PROTECT YOUR BRIGHT IDEAS

Trademarks, Copyrights & Business Law

How far does the long arm of U.S. trademark law reach? At least to Canada

By David Baker, Esq.

Late last month, the U.S. Court of Appeals for the Ninth Circuit determined that U.S. courts have jurisdiction over a trademark lawsuit filed by a U.S. grocery store against a Canadian reseller even though the products at issue were only sold in Canada. The implications of such a decision are significant because it may give U.S. companies the ability to enforce trademark rights against foreign infringers even when those infringers don’t sell their wares within the U.S.

Trader Joe’s operates a popular chain of grocery stores in the U.S. and holds numerous trademarks related to those operations, including the registered trademark “TRADER JOE’S” (USPTO TM Reg. No. 1424176) dating back to 1986. It also sells a broad array of products under its own private label and many of its customers are devoted to them.  But, Trader Joe’s does not currently operate any stores in Canada.  And, to Michael Hallett, this presented an opportunity of sorts.

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Mr. Hallett set up his own store north of the border and called it Pirate Joe’s. He also designed the store to resemble familiar elements of the Trader Joe’s chain and even stocked the shelves with products he purchased at Trader Joe’s in Washington State and then transported to the store in Canada. Apparently, Pirate Joe’s was well-received by Canadian, but not by Trader Joe’s itself.

In 2013, Trader Joe’s sued Hallett in the U.S. District Court for the Western District of Washington for trademark infringement and unfair competition under the Lanham Act. Trader Joe’s alleged that Hallett intentionally misled Canadian customers into thinking Pirate Joe’s was an authorized Trader Joe’s retailer by displaying its trademarks and mimicking its trade dress. Not surprisingly, Hallett denied these allegations and claimed that had had informed customers that he was not an authorized Trader Joe’s retailer and the district court agreed to dismiss the case, largely because of a determination that the Lanham Act did not apply to trademark infringement beyond U.S. borders.

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But, on appeal, the Ninth Circuit reversed the district court’s findings on the federal trademark claims and held that Hallett’s conduct “could harm the reputation of Trader Joe’s American-held marks.” The appellate court reasoned that a defendant’s activities abroad, even if not substantial or significant, could fall within the purview of the Lanham Act.it also found that, under certain circumstances, the Lanham Act applies extraterritorially.  The net effect on Hallett and Trader Joe’s is that the case was remanded back to the district court for further litigation and, eventually, trial.

Why It Matters. The Ninth Circuit’s opinion suggests that infringement abroad, even when the goods at issue are never brought into the U.S., can be the basis for a trademark claim if the infringement otherwise affects a U.S. mark. There are implications for companies doing business internationally that compete with U.S. marks because U.S. mark holders may only need to show the right amount of harm (actual or foreseeable) to broaden their ability to sue foreign companies for trademark infringement.

According to the Ninth Circuit, this is especially true where “(1) the alleged violations create… some effect on American foreign commerce; (2) the effect [is] sufficiently great to present a cognizable injury to the plaintiffs under the Lanham Act; and (3) the interests of and links to American foreign commerce [are] sufficiently strong in relation to those of other nations to justify an assertion of extraterritorial authority.”

Will the Raiders Gamble on Vegas, Baby?

Rumors have been running rampant about the future home of the Oakland Raiders for quite some time, especially while they were still in the running to return to Los Angeles.  But, speculation ahs really stepped up in the last couple of weeks following the team’s registration of various trademarks for the team name and logo combined with the name “Las Vegas.”  The Raiders fans in my office certainly did not receive this news with much joy.  Nevertheless, there does seem to be a certain symmetry to a team like the Raiders (possibly) relocating to the gambling Meccas of the world.

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In an article entitled “Oakland Raiders file three trademark applications suggesting potential Las Vegas relocation” published on the  IPWatchdog blog, Steve Brachmann comments on the possibility of a move and what it might mean for the NFL, for Las Vegas, and for trademarks.

