referred to as one of the top copyright cases to watch this year. The case Alexis Hunley v. Instagram. It questioned the scope and validity of the server test, a copyright doctrine that was established by the 9th Circuit and has since been rejected by a number of other courts. The 9th Circuit has spoken, and we’re going to talk about this case on the next installment of the briefing by Weintraub Tobin. Alexis Hunley versus Instagram involved a potential class action claim against Instagram related to its embedding practice. The plaintiffs were two photojournalists whose photographs were featured on websites of various media outlets without a license. Hunley alleged that Instagram provided an embedding tool which allowed the photos or videos posted on an Instagram account to be simultaneously displayed on third party websites. Hunley alleged that these third parties who displayed her photos via the use of Instagram’s embedding tool, committed direct copyright infringement and that Instagram was secondarily liable for infringement. Jamie: Embedding is the process of copying unique HTML code assigned to the location of a digital copy of a photo or video published to the Internet, and the insertion of that code into a target web page or social media post enables that photo or video to be linked for display within the target post. Scott: The lower court tossed the case, holding that the third-party media companies that displayed the photographs Time and BuzzFeed, to name a few, were not liable for direct copyright infringement, and as a result, Instagram was not liable for secondary copyright infringement. The district court concluded that the 9th Circuit’s 2007 opinion in Perfect Ten versus Amazon, which established the server test, precluded relief. To Huntley to violate the public display right infringers must display copies of the copyrighted work. The district court held that the embedding websites do not store an image or video and do not communicate a copy of the image or video and thus do not violate the copyright owner’s exclusive display. Right under perfect Ten, an alleged infringer displays an image in violation of a copyright holder’s rights only if a copy of the image is embodied stored on a computer’s server or other storage device. Jamie: The court concluded that because Time and BuzzFeed did not store the image files on their actual servers, they were not liable for direct copyright infringement, and because there was no underlying direct infringement, Instagram could not be secondarily liable. The court invited the plaintiffs to raise their issue with the 9th Circuit if they believed the server test violated copyright law, and the photographers took the court up on its offer. Scott: In June 2022, the photographers filed an appeal with the 9th Circuit arguing for a review of the applicability of the server test. They claimed that the server test was outdated and impractical and argued that it had been widely rejected by virtually every court throughout the country that had considered the same issue. Jamie: In their appeal, the photographers argued that the server test is a technological loophole that did not exist when the Copyright Act was enacted by Congress, which has no support or explanation in the plain language of the Copyright Act and for which no public policy justification exists. Scott: The photographers also argued that the District Court went well beyond the scope of applicability of Perfect Ten. Perfect Ten applied to the use of embedded images in a search engine, not third-party website publishers. The plaintiffs contended that no court has expanded the server test to apply to embedding technology from Instagram or other social media platforms to third party website publishers. Jamie: The photographer’s appeal didn’t quite go as hoped. The 9th Circuit rejected their arguments that Instagram’s embedding tool violated their right of public display and also rejected all of their arguments for getting rid of or limiting the scope of the server test. Scott: That’s right. The Court rejected Hunley’s argument that the server test should only apply to search engines and should not extend to content embedded into commercial websites from social media platforms. The Court said that its holding in Perfect Ten did not rely on the unique technology of a search engine, but rather the plain language of the Copyright Act. Jamie: And the Court also rejected Hunley’s argument that the server test is inconsistent with the Copyright Act. Rather than address the specific challenges raised by Hunley, the Court simply said that it will not consider these arguments in any detail because they are foreclosed by Perfect Ten. This is due to the fact that the 9th Circuit can’t overrule its own holding in Perfect Ten outside of Bank proceeding unless there has been a statutory change or an intervening Supreme Court decision. Scott: The court also rejected Hunley’s argument