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T-CAM Developments You Can’t Afford to Ignore: 2015 Year in Review Jim Steffen FaegreBD

The Lanham Act at the Supreme Court

►Hana Financial, Inc. v. Hana Bank, 135 S. Ct. 907 (2015) ► Cert. granted to resolve Circuit split on question of whether legal

equivalence for “tacking” priority to a prior version of a mark is a question of fact (for the jury) or a question of law (for the judge).

► SCOTUS: legal equivalence, a question of whether the marks “create the same, continuing impression,” “relies upon an ordinary consumer’s understanding of the impression” of the mark and should be decided by the jury as a question of fact.

► Not surprising; little practical effect

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The Lanham Act at the Supreme Court

►B&B Hardware, Inc. v. Hargis Industries, Inc., 135 S. Ct. 1293 (2015) ► SCOTUS reverses Eighth Circuit

► holding that “so long as the other ordinary elements of issue preclusion are met, when issues adjudicated by the TTAB are materially the same as those before a district court, issue preclusion should apply.”

► Questions of how broadly preclusion would apply were largely left for later development.

► Seemingly may turn on whether TTAB considered “marketplace evidence” ► Not limited to likelihood of confusion – Ashe v. PNC Financial (D. Md. Nov.

2015) (preclusion on issue of priority of use) ►Ruling surprised many practitioners; requires reconsideration of

strategy ►FaegreBD planning separate WebEx seminar for Q1 2016.

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The Lanham Act at the Supreme Court

►The Next SCOTUS Issue? ► Does Section 2(a)’s prohibition on registration of offensive marks

violated the First Amendment? ► In re McGinley (Fed. Circ. 1981) said no First Amendment violation

► no conduct proscribed; no tangible form of expression suppressed ►But, now pending in two Circuits

► In re Tam (Federal Circuit, en banc) – THE SLANTS for a rock band ► Pro-Football v. Blackhorse (Fourth Circuit) – REDSKINS for football

team

Trademark: Guidance from the Federal Circuit

►You’d Better Have Documents Supporting Your Intent To Use ... ► M.Z. Berger & Co. v. Swatch AG, 787 F.3d 1368 (Fed. Cir. 2015)

► Affirmed TTAB that applicant had mere intent to reserve a mark, not a bona fide intent to use the mark in ordinary course of commerce

► “applicant’s intent must be demonstrable and more than mere subjective intent” – it requires “objective evidence of intent”

► “decided on a case-by-case basis considering the totality of the circumstances”

►Service mark isn’t “used” until service is actually rendered; “offering” service is not enough

► Couture v. Playdom, Inc., 778 F.3d 1379 (Fed. Cir. 2015) ► Could be read as inconsistent with some prior opinions ► Opens potential lines of defense in infringement actions

Trademark: Crisis Averted

►Multi Time Machine v. Amazon.com ►District Court granted summary

judgment. ► Products clearly labeled →

no likelihood of confusion ►July 2015: 9th Circuit reversed.

► Jury must decide initial interest confusion.

►October 2015: 9th Circuit reverses itself.

► Summary judgment affirmed.

Trademark: Store Brands

►Store brands largely winning, but national brands keep trying... ► Pepperidge Farm, Inc. v. Trader Joe’s Co. (D. Conn., filed Dec. 2015)

Trademarks: Global Developments

►European Union trademark reform coming, beginning April 2016 ► Names changes: CTM→EUTM and OHIM→EUIPO ► Broader provision for non-traditional marks (e.g., sound, color) ► End of grandfathering of pre-June 2012 “class heading” registrations

► Amend now or be limited to literal terms. ► Fee changes effective April 2016

► End of 3-for-1 class pricing ► Lower renewal fees

► Allows for third-party objections during prosecution (letter of protest). ► All national systems must allow opposition / cancellation in trademarks

office without requirement of court action. ► To fight counterfeiting, action allowed against goods in transit.

Trademarks: Global Developments

►Delays in Canadian Trademark Reform ► Had expected changes, including Madrid ascension, by 2015

► With software issues, may not happen until 2018 ► Has begun accepting optional Nice classifications

►Madrid Expansion Continues ► New this year: OAPI (17 nations), Algeria, The Gambia, Zimbabwe ► More expected with Trans Pacific Partnership agreement

►Attention to Cuba ► Applications legal through Madrid Protocol

Trademarks: Quick Hits

►Has “trademark verbing” trend finally crested? ► Violates first “rule” of trademark use (tm is an adjective ...) ► But, if employed carefully with strong marks, won’t actually result in

genericide; might even add strength ► Now ubiquitous; perhaps post-peak?

►Social media IP-shaming ► Long had to be concerned with posting of C&D letters and responses. ► Now frequently seeing instances where social media is end in itself

► no legal claim ever asserted. ► Take care not to elevate PR problem to legal problem; team with PR

►Native American names and associations ► Urban Outfitters suit as reminder of difficult legal setting.

