PTAB Updates the AIA Trial Practice Guide After Six Years by Maxey-Fisher, PLLC

The original AIA Trial Practice Guide (“TPG”) was published and implemented during the same time period as the AIA Trial Rules in 2012. Six years later, the Patent Trademark and Appeal Board (“PTAB”) decided the TPG needed an update. The purpose in the initial TPG was to make the standard practices during these trials apparent to the public and to create consistency in procedures during the trying a case. The PTAB believes that after six years of experience, certain sections of the TPG may have been overlooked in the past by parties and require an update to make the procedure clearer to the public. This update to the TPG was published on August 13, 2018.

The updates to the TPG are procedural. The updates effect the timing and use of expert testimony, sur-replies, and oral hearings. Additionally, the update provides for a pre-hearing conference wherein the parties preview the arguments with the panel so the panel can provide feedback as to which issues should be stressed or fleshed out during the hearing.

PTAB has made it clear that this will not be the only update, and it is likely that more updates will come in the future as PTAB learns the strengths and pitfalls of the TPG through PTAB’s constant review of AIA trial proceedings.

You can find the official statement by the United States Patent and Trademark Office here: https://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/ptab-trial-practice-guide-august-2018

The published update can be found here: https://www.uspto.gov/sites/default/files/documents/2018_Revised_Trial_Practice_Guide.pdf

The New Trade Deal Between the United States, Canada and Mexico: The USMCA or the Modernized NAFTA and its Notable Changes to Intellectual Property Rights by Maxey-Fisher, PLLC

On October 1, 2018, the United States, Mexico and Canada announced that they reached an agreement in principle regarding the USMCA, the successor of the North American Free Trade Agreement (NAFTA). This agreement aims to modernize trade between the three countries and to increase the economic growth of each party. Among other impacts, the USMCA will have notable effects regarding Intellectual Property Law. Each party will see its Intellectual Property Laws evolve and they will have to grant the same rights to their own citizens as well as those granted to citizens from the other member party countries. The new agreement states that each party shall ratify the Madrid Protocol and if the United States and Mexico are already member states of such organization, Canada is the last party to join the treaty and will allow trademark owners to register their marks in any member countries using a single application. In terms of trademarks, the USMCA will require the signatories to pre-establish damages for trademark infringement. Canada will be the one to implement this legislation as the United States already have a provision for pre-established damages and require statutory damages for counterfeit marks. The goal is to deter future infringements and to compensate the trademark owner.

One of the most significant changes concerns Canada as it will have to align its national Copyright Law on the United-States’ and increase the basic term of copyright protection to the life of the author plus seventy (70) years after the author’s death. New “take down” provisions will provide safe harbors for Internet Service Providers (ISPs) that will require them to remove or disable access to infringing copyright content. ISPs must implement a policy of terminating the accounts of repeat infringers that will allow them to be shielded from liability for copyright infringements not controlled, initiated, or directed by the ISPs.

If the Intellectual Property landscape experiences substantial changes from a copyright and trademark standpoint, the landscape for pharmaceuticals and for patents will also be impacted. The current term for biologics in the United States is twelve (12) years, but the USMCA will require a party to provide a data protection term for biologics of at least 10 years of market exclusivity from the date on which the first marketing approval is granted. Patents will also benefit from additional protection and will receive term adjustments for unreasonable patent-granting office delays through no fault of the applicant. The delay will be defined in the issuance of a patent of more than “five years from the date of filing of the application in the territory of the party,” or “three years after a request for examination of the application has been made, whichever is greater.” These provisions should encourage the timely granting of patents. The United States already has Patent term adjustment as part of their laws, but it will be new for Canada and require some adjustment. Although the parties have agreed in principle, the countries still need to ratify the agreement to see all these changes coming into effect. The ratification is expected early 2019.

When Art, Technology, and Law Align by Maxey-Fisher, PLLC

So far, 2018 has been a big year for the music industry. In May, the BTS Boys became the only Korean pop group ever to get a Billboard Music Award twice. Child singing sensation Justin Bieber got married. Plus, Congress passed perhaps the greatest music legislation of the century.

