In a recent precedential decision, In re Stanley Brothers Social Enterprises, LLC, the Trademark Trial & Appeal Board affirmed the refusal for the mark "CW" for use on “hemp oil extracts sold as an integral component of dietary and nutritional supplements” in International Class 5, finding such a sale of hemp products for dietary and nutritional supplements is unlawful in U.S. commerce. 

Trademark rights are built on lawful use in United States commerce. While some hemp-derived products may be legally sold in U.S. commerce, products that are to be ingested or swallowed by humans or animals, to be deemed "lawful", must be first evaluated by the Food & Drug Administration before releasing the products to the public. Here, though the Applicant has used the mark “CW” in connection with selling hemp-derived oil as dietary and nutritional supplements since 2015, because the supplements are swallowed by consumers and the products have not been approved by the FDA, this use was deemed “unlawful” as a per se violation of the Food, Drug, & Cosmetics Act, and therefore, not registerable as a federal trademark.

However, this decision does not bar registration of all hemp-based products. Non-ingested hemp-based products that are categorized in other International Classes, such as smokable loose hemp flower in Class 34 or topical hemp-based pain cream in Class 3, may be registerable with the U.S. Patent & Trademark Office, where the product has no more than .3% of THC on a dry weight basis. Indeed, the USPTO has issued several registrations for marks for use on those types of products.

This is an important decision in the evolving area of law regarding hemp-based and cbd products. Though the Applicant had been using the mark “CW” since 2015 as part of a dietary and nutritional supplement, registration for this mark was not permitted as the use is still considered not lawful under current federal statutes. This suggests that even for a business that has sold ingestible hemp-based products for many years in connection with a mark, at this point, an application to register that mark with respect to those products, such as dietary and nutritional supplements, will likely be refused. However, if the same business uses the mark in connection with lawful products as well, such as smokable loose hemp flower or hemp-based pain cream, the business may still obtain a federal trademark registration with respect to those products. 

In an 8-1 opinion penned by Justice Ruth Bader Ginsburg, the United States Supreme Court rules that the mark “BOOKING.COM” is not generic and is entitled to federal trademark registration, in light of evidence that consumers perceive the mark as a source-identifier. Though the mark “BOOKING.COM” is composed of the generic combination of simply “booking” and “.com” for use in connection with providing online hotel reservation services, the Supreme Court ruled in United States Trademark Office Et Al. v. Booking.Com B.V. that because the evidence showed that consumers do not perceive the term “BOOKING.COM” as generic, it is therefore registerable.

A trademark is any word, slogan, or symbol which is used in commerce with goods and services to indicate their source of origin and to distinguish them from the goods and services of others. Marks are considered by strength and distinctiveness based on a scale from not distinctive at all, i.e., generic, to highly distinctive, such as an arbitrary mark. Under the federal trademark registration system established by the Lanham Act, the U.S. Patent & Trademark Office (“USPTO”) may not issue a federal trademark registration for weak, non-source identifiying marks, such as those that are deemed to be "generic." Previously, applications for marks such as "LAWYERS.COM", "HOTELS.COM", ""MATTRESS.COM" were refused federal trademark registration on the basis that they were generic.

More distinctive than a generic mark is a mark that is considered "descriptive," which also may be refused registration for not serving as a source-identifier. For weaker marks such as these, there is still a possibility to overcome the USPTO's refusal and reach federal trademark registration upon a showing that the mark has acquired distinctiveness or reached “secondary meaning.” To establish acquired distinctiveness or secondary meaning, an Applicant my provide evidence that demonstrates that consumers are so familiar with this mark, that they perceive it to indicate the provider of the goods or services, and not a description thereof. If the applicant proves that a mark has acquired distinctiveness in the eyes of the consumers to the satisfaction of the USPTO’s Examining Attorney, then an application for a weaker mark may still be approved for federal registration on the Principal Register. 

While the parties agreed that “booking” by itself would be a generic and an unregisterable mark, Booking.com contended that the combination of “booking” and “.com”, along with the evidence of consumer perception, edged the mark over to being descriptive, source-identifying, and therefore, registerable. The USPTO, on the other hand, took the position that where a generic term, such as “booking”, is combined with a generic top-level domain like “.com”, the resulting combination is generic and therefore unregisterable. The USPTO went so far as to urge the Supreme Court to adopt the position that every “generic.com” term is generic, absent an exceptional circumstance of being a play on words, such as “www.tennis.net.”

