*Note* The Meeting below has been cancelled. Further information is available here.
The U.S. Patent and Trademark Office (USPTO) announced late last week that it will hold a public meeting on July 17, 2017 at its Alexandria, Virginia headquarters on measuring the impact of voluntary initiatives to reduce online intellectual property infringement.
As private online retail and social media platforms such as Amazon and Facebook are becoming the main channels in which people shop and socialize respectively, voluntary IP enforcement measures taken by these and other online parties are increasingly shaping how IP is enforced online—with both positive and negative reception. Google is a perfect example of this phenomenon. Google currently handles millions of online copyright and trademark takedown requests a day, up from merely dozens a day just a decade ago. Based on its heightened role as one of the Internet’s main search engines and online service providers, Google has developed its own voluntary initiatives to deter trademark and copyright infringement including removal of listings that have received repeated notices of IP infringement. While arguably taken to protect against any contributory liability (see 17 U.S.C. § 512(i)(1)(A)), Google’s voluntary enforcement measures such as its removal of repeat infringers is shaping how IP is protected online and how content rights holders address online IP protection. Despite such influence, Google has in the past also faced scorn by such rights holders for not going far enough with other voluntary measures, such as demoting search results of known infringers.
The July 17th meeting is a part of the USPTO’s recent outreach efforts to such interested parties concerning their voluntary online IP enforcement regimes, and is intended to evaluate how such private parties are addressing online IP enforcement—both and home and abroad. Topics to be discussed at the meeting include (among others) evaluating the effectiveness of self-regulatory regimes, presenting case studies of certain private sector initiatives, discussing the role of voluntary undertakings in raising consumer awareness and stemming revenue flows to bad actors (i.e. infringers), as well as others.
Further information about the meeting is available here.
For those interested in U.S. and Canadian IP protection issues, I will be giving a presentation at the April 2, 2015 King County Bar Association (KCBA) – Intellectual Property Section meeting in Seattle, Washington on U.S. and Canadian cross-border IP protection issues. Particularly, the presentation will cover IP protection issues that U.S. businesses should consider as they expand into Canada, and conversely, IP issues Canadian businesses should consider as they enter the U.S. market.
The April 2nd KCBA IP Section meeting will be held at KCBA’s headquarters at 1200 Fifth Avenue, Suite 700, Seattle, Washington 98101. A webcast of the meeting will be made available to KCBA IP Section members. Further details on the webcast are available here.
Hope you can make it!
It is that time of year again when the Office of the U.S. Trade Representative (USTR) releases its annual report on Notorious Markets—The 2014 Out-of-Cycle Review of Notorious Markets. As we reported on last year, this annual review identifies foreign physical and online markets reported by U.S. businesses and industry organizations as being engaged in substantial IP piracy and counterfeiting.
This year’s review identified several foreign social media and file transferring websites, as well as a number of Internet service providers (ISPs), as being notorious markets including those hosted or located in Argentina, the British Virgin Islands, Canada, China, Czech Republic, France, Netherlands, Panama, Philippines, Poland, Russia, San Marino, Spain, Switzerland, Ukraine, the United Kingdom and Vietnam. Additionally, physical markets in Argentina, Brazil, China, Ecuador, India, Indonesia, Mexico, Nigeria, Paraguay, Thailand and Uruguay were also identified as being notorious markets.
The USTR also highlighted a number of recent developments including efforts by certain previously listed Chinese sites to curb piracy activities on their websites, as well as increased enforcement actions by rights holders and government officials to shut down physical and online markets in Brazil, the European Union and Ukraine among others.
What’s The Takeaway? As we have said before, every foreign market has its own IP protection challenges. U.S. businesses that operate abroad or are expanding into new markets should review the USTR’s 2014 Out of Cycle Review of Notorious Markets to help evaluate the IP protection risks associated with particular markets they wish to enter. Doing so can help to ensure that such businesses can better protect their IP assets abroad.
For those who did not have a chance to attend my January 20, 2015 presentation Online Copyright and Trademark Enforcement in the U.S. and Abroad, the Washington State Bar Association International Practice Section’s Blog, The Global Gavel, has provided a summary of my presentation. It overviews the main issues discussed and key takeaway points. Those with further questions should feel free to contact me.
