IP Blog

Intellectual Property Blog

Appellate Reversals of §2(d) Refusals by USPTO Trademark Examining Attorneys: 15%

Recent statistics from the U.S. Patent and Trademark Office (“USPTO”) for 2023 indicate an 85% affirmance rate of §2(d) refusals of  trademark applications on appeal to the Trademark Trial and Appeal Board (“TTAB”).  This in generally in line with historic rates.

A trademark application is reviewed by a USPTO Trademark Examining Attorney on a variety of grounds, but most notably on whether there is a conflict with a prior-registered mark.  A §2(d) refusal – so named because of the applicable section of the Lanham Act – is a determination that the applied-for mark may not be registered because it “so resembles a mark [previously] registered” that it is “likely to cause confusion, or to cause mistake, or to deceive.”  That decision, however, is based on many subjective factors, including the similarity of the marks in appearance, sound, connotation, and commercial impression, the similarity (or relatedness) of the goods or services under the marks, the similarity of the channels of trade, the strength of the prior-registered mark, and many others.  If refused, a trademark applicant may appeal to the TTAB, but these most recent statistics suggest a 15% chance of reversing the §2(d) refusal.

Given the tremendous deference that the TTAB gives to the mostly-subjective opinion of an individual USPTO Examining Attorney in issuing a §2(d) refusal, trademark searching prior to filing a trademark application continues to be extremely valuable, often providing an experienced trademark attorney with valuable information about how best to tailor a trademark application to be more likely to avoid this type of refusal in the first place.

Disney’s Steamboat Willie Mickey and Minnie Mouse Characters Enter the Public Domain

As of this month, the Steamboat Willie versions of Disney’s Mickey and Minnie Mouse characters are no longer protected under the U.S. copyright laws. The iconic Disney cartoons have officially entered the public domain nearly one-hundred (100) years after the 1928 release of the short film Steamboat Willie, in which Mickey and Minnie Mouse were introduced for the first time. While Disney’s copyright protection in Steamboat Willie was initially scheduled to expire in 1984, the copyright laws were amended in 1976 and then again in 1998, ultimately extending copyright protection in works of authorship for the life of the author plus seventy (70) years. Disney was reportedly involved in the lobbying efforts that drove those changes, alongside other entertainment companies. As a result, Disney’s copyright protection in Steamboat Willie was extended through 2023. Now, under U.S. law anyone can use only the Steamboat Willie versions of Mickey and Minnie Mouse without committing copyright infringement. Newer versions of the Mickey and Minnie Mouse characters remain protected.

In the United Kingdom, AI Cannot be an Inventor for a Patent

The debate over the role of artificial intelligence (AI) in patent law has been a topic of global discussion for several years. The United Kingdom’s Supreme Court has recently contributed to this discourse, delivering a judgment that aligns with many other countries’ boundaries of AI’s role in patent applications. Per the UK’s Patents Act 1977, this ruling finds that an inventor must be a natural person, effectively precluding AI systems from being acknowledged as inventors.

As in many other courts across the globe, the UK’s Supreme Court’s decision hinged on the definition of an ‘inventor.’ Within the context of the Patents Act 1977, the Court analyzed the Act’s language, concluding that the Act defines an inventor as the ‘actual deviser’ of an invention that unambiguously refers to a human being. This interpretation underscores a fundamental principle in patent law: recognizing human creativity and ingenuity as a core of invention.

This decision by the UK Supreme Court is a national statement and a significant marker in the global legal landscape concerning AI and intellectual property. It aligns with the stance of several other nations, reinforcing the notion that AI, despite its advanced capabilities, cannot replace the human element in the context of patent law. This ruling can have far-reaching implications, potentially influencing future legislative developments and judicial decisions in other countries and shaping the global approach to AI and patent law.

White House Proposal Suggests “High Prices” Should Be Factor in Decision to Compel Licensing of Taxpayer-Funded Inventions

Today, the White House released a statement proposing new action to lower health care and prescription drug costs. Among these proposals, is a new framework that would allow the federal government additional leeway in granting compulsory licenses to other drug manufacturers when the cost of taxpayer-funded and patented drugs is deemed to restrict access to the drug. The Federal Government has long had the ability to compel licenses to taxpayer-funded and patented drugs under the Bayh-Dole Act of 1980, if the drug was developed with government funds and is “not accessible to the public.” Historically, the accessibility of a drug was determined by the patent owner’s ability to supply the drug in sufficient quantities. The proposed new rule, promulgated under the Department of Commerce and Health and Human Services, would also allow the government to consider the price of a drug in determining whether it is “accessible to the public.” The proposed rule is currently open for notice and comment by the public.

Franchise Fees Imposed Through Franchisor Operations Manuals Violate Federal and State Law If Not in FDD (Washington State Opinion)

National franchisors should take note that Washington State released Franchise Act Interpretive Statement No. 9 (the “Statement”) discussing the disclosure of fees to prospective franchisees in the Franchise Disclosure Document (FDD) prior to the inception of the franchisor-franchisee relationship. The question presented was whether a franchisor may impose fees on the franchisee through its operations manual or otherwise, where such fees were not disclosed in the FDD.

It is commonly known in the franchising industry that franchisors generally keep the substantive contents of their operations manuals – to which franchisees are normally bound –  confidential. Some franchisors give their prospective franchisees the opportunity to review the franchise’s operations manual, but usually only after signing a confidentiality agreement, for example. Even when such an opportunity is available, however, not all franchisees are actually aware of it or otherwise elect to forgo their chance to review the manual. Nevertheless, some franchisors list additional fees in their operations manuals that are not disclosed in their respective FDDs.

