Federal Appeals Court Prohibits "Pro-Life" License Plates

Most states offer specialty automobile license plates that reflect a variety of special interests and political viewpoints. The state typically charges a nominal sum for a specialty plate, and may contribute a percentage of the proceeds to a non-profit organization dedicated to that particular cause.

For example, Virginia offers a license plate that says:  "Friends of Tibet." According to the Department of Motor Vehicles, as a revenue-sharing plate, after the sale of the first 1,000 qualifying plates, $15 of the $25 fee is transferred to the Conservancy for Tibetan Art and Culture to support its programs in Virginia.  Virginia also offers a "Friends of Coal" plate, with funds going to the Virginia Department of Mines, Minerals and Energy to support its programs.

Other states offer plates with a wide variety of viewpoints and diverse causes represented. Florida offers a John Lennon "IMAGINE" logo license plate, supporting efforts to reduce hunger. Others range from anti-terrorism and anti-drug messages to those supporting the National Rifle Association, pro-environmental conservation efforts and many others.

However, the American Civil Liberties Union filed a federal lawsuit against the State of North Carolina, which had approved a license plate in 2011 depicting children on it, along with the phrase "CHOOSE LIFE." Each plate would cost $25, with $15 of that going to the Carolina Pregnancy Care Fellowship, an association of nonprofit pregnancy counseling centers.

The North Carolina legislature considered, but rejected, license plates that would have said "TRUST WOMEN" and "RESPECT CHOICE."

The ACLU's argument was that, by choosing a "pro-life" viewpoint without offering equal time to an "opposing" viewpoint, the government ran afoul of the First Amendment.

And yesterday, the United States Court of Appeals for the Fourth Circuit agreed with the ACLU. North Carolina has been banned from manufacturing the plates.

Is "Dumb Starbucks" Free Speech or Just a Dumb Ploy Inviting a Lawsuit?

A new coffee shop has opened in Los Feliz, Los Angeles, titling itself "Dumb Starbucks."  The mock coffee shop utilizes a virtually identical logo to Starbucks' logo on all its products and signage, but places the word "Dumb" before everything.

According to news reports, the owners are claiming that their coffee shop is some kind of "pop art" installation intended to mock the massive Starbucks corporation.  They apparently claim that they are shielded from liability for trademark infringement or dilution by the First Amendment, and that their lawyers are fully in control of the situation.

Notably, the news reports also claim that their coffee is not for sale, but is handed out free of charge, which would tend be garner some sympathy for the argument that the whole excursion is a non-commercial artistic endeavor. However, the "FAQ" disclosed by the owners seems to suggest that the coffee is very much for sale.  It states, in relevant part:

"Although we are a fully functioning coffee shop, for legal reasons Dumb Starbucks needs to be categorized as a work of parody art. So, in the eyes of the law, our "coffee shop" is actually an art gallery and the "coffee" you're buying is actually the art. But that's for our lawyers to worry about. All you need to do is enjoy our delicious coffee!"

But what does that matter?  Under the federal Lanham Act, there is a requirement that the unauthorized use be "in commerce" to be considered an infringement. The Federal Trademark Dilution Act does not expressly contain such a commercial use requirement, but it would certainly be relevant to a court's consideration if the whole stunt has no commercial element.

Rather, here, it would appear the entire endeavor is a publicity stunt essentially inviting the Starbucks' chain to file a lawsuit. Even if Starbucks won, it might lose in the court of public opinion, for looking like it has no sense of humor. So the owners may be taking an expensive gamble.

That being said, Starbucks Corporation is inevitably going to be forced to sue this particular coffee shop, and the odds are that it will likely prevail in shutting it down in very short order. Perhaps that is the reason that news reports that there is a several hour wait to enter the shop.

Samsung's Counsel Get a Slap on the Wrist for Breaching Confidentiality

As discussed and predicted here in November 2013, Samsung's outside counsel were found to have violated the Court's "Protective Order" in the Apple patent litigation, but received nothing more than "public shaming" from a U.S. Judge.

To address the potential mishandling of proprietary and confidential information during litigation, parties routinely stipulate to entry of a “Protective Order.”

This stipulation takes the form of a Court Order which allows the parties and their counsel to designate documents and information into categories or tiers.

When documents contain highly sensitive information, such as pricing or key licensing terms, the parties are usually able to mark documents as “Outside Counsel’s Eyes Only,” and file such documents under a strict seal so the public cannot get access through the Court’s docket.

