Fashion & Entertainment Law Guide

Fashion & Entertainment Law Guide

Intellectual Property and Valentines Day

Posted in Copyright Law, Intellectual Property Law, New Orleans Intellectual Property Law, Random Thoughts, Valentines Day

being-alone-different-other-day-valentines-day-ecards-someecardsMardi Gras just ended in New Orleans, and now my friends and I are turning our attention to that beloved (or dreaded) holiday known as Valentine’s Day.  In honor of the holiday, let’s explore some intellectual property issues and disputes surrounding the candy, flowers and cards that some of us are expecting (hint, hint) and others are giving., the ubiquitous candy heart.  Officially produced by the New England Candy Company (the purveyors of Necco® Wafers and a fabulous new ad campaign), the name “SWEETHEARTS” is a registered trademark (Registration Number 77868687) that prevents others from using the mark in conjunction with candy.  The shape, however, is not protected.  That’s why you see so many knock-offs of the heart shape with stamped-on make-your-own phrases (some more clever than others).

What should come with candy?  Flowers, of course!  Or, maybe a bouquet of fruit?  The main suppliers of home-delivery fruit arrangements — Edible Arrangements® and 1-800-Flowers® — have been in a years-long battle over the use and registration of various trademarks.  In 2014, Edible Arrangements sued 1-800-Flowers for trademark infringement, claiming that the flower delivery behemoth intentionally undermined Edible Arrangements by using similar word marks to describe their own fruit arrangement subsidiary company and arrangement design names, embedding “edible arrangement” in website coding, and designing similar-looking baskets.

Not to be outdone, in 2015, 1-800-Flowers filed an antitrust countersuit that alleged that Edible Arrangements obtained trademarks by submitting false statements to the Trademark Office to obtain registrations for “fruit bouquets”, “edible” and “edible arrangements” (terms that I think are descriptive at most, but that’s another post).  1-800-Flowers claimed that registration of those marks “chilled competition, by making it too burdensome and expensive to use generic terms.”  The case between the two delivery services is set to go to trial in January 2017.

Finally, Valentine’s Day e-cards can spark intellectual property disputes.  Many e-card companies allow people to personalize their own cards with their own content.   Predictably, users will just pull song lyrics, photos and other content from the internet and upload to their personalized cards.

These e-card sites, however, are savvy and explain in their terms of use that users cannot design cards that infringe others’ intellectual property.  And to comply with the DMCA, these online services provide a process for persons who believe their IP has been infringed to request a take down.  So far, I have not found any lawsuits sparked by unauthorized use of protected intellectual property in the e-card arena but it surely is just a matter of time.

So this Valentine’s Day, as you are enjoying your candy hearts, fruit arrangements and snarky e-cards, think of the romance that is intellectual property protection.

Got any Valentine’s Day IP stories?  Post Below!







Converse Chalks Up An Early “W”

Posted in Copyright Law, Fashion Law, Intellectual Property Law, Trademark Law

You may recall that, about a year ago, Converse embarked on a broad and aggressive campaign of litigation intended to protect its iconic – and trademark protected – Chuck Taylor sneaker design from what it claimed was a flood of infringing knockoffs.  In short order, athletic footwear manufacturer New Balance launched an equally aggressive response, seeking not only a judicial declaration that its own sneakers do not infringe the Converse mark, but cancellation of the Converse mark as well.  Last week, a U.S. International Trade Commission judge sided with Converse and ruled, in a one-page notice, that the importation of certain Chuck Taylor lookalike sneakers violates U.S. trade laws, because those shoes (which the judge did not identify in his ruling) infringe the Converse mark.

This may be an early victory for Converse, but it is far from the end of the story.  If the full International Trade Commission upholds the judge’s ruling, that decision can be appealed to the Federal Circuit.  And, while most of the defendants have already settled with Converse, New Balance is part of a small group of defendant manufacturers and retailers remaining in the case that likely will not concede this point.  Further, there are still multiple cases in federal court, all of which were stayed pending a ruling on the ITC’s investigation, and none of which are bound by the ITC’s findings.

So, the case is far from closed.  But the ITC ruling isn’t without weight, as it seems to indicate increased acceptance in the U.S. – at least by the ITC – of Converse’s trade dress theory.  It will certainly be interesting to see how the federal courts weigh in.

