A question often asked is whether businesses and individuals can avoid contract performance because of the COVID-19 pandemic? This question permeates all aspects of the business world, from office leases to product purchase and sale contracts to loan contracts and myriad other contractual arrangements.
Here are two recent white papers by some very esteemed lawyers that discuss the topic in detail:
Please call us if you have any questions.
Set forth below is a highly-recommended recent white paper by INLEX, one of our European trademark associates, about differences between trademark law in Europe and the United States. Many thanks to Eric Schahl & Lou Marec of INLEX for this white paper. The INLEX website is at http://www.inlex.com.
Please call us if you have any questions.
|While trademark law follows the same logic across all countries, there are local specificities, and in particular differences between the American and European systems.
In the US and the EU, two different systems, in theory
At first glance, the European system seems very different. The European Union Intellectual Property Office (EUIPO) offers only a single procedure, based on a single mode of filing and a single regime. A trademark can be filed without any proof of use or even of immediate intention to exploit. Therefore, in order to avoid a third-party request for the lapse of the trademark registration, the trademark must never not be exploited for more than five consecutive years. No proof of exploitation of the trademark is required either at the time of filing, at the time of renewal of the trademark, or even during the registration process.
The necessary taking into account of European specificities
BONOBO vs BONOBOS Case: French-speaking company court of Brussels, November 21st, 2019
The American company BONOBOS INC. was blocked in its expansion into European market by the 2006 BONOBO trademark from the French group MAGELLAN.
The American company’s attempt to buy without exploiting, despite an ongoing dispute with its European opponent covering identical activities, ultimately backfired.
In 2011, HASBRO INC. filed an opposition against the DRINKOPOLY application by Kreativni on the basis of various earlier MONOPOLY trademarks and was successful.
In 2015, McDonalds opposed the registration of the Irish company Supermac’s trademark “Supermac’s”, claiming resemblance to its trademark “BIG MAC”.
E&J GALLO WINERY is the owner of the 1998 Community trademark “GALLO”, claiming the seniority of the French trademark registered in 1968 which has since been abandoned by the company.
In defense, the SCEV CHAMPAGNE GALLO raised the “retroactive” revocation of the expired French trademark and obtained the cancellation of the trademark for lack of use. The claim was therefore no longer valid, and the 1996 Community trademark was cancelled on the basis of the SCEV CHAMPAGNE GALLO’s corporate name ‘Gallo’, which had been in use since 1984.
The American and European systems, in practice similar
In the name of harmonization of the law, the “Trademark Package” reform of 2015 has, in particular, reinforced the requirement of proof of use in opposition proceedings. From now on, the opponent must be able to prove the use of the earlier trademark on which the opposition is based for each of the goods and services concerned. Such a provision thus obliges the applicant to limit his application to the goods and services he actually uses.
The strict assessment of the use of the trademark
The severe penalties for fraudulent conduct by trademark applicants
Eric SCHAHL & Lou MAREC
US Supreme Court Resolves Major Dispute in Trademark Law: Willfulness No Longer Required for an Award of Infringer’s Profits as Damages
For many years, there has been a dispute in the federal courts about what level of culpability by a trademark infringer was required to support an award of the infringer’s profits as damages. The courts in the Second, Eighth, Ninth, and Tenth Circuits required that a trademark owner show that the infringement was “willful” before the infringer’s profits earned from the infringement could be awarded as damages. In contrast, the law in the Third, Fourth, Fifth, Sixth, Seventh, and Eleventh Circuits was that the infringer’s willfulness could be considered in deciding whether to award profits as damages, but that willfulness was not a requirement for an award of profits.
On April 23, 2020, the United States Supreme Court issued its decision in Romag Fasterners, Inc. v. Fossil, Inc. by which it resolved the dispute among the circuits and held that willfulness is not a precondition to recovering a trademark infringer’s profits as damages. Critically, the Court did not completely discount the role of the infringer’s culpability in the damages analysis – the Court expressly stated that “a trademark defendant’s mental state is a highly important consideration in determining whether an award of profits is appropriate.”