that Perfect Ten has essentially been overruled by the Supreme Court’s decision in ABC versus Arrow. The Court noted that Arrow involved a different right the right of public performance and not the public display right. And the difference between these rights mandates a different form of analysis. Jamie: At the beginning of the Court’s opinion, a fair amount of time was spent discussing the technical aspects of embedding. Scott: Yeah, that’s true. It seems that the Court did this so that the readers of the opinion could understand the Court’s discussion of how the right of public display is infringed. The Court also drew an analogy of embedding to hypertext linking. Both are lines of code which cause a user’s browser to display an image at the target location. And generally, courts have found that hypertext linking is not direct infringement. Also, I think the Court was trying to point out that the host server retained full and complete control over the embedded image, that the host server can change the image. It can prevent the display of the image altogether by disabling the embedding functionality. And I think that control element was and is and remains an important element in the server test. Jamie: So, Scott, is this the end of the line for Hunley and the final challenge to the server test. Scott: It’s probably not the end of the line for Hunley, and it certainly is not the last challenge to the server test. The server test is the law of the land in the 9th Circuit, but it’s been rejected by judges in the Southern District of New York. So, there is bound to be a discussion in those states that have not officially weighed in yet. And maybe we’ll have a circuit split that may require the Supreme Court to weigh in. As for Hunley, the Court said that it can’t overrule perfect ten outside of an in-bonk review from the entire 9th Circuit Court or an intervening decision from the Supreme Court. So, it’s a fair bet that Hunley will go one of those two routes. Jamie: That’s really interesting, Scott. Thank you for sharing that with us. We will keep up with what happens with Hunley if there is an appeal. Scott: Yeah, we will definitely do that. Jamie, thanks for joining us today. Jamie: Thanks for having me. Scott: Well, that wraps it up for this installment of The Briefing by Weintraub Tobin. We hope you enjoyed this episode. Please remember to subscribe to our webcast and to our podcast asked and if you’re interested in more content, well, we have lots of episodes for you to.

The Ninth Circuit recently issued an opinion affirming that Zillow infringed thousands of copyrights owned by a real estate photography studio. Scott Hervey and James Kachmar discuss this case on this episode of The Briefing. Watch this episode on the Weintraub YouTube channel, here.   Show Notes: Scott: In 2019, the 9th Circuit affirmed the trial court’s judgment against Zillow Group based on Zillow’s use of VHT’s photographs on Zillow’s Digs platform. In June of this year 2023, this case found itself back up to the 9th Circuit. I’m joined by my partner, James Kachmar, to talk about this recent decision on this episode of The Briefing You. Thanks for joining us. I’m joined today by Weintraub litigation partner, James Kachmar. James, thanks for joining us today. James: Thanks, Scott, for having me. Scott: Certainly, James. Let’s start by providing some context for our viewers and listeners. Could you briefly explain the background of the case between VHT and Zillow Group? James: Sure, Scott. Everyone should know what Zillow is the website with homes for sale. VHT is the largest professional real estate photography studio in the US. It is generally engaged by real estate agents and brokers to photograph homes for sale. These photos are edited, loaded into VHT’s database, and then sent back to the agents and brokers pursuant to a license agreement to help promote their listings. VHT’s photographs appear on Zillow’s website one of two ways. First, Zillow will use these photographs as part of showing property listings on its website. Second, Zillow would feature some of these photographs on their website, Digs, to offer users or give people some home improvement ideas. VHT filed a copyright infringement lawsuit against Zillow, claiming that the photos were being used without their permission. Scott: In the previous trial, the 9th Circuit found in favor of Zillow on most counts, but reversed the findings of fair use. Regarding the use of the photos on the Diggs website. Could you elaborate on how the court reached that conclusion? James: Sure. The 9th Circuit in the first case, which is referred to as Zillow One, determined that Zillow had added searchable functionality on its Zigs website, which made it not a fair use of VHT’s photographs. They concluded that Zillow had committed copyright infringement in doing so. However, the court in Zillow One held that Zillow was not liable for direct, secondary or