Harrowing Halloween Lawsuits

Posted in Copyright Law, Entertainment Law, Fashion Law, Intellectual Property Law, Movies, Television, Uncategorized

I’m baaaaack.  And in honor of Halloween (which is a HUGE deal in New Orleans), I wanted write about some Halloween-themed entertainment and intellectual property lawsuits.  So grab your candy corn and keep reading!

conjuringFiled just this week, the owners of a supposedly haunted farm house that was the basis of the movie “The Conjuring” filed suit against Warner Bros.  Distributed by Warner Bros., “The Conjuring” is a creeptastic, based-on-a-true-story tale of a haunted house that torments its newest residents.   (Think “Amityville Horror”, but set in an isolated Rhode Island village rather than New Jersey.)  The film did not include shots of the real Rhode Island house, but instead was filmed in North Carolina.

The lawsuit claims that since the 2013 release of “The Conjuring”, the real house has been overrun by unwelcome and uninvited horror fans.  According to the Boston Globe, the owners feel “harassed, trespassed, stalked, and besieged” by the fans.  They are demanding installation of a security system and unspecified damages from Warner Bros.

Interestingly, the plaintiffs voluntarily appeared on spooky television shows like a 2005 episode of “Ghost Hunters” and released an hour-long YouTube video about their paranormal experiences in the house.  It will be interesting to see how the plaintiffs will prove that it was the release of “The Conjuring” rather than their own voluntary media appearances that caused interest in the house.

The second series of Halloween lawsuits inspired a hilarious episode of Netflix’s “The Unbreakable Kimmy Schmidt” involving counterfeit Disney costumes.  In 2008, Disney sued a small family-owned party supply business that sold costumes resembling Winnie-the-Pooh and Eeyore.  Disney claimed that the fake costumes were protected both under copyright and trademark laws and demanded $1 million in damages from the store.  In 2012, both Disney and Warner Bros. sued an online costume supply store that rented unauthorized costumes featuring copyright and trademark protected characters.  Both companies sought hundreds of thousands of dollars in statutory copyright and trademark damages.

As you can imagine, both lawsuits settled out of court.  But the issue of counterfeit costumes does not only matter to IP geeks like me.  There have been media reports that unlike authorized costumes, the counterfeit costumes are not flame retardant and easily can catch on fire.  So if you are going to dress as Elsa from “Frozen” this year, either buy your costume direct from Disney or make your own.

Any other terrifying tales of Halloween lawsuits?  Post below!









Converse Switches to Defense

Posted in Copyright Law, Fashion Law, Intellectual Property Law, Trademark Law

Back in October, we reported the aggressive ‒ and very new ‒ efforts by Converse to protect its iconic Chuck Taylor sneaker design.  Converse recently filed multiple parallel lawsuits in the International Trade Commission and the United States District Court for the Eastern District of New York, suing “basically everyone in the world” in an attempt to end the import and sale of knockoff Chucks.  The lawsuits claim that Converse owns common law and federal trademark rights for the Chuck Taylor design, consisting of two black stripes on the midsole, a rubber toe cap, and the diamond-patterned “bumper” that runs around the front of the shoe.

The timing of this flurry of enforcement activity was curious, leaving us equally curious as to whether Converse has allowed its classic design ‒ part of an instantly recognizable shoe that has been a staple of athletic footwear for nearly 100 years ‒ to become generic.  As it turns out, we weren’t the only ones to wonder.

On December 23, New Balance (which has not yet been named a defendant by Converse) took the offensive and filed a declaratory judgment action in the United States District Court for the District of Massachusetts, seeking not only a declaration by the court that its PF Flyer sneakers ‒ which have featured midsole stripes, a toe cap, and a toe bumper since the 1940s ‒ do not infringe the Converse trademark, but also cancellation of the Chuck Taylor design trademark registration.

In its complaint, New Balance does not use the G-word, but it alleges that the athletic shoe market has long been saturated by a variety of shoes featuring the midsole stripe, toe cap, and toe bumper combination, and that Converse has been aware of these similar sneakers for just as long.  As a result, New Balance claims that “consumers (both historic and current) do not exclusively associate the combination of a toe cap, toe bumper, and striped midsole with Converse” in the absence of any other indicators of source, and that Converse’s tolerance of these shoes “for decades, constitute[s] acquiescence, estoppel, abandonment, or other equitable bar to any injunctive relief preventing use of the combination of a toe cap, toe bumper, and striped midsole by third parties.”