In the National Football League, as with other major sports leagues, relocation of a team is a subject that can give owners leverage during negotiations and strike fear into the hearts of diehard fans. This summer saw the relocation of the St. Louis Rams to their former home in the Los Angeles Coliseum, where the franchise played its football games between 1946 and 1979.

It’s likely that the Rams move is simply the first in a series which could dramatically alter the NFL landscape on the West Coast. The San Diego Chargers have opted to remain in their current city but they do have an agreement in place with the Rams to share a new stadium being built in the Inglewood area once it’s complete. The Oakland Raiders were initially rumored to be returning to Los Angeles along with the Rams, but a series of recent trademark application filings at the U.S. Patent and Trademark Office show that Las Vegas is a much more likely destination for the Raiders.

On August 20th, the Oakland Raiders filed three trademark applications with the USPTO for standard character marks on “Las Vegas Raiders,” suggesting the team is very serious about relocating to Las Vegas in the near future. U.S. Trademark Application No. 87145341 would protect the use of Las Vegas Raiders on football helmets, downloadable software and electronic guides related to football, jewelry, trading cards and other souvenir items. U.S. Trademark Application No. 87145339 would protect the use of Las Vegas Raiders for the conducting of professional football games, football fan club services, sports and entertainment information provided via cable or satellite as well as live shows featuring football competitions. U.S. Trademark Application No. 87145331 would protect the use of Las Vegas Raiders on a variety of clothing items, including jerseys, caps, visors, earmuffs, T-shirts, sweaters, gloves and scarves.

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For the rest of the story, check out Raiders Invade Vegas?

Europe Takes the Lead on Copyright Reform, Sorta

Yesterday, the European Commission released its legislative proposal for changes to copyright law in the European Union copyright law and has been introduced as a Directive on copyright in the Digital Single Market. The intent of the Directive was to bring European copyright law, last updated in 2001, into line with the prevalent use of the Internet and the explosion of information-based technology.  Many hoped the result might set the standard for changes around the world, including an update of the U.S. Digital Millennium Copyright Act.

However, not everyone is pleased by the Directive. Many have complained, among them Internet users, teachers, startups and even consumers, that the Commission has done little more than further entrench the rights of existing copyright owners under the pretense of overhauling the way copyright law is enforced.

As reported in The Wall Street Journal on Wednesday by Sam Schechner and Stu Woo,

The copyright proposals would grant news publishers new online rights to their articles, making it easier for them to negotiate payment when aggregators like Alphabet Inc.’s Google post snippets of their articles online. Other provisions would oblige online-video sites to automatically comb their catalogs for pirated uploads, and to be transparent to authors and performers about how much profit is made from their works to help them negotiate better licensing deals.

Meanwhile, behemoths like Facebook, Microsoft, and Google have taken a very proactive stance by issuing their own recommendations to the Commission in hopes of influencing key provisions of the Directive. More than 25 tech companies urged the Commission not to pass a law that would require payment to newspapers for the use of news snippets on social media platforms.  They also asked that the Commission not weaken protections against lawsuits based on copyright infringement against hosting platforms like YouTube or Instagram.

On the other side of the debate, record labels have lobbied for YouTube and other hosting services to be required to actively scan uploaded material for potentially infringing material and to report these results to content owners, something that is not currently required under U.,S. copyright law. And consumer advocates complained that strengthening copyright laws and enforcement mechanisms would hurt consumers more than other groups and, ultimately, stifle creativity.

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Much of the debate over the Directive has focused on the following provisions,

  • An ancillary copyright that would act as a “link tax” for press publishers to extract fees from search engines for incorporating short snippets of—or even linking to—their content.
  • A copyright exception for education covering digital content that European Union members can ignore if there’s a content licensing option available for the educational materials.
  • A limited exception for text and data mining available only to nonprofit research institutions.
  • A copyright exception for cultural heritage institutions to digitize their collections, but not put them online.
  • A mechanism that would require Internet platforms to proactively monitor user uploaded content in order to identify and remove copyright infringing content.

