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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Pre-registration of a Copyrightable Work

An often overlooked method to protect copyrightable works is pre-registration. This method will likely become a little more prominent because, earlier this year, the United States Supreme Court determined in Fourth Estate Public Benefit Corp. v. Wall-Street.com, 585 U.S. ___ (2019) that a copyright owner must wait to bring suit for copyright infringement until their works have been registered. Previously, in the view of certain lower courts, the copyright owner simply had to apply for registration. This decision increased the burden on copyright owners to bring a suit for infringement, but the Supreme Court noted several reasons for its decision, including pre-registration.

Pre-registration is a tool used to protect unpublished works that are in the final stages before commercial distribution, making them particular susceptible to copyright infringement. Instead of following the full registration process that will take over half a year, the copyright owner would submit the work to the United States Copyright Office and, after a limited review, will receive pre-registration. Under Section 408(f) of the Copyright Act, a work that has been pre-registered provides the copyright owner an opportunity to immediately bring a suit for copyright infringement.

Although this particular method of protection might have limited application, it is an important tool to ensure that owners of particularly vulnerable copyrightable works are able to bring suit immediately against those infringing on their works. Otherwise, the copyright owner will have to wait eight or nine months to receive actual registration from the copyright office before they can bring a suit for copyright infringement, which would likely damage the value of the underlying intellectual property. As always, the attorneys at Vandenack Weaver are available to assist with protecting your intellectual property.

VW Contributor: Alex Rainville
© 2019 Vandenack Weaver LLC
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Copyright Infringement: Will Congress Make it Easier to Obtain a Remedy?

On October 22, 2019, the United States House of Representatives passed H.R. 2426, The Copyright Alternative in Small-Claims Enforcement Act of 2019. The intent of the legislation is to make it easier for copyright owners to seek enforcement of their rights in situations where the overall damages to the copyright owner are minimal. Essentially, the Copyright Office would create a Copyright Claims Board that would adjudicate infringement claims with damages under $30,000.

The rationale behind the legislation is that cost is a significant impediment to a copyright holder bringing a claim against someone infringing on their work. To bring a claim, as recently determined by the United States Supreme Court, the underlying work must be registered with the United States Copyright Office, which takes time and includes certain expenses. Once registered, the copyright owner can only seek a remedy in federal court, since that is the exclusive jurisdiction for a copyright infringement claim. This process is expensive and, although attorney’s fees can be recovered pursuant to section 505 of the Copyright Act, the United States Supreme Court has also recently limited the scope of recovery. The end result is that many copyright owners are unable to seek a remedy.

This legislation passed with near unanimous support in the United States House of Representatives and moves to the United States Senate for consideration. Should this legislation ultimately become law, it will likely have a significant impact on how copyright owners protect their intellectual property.

VW Contributor: Alex B. Rainville
© 2019 Vandenack Weaver LLC
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