Brexit and Your Intellectual Property

What impact will Brexit have on your trademarks?

Any person or company holding an EU Trademark (EUTM) must review its position in light of the United Kingdom leaving the European Union at midnight on Friday, March 29, 2019.  The UK government may agree to an arrangement whereby existing rights will automatically transfer, with or without a fee, but currently there is no agreement in place.  It has been the practice that if a trademark was used in the UK and Ireland, that should constitute sufficient use to enjoy protection in all member states.  When the UK leaves the EU, a business may have insufficient use of its EUTM elsewhere in the EU to meet the threshold requirement, thus EU-wide protection could be lost.

A Registered Community Design (RCD) provides wide-range design protection in the EU, including furniture, bicycles, chocolates and clothing and fashion appliques.  After the UK leaves the EU, the RCD will no longer be enforceable in the UK.  Small to medium-sized enterprises (SME) will need to know how to protect designs in the UK post-Brexit.  Businesses and companies with EU domain names will need to identify such names in their portfolio and decide if it is necessary to transfer ownership into an entity placed within the European Economic Area.

If the UK is a key market for the owner of an EU trademark who does not currently have a separate UK trademark, filing a UK trademark application now is necessary in order to ensure continued trademark protection in the UK regardless of the outcome of the withdrawal process.  Businesses are taking action now to protect their intellectual property rights.  UK trademark filings by US applicants have increased by over 150%, filings from China by over 175% and filings from Canada by about 100%.  Although it is hoped that a settlement will make provision for the re-registration of European Union Trade Marks and Registered Community Designs before the UK Intellectual Property Office, if an agreement is not reached, all EU Trade Marks and all Registered Community Designs will become ineffective in the UK after March 29, 2019.

In addition, SMEs will need to know what effect Brexit will have on IP licenses and agreements and it will be important to ensure that any agreements or licenses that are negotiated prior to March 2019 properly address the effect of the UK’s departure from the EU to minimize trading uncertainty.  It is not yet clear what effect Brexit will have on the extensive scheme of EU protections for geographical indications, which include Protected Designations of Origin and Protected Geographical Indications.  Although some of these EU schemes are open to non-EU applicants, the “home” country must provide reciprocal recognition.

What impact will Brexit have on your patents?

Inventors seeking to protect their inventions in Europe may not need to adjust their filing strategies because of Brexit. After the UK leaves the EU, it will still be possible for inventors to obtain protection for their inventions in the UK by filing patent applications directly at the UK Intellectual Property Office.  Brexit will have no effect on UK patents granted by the UK Intellectual Property Office.  Inventors will still be able to obtain protection for their inventions in other European countries by filing European Patent Applications at the European Patent Office.

Omni Legal Group is here to review and protect your intellectual property position.

Red Bull Fights Against Gray Market Energy Drinks

Red Bull recently filed a complaint in the United States District Court for the District of New Jersey against a wholesaler for distributing gray market energy drink products in this country. Intended for sale in South Africa and not in the United States, Red Bull asserted the unauthorized energy drinks violated Federal Drug Administration requirements as well as Red Bull’s intellectual property rights. More particularly, the energy drink giant accused Quality Wholesale Distributors of trademark infringement, unfair competition, and trademark dilution.

Quality allegedly has been involved in the importation, sale, promotion, and distribution of the gray market Red Bull drinks. Such gray market products are authorized for sale in selected foreign countries, such as South Africa, to “reflect differences in terms of language, government regulations and units of measurement,” according to the complaint. Red Bull claimed the gray market products have not been subject to its quality control standards, do not contain adequate universal product codes for tracking, nor do they display beverage container deposit information, as required in many states.

Gray market goods, or parallel imports as they are more properly known, are branded goods sold outside of the brand owner’s authorized distribution channels. Parallel imports are not intended for sale domestically by the trademark owner and may have been formulated or packaged differently for sale in foreign markets. This is distinguishable from counterfeit goods, which are identical but not genuine. In contrast, parallel imports have been produced by, for, or under license from the trademark owner.