contributory infringement and remanded the case back to the district court for further proceedings. This resulted in further motion practice and a second trial. Scott: The 9th Circuit addressed the issue of copyright registration and whether VHT’s claims should be dismissed due to incomplete registration. Could you explain the court’s reasoning and how it applied the U.S. Supreme Court’s fourth estate decision? James: Sure. Just days before the 9th Circuit rendered its opinion in Zillow One, the US. Supreme Court issued its decision in Fourth Estate Public Benefit versus Wallstreet.com, in which it found that the registration requirement to bring a copyright infringement claim can only be satisfied when the Copyright Office has registered the copyright, not merely when the application for registration is filed by the plaintiff. When the case went back to the lower court, Zillow argued that because VHT had filed its lawsuit before the Copyright Office had registered its copyrights, the action should be dismissed. The lower court, however, found that dismissal would cause irreparable harm to VHT, especially given the extensive litigation to date, and held that excusing this requirement did not undermine the purpose of the Act’s pre-filing registration requirement. The 9th Circuit, on a second appeal, agreed with the court’s finding in this regard. Scott: The Supreme Court’s decision in Fourth Estate was due to what had been a split among the Circuits with regard to the requirement the pre-filing requirement of the registration copyright registration. The 9th Circuit had long held that the mere filing of the registration application was required, while other Circuits had held that the actual issuance of the registration was required prior to the commencement of a lawsuit. James: That’s correct, Scott. Scott: Another issue main issue that the 9th Circuit considered in this case was whether VHT’s photos constituted a compilation or individual work for the purpose of statutory damages. James, how did the court approach this question, and what factors influenced its decision? James: Sure, Scott. As I mentioned earlier, VHT would load the photographs into its database, and VHT had applied to register its database of its photos as a compilation with the Copyright Office. The court had to determine whether the photos qualified as one work under the Copyright Acts provision that treats all parts of a compilation as a single work for statutory damages. VHT argued that it owned copyrights in both the individual photos as well as the database, while Zillow claimed that the database registration automatically made the photos part of a compilation. In essence, if the court accepted Zillow’s argument, there would only be one copyright violation I. E. The database. However, on the other hand, if the court accepted VHT’s argument that each photo in the database was its own separate work, then the use of each photo would be a separate copyright violation, allowing for damages for each photo. In the end, the court rejected Zillow’s argument and emphasized that the individual photos had separate independent economic value from VHT’s database. Scott: That makes sense, James. In the first trial, VHT was awarded damages of one $500 per image due to willful infringement by Zillow. However, the district court awarded different amounts in the retrial. Could you explain the reasoning behind this decision and VHT’s appeal? James: Sure Scott. The 9th Circuit determined that the higher damages awarded in the first trial were because there was a specific finding of willful infringement by Zillow, which was later reversed on the retrial. The evidence showed only innocent infringement by Zillow, and the court concluded that the district court properly awarded lower damages amount because the evidence showed innocent infringement and not the willful infringement that had existed in the first trial. Therefore, the 9th Circuit rejected VHT’s appeal for higher damages. Scott: James, thanks for discussing this case with us today. I think this case serves as a reminder of the importance of the Fourth Estate case, the importance of pre-filing copyright registration applications before commencing litigation, and I also think this case serves as a reminder of the importance of copyright diligence in the digital age and the considerations courts make when determining infringement and damages. As you and I know, it’s an evolving area of law, and it’s crucial for content creators and users to understand their rights and their obligations. James: Thanks, Scott. It’s been my pleasure. Thank you for having me. Scott: Well, that wraps it up for this installment of The Briefing by Weintraub Tobin. Please remember to like and subscribe to both our podcast and our YouTube channel. And if you found this piece interesting, well, we’ve got over 100 episodes for you to choose from, and you can also visit us at theiplawblog.com.

