One of the pleasures of practicing law, perhaps especially in the technology space –is in observing how technology trends and legal theories intersect, ebb and flow over time. Many people in the trademark world watched excitedly over 17 years ago when the U.S. Supreme Court, in Qualitex v. Jacobson, determined that single colors could be protected as trademarks—as long as the color, as applied to the relevant products, was not merely functional. Previously, some feared that granting trademark protection to single color (even if the color was non-functional) would be anti-competitive because colors were in short supply. Hence, no one should own one color exclusively. The Qualitex ruling seemed to provide closure on the issue by focusing the analysis on the functionality of the color shade rather than the potential for that color to be removed from the designer’s pallet.
But recently, as the trademark community knows, the Second Circuit Court of Appeals took up the appeal in Louboutin v. Yves Saint Laurent, a case that revisits the protectability of color, this time as used to identify a brand of shoes. The District Court opined that the use of red on a shoe sole (or on any fashion item) was “functional” by its very nature and that granting a monopoly to color on a fashion item was outside the bounds of trademark law protection. The District Court characterized the impact of protecting colors in the fashion industry as one encouraging anti-competitive color grabs:
…Louboutin’s claim would cast a red cloud over the whole [fashion] industry, cramping what other designers could do, while allowing Louboutin to paint with a full palette. Louboutin would thus be able to market a total outfit in his red, while other designers would not. And this impediment would apply not just with respect to Louboutin’s registered ‘the color red,’ but, on its theory as pressed in this litigation, to a broader band of various other shades of red which would be available to Louboutin but which it could bar others from using.
Unpacking that argument, it seems that the District Court’s real concern is not so much that the colors are functional in the fashion industry, but that designers’ pallets will become incrementally limited as each designer lays claim to a shade. That sounds a lot to this blogger like we are revisiting color depletion as a basis for declining to protect single color marks. And that, in turn lead me to consider how a re-emergence of depletion theory might impact other industries who seek to use common and limited elements (such as letters) as trademarks. You can read more about that here.
As of July 2, 2012, the World Trademark Review and its blogger, Helen Sloan, are reporting that Apple has agreed to pay $60 million to Proview Technologies for the IPAD mark in China. As I previously summarized in an earlier post, Apple thought it had already acquired all the rights to the IPAD mark, but it learned after a transaction with Proview’s sister company that it had not (allegedly) obtained a complete assignment in China from the record owner of the rights there. Apple’s proffered settlement is quite a bit larger than the $16 million it was rumored to be offering, but given the popularity of the Apple device and the potential market in China, the sum is a worthy investment.
Lessons from Apple’s experience include:
1) Diligence needs to be thorough. Mixed ownership of assets in related, sister and subsidiary names is not uncommon. Making sure the papers are signed by the right entity is critical to finalizing a deal and getting genuine closure on the acquisition of any intellectual property right.
2) Negotiating through an acquisition subsidiary can be perilous. Apple used a separate corporation to purchase rights to the IPAD mark in various countries — a method that is rather common among large companies to fend off demands for a high price when sellers know that they have a deep-pocketed purchaser. But Apple’s experience with Proview demonstrates that, even though perfectly legal, such tactics can lead to disputes later. Of course, Proview’s complaints in this regard were handily dismissed in the U.S., but at what cost to Apple in reputation and legal fees? In the wake of Apple’s experience, it’s worth considering whether using an opaque acquisition sub really saves the buyer anything and/or whether a fair and open dialog might have avoided the stress and cost caused by Proview’s lawsuits. Certainly there will be times when using such tactics is worthy. But a careful strategy will include consideration of alternate methods and the pros/cons of using such a method.
3) Clearing rights early and often can be critical. Although Apple surely began its clearance early, a common mistake made by some companies is not clearing trademark rights ahead of product launch. Companies too often leave clearance to the last minute or only clear rights nationally — even though the marketing strategy is global. There are many rationalizations for this approach, not the least of which are the time and cost associated with a global review of rights. But in reality, if product development teams and marketers get ahead of the trademark clearance process in advance of launch, they almost always will avoid costs down the road, whether it be the cost of fending off unnecessary lawsuits or the exposure caused by the need t0 acquire rights from third parties. Generally, those clearance procedures should be as geographically broad as any planned market penetration at least 18-36 months into the future.