In sum, New Balance claims that the registration is subject to cancellation, among other reasons, because “in the minds of the public there is no exclusive association between the claimed trademark and Converse as source.”

And, while New Balance is certainly the biggest player thus far to question the way Converse has policed its design over the years, it is not alone.  None of the major retailers and manufacturers Converse targeted in its litigation campaign have yet responded substantively to the Converse lawsuits (defendants named by Converse in the ITC action could, and did, seek a stay of the district court litigation while the trade case is pending).  But, Law360 reports that two smaller defendants asserted in case management filings in November that the midsole stripe/toe cap/toe bumper design has become generic.  One called it “ubiquitous.”  The other referred to the “sea of other canvas sneakers” that feature the same design combination, which exist only as a result of Converse’s failure to police the mark.  Certainly, these will not be the only defendants to advance the theory.

Converse’s potential problem is this:  the first Converse All Stars were introduced in 1917, and became the Chucks we all know and love today, complete with midsole stripes, toe cap, and toe bumper, in the 1930s.  The double stripe, toe cap, and patterned bumper combination is specifically protected by U.S. Trademark Registration No. 4,398,753 . . . but Converse did not apply for that registration until August, 2012.  And, as New Balance illustrates in its complaint, between 1917 and 2012, many athletic footwear manufacturers produced sneakers with the midsole stripe/toe cap/toe bumper combination, including such popular brands as Keds, Wilson, AMF Voit, and Kinney.

The registration finally issued in September, 2013, and, shortly thereafter, Converse began to run advertisements in footwear industry trade publications and on social media touting the double stripe, toe cap, and toe bumper design as its registered trademark.  Then, in October 2014, Converse filed its flood of lawsuits.

In its complaints, Converse argues (seemingly in anticipation of a claim that the design has become generic) that knockoff Chucks were relatively rare until around 2008; but, in the past six or so years, it has issued more than 180 cease and desist letters over similar-looking sneakers.  Thus, its new, aggressive enforcement campaign.

But is it too little, too late?  Putting aside the issue of whether the Converse design even deserves trademark protection in the first place (we will leave that one for another post), has Converse let its exclusive claim to one of America’s most recognizable, iconic designs slip through its fingers?

Sony Cyber Attacks: The Changing Face of Security and Data Breaches

Posted in Entertainment Law, Media Law, Movies

Cyber Crime on the Rise

2014 was dominated by news reports of data breaches from numerous large companies including Sony, Michaels, Home Depot, ebay, Neiman Marcus, JPMorgan Chase, Bebe, and most recently, Chick-Fil-A. Certainly, as everyone becomes increasingly more technologically reliant, hackers are becoming more savvy and aggressive in their tactics. Consequently, companies cannot afford to neglect cyber security issues.

The 2014 Cost of Cyber Crime Study conducted by Ponemon Institute found that the cost of cyber crimes to U.S. organizations has increased by a whopping 96% over the past five years, and the average cost incurred by a U.S. organization was $12.7 million. This is an issue that executives cannot neglect anymore.

The Scope and Impact of the Sony Cyber Attack

The most infamous of 2014’s data breaches was by far that of Sony Pictures Entertainment, by a group called “Guardians of Peace.” Unlike many of the other 2014 data breaches, which involved consumer information often obtained through point-of-sale devices, the Sony hack involved an entirely different beast: financial data, trade secrets, and confidential internal information of more than 47,000 current and former Sony employees, including their social security numbers, bank accounts, medical information, salaries, and performance reviews.  The leaked data also included highly sensitive (and offensive) emails between Sony execs discussing yet-to-be-made movies and their potential stars.

As a result of the Sony hack and cyber-terrorist threats, the company pulled the Christmas Day theatrical release of “The Interview,” and instead released the film online through Google Play, YouTube, and Xbox Video, and eventually through independent theatres, allowing the company to recoup some of its investment in the film.

After the FBI linked the cyberattack to North Korea, the White House increased sanctions on the country. Who would have thought that a comedy, though controversial, would spur international conflict?