There is some concern that the Supreme Court’s decision in Andy Warhol Foundation v. Goldsmith will harm the documentary filmmaking community. Scott Hervey and Tara Sattler discuss the implications of this case on this episode of The Briefing. Watch this episode on the Weintraub YouTube channel here. Show Notes: Scott: When Andy Warhol Foundation versus Goldsmith was pending before the Supreme Court, a group of prominent documentary filmmakers, including the makers of The Last Days of Vietnam, The Invisible War. Won’t you be my neighbor? And RBG filed an amicus brief and claimed that the Second Circuit’s proposed change to the way fair use is analyzed could, quote, devastate now that Warhol has been decided, it’s clear that the way in which fair use is now to be determined will have an impact on documentarians who rely on the use of unlicensed third-party materials as part of conveying their story. We are going to talk about this on this installment of The Briefing. We covered the Supreme Court’s decision in Andy Warhol Foundation versus Goldsmith in a previous episode, but let’s hit on some highlights relevant to the impact of this decision on documentarians. The decision changes the way fair use is analyzed. In determining fair use, four factors are examined. The first fair use factor examines the purpose and character of the use. Prior to this case, the focus has been on the transformative nature of the work itself. The Supreme Court in Campbell versus Acuffro’s Music established this transformative use analysis when it said that the first fair use factor is an inquiry into whether the new work merely supersedes the objects of the original creation or instead adds something new with further purpose or different character, altering the first with new expression, meaning, or message. In other words, whether and to what extent the new work is transformative. Tara: This transformative use analysis took on great importance and often eclipsed the other fair use factors. Prior to this case, the focus has been on whether the second work had a different aesthetic or conveyed a different meaning. If the work was transformative, it was almost always found to be fair use. The importance of transformativeness all changed with this opinion. The fact that the second work conveys a different meaning or message from the first work without more is not dispositive. Now, the focus of the first fair use factor, the purpose and character of the use, has shifted from a context-based analysis to a purpose-based analysis. Scott: That’s right, Tara. Now, the first fair use factor will analyze whether the purpose of the use of the second work is different enough from the first to reasonably justify a copying. So now let’s talk about how this decision will and will not change how documentarians can use third party footage under fair use. So documentarians frequently use third party footage in order to comment on or critique the footage itself. Section 107 of the Copyright Act provides that the fair use of a copyrighted work, including such use for purposes such as criticism and comment, is not an infringement of copyright. Tara: At oral argument in Warhol, both Goldsmith and the US. Government agreed that commenting on the original work, criticizing it, or otherwise shedding light on the original work is the most straightforward way to establish fair use. Scott: Right. In its opinion, the Supreme Court reasoned that where the use is for commentary or criticism, a copying of the first work may be justified because copying is reasonably necessary to achieve the user’s new purpose. Also, the Court observed that criticism of a work ordinarily does not supersede the objects of or supplant the work. Rather, it uses the work to serve a distinct end. Tara: But what about uses that are not for the purpose of criticism or commentary, but for a biographical purpose? Documentarians often use third party footage as a biographical anchor to convey a biographical fact about the subject. Would such uses reasonably justify the use of the underlying material? Scott: That’s a great question, Tara. Let’s take, for example, the copyright infringement case filed by the rights holders to The Ed Sullivan Show against the producers of the Broadway hit Jersey Boys. That’s the case of Sofa Entertainment versus Dodger Productions. In that case, Sofa Entertainment took issue with a segment in the play where one of the band members speaks to the audience directly about how the band was coming of age during the British invasion. And then he speaks to the audience, or as he’s speaking to the audience. A clip of The Ed Sullivan Show is shown where Sullivan introduces the band, and then after that, the stage actors perform in. Tara: Sova the 9th Circuit said that using it as a biographical anchor, the producers put the clip to its own transformative ends, and that being selected by Ed Sullivan to perform on his show was evidence of the band’s enduring prominence in American music. Scott: The 9th Circuit’s analysis of the purpose of the use of the clip the Ed Sullivan clip was contextual. Had the 9th Circuit engaged in a purpose-based analysis, this factor may have favored the plaintiff. Given that, there is a strong argument that the purpose of both uses are extremely close the original being to introduce the band to the Ed Sullivan audience, and the purpose of the second use being to show the introduction of the band on The Ed Sullivan Show. Tara: Right, and prior to the US. Supreme Court’s decision in Warhol, it was well established that the use of third-party content to serve