Thursday, May 30, 2013

Wednesday, May 29, 2013

Good article on the cost and benefits of trademark litigation.

Here is a good article on the cost and benefits of trademark litigation. Trademark litigation is when a mark owner sues someone for infringement, or when someone who does not own a mark sues the mark holder for a declaratory judgment invalidating the trademark. When a defendant is sued for infringement, the defendant will usually file a counterclaim for a declaratory judgment of invalidity. When a defendant is sued for a declaratory judgment of invalidity, the defendant may file a counterclaim for infringement. This just means that when a trademark owner or alleged infringer gets slapped with a lawsuit, he or she does not usually turn the other cheek. It means that he or she slaps back.

Saturday, May 25, 2013

Exit fees and the Atlantic Coast Conference vs. the University of Maryland.

The lawsuit between the Atlantic Coast Conference (ACC) and the University of Maryland could have significance in future cases challenging collegiate conference grants of media rights. Maryland is suing the ACC over the conference's $50M "exit fee," which Maryland would be required to pay if it leaves for the Big Ten Conference. Maryland's defection to the Big Ten is a foregone conclusion, because the Big Ten has already included Maryland in its 2014 football schedule.

The ACC is seeking dismissal of the lawsuit, because it alleges that Maryland has not been damaged. The disposition of this case could be significant to the media rights issue, because both require any defecting schools to pay or forfeit an enormous amount of money to their conference. If the ACC's exit fee is an illegal restraint of trade, it makes it much more likely that grants of media rights are also restraints of trade.

Friday, May 24, 2013

Using another's trademark in Google advertising keywords.

Competitors of companies with valid trademarks can now place keywords using those marks in their (the competitors) advertisements to become more prominent in Google search results. For instance, a small fast-food restaurant in Minot, North Dakota, that competes with McDonald's can use "McDonald's" in its Google advertising keywords. By doing so, this small fast-food restaurant would show prominently in search results when people search for "McDonald's in Minot North Dakota."

Using a competitor's trademark in website metadata can be infringement, but it is not always so. It depends on whether the alleged infringer is using the competitor's mark to divert customers from the competitor to him or her. I would argue that using a competitor's trademark in any metadata constitutes using the mark in connection with a good or service, because all websites are essentially advertisements. If you use the a competitor's trademark in advertising keywords for search results, as Google now allows, you are more directly using the mark in connection with a service: advertising. You advertise to get customers. By definition, using another's mark in your ads would seek to divert customers from them to you, thus effecting infringement. So, there will almost certainly be litigation over this in the near future.

Thursday, May 23, 2013

Eminem v. Facebook over copyright infringement.

Eminem's publisher is suing Facebook over its use of an Eminem song in an advertisement for Facebook Home. Remember, the elements of copyright infringement are (1) ownership of a valid copyright and (2) infringement without exception. Infringement is shown by proving a defendant had access to the copyrighted work, and the two works are substantially similar. More access means less substantial similarity is required. Less access means more substantial similarity is required.

Here, the article says the song is a slight variation of the Eminem song. This would mean that there is substantial similarity between the two works. The article also mentions there is an online trail proving that Facebook's founder was an Eminem fan. This would show access. Eminem's fame in general also goes to proving access. So, if Eminem can prove he has a valid copyright, he probably has a winning case.

Wednesday, May 22, 2013

The importance of "notice" in so many areas of the law.

In the law, and particularly contract law, whether a person had actual or implied notice of a given event, contract term or otherwise is often dispositive of an issue. In some cases, notice will clearly not apply, but these are usually self-evident. When notice is relevant, it is perhaps the most important factor in deciding cases, because it applies in so many different areas. For instance, the enforceability of click-wrap or browse-wrap agreements in web surfing depends on notice of the website's terms. The enforceability of form contracts between a business and consumer also depends on notice, and whether the terms are within the reasonable expectations of the consumer.

Statutes of limitation for bringing a lawsuit often do not begin to run until a person has notice of his or her legal claim. There are a number of other examples as well. So, if you are in a legal dispute, you may want to ask yourself whether notice of a given fact or event is important. It may not be, which you can probably decide for yourself. But if it is, it may end up being the deciding factor on whether you have a winning or losing case.

Friday, May 17, 2013

Collegiate conference realignment and trademark squatters.

In the past few years, collegiate conference realignment has been driven by television and marketing revenue from football. Conferences have been trying to expand their "footprint" in order to leverage the largest number of cable subscribers or network television viewers. When a conference has its own cable network, like the Big Ten or Southeastern Conference (SEC), an expanded footprint is more important than when a conference has a TV contract with network channels.

