Jan 19 2017

SCOTUS to Decide If “Scandalous” “Immoral” Terms Can Be Trademarked

In a case that presents a crossfire of First Amendment and intellectual property issues, the Supreme Court heard arguments yesterday in a case involving an Asian-American band that calls itself “the Slants.” The Slants had been denied a trademark for their name by the US Patent and Trademark Office (USPTO) under a Federal law that prohibits the USPTO from registering trademarks deemed “immoral, deceptive, or scandalous,” or that “disparage… persons, living or dead, institutions, beliefs, or national symbols.” This law came to most people’s attention perhaps in 2014 when the USPTO cancelled the trademark registration of the Washington Redskins.

While the USPTO declined to register the bands’ trademarks because “slants” is a pejorative term for Asians, the band — whose members are all Asian-American — has made it clear that the Slants name was chosen as a deliberate commentary on the state of race, culture, and music. A Federal appellate court ruled that the law was unconstitutional as it violated the First Amendment’s protection of free speech. The relevant part of the First Amendment reads “Congress shall make no law . . . abridging the freedom of speech.” Pretty straightforward on its face. And the appellate court found that by denying the Slants’ trademark request, the USPTO was abridging their free speech rights especially since the ban was based on the content or viewpoint of the speech stating: “When the government discriminates against speech because it disapproves of the message conveyed by the speech, it discriminates on the basis of viewpoint”
In First Amendment law, viewpoint restrictions are the ones that courts get most concerned about.

You can get this as long as the “R” isn’t for “Racist”

The USPTO took the appeal to the Supreme Court arguing that merely denying the trademark doesn’t stop the band from using the name; it just means there are fewer protections against others using the unregistered marks. Because the mark could still be used in commerce, the government also argued, the Slants still had their State trademark rights and could sue a competitor if that competitor tried to falsely claim they were these “The Slants.” The justices gave Marshal Stewart, the US Solicitor General who argued the case on behalf of the USPTO a hard time. The justices focused on two main issues (1) What government interest in trademark does this law promote and (2) How is it not “viewpoint” discrimination since I can say nice things about a race but not a bad thing? Stewart tried hard to make the case that a trademark should not distract from its primary purpose which is to identify the source of goods- it is not to make a statement. He had this exchange with Justice Kagan:

MR. STEWART: The — the type — the type of distraction that may be caused by a disparaging trademark will depend significantly on the precise type of disparagement at issue. That is, in the case of racial epithets, these words are known to cause harm, to cause controversy. They — in some sense they may no — they may be no more distracting than a positive message,
but Congress can determine this is the wrong kind of distraction.

JUSTICE KAGAN: Mr. Stewart, please.

For those non-lawyers who read this blog, you need to know that “Mr. Stewart, please” is the SCOTUS equivalent of “Are you f–king kidding me?”

The Court also gave John Connell, The Slants’ lawyer, an equally hard time. Their focus for him was (1) How is this restricting their speech, when all it is doing is stopping them from using a racial slur as a Federally-registered product identifier? Can you force the government to condone racial slurs by sanctioning them as protected trademarks? (2) How is this any different from other permissible restrictions on speech? For example, libel laws or commercial disparagement law that would prohibit anyone from putting out a product that said “Miller Beer is Poison.”

O’Connell chose to argue that all of those restrictions should not stop the registration of a trademark. I think taking such a hard line stance seriously hurt his argument as the Justices nearly jumped down his throat when he made it. Here is one brief exchange between him and Justice Sotomayor who was using a timely example of libelous speech:

JUSTICE SOTOMAYOR: But your argument earlier was that if someone slanders or libels an individual by saying — Trump before he was a public figure — Trump is a thief and that becomes their
trademark, that even if they go to court and prove that that’s a libel or a slander, that trademark would still exist and would be capable of use because otherwise canceling it would be an abridgement of the First Amendment?

MR. CONNELL: I believe that’s correct.

JUSTICE SOTOMAYOR: That makes no sense.

Oh boy, that’s worse than hearing “[Your Name Here], please.”

The Court continued to press Connell on what may be the defining issue – that this is just one small arena that the government has said do not use racial slurs – The Slants are free to sue them in their name, their song lyrics, their advertisements, everywhere else. Justice Ginsburg compared it to the prohibition of George Carlin’s “Seven Dirty Words” on public air waves.

With the Court attacking both counselors equally and with the broad sweeping issues at stake here, it is hard to predict the outcome. I suspect the law will be upheld because of the narrow restriction posed by the statute and that it does not really prevent the Slants from using he name in commerce. As for the Redskins? Well, they did not get their appeal through to the Federal Appellate Court in time and when they asked SCOTUS to allow them to jump over that step because of this case, the Court denied he petition. So they just have to sit on the sidelines and hope that Mr. Connell’s arguments won the day.

