Omid Khalifeh, Author at Omni Legal Group Blog

Can Los Angeles-based Japanese restaurant “The Hand Roll Bar Experience” be held liable to Sushi Nozawa Group for trademark infringement?

Sushi Nozawa Group filed a lawsuit in the United States District Court for the Central District of California against The Hand Roll Bar Experience, or HRB, alleging trademark infringement and unfair competition. The owners of Sushi Nozawa Group operate Sugarfish, Nozawa Bar, and KazuNori, which uses the slogan “The Original Hand Roll Bar.” The group alleges that Downtown Los Angeles Japanese hand roll bar is liable for infringing their trademark in this phrase.

Sushi Nozawa was founded by its namesake chef Kazunori Nozawa. KazuNori creates specially crafted sushi hand rolls and deems itself the first of its kind in the United States. Sushi Nozawa currently owns standard character registration for “The Original Hand Roll Bar” and a design mark registration for “The Original Hand Roll Bar Founded 2014 Los Angeles” as applied to “restaurant services.” Both marks were applied for in 2015 but Sushi Nozawa claims to have first used both marks in 2014.

The Hand Roll Bar Experience has advertised a similar “hand roll bar” and plans to operate two Los Angeles restaurants specializing in the same. In February 2019, HRB filed a trademark application for “HRB” as applied to “restaurant services featuring hand rolls.” This application remains an intent to use application, meaning that the applicant has yet to use the mark in commerce in connection with the applied-for services. However, the application received no rejections from the trademark examining attorney and published for opposition a few months after filing.

Within the United States Patent and Trademark Office, there exist two separate trademark registers, the Principal and the Supplemental. Most commonly, when new trademark applications are approved, they issue to the Principal Register. Under certain circumstances, trademark applications may instead issue to the Supplemental Register. For instance, descriptive marks, that is, marks which merely describe an ingredient, quality, characteristic, function, feature, purpose, or use of a product or service offered under the mark, must go on the Supplemental Register.

The Principal Register provides a presumption of validity of a trademark as well as protection for distinctive marks. Distinctive marks are those which, by their nature, serve a source-identifying function. In this manner, marks on the Principal Register enjoy a presumption of ownership, in addition to constructive notice to junior users. On the other hand, the Supplemental Register provides protection for nondistinctive marks but no presumption of validity. A Supplemental Register trademark owner is therefore required to prove the validity of its mark. Similarly, there is no presumption of ownership nor constructive notice for marks on the Supplemental Register.

Notably, both of Sushi Nozawa’s registrations exist on the Supplemental Register. During prosecution of these trademark applications, the trademark examining attorney refused registration on the Principal Register asserting that the applied-for marks merely describe various characteristics and the nature of the applicant’s services, namely, restaurant services. The examining attorney claimed that “Hand Roll” indicates one of the items featured at the applicant’s restaurant, as demonstrated by a specimen submitted by Sushi Nozawa. In addition, “Bar” is defined as “a small place that serves a particular type of food” and, therefore, indicates the nature of the applicant’s restaurant. Moreover, “original” is merely a laudatory term that, by itself, describes that the goods or services being offered are the first of their kind.

More recently, in November 2019, Sushi Nozawa filed new trademark applications for “The Original Hand Roll Bar” and “The Original Hand Roll Bar Founded 2014 Los Angeles” seeking registration on the Principal Register. In so doing, the restaurant group alleged that both marks had acquired distinctiveness based on its continuous use of the marks for five years. Acquired distinctiveness means that the mark has gained secondary meaning in the minds of consumers in that the mark has come to identify not only the goods or services, but also the source of those goods or services.

In response, the trademark examiner disagreed with the applicant’s assertion of acquired distinctiveness and noted that to support its claim, Sushi Nozawa must submit additional evidence such as advertising expenditures, sales success, length and exclusivity of use, unsolicited media coverage, and consumer studies which link the mark to its source. While Sushi Nozawa responded by submitting more than one hundred pages evidencing its extensive use of the mark, the examining attorney nonetheless maintained its rejection and required the group to disclaim “Hand Roll Bar” asserting that this portion of the mark is unregistrable. As such, Sushi Nozawa agreed to this amendment.

After Sushi Nozawa filed its complaint, HRB moved to dismiss the claims asserting that HRB’s use of any protected marks creates no likelihood of confusion or, alternatively, qualifies as fair use. At the pleading stage of litigation, a plaintiff fails to sufficiently allege likelihood of confusion when the marks are clearly dissimilar or the channels in which the marks are used are completely unrelated. The court noted certain differentiating characteristics between the disputed marks but that both marks prominently use “hand roll bar” in the same channels of trade and geographic location. As a result, the court determined that confusion may exist amongst consumers who enjoy hand roll sushi. Further, the court agreed with Sushi Nozawa that the fair use defense is not available at the pleading stage of litigation.