Responsible outside counsel take great pains to respect these orders, often at significant cost and inefficiency. Multiple drafts of the same document must be created and digital firewalls maintained with redactions and password-protected file folders.

These day-to-day procedures involved in handling competitors' sensitive data can be onerous to the parties and their outside counsel litigating these cases, but such measures are viewed as necessary to ensure that litigants feel that their sensitive information is not being acquired by their competitors in the guise of discovery exchange.

In the now famous Apple/Samsung patent case, highly confidential licensing terms were apparently contained in a draft expert report on damages that was forwarded to Samsung’s internal personnel without any redactions whatsoever.

The leak of the confidential information only came to light after the case was effectively over, when Samsung happened to be negotiating a license with third party Nokia.  According to testimony, a Samsung executive told Nokia that he knew the terms of the Apple-Nokia license and was able to recite its terms verbatim during the negotiation.  Nokia told Apple, who demanded a formal investigation.

After a Court-ordered investigation, it became clear that Samsung’s outside counsel had posted a draft of its expert’s report on a client file-sharing site that was accessible by Samsung’s staff, and e-mailed instructions for accessing the site, which included over fifty Samsung employees who were not permitted to access the highly confidential information contained therein.

Samsung's outside counsel essentially admitted that all of the above did indeed occur, but denied that the violation was intentional. Samsung argued that no sanctions whatsoever are warranted, despite the harm to Apple and the threat to the integrity of the discovery process.

Frequently, outside counsel entering into the exchange of sensitive discovery materials during intellectual property litigation are asked by their clients whether to trust that the terms of protective orders are respected by their adversaries.

And the standard response that outside counsel typically give to their clients is supposed to allay their concerns:  Any violations of the Protective Order wil be swiftly punished by the Court, thus deterring misconduct.

Not this time.

The Judge found that the only appropriate punishment for Quinn is its "public shaming."  Apparently, that shame will follow the firm all the way to the bank.

As we previously wrote, Americans live under a legal system that is far too tolerant of discovery abuses.

Canadian Olympic Committee Sues North Face for Misleading Customers

An Accused North Face Product

Canadian news is reporting that the Canadian Olympic Committee (the "COC") is suing apparel maker The North Face, alleging that it infringed upon the Olympic trademarks and attempted to mislead customers into believing that it had sponsored the games, when it hasn't.

The lawsuit, which was recently filed in British Columbia, formally alleges that the North Face sold jackets and bags adorned with the maple leaf and "RU/14", which the COC alleges is a reference to Russia and the 2014 Sochi Games, while others featured "2.7.14", an alleged reference to the date of this week's opening ceremonies.  Further, the lawsuit alleges that some of the items were identified with such names as "Men's Sochi Full Zip Hoodie."

The lawsuit claims that the COC had warned the North Face about its concerns on multiple occasions, but that the warnings went largely unheeded.  

The North Face apparently responded by saying:  "[W]e are not an official sponsor of the COC or Team Canada and never indicated we were.  We do not agree with the COC's claims and we are disappointed they have taken this action."

The COC has been accused of overzealously protecting its brand. For example, in 2004, the COC launched a high-profile battle to force the Olympia Pizza and Pasta Restaurant in Vancouver to remove signs that featured the Olympic rings and torch. The restaurant owner defied the committee's demand, and the signage apparently still remains in place today.

Online Oscar "Replica" Seller in Texas Sued for Counterfeiting and Fraud

©A.M.P.A.S.®

The Hollywood Reporter describes a lawsuit filed yesterday against Jaime De La Rosa, a Texas individual who was selling fake Oscar statuettes online.

The Academy of Motion Picture Arts and Sciences (AMPAS) alleges that it first became aware of the existence of these "counterfeit replica" statuettes in November 2013, when it found an eBay listing for an "Academy Award Hollywood Metal Movie Acting Trophy Prop Replica" selling for $850.00.

AMPAS then contacted De La Rosa, who signed a sworn Declaration attesting that he had made seven statuettes, selling six and surrendering one to the Academy.

AMPAS now claims that it has identified four additional statuettes sold by De La Rosa on eBay and another sold by him on Etsy, making De La Rosa's Declaration seemingly false.

AMPAS has filed other lawsuits attempting to protect its intellectual property rights in the Oscar statuettes.  For example, AMPAS sued a chocolatier in North Hollywood who made chocolate figurines.

