intellectual property

January 9, 2023

Trademarks in the Metaverse

What is the Metaverse?

The metaverse is essentially an immersive experience that integrates the virtual world and reality, allowing users to interact with one another even if they are not physically in the same space. People can work, shop, and socialize in the metaverse the same way they do in real life. This inevitably translates to a digital economy; users can sell and purchase virtual products, like clothes and real estate, that only exist in the metaverse. 

Who is trademarking in the Metaverse?

Major brands are preparing to enter the metaverse by trademarking their logos and products. 

  • Nike has filed seven trademark applications with the USPTO in which the company indicated its intent to make and sell virtual apparel. 
  • CVS Health filed to trademark its pharmacy and health clinics with the USPTO, intending to patent sales of virtual goods like wellness and beauty products, prescription drugs, and non-emergency medical services.
  • Walmart has filed several trademarks that indicate its intent to market virtual goods. In a separate filing, Walmart specified that it would offer customers NFTs and a virtual currency. 
  • Most notably, Facebook has dedicated itself to total immersion in the metaverse. Last year, the company officially changed its name to Meta. 

Why are trademarks in the Metaverse important?

Your intellectual property is valuable and should be protected- both physically and virtually. Creators are already taking advantage of the unprecedented circumstances created by the introduction of the metaverse. For example, third-parties filed two trademark applications last year to use Prada and Gucci logos on “downloadable virtual goods” on metaverse platforms. The third parties are unaffiliated with the real Prada and Gucci, but their attempt to capitalize on  major brands in the metaverse marketplace is an indication of what is to come.

 Shielding your brand’s name and image in the virtual world is crucial. Lloyd & Mousilli can guide you through the complexities of obtaining a trademark for use in the metaverse to ensure you are afforded the protection your brand is entitled to. 

What protections does a trademark in the Metaverse offer?

Fraudulent use of your intellectual property by unaffiliated third parties can be detrimental to your brand’s image. The last thing you want is your customers being exposed to confusingly similar products being sold by infringers. A trademark will legally protect your brand in the event that your products or intellectual property are infringed upon. Even if your brand has already obtained trademark registrations for the “real world,” you should consider filing separate applications for those existing trademarks that cover distinct virtual goods and services. This will ensure that such rights are recognized and protected in the metaverse virtual marketplace. 

How are trademarks in the Metaverse enforced?

The first course of action to enforce a trademark is typically to send a cease and desist letter to the infringer. If this is unsuccessful in stopping the infringement, the next step is to file a lawsuit. Trademarking in the metaverse is a relatively new concept so it is still too early to say exactly how trademark enforcement in the virtual world will unfold, but the general process of stopping an infringer will be the same. Lloyd & Mousilli is prepared to preserve the integrity of your brand by counseling you in the event of trademark infringement.

You Want In: Where Do You Start?

Filing a trademark application for your brand is the first step. Lloyd & Mousilli's trademark attorneys understand the complexities of intellectual property, as well as the intersection of technology and law. Book a consultation to discuss more in depth about the trademark process as it pertains to the metaverse.

November 25, 2022

Patent Examiner Interviews: Why You Need One and How to Prepare

Why are Examiner Interviews beneficial?

Examiner interviews are the not-so-secret weapons of patent prosecution. If conducted strategically, an interview with your patent examiner can potentially be the driving force that leads to a successful registration. 

An examiner interview can provide several benefits, including: 

Clarification

Examiners are only human; misunderstandings in the written communication between the examiner and the applicant can often be clarified with a face-to-face discussion. Your conversation may unearth information you otherwise would not have obtained. For example, your examiner may have misunderstood your claim as you’ve written them. A verbal explanation may provide the necessary clarity that the examiner was missing. 

Cost and time reduction

On average, each Office Action response costs about $3,000. An interview with the examiner can potentially reduce the number of refusals issued against your application, saving you money and cutting down the prosecution time. 

When and how can you request an interview?

Once a first refusal has been issued, patent applicants are entitled to an interview with their examiner. There are three ways to submit a request for an interview: 

(1) Fill out a PTOL-413A form 

(2) The USPTO’s online Automated Interview Request (AIR) system

(3) Call your examiner directly to request an interview

Tips for a successful interview:

Simply attending the interview isn’t enough; preparation is key. Some ways to prepare for your interview are:

Prepare an itinerary

Come prepared. Examiner interviews are typically 30 minutes long - make the most of your time by being as concise and efficient as possible. Prepare an itinerary for your discussion, including all questions and arguments you have for the examiner.

Ask for input

An interview allows you to directly request the examiner’s recommendations for improving the claims in your application. For example, making note of the claim language the examiner uses is a strategic way to improve your arguments; they are not likely to reject their own language, so take advantage of this opportunity to receive their direct input. 

Ready to take the plunge on a patent application?

Patent applications are tedious and complex. It can take the average person months to learn the ins and outs of patent prosecution. Applying on your own is always a risk, as one small mistake can lead to drastic consequences regarding cost and time delays. 

