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Alt Legal Connect Session SummaryGo with the Current: Recent changes in IP law

Alt Legal Team | February 08, 2023
5 min read

On Wednesday, February 8, Christine Farley of American University lead Tiffany Shimada of Greenberg Traurig and Chris Turk of FisherBroyles in a panel discussion, “Go with the Current: Recent changes in IP law.” The panel discussed current trends in IP law including the intersection of IP protection and the First Amendment, the rise of generic refusals and increasing risks of genericide, the important copyright case before the Supreme Court, Warhol v. Goldsmith, Web 3 and its impact on IP protection, and more.

Presentation Materials: Click here

View Recording: Click here

Copyright and Trademark Fair Use Developments

Christine began by discussing the important Warhol v. Goldsmith case pending before the Supreme Court. Goldsmith is a celebrated photographer, known particularly for her photos of musicians. She took photographs of Prince on assignment for Newsweek magazine. Goldsmith’s licensing agency licensed her photos to Vanity Fair which had hired Warhol to create an illustration of Prince based on Goldsmith’s photo for a story in the magazine. Vanity Fair published Warhol’s illustration and Goldsmith never knew about it. After Prince died in 2016, Conde Nast published a book featuring the Warhol illustration, along with 16 other artworks based on the Goldsmith photograph. Goldsmith sued for copyright infringement.

The District Court ruled in favor of Warhol on summary judgment. The Second Circuit reversed finding all of the Google v. Oracle factors had been met. The case is now pending before the Supreme Court and oral arguments were heard in October. Christine noted that the decision will teach us a lot of interesting things:

  1. The Supreme Court just recently opined on fair use with Google v. Oracle. It’s curious to see why the Supreme Court wanted to opine on fair use again now that Justice Breyer is no longer on the Court.
  2. What is the relationship between derivative rights and fair use? Goldsmith’s lawyer made a big point of this – this work is licensed for an artist to make a derivative work. But are the works derivative or fair use based on the original? This may be the distinguishing factor between this case and Google v. Oracle.
  3. How will the Court navigate the question of Warhol’s prominence as an artist in this case? How do we judge these works and to what extent does it matter that these are Warhol’s works? The Second Circuit was explicit in stating that they were doing a side-by-side analysis and found very clear resemblance of the photographer’s work in the illustration.

Next, Christine discussed fair use in trademark law in reference to the Jack Daniel’s and Bad Spaniels dog chew toy case which is currently before the Supreme Court – VIP Products v. Jack Daniel’s. This case raises a well-known trademark doctrine in fair use law, the Rogers v. Grimaldi test, that the Second Circuit developed. Under the Rogers test, the ordinary infringement test of likelihood of confusion applies if the use has no artistic relevance to the underlying work or if the work explicitly misleads as to the source. Christine noted that the Second Circuit hasn’t followed the test so carefully and instead has latched onto language in the opinion balancing speech rights versus trademark rights. The Ninth Circuit has applied the Rogers v. Grimaldi test in a number of cases. The question that is at play is what is an expressive work, namely a parody? This is the primary issue in the important case Vans v. MSCHF, currently before the Second Circuit. Christine showed a number of other examples from MSCHF and their arguably “expressive works.”

Christine then moved onto discuss the Hermès v. Rothschild NFT case which was just decided by the SDNY in favor of Hermès. The defendant claimed that he was engaged in artistic speech, arguing that Rogers v. Grimaldi applied. However, Christine noted that the judge and jury seemed to be skeptical of the defendant’s claims.

Extraterritorial Scope of the Lanham Act

Tiffany began by discussing the extraterritorial scope of the Lanham Act with the case currently before the Supreme Court, Abitron Austria v. Hetronic International, dealing with a circuit split between the 10th 2nd and 5th Circuits. Hetronic manufacturers remote controls for construction equipment and the defendant is the European distributer for these products. The defendants found that in a prior agreement, that they owned the IP and they began manufacturing identical products with identical marks. The court awarded Hetronic over $100 million in damages plus a worldwide injunction, barring the defendant from selling the product. The defendant ignored the injunction, claiming that the Lanham Act didn’t apply in other jurisdictions. The 10th Circuit addressed this issue for the first time and found that the court had personal jurisdiction over the defendants based on the forum selection clause and the long arm statute.

The current issue before the Supreme Court is whether the 10th Circuit erred in applying the Lanham Act extraterritorially to Abitron’s foreign sales, including purely foreign sales that never reached the US or confused US consumers. The Solicitor General argues that extraterritoriality of the Lanham Act should apply only where the use of the mark abroad is likely to cause confusion in the US.

The next case Tiffany discussed is In re Jasmin Larian, the owner of the fashion brand Cult Gaia. She had designed a handbag that she tried to register – the Ark handbag. The mark was refused under the genericness test. The TTAB produced lots of evidence showing similar/identical bags sold before Cult Gaia’s launch in 2013. Additionally, the applicant herself claimed that the bag was a reproduction of a classic Japanese picnic bag and inspired by a vintage bamboo bag that she had found. The TTAB also looked at historical evidence and evidence from bloggers and magazines showing that the bag design had long been in existeence. The applicant had also tried to use YouTube videos commenting on her bag to show acquired distinctiveness and overcome the genericness refusal, which the TTAB would not allow. Tiffany noted that this case is a great study for what evidence you need to provide to show acquired distinctiveness and to overcome a genericness claim for product configuration.

Tiffany then discussed the case Unicolors v. H&M. Unicolors designs fabric designs and had obtained copyright registrations for a number of designs. H&M sold items bearing one of Unicolors’ designs and Unicolors responded by suing H&M. In defense, H&M argued that Unicolors’ registration was invalid because Unicolors had applied for many works at once when they were not in the same unit of publication, which was a requirement for registration of multiple works. Unicolors asserted that the safe harbor provision says that a registration is still valid even if it contains inaccurate information unless (1) there was knowledge that information was inaccurate, (2) if known, the inaccurate information would have caused the Copyright Office to refuse registration. The court found in favor of Unicolors but on appeal, the Ninth Circuit reversed and remanded to district court to determine if the registration would have been refused had the Copyright Office known of the error. Unicolors requested that the Supreme Court review the Ninth Circuit’s decision and the Supreme Court found that the safe harbor provision applies to mistakes of law and fact. Tiffany noted that most practitioners viewed this case as a positive development for copyright registrants who make small mistakes, particularly those who file registrations without attorneys, and anyone who files making small mistakes without bad faith.

Practice Tips

Chris discussed important practice tips relating to current developments in IP and trademark law. First, the shortened office action response deadlines from the USPTO allows practitioners 3 months to respond to office actions. The primary implication of these new deadlines is that attorneys need to be more responsive. Firm management is also very important. Chris noted that he often has to chase clients for information for office action responses. The firm must consider how often they contact a client for a response before it becomes necessary to fire a client.

Next, Chris discussed how to counsel a client like MSCHF that wants to avoid conflict and claims of copying. Chris said it is very important to separate the inspiration from the design element and advise clients to design in an entirely “sterile” room with no signs of inspiration.

Chris then went on to discuss how to avoid genericide. Companies such as Xerox and 3M (owners of Velcro) have put out very effective ad campaigns to encourage proper use of their marks to avoid genericide. Both have also effectively used social media to get their messages out there.

Finally, Chris discussed the increase in first action pendency rates before the USPTO. Due to a surge in new applications before the USPTO, the current rate is over 8 months. Chris noted that the pendency rates can have an effect on clearance and overcoming refusals and waiting for registrations to drop off.

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