Why It Matters.  Worldwide copyright law has been the subject of increasing debate in recent years as traditional content sources have shifted their focus to the Internet, a place when infringement is much easier and, many contemn almost inevitable.  It is likely that these latest  proposals will be subject to months or years of debate in the European Union’s parliament and its council of member states before they can be adopted, if they are adopted.  Meanwhile, many are questioning how Great Britain will respond to the Directive given the vote earlier this year to leave the Union.  Much remains to be seen about how copyright law will evolve in Europe and elsewhere..

Stairway to an Appeal, but not to Attorney’s Fees

By David Baker, Esq.

In June, a Los Angeles jury decided that Led Zeppelin’s hit song “Stairway to Heaven” did not infringe the copyright held by Randy Craig Wolfe in the lesser known 1969 Spirit song “Taurus,” but by August the Randy Craig Wolfe Trust (the singer-songwriter is deceased) had filed a notice of appeal.

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Shortly after the trial court victory, Led Zeppelin filed a motion for attorney’s fees, seeking almost $800,000 that the group, including guitarist Jimmy Page and vocalist Robert Plant, had spent to defend itself against the copyright infringement lawsuit. Zeppelin’s music publisher, Warner/Chappell Publishing, joined in the motion for legal fees and expert witness costs, which argued that the underlying lawsuit was frivolous, that it was intended to shake down the rock stars for money and that awarding fees and costs to the defendants would deter future meritless copyright claims.

 

However, Judge R. Gary Klausner didn’t agree. Instead, he ruled that the band’s songwriters, record label and associated companies were not entitled to legal fees and other costs because the copyright lawsuit against them was not frivolous.

In the original case, Michael Skidmore, acting as the trustee for the Wolfe Trust, argued that that Led Zeppelin had stolen the famous opening of “Stairway” from a similar-sounding passage about 45 seconds into “Taurus,” the instrumental from Spirit’s 1968 debut album written by Randy Wolfe, better known by his nickname Randy California. Over the course of the 7-day trial, Led Zeppelin’s lawyers successfully argued that similar sections of the two songs are common musical elements and are not protected under copyright law. And, the jury found that, while Page and Plant did have access to “Taurus” before writing “Stairway,” the songs are not substantially similar, the legal standard required to prove unlawful infringement.

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In a prepared statement following the jury’s decision in their favor, Led Zeppelin said, “We are grateful for the jury’s conscientious service and pleased that it has ruled in our favor, putting to rest questions about the origins of ‘Stairway to Heaven’ and confirming what we have known for 45 years. We appreciate our fans’ support, and look forward to putting this legal matter behind us.”

In the formal notice of appeal, Skidmore asserted, “Please take notice that Plaintiff Michael Skidmore, Trustee for the Randy Craig Wolfe Trust, hereby appeals to the United States Court of Appeals for the Ninth Circuit from the final judgment entered on June 23, 2016, as well as any and all interlocutory rulings, decisions, and orders that gave rise to the judgment and are merged therein.” Specific grounds for the appeal will not become apparent until briefing begins.

Now, it will now be up to the Ninth Circuit to decide if there was sufficient error in the lower court proceeding to require a different outcome. However, the odds don’t favor Skidmore.

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Why It Matters. The losing party in a decision by a trial court in the federal courts normally is entitled to appeal the decision to a federal court of appeals. Although some cases are decided based on written briefs alone, many cases are selected for an “oral argument” before the court. Oral argument in the court of appeals is a structured discussion between the appellate lawyers and the panel of judges focusing on the legal principles in dispute. Each side is given a short time — usually about 15 minutes — to present arguments to the court.

Most appeals are final. The court of appeals decision usually will be the final word in the case, unless it sends the case back to the trial court for additional proceedings, or the parties ask the U.S. Supreme Court to review the case. In some cases the decision may be reviewed en banc, that is, by a larger group of judges (usually all) of the court of appeals for the circuit.