A link to the presentation summary can found here.
The New York Times and other news outlets reported last week that The Hershey Company, the global confectionary behemoth, settled its U.S. federal trademark lawsuit against leading U.S. importer of British confectionery products, LBB Imports, LLC (Case 1:14-cv-01655-JEJ), who had allegedly infringed Hershey’s own trademark-protected brands, as well as those it has exclusively licensed, through LBB’s unauthorized importation of popular UK brands and UK versions of existing U.S. brands including CADBURY DAIRY MILK, CARAMELLO, TOFFEE CRISP, YORKIE, MALTESERS, ROLO and KIT KAT.
Although these news reports have largely focused on U.S. consumer dissatisfaction over inaccessibility of these UK chocolate varieties as a result of the settlement, this case also underscores the important role trademark licensees have in the cross-border enforcement of their licensed trademarks. Hershey attested in their complaint that it has produced and promoted Cadbury’s brands in the U.S. for over 25 years, and that it is Cadbury’s exclusive U.S. licensee of several of its U.S. registered trademarks including Cadbury’s logo (U.S. Reg. No. 1,107,458) and its DAIRY MILK brand (U.S. Reg. Nos. 1,403,327, 4,224,494 and 1,460,259) (collectively, the Cadbury Marks).
While it is unclear what contractual obligations Hershey had with Cadbury concerning enforcement of the Cadbury Marks in the U.S., in regards to infringing imports or otherwise, Hershey likely had substantial legal and business incentives to enforce the Cadbury Marks against LBB. Often, foreign distributors, manufacturers, and promoters have licensed rights, and in many cases, contractual obligations, to enforce rights in their licensed trademarks including preventing the importation of infringing goods and parallel importation shipments (aka grey goods). Beyond legal obligations, licensees like Hershey have financial incentives to enforce their licensed trademarks rights as it is often necessary to protect business opportunities, as well as relationships, that accompany cross-border licensing arrangements.
As these licensed rights and obligations have substantial legal and business implications, it is important for licensing businesses to know and understand such rights and obligations, and develop enforcement strategies based on the same. So how do licensees do this? Well, here are a few things licensees should consider:
Evaluate and Understand Contractual Rights and Obligations. The first and most important thing a licensee should do when entering a cross-border licensing arrangement and considering enforcement measures based on that arrangement is to evaluate and understand their rights and obligations of enforcement. This requires that a licensee read and evaluate whatever agreement(s) acknowledge their licensing arrangement to identify such rights and obligations. Such rights and obligations may be detailed in a stand-alone trademark licensing agreement, they may be included in a more comprehensive distribution or service agreement, or they may be covered multiple agreements.
Regardless of what type of agreement(s) such rights and obligations are acknowledged, licensees need to identify three things:
(1) their rights to enforce rights in licensed mark(s);
(2) their obligations to enforce rights in licensed mark(s); and
(3) the extent and territoriality of such rights and obligations.
Licensed rights include a licensee’s optional ability to enforce rights in licensed mark(s), while obligations are a licensee’s contractual duty to enforce rights such mark(s). The extent and territoriality of such rights and obligations is particular important in cross-border IP protection as it is needed for a licensee to establish both the subject and geographic scope of their rights and obligations. In Hershey’s case, being Cadbury’s exclusive U.S. licensee of the Cadbury Marks likely gave Hershey rights and obligations of enforcement for such Marks in the U.S. However, Hershey was likely not given rights of enforcement for all Cadbury brands, nor rights of enforcement for the Cadbury Marks outside the U.S. as Hershey is identified as having only licensed certain Cadbury brand lines, and only in the U.S.
In any instance, a licensee needs to know their licensed rights and obligations, as well as its scope and territoriality.
Develop Tailored Strategies to Fulfill Licensing Obligations. Once particular licensed enforcement rights and obligations are identified, a licensee must evaluate what such obligations mean for their business. If a licensee is obligated to enforce rights in licensed mark(s) under their particular licensing arrangement, they may be required to monitor use of the marks in commerce, register (aka prosecute) the marks with national trademark authorities, record trademark registration(s) with national customs agencies to monitor and detain infringing imports, and/or conduct litigation enforcement.