When the application for the “BOOKING.COM” mark was refused by the USPTO, Booking.com sought review in the U. S. District Court for the Eastern District of Virginia, where it introduced new additional evidence as to the perception consumers have upon encountering the mark. This evidence included a consumer survey where respondents strongly the mark “BOOKING.COM” with the online hotel services rendered by Booking.com, rather than a general type of genus of services. In concluding that the mark was not generic, the District Court found that the combination of “booking” and “.com”, along with the extensive evidence provided, established that the mark should be registerable as a federal trademark. The United States Fourth Circuit Court of Appeals affirmed the lower court's decision, finding no error in the District Court’s assessment of how consumers perceive the mark, and also rejecting the USPTO’s rule that combining a generic term with a generic top-level domain such as “.com” makes the mark generic.

The Supreme Court affirmed the Fourth Circuit Court of Appeals, and held: “A term styled 'generic.com' is a generic name for a class of goods or services only if the term has that meaning to consumers.” While rejecting the ruled proffered by the USPTO that all “generic.com” terms are generic terms, at the same time, the Highest Court clearly cautioned that the holding does not make a blanket rule in the reverse: “[W]e do not embrace a rule automatically classifying such terms as nongeneric.” Indeed, the opinion explains that the test for whether any given “generic.com” term is generic, “depends on whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class." Here, after considering consumer perception, the Supreme Court found the mark "BOOKING.COM" not to be generic but source-identifying, and therefore, eligible for federal trademark registration.

In early 2018, Stephanie Sinclair, a professional photographer brought a copyright suit against Mashable, Inc. and its parent company, Ziff Davis, LLC. Stephanie alleged the defendants infringed on her copyright regarding one of her photographs at least because Stephanie posted said photograph to her Instagram profile wherein Mashable then displayed the photograph on one of their articles.

In discovery, Mashable created an article, and displayed Stephanie’s photograph as part of the article by virtue of embedding the photograph from Stephanie’s Instagram. It is critical to note, as opposed to directly downloading and posting and/or copying and pasting Stephanie’s photograph to Mashable’s article (which may otherwise be knowing as uploading), Mashable embedded her photograph to the article via an Instagram interface.

From the standpoint of this case, embedding may be defined as a simple process wherein a webpage author can display an image, video and/or other media source to the author’s webpage by virtue of directly linking the source of such media. The process of embedding technically allows for the author’s website to display such media without the author’s website needing to “host,” own, or in some cases, have a license for the media.

An example of embedded media may be found here. Note, that upon hovering over or selecting embedded media, a user may be directed to Instagram’s webpage or have Instagram’s information displayed above such media.

The case (which can be found here) was ultimately dismissed in full albeit many arguments made by Stephanie. The ruling came generally from the following discovery: (1) Instagram’s terms and conditions state content posted to Instagram grants Instagram (and subsequently Instagram’s embedding interface) a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to such content, (2) Stephanie agreed the above portion of Instagram’s terms and condition and (3) Mashable properly utilized Instagram’s embedding interface to display Stephanie’s photograph. Thus, a generalized conclusion could be made that Mashable was not in fact infringing on Stephanie’s copyright as Mashable was utilizing a photo licensed by Instagram and interface owned by Instagram.

Now recently, a similar suit was filed by Elliot McGuken, a photographer who took a photo of a lake and posted the photo to his Instagram page. He found himself in a near identical situation to Stephanie wherein the day after Elliot posted the photograph, he found the photo displayed on a Newsweek LLC, article. The suit outlines the fact that Elliot is suing for copyright infringement and the fact that Newsweek properly embedded Elliot’s photograph from Instagram.

In contrast to Stephanie’s case, Elliot’s case was not dismissed in full and Elliot may have an opportunity to legally claim prayer for relief in form of damages, which may be monetary. Reportedly, an Instagram representative has made comment stating that the use of their embedding interface does not directly extend Instagram’s license of content to those seeking to utilize the interface, which creates a sharp contrast for the cases as described above.

More information is sure to emerge on not only the status of Elliot McGuken vs. Newsweek, LLC, but also the use of Instagram’s embedding interface and possibly the copyright implications that may arise from its use.

Instagram is the one of the largest photograph and video-sharing social media platforms in the world. As Instagram releases more information on the subject, it is sure to be a topic for online news, blog or media outlets to pay close attention to in order to ensure compliance with copyright laws, and a subject for photographers who use Instagram to follow to ensure their rights are protected.