Officially named the Academy Award of Merit, the Oscar statuette is the most recognized trophy in the world, and has stood on the mantels of the greatest filmmakers in history since 1929.

Since the initial Academy Awards banquet began on May 16, 1929, 2,809 Oscar statuettes have been presented. Each January, additional new golden statuettes are cast, molded, polished and buffed by R.S. Owens & Company, the Chicago-based awards manufacturer retained by the Academy since 1982.  Oscar stands 13 1/2 inches tall and weighs in at 8 1/2 pounds.

On its website, AMPAS notes that the Academy, as the copyright owner of the Academy’s “Oscar” statuette, and owner of its trademarks and service marks, including “OSCAR®,” “OSCARS®,” “ACADEMY AWARD®,” “ACADEMY AWARDS®,” “OSCAR NIGHT®,” “A.M.P.A.S.®” and the federally registered “Oscar” design mark, is required to protect its properties against unauthorized uses and infringements.

Confusion and Conflict Over "Candy Crush" Trademark Status

Over the last several weeks, news reports began to circulate that King.com Limited, the software developer that designed the hugely popular "Candy Crush Saga" game, had trademarked the term "CANDY" in the United States, and had begun to send cease and desist demands to developers who were using the term "candy" in connection with other, unauthorized applications.

The developer is also the creator of PetRescue Saga and the FarmHeroes Saga.

Yesterday, the Los Angeles Times reported on the more accurate status of the matter.

Namely, the game maker had applied for a federally registered trademark for the word "CANDY" nearly a year ago, and on January 15, 2014, the application was "approved for publication" in the Official Gazette.

This status means that the public has thirty (30) days within which to file any formal oppositions to the pending trademark application.

If, after that period, no one objects (or any formally litigated opposition is unsuccessful), the application will proceed to receive a federal registration.

To protest King's trademark application, several game developers have reportedly created a "Candy Jam" protest website that encourages others to create unauthorized games themed around "candy."  Extra credit may be offered to those who also use the words "scroll", "memory", "saga", "apple", or "edge".

One of the creators of the protest website reportedly told the Los Angeles Times: "Reaching a point where a company is allowed to trademark a common word is complete nonsense.  You don't need to have a great understanding of the laws to understand that this is ridiculous and totally unethical."

But these protesters are legally incorrect.  During the prosecution of the application, the U.S. Trademark Examiner conducted an exhaustive search and found that the word "CANDY" is not commonly nor descriptively used in connection with any other mobile digital applications.

The Examiner did find an existing trademark for "KANDY" in one of the classes of services at issue, but that conflict seems to have been resolved.

Trends in the Intellectual Property Legal Marketplace

One of the most frequent questions that I am asked is what trends I see in the areas of intellectual property, brand protection and the marketplace for legal services.

There are a few interesting, long-term trends in the data worth mentioning, that affect everyone and not just lawyers or those who work in the brand protection and IP industry.  Perhaps the most glaring one is that:

The Cost of Doing Business Globally is Going Down, But the Cost of Protecting Intellectual Property Keeps Going Up

By 2014, the out-of-pocket costs of engaging in global commercial activity have become extremely low.  In fact, they are the lowest they have ever been.

For example, a relatively desirable Internet domain name can be leased for only a few dollars a year.  Using templates and shared hosting, virtually anyone can design and host an e-commerce website very cheaply.

This is a departure from a decade ago, when designing a website required an understanding of HTML and related computer languages, technical knowledge generally limited to IT Departments and computer consulting firms.

Similarly, marketing has become cheap.  Today, by using free e-mail accounts and social media platforms like Facebook, Pinterest, Google+ and Yahoo! for communication and marketing, and low-cost international distribution and shipping channels like eBay, Stamps.com, AliBaba and others, a well-managed small business can conceivably generate hundreds of thousands of dollars per year in only a short amount of time.

Yet the out-of-pocket cost involved in protecting a brand against Intellectual Property theft and infringement, both online and in the brick and mortar context, continues to spiral ever upward.

For example, the high-profile attorneys in the Apple v. Samsung patent wars charged their clients $1,200 per hour.  The hourly billing rates at all the large law firms have reached an all-time high, with many lawyers routinely charging well over $1,000 per hour.

And clients who choose smaller law firms and those firms that offer "flat fee" arrangements may get a better deal, but are not immune from the increased competition for high-quality intellectual property legal services.  

For example, one small law firm in Maryland posted its flat fees online, and notes that it is charging up to $12,000 for filing a provisional U.S. patent application.  An appeal if it is denied could add another $8,000.  That may be less than a large law firm's services, but just filing for a patent is still an expensive proposition.