Federal law states that an FDD must disclose “all fees and payments, or commitments to pay, for services or goods received from the franchisor or any affiliate before the franchisee’s business opens.” 16 CFR 436.5(e). Further, “all other fees that the franchisee must pay to the franchisor or its affiliates, or that the franchisor or its affiliates impose or collect in whole or in part for a third party,” must be disclosed as well. Accordingly, Washington state took the position in its Statement that the imposition of additional fees via an operations manual violates both federal and Washington state law, when such fees are not also disclosed in the FDD.  Such violations may entitle franchisees to a host of legal remedies against a franchisor.

The entirety of Franchise Act Interpretive Statement No. 9 is available here.  For more information about franchising, please contact Keith Kanouse and Kelly Malloy.

Pro Bono Services to PAMM, Corporate Luncheon

Firm Partners Oliver Ruiz and John Malloy attended the 15th Annual Perez Art Museum Miami (PAMM) Corporate Luncheon honoring philanthropic partners. The Firm is honored to represent PAMM on a pro bono basis with respect to Intellectual Property matters, as it does for many other non-profits in our community.

USPTO Issues Design Patent No. D1,000,000

The United States Patent and Trademark Office celebrated a milestone this week as it issued the millionth design patent. The patent was issued to Agustina Huckaby of Fort Worth, Texas and is for a Dispensing Comb.

Design patents are one of the three types of patents issued by the United States Patent and Trademark Office, the other two being utility patents and plant patents. Design patents are for new, original, and ornamental designs as compared to utility patents, which are for new, non-obvious, and useful inventions. The firm routinely assists its clients with both forms of patent protection from its offices in Miami, Boca Raton, and Jacksonville.

AI-Generated Artwork Denied Copyright Protection by U.S. District Court

This is an update to a blog post dated February 25, 2022.

On August 18, 2023, the U.S. District Court for the District of Columbia released an Opinion denying Plaintiff Stephen Thaler copyright protection for A Recent Entrance to Paradise, a work of visual art generated by an artificial intelligence (AI) system called the “Creativity Machine.” The U.S. Copyright Office denied copyright registration for the artwork last year due to a lack of human authorship and Thaler filed suit under the Administrative Procedure Act (APA) in response, calling the Copyright Office’s decision an “arbitrary, capricious . . . abuse of discretion” that was “not in accordance with the law, unsupported by substantial evidence, and in excess of [the Office’s] statutory authority. . . .” The APA provides for judicial review of a “final agency action for which there is no other adequate remedy in court” and requires the agency to “defend its actions based on the reasons it gave when it acted.”

While the Court agreed with Thaler that “copyright law has proven malleable” throughout history, the Court opined that “human creativity is the sine qua non at the core of copyrightability, even as that human creativity is channeled through new tools or into new media.” The Court further noted that “[c]opyright has never stretched so far . . . as to protect works generated by new forms of technology operating absent any guiding human hand.” Accordingly, the Court found that the Copyright Office acted properly in denying copyright registration for A Recent Entrance to Paradise, stating that human authorship requirement remains a “bedrock requirement” of copyright.

This case is THALER v. PERLMUTTER, Register of Copyrights and Director of the United States Copyright Office, et al., Civil Action No. 22-1564 in the U.S. District Court for the District of Columbia.

Between Innovation and Infringement: Cases Against OpenAI’s ChatGPT Could Establish Legal Precedent for Generative AI

OpenAI, the organization behind the ChatGPT platform, finds itself amidst a series of lawsuits centered on allegations of copyright infringement. For context, ChatGPT operates as a free-to-use generative AI model trained on vast amounts of text data from the internet. This extensive training allows it to generate human-like text based on user prompt inputs. Since its public release in late 2022, its adoption has skyrocketed, with the platform now boasting over 1.5 billion monthly visits.

That said, the sources of its training data, potentially including copyrighted works, have become a point of contention. As of now, there are just a few filed lawsuits that highlight the intricate relationship between AI training data and copyrighted content.

The case of Authors v. OpenAI serves as a prime example. Here, the plaintiffs (a consortium of authors) assert that OpenAI’s models, in their training phase, consumed copyrighted books, articles, and other literary works that, despite being publicly accessible, remain under copyright protection. Their contention essentially is that such training equips the models to either mirror original content or produce derivative works. In fact, the plaintiffs have described instances where the models exhibited this behavior. They argue that this erodes their creations’ intrinsic value and robs them of due royalties. The lawsuit, grounded on theories of direct and vicarious copyright infringement, negligence, and state unfair competition law violations, seeks monetary damages and an injunction against OpenAI’s continued use or distribution of models trained on copyrighted content.

Parallel lawsuits, like Sarah Silverman et al. v. OpenAI and Paul Tremblay & Mona Awad v. OpenAI, echo similar complaints. Media giant, The New York Times, is also contemplating legal measures against OpenAI. In a broader context, other AI entities are facing litigation for generative AI models related to visuals (not just text generation), such as in Getty Images v. Stability AI (in the High Court of Justice in London).

While generative AI, in its foundational concepts, has been around for several decades its rapid development and accessibility to the general public are recent phenomena. As a result, the legal landscape is still in its infancy, and legal doctrine sparse. While rooted in longstanding law, the cases at hand are trailblazers in their own right, set to define the legal boundaries of the generative AI frontier.