Nearly twenty years of trademark litigation between Marcel Fashions Group and Lucky Brand Dungarees resulted in a Supreme Court decision, which ruled that the principle of claim preclusion does not bar Lucky Brand’s reliance on a new defense, particularly given the evolving facts and issues that can arise in a trademark dispute. In the case under review, Marcel alleged that Lucky Brand infringed on Marcel’s “Get Lucky” mark through its use of “Lucky” in violation of a 2005 injunction (which followed the settlement of a 2003 action between the parties, with certain claims being released). The Supreme Court ruled that Lucky Brand was not precluded from asserting a defense based on the release in the 2003 agreement even though it had not pursued that defense in a prior action, because the defense can only be barred if the causes of action are the same, or “share a common nucleus of operative facts.” Finding that the prior action did not share a common nucleus of operative fact, the Supreme Court reversed the decision below and ruled that Lucky Brand could rely on the defense in the most recent action.

This case marks the third round of litigation between the parties. Marcel initiated the first round in 2001 with an allegation that Lucky Brand infringed on its “Get Lucky” trademark. A settlement was reached in 2003, which stipulated that Lucky Brand would refrain from using “Get Lucky”. In 2005, Lucky Brand initiated the second round, alleging that Marcel copied its designs and logos. Marcel filed multiple counterclaims, almost all relying on Lucky Brand’s continued use of the “Get Lucky” mark in violation of the 2003 agreement. Lucky Brand moved to dismiss Marcel’s counterclaims on the theory that they were barred by a release provision in the 2003 agreement; this was the only time Lucky Brand invoked the release defense prior to the current case. The 2005 action concluded with the district court permanently enjoining Lucky Brand’s use of “Get Lucky.” However, as pointed out by Justice Sotomayor in the Supreme Court’s decision, the injunction did not mention Lucky Brand’s use of other marks or phrases containing the word “Lucky.”

Marcel filed the most recent case in 2011, alleging that Lucky Brand violated the 2005 injunction due to its use of the “Lucky” trademark. The central issue became whether Lucky Brand’s failure to litigate the release defense in the 2005 suit barred it from invoking the release defense in the most recent action. The Second Circuit held that Lucky Brand was unable to assert the defense due to the principle of claim preclusion, which prevents parties from raising issues that could have been raised and decided in a prior action–even if they were not actually litigated. However, the Supreme Court reversed on May 14, 2020, finding that a defense can be barred only if the causes of action are the same, or “share a common nucleus of operative facts.”

The Supreme Court ruled that the 2005 and 2011 cases do not share a common nucleus of operative fact because, while the 2005 action depended on Lucky Brand’s use of “Get Lucky,” the case under review did not. Rather, the 2011 action alleged only that Lucky Brand infringed by using their own marks containing the word “Lucky.” The Court explained that claim preclusion generally does not bar claims predicated on events that postdate the filing of the initial complaint, and highlighted that this principle “takes on particular force in the trademark context, where the enforceability of a mark and likelihood of confusion between marks often turns on extrinsic facts that change over time.” Because the two suits involved different marks, legal theories, conduct, and time frames, the Court found that they do not share a common nucleus of operative fact. As such, the Court held that, under the facts of this case, claim preclusion would not bar Lucky Brand from relying on the release defense in the most recent action.

In Buddy Webster v. Dean Guitars, the 11th Circuit held that unlike an ordinary copyright infringement claim, which accrues for each infringing act, a claim concerning ownership accrues only once. Under the Copyright Act, a civil copyright action must be brought within three years after the claim accrues. 17 U.S.C. § 507.

This case centered on the late-guitarist Darrell Abbott of the famous heavy-metal band Pantera, and importantly, the lightning storm graphic on his "Dean from Hell" ("DHF") guitar. Buddy Webster, a successful guitar maker, designed the DHF guitar and commissioned someone to paint the lightning storm graphic on the guitar, which was subsequently given to Abbot in 1987.

In 2004, the late Abbott entered into an endorsement-type contract with Dean Guitars, which started reproducing and selling reissues of the DHF guitar with the lightning storm graphic without Webster's consent. In 2007, Abbott's estate claimed sole ownership of the lightning storm graphic. After over a decade of displeasure, Webster filed suit in 2017, alleging copyright infringement based on Dean's sale of the DHF reissues.

The district court concluded that Webster's copyright claim was time-barred because the claim accrued more than three years before Webster filed suit, noting that the "gravamen" of Webster's claim of copyright infringement was ownership. Webster’s main argument was that he owns the lightning storm graphic and that Dean Guitars reproduced the graphic without his consent. Because the parties agreed that Dean reproduced the graphic on the Dean reissue guitar models, the essence of the dispute hinged on ownership.