Sony may also lose tens of millions of dollars, from the lost box office revenue resulting from the theft and release of five other films (including “Annie” and “Fury”) during the attack. Time will tell if Sony is able to recover financially from the attack.

Class Action Lawsuits Against Sony

Following the leak, five class action lawsuits were filed in federal court against Sony by former employees who claim that the company failed to properly secure their personal identifying information. The complaints include claims for negligence, invasion of privacy, and violations of California laws governing protection of private and medical information. The complaints also reference a data breach to Sony’s Playstation Live system in April 2011 that impacted nearly 75 million customers and resulted in Sony’s $15 million settlement of a class action lawsuit. The former employees allege that, despite the 2011 attack, Sony failed to take more stringent cyber security measures.

Moving Forward Following the Hack Heard ‘Round the World

Just prior to the Sony attack, Forrester Research predicted that at least 60% of companies will discover a breach of sensitive data this year. Yet, surprisingly, Forrester found that “only 21% of global security technology decision-makers report that improving incident response is a critical priority.”

Considering the numerous emails between Sony execs made public, should we now assume that anything we write in an email could be hacked? Should we ditch our iPhones and Androids in favor of BlackBerrys because of their strong reputation for security? Hopefully, following the impact of the massive Sony hack, organizations will be tasking executives to develop more robust cyber security precautions in 2015, hoping to avoid becoming the next Sony, Home Depot, Michaels, ebay, Bebe, or JPMorgan Chase.



Patenting the Sportswear Revolution

Posted in Fashion Law, Intellectual Property Law

For a company that makes yoga clothes, lululemon is less than zen when it comes to its intellectual property.  The athletic wear giant has obtained thirty-nine U.S. patents for its designs of various articles of clothing and exercise accessories and is not afraid to litigate to enforce these patents.

Though lululemon began in 1998 as a small store in Vancouver, the company has grown exponentially since that time, reporting sales of $1.3 billion in 2013.  lululemon has been at the forefront of the current “sportswear revolution,” as described in VOGUE by Topshop creative director Kate Phelan when announcing the launch of the retailer’s collaboration with Adidas.  A February 2014 report from the NPD Group, a market research firm, reported that active wear sales increased 9% in 2013, compared to an increase of just 2% in the apparel market as a whole.

Not surprisingly, the popularity of active wear has led to increased competition in the industry.  Topshop is not the only company to move into athletic wear; retailers from Anthropologie to Tory Burch are launching fitness lines.  Even Karl Lagerfeld designed tweed sneakers for Chanel’s Fall 2014 show.

While not new, lululemon’s aggressive approach to protecting its intellectual property with design patents is somewhat unique in the fashion industry, which has traditionally been trademark driven.  35 U.S.C. § 171 provides for the issuance of a design patent for “any new, original, and ornamental design for an article of manufacture[.]”  Design patents made headlines in 2012 when Apple obtained a judgment against Samsung for its imitation of the patented design of the iPhone and iPad.  Because fashion designs are not protected by copyright law, design patents could become an important way for clothing companies to protect their intellectual property.

lululemon’s design patents cover everything from jackets to duffel bags to pants.  Indeed, in 2012 lululemon brought suit against Calvin Klein and G-III Apparel Group, Ltd., a Calvin Klein manufacturer, for selling pants that infringed on various lululemon design patents.  Specifically, the suit, brought in federal court in Delaware, alleged that Calvin Klein’s “performance compression overlapping waistband pants” infringed lululemon’s patents protecting its Astro Pant.  The parties entered into a confidential settlement agreement a few months after the suit was filed.

The following year, in 2013, Hanes sued lululemon after receiving a cease and desist letter from the company.  lululemon accused Hanes and Target of violating the design patents for its No Limits and Practice Freely tank tops with built-in bras.  lululemon claimed that Hanes’s manufacture and Target’s sale of the “C9 by Champion Women’s Layered Tank with Bra – Assorted Colors” infringed its patent and demanded that they stop manufacturing, advertising, or selling the tank tops, issue a press release admitting infringement, and agree to pay liquidated damages for any future infringement.

