Category: Intellectual Property

IP Law Summit – March 21-23, 2013

The National Law Review is pleased to bring you information about the upcoming IP Law Summit:

The IP Law Summit is the premium forum for bringing senior IP Counsel and service providers together. As an invitation-only event taking place behind closed doors, the Summit offers an intimate environment for a focused discussion of cutting edge technology, strategy and products driving the IP market place.

The one-on-one business meetings provide access to Senior IP Counsel within the largest corporations across the United States. A thorough selection process ensures a qualified audience, which grants unparalleled business and networking opportunities in a luxurious and stimulating environment.

March 21-23, 2013

The Broadmoor, Colorado Springs, CO

Controversial Film “Escape From Tomorrow” Shows Need to Protect Intellectual Property

The National Law Review recently published an article written by Matthew J. Kreutzer with Armstrong Teasdale regarding Intellectual Property Protection:

ArmstrongTeasdale logo

 

“Escape From Tomorrow,” one of the most controversial films at the 2013 Sundance Film Festival, has put copyright and trademark law, as well as the question of what constitutes parody, in the spotlight. The film reminds companies why it is important to protect their intellectual property: to prevent use (or misuse) by others.

“Escape” tells the story of a family on vacation at Disney World during the outbreak of a mysterious new flu virus. As family members tour the park, they are plagued by increasingly bizarre events that make the rides at the “Happiest Place on Earth” appear to have sinister undertones. As the film progresses, the audience is forced to question whether there really is something unpleasant lurking beneath the famously joyful facade, or if instead, the parents themselves are slowly losing their grip on reality.

Although the film is interesting in its own right, it has become both controversial and noteworthy because it was made “guerilla-style” at the Disney World and Disneyland theme parks without the knowledge or consent of Disney. The cast and crew are seen in the film walking the parks, riding the famous rides, and interacting with the beloved Disney characters without having names, likenesses or locations blurred or obscured. Moreover, ordinary park visitors, who did not know they were being filmed or consent to being in the movie, appear as the background actors.

In the end, Disney may not choose, and ultimately may not be able, to stop the general release of “Escape,” but the specter of IP protection at least gives Disney a possible avenue to pursue. Section 107 of the Copyright Act lists the various purposes for which the reproduction of a particular work may be considered fair use, such as criticism, comment, news reporting, teaching, scholarship, and research. The section also sets out factors to be considered in determining whether a particular use is fair including whether the work is of commercial nature.

Although the U.S. Supreme Court considers parody to be fair use, the particular facts are critical to the final outcome since there is a fine line between parody and a derivative work. Thus, whether the depiction of the Disney parks in “Escape” constitutes fair use could be a matter of interpretation.

“Escape” serves as a warning to those in marketing and sales about the risks of using intellectual property owned by others, such as copyrighted images, when developing promotional materials and webpages. Use of protected images, for example, may not be fair when designed for commercial gain.

Finally, the controversy surrounding “Escape” is a reminder about the danger of showing people in commercial videos, including those used in social media, who have not given their consent to being filmed. Those individuals may have a right of publicity or even claims based on a violation of a right to privacy.

© Copyright 2013 Armstrong Teasdale LLP

Enforcement Implications of Already, LLC v. Nike, Inc.

The National Law Review recently published an article, Enforcement Implications of Already, LLC v. Nike, Inc., written by Karen A. Butcher, Michael F. Clayton, and J. Kevin Fee with Morgan, Lewis & Bockius LLP:Morgan Lewis logo

Brand owner’s broad covenant not to sue may render invalidity counterclaims moot.

On January 9, the U.S. Supreme Court in Already, LLC v. Nike, Inc.[1] held that a plaintiff trademark owner’s dismissal of its infringement claims, coupled with the grant of a broad and irrevocable covenant not to sue a competitor, could render the competitor’s invalidity counterclaims moot. This holding clarifies the standard governing how counterclaims can be rendered moot in the event the underlying infringement claim is dropped. Intellectual property owners should take this standard into account when developing and refining their intellectual property enforcement strategies.

