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The Supreme Court recently granted certiorari in the Star Athletic, LLC v. Varsity Brands, Inc. case to resolve an issue that may heavily impact that more than $330 billion a year U.S. apparel market: is clothing eligible for copyright protection?  In order to answer that question, the Court must clarify the “appropriate test to determine when a feature of a useful article is protectable under §101 of the Copyright Act.”  Petitioners refer to this issue as “the most vexing, unresolved question in copyright law: how to determine whether a feature of a useful article — such as a garment or piece of furniture — is conceptually separable from the article and thus protectable.”  Courts appear to agree, as one appeals court had described this challenge as a “metaphysical quandary.”

Varsity Brands designs and manufacturers apparel and accessories for cheerleading and other athletic activities.  Varsity sought and received copyright registrations for “two-dimensional artwork” for a number of its apparel designs, including the following, which are the subject of the lawsuit:

Star Athletica marks and sells uniforms for football, baseball, basketball, lacrosse, and cheerleading.  Varsity filed the instant copyright infringement suit when it noticed Star’s marketing materials for cheerleading uniforms that resemble Varsity’s registered designs above.  The Tennessee district court entered summary judgment in Star’s favor, concluding that Varsity’s designs were not copyrightable because the graphic elements of the designs were not physically or conceptually separable from the utilitarian function of a cheerleading uniform because the “colors, stripes, chevrons, and similar designs typically associated with sports in general, and cheerleading in particular” make the garment they appear on “recognizable as a cheerleading uniform.”  Essentially, the district court held that the aesthetic features of a cheerleading uniform merge with the functional purpose of the uniform.    Varsity appealed to the Sixth Circuit, which reversed.

The Sixth Circuit first held that the district court erred by failing to give greater deference to the Copyright Office’s registration determinations.  The Sixth Circuit then found that registrations were copyrightable under its newly formulated five-step “hybrid” test for determining whether an artistic design is separable from the utilitarian aspects of a useful article:

1. Is the design a pictoral, graphic, or sculptural (PGS) work?
2. If yes, then is it a design of a useful article – “an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information”?
3. What are the utilitarian aspects of the useful article?
4. Can the viewer of the design identify “[PGS] features” “separately from . . . the utilitarian aspects of the [useful] article”?
5. Can the “[PGS] features” of the design of the useful article “exist[] independently of[] the utilitarian aspects of the [useful] article”?

The Supreme Court will now review whether this “hybrid” test is appropriate to determine whether useful items, such as cheerleading uniforms, are copyrightable.   This decision will hopefully clear up the circuit split on this issue.

Automobile manufacturing giant Daimler AG, which owns global automobile manufacturer Mercedes-Benz, has sued e-commerce titan Amazon.com for trademark and design patent infringement in connection with  replica Mercedes-Benz wheels built buy a third party and sold on amazon.com.  The complaint, filed in the U.S. District Court of Seattle, seeks to impose liability on Amazon for selling copies of Daimler AG’s wheels and using the MERCEDES-BENZ trademark to do so.  The case may open the door to a new level of liability for online retailers who sell counterfeit goods sold on their sites.

Last year, pillowcase maker Milo & Gabby brought a similar suit against Amazon, but lost on a jury verdict because Amazon had technically not made an “offer to sell.”  Milo & Gabby appealed the case, explaining that the finding that Amazon, the largest Internet-based retailer in the United States, does not actually sell or offer products for sale is “worthy of appellate review.”  Likely in an attempt to avoid the same fate, Daimler AG alleges that the wheel replica listings included the wording “sold by Amazon” and were shipped by Amazon itself.  The listings still appear to be active, although they do not appear to claim they are “sold by Amazon.”   The results of this case could have far-reaching effects for both online retailers and brand owners.

It appears as though the parties may be working towards a resolution of the case as the parties stipulated to extend the deadline for Amazon to respond to the complaint to June 6, 2016.

This week marks the beginning of major reforms to the European Union trademark system. The Amending Regulation will take effect on March 23, 2016, and will incorporate a number of substantive changes into European Union trademark law.

Description of Goods and Services
Any language designating classes of goods and services will be interpreted literally. Therefore, class headings will only be read to include whatever goods and services are literally indicated within. Owners of CTM registrations filed before June 22, 2012 have until September 23, 2016 to file an amendment to revise their registrations to claim their desired goods and services, which International Registrations designating the EU are excluded from this provision.