While often referred to by trademark owners as bootleg products, gray market goods are actually acquired legally abroad then imported into the United States without the trademark owner’s consent. Because of the legal acquisition of the goods, such actions do not legally constitute trademark infringement under the Lanham Act absent “legal confusion.” In particular, legal confusion will be found where the gray market goods are “materially different” from that of the trademark owner. Courts have looked to a number of different elements in finding “material differences,” including labelling, packaging, structural strength of product components, product composition, and storage of material. Further, services provided with the product, warranties or lack thereof, as well as, the trademark owner’s superior internal quality control standards may also constitute material differences.

Parallel imports remain problematic for both trademark owners and the consuming public. Importation of gray market products can cause the trademark owner to lose its ability to control the quality of goods bearing its brand as well as ensure the goods satisfy United States government regulations. More than that, even if the products are of high quality, often products are tailored to specific preferences of a particular market. Because of this, trademark owners suffer from an inability to ensure United States consumers are receiving goods designed for their consumer tastes. Trademark owner may subsequently lose goodwill if the gray market products negatively impress upon consumers in this country. As to consumers, the parallel import may be formulated for particular conditions, such as weather or different electrical sockets, that exist in other countries but not the United States. Consumers may then be unable to use or enjoy the products due to these disparities.

Remarkably, this is not the first time Red Bull has defended its brand against the unlawful distribution of gray market energy drinks. In 2006, the energy drink company sued a Georgia-based company for its unauthorized distribution of gray market products. In that suit, Red Bull ultimately obtained a $2.1 million verdict and a permanent injunction prohibiting further infringement and dilution. Again, in 2009, Red Bull brought suit in New York claiming gray market energy drinks were being diverted from foreign countries in which the sale was authorized into the United States. Subsequently, the United States International Trade Commission issued a general exclusion order prohibiting the importation of unauthorized Red Bull energy drink products into this country. As a result of this order, the United States Customs Department was to intercept any gray market products from United States ports.

If successful in proving Quality’s gray market energy drinks are materially different from those sold by Red Bull, Red Bull may be able to obtain damages for customer dissatisfaction, diminution in the value of the goodwill associated with its trademark, and loss of sales and market shares to Quality. Red Bull is also seeking attorney’s fees, treble damages, as well as any profits gained by Quality as a result of its sale of the energy drinks. Of course, Red Bull has also requested an injunction preventing the further sale of gray market energy drinks.

Wubba Lubba Dub PUB Closes Down After Allegations of Copyright and Trademark Infringement

A “Rick and Morty” themed pop-up bar, located at the “Wubba Lubba Dub PUB” in D.C., was forced to close down merely one day after opening because negotiations with Turner Broadcasting and Cartoon Network fell through. Drink Company, the entity behind the pop-up, announced intentions to execute this “schwifty” experience without first seeking permission or a license from the network. The pop-up was planned to run from August 9 until October 6 but experienced a one week delay in opening due to hopeful negotiations with Turner Broadcasting. In the weeks prior to the bar opening, an attorney for Drink Company describes settlement negotiations as cordial and covering the usual type of issues, including agreements about placing disclaimers distinguishing the parties and indemnification by Drink Company should a guest become injured in the bar and choose to sue Turner Broadcasting. Then, according to Drink Company, Turner Broadcasting “changed their minds.” The Monday before the bar was set to open, Turner sent a new counteroffer, which, for the first time, included a six-figure licensing fee and requested Drink Company cut down the length of the pop-up by one month.

The cartoon follows the misadventures of alcoholic mad-scientist Rick and his grandson Morty as they travel throughout the multiverse, through space and time. As a tribute to the cartoon, the bar featured decorations and imagery from the show, including wall paintings and hand-sewn plush figures of characters. Even more, the space included life-size recreations of Rick’s garage laboratory and the spaceship used by Rick and Morty in their adventures. Costumes were welcomed and encouraged and the pop-up even included a special entrance for any guests who dressed up as Rick. Specialty themed drinks included aptly-named beverages such as the “Existence if Pain,” “Get Schwifty,” “Pirates of the Pancreas,” “Morty’s Mind Blower,” “Pickle Rick,” “Sleepy Gary,” “Peace Among Worlds,” “Keep Summer Safe,” and “Plumbus.”