And of course, that is just the first step in protecting Intellectual Property.  Filing for a patent or trademark is no guarantee that it will be respected by others. 

When infringers are inevitably discovered, commencing and pursuing complex litigation against them routinely costs companies many hundreds of thousands of dollars per year.

Therefore, it is clear that while many are finding it easier and easier to start and develop businesses, they are also finding it more and more expensive to effectively protect their Intellectual Property assets against thieves and infringers.

What does this trend signify?  It would appear that the marketplace is beginning to fully understand that the legal services offered by experienced Intellectual Property lawyers are at a premium, because branding and IP assets in general are as valuable -- if not more valuable -- than traditional ones.

Rock Showdown: Queensrÿche Faces Trial Over Trademark Ownership

Queensrÿche with Original Lead Singer Geoff Tate

It appears that hard rock and 1980's "hair bands" are a perennially fertile source of trademark litigation, as well as bar brawls and heady interpersonal drama.

Last year, we reported on the ugly trademark dispute between Ed Kowalczyk and his former band Live as they disputed whether it was appropriate for Ed to continue to bill himself as "Ed Kowalczyk of Live." (According to a recent Rolling Stone interview, that case has been settled).

Now, the original members of progressive heavy metal band Queensrÿche are embroiled in a hotly-contested litigation that is preparing for an imminent trial in a Washington State Court. The band's intellectual property is owned by Tri-Ryche Corporation, which is the company owned by the band's members.

(One legal oddity of this case is that it is an intra-corporate dispute between band members, which is a purely state law matter, whereas the vast majority of trademark cases invoke exclusively federal jurisdiction).

Last year, Rolling Stone reported that fans--and lead singer Geoff Tate himself--were stunned to learn that Queensrÿche had fired its lead singer after nearly thirty years with the band.

For those unfamiliar with Queensrÿche's catalog, it includes such songs as Silent Lucidity and full-length narrative-driven albums Rage for Order and Operation: Mindcrime.

After the 2012 split, two bands were simultaneously using the name and Queensrÿche brand.  They are each identified by their frontman, with one version led by new singer Todd La Torre, with original members Rockenfield, Wilton and Jackson and guitarist Lundgren (who joined in 2009) and the other led by original singer Geoff Tate, with former guitarist Gray, Randy Gane and Robert Sarzo and Simon Wright.

"Queensrÿche" With Lead Singer Todd La Torre

The litigation centers around who should own the rights to control the Queensrÿche brand and related trademarks after an alleged "assault" by Tate on the other band members occurred in Sao Paolo, Brazil early last year.  

The band's core legal argument is that Tate's alleged assault justified his firing as a form 'corporate action' to address his breach of duty to the other members of the entity.

Tate's court papers allege that "[t]he cut-and-thrust of Defendants' motion is that the alleged 'assault' in Sao Paulo, Brazil justifies all of their 'corporate' action under the Business Judgment Rule and leaves Geoff Tate with no defense."

First, Tate argues that there is a genuine issue of material fact demanding a trial regarding what happened in Brazil. Second, Tate substantively disputes the facts and circumstances surrounding the incident in Brazil and does not 'admit' he 'assaulted' anyone.

In his Declaration in Support of the Tates' Motion for a Preliminary Injunction, Geoff Tate swears that Mr. Rockenfield taunted him, saying, 'I fired your wife, I fired your daughter and your son-in-law, and you're next.' Angry, Geoff Tate admits that he 'went after' Mr. Rockenfield, but never touched him."

The Court apparently agreed that a trial was necessary to sort out the mess. According to music blog Blabbermouth, the trial will start in January 2014.

Sounds like a trademark trial worth following.  Stay tuned.

"Thanksgivingukkah" Trademarked Over One Year Ago

Screenshot from ModernTribe.com

"Thanksgivingukkah" is the term being used to describe the very rare confluence of Hannukah and Thanksgiving.

However, those seeking to commercialize the term may want to think twice:  An enterprising Boston resident had the prescience over a year ago to trademark the term.

Local Boston news is reporting that Dana Gitell trademarked the term in 2012, and has partnered with Atlanta-based company Modern Tribe to create a line of Thanksgivingukkah themed merchandise, including an apron with a turkey and a menorah on it.

