UnIntellectual Property

Cheerleading Outfit Design Not Copyrightable

On March 21, 2014, in Copyrights, by Brian A. Hall

UnIntellectual Property (UnIP): Copyright for Cheerleading Outfit

Give me a U, give me an N, give me an I, give me a P, what’s that spell…UNIP.  That is exactly what the Plaintiff was left with after suing a competing chearleading outfit provider for copyright infringement.  The United States District Court for the Western District of Tennessee held that there was no copyright for these particular uniforms because the design elements could not be conceptually or physically separated from the utilitarian function.  In doing so, the Court specifically held that “the utilitarian function of a cheerleading uniform is not merely to clothe the body; it is to clothe the body in a way that evokes the concept of cheerleading.”

The Plaintiff has appealed to the Sixth Circuit, who may apply a different standard or find that the design pattern or ornamentation is indeed enough to qualify for copyright protection, apart from any utilitarian function.

Plaintiff apparently needs to cheer harder.

Varsity Brands, Inc. v. Star Athletica, LLC, No. 10-cv-02508 (W.D. Tenn. March 1, 2014).

 

UnIntellectual Property (UnIP): Trademark for Suction Cup Design

The United States District Court for the Western District of Pennsylvania granted Defendant’s motion for summary judgment, which stemmed from the lawsuit by a trademark applicant against the Judge in the Trademark and Trial Appeal Board (TTAB) proceeding, who had affirmed the Examining Attorney’s refusal to register the trademark application for a suction cup design.

The Court analyzed the typical functionality factors, including:

1. Whether a utility patent exists that discloses the utilitarian advantages of the design sought to be registered;
2. Whether applicant’s advertising touts the utilitarian advantages of the design;
3. Whether alternative designs are available that serve the same utilitarian purpose; and
4. Whether the design results from a comparatively simple or inexpensive method of manufacture.
Having a registered utility patent for the design immediately placed the Plaintiff in a tough position.  The Court went on to analyze each factor and granted summary judgment to Defendant, thus finding that the suction cup design was not entitled to trademark protection.
Surprised?  I am not, but I appreciate the dedication of the Plaintiff, wow.
Adams Mfg. Corp. v. Rea, CIV.A. 12-1430, 2014 WL 978116 (W.D. Pa. Mar. 12, 2014).
 

SalesForce Reports Not a Trade Secret

On March 12, 2014, in Trade Secrets, by Brian A. Hall

UnIntellectual Property (UnIP): Trade Secret for Certain Customer Relationship Management Software Reports

This case from the Court of Chancery of Delaware involved the alleged possession and misuse of a fire alarm and fire protection system company’s proprietary information by certain of its former employees.  One former employee, in particular, upon termination, began working for an entrepreneur that started a similar business.  Plaintiff alleged that defendant copied the company’s proprietary information and trade secrets for the purpose of bringing that information to the new fire alarm and fire protection system business.  In particular, defendant copied, while working for his former employer, (1) a contacts report and (2) a sales opportunity report, both of which were generated by Salesforce.com (“Salesforce”), which is a “customer relations management tool” that Plaintiff uses to store data such as contact information, sales information, and proposal information for each of its customers.  Plaintiff paysapproximately $15,000 per year to use Salesforce and allegedly has spent thousands of dollars customizing the database to meet its specific needs.  While the Court, following a trial, addressed several causes of action, I am focused solely on the trade secret misappropriation cause of action, pursuant to the Delaware Uniform Trade Secrets Act (DUTSA), which was denied.

