Category: Intellectual Property

Trade Mark Infringement – Muslim Dating App Meets its Match [.com]

A recent Intellectual Property Enterprise Court Decision (IPEC) on 20 April 2022 has decided that ‘Muzmatch’, an online matchmaking service to the Muslim Community has infringed Match.com’s registered trade marks.

The decision by Nicholas Caddick Q.C was that Muzmatch’s use of signs and its name amounted to trade mark infringement and/or passing off of Match.com’s trade marks. This case follows successful oppositions by Match.com to Muzmatch’s registration of its marks in 2018, and unsuccessful attempts by Match.com to purchase Muzmatch between 2017 and 2019.

Match.com is one of the largest and most recognisable dating platforms in the UK. It first registered a word mark ‘MATCH.COM’ in 1996 and also owns other dating-related brands including Tinder and Hinge with other marks including the word mark ‘TINDER’. Match.com used a 2012 TNS report to illustrate its goodwill and reputation and 70% of people surveyed would be able to recall Match.com if prompted, 44% unprompted and 31% of people would name Match.com as the first dating brand off the ‘top of their head.’

Muzmatch is a comparatively niche but growing dating platform, which aims to provide a halal (i.e. in compliance with Islamic law) way for single Muslim men and women to meet a partner. Muzmatch is comparatively much smaller and was founded in 2011 by Mr Shahzad Younas and now has had around 666,069 sign-ups in the UK alone.

The Court considered that the marks ‘Muzmatch’ and ‘MATCH.COM’ and each company’s graphical marks, had a high degree of similarity in the services provided. The marks were also similar in nature orally and conceptually and the addition of the prefix ‘Muz’ did not distinguish the two marks, nor could the lack of the suffix ‘.com’ or stylistic fonts/devices.

The key issue of the case relates to the idea of the term ‘Match’ which is used by both marks to describe the nature of the business: match[ing]. Muzmatch argued that as both marks share this descriptive common element, so it is difficult to conclude that there is a likelihood of confusion between the two marks as the term just describes what each business does.

 The Court found that finding that there is a likelihood of confusion for a common descriptive element is not impossible, as the descriptive element can be used distinctively. The average consumer would conclude that the portion ‘Match’ is the badge of origin for Match.com due to its reputation as a brand and the very substantial degree of distinctiveness in the dating industry. An average consumer would have seen the word ‘Match’ as the dominant element in the Match.com trade marks and Match.com is often referred to as just ‘Match’ in advertisements.

Aside from its marks, Muzmatch utilised a Search Engine Optimisation strategy from January 2012 whereby it utilised a list of around 5000 keywords which would take a user to a landing page on the its website. In the list of the keywords used, Muzmatch used the words ‘muslim-tinder’, ‘tinder’ and ‘halal-tinder’ which were accepted by Muzmatch during the litigation to have infringed Match’s trade marks of the Tinder brand including the word mark ‘TINDER’. Muzmatch’s SEO use was also found to cause confusion based on some of its keywords including ‘UK Muslim Match’, which again uses the term Match distinctively, therefore a consumer may confuse a link to ‘UK Muslim Match’ with ‘Match.com’.

Therefore, the Court found that there was likely to be confusion between Muzmatch and Match.com because of the distinctive nature of the term ‘Match’ in the world of dating platforms.  An average consumer would conclude that Muzmatch was connected in a material way with the Match.com marks, as if it was targeted at Muslim users as a sub-brand, so this confusion would be trade mark infringement under S10(2) of the Trade Marks Act 1994.

The Court also considered that Muzmatch had taken unfair advantage of Match.com’s trade marks and had therefore infringed those marks under S10(3) of the Trade Marks Act 1994. This was due to the reputation of Match.com’s trade marks and because a consumer would believe that Muzmatch was a sub-brand of Match.com.

The Court rejected Muzmatch’s defence of honest concurrent use and found that Match.com would also have an alternative claim in the tort of passing off.

Key Points:

  • The Court found that a common descriptive element can acquire distinctiveness in an area, solely because of a company’s reputation and influence in that market.
  • The use of Search Engine Optimisation strategies can also constitute a trade mark infringement.
  • The lack of the suffix ‘.com’ in a mark is not sufficient to distinguish use from a household brand such as Match.com, so care should be taken with brands such as ‘Match.com’, ‘Booking.com’[1]

Source:

[1] Match Group, LLC, Meetic SAS, Match.Com International Limited v Muzmatch Limited, Shahzad Younas [2022] EWHC 941 (IPEC)

[1] Note- Blog Post of July 6 2020 Relating to Booking.com- https://www.iptechblog.com/2020/07/us-supreme-court-opens-doors-to-generic-com-trademarks/

Article By Connor Sargeant and the Intellectual Property and Technology Practice Group at Squire Patton Boggs (US) LLP ​.

For more intellectual property legal news, click here to visit the National Law Review.

© Copyright 2022 Squire Patton Boggs (US) LLP

Trademark Infringement in the Metaverse: Nike Sues Online Resale Platform Alleging Infringing Use of Logo in StockX NFT

In the 3D virtual world known as the metaverse, pioneering enterprises are exploring ways to capitalize on this new frontier’s growing popularity. As expected, the use of company marks and brands is becoming an issue to watch. Take Nike’s recent lawsuit against online resale platform StockX. The suit alleges StockX NFTs that incorporate images of Nike sneakers infringe on Nike’s famous trademarks. The complaint presents novel legal issues that, once decided, have the potential to define the scope of trademark rights in the world of NFTs.

What is an NFT?

Before we get into infringement, we need to understand the landscape in play. Non-fungible tokens, or NFTs, are unique digital assets stored on the blockchain, which is a digital and non-centralized ledger that publicly discloses who owns a particular NFT. NFTs act as a digital representation of ownership of tangible and nontangible items in the real world, such as artwork, real estate, and video game skins. Each NFT has a unique address associated with its owner that enables proof of ownership. NFTs can exist in any form of digital media, ranging from images to songs. Among some of the famous examples are the Bored Ape Yacht Club NFTs, which act as both a digital avatar and a ticket to an exclusive online social club.

Bored Ape Yacht Club NFTs are represented by a digital avatar of a uniquely designed ape. The middle image is a Bored Ape owned by Tonight Show host, Jimmy Fallon, who purchased the NFT for over $200,000.

While the first NFT was minted back in May 2014, they have only recently gained mainstream attention following celebrity buy-in and reports of NFTs selling for millions of dollars. In 2021, a crypto entrepreneur purchased Twitter founder Jack Dorsey’s first-ever tweet as an NFT for $2.9 million. As pricy NFTs garnered mainstream attention, many were left wondering why someone would pay millions of dollars to purchase what appears to be a simple image or video that is readily available to view online for free. While it is possible to screengrab and download copies of digital art that someone has purchased as an NFT, the NFT purchaser still remains the owner of the original work and such ownership is recorded on the blockchain. While someone may have a print of one of Monet’s impressionist landscapes hanging in his or her living room, only one original copy of the painting exists and ownership of that original carries significant value despite the existence of copies.

Nike Swooshes In

Nike brought an action in February 2022 for trademark infringement against StockX, a large online resale marketplace. StockX is a streetwear reseller that, unlike other marketplaces, also acts as an intermediary that provides authentication services to its customers. Recently, StockX expanded this authentication service by launching its own collection of NFTs, which it claims are linked to authenticated physical goods. Many of the NFTs being minted by StockX are comprised of images of Nike sneakers. Nike alleges such use of Nike’s famous marks constitutes trademark infringement, false designation of origin, and trademark dilution, among other violations.

StockX’s Nike NFTs.

The case hinges on whether StockX’s NFTs represent proof of ownership of physical goods or whether the NFTs themselves are virtual products.