Don’t Forget ICANN’s New gTLDs

►Largely out-of-sight, out-of-mind for most of us – but ... ► Now more than 750 functioning new gTLDs ► .xyz has largest number of second-level registrants – > 1.5 million

► Growth spurred by Alphabet’s reservation of abc.xyz ► Successful enough to spawn false advertising suits with .com (Verisign)

► Some lesser traction with other new gTLDs – e.g., .bank, .law ► Most being used to link to .com sites

► faegrebd.law links to faegrebd.com ► Beginning to see some move to using new gTLD as home gTLD

► myfbtbank.com → myfarmers.bank ► dollarbank.com → dollar.bank

► Query: Will Google begin to use gTLDs in search algorithms?

Don’t Forget ICANN’s New gTLDs

►Trademark Rights Protection Mechanisms – mixed results ► More than 37,000 marks in Trademark Clearinghouse

► Notices of Clearinghouse rights having at least some positive effect ► Vast majority don’t follow through when notified, but ...

► Sunrise Period rights – less useful than hoped ► Confusion as to dates, rules ► “Premium” pricing

► URS (Uniform Rapid Suspension) – less useful than hoped ► Very few filed ► Limited remedy; tight standards

► UDPRs – the usual problems with proving bad faith ► Brand owners wins in the YoYo .email hijacking cases ► Brand owner losses in delta.tours and marlboro.party

Old School Right of Publicity Issues

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Old School Right of Publicity Issues

Old School Right of Publicity Issues

►“Reese Ring” Suit: Cleared for trial in L.A.

Old School Right of Publicity Issues

►Motion to dismiss pending: Harris Faulkner v. Hasbro

Copyright: Fair Use Developments

►Most interesting developments in 2015 in development and broadening circuit split in fair use analysis

► Covered in depth in first session of this series in October ► Note particularly split between the Second and Seventh Circuits in what

is the most important factor in the fair use analysis ► E.g., Kienitz v. Sconnie Nation LLC, 766 F.3d 456 (7th Cir. 2014) (market

effect is most important factor; expressly criticizing Second Circuit’s position that transformative use is the critical inquiry)

Copyright: Fair Use and the DMCA

►Some backlash against perception that copyright claimants are misusing DMCA take-down provisions.

► Lenz v. Universal Music Corp. (9th Cir. 9/14/2015) ► YouTube video of baby dancing to Prince’s Let’s Go Crazy ► Lenz says Universal’s take-down notice in bad faith for failure to consider

fair use. ► District Court and Ninth Circuit agree; case can proceed to trial.

► YouTube announced in November 2015 that it will provide legal support

to posters challenging take-down notices on fair use grounds.

Copyright: Pop Quiz on Litigation Trends

►Huge numbers of Internet file sharing/download suits, many against “John Doe” defendants.

►Excepting those, have the largest number of federal copyright suits filed over the past few years involved claims of infringement of:

A. musical works; B. photographs; C. textile designs; or D. computer software?

Copyright: Textile Design Suits

►“Copyright trolls” in the fashion industry ► Since 2009, 11 of top 16 defendants in non-file sharing cases are retailers

► e.g., Ross Stores (181 cases); TJX Cos. (98 cases); Burlington Coat Factory (54 cases)

► Since 2009, 741 cases by an L.A. boutique law firm representing textile industry “copyright trolls”

► e.g., L.A. Printex, Unicolors, Star Fabrics, United Fabrics ►Has attracted some press / legislative attention ►Acting as something of a counterweight to the fashion industries push

for copyright or copyright-like protection for clothing designs

Copyright: Textile Design Suits

►Some hope came earlier this year when a District Court in Tennessee suggested that stripes, coloring and shapes on cheerleading uniforms were utilitarian and couldn’t have copyright protection.

►But, 6th Circuit reversed – “more like fabric design than dress design” ► Varsity Brands, Inc. v. Star Athletica, LLC (8/19/2015) ► Certiorari? There was a dissent ...

Copyright: “Reasonable Royalty” Damages

►Gaylord v. United States, 777 F.3d 1363 (Fed. Cir. 2015) ► Postal Service depicted Gaylord’s sculpture on stamp without permission. ► Fair use claimed, but rejected. ► Federal Circuit affirms award of 10% royalty on $5.4 million in sales. ► Damages affirmed based on “hypothetical negotiation” test common in

patent cases, with explicit comment on borrowing from patent law. ► Consider: work’s footprint in market; non-infringing alternatives, past

licenses, etc.

Copyright: Quick Hits

►Of local interest: changes to anti-circumvention provisions of the DMCA as they related to the ability of patients and researchers to obtain data from medical devices, particularly implantable medical devices.

►Perennial copyright jurisdiction question: application sufficient or must court wait for Copyright Office to act?