You can read the full text of the argument HERE

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Jan 11 2017

Getty Denies Knowing About French Lawyer’s Trolling on Its Behalf

Having waged literally thousands of battles against Getty Images’ copyright trolling program I was not surprised to see that they engaged a French law firm to attack US authors for alleged defamation in France. That’s what happened to a client of mine recently who has a blog that exposes, challenges and criticizes Getty Images’demand letter program. You can learn more about it at his site Extortionletterinfo.com (ELI) where I am a legal adviser. He received a letter from a Vanessa Bouchara of Cabinet Bouchara – Avocats, where she claims to be an intellectual property specialist. Her complaint essentially revolves around the use of the word “extortion” and it variables to describe what Getty does. We have been down this road endlessly and US courts have recognized that terms such as “extortion” and blackmail” have a secondary meaning outside the criminal charges definition. Avocat Bouchara lists about ten examples where this harsh language was used by my client and some third parties who posted on the site. She also states that she has been instructed to commence litigation should the “disparaging” comments not be removed within eight days. When my client called me about it, I told him not to worry about it. First of all the Speech Act makes foreign defamation judgments unenforceable in the United States unless the foreign findings are consistent with the First Amendment of the US Constitution. Second of all, a quick internet search revealed that French law is essentially similar – that is if the target is a foreign company who has no business in France, then the offending language must be judged by that country’s code of conduct. So I advised him that these expressions of opinion are wholly protected by the First Amendment. Third of all, France has a very short statue of limitation for defamation. A cause of action must be started withing three months of publication. That includes on-line publication. Since these statements were made years ago, the claim would apparently be time-barred in France.

When he heard the weakness of the claim, my client asked me if I thought that the attorney was acting on her own without Getty US’ knowledge and approval I said “No way.” She specifically states in her letter that she has received instructions to file suit and what would make her act on her own? The issue was picked up by my friend and colleague Eugene Volokh of the wildly popular blog, The Volokh Conspiracy. He actually reached out to Getty because, like my client, he found it hard to believe that Getty could authorize such a frivolous demand. Here is their response:

Dear Eugene,
Your inquiry to Ms Bouchara of CABINET BOUCHARA – Avocats has been brought to Getty Images’ attention and we wanted to provide the below statement from Getty Images:
Cabinet Bouchara was retained as our outside counsel in France, having previously been granted limited permission to act on Getty Images’ behalf in this region only. The firm were under no means sanctioned to contact sites outside of this jurisdiction, including in North America, however it has come to our attention that this has in fact unfortunately occurred.
This practice has been ceased immediately and we apologize for the error.
Kind regards, …

Getty’s position?

I was very surprised that they actually claimed they had no idea this French lawyer was doing that. I don’t believe to for a second. I’m not buying it for a second. This is multi-national major corporation that is second only to perhaps Disney in its attempts to protect and make money off of its intellectual property. A few years ago, they paid PicScout, a small Israeli company, over $20MM for the software PicScout developed to search websites for images and match them to the Getty catalog. They formed a separate entity, License Compliance Services (LCS), to pursue infringement claims against folks who used a purported Getty Image picture on their website. LCS now does this for almost all of Getty’s competitors so Getty is making money off alleged infringement from its competitors as well. They have employed a well-respected Seattle law firm to file a smattering of lawsuits around the country so that people who get these letters will see that they do in fact file suit on occasion. They have tried left and right to give ELI and myself headaches and battles on various fronts. So nothing about this company says they are casual about their infringement efforts. I am reminded of the French police captain in Casablanca who shuts down Rick’s Cafe because he is “shocked, shocked to find that gambling is going on here” as he receives his winnings.

Ms. Bouchara has written an apology to my client for her letter. That’s great. But I wonder if she has attacked any other bloggers in a similar fashion who maybe complied out oof fear of being dragged into a French courthouse.