Nora Ephron. Photo Shutterstock.com
Last night, Nora Ephron passed. Already the internet and blogosphere are filled with this news and discussion of the loss of an incredibly prolific, comical and impactful artist. While she is associated with a broader feminist agenda, her real contributions were in giving comic and touching voice to life experiences that happened to be shared primarily by women. Her clarion call to women, especially younger women, to “…be the heroine of your life, not the victim,” might have been her most poignant gift.
But what, you may well ask, has Ephron’s passing to do with intellectual property or the law of information? Well everything and nothing at once… I was once asked to opine upon the intersection of intellectual property protection and gender. I was flummoxed by this question at first, feeling that certainly there was gender blindness when it comes to IP rights and their exploitation. But if you scratch beneath the surface — as Ephron always did — the story is much more complicated. Continue Reading
On June 13, ICANN announced the list of applicants for 1,930 proposed new top level domains. For the uninitiated, top level domains, or “TLDs” are the portion of the domain that appears to the right of the dot. Since the web’s beginning as a commercial venture, most of us have been accustomed to .com, .biz, .info, etc., and the cc (country code) TLDS such as .US, .UK etc. There are approximately 280 TLDs existing today (excluding internationalized TLDs and a few other “test” TLDs on ICANN’s radar).
For several years, ICANN, with the advice and comment of various constituency groups, has worked toward a system of identifying new TLDs in order to expand the top level domain name space, and (according to ICANN) encourage and enhance competition. Late last year, ICANN began receiving applications from those interested in being registrars for new, proposed TLDs. The list of applicants and their proposed offerings includes “.sucks” “.amazon,” “.science,” and “.like.” among others. If all of these TLDs ultimately come into being, it would expand the top level domain name space 8 times.
Media attention to the prospect of so many new domains has been somewhat schizophrenic, with some applauding the new direction ICANN has proposed, and others criticizing the vast and apparently overnight expansion as potentially giving way to chaos — particularly for IP and trademark rights holders who have legitimate concern that their enforcement budgets will now have to increase eightfold in order to match the new glut of opportunity for squatters, infringers and counterfeiters. To my reading, the best response has been Letterman- Style Top Ten Domains Not Applied For published by Forbes.. Continue Reading
Perhaps no other endeavor has created more community among humankind than sport. It engages us, it inspires us, and it moves entire communities to do all sorts of unusual things, including mass face painting in the local team colors, and the emblazoning of team trademarks and colors on city buildings and structures in support of the local protagonists. Can those activities be harmful to brand protection?
As a trademark lawyer I can offer the observation that branding and sport are as intertwined as any two fields. At least since the early 20th century, if not earlier, sponsorship dollars have ensured that sport could continue and rise to the world stage through radio, then television, satellite, cable and now onto mobile devices for the upcoming 2012 London games– and why not? Across all cultures we seem to have an unending thirst to see whether this one will triumph or that one will fail. But for spectators and business owners it often comes as a surprise that sports brands, and in particular the trademarks associated with famed events such as the Olympics, are owned and controlled –even to the exclusion of the participants– by stake holders whose primary goal is simply to monetize the brand.
In the case of the Olympics, the five rings, the very words “Olympic”, “Olympics”, “Olympiad” and the ancient tag line “Citius Altius Fortius” are not just owned and controlled by the various Olympic committees, but they are protected by a web of law and regulation that, boiled down, severely restricts not only the use of the brands in promotion and advertising but also who can actually refer to the brands and under what circumstances.
Mass. State House Dressed in Boston Celtic Green
Interestingly, protection of the Olympic marks has been the subject of international treaty and national legislation for decades. In 1981, several nations (not the U.S.) entered into the Nairobi Treaty on the Protection of the Olympic Symbol. That Treaty identifies the five-colored olympic rings as the ultimate symbol of the games, and requires nations that sign the treaty to invalidate any attempt to register that symbol and to take steps to enforce against illicit commercial use of the symbol, other than on behalf of the International Olympic Committee. Continue Reading
Why or what or who is Lex Indicium
? Roughly translated, and with apologies to the classical scholars who may happen upon this blog, Lex Indicium
means “law of information,” or “law of data” in Latin. In a broad sense, the “law” that applies to data, and/or rights in data or information is what this blog seeks to explore. In my law practice, I might say that I am an “intellectual property lawyer, who specializes in trademarks, copyrights, and information law.” But my passion and interest have been drawn to this craft by fundamental questions – “who owns or should own information—any information, be it text, raw factual data, art, etc? Should it be free or should it be exploitable and monopolized and monetized? And which answers lead to the greatest good for society?”