The co-founder of Sushi Nozawa Group, Jerry Greenberg, publicly stated that it created the concept of a sushi restaurant dedicated to hand rolls in the United States. Greenberg also stated that HRB has copied KazuNori rather than using an original idea. Moreover, Sushi Nozawa Group claims to have reached out to HRB prior to its opening to resolve the issue and the two companies purportedly reached an agreement that would not require litigation. However, according to Greenberg, HRB did not follow through on commitments made.

Also publicly, the HRB team released a statement that the case is “a classic example of a deep pocket business attempting to crush a newcomer in the industry because it is afraid of legitimate competition.” Further, the newcomer officially stated that it has not infringed any of Sushi Nozawa’s trademarks and that it is confident it will prevail on the merits. In this manner, HRB points to the fact that Sushi Nozawa’s registrations are not on the Principal Register and that it was required to disclaim “Hand Roll Bar” in its marks.

Can libraries be held liable for e-book lending?

At the beginning of June, four publishing companies filed a lawsuit in the United States District Court for the Southern District of New York against the Internet Archive alleging direct and secondary copyright infringement. Specifically, the four publishing companies, including HarperCollins, Hachette Book Group, John Wiley & Sons, and Penguin Random House, allege Internet Archive’s “Open Library” and/or “National Emergency Library” infringes their respective copyrights.

Plaintiffs are four of the world’s preeminent publishing houses and collectively, they publish some of the most successful and leading authors in the world. Indeed, many of these authors are winners of the Pulitzer Prize, National Book Award, Newbery Medal, Man Booker Prize, Caldecott Medal and Nobel Prize. Plaintiffs are the copyright owners of each of the works upon which the lawsuit is based.

Founded in 1996, the Internet Archive is a non-profit digital library offering free universal access to books, movies, and music. Via its “Open Library,” Internet Archive distributes digitally scanned copies of over one million titles. Any Internet-connected user has the ability to access complete digital copies of copyrighted books in this manner. Moreover, Internet Archive has openly pledged to do the same for millions more. In March, at the outset of the global pandemic, Internet Archive created the “National Emergency Library” with a goal to render all scanned books immediately accessible to anyone with an account.

The plaintiff publishing companies allege the Internet Archive has engaged in willful copyright infringement by scanning print books, uploading these “illegally scanned books” to its servers, and distributing whole digital copies of the books to the public. Plaintiffs further allege the defendant has done so without any license or payment to the publishing companies or authors. Because these e-books are scanned from physical copies rather than purchased in their digital form, the project circumvents the typical licensing restrictions used by conventional libraries. As a result, plaintiffs argue the Internet Archive is conflating print books and e-books.

Under the United States Copyright Act, copyright owners have six exclusive rights, including reproduction, preparation of derivative works, distribution, public performance, public display, and digital public performance of sound recordings. The right to distribute copies of copyrighted works to the public includes offering copies for sale, lease, or auction. Direct copyright infringement occurs when a person, without authorization, reproduces, distributes, displays, or performs a copyrighted work, or prepares a derivative work based on a copyrighted work. On the other hand, secondary copyright infringement occurs when a third party enables or supports infringement, as Internet Archive has allegedly done in this matter.

The first sale doctrine provides a defense to copyright infringement. Under the first sale doctrine, this distribution right is extinguished when a copyright owner transfers ownership of a particular legal copy of a work to another person. To succeed on this defense, the accused party must prove that he lawfully owned the copy that was later distributed. This doctrine is premised on the user’s right to dispose of his or her particular copy of a copyrighted work but does not necessarily extend to a situation in which the user has made another copy or otherwise converted the work to another form.

To avoid problems related to unauthorized reproduction of electronic books, many publishers use Digital Rights Management (DRM), which broadly refers to any technological measure that limits the use of copyrighted electronic media. One basic example of DRM is copy protection, which limits a user’s ability to copy, transfer, or otherwise duplicate protected data files. As another example, DRM may restrict copies of a particular electronic file to reside on a limited number of devices simultaneously. However, DRM can be used to enforce virtually any limitation a copyright owner desires. Of course, circumvention of DRM is prohibited under United States copyright law, and the Digital Millennium Copyright Act (DMCA), in particular.

In this case, DRM is not at issue because the libraries never held digital rights to the copyrighted works. Instead, the libraries rightfully owned physical copies of the books at issue and scanned their copies to create a digital form. Indeed, in response to this lawsuit, the Internet Archive claims that it is merely acquiring books and lending them as libraries have always done. The Internet Archive further rationalizes that because schools and libraries remain temporarily closed, due to the ongoing pandemic, creating electronically accessible versions of these titles is the most reasonable option for continuing to lend books. However, Internet Archive has yet to formally respond to this lawsuit and has until the end of the month to do so.

Can the United States Space Force lose its trademark to the Netflix series by the same name?

While President Trump officially unveiled the flag of the country’s newest military unit, Space Force, Netflix has been working to secure trademark rights to the same name for its comedy series across the globe. Prior to the series’ launch in late May, the popular streaming company secured rights to the show’s logo in certain countries in Europe, as well as, Australia and Mexico. The Department of the Air Force has since filed its own United States trademark applications for registration of “SPACE FORCE,” both of which remain pending. Currently, the Trademark Electronic Search System indicates Netflix has not yet attempted to secure trademark rights to “SPACE FORCE” in this country.

