New Rules at the Trademark Office

Effective February 15, 2020, the United States Patent and Trademark Office (“USPTO”) implemented several new rules for applicants and registrants. While these rule changes are not substantive in nature, the procedural and administrative updates are likely to cause substantive disruption for certain trademark owners and applicants. Although it is arguable what will have the largest impact, the update to the specimen requirements are likely to create new challenges.

The USPTO revised the items that are deemed an acceptable specimen. The change is designed to ensure that the specimen submitted clearly depicts the trademark in use with the specific good or service provided. By way of example, mock-ups, designs on their own, and labels without clear association with the good or service are no longer accepted. Another change includes the USPTO designating email as the only method for formal correspondence. This procedural change includes a new requirement that all registration applications must be submitted electronically, with limited exception. For attorney’s filing on behalf of a client, the attorney will also need to provide the email address for the client, as opposed to just the attorney. This requirement applies to proceedings in front of the trademark trial and appeal board as well as registration applications.

These procedural changes are the latest updates to take effect as the USPTO attempts to modernize and combat fraudulent registrations and applications. For those with a registered trademark, these changes will apply to the next required filing or, if the USPTO so elects, to an audit of the registered mark. This means that trademark owners should ensure that they continuously use their trademarks in commerce in the manner described in the trademark registration.

VW Contributor: Alex Rainville
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Scandalous Trademarks: What You Need to Know.

The Lanham Act, which governs trademarks that are registered through the United States Patent and Trademark Office (“USPTO”), expressly prohibits the registration of marks that are deemed scandalous, immoral, or deceptive. This prohibition has historically prevented brands from using marks that could fall into this category, even if the mark is appropriate for the situation. However, in 2019, this prohibition was expressly overridden and these types of marks are now eligible for registration and protection under the Lanham Act.

During the summer of 2019, the United States Supreme Court determined that the prohibition against scandalous marks contained in the Lanham Act is an unconstitutional prohibition on protected speech. See Iancu v. Brunetti, 488 U.S. ___ (2019). Essentially, the Court decided that this amounted to viewpoint discrimination, in violation of the First Amendment. As a result, the USPTO is required to accept and consider scandalous trademark registration applications.

For businesses, artists, and musicians that utilize what was deemed scandalous marks by the USPTO as part of their operations, now is the time to act to protect the intellectual property. Although the USPTO hasn’t reported a rush applications that fit this category, now that these previously un-protected marks are protectable, it is expected that the volume of applications will increase.

VW Contributor: Alex Rainville
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Supreme Court to Determine Whether Fossil Must Turn Over Profits for Trademark Infringement

Fossil, Inc., the luxury goods retailer, could owe a manufacturer, Romag Fasteners, Inc., its profits for infringing on Romag’s trademark. The issue of whether Fossil owes Romag approximately $6.7 million dollars in profits gained by using the infringing trademark depends on whether the remedy of disgorgement of profits by a party infringing on a trademark requires willfulness by the infringing party.

The issue arises from Fossil using a magnetic snap fastener on some of its bags, purchasing some of the fasteners directly from Romag. However, Fossil also purchased some fasteners that looked nearly identical to those of Romag from another source, likely knowing that the fasteners were counterfeit and infringed on the trademark of Romag. Despite this knowledge, Fossil proceeded to use them anyways in “callous disregard” to the rights of Romag. In a moment of luck for Romag, an employee discovered the counterfeit products when visiting a Macy’s, finding the Fossil bags with the counterfeit fastener. Romag successfully argued that Fossil infringed on their trademark rights, but an open question regarding the remedy remains. The United States Supreme Court will determine whether the remedy includes the profits of Fossil, and such decision will be based on whether Fossil must willfully infringe on Romag’s trademark rights or if “callous disregard” is sufficient to entitle Romag to the profits of Fossil.

This case highlights the broader importance of protecting the brand and intellectual property of a company. Traditionally, this means taking active steps to ensure that the trademarks, copyrights, trade secrets, and patents are protected under applicable law, but it should also mean proactively verifying that the initiatives of the company don’t infringe on the rights of another. Failure to take consider trademark rights, as Fossil is learning the hard way, could result in disgorgement of profits.

VW Contributor: Alex Rainville
© 2020 Vandenack Weaver LLC
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Fortnite Under Siege

Fornite, the video game by Epic Games that has taken the world by storm, has been subject to a number of copyright infringement claims for dances performed by characters in the game. The dances causing problems include those that are well known and new viral sensations such as the “Carlton,” “Backpack Kid” flossing, “Milly Rock” dance, and Halloween “Pump It Up.” While most are relatively standard copyright infringement claims, alleging the characters doing the dances in the game infringe on the copyright, one claim, for infringement of the “Running Man” dance, has an interesting twist.