The Music Modernization Act, officially named the Orrin G. Hatch­-Bob Goodlatte Music Modernization Act, is a bill designed to finally bring laws governing the music industry up to date with the reality of internet streaming and distribution services. After unanimously passing through both the House and Senate, President Trump signed the bill into law on October 11, 2018.

The law’s passage demonstrates a major shift in the entertainment industry. Twenty years ago, the introduction of internet streaming technology had thrown the music industry into chaos. The “normal” ways to pay musicians through distributors paying royalties and percentages of physical record sales became impossible to regulate as file formats storing music got more web-friendly (i.e., MP3s). Companies like Napster capitalized on these innovations by creating what came to be known as “peer-to-peer music sharing websites”, which were essentially digitalized spaces for consumers to exchange songs for free.

As expected, a series of lawsuits followed. Outraged that their music was being distributed without their knowledge, artists, producers, and their management companies demanded due compensation from Napster’s profits. Such hardships foreshadowed some of the backlash that Napster’s successors, like Pandora and Spotify, would come to face in the years to come. Because tensions in the music industry did not seem to be resolvable by the existing regime, the Music Modernization Act meant sweet deliverance for all.

First, Title I of the Act calls for the creation of a nonprofit agency that would govern a compiled database of all mechanical licenses owned by song owners, denoting the people who have property interest in a recording’s composition and lyrics. Songwriters are ensured a portion of the payment involved with digital or physical song reproductions, at a rate set by contract. Cases regarding royalty rates would also be randomly assigned to judges in the United States District Court for the Southern District of New York, instead of being automatically sent to the same single judge. The Act thereby attempts to reduce time wasted in trying to locate and pay a song’s owners, ensure songwriters due pay, and increase court efficiency when dealing with royalty rate disputes.

Hopefully, the Music Modernization Act will help artists and record companies get paid right the first time. With less lawsuits filed against them, digital service providers can also rest easier. Plus, with fairer exchange, creators are incentivized to produce better media so that the public can enjoy greater access to better music.

For the full text of the Bill, see 115 H.R. 1551.

Username Jacking: Tips and Tricks When Jacked Yourself by Maxey-Fisher, PLLC

Username Jacking has been at the forefront of conversation in the realm of Intellectual Property Law for quite some time. In summation, username jacking exists when individuals or brands, usually of popularity or prominence, go to register a website or social media account for themselves and discover that another individual or brand has registered the account first. Of course, this could occur coincidentally. However, intentional username jacking happens all the time, and it usually ends with the prominent figure or brand having to buy out the registered owner for a large amount of money.

Unfortunately, there is no clear-cut method of resolution for this problem. So, the question remains, how do you navigate this problem when it happens to you? For starters, you can evaluate the Terms of Use for a social media platform and find out if they have protections in place for this type of activity. Websites have varying methods of resolution, whether it be requiring account owners to identify themselves as “parody” accounts, or removal of the account entirely.  Additionally, there is legal recourse available, but not without a cost. Social media platforms are protected by Section 230 of the Communications Decency act, so your best bet for legal action is to try to identify the account owner and pursue a lawsuit directly. Big brands, however, can take legal action in the form of a trademark infringement lawsuit, which can provide a more clear cut path for getting the fake account removed.

A New Trade-mark Act puts Canada in line with International Intellectual Property Treaties by Maxey-Fisher, PLLC

Canada officially moved toward amending its Trade-marks Act and, in early 2019, will join multiple international agreements including the Nice Agreement concerning the Classification of Goods and Services, the Singapore Treaty of the Law of Trademarks, and the Madrid Protocol concerning the International Registrations of marks. All of which has been recently announced by the Director General at the Trademarks Branch of the Canadian Intellectual Property Office. Canada’s membership in these treaties represents real benefits for Canada as it will “reduce [the] administrative burden,” “align with international best practices,” and consequently attract foreign businesses. Regarding the Trademark applications, the registration process will be faster overall. Once Canada joins this International Trademark System, along with the one hundred and seventeen (117) other countries who are already part of the World Intellectual Property Organization (WIPO), applicants will be able to register their Trademark in multiple countries through a single application. According to the Canadian Intellectual Property Office, the process for registering a Trademark will be “faster, simpler and less expensive.” Trademark owners should take advantage of this new opportunity as soon as it is implemented.