StockX contends its NFTs are simply a method to track ownership of physical Nike products sold on the StockX marketplace and held in StockX’s custody. In denying that its NFTs are virtual products, StockX points to its redemption process in which NFTs may be redeemed by an owner at any time in exchange for delivery of the physical shoes. Importantly, this novel method for tracking ownership facilitates a more efficient and sustainable resale process. Instead of physical goods that are frequently sold and traded among consumers being repeatedly shipped following each sale, users can simply sell and exchange an NFT.

Nike argues that StockX’s Nike-branded NFTs are themselves virtual products, and not simply a representation of ownership of physical Nike sneakers. While StockX touts its customers’ ability to redeem an NFT in exchange for possession of the physical product as evidence that their NFTs act simply as proof of ownership, such redemption process is currently unavailable, with no indication as to when, if ever, such service will become available. Instead of presenting a new and efficient method for trading goods, Nike alleges that StockX is minting NFTs to profit from Nike’s goodwill and reputation in the streetwear scene. Indeed, the potential profit from selling Nike-branded NFTs is significant – a physical pair of Nike Dunk Low shoes have a resale price of $282 on StockX, but the StockX NFT purportedly linked to this shoe has traded for over $3,000, an almost 1,000 percent price difference between the physical shoe and the NFT. Nike concludes that the StockX NFTs are collectible virtual products, created and distributed by StockX using Nike branding without authorization.

Nike has a particularly strong interest in avoiding brand confusion in this case, as it recently acquired RTFKT Studios (pronounced “artifact”), a digital art and collectibles creative studio engaged in the creation of NFTs, in the hopes of combining blockchain technology with sneaker culture and fashion. Through this new acquisition, Nike has released NFTs through RTFKT, including collectible digital sneakers. Notably, Nike additionally has multiple pending trademark applications before the US Patent and Trademark Office to register its sneakers as virtual goods.

The Nike case is poised to be key to the development of metaverse jurisprudence because of its potential to address the scope of a trademark owner’s right to regulate unauthorized uses of its marks in NFTs. While the outcome of this case remains to be seen, other major brands are already seeking protection of their branding in this emerging space by filing trademarks to specifically protect virtual goods and services. Given the nascent uncertainty of how our current legal framework will apply in the metaverse, seeking registration for virtual goods and services is a prudent step for brand owners as we conduct business in the fast-growing digital economy.

©2022 Katten Muchin Rosenman LLP
For more articles about copyright infringement, visit the NLR Intellectual Property Law section.

Intellectual Property: Understand It to Protect What You Own, Drive Value to Your Business and Positively Impact Your Bottom Line

Intellectual Property (or “IP”) is commonly defined as a group of legal rights that provide protection over things people and businesses create or invent. It might sound straightforward, but there is a lot of confusion over what can actually be protected and what cannot.

Who needs to be concerned with IP Protection?

We’ve all heard the phrase, “hindsight is 20/20”. That’s especially true when it comes to IP protection. So often people and businesses do not realize a new creation or innovation should be protected until it is too late. If you are creating or developing within your space, you need to have an IP strategy to avoid any unintentional disclosure missteps. And, when you are creating, be careful to:

  • Make records. They should be accurate, dated, and corroborated.
  • Research the competitive landscape early and identify both opportunities for protection and risks of infringement.
  • Use a non-disclosure agreement or contract before collaborating with another business or other people, such as consultants.

What are some of the biggest IP challenges business owners and employers need to overcome?

The goal for your IP strategy needs to be: Identify, Protect, Monetize.  The question business owners need to answer is how they can most effectively achieve this. The first step is understanding the applicable types of IP that are protectible and the steps needed to secure protection  of each.

Intellectual Property Type The Value

Trade Secret

 No registration fees or costs. Goes into effect upon creation and can last forever. Protection available at the state and federal levels.

Non-Disclosure Agreement/Contract (or “NDA”)

 Very affordable and flexible but, it only binds the contracting parties. An NDA should be used with your employees and other businesses you deal with concerning sensitive business information.

 

Copyright

 

 Free and automatic upon creation, register for significant added value. Protection available only at the federal level and registration is required to enforce protection.

Trademark/Service

 Commercial differentiation, quality identifier and price enhancement. Low cost and can last forever but must police others’ misuse.

How can an IP strategy affect your bottom line?

It’s important to understand there is no “one-size fits all” approach to IP. The correct IP strategy must be tailored to your unique business. While some businesses may be overspending on a scattered approach to protecting IP, other businesses may not be investing enough and potential losing out on what could have been an important revenue stream.

© 2022 Davis|Kuelthau, s.c. All Rights Reserved
For more articles about IP Law, visit the NLR Intellectual Property section.

The Misapplication & Legal Deficiencies of the TRIPS Agreement for COVID-19 Patents

Guest Commentary

Last year, the Biden Administration announced its support for a waiver of intellectual property rights to help fight the COVID-19 pandemic. Recently, the European Union, India, South Africa, and the United States have reached a tentative compromise on a proposed TRIPS waiver of intellectual property (IP) rights, meaning we are quickly approaching a collective refrain enforcing intellectual property rights related to fighting COVID by these countries within their borders. Ultimately, it is the opinion of Wen Xie, Partner at Global IP Counselors, that any attempt to waive IP will be ineffective in its application. COVID patents will probably still be enforced in the US nonetheless, and the TRIPs Waiver only destabilizes the innovative ecosystem by rendering intellectual property rights unpredictable on a global scale. The NLR asks Xie to go into more depth about the various legal questions raised by the prospective waiver.

1. NLR: Can you explain the TRIPS agreement considering the COVID pandemic? How will a non-uniform enforcement of the waiver affect companies and what should they know about it?

XIE: Right now we are working off of a leaked WTO ‘solution’ for waiving COVID patents1; nothing has been formalized or voted on at this stage. The document basically says that Member countries have the option to make, use, sell or import COVID-19 vaccines without the authorization of the patent holder, which is saying that the vaccine makers can’t (cannot) raise a big fuss and take anyone to court on the grounds that their patents are being infringed. One of the most important things to note is that there is a great degree of optionality to this proposal – the proposal repeatedly states that Member countries “may” do any of the actions that are permitted if this proposal ends up being adopted.

This means that the implementation of this TRIPS waiver will look different from country to country depending on how much they want to do in terms of waiving patent rights within their national jurisdictions. Countries that fervently advocated for this measure (namely India and South Africa2) will probably go to the whole extent of what they are allowed to do. They might even build manufacturing facilities for mRNA vaccines that are right now protected by the Pfizer and Moderna patents.  I don’t the US or Europe will go this far, if at all.  The US might choose to not waive COVID-19 vaccine patents in the US at all because the laws governing the conferring of patent rights is under Title 35 of the United States Code and has nothing to do with TRIPS or any other international agreement.  Any kind of implementation of this waiver brokered under the President’s Treaty Powers will ultimately need legislative sanction.  It’s highly doubtful the Administration will end up pushing for something like that.

What seems to be really happening with this so-called “waiver” is a multi-lateral agreement that some developing nations are going to not enforce COVID vaccine patents within their borders and the WTO is not going to retaliate.  It’s sort of like the US and Europe are saying to the countries that pushed for this, “Go ahead, you’re off the hook.” But since the tentative agreement allows Member countries the option to implement the provisions, the US will probably not choose to adopt it within its borders.

2. Given the global economic and human toll of the COVID pandemic, why is maintaining intellectual property rights for COVID-19 treatments important?

In the field of biomedical sciences, the period of exclusivity granted by patents is critical for recouping costs used for reinvestment into the next round of research and development. The major pharma companies spend as much as 25% of their revenue on R&D. Here’s a breakdown of some of the major companies in terms of their R&D spending in 2020:

  • Johnson & Johnson (14.8% of revenue)3
  • Roche (24.1% of revenue)4
  • Novartis (18.5% of revenue)5
  • Merck (28.3% of revenue)6
  • Pfizer (22.4% of revenue)7
  • AstraZeneca (22% of revenue)8
  • Eli Lilly (24.7% of revenue).9

Compare that to Apple which spent 5.99% of its revenue on R&D in 2021, and Microsoft which spent 12.32%.10

The vaccine makers are for-profit companies whether we like it or not. Pfizer, Moderna, and J&J each received governmental funding through Operation Warp Speed to incentivize them to develop the COVID vaccines in the time span that it occurred. We must examine how much suppressing IP and thereby suppressing the investment incentive to continue ongoing innovation will end up costing us as a society.