A party who loses in a federal court of appeals, or in the highest court of a state, may file a petition for a “writ of certiorari,” which is a document asking the Supreme Court to review the case. The Supreme Court, however, does not have to grant review. The Court typically will agree to hear a case only when it involves an unusually important legal principle, or when two or more federal appellate courts have interpreted a law differently. There are also a small number of special circumstances in which the Supreme Court is required by law to hear an appeal.

How accurately did Star Trek predict the future?

Today is the 50th anniversary of the debut of the Star Trek television series on CBS and in honor of the milestone numerous articles have been written about the groundbreaking nature of the series and its importance in setting up the mythos that would pervade several follow-on TV series and a slew of successful movies.  Arguably, the original television series, starring William Shatner as Captain James T. Kirk and Leonard Nimoy as the Vulcan Mr. Spock, did much more in the way it predicted an enlightened approach to race relations, international politics, and, of course, technological advances.  But, just exactly how close did the series (and its progeny) come to predicting the future world that we know as 2016?

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Earlier today, Steven Brachmann, writing for the IPWatchdog blog, posted an intriguing article on the subject entitled “50 years of Star Trek inspires innovations in mobile computers, speech recognition and tricorders,”

On September 8th, 1966, the American broadcast network NBC aired the first episode of Star Trek, a science fiction television series conceived by Gene Roddenberry. In the decades which have followed, the original series which only lasted three seasons inspired a growing list of additional series and feature films, making a huge impact on both science fiction and pop culture.

As the 50th anniversary of the first Star Trek episode comes around this September, fans around the world continue to be fascinated by the adventures of the crew of the USS Enterprise and the rest of the Starfleet as they explore space, the final frontier. Early August saw the 15th annual Star Trek Las Vegas convention where stars from the original series and cosplaying fans express their admiration for the show and its futuristic vision of a world where differences are explored and not feared. In Scotland, a free September 10th screening of Star Trek II: The Wrath of Khan will bring many fans to a 600-year old castle in Linlithgow, the Scottish town from which Enterprise crew member Scotty hails. This summer saw the release Star Trek Beyond, the latest addition to the franchise’s canon of movies. In January 2017, Star Trek: Discovery will become the newest TV series in the Star Trek franchise when it becomes available on CBS All Access, so the Star Trek universe will continue to expand in the future.

One of the more interesting aspects of Star Trek is just how much of the show’s science fiction has become technological reality. Earlier this year, we profiled the discovery of spinel, a material which closely resembles the transparent aluminum which played a large role in the 1986 movie Star Trek IV: The Voyage Home. With 50 years of scientific progress haven taken place since the first Star Trek episode aired, many of the technological wonders created for television and movies have either become commonplace or are being seen on the horizon of research and development.

Star Trek PADD Presages the Rise of Mobile Computing

Star Trek: The Next Generation began its seven-year run in 1987, showing the adventures of the USS Enterprise under the direction of Jean-Luc Picard who was portrayed by British actor Patrick Stewart. It was the series which introduced viewers to the Personal Access Display Device (PADD), a handheld computing device used by Starfleet and others. Crew manifests, diagnostic reports and other data could be input through a touch-sensitive screen powered by printed circuit boards and were generally rectangular in shape.

Most people watching The Next Generation or any of the following series in which PADDs were used would very quickly recognize that the devices closely resemble the tablet computers which have been commercialized over the past decade, most notably the iPad developed by consumer tech company Apple Inc. (NASDAQ:AAPL) of Cupertino, CA. Personal digital assistants (PDAs) had already become a popular piece of consumer gadgetry through the 1990s but they lack the touchscreen interfaces which have been realized both by tablet computers as well as smartphones.

Interestingly, budget constraints appear to be a major reason why PADDs incorporated a large touchscreen and mainly utilized software-definable functions. Ars Technica reports that, compared to the Star Trek movies, the television series did not have large art budgets. The use of a large screen without control knobs and on which colored sheets could be displayed as the computer interface was a cheap option for creating a believable mobile computing platform.