In the summer of 2010, college football was at a crossroads. The Universities of Nebraska and Colorado left the Big 12 Conference for the Big Ten and Pac-12 Conferences, respectively. Although some schools were secure with their conference affiliation, many "big name" schools were left wondering where they would end up. Similar events occurred in the fall of 2011, when the University of Missouri and Texas A&M University left the Big 12 for the SEC. Other big name schools changed conference affiliation as well, and the ripple effects are still being felt today. There is no indication that conference realignment is over, despite several conferences' members agreeing to grant their media rights to the conference for a specified period of time.

Of the schools and conferences that were unsure where they would end up as a result of realignment, some filed intent-to-use applications over the past decade or so, in order to reserve alternate or new conference names in the event of a conference's dissolution or addition of members. For instance, from 1997 to 2009, the Big 12 filed intent-to-use applications three separate times for the "Big 14," in anticipation of the conference membership expanding to 14 schools. All three were abandoned, the last of which on September 24, 2012.

The most recent wave of conference realignment resulted in seven Catholic schools leaving the current Big East Conference to form a new Big East. The remaining members formed the American Athletic Conference, and added a few other schools. The new conference filed intent-to-use applications for a variety of names that were under consideration before it made its final selection. This saved time when the conference made its selection and used the name in commerce, by making full trademark registration easier. For the names the conference did not use (e.g., All America Conference, America 12 Conference), it will simply abandon the applications.

When a few conferences almost "imploded" in 2010, which would have left numerous schools without a conference affiliation, a number of individuals tried to anticipate new conference names by filing intent-to-use applications on nonexistent conferences with the hope of later profiting from them, much like cybersquatters do. For instance, one individual filed an application in June 2010 for the "Super16 Conference." This guy was apparently unaware that he would need to use the name in commerce to ultimately secure a federal registration. Eventually, his intent-to-use application would lapse, because he ostensibly had no connection to the hypothetical conference that would want to use the name.

Plus, the hypothetical conference could also have just selected a different name. Or, it could have have used the "Super16" name and simply proven that the previous filer had no bona fide intent to use the mark in commerce.

Thursday, May 16, 2013

Secondary liability for copyright infringement.

Direct copyright infringement, as discussed in previous posts, consists of a personal trespass to a copyright owner's statutorily-granted rights. In certain situations, one can be secondarily liable for contributory or vicarious copyright infringement. Neither is expressly permitted in the Copyright Act, but neither is prohibited.

To be liable for contributory infringement, the defendant must contribute or enable an infringement by intentionally inducing or enabling another to engage in direct infringement. This would be the proverbial devil on one's shoulder, encouraging that person to infringe someone's copyright.

To be liable for vicarious infringement, the defendant must profit from an infringement while declining to stop or limit it. Implicit in this is the ability to control the infringing activity.

Wednesday, May 15, 2013

What to do if your mark is not entitled to federal trademark registration.

There is actually a third type of trademark registration, aside from full and intent-to-use registrations. In previous posts, when I referred to "registration" of a trademark, I referred to a mark on the principal register. When a mark is on the principal register, it is fully protected. But marks that cannot be on the principal register can usually be registered on the supplemental register.

To compare, here are some of the benefits of full registration on the principal register:

- Constructive notice (not actual notice) to the public of the registrant's claim of ownership of the mark.
- A legal presumption of a proprietary interest in the mark.
- The ability to bring an action concerning the mark in federal court.
- A date of constructive use of the mark as of the filing date of the application.
- The ability to prevent the importation of infringing foreign goods.
- The right to obtain "incontestability" of the mark.
- The use of the U.S. registration as a basis to obtain registration in other countries.

Here are differences for registration on the supplemental register:

- You cannot file an intent-to-use application for the supplemental register.
- A mark can be merely descriptive or deceptively misdescriptivegeographically descriptive, or merely a surname on the supplemental register.
- Secondary meaning is not required.
- Registration does not provide constructive notice of use to the public.
- A mark is not subject to opposition or cancellation.
- A mark cannot gain "incontestable" status.
- A mark is not subject to interference or interference proceedings.
- Registration does not provide evidence of an exclusive right to use the mark.
- Registration does not prevent importation of infringing goods.

So, as you can see, there are definite benefits to being on the principal register as opposed to the supplemental register. But, in cases when a mark cannot be registered on the principal register, the supplemental register may still be available.

Tuesday, May 14, 2013

What to do if you find out that you have been using a business name incorporating another person's trademark.