In May of this year, President Trump signed the 2020 Armed Forces Day Proclamation, officially creating the United States Space Force. In so doing, President Trump indicated that the branch would be aimed at protecting strategic American space infrastructure, including communications, navigation, and spy satellites from adversaries. In signing this proclamation, the President also unveiled the official flag of the new military branch, which included the Space Force logo. According to the White House, the colors used on the logo are meant to symbolize the “vast recesses of outer space.” Moreover, the logo includes an elliptical orbit with three large stars, each of which are meant to represent the branches’ three-pronged purpose: organizing, training and equipping Space Force troopers.

Netflix first filed to register its “SPACE FORCE” trademark in January of 2019 for the Netflix series starring Steve Carell. Since then, the entertainment giant has succeeded in securing rights in Australia, Canada, Mexico, and the European Union for entertainment services in the nature of a comedic drama television series. Netflix has also secured registration of the mark as applied to calendars, greeting cards, clothing, Christmas tree decorations, dolls, exercise equipment, and other goods in Canada. Moreover, Netflix holds other applications for the mark as applied to additional goods and services in Australia, Europe, and Canada, all of which remain pending. Most recently, Netflix sought registration of the mark in Mexico for a wide range of goods, such as calendars, posters, books, clothing, Christmas tree decorations, toy figures, and numerous others. Despite these multiple international filings under “Netflix Studios,” no U.S. applications to “Netflix Studios” have been filed.

Beginning in March 2019, the Air Force filed two intent-to-use applications for the standard character mark for “SPACE FORCE.” Standard character marks are those which allow the applicant to register the words of the mark in any design, capitalization, or font. To date, the Air Force has not filed any trademark applications for the Space Force logo. However, standard character marks not only provide broader protection than design trademarks, they also constitute the broadest type of trademark protection permitted in the United States. These applications provide a large range of goods and services, including space vehicles, promoting public awareness of the need for the United States Space Force, educational services, clothing, metal and non-metal name plates, backpacks, belt buckles, beer mugs, and cigarette lighters.

Intent-to-use applications are filed when the applicant may or may not have already been using the mark in commerce prior to filing their application. Such applicants must file based on a good faith or bona fide intent to use the mark in commerce. Along these lines, the United States Patent and Trademark Office relies on the “first-to-use” concept in trademark registrations. Under this concept, the entity which first uses a given trademark in commerce then secures the rights to it. Oppositely, most other countries follow the “first-to-file” rule, essentially creating a race to the trademark office in order to secure rights. Thus, in the event a dispute arises between the Department of the Air Force and Netflix, the entity which first used the mark in commerce is likely to prevail.

Ironically, some have commented that the logo for the military’s newest branch appears confusingly similar to Star Trek’s Starfleet logo. Others have rebutted that imagery such as arrowheads, orbits, stars, planets, and swooshes have been used in space emblems long before either the Starfleet or the space force logo. However, interestingly, there exist more than twenty applications and/or registrations which include the phrase “space force.” For instance, one application was filed in August 2019 for computer software in the field of parking lot services. As another example, another “SPACE FORCE” intent-to-use application was filed in May of this year for dietary supplement drink mixes, clothing, and energy drinks. Others exist for various goods and services, including video games, toys/action figures, community service organizations, and writing instruments.

Two identical trademarks can coexist if they are used in wholly unrelated industries. In particular, trademark infringement exists when there is a likelihood that consumers will be confused, mistaken, or deceived as to the source of particular goods or services. In this manner, if consumers are likely to believe the United States military’s newest branch is connected to the Netflix series, trademark infringement exists. For infringement to exist in this case, consumers would have to be likely to believe that Netflix is sponsoring the military’s training of fighting astronauts or that the federal government produced a television series about it.

Does livestreaming carry any copyright infringement risks?

Due to the coronavirus pandemic, many states, including California, have implemented strict shelter in place orders, under which people are forced to perform their daily activities out of their homes. As a result, use of livestreaming platforms, such as Zoom, Google Hangouts, WebEx, as well as, Instagram Live, Facebook Live, and YouTube, has significantly increased. Businesses of all types have also started using livestreaming platforms to provide services that were previously delivered in person. These services range from religious services, educational services, and fitness classes to weddings, funerals, graduations, and other social events. Because many of these livestreams include unoriginal audio or audiovisual content, copyright concerns exist.

As one example, legendary DJ D-Nice has been offering a daily “Homeschool at Club Quarantine” livestream series on Instagram Live in an attempt to bring a dance party into everyone’s homes. The now-viral stream started out as an attempt to change DJ D-Nice’s own feelings of isolation and now frequently features drop ins by famous celebrities, such as Drake, Jennifer Lopez, Michelle Obama, Dave Chappelle, Oprah Winfrey, and Mark Zuckerberg. According to DJ D-Nice’s representatives, Instagram arranged for broadcasting licensing for DJ D-Nice such that his use of copyrighted music does not constitute copyright infringement.