Lloyd & Mousilli has dedicated intellectual property attorneys who are experienced in the patent application process. We can assist with the preparation and filing of your application, as well as offer strategic guidance on your overall intellectual property protection. 

October 24, 2022

A case of Bad Blood? Taylor Swift Sued for Alleged Copyright Infringement

La Dart’s official complaint is largely predicated on her assertion that the stylistic elements of her book are not typical, and that they are not present within other published works. Therefore, she alleges that there is a substantially similar overall impression of the two works that constitutes infringement. 

In order to prove her allegations, La Dart has the burden of proving two elements:

  1. She owns a valid copyright 
  2. Swift copied constituent elements of La Dart’s original work

La Dart’s complaint establishes that she obtained a valid copyright registration for her book in 2010. The more difficult element to prove is the second, as it relies on La Dart using circumstantial evidence to support her claims. 

For example, La Dart’s complaint asserts that Swift had “repeated and long-term access” to her book “Lover“ as it was available through various channels after its publication. If she is unable to provide evidence that the work was actually accessed, she must show that there is a “striking similarity” between her work and Swift’s.

La Dart claims that Swift’s album and accompanying book contain a “substantially similar” format, color scheme, and design. The identical titles, of course, are also at issue. The complaint also alleges that the photographs of the two women on the covers of their respective books are similar enough to warrant infringement, as they are each shown in an “upward pose.” 

An additional element often used to prove copyright infringement is that the defendant sought commercial advantage or private financial gain. While La Dart’s complaint does not explicitly accuse Swift of such, it certainly implies it by referring to the considerable number of sales and subsequent monetary gains of Swift’s Lover album.

The complaint, filed on August 23rd, 2022, declares that La Dart has been irreparably harmed by Swift’s album. She is seeking $1 million in damages, as well as Swift’s profits attributable to the infringement. At the time of this publication, there were currently no substantive updates on the case.

October 24, 2022

Temporary Restraining Orders: The Strategy Behind Injunctive Relief in IP Disputes

What is Injunctive Relief?

Injunctive Relief is a court-ordered act or prohibition against an act that has been requested in a petition to the court for an injunction. Usually, injunctive relief is granted only after a hearing at which both sides have an opportunity to present testimony and legal arguments (NOLO, n.d.).

What is a Temporary Restraining Order?

A Temporary Restraining Order is a court order that prevents someone from committing a certain action endorsed by the court. This type of order has a specified time limit and does not exceed 14 days, unless the court sets a time before that date. 

What is a Permanent Injunction?

A Permanent Injunction is a court order that a person or entity take certain actions or refrain from certain activities. A permanent injunction is typically issued once a lawsuit over the underlying activity is resolved, as distinguished from a preliminary injunction, which is issued while the lawsuit is pending (NOLO, n.d.). Injunctions are decisions made by the court commanding or preventing a specific act. This is useful in Intellectual Property disputes when parties are arguing over ideas and intellectual rights owned by one of the parties.

When there is a patent, copyright, or trademark owned by a party, that party can prove to the court that they own that property protected by the law. With this document stating they own the rights to the specific property, they are able to request a permanent injunction from the court to prevent another party from using their property.

For example, if you owned a trademark for the company name “Amazing Star”, and you noticed that a store opened with the name “Amazing Star” across the street from your business then they would be infringing on your entity’s trademark. In order to receive injunctive relief from the court, you will need to provide the trademark declaration to the court for proof of ownership. 

What does a Business need to prove to get a preliminary injunction awarded?

First, you must decide if your case should be heard in State or Federal Court. This can be deciphered by determining the questions or diversity involved in your case. Inter-state issues should be filed in Federal Court, whereas issues that are within state jurisdictions should be filed in state courts. 

Once you have decided if the case should be filed in State or Federal Court, it would be beneficial to decide which court you would like to petition to hear the case. This is a crucial step to ensure that the judge you decide to request a hearing from is willing to hear – and potentially grant your case. 

How Do I Request an Injunction?

Prepare Your Complaint

To begin your request to the court, you would likely want to start with the complaint. This is beneficial to the judge overseeing the case because it will give the judge an idea of what to expect during the hearings and the duration of the trial. You should be as descriptive as possible in your complaint, but not excessive. This complaint will be attached to the petition that is filed with the court. 

Review Applicable Rules

Before you submit your petition to the court, you want to ensure that you have reviewed the local rules of the court. This will help to have a better understanding of how the process would go moving forward in the case. Most courts post their local rules on their respective websites. These rules are usually issued by the presiding judge and abided by their associates. 

Proceed with Filing

Once you have reviewed all the facts needed and verified that you have included all necessary points, you can proceed with filing with the court. After reviewing all the rules associated with the court, you can adjust accordingly for a likely outcome. (American Bar Association, n.d.).

A Preliminary Injunctive Relief can benefit the Plaintiff in an Intellectual Property Dispute by bringing the seriousness of the damages to the court’s attention. This is most useful when there are other parties involved that seek to steal or misuse property that would otherwise cause the Plaintiff’s company harm. A Preliminary Injunction MUST show that the Plaintiff will suffer irreparable harm unless the injunction is granted. 