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The Replicator: An Early Vision of 3D Printing

The Next Generation also introduced Star Trek fans to the replicator, a piece of technology which could produce food for consumption, mechanical parts for repairs and just about any other object imaginable, except for fatal poisons. Replicators used transporter technology which improved upon the performance of food synthesizers from the original series by dematerializing matter to get rid of waste and then rematerializing matter in its requested form.

3D printers may be a step behind replicators in terms of transportation technology but we do live in a world in which programmable printing devices can be sent instructions to create objects from toys to electronic components to food. This February, scientists at Wake Forest University announced that they had created a transplantable organ which was 3D printed. Edible printing filaments are used by the Foodini, developed by Natural Machines of Barcelona, Spain, which connects to cloud-based recipe sites so users can select their dinner.

The waste reductions realized by 3D printing is also having an impact on the manufacturing sector, where the technology is known as additive manufacturing. American automaker Ford Motors (NYSE:F) and Chicago-based Boeing Company (NYSE:BA) were recently announced as partners with 3D printing developer Stratasys (NASDAQ:SSYS) of Eden Prairie, MI, and will incorporate Stratasys’s 3D printing platforms into their manufacturing processes. Global spending on 3D printing tech is expected to reach $26.7 billion in 2019 according to the International Data Corporation.

Real-World Tricorders Provide Handheld Data Analysis Tools

Tricorders, handheld devices which help Starfleet crew members detect atmospheric and biological data in unknown locales, appeared as early as the original Star Trek series in the 1960s. Star Trek tricorders are multipurpose and some versions have been finely tuned to detect diseases in the human body or to aid in starship engineering. Although tricorders may have different purposes, every tricorder achieves three functions: sensing conditions, computing the data and then recording that data.

The first manmade device marketed as a tricorder was the TR-107 Mark 1, a device first released in 1996 by the now-defunct Vital Technologies Corporation. It was capable of measuring electromagnetic fields and offered other components including a clock, a timer, a thermometer and a barometer. Outside of this, there have been some limited developments on the road towards a true functioning tricorder. Late last year, media outlets were reporting on research out of Stanford University which could result in a medical tricorder which can detect tumors within a human body from up to a foot away. Verily, the life sciences arm of tech conglomerate Alphabet Inc. (NASDAQ:GOOGL), has also announced its work on a cancer-detecting tricorder, although development of that project seems to have stalled in recent months.

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For the rest of the story, check out 50 years of Star Trek tech

 

 

of the series to

Grand Theft Auto – Now with even more Lindsay Lohan! Not.

By David Baker, Esq.

Last week, a New York state appeals court dismissed a lawsuit by actress Lindsay Lohan that sought monetary damages from the producers of the popular video game Grand Theft Auto because, Ms. Lohan claimed, they had used a likeness of her without her permission.

A panel of judges in the Manhattan Appellate Division ruled in favor of Take-Two Interactive Software Inc. on the grounds that “This video game’s unique story, characters, dialogue, and environment, combined with the player’s ability to choose how to proceed in the game, render it a work of fiction and satire.” Further, the video game doesn’t “fall under the statutory definition of ‘advertising’ or ‘trade.’ And, because the judges determined that the game didn’t use her actual “name, portrait or picture” it didn’t violate her right to privacy. As such, the court said the depictions deserved First Amendment protection.

In the lawsuit, Ms. Lohan had argued that Take-Two modeled her physical features, including clothing, shoulder-length blonde hair and voice in the fifth installment of Grand Theft Auto. She had claimed that the game violated her privacy under New York the state civil rights law by “misappropriating” her likenesses, language, attire and life stories for commercial purposes without her permission or compensating her.

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GTA, as it is widely known amongst fans, is actually a series of video games that take place in fictionalized American cities where players act as car-stealing criminals and compete to move up within a criminal, Mob-like organization. Lohan had claimed that a character in GTA, Lacey Jonas, looked and dressed just like she had in “Mean Girls,” fled the paparazzi like Lohan and wore a line of accessories like the ones Lohan had promoted just two years before the game was released.