Background

Nike, a well-known designer and manufacturer of athletic footwear, filed a trademark infringement suit in federal district court against Already, another designer and manufacturer of footwear, alleging that Already’s “Sugars” and “Soulja Boys” shoe lines infringed and diluted Nike’s trademark in its “Air Force 1” product configuration. Already denied Nike’s allegations and filed a counterclaim alleging that Nike’s Air Force 1 claimed trademark was invalid.

Eight months after filing its complaint, Nike concluded that “‘Already’s actions . . . no longer infringe or dilute the [Air Force 1 mark] at a level sufficient to warrant the substantial time and expense of continued litigation'” and issued a covenant not to sue.[2] In the covenant, Nike agreed not to assert any claim or demand against Already or any affiliated entity (including distributors and their employees and customers) based on any of Already’s existing shoe designs or any future Already designs that constituted a “colorable imitation” of Already’s current products. After issuing the covenant, Nike moved to dismiss both its infringement claim and Already’s invalidity counterclaim on the ground that the covenant eliminated the existence of a case or controversy necessary for the survival of Already’s counterclaim. Already argued that, even though Nike had agreed to refrain from suing Already, a case or controversy still existed because Already would still be injured by the continued existence of Nike’s trademark registration. The trial court dismissed Already’s counterclaim and the U.S. Court of Appeals for the Second Circuit affirmed the trial court’s decision. The Supreme Court granted certiorari.

The Supreme Court’s Decision

The Supreme Court unanimously affirmed the decision of the Second Circuit, which dismissed as moot Already’s counterclaim of trademark invalidity in light of Nike’s broad covenant not to sue Already in the future. The district court held that the plaintiff’s broad and irrevocable covenant not to sue removed the existence of an “actual case or controversy,” an element necessary to demonstrate standing in federal court.

Article III of the Constitution prohibits federal courts from rendering advisory opinions or deciding legal disputes in the absence of an “actual case or controversy.” The Supreme Court noted that an “actual controversy” must exist throughout the entirety of litigation, not just at the time the complaint is filed. A case becomes moot—and therefore no longer presents a case or controversy—when the issues presented are no longer live or when the parties no longer have a legally cognizable interest in the outcome. The Court held that the “voluntary cessation” doctrine applies when determining whether a declaratory judgment counterclaim is moot. Specifically, in this case, Nike bore the “formidable burden” of showing that another trademark infringement claim against Already was not reasonably likely to occur.[3]

The Court determined that Nike had overcome its formidable burden under the voluntary cessation doctrine. Specifically, the Court reviewed Nike’s covenant and determined that it was sufficiently broad to render Already’s counterclaim moot for the following reasons: it was unconditional and irrevocable; it applied to Already’s past and current shoe designs, as well as future designs that were “colorable imitations”; it applied to its distributors and customers; and it prohibited Nike from not only filing a suit, but also from making any claim or demand. Because the Court was unable to imagine a scenario under which Nike could bring another Air Force 1 trademark infringement claim against Already (absent blatant counterfeiting), Already’s invalidity counterclaim was held to be moot.

The Court’s holding is consistent with its 2007 decision in MedImmune, Inc. v. Genentech, Inc.,[4] which liberalized declaratory judgment jurisdictional considerations. In MedImmune, the Court held that a genuine threat of enforcement of intellectual property rights that inhibits commercial activity may support standing for a declaratory judgment claim. In the Already case, the Court found that Nike’s covenant eliminated any genuine threat of future enforcement by Nike.

Implications of the Court’s Holding

The Already decision is important to all trademark owners, particularly with respect to developing and implementing enforcement strategies. One of the risks associated with bringing a trademark infringement claim is that the defendant might file a counterclaim for a declaratory judgment that the plaintiff’s trademark is invalid. The Court’s decision clarifies that a plaintiff can successfully have the counterclaim dismissed by issuing a broad covenant not to sue.