3.  What are the legal deficiencies of the TRIPS agreement?

One of the truly bizarre aspects of the TRIPS “waiver” is that there is no such thing as a “TRIPS patent.”  All patents have national jurisdictions.  US patents are issued by the United States Patent and Trademark Office under Title 35.  The same goes for the process of filing for patents at all the other national patent offices – TRIPS plays no role in the whole process.  In terms of legal deficiencies, we should be rigorously examining what kind of jurisdiction the TRIPS Agreement will have to render patents unenforceable or useless.

When it comes to patent rights, the TRIPS Agreement obligates its signatories to comply with the Paris Convention which is a treaty that was signed in 1883.  The Paris Convention was one of the first attempts to harmonize the patent system worldwide.  The reason for doing this was to create a system for claiming priority and to harmonize the standards of patentability across nations so that applications can claim priority and get the benefit of an earlier priority date of a related application that was filed in a different country.  Priority dates are used to determine the scope of the prior art that can be used against the application when examining for novelty and obviousness, which is why these dates are important.

For example, the US and Japan are both signatories to the Paris Convention treaty.  An applicant filing at the USPTO can claim priority to an earlier-filed Japanese patent application that was filed at the Japan Patent Office under the Paris Convention.  And the same can occur in reverse.

What authority does the TRIPS Agreement have in terms of patents?  I think TRIPS can possibly do away with the system of priority claiming under the Paris Convention and subject patents to reexamination as they lose their priority dates.  But neither the TRIPS Agreement nor the Paris Convention should have anything to do with domestic patent applications that are filed directly with the national patent offices.  And more likely than not, the COVID vaccine patents were filed directly at domestic patent offices around the world, which should be completely beyond the jurisdiction of the TRIPS Agreement or any other international agreement on patent rights.  The priority system is mostly utilized by companies who are constrained by their IP budget and does not yet have the budget to file in several patent offices internationally at once, so they stagger these filings over time and claim priority to the original patent application.  I doubt that this is what Pfizer, Moderna, and J&J did with the COVID vaccine patents.

4. What are the practical deficiencies of the TRIPS agreement related to COVID?

The TRIPS waiver probably won’t help the developing nations that much in terms of getting access to cheaper COVID vaccines.  Practically speaking, developing nations could have always ignored Pfizer and Moderna’s patents for their vaccines without the need for a worldwide agreement to render patents useless.  Again, patents have national jurisdiction.  So, India can just ignore Pfizer’s Indian patent, for example.  A lot of countries have fallen short of a robust assertion of patent rights in their domestic courts as agreed under the international treaties without facing WTO sanctions or penalties (see China).11 So these countries could have unilaterally treated patents however they wanted, which is already what has been happening for a long time. It is very unclear why such a drastic, coordinated course is necessary and why the US needs to be complicit in destabilizing the innovative landscape for IP stakeholders.

Another issue is that say a developing nation decides to build manufacturing facilities to produce mRNA vaccines.  Waiving patent rights does not provide them with access to manufacturing processes, test data, medical formulas, cell lines, and other critical data that they will need.  So waiving IP rights still does effectively very little in terms of improving developing nations’ access to vaccines, nor will it enhance their ability to make or produce these vaccines on their own.

5. What are the potential long-term impacts of the TRIPS agreement related to COVID, and how should companies prepare?

Both the TRIPS Agreement and the Paris Convention have provisions obligating its signatories to recognize the domestic patent rights of foreign entities and to receive the same treatment as if the patents were owned by nationals.  I think this is what it really comes down to – the TRIPS waiver is meant to give free rein to some countries who do not want to recognize the patent rights of foreign companies over products that they want more of. If this proposal is adopted, the WTO will be a collection of nations agreeing to no longer recognize that foreign entities enjoy the same property rights as nationals, which is a dangerous precedent.

In the US, we’ve never had to make a law to say foreigners can enjoy the same property rights as nationals – that was just a given under the Equal Protection Clause which entitles both citizens and aliens to the equal protection of the laws of the State in which they reside. You need sanctions in the US to seize a Russian oligarch’s yacht.

Intellectual property may not physical or tangible, but it is a right.  Patentees sought out this right in reliance on the government’s promise that it would be protected in return for a full, enabling disclosure of their inventions. There were so many alternatives that could provide developing nations with greater access to vaccines, such as purchasing the vaccines directly for them.  But instead, the government has effectively reneged on a promise, and the end result is that developing nations in need of vaccines will still face the same hardships and barriers as they did before.

The opinions expressed herein are those exclusively of Wen Xie and any commentary should be directed to the interviewee at E‐mail: wxie@giplaw.com.

Copyright (C) GLOBAL IP Counselors, LLP

Article By Wen Xie of Global IP Counselors

For more articles on IP law, visit the NLR Intellectual Property section.

SCOTUS Cert Recap: Copyright Act’s Fair Use Defense, ‘Dormant’ Commerce Clause, And Independent And Adequate State Ground Doctrine

On March 28, the Supreme Court agreed to consider the following three questions:

Is a work of art that copies from a prior work but that conveys a different meaning than the prior work necessarily “transformative” for the purpose of the Copyright Act’s fair use defense?

Does California’s Proposition 12 – which requires all pork sold in California to come from pigs housed in compliance with the state’s animal-confinement rules, even pigs raised entirely in other states – violate the Constitution’s Commerce Clause?

Is Arizona Rule of Criminal Procedure 32.1(g), which requires a state prisoner seeking post-conviction relief to identify a “significant change in the law” that would probably have produced a different result in the prisoner’s case, an adequate and independent state-law ground to support a state-court judgment denying post-conviction relief?

 

On March 28, the U.S. Supreme Court added three cases to its docket for next term: one about when a work of art “transforms” a prior work for the purpose of the Copyright Act’s fair use defense, another involving a “dormant” Commerce Clause challenge to a California law that prohibits selling any pork in the state unless the pork comes from pigs housed in compliance with California’s animal-confinement rules, and a third concerning whether the independent and adequate state ground doctrine bars the Court from reviewing an Arizona state-court decision denying a request for post-conviction relief.

The copyright and Commerce Clause cases – which drew four and five cert-stage amicus briefs, respectively – will capture significant attention from businesses and civil litigators and could each produce landmark decisions in their respective areas of law. The case concerning the independent and adequate state ground doctrine will be of greater interest to those who practice in the post-conviction area – where such issues arise with some frequency – but all lawyers who practice before the Supreme Court should watch that case carefully as well, as the doctrine applies to all state-court decisions whatever the subject matter.

When Works Are ‘Transformative’ Under the Copyright Act’s Fair Use Defense

In Andy Warhol Foundation for the Visual Arts v. Goldsmith, the Court will return to a question it confronted last year in Google v. Oracle: When does copying a portion of a copyrighted work constitute protected “fair use” under the Copyright Act?

The notion of “fair use” in the copyright context initially developed as a common-law doctrine to allow borrowing in some situations in order to further the Copyright Act’s general purpose of fostering creativity and innovation. Congress codified that doctrine in 1976, and the Copyright Act now expressly recognizes fair use as a defense and lists four non-exclusive factors courts should consider in determining whether a use is “fair”: 1) the purpose and character of the use, 2) the nature of the copyrighted work, 3) the amount used in relation to the copyrighted work as a whole, and 4) the effect of the use upon the potential market for the copyrighted work.