As far as Canada’s domestic law, the main changes for the registration of a mark will be changes to its fundamental requirement of “use” for registration, which will be removed under the new Trade-marks Act. Other changes will include what constitutes the use of a mark for goodwill in the marketplace as well as the reputation of the mark, which can be proven during the process rather than prior to the Trademark application. Furthermore, the definition of Trademark will expand to include tastes, sounds, smells and other identifiers. More so, fee structures and registration terms will change. While fees will increase from C$250 to C$330 for one class and C$100 for additional classes, the application for a renewal term will be shortened from fifteen (15) years to ten (10) years. There will also be a new system for examining marks, as well as additional grounds for opposition of a Mark. All these changes are being implemented to align the protection of Intellectual Property Rights within Canada with international practices and WIPO Members States for Trademark registration.

Regardless, Canada will most-likely experience an increase in filings of Trademark applications and, consequently, a major change in its Trademark landscape. Nonetheless, the globalization of intellectual property continues and applicants are having greater opportunities to file their trademark more broadly and further extending the protection of their Mark.

How Not to Obtain a Preliminary Injunction: Trademark Edition by Maxey-Fisher, PLLC

Forever 21 has had a busy year in the intellectual property world, defending lawsuits and warding off cease and desist letters for numerous claims of IP infringement and counterfeit. In a particular lawsuit brought by Puma, Puma initially moved for a temporary restraining order, which the Court denied. In April, Puma then moved for a preliminary injunction requesting the Court to order Forever 21 to immediately cease selling the allegedly copied shoes. Puma was again unsuccessful, as the Court denied the preliminary injunction request last month. While unsuccessful, some great practice points come out of the Court’s ruling on the preliminary injunction.

As a legal standard, a party seeking a preliminary injunction must make a clear showing of: (1) a likelihood of success on the merits, (2) a likelihood of irreparable injury to the plaintiff if injunctive relief is not granted, (3) a balance of hardships favoring the plaintiff, and (4) an advancement of the public interest. Here, the Court looked only at the second prong to determine whether Puma sufficiently met its burden as to “irreparable injury”. The Court noted that “[i]t is well established that as the party seeking emergency relief,[Puma] must make a clear showing that it is at risk of irreparable harm, which entails showing a likelihood of substantial and immediate irreparable injury.”

In order to prevail on the “irreparable injury” prong, Puma must have shown that remedies available at law, such as monetary damages, would be insufficient to compensate Puma’s injury. As evidence in support of its “irreparable injury”, Puma submitted a declaration of Mr. Adam Petrick, the company’s Global Direct of Brand and Marketing. In the declaration, Petrick detailed how Forever 21’s knock-offs injure brands, depress sales volume and prices, and diminished the excitement after the launch of Puma’s “Fenty” line with global superstar Rihanna. However this is all that Puma submitted. And the Court found it grossly insufficient, stating “Puma dedicates a mere two and a half pages to this factor in its motion.”

Lesson learned: IP owners cannot solely rely on the merits of their claim to obtain a preliminary injunction. As a practice point, to better align yourself in order to obtain a preliminary injunction, remember that the “irreparable injury” should not lend itself to be compensated by monetary damages. If monetary damages are an appropriate remedy for your “injury”, then a preliminary injunction is not your best route. An effective way to show “irreparable injury” is to submit evidence showing the damage done to your brand, not financially, but in the eyes of the consumer. This can be done by surveying consumers, or via affidavits from specific for a less financially cumbersome approach.

For the Court’s Order, the case is Puma SE v. Forever 21, Inc., No. 2:17-cv-02523-PSG-E (C.D. Cal).

Start Me Up: How Startups Can (and Should!) Protect Their Intellectual Property Rights by Maxey-Fisher, PLLC

Starting a business has a laundry list of to dos. More often than not, protecting intellectual property, and more importantly doing your due diligence in researching existing brands, is left on the back burner. One of the worst things a startup can do is ignore their IP. This can have grave consequences, whether you fail to protect your own IP and have to fight a third party for your rights, or infringe on a third party’s IP and are dragged into court to defend your company. And the dreaded “R” word, forced rebrand.