Turner Broadcasting based its position on trademark infringement, trademark dilution, copyright infringement, and unfair competition. In particular, Turner was concerned consumers may be confused into believing the network was responsible for the “Rick and Morty” themed pop-up bar. Trademark infringement takes place when there exists a likelihood of confusion as to the source, sponsorship, or approval of goods or services. Similarly, copyright infringement occurs when an accused work is substantially similar to the original expression of the work and is analyzed under the audience test, which would find copyright infringement whenever an ordinary observer would immediately detect the similarities between the two works, without any aid or suggestion from others. Moreover, Turner claimed it worried the experience would not be up to the standards set for Rick and Morty fans, whom the network did not want to disappoint.

On the other hand, Drink Company asserted its pop-up experience qualified as fair use. Fair use is a permitted defense where any copying of copyrighted material is done for a limited or transformative purpose. In essence, fair use includes commentary, criticism, and parody, and provides for the unlicensed citation or incorporation of copyrighted material in another’s work. Drink Company claimed that consumers would recognize the “Wubba Lubba Dub PUB” as a fan tribute and would not be confused into believing Cartoon Network was starting a pop-up bar.

This is not the first time a bar has opened or proposed to open a fan-centric bar pop-up experience that has faced copyright issues. Last September, Netflix issued a playful cease and desist letter to “The Upside Down,” a Chicago-based bar themed to the hit series, Stranger Things. In that case, the streaming giant permitted the pop-up to remain open but requested it not extend beyond its planned six-week run and further that the bar request permission if ever attempting another bar inspired by Netflix intellectual property. Another example was “The Dark Side” bar, which celebrated the release of “The Last Jedi” and launched in Hollywood, New York, and D.C. last November. Finally, “Enter Wakanda” unofficially celebrated “Black Panther” with a throne room inspired by the film, paintings of characters, and cocktails named things like “Vibranium” and “Heart of Wakanda.”

This is not even the first time a “Rick and Morty” inspired bar has opened. In January, an arcade bar in Chicago, Replay, opened a similar experience decorated with fan art of the characters and offered a thematic cocktail menu. Replay had similarly been contacted by Turner Broadcasting but had received permission to operate its pop-up in an unofficial capacity for a truncated period of time. Moreover, the “Wubba Lubba Dub PUB” pop-up space is home to previous fan-centered experiences by Drink Company, including tributes to Christmas, cherry blossoms, and even the royal wedding. Indeed, Drink Company gained initial fame for its prior operation of a Game of Thrones-themed pop-up in the same space. Despite this turn of events, Drink Company has stated it will not be dismayed in future themed pop-up pursuits. Rather, it claims to have learned a valuable lesson: “when it comes to free speech and fair use, Turner Broadcasting/Cartoon Network believes that should only be a joke on the show.”

Disney’s “The Last Days of Michael Jackson”: fair use or copyright infringement?

The Walt Disney Company recently moved to dismiss a copyright infringement lawsuit brought against it by the estate of Michael Jackson. “The Last Days of Michael Jackson,” the subject of the lawsuit, was aired by ABC earlier this year as a documentary television retrospective on the star’s Jackson 5 years to his final days. In essence, the estate claims the documentary features copyright-protected videos and songs owned exclusively by the estate and without ever seeking permission for the same. In response, Disney continues to maintain its documentary constitutes fair use.

In its complaint, Michael’s Jackson’s estate focuses on the irony of Disney’s previous zealously advocation of intellectual property rights. In particular, the estate notes that the entertainment company’s “zeal to protect its own intellectual property from infringements, real or imagined, often knows no bounds.” The estate goes further to cite three sympathetic examples of how Disney used its power to force others to comply with its intellectual property will.  First, the estate cites threats made by Disney against independent child care centers for having pictures of Mickey Mouse and Donald Duck on their walls, forcing the centers to remove the pictures from their walls. Another example is a lawsuit seeking one million dollars brought against “a couple on public assistance” who had been appearing as Tigger and Eeyore at children’s parties. Lastly, and perhaps the most relevant to Disney’s fair use defense, the complaint cites DMCA takedown notices sent by Disney to Twitter, Facebook, and the like, when consumers posted pictures of Star Wars toys the consumers had legally purchased. Through these examples, Michael Jackson’s estate attempts to paint the picture that Disney “has never been shy about protecting its intellectual property.”