In Hershey’s case, Cadbury had already registered the Cadbury Marks with the U.S. Patent and Trademark Office, and it remains unclear what Hershey’s obligations were under their licensing agreement(s) with Cadbury to record such registrations, monitor commercial use of the Marks, or even litigate their rights against potential infringers such as LBB. However, if Hershey’s did have monitoring and enforcement obligations in their licensing agreement(s) with Cadbury, their lawsuit against LBB would likely have been fulfilling these obligations as Hershey went after an allegedly unauthorized importer of Cadbury’s brands in the U.S., which it would have not otherwise known without attaining monitoring services and potentially other enforcement measures.
In short, licensees, like Hershey, have to find ways to fulfill their licensing obligations that are tailored to their particular obligations and business. As such, licensees should establish a budget to conduct such enforcement services, and consider retaining qualified counsel to ensure effective execution of obligated enforcement activities.
Consider Business Implications of Optional Licensed Rights. A licensee’s fulfilling of their licensed legal obligations is relatively straightforward, yet determining when and how to enforce licensed optional rights of enforcement is more complex, and often has more business than legal implications. Although a licensee may have optional rights of enforcement, the nature of the licensing arrangement and business relationships may obligate a licensee to adopt trademark enforcement measures. This is because the success of a licensing arrangement often depends on a licensee’s exclusive use of their licensed mark(s) in a particular country, requiring enforcement measures if such exclusivity is jeopardized. Further, licensors often urge their foreign licensees to enforce their licensed trademark rights regardless of contractual obligations, making such acts the basis for continuing their licensing arrangements. As such, a licensee may wish to adopt enforcement measures for their licensed marks despite having no obligations to do so to ensure profitability and continuation of their licensing arrangement, and to protect their existing business relationship with their licensor.
In Hershey’s case, they have been Cadbury’s exclusive U.S. licensee of the Cadbury Marks for over 25 years. Even if their rights of enforcement were optional, Hershey likely had substantial incentive to enforce rights in the Cadbury Marks as LBB’s imports jeopardized their exclusive use of such brands, and Hershey’s failure to enforce such rights may have harmed their long existing relationship with Cadbury.
Like Hershey, any licensee with optional rights of enforcement needs to consider the impact of non-enforcement on the business opportunities available in their licensing arrangement, as well as its impact on their relationship with their licensor.
What’s The Takeaway? As more and more businesses seek local foreign businesses to assist them with promoting their brands abroad, licensee businesses will be increasingly required to understand what rights and obligations they have in their trademark arrangements, and what measures they should take to fulfill those obligations, especially in deterring infringing imports. As these enforcement rights and obligations have substantial legal and business implications, licensees should work with their licensors and qualified counsel to determine how to best fulfill their enforcement obligations.
As this year comes to a close, I posted my last posting on The IPKat as a guest contributor about updates to Australia’s proposed injunctive online copyright enforcement reforms. This posting discussed recent updates to a blog posting I made on this blog in August concerning these proposed reforms. Particularly, I highlighted recent implementation and freedom of speech concerns about the proposed reforms.
The IPKat posting is available here.
Wanted to let you all know that I will be speaking on cross-border online copyright and trademark enforcement at a Washington State Bar Association – International Practice Section seminar on January 20, 2015 at Noon at Davis Wright Tremaine LLP in Seattle, Washington.
Titled Online Copyright and Trademark Enforcement in the U.S. and Abroad, the seminar will cover issues in obtaining cross-border protection for copyrighted works and trademarks, understanding copyright and trademark enforcement systems in the U.S. and other jurisdictions, and using copyright and trademark enforcement measures on major online social media and retail sites such as Google, Facebook, Amazon, Baidu and others.
Further information on attending the seminar can be found here.
Hope you can make it. It should be fun!
Co-author Peter Dang, recent graduate of the University of Washington School of Law and admitted member of the Washington State bar.