As the Court explained in Google, the first of these factors – the purpose and character of the use – asks “whether the copier’s use adds something new … altering the copyrighted work with new expression, meaning or message,” and the Court has “used the word ‘transformative’ to describe a copying use that adds something new and important.” This case offers the Court an opportunity to provide further detail on what it means for a work of art to be “transformative” in this sense. It concerns a series of silkscreen prints and pencil illustrations created by Andy Warhol – whose foundation is the petitioner here – based on a 1981 portrait photograph of Prince taken by the respondent, Lynn Goldsmith. The foundation argues that the works are necessarily transformative because they convey a new meaning: namely, that they portray Prince as an “iconic” figure rather than the “vulnerable human being” depicted in Goldsmith’s photograph.

In its decision below, however, the Second Circuit rejected the notion that imbuing a work with a new meaning is necessarily “transformative.” It observed that such a rule would seem to expand fair use to make copyright licensing unnecessary in the “paradigmatically derivative” context of film adaptations – since many movies transform the message of the underlying literary work – and it noted that ascertaining the meaning of artistic works is a subjective endeavor to which judges are typically unsuited. Instead, it held that Warhol’s work is not transformative on the ground that it is “both recognizably deriving from, and retaining the essential elements of, its source material.”

The Supreme Court is now set to review this decision and thereby give litigants and lower courts further guidance on what makes a work that borrows from another sufficiently “transformative.” Copyright practitioners around the country will be closely following what the Court says.

Commerce Clause Limits on States’ Authority to Regulate Commerce

In National Pork Producers Council v. Ross, the Court will consider a challenge to California’s Proposition 12, a law that sets minimum size requirements for pig pens – and that extends those requirements to farmers across the country by making compliance with them a condition of selling pork in California.

The challengers contend that the out-of-state application of these pen-size rules violates the Commerce Clause. They note that, while the Commerce Clause is expressly framed as a grant of authority to Congress, the Supreme Court has long read the Commerce Clause to also implicitly limit states’ regulatory authority. This doctrine, often called the “dormant” Commerce Clause, has a handful of different components, and two are at issue in this case.

The first, known as the extraterritoriality doctrine, has been invoked in a number of Supreme Court decisions but is most prominently associated with the 1980s decisions Brown-Foreman Distillers Corp. v. New York State Liquor Authority and Healy v. Beer Institute. The challengers here argue that under these decisions, a state law per se violates the Commerce Clause if its practical effect is to control conduct beyond the state’s boundaries, and they contend Proposition 12 does so by effectively requiring out-of-state farmers to follow California’s pen-size rules on pain of exclusion from the California market. And California responds that Proposition 12 merely regulates in-state sales, and that any indirect, upstream effects it has on farmers is insufficient to run afoul of the extraterritoriality doctrine.

The second issue concerns the balancing test the Supreme Court articulated in Pike v. Bruce Church, which bars state laws that impose a burden on interstate commerce that “is clearly excessive in relation to the putative local benefits.” Here the parties dispute the significance of Proposition 12’s economic effects and the strength of the interests underlying the law – issues that could become complicated by the motion-to-dismiss posture of the case.

The Court has now agreed to address both of these issues, and whatever the Court decides, its decision will carry implications for the validity of state commercial regulations in a wide variety of industries across the country.

The Scope of the Independent and Adequate State Ground Doctrine

In Cruz v. Arizona, the Court will take up a criminal-law case that presents a recurring issue that arises in both criminal and civil cases alike: When does a state-court decision rest on an independent and adequate state ground such that the U.S. Supreme Court lacks jurisdiction to review the decision?

The case arises from the Supreme Court’s 1994 decision in Simmons v. South Carolina, which held that where a capital defendant’s “future dangerousness is at issue, and state law prohibits the defendant’s release on parole, due process requires that the sentencing jury be informed that the defendant is parole ineligible.” The Arizona Supreme Court later concluded that Simmons was inapplicable in Arizona – on the theory that Arizona law did not universally prohibit capital defendants’ release on parole – but the U.S. Supreme Court overturned that conclusion in Lynch v. Arizona.

Shortly thereafter, Cruz – a capital defendant whose trial and sentencing occurred after Simmons but before Lynch – filed a petition for post-conviction relief in Arizona state court. Because this was not Cruz’s first petition, he sought relief under Arizona Rule of Criminal Procedure 32.1(g), which at the time provided that relief would be available even for successive petitions where there “has been a significant change in the law that if determined to apply to defendant’s case would probably overturn the defendant’s conviction or sentence.”

Cruz argued that Lynch constituted a significant change in the law and that it applied retroactively to render his sentence unlawful. And after the Arizona Supreme Court rejected his claim, he filed a cert. petition arguing that federal law requires applying Lynch retroactively in state post-conviction proceedings. Arizona, meanwhile, countered that the Court would lack jurisdiction under the independent and adequate state ground doctrine: The Arizona Supreme Court’s decision, the state argued, simply concluded that Cruz failed to meet the state-law requirements of Rule 32.1(g).

While the U.S. Supreme Court granted Cruz’s cert. petition, it has limited its consideration to only the question concerning the independent and adequate state ground doctrine. And because its answer to that question could affect jurisdictional rulings in all manner of cases, the case will be of interest to anyone who practices before the Court.

Article By Kian Hudson of Barnes & Thornburg LLP

For more litigation legal news, click here to visit the National Law Review.

© 2022 BARNES & THORNBURG LLP

Russian Sanctions Create Patent Risks

While multi-national sanctions recently imposed on Russia were intended to punish Russia for its aggression in Ukraine, the effects of the sanctions have led to a need for tough decisions for U.S. entities with patent interests in Russia.  The prohibitions on financial exchanges with certain Russian banks will essentially prevent any payment of fees to Rospatent (the Russian patent office), and although a general license from the Department of the Treasury provides a short window for winding down certain administrative transactions, U.S. entities engaged in patent transactions with Rospatent only have a short time to make decisions about current and future patent activities in Russia.

Prohibited Activities

On February 28, 2022, the Department of the Treasury initiated prohibitions related to transactions involving certain financial institutions in Russia, including the Central Bank of the Russian Federation.1 The directive specifically prohibits a United States person (unless otherwise excepted or licensed) from engaging in any transaction involving the listed financial institutions, including any transfer of assets to such entities or any foreign exchange transaction for or on behalf of such entities.  Under the directive, the prohibitions are specifically worded to include: (1) any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions of the directive; and (2) any conspiracy formed to violate any of the prohibitions of the directive.

Notably, the prohibited activities do not expressly prevent any transactions of a U.S. person with Rospatent.  And although the United States Patent and Trademark Office (USPTO) has cut off direct engagement with Rospatent for carrying out activities such as use of the Global Patent Prosecution Highway (GPPH) program2, Rospatent is not currently a sanctioned entity under the directive.  This, however, is essentially a distinction without a difference.  Moreover, since the USPTO (and also the European Patent Office) has already cut ties with Rospatent, there still remains the possibility that Rospatent itself will be added to the sanctions at a future date and thus completely eliminate any pursuits by U.S. persons with Rospatent.

The current sanctions directly affect entities seeking patent protection in Russia since payments of required fees related to patent applications and granted patents in Russia are processed through the Central Bank of the Russian Federation.  This includes a number of financial transactions, such as payment of government filings fees for directly filing a patent application in Russia or filing a national phase of an international PCT application in Russia, as well as incidental fees incurred during prosecution of pending Russian patent applications and payment of yearly maintenance fees for issued Russian patents.  This would also include payment of yearly maintenance fees for patents obtained through the Eurasian Patent Organization (EAPO) and maintained in Russia since such fees paid to the EAPO must be forwarded to Rospatent.  Because of the intertwining of Rospatent with the Central Bank of the Russian Federation, any fees paid to Rospatent must be considered equivalent to making a transaction through said bank.