If your request for a preliminary injunction is denied by the court, and sufficient evidence has been provided, the party requesting the preliminary injunction may file and interlocutory appeal (an appeal that occurs before the trial court’s final ruling on the entire case). There are three reasons that must be met in order to complete an interlocutory appeal. First, the order must have conclusively determined the disputed question. Second, the order must “resolve an issue completely separate from the merits of the action. Finally, the order must be “effectively unreviewable on appeal from a final judgment.” (Cornell Law School, n.d.)

Lloyd & Mousilli Can Help

This may seem like a lot of information, but there are resources out there to help with the questions you have. Selecting the best attorney that suits your needs and has the experience you need to get this case through is a hard task. At Lloyd & Mousilli, we are here to help get you through the difficult times and strive to get you the best outcome for you and your company.

October 13, 2022

Concealing a Trademark Application


What is a Trademark?

While driving down the road, you might recognize that a McDonald’s is approaching your line of sight by identifying the infamous “golden arches” at the forefront of your dashboard. With this iconic symbol pinned at nearly every intersection, it is difficult not to recognize the fact that McDonald’s has some pretty serious brand establishment. 

It is no easy feat to accomplish this type of remunerative stature, however, the process of protecting a brand’s identity is a great way to start. Submitting a trademark application is one of the first things a business can do to establish an economic profile and jump start a brand’s identity. 

The word “trademark” can refer to both trademarks and service marks. The United States Patent and Trademark Office (USPTO) defines a trademark as a word, phrase, symbol, design or a combination of any of the aforementioned that defines goods or services. This is how consumers are likely able to identify a brand from other potential competitors and can also protect a business from its economic rivalries. 

With that said, any business entity or individual can apply for a trademark. It is an essential part of protecting a company’s intellectual property and can emphasize the marketability of a business.

Filing a Trademark Application

During the process of filing a trademark application, the mark will be evaluated as to whether it is registrable, and how difficult it will be to protect. After this has been determined, the application will be submitted to the USPTO for review and approval. 

From this point forward, the proposed mark will live in the Trademark Electronic Search System (TESS) while awaiting review. TESS is a trademark database that allows anyone in the world to search for trademarks that have been registered or applied for in the United States. This platform is used to show the public what trademarks are currently awaiting registration, and which of those already have a registered status. This also give entities a closer look into the current climate of what companies are looking to register as their own mark. 

Such as any publicly searchable database, TESS provides a great deal of public exposure to pending trademark applications, which can be a huge topic of concern for high-profile companies. Big fish brands have to go through the same process of filing a trademark application just like any other business, so a considerable amount of time, strategy and analysis goes into selecting the best course of action for submitting a trademark.

Concealing a Trademark Application 

Recently, companies have gotten more sophisticated with how they approach submitting their trademark applications. With society’s ever-growing concern for the next big product, it has become harder and harder for brands to mask their newest creations inside the world of the internet, thus requiring concealment. The most recent example of a successful trademark concealment can be found in Apple’s latest addition to their tech roster, the iPhone 14.

September 16, 2022 marked the release of the new and improved iPhone 14, with some pretty distinctive upgrades. Most notably, what was once was a thick black indent on the top of the screen is now an interactive touch bar titled the Dynamic Island. This new upgrade allows the user to engage with the screen in a multitude of variations that are not privy to older iPhone generations. 

Apple is no stranger to trademarks, so it can be assumed that their strategy on filing certain trademark applications is razor sharp. The submission of the Dynamic Island trademark was kept well under wraps without an inkling of potential for pre-exposure, and many ask how this was possible given the highly anticipated launch of the tech giant’s newest addition to the iPhone dynasty. 

This concept of concealing trademark applications to prevent pre-exposure has become an increasingly used tactic amongst many big named brands. TESLA is another example of a very established company that utilizes this tactic to conceal their latest and greatest trademark. Other companies use this approach to prevent competitors from searching for technology gold.

With that, there are certain strategies you can implement into a trademark application to prevent the general public from viewing and potentially replicating a mark. Trademark concealment is most commonly utilized when a brand wants anonymity during the process of waiting for a trademark registration, which has consistently been met with success. This is accompanied by using foreign priority rights to keep the trademark filing a secret. 

What is Section 44(d)?


Section 44(d) of the Trademark Act has allowed companies to jump over the hurdle of having their trademark applications displayed in the Trademark Electronic Search System by filing their trademark application in a foreign country such as Jamaica, or in any other country that does not have an online database viewable to the public. If someone wanted to view the recent trademark applications in Jamaica, they would need to go the physical Jamaican trademark office. This provides an extra layer of effort and determination for scouters to cross through in attempting to leak a mark. 

Now, subject to scrutiny and public opinion, this loophole does not have a very long shelf-life. If a company intends on having their mark registered with the United States Patent and Trademark Office, it is required that trademark applicants file with the U.S. claiming priority to the trademark within 6-months of filing the foreign application. Given the fact that the majority of brands use this tactic to prepare for the release of major products, the concern of the concealment lifespan is marginal to most. 