as a biographical anchor is fair use. Scott: That’s true, and I gave that advice previously many times to documentary producers. However, it’s not so clear that that will always be the case in light of Warhol going forward. While a different contextual purpose may be relevant, as you said earlier, it’s no longer dispositive. Further, it may be challenging to determine when the first factor would favor copying, since the determination of whether the second use shares the purpose or character of the original work or instead has a further purpose or different character is a matter of degree, and that degree of difference must be balanced against the commercial nature of the use. As said the Supreme Court in Warhol, and there is scant little case law to provide guidance here. Tara: The Warhol Court focused significantly on balancing the first fair use factor against the copyright owner’s right to create derivative work. The court said that Campbell cannot be read to mean that the first fair use factor weighs in favor of any use that adds new expression, meaning or message. Otherwise, transformative use would swallow the copyright owner’s exclusive right to prepare derivative works. Perhaps the extent to which a secondary work could or could not be considered a derivative of the first is part of the measurement of the degree to which the second work has or doesn’t have a further purpose or a different character. Scott: I agree with that. I do think that whether or not the allegedly infringing work could be considered a derivative of the original will be part of the measurement of the degree to which the second work has or doesn’t have a further purpose or a different character. In light of the refocusing of the first fair use factor, the remaining fair use factors also take on renewed importance, and they will require a deeper inquiry post Warhol. So what might this look like for a documentarian who uses a third party clip as a biographical anchor? Well, some guidance may be found in Sofa Entertainment, the Ed Sullivan case that we just talked about, where the clip is used and where it conveys mainly factual information. The second factor, the nature of the copyrighted work, will favor the documentarian. Since factual information is not as close to the core of intended copyright protection as for the third factor, the amount and substantiality of the portion used. If the clip used is short, and in Sofa it was 7 seconds, then its use may be quantitatively insignificant. Tara: But what about that fourth factor, the one about market harm? Generally, a documentary that uses the clip as a biographical anchor will not be a market substitute for the clip’s source. However, what if the plaintiff actively licensed its content for a fee? Scott: In Bill Graham archives versus Dorling Kinserly, the court said that the market harm suffered due to the loss of license fees was not sufficient to sway the fourth factor, where the use of the images was contextually transformative. However, in Warhol, the Court of Appeals found that the Warhol Foundation’s commercial licensing of its image encroached on Goldsmith’s protected Market to license her photographs. Tara: Given the shift in how the first fair use factor is analyzed, even if the purpose of use is different in a situation where the plaintiff licensed its content, would the use be different enough to reasonably justify a copying? Scott: So that’s the million-dollar question, and that one will probably have to be worked out in litigation in lower courts. And while Warhol does not seem to impact a documentarian’s ability to use third party content for criticism and commentary, it does complicate the ability of a documentarian to use third party content for biographical purposes. This uncertainty isn’t good for documentarians or the consuming public that enjoys compelling documentaries. Tara: Yeah, I think that’s true. I think in the documentaries and docuseries that we watch, it really helps to draw in the viewer and attract the viewer when clips such as The Ed Sullivan Show or other well-known pop culture icons can give context to a story that the documentary or the docu-series is telling. Scott: Right. And it definitely makes it more difficult for the likes of you and I to provide guidance to our clients on whether or not they can use third party content. Because right now it’s a big I don’t know, or it really may be risky and there’s no clear path that there’s no clear path yet. Tara: Yeah. Anything that relies on a specific degree where there isn’t a clear line differentiating the appropriate and inappropriate degree, that really creates a lot of work for lawyers and a lot of risk analysis that we’re going to be doing. Scott: Right. Really, this is going to have to be fleshed out in future litigation. And I know I don’t want my clients to be part of that litigation. So, I think, unfortunately, this is one where analysis, or at least the advice given, will have to be a little bit more conservative until there’s lower court litigation, giving us some milestones that we can rely on, especially where the plaintiff has a licensing program where they actively license their clips. I think it’s just very risky, but we’ll see what litigation will come because it certainly will come from this. Tara: Yeah, absolutely. Thanks for talking to us about this. Scott: Thanks, Tara. Tara: Thanks for tuning into this installment of the briefing. We have a lot more content like this over a hundred more episodes wherever you find podcasts or on YouTube, so please subscribe like us or leave us a comment.