At issue are the two reports noted above.  The “contacts report” contains the names, addresses, and phone numbers for Plaintiff’s main contact at each of its clients.  The “opportunities report” contains Plaintiff’s potential business prospects, including the location and nature of the job and Plaintiff’s assessment of how likely it is to secure the project.  The Court first addressed whether either of these reports “derive[d] independent economic value” by virtue of the information “not being generally known to” and “not being readily ascertainable by proper means by” others.  The Court found that the “opportunities report” satisfies this criterion, but the “contact list” does not.  The Court reasoned that the “opportunities report” includes valuable information beyond just the names of the opportunities, such as how much Plaintiff has bid on certain projects and how Plaintiff became aware of the opportunity.  Since the vast majority of the opportunities were created by some combination of cold calling, customer referrals, and repeat business from existing customers, these opportunities are “generally known.” The Court determined that it also is unlikely that a potential competitor to Plaintiff could produce the same list of opportunities without spending significant time and money to develop an existing customer base and solicit new business.
Equating the “contacts report” to a client or contact list, the Court held that it was not a trade secret, and in doing so relied upon its previous holding:
The market of the product or service involved is the main factor in determining whether a client list constitutes a compilation deriving independent economic value from not being generally known by other persons who can obtain economic value from its disclosure or use. If the buyers are easily identified, it is unlikely that their identities will hold independent economic value even when the identities are considered confidential.107
It held that Plaintiff has not carried its burden of proving that the identities of its customers cannot be easily determined, such as by using knowledge of the industry and replicating such a list.  Plaintiff’s attempt to argue that the “contact report’s” inclusion of key decision makers somehow made it qualify as a trade secret also failed because the Court recognized that such information could be identified through proper means.
Ultimately, the Court held that “neither the contacts report nor the opportunities report constitutes a protectable trade secret under DUTSA because Wayman has not shown that the reports were the “subject of efforts that are reasonable under the circumstances to maintain [their] secrecy.”  The Court based its decision on the fact that, although SalesForce was password protected, there were no policies regarding confidentiality or confidentiality provisions in any employment agreements, employment handbooks, etc.
This case was of particular interest to me because my law firm uses SalesForce and has a very robust contact and opportunity reporting structure in order to manage prospective client and existing clients alike.  We do far more than password protect, and the practice of law’s restrictions would introduce additional complexities in the event of any similar fact pattern.  Nevertheless, users of SalesForce or other comparable customer relationship management software should be mindful of this decision.

Wayman Fire Prot., Inc. v. Premium Fire & Sec., LLC, CIV.A. 7866-VCP, 2014 WL 897223 (Del. Ch. Mar. 5, 2014).

 

Hookah Shape Not Copyrightable: Plaintiff Gets Smoked

On March 10, 2014, in Copyrights, by Brian A. Hall

UnIntellectual Property (UnIP): Copyright for Hookah Water Container

The United States Court of Appeals for the Ninth Circuit has upheld a District Court’s grant of summary judgment in a copyright infringement case involving a hookah water container.  The Plaintiff, the owner of a copyright registration for the sculptural shape of the water container through which tobacco can be smoked, got smoked in this case.  The Court held that the shape of the hookah was not copyrightable because it was physically and conceptually inseparable from the utilitarian function of the hookah.  Put another way, this Court deemed that it should not have been registered but instead should have received a functionality refusal.

It is worth noting that had the Plaintiff relied upon some particular design, such as the skull and crossbone image on its hookah, it may still warrant copyright protection.  That said, this Defendant did not use any such design, and thus Plaintiff was left to base its claim upon the shape of the hookah alone.

Inhale, Inc. v. Starbuzz Tobacco, Inc., Case No. 12-56331 (9th Cir., Jan. 9, 2014).

 

You Decide: Is Facebook a Trademark Bully?

On February 27, 2014, in Trademarks, by Brian A. Hall

I often review decisions that detail an overzealous Plaintiff that claims certain intellectual property rights only to be rebuked by a court of law, thus ending up with UnIP and possibly even labeled as a bully.  A relatively highly publicized case involving Facebook raises the question as to whether Facebook is (1) being overzealous with enforcement of its trademark (i.e. a trademark bully) or (2) acting as a trademark owner should in order to avoid a likelihood of consumer confusion, dilution, or other harm to its mark.  Let me be clear, to date, there has been no decision that invalidates the FACEBOOK trademark and such a result is not possible in the context of the present dispute.  However, whether Facebook is a trademark bully or an active and legitimate trademark enforcer is the question to be answered in a dispute involving a pet-themed social network called Facepets, who has applied for a federal trademark.  You can learn more about the case from WIPR.

Let the debate begin…

 

Trademark Licensee Estoppel Doctrine

On February 21, 2014, in Trademarks, by Brian A. Hall

Trademark Litigator Alert!!!

