The BREXIT Transition Period Ends December 31, 2020: What Does That Mean For Your IP Rights
Here’s a link to a valuable article discussing what the end of the BREXIT transition period may mean for IP rights:
https://www.lexology.com/library/detail.aspx?g=eafc0270-9638-4504-b0b5-3fa091262b59
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.
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.
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:
- 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.
Insights 