Copyright protects original works of authorship, including literary, dramatic, musical, and artistic works. Under the United States Copyright Act, copyright owners possess various rights, including the right to perform the work publicly. Copyright infringement occurs when someone publicly performs the musical composition, broadcasts an audiovisual work, such as a motion picture or television program, without permission from the copyright owner.

For musical works, there are two separate copyrights that are frequently held by different parties. The songwriting copyright is possessed by the songwriter while the sound recording copyright is often held by the record label. Performing rights organizations license, collect, and distribute public performance royalties for songwriters and publishers. Through these contracts, songwriters and publishers are entitled to collect a royalty each time their song is played on the radio, at a restaurant, retail establishment, fitness studio, park district facility, or online. In return, the performance rights organization provides a “blanket” license allowing the facility or service to broadcast the songs in the organization’s catalog. Livestreaming platforms typically do not have blanket licenses covering a user’s use or performance of a musical work over the platform. However, as mentioned previously, DJ D-Nice’s “Homeschool” livestream appears to be under such a license.

While a popular service, Instagram’s policies regarding copyright and the chance of being muted or interrupted in the middle of a livestream remain uncertain at best. Instagram’s computers detect each and every note that is played in a video that is posted, livestream or otherwise. When Instagram detects copyrighted material in a livestream video, the stream is cut off, and the streamer and the audience are both kicked out to the home page. This forces the streamer to start its stream over, undoubtedly losing audience members in the process.

For instance, various gyms and fitness studios have begun livestreaming classes which, almost invariably include, music. Instructors must be careful in selecting their tunes so as to avoid triggering Instagram’s copyright infringement algorithm. Kicking the instructor and the class members out of the feed kills the vibe and disengages the audience. As one solution, some instructors have decided to use only remixes or lesser-known music.

As another example, DJs that are lesser known than DJ D-Nice (and therefore are less likely to have a separate agreement with Instagram) constantly suffer the risk of any song clip they play triggering the algorithm. Some DJs have noticed that the takedowns are triggered by the duration of copyrighted content. These DJs have therefore avoided Instagram by quickly switching between songs and, also, playing less popular music. Notably, such “solutions” may still constitute copyright infringement but are less likely to cause an interruption in the livestream.

Penalties for copyright infringement can be expensive. In addition to actual damages for infringement, if the copyright is registered, the copyright owner may be entitled to recover statutory damages. Statutory damages range from $750 to $30,000 per work and even up to $150,000 if the infringement was willful. While this country follows the American rule that each party is responsible for paying its own attorneys’ fees, per statute, the copyright owner can also collect attorneys’ fees and court costs. Thus, if pursued to the fullest extent of the law, livestreamers could be subject to a number of severe consequences for copyright infringement.

Can artificial intelligence be a patent inventor?

The United States Patent and Trademark Office (USPTO) was recently required to determine whether a patent application may list artificial intelligence as an inventor. At issue were two patent applications for two separate, seemingly mundane devices. One application described a shape-shifting container for food and the other an emergency flashlight. The two inventions were created by DABUS, an artificial intelligence system created by physicist and artificial intelligence researcher Stephen Thaler. In a published decision, the USPTO determined that neither DABUS, nor any other artificial intelligence, can be listed as an inventor on a patent filing.

For a patent to be granted, it must satisfy certain requirements. The invention must be (1) patent eligible in that it is either a machine, process, article of manufacture, or a composition of matter; (2) useful; (3) new; (4) nonobvious; and (5) described with enough particularity that a person of ordinary skill in the relevant technology field would understand the invention without undue experimentation. Aside from these patentability requirements, the application must be filed with certain documentation, including, among others, an application data sheet which identifies the inventor(s).

When filed, the application papers at issue included an application data sheet, a substitute statement in lieu of a declaration, an inventorship statement, and assignment documentation assigning the entire right title and interest to Stephen Thaler. The application data sheet, which identifies the inventor or joint inventors of an invention, identified a single inventor with the given name “DABUS” and the family name “Invention generated by artificial intelligence.” Similarly, the substitute statement was executed by Stephen Thaler, who identified himself as the legal representative of DABUS and the applicant of the invention. Substitute statements take the place of an oath or declaration when an inventor is deceased, under a legal incapacity, has refused to execute an oath or declaration, or cannot be found or reached after diligent effort.

In August 2019, a Notice to File Missing Parts was issued, which indicated the application data sheet “did not identify each inventor by his or her legal name.” In instances where a Notice to File Missing Parts is issued, the patent application will still be accorded a filing date and application number. The applicant is then given a certain time period (usually two months) to file all required items and any fee. In this case, although the Notice sought a new application data sheet with correct inventorship, the applicant instead filed a petition requesting supervisory review of the Notice. This petition was dismissed, and the applicant requested reconsideration of this decision. The USPTO agreed with the prior ruling and therefore, refused to vacate the decision.