Section 44(d) gives companies practically 6-months of secrecy to prepare for any necessary actions before the trademark is officially released as public record in the U.S. Whether that be a media event or a soft social media launch, it is imperative to a business that their secrets remain well hidden- and rightfully so. 

Conclusion 

This is an extremely useful way for brands to maintain the integrity of their most prized trademark applications, and a beneficial tool to utilize when there is concern over competitor poaching. If this alternative did not exist, some of our most beloved products might not be what they are today. 

The protection of your trademark is one of Lloyd & Mousilli’s highest priorities. Our seasoned legal counselors can provide you with the necessary tools required to file a successful trademark application and maintain the integrity of your intellectual property.


October 6, 2022

Amazon's Brand Registry: Why Trademarks Matter

Brand protection in e-commerce

In the e-commerce space, the available options are limitless for the consumer. There are endless amounts of products available from anywhere at any time, which is why brand identity is critical in the online marketplace. Considering the tremendous amount of e-commerce companies, there is always the possibility of infringement. This is why it is important that the consumer knows exactly who they are purchasing from.

What is the Amazon Brand Registry?

The Amazon Brand Registry is a program that assists brand owners in protecting their intellectual property on Amazon. The most pertinent feature in this context is its Project Zero Program. Once infringement is proven, the program allows you to blacklist those infringing users.

Why is Amazon's Brand Registry important?

A popular seller on Amazon is bound to attract infringing parties who seek to capitalize on that brand’s reputation and loyal customer base. The infringing party may produce subpar products and deliver poor customer service. This can result in financial loss and a damaged reputation for the true brand. A trademark registration, however, gives the Amazon seller recourse to take action against the infringing party.

Establishing a trusted brand that customers will return to is key, and the first step is to ensure that your brand identity is protected by a trademark registration. This will safeguard both your brand’s identity as well as your customers from infringing parties. Joining Amazon's Brand Registry gives you the ability to report those infringing listings to keep your brand safe, and your customers satisfied.

How do I join Amazon’s Brand Registry?

To be listed on the registry, your brand must have an active, registered trademark through one of the following government trademark offices: United States, Brazil, Canada, Mexico, Australia, India, Japan, France, Germany, Italy, Spain, Netherlands, Turkey, Singapore, Saudi Arabia, Sweden, Poland, the United Kingdom, the European Union, and the United Arab Emirates.

Once you’ve obtained a trademark registration, you may apply for the registry.

How do I obtain a trademark registration?

Applying for a trademark:

Obtaining a trademark begins with filing an application. Lloyd & Mousilli specializes in intellectual property and can assist you with the trademark application process from start to finish. We will guide you through the process of crafting a goods and services description and selecting appropriate evidence of use. Additionally, our seasoned attorneys are well equipped to advise you on overall IP strategy.

Click here to book a free consultation with a member of our trademark team.


Can I join Amazon's Brand Registry if my application is pending?

There is a loophole that allows some sellers to apply to Amazon’s Brand Registry even if their trademark is not officially registered yet. Sellers in the United States, United Kingdom, Germany, and India are eligible to apply to the registry while their trademark is pending in the application/examination phase. This is especially advantageous considering the registration process is currently averaging 8 to 12 months for United States applicants.

If you are in one of the above mentioned countries, your brand is eligible to apply to the registry as soon as your trademark application is pending.

How Lloyd & Mousilli can help

Protecting your intellectual property is critical to maintaining your brand’s identity. Our experienced counsel can guide you through the trademark application process to ensure you have the greatest likelihood of achieving registration. We are well-versed in the Amazon Brand Registry process and are ready to help you claim your place on the registry.

September 19, 2022

Texas Judge Issues Scathing Order in Toys R Us Complaint Against Independent Toy Store

Geoffrey the Giraffe is casting an ominous shadow over one Texas family.

Last summer, almost immediately following the news that Toys “R” Us and Macy’s were teaming up to relaunch the iconic toy store in the U.S., The Toy Book reported on a detour from that forward movement as Tru Kids Brands Inc. — the WHP Global-owned parent of the Toys “R” Us and Babies “R” Us brands — took a step backward and filed a lawsuit against an independent toy store in New Jersey.

At the time, Tru Kids alleged “trademark infringement” as the store, Toys & Beyond, had moved into the space that was previously occupied by one of the two, short-lived Toys “R” Us concept stores that opened in partnership with b8ta in 2019. At the center of the complaint were issues regarding the colorful logo of Toys & Beyond and the reuse of fixtures and signage, including Geoffrey’s Treehouse, Geoffrey’s Magical Mirror, and the Play Around Theater, that were left behind when Toys “R” Us abandoned the space at the Westfield Garden State Plaza in January 2021.

