Author Archive: Greg Goonan

Does the New Netflix Movie “Enola Holmes” Infringe the Copyright in Sherlock Holmes?

A recently filed lawsuit in federal court in New Mexico raises the question of whether the new Netflix film “Enola Holmes,” a film about Sherlock Holmes’ sister, infringes the copyright in the Sherlock Holmes character and stories owned by the Arthur Conan Doyle Estate.

As reported in a June 24, 2020 article in the Hollywood Reporter (see https://www.hollywoodreporter.com/thr-esq/conan-doyle-estate-sues-netflix-coming-movie-sherlock-holmes-sister-1300108), the Conan Doyle Estate has sued Netflix, Legendary Pictures, Penguin Random House and others, including author Nancy Springer, whose book series forms the basis of the new movie, claiming that the Enola Holmes character and story infringe the copyright in Arthur Conan Doyle’s famous character and stories.

The complicating factor for the Doyle Estate is that in 2014, the Doyle Estate lost most of its copyright rights to Sherlock Holmes when a federal appellate court ruled that all of the stories authored about the Holmes character before 1923 were in the public domain. But the ruling didn’t strip away the Doyle Estate’s copyright on the last 10 original Sherlock Holmes stories authored between 1923 and 1927.

Under well settled copyright law, only the original elements of Doyle’s last ten Holmes stories are protected by copyright. And the copyright does not protect what are known as scènes à faire, which are standard and customary plot elements standard for the works in a particular genre. Think of a car chase in a crime drama.

To try to get around the public domain and scènes à faire problems, the Estate’s complaint alleges that “After the stories that are now in the public domain, and before the Copyrighted Stories, the Great War happened . . . In World War I Conan Doyle lost his eldest son, Arthur Alleyne Kingsley. Four months later he lost his brother, Brigadier-general Innes Doyle. When Conan Doyle came back to Holmes in the Copyrighted Stories between 1923 and 1927, it was no longer enough that the Holmes character was the most brilliant rational and analytical mind. Holmes needed to be human. The character needed to develop human connection and empathy.”

And so Sherlock “became warmer,” continues the complaint, setting up the question of whether the development of feelings is something that can be protected by copyright and whether the alleged depiction of Sherlock in “Enola Holmes” is somehow derivative and therefore infringing.

It will be interesting to see how this case plays out. The estate likely will have to convince the court that the “warmer” Sherlock Holmes character in the stories still protected by copyright is expressed sufficiently differently from the colder one in the public domain stories such that the warmer character acquired protectable elements. Then, the estate also will have to prove that the warmer character in the allegedly infringing works is warmer in the same manner as the character in the works protected by the copyright.

A copy of the complaint can be found here: https://www.documentcloud.org/documents/6956021-Sherlock.html

United States Supreme Court Finds That A Generic Term Coupled with A Top-Level Domain Name May Be Registered as Trademarks If They Have Secondary Meaning

On June 30, 2020, the United States Supreme Court issued its long-awaited decision in United States Patent and Trademark Office v. Booking.com, B.V., (“Booking.com”) which addressed the issue of whether a generic word coupled with a top-level domain name such as “.com” could qualify for trademark protection. The Booking.com decision can be found here: https://www.supremecourt.gov/opinions/19pdf/19-46_8n59.pdf.

It had long been the position of the United States Patent and Trademark Office (PTO) that a generic term like “booking” remained generic and thus not eligible for trademark protection even if combined with a top-level domain name. Such claimed trademarks are referred to as “generic.com” trademarks.

In its decision in Booking.com, the Supreme Court, in an 8-1 decision, rejected the bright line rule advocated by the PTO and held that a generic.com term may function as a trademark if such generic.com term (like the booking.com trademark) has acquired secondary meaning.

Critically, not all generic.com terms will qualify as trademarks. On the contrary, only those terms that have acquired distinctiveness and therefore have become source indicators in the minds of consumers will be eligible for trademark protection. The Supreme Court was clear that generic.com terms cannot be inherently distinctive but can acquire distinctiveness with consumers.

Establishing the acquired distinctiveness and secondary meaning necessary for registration may come from consumer surveys, but they are not the only means. Others include dictionaries, usage by consumers and competitors, and any other source of evidence bearing on how consumers perceive a term’s meaning.