Why It Matters.  Ms. Lohan’s lawsuit against Take-Two was based on a claim that her “right of publicity” had been infringed by the images in the game depicting someone with her likeness and that she had been portrayed without permission or compensation. She sued in New York because the right of publicity is a matter of state law under the New York Civil Rights Law Sections 50 and 51.  [California has a similar law which is codified as California Civil Code Section 3344.]

The right of publicity is the right to control the commercial exploitation of a person’s name, image or persona. Usually, it is associated with celebrities because the name or image of a famous person often is used to sell products or services. The right only extends to commercial exploitation and uses for purposes of news, information, or public interest are not a violation of the right of publicity. However, the right doesn’t just protect celebrities.  Everyone has a right to privacy and, therefore, a right of publicity.

Go directly to Jail. Do not pass Go. Do not collect $200.

In the post Alice v. CLS Bank world, patent attorneys are having to wrestle with appellate courts that seem less and less able to understand the intricacies of patent law in the U.S. let alone the serious implications their uninformed decisions will likely have on the future of invention itself and the business side thereof. Never one to shy away from having an opinion and sharing it with anyone willing to listen, renowned patent attorney Gene Quinn recently opined on the implications of the Alice decision on  the patentability of the popular board game Monopoly.

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The application of the Supreme Court’s decision in Alice v. CLS Bank by the Federal Circuit has been disappointing, to say the least. There have been some rays of hope for innovators with decisions in DDR Holdings, Enfish and BASCOM, but these bright spots shine so radiantly because they are scattered in a sea of despair. Whether the Supreme Court intended to kill software patents or not, the way the Federal Circuit, the Patent Trial and Appeal Board (PTAB) and many patent examiners have applied Alice is to render much software patent ineligible in the United States.

One particularly disconcerting and largely unpredictable aspect of Alice is how it has been used to render games patent ineligible.

The United States Patent and Trademark Office (USPTO) has long issued patents for new games using conventional equipment (e.g., balls, clubs, cards, etc.) where the invention lies in the steps of the game. For example, in 1935 the USPTO issued U.S. Patent No. 2,026,082 on Monopoly®, and the USPTO has had gaming art units and classifications for decades. For example, see Art Units 3711 and 3714, and classes 273, 463 and 473.

Given the way Alice is being interpreted by both patent examiners and some of the judges on the Federal Circuit, one has to ask whether games are patent eligible any more. Could Monopoly® be patented if it were newly invented in 2016? According to at least some judges on the Federal Circuit, rules of game play are abstract ideas. But how can something that is defined with enough specificity to allow average citizens to enjoy countless hours of enjoyment be abstract? What exactly is abstract about a game, or the rules of a game? Absolutely nothing, and that this isn’t self evident speaks volumes of just how far we have fallen down the rabbit hole in the pursuit of whatever it is the Courts are presently chasing.

Monopoly® is not the only successfully patented game, although it quite possibly is the most famous patented game. Still, in the field of card games, the USPTO has long issued patents for entirely new games, improvements to existing games, and new betting options and/or payouts for existing games, all using conventional playing cards. See, e.g., U.S. Patent No. 5,823,873 (improved poker game using conventional cards commercialized as Triple Play Draw Poker®); U.S. Patent No. 5,154,429 (method of modified blackjack using conventional cards). There have also been many success stories of inventors commercializing or licensing patented new games.

In re Smith

Notwithstanding, earlier this year, in March 2016, the Federal Circuit issued a curious and highly questionable decision in In re Smith, which incorrectly expands the “abstract idea” test of Alice well beyond where the test was ever envisioned going. The panel decision extended the Alice reach to claims directed to performing a novel and non-obvious underlying practice that did not previously exist (steps of a new game) with known manufactures (cards).

The ruling in In re Smith is wrong because a process that did not previously exist simply cannot qualify as an “abstract idea” under step one of the Alice test. Furthermore, although we have not been told the definition of what it means to be “abstract” or for an idea to be an “abstract idea,” whatever those terms mean the logically cannot said to apply to a novel and non-obvious process. Indeed, a process that has never before existed, and which is thoroughly described, must logically transform an otherwise “abstract idea” into eligible subject matter under step two of the Alice test.