On Oct. 25, 2021, The Toy Book was first alerted to a nearly identical lawsuit filed in Texas against TOYZ, a family-owned toy store that opened nearly 20 years ago. Farida Afzal immigrated to Houston from Pakistan and built a business that eventually grew to include a distribution arm and several retail stores, including a small location on the lower level of Simon Property Group’s Galleria Mall.

In its response to the complaint filed by attorneys at Baker Botts on behalf of Tru Kids Brands, Afzal Ali Enterprises, Inc. dba TOYZ noted that its store peacefully co-existed with Toys “R” Us during the time that both stores were open in the Galleria. According to the response, the scuffle began months after Toys “R” Us closed, when the Galleria landlord offered TOYZ the opportunity to expand into the former Toys “R” Us store.

Nearly a year later, the legal battle continues and it’s begun making headlines as The Houston Chronicle, alongside ABC and CBS affiliates have reported on the story. Meanwhile, a Change.org petition is calling upon WHP Global and Tru Kids Brands to drop the lawsuit, while members of the U.S. and global toy communities, including Richard Derr of Learning Express, MGA Entertainment Founder and CEO Isaac Larian, Toy World Publisher John Baulch, World Alive Founder Amy Holden, and Michael Olafsson of Monkey Fish Toys have taken to LinkedIn to express support for the owners of TOYZ and call for an end to what appears to be legal bullying in a “bleed them dry” campaign.

In Texas, it appears that Judge Charles Eskridge might agree.

On August 23, Judge Eskridge issued a scathing order against Tru Kids Brands and Toys “R” Us.

In the filing, Judge Eskridge denies a motion by Tru Kids to amend its complaint against TOYZ, stating that “the motion itself evinces undue delay and dilatory motive,” and that “the motion could also be considered abusive.”

“Toys ‘R’ Us is trying to shutter a family-owned toy store in an attempt to set a precedent for shutting down any toy store in the country that has a multi-colored logo,” Lema Barazi, lead attorney representing TOYZ for Lloyd & Mousilli tells The Toy Book. “We must — and I am confident that we will — prevail against Toys ‘R’ Us in its malicious tactics of burying small businesses in protracted litigation based on frivolous and overreaching trademark claims.”

And the tactics being used by Tru Kids brands are under scrutiny by the court itself.

Judge Eskridge says in his order that “substantial question exists regarding whether Tru Kids has initiated this action primarily for the purpose of harassing or maliciously injuring a competitor, and whether it is using the law’s procedures only for legitimate purposes.”

Tru Kids Brands was ordered “to provide by Sept. 13, 2022, an iteration of all actions it has initiated against any defendant worldwide since acquiring its interest in the Toys ‘R’ Us brand in January 2019, wherein it has alleged claims, as here, of trademark and trade-dress infringement, trademark dilution, unfair competition, or unjust enrichment relating to Toys ‘R’ Us intellectual property,” Judge Eskridge declared.

Attorneys for Tru Kids Brands did file documents to meet the Sept. 13 deadline but they did so in a sealed filing. Ahead of the deadline, The Toy Book reached out to WHP Global/Tru Kids Brands on Sept. 12, but the company did not respond to a request for comment.

While the legal dance continues to play out in court, Toys “R” Us is continuing to open its new store-within-a-store concepts in every Macy’s store ahead of an Oct. 15 completion date. Both the Galleria in Houston and the Westfield Garden State Plaza in New Jersey have Macy’s stores that are set to include Toys “R” Us departments.

Although Toys & Beyond closed its store in New Jersey, the space is currently occupied by yet another toy store: CAMP.

May 15, 2020

Trademarks

What is a service mark?

A trademark is essentially a brand name. It’s a word, phrase, symbol, and/or design that distinguishes the source of goods of one party from another. A service mark is any word, name, symbol, device, or any combination, used (or intended to be used) in commerce to identify and distinguish the services of one provider from the services provided by others, and to indicate the source of the services.

At what point should a company register a trademark?

It depends on a myriad of factors, but a lot of businesses will trademark and incorporate simultaneously. It’s advisable to trademark at least your name and logo in order to prevent others from ripping off your company and be provided a legal recourse if this ever happens.

Is my trademark protected even if I don’t register it with the USPTO?

Although common law trademark rights exist, it takes a lot more time and effort to prove your rights. Also, common law rights only extend to the geographic area your business is in, rather than being protected throughout the entire country if you register it with the USPTO.

When does the USPTO deny trademark applications?

Applications are routinely rejected based on the “likelihood of confusion” standard. According to the USPTO, “likelihood of confusion exists between trademarks when the marks are so similar and the goods and/or services for which they are used are so related that consumers would mistakenly believe they come from the same source. Each application is decided on its own facts, and no strict mechanical test exists for determining the likelihood of confusion.” As you can see, there is no bright-line rule to follow. That’s why utilizing an attorney experienced with the USPTO makes sense.

How long does it take to register a trademark?

The total time for an application to be processed may be anywhere from almost a year to several years, depending on the basis for filing, and the legal issues which can take place during the examination of the application. For an in-depth discussion of the time frame, read Understanding the USPTO Trademark Timeline and Examination Process.