The Supreme Court’s opinion in Romag can be found here: Romag Fasteners, Inc. v. Fossil, Inc., 590 U.S. __, No. 18 – 1233 (April 23, 2020).
It usually is the case in trademark infringement cases that it is difficult to prove the profits lost by the trademark owner as a result of an infringement. Consequently, prior to Romag, it often was difficult for a trademark owner to obtain damages in cases where the infringer did not act willfully.
While recovering profits-based damages in trademark infringement cases may continue to be challenging given the Supreme Court’s instruction that the infringer’s “mental state” still is an important consideration in the damages calculation, the Romag decision has removed a significant legal hurdle to an award of such damages. It will be interesting to see how the Romag decision affects the settlement value of trademark infringement cases and whether the decision results in an increase in the number of infringement actions filed since the cases now may have more value.
This post is courtesy of our law clerk Ashley Franco, an exceptional student at California Western School of Law who just finished her second year:
The answer to the question in the title to this post is the typical lawyerly “it depends.” It is important to distinguish between the ownership rights to the tangible tattoo (the skin itself) and the exclusive rights provided by copyright for the design of the tattoo. The ownership rights to the tangible tattoo (the skin itself) belong of course to the tattoo bearer. However, the “author” of the tattoo (i.e. tattoo artist) may have exclusive copyright rights in the tattoo design.
Under section 101 of the Copyright Act, a creator of original work that is fixed in a tangible medium of expression for more than a transitory duration is given copyright protection for the original elements of the work. A tattoo may be an original work (depending on the design) and of course is fixed to a tangible medium (the body) for more than a transitory duration. Therefore, the copyright doctrine applies to tattoos and may provide the tattoo artists with copyright protection for original designs.
Copyright protection grants the copyright owner six exclusive rights, which he or she may transfer: (1) the right to reproduce (2) the right to prepare derivative works (3) the right to distribute (4) the right to perform the work publicly (5) the right to display the work publicly, and (6) the right to perform the work publicly by digital transmission.
To determine the ownership of the exclusive rights, it is important to determine who is the “author” of the tattoo. The “author” may be the tattoo artist, the tattoo bearer, or both if they both contributed to the tattoo design. The “author” may also be the tattoo artist’s employer, through a doctrine known as the “work made for hire” doctrine.
Most tattoo copyright infringement cases are filed by tattoo artists and are settled. Therefore, the courts have yet to decide what the tattoo bearer has the right to do with his or her tattoo. In Whitmill v. Warner Brothers (a tattoo infringement case), Judge Perry did comment that tattoos could be copyrighted, and that there was a high likelihood of Whitmill prevailing on the merits. In Whitmill, Victor Whitmill designed the famous tribal tattoo for Mike Tyson, which he had tattooed on his face. An exact copy the tattoo later appeared in the movie “The Hangover II”, on Ed Helms’s face. Thereafter, Whitmill filed suit seeking monetary damages for copyright infringement of the Tyson tribal tattoo, and a preliminary injunction preventing the release of the film. However, the parties settled before the court could weigh in on the application of the copyright doctrine to tattoos.
As tattoos have gained popularity, more suits have arisen by tattoo artists claiming copyright infringement. Many of these suits are against the NFL and NBA and/or their marketing partners because athletes’ tattoos are copied and displayed on an array of media (i.e. posters, video games). Consequently, companies are now implementing contracts in which the tattoo artist waives his or her rights to copyright.
We expect that so-called “tattoo infringement” litigation will increase as tattoos continue to gain popularity and prominence among celebrities, athletes and common folk, and tattoo designs become more elaborate and unique. Therefore, for a person spending a lot of money getting a tattoo or a tattoo artist developing unique and original tattoo designs, it is a wise investment to have an attorney draft a contract to clearly state who owns what rights to the tattoo.