A recent case out of the U.S. District Court for the E.D. of Tennessee discussed an issue that should be of interest to any trademark litigator – the licensee estoppel doctrine.  The Court, entertaining motions in limine, held that “equities weigh in favor of applying the doctrine of licensee estoppel with respect to the “invisible fencing” mark. Fido’s Fences must only rely upon post-termination evidence in demonstrating that IFI’s mark is generic.”  Put another way, the Court found that it is not fair for a trademark licensee to be able to attack the trademark rights of the trademark licensor prior to or during the term of the trademark license.  However, the Court did limit the doctrine and allow the trademark licensee to challenge the trademark licensor’s trademark after the termination of the licensee, just as any third party (with standing) can attach the genericness of a trademark.  See below the most relevant language from the decision below:

The doctrine or theory of licensee estoppel provides that a licensee should be, in many cases, “estopped from claiming any rights against the licensor which are inconsistent with the terms of the license.” Westco Group, Inc. v. K.B & Associates, Inc., 128 F.Supp.2d 1082, 1091 (N.D.Ohio 2001). For instance, after obtaining the benefit of a trademark license but breaching the terms thereof, a licensee should not be able to “benefit from its own malfeasance” by “challeng[ing] a licensor’s ownership of a trademark.” Id at 1086–89; see also Big Boy Restaurants v. Cadillac Coffee Co., 238 F.Supp.2d 866, 873–74 (E.D.Mich.2002).The Supreme Court of the United States has done away with licensee estoppel in the patent context, but the doctrine remains part of trademark jurisprudence. Lear, Inc. v. Adkins, 395 U.S. 653, 674, 89 S.Ct. 1902, 23 L.Ed.2d 610 (1969); But see, Beer Nuts, Inc. v. King Nut Co., 477 F.2d 326, 328–29 (6th Cir.1973) (distinguishing Lear ).

The following from McCarthy on Trademarks is instructive:

Many courts have adopted a view of trademark license estoppel under which a former licensee may challenge the licensor’s title, but only on facts which arose after the license contract has expired. That is, the estoppel covers only facts which occurred during the time frame of the license. As to facts which occur thereafter, the exlicensee is in the same position as any other challenger of the validity of the mark. For example, the Trademark Board applied the licensee estoppel rule to prevent a former licensee of the REALTOR mark from challenging the mark as being a generic name for real estate agents. The facts on which the genericness challenge was based arose prior to and during the challenger’s 20 years as a dues-paying member of the REALTOR association.

3 Thomas J. McCarthy, McCarthy on Trademarks and Unfair Competition § 18:63 (4th ed.2006).

Invisible Fences, Inc. v. Fido’s Fences, Inc., 3:09-CV-25, 2014 WL 558672 (E.D. Tenn. Feb. 11, 2014).
 

Although this case did not result in a finding that the claimed copyright, an architectural design for a building, was not protectable as a whole, it is particularly enlightening because it drives home several important concepts for any copyright litigator, including:

1. Architectural works are entitled to “specific copyright protection,” which does have limitations, as set forth in the Copyright Circular for Copyright Claims in Architectural Works and discussed by this Federal District Court in Miami:

Architectural works, and other compilations, have “specific copyright protection” in that the copyright protects the exact work itself; only subsequent works which copy the work’s specific expressions and designs will infringe upon that protection. The precise expression in the plan which was submitted to the United States Copyright Office is the work which is protected. However, certain standard elements which do not comprise the expression are not protectable. For example, the Eleventh Circuit has held that there are a finite number of ways buildings such as condominiums, homes, and offices can be arranged and such arrangements are not protectable. See Intervest, 554 F.3d 914; Howard v. Sterchi, 974 F.2d 1272, 1276 (11th Cir.1992). This must be the case because, to borrow a phrase used by the Ninth Circuit in a photography case, “the range of protectable expression” is limited by the fact that the work is architectural. Ets–Hokin v. Skyy Spirits, Inc., 323 F.3d 763, 766 (9th Cir.2003).

A plaintiff cannot use copyright to control the right to unoriginal arrangements, and so the protection afforded architectural works must be specific. An architectural copyright is not “minimal” or “thin” because the copyright does protect what it was issued to protect, i.e. the plan submitted to the Copyright Office. A copyright of an architectural work is a full-fledged copyright which protects the specific expression embodied in the plan which was issued a copyright by the Copyright Office

2. The question of substantial similarity is ripe for decision at the Motion to Dismiss stage, and does not have to wait until Summary Judgment.