On appeal, the 11th Circuit noted two different standards for the accrual of copyright ownership claims: (1) the First, Second, Fifth, and Seventh Circuits have held that copyright ownerships claims accrue when the plaintiff learns, or should as a reasonable person have learned, that the defendant was violating his rights; (2) the Sixth and Ninth Circuits have held that copyright ownership claims accrue when there is a plain and express repudiation of co-ownership by one party as against the other.

The 11th Circuit reasoned that Webster's copyright ownership claim was time-barred under either standard. First, Webster had reason to know his alleged ownership rights were being violated as early as 2004, when he first learned that Dean Guitars was reproducing the DHF reissues. Second, Webster learned in 2007 that Abbott's estate claimed sole ownership of the lightning storm graphic, an express repudiation of co-ownership. Therefore, Webster's claim accrued in 2007 at the latest, and the three-year limitation period expired years prior to his copyright action in 2017.

The 11th Circuit affirmed the district court's decision, and for the first time, it held that unlike ordinary copyright infringement claims, which accrue for each infringing act, a claim concerning mainly ownership accrues only once. Furthermore, any copyright infringement claims flowing from a time-barred ownership claim, were also barred.

For further information, the Court's opinion can be found below:

http://media.ca11.uscourts.gov/opinions/pub/files/201910013.pdf

It was a historic day for the Supreme Court of the United States, as the high court conducted oral arguments that were broadcasted in a live audio stream for the first time in its history. The format for the argument was also unique, with the Justices asking questions in order of seniority.

The first case to be argued was a trademark case, involving an appeal of the U.S. Patent & Trademark Office’s refusal to register BOOKING.COM, based on the PTO’s position that it is a generic term for hotel reservation services and other related services, such that is incapable of functioning as a trademark. The Applicant appealed the PTO’s decision to a federal court, which ruled in its favor, finding BOOKING.COM to be a registrable (and thus enforceable) trademark. The decision was appealed to the U.S. Court of Appeals for the Fourth Circuit, which affirmed the district court’s ruling and held that it did not commit error when it found that the PTO “failed to satisfy its burden of proving that the relevant public understood BOOKING.COM, taken as a whole, to refer to general online hotel reservation services rather than Booking.com the company,” i.e., as a source-identifying trademark.

The audio of the Supreme Court argument can be found here:  https://cs.pn/2SI6DJE. The decision on appeal, from the U.S. Court of Appeals for the Fourth Circuit, can be found here:  http://www.ca4.uscourts.gov/Opinions/172458.P.pdf.

*** APRIL 2020 UPDATE ***

In an unanimous opinion dispelling a split approach among Circuits, the Supreme Court ruled that a trademark infringement plaintiff is not required to demonstrate that the defendant’s trademark infringement activity was willful in order to obtain an award of the defendant’s profits. The question revolved around the language of Section 43(a), 15 U.S.C. § 1125(a), which states:

 When . . . a violation under section 1125(a) of this title, or a willful violation under section 1125(c) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled . . . subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.

 The Circuits have been split as to how to apply the “principles of equity,” and what role a “willful violation” should play. In order to reward profits, the Second, Eighth, Ninth, Tenth, D.C., and Federal Circuit required a finding that the Defendant acted willfully in the infringing activity, whereas the Third, Fourth, Fifth, Sixth, Seventh, and Eleventh Circuits found that the infringer’s intent was merely one of the many factors in the weighing of the equities. The First Circuit took an alternative approach by requiring willfulness only when the parties are not competitors.

 Justice Gorsuch, who authored the Supreme Court’s deciding opinion, noted that an innocent infringer and an intentional one “stand in very different shoes.” While the Justices “do not doubt that a trademark defendant’s mental state is a highly consideration in determining whether an award of profits is appropriate,” this acknowledgement that willfulness of a defendant plays an important role in the determination is a “far cry” from the “inflexible precondition” that willfulness be proven to award profits. As such, an establishment of willful infringement is not required to obtain an award of an infringer’s profits.

 

As an update to a blog entry on March 31, the U.S. Patent and Trademark Office (“USPTO”) has taken additional actions in response to the COVID-19 health crisis.  Pursuant to temporary authority provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the USPTO has extended various filing and fee payment deadlines for patent and trademark cases (due dates between March 27 and May 31) to June 1, 2020.  This is in addition to the prior extension the USPTO had announced on March 31, 2020.  Andrei Iancu, Under Secretary of Commerce for Intellectual Property and Director of the USPTO, said, “Innovation and entrepreneurship will play a key role in our fight against this pandemic, and in the upcoming recovery of our country…. Accordingly, the USPTO continues to assess measures to support the work of inventors and entrepreneurs during this crisis and beyond.”  For more information about particular deadlines, feel free to speak to one of the Firm’s attorneys.

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