IP Blog

Intellectual Property Blog

Russia Authorizes Infringement of Patents Owned by Holders Associated with “Unfriendly” Countries

Earlier this month in Moscow, Russia’s Chairman of Government Mishustin released a decree effectively allowing patent infringement within the country. The decree amends Russia’s method for determining the amount of compensation paid to a patent owner in the case of infringement. Of course, this news comes in the wake of President Vladimir Putin’s invasion of Ukraine in late February, for which the international community has imposed heavy sanctions on Russia.

Specifically, the decree revises Russian intellectual property law so that, if patent holders are “associated with foreign states who commit unfriendly actions against Russian legal entities and individuals” then “the amount of compensation is 0 percent of the actual proceeds” gained by infringers. In the words of the Russian government, an infringer enabled by this amendment is a “person who exercised the right to use an invention, utility model or industrial design without the consent of the patent owner . . . .” Patent holders may fall within this unprotected class if they are a citizen of an “unfriendly” state, or if such a state is their place of registration, primary business activity, or primary profit from business activity. The list of “unfriendly” countries includes the United States, Canada, the United Kingdom, Japan, South Korea, Australia, all European Union member countries, and, of course, Ukraine.

Patent Infringement in the COVID-19 Pandemic: mRNA Vaccines Take Center Stage

On February 28, 2022, Arbutus Biopharma Corporation and Genevant Sciences GmbH (collectively the “Plaintiffs”) sued Moderna, Inc. and ModernaTX, Inc. (collectively “Moderna”) in the U.S. District Court for the District of Delaware, alleging Moderna had infringed upon six of Plaintiffs’ issued patents in the creation of its COVID-19 mRNA vaccine. This suit marks the first major patent infringement action in the now-rapidly developing landscape of mRNA vaccines.

In its complaint, Plaintiffs alleged, inter alia, that Moderna was able to produce its mRNA vaccine for COVID-19 in “record speed” because it unlawfully used the technologies in U.S. Patent Nos. 8,058,069, 8,492,359, 8,822,668,  9,364,435, 9,504,651, and 11,141,378, which are collectively directed to a lipid nanoparticle (“LNP”) delivery platform that aids in the uptake of specific mRNA sequences into human cells (and without which the uptake of such sequences and eventual production of important proteins would be stymied by the human immune system). Furthermore, the complaint alleges that Moderna was “well aware” of Plaintiffs’ issued patents, as it had “licensed them for other product programs . . . but chose not to do so for its COVID-19 vaccine,” and unsuccessfully “attempted to invalidate several of [Plaintiffs’] patents” through inter partes review (IPR) proceedings.

Plaintiffs did not seek a preliminary injunction—as they claimed they did not want to “impede the sale or manufacture of Moderna’s life-saving vaccine”—but rather only requested damages, stating that “[a]ll Plaintiffs seek is the compensation due to them under the patent laws of the United States and as a matter of simple fairness.” If Plaintiffs prove to be successful in their suit, the resulting damages could total in the tens of billions of dollars.

This case is Arbutus Biopharma Corp. et al. v. Moderna, Inc. et al., Case No. 1:22-cv-00252. The complaint can be found at the following link: https://fingfx.thomsonreuters.com/gfx/legaldocs/zgpomzkbzpd/IP%20MODERNA%20PATENTS%20complaint.pdf

Kendall Jenner’s 818 Tequila Brand Sued for Trademark Infringement

“The Kardashian-Jenner family strikes again,” says ClipBandits, LLC, owner of the brand Tequila 512. On February 16, 2022, ClipBandits filed suit in the Central District of California against K & Soda, LLC, known for doing business as 818 Spirits, for trademark infringement, false designation of origin, and unfair competition. Reality television star and fashion supermodel Kendall Jenner debuted 818 Spirits in May 2021 as her own tequila brand, and it quickly skyrocketed in popularity.

ClipBandits has a federal trademark registration for its “512” mark, which it applied for in 2008 and registered in 2013. Following the launch of Jenner’s brand, however, ClipBandits filed another trademark application for “TEQUILA 512” and Design in an effort to protect the elements featured on the Tequila 512 label.