Patent prosecution in Rospatent requires engagement with a Russian patent practitioner.  While U.S. entities pursuing patent interests in Russia are unlikely to directly engage Rospatent and pay fees that are ultimately processed through the prohibited bank, it is clear from the directive that strategies, such as routing payments through countries that are neutral in relation to sanctions, are prohibited.  As noted above, the directive prohibits any transaction that actually “evades or avoids” the other prohibitions of the directive, as wells as any transaction that “has the purpose of evading or avoiding” the other prohibitions.  This language appears to have the potential to ensnare purposeful non-adherence as well as actions that unwittingly end in non-adherence (e.g., forgetting to discontinue an automated payment of a patent maintenance fee to Rospatent).

Deadline for Administrative Transactions

U.S. entities still have time to complete administrative transactions with Rospatent despite the February implementation of the directive.  On March 2, 2022, the Department of the Treasury issued a general license authorizing certain transactions that are otherwise prohibited by the directive.3  The license authorizes U.S. persons to pay taxes, fees, or import duties, and purchase or receive permits, licenses, registrations or certifications to the extent such transactions are prohibited under the directive, provided such transactions are ordinarily incident and necessary to such persons’ day-to-day operations in the Russian Federation.  For at least U.S. entities whose day-to-day operations include securing and maintaining intellectual property, including in Russia, this license provides a window to complete activities and avoid violation of the directive.  Currently, the transaction window provided under the license runs through 12:01 a.m. eastern daylight time on June 24, 2022.

Forming a Russian Patent Strategy

The incursion of Russia into Ukraine has been underway for shortly more than one month, but there is no way to know when hostilities may cease.  Moreover, even when peace is achieved, it is impossible to know how long the current sanctions against Russia may continue.  Those familiar with patent law know that the business of obtaining patents is a deadline-driven venture, and uncertainty of time quickly breaks apart the paradigm.  A “wait and see” approach thus has the potential to result in a loss of patent rights as well as possible liability for knowingly or unknowingly engaging in activities that are prohibited under the directive.  Anyone engaged in patent activities in Russia thus would be advised to undertake a portfolio review and utilize the time remaining under the General License to form a plan that ensures compliance with the current sanctions.  This can include at least the following items.

Anyone engaged in patent activities in Russia thus would be advised to undertake a portfolio review and utilize the time remaining under the General License to form a plan that ensures compliance with the current sanctions.

  • Proceeding with Grant of Presently Allowed Applications – For Applicants that have received a Notice of Allowance with a due date after expiration of the General License, one may consider early payment of the fees.  This should only be done, however, to the extent that it is possible to confirm that payment will be processed through Rospatent and the Central Bank of the Russian Federation prior to the expiration of the General License on June 24, 2022.
  • Annuities on Granted Patents – Any patent annuity paid to Rospatent after the General License expires should be assumed to be in violation of the current sanctions.  Patent holders that engage a patent annuity service should contact their provider to confirm that they have a plan in place for compliance with the sanctions.  Some annuity services have, in fact, already announced that they will no longer make payments to the Rospatent until further notice.  Presumably, for Russian patents with annuities due in 2022, early payment could be made in the hope that normalcy will ensure prior to the deadline in 2023, but such action should only be taken to the extent one can ensure that payment is processed through Rospatent and the Central Bank of the Russian Federation before the deadline.  Even then, it may be advisable to consider whether “early” payment of patent annuities would be considered to be “ordinarily incident” to day-to-day operations of a person’s patent pursuits.  In the alternative, a patent owner should confirm that any Russian patents are under a “do not pay” order with their annuity provider to avoid an unintentional, automated payment in violation of the sanctions.
  • Filing a Direct or National Phase Patent Application – If a new patent application in Russia is planned, or if the deadline for national phase entry of a PCT application is approaching, one may consider early filing prior to the expiration of the General License.  This could be done in the hope that a deadline for payment of future fees to Rospatent do not arise before the time that sanctions are lifted.  This is seen to be a risky proposition since it is unknown how quickly Rospatent processes paid fees through the Central Bank of the Russian Federation, and it is likewise unknown to what extent a fee paid to Rospatent before expiration of the General License but only processed through the Central Bank of the Russian Federation after expiration would be viewed as being in violation of the sanctions.  Moreover, if Rospatent itself is later added to the sanctions, any early filings would be at significant risk for abandonment due to an inability to continue transactions with Rospatent.
  • Filing Through EAPO as an Alternative to Russia – Russia is one of several countries where patent protection can be secured based on a granted patent from the EAPO.  As of this writing, the banks utilized for processing financial transactions for the EAPO (AO UniCredit Bank and AO Raiffeisenbank) are not included in the U.S. sanctions.  As such, direct filing or national stage entry with the EAPO can provide an alternate pathway for patent protection in Russia.  The cessation of interaction between the USPTO and the EAPO would not have a bearing on this option, but care would need to be taken to ensure that all documents otherwise transferrable directly between the offices are handled by other routes.  Once a patent is granted by the EAPO and Russia is elected as a country for maintenance of the patent, annuities paid to the EAPO are forwarded to Rospatent.  As such, this alternative pathway is only effective for patents where annuities in Russia would not become due until after lifting of sanctions.  As the average length of time for completion of patent prosecution with the EAPO is generally two or more years, one would hope that the current situation in Russia would be resolved within that timeframe.  Again, however, uncertainty remains.
  • Using Russia as an International Search Authority – Rospatent is one of the limited number of patent offices available for use as the ISA in a PCT application, and Rospatent may be preferred because of the relatively low cost relative to other ISA options.  Search fees paid to the World Intellectual Proper Organization (WIPO) are forwarded to Rospatent when chosen as the ISA, and it is not possible to ensure that such fees paid to WIPO will be forwarded to Rospatent, and then to the Central Bank of the Russian Federation before the expiration of the General License deadline.  As such, it is recommended to not use Rospatent as the ISA in any PCT application from now until sanctions are lifted.
  • Enforcement of Granted Russian Patents – A comprehensive patent strategy in Russia must now also consider the relative value of any Russian patents in light of the recent decree on patent enforceability in Russia.4   Therein, any holder of a Russian Patent from a so-called “unfriendly” foreign state is required to give a mandatory license with no compensation to anyone in Russia wishing to exercise the right of use without consent of the patent owner.  As with the entire situation, uncertainty reigns with this decree, and it is impossible to know when (if ever) rights of Russian patent holders from “unfriendly” states will be returned.  Accordingly, a Russian patent strategy must consider not only options for proceeding in the near term to secure rights to the extent possible but must also consider the reality that any “rights” that are secured with a Russian patent are of no effect and will be for the foreseeable future.

Next Steps

For anyone with significant patent interests in Russia, time is of the essence for cementing a strategy for moving forward.  For some, the most expeditious approach could be to simply close your file on any Russian patents and patent applications.  If such approach is taken, careful attention must be made, as noted above, to ensure that any possibility of a fee being paid to Rospatent after June 24, 2022, is eliminated.  For others, investments in Russia may not allow for a complete abandonment of possible future patent enforcement rights in Russia.  If actions as noted above are taken to “batten down the hatches” of the Russian patent portfolio prior to the deadline in order to weather this storm, timing is again crucial in order to avoid unintentional engagement in sanctioned activities.  Also, moving to patent filings through the EAPO as a starting point for Russia can be an effective workaround so long as Russian sanctions get lifted before any patent annuities through an EAPO patent would become due in Russia.  Finally, in forming a strategy, one also must consider that even before its recent decree on patent enforceability, Russia was already one of nine countries on the United States Trade Representative (USTR) “Special 301 Report”  of trading partners presenting the most significant concerns regarding insufficient IP protection or enforcement or actions that otherwise limited market access for persons relying on intellectual property protection.