► Circuit split. ► Eighth Circuit has not take a position. ► November 2015 Judge Doty order in Asche & Spencer Music, Inc. v.

Principato-Young Entertainment, Inc. (Civ. No. 15-3305) ► Granting motion to dismiss; court must wait for Copyright Office to act.

Advertising Law: The Humor “Defense”

►Advertising disputes up in courts and at NAD ► But, most decisions are applications of established principles ► No real blockbuster or groundbreaking decisions this year

►NAD, however, had three cases that test the marketer’s refrain that,

“it’s not a claim, it’s just funny!”

Advertising Law: The Humor “Defense”

► DirecTV, LLC – Picture, Sound, Signal Reliability and Customer Service Advertising (NAD #5820, 3/2015) (NARB #____, 8/2015)

Advertising Law: The Humor “Defense”

► DirecTV, LLC – Picture, Sound, Signal Reliability and Customer Service

Advertising (NAD #5820, 3/2015) (NARB #____, 8/2015) (humor defense loses)

Advertising Law: The Humor “Defense”

► Dole Packaged Foods, LLC – Dole Fruit Bowls (NAD #5868, 7/2015)

Advertising Law: The Humor “Defense”

► Dole Packaged Foods, LLC – Dole Fruit Bowls (NAD #5868, 7/2015)

(humor defense wins)

Advertising Law: The Humor “Defense”

► Dollar Shave Club, Inc. – Dollar Shave Club Razors (NAD #5834, 5/2015)

Advertising Law: The Humor “Defense”

► Dollar Shave Club, Inc. – Dollar Shave Club Razors (NAD #5834, 5/2015)

(humor defense f**king kills)

NAD Rule Revisions

►Long anticipated; somewhat controversial. ►Announced at September 2015 NAD Conference ►Highlights:

► Scheduling to be more tightly controlled to speed results ► Private settlements will result in automatic case closure. ► First sentence of advertiser’s statement must say: (a) will comply; (b)

won’t comply; or ( c) will appeal. ► No longer able to avoid issue with “will take into consideration in future

advertising.” ► NAD will no longer be a party to NARB appeals.

FTC: Focus On Endorsements Disclosures

►FTC requires disclosure of material connections between advertisers and endorsers.

►What’s a material connection? ► Exchange of cash or in-kind payment (freebies, coupons)

►Who are we talking about? ► Paid bloggers ► Employees on social media sites ► Celebrities

►What do you have to do? ► Educate endorsers—provide guidance on how/what to disclose, provide

the disclosure statement. ► Monitor—stop using endorsers who fail to make disclosures.

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FTC: Focus On Endorsements Disclosures

► .com Disclosures Guide (March 2013) ► First revision since 2000 (pre-Twitter, etc.) ► Issue: What to do about disclosures when small screens/character limit

are an obstacle to traditional disclosures/footnotes? ► Answer: General advertising law applies

► Must always be “clear and conspicuous” and in close proximity. ► If the medium doesn’t allow proper disclosures, don’t use the medium.

► Focus on disclosures necessary to prevent misleading: ► Health/safety/cost disclosures must be integrated in same screen in all formats. ► For other disclosures, hyperlinks must be specific: “Restocking fees apply”; not

“More details”. ► Can’t use mechanism that won’t work for many (e.g., no pop-ups) ► Disclosures will be found inadequate if analytics demonstrate users were not

viewing disclosures; burden on advertisers to adjust per their analytics. 33

FTC: Focus On Endorsements Disclosures

►FTC Endorsement Disclosure FAQs (May 2015)

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FTC: Focus On Endorsements Disclosures

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FTC: Focus On Endorsements Disclosures

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Quick Hits: Privacy

► In October 2015, the Court of Justice of the European Union invalidated the U.S.-E.U. data transfer safe harbor on which many U.S. companies relied.

► New framework and/or other action expected within weeks.

►FTC v. Wyndham Worldwide Corp. (3d Cir. Aug. 2015) ► Security breach led FTC to allege “unfair” practices under Section 5(a) ► Affirmed that FTC has jurisdiction over data security practices ► Focus in part was on inaccurate statements in privacy policies

► FTC will interpret privacy policy literally and against you ► Say what you mean, and mean what you say

California (Finally) Fixes Its “Made In USA” Law

►California long had standard far stricter than FTC or any other state. ► Was nearly impossible to be CA “Made in USA” compliant ► Substantial volume of class action litigation ► Nordstrom vendor paid millions earlier this year

►Governor Brown signed revision on September 1, 2015. ► Still different than FTC’s “all or virtually all” standard:

► 5% of final wholesale value of product; or ► 10% if part can’t be obtained in U.S. for reason other than cost.

Questions

Jim Steffen Partner | Minneapolis +1 612 766 8508 james.steffen@FaegreBD.com