Author Archive: Greg Goonan

Trademark Trial And Appeal Board Confirms That A Social Media Website Is Not Trademark Use

On October 26, 2016, we posted about a decision from the Trademark Trial and Appeal Board (TTAB) finding that the use of a Twitter handle, by itself, was not sufficient use to establish trademark rights. You can find our October 26 post here: https://affinitylaw.wordpress.com/2016/10/26/a-social-media-handle-alone-may-not-be-sufficient-use-to-establish-trademark-rights/

In the recent case of In Re Florists’ Transworld Delivery, the TTAB confirmed that a social media website, by itself, is not sufficient use to support trademark rights.  In In Re Florists’ Transworld Delivery, the world-famous florist FTD sought to register the trademark “Say It Your Way” for on-line retail store services and creating an on-line community for registered users to interact with other users.  In support of its application, FTD submitted a copy of its Twitter page.

The Trademark Office refused registration on the ground that FTD’s Twitter page was not sufficient evidence of trademark use.  On appeal, the TTAB agreed with the Trademark Office, explaining that a social media website publication like FTD’s Twitter page was neither an advertisement for FTD’s services nor FTD actually providing the services and thus was not sufficient trademark use to support registration.

The lesson to be learned is that while social media advertising can be critical to the development of a brand or trademark, social media advertising alone is not enough to create trademark rights.  Instead, there must be some other way (either on the Web or brick & mortar) by which the trademark owner actually offers its goods and/or services to the public.

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Who Owns The Legal Rights To A Tattoo?

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.

Essential Intellectual Property Tips For Startup Companies

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:

  1.  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.
  2. 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!
  3. 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.
  4. 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!
  5. 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.

A Social Media Handle Alone May Not Be Sufficient Use To Establish Trademark Rights

There can be no doubt that individuals and businesses are becoming increasingly reliant on social media like Twitter, Instagram, Snapchat and the like to market and sell their products and services.  As users of these social media platforms are aware, the individual users are identified by unique “handles” which really are code names.  For example, our firm’s Twitter handle is “@AffinityLaw.”  The question therefore arises whether a use of a social media handle is sufficient trademark use in and of itself to create trademark rights in the word/phrase comprising the handle.

In its recent decision in Nazon v. Ghiorse (Opposition No. 91216729), the federal Trademark Trial and Appeal Board (TTAB) addressed the issue of whether a Twitter handle constitutes sufficient use to create trademark rights.  The claimed trademark in the Nazon case was “Sextrology” for astrological services.  The Opposer opposed an application to register the trademark “Sexy Astrology” for similar services.  Given the similarity of the marks and services, a principal issue was who had priority of use.  Among her other arguments, the Opposer claimed that she had priority of use because she had used the word “sextrology” in her Twitter handle.  The TTAB rejected this argument, finding that the use of “sextrology” as part of the Opposer’s Twitter handle did not constitute sufficient use to create trademark rights.

In so holding, the TTAB was clear that its finding was based on the absence of evidence that the Opposer was actually offering any services using her Twitter handle.  Consequently, it remains to be seen whether the Nazon case announces a bright line rule that no social media handle can create trademark rights (which is not likely) or, more likely, whether the Nazon case stands for the proposition that a social media handle by itself does not confer trademark rights and some additional trademark use in conjunction with the handle is necessary to create rights.

California Halts Efforts to Seek Copyright Protection for Public Records

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.

What is the Difference Between Business Entity Names, Trademarks, and Domain Names?

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.

Dissolution of California LLCs Will Be Easier and More Common Sense Starting January 2017

Consider the following two situations:

  1.  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.
  2. 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.

New Rules for Trademark Trial and Appeal Board Practice

The Rules of Practice for the Trademark Trial and Appeal Board (TTAB) are changing effective January 14, 2017. The new rules will be applicable to all proceedings, including those filed before January 14, 2017 and pending on that date.  The new rules will apply to inter partes proceedings (oppositions, cancellations, concurrent use) and ex parte appeal proceedings.