1  Directive 4 Under Executive Order 14024, “Prohibitions Related to Transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation,” February 28, 2022, Office of Foreign Assets Control, Department of the Treasury.  See, https://home.treasury.gov/system/files/126/eo14024_directive_4_02282022….
2  USPTO Statement on Engagement with Russia, the Eurasian Patent Organization, and Belarus, March 22, 2022.  See, https://www.uspto.gov/about-us/news-updates/uspto-statement-engagement-r….
3  General License No. 13, “Authorizing Certain Administrative Transactions Prohibited by Directive 4 Under Executive Order 14024, Office of Foreign Assets Control, Department of the Treasury, March 2, 2022.  See, https://home.treasury.gov/system/files/126/russia_gl13.pdf. 
4  Decree of the Government of the Russian Federation of 06.03.2022 No. 299 “On Amendments to Clause 2 of the Methodology for Determining the Amount of Compensation Paid to a Patent Owner When Deciding to Use an Invention, Utility Model or Industrial Design without His Consent, and the Procedure for its Payment.” See, http://publication.pravo.gov.ru/Document/View/0001202203070005?index=0&r…

Article By Ryan Cagle of Womble Bond Dickinson (US) LLP

For more intellectual property legal news, click here to visit the National Law Review.

Copyright © 2022 Womble Bond Dickinson (US) LLP All Rights Reserved.

Copyright Dispute Over Andy Warhol’s Portraits of Prince Heading to U.S. Supreme Court

The U.S. Supreme Court will review the standard for a “transformative” work as “fair use” under the Copyright Act.   Specifically, whether a second work of art is “transformative” when it conveys a different meaning or message from its source material, or not where it recognizably derives from and retains the essential elements of its source material.

The Court agreed to review the Second Circuit’s decision that Andy Warhol’s Prince Series portraits of the musician Prince did not make fair use of celebrity photographer Lynn Goldsmith’s photograph of Prince.  Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, No. 21-869 (petition granted Mar. 28, 2022).

The Warhol Foundation’s (AWF) petition argues that the Second Circuit’s decision contradicts Supreme Court precedent that a new work is “transformative” if it has a new “meaning or message” citing Google LLC v. Oracle Am., Inc., 141 S. Ct. 1183, 1202-03 (2021) (quoting Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994).  AWF also argued that the Second Circuit’s decision creates a circuit split where the Ninth Circuit has held that even with few physical changes a work can be transformative if new expressive content or a new message is apparent.  As a result, this decision “threatens massive restrictions on First Amendment expression” that would create a “sea-change in the law of copyright.”

Goldsmith’s opposition brief asserts that the AWF mischaracterizes Supreme Court precedent.  And that the Second Circuit “faithfully applied” the proper test for transformativeness in determining Warhol’s series of silkscreen prints were not fair use.  Goldsmith also argues petitioner has manufactured a circuit split that does not exist.

This dispute stems from a a declaratory judgment action filed in 2017 by the Andy Warhol Foundation in the Southern District of New York seeking that Warhol’s portraits of Prince did not infringe photographer Lynn Goldsmith’s photograph.  In 2019, the district court granted summary judgment to the Warhol Foundation, holding that the Prince Series was “transformative” because it incorporated a new meaning and message different from Goldsmith’s photograph.

In 2021, the Second Circuit reversed, holding that Warhol’s portraits were not fair use as a matter of law.  The Second Circuit held that Warhol’s use was not “transformative,” even though Warhol’s use included some visual differences from Goldsmith’s photograph, because Warhol’s use “retains the essential elements of the Goldsmith Photograph without significantly adding to or altering those elements.”

Multiple amicus briefs supporting the Warhol Foundation were filed including by a group of 12 copyright law professors; a group of 13 art law professors; artists and art professors Barbara Kruger and Robert Storr; and the Robert Rauschenberg Foundation, Roy Lichtenstein Foundation, and Brooklyn Museum.  The visual arts community and content creators in every industry will heavily watch this case.

The Supreme Court will hear the Warhol case in its new term, which begins in October.

Article By Susan M. Kayser and Eric W. Lee of K&L Gates

For more intellectual property legal news, click here to visit the National Law Review.

Copyright 2022 K & L Gates

So You Wanna Play with Copyright? “Joyful Noise” Ostinato Isn’t Original Expression

The US Court of Appeals for the Ninth Circuit affirmed a district court’s order vacating a jury award of damages for copyright infringement and granting judgment as a matter of law, explaining that the musical work alleged to have been copied did not qualify as an original work of authorship but consisted only of “commonplace musical elements.” Marcus Gray PKA Flame et al. v. Katheryn Elizabeth Hudson PKA Katy Perry et al., Case No. 20-55401 (9th Cir. Mar. 10, 2022) (Clifton, Smith, Watford, JJ.)

Key Definitions:

  • A musical scale is a sequence of musical notes or tones by pitch.
  • A subset of seven notes is called the minor scale and can be referred to with alphabetic names (A, B, C, etc.) or scale degrees (1, 2, 3, etc.).
  • An ostinato is a repeating musical figure (for example, 3-3-3-3-2-2).

In 2007, Marcus Gray (Flame) purchased an ostinato and used it in the song “Joyful Noise.” The song was released in 2008. While “Joyful Noise” did not achieve significant commercial success or airtime, it received millions of views online. In 2013, American singer-songwriter Katy Perry created “Dark Horse,” which was a hit, resulting in her performance at the Super Bowl halftime show in 2015.

The “Joyful Noise” ostinato consists of notes, represented as 3-3-3-3-2-2-2-1 and 3-3-3-3-2-2-2-6, whereas Dark Horse’s ostinato contains 3-3-3-3-2-2-1-5. Both have a uniform rhythm and equal note duration in time.

Plaintiffs sued Perry and her co-defendants for copyright infringement. Plaintiffs presented circumstantial evidence that the defendants had a reasonable opportunity to access “Joyful Noise” and that the ostinatos in both songs were substantially similar. Plaintiffs did not present direct evidence that Perry and the others had copied elements of the song, instead relying on testimony from their expert musicologist, Dr. Todd Decker.

Decker testified that the ostinatos were similar in many aspects, but he also testified that there was no single element that caused him to believe the ostinatos at issue were “substantially similar” when viewed “in isolation.” The jury also heard testimony from Perry’s expert, who disagreed altogether that the ostinatos were substantially similar.

The jury found that the defendants had a reasonable opportunity to hear “Joyful Noise” before composing “Dark Horse,” that the two songs contained substantially similar copyrightable expression and that “Dark Horse” used protected material from “Joyful Noise.” The jury found the defendants liable for copyright infringement and awarded $2.8 million in damages. The district court vacated the award and granted judgment as a matter of law to defendants, concluding that the evidence at trial was legally insufficient to show that the “Joyful Noise” ostinato was a copyrightable original expression. The plaintiffs appealed.

The Ninth Circuit explained that because the plaintiffs did not present any direct evidence that the defendants copied the “Joyful Noise” ostinato, they were required to show that the defendants had access to the work and that the ostinatos were substantially similar.

The Ninth Circuit began with its analysis of the “substantially similar” prong, employing a two-part test having “extrinsic” and “intrinsic” components. The Court noted that while it must refrain from usurping the jury’s traditional role of evaluating witness credibility and weighing the evidence, the extrinsic test requires that the Court ensure that the evidence of objective similarities between two works is legally sufficient to serve as the basis of a copyright infringement claim, regardless of the jury’s views. The Court explained that the substantial similarity test focuses on the protectable elements standing alone and disregards non-protectable elements.

To be a protectable element under copyright law, the “Joyful Noise” ostinato had to qualify as “original expression.” Based on the trial record, the Ninth Circuit found that the “Joyful Noise” ostinato consisted entirely of commonplace musical elements, and that the similarities between the two ostinatos did not arise out of an original combination of these elements. Without original expression, no element identified by Flame was individually copyrightable. For example, the Court noted that “the fact that Joyful Noise and Dark Horse both make use of sequences of eight notes played in an even rhythm is a trite musical choice outside the protection of copyright law.”

Finding the evidence presented at trial legally insufficient to establish that the musical elements were individually copyrightable, the Ninth Circuit determined that the jury’s verdict finding defendants liable for copyright infringement was unsupported by substantial evidence. Thus, the Court affirmed the trial court’s grant of judgment as a matter of law.