Whether a covenant not to sue will divest a federal court of Article III jurisdiction over an invalidity counterclaim depends on whether the breadth of the covenant renders the threat of future litigation between the same parties based on the same trademark remote or nonexistent. Although future cases will hinge on the specific underlying facts, the Supreme Court’s opinion sets forth the general elements necessary for a sufficiently broad covenant, including that it (i) be unconditional and irrevocable; (ii) cover the defendant and related entities; (iii) cover not only all current and previous products, but also “colorable imitations”; and (iv) prohibit the plaintiff from making any future claims or demands with respect to the pertinent trademark.

Although a broad covenant not to sue may be desirable to obtain dismissal of a trademark invalidity counterclaim, the decision to issue such a covenant must be balanced against the risk that such covenants could negatively impact the strength and enforceability of the trademark in the future. For instance, depending on the facts, broad covenants not to sue on multiple occasions could result in the loss of trademark rights by the trademark owner or a decrease in the owner’s ability to assert such rights against other third parties not covered by the covenant. As a result, trademark owners should consider these issues before they initiate trademark infringement litigation, particularly when the alleged infringement is limited in scope and the infringement is not seriously impacting the trademark owner’s business.

[1]. Already, LLC v. Nike, Inc., No. 11-982 (U.S. Jan. 9, 2013), available here.

[2]. Id. at 2.

[3]. Id. at 5–6.

[4]. 549 U.S. 118 (2007).

Copyright © 2013 by Morgan, Lewis & Bockius LLP

IP Law Summit – March 21-23, 2013

The National Law Review is pleased to bring you information about the upcoming IP Law Summit:

The IP Law Summit is the premium forum for bringing senior IP Counsel and service providers together. As an invitation-only event taking place behind closed doors, the Summit offers an intimate environment for a focused discussion of cutting edge technology, strategy and products driving the IP market place.

The one-on-one business meetings provide access to Senior IP Counsel within the largest corporations across the United States. A thorough selection process ensures a qualified audience, which grants unparalleled business and networking opportunities in a luxurious and stimulating environment.

March 21-23, 2013

The Broadmoor, Colorado Springs, CO

In a Rarely-Seen Joint-Effort in the Competition Arena, the DOJ and the USPTO Unite in Issuing a Policy Statement on Remedies Involving Standard Essential Patents

The National Law Review recently published an article, In a Rarely-Seen Joint-Effort in the Competition Arena, the DOJ and the USPTO Unite in Issuing a Policy Statement on Remedies Involving Standard Essential Patents, written by the Antitrust and Trade Regulation Practice of Sheppard, Mullin, Richter & Hampton LLP:

Sheppard Mullin 2012

On January 8, 2013 – less than a week after the Federal Trade Commission (“FTC”) entered into a consent order with Google,[1] under which Google is generally banned from seeking injunctions on its F/RAND[2] -encumbered standard essential patents (“SEPs”)[3] – the United States Department of Justice (“DOJ”) banded together with the United States Patent and Trademark Office (“USPTO”) (jointly referred here as “the Agencies”) in issuing the Policy Statement on Remedies for Standard Essential Patents Subject to F/RAND Commitment (“Policy Statement on Remedies for SEPs”).

This was a rare pairing in that, in the past, the DOJ has generally joined forces with the FTC in jointly issuing guidelines in the area of competition and antitrust enforcement policy. Examples include the DOJ-FTC joint “Antitrust Policy Enforcement Regarding Accountable Care Organizations,” “Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition,” “Antitrust Guidelines for the Licensing of Intellectual Property,” “Antitrust Guidelines for Collaborations Among Competitors,” and “Horizontal Merger Guidelines.” The Policy Statement on Remedies for SEPs is, therefore, a departure from that established practice.

The DOJ issued the policy statement in its capacity as “the executive-branch agency charged with protecting U.S. consumers by promoting and protecting competition,” and the USPTO in its capacity as “the executive-branch agency charged with responsibility for examining patent applications, issuing patents, and—through the Secretary of Commerce—advising the President on domestic and certain international issues of intellectual property policy.” Policy Statement on Remedies for SEPs at 8.