[T]he “substantial-similarity” test is more often correctly administered by a judge rather than a jury—even one provided proper instruction. The reason for this is plain—the ability to separate protectable expression from non-protectable expression is, in reality, a question of law or, at the very least, a mixed question of law and fact.

3. Although the entire expression of an architectural design may be protected as a copyright, “the number of condominium units per floor, the height of the building, and the height of the ceilings are not features over which Plaintiff, or anyone, could claim a valid copyright.”

4. Detail, detail, detail.  What I mean by this is best evidenced by the analysis in this opinion.  Simply put, even if the concept is the same, the expression is what counts, and how that expression is achieved is considered.

I love this decision because it is detailed and well-reasoned.  It does, however, sound a bit unfair to the Plaintiff if indeed this was not a case of independent creation, but the facts are the facts.  Architects, designers, and others would be well-served to understand the scope of their copyright rights, and this opinion provides a roadmap.
Sieger Suarez Architectural P’ship, Inc. v. Arquitectonica Int’l Corp., 13-21928-CIV, 2014 WL 585883 (S.D. Fla. Feb. 14, 2014).

 

UnIntellectual Property (UnIP): Trademark for “Web Celeb”

The United States Court of Appeals for the 9th Circuit affirmed a district court’s grant of summary judgment to defendants Procter & Gamble Co., Microsoft Corp., and BermanBraun, LLC, on plaintiff Webceleb, Inc.’s  claims for trademark infringement under the Lanham Act and unfair competition under California Business & Professions Code section 17200.  The thresshold issue was whether use of “web celeb” by the defendants infringed plaintiff’s registered trademark for WEBCELEB.

The Court held that: “Defendants’ use of “web celeb” as a television show award category and a section of an entertainment website is an objectively fair use of plaintiff’s “WEBCELEB” trademark. There is no genuine dispute that defendants’ use meets the classic fair use elements: (1) the use of the mark is not a trademark use; (2) the use is fair and in good faith; and (3) the use is only descriptive. Cairns v. Franklin Mint Co., 292 F.3d 1139, 1151 (9th Cir.2002).”
In doing so, the Court drew the following conclusions:
1. defendants did not use “web celeb” as a source identifier
2. defendants used “Favorite Web Celeb” as one of more than thirty-five awards, most of which follow the “Favorite [category]” scheme
3. “web celeb” is common parlance for Internet celebrities, which is precisely what the award is intended to recognize
4. defendants’ use of “web celeb” as part of a stylized “button” and a headline on defendants’ online magazine is also not a trademark use
5. defendants’ use of “web celeb” was merely descriptive of the magazine’s content
6. “Web celeb” headlined stories about Internet celebrities and the “Favorite Web Celeb” contest, much like the stylized “AWW” button denoted cute or “aww”-inspiring content
7. the prominent presence of defendants’ own trademarks and logos alongside each use of “web celeb” is another indication of a non-trademark use
8. difference between “web celeb” and “WEBCELEB” is “pivotal,” since “web celeb” has a common meaning that defendants intended to invoke
I would have thought this case would be closer than what the district court and 9th Circuit held in their opinions with regard to whether some of the above-identified uses were purely descriptive or arguably as a source identifier.  This is undoubtedly a victory for the trademark fair use doctrine and those who wish to use descriptive words consistent with their dictionary or colloquial meaning.  This would have been a very different case had defendants used the mark in connection with those services/goods covered by plaintiff’s trademark, namely “Providing temporary use of on-line non-downloadable software to enable uploading, posting, showing, displaying, tagging, blogging, sharing, or otherwise providing electronic media or information in the field of general interest over the Internet or other communications network.”  This case goes to show that when the descriptions that may allow a trademark to be registered in the first place are actually applied to the underlying goods/services, it may not be as distinctive or strong as it appears when simply viewing the TESS record.
Webceleb, Inc. v. Procter & Gamble Co., 12-56943, 2014 WL 448648 (9th Cir. Feb. 5, 2014).
 