So, you have an established business and generated goodwill among your community. You may not be a large business, but within your geographic reach, you are well-known for quality goods or services. Subsequently, you conduct a trademark search and notice that your business incorporates another person's trademark. The person or company may issue you a cease-and-desist letter, asking you to stop using the name. Or the company may threaten suit. Or maybe you have already been sued. Or maybe you are just abundantly cautious, and have taken recent notice that you are technically infringing on another person's trademark rights. Maybe you noticed that the trademark was published for opposition, and is not officially registered yet. What do you do in such situations?

When the mark is published for opposition, but has not been officially registered, you have 30 days from the date it is published to oppose the mark's registration. Opposition entails filing an opposition stating the grounds on which you claim that registration of the offending mark would cause you harm.

If the mark has been registered, you have five years from the time of registration to seek cancellation of the mark. Cancellation of a mark entails filing a petition for cancellation stating the grounds on which you claim that continued registration of the offending mark would cause you harm. After five years, the mark becomes "incontestable," which means that you cannot challenge it except for a few circumstances.

You do not need evidence to file an opposition or cancellation. All you need is a belief that you will be harmed by registration or continued registration of a mark. If it has been five or more years since registration of a mark, and that mark owner has filed an affidavit for purposes of establishing incontestability, the grounds on which you can cancel the mark are limited. These grounds include misuse or misrepresentation, abandonment or "genericide." Genericide is the trademark term for when a brand name of a good becomes the generic name for the class of goods in which it operates.

Monday, May 13, 2013

Is it a group boycott for major NCAA football programs to refuse to play smaller FBS and FCS schools?

In major college football, there are two subdivisions within Division I: the Football Bowl Subdivision (FBS) and the Football Championship Subdivision (FCS). Since 1978, the FCS has determined its national champion through a playoff, which currently includes 16 teams. Recently, the FBS announced it was beginning a four-team playoff beginning in 2014. The participants in the four-team playoff -- called the College Football Playoff -- will be determined by a selection committee. The details of the selection committee have not been finalized, but strength of schedule will be a primary consideration.

Major college football conferences have taken different approaches to improving their strength of schedule, in order to improve their chances of qualifying a team in the four-team playoff field. Teams in the Big 12 Conference (Big 12) and Southeastern Conference (SEC) have had the most difficult schedules in recent years, due to the strength of the teams in each conference. Teams in the Big 12 play nine-conference games per year, while teams in the SEC play eight. The conventional wisdom is that if you play more conference games, it will improve your strength of schedule. With the five "best" conferences: the Big 12, SEC, Pac-12 Conference (Pac-12), Big Ten Conference and Atlantic Coast Conference (ACC), this is true. Along with the Big 12, the Pac-12 plays nine conference games, and the Big Ten will begin playing nine in 2016. Currently, FBS programs play 12 regular season games, including conference games. So, playing more conference games limits the amount of out-of-conference games a team can play.

In the past few months, the Big Ten has stated that it intends for its programs to cease playing FCS opponents. FCS schools give out fewer scholarships to players than those in the FBS, and are consequently deemed inferior competition. In turn, playing FCS schools hurts Big Ten programs' strength of schedule rating.

In antitrust law, a group boycott is a concerted refusal to deal among competitors. Here, the Big Ten has flatly stated that it intends to refuse to play FCS schools. A huge portion of yearly football revenue for FCS schools comes from playing major conference FBS schools, like those in the Big Ten. So, if Big Ten schools no longer play FCS schools, it will inhibit FCS schools' ability to compete.

Other teams and conferences have hinted at the notion of refusing to play FCS schools. University of Alabama head coach, Nick Saban, recently stated that he would like the five major conferences within the FBS to only play each other. This would mean that not only are FCS schools cut off from major college football, but FBS schools not in those five major conferences are as well.

Without more, this would be the definition of a classic group boycott: concerted action among major conference schools in refusing to play other Division I competitors. This is a very similar situation to what was criticized with the Bowl Championship Series (BCS). With the BCS, the criticism was that smaller conferences did not have access to lucrative BCS bowl games. Here, the same criticism could be leveled, because the smaller conference schools would not be able to access the lucrative four-team playoff.

The legality of the exclusive scheduling model (excluding smaller FBS and FCS schools) ultimately depends on the definition of the relevant market. If the market is defined as all Division I football programs, then the exclusive scheduling model is probably illegal because all Division I football programs are "competitors" of each other. Accordingly, agreeing with other conferences to cut off competitors is an illegal group boycott.