In its Complaint, ClipBandits accuses 818 Spirits of “simply and blatantly” copying the Tequila 512 logo and color scheme, in addition to similarly choosing a “prominent area code” with “a central 1” as its brand name. ClipBandits further argues that there has been actual consumer confusion in the marketplace, which has damaged the Tequila 512 brand. More specifically, ClipBandits submits that 818 Spirits is not entitled to “steal sales . . . through its deception” or transfer to Tequila 512 the “substantial ill-will” associated with 818 Spirits (due to accusations of “cultural insensitivity”). ClipBandits states that 818 Spirits can “shoot itself in the foot with its own positioning and marketing,” but “cannot be allowed to drag [Tequila 512] down with them.”

This case is ClipBandits, LLC v. K & Soda, LLC, Case No. 2:22-cv-01071, in the Central District of California.

Kobe Bryant’s Estate Files Trademark Applications Signaling Bryant’s Expansion Into the Metaverse

Hall of Famer and NBA legend Kobe Bryant obtained numerous trademarks during the course of his career.  Through is company Kobe, Inc., Bryant registered trademarks spanning from footwear, wine, and apparel.  Signaling the NBA legend’s expansion into the metaverse and digital experiences, Kobe Bryant’s estate (through Kobe, Inc.) recently filed trademark applications for KOBE BRYANT, MAMBACITA, and MAMBA FOREVER.  The applications seek to protect the Los Angeles Laker’s image and likeness as it relates to virtual and digital goods, including art, avatars, and collectible coins.

Artwork Made by Artificial Intelligence Denied Copyright Protection

In the face of human authorship and human inventorship requirements, many wonder how and when, if ever, protection for inventions and creative works generated by artificial intelligence (AI) will fit into the intellectual property realm.

On February 14, 2022, a second request for reconsideration in a copyright application for AI-made artwork, entitled A Recent Entrance to Paradise, was rejected because it lacked the required human authorship to receive protection. The Copyright Review Board, which hears final administrative appeals of refusals of copyright registrations at the U.S. Copyright Office, issued the rejection. Applicant Steven Thaler argued throughout the proceedings that “the human authorship requirement is unconstitutional and unsupported by either statute or case law.” In its decision, however, the Board pointed to a robust body of precedent in response, including Supreme Court opinions, as well as sections of the Compendium of U.S. Copyright Office Practices to support its rejection. The Board summarized that copyright law protects only “the fruits of intellectual labor” that “are founded in the creative powers of the human mind.” Irrespective of the type of creative work, the Board emphasized that the U.S. Copyright Office currently “will refuse to register a claim if it determines that a human being did not create the work.”

The denial of protection for A Recent Entrance to Paradise comes on the heels of a U.S. Patent and Trademark Office (“USPTO”) decision from 2020, known as the “DABUS” case. There, the USPTO concluded that AI cannot be considered an inventor under our patent regime. The catalyst in the DABUS case was a petition regarding a patent application, in which the applied-for invention was generated by an AI creativity machine named “DABUS.” Accordingly, the petitioner named DABUS as the inventor on the application, claiming that “it was the machine, not a person, which recognized the novelty and salience of the invention.” In a manner similar to Thaler, the DABUS petitioner argued that inventorship should not be limited to natural persons, but the USPTO fiercely disagreed.

In finding that the patent laws preclude naming an AI as an inventor, the USPTO relied on Title 35 of the U.S. Code (“35 U.S.C.”) and relevant precedent. The opinion noted that 35 U.S.C. “consistently refers to inventors as natural persons” and pointed to § 100(a), under which an “inventor” is defined as an “individual.” The USPTO also emphasized § 101, which states: “Whoever invents or discovers any new and useful process, machine, manufacture or composition of matter . . . may obtain a patent therefor. . . .” From this language, the USPTO reasoned that the term “whoever” suggests a natural person. The Office also described sections of 35 U.S.C. employing “pronouns specific to natural persons” such as “himself” or “herself,” in addition to citing a requirement that an inventor who executes an oath must be a person. All in all, the USPTO decided that “the patent laws require that an inventor be a natural person.” The DABUS application was finally rejected, and the Office declared that “[n]o further requests for reconsideration [would] be entertained.”