Toy Company Sues Beastie Boys, Claiming Parody Protects Its Viral Ad

Screenshot from GoldieBlox's website

A progressively-themed company that makes and sells toys that will supposedly help young girls overcome gender stereotypes has become embroiled in a high-profile copyright litigation with the Beastie Boys.  Toy company GoldieBlox says on its website: 

"In a world where men largely outnumber women in science, technology, engineering and math...and girls lose interest in these subjects as early as age 8, GoldieBlox is determined to change the equation.  Construction toys develop an early interest in these subjects, but for over a hundred years, they've been considered "boys' toys".  By designing a construction toy from the female perspective, we aim to disrupt the pink aisle and inspire the future generation of female engineers."

In its recent viral video commercial touting the ingenuity of young girls who build an elaborate contraption that can change the television channel, GoldieBlox intentionally utilized the music and parodied the lyrics from the Beastie Boys' song Girls.

The Beastie Boys were apparently not pleased with GoldieBlox's unauthorized use and sent a cease and desist letter, alleging copyright infringement and demanding that GoldieBlox end its campaign.

Rather than complying with the demands, GoldieBlox countered by filing a Declaratory Judgment Complaint against the Beastie Boys in Los Angeles federal district court, asserting that its usage was parody and fully protected by the First Amendment.

Given the Beastie Boys' recent unhappy experience with copyright litigation, one suspects that GoldieBlox's executives were well aware that this dispute would erupt, and intentionally developed a strategy inducing litigation to fuel its viral campaign to garner "free" publicity.  Whether the gambit works or not is yet to be seen.

Legally, the controlling analysis here is the Supreme Court's decision in 1994 in Campbell v. Acuff-Rose Music, Inc., interpreting the "fair use" defense to musical parodies used in a commercial context.

In that case, the members of the rap music group 2 Live Crew had created a parody of Roy Orbison's iconic "Pretty Woman," called "Big Hairy Woman."  Roy Orbison's estate sued the rap group, alleging that the group's use was not fair or protected free speech, but was an unprotected commercial use.

After years of litigation, the Supreme Court ultimately held that 2 Live Crew's commercial parody may very well be a fair use within the meaning of § 107 of the U.S. Copyright Act, which states:

"In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—




(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;


(2) the nature of the copyrighted work;


(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work."

On appeal, the Supreme Court found the aforementioned four factors must each be applied to every situation on a case by case basis, and that the fact that the parody was used in a commercial context alone was not dispositive.

When looking at the purpose and character of 2 Live Crew's use, the Supreme Court found that the more transformative the new work, the less will be the significance of the other three factors.  The court found that, in any event, a work's commercial nature is only one element of the first factor enquiry into its purpose and character.

Justice Souter, writing for the majority of the Court, then moved onto the second § 107 factor, "the nature of the copyrighted work", finding it has little merit in resolving this and other parody cases, since the artistic value of parodies is often found in their ability to invariably copy popular works of the past.

The Court found the third factor integral to the analysis, finding that the Ninth Sixth Circuit Court of Appeals had erred in holding that, as a matter of law, 2 Live Crew copied "excessively" from the Orbison original.

Justice Souter reasoned that the "amount and substantiality" of the portion used by 2 Live Crew was reasonable in relation to the band's purpose in creating a parody of "Pretty Woman".

The majority reasoned "even if 2 Live Crew's copying of the original's first line of lyrics and characteristic opening bass riff may be said to go to the original's 'heart,' that heart is what most readily conjures up the song for parody, and it is the heart at which parody takes aim." 

The Supreme Court then looked to the new work as a whole, finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics, producing otherwise distinctive music.

Looking at the final factor, the Supreme Court found that the Court of Appeals erred in finding a presumption or inference of market harm.

Parodies in general, the Court said, will rarely substitute for the original work, since the two works serve different market functions.

While Acuff-Rose found evidence of a potential "derivative" rap market in the very fact that 2 Live Crew recorded a rap parody of "Oh, Pretty Woman" and another rap group sought a license to record a rap derivative, the Supreme Court found no evidence that a potential rap market was harmed in any way by 2 Live Crew's parodic rap version.

In fact, the Supreme Court found that it was unlikely that any artist would find parody a lucrative derivative market, noting that artists "ask for criticism, but only want praise."

Applying this same analysis in the newly-filed Beastie Boys case, the courts will need to evaluate each of these same factors to determine if Goldiblox's usage was appropriate or improper.

In the meantime, the GoldieBlox commercial has gone viral, and received nearly 8 million views.