The U.S. Supreme Court recently decided that trademark infringement claims under the Lanham Act only apply if the infringing “use in commerce” occurs in the United States. Scott Hervey and Tara Sattler talk about this case on this installment of The Briefing. Watch this episode on the Weintraub YouTube channel here. Show Notes: Tara: Extraterritorial? Not quite for the Lanham Act. The U.S. Supreme Court recently decided that trademark infringement claims under the Lanham Act only apply if the infringing “use in commerce” occurs in the United States. This is what we will be discussing on this installment of the Briefing. Scott: We talked about the facts of this case, Abitron Austria GmbH, v. Hetronic International, Inc., and the holdings of the lower courts on an earlier episode of “The Briefing,” so Tara, why don’t you give us a quick reminder of the facts and how this case came before the U.S. Supreme Court. Tara: Sure, Hetronic International, Inc., is a U.S. company that manufactures radio remote controls used to operate heavy-duty construction equipment. Abitron, the defendant, distributed Hetronic’s products in Europe. When the distributor relationship ended, Abitron started manufacturing their own products that were identical to Hetronic’s and that included the Hetronic trademark. The defendant sold their products with the Hetronic branding in Europe, so Hetronic sued Abitron. A jury in the Western District of Oklahoma awarded Hetronic over $100 million in damages, most of which tied to the defendants’ trademark infringement based on sales outside of the U.S. as 97% of the defendant’s sales were made “in foreign countries, by foreign companies, to foreign customers, for use in foreign countries”. On appeal to the 10th Circuit, the defendants insisted that the Lanham Act’s reach for trademark infringement doesn’t extend to their conduct because their conduct generally involved foreign defendants making sales to foreign consumers. And now, the Supreme Court has remanded the case and held that liability for trademark infringement under the Lanham Act extends only to infringing “use in commerce” in the United States. Scott: The Lanham Act governs federal trademark and unfair competition disputes. It imposes liability on 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. In the U.S. Supreme Court’s holding, they focused specifically on the “use in commerce” language in the Lanham Act, in holding that “use in commerce” must occur in the United States in order to constitute trademark infringement under the Lanham Act. Tara: That’s right. The focus on “use in commerce” is different than the holdings that some of the other federal circuits have taken on the extraterritorial application of the Lanham Act. Some federal circuits looked instead to whether the foreign activities of foreign defendants have a “substantial effect” on U.S. commerce. In fact, the only other Supreme Court case that addresses the extraterritorial application of the Lanham Act also discussed the effects of the alleged infringement on U.S. commerce. Scott: That case is Steele v. Bulova Watch Co. and was decided in 1952. In that case, Steele, a Texas man, procured component parts from the United States and Switzerland, 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 ‘Bulova’ watches, but upon inspection, it often turned out that the watches weren’t Bulova watches at all. The Supreme Court held that Steele’s activities were covered by the Lanham Act and looked to the impact of Steele’s activities on U.S. commerce. Tara: So, the Supreme Court made sure to distinguish the Abitron case from the Steele case in its recent decision. The court clarified that the Steele case “implicated both domestic conduct and the likelihood of domestic confusion” as compared to the Abitron case, where 97% of sales were made in foreign countries, to foreign buyers, for use in foreign countries. Scott: This case will have broad implications for U.S. companies that sell products overseas, and best practices will probably lead to the registration of trademarks in strategic international jurisdictions. And it seems like this case would also raise concerns for foreign companies who sell products online in the U.S. Tara: That’s right. And Justice Jackson wrote a concurring opinion on that point, suggesting that “use in commerce” in the U.S. would not necessarily require a company to be physically present in the U.S.

The subjects of a documentary have dropped their long-standing defamation lawsuit against Netflix and producers. Scott Hervey and Jamie Lincenberg 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: As of last week, a longstanding lawsuit against Netflix and producers, Doc Shop Productions, has been dropped. In a previous episode of The Briefing, we discussed the then-current status of the case where seven subjects of the Netflix docuseries “Afflicted” sued Netflix for claims of defamation, fraud and invasion of privacy.  