In response, Hanes filed a complaint in federal court in North Carolina seeking a declaratory judgment that the C9 tank top did not infringe lululemon’s patents and that the patents were invalid because “material prior art and other information . . . indicates that the [patent] was anticipated or would have been obvious at the time the claimed design was made and . . . the figures of the [patent] are vague and indefinite.”

As with the prior suit, Hanes and lululemon settled the case out of court.  Though the terms of the settlement are not public, it is worth noting that the “C9 by Champion Women’s Layered Tank with Bra – Assorted Colors” is no longer available for sale on Target’s website.

lululemon’s approach represents a continuing trend among fashion designers to protect their creations by patent.  But is that a good thing?  Should fashion be patented?  Is the layering of a sports bra and a tank top worthy of protection or an obvious innovation in workout wear?

Fashion and Entertainment Companies Beware: Unpaid Internship Litigation on the Rise

Posted in Entertainment Law, Fashion Law, Media Law, Movies, Random Thoughts, Television

Roughly a decade ago, I was an unpaid intern for a film company in Hollywood.  I had a great summer internship, filled with excellent hands-on experience and the occasional celebrity visit to the office.  But financially it was a struggle.  Living in Los Angeles for two or three months on a shoestring budget was a challenge of Herculean proportions.

Maybe it’s tough economic times or working countless hours answering phones that’s angered unpaid interns.  Now they’re fighting back in the courtroom.

For countless years, unpaid internships have been a great way for companies to provide learning opportunities for young workers — often college students — while bringing in fresh talent and new ideas.  But unpaid interns may increase a company’s risk of litigation.

Unpaid internship lawsuits in the fashion and entertainment industry have been on the rise since the July 2013 Southern District of New York decision against Fox Searchlight Pictures which held that the company violated state and federal minimum wage laws by failing to pay production interns working on the film Black Swan.  Judge William H. Pauley held that the production interns were entitled to minimum wage because they did the same work as regular employees, provided value to the company, and performed tasks that didn’t require specialized training.  The United States Second Circuit Court of Appeals is reviewing Fox’s appeal and a decision is expected in 2015.

Recent Spike in Unpaid Intern Litigation

The Black Swan decision has sparked an increase in unpaid intern litigation.  In the past eight weeks alone, class action suits involving unpaid interns have been filed against Oscar de la Renta, Calvin Klein, Marc Jacobs, and Lionsgate.  Earlier this year, a former Coach, Inc. intern sued the company for allegedly misclassifying employees as unpaid interns and failing to pay the unpaid interns minimum wage.  In 2013, former interns of Donna Karan, Gawker Media, Warner Music Group, MTV, and Bad Boy Entertainment also filed class action suits against those companies alleging violations of the Fair Labor Standards Act.  Undoubtedly, the recent increase in litigation led Louis Vuitton Moet Hennessey to recently pay its interns.  For companies that cannot afford to pay interns, the spike in recent litigation may have a chilling effect on the number of internship opportunities available to young workers.

Department of Labor Guidelines for Internships

Unpaid internships by for-profit companies are subject to the Fair Labor Standards Act (“FLSA”) and similar state laws, which require the payment of wages and overtime for employees.  For decades, courts have held that FLSA was inapplicable to a “trainee.”  The U.S. Department of Labor has created a six-factor test that must be met for an intern to qualify as a “trainee”:

  1. The training, even though it includes actual operation of the facilities of the employer, is similar to that which would be given in a vocational school;
  2. The training is for the benefit of the trainees or students;
  3. The trainees or students do not displace regular employees, but work under close supervision;
  4. The employer that provides the training receives no immediate advantage from the activities of the trainees or students and, on occasion, his operations may even be impeded;
  5. The trainees or students are not necessarily entitled to a job at the conclusion of the training period; and
  6. The employer and the trainees or students understand that the trainees or students are not entitled to wages for the time spent in training.

Check out the DOL’s internship fact sheet for more information.

Given the sharp increase in the number of class action suits filed, fashion and entertainment companies should make sure that they understand both the realities of their internship programs and ensure that their programs comply with both state and federal wage laws.