In light of Disney’s rigorous intellectual property protection, the estate claims it is particularly egregious that Disney has so blatantly used Michael Jackson’s works without seeking a license from the estate. Indeed, the complaint states “Disney’s passion for the copyright laws disappears when it doesn’t involve its own intellectual property and it sees an opportunity to profit off of someone else’s intellectual property without permission or payment.” Even more, the estate’s grievance is aggravated by the quantity of copyrighted works used by Disney in its special. “The Last Days of Michael Jackson” purportedly used at least thirty different copyrighted works including, “substantial portions of some of Michael Jackson’s most famous music,” such as Billie Jean, Beat It, Don’t Stop ‘Til You Get Enough, The Girl is Mine, and Leave Me Alone. Moreover, the two-hour special features “extensive parts of Michael Jackson’s copyrighted music videos,” including Michael Jackson’s Thriller, Billie Jean, Black or White, and Childhood.

While Disney admits to having utilized “short excerpts” from Michael Jackson’s songs and videos, the company contends its use is “limited.” Disney contends these works are used solely for the purpose of providing historical context and explanation tracing the arc and aspects of Michael Jackson’s life and career. Furthermore, Disney claims that in most instances in its documentary special “well less than 1& of the works” were reproduced.

Disney’s primary argument to Michael Jackson’s estate’s complaint is that its film qualified as a documentary and therefore, that its “limited” use of the copyrighted material was fair game. Specifically, Disney argues that per its right of free speech under the First Amendment and the doctrine of fair use under the Copyright Act, its use was completely permissible. For a use of copyrighted work to be classified as a “fair use,” it must be done for a limited and transformative purpose. Generally speaking, most fair use qualifies as either commentary/criticism or parody. It follows, therefore, that Disney contends it is allowed to limited use of the estate’s copyrighted works for the purpose of reporting on, commenting on, teaching about, and criticizing a well-known public figure.

Michael Jackson’s estate seeks to hold Disney liable for ABC, Inc.’s release of “The Last Days of Michael Jackson” under an agency theory. Specifically, ABC is a wholly-owned subsidiary of The Walt Disney Company. Moreover, the estate contends Disney had knowledge of ABC’s “planned infringing activity” as its General Counsel was sent numerous letters in the days prior to the special’s airing and ignored the last two letters. Based on this knowledge and control, the estate claims The Walt Disney Company can therefore be held liable for ABC’s alleged wrongful conduct of airing the infringing special.

Did you know?

The first microwave was invented by accident in a Raytheon laboratory testing magnetrons. Perry Spencer, the accidental inventor, was a Raytheon employee and self-taught engineer. One day while working near the magnetrons, which are high-powered vacuum tubes inside radars, Spencer noticed a peanut butter chocolate candy bar in his pocket had begun to melt. With this newfound knowledge of how to cook food within seconds, Spencer, together with Raytheon, patented the invention. Two years later, the first commercial microwave oven was launched by Raytheon, cost $5,000 at the time, and approximated 750 pounds in weight and nearly 6 feet in height.

Tesla Recently Settled Dispute Over Farting Unicorns

Billionaire CEO of Tesla and SpaceX, Elon Musk, recently settled a dispute with an artist over a farting unicorn image. Tom Edwards, a Colorado-based potter, first released the drawing of a unicorn farting into a pipe to power an electric car in 2010. The mug featuring the image was consistent with the signature light-hearted cartoons of Edwards’ “Wallyware” brand and contained the phrase “electric cars are good for the environment because electricity comes from magic.” The dispute began last year when Musk tweeted a picture of the coffee mug including Edwards’ work with the caption “maybe my favorite mug ever.” A month later, the billionaire tweeted a copy of an identical cartoon image to promote the new sketch pad feature of Tesla, which allows drivers to doodle on a touchscreen. The cartoon also appeared in a Christmas message to Tesla customers.