It will be interesting to see if the Booking.com decision leads to an onslaught of applications seeking trademark registration for alleged generic.com trademarks. It also will be interesting to see how demanding the PTO will be as to the evidence necessary to prove acquired distinctiveness and secondary meaning. And we will soon see how the courts will resolve competing claims to similar claimed generic.com trademarks – think beer.com and beer.com.

Photographers and Visual Artists Beware! You May Lose Exclusive Control Of Your Copyrighted Work By Posting on Social Media

Many photographers and others involved in the visual arts often post their works on Instagram and other social media sites as a way to advertise and promote themselves, showcase their works, and try to license or sell the posted works. In most cases, the posted works are protected by copyright in favor of the author.

Among the rights granted to to the author of a copyrighted work are the exclusive right to control the reproduction and copying of the work, the exclusive right to control the distribution of the work (including to license the work), and the exclusive right to control the display of the copyrighted work. In a recent case from a federal court in New York that sent shockwaves through the copyright world, the court held that a third party who “embedded” a link to a photograph posted on the public portion of Instagram did not infringe the copyright owner’s exclusive rights because the terms and conditions for the use of Instagram grant Instagram the right to sublicense works posted on the public portion of Instagram.

The case in question is Sinclair v. Ziff Davis, LLC, Case No. 18-CV-790 (KMW), decided by Judge Kimba Wood of the United States District Court for the Southern District of New York on April 13, 2020, often referred to as the “Mashable” case because the website that was alleged to have infringed the plaintiff’s copyright was the Mashable site.

In the Mashable case, the plaintiff was a professional photographer who owned the exclusive copyright in a photograph (the “Photograph”) titled “Child, Bride, Mother/Child Marriage in Guatemala.” The plaintiff posted a copy of the Photograph to her Instagram account, which was a “public” account, viewable by anyone.

Mashable offered the plaintiff $50.00 to license the Photograph for use in connection with an article about female photographers, which the plaintiff rejected. Mashable nevertheless featured the Photograph in its article even though the plaintiff did not give Mashable permission or consent to use the Photograph, and in fact rejected Mashable’s attempt to obtain a license.

Mashable used a technical process called “embedding” to incorporate the Photograph into its article. Embedding allows a website coder to incorporate content, such as an image, that is located on a third-party’s server, into the coder’s website. When an individual visits a website that includes an “embed code,” the user’s internet browser is directed to retrieve the embedded content from the third-party server and display it on the website. As a result of this process, the user sees the embedded content
on the website, even though the content is actually hosted on a third-party’s server, rather than on the server that hosts the website.

Judge Wood held that Mashable did not infringe the plaintiff’s copyright because the plaintiff granted Instagram the right to sublicense the Photograph when the plaintiff created her Instagram account and agreed to Instagram’s terms and conditions, and Instagram validly exercised that right by granting Mashable a sublicense to display the Photograph.

As Judge Wood explained her decision, the terms and conditions for use of the public portion of the Instagram site state that “by posting content to Instagram, the user “grant[s] to Instagram a nonexclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to the Content
that you post.” Based on this language, Judge Wood found that, because Plaintiff uploaded the Photograph to Instagram and designated it as
“public,” she agreed to allow Mashable, as Instagram’s sublicensee, to embed the Photograph in its website so there was no copyright infringement.

There are a number of important take-aways from the Mashable case:

1. Although the Mashable case involved the Instagram terms and conditions, virtually all social media sites — like Twitter, Facebook, etc. — have the same or similar terms and conditions which allow sublicensing, so the Mashable case may be extended to infringement claims based on works posted on other social media sites.

2. The Mashable case is limited to situations where the accused infringer displayed the copyrighted work by embedding the work on its website. Traditional copyright infringement analysis still will apply in those cases where there is actual copying – in other words, where the accused infringer publishes a digital copy of a copyrighted work on its website rather than just using embedding.