Converse’s Quest to Protect Chuck Taylor All Stars

Posted in Fashion Law, Intellectual Property Law, New Orleans Intellectual Property Law, Trademark Law, Uncategorized

One of New Orleans’ most entertaining events is the Red Dress Run.  Held on a blazingly hot August Saturday, women and men don red dresses and run around the French Quarter (and drink) for charity.  My friend Shawn and I decided to participate this year and wore matching tutus and red Converse Chuck Taylors. 

I bought my Chucks at a Foot Locker.  Shawn bought his at a small mom-and-pop “fashion store.”  Comparing them on the day of the run, my Chucks were authentic, his were not-that-obviously counterfeit.  Other runners also had on what appeared to be “Chuck Taylors” — with a rubber toe front and sole with a black stripe — but if you looked closely, did not have the star or Converse label on the back of the shoe.  

Yesterday, Converse filed multiple lawsuits in the United State District Court for the Eastern District of New York seeking to end the import and sale of knock off Chuck Taylors.  The suits weren’t filed against the mom-and-pop retailers that sell counterfeit shoes.  Instead, Converse sued 31 companies, including major companies like Walmart, Kmart, Sketchers and H&M (or, as Huffington Post put it, “basically everyone”).  The lawsuits claim that these companies sell knock offs of the Chuck Taylor design.   (For a discussion of counterfeit v. knock offs, check out this previous post).  

The lawsuits claim that Converse owns common law and federal trademark rights for the Chuck Taylor design, including U.S. Trademark Registration No. 4,398,753, which protects the double black band on the rubber soles of the shoes, the design of the rubber toe cap, and the diamond patterned bumper at the front of the shoe.  The lawsuits detail the history of the Chuck Taylor design, which originated in 1917.  The present day design has been used since 1932.   Interestingly, however, the trademark was not registered until September 2013.

Converse asserts claims for trademark infringement and trademark dilution under the Lanham Act, common law trademark infringement and unfair competition, as well as various New York state unfair trade practices claims.   

Reviewing the lawsuits, the New York Times noted that trademark law does not allow companies to protect functional parts of their fashion designs.  While I don’t disagree with that general statement, I think Converse’s claims have merit. 

First, the double black stripe on the soles of the Chucks does not appear to be functional.  Neither does the rubber toe design.  Second, as we learned in the Louboutin v. Yves St. Laurent red sole battle, a valid U.S. trademark registration provides the trademark owner with the presumption that the registered mark is valid.  That means that the defendants bear the burden of proving that the Chuck Taylor design is primarily functional, rather than serving as an indicia of the producer.  Let’s leave the aesthetic functionality argument for another post… .

One problem that Converse may face — has the Chuck Taylor design become generic so that a person viewing the shoes would not associate the design with Converse?  If so, then the trademark could be invalidated. 

What do you think readers?  When you see a rubber soled, rubber toed shoe, do you think Chuck Taylors made by Converse?  Or do you think of Sketchers, H&M or another manufacturer? 

Post your comments below!  


Supreme Court Cuts the Cord on Aereo (For Now)

Posted in Copyright Law, Entertainment Law, Media Law, Television

Have you ever thought about “cutting the cord,” as in the cable cord?

In the past, “cutting the cord” may have been an effort to lead a simpler, less technologically dependent life.  Now, the movement stems from frustration with cable and satellite television providers for rising costs and having to pay for 300+ channels when you maybe watch 10 of them.  An abundance of new technological options involving Internet streaming — from Netflix, Amazon Instant Video and Hulu to Apple TV, Google Chromecast and Roku to Simple.TV, Tablo and…Aereo — have cropped up to make it easier for consumers to “cut the cord,” while still being able to enjoy their favorite television programming.  Last month in American Broadcasting Cos. v. Aereo, Inc., however, the Supreme Court nipped in the bud (or did it?) one such cord-cutting option based on an application of copyright law.  Could others also be impacted?

For as little as $8 a month, Aereo offered its subscribers broadcast television programming over the Internet, almost simultaneously as the program was being broadcast.  It also offered a DVR-like component too, although that feature was not before the Court.  Aereo paid no licensing fees to the copyright holders of the television programming being streamed — enter lawsuit by television producers, marketers, distributors and broadcasters.

For those of you not familiar with copyright law, perhaps a bit of a primer is necessary.  Under copyright law, a copyright owner is given certain exclusive rights.  The exclusive right at issue in Aereo was the right “to perform the copyrighted work publicly.”  17 U.S.C. §106(4) (emphasis added).  To “perform” a work means “to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.”  §101.