After Musk released this image, multiple news sources incorrectly reported that Musk designed and created the image. The artist hired an attorney who promptly sent to Tesla “not a cease and desist” letter but rather “an invitation for all parties to continue to benefit from the whimsical, and amazingly spot on piece of imagery” created by the artist. Edwards’ daughter, Lisa Prank, took to Twitter to call Musk out for his use of the images querying “don’t you think artists deserve to be paid for their work?” The Tesla CEO replied that the image was chosen randomly by a software team as a joke. Musk also asserted that it would be “kinda lame” if Edwards were to sue for money and that, if anything, the attention from Tesla “increased his mug sales.” This dispute has since been settled as the Colorado potter aptly noted that Elon Musk is “really really interesting. But he isn’t above copyright law.”

YouTube Launches Copyright Match Tool

In response to continued criticism for failing to adequately prevent copyright infringement on its platform, YouTube has launched a tool designed to fight the issue. Known as the “Copyright Match” tool, the initiative is designed to identify re-uploads of a user’s content to other accounts. The uploaded video is first scanned and checked for similarities to other videos. Any such matches appear appropriately in the “matches” tab. Once a match has been identified, the user may choose to take no action, request YouTube remove the video, or take matters into their own hands by contacting the creator directly. When a removal request is submitted to YouTube, a 7-day delay is required to permit the alleged infringer to resolve the issue themselves. In announcing this launch, the video sharing platform emphasized the importance of ensuring exclusive ownership in the content prior to taking action. For instance, if the content is safely within the public domain or subject to fair use, the user should not file a takedown request nor contact the uploader directly. If successful, this initiative may prove to be a large step toward the longtime headache experienced by creators in policing stolen online content. #omnilegalgroup #copyright #youtube

USPS Ordered To Pay New York-New York Statue Of Liberty Sculptor $3.5M For Copyright Infringement

In 2010, the United States Postal Service released its collection of Liberty Forever stamps. After approximately three billion stamps had been printed, USPS realized the image it had obtained from Getty Images, a stock photography company, was not of New York’s beloved Statue of Liberty but instead, bore the face of the Statue of Liberty replica positioned outside the New York-New York hotel and casino in Las Vegas. Robert Davidson, the replica’s sculptor, was hired in 1996 to create the statue after completing his work on the 110-foot replica of the Sphinx down the street. Davidson claims he was given no models to work off of and he particularly set out to make his version of Lady Liberty “more appropriate for Las Vegas.” Indeed, the sculptor says he tried to distinguish his work by rendering Lady Liberty more “fresh-faced,” “sultry,” and even “sexier.” In response to Davidson’s claims for copyright infringement, attorneys for USPS argued the two statues were too similar to notice any differences and that therefore Davidson does not possess a valid copyright in his statue. Copyright protection subsists only in original works of authorship and infringement can only be found through “substantial similarity.” The district court judge disagreed with USPS in finding that a mere comparison of the two faces “unmistakably shows that they are different” and that Davidson’s work was entitled to protection. The court proceeded to award Davidson $3.5 million in damages as a result. #omnilegalgroup #copyright #statueofliberty #usps #lasvegas

Omni Legal Group would like to welcome Pamela Fond to its practice!

After decades of experience in the law, Mrs. Fond will join the firm as a legal assistant. Mrs. Fond studied at Armstrong College, where she dual-majored in English and Business. Through years of experience as both a legal assistant as well as an office manager, Mrs. Fond brings strong communication and administrative skills to the practice. Moreover, her gregarious personality and receptivity renders Mrs. Fond exceptionally capable of dealing with clients, the courts, and opposing counsel.

Did you know?

In 1859, Ms. B Franklin Coston was issued the first patent related to a fireworks display. While fireworks originated and were well-known in China, Ms. Franklin invented a “Method of Signalizing Any Numeral or Combination of Numerals by the Display of Different Pyrotechnic Fires.” The patent details the successive exhibitions of fires of three different colors, those colors unsurprisingly being red, white, and blue. Decades later, The Walt Disney Company patented a “Precision fireworks display system having a decreased environmental impact.” Disney’s invention involves a launching device and an electronic control system capable of causing the projectile to explode mid-air into a firework display after a predetermined time period. This invention explains how Disney can set off explosions to approximate Mickey Mouse’s famous silhouette.