Imitation may be the sincerest form of flattery, but try telling that to Converse. Last month, Converse filed multiple lawsuits in the U.S. District Court for the Eastern District of New York against 31 alleged infringers including Sketchers, H&M and others, for importing and selling knockoffs of Converse’s iconic shoes, the Chuck Taylor. Converse claimed that such alleged infringers infringed the Chuck Taylor’s distinctive shoe designs (aka trade dress) (15 U.S.C. § 1114), diluted such trade dress’ distinctiveness (15 U.S.C. § 1125(c)), and used such trade dress in a manner that constituted unfair competition (15 U.S.C. § 1125(a)). The trade dress at issue in both cases consists of Chuck Taylor’s federally registered “midsole design” and “outsole design” (collectively, the “Designs”). The midsole design (Reg. No. 4,398,753 – see image above) refers specifically to the Chuck Taylor’s “toe bumper” and “toe cap,” while the outsole design (Reg. No. 1,588,960) refers to the distinct diamond pattern on the sole of the shoe.
Simultaneously to filing its federal lawsuits, Converse filed a parallel complaint at the International Trade Commission (ITC) against the same alleged infringers for unfair trade practices (19 U.S.C. §1337 et seq.) related to importing shoes that infringed the Designs.
So why are these cases important? Beyond the large amount of potential financial recovery at stake, the outcome of these proceedings will have strong implications for cross-border trademark protection. Converse’s victory in its federal lawsuits may provide greater means for U.S. and foreign retail product producers to protect their products’ designs from unauthorized use in the U.S. by potentially expanding U.S. legal protections afforded to clothing and footwear trade dress. Further, an ITC ruling in Converse’s favor provides Converse the means to not only prevent the infringement of their trade dress, it also helps to stem the cross-border flow of shoes infringing their Designs.
Commentators have reported that Converse faces challenges in its actions because the Designs’ elements may be considered functional, and thus not protectable. Under U.S. trademark law, only distinctive non-functional elements of trade dress are protectable. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 775 (1992). Since the Designs’ rubber toe bumper and cap, and outside design are arguably used to prevent wear and provide foot protection, they may be considered functional elements of the Chuck Taylor, and thus unprotectable.
In contrast, others believe that footwear trade dress precedent may give Converse the legal basis it needs to succeed in such actions through the Designs’ potential secondary meaning. In Christian Louboutin, S.A. v. Yves Saint Laurent Am. Holding, Inc., 2012 WL 3832285 (2nd Cir. 2012), the Court found that Louboutin’s iconic red sole of its luxury women’s shoe to be distinctive despite being a element of the shoe’s sole due to secondary meaning (aka acquired distinctiveness) that the sole had acquired amongst the general public, thereby granting Louboutin trade dress protection to its shoe’s red sole. As the Chuck Taylor shoes have been widely available in U.S. commerce for decades, Converse may be able to establish that the Designs acquired secondary meaning amongst the U.S. public, and are thus protectable despite their apparent functionality.
Impact of the ITC Action
Although Converse’s victories in its federal court actions would likely result in substantial financial recovery for Converse, a favorable ITC decision would arguably provide Converse greater cross-border benefits. The ITC provides rights holders of U.S. patent, trademark and copyright rights the means to petition the U.S. government under Section 337 of the 1930 Tariff Act to conduct an investigation of unfair trade practices, including the importation of goods infringing such U.S. IP rights. If such infringing importation is found, the ITC may issue a ban on such infringing imports. In Converse’s case, an ITC issued ban would prevent the alleged infringers’ importation of footwear utilizing the Designs into the U.S., and potentially deter transshipments of such footwear to other markets from the U.S. As such a ITC decision impacts the importation and exportation of shoes infringing the Designs, it arguably has more cross-border benefits as it could effectively provide Converse trademark protection across multiple markets through one legal action.
What’s The Takeaway?
If successful in both its federal and ITC actions, Converse may obtain substantial financial recovery and injunctive relief to prevent imitators from selling their shoe designs in the U.S. and potentially other markets. More broadly, a favorable ITC ruling for Converse would provide Converse the tools to protect its Designs and control the flow of goods infringing such Designs across markets, a strategy that commentators have reported is overlooked, but has the potential to provide enhanced cross-border trademark protections.
For those who are interested in IP, personality rights and privacy issues in the art world, I will be speaking on a panel at the Washington Lawyers for the Arts‘ 2014 Art Law Institute on December 15, 2014. Particularly, I will be speaking about personality rights and privacy issues in cross-border art transactions.
Further information on attending the 2014 Art Law Institute can be found here. Hope you can make it!