A Recent Entrance To Paradise

[1] See, e.g., U.S. Patent Application No. US16/524,350 (filed July 29, 2019) (Dep. Comm’r Pat.

Apr. 27, 2020) (petition denied) (https://www.uspto.gov/sites/default/files/documents/16524350_22apr2020.pdf)  (inventor listed on patent was a non-human AI machine named DABUS).

[2] COMPENDIUM OF U.S. COPYRIGHT OFFICE PRACTICES ch. 300 § 306 (2021),

https://copyright.gov/comp3/chap300/ch300-copyrightable-authorship.pdf.

[3] A Recent Entrance to Paradise, Copyright Review Board (https://www.copyright.gov/rulings-filings/review-board/docs/a-recent-entrance-to-paradise.pdf) (last accessed February 24, 2022 at 2:56 PM).

[4] Id.

[5] See, e.g., Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53 (1884) (wherein the Court refers to authors as human).

[6] A Recent Entrance to Paradise, Copyright Review Board (https://www.copyright.gov/rulings-filings/review-board/docs/a-recent-entrance-to-paradise.pdf) (last accessed February 24, 2022 at 2:56 PM) (emphasis added).

[7] Id.

[8] U.S. Patent Application No. US16/524,350 (filed July 29, 2019) (Dep. Comm’r Pat.

Apr. 27, 2020) (petition denied) (https://www.uspto.gov/sites/default/files/documents/16524350_22apr2020.pdf).

[9] Id.

[10] Id.

Hermès Sues NFT Artist over “MetaBirkins” Collection

Legal action is ongoing after Mason Rothchild released a series on Rarible of 100 Birkin bag-inspired non-fungible tokens (NFTs) with simulated fur entitled “MetaBirkin” in December 2021. These NFTs share no affiliation or profits with Hermès, the luxury fashion brand behind the highly coveted “Birkin” bag. Yet, today these NFTs are going for a high of 249 ETH or approximately $780,000, which is nearly double the most expensive Hermès Birkin sold at auction in real life. 

 However, the current rules on NFT counterfeits in the Metaverse are very unclear and ownership over digitally created products is extremely uncertain. Even if Hermès wins its case against Rothchild, the subject NFTs cannot be erased as they are tokens permanently recorded on the Ethereum blockchain. Nevertheless, this lawsuit is breaking new legal ground for what is to come with intellectual property rights in the world of Web3.

The rise of this NFT series’ popularity has prompted the French fashion house to fight back. Hermès believes that these NFTs have “infringed upon the intellectual property and trademark rights of Hermes and are an example of fake Hermes products in the metaverse”. After failing to stop Rothchild with a cease-and-desist letter, Hermès filed a trademark infringement and dilution lawsuit against Rothchild in New York federal court. However, Rothchild says he “won’t be intimated” and maintains that his virtual interpretation of the famed bag is an artistic commentary on the bags and brand and as such should be considered “fair use”. Furthermore, Rothchild has stated: “[i]t’s quite clear from reading Hermes’ complaint that they don’t understand what an NFT is, or what NFTs do.” In this regard, Rothchild is now attempting to secure a dismissal of the suit based on his First Amendment rights.   

Nike Files Lanham Act Claims Against StockX Over NFT’s

Sportswear company Nike recently sued StockX, an online reseller of shoes and other goods, claiming that StockX began selling virtual products using Nike’s trademarks.  The lawsuit filed in the Southern District of New York alleges that these unauthorized non-fungible tokens (“NFT’s”) are likely to cause confusion and to create a false association in the minds of consumers that there is an association between Nike and the Nike-branded NFT’s.  In addition to monetary damages, Nike seeks an injunction blocking such sales of StockX’s NFT’s. 