November 6, 2019

Trademark vs Copyright - Understanding the Different Protections of Intellectual Property

We will discuss the different types of objects that can be protected, with specific examples, and highlight the contrasts between trademarks and copyrights

Trademark

One of the essential functions of a trademark is to allow a consumer to identify a particular source for a product or service. The same way when you see the Golden Arches as you're driving down a highway, you know that you can expect a particular meal that includes hamburgers.

Trademarks protect “source identifiers” of goods and services, this includes:

  • Names of companies (Apple, Google, Amazon)
  • Names of product lines (MacBook, iPhone, Camry, Jeep Wrangler)
  • Names of distinctive individual products (Oreos, Nike)
  • Names of book, movie, and other creative media series (Seinfeld,
  • Game of Thrones, Harry Potter, Star Wars
  • Non-functional forms of products (Wax seal on Maker’s Mark whiskey, sprig of mint on a Mint Mojito at Philz Coffee)
  • Logos of all kinds (swoosh mark for Nike, mermaid for Starbucks, three stripes for Adidas)
  • Slogans of all kinds (Just Do It, Think Different)

Trademarks do not protect:

  • The content, story, writing, and plot of books, movies, and other creative media
  • Designs
  • Special methods by which goods are manufactured or services are provided
  • The unique function of inventions

Trademark rights come in two basic varieties, common law rights, and rights stemming from a trademark registration. Common law rights come from simply using the word or words in commerce to identify a given set of goods and services, but are limited to a particular geographic scope of the business market. So, say someone is selling clothing under the trademark Mousilli Mops, and can establish that they have had continuous sales in 20 states. They may have developed common law trademark rights to Mousilli Mops in those states, even if they never filed anything with the USPTO or with their Secretary of State's office in the 20 states, at least on paper.The problem with common law rights is that they are only as good as your ability to enforce them, which means that in practice you need to have a lot of evidence of ongoing sales in the states in question, as well as constant supply of money to pay attorneys to enforce your rights. For this reason, federal registrations are practically a no-brainer for people serious about protecting their brands. They also provide protection throughout the entire country, rather than just the states or markets where you had a continuous presence and market.In fact, rights from a federal registration are what most people think of when they think of having a trademark as these rights tend to be much easier to enforce both in court, and out. Pointing an opposing party a valid Principal Register trademark registration tends to diffuse the vast majority of disputes before they ever get even close to a court proceeding, saving a lot of time and money. Especially once you have put a potential infringer on notice of their infringement.A federal trademark registration creates a presumption of the trademark holder’s exclusive rights in the trademark. This places the burden of proof on the other party, to attempt to overcome the presumption. This means that if you hold a trademark registration, the burden is not on you to prove that you have rights in the mark as would be the case with common law rights, but it is on the opposing party to prove that you do not. Because this is usually a very difficult burden to meet, these trademark rights are typically considered very strong.

Copyright

Copyright is protection for the expression of an idea as captured in a recorded form. This is what is typically sought after for creative expressions of art, music, books, and film.

Copyrights do protect the content of creative works laid down in some physical medium, this includes:

  • Printed books, brochures, pamphlets, poems, documents, etc.
  • Recorded films
  • Recorded music
  • Board games, card games, tabletop roleplaying games and their attendant rules sheets, rulebooks, etc.
  • Paintings, drawings, sculptures, and other physical pieces of art
  • Software source code
  • Unique interfaces or designs (though not the functional elements)

Copyrights do not protect:

  • Special methods by which goods are manufactured or services are provided
  • The unique function of inventions
  • Any performance that is not recorded
  • Generic expressions of data (phone book, contact lists, etc.)
  • Anything listed as protected by trademark

Copyright technically exists for the author as soon as a copyright eligible work is recorded, so, as soon as a book is written, movie is filmed, or painting is painted. That said, as with common law trademark rights, unregistered copyright is not very strong and doesn't provide a lot of easy remedies for infringement.The remedy for dealing with infringement of copyright in the United States are to file a DMCA takedown notice. This is considerably easier if you have a Copyright Office registration that you can cite in your complaint.If you want to have the ability to sue (and credibly threaten to sue) infringers for damages, you will need a federal copyright registration. As with trademarks, the greatest practical advantage of a registration is not that it gives you better chances in court, but it is the threat of being able to sue infringers for money damages is likely to keep you out of court, as most infringers do not want the very costly uphill battle of fighting a federal registration.Especially since once an infringer is put on notice, statutory damages for copyright infringement are up to $150,000 per instance.

August 8, 2017

Why Terms of Use are Critical for Your Company Like Playground Rules

Every time you’ve installed a piece of commercial software, you’ve invariably been presented with what must have appeared to be legal gibberish- a seeming difficult to read, needlessly long, solid block of text that was almost impossible to understand. Most people never bother to read the information presented- quickly scrolling to the bottom of the page, checking a box, clicking on “I Agree” or doing whatever it takes to get past this legal hurdle to access the software.