To perform or display a work “publicly” means “(1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or (2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any devise or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”  §101.

Clause (2) cited above is called the “Transmit Clause” and was added to the Copyright Act when it was amended in 1976.  Legislative history indicates that the intent behind the Transmit Clause was to make clear that “a cable television system is performing when it retransmits [a network] broadcast to its subscribers.”  H.R. Rep. No. 94-1476, p. 63 (1976).  The Transmit Clause was seen as Congressional rejection of two Supreme Court cases narrowly construing the Copyright Act with respect to CATV systems (precursors to modern cable), each case holding that the respective CATV providers did not “perform”.  See Fortnightly Corp. v. United Artisits Television, Inc., 392 U.S. 390 (1986); Teleprompter Corp. v. Columbia Broadcasting System, Inc., 415 U.S. 394 (1974).  At the same time, Congress also created the Section 111 compulsory license framework, which sets out the conditions under which cable systems may retransmit broadcasts.

Some of you may see this as a no brainer — Aereo was clearly infringing.  However, the way the Aereo system was technologically set up was arguably to exploit a perceived loophole in the Transmit Clause (although in response to questioning during oral argument, Aereo stated that there were in fact technological reasons for the way it was set up).

Behind the technological veil, Aereo owned warehouses in 11 cities across the U.S., with each warehouse containing thousands of dime-sized antennas.  Each antenna was dedicated to one subscriber, and one subscriber alone.  When a subscriber wanted to watch a show that was currently being broadcast, the subscriber would visit the Aereo website and select a show to view from a list of the available local programming.  Then, the Aereo server would select that subscriber’s antenna and tune it to the over-the-air broadcast carrying the show, and the signals received would be translated into data that could be transmitted over the Internet.  The Aereo server would then save the data in a subscriber-specific folder on Aereo’s hard drive (creating a subscriber’s “personal” copy of the program, again, not addressed by the Court), and after several seconds of programming had been saved, begin streaming the saved copy of the show over the Internet to the subscriber’s Internet connected device (e.g., laptop, smart phone, iPad, etc.).

In short, Aereo argued that the “public” requirement was not met — as each transmission from each dime-size antenna was only to one individual.  This argument had previously been successful in a Second Circuit case concerning remote-storage DVRs.  See Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (cert. denied) (“Because each RS-DVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber, we conclude that such transmissions are not performances ‘to the public,’ and therefore do not infringe any exclusive right of public performance.”)  Aereo also argued that it was merely an equipment provider, and was not “performing.”

However, in a 6-3 opinion, the Supreme Court for the most part applied the duck test:  If it looks like cable, acts like cable and sounds like cable, then it falls within the Transmit Clause.  The Court was not impressed by the technological differences, stating bluntly, “Viewed in terms of Congress’ regulatory objectives, why should any of these technological differences matter?  They concern the behind-the-scenes way in which Aereo delivers television programming to its viewers’ screens.  They do not render Aereo’s commercial objectives any different from that of cable companies.  Nor do they significantly alter the viewing experience of Aereo’s subscribers.”

The Court did, however, make a point to respond to all the “cloud is falling” arguments, stating that    “[q]uestions involving cloud computing, [remote storage] DVRs, and other novel issues not before the Court, as to which Congress has not plainly marked [the] course, should await a case in which they are squarely presented,” further referencing that concerned commercial actors could always seek action from Congress.

Overall, the Aereo decision may have stopped one avenue of “cord-cutting,” but probably did not stop the tide of technological innovation aimed at meeting consumer demand for “a la carte” television programming.  Inevitably, there will be more lawsuits to explore the contours of the Aereo decision, and the application of copyright law to other technologies, such as cloud computing and remote-storage DVRs.  One thing to consider, should this be left to the Supreme Court, with justices who refer to “the Dropbox” and “the iCloud” and seem uncomfortable with aspects of modern technology (see oral argument transcript), or should Congress maybe take this as an invitation to update the, now almost 40-year old, Copyright Act of 1976 to squarely address these new technologies?