Take the following example: Susie opens a bicycle shop called SPIN. (What some may not recognize is SPIN is Susie’s trademark, the brand that she is offering her products and services under. This is completely separate from Spin Florida, LLC, Susie’s corporate entity). Susie’s bike shop is a hit and becomes known as THE bike shop in the town. Fast forward six months later, Susie decides she wants to protect her trademark. She hires an IP attorney to perform research on her SPIN trademark. Unfortunately, another company has already filed a trademark application before Susie for the same trademark. If Susie wants to file her own application, the other company’s application will prevent her from filing, and she will have to fight their application in court if she wants to get over this hurdle. Susie hits another road bump: she receives a cease and desist letter from SPINNERS, a nation-wide bicycle chain. SPINNERS demands that Susie cease using the SPIN trademark within 30 days and pay $3,000 for her infringement, or they will file a lawsuit against her. Susie is forced to rebrand, spending thousands on new signage and marketing materials. Changing the name of Susie’s store has also shaken the confidence in her customers and new consumers who heard about SPIN can’t find her store.

This may sound like a dramatized scenario, but it is something we have seen countless times, affecting anyone from a local business to a nationwide company. Below are a few practice points to help ward off some potential pitfalls:

Practice Point #1: Perform due diligence research BEFORE you launch, produce business cards, marketing materials, and signage. You may find that your brand infringes on a third parties rights, or that so many other companies have a similarly named brand that consumers won’t be able to pick your business out of a line up. If you are forced to change your brand identity or rebrand entirely, a lot of money will be wasted that you may not be able to recoup.

Practice Point #2: File for trademark protection. Depending on your business, state or federal protection is the route you need to go. Within the State of Florida, a trademark must be in use before an application can be filed. However, the United States Patent and Trademark Office allows both intent to use and use based applications to be filed. Take advantage of this!

Practice Point #3: Contracts. Unless you are the sole owner, contracts are imperative to plan for the future of the company’s IP. What if a partner leaves the business entity, does the IP stay with the entity or leave with him/her? Who owns the IP assets? Have contracts lay out the ownership and future of the IP from the start to result in cleaner relationships and transitions

down the road. Don’t forget that although intangible, IP is a piece of property like that of real estate, machinery, etc.

Practice Point #4: Always think towards the future. This goes along with all of the points above. You may be thinking “We’re a very small business”, “We’re just locally owned”, “We don’t have plans to expand out of the county”. If you are an entrepreneur, chances are that no matter how small you are now, you don’t want to stay small. Think of the dreams and goals of your company, and ensure that your IP strategies align with those goals. If you are currently selling your products at a farmers market, but have plans to launch an entire e-commerce website, it won’t take long for third parties to find you if your trademark infringes on their brand.

Oh Yes They Did: Ninth Circuit’s Holding May Turn DMCA Safe Harbor Protections on Its Head by Maxey-Fisher, PLLC

On April 07, the Ninth Circuit Court of Appeals issued its most recent decision on the scope of safe harbor protection extended to online providers, holding that an online provider may lose its safe harbor protection if its moderators assist in selecting content submitted by user.

The factual aspects of the case involve Mavrix Photographs, LLC, a celebrity photograph agency which sued LiveJournal, Inc. for copyright infringement of several of its photographs. LiveJournal runs LiveJournal.com, a social media platform which allows users to create and run communities online. One of LiveJournal.com’s more popular communities titled “Oh No They Didn’t!” features celebrity news and gossip, with the posts within said community often including photographs.

LiveJournal.com users submit posts to volunteer moderators, who then review the posts to ensure the posts comply with the sites rules, one of which is a prohibition on copyright infringement. LiveJournal also pays a full-time employee to review and approve the posts. Interestingly Mavrix did not submit a DMCA takedown request, and instead filed suit claiming rights in twenty photographs posted on “Oh No They Didn’t!” without Mavrix’s permission.

Under the DMCA, an online provider can claim safe harbor protection if: (1) the provider “does not have actual knowledge that the material or an activity using the material” is infringing; (2) in the absence of actual knowledge, the provider “is not aware of facts or circumstances from which infringing activity is apparent”; or (3) “upon obtaining such knowledge or awareness” the provider “acts expeditiously to remove, or disable access to, the material”. 17 U.S.C. § 512(c).