Thanks also to my friend Eugene Volokh of the Volokh Conspiracy for weighing in on this. Here is a link to his article

Dec 20 2016

New NYC Law Makes Written Contracts Mandatory for Freelancers

Every holiday season, many NY City companies employ freelancers to fill a variety of roles for when the business gets swamped. Well starting in 2017, those businesses will need to comply with a new law that goes into effect May 15 2017 in the five boroughs of New York City. The law, appropriately named “The Freelancers Aren’t Free Act” protects freelance workers by (1) requiring freelancer contracts to be in writing, (2) requiring timely payment, (3) prohibiting retaliation, and (4) providing specific remedies and damages available to aggrieved freelance workers. The law does not apply to sales representatives, attorneys or licensed medical professionals. Key Points:

A. Contracts with freelancers for services of $800 or more must be in writing. That total can be reached by including the amounts for contracts between the same parties in the immediately preceding 120 days. The contract must include the name and address of the hiring party and the freelance worker; an itemization of the services the freelancer will provide; a price schedule for those services; and the date for final payment to the freelancer. That will require companies to use their legal name in the contract to make it easier for freelancers to identify who or what entity is actually hiring them.

B. The hiring party must pay the freelancer on or before the date specified in the contract. If there is no date set in the contract, the law requires the hiring party pay the freelancer no later than 30 days after the completion of the freelancer’s work.

C. The hiring party may not threaten, harass, deny an opportunity to or take any action against a freelance worker that deters the freelancer from exercising any right under the Act.

So what happens if the hiring party violates one of these provisions? The law provides clear penalties:

nyc-labor-office1. A plaintiff who proves they requested but were denied a written contract before work began is entitled to statutory damages of $250.
2. If a hiring party violates the written contract requirement plus any other section of the statute, the statutory damages will be the full value of the underlying contract in addition to damages for the other sections violated.
3. Plaintiffs who are successful in claims under the payment provision are entitled to double damages; so a freelancer who is contractually entitled to $1,000 in unpaid fees is automatically entitled to $2,000 under this section.
4. Plaintiffs who are successful in claims under the retaliation provision of the act are entitled to damages in the value of the underlying contract for each instance of retaliation.
5. A successful plaintiff is entitled to attorney’s fees.

That last provision means that plaintiff employment lawyers will be looking for these cases as the value of the case will not be a deterrent to bringing a claim under the Act.

Like most labor regulations, waivers of these statutory rights are void as against public policy. That means employers cannot get freelancers to sign a general release saying they were properly paid. The Act states that the New York City Office of Labor Standards (NYCOLS) will collect data on the effectiveness of these new laws. It may be useful at the end of 2017 to file a Freedom of Information Law request for this data to see what industries were impacted and what were the average size of penalties and legal fees awarded.

One thing is clear: We continue to see a trend on placing additional requirements and burdens on employers – large and small – to ensure that workers aren’t taken advantage of. However, many small businesses that are not getting proper legal advice will be caught in the crossfire and could face significant financial penalties for breaking laws they did not even know existed.

Follow me on Twitter @oscarmichelen

Dec 15 2016

“3:05 Cafecito Time” Case Shows Limits of a Good Idea

I’m sure Jenny Lee Molina, the founder and principal of the Miami public relations firm JLPR, publicist JennyLee Molina, thought she struck gold when she came up with “#305Cafecito” to designate 3:05pm as the official time in Miami to grab a little cup of Spanish coffee (“un cafecito”). After all, 305 is the area code for Miami and walking up to a restaurant’s ventanita (“little window”)for the afternoon cafecito is an Hispanic tradition. The marketing program caught a little fire in the Miami-Dade community and in 2013, Miami Mayor Tomás Regalado designated 3:05pm as the official coffee break time of the City of Miami. It was a great idea for sure.

So imagine her surprise when recently coffee giant Cafe Bustelo began using “3:05pm cafecito” in a series of pop-up activations in cities such as New York, Los Angeles, and Chicago where free coffee was distributed at 3:05 p.m., with signs depicting “305” and “cafecito time” held by attendees. Cafe Bustelo is owned by the J.M. Smucker megacorporation which owns Bustelo, Smucker’s Jam, Folger’s, and Café Pilon. In addition, J.M. Smucker sells coffee under the Dunkin’ Donuts brand in grocery stores across the U.S. and owns the Meow Mix, Kibbles N’ Bits, Milk Bone, and 9 Lives brands plus many others.

This past October, Molina asked the J.M. Smucker Company to properly recognize JLPR asking for creative credit. She told them that
she monetizes 3:05 Cafecito by using it as a marketing vehicle for events and using it as a social media influencer with other brands that she promoted on a 3:05 Cafecito channel.The Smucker Company was not impressed with her claim. They responded through their lawyer that they were not claiming trademark rights to 3:05 Cafecito as the term is merely descriptive to tell their followers at what time they will be offering a free cafecito at selected locations. What’s worse is they used JennyLee’s own success against her:

Our research shows that 3:05 p.m. has been recognized as “Miami’s official cafecito time” following the mayor’s proclamation in 2013. We do not believe that anyone has exclusive rights in celebrating a coffee moment at 3:05 p.m. To claim otherwise seems contrary to the idea of sharing pride in the afternoon cafecito ritual as a way to honor the Latin culture in Miami.