Fee Changes

Applications
Formerly, EU trademark applications cost €900 and covered up to three classes. Moving forward, applications will cost €850 for one class, €900 for two classes, and an additional €150 for each additional class. The table below provides a detailed comparison:
Class(es) Current OHIM fee (EUR/USD) New EUIPO fee (EUR/USD)
One €900 / ≈$1000 €850 / ≈$960
Two €900 / ≈$1000 € 900 / ≈$1,000
Three €900 / ≈$1,000 €1,050 / ≈$1,180
Four €1,050 / ≈$1,180 €1,200 / ≈$1,350
Additional classes + €150 / ≈$170 + €150 / ≈$170

Renewals
Formerly, a renewal fee of €1,350 covered up to 3 classes. Now, the new renewal fees mirror the filing fees, which results in a reduction in renewal fees for registrations up to four classes:

Class(es) Current OHIM fee (EUR/USD) New EUIPO fee (EUR/USD)
One €1,350 / ≈$1,520 €850 / ≈$960
Two €1,350 / ≈$1,520 €900 / $1,000
Three €1,350 / ≈$1,520 €1,050 / $1,180
Four €1,750 / $1,970 €1200 / $1,350
Additional classes + €400 / $450 + €150 / $170

Renewal Deadline
Currently, trademark renewals are allowed to be filed by the end of the month in which the registration expires. The new regime will harmonize the renewal deadline with the expiration date, so all renewals will now be due on the actual date of expiration.

Oppositions
The three month opposition period against International Registrations designating the EU will be open one month, rather than the current six months, after publication. Protected designations of origin and protected geographical designations have been added as grounds for oppositions.

What should you do as a trademark owner?

(1) If you currently file applications for three classes in the EU to take advantage of the pricing, you may want to reevaluate this strategy as three class applications have now become more expensive, as have the renewals in connections with these applications.
(2) Determine if any existing CTM registrations filed before June 22, 2012 should be amended to unambiguously designate the desired goods and services. Review CTM application filed on or after June 22, 2012 to determine whether additional applications may be needed to ensure that goods or services of interest are covered.

Should you have any questions regarding the effects of the new changes or trademark strategy, please contact us.

This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to IPLA, LLP, or the firm’s clients.

Since the rise of the Internet, the .COM top level domain (TLD) has dominated the domain landscape. A majority of the 271 million domain names registered worldwide are .COM domains (42%). The next closest TLD is .NET, at around 5.5%. However, this is expected to change quite quickly due to the Internet Corporation for Assigned Names and Numbers’ (ICANN) expansion of the domain name playing field in 2014.

Why Add New Domain Suffixes?
The Internet has seen tremendous growth over the past 20 years, and the .COM domain is crowded. Relevant and meaningful domain names are few and far between, evidenced by the fact that the average length of a new .COM domain since 2013 is more than 15 characters. In addition, the registration of .com domains has been in steady decline. The new domain system has been implemented to spur growth by providing more relevant, meaningful, and valuable domains to the expanding Internet user community (more than 2.6 billion people worldwide).

New Generic TLDs
Over the past two years, a number of new generic TLDs (gTLDs) have been created. Experts believe the descriptive nature of the new gTLDs is generally more intuitive than the .COM structure and will allow users to directly navigate when they already have a specific website destination in mind. Some notable examples of new gTLDs are .sucks, .feedback, .wealth, .app, and .bike.
The response to this new system has been tremendous. In 2015, the number of new generic top level domains (TLDs) skyrocketed from 4 million in January to 11 million by the end of December. This gTLD tracker shows that almost 16 million new gTLDs have been registered to date.
Of course, registration of new gTLDs does not indicate that Internet users have become accustomed to using these new domains. However, it appears likely that over the next few years, the new gTLDs (at least the popular ones) will be gradually adopted as a significant if not primary source of Internet content.

.BRANDS
In 2012, ICANN opened the .BRAND domain space and over 600 brand holders signed up. Experts believe that by 2020, it will become normal for companies to manage their own space on the internet, and these .BRAND websites will become the starting point for browser navigation moving forward.
The .BRAND owner is free to set up a closed ecosystem of related websites and direct traffic along its virtual community however it wishes. Such freedom allows a mark owner with a .BRAND domain to make a new page to immediately capitalize on any trending social media patterns and ad campaigns, something previously made difficult by the need to find an available .com or .net webpage. It also allows these brands to beef up their online security.
Large brands have already begun using their .BRANDS domains, and a number of different approaches have emerged. Last year, BNP Paribas switched over from its .net and .fr TLDs to .bnpparibas. Barclays soon followed and now manages its online presence from .barclays and .barclayscard. Both banking conglomerates attributed their move in large part to the added layer of security for consumers, who now can check the TLD to ensure that they are at an authentic BNP or Barclays website.
Microsoft (home.microsoft), Cisco (security.cisco), Bridgestone (wsc.bridgestone), and E. Merck (company.emerck) have also begun their dot brand transitions, though some of these domains merely redirect back to a .com website. Some companies have even leveraged their dot brands for interactive advertising and social media: Sony promoted the release of the film “Spectre” through the assistmoneypenny.sony address, which featured an interactive James Bond game.
Yet, there are still a significant number of mark owners that have yet to migrate. On top of the hefty ICANN fee, mark owners might be unwilling to risk alienating less tech-savvy consumers who are conditioned to using .com and .net addresses. Moreover, some companies own hundreds of websites, which for the time being might not be worth the significant time and expense needed to migrate over to a new TLD. It seems, at least for now, that the .BRAND domains are only affordable for large companies.
Interestingly, many .BRANDS owners have not rolled out their sites at all. Such behavior suggests that the primary concern of these brand owners is to prevent cybersquatting and the inevitable consumer confusion that follows, rather than to actually make use of their TLDs.