Software Trade Secrets and Sanctions

On February 6, 2014, in Trade Secrets, by Brian A. Hall

UnIntellectual Property (UnIP): Software Trade Secret

The United States District Court for the Northern District of Georgia struck plaintiff software developer’s action against competitor for misappropriation of the software developer’s trade secrets, and in doing so granted Rule 11 sanctions.  As always, these trade secret cases are fact intensive.  “Both develop customer-relationship management software and license it to companies in the home care or hospice industry. Homecare and PlayMaker each have a core software product and an add-on program that allows customers to access even more information. Homecare’s core product is “HomecareCRM,” and its add-on software is called “Harvest.” PlayMaker’s core product is “PlayMaker CRM,” and its add-on software is called “TargetWatch.” The programs, among other things, allow the parties’ respective customers to access and filter medical claims data in order to find potential clients. The parties’ current clash involves Harvest and TargetWatch.”  Plaintiff’s position, as set forth in its Complaint, was that defendant “misappropriate[ed] significant portions of [Homecare's] proprietary software solutions, including the manner in which [Homecare's] software analyzes, compiles, presents and displays data on home health care referral sources, and using that information to design and develop competing software solutions.”

The Court applied Rule 11 and analyzed whether the trade secret misappropriation claim “(1) has no reasonable factual basis; (2) is based on a legal theory that has no reasonable chance of success and that cannot be advanced as a reasonable argument to change existing law; and (3) is filed in bad faith for an improper purpose.”  The Court focused on documents within Plaintiff’s own possession, which showed that “Homecare accessed PlayMaker’s software in March 2012, several months before it filed this action, and used its access to put together a matrix that compared the features of HomecareCRM and Harvest with the features of PlayMaker CRM and TargetWatch. The final matrix was completed on April 12, 2012 and contains a section that compares only Harvest and TargetWatch. At the end of this section, there is a paragraph entitled “Intellectual Property Concerns” which concludes that Homecare had “no intellectual property concerns” about TargetWatch. Understandably, PlayMaker is baffled that Homecare then alleged in its complaint two months later that TargetWatch suggests or shows that PlayMaker misappropriated Harvest.”

Put simply, the fact that plaintiff’s own documentation had previously shown their knowledge of, analysis of, and determination that there was no legal issue was sufficient to warrant sanctions.

This decision highlights the risk of bringing a specious trade secret claim out of hate for another party.  Courts will often look at what the party knew or should have known at the time of filing a Complaint.  When documents without the plantiff’s possession are contrary to the position taken in the Complaint, it is hardly surprising that sanctions were awarded.  Software trade secret misappropriation matters are complex enough without allegations of frivolousness.

Homecare CRM, LLC v. Adam Grp., Inc. of Middle Tennessee, 952 F. Supp. 2d 1373, 1375-76 (N.D. Ga. 2013).
 

Holy UnIP: No Copyright Protection for a Blessing

On February 5, 2014, in Copyrights, by Brian A. Hall

UnIntellectual Property (UnIP): Copyright for a Blessing

The United States District Court for the Northern District of Illinois granted defendant’s motion to dismiss for failure to state a claim stemming from plaintiff’s copyright infringement lawsuit against defendant.  Plaintiff produces gift items personalized with poetry verses for special occasions and then sells them on its website, www.poetrygifts.com. Defendant sells the same types of personalized gift items on various websites, including www.giftsforyounow.com. Plaintiff alleged that the defendant unlawfully used the verse “May the strength of the Holy Spirit be with you, guiding you every day of your life” on its merchandise.

The Court disposed of the lawsuit stating: “The short verse “May the strength of the Holy Spirit be with you, guiding you every day of your life” is too common and unoriginal to receive copyright protection in itself. The excerpt is a common expression of a blessing. The expression, “May the strength of the Holy Spirit be with you,” is of a kind with the common blessings “May the strength of the Lord be with you,” “May the Lord be with you,” or “God be with You,” which are widely used and decidedly not original to PKI. Blessings invoking the strength and guidance of the Holy Spirit are simply too ubiquitous to warrant copyright protection.”  In doing so, it refused to find copyright infringement or any violation of the Digital Millenium Copyright Act (DMCA).

This decision, to me, comports with black letter law: no copyright protection in a phrase.  See US Copyright Circular.  I love the verse and blessing, and I wish better guidance would have been with it on that particular day.

Pers. Keepsakes, Inc. v. Personalizationmall.com, Inc., 11 C 05177, 2013 WL 5348329 (N.D. Ill. Sept. 24, 2013).