That’s right – they threw back in her face that since the Mayor proclaimed 3:05pm as the official coffee break time of Miami, the “305 Cafecito” movement stopped being a privately held trademark and instead became a generic term. But of course, 3:05pm was only selected by JennyLee as a clever use of Miami’s area code. There was no natural tradition of having a coffee at exactly 3:05 pm. And its just plain smarmy nonsense to claim that they are doing it to “share pride” in Latin culture in Miami. There can be no serious dispute that JM SMucker got the idea from JennyLee. Her and her company are named in the Mayor’s 2013 Proclamation. But that’s not enough under trademark law. Here’s another important passage from JM Smucker’s response letter:

“cafecito” and “cafecito time” are generic terms that are not subject to trademark protection, and 305 is geographically descriptive as a reference to the telephone area code of Miami, Florida, and also not protectable. In fact, the USPTO has required a disclaimer of exclusive rights to the terms “cafecito” and “305” in numerous third party registrations.

Smucker’s lawyer is likely right. There is nothing unique or fanciful about “305 Cafecito.” And while it may have been popular in Miami, it hardly was a national concept or household term. And that’s essentially what JennyLee would have to prove to be able to stop Smucker’s from using her idea – that it acquired “secondary meaning” under trademark law. Under trademark law, a mark associated with a marketed product generally cannot receive full trademark protection unless it is distinctive. Think about trademarks like “Exxon” or “Motrin” These are not real words; they do not describe the product or its use; they don’t just use a proper name or a geographical location. They are called “fanciful” because someone created them out of their imagination. Trademark protection gives the holder of a distinctive mark the exclusive right to use that mark in connection with a product. The mark is placed in the principal register of trademarks in the US Patent and Trademark Office. Descriptive and generic marks ordinarily do not qualify for the principal register. A person may not, for example, claim the right to the word “nice” in connection with a product because the word is merely descriptive. A descriptive or generic mark may, however, be placed on the supplemental register, which gives the holder of the mark a certain measure of trademark protection. If the mark acquires a secondary meaning after five years of continuous, exclusive use on the market, the mark may be placed on the principal register.

Trademark-SymbolA descriptive or generic mark attains a secondary meaning if the producer so effectively markets the product with the mark that consumers come to immediately associate the mark with only that producer of that particular kind of goods. Think of “Just Do It” – Nike’s trademark. That’s a common English phrase that is not distinctive. So to protect it, Nike made sure to roll it out in a national multi-million dollar ad campaign. They put “Just Do It” on billboards, TV and radio; they put it on every label of Nike clothes shipped out at the start of the campaign; they placed ads in just about every print magazine in the country. It was not long before “Just Do It” became synonymous with Nike so that when you hear it, you no longer think of the actual phrase but you think of Nike – “Just Do It” has acquired a secondary meaning. The other issue JennyLee has is that she is not even in the business of selling coffee, so Smucker’s and her are not really competitors. In her trademark application, she listed dozens and dozens of products that she used or intended to use 305 Cafecito on: coffee mugs, bumper stickers, adhesive tape and and so on. But “coffee” was not on the massive list. If she had a national coffee brand called “305 Cafecito” she would have a much better chance of stopping the Smucker’s campaign. I noticed in searching the USPTO records that in July 2016 someone applied for the trademark “Cafecito 305” in connection with the sale of coffee, coffee beans and ground coffee.

In the Miami New Times’ article about the case, JennyLee is quoted as saying:

“If they would have done a post saying to join the #busteloexperience and drink coffee at 3:05 p.m., brought to you by 3:05 Cafecito, I would have been more than fine. At the very least, they could have corrected what happened, but what they did was take a stance that my idea is not my idea, and that’s why I’m upset. It’s not fair. They gain nothing and lose nothing by giving us credit

JennyLee is missing the point: They are not disputing that its her idea really; they are disputing that her idea is protectable, because it is generic and not distinctive and because its just an idea and not a product. She is right however that Smuckers really had no reason to not give JennyLee accreditation. They likely did a quick assessment of the strength of the trademark (or lack thereof) and determined that it was not protectable, so why not use it? They also likely assessed the likelihood of a small Miami PR firm taking on one of the largest conglomerates in the world in a trademark lawsuit. JennyLee is trying to get their attention by starting a #boycottbustelo campaign but so far it has not had much in the way of activity. I wish her luck but I think this will be an uphill battle.

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