If the market is defined as all FBS programs, then the scheduling model may be illegal, because all FBS schools, including those in smaller conferences, are "competitors" of each other. If the market is defined as only major conference FBS programs, then the scheduling model is probably legal, because only the major conference programs are "competitors" of each other, and there is a corresponding justification for treating smaller FBS and FCS programs differently. If this issue becomes disputed in the future, the crux of the legal battle will concern how the relevant market is defined.

Friday, May 10, 2013

To be a trade secret, information must derive independent economic value.

Previously, I wrote about the necessity of using a trademark in commerce for it to be a valid mark. Without using a mark on or in connection with goods or services, you do not have a trademark; you only have a creative design, phrase or name. Concomitantly, someone could use it on or in connection with goods or services, and own all the rights to it as a trademark. It does not matter if you were the creative genius behind the mark.

By definition, trade secrets cannot be used on or in connection with goods or services. But they do need to derive independent economic value from not being generally known or readily ascertainable by proper means. In other words, they need to make you money and give you a competitive advantage over competitors by virtue of their secrecy.

A trade secret can be any information in the form of a formula, pattern, compilation, program, device, method, technique or process. This includes recipes, business secrets, and even business experience gained from one company that inevitably must be relied upon when going to work for a competitor. Not all of the latter qualifies as a trade secret, but in some cases it can.

To protect your information as a trade secret, it must be kept secret. Even if the secret is wrongfully divulged by a competitor or disgruntled employee, it still loses its status as a trade secret. If this happened, you could seek damages from the wrongdoer, but these would probably still pale in comparison to what you might make in the long run had the secret not been divulged.

Thursday, May 9, 2013

The meaning of "TM" or R-circle juxtaposed with a logo or wordmark.

When looking closely at logos and wordmarks of famous or distinctive companies, you will almost always notice that they have a "TM" or R-circle designation juxtaposed with the mark. These mean different things, and you should take care not to misuse them.

The R-circle, seen at right, is available when a company has a federally registered trademark. It is required to provide notice to any potential infringers that the mark is federally registered. If the mark holder does not provide this notice, he or she probably cannot obtain profits or damages in a later infringement action.

The "TM" is used for pending or unregistered trademarks. If you filed a federal trademark registration, but it is not officially registered yet, you can use "TM." If you have an unregistered mark, but claim rights in it, you can use the "TM."

The difference is easily illustrated with sports logos. When teams introduce a new logo, you will see a "TM" next to the mark. This means that the team has not used the mark long enough for a federal registration to issue. For instance, take a look at the new University of California-Berkeley logo. If you notice the top image on the link, it has a "TM" next to it. This logo was just unveiled a few weeks ago. If you take a look at the logo in a few years, you will notice that it has changed from a "TM" to an R-circle.

For another example, take a look at one of the University of Nebraska's logos. This logo has been around for a while, and thus has a federal registration.

Wednesday, May 8, 2013

The "fair use" exception to copyright infringement.

Yesterday, I wrote about copyright infringement as it relates to Usher's situation. For the unaware, Usher and Justin Bieber are being sued for copyright infringement. Unless the plaintiff's account of facts is inaccurate, Usher and Bieber are probably liable for infringement.

Even if a defendant violates a copyright owner's right to reproduce, distribute, perform, display or prepare derivative works of a copyrighted work, there are exceptions to liability. One of which is "fair use," which is the most common exception to liability for infringement.

A "fair use" occurs when a defendant uses a copyrighted work for criticism, comment, news reporting, teaching, scholarship or research. Contrary to popular opinion, it is not automatically a fair use if you do not make money off of it. Even if you use a work for one of the specific fair uses in this paragraph, courts still look at four factors in determining whether to apply the exception in an individual case:

  1. The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.
  2. The nature of copyrighted work.
  3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole.
  4. The effect of the use upon the potential market for or value of the copyrighted work.
So for instance, even if you use a work for scholarly purposes, it may not be a fair use if you affect the potential market for sales of the copyrighted work. Or if you use the work for criticism, it may not be a fair use if you use the entire work in your critique.

Tuesday, May 7, 2013

Usher and Justin Bieber sued for copyright infringement.

This case illustrates the elements of copyright infringement. Usher and Justin Bieber are being sued over a song they released in 2010. The plaintiff claims that he recorded the song and obtained a copyright registration on it in 2008, two years before Usher and Bieber recorded it.

The plaintiff also claims that he had discussions with Usher's mother in 2009 regarding re-recording the song and touring with Usher. On occasion, Usher's mom acted as his manager. She said Usher heard the song and liked it.