Article By Jodi Benassi of McDermott Will & Emery

For more intellectual property legal news, click here to visit the National Law Review. 

© 2022 McDermott Will & Emery

“Levitating” Lawsuits: Understanding Dua Lipa’s Copyright Infringement Troubles

Even global stardom will not make copyright woes levitate away from British superstar Dua Lipa. The pop icon is making headlines following a week of back-to-back, bi-coastal lawsuits alleging copyright infringement with her hit “Levitating.” First, on Tuesday, March 1st, members of reggae band Artikal Sound System sued Dua Lipa for copyright infringement in a Los Angeles federal district court1. Then, on Friday, March 4th, songwriters L. Russell Brown and Sandy Linzer filed their own copyright infringement lawsuit against the pop star in a New York federal district court2. Both lawsuits were filed claiming violations of the Copyright Act, 17 U.S.C. §§ 101 et seq.3

The Artikal Sound System lawsuit is short and alleges that Dua Lipa and the co-creators of “Levitating” copied Artikal Sound System’s 2017 song “Live Your Life.”4 The lawsuit does not provide any details in the allegation, other than explaining that “Live Your Life” was commercially released in 2017, was available during the time Dua Lipa and her co-creators wrote “Levitating,” and that because the two songs are substantially similar “Levitating” could not have been created independently.5 As a remedy, Artikal Sound System seeks actual damages, a portion of Dua Lipa’s profits stemming from the alleged infringement, the cost of the lawsuit, and any additional remedies the Court sees fit.6

Similarly, the Brown and Linzer lawsuit alleges that Dua Lipa and her “Levitating” co-creators copied their works “Wiggle and Giggle All Night” and “Don Diablo.”7 More specifically, the Brown and Linzer lawsuit alleges that “Levitating” is substantially similar to “Wiggle and Giggle All Night” and “Don Diablo.”8

Accordingly, the lawsuit claims that the defining melody in “Levitating,” the “signature melody,” is a direct duplicate of the opening melody in “Wiggle and Giggle All Night” and “Don Diablo,” and therefore appears in all three songs.9 As additional support, the lawsuit points to professionals and laypersons noticing a similarity between the three songs, and Dua Lipa previously admitting that she “purposely sought influences from past eras for the album Future Nostalgia.”10

As for a remedy, Brown and Linzer request full compensatory and/or statutory damages, punitive damages, an injunction on “Levitating,” a portion of Dua Lipa’s profits stemming from the alleged infringement, the cost of the lawsuit, and any additional remedies the Court sees fit.11

The copyright infringement legal framework

A general overview of the copyright infringement legal framework is helpful in assessing the potential outcomes of the “Levitating” lawsuits. Specifically, the legal framework from the 9th Circuit, where one of the “Levitating” lawsuits was filed, provides great guidance.

In order to establish copyright infringement, one must prove two elements: owning a valid copyright and copying of “constituent elements of the work that are original.”12 Importantly, when there is no direct evidence of copying, but rather circumstantial evidence, plaintiffs must show that:

  1. the accused infringers had access to the copyrighted work, and

  2. the infringing work and the copyrighted work “are substantially similar.

Plaintiffs can easily show access to the copyrighted work, but “substantial similarity” is harder to show.

2-Part Test

Luckily, the 9th Circuit devised a 2-part test to prove “substantial similarity.”13 Under the test, there is sufficient copying, and therefore “substantial similarity,” if an infringing work meets an “extrinsic” and “intrinsic” prong.14 The intrinsic prong is met if there is “similarity of expression” between the works, as evaluated from the subjective standpoint of an “ordinary reasonable observer.”15 The extrinsic prong is objective and requires comparing the “constituent elements” of the copyrighted and infringing works to see if there is substantial similarity in terms of the “protected” elements in the copyrighted work.16

As such, if the commonality between the copyrighted and infringing works is not based on “protected” elements, then the extrinsic prong is not met, and there is no “substantial similarity” between the works for purposes of a copyright infringement action. It must be noted that the 9th Circuit recognizes that, in certain situations, there can be a “substantial similarity” even if the constituent elements are individually unprotected, but only if their “selection and arrangement” reflects originality.17

To understand “substantial similarity” one must define what is “protectable” under copyright law. Copyright protection extends only to works that contain original expression.18 In this context, the standard for originality is a minimal degree of creativity.19 According to the Copyright Act, protection does not extend to ideas or concepts used in original works of authorship.20 In the musical context, copyright does not protect “common or trite musical elements, or commonplace elements that are firmly rooted in the genre’s tradition” because “[t]hese building blocks belong in the public domain and cannot be exclusively appropriated by any particular author.”21

Katy Perry “Dark Horse” case and an ostinato

While the “Levitating” lawsuits are still young, a recent decision by the 9th Circuit in the infamous Katy Perry “Dark Horse” case is a good example of how courts conduct legal analyses in copyright infringement cases. The precedential ruling (Gray v. Hudson), released on March 10th, affirms a U.S. District Judge’s decision to vacate a jury verdict that awarded US$2.8 million in damages to a group of rappers who claimed Katy Perry’s “Dark Horse” copied their song “Joyful Noise.”22

The 9th Circuit’s opinion cogently applies copyright law to hold that the plaintiffs in the original lawsuit did not provide legally sufficient evidence that “Joyful Noise” and “Dark Horse” were “extrinsically similar” in terms of musical features protected by copyright law.23

Specifically, the Court reasoned that while “Dark Horse” used an ostinato (a repeating musical figure) similar to the one in “Joyful Noise,” the resemblance in the ostinatos stemmed from “commonplace, unoriginal musical principles” and made them uncopyrightable.24 Without the ostinatos, the plaintiffs could not point to any “individually copyrightable” elements from “Joyful Noise” that were “substantially similar” in “Dark Horse.”25

Additionally, the Court held that the “Joyful Noise” ostinato was not original enough to be a protectable combination of uncopyrightable elements.26 In turn, under the legal framework for copyright infringement the plaintiffs failed to meet their burden.27 The Court put it best by opining that:

“[a]llowing a copyright over [the] material would essentially amount to allowing an improper monopoly over two-note pitch sequences or even the minor scale itself, especially in light of the limited number of expressive choices available when it comes to an eight-note repeated musical figure.”28

“Levitating” lawsuits likely outcomes

Applying the copyright infringement framework to the “Levitating” lawsuits allows us to understand the likely outcomes. First, the Artikal Sound System lawsuit does not allege any direct evidence of copying. As such, Artikal Sound System must show that Dua Lipa had access to “Live Your Life” and that “Levitating” is “substantially similar” to their song under the 2-prong test. Access is easily proved, as “Live Your Life” was commercially available on multiple streaming services when Dua Lipa wrote “Levitating.”29

However, the Artikal Sound System lawsuit does not provide enough information to pass the 2-prong “substantial similarity” test. The lawsuit only alleges that “Levitating” is “substantially similar” to “Live Your Life,” but does not detail any similarities much less provide any evidence that there is similarity of expression between the works from the point of view of a reasonable observer, as required by the intrinsic component of the test.30

More importantly, the lawsuit does not even mention any protectable elements from “Live Your Life” copied in “Levitating” and would, therefore, fail the extrinsic prong of the “substantial similarity” test.31 In turn, as submitted, the Artikal Sound System lawsuit fails to make a prima facie case of copyright infringement by Dua Lipa’s “Levitating.”

The story may be different for the Brown and Linzer lawsuit. Like the first suit, the Brown and Linzer lawsuit does not provide direct evidence of copying and will therefore only succeed if it passes the circumstantial evidence requirements of 1) access and 2) “substantial similarity.” Unlike the first suit, however, the Brown and Linzer complaint includes comparisons of the notes in “Levitating” to the notes in “Wiggle and Giggle All Night” and “Don Diablo” as support for the allegation of “substantial similarity.”