According to the applicant, DABUS is programmed as a series of neural networks that have been trained with general information in the field of endeavor to independently create the invention. Thaler claims it was DABUS, not a person, that recognized the novelty and importance of the purported invention. Moreover, DABUS was not trained to solve any specific problem nor was it trained on any special data relevant to the invention at issue. As a result, Thaler maintains the position that inventorship should not be limited to natural persons.

In explaining its decision, the USPTO provided several statutes, including that which sets forth the requirement that a patent application include “the name of the inventor for any invention claimed in the application” and that which defines “inventor” as “the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.” The USPTO determined that the statute precludes the applicant’s proposed broad interpretation of “inventor.” Indeed, it was also explained that the terms “whoever,” “himself,” “herself,” and “person” suggest a natural person and not a machine. Further, the USPTO cited several Federal Circuit Court of Appeals decisions that set forth that drafted must be natural persons. Overall, the USPTO found that the language of the patent laws as written by Congress and as subsequently interpreted by courts unequivocally supports the position that machines cannot be inventors.

Is a photographer owed a licensing fee in addition to compensation for time and labor for commissioned photographs to be used in the launch of a premium tequila brand?

Los Angeles-based photographer Anais Ganouna and her company, Frank & Anais, filed a lawsuit against The Colors You Like (TCYL) and Cincoro Spirits Group (doing business as Cincoro) for copyright infringement, fraud, civil conspiracy to commit fraud, and unfair competition. Ganouna claims the defendants knowingly and unlawfully exploited her creative work in connection with Cincoro’s highly anticipated launch of its premium tequila brand in 2019. Cincoro is owned by Michael Jordan and four other NBA owners.

Ganouna is a professional photographer and was commissioned to do a photoshoot for the defendants of the agave fields and plants in Mexico, the tequila production process, and the tequila bottles and barrels, as well as other instrumentalities, used for Cincoro’s tequila. Prior to contacting Ganouna, TCYL had used a staff photographer for the project but was dissatisfied with the quality of the images produced. According to Ganouna, her photoshoot was a “major success” and the defendants expressed their excitement at the prospect of using the images in their advertising campaign.

For her time, Ganouna was paid a discounted day rate of $1,000 with the understanding that licensing/usage rights would be negotiated at a later point. Indeed, Ganouna claims that such rights are typically negotiated separately from a photographer’s day rate, which merely serves to compensate the photographer for its time. When Ganouna later reached out to discuss usage of her photographs, a representative for TCYL responded that it had not been made clear that licensing the photographs would cost additional money. This same representative also represented that TCYL would be hiring another photographer to do reshoots and that none of Ganouna’s photographs would be used. However, Ganouna alleges defendants never engaged another photographer for this purpose and that no reshoots ever took place.

In September 2019, Cincoro officially launched. At this point, despite defendants’ representations, Ganouna discovered that Cincoro had indeed used a number of her images on its website, social media accounts, including Instagram, Facebook, and Twitter, as well as in paid advertising (i.e., sponsored advertisements) and by third-party vendors. As such, Ganouna, through counsel, sent a letter to defendants demanding compensation for their purported use of her photographs and requesting they cease using the same until after a resolution had been reached.

In response to Ganouna’s letter, defendants claimed that TCYL had meta data proving that every photograph used was pulled from a video shot by TCYL and not from Ganouna’s photographs. Nonetheless, Ganouna argues that even if this is the case, the photographs selected from the videos taken concurrently with her photoshoot appear to be identical to her photographs or “extremely close derivatives thereof.” Indeed, Ganouna claims to have dressed the sets, staged the shots, and placed or directed the subjects of the shots. Moreover, Ganouna claims that video was not shot to accompany every scene Ganouna shot. To date, Ganouna’s alleged photographs remain on Cincoro’s website and social media pages.

Ganouna’ first claim for relief, copyright infringement under 17 U.S.C. § 101 et seq., requires the use of works protected by copyright law without permission for such usage, thereby infringing the copyright holder’s exclusive rights. Under copyright law, authors of original works of authorship that are fixed in a tangible medium possess numerous rights, including reproduction, preparation of derivative works, distribution, public performance, and public display. For economic rights to a copyrighted work to be transferred, such as through a licensing agreement, the transfer must be in writing and signed by the copyright holder. Notably, such transfer does not require payment or any consideration in exchange for the granting of a license. That being said, copyright holders often do require payment or otherwise place restrictions or obligations on the licensee. Thus, in this case, the court will determine whether by accepting a $1,000 fee, Ganouna had licensed the rights to her photographs. In any event, though defendants have not responded to Ganouna’s lawsuit, defendants may maintain their position that none of Ganouna’s photographs was used, in which case no license would be required.

Can 3M use a trademark infringement lawsuit to mitigate price inflation of N95 respirator masks during the global COVID-19 pandemic?

Earlier this month, 3M filed a lawsuit alleging trademark infringement against Performance Supply, LLC, an N95 respirator distributor in the District Court for the Southern District of New York. 3M alleges Performance Supply has been offering for sale counterfeit 3M-brand N95 respirators to unwitting consumers, including government agencies. In addition to addressing Performance Supply’s infringement of 3M’s eponymous trademark, the goal of the lawsuit is to eliminate “a false and deceptive price-gouging scheme” by this unauthorized supplier of 3M respirators.