Noting the procompetitive virtues of consensus-driven standards along with their risks, the Agencies sought to balance the rights of SEP holders against the risk of hold-up to implementers. On the one hand, the Agencies recognized that “[i]n some circumstances, the remedy of an injunction or exclusion order may be inconsistent with the public interest” and “may harm competition and consumers.” Id. at 6. On the other hand, they rejected a general ban on injunctive relief actions for SEPS, see id. at 7-8, or rigid imposition of “one-size-fits-all mandates for royalty-free or below-market licensing, which would undermine the effectiveness of the standardization process and incentives for innovation,” id. at 5-6.

In determining whether an injunction or exclusion order may be appropriate, or otherwise should be denied, the Agencies offered a flexible approach that could be used to adapt the remedy to the specific facts of each case by identifying non-exhaustive “relevant factors when determining whether public interest should prevent the issuance of an exclusion order… or when shaping such a remedy.” Id. at 7-9. One such factor is “whether a patent holder has acknowledged voluntarily through a commitment to license its patents on F/RAND terms that money damages, rather than injunctive or exclusionary relief, is the appropriate remedy for infringement.” Id. at 9.

However, according to the Agencies, “This is not to say that consideration of the public interest factors … would always counsel against the issuance of an exclusion order to address infringement of a F/RAND-encumbered, standards-essential patent”; such an order may still be “an appropriate remedy” in some circumstances. Id. at 7.

For example, an exclusion order by the International Trade Commission (“ITC”) or a district court injunction may be appropriate when “a putative licensee refuses to pay what has been determined to be a F/RAND royalty, or refuses to engage in a negotiation to determine F/RAND terms.” Id. The Agencies also made clear that “a constructive refusal to negotiate” could be the basis for injunctive relief or an exclusion order, such as when the putative licensee “insist[s] on terms clearly outside the bounds of what could reasonably be considered to be F/RAND terms in an attempt to evade the putative licensee’s obligation to fairly compensate the patent holder.” Id. Other factors relevant to a particular case may also justify such a relief, making the inquiry a case-specific one. See id. (noting that “[t]his list is not an exhaustive one,” thus leaving room for other considerations).

In contrast, the FTC has taken a much more restrictive view of SEP inunctions. For example, in its Google order, the FTC generally banned efforts by Google to seek injunctive relief on its SEPs, except in the following narrowly enumerated circumstances against a potential licensee who (a) is outside the jurisdiction of the United States, (b) has stated in writing or sworn testimony that it will not license on any terms, (c) refuses to enter a license on terms determined to be F/RAND in the “Final Ruling” of a court (after exhaustion of all appeals) or through binding arbitration or other mutually-agreed process, or (d) fails to provide a written confirmation to a SEP owner in response to a F/RAND Terms Letter as outlined in the FTC Order. FTC Decision & Order at 7-8. The order also allows Google to seek injunctive relief in certain circumstances when the putative licensee first sues Google for injunctions on the potential licensee’s own SEPs. Id. at 11-12. The order also requires rigid adherence to an offer of a detailed licensing agreement and specific steps for negotiating and resolving disputes before pursuing any injunctive relief consistent with the above conditions. See, e.g., id. at 9-12.

Notably, the FTC order is not based on the antitrust laws, but instead relies on Section 5 of the FTC Act, which is primarily a consumer protection statute that prohibits “unfair method of competition” and “unfair acts or practices.” See FTC Complaint, ¶¶ 31-32. Commissioner Ohlhausen dissented generally questioning the applicability of Section 5 to Google’s conduct and the “doctrinal confusion” the order would cause, among other reasons. See generally Dissenting Statement of Commissioner Ohlhausen. Commissioner Rosch issued a separate statement that called into question the FTC’s use of Section 5’s “unfair method of competition” prong without any “limiting principles” – such as “the requirement that a respondent have monopoly or near-monopoly power” – which risked “unsettl[ing] ‘settled principles of [Sherman Act] Section 2 law’ as defined by the Supreme Court case law under Section 2, … as well as the language of Section 2 itself.” Sep. Stmt. of Commissioner Rosch at 3-4.