Under the statute, new processes that use conventional equipment or materials are clearly patent eligible subject matter. See 35 U.S.C. § 100(b), which says that patent eligible processes include “a new use of a known process, machine, manufacture, composition of matter, or material.” (emphasis added). The Supreme Court has never abrogated § 100(b), so it should be applied rather than ignored as if it doesn’t exist.

With respect to the game at issue in In re Smith, it was undisputed that the claimed combination of game steps is new, as the USPTO found that the Applicant overcame all §102 and §103 rejections based on the recited combination of such steps.

To fail the first step of the Alice test, a claim needs to tie up an “abstract idea,” which for purposes of this test was defined to be a preexisting practice that serves as a fundamental “building block of human ingenuity,” such as a “longstanding” and “prevalent” economic practice. Alice, 134 S. Ct. at 2354, 2356. In conflict with the statute and the Supreme Court’s reasoning, the Federal Circuit panel in In re Smith applied the Alice test to claims that indisputably recite a new set of game steps that was not preexisting, let alone “fundamental.” The inventiveness of the claims was based on the previously unknown combination of game steps, not the cards.

Left uncorrected, the panel’s decision will be applied by patent examiners, the Patent Trial and Appeal Board (PTAB), and district courts to create an improper categorical ban against patents claiming new games or similar inventive practices using conventional equipment. Such a categorical ban is contrary to the statute, controlling precedent and the USPTO’s own long history of granting patents on inventive practices using known equipment, including numerous game patents.

For the rest of the story, check out “Get out of jail” free card.

 

Happy Labor Day!

 

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“My father taught me to work; he did not teach me to love it.”

  • Abraham Lincoln (1809-1865)

Are Texas A&M’s IP lawyers the true “12th Man”?

By David Baker, Esq.

In their NCAA season opener this Saturday, the Texas A&M Aggies will battle the UCLA Bruins. And about a week later, in their NFL opener, the Seattle Seahawks will take on the Miami Dolphins.  Being football, both games will have a lot in common, including the presence of the all-important 12th Man, a shorthand way of referring to rabid fans who support their favorite team through thick and thin.  For the Aggies, the 12th Man will be present with the protection of a federal trademark.  And for the Seahawks, their 12th Man will be there as an official trademark licensee.  Confused?

The Seahawks are allowed to use the 12th Man trademark because of an ongoing licensing deal with Texas A&M.  Under the latest 5-year license, the Seahawks agreed to pay a licensing fee of $18,000 a year to the Aggies for using the mark but only in the Pacific Northwest and to pay an additional $10,000 a year to the support enforcement of the mark against other infringers.

12th Man

Over the years, the phrase “12th Man” has been used by a number of football teams as a way to honor their fans, but Texas A&M was the first to apply for and get federal registration in 1990 (USPTO TM Reg. No. 1612053).  The original application cited consistent usage of the trademark in association with all things fandom dating all the way back to 1965.  Since then, anyone using the trademark has had to contend with the Aggies legal team.

The Seahawks have used “12th Man” for quite a while themselves, but the team isn’t nearly as long-lived as the Aggies so when the Aggies demanded the Seahawks stop using it back in the early 2,000’s, the Seahawks’ only viable alternative, if they wanted to continue using it, was to obtain a license from Texas A&M.  Under earlier licensing deals, which were first signed in 2006 and again in 2011, the Seahawks agreed not to use “12th Man” on their Ring of Honor, to avoid selling “12th Man” merchandise, and not to use it on any of the team’s social media names.

Anyone who has visited Seattle in recent years has probably noticed that the Seahawks’ use of the “12th Man” is greatly reduced in favor of “12” and “12s.” Of course, Seattle has learned from tis expensive lesson with the Aggies and has filed 52 applications for registration of trademarks using “12” and “12s.” At the moment, the Seahawks already own federal registrations for “12,” “The 12s,” “We Are 12s” in relation to goods and services related to professional football.