Since 1902, when 3M began as a small-scale mining venture, it has become a provider of scientific, medical, household, and other products to consumers internationally. According to the Complaint, 3M is “an industry-leading provider of scientific, technical, and marketing innovations throughout the world,” including a portfolio of more than 60,000 goods and services. As it relates to this lawsuit, 3M offers a wide variety of medical devices, supplies, and personal protective equipment (PPE), including the N95 respirator.

For the past century, 3M has been using its trademarks, such as “ACE,” “POST-IT,” “SCOTCH,” “NEXCARE,” the slogan “3M Science. Applied to Life,” as well as others. However, 3M claims to be most widely recognized by its eponymous brand, including its standard character “3M” and the inset 3M design mark. 3M has been using its standard-character 3M mark as applied to respirators since at least 1960 and its design 3M mark on respirators since at least 1990. 3M claims that its 3M trademark is famous and distinctive.

Famous trademarks are those that have an immediate connection in the minds of the consumer with a particular product or service and the source of that product or service. Famous marks enjoy a broader scope of protection. Trademarks may become distinctive after five years of substantially exclusive and continuous use of the mark in commerce. Because 3M has been using its 3M marks on N95 respirators for more than 30 years, there can be little doubt 3M’s marks are distinctive.

During this global pandemic, 3M has doubled its production of 3M-brand, Model 8210 respirators, many of which are provided to healthcare workers. Indeed, 3M’s anticipated annual production is 1.1 billion respirators. These N95 respirators reduce exposure to airborne biological particles and liquid contaminants, which is especially crucial during the outbreak of the coronavirus. Despite investing capital and resources to increase its production of these essential N95 respirators, 3M has not increased its prices.

In addition to not increasing its prices, 3M has also taken an active role in counteracting price-gauging by third parties who seek to exploit the exponentially increased demand for 3M-brand N95 respirators. Not only have these third parties increased their prices, some sell counterfeit, lesser-quality versions of the masks and others even accept money for the respirators despite not having the product nor ever intending to deliver the product. 3M’s goal is also to protect the reputation and goodwill of its brand. In so doing, 3M has worked with law enforcement, retail partners, and even consumers to stop the unlawful practices related to 3M’s respirators.

Around the end of March, at a time when New York City was reporting record numbers of COVID-19 positive tests and deaths, Performance Supply emailed a “Formal Quote” to the New York City’s Office of Citywide Procurement. Therein, Performance Supply offered to sell the Office 2 million 3M-brand N95 Model 8210 and Model 1860 respirators at prices 500-600% over 3M’s suggested list price. Within the Formal Quote prepared by Performance Supply, 3M’s design and standard character marks were used nine times.

Due to Performance Supply’s “rampant use” of the 3M trademarks, as well as, the New York City officials’ mistaken identification of Performance Supply as an authorized vendor of 3M-brand, N95 respirators, the Procurement Office actually purchased $45 million-worth of purported 3M-brand N95 respirators. However, 3M claims to have no association with Performance Supply, nor is Performance Supply an authorized distributor of 3M products. As a result of this conduct, 3M filed claims for federal and state trademark infringement, unfair competition, false association, false endorsement, false designation of origin, trademark dilution, false advertising, and deceptive acts and business practices.

Does copyright infringement arise out of publishing embedded content from third-party websites?

The United States District Court for the Southern District of New York recently determined that Mashable lawfully used a photojournalist’s photograph pursuant to a sublicense from Instagram. Following a motion to dismiss by defendants, Mashable and parent company, Ziff Davis, the court held no copyright infringement had occurred by embedding the Instagram photo in an article. As a result, the plaintiff’s, Stephanie Sinclair, complaint for copyright infringement was dismissed.

The dispute began in March 2016, when an article titled “10 female photojournalists with their lenses on social justice” was published. The article highlighted the work of ten female photographers whose work focuses on social justice. One of the photojournalists featured, Sinclair, shoots for National Geographic and aims to protect girls’ rights and end child marriage by documenting sensitive human rights topics internationally. With a particular focus on gender issues, Sinclair most frequently shoots the subjects of child marriage and self-immolation. At issue is one photograph in particular, titled “Child, Bride, Mother/Child Marriage in Guatemala.” Mashable initially offered Sinclair $50 for rights to this photograph for the article. When Sinclair declined, Mashable embedded the image from Sinclair’s official Instagram account. Shortly thereafter, Sinclair filed a lawsuit for copyright infringement.

In including Sinclair’s Instagram photo in their article, Mashable used a process called “embedding.” This technical process allows a website coder to incorporate content that is located on a third-party’s server into the coder’s website. When users visit said website, the user’s Internet browser retrieves the embedded content from the third-party server and displays it on the website. Thus, the user sees the embedded content on the website, despite the fact of it actually being hosted on a third-party’s server. Instagram uses an “application programming interface,” or “API,” to enable users to access and share content posted to “public” accounts, such as Sinclair’s. Here, Mashable used the API to embed Sinclair’s photograph from her Instagram account to their article.