Since I began practicing law almost 20 years ago these questions really have been asked repeatedly in the context of one burgeoning cultural phenomenon known as digital technology—which technology has had one primary (and largely freely available) medium– the internet. But the questions themselves and the issues that flow from them are ancient, stretching back to ancient times. This, combined with my own background in classical archaeology, form the bases for selection of a Latin name as the name for this blog. I hope we can use this blog to explore these topics together.
Apple Computers, a company that is perennially the subject of stories about its successful branding strategies, has found itself knotted in a thorny trademark dispute – one partly of its own making and surely one that might have been avoided. Simply put, Apple negotiated a purchase of trademark rights from party A, when party B was the record owner of at least some of the rights in question. But while the blogosphere and media have questioned whether Apple exercised simple diligence in the deal, the dispute really (in this poster’s view) centers on more complex questions of corporate disclosure and, possibly, cross cultural undertone.
As will not surprise branding professionals, when Apple first committed to the iPad® trademark for its new tablet in 2009, it learned that in some countries the mark already had been registered by others. In a move that is rather common among successful international companies, Apple created a new company (not named Apple) to, perhaps among other objectives, negotiate the purchase of conflicting trademark rights around the world so that it could safely announce its new device globally without threat of infringement claims. While we don’t know for sure, it is suspected that Apple chose this stealth route in part because it did not want the trademark registrants to know that the negotiations were really with Apple Computer. No doubt such disclosure would embolden a potential seller to demand a substantially higher purchase price than it might otherwise require for the transfer.
Apple, through its stealth acquisition sub, purchased rights to the iPad mark in China, Hong Kong and eight other countries from a Taiwanese company called Proview. However, an affiliated Chinese company, Proview Shenzhen, now claims that it owns the trademark registrations in China (rather than Proview Taiwan), and that Proview Taiwan was not authorized to sell those registrations to Apple. Interestingly, the primary negotiator for Proview Taiwan was also the principal of Proview Shenzhen. Nevertheless, the Chinese company refused to stand by the sale of the Chinese rights. Continue Reading
The absolute best part of my job is problem solving. It’s especially fun because hardly a day goes by that I don’t encounter a person saying something like “oh, I have a quick question about…,” or “I wonder if its ok if I use this photo/text…” In very limited cases is the answer really quick and easy. If it were, I’d be out of work and so would a lot of other lawyers. So in this corner, we will try to address questions we’ve encountered or questions our blog readers pose about what they can and can’t do with the work/content of others (or any other random related question that may arise).
Here is this week’s question:
I am taking photos of a friend with various artworks she would like sell. Do we need permission from the artist who created the works to photograph and post the photos on the web?
The answer is – (sorry), it depends. First I need to make assumptions about the works that I hope apply. I am going to assume that the works were created in the U.S. by a U.S. citizen. I am also going to assume that the works were created after 1978. If either of those assumptions do not apply we need to go a different direction with the analysis. In the U.S. after 1978 it is crystal clear that the artist retains all copyrights in the works even after the physical works are sold/transferred unless the artist transferred the copyrights in writing to the owner of the physical work. In the absence of a written assignment from the artist, the artist will retain all copyrights, including the right to reproduce and display the works publicly. That said, as a practical matter, of course it is hard to sell something that you can’t show the public. Furthermore, many artists, particularly less well known artists, are unlikely to object to the reproduction of their works, since it generally lends to the artist’s notariety. While technically having an assignment or license to display the photos of the original work(s) is necessary, you may have a limited “fair use” defense if you can argue that your display/reproduction does not hinder the commercial value of the reproduction right owned by the artist. Many sites achieve this goal by blurring or inserting an electronic water mark over the works that make reproducing your digital image less commercially viable. I’d say you are better off getting permission (in writing), but as a practical matter, if permission can’t be obtained, the risk can be mitigated by: a) creating photos that are less likely to be themselves reproduced; b) and attributing the works in the photos properly to the artist. Of course, there may be additional details that might lead in a different direction, so obtaining legal counsel on these issues and to discuss the details is almost always worthwhile.