As a post-script, despite arguing throughout the course of its journey through the courts that it was not a cable company (a point that seemed to be agreed on by both sides), in the aftermath of the decision, Aereo has now done an about face and has argued that it is a cable company and entitled to avail itself of the Section 111 compulsory license.  Time will tell how this approach turns out, but note that the Supreme Court never said that Aereo was in fact a cable company — only that its activities were substantially similar to one.  Plus, does Aereo really want to be a cable company, subject to all the rules and regulations that brings with it, including negotiating with the same broadcasters it was just sued by over retransmission fees?  In the end, the consumer might end up the same place it was before — paying high fees for unwanted channels.

Trademark Trial and Appeal Board Cancels Redskins Marks – Again

Posted in Copyright Law, Entertainment Law, Intellectual Property Law, Trademark Law

It’s like déjà vu all over again.

Last week, the Trademark Trial and Appeal Board canceled six trademark registrations of the Washington Redskins, ruling that those marks are disparaging to Native Americans.  The Board ruled that the REDSKINS marks were inappropriately granted in contravention of Lanham Act section 2(a), 15 U.S.C. § 1052(a), which prohibits registration of a mark “which may disparage . . . persons . . . or bring them into contempt, or disrepute.”  The decision has the potential to cost the franchise untold millions of dollars.  It could make fighting infringement more difficult (and costly), and open the floodgates to counterfeit goods from overseas.

The decision has been widely lauded.  Sen. Maria Cantwell (D-Wash.) interrupted a debate on the Senate floor to praise the ruling.  Even Senate Majority Leader Harry Reid (D-Nev.) chimed in, proclaiming that “[t]his name will change and justice will be done for the tribes in Nevada and across the nation who care so deeply about this issue.”  Law360 announced that “The End Is In Sight For ‘Redskins.'”

But is it?

The 2-1 decision is a case of “been there done that” for the Board, which cancelled registrations of the same six marks back in 1999, only to have its decision reversed on appeal four years later.  And, while the Board was careful to point out the differences between the two cases in its 99-page opinion (including an 18-page dissent), the similarities cannot be ignored.  According to the Redskins, the similarities render the new decision meaningless.

The most recent case was essentially a relitigation of its predecessor, Harjo v. Pro Football, Inc.  As in Harjo, the Board used the same two-part inquiry to determine whether the marks are disparaging, evaluating: (1) the meaning of the mark in question, as it appears in the marks and as used in commerce and (2) whether the meaning of the marks is one that may disparage Native Americans.   To be deemed disparaging, the marks need to have been offensive not by today’s standards, but when they were registered; thus, both questions must be answered as of the various dates of registration of the challenged marks.   And, as to the second question, the Board looks not to the American public as a whole, but to the views of the referenced group (here, Native Americans).  The views of the referenced group are “reasonably determined by the views of a substantial composite thereof.”

This time around, the Board found that the views of a substantial composite of Native Americans were embodied in a resolution passed by the Executive Council of the National Congress of American Indians in 1993 (and also considered in Harjo), denouncing the use of the term REDSKINS as “pejorative, derogatory, denigrating, offensive, scandalous, contemptuous, disreputable, disparaging and racist . . . and damaging to Native Americans.”  The Board found that “at a minimum, approximately thirty percent of Native Americans found the term REDSKINS used in connection with respondent’s services to be disparaging” at all relevant times, and that the six registrations, accordingly, “must be cancelled.”

The Redskins have sworn to appeal the Board’s ruling.

In a press release issued the day the decision came down, the team stated that “[t]he evidence in the current claim is virtually identical to the evidence a federal judge decided was insufficient more than ten years ago.”  Thus, the Redskins are confident they “will prevail once again, and that the Trademark Trial and Appeal Board’s divided ruling will be overturned on appeal.”

The effect of the cancellation is, at least for the time being, largely symbolic.  While the Redskins’ appeal is pending, all six registrations will remain effective.  The team can continue to sell logo merchandise, license its marks, and otherwise operate as it has since the first of the challenged marks was registered in 1967.

Wednesday’s decision is a positive step for Native Americans and others who oppose the Redskins name.  And, the issue is receiving far more attention than it did when Harjo was ultimately decided more than a decade ago.

However, the only thing certain, now, is that several more years will likely pass before this case concludes, and the fate of the Redskins’ marks is determined with any finality.  Again.