[1] All of the relevant documents, including the FTC Complaint, the Decision and Order, and Separate and Dissenting Statements respectively of Commissioners Rosch and Ohlhausen can be found on the FTC’s website at http://www.ftc.gov/os/caselist/1210120/index.shtm.

[2] “F/RAND” refers to a commitment made by a patentee to an industry standard setting organization (“SSO”) that the patentee will license its patents that are, or will become, essential to a standard adopted by the SSO on fair, reasonable, and non-discriminatory terms.

[3] Throughout, “SEPs” is used to refer only to F/RAND-encumbered standard essential patents. These are patents that have been designated as essential to the functionality of an approved standard, such as the telecommunications standards applicable to mobile devices operating on a 3G network, pursuant to the specifications of an SSO.

Copyright © 2013, Sheppard Mullin Richter & Hampton LLP

IP Law Summit – March 21-23, 2013

The National Law Review is pleased to bring you information about the upcoming IP Law Summit:

The IP Law Summit is the premium forum for bringing senior IP Counsel and service providers together. As an invitation-only event taking place behind closed doors, the Summit offers an intimate environment for a focused discussion of cutting edge technology, strategy and products driving the IP market place.

The one-on-one business meetings provide access to Senior IP Counsel within the largest corporations across the United States. A thorough selection process ensures a qualified audience, which grants unparalleled business and networking opportunities in a luxurious and stimulating environment.

March 21-23, 2013

The Broadmoor, Colorado Springs, CO

POSTPONED – Copyright and Trademark Protection in The Digital Age Conference – February 6-7, 2013

THIS CONFERENCE HAS BEEN POSTPONED BY THE ORGANIZER

 

The National Law Review is pleased to bring you information about the upcoming marcus evans Copyright and Trademark Protection in The Digital Age Conference:

Copyright and Trademark Feb 6-7 2013

The marcus evans Copyright and Trademark Protection in The Digital Age Conference will provide strategies for organizations who are dealing with digital copyright and trademark issues, address the management of digital content, digital license agreements, and overall evolution of copyright and trademark to ensure they are protecting their brand.

Copyright and Trademark Protection in The Digital Age Conference – February 6-7, 2013

The National Law Review is pleased to bring you information about the upcoming marcus evans Copyright and Trademark Protection in The Digital Age Conference:

Copyright and Trademark Feb 6-7 2013

The marcus evans Copyright and Trademark Protection in The Digital Age Conference will provide strategies for organizations who are dealing with digital copyright and trademark issues, address the management of digital content, digital license agreements, and overall evolution of copyright and trademark to ensure they are protecting their brand.

Copyright and Trademark Protection in The Digital Age Conference – February 6-7, 2013

The National Law Review is pleased to bring you information about the upcoming marcus evans Copyright and Trademark Protection in The Digital Age Conference:

Copyright and Trademark Feb 6-7 2013

The marcus evans Copyright and Trademark Protection in The Digital Age Conference will provide strategies for organizations who are dealing with digital copyright and trademark issues, address the management of digital content, digital license agreements, and overall evolution of copyright and trademark to ensure they are protecting their brand.

Copyright and Trademark Protection in The Digital Age Conference – February 6-7, 2013

The National Law Review is pleased to bring you information about the upcoming marcus evans Copyright and Trademark Protection in The Digital Age Conference:

Copyright and Trademark Feb 6-7 2013

 

The marcus evans Copyright and Trademark Protection in The Digital Age Conference will provide strategies for organizations who are dealing with digital copyright and trademark issues, address the management of digital content, digital license agreements, and overall evolution of copyright and trademark to ensure they are protecting their brand.