Potential Downsides
These new TLDs offer numerous opportunities for domain name hijackers. Although the general public may not yet appreciate this, this creates an enormous challenge for companies wishing to maintain and improve their online brand presence. It will likely be impossible, or at least extremely expensive, for brand owners to register every trademark in every domain extension.

What Can Brand Owners Do?
As the domain landscape changes over the next decade, new strategies should be implemented to capitalize on this opportunity. At the same time, brand owners must take steps to protect brands from infringement and cybersquatting. So, brand owners should evaluate whether any new gTLDs or .BRAND domains make sense from a business perspective. In addition, brand owners should anticipate unauthorized, confusion-engendering uses of their mark on TLDs they do not control. To that end, mark owners should consider monitoring their trademark marks to make sure they are not used in connection with new generic gTLDs.
This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to IPLA, LLP, or the firm’s clients.

A European Union court concluded that the shape of Lego’s figurines can be registered as a trademark. In Best-Lock (Europe) v. OHMI-Lego Juris, Lego’s efforts to protect the shape of its toys under trademark law prevailed against the argument that the shape was a mere “technical result” to help attach the Legos together. The General Court noted that the “essential” parts rather conferred human traits onto those figures.

http://www.law360.com/articles/668402/lego-figurine-is-a-trademark-eu-court-says

The Ninth Circuit decided that Amazon will have to face a TM lawsuit due to its online search results. In Multi Time Machine v. Amazon.com, high-end watchmaker Multi Time Machine (MTM) sued the e-commerce platform on the basis that its search results may cause “initial interest confusion” over a MTM product’s source: Currently, Amazon users who search for a type of MTM watch will see a list of competitor watches sold by Amazon. The case returns to the district court in Los Angeles for further proceedings.

http://arstechnica.com/tech-policy/2015/07/appeals-court-amazon-cant-dodge-trademark-suit-over-watch-search-results/

IP legislative reform in the Caribbean is developing in Trinidad and Tobago, the third richest country by GDP per capita in the Americas following the U.S. and Canada. The country’s current legislation (based on the UK’s Trademarks Act 1938) is expected to be replaced by a new law, the most significant change being its accession to the Madrid Protocol. For the first time, injunctions against unauthorized use of marks identical or similar to a well-known mark based on likelihood of confusion will be permitted.

http://www.worldtrademarkreview.com/Blog/detail.aspx?g=6dbc8067-eaa9-43af-955c-7c5dbf2d1d5e

A federal judge ruled against the Washington Redskins by leaving in place last year’s USPTO decision to strip the team’s name of TM protection. The 70-page ruling was based on evidence before the Court that the Redskins Marks consisted of matter that ‘may disparage’ Native Americans. The judgment does not preclude the Redskins from using the marks in commerce.

http://blogs.wsj.com/law/2015/07/08/judge-redskins-have-no-right-to-disparaging-trademark/

In re Tam, Appeal No. 2014-1203

The United States Court of Appeals for the Federal Circuit vacated its decision issued on April 20, 2015 in which it affirmed the TTAB’s ruling that the applied for mark, THE SLANTS, belonging to an Asian America band, is derogatory to persons of Asian descent. The court issued a sua sponte order to hear the appeal en banc and focus on whether “the bar on registration of disparaging marks in 15 U.S.C. § 1052(a) violates the First Amendment?”

Louis Vuitton Malletier v. Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM)

The OHIM has invalidated two of Louis Vuitton’s Community trademarks after a German company challenged their validity. The marks in contention are Louis Vuitton’s chess board pattern featured in dark brown/beige and black/grey combination patterns. German Retailer, Nanu-Nana claimed that both color combinations have failed to acquire distinctiveness across all EU member states. The OHIM agrees with Nanu-Nana and stated that “the juxtaposition of two elements that are not in themselves distinctive cannot alter the perception of the relevant public as to the absence of distinctive character, ab initio, of the contested mark.”

Katy Perry has had two trademark applications denied by the USPTO for her “Left Shark” whom was made famous during Super Bowl XLIX’s half-time performance. The applied for design marks were found by the examiner to only identify a particular character and the mark did not “function as a service mark to identify and distinguish applicant’s services from those of others.” Perry is still awaiting the USPTO’s decisions on her applications for “Basking shark”, “Left shark”, “Right shark”, and “Drunk shark”. These applications were soon filed after Perry’s debacle with Fernando Sosa, who sold 3D printed models of the left shark on Shapeways, an online marketplace.

Flotek Industries Inc., a Texas producer of hydraulic-fracturing fluids used to extract oil and gas from rocks, seeks to trademark their scent used for their products. Virginia Trademark Officials received vials of clear liquid smelling of oranges from Flotek in hopes to demonstrate that customers have come to associate the orange scent with its fracking chemicals. Currently, there are only three scents listed on the TMO’s principal register and in order to be successful, applicants have to show that a fragrance serves no important practical function other than to help identify and distinguish a brand. This may be a growing tool for companies to use and promote a product since the sense of smell has been proven to be very influential in memory and decision making.