We are going to take a look at this dismissal on this installment of the Briefing by Weintraub Tobin. I am Scott Hervey of Weintraub Tobin and I am joined today by my colleague, Jamie Lincenberg. Jamie, welcome to The Briefing. Jamie: Thank you, Scott. I’m happy to be here. Scott: Jamie, can you provide a quick recap on the lawsuit. Jamie: Sure.  the seven-part series “Afflicted” explores the world of chronic diseases, following a number of patients and their loved ones suffering from the same. The show casts a skeptical eye on some of the subject’s illnesses and those subjects then brought claims accusing Netflix and the producers for editing the show to make the subjects’ rare illnesses look psychosomatic and alleging that the plaintiffs were “duped by the defendants into participating in a salacious reality television program that questioned the existence of chronic illness and portrayed the plaintiffs as lazy, crazy, hypochondriacs who were deserving of scorn and who in fact have since received scorn and abuse because of the shows false representation. Scott: Netflix and the producers fired back – filing an anti-SLAPP motion to quickly block the lawsuits, based on the right to free speech. However, an LA county judge rejected the motion, and the appeals court agreed in a unanimous decision where the judges found that “undisputed facts concerning the plaintiff’s diagnosed medical conditions, when contrasted with the show script excerpts and aired version of “Afflicted” were sufficient to constitute a threshold showing that the defendants could reasonably be understood as falsely implying that the sick plaintiffs were imagining their illnesses due to some psychological condition and that their caregivers were gullible pawns or enablers who had been duped into providing care for persons who did not need it.” The plaintiff’s attorney called the ruling a “Significant Win” and we discussed in our episode that such a ruling could in fact be a shift in the norm and represent major issues for documentary/non-scripted film and television producers. Jamie: Now, almost four years since the initiation of the lawsuit, the case has been dropped. From limited sources, it seems that both sides have agreed to drop the suit, according to a request for dismissal filed on June 6. Details of the deal have not been disclosed, but of course, this is a win for Netflix, and the producers. Scott: Of course, Netflix is no stranger to defending itself from accusations of defamation. This is one of many defamation lawsuits that have been brought against not just Netflix, but many studios and producers working in the documentary space. This case addresses a number of issues that are generally always present in documentary industry and highlights important lessons for both producers and subjects of those documentaries. Jamie: These issues are present now, more than ever. Given guild strikes halting much of traditional production and the significantly decreased cost of non-scripted content, documentaries, docuseries, and other non-scripted productions are booming and regularly ranked among the most viewed shows on Netflix and other streamers. Scott: Despite the dismissal, this case is a cautionary tale for produces in the documentary space. Jamie: I agree. This show was controversial from the moment it began streaming in 2018. Dozens of doctors, scientists, artists and writers, including names such as Lena Dunham and Monica Lewinsky, signed an open letter to Netflix a few years back, accusing the producers of the flagrant misrepresentations present in the show. In looking at the details of the case, it seems that the producers of the show likely used creative tools and journalistic practice to advance a narrative that is not actually supported by fact – from early misrepresentations of their intentions with the show, to showing apparent diagnoses from doctors who had never even examined the subjects. While we understand the need to produce a compelling documentary production, but I don’t think that can be at the cost of the subjects of those shows and the audience, who are also being misled by a false narrative. How do you think we reconcile this in the industry? And what is the advice to provide producers and studios as the documentary/non-scripted industry? Scott: I think the industry needs to understand that if you obtain a release by deceiving the subject, that release may not stand up under challenge. So despite the fact that the written release signed by the subject says that they could be portrayed in an unflattering manner or even defamed and advises the subject to consult their own attorney, if the producer is not truthful with the participant about the nature of the program, the release may be voided due to fraud which could then expose the producer to a defamation claim.  Now I don’t think that most documentary producers intend to defame a subject, but some producers have a strong sense of the story they are trying to tell and that may result in an unflattering portrayal of a subject.  But truth is always a defense to a defamation claim so the producer should always be prepared to show that the portrayal is true.

The U.S. Supreme Court provided clarification on the application of the Rogers test in relation to Jack Daniels v. VIP Products. Scott Hervey and Jamie Lincenberg talk about this ruling on this episode of The Briefing by the IP Law Blog. Watch this episode on the Weintraub YouTube channel here. Show Notes: Scott: In the case of Jack Daniel’s Properties, Inc. v. VIP Products, the Supreme Court has spoken and provided clarification on the application of the Rogers test and whether the parodic use of another’s trademark is always non-commercial use for the purposes of a dilution claim. We are going to talk about this ruling and its potential future applications on this installment of the Briefing by WT. I am Scott Hervey of Weintraub Tobin, and I am joined today by my colleague, Jamie Lincenberg. Jamie, welcome to the briefing. Scott: On June 8, 2023, the United States Supreme Court handed down its opinion in JACK DANIEL’S PROPERTIES, INC. v. VIP PRODUCTS. The dispute dates back to 2014 when Jack Daniel’s sent a series of cease and desist letters to VIP products concerning its squeaky dog chew toy, Bad Spaniels. This toy parodies the Jack Daniel’s product;  “Jack Daniel’s” becomes “Bad Spaniels.” And the phrase “Old No. 7 Brand Tennessee Sour Mash Whiskey” turns into “The Old No. 2 On Your Tennessee Carpet.” Jack Dailes claimed that VIP Products had infringed and diluted its trademarks. In 2018 a district court judge ruled in Jack Daniels’s favor. Jamie: In its ruling on a motion for summary judgment, the district court held that the Rogers test, which is used to balance the interests between trademark law and the First Amendment, was inapplicable because the toy is not an expressive work. Later, after a four-day bench trial, the District Court ruled against VIP Products and found it had infringed Jack Daniel’s marks. Scott: On appeal to the Ninth Circuit, VIP argued that the district court erred in finding that the toy wasn’t expressive. The Ninth Circuit, therefore, remanded the matter to the district court to apply the Rogers test, which requires the mark holder to show the putative infringer’s use of the mark either (1) is “not artistically relevant to the underlying work” or (2) “explicitly misleads consumers as to the sources or content of the work. Jamie: In reviewing the Ninth Circuit’s holding, the Supreme Court framed its analysis by starting its opinion with a discussion of the purpose and function of a trademark, which is to serve as an identifier of the source of certain goods and services. From there, the Court then looks at the Ninth Circuit’s application of the Rogers test and its analysis of Jack Daniels’ dilution claim. Scott: Right. With regard to the application of the Rogers test, the Supreme Court said the issue is not whether the dog toy is an expressive work. The issue is the nature of the use of Jack Daniel’s marks. The Supreme Court found that VIP’s use of the marks, while humorous, was for the purpose of serving as a source identifier…trademark use, in other words. That didn’t seem to be a controversial analysis since, in its complaint, VIP claimed trademark rights in Bad Spaniels, and VIP had, in fact, secured trademark registration of Bad Spaniels. This use, use as a trademark, is outside of the application of the Rogers test and instead should be analyzed under the multi-factor test like Sleekcraft. Jamie: The Supreme Court said that this approach….confining Rogers to instances where a trademark is not used to designate a work’s source but solely to perform some other expressive function….. is not new and has been followed by lower courts in other cases. Scott: That’s an important point you raise. The use of the trademark must only be to perform some other expressive function. Where a mark is used both to perform an expressive function and also as a source identifier, the Rogers test is not applicable. Jamie: Scott, do you think the Court’s analysis would have been different if VIP had not claimed trademark rights in Bad Spaniels? Scott: That certainly gave the Supreme Court an easy out. The Supreme Court said that the lower Court got it right when it said that “VIP uses its Bad Spaniels trademark and trade dress as source identifiers of its dog toy,” and the Supreme Court said that this point was conceded by VIP when it said in its complaint that it both owns and uses the Bad Spaniels trademark and trade dress for its dog toy. For certain, the Supreme Court points to some other factors, but this seems to be the proverbial nail in the coffin. Jamie: Continuing with this hypothetical, what if VIP didn’t claim that Bad Spaniels was a trademark, didn’t treat it as a product name, and rather claimed that its use was merely humorous and ornamental and not any form of trademark use? Scott: That probably would have helped. It’s certain from this opinion that this threshold analysis of whether the use is trademark use, even if it’s parodic or humorous, is going to be case by case. Jamie: The Supreme Court engaged in a similar analysis in its treatment of Jack Daniel’s claim of dilution by tarnishment. The Ninth Circuit had dismissed that claim based on the Lanham Act’s exclusion from liability for dilution for any non-commercial use of a mark, and VIP’s parodic use constituted non-commercial use. Scott: The Supreme Court took issue with that. It said that not every parody or humorous commentary is a non-commercial use and that use as a designation of source for the person’s own goods or services, even if a parody or humorous commentary, is not a non-commercial use. Jamie: Scott, I know that you regularly look to the Rogers test for guidance with your creative clients who may include third-party brands in their programs. How do you think this case will impact them? Scott: Good question. As a threshold matter in determining whether Rogers applies, we will ask, is this use trademark use….are we using it as a source identifier? For example, where a production company films a character getting out of a Ferrari and where that’s done to establish some characteristic about that character (for example, rich, stylish, risk taker), that’s not going to be source identifier use, As such, we will just apply the Rogers test, where this case will present issues for companies that build a business around poking fun at or commenting at other brands.

A court denied Netflix’s request for GoTV Streaming to supply documents relating to the source of its patent litigation funding. Scott Hervey and Eric Caligiuri discuss this dispute on this episode of The Briefing by the IP Law Blog. Watch this episode on the Weintraub YouTube channel here. Read more about this case here.