3. It is not clear how far the Mashable case will extend. The Mashable case is a trial court decision that has no binding effect on any other court in the United States. There have not been any cases outside the Southern District of New York that have addressed the same issue as the Mashable case. In another recent decision from the Southern District of New York on June 1, 2020 that also involved embedding a copyrighted photograph from Instagram (McGucken v. Newsweek, LLC, Case No. 19-CIV-9617 (KPF)), Judge Katherine Polk Failla confirmed the Mashable holding but refused to dismiss her case because she found there was no evidence of a sublicense between Instagram and Newsweek. The McGucken decision is interesting and curious because the facts were virtually the same as the Mashable case.

4. Finally, and perhaps most importantly, Instagram itself has expressly stated and made clear that users of its embedding feature don’t get licenses from Instagram to display copyrighted photographs of others.

So what does this all mean? For photographs and visual artists, the safest way to protect their copyrights is to switch their Instagram and other social media accounts to private until we have more clarity about the reach of the Mashable decision. But of course, such a switch will prevent users on the Instagram platform from seeing their content, which can be a career liability for professionals. Unfortunately, right now, Instagram does not offer an option to make content public inside the Instagram platform while disabling embedding on external websites.

For media companies and those who want to display photographs and other works posted by others on Instagram and other social media sites, the decision is clear: do not rely on the Mashable decision to shield you from liability for copyright infringement even if you intend to just embed the work. Instead, get permission from the artist to display his or her work and do not display if the artist says no.

Does the COVID-19 pandemic excuse contract performance under the doctrine of force majeure?

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:

http://www.cblg.biz/resources/force-majeure-and-covid-19/

https://www.bricker.com/resource-center/COVID19/publications/force-majeure-provisions-dusting-off-a-law-school-exam-topic-for-the-covid-19-pandemic

Please call us if you have any questions.

Should American Businesses be More Well-Versed In European Trademark Law?

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
The United States Patent and Trademark Office (USPTO) offers various options for trademark registration. The American system is based, on the one hand, on the choice of filing based on prior use or on the intention to use, and on the other hand, on a dual system. The “Principal register”, which is conditional on the distinctiveness of the trademark, offers maximum protection due to the presumption of ownership and the principle of incontestability. The “Supplemental register“, open to weaker trademarks, provides more limited protection. Is this American system so different from the European system?

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
It seems that often, American companies, although theoretically aware of the differences in regimes, do not in practice take into account the particularities of the European system. This apparent ignorance of European law can lead them to undertake unsound strategies whenever a dispute arises between an American trademark and a European trademark (or a European national law). These choices can have farreaching consequences, sometimes even leading to the cancellation or revocation of the trademark.
Recent decisions have highlighted the importance for US companies of knowing European law in order to protect their trademarks.

BONOBO vs BONOBOS Case: French-speaking company court of Brussels, November 21st, 2019[1]

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.
Specifically, MAGELLAN counter‐attacked in forfeiture for non‐use of the BONOBO WEAR trademark before the Belgian courts (and not in the field of fraud or bad faith).
As the American company was unable to report serious use of the trademark or even proof of any sale of the goods, the court ordered the revocation of the trademark BONOBO WEAR, which will be removed from the Belgian register.

  • It is essential that trademark strategy, both in attack and in defense, be correlated with usage.
  • The trademark revocation action was a judicious choice allowing the French group to reverse the burden of proof (and subsequently giving it the possibility of bringing a subsidiary action for fraud).
  • MONOPOLY vs DRINKOPOLY Case: EU Court of Appeal, July 22nd, 2019[2]

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, Kreativni brought an action for invalidity against the European trademark MONOPOLY, arguing that it had been filed in bad faith and that its registration was intended solely to counter the consequences of a possible revocation for failure to use the other earlier MONOPOLY trademarks.
The Cancellation Division rejected this request as unfounded. Kreativni appealed to the Board of Appeal, which ordered the partial cancellation of the European trademark MONOPOLY. It held that the “repeated” registration of the mark MONOPOLY did not follow a legitimate and justified commercial logic. The purpose of this practice was to extend indefinitely, in an abusive and fraudulent manner, the 5‐year time limit for evading the legal obligation of genuine use of the other MONOPOLY trademarks previously registered.