To establish copyright infringement, a plaintiff must show (1) ownership of a valid copyright, and (2) infringement of the owner's right to:
  • reproduce the work,
  • prepare derivative works,
  • distribute the work,
  • perform the work, or
  • display the work.
If infringement is shown, a defendant can argue that he or she should not be held liable, because of fair use or another recognized exception. Establishing ownership of a valid copyright is usually not difficult. Here, the plaintiff claims that he obtained a copyright registration in 2008. Establishing infringement is more difficult, because direct evidence of copying is rarely available.

Without direct evidence of copying, infringement is established by comparing the degree of access a defendant had to the copyrighted work with the degree of similarity between the two works. The more access a defendant had to a work, the less similarity is needed for infringement. The less access a defendant had to a work, the more similarity is needed for infringement.

"Access" does not refer to the theoretical availability of the work to a defendant. For instance, you do not have access to every book in the world that has a copyright registration. You only have access to those books you have been exposed to, or those that are well-known.

If a defendant did not have much access to a work, he or she may have independently created it. If a work was independently created, there is no infringement. On the other hand, if a given work was widely disseminated and everyone knew about it, there is a high level of access and the chance of independent creation is very low.

Sometimes access can be proven, which appears to be the case here. Usher's mother said that Usher liked the song. If access is proven, the plaintiff would not need to show that the two songs are very similar. But it appears that the songs are very similar. (I have not listened to either song.)

Unless the plaintiff's account of events is incorrect, or if one of the exceptions apply that would negate improper appropriation, Usher and Bieber are probably liable for copyright infringement.

Monday, May 6, 2013

A new antitrust challenge to professional medical boards.

This is a new antitrust lawsuit challenging the ongoing education requirements of professional boards. This one involves medical board recertification. In the suit, the plaintiffs allege that the defendant forces physicians to spend a lot of money to comply with a recertification program without a sufficient procompetitive justification. In fact, the plaintiffs allege that the defendant exacts the heavy costs in order to make money.

The plaintiffs are the Association of American Physicians & Surgeons. The defendant is the American Board of Medical Specialties. Generally, antitrust lawsuits against professional boards fail, because courts let the boards determine their own requirements to maintain the quality of the profession. Given the deference to professional boards in the past, the defendant's conduct here will not be per se illegal. If the plaintiffs were to ultimately win, it would have to be under a full rule of reason analysis, because the presumption is that ongoing education requirements by professional boards is permissible.

Between per se illegality and the rule of reason, there exists a middle-ground known as the "quick-look" doctrine. Under the quick-look doctrine, the court engages in a more thorough analysis than is done with per se illegal conduct, but the court does not conduct a full rule of reason analysis. The court makes presumptions about the anticompetitive nature of the conduct, instead of making the plaintiff prove it. It is unlikely to apply here, because the court will not make a presumption on the anticompetitive nature of the professional board's conduct, given how this conduct has been considered permissible in the past.

Friday, May 3, 2013

The unlikelihood of class decertification.

In 2007, the nation's four largest rail companies were sued over conspiring to fix prices. The litigation is still ongoing, and a class of plaintiffs was certified last year. So it is a class action. Recently, the rail companies tried to decertify the class. The case illustrates the tendency of defendants in a class action to seek quick settlement, because there is so much risk in taking a class action to trial. If the defendant in a class action loses, the potential amount it would have to pay could reach 10-figures or more.

The process of certifying a class is very complex. So, once a class is certified, it is rarely decertified.

Thursday, May 2, 2013

On Nike and Under Armour's trademark dispute over "I Will."

Most of us have articles of clothing from either Nike or Under Armour. They are industry giants when it comes to sportswear and team apparel. This is an ongoing case between the two over the "I Will" mark. Under Armour claims ownership of the mark, and Nike claims that it has been using the noun-verb combination since at least 1995. The dispute follows the trajectory of typical trademark lawsuits: Under Armour filed for trademark infringement. Nike counterclaimed for a declaratory judgment of invalidity.

In trademark infringement suits, the defendant often counterclaims for a declaratory judgment of invalidity. This basically "ups the ante," because there are more potential consequences: namely that the mark may be invalidated. So a plaintiff who is unsure of his or her claim might think twice about continuing the suit, if the defendant seeks to invalidate the trademark.

Wednesday, May 1, 2013

What Is a Certification Mark?

A certification mark is entitled to the same federal protection with the USPTO as a standard trademark. It is owned by a party who allows others to use it to certify regional or other origin, material, mode of manufacture, quality, accuracy or other characteristics of the user's goods or services. A certification mark is not a source identifier of the company making the product or service, but it designates the procedure or standard of the product or service. An example is the "Real" seal for dairy products.