The five (5) count complaint was filed near the time of Nike releasing its own NFT’s, including the “MNLTH,” which was released on or about February 8.  This NFT features the “Nike swoosh” on both sides, and suggests that an unknown object is encased within the box.  See https://opensea.io/assets/0x86825dfca7a6224cfbd2da48e85df2fc3aa7c4b1/1

Recent Trademark Filings Suggest a Fashionable Metaverse

Over the past few months, there has been a slew of new U.S and foreign equivalent intent-to-use trademark applications filed for virtual goods and spaces, particular within the fashion industry. For example, this past November, third parties filed two trademark applications in connection with the Gucci and Prada logos in a range of metaverse-related arenas, including downloadable virtual goods, virtual worlds, and virtual clothing used in virtual spaces. Likewise, DKNY and Nike filed applications in connection with downloadable virtual goods, namely, computer programs featuring footwear, clothing, and accessories and for use in online virtual worlds. In December, Ralph Lauren similarly filed an application in connection with retail store services featuring virtual clothing and accessories for use in online virtual worlds, and online, non-downloadable virtual clothing and accessories for use in virtual environments. These applications and many more suggest fashion brands are ready to jump into the metaverse.

Although the “zone of natural expansion” may provide some protection for existing trademark filings that lack virtual goods and spaces, brands interested in conducting business in Web3 should consider expanding the scope of their trademark protections as it creates an important presumption of validity and ownership. Some relevant international classes include classes 9, 35, and 41. Additionally, brands should consider retaining virtual rights through licensing and distribution agreements. 

Gruyere Cheese Can Still Be Branded as “Gruyere,” Even if it Does Not Originate From Switzerland

An association of several Swiss and French business owners previously filed a trademark application seeking protection for the name “GRUYERE” in relation to cheese. According to the association, gruyere is “painstakingly made from local, natural ingredients using traditional methods that assure the connection between the geographic region and the quality and characteristics of the final product.” Against their arguments, the Trademark Trial and Appeal Board denied the application. On appeal at the federal district court level, the court similarly ruled that gruyere-branded cheese does not have to originate from the Gruyere region of Europe. The opposition in the district court case argued that gruyere had become generic, and that consumers believed that it applied to a certain type of cheese as opposed to the location where that cheese originated. U.S. District Judge T.S. Ellis agreed, finding that “the term GRUYERE may have in the past referred exclusively to cheese from Switzerland and France,” but that “decades of importation, production, and sale of cheese labeled GRUYERE produced outside the Gruyère region of Switzerland and France have eroded the meaning of that term and rendered it generic.”

Bacardi Sues USPTO Over “HAVANA CLUB” Rum Renewal

One basic tenet of trademark law is that rights are territorial. One interesting example of this principal is the ongoing dispute between Bacardi and the government of Cuba pertaining to “HAVANA CLUB” rum. The Havana Club rum brand was nationalized by the Cuban government and has been produced and distributed throughout the world in partnership with Pernod Ricard, a French company. However, due to the embargo, Havana Club has never been sold by Pernod inside the United States. Instead, the family that previously owned the brand formed an alliance with Bacardi, who produces the rum in Puerto Rico and sells it in the United States. Yet due to some exceptional circumstances, the Cuban government owns the U.S. trademark registration for “HAVANA CLUB.”

In 2006, when the U.S. “HAVANA CLUB” trademark registration came due for renewal, the U.S. Treasury Department declined to provide the Cuban government with a license to pay the necessary fees. Instead of giving up the trademark registration, the Cuban government appealed the decision, a process which lasted over ten years. In 2016 the U.S. Treasury Department finally granted permission for the Cuban government to pay the necessary fees to renew its trademark registration and the U.S. Patent and Trademark Office, in an apparent aberration from its usual procedures, treated this payment as timely.

Bacardi has now asked a Federal District Court to deem the action taken by the U.S. Patent and Trademark Office as unlawful and beyond the scope of its authority. If Bacardi succeeds, it would likely mean that the registration owned by the Cuban government will be deemed expired and Bacardi’s pending applications will be free to move forward toward registration.