Previously, the nature of this lawsuit revolved around the server test. This doctrine focuses on the fact that a publication which uses a photo-embed code never stores the photo on its own servers or transmits it to the user. Rather, the embed code instructs the user’s Internet browser how to download the image directly from another site. In this case, the other site was Instagram, and particular, Sinclair’s official, public account. A majority of courts have found such use of third-party content to not constitute copyright infringement because the publisher is not distributing or displaying the content to users. Other courts, including the Southern District of New York, have found infringement in these instances claiming the technical details of how the photograph reached the user’s browser does not overshadow the fact that the news websites caused the photo to appear on user’s browsers without permission from the copyright holder. Problematically, under the server test, those who evaded liability for direct infringement could still be held liable for indirect copyright infringement.

Instead of relying on the server test, Mashable argued Sinclair granted a license to Instagram to use her photo when she uploaded it. In addition, Instagram’s terms of service state that it has the right to sub-license the photo to others. A copyright owner who permits a licensee to grant sublicenses cannot bring an infringement suit against a sublicensee, so long as the licensee and sublicensee have acted within the terms of their license and sublicense, respectively. Indeed, a sublicensee cannot acquire valid rights to copyrighted works if the sublicensor had no right to issue a sublicense in the first place.

By using Instagram’s embedding service, Mashable was lawfully sublicensing the photo from Instagram. The court agreed with this argument in finding no copyright infringement had occurred. This licensing-based reasoning clearly distinguishes between authorized and unauthorized social media uploads. Importantly, through a site like Instagram, which is automatically granted a license to content uploaded to its platform, the user who uploads content may disable any third-party use of the same by marking the post as private. Sinclair appears to have done just that as her photograph no longer appears in Mashable’s article. Moreover, any sublicense arising out of an Instagram-posted photo is limited to the embedding tool. Thus, if Mashable, or another entity, sought to use the photo for another purpose, it would require a separate license from Sinclair.

Tiger King

Netflix’s “Tiger King” has become a mainstay in many American households during this period of quarantine. Indeed, in the first few days following the hit, true-crime documentary miniseries’ March 20^th debut, more than thirty-four million viewers tuned in to follow the demise of Joe Exotic. Exotic is a self-proclaimed “gay, gun-carrying redneck with a mullet” who owns a big cat roadside zoo and animal park in Oklahoma. Moreover, those who watched learned that Joe Exotic’s intellectual property infringement was the first step in a series of negative events that eventually led to his conviction and prison sentence.

While much of “Tiger King” tracks Exotic’s bitter, decades-long discord with animal conservationist Carol Baskin, one particular episode focuses on trademark and copyright disputes between the pair. Baskin is the owner of Big Cat Rescue, which takes in large felines and allows them to live out their days in caged conditions. Baskin’s purported goal is to make the selling of exotic cats in the United States illegal. Baskin trademarked her logo, which includes the words “Big Cat Rescue.” Later, in the heat of the pair’s bad blood, Joe Exotic named his traveling venture “Big Cat Rescue Entertainment,” with a logo that looks uncannily similar to Baskin’s.

Notably, prior to Exotic’s use of “Big Cat Rescue Entertainment,” Baskin did not own a trademark for the phrase “Big Cat Rescue.” Instead, she merely owned a design mark for a logo that incorporated “Big Cat Rescue.” However, during prosecution of Baskin’s design mark, the trademark office required a disclaimer of “big cat rescue.” A disclaimer does not remove the disclaimed matter from the mark but is simply a statement that the trademark applicant does not claim exclusive rights in the disclaimed wording apart from the mark as shown in the drawing. In addition, just because Baskin failed to secure registration of the words by themselves, she may have nonetheless been entitled to common law protection due to her extensive prior use of the same. Thus, absent the consent judgment, Exotic may potentially have been able to prevail on his use of “Big Cat Rescue Entertainment.” That being said, due to the highly similar nature of the respective logos, as well as, the nearly identical services, Exotic likely would have lost on the design mark claim.

Later, between 2011 and 2012, a second lawsuit was filed against Joe Exotic by Carol Baskin and her husband alleging copyright violations. This litigation arose due to Exotic’s misappropriation and posting online of various photographs to which Baskin owned copyrights. During depositions, Exotic admitted to posting the pictures but still asserted that Baskin was not the original owner of the photos. Such an argument is irrelevant in copyright law and as such, Exotic was forced to pay Big Cat Rescue Corp. damages totaling $75,000. However, as a result of the consent judgment in the trademark dispute, Exotic owed more than $950,000 in damages, for a total of over a million dollars in judgments against him. As a result, Exotic became bankrupt.

Meanwhile, since the series’ release, multiple individuals or entities have filed trademark applications for marks including “TIGER KING” and “JOE EXOTIC.” For instance, one application for “JOE EXOTIC” is for hats, sweatshirts, and t-shirts, and was filed by a California company that presumptively has no connection to the Oklahoma-based flamboyant feline lover. By way of further example, applications for “TIGER KING” include for plush toys, clothing, bean bag chairs, decorative seasonal stockings, Halloween costumes, and multimedia goods. While these entities may believe they have gotten ahead of the curve by cashing in early on the series’ sudden popularity, their changes of security registration are most likely slim to none.