The 2nd Circuit, where the lawsuit was filed, held that a court can determine as a matter of law that two works are not “substantially similar” if the similarity between the two works concerns non-copyrightable elements of the copyrighted work.32 In practice, this means that the 2nd Circuit can apply the 2-prong “substantial similarity” test. Brown and Linzer can easily prove access to “Wiggle and Giggle All Night” and “Don Diablo” since both songs are internationally popular.33

Brown and Linzer can also meet the intrinsic prong of the test because, as they point out, “laypersons” (ordinary reasonable observers) have noticed the commonality between their copyrighted works and “Levitating,” as supported by widespread postings on mediums like TikTok.34 The extrinsic prong of the test is more uncertain.

In their lawsuit, Brown and Linzer point to a “signature melody” that repeats in “bars 10 and 11 of all three songs… [and] with some slight variation, in bars 12 and 13.”35 The court may find that this “signature melody” is not protected by copyright if it reasons that a melody is a basic musical principle, much like the 9th Circuit did for ostinatos in the Katy Perry “Dark Horse” case.

At its core, it seems like Brown and Linzer will have to convince the court that a melody, which they define as “a linear succession of musical tones,” qualifies as copyrightable because it is an original creative expression. Conversely, Brown and Linzer can concede that a melody is not copyrightable, but that their original arrangement and use of the melody in their copyrighted songs is copyrightable. In the end, it will be up to whether or not a court finds that the “signature melody” is copyrightable. As such, the outcome of Brown and Linzer’s action for copyright infringement is uncertain.

Nonetheless, one thing is for sure, copied or not, “Levitating” will continue powering gym visits and nights out dancing.

Footnotes

  1. See Complaint, Cope v. Warner Records, Inc., Case 2:22-cv-01384 (C.D. Cal. 2022).

  2. See Complaint, Larball Publ’g Co., Inc. v. Dua Lipa, Case 1:22-cv-01872 (S.D.N.Y. 2022).

  3. See Complaint at ¶ 7, Larball Publ’g Co., Inc. v. Dua Lipa, Case 1:22-cv-01872 (S.D.N.Y. 2022); Complaint at ¶ 12, Cope v. Warner Records, Inc., Case 2:22-cv-01384 (C.D. Cal. 2022).

  4. See Complaint at ¶ 17, Cope v. Warner Records, Inc., Case 2:22-cv-01384 (C.D. Cal. 2022).

  5. See Complaint at ¶ 15-18, Cope v. Warner Records, Inc., Case 2:22-cv-01384 (C.D. Cal. 2022).

  6. See Complaint at ¶ 19-22, Cope v. Warner Records, Inc., Case 2:22-cv-01384 (C.D. Cal. 2022).

  7. See Complaint at ¶ 2, Larball Publ’g Co., Inc. v. Dua Lipa, Case 1:22-cv-01872 (S.D.N.Y. 2022).

  8. See Complaint at ¶ 2, Larball Publ’g Co., Inc. v. Dua Lipa, Case 1:22-cv-01872 (S.D.N.Y. 2022).

  9. See Complaint at ¶ 3, Larball Publ’g Co., Inc. v. Dua Lipa, Case 1:22-cv-01872 (S.D.N.Y. 2022).

  10. See Complaint at ¶ 49, Larball Publ’g Co., Inc. v. Dua Lipa, Case 1:22-cv-01872 (S.D.N.Y. 2022).

  11. See Complaint at 13-14, Larball Publ’g Co., Inc. v. Dua Lipa, Case 1:22-cv-01872 (S.D.N.Y. 2022).

  12. Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991).

  13. Apple Comput., Inc. v. Microsoft Corp., 35 F.3d 1435, 1442 (9th Cir. 1994).

  14. Id.

  15. Id.

  16. Swirsky v. Carey, 376 F.3d 841, 845 (9th Cir. 2004).

  17. Satava v. Lowry, 323 F.3d 805, 811 (9th Cir. 2003).

  18. See 17 U.S.C. § 102(a); Feist, 499 U.S. at 345.

  19. See Feist, 499 U.S. at 345.

  20. See 17 U.S.C. § 102(b); Skidmore as Tr. for the Randy Craig Wolfe Tr. v. Led Zeppelin, 952 F.3d 1051, 1069 (9th Cir. 2020) (en banc).

  21. Skidmore, 952 F.3d at 1069.

  22. Gray v. Hudson, No. 20-55401, slip op at 26 (9th Cir. Mar. 10, 2022).

  23. Id.

  24. Id. at 14-21.

  25. Id. at 17.

  26. Id. at 22.

  27. Id. at 26.

  28. Id. at 24.

  29. See Complaint at ¶ 16, Cope v. Warner Records, Inc., Case 2:22-cv-01384 (C.D. Cal. 2022).

  30. See Complaint at ¶ 18, Cope v. Warner Records, Inc., Case 2:22-cv-01384 (C.D. Cal. 2022).

  31. See Complaint at ¶ 18, Cope v. Warner Records, Inc., Case 2:22-cv-01384 (C.D. Cal. 2022).

  32. Peter F. Gaito Architecture, LLC v. Simone Dev. Corp., 602 F.3d 57, 63-65 (2d Cir. 2010).

  33. See Complaint at ¶ 35, Larball Publ’g Co., Inc. v. Dua Lipa, Case 1:22-cv-01872 (S.D.N.Y. 2022).

  34. See Complaint at ¶ 4, Larball Publ’g Co., Inc. v. Dua Lipa, Case 1:22-cv-01872 (S.D.N.Y. 2022).

  35. See Complaint at ¶ 38, Larball Publ’g Co., Inc. v. Dua Lipa, Case 1:22-cv-01872 (S.D.N.Y. 2022).

Article By Adrian Gonzalez Cerrillo and Sana Hakim of K&L Gates

For more intellectual property legal news, click here to visit the National Law Review.

Copyright 2022 K & L Gates

Europol: More Than Half of Counterfeits Originate in China

On March 7, 2022, the European Union Agency for Law Enforcement Cooperation (Europol) and the European Union Intellectual Property Office (EUIPO) jointly released the Intellectual Property Crime Threat Assessment 2022. Per the Assessment, China (including Hong Kong) was the main source of counterfeits based on number of counterfeits and by value of the counterfeits seized at the EU external borders.  Almost 76% of the fake goods detained were for trademark infringement; design infringement was the second most reported at 23% while copyright was third with 15%.

China and Turkey remain the main countries of origins for counterfeit clothing, shoes, bags, watches, and jewelry seized at the EU’s border. These goods are mostly ordered online and discovered as part of postal shipments or on passengers entering the EU.

Similarly, China is the country of origin for most of the seized counterfeit electrical/electronic and computer equipment, mobile phones and accessories. With respect to mobile phones, the Assessment states,

…the visual appearance of the counterfeit devices is very convincing, closely mimicking the external characteristics of the original phones. However, typically some features and software characteristics are missing and the International Mobile Equipment Identity (IMEI) is often fake.  The use of cheap and substandard electric components, which can be found in fake batteries, headphones or chargers, pose safety risks.

“China and Turkey were among the most frequently reported non-EU countries of origin for counterfeit food and drink seized at the EU’s external border.” Similarly, counterfeit perfumes and cosmetic products often originate from China and Turkey.

In addition to ready-to-use IPR-infringing goods, product components, such as aroma compounds, fixatives and solvents, are increasingly being seized. These components are used to create the final counterfeit products in the EU.

More worrisome, China and Turkey were the main origin of counterfeit pharmaceutical products.

Toys round out the top 10 counterfeits with China also being main point of origin.

The full Assessment is available here: IP_Crime_Threat_Assessment_2022_FullR_en.

Article By Aaron Wininger of Schwegman, Lundberg & Woessner, P.A.

For more intellectual property legal news, click here to visit the National Law Review.

© 2022 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.