Despite the relative ease with which these legal terms are bypassed, or the wide range of names they are called (e.g., Terms of Use, Terms and Conditions, T&Cs, Terms of Service, End User License Agreement, EULA, etc.) these terms contain critical contractual language limiting your rights as a user of the software or service and granting rights to the use of your information and data to the software publisher, among a host of other conditions and limitations.

Terms of Use are your Playground Rules, placing users on notice upon entering your playground.

While this may seem like a nefarious or underhanded practice to take advantage of unwitting users, it is actually business critical for the software publisher to be able to prevent abuse of the software or service by malicious users, hackers, or even competitors. These terms also limit the liability for the business for claims that may be filed by the user of the software in ways that the business could never have anticipated.

Just as every business has different requirements that vary by size, industry, and region, software terms are not one size fits all, and should be customized to meet the specific service offering, secure the rights required, and mitigate the associated risks unique to the business model.

Playground Rules

As the business providing the software or services being offered, you are setting the “Playground Rules.” Your Terms of Use are your Playground Rules, placing users on notice upon entering your playground

Within the Terms of Use, you can spell out exactly what activities are prohibited on your website or platform. You can create a laundry list of prohibited practices, anything from use of profanity, multiple accounts, harassment of other users, etc. There are way too many terms that could be potentially included here to be discussed in detail, but it is sufficient to know that a social media platform would have very different terms from a personal finance management application.

At a minimum, it should allow your business to stop abusive users, terminate access or accounts at your sole discretion, and enforce restrictions and guidelines that you spell out in the Terms of Use. Users must follow your terms to access, use, and interact with your software or service.

Limiting Your Exposure

No matter how long you’ve been in business, users invariably find a way of surprising you with a confounding use of your software that you may never have anticipated. It’s baffling how these corner use cases often become the most litigious in their demands or claims when your software fails to continue meeting their needs.

A potential scenario follows. Your small business lead platform quietly becomes the default CRM for a statewide real estate agency that can no longer access closing contracts when your servers are offline for unscheduled maintenance. All of their real estate closings have to be rescheduled, loan rates are no longer valid, and the buyers are looking for blood.

While this may seem unreasonable in reliance, your terms of use can also limit the liability for your business for claims that may be filed by the user of the software in ways that the business could never have anticipated. A limitation of liability clause can easily set the maximum exposure for your business to the license fees paid by the user.

Your State, Your Laws

While electronic distribution over the internet or app stores lets you distribute your software offering far and wide, the last thing that you want for your business is to be dragged into court in some unfamiliar jurisdiction, with unanticipated state or country laws you are now subject to.  You may strategically use your Terms of Use to contractually set out venue requirement in your home state and country and designate the governing law to be used in the event of a legal issue arising.

It may also be preferable for your business to require arbitration proceedings for any legal issue that arises with your users, rather than allow for litigation, as a cost saving measure.

Rights, Rights, Baby

For many software and service offerings, the information received from users (i.e., photos, written content, reviews, purchase transactions, behavioral tracking, and other data) serves as an essential element of your value proposition. But have you properly secured the right to the use of this information? For creative material, the copyright vests in the author and you will need to ensure you have been granted the right to the use of this material. Your Terms of Use is the vehicle to obtain a license to the use of any intellectual property that a user provides on your platform.

Terms of Use can allow a license to any IP a user provides on your platform.

Oftentimes, platforms with user-generated content tend to allow users to retain ownership to their content, but take a very broad license for the use of the material. This heavy-handed approach can cause customer satisfaction issues, as evidenced by the backlash Facebook and other content sharing sites have experienced when they expanded their rights to the user content. This license needs to be crafted for your specific business requirements to secure the rights you legitimately need to fulfill your platform objectives.

This information collection also raises the issue of privacy rights that is a topic in its own right and addressed in a separate article covering the usage of Privacy Policies.

User Generated Headaches

Many platforms allow for users to create content that is visible to other users on the platform or publicly. Often times this user generated content includes the ability for users to upload photos, audio, or video to make the content more engaging and attractive. The viral user video that got all the press for your platform? Turns out it included clips from Game of Thrones and HBO isn’t happy about the copyright infringement.

DMCA can provide a defense against user copyright infringement liability

Fortunately, you can provide a defense for your business from copyright violations your users may create by virtue of complying with the Digital Millennium Copyright Act (“DMCA”). The DMCA helps protect businesses and apps from having legal liability for any copyright infringement that takes place due to the actions of its users, if they follow the procedures required. While the DMCA is a United States law, other countries around the world have laws regarding copyright infringement.

In order to comply with the requirements of the DMCA defense to infringement, your Terms of Use need to include (a) clause that states you will take down/remove any material that turns out to be copyrighted if the violation is brought to your attention, (b) provide a method by which the third-party copyright owner can report a copyright violation, and (c) have a policy in place for responding to take down notices for violating material reported.

Unlawful Content

In addition to the copyright issues from user generated content, your business can still run afoul of content considered unlawful in any number of jurisdictions around the world. Many jurisdictions worldwide have laws restricting material that is considered hate speech, inflammatory, child pornography, graphic violence, depictions of abuse, and other material considered unlawful content. These interpretations vary widely in their scope and breadth.