This is where the facts get really important and where the Ninth Circuit made its distinction. The district court granted LiveJournal summary judgment, holding that Section 512(c) shielded LiveJournal from liability. The Ninth Circuit reversed the summary judgment, finding critical LiveJournal’s role in posting the photographs to its platform. The Ninth Circuit ultimately held that whether the photographs were posted “at the direction of the users” was dependent on whether the moderators actions could be attributed to LiveJournal. Here, the court found that a juror could conclude an agency relationship between LiveJournal and its moderators based on the following facts: LiveJournal selects and gives specific direction to its moderators, LiveJournal users may have reasonably believed that the moderators had the authority to act on behalf of LiveJournal, and LiveJournal maintained sufficient control over the “Oh No They Didn’t!” community through LiveJournal’s supervision, selection, and removing of the moderators.

For the full Opinion, the case is Mavrix Photographs, LLC v. LiveJournal, Inc., No. 14-56596, 2017 WL 1289967, at *1 (9th Cir. Apr. 7, 2017).

V-I-C-T-O-R-Y for Varsity Brands, Inc. in Supreme Court Battle Over Decorative Elements of Cheerleading Uniforms by Maxey-Fisher, PLLC

On Wednesday, the U.S. Supreme Court issued its highly-anticipated Opinion on the copyrightability of design elements found in plaintiff’s cheerleading uniforms. In its initial lawsuit filed in 2010, Varsity Brands, Inc., the country’s largest cheerleading supplier, argued that Star Athletica, L.L.C. infringed its copyrighted designs consisting of chevrons, stripes, various line designs, and color blocks. Under the Copyright Act, “useful items”, such as an underlying garment, are barred from copyright protection. The case brought differing rulings in the lower courts as to whether the decorative elements in the garments were separable enough from the underlying garment to be eligible for copyright protection.

After “widespread disagreement” in the lower courts as to the ability to copyright such designs, the Supreme Court established a two-part test for determining when a design element in a useful item can be protected:

A feature incorporated into the design of a useful article is eligible for copyright protection only if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic, or sculptural work—either on its own or fixed in some other tangible medium of expression—if it were imagined separately from the useful article into which it is incorporated.

The Supreme Court found that the test was satisfied in the instant case. Expectedly, the fashion industry lobbied for a lenient standard to allow more copyright protection, while consumer groups sought a more strict approach to foster competition. Though the Supreme Court limited the holding to two- or three-dimensional works of art, and not copyright protection for the underlying garment itself, the Court’s ruling has wide spread implications for fashion and related industries for companies and individuals to take advantage of.

For the full Opinion, the case is Star Athletica, L.L.C. v. Varsity Brands, Inc., et al., No. 15-866 (U.S. March 22, 2017).

Acceptance of Building Signage as Specimens Evidencing Use of a Trademark Remains Industry Specific by Maxey-Fisher, PLLC

The Trademark Trial and Appeal Board (“TTAB”) refused to accept the following photographs of a trademark displayed on the front door of a building as acceptable specimens for real estate investment and acquisition services:

In re Republic National LLC, Serial No. 86513101 (February 23, 2017) [not precedential].

The board held that the signage on the front door was not actually used in providing the real estate investment and acquisition services and therefore must be considered advertisement. While it may seem strange that the door through which customers must enter to receive the cited services would not be considered as being used in connection with the services, the outcome of this case is consistent with earlier rulings by the board. For example, in In re R & B Receivables Management, Inc., Serial No. 77855168 (September 23, 2011) [not precedential] the TTAB refused to accept the following specimen for various financial advisory services based on the same reasoning:

Because the two cases above did not involve use of the mark in actually providing the services, they were treated as advertisements for which there must be some link to the services shown in the specimen itself. Neither of the specimens show any description of the services provided. It would appear the non-descript nature of the building is the important factor in these decisions, because there is a long history of allowing photographs of building signage as specimens of use for service marks that appear to be buildings where the type of service applied for would be expected from that type of building. One example, randomly chosen from marks registered in 2016, is the specimen below, which was accepted as a specimen of use for restaurant services.

United States Trademark Registration No. 5,109,887.