Late last year, the Indianapolis Colts made the same mistake as the Seahawks by using “12th Man” without permission and they were promptly sued by Texas A&M.  Rather than negotiate an expensive licensing deal, the Colts simply agreed to stop using the mark and the case was dismissed.

Why It Matters.  Essentially, a trademark license is an agreement in which a trademark owner (the “licensor”) permits someone else (“the “licensee”) to use the licensor’s trademark in connection with specific products or services.  The trademark does not have to be registered in order to be licensed nor does it have to be in writing, but it is a good idea that all trademark licensing agreements be in writing and that they be signed by both the licensor and licensee.

Every trademark license agreement is different, but all license agreements must include certain provisions in order to be enforceable, including the following:

    • Names of the licensor and licensee;
    • Specific identification of the subject trademark or marks;
    • Description of the goods and/or services which may be sold under the mark;
    • Geographic limitations within which the mark may be used; and
    • Quality control provisions establishing well-defined standards as to the nature and quality of the licensed goods and/or services being sold.

 

Trademark license agreement lacking quality control provisions are often known as “naked licenses” and very likely unenforceable by either party to the agreement.

When the vultures begin to circle…..

They say opportunity is the mother of invention, but when it comes to big large firms, it usually means a smaller firm has been struggling.  This seems to be the case with many small and mid-size IP firms, some of which have been mislabeled “boutique” merely because of their size, as much larger firms see the chance to gobble up profitable IP practices.

Earlier today, The Wall Street Journal reported on the demise of well-respected, but mid-size, Kenyon & Kenyon, as it loses its most profitable partners and clients to a much larger rival in Sara Randazzo’s article entitled, “Intellectual Property – Law Firm Kenyon & Kenyon to Close.”

A storied but rapidly-shrinking intellectual-property-law boutique, Kenyon & Kenyon

LLP, is moving its practice to full-service Texas law firm Andrews Kurth LLP, marking

the latest closure from a shrinking national roster of intellectual-property-law firms.

The deal, to be finalized in the coming days, comes after months of defections from New

York-based Kenyon, which counts companies including Mattel Inc., Sony Corp. and

Volkswagen AG as clients. The firm employed more than 200 lawyers a decade ago but is

down to 55 today in New York, Washington, D.C., and Palo Alto, Calif. All are joining

Andrews Kurth, a 350-lawyer firm that focuses on the energy, finance and technology

sectors.

Founded in 1879, Kenyon is the latest in a string of old-line intellectual-property-law

firms to close over the past several years. Like Kenyon, many have been absorbed into

full-service firms, largely a reflection of the increasing importance companies now place

on the protection of patents, trademarks and copyrights.

“We always invented things, but high-tech turns on intellectual property,” said legal

consultant Aric Press. Starting around the late 1990s, he said, “patents became litigated

over with no holds barred and no budgets,” turning intellectual property into a lucrative

and coveted practice for larger firms.

Intellectual-property lawyers—both litigators and those who process patent

applications—typically have technical backgrounds, with many holding advanced degrees

in engineering or the sciences. That has made poaching existing intellectual-property

specialists or scooping up entire boutiques even more attractive to larger firms trying to

get into the practice.

In 2005, for instance, Ropes & Gray LLP acquired then-prominent intellectual-property

firm Fish & Neave. By then, two other stalwarts in the field, New York’s Pennie &

Edmonds and Los Angeles-based Lyon & Lyon LLP, had both gone bust, with lawyers

decamping to other firms. Several smaller intellectual-property firms have been acquired

or dissolved more recently, including Morgan & Finnegan LLP, whose lawyers joined

Locke Lord LLP in 2009.

Some intellectual-property firms have been able to stay independent by growing larger

themselves, like 370-lawyer Fish & Richardson, 280-lawyer Knobbe, Martens, Olson &

Bear LLP and Finnegan, Henderson, Farabow, Garrett & Dunner LLP, with 350

professionals.

For the rest of the story, check out Kenyon & Kenyon Shuts Down

 

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