More information about the new rules can be found on the TTAB website at this link:

https://www.uspto.gov/trademarks-application-process/trademark-trial-and-appeal-board-ttab?utm_campaign=subscriptioncenter&utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=

FDA Regulation of Electronic Cigarettes

Here’s an excellent post by our Of Counsel Ashley Franco:

As new technologies appear, so do laws that regulate them. Changes in technology usually outpace laws put in place to regulate them; as a result, there is usually a gap between the time the technology emerges and time a law is enacted to regulate it. Until recently, the increasingly popular e-cigarette went without regulation. On May 5, 2016, the U.S. Food and Drug Administration finalized a rule extending its authority to include e-cigarettes as part of the tobacco products it can regulate. The new rule, effective August 8, 2016, imposes disclosure requirements to companies selling and/or manufacturing the e-cigarettes and/or any of its affiliated products.

One major implication of the new rule is that e-cigarette manufacturers will have to undergo a premarket review in which they must disclose the ingredients in the e-liquids used in the e-cigarette. The FDA stated the new requirements are in the interest of the consumers who should have the opportunity to evaluate the potential risks associated with consuming the e-cigarette liquids, which usually contain nicotine derived from tobacco.

It comes as no surprise that the FDA has decided to regulate e-cigarettes, since there are obvious health risks associated with consuming tobacco products. Since the e-cigarette’s introduction, it has gone under the radar with little to no regulation. You will most likely find individuals smoking e-cigarettes in the non-smoking sections of restaurants and bars. It has become a way for smokers to get their nicotine fix in areas where the common cigarette is banned by regulation. That seems to be heading to an end with the new regulation because under the new rule the FDA will be able to evaluate the dangers of the e-cigarette.

Under the new rule’s premarket review requirement, the FDA will be able to evaluate the dangers of the e-cigarette. For example, tobacco smokers are prohibited from smoking regular cigarettes in certain areas because of the known health risks associated with second hand smoke. The effects of e-cigarette second hand smoke is not certain as of yet, but will be investigated as part of the new rule and will most likely have an affect on where e-cigarette smokers can enjoy their e-cigarettes.

Who should worry about the outcomes of the new rule? Small businesses should certainly start looking into the impact this new rule will have on them. The new disclosure requirements will most likely have a negative effect on small businesses that may not be able to cover the costs of the additional disclosure requirements. The premarket review requirement imposes a great costs to all businesses that sell and/or manufacturer e-cigarettes and affiliated products.

If you manufacture e-cigarettes the rule requires you to:

  1.  Submit an application and obtain FDA authorization to market the e-cigarette
  2. Register establishment(s) an submit the product listing to FDA by December 31, 2016
  3. Submit a list of the ingredients associated with your e-cigarette and affiliated products
  4. Submit information on the harmful and potentially harmful constituents (HPHCs)
  5. Submit tobacco health documents
  6. Manufacture your tobacco product with the required warning statement on packaging and advertisements
  7. Market your tobacco product in compliance with the other applicable statutory requirements, rules and regulations.

If you sell e-cigarettes or their component parts that are made or derived from tobacco you are also subject to certain FDA requirements.

Complying with the law may be a long and complex process. We recommend you consult with a lawyer to help you understand and comply with the FDA regulations and policies.

For a copy of the Final Rule see https://www.federalregister.gov/articles/2016/05/10/2016-10685/deeming-tobacco-products-to-be-subject-to-the-federal-food-drug-and-cosmetic-act-as-amended-by-the#h-9

Controversial Copyright Bill Advances in California

The California Assembly recently passed a measure that would allow the state government to obtain copyrights for materials that it creates. Critics, such as the Electronic Frontier Foundation, claim that this measure could suppress the dissemination of government funded works. The measure, AB 2880, was passed by a vote of 76-3. Peter Scheer, Executive Director of the First Amendment Coalition, says that the assembly is stepping into a hornet’s nest, noting that the federal government itself does not claim copyright protection in its public works. Jim Ewert, General Counsel for the California Newspaper Publishers Association, says that his concern is the potential for an agency to use copyright as a means to limit the public’s ability to use records that a state or local agency has created. The California Chamber of Commerce has also come out against the proposed legislation.

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