  • It is essential, in the case of repeated filings, to adopt a strategy that shows a real business logic and to keep any useful document that can demonstrate this.
  • This decision, which is symptomatic of a reversal of position in the European Union, makes the real intention to use the trademark, as a major element, a sine qua non condition.
  • SUPERMAC’S vs MCDONALDS Case: EUIPO, January 11, 2019[3]

In 2015, McDonalds opposed the registration of the Irish company Supermac’s trademark “Supermac’s”, claiming resemblance to its trademark “BIG MAC”.
In defense, Supermac’s filed a nullity action for non‐use of the “BIG MAC” trademark on the grounds that McDonalds had not made effective use of it as a product (sandwich) and service (restaurant) in the territory of the EU from 2012 to 2017.
To justify the use of its trademark, McDonald’s brought some documents (attestation of its own staff and screenshots of the website). However, the Cancellation Division of the Office considered that these elements were insufficient and that the serious use of the “BIG MAC” trademark on the market was not demonstrated (absence of data on turnover, receipts, survey on notoriety, link with customers via the Internet site, etc.).
Similarly, the EUIPO found that McDonald’s did not demonstrate the extent of use of the trademark and declared the Big Mac trademark invalid. As a result, the opposition filed by McDonald’s against Supermac’s could not succeed since it was based on a lapsed trademark. McDonald’s, of course, appealed this decision.

  • It is crucial to ensure that the trademark on which the invalidity action is based is being seriously used on the market, and not partially exploited.
  • No matter how well-known the trademark is, cancellation for non-use can be pronounced, if relevant documents related to use cannot be provided.
  • E&J GALLO WINERY vs SCEV CHAMPAGNE GALLO Case: Court of cassation, September 26th, 2018[4]

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.
The company E&J GALLO WINERY has started to use its Community trademark (but not in France) and has sued SCEV CHAMPAGNE GALLO, producer of “Gallo” champagne since 1984, for infringement.

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 seniority claim offers an attractive savings opportunity. However, it is necessary to be able to prove that the earlier national mark is not liable to be invalid or revoked at the time of the seniority claim.
  • Trademark protection, seniority claims, trademark abandonment and use constitute an alchemy that must be perfectly mastered.

The American and European systems, in practice similar
While European and American trademark laws seem far removed from each other, certain developments, both legislative and jurisprudential, have tempered the particularities of the European system.

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
In that respect, the European Office very strictly assesses the exploitation of the sign. In addition to the sign, the goods and services, and the territory for which the trademark has been registered, proof of use must be dated and in sufficient quantity. The multiplication of the grounds for cancellation of the trademark thus requires the applicant to be vigilant both regarding the use of the trademark and the preservation of evidence of such use.
Such a novelty must obviously be interpreted in the light of the recent Skykick case law. On January 20th  2020, the Court of Justice of the European Union stated that the registration of a trademark without the intention of using it for each of the goods and services it concerns may constitute bad faith and consequently be annulled for said goods or services.

The severe penalties for fraudulent conduct by trademark applicants
In such a context, the applicant must therefore take care to exploit the trademark without acting fraudulently. It is illegitimate to obtain an exclusive right for purposes other than the functions of a trademark. Such an attitude, once it is established, is punishable by cancellation or revocation of the trademark. This is the case for the repurchase of an earlier mark which has not been used, the repeated registration of a mark to avoid the obligation to use it, the partial use of a trademark, or the Community application under claim of seniority of an abandoned mark.
The protection of a trademark requires thought and anticipation which should not be neglected. With legal support, these situations could have been prevented. It is therefore essential that the brand strategy developed by American companies be adopted in line with current European legislative and jurisprudential developments.

Eric SCHAHL & Lou MAREC

 

[1]https://app.darts-ip.com/darts-web/client/case-results.jsf : darts-999-461-H-en-2
[2]http://vmguidelines.dkpto.dk/media/131469/20190722_r1849_2017-2.pdf

[3]https://res.cloudinary.com/fieldfisher/image/upload/v1574435105/PDF-Files/PDFs%20from%20old%20website/euipo-decision_mzjvve.pdf

[4]https://www.legifrance.gouv.fr/affichJuriJudi.do?oldAction=rechJuriJudi&idTexte=JURITEXT000037495373&fastReqId=847777647&fastPos=1

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.

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.

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.

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