Martinson Coffee's Advertising Campaign Risks Elvis Presley Estate Lawsuit

I recently came across a billboard on the side of a telephone booth (yes, those still exist) in New York City, and stopped dead in my tracks to snap a photograph of it.

The primary reason that the advertisement caught my attention was that about three years ago, I had considered approving a similar advertising campaign.  We considered utilizing a stock photograph of a cheesy Elvis Presley impersonator along with the tagline: "Not All Imitation Is Flattery."

Now, there is an ongoing debate in legal circles about whether such commercial use of a famous persona should be protected as free speech and constitute a form of parody or fair use, or whether such use could conceivably be an infringement of the late Elvis Presley's right of publicity and trade dress and trademark rights.

Absent such a finding of free speech or fair use, the unauthorized commercial use of a famous person's likeness can constitute an infringement of their right to publicity.  This right can be protected under state law, even long after their death, unless that right has lapsed, or the person's identity is in the public domain.

Last year, we reported on the legal developments involving Albert Einstein's likeness and how use of it embroiled General Motors in protracted litigation.

There has been much written in the academic literature about the fuzzy boundaries between unlawful imitation and flattery. For example, Touro Law Review published an article in 2012 about this subject.

Aware of how aggressive Elvis Presley Enterprises (EPE) has been in the past in protecting Presley's image and likeness, we had contacted EPE to discuss whether we could obtain a license. This standard "clearance" procedure is a prudent measure, regardless of whether a fair use/parody defense exists.

I was informed by EPE's representative that the Estate would not offer a license for Elvis' likeness to be used in this manner. (It is possible that the unflattering impersonator we were considering using may have played a role).

Regardless of the legal merits of EPE's position, out of respect for "the King's" intellectual property rights and to avoid the risk of litigation, we never approved or ran the advertisement.

Now, it would appear that Martinson Coffee had a similar idea, and decided to run the advertisement.

According to a press release issued by Martinson in October 2013, it is using a media blitz campaign, including with roving trucks emblazoned with the billboards. "The Martinson® Coffee trucks will appear in over two dozen locations during the campaign. The social media launch will run in conjunction with a city-wide advertising campaign. The ads, featured on New York commuter rail stations, subway stations and the like, will focus on proving why Martinson is the Real Joe."

I contacted Martinson Coffee's public relations department by e-mail, to ask if they had sought or received a license from EPE. This is what they said:

"We currently buy our images from a stock image company.  They provide all the licenses for all the images they own.

We don’t do anything on our end.  They vet those issues out prior."

In other words, the advertising agency utilized "stock photography" and assumed that the stock photography company had acquired and provided all relevant licenses.

But this assumption is usually factually and legally incorrect.

For example, iStockPhoto, Getty Images, ShutterStock and other "stock image" galleries offer a variety of "Elvis Impersonator" photographs.

However, the licenses offered for such stock photographs is typically "for editorial use only."  Their Terms of Use specifically state that "Files for Editorial Use Only cannot be used for any commercial purposes. These files may contain identifiable brands, locations or people without the proper legal releases needed for commercial use.  They may be used in blogs, magazine and newspaper editorial applications, or other non-commercial uses." Shutterstock explains the distinction on its website.

Therefore, assuming for argument's sake that Martinson acquired its Elvis impersonator image from such a third party stock image company, its commercial use would clearly fall outside the scope of the editorial use only license.

Consequently, Martinson could not avail itself of the license defense, and could not drag the third party stock image company into the case to indemnify (defend) it.

Further, whatever "releases" the stock image company acquired for use of the image would only involve the model depicted in the photograph -- not the Elvis Presley Estate, who has the legal right and obligation to protect the King's likeness.

Commentators have noted that EPE is strategic about its litigation targets. It is yet to be seen if Martinson Coffee incurs its wrath, as there is no word yet on whether a lawsuit has been filed. 

Stay tuned.

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.