Your Terms of Use can address this issue through a relatively straightforward clause restricting any unlawful content and stating your policy of removal of any such offending content upon review.

Summary

Hopefully, you have developed an appreciation for the benefits and risk mitigation measures springing from having a comprehensive Terms of Use tailored to your specific business requirements.

While not required by law, we firmly believe one of the greatest benefits to having an effective Terms of Use for your business is the intangible one from having clarity of your users on their expectations and responsibilities in using your software and services and will pay dividends in customer satisfaction. See Lloyd & Mousilli's Terms  for a sample.

We stand ready to review your business needs and help you achieve your business objectives in consultation with your lawyer at Lloyd & Mousilli.

February 26, 2020

Amazon and the Pitfalls of Counterfeits and Wrongful Takedowns

E-commerce has fundamentally transformed the retail marketplace and has changed the way consumers shop. Fast and inexpensive shipping, the convenience of being able to shop at any time of day from anywhere, and the ability to quickly compare prices online— added to the convenience of avoiding long lines and traffic— makes e-commerce appealing to virtually every shopper. Unsurprisingly, e-commerce sales account for a significant and continuously growing percentage of total retail sales in the U.S.

Among the various e-commerce platforms available, Amazon leads all others in sales by a comfortable margin and is the highest-grossing online retailer in the nation. On the Amazon website, customers can purchase products sold directly by Amazon and those available on Amazon’s marketplace sold by a third-party seller. Amazon’s e-commerce platform has allowed third-party sellers to reach a far wider consumer audience— estimated at over 300 million active customers— than was ever possible before. Hundreds of thousands of small and medium-sized businesses sell on Amazon and the number of sellers in the United States and around the world continues to grow every day. In fact, Amazon has emerged as one of the most powerful distribution channels in the world.

Given the ease of selling on Amazon’s e-commerce platform, the relative anonymity sellers have, and its massive global audience, there is little wonder why the shadowy business of counterfeit goods has found its way to Amazon. After all, the world of counterfeits is a massive, sprawling   industry.  According to a 2019  Organization for Economic Co-operation and Development report, international trade for counterfeit goods reached $509 billion in 2016. In the U.S., counterfeits are estimated to cost the economy $30 billion to $40 billion annually by diverting sales away from purchases of legitimate products. The top industries affected by counterfeits include footwear, luxury handbags, electrical machinery and equipment, and watches. Given the significant amount of lost revenue counterfeit goods siphon from their authentic counter-parts, it is little wonder why counterfeits are considered a serious threat to companies and their brand.

As recent court decisions indicate, Amazon and other similar third-party marketplaces are not liable for selling counterfeit products on their sites largely because they are a platform for sellers rather than sellers themselves. In Milo & Gabby LLC v. Amazon.com, Inc., for example, the   Federal Circuit held that Amazon’s activities, which included providing an   online marketplace and shipping services to third-party vendors selling products that allegedly infringed the plaintiff’s copyrighted products, did not create seller liability for the purposes of copyright infringement. See Milo & Gabby LLC v. Amazon.com, Inc., 693 F. App'x 879 (Fed. Cir. 2017).

While Amazon and other third-party marketplaces have no legal duty to police counterfeit listings and they are not legally obligated to proactively remove suspected counterfeits from their platform, they will apply a take down procedure and quickly remove the product listing from their website when a complaint is properly filed. Consequently, right holders must take responsibility for their own intellectual property enforcement.

Unfortunately, at times, right holders improperly abuse Amazon’s take down procedure by wrongfully filing complaints— including trademark and patent infringement claims— against legitimate sellers. For example, right holders often misunderstand their rights under U.S. intellectual property law and attempt to overreach by filing illegitimate complaints against resellers of their brand. Once a complaint is filed— whether or not the complainant is on the right side of the law— Amazon will deactivate or suspend the seller’s account until an investigation is completed. Investigations are protracted events that are seldomly resolved quickly, much to a seller’s disadvantage since a suspended account for a seller means lost revenue every moment of the suspension.

Sellers are frequently eager to reinstate their account quickly but often find difficulty navigating Amazon’s complex rules for reinstatement. Faced with complaints from a powerful brand holder, sellers often give up the fight, unaware that the brand holder is on the wrong side of the law. When this occurs, a formal demand for the brand holder to cease and desist is in order. The demand letter should cite pertinent U.S. intellectual property statutes and caselaw to support the seller's position and should instruct the brand owner to retract all complaints immediately. A working knowledge of basic U.S. intellectual property law and practical negotiation skills are usually all that are needed for relatively quick closure to these disputes.

The world of e-commerce is constantly evolving and it has become increasingly more complex and sophisticated. In order to stay in business and remain competitive, sellers can no longer remain ignorant of U.S. intellectual property law. Savvy sellers can protect their brand and/or fend off unwarranted take downs by becoming informed and utilizing the law to their advantage.