In particular, unlike the patent system, under which the first inventor to file an application is entitled to rights (assuming the other requirements of patentability are satisfied), trademarks are not awarded based solely on a first-to-file system. Rather, for trademarks, it is the first entity that uses the mark in commerce that matters. Moreover, unless the applicants get Joe Exotic to consent to the use of his name, the Trademark Act, which bars federal registration of a mark that consists of or comprises matter which falsely suggests a connection with a famous person, will likely block these applications from registering.

Can one copyright a graphic depiction of a mood?

In an action to determine whether certain anthropomorphized characters representing human emotions qualify for copyright protection, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of the action. The lawsuit was filed by Denise Daniels and The Moodster Company, who created “The Moodsters.” In their complaint, plaintiffs alleged that The Walt Disney company and Pixar infringed their copyrighted characters through the movie “Inside Out.” The Ninth Circuit also affirmed the district court’s denial of plaintiffs’ claim for breach of an implied-in-fact contract under California law based on plaintiffs’ alleged disclosure of information about The Moodsters to various employees of Disney and its affiliates.

Plaintiff Daniels is an expert on children’s emotional intelligence and development and designs and promotes initiatives that help children cope with their emotions. As a commercial application of this work, Daniels developed “The Moodsters” and hired a team under her company, The Moodsters Company. The Moodsters are lightly sketched anthropomorphized characters representing human emotions. The Moodsters include five characters that are color-coded anthropomorphic emotions, each representing a different emotion: pink for love, yellow for happiness, blue for sadness, red for anger, and green for fear.

In 2007, Daniels and her team created a 30-minute pilot episode for a television series featuring The Moodsters, titled “The Amoodsment Mixup,” which was later available on YouTube. Between 2012 to 2013, plaintiffs developed a line of Moodster products, including toys and books that were sold at Target and other retailers beginning in 2015. Moreover, plaintiff claims to have pitched The Moodsters to numerous media and entertainment companies. Notably, plaintiff alleges that the Walt Disney Company and Pixar were recurring targets, although no deal was ever reached.

Meanwhile, Disney began development of “Inside Out” in 2010 and the film was released in 2015. “Inside Out” centers on five anthropomorphized emotions that live inside the mind of an 11-year-old girl. Slightly different than The Moodsters, these emotions are joy, fear, sadness, disgust, and anger. In addition, in Disney’s telling, yellow is for joy, blue is for sadness, red is for anger, green is for disgust, and purple is for fear.

In 2017, plaintiffs filed their lawsuit for copyright infringement of The Moodster characters and breach of an implied-in-fact contract. According to plaintiffs, the contract arose from Disney using plaintiffs’ characters to develop “Inside Out” and the breach occurred when Disney failed to compensate plaintiffs for the material. As to copyright infringement, plaintiffs alleged infringement of the individual Moodster characters and the entire ensemble of characters. Disney responded to the lawsuit by filing a motion to dismiss, alleging that plaintiff failed to meet the standard for copyright protection and that plaintiff’s publication of the characters doomed plaintiff’s breach of contract claim. The district court granted Disney’s motion to dismiss and plaintiff appealed to the Court of Appeals for the Ninth Circuit.

At primary issue in this case is whether The Moodsters constitute copyrightable material. While characters are not an enumerated copyrightable subject matter, courts have often extended such protection to graphically depicted characters. A character is entitled to copyright protection only if (1) the character has physical as well as conceptual qualities, (2) the character is sufficiently delineated to be recognizable as the same character whenever it appears and displays consistent, identifiable character traits and attributes, and (3) the character is especially distinctive and contains some unique elements of expression.

Disney conceded that The Moodsters certainly have physical as well as conceptual qualities. However, the court determined that these characters do not qualify for copyright protection because they lacked consistent, identifiable character traits and attributes and were not especially distinctive. In particular, the notion of using a color to represent a mood or emotion is an idea that does not fall within the realm of copyright protection. The court noted the vast number of works featuring the idea of color psychology. The court further noted that colors themselves are generally not copyrightable. Moreover, The Moodsters changed significantly over time and therefore, lacked consistent, identifiable character traits. For example, the characters’ names changed throughout the various iterations. Indeed, other than the notion of color and emotions, there are few other identifiable character traits and attributes that have remained consistent across the various versions of The Moodsters.

Further, The Moodsters did not qualify for copyright protection under the alternative “story being told” test. Under this test, a character can be subject to copyright protection if it constitutes the story being told. In other words, to be eligible for protection, the character must be central to the story. On the other hand, if the character is “a mere chessman in the game of storytelling,” no protection subsists. Here, the court found that the depictions of The Moodsters failed to include any substantial character development or character study. Therefore, the court held that that characters each serve as a means by which particular emotions are introduced and explored.

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