A recent decision by the United States Supreme Court mandated that a copyright owner must register the work with the Copyright Office prior to filing a claim for copyright infringement. As a result, many claims, including those against Epic Games, were withdrawn until the work could be registered. However, the owners of the “Running Man” dance elected to amend their claim, from a copyright infringement claim to trademark infringement claim. As a defense to trademark infringement, Epic Games is asserting that the claims are preempted by the Copyright Act. Although no one disputes that the name of a dance can be protected under trademark law, it is unclear whether a court will decide if the dance itself is protected; typically a dance is protected by copyright, as choreography.

This could open the door for more claims against Epic Games for dances used in Fortnite, but the more impactful consequence is the potential to further define the scope of what constitutes a trademark. If it is ultimately determined that a dance can be a protectable trademark, that would add to the list of protectable marks, which already includes color, scent, sound, designs, layouts, and words.

VW Contributor: Alex Rainville
© 2020 Vandenack Weaver LLC
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Intellectual Property: A Peloton Story

Most people know Peloton because of their flashy and controversial ads, as well as for revolutionizing the indoor cycling industry. However, as Peloton forges forward in the competitive fitness equipment industry and fights to keep its stock price above its IPO level, they have also been litigating trademark and copyright claims. Recently, a Federal District Court ruled in favor of Peloton in the trademark matter, which means, for now, Peloton will be able to retain its name.

In the case, Move Press, LLC v. Peloton Interactive, Inc., Move Press claimed that Peloton was infringing on their trademark rights because Move Press has a cycling publication named Peloton Magazine. Move Press had registered this trademark with the United States Patent and Trademark Office, and its use of the mark clearly preceded the use by Peloton. However, Move Press did not file the claim against Peloton for well over four years. As a result, Peloton argued that this claim was barred under an equitable legal theory known as laches, which means that Move Press waited an unreasonable period of time to bring the claim. Peloton had to argue laches, as opposed to a statute of limitations, because the Lanham Act, which governs registered trademarks, does not have a statute of limitations. The Federal District Court, after undergoing a rigorous review of the elements in the laches defense, ruled in favor of Peloton.

Had Move Press timely made the claim against Peloton, the result would have likely been in favor of Move Press and the public would know Peloton as something different. For business owners, this raises two important points. The first is that every registered trademark owner has an obligation to police their marks and, should they find someone infringing on their mark, timely bring a claim. The second is that a business, when selecting its name, branding a new product, or re-branding, should review its rights in the marks prior to making a significant marketing investment.

VW Contributor: Alex Rainville
© 2019 Vandenack Weaver LLC
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U.S. Supreme Court to Decide Whether a Software Interface is Protected under Copyright Law

In a case that pertains to technology originally developed in the 1990s, the United States Supreme Court has granted certiorari in Google LLC v. Oracle America, Inc. The dispute between these two technology giants focuses on application programming interfaces (API) that Oracle developed through its predecessor, Sun Microsystems, Inc. At issue for the technology industry is whether an API is copyrightable and, therefore, protected.

The API is critical to most technology companies, especially those with complex and multi-layered tech stacks, because it allows the company to integrate and communicate with other software developers. By way of example and at issue in the case, the Android operating system uses the API originally created by Oracle to allow third-party developers to integrate into the operating system. Although most consumers will not understand how the API works, the use of third-party applications in the Google owned Android operating system is made possible through the API. As a result of its importance in modern commerce, many technology companies protect the structure, sequence, and organization of the API, even if they share how to connect to it.

Regardless of the decision by the Supreme Court on whether the API is protectable under copyright law, the ramifications will be significant. In fact, most of the prominent global technology companies have filed briefs in this case to voice their opinion on the matter. When the Supreme Court decides the case in 2020, every company that interfaces and integrates into the software of another company will need to re-evaluate their intellectual property protection strategies.

VW Contributor: Alex Rainville
© 2019 Vandenack Weaver LLC
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Copyright Ownership when Using Independent Contractors and Service Providers

Businesses often utilize a third-party for services, especially when directly employing someone to perform the task will not add value to the organization. By way of example, it is common practice for a business to hire a freelance photographer, a marketing company to write advertising copy, or an independent contractor to write specific policies and procedures. For many, the business needs require the decision maker move fast and little consideration is given the intellectual property rights. Unfortunately, this can lead to a number of challenges for both the business and the independent contractor.

Generally, when a business hires an independent contractor, the ownership of the creative work belongs to the hiring business. That means the independent contractor is unable to use the work that they actually created without the permission of the business. By way of example, a freelance photographer is infringing on the businesses copyright ownership when posting the photo they took on behalf of the business to their personal portfolio website. Conversely, if the agreement between the business and the independent contractor provides that the independent contractor will have ownership rights, the business may be limited in how they can use the work that they specifically hired the independent contractor to complete. Even more complicated is when no written agreement exists at all or if the business is operating in certain states that have rules that alter the ownership analysis.

To avoid intellectual property disputes that arise from hiring independent contractors, a business should ensure that they have an agreement in place with each independent contractor. The agreement should address ownership and, in many of the more complex business relationships, ensure that the licensing adequately protects the interests of both parties.

VW Contributor: Alex Rainville
© 2019 Vandenack Weaver LLC
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