Readers may be surprised to learn how often we are consulted by clients who face the following predicament: an individual or group of people get together to start a business. Working out of a home, or a garage, or a small workspace, they create a product or come up with a service that they think they can sell and proceed through sheer will and hard work to get the product or service to a point where the product really takes off.
Sounds like a success story, right? And it is. But then what too often happens is problems arise. Infighting starts about who created what, who owns what rights and who is entitled to what payments. And of course competitors notice the success of the product or service and before long knock-offs start appearing.
To do as much as is possible to protect against the foregoing problems and other intellectual property issues, we offer the following tips:
- Protect your intellectual property before you do anything else – consult with an experienced intellectual property attorney who can help identify what intellectual property rights exist and how best to protect them. Make sure you budget sufficient funds for legal advice and intellectual property protection – it will be money well spent in the long run.
- Put agreements in place to define specifically who created what intellectual property, who owns what and who gets what payments – such agreements can include corporate shareholder agreements, LLC operating agreements, license agreements, and assignment agreements. Also address at the front end what will happen if one or more of the founders wants out or if the success of the business fades – it is important to consider at the front end what will happen to the business assets and intellectual property down the road. The key is everything must be in writing – do not rely on trust, handshake agreements, oral agreements or any non-written agreement!
- A non-disclosure/confidentiality agreement is essential and must be in place before you discuss your product with anyone – and this includes not only potential vendors, business partners, etc. but also visitors to the place of business, friends, etc. if any protected details of products or services will be disclosed.
- Make sure to protect ownership through appropriate agreements – all employees and independent contractors should execute appropriate assignment agreements and work made for hire agreements. This is especially important with respect to website design and maintenance, marketing activities, outside sales people, and customer lists. It bears repeating: everything must be in writing!
- Put appropriate agreements in place if others will use your intellectual property to make sure there is no question who owns what and what uses can be made of the intellectual property.
On June 21, 2016, we published a post discussing an effort by the State of California to obtain copyright protection for public records. The proposed legislation sought to give copyright protection to public records created using taxpayer funds (such as maps, hearing transcripts, legislative reports, etc.), and would have authorized state and county governments to control and even prohibit their use. The proposed legislation met with strong opposition, primarily from free speech and open government advocates. Fortunately, the author of the controversial legislation (Assemblyman Mark Stone of Monterey Bay) saw the error of his proposal and has abandoned the proposed legislation.
One of the most frequent questions we must address in our practice is what is the difference between business entity names, trademarks and domain names in terms of legal protection and intellectual property status. A recent article in Forbes Magazine (republished from an article in Entrepreneur Magazine) has a good discussion on this topic. The article can be found at this link: http://fortune.com/2016/07/05/domain-names-trademarks.
We highly recommend this article to gain insight on this important subject.
Consider the following two situations:
- Two people form a California corporation as equal owners. One of the owners later decides he/she wants to dissolve the corporation but the other owner objects.
- Two people form a California limited liability company (LLC) as equal owners (members). One of the members later decides he/she wants to dissolve the LLC but the other member objects.
Under current California law, the owner who wants to dissolve the corporation in the first scenario can do so without having to resort to court action because a voluntary corporation dissolution can be initiated by 50% voting power. However, under current California law, the member who wants to dissolve the LLC in the second scenario must file a costly and potentially time consuming lawsuit to obtain a court order to dissolve the LLC since the vote a majority of the members of an LLC (not just 50%) must vote to initiate a voluntary dissolution of an LLC under Corporations Code sections 17707.01 and 17707.02. Such an anomaly clearly makes no sense.
Fortunately, Governor Brown recently signed legislation to end this anomaly. Effective January 1, 2017, the LLC dissolution law will be harmonized with the corporate dissolution law. Consequently, starting January 1, an LLC member with 50% voting power can initiate a voluntary dissolution of an LLC just as can be done with corporations. Of course, just as is true with most other aspects of LLC operation and management, the members of an LLC remain free to draft their articles of formation and operating agreements to require a higher voting percentage than 50% for a voluntary dissolution, to require judicial